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HomeMy WebLinkAbout1995-06-27; Industrial Development Authority; 003 Exhibit 10; Environmental IndemnityENVIRONMENTAL INDEMNITY M THIS ENVIRONMENTAL INDEMNITY (this llInderrmityo) is entered into as of July 1, 1995, by CIP LIMITED, L.P., a California Limited Partnership (I@IndemnitorII), to and for the benefit of FIRST INTERSTATE BANK OF CALIFORNIA, a California corporation, (@@Lender11), acting as Trustee under that certain Indenture dated July 1, 1995 le indenture^^), between First Interstate Bank of California and the Industrial Development Authority of the City of Carlsbad, California (I@Issuer@I), and each of its successors, assigns and participants, and its and their respective parent, subsidiary and affiliated corporation, and the respective directors, officers, agents, attorneys, and employees of each of the foregoing (each of which shall be referred to hereinafter individually as an IIIndemniteeII and collectively as the ( 11111demnit88S11) . W I TNE 8 SETH: A. Lender has agreed to make a loan in the original principal amount of Two million seventy thousand Dollars ($2,070,000.00) pursuant to that certain Loan Agreement dated July 1, 1995 (the IILoan between Indemnitor and Issuer, which Loan is to be secured by, among other things, that certain Deed of Trust, Fixture Filing and Assignment of Rents of even date herewith executed by Borrower, as trustor, in favor of Lender, as beneficiary (the IlDeed of Trustr1), which Deed of Trust encumbers the real property described on Exhibit A attached hereto (the ~~Property1~) , and the improvements constructed or to be constructed thereon (which improvements, together with the Property, shall hereinafter be referred to as the 11Pr~j8~t11). Pursuant to the Indenture the Issuer assigned its rights under the Loan Agreement to the Indemnitee. B. It is a condition of Lender making the Loan that this Indemnity be executed and delivered by Indemnitor. Lender is making the Loan in reliance upon this Indemnity. C. Indemnitor will benefit from the making of the Loan by Lender. D. Any initially capitalized term used herein which is not defined herein shall have the meaning given such term in the Loan Agreement unless the context requires otherwise. NOW, THEREFORE, in consideration of the foregoing and of Lender making the Loan, and other valuable consideration, the receipt of which is hereby acknowledged, Indemnitor agrees as follows: 1. As used in this Indemnity, the following terms shall have the following meanings: Wnvironmental Laws11 means any and all present and future federal, state and local laws, ordinances, regulations, permits, guidance documents, policies, and any other requirements of Governmental Authorities relating to health, safety, the environment or to any Hazardous Substances or Hazardous Substances Activity, including, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (1WERCLAII), the Resource Conservation Recovery Act ("RCR2P) , the Hazardous Materials Transportation Act, the Toxic Substance Control Act, the Clean Water Act, the Endangered Species Act, the Clean Air Act, the Occupational Health and Safety Act and the applicable provisions of the California Health and Safety Code and the -1- LAAj(i9401.2 California Water Code, and the rules, regulations, and guidance documents promulgated or published thereunder. "Environmental Losses" means Losses suffered or incurred by any Indemnitee, arising out of or as a result of: (i) any Hazardous Substance Activity that occurs or is alleged to have occurred in whole or in part on or prior to the Transfer Date; (ii) any violation based in whole or in part on activity alleged to have occurred prior to the Transfer Date of any applicable Environmental Laws relating to the Property or the Project or to the ownership, use, occupancy or operation thereof; (iii) any investigation, inquiry, order, hearing, action, or other proceeding by or before any governmental agency in connection with any Hazardous Substance Activity that occurs or is alleged to have occurred in whole or in part on or prior to the Transfer Date; or (iv) any claim, demand or cause of action, or any action or other proceeding, whether meritorious or not , brought or asserted against any Indemnitee which directly or indirectly relates to, arises from or is based on any of the matters described in clauses (i), ( ii) or (iii) , or any allegation of any such matters. Environmental Losses shall include Losses suffered or incurred by an Indemnified Party after the Transfer Date that would not have been incurred or suffered but for any matter described in clause (i), (ii) or (iii) or any allegation of any such matters, including without limitation, Environmental Losses incurred by any Indemnitee arising out of or as a result of (a) the introduction or release of a Hazardous Substance which is discovered or released at the Property or any portion thereof after the Transfer Date, but which were introduced at the Property prior to the Transfer Date and (b) the continuing migration or release of any Hazardous Substance introduced in, on or under the Property or surrounding property prior to the Transfer Date and (c) fees incurred for the services of attorneys or consultants, contractors, laboratories and all other costs incurred in connection with any matter described in clause (i), (ii) or (iii) above. "Hazardous Substance" means (i) any chemical, compound, material, mixture or substance that is now or hereafter defined or listed in, or otherwise classified pursuant to, any Environmental Laws as a "hazardous substance", "hazardous material", "hazardous waste", "extremely hazardous waste", "acutely hazardous waste," "radioactive waste", "infectious waste", "biohazardous waste", "toxic substance", "pollutant" , "toxic pollutant, " "contaminant" as well as any formulation not mentioned herein intended to define, list, or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive toxicity, "EP toxicity," or "TCLP toxicity"; (ii) petroleum, natural gas , natural gas liquids , liquif ied natural gas, synthetic gas usable for fuel (or mixtures of natural gas and such synthetic gas) and ash produced by a resource recovery facility utilizing a municipal solid waste stream, and drilling fluids, produced waters and other wastes associated with the exploration, development or production of crude oil, natural gas, or geothermal resources; (iii) "hazardous substance" as defined in Section 25281(f) of the California Health and Safety Code; (iv) "waste" as defined in section 13050(d) of the California Water Code; (v) asbestos in any form; (vi) urea formaldehyde foam insulation; (vii) polychlorinated biphenyls (PCBs) ; (viii) radon; and (ix) any other chemical, material, or substance that, because of its quantity, concentration, or physical or chemical characteristics, exposure to which is limited or regulated for health and safety reasons by any Governmental Authority, or which poses a significant present or potential hazard to human health and safety or to the environment if released into the workplace or the environment; and (x) any substance the presence of which requires remediation or investigation under any federal, state or local statute, regulation, ordinance, order, action, policy or common law. -2- "Hazardous Substance Activity" means any actual, proposed or threatened use, storage, holding, existence, release (including any spilling, leaking, pumping, pouring, emitting, emptying, dumping, disposing into the environment, and the continuing migration into or through soil, surface water, or groundwater), emission, discharge, generation, processing, abatement, removal, disposition, handling or transportation to or from the Property of any Hazardous Substances from, under, in, into or on the Project or surrounding property, including, without limitation, the movement or migration of any Hazardous Substance from surrounding property or groundwater in, into or onto the Project and any residual Hazardous Substance contamination on or under the Project. "Losses" means any and all losses, liabilities, damages (whether actual, consequential, punitive, or otherwise denominated), demands, claims, actions, judgements, causes of action, assessments, penalties, costs and expenses (including, without limitation, reasonable attorneys' fees and/or consultants' fees and disbursements), of any and every kind or character, foreseeable and unforeseeable, liquidated and contingent, proximate and remote, including, without limitation, any of the foregoing caused by the negligence of any Indemnified Party. "Transfer Date" means the date on which Lender (or its affiliate) acquires fee title to the Property, the Project or any portion thereof pursuant to power of sale or judicial foreclosure of the lien of the Deed of Trust, or by receipt of a deed in lieu of such foreclosure, and all redemption rights which Borrower may have expired, so long as a period of ninety-one (91) days have elapsed since the date on which fee title vests in Lender (or its affiliate) and during such period no bankruptcy or other insolvency proceeding is filed by or against Borrower. If Borrower should remain in possession of the Project after the Transfer Date, or if Borrower should engage in any Hazardous Substance Activity on or at the Project after the Transfer Date, the Transfer Date shall be deemed to be the date after which Borrower is no longer in possession of the Project and has ceased to engage in any Hazardous Substance Activity on or at the Project. 1. Indemnitor hereby agrees to indemnify, defend, and hold harmless Indemnitees, and each of them, from and against any and all Environmental Losses. 2. (A) If any Indemnified Party notifies Indemnitor of any claim or notice of the commencement of any action, administrative or legal proceeding, or investigation as to which the indemnity provided for in ParasraDh 2 applies, Indemnitor shall, upon demand by the Indemnified Party, assume on behalf of the Indemnified Party and conduct with due diligence and in good faith the investigation and defense thereof and the response thereto with counsel and other professional consultants selected by the Indemnified Party. (A) If any claim, action, proceeding, or investigation arises as to which the indemnity provided for in ParasraDh 2 applies, and Indemnitor fails to assume promptly (and in any event within ten (10) days after being notified of the claim, action, proceeding, or investigation) the defense of the Indemnified Party, then the Indemnified Party may contest and settle the claim, action, proceeding, or investigation at Indemnitor's expense using counsel selected by the Indemnified Party; provided, however, that after any such failure by Indemnitor no such contest need be made by the Indemnified Party and settlement or full payment of any claim may be made by the Indemnified Party without Indemnitor's consent and without releasing Indemnitor from any obligations to the Indemnified Party under ParasraDh 2. 3. This Indemnity is given solely to protect Lender and the other Indemnitees against Environmental Losses, and not as additional security for, or as a means of repayment of, the Loan. The obligations of Indemnitor under this Indemnity are independent of, and shall not be measured or affected by (i) any amounts at any time owing under the Loan or secured by the Deed of Trust or any other security instrument , (ii) the sufficiency or insufficiency of any collateral (including, without limitation, the Project) given to Lender to secure repayment of the Loan, (iii) the consideration given by Lender or any other party in order to acquire the Property or the Project, or any portion thereof, (iv) the modification, expiration or termination of the Deed of Trust or any other document or instrument relating to the Loan, or (VI the discharge or repayment in full of the Loan (including, without limitation, by amounts paid or credit bid at a foreclosure sale or by discharge in connection with a deed in lieu of foreclosure). 4. Indemnitor's obligations hereunder shall survive the sale or other transfer of the Property or the Project by Borrower prior to foreclosure or other transfer of the Property. The rights of each Indemnitee under this Indemnity shall be in addition to any other rights and remedies of such Indemnitee against Indemnitor under any other document or instrument now or hereafter executed by Indemnitor, or at law or in equity (including, without limitation, any right of reimbursement or contribution pursuant to CERCLA) , and shall not in any way be deemed a waiver of any of such rights. Indemnitor agrees that it shall have no right of contribution (including, without limitation, any right of contribution under CERCLA) or subrogation against any other person or entity, including, but not limited to, Borrower unless and until all obligations of Indemnitor have been satisfied. 5. All obligations of Indemnitor hereunder shall be payable on demand, and any amount due and payable hereunder to any Indemnitee by Indemnitor which is not paid within thirty (30) days after written demand therefor from an Indemnitee with an explanation of the amounts demanded shall bear interest from the date of such demand at the Default Rate. 6. Indemnitor agrees to pay to each Indemnitee all costs and expenses (including, without limitation, Indemnitee's reasonable attorneys' fees and disbursements) incurred by such Indemnitee in connection with this Indemnity or the enforcement hereof. As used herein, the term "attorneys' fees" shall have the meaning given such term in of the Loan Agreement. 7. This Indemnity shall be binding upon each Indemnitor, his/her heirs, representatives, administrators, executors, successors and assigns and shall inure to the benefit of and shall be enforceable by each Indemnitee, its successors, endorsees and assigns (including, without limitation, any entity to which Lender assigns, sells or participates all or any portion of its interest in the Loan). 0. THIS INDEXNITY SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA. 9. Every provision of this Indemnity is intended to be severable. If any provision of this Indemnity or the application of any provision hereof to any party or circumstance is declared to be illegal, invalid or unenforceable for any reason whatsoever by a court of competent jurisdiction, such invalidity shall not affect the balance of the terms and provisions hereof or the application of the provision in question to any other party or circumstance, all of which shall continue in full force and effect. 10. No failure or delay on the part of any Indemnitee to exercise any power, right or privilege under this Indemnity shall impair any such power, right or privilege, or be construed to be a waiver of any default or an acquiescence therein, nor shall any single or partial exercise of such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. No provision of this Indemnity may be changed, waived, discharged or terminated except by an instrument in writing signed by the party against whom enforcement of the change, waiver, discharge or termination is sought. 12. All notices, requests and demands to be made hereunder to the parties hereto shall be in writing (at the addresses set forth below) and shall be given by any of the following means: (a) personal service; (b) electronic communication, whether by telex, telegram or telecopying (if confirmed in writing sent by registered or certified, first class mail, return receipt requested); or (c) registered or certified, first class mail, return receipt requested. Such addresses may be changed by notice to the other parties given in the same manner as provided above. Any notice, demand or request sent pursuant to either subsection (a) or (b) hereof shall be deemed received upon such personal service or upon dispatch by electronic means, and, if sent pursuant to Subsection (c) shall be deemed received three (3) days following deposit in the mail. To Lender: First Interstate Bank of California 707 Wilshire Boulevard, W11-1 Los Angeles, California 90017 Attn: Corporate Trust Department To Indemnitor: CIP LIMITED, L.P. 475 W. Bradley Avenue El Cajon, California 92020 Attn: Jeffrey C. Hamann 13. This Indemnity may be executed in counterparts each of which shall be deemed an original and all of which shall constitute one and the same Indemnity with the same effect as if all parties had signed the same signature page. Any signature page of this Indemnity may be detached from any other counterpart of this Indemnity and reattached to any other counterpart of this Indemnity identical in form hereto but having attached to it one or more additional signature pages. -5- IN WITNESS WHEREOF, Indemnitor has executed this Indemnity as of the day and year first above written. "INDEMNITOR" CIP LIMITED, L.P. A California Limited Partnership Bv its General Partner: Whammy, Inc. A California corporation By : By : By : By : By : By : Jeffrey C. Hamann, President Daniel M. Whitaker, Secretary Jeffrey C. Hamann, as an individual and as Trustee of the J.C. Hamann Family Trust, UTD 4/25/86 Gregg Hamann, as an individual and as Trustee of the Gregg Hamann Family Trust, UTD 4/25/86 Daniel M. Whitaker as an individual Daniel M. Whitaker and/or Dona C. Whitaker, Co- Trustees of the Whitaker Family Trust, UTD 10/22/79, as Amended and Restated 12/22/83 -6- EXHIBIT A DescriDtion of the ProDertv -1-