Appendix K: Form of Environmental Indemnity Agreement

• Author: Gregory M Stein - Michael D Goodwin - Morton P Fisher Jr
• Pages: 560-575

560 Appendices

Appendix K

Form of Environmental Indemnity Agreement

Note: Remember that legal requirements vary from state to state and

that this document will probably need to be modified to comply with the

requirements of any particular jurisdiction.

ENVIRONMENTAL INDEMNITY AGREEMENT

This ENVIRONMENTAL INDEMNITY AGREEMENT (this “Agreement”)

made as of the day of , 20 , by , a

, having an office at

(“Borrower”), and ,

a , having an office at (“Guar-

antor”, and together with Borrower, collectively the “Indemnitor”), in

favor of , a , hav-

ing an office at

(“Lender”), and other Indemnified Parties (defined below).

RECITALS:

WHEREAS, Lender is prepared to make a loan (the “Loan”) to Borrower

in the principal amount of and No/100 Dol-

lars ($ ), pursuant to a Loan Agreement of even date herewith

between Borrower and Lender (as the same may be amended, restated,

replaced, supplemented, or otherwise modified from time to time, the

“Loan Agreement”);

WHEREAS, Lender is unwilling to make the Loan unless Indemnitor

agrees to provide the indemnification, representations, warranties, cove-

nants, and other matters described in this Agreement for the benefit of the

Indemnified Parties; and

WHEREAS, Indemnitor is entering into this Agreement to induce

Lender to make the Loan.

NOW THEREFORE, in consideration of the premises and other good

and valuable consideration, the receipt and sufficiency of which are hereby

acknowledged, Indemnitor hereby represents, warrants, covenants, and

agrees for the benefit of the Indemnified Parties as follows:

1. ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES.

Except as otherwise disclosed by that certain Phase I environmental report

(or Phase II environmental report, if required) in respect of the Property

delivered to Lender (referred to below as the “Environmental Report”),

a copy of which has been provided to Lender, (a) there are no Hazardous

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Appendices 561

Substances (defined below) or underground storage tanks in, on, or under

the Property, except those that are both (i) in compliance with all Environ-

mental Laws (defined below) and with permits issued pursuant thereto

and (ii) fully disclosed to Lender in writing pursuant to the Environmen-

tal Report; (b) there are no past, present, or threatened Releases (defined

below) of Hazardous Substances in, on, under, or from the Property that

have not been fully remediated in accordance with Environmental Law;

(c) there is no threat of any Release of Hazardous Substances migrating

to the Property; (d) there is no past or present non-compliance with Envi-

ronmental Laws, or with permits issued pursuant thereto, in connec-

tion with the Property that has not been fully remediated in accordance

with Environmental Law; (e) Indemnitor does not know of, and has not

received, any written or oral notice or other communication from any

Person (including but not limited to a governmental entity) relating to

Hazardous Substances or Remediation (defined below) thereof, of pos-

sible liability of any Person pursuant to any Environmental Law, other

environmental conditions in connection with the Property, or any actual

or potential administrative or judicial proceedings in connection with any

of the foregoing; and (f) Indemnitor has truthfully and fully provided

to Lender, in writing, any and all information relating to conditions in,

on, under, or from the Property that is known to Indemnitor and that is

contained in files and records of Indemnitor, including but not limited to

any reports relating to Hazardous Substances in, on, under, or from the

Property and/or to the environmental condition of the Property.

2. ENVIRONMENTAL COVENANTS. Indemnitor covenants and

agrees that (a) all uses and operations on or of the Property, whether by

Indemnitor or any other Person, shall be in compliance with all Environ-

mental Laws and permits issued pursuant thereto; (b) there shall be no

Releases of Hazardous Substances in, on, under, or from the Property;

(c) there shall be no Hazardous Substances in, on, or under the Prop-

erty, except those that are both (i) in compliance with all Environmental

Laws and with permits issued pursuant thereto and (ii) fully disclosed to

Lender in writing; (d) Indemnitor shall keep the Property free and clear of

all liens and other encumbrances imposed pursuant to any Environmen-

tal Law, whether due to any act or omission of Indemnitor or any other

Person (the “Environmental Liens”); (e) Indemnitor shall, at its sole cost

and expense, fully and expeditiously cooperate in all activities pursuant

to Section 3 of this Agreement, including but not limited to providing all

relevant information and making knowledgeable Persons available for

interviews; (f) Indemnitor shall, at its sole cost and expense, perform any

environmental site assessment or other investigation of environmental

conditions in connection with the Property, pursuant to any reasonable

written request of Lender (including but not limited to sampling, testing,

and analysis of soil, water, air, building materials, and other materials and

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