Exhibit 10.M
ENVIRONMENTAL INDEMNIFICATION AGREEMENT
HANOVER MARRIOTT
HANOVER, NEW JERSEY
This Environmental Indemnification Agreement ("Agreement") is executed and
delivered as of the 18th day of August, 1997 by HANOVER MARRIOTT LIMITED
PARTNERSHIP, a Delaware limited partnership ("Borrower"), and by MARRIOTT
HANOVER HOTEL CORPORATION, a Delaware corporation (the foregoing, including
Borrower, are collectively referred to in this Agreement as the "Indemnitors"),
for the benefit of CONNECTICUT GENERAL LIFE INSURANCE COMPANY, a Connecticut
corporation ("Beneficiary").
W I T N E S S E T H:
A. Borrower is the maker of that certain Promissory Note in the original
principal sum of Twenty Nine Million Eight Hundred Seventy Five Thousand and
No/100 Dollars ($29,875,000.00) (the "Note") of even date herewith, in favor of
Beneficiary, as payee, which Note is secured, inter alia, by a Mortgage and
----- ----
Security Agreement (the "Mortgage") on certain real property and improvements
thereon (as more completely defined and described in the Mortgage, the "Real
Property") located in the Township of Hanover, County of ▇▇▇▇▇▇, and State of
New Jersey. The Note, the Mortgage and any other instrument evidencing,
securing or pertaining to the loan by Beneficiary to Borrower (the "Loan") are
collectively referred to in this Agreement as the "Loan Documents".
B. As a condition precedent and prior inducement to the Beneficiary making
the Loan to Borrower, Borrower agreed to provide this Agreement from
Indemnitors.
C. It is to the benefit of each of the Indemnitors that Beneficiary make
the Loan to Borrower.
D. Indemnitors now desire to execute and deliver this Agreement.
NOW, THEREFORE, for the purpose of inducing Beneficiary to make the Loan,
and in consideration of Beneficiary extending the Loan to Borrower and for other
good and lawful consideration, the receipt of which is hereby acknowledged, and
notwithstanding any contrary provision to be included in the Note, the Mortgage,
or any other of the Loan Documents, Indemnitors jointly and severally agree for
the benefit of Beneficiary and any subsequent holder of the Note as follows:
1. Definitions. The following terms shall have the definition set forth:
-----------
"Hazardous Materials" shall mean and include those elements,
materials, compounds, mixtures, wastes or substances (collectively "Substances")
which are designated as pollutant, toxic, infectious, flammable, radioactive or
hazardous or which are contained in any list of hazardous Substances or toxic
pollutants adopted by the United States Environmental Protection Agency (the
"EPA"), the United States Congress or the State of New Jersey, or which are
defined as hazardous, toxic, pollutant, infectious, flammable or radioactive by
any of the Environmental Laws (hereinafter defined) and, whether or not included
in such lists or Environmental Laws, shall be deemed to include all Substances
containing petroleum, petroleum products and derivatives, asbestos, and/or
polychlorinated biphenyls ("PCB's").
"Environmental Laws" shall mean and include any Federal, State, or
local statute, law, ordinance, code, rule, regulation, order, or decree
regulating or relating to protection of human health or the environment
concerning the Disposal (defined hereinbelow) of any Hazardous Materials, or
regulating or imposing liability or standards of conduct concerning the Disposal
of any Hazardous Materials, as now or at any time hereafter in effect including,
without limitation, the Federal Comprehensive Environmental Response,
Compensation and Liability Act, as amended, 42 U.S.C. (S)(S)9601 et seq., the
-- ---
Superfund Amendments and Reauthorization Act, 42 U.S.C. (S)(S)9601 et.
--
seq., the Federal Oil Pollution Act of 1990, 33 U.S.C. (S)(S)2701, et. seq., the
--- -- ---
Federal Toxic Substances Control Act, 15 U.S.C. (S)(S)2601 et. seq., the Federal
-- ---
Resource Conservation and Recovery Act as amended, 42 U.S.C. (S)(S)6901 et.
--
seq., the Federal Hazardous Materials Transportation Act, 49 U.S.C. (S)(S)1801
---
et. seq., the Federal Clean Air Act 42 U.S.C. (S)7401 et. seq., the Federal
-- --- -- ---
Water Pollution Control Act, 33 U.S.C. (S)1251 et. seq., the Rivers and Harbors
-- ---
Act of 1899, 33 U.S.C. (S)(S)401 et. seq., the New Jersey Industrial Site
-- ---
Recovery Act (formerly the Environmental Cleanup Responsibility Act), as
amended, N.J.S.A. 13:1k-6 et seq., the Spill Compensation and Control Act, as
amended, N.J.S.A. 58:10-23.11, et seq., New Jersey Tank Registration Act,
N.J.S.A. 58:10A-21, et seq., and the New Jersey Water Pollution Control Act, as
amended, N.J.S.A. 58:10A-1 et seq., and all laws, statutes, rules, ordinances
and regulations of the EPA or the State of New Jersey, and all rules and
regulations of the EPA, or any other state, federal or local department, board,
or agency, or any other state, federal or local agency or governmental board or
entity having jurisdiction over the Real Property, as any of the foregoing have
been, or are hereafter created, amended, supplemented, re-authorized, superseded
and/or replaced from time to time.
"Borrower" shall mean and include Borrower as defined above, any successors
and assigns, and any subsequent owner of all or any part of or interest in the
Real Property.
"Attorneys' Fees" shall mean and include both the reasonable fees and all
charges and costs incurred by Beneficiary through its retention of outside legal
counsel and paralegals and the reasonably allocable fees and all charges and
costs relating to the Loan for services rendered by Beneficiary's in-house or
staff counsel and paralegals, and shall include without limitation all expert
witness payments and other court costs whether or not incurred in any judicial,
bankruptcy or administrative proceeding.
2. Indemnity. Indemnitors shall jointly and severally protect, indemnify,
---------
defend, and hold harmless Beneficiary and its assigns and their
respective directors, officers, employees and agents and their respective heirs,
legal representatives, successors and assigns, from, against and with respect
to, and shall be responsible for, any and all losses, damages, costs, charges,
liens, debts, fines, penalties, injunctive relief, claims, demands, expenses,
suits, orders, judgments, adjudications, liabilities, or injuries to person,
property or natural resources, including Attorneys' Fees and consultant fees
(any of the foregoing being referred to in this Agreement as a "Claim") arising
out of, attributable to, or which may accrue out of or result from (i) a
violation or alleged violation of the Environmental Laws relating to or
affecting the Real Property by any person or entity or other source whether
related or unrelated to Borrower, or (ii) any past or present or future actual
or alleged presence, release, spill, transportation, migration, generation,
treatment, processing, storage, use or disposal of Hazardous Materials on, in,
under, above or emanating from any portion of the Real
Property by any person or entity or other source, whether intentional or
unintentional, direct or indirect, foreseeable or unforeseeable by any person or
entity or other source, whether related or unrelated to Borrower (all of the
foregoing being herein collectively referred to as a "Disposal"), provided that
such indemnification obligations shall not apply if, and only to the extent
that, (i) any such Disposal or violation of the Environmental Laws is due to any
actions by Beneficiary or its directors, officers, employees or authorized
agents, or (ii) first exists after the earliest to occur of the following: (a)
the date of the repayment of the entire outstanding Indebtedness (as such term
is defined and described in the Mortgage); or (b) the date Beneficiary or
another person or party accepts title to the Real Property through foreclosure
of the Mortgage or, if approved by Beneficiary in advance in writing in its sole
discretion, pursuant to a deed-in-lieu of foreclosure of the Mortgage (such
occurrences described in (a) and (b) in this sentence being herein collectively
referred to as the "Termination Events"). Notwithstanding anything contained in
this Agreement to the contrary, Indemnitors' obligations under this Agreement
shall extend and apply to all events which first occur and all conditions which
first exist up to the date of, but not later than the date of, the earliest to
occur of the Termination Events, and such indemnification obligations shall
survive for a period of three (3) years after the earliest to occur of the
Termination Events, unless, and only to the extent that, any Claims arising from
any events which first occur and all conditions which first exist prior to the
earliest to occur of the Termination Events are noticed or discovered within
such three (3) year period, in which event such noticed or discovered Claim(s)
shall survive beyond such three (3) year period and beyond the full release of
the lien of the Mortgage, or the extinguishment of the lien by foreclosure,
power of sale, or any other action and shall survive the delivery of any deed in
lieu of foreclosure, all to the maximum extent and for the maximum period of
time not prohibited by law.
3. Duty to Defend. Upon written request of Beneficiary, at Beneficiary's
--------------
sole option, Indemnitors shall undertake the defense of Beneficiary, at
Indemnitors' sole cost and expense, with counsel reasonably approved by
Beneficiary, in connection with any obligation set forth in this Agreement for
which Indemnitors have an obligation to protect, indemnify, defend, and hold
harmless Beneficiary. In the event Indemnitors refuse to undertake the defense
of Beneficiary promptly after receiving such request, or fail to diligently,
vigorously and continuously conduct such defense after receiving such request,
Beneficiary may elect to undertake its own defense with counsel of its own
selection, at Indemnitor's sole
expense, without reducing Indemnitors' obligations to protect, indemnify and
hold harmless Beneficiary as provided in this Agreement; the costs incurred by
Beneficiary in undertaking its own defense in such circumstances, including but
not limited to Attorneys' Fees, shall constitute a portion of the
indemnification duties set forth in this Agreement. In addition to the
foregoing, Beneficiary may at any time elect to undertake its own defense with
counsel of its own selection at its own cost and expense without reducing
Indemnitors' obligations to protect, indemnify and hold harmless Beneficiary for
all other obligations under this Agreement.
4. Remedial Work. Indemnitors acknowledge that, pursuant to the
-------------
Mortgage, in the event that any investigation, site monitoring, containment,
clean-up, removal, restoration or other remedial work of any kind or nature (the
"Remedial Work") is required under any applicable local, state or federal law or
regulation, any judicial order, or by any governmental entity or person because
of, or in connection with, any past, present or future Disposal of a Hazardous
Material in or about the air, soil, ground water, surface water or soil vapor
at, on, about, under or within the Real Property (or any portion thereof),
Borrower is required to, within thirty (30) days after written demand for
performance thereof by Beneficiary (or such shorter period of time as may be
required under any applicable law, regulation, order or agreement), commence and
thereafter diligently prosecute to completion, all such required Remedial Work.
Indemnitors shall pay the costs of all consultants and environmental audits and
follow-up reports required to satisfy the terms, conditions and covenants of the
Mortgage and this Agreement. All Remedial Work shall be performed by qualified
contractors approved in advance by Beneficiary, except in emergency situations
where such approval cannot be sought before Remedial Work is actually commenced,
provided that such approval is sought within two (2) Business Days (defined in
Section 10 hereinbelow) of the hiring of such contractors, and under the
supervision of a qualified consulting engineer approved in advance by
Beneficiary, except in emergency situations where such approval cannot by sought
before Remedial Work is actually commenced, provided that such approval is
sought within two (2) Business Days of the hiring of such consulting engineer.
Beneficiary's approval of such contractors and consulting engineer shall not be
unreasonably withheld or delayed. The Mortgage further requires that all costs
and expenses of such Remedial Work shall be paid by Borrower including, without
limitation, Beneficiary's Attorney's Fees incurred in connection with
investigation, monitoring and/or review of such Remedial Work. In the event
Borrower shall fail to timely prosecute to completion such Remedial Work,
Beneficiary may, but shall not be required to, cause such Remedial Work to be
performed, and Indemnitors shall jointly and severally pay pursuant to the
indemnity provided in Section 2 of this Agreement (including the provisions
regarding survival) all such costs and expenses thereof, or incurred in
connection therewith upon demand. Further, Beneficiary may, at its option, add
all such costs and expenses thereof, or incurred in connection therewith, to the
Indebtedness as defined in the Mortgage without affecting the liability of
Indemnitors hereunder.
5. Representations and Warranties of Indemnitors. Except for violations
---------------------------------------------
of the Environmental Laws and/or Disposals of Hazardous Materials specifically
disclosed as such in the environmental reports listed on EXHIBIT A attached
hereto and made a part hereof (collectively herein referred to as the
"Environmental Reports"), true and complete copies of all of which have been
delivered to Beneficiary and Indemnitors, Indemnitors represent and warrant to
Beneficiary as follows:
a. Borrower has not used, and to the best of Indemnitors' knowledge, no
prior owner or current or prior tenant, subtenant, or other occupant of all or
any part of the Real Property has Disposed of or is Disposing of any Hazardous
Materials on, from or affecting the Real Property in any manner that violates
any Environmental Law, and there has been no Disposal of Hazardous Materials on,
in, under, above or emanating from the Real Property by any person or entity or
other source whether related or unrelated to Borrower such that any Remedial
Work is required under any of the Environmental Laws, and Borrower will not
permit any such Disposal or violation of the Environmental Laws to occur or to
continue to exist;
b. Indemnitors have received no notice from any person or entity, public
or private, claiming any violation of any Environmental Law with regard to the
Real Property nor has it received any administrative order or entered into any
administrative consent order with any governmental agency with respect to
Hazardous Materials on or at the Real Property;
c. To the best of Indemnitors' knowledge, the Real Property does not
contain, and has not in the past contained, any asbestos-containing material in
friable form, and there is no current or potential airborne contamination of the
Real Property by asbestos fiber, including, but not limited to, any potential
contamination that would be caused by maintenance or tenant finish activities in
the Real Property; and
d. Indemnitors have each received adequate consideration for the
execution, delivery and performance of obligations under this Agreement, each
Indemnitor acknowledging that Beneficiary's making the Loan to Borrower has
provided substantial benefit to such Indemnitor and the Beneficiary would not
have made the Loan to Borrower had such Indemnitor not executed and delivered
this Agreement to Beneficiary.
6. Performance. The undertakings, liabilities and obligations of
-----------
Indemnitors hereunder shall not be affected, discharged, improved or varied
except by the due and punctual performance of the obligations hereby assumed and
then only to the extent thereof. The rights of Beneficiary hereunder shall not
be limited by any investigation or the scope of any investigation undertaken by
or on behalf of Beneficiary in connection with the Real Property prior to the
date hereof.
7. Gender/Case. As used herein, the masculine gender shall include the
-----------
feminine, and the singular case shall include the plural and the plural the
singular, wherever the same may be applicable.
8. Time of Essence. It is expressly understood and agreed that time is
---------------
of the essence with respect to the intent, purpose, construction and enforcement
of each and every provision of this Agreement.
9. Modifications. This Agreement may not be modified, amended, revised,
-------------
revoked, terminated, changed or varied in any way whatsoever except by the
express terms of a writing signed by the party or parties sought to be bound
thereby.
10. Notices. Any notice, demand, request, statement or consent made
-------
hereunder shall be in writing, signed by the party giving such notice, request,
demand, statement, or consent, and shall be deemed to have been properly given
when either delivered personally, or deposited in the United States Mail,
postage prepaid and certified or registered, return receipt requested, or
delivered to a reputable overnight delivery service providing a receipt, in each
case addressed to the other party as set forth below or to such other address
within the continental United States of America as such party may have
theretofore designated in writing in accordance with the terms of this
provision. The effective date of any notice given as
provided in this Section shall be the date of personal service, or five (5)
Business Days after being deposited in the United States mail, or one (1)
Business Day after delivery to such overnight delivery service, whichever is
applicable. The terms "Business Day" and "Business Days" as used in this
Agreement shall mean any calendar day other than a Saturday, a Sunday or a
Federal holiday on which the U.S. Postal Service offices are closed for business
in one or more of Hanover, New Jersey, Bethesda, Maryland or Hartford,
Connecticut. For purposes hereof, the addresses are as follows:
If to Beneficiary:
Connecticut General Life Insurance Company
c/o CIGNA Investments, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Investment Services, S-319
with a copy to:
CIGNA Corporation
Investment Law Department
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Real Estate Division, S-215A
If to Indemnitor:
Hanover Marriott Limited Partnership
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Treasurer
with a copy to:
Host Marriott Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Law Department
11. Choice of Law. This Agreement has been delivered at Hanover Township,
-------------
▇▇▇▇▇▇ County, New Jersey, and shall be construed in accordance with, and
governed by, the laws of the State of New Jersey.
12. Interpretation. Each provision of this Agreement shall be interpreted
--------------
in such manner as to be effective and valid under applicable law, but if any
provision of this Agreement shall be prohibited by or invalid under such law,
such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
13. Personal Liability. The covenants, agreements, representations,
------------------
warranties, indemnities and obligations of Indemnitors pursuant to this
Agreement shall not be subject to
any liability limitations whether or not contained in any of the Loan Documents,
including without limitation the paragraph entitled "Limitations on Recourse" of
Section 15 of the Note and Section 40 of the Mortgage.
14. Joint and Several Liability. Indemnitors hereby acknowledge and agree
---------------------------
that each and every one of Indemnitors' obligations under this Agreement are and
shall be joint and several and Beneficiary may obtain satisfaction of
Indemnitors' obligations from any one or more of Indemnitors independently,
successively, simultaneously or concurrently.
15. Waiver of Trial by Jury. Indemnitors hereby waive their right to a
-----------------------
trial by jury as to any matter arising out of or concerning the subject matter
of this Agreement.
16. Litigation. In the event of litigation or arbitration arising out of
----------
or concerning the subject matter of this Agreement, the prevailing party shall
be entitled to an award of reasonable attorneys' fees, plus all costs of
collection and enforcement.
17. Availability of Other Remedies. It is understood and agreed by each of
------------------------------
the Indemnitors that (i) any rights and remedies Beneficiary may have under this
Agreement, as well as (ii) any duties and obligations of Indemnitors under this
Agreement are each in addition to and independent of and shall not in any manner
whatsoever supersede, replace, diminish or abrogate any (i) rights and remedies
Beneficiary may at any time have under this or any other documents or agreements
or insurance policies, or as may be generally available at law or in equity, or
(ii) any duties and obligations of any one or more of the Indemnitors under this
Agreement or any other documents or agreements, or as may be generally imposed
by law or in equity.
18. Consent to Jurisdiction. Indemnitors and each of their general
-----------------------
partners irrevocably and unconditionally (a) submit to the jurisdiction and
venue of any state or federal court sitting in the State of New Jersey in any
suit, action or proceeding under, arising out of or relating to this Agreement
or any of the Loan Documents, (b) waive any objection which any of them may now
or hereafter have to the propriety of venue of any such suit, action or
proceeding brought in any such court and any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum,
(c) waive the right to object, with respect to any such suit, action or
proceeding brought in any such
court, that such court does not have jurisdiction over the Indemnitors or any of
their general partners, and (d) consents to the service of process in any such
suit, action or proceeding in any such court by the service of such process to
Indemnitors and their general partners by any means authorized by law or rule of
court at Indemnitors' address set forth in this Agreement for the purpose of
giving notice. Indemnitors and their general partners hereby agree that any
cause of action relating to the their obligations under this Agreement or any
other Loan Documents will arise in New Jersey. Nothing herein shall affect the
right to serve process in any other manner permitted by law or shall limit the
right of the Beneficiary to bring proceedings against Indemnitors and/or their
general partners in any competent court elsewhere having jurisdiction.
[Signatures Appear on Next Page]
IN WITNESS WHEREOF, Indemnitors have executed this Agreement as of the day
and year first above written.
INDEMNITORS:
HANOVER MARRIOTT LIMITED PARTNERSHIP,
a Delaware limited partnership
By: Marriott Hanover Hotel Corporation,
a Delaware corporation,
its sole general partner
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ (SEAL)
------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
AND
MARRIOTT HANOVER HOTEL CORPORATION,
a Delaware corporation
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ (SEAL)
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
EXHIBIT A
---------
TO
--
ENVIRONMENTAL INDEMNIFICATION AGREEMENT
---------------------------------------
For purposes of this Agreement, the term "Environmental Reports" shall mean that
certain Environmental Site Assessment Hanover Marriott ▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, prepared by Environmental Risk Limited, dated July, 1997
(ERL Project No. 06060-58).