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Exhibit 10.3
ENVIRONMENTAL INDEMNITY AGREEMENT
This
Environmental Indemnity Agreement (" Environmental
Indemnity " or " Agreement ") is
given in connection with the extension of a term loan (the "
Loan
") by WACHOVIA
BANK,
a national association having an office at 5 Research Drive,
Shelton, Connecticut 06484 (the " Bank "), to
SONOMAWEST
HOLDINGS INC. , a Delaware corporation,
having an address at 2064 Highway 116 North, Sebastopol,
California 95472 ( the "Borrower" or
“Indemnitor”) , which Loan is made pursuant
to the terms and conditions of, and is evidenced by, a certain
Promissory Note in the original principal amount of Two
Million Five Hundred Thousand and 00/100 Dollars
($2,500,000.00) payable by the Borrower to the order of the
Bank dated of even date herewith (the "Note"
).
A. The
term "Bank" shall mean
Wachovia Bank and its successors and assigns.
B. The
term " Collateral " shall
mean any and all real, personal, tangible and intangible
property, now existing or hereafter acquired or arising, that
secures the Obligations of the Indemnitors under the Note and
the other Loan Documents.
C. The
term "Environmental
Enforcement Action" shall mean all actions, orders,
requirements or liens instituted, threatened, required,
completed, imposed or placed by any governmental authority
and all claims made or threatened by any other person against
or with respect to the Property or the Surrounding Property,
or any present or past owner or occupant thereof, arising out
of or in connection with any of the Environmental Legal
Requirements, any environmental condition, or the assessment,
monitoring, clean-up, containment, remediation or removal of,
or damages caused or alleged to be caused by, any Hazardous
Materials (i) located on or under the Property or the
Surrounding Property, (ii) emanating from the Property or the
Surrounding Property, or (iii) generated, stored,
transported, utilized, disposed, managed, or released by any
Indemnitor (whether or not on, under or from the Property or
the Surrounding Property).
D. The
term "Environmental Legal
Requirements" shall mean all past (which have current
effect), present or future federal, state, county and local
laws, by-laws, rules, regulations, codes and ordinances, or
any judicial or administrative interpretations thereof, and
the requirements of any governmental agency or authority
having or claiming jurisdiction with respect thereto,
applicable to the regulation or protection of the environment,
the health and safety of persons and property and all other
environmental and ecological matters and shall include, but
not be limited to, all orders, decrees, judgments and rulings
imposed through any public enforcement proceedings, relating
to Hazardous Materials or the existence, use, discharge,
release, containment, transportation, generation, storage,
management or disposal thereof, or otherwise regulating or
providing for the protection of the environment applicable to
the Property and relating to Hazardous Materials, or to the
existence, use, discharge, release or disposal
thereof. Environmental Legal Requirements presently
include, but are not limited to, the following
laws: Comprehensive Environmental Response
Compensation and Liability Act (42 U.S.C. § 9601
et
seq .),
the Hazardous Materials Transportation Act (49 U.S.C.
§ 1801 et
seq .),
the Public Health Service Act (42 U.S.C. § 300(f)
et
seq .),
the Pollution Prevention Act (42 U.S.C. § 13101
et
seq .),
the Federal Insecticide, Fungicide and Rodenticide Act (7
U.S.C. § 136 et
seq .),
the Resource Conservation and Recovery Act (42 U.S.C.
§ 6901 et
seq. ),
the Federal Clean Water Act (33 U.S.C. § 1251
et
seq .),
the Federal Clean Air Act (42 U.S.C. § 7401
et
seq .)
and the applicable laws of the State of
California.
E. The
term "Environmental
Reports" shall mean the reports, if any, most recently
delivered to the Bank.
F. The
term "Hazardous
Materials" shall mean and include asbestos in any form,
flammable materials, explosives, radioactive or nuclear
substances, polychlorinated biphenyls, other known or
suspected carcinogens, oil and other petroleum products, radon
gas, urea formaldehyde, chemicals, gases, solvents,
pollutants, pesticides or contaminants in quantities that
could be a detriment or pose a present or potential danger to
the environment or to the health or safety of any person, and
any other hazardous or toxic materials, hazardous or solid
wastes or substances which are defined, determined or
identified as such in any Environmental Legal
Requirements.
G. The
term "Indemnified
Party" shall mean: (i) the Bank; (ii) all
those claiming by, through or under the Bank, including any
subsequent holder of the Loan and any present or future owner
of a participation interest therein; (iii) any subsequent
owner or tenant of all or any portion of the Property
following the exercise by the Bank of its rights under the
Mortgage, the Note or any other Loan Document including, but
not limited to, a foreclosure sale or deed in lieu thereof;
and (iv) as to each of the foregoing, their respective
affiliate, parent and subsidiary corporations, and, as
applicable, the respective officers, directors, stockholders,
agents, employees, accountants and attorneys of any one or
more of them, and any person, firm or entity which controls,
is controlled by, controlling, or under common control with,
any one or more of them.
H. The
term "Loan
Documents " shall mean this Agreement, the Note, the
Mortgage and all other instruments, documents and agreements
evidencing, securing or related to or executed in connection
with the Loan.
I. The
term "Mortgage" shall
mean that certain Deed of Trust, Assignment of Rents, Security
Agreement and Fixture Filing dated of even date herewith
granted by the Borrower to the Bank to secure the Obligations
of the Borrower under the Loan, as the same may be amended and
supplemented from time to time, relating to the
Property.
J. The
term “Obligations"
shall mean all obligations and liabilities of every kind and
nature of the Indemnitors under the Note, the Mortgage and all
other Loan Documents whether now existing or hereafter
arising.
K. The
term "Property" shall
mean the property owned by the Borrower located at 2064
Highway 116 North, Sebastopol, California, as more
particularly set forth in the Mortgage and any other real
property in which the Bank now or hereafter receives a
mortgage in connection with the Loan or any of the other
Obligations.
O. The
term "Surrounding
Property" shall mean any property contiguous to the
perimeter of the Property.
P. The
terms "generated," "stored," "transported," "utilized,"
"disposed," "managed," “released,” and "threat of
release," and all conjugates thereof, shall have the meanings
and definitions set forth in the Environmental Legal
Requirements.
FOR VALUE RECEIVED , and to induce the Bank to make the Loan
and otherwise extend credit to the Borrower as provided for in the
Loan Documents, the Indemnitors hereby jointly and severally and
unconditionally agree as follows:
1.
Compliance with
Environmental Legal Requirements .
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1 .
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Compliance . Until
such time as the Obligations have been paid in full, each
Indemnitor guaranties and agrees that it shall comply in all
material respects with all Environmental Legal Requirements,
including, but not limited to, Environmental Legal Requirements
applicable to the Property, and that it shall take all remedial
action necessary to avoid any liability of the Indemnitors, the
Bank, or any subsequent owner of the Property, and to avoid the
imposition of, or to discharge, any liens on the Property, as a
result of any failure to comply with Environmental Legal
Requirements applicable to the Property.
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1 .
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Prohibitions . Without
limiting the generality of the foregoing, each Indemnitor agrees
that it shall not:
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(a)
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except
in material compliance with all Environmental Legal Requirements,
release or permit any release or threat of release of any Hazardous
Materials on the Property;
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(b)
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other
than in the ordinary course of its business and in material
compliance with all Environmental Legal Requirements, generate or
permit any Hazardous Materials to be generated on the
Property;
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(c)
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except
in material compliance with all Environmental Legal Requirements,
store or utilize, or permit any Hazardous Materials to be stored or
utilized on the Property;
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(d)
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other
than in the ordinary course of business and in material compliance
with all Environmental Legal Requirements, dispose of or permit any
Hazardous Materials to be disposed of on the Property;
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(e)
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fail
to operate, maintain, repair and use the Property in all material
respects in accordance with the Environmental Legal Requirements;
or
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(f)
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allow,
permit or suffer any other person or entity to operate, maintain,
repair and use the Property except in accordance in all material
respects with the Environmental Legal Requirements.
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2 .
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Remedial Actions . Upon any
Indemnitor becoming aware of the violation of any Environmental
Legal Requirement related to the Property, or the presence, or any
release or any threat of release, of any Hazardous Materials on,
under, or from the P
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