Hazardous Materials Indemnity Agreement

Loan No. 30-0540284


HAZARDOUS MATERIALS INDEMNITY AGREEMENT
(Unsecured)


THIS HAZARDOUS MATERIALS INDEMNITY AGREEMENT (this "Indemnity") is given on January 7, 1998 by ARDEN REALTY LIMITED PARTNERSHIP, a Maryland limited partnership ("Indemnitor") to LASALLE NATIONAL BANK, AS TRUSTEE for Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through Certificates, Series 1996-WF1 ("Lender"), on the basis of the following facts and understandings:


RECITALS


A. Wells Fargo Bank, National Association ("Wells Fargo") has heretofore made a loan to Activity Business Associates, LLC, a California limited liability company ("ABA") in the principal sum of EIGHT MILLION FOUR HUNDRED THOUSAND AND NO/100 DOLLARS ($8,400,000.00) (the "Loan").


B. The Loan is evidenced by that certain Promissory Note Secured by Deed of Trust dated April 30, 1996 (the "Note"), made by ABA to the order of Wells Fargo in the principal amount of the Loan and is secured by, among other things, that certain Deed of Trust and Absolute Assignment of Rents and Leases and Security Agreement (and Fixture Filing) dated as of April 30, 1996, made by ABA for the benefit of Wells Fargo (the "Deed of Trust"; and the Note, the Deed of Trust and any and all other documents and instruments executed in connection with the making of the Loan are herein referred to collectively as the "Original Loan Documents") and encumbering the real property described in Exhibit A attached hereto and incorporated herein by this reference (the "Property").


C. On or about October 30, 1996, Wells Fargo transferred and assigned to Lender all of Wells Fargo's right, title and interest in, to and under the Loan and the Original Loan Documents, and Lender is now the owner and holder of the Loan and the Original Loan Documents.


D. ABA and ACTIVITY BUSINESS CENTER, L.P., a Delaware limited partnership ("Borrower") have requested Lender to consent to (i) a transfer, conveyance and sale of the Property from ABA to Borrower, and (ii) an assumption by Borrower of the Loan and the obligations of ABA under the Original Loan Documents.


E. Indemnitor is a limited partner of Borrower, and has a direct financial interest in the Property and will benefit from Lender consenting to Borrower's acquisition of the Property and assumption of the Loan and the obligations of ABA under the Original Loan Documents.


F. Lender is willing to consent to Borrower's acquisition of the Property and assumption of the Loan and the obligations of ABA under the Original Loan Documents only on the condition, among others, that Indemnitor defend, indemnify and hold harmless Lender from and against any and all claims, loss,


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damage, cost, expense or liability arising out of the presence of "Hazardous Materials" (as defined below) on the Property.


G. Contemporaneously with the execution and delivery of this Indemnity, Lender, ABA, Borrower, Indemnitor and certain other parties have entered into that certain Assumption Agreement of even date herewith (the "Assumption Agreement"), pursuant to which, among other things, (i) Borrower has agreed to assume and has assumed and has covenanted and agreed to timely perform all of the payment and performance obligations of ABA set forth in the Note, the Deed of Trust and the other Original Loan Documents, and (ii) Lender has consented to Borrower's acquisition of the Property and assumption of the Loan, all on and subject to the terms and conditions set forth in the Assumption Agreement and the other "Assumption Documents" (as defined in the Assumption Agreement; this Indemnity constituting one of the Assumption Documents; and the Original Loan Documents, the Assumption Agreement and the other Assumption Documents are referred to herein collectively as the "Loan Documents").


H. Since the presence of "Hazardous Materials" on the Property may reduce the value of the Property to an extent that is unforeseeable and indeterminable and may, in fact, cause the value of the Property to be substantially less than the claims against Lender or the liabilities associated with ownership of such Property, Lender also is willing to consent to Borrower's acquisition of the Property and assumption of the Loan and the obligations of ABA under the Loan Documents only on the condition that Indemnitor's indemnity with respect to hazardous materials be and remain an unsecured personal obligation of Indemnitor.


I. Notwithstanding that this Indemnity is collectively included in the term "Loan Documents" as used herein, this Indemnity is not one of the "Loan Documents" as defined in the Note and therefore is not secured by any of the documents and instruments securing the Note.


NOW, THEREFORE, in consideration of Lender contemporaneously herewith consenting to Borrower's acquisition of the Property and assumption of the obligations of ABA under the Original Loan Documents, and for other good, valuable and adequate consideration, receipt of which is hereby acknowledged, Indemnitor agrees as follows:


1. Indemnity. Indemnitor shall defend, indemnify and hold harmless Lender, any corporation controlled by Lender, and each of their respective directors, officers, employees, agents, successors and assigns (including, without limitation, any participants in the Loan) from and against any claim, loss, damage, cost, expense or liability directly or indirectly arising out of (i) the use, generation, manufacture, storage, treatment, release, threatened release, discharge, disposal, transportation or presence of any oil, flammable explosives, asbestos, urea formaldehyde insulation, radioactive materials, hazardous wastes, toxic or contaminated substances or similar materials (collectively "Hazardous Materials"), including, without limitation, any substances which are "hazardous substances", "hazardous wastes", "hazardous materials" or "toxic substances" under any present or future state or federal law, ordinance or regulation, which are found in, on, under or about the Property; or (ii) the breach of any covenant (or representation and warranty) of Indemnitor under this Agreement. Such indemnity shall include, without limitation:


(a) the costs, whether foreseeable or unforeseeable, of any repair,
cleanup or detoxification of the Property which is required by any
governmental entity or is otherwise necessary to render the Property
in compliance with all laws and regulations pertaining to Hazardous
Materials;


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(b) all other direct or indirect consequential damages (including,
without limitation, any third party tort claim or governmental
claims, fines or penalties against Lender, any corporation
controlled by Lender, or any of their respective directors,
officers, employees, agents, successors or assigns); and


(c) all court costs and attorney's fees paid or incurred by Lender, any
corporation controlled by Lender, or any of their respective
directors, officers, employees, agents successors or assigns.


3. Term. The term of the indemnity provided for herein will commence on the date hereof and continue until such time as no legal action can be successfully brought against Lender due to applicable statutes of limitation. Without in any way limiting the above, it is expressly understood ...