EX-10.7






7150\39\726561.3



HAZARDOUS SUBSTANCES
INDEMNITY AGREEMENT 



THIS HAZARDOUS SUBSTANCES INDEMNITY AGREEMENT (this “Agreement”), made jointly and
severally by HRMED, LLC, a Colorado limited liability company (“Borrower”), whose address
is c/o Gibbons-White Incorporated, 2305 Canyon Boulevard, Suite 200, Boulder, Colorado 80302, and
by WILLIAM SCOTT REICHENBERG and NEIL LITTMANN, (collectively “Guarantor”), whose addresses
are c/o Gibbons-White Incorporated, 2305 Canyon Blvd., Suite 200, Boulder, Colorado 80302 (for
William Scott Reichenberg) and c/o The Colorado Group, 3434 47th Street, Suite 220,
Boulder, Colorado 80301 (for Neil Littman) (Borrower and Guarantor sometimes being referred to
herein collectively as “Indemnitors" and individually as “Indenmitor”), in favor of
COLUMN FINANCIAL, INC., a Delaware corporation (“Lender”), whose address is 11 Madison Avenue,
5th Floor, New York, New York 10010, Attn: Edmund Taylor.



WITNESSETH:




WHEREAS, Lender has extended to Borrower a loan (the “Loan”) in the principal amount
of FOUR MILLION NINE HUNDRED SIXTY-EIGHT THOUSAND SEVEN HUNDRED FIFTY AND NO/100 DOLLARS
($4,968,750.00); and



WHEREAS, the Loan is evidenced by a Promissory Note (the “Note”) dated of even date
herewith, executed by Borrower and payable to the order of Lender, in the stated principal amount
of FOUR MILLION NINE HUNDRED SIXTY-EIGHT THOUSAND SEVEN HUNDRED FIFTY AND NO/100 DOLLARS
($4,968,750.00), and is secured by a Deed of Trust and Security Agreement (the “Deed of
Trust”) dated of even date herewith, from Borrower, as grantor, to the Public Trustee in and
for Douglas County, Colorado for the benefit of Lender, as beneficiary, encumbering that certain
real property situated in the County of Douglas, State of Colorado, as is more particularly
described on Exhibit A attached hereto and incorporated herein by this reference, together
with the buildings, structures and other improvements now or hereafter located thereon (said real
property, buildings, structures and other improvements being hereinafter collectively referred to
as the “Property”), and by other documents and instruments (the Note, the Deed of Trust and
such other documents and instruments, as the same may from time to time be amended, consolidated,
renewed or replaced, being collectively referred to herein as the “Loan Documents”); and



WHEREAS, as a condition to making the Loan, Lender has required that Indemnitors indemnify
Lender with respect to hazardous wastes on, in, under or affecting the Property as herein set
forth.



NOW, THEREFORE, to induce Lender to extend the Loan to Borrower and in consideration of the
foregoing premises and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Indemnitors hereby covenant and agree for the benefit of Lender, as
follows:



(1) INDEMNITY. INDEMNITOR COVENANTS AND AGREES, AT INDEMNITOR’S SOLE COST AND
EXPENSE, TO INDEMNIFY, DEFEND (AT TRIAL AND APPELLATE LEVELS, AND WITH ATTORNEYS, CONSULTANTS AND
EXPERTS ACCEPTABLE TO LENDER), AND HOLD LENDER HARMLESS FROM AND AGAINST ANY AND ALL LIENS,
DAMAGES, LOSSES, LIABILITIES, OBLIGATIONS, SETTLEMENT PAYMENTS, PENALTIES, ASSESSMENTS, CITATIONS,
DIRECTIVES, CLAIMS, LITIGATION, DEMANDS, DEFENSES, JUDGMENTS, SUITS, PROCEEDINGS, COSTS,
DISBURSEMENTS AND EXPENSES OF ANY KIND OR OF ANY NATURE WHATSOEVER (INCLUDING, WITHOUT LIMITATION,
REASONABLE ATTORNEYS’, CONSULTANTS’ AND EXPERTS’ FEES AND DISBURSEMENTS ACTUALLY INCURRED IN
INVESTIGATING, DEFENDING, SETTLING OR PROSECUTING ANY CLAIM, LITIGATION OR PROCEEDING)
(COLLECTIVELY “COSTS”) WHICH MAY AT ANY TIME BE IMPOSED UPON, INCURRED BY OR ASSERTED OR
AWARDED AGAINST LENDER OR THE PROPERTY, AND ARISING DIRECTLY OR INDIRECTLY FROM OR OUT OF: (i)
HAZARDOUS SUBSTANCES (AS DEFINED IN THE SECURITY INSTRUMENT) ON, IN, UNDER, AFFECTING OR
THREATENING TO AFFECT ALL OR ANY PORTION OF THE PROPERTY OR, IF RELEASED AT, ON, UNDER OR FROM THE
PROPERTY, ANY SURROUNDING AREAS, REGARDLESS OF WHETHER OR NOT CAUSED BY OR WITHIN THE CONTROL OF
INDEMNITOR;



(ii) THE VIOLATION OF ANY ENVIRONMENTAL LAWS (AS DEFINED IN THE SECURITY INSTRUMENT)
RELATING TO OR AFFECTING THE PROPERTY, WHETHER OR NOT CAUSED BY OR WITHIN THE CONTROL OF
INDEMNITOR;



(iii) THE FAILURE BY INDEMNITORS TO COMPLY FULLY WITH THE TERMS AND CONDITIONS OF
THIS AGREEMENT; (iv) THE BREACH OF ANY REPRESENTATION OR WARRANTY CONTAINED IN THIS AGREEMENT; OR
(v) THE ENFORCEMENT OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, THE REASONABLE COST OF
ASSESSMENT, CONTAINMENT AND/OR REMOVAL OF ANY AND ALL HAZARDOUS SUBSTANCES ON AND/OR FROM ALL OR
ANY PORTION OF THE PROPERTY OR ANY SURROUNDING AREAS, THE REASONABLE COST OF ANY ACTIONS TAKEN IN
RESPONSE TO THE PRESENCE, RELEASE OR THREAT OF RELEASE OF ANY HAZARDOUS SUBSTANCES ON, IN, UNDER
OR AFFECTING ANY PORTION OF THE PROPERTY OR ANY SURROUNDING AREAS TO PREVENT OR MINIMIZE SUCH
RELEASE OR THREAT OF RELEASE SO THAT IT DOES NOT MIGRATE OR OTHERWISE CAUSE OR THREATEN DANGER TO
PRESENT OR FUTURE PUBLIC HEALTH, SAFETY, WELFARE OR THE ENVIRONMENT, AND REASONABLE COSTS INCURRED
TO COMPLY WITH THE ENVIRONMENTAL LAWS IN CONNECTION WITH ALL OR ANY PORTION OF THE PROPERTY OR ANY
SURROUNDING AREAS. AS USED HEREIN, THE TERM “RELEASE” SHALL INCLUDE, WITHOUT LIMIT,
770N,, ANY INTENTIONAL OR UNINTENTIONAL PLACING, SPILLING, BREAKING, PUMPING, POURING
EMITTING, EMPTYING, DISCHARGING, INJECTING, ESCAPING, LEACHING, DISPOSING, DISCARCHING OR
ABANDONING OF ANY HAZARDOUS S OTHER THAN IN THE NORMAL COURSE OF BUSINESS OR ACTIVITIES OF
BORROWER OR BORROWER’S AGENTS, EMPLOYEES OR CONTRACTORS, OR ITS TENANTS, AND IN COMPLIANCE WITH
ALL ENVIRONMENTAL LAWS. “COSTS” AS USED IN THIS AGREEMENT SHALL ALSO INCLUDE ANY
DIMINUTION IN THE VALUE OF THE SECURITY AFFORDED BY THE PROPERTY OR ANY FUTURE REDUCTION OF THE
SALES PRICE OF THE PROPERTY BY REASON OF ANY MATTER SET FORTH IN THIS SECTION 1, AND ANY
AND ALL LIENS, DAMAGES, LOSSES, LIABILITIES, OBLIGATIONS, SETTLEMENT PAYMENTS, PENALTIES,
ASSESSMENTS, CITATIONS, DIRECTIVES, CLAIMS, LITIGATION, DEMANDS, DEFENSES, JUDGMENTS, SUITS,
PROCEEDINGS, COSTS, DISBURSEMENTS OR EXPENSES OF ANY KIND OR OF ANY NATURE WHATSOEVER ARISING OUT
OF OR RELATING TO INJURY OR DEATH DUE TO EXPOSURE FROM HAZARDOUS SUBSTANCES THAT ARE PRESENT OR
RELEASED AT, ON, UNDER OR FROM THE PROPERTY. LENDER’S RIGHTS UNDER THIS SECTION SHALL SURVIVE
PAYMENT IN FULL OF THE INDEBTEDNESS SECURED BY THE SECURITY INSTRUMENT (BUT ONLY AS TO ACTS OR
OMISSIONS OCCURRING PRIOR TO SUCH PAYMENT) AND SHALL BE IN ADDITION TO ALL OTHER RIGHTS OF LENDER
UNDER THIS AGREEMENT, THE SECURITY INSTRUMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS.



THE FOREGOING INDEMNITY SHALL SPECIFICALLY NOT INCLUDE ANY SUCH COSTS RELATING TO HAZARDOUS
SUBSTANCES WHICH ARE INITIALLY PLACED ON, IN OR UNDER THE PROPERTY AFTER FORECLOSURE OR OTHER
TAKING OF TITLE TO THE PROPERTY BY LENDER, AND THIS INDEMNITY SHALL NOT BE APPLICABLE TO SUCH ITEMS
ARISING SOLELY FROM THE GROSS NEGLIGENCE AND WILLFUL MISCONDUCT OF LENDER.




(2) Representations Regarding Hazardous Substances. Indemnitors hereby represent



and warrant to and covenant and agree with Lender, to the best of Indemnitor’s present, actual
knowledge, based solely on the Phase I Environmental Report prepared by ABCO Engineering Corp., and
dated September 25, 2002 as follows:




(a) The Property is in full compliance with all Environmental Laws;




(b) No Hazardous Substances are located on or have been handled,



manufactured, generated, stored, processed, transported to or from, or disposed of on or subjected
to Release or discharged from the Property (including the soil and groundwater beneath the
Property), except for those substances used by Borrower or the tenants of the Property in the
ordinary course of their business and in compliance with all Environmental Laws;




(c) The Property is not subject to any private or governmental lien or
judicial,



administrative or other notice or action relating to Hazardous Substances or noncompliance with
Environmental Laws, nor are any of the Indemnitors aware of any basis for such lien, notice or
action;




(d) There are no underground storage tanks or other underground storage



receptacles (whether active or abandoned) for Hazardous Substances on the Property;




(e) Indemnitors have received no notice of, and to the best of Indemnitors’



present, actual knowledge, there exists no investigation, action, proceeding or claim by any
agency, authority or unit of government or by any third party which could result in any liability,
penalty, sanction or judgment under any Environmental Laws with respect to any condition, use or
operation of the Property, nor do Indenmitors know of any basis for such investigation, action,
proceeding or claim;




(f) Indenmitors have received no notice that, and to the best of Indemnitors’



present, actual knowledge, there has been no claim by any party that, any use, operation or
condition of the Property has caused any nuisance, trespass or any other liability or adverse
condition on any other property, nor do Indenmitors know of any basis for such a claim; and




(g) There are no present environmental conditions or events or, to the best of



Indemnitors’ present, actual knowledge, past environmental conditions or events on or near the
Property that could be reasonably anticipated to materially adversely affect the value of the
Property.




(3) Covenants of Indemnitors.




(a) Indemnitors shall keep or cause the Property to be kept free from



Hazardous Substances (except those substances used by Borrower, its agents, employees and
contractors, and the tenants of the Property in the ordinary course of its business and in
compliance with all Environmental Laws) and in compliance with all Environmental Laws, shall not
install or use any underground storage tanks, shall expressly prohibit the use, generation,
handling, storage, production, processing and disposal of Hazardous Substances by all tenants
(except those substances used by Borrower, its agents, employees and contractors, and tenants in
the ordinary course of their activities and in compliance with all Environmental Laws), and,
without limiting the generality of the foregoing, during the term of this Agreement, shall not
install in the Improvements or permit to be installed in the Improvements asbestos or any
substance containing asbestos. If required by Lender or under any Environmental Law, Indemnitors
shall maintain an Operations and Maintenance Program (“O&M Program”) for the management of
asbestos, lead-based paint, radon or any other Hazardous Substances at the Property.




(b) Indenmitors shall promptly notify Lender should Indenmitors, or either of



them, become aware of (i) any Release (as defined in Paragraph (1) herein) or threatened Release
of Hazardous Substances at, on, under, or from the Property, or other potential environmental
problem or liability, with respect to the Property, (ii) any lien of filing of a lien, action or
notice affecting or otherwise threatening to affect the Property or Borrower resulting from any
violation or alleged violation of the Environmental Laws, (iii) any investigation, inquiry or
proceeding concerning Borrower or the Property pursuant to any Environmental Laws or otherwise
relating to Hazardous Substances, or (iv) any occurrence, condition or state of facts which would
render any representation or warranty contained in this Agreement incorrect in any material
respect if made at the time of such discovery. Further, immediately upon receipt of the same,
Indemnitors shall deliver to Lender copies of any and all orders, notices, permits, applications,
reports, and other communications, documents and instruments pertaining to the actual, alleged or
potential non-compliance with any Environmental Laws in connection with the Property or presence
or existence of any Hazardous Substances at, on, about, under, within, near or in connection with
the Property (except those substances used by Borrower, its agents, employees and contractors, and
tenants in the ordinary course of their business activities and in compliance with all
Environmental Laws). Indenmitors shall, promptly and when and as required, at Indemnities’ sole
cost and expense, take all actions as shall be necessary or advisable for compliance with the
terms of this Agreement or for the remediation of any and all portions of the Property or other
affected property, including, without limitation, all investigative, monitoring, removal,
containment, remedial and response actions in accordance with all applicable Environmental Laws
(and in all events in a manner reasonably satisfactory to Lender), and shall further pay or cause
to be paid, at no expense to Lender, all remediation, response, administrative and enforcement
costs of applicable governmental agencies which may be asserted against the Property. In the event
Indemnities fail to do so, Lender may take or cause to be taken, but shall have no obligation to
take or cause to be taken, steps to remove, contain or remediate any Release (as defined in
paragraph (1) herein) or threatened Release of Hazardous Substances at the Property or other
affected property or otherwise to have the Property brought into conformance with Environmental
Laws, and any reasonable cost incurred in connection therewith shall be included in Costs and
shall be paid by Indemnities in accordance with the terms of Section 4(c) hereof. In
furtherance of the foregoing, Indemnities hereby grant to Lender access to the Property and an
irrevocable license to remove any items deemed by Lender to be Hazardous Substances (except as
expressly permitted herein) and to do all things Lender shall reasonably deem necessary to bring
the Property into conformance with Environmental Laws.



(c) Upon the request of Lender, at any time and from time to time after the



occurrence of a default under this Agreement or the Loan Documents beyond any grace period
applicable to such default or at such other time as Lender has reasonable grounds to believe that
Hazardous Substances are or have been Released (as defined in paragraph (1) herein), stored or
disposed of on or around the Property (except as expressly permitted herein) or that the Property
may be in violation of the Environmental Laws, Indemnities shall provide, at Indemnities’ sole
expense, an environmental site assessment or environmental compliance audit of the Property
prepared by a hydrogeologist or environmental engineer or other appropriate consultant approved by
Lender to determine whether there has been a Release or threatened Release of Hazardous Substances
at, on, under or from the Property onto adjoining Property and if the Property is in full
compliance with Environmental Laws (including asbestos containing materials or lead based paint).
If Indemnities fail to provide such assessment or audit within thirty (30) days after such
request, Lender may order the same, and Indemnities hereby grant to Lender access to the Property
and an irrevocable license to undertake such assessment or audit. The cost of such assessment or
audit shall be included in Costs and shall be paid by Indemnities in accordance with the terms of
Section 4(c) hereof




(4) Indemnification Procedures.




(a) If any action shall be brought against Lender based upon any of the



matters for which Lender is indemnified hereunder, Lender shall notify Indemnities in writing
thereof and Indemnitors shall promptly assume the defense thereof, including, without limitation,
the employment of counsel acceptable to Lender and the negotiation of any settlement; provided,
however, that any failure of Lender to notify Indemnitors of such matter shall not impair or
reduce the obligations of Indemnitors hereunder. Lender shall have the right, at the expense of
Indemnitors (which expense shall be included in Costs), to employ separate counsel in any such
action and to participate in the defense thereof In the event Indemnitors shall fail to discharge
or undertake to defend Lender against any claim, loss or liability for which Lender is indemnified
hereunder, Lender may, at its sole option and election, defend or settle such claim, loss or
liability. The liability of Indemnitors to Lender hereunder shall be conclusively established by
such settlement, provided such settlement is made in good faith, the amount of such liability to
include both the settlement consideration and the reasonable costs and expenses, including, without
limitation reasonable attorneys’ fees and disbursements, incurred by Lender in effecting such
settlement. In such event, such settlement consideration, costs and expenses shall be included in
Costs and Indemnitors shall pay the same as hereinafter provided. Lender’s good faith in any such
settlement shall be conclusively established if the settlement is made on the advice of independent
legal counsel for Lender.




(b) Indemnitors shall not, without the prior written consent of Lender:



(i) settle or compromise any action, suit, proceeding or claim or consent to the entry of any
judgment that does not include as an unconditional term thereof the delivery by the claimant or
plaintiff to Lender of a full and complete written release of Lender (in form, scope and substance
satisfactory to Lender in its sole discretion) from all liability in respect of such action, suit,
proceeding or claim and a dismissal with prejudice of such action, suit, proceeding or claim; or


(ii) settle or compromise any action, suit, proceeding or claim in any manner that may adversely
affect Lender or obligate Lender to pay any sum or perform any obligation as determined by Lender
in its sole discretion.




(c) All Costs shall be immediately reimbursable to Lender when and as



incurred and, in the event of any litigation, claim or other proceeding, without any requirement
of waiting for the ultimate outcome of such litigation, claim or other proceeding, and Indemnitors
shall pay to Lender any and all Costs within thirty (30) days after written notice from Lender
itemizing the amounts thereof incurred to the date of such notice. In addition to any other remedy
available for the failure of Indemnitors to periodically pay such Costs, such Costs, if not paid
within said thirty-day period, shall bear interest at the Default Interest Rate (as defined in the
Note).




(5) Reinstatement of Obligations. If at any time all or any part of any payment made



by Indemnitors or received by Lender from Indemnitors under or with respect to this Agreement is
or must be rescinded or returned for any reason whatsoever (including, but not limited to, the
insolvency, bankruptcy or reorganization of either Indemnitor), then the obligations of
Indemnitors hereunder shall, to the extent of the payment rescinded or returned, be deemed to have
continued in existence, notwithstanding such previous payment made by Indemnitors, or receipt of
payment by Lender, and the obligations of Indemnitors hereunder shall continue to be effective or
be reinstated, as the case may be, as to such payment, all as though such previous payment by
Indemnitors had never been made.




(6) Waivers by Indemnitors. To the extent permitted by law, Indemnitors
hereby



waive and agree not to assert or take advantage of:




(a) Any right to require Lender to proceed against any other person or to



proceed against or exhaust any security held by Lender at any time or to pursue any other remedy
in Lender’s power or under any other agreement before proceeding against Indemnitors hereunder;




(b) Any defense that may arise by reason of the incapacity, lack of authority,



death or disability of any other person or persons or the failure of Lender to file or enforce a
claim against the estate (in administration, bankruptcy or any other proceeding) of any other
person or persons;




(c) Demand, presentment for payment, notice of nonpayment, protest, notice



of protest and all other notices of any kind, or the lack of any thereof, including, without
limiting the generality of the foregoing, notice of the existence, creation or incurring of any
new or additional indebtedness or obligation or of any action or non-action on the part of Lender,
any endorser or creditor of either Indemnitor or any other person whomsoever under this or any
other instrument in connection with any obligation or evidence of indebtedness held by Lender;




(d) Any defense based upon an election of remedies by Lender;




(e) Any right or claim of right to cause a marshalling of the assets of either



Indenmitor;




(f) Any duty on the part of Lender to disclose to Indemnitors any facts Lender



may now or hereafter know about the Property, regardless of whether Lender has reason to believe
that any such facts materially increase the risk beyond that which Indemnitors intend to assume or
has reason to believe that such facts are unknown to Indemnitors or has a reasonable opportunity
to communicate such facts to Indemnitors, it being understood and agreed that Indemnitors are
fully responsible for being and keeping informed of the condition of the Property and of any and
all circumstances bearing on the risk that liability may be incurred by Indemnities hereunder;




(g) Any lack of notice of disposition or of manner of disposition of any



collateral for the Loan;




(h) Any invalidity, irregularity or unenforceability, in whole or in part, of any



one or more of the Loan Documents;




(i) Any deficiencies in the collateral for the Loan or any deficiency in the



ability of Lender to collect or to obtain performance from any persons or entities now or
hereafter liable for the payment and performance of any obligation hereby guaranteed;



An assertion or claim that the automatic stay provided by 11 U.S.C. §362 (arising upon the
voluntary or involuntary bankruptcy proceeding of Borrower) or any other stay



provided under any other debtor relief law (whether statutory, common law, case law or
otherwise) of any jurisdiction whatsoever, now or hereafter in effect, which may be or become
applicable, shall operate or be interpreted to stay, interdict, condition, reduce or inhibit the
ability of Lender to enforce any of its rights, whether now or hereafter required, which Lender may
have against Guarantor or the collateral for the Loan;




(k) Any modifications of the Loan Documents or any obligation of Borrower



relating to the Loan by operation of law or by action of any court, whether pursuant to the
Bankruptcy Reform Act of 1978, as amended, or any other debtor relief law (whether statutory,
common law, case law or otherwise) of any jurisdiction whatsoever, now or hereafter in effect, or
otherwise; and




(1) Any action, occurrence, event or matter consented to by Indemnitors under



	 	 	 
	Section 7(h) hereof, under any other provision hereof, or otherwise.
	 
	(7)
	 	General Provisions.

	 	 	 








(a) Fully Recourse. All of the terms and provisions of this
Agreement are



recourse obligations of Indemnitors and not restricted by any limitation on personal liability.




(b) Unsecured Obligations. Indemnitors hereby acknowledge that
Lender’s



appraisal of the Property is such that Lender is not willing to accept the consequences of the
inclusion of Indemnitors’ indemnity set forth herein among the obligations secured by the Deed of
Trust and the other Loan Documents and that Lender would not make the Loan but for the unsecured
personal liability undertaken by Indemnitors herein. Indemnitors further hereby acknowledge that
even though the representations, warranties, covenants or agreements of Indemnitors contained
herein may be identical or substantially similar to representations, warranties, covenants or
agreements of Borrower set forth in the Deed of Trust and secured thereby, the obligations of
Indemnitors under this Agreement are not secured by the lien of the Deed of Trust or the security
interests or other collateral described in the Deed of Trust or the other Loan Documents, it being
the intent of Lender to create separate obligations of Indemnitors hereunder which can be enforced
against Indemnitors without regard to the existence of the Deed of Trust or other Loan Documents
or the liens or security interests created therein.




(c) Survival. This Agreement shall be deemed to be continuing in
nature and



shall remain in full force and effect and shall survive the payment of the indebtedness evidenced
and secured by the Loan Documents and the exercise of any remedy by Lender under the Deed of Trust
or any of the other Loan Documents, including, without limitation, any foreclosure or deed in lieu
thereof, even if, as a part of such remedy, the Loan is paid or satisfied in full, but only as to
acts or omissions occurring prior to the payment of the indebtedness or exercise of Lender’s
remedies.




(d) No Subrogation; No Recourse Against Lender. Notwithstanding the



satisfaction by Guarantor of any liability hereunder, Guarantor shall not have any right of
subrogation, contribution, reimbursement or indemnity whatsoever or any right of recourse to or
with respect to the assets or property of Borrower or to any collateral for the Loan. In



connection with the foregoing, Guarantor expressly waives any and all rights of subrogation
to Lender against Borrower, and Guarantor hereby waives any rights to enforce any remedy which
Lender may have against Borrower and any right to participate in any collateral for the Loan. In
addition to and without in any way limiting the foregoing, Guarantor hereby subordinates any and
all indebtedness of Borrower now or hereafter owed to Guarantor to all indebtedness of Borrower to
Lender, and agrees with Lender that Guarantor shall not demand or accept any payment of principal
or interest from Borrower, shall not claim any offset or other reduction of Guarantor’s
obligations hereunder because of any such indebtedness and shall not take any action to obtain any
of the collateral from the Loan. Further, neither Indemnitor shall have any right of recourse
against Lender by reason of any action Lender may take or omit to take under the provisions of
this Agreement or under the provisions of any of the Loan Documents, except for Lender’s gross
negligence or willful misconduct.




(e) Reservation of Rights. Nothing contained in this Agreement shall
prevent



or in any way diminish or interfere with any rights or remedies, including, without limitation,
the right to contribution, which Lender may have against either Indemnitor or any other party
under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (codified
at Title 42 U.S.C. §9601 et seq.), as it may be amended from time to time, or any other applicable
federal, state or local laws, all such rights being hereby expressly reserved.




(f) Financial Statements. Each Indemnitor hereby agrees, as a
material



inducement to Lender to make the Loan to Borrower, to furnish to Lender promptly upon demand by
Lender (but not more than once during any 12 month period, unless Borrower or any Indemnitor
defaults at any time under the Loan Documents) current and dated financial statements, certified
by or on behalf of each Indemnitor, detailing the assets and liabilities of said Indemnitor, in
form and substance acceptable to Lender. Each Indemnitor hereby warrants and represents unto
Lender that any and all balance sheets, net worth statements and other financial data which have
heretofore been given or may hereafter be given to Lender with respect to said Indemnitor did or
will at the time of such delivery fairly and accurately present the financial condition of said
Indemnitor.




(g) Rights Cumulative; Payments. Lender’s rights under this Agreement
shall



be in addition to all rights of Lender under the Note, the Deed of Trust and the other Loan
Documents. FURTHER, PAYMENTS MADE BY INDEMNITORS UNDER THIS AGREEMENT SHALL NOT REDUCE IN ANY
RESPECT BORROWER’S OBLIGATIONS AND LIABILITIES UNDER THE NOTE, THE DEED OF TRUST AND THE OTHER
LOAN DOCUMENTS.




(h) No Limitation on Liability. Indemnitors hereby consent and agree
that



Lender may at any time and from time to time without further consent from Indemnitors do any of
the following events, and the liability of Indemnitors under this Agreement shall be unconditional
and absolute and shall in no way be impaired or limited by any of the following events, whether
occurring with or without notice to Indemnitors or with or without consideration: (i) any
extensions of time for performance required by any of the Loan Documents or extension or renewal
of the Note; (ii) any sale, assignment or foreclosure of the Note, the Deed of Trust or any of the
other Loan Documents or any sale or transfer of the Property; (iii) any change in the



composition of Borrower, including, without limitation, the withdrawal or removal of
Indemnities from any current or future position of ownership, management or control of
Borrower; (iv) the accuracy or inaccuracy of the representations and warranties made by
Indemnitors herein or by Borrower in any of the Loan Documents; (v) the release of Borrower or
of any other person or entity from performance or observance of any of the agreements,
covenants, terms or conditions contained in any of the Loan Documents by operation of law,
Lender’s voluntary act or otherwise; (vi) the release or substitution in whole or in part of
any security for the Loan; (vii) Lender’s failure to record the Deed of Trust or to file any
financing statement (or Lender’s improper recording or filing thereof) or to otherwise
perfect, protect, secure or insure any lien or security interest given as security for the
Loan; (viii) the modification of the teens of any one or more of the Loan Documents; or (ix)
the taking or failure to take any action of any type whatsoever. No such action which Lender
shall take or fail to take in connection with the Loan Documents or any collateral for the
Loan, nor any course of dealing with Borrower or any other person, shall limit, impair or
release Indemnitors’ obligations hereunder, affect this Agreement in any way or afford
Indemnities any recourse against Lender, except for such actions which arise from the gross
negligence or willful misconduct of Lender. Nothing contained in this Section shall be
construed to require Lender to take or refrain from taking any action referred to herein.



(i) Entire Agreement; Amendment; Severability. This Agreement contains



the entire agreement between the parties respecting the matters herein set forth and supersedes


(except as to the Deed of Trust) all prior agreements, whether written or oral, between the
parties


respecting such matters. Any amendments or modifications hereto, in order to be effective, shall



be in writing and executed by the parties hereto. A determination that any provision of
this Agreement is unenforceable or invalid shall not affect the enforceability or validity of
any other provision, and any determination that the application of any provision of this
Agreement to any person or circumstance is illegal or unenforceable shall not affect the
enforceability or validity of such provision as it may apply to any other persons or
circumstances.



(j) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF COLORADO, EXCEPT TO THE EXTENT THAT THE APPLICABILITY
OF ANY OF SUCH LAWS MAY NOW OR HEREAFTER BE PREEMPTED BY FEDERAL LAW, IN WHICH CASE SUCH
FEDERAL LAW SHALL SO GOVERN AND BE CONTROLLING.




(k) Binding Effect; Waiver of Acceptance. This Agreement shall bind each



Indemnitor and the heirs, personal representatives, successors and assigns of each Indemnitor
and shall inure to the benefit of Lender and the officers, directors, shareholders, agents and
employees of Lender and their respective heirs, successors and assigns. Notwithstanding the
foregoing, Indemnitors shall not assign any of their respective rights or obligations under
this Agreement without the prior written consent of Lender, which consent may be withheld by
Lender in its sole discretion. Each Indemnitor hereby waives any acceptance of this Agreement
by Lender, and this Agreement shall immediately be binding upon Indemnitors.




(1) Notice. All notices, demands, requests or other
communications to be sent



by one party to the other hereunder or required by law shall be given and become effective as
provided in the Security Instrument, provided that the address of Indemnitor shall be as follows:



	 	 	 
	c/o Gibbons-White Incorporated

2305 Canyon Boulevard, Suite 200

Boulder, CO 80302

(for Borrower and W. Scott Reichenberg)

	 	c/o The Colorado Group 3434

47th Street, Suite 220

Boulder, CO 80301

(for Neil Littmann)






(m) No Waiver; Time of Essence; Business Days. The failure of any party
hereto to enforce any right or remedy hereunder, or to promptly enforce any such right or remedy,
shall not constitute a waiver thereof nor give rise to any estoppel against such party nor excuse
any of the parties hereto from their respective obligations hereunder. Any waiver of such right or
remedy must be in writing and signed by the party to be bound. This Agreement is subject to
enforcement at law or in equity, including actions for damages or specific performance. Time is of
the essence hereof. The term “business day” as used herein shall mean a weekday, Monday through
Friday, except a legal holiday or a day on which banking institutions in New York, New York are
authorized by law to be closed.



(n) Captions for Convenience. The captions and headings of the sections and



paragraphs of this Agreement are for convenience of reference only and shall not be construed in
interpreting the provisions hereof.




(o) Attorneys’ Fees. In the event it is necessary for Lender to
retain the



services of an attorney or any other consultants in order to enforce this Agreement, or any
portion thereof, Indemnitors agree to pay to Lender any and all reasonable costs and expenses,
including, without limitation, reasonable attorneys’ fees, incurred by Lender as a result thereof
and such costs, fees and expenses shall be included in Costs.




(p) Successive Actions. A separate right of action hereunder shall
arise each



time Lender acquires knowledge of any matter indemnified by Indemnitors under this Agreement.
Separate and successive actions may be brought hereunder to enforce any of the provisions hereof
at any time and from time to time. No action hereunder shall preclude any subsequent action, and
Indemnitors hereby waive and covenant not to assert any defense in the nature of splitting of
causes of action or merger of judgments.




(q) Joint and Several Liability. Notwithstanding anything to the
contrary



contained herein, the representations, warranties, covenants and agreements made by Indemnitors
herein, and the liability of Indemnitors hereunder, is joint and several both with respect to each
other and with respect to any other indemnitors or obligors relative to the Loan or the Costs.




(r) Reliance. Lender would not make the Loan to Borrower without this



Agreement. Accordingly, Indemnitors intentionally and unconditionally enter into the covenants and
agreements as set forth above and understand that, in reliance upon and in consideration of such
covenants and agreements, the Loan shall be made and, as part and parcel thereof, specific



monetary and other obligations have been, are being and shall be entered into which would
not be made or entered into but for such reliance.



(s) Counterparts. This Agreement may be executed in any number of



counterparts, each of which shall be effective only upon delivery and thereafter shall be deemed
an original, and all of which shall be taken to be one and the same instrument, for the same
effect as if all parties hereto had signed the same signature page. Any signature page of this
Agreement may be detached from any counterpart of this Agreement without impairing the legal
effect of any signatures thereon and may be attached to another counterpart of this Agreement
identical in form hereto but having attached to it one or more additional signature pages.



(t) SUBMISSION TO JURISDICTION. INDEMNITORS, TO THE FULL EXTENT
PERMITTED BY LAW, HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF
COMPETENT COUNSEL, (A) SUBMIT TO PERSONAL JURISDICTION IN THE STATE OF COLORADO OVER ANY SUIT,
ACTION OR PROCEEDING BY ANY PERSON ARISING FROM OR RELATING TO THIS AGREEMENT, (B) AGREE THAT ANY
SUCH ACTION, SUIT OR PROCEEDING MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION PRESIDING OVER DOUGLAS COUNTY, COLORADO, (C) SUBMIT TO THE JURISDICTION OF SUCH
COURTS, AND (D) TO THE FULLEST EXTENT PERMITTED BY LAW, AGREE THAT NEITHER OF THEM WILL BRING ANY
ACTION, SUIT OR PROCEEDING IN ANY OTHER FORUM (BUT NOTHING HEREIN SHALL AFFECT THE RIGHT OF LENDER
TO BRING ANY ACTION, SUIT OR PROCEEDING IN ANY OTHER FORUM). TO THE EXTENT PERMITTED UNDER
APPLICABLE LAW, INDEMNITORS FURTHER CONSENT AND AGREE TO SERVICE OF ANY SUMMONS, CITATION,
COMPLAINT OR OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY REGISTERED OR CERTIFIED
U.S. MAIL, RETURN RECEIPT REQUESTED, POSTAGE PREPAID, TO THE INDEMNITORS AT THE ADDRESS FOR
NOTICES DESCRIBED IN SECTION 7(1) HEREOF, AND CONSENTS AND AGREES THAT SUCH SERVICE SHALL
CONSTITUTE IN EVERY RESPECT VALID AND EFFECTIVE SERVICE (BUT NOTHING HEREIN SHALL AFFECT THE
VALIDITY OR EFFECTIVENESS OF PROCESS SERVED IN ANY OTHER MANNER PERMITTED BY LAW).




(u) Waiver by Indemnitors. Borrower and Guarantor covenant
and agree that



upon the commencement of a voluntary or involuntary bankruptcy proceeding by or against Borrower,
neither Borrower nor Guarantor shall seek a supplemental stay or otherwise seek, pursuant to 11
U.S.C. §105 or any other provision of the Bankruptcy Reform Act of 1978, as amended, or any other
debtor relief law (whether statutory, common law, case law, or otherwise) of any jurisdiction
whatsoever, now or hereafter in effect, which may be or become applicable, to stay, interdict,
condition, reduce or inhibit the ability of Lender to enforce any rights of Lender against
Guarantor by virtue of this Agreement or otherwise.



(v) WAIVER OF JURY TRIAL. INDEMNITORS, TO THE FULL EXTENT PERMITTED
BY LAW, HEREBY KNOWINGLY, INTENTIONALLY AND



VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, WAIVE, RELINQUISH AND FOREVER
FORGO THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN
ANY WAY RELATING TO THIS AGREEMENT OR ANY CONDUCT, ACT OR OMISSION OF LENDER OR INDEMNITORS, OR
ANY OF THEIR DIRECTORS, OFFICERS, PARTNERS, MEMBERS, EMPLOYEES, AGENTS OR ATTORNEYS, OR ANY OTHER
PERSONS AFFILIATED WITH LENDER OR INDEMNITORS IN CONNECTION WITH THE LOAN, IN EACH OF THE
FOREGOING CASES, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.



IN WITNESS WHEREOF, Indemnitors have executed this Agreement to be effective as of October
18, 2002.



BORROWER:



HRMED, LLC, a Colorado limited liability company



By: Neil Littmann

Name: Neil Littmann

Title: Manager





GUARANTORS:

/s/ William Scott Reichenberg

William Scott Reichenberg



/s/ Neil Littmann


Neil Littmann



	 	 	 
	STATE OF COLORADO

COUNTY OF BOULDER

	 	§

§

§






This instrument was acknowledged before me on this 17th day of October, 2002, by Neil
Littmann, as Manager of HRMED, LLC, a Colorado limited liability company on behalf of said company.



Given under my hand and seal of office the day and year last above written.



/s/ Kenneth Diamond


Kenneth Diamond


My Commission Expires: May 18, 2005



	 	 	 
	STATE OF COLORADO

COUNTY OF BOULDER

	 	§

§

§






This instrument was acknowledged before me on this 17th day of October, 2002, by Neil
Littmann.



Given under my hand and seal of office the day and year last above written.



	 	 	 
	/s/ Kenneth Diamond

Kenneth Diamond

	 	



	My Commission Expires: May 18, 2005

	STATE OF COLORADO

COUNTY OF BOULDER

	 	§

§

§






This instrument was acknowledged before me on this 17th day of October, 2002, by William
Scott Reichenberg.



Given under my hand and seal of office the day and year last above written.



/s/ Kenneth Diamond


Kenneth Diamond


My Commission Expires: May 18, 2005