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EXHIBIT 10(k)(7)(c)
ENVIRONMENTAL INDEMNIFICATION AGREEMENT
FROM
XXXXX EQUITY, INC.
TO
FIRST UNION NATIONAL BANK, AS AGENT
DATED AS OF DECEMBER 30, 1998
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ENVIRONMENTAL INDEMNIFICATION AGREEMENT
THIS ENVIRONMENTAL INDEMNIFICATION AGREEMENT (this "Agreement") is made
and executed as of this 30th day of December, 1998, from
XXXXX EQUITY, INC., a Florida corporation ("Borrower"), whose address is 0000
Xxxxxxx Xxxxxxxx Xxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000 Attention: X.X. Xxxxxx,
President,
to and in favor of
FIRST UNION NATIONAL BANK, a national association, as Agent ("FUNB"), for the
Lenders (as such term is defined in the Loan Agreement, as hereinafter defined)
(FUNB and such Lenders are collectively referred to herein as the "Lenders"),
whose address is 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: First Union Capital Markets Group, which terms Borrower and Lenders,
whenever hereinafter used will be construed to refer to and include the heirs,
legal representatives, executors, administrators, successors and assigns of said
parties.
R E C I T A L S :
A. Borrower has obtained financing from Lenders pursuant to that
certain Second Amended and Restated Revolving Credit Loan Agreement dated as of
even date herewith (hereinafter, together with any and all extensions, renewals,
modifications, replacements and substitutions thereof, referred to as the "Loan
Agreement") and those certain Substitution Revolving Promissory Notes and
Revolving Promissory Notes dated as of even date herewith (hereinafter, together
with any and all extensions, renewals, modifications, replacements and
substitutions thereof, referred to as the "Loan").
B. Borrower's obligations under the Loan are secured in part by a
Deed of Trust, Assignment of Leases and Rents and Security Agreement in favor of
Lenders (the "Deed of Trust") encumbering real property located in Bexar County,
Texas, and being more particularly described on attached Exhibit A (the
"Property").
C. As a condition precedent to and as a material inducement for
Lenders' agreement to provide the Loan to Borrower, Lenders have required
Borrower to execute and deliver this Agreement, it being acknowledged and
understood by Borrower that Lenders otherwise are not willing to make or provide
the Loan.
D. Borrower has obtained a Phase I Environmental Site Assessment
dated May 14, 1997, prepared by Law Engineering for each of the Atrium Building
and the Pacific Plaza Building (collectively, the "Environmental Assessment"),
and has delivered a copy
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of the same to Lenders. Lenders intend to rely on the Environmental Assessment
in making the Loan.
NOW, THEREFORE, for and in consideration of Ten and No/100 Dollars
($10.00) and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, and as a material inducement to Lenders to make
or provide the Loan to Borrower, Borrower hereby covenants and agrees with
Lenders as follows:
1. Definitions. The following terms as used in this Agreement
will have the meanings set forth below:
(a) "Hazardous Substances" will mean any hazardous or toxic
substances, materials or wastes, including without limitation any flammable
explosives, radioactive materials, friable asbestos, kepone, polychlorinated
biphenyls (PCB's), electrical transformers, batteries, paints, solvents,
chemicals, petroleum products, or other man-made materials with hazardous,
carcinogenic or toxic characteristics, and such other solid, semi-solid, liquid
or gaseous substances which are radioactive, toxic, ignitable, corrosive,
carcinogenic to human health, those substances, materials, and wastes listed in
the United States Department of Transportation Table (49 CFR 972.101) or by the
Environmental Protection Agency, as hazardous substances (40 CFR Part 302, and
amendments thereto) provided all such substances, materials and wastes are or
become regulated under applicable local, state or federal law relating to (i)
petroleum, (ii) asbestos, (iii) PCB's, or (iv) materials designated as a
"hazardous substance," "hazardous waste," "hazardous materials," "toxic
substances," "contaminants," in each case under any applicable Environmental
Laws.
(b) "Environmental Laws" will mean any applicable present or
future federal, state or local laws, ordinances, rules or regulations pertaining
to Hazardous Substances, including without limitation the following statutes and
regulations, as amended from time to time: (i) the Federal Clean Air Act, 42
U.S.C. Section 7401 et seq.; (ii) the Federal Clean Water Act, 33 U.S.C. Section
1151 et seq.; (iii) the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901 et seq. ("RCRA"); (iv) the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. Section 9601 et seq.
("CERCLA") and the Superfund Amendments and Reauthorization Act of 1986, Pub. L.
Xx. 00-000, 000 Xxxx. 0000 ("XXXX"); (v) the Hazardous Materials Transportation
Act, 49 U.S.C. Section 1802; (vi) the National Environment Policy Act, 42 U.S.C.
Section 1857 et seq.; (vii) The Toxic Substance Control Act of 1976, 15 U.S.C.
Section 2601 et seq.; (viii) applicable regulations of the Environmental
Protection Agency, 33 CFR and 40 CFR relating to hazardous substances; and (ix)
and similar statutes, rules and regulations under the laws of the State of
Texas.
(c) "Hazardous Condition" will mean the presence, discharge,
disposal, storage or release of any Hazardous Substance, in violation of any
Environmental Laws, on or in
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the improvements, air, soil, groundwater, surface water or soil vapor on or
about the Property, or that migrates, flows, percolates, diffuses or in any way
moves onto or into the improvements, air, soil, groundwater, surface water or
soil vapor on or about the Property, or from the Property into adjacent
property.
(d) "Claims" will mean, individually and collectively, any claims,
actions, administrative proceedings, judgments, damages, punitive damages,
penalties, fines, costs, liabilities, sums paid in settlement, interest, losses
or expenses (including reasonable attorneys' and paralegals' fees and costs,
whether incurred in enforcing this Agreement, collecting any sums due hereunder,
settlement negotiations, at trial or on appeal), reasonable consultant fees and
reasonable expert fees, together with all other reasonable costs and expenses of
any kind or nature, that arise directly from or in connection with the existence
of a Hazardous Condition, whether occurring before, on or after the date of this
Agreement or caused by any person or entity.
Without limiting the generality of the foregoing definition, Claims
specifically will include claims, whether by related or third parties, for
personal injury or real or personal property damage, and capital, operating and
maintenance costs incurred in connection with any Remedial Work.
However, notwithstanding the foregoing, Claims will not be deemed to
include claims, actions, administrative proceedings, judgments, damages,
punitive damages, penalties, fines, costs, liabilities, sums paid in settlement,
interest, losses or expenses, that arise in connection with any Hazardous
Condition that is determined by proper judicial or administrative procedure to
have been introduced to the Property from and after the date upon which Lenders
take possession of the Property pursuant to an Order of Receivership,
foreclosure or deed in lieu of foreclosure, or which is caused by the actions of
Lenders.
(e) "Remedial Work" will mean any investigation or monitoring of
site conditions, any clean-up, containment, remediation, removal or restoration
work required or performed by any federal, state or local governmental agency or
political subdivision or performed by any nongovernmental entity or person due
to the existence of a Hazardous Condition.
2. Compliance with Environmental Laws; Disclosure of Hazardous
Conditions. Except as to those conditions (the "Existing Conditions") as
specifically may be disclosed in the Environmental Assessment, Borrower hereby
represents, warrants, covenants and agrees in all material respects to and with
Lenders that all operations or activities upon, or any use or occupancy of the
Property by Borrower, any tenant or other occupant, to the best of Borrower's
knowledge, is presently and will at all times until Borrower's conveyance of the
Property or foreclosure of Deed of Trust be in compliance with all Environmental
Laws; that Borrower has not at any time engaged in or permitted, nor has any
existing or previous tenant or occupant of the Property engaged in or permitted
to the best of Borrower's knowledge the occurrence of any Hazardous Condition,
except as specifically
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may be disclosed in the Environmental Assessment; and that to the best of
Borrower's knowledge, there does not now exist nor is there suspected to exist
any Hazardous Condition on or about the Property, except as specifically may be
disclosed in the Environmental Assessment.
3. Indemnification. Borrower hereby indemnifies and agrees to
protect, defend and hold Lenders harmless, which for purposes of this paragraph
will be deemed to include the directors, officers, shareholders, employees and
agents of Lenders, from and against any Claims other than claims arising from
Lenders' or such other included parties' gross negligence or willful misconduct,
including, without limitation, any claims relating to an Existing Condition. In
the event that Lenders suffer or incur any Claims, Borrower will pay to Lenders
the total of all such Claims suffered or incurred by Lenders upon demand
therefor by Lenders.
4. Remedial Work. In the event that any Remedial Work with
respect to any Hazardous Conditions that could result in a Claim is required
under any Environmental Laws by any judicial order, or by any governmental
entity, or in order to comply with the terms, covenants and conditions of this
Agreement or of any other agreements affecting the Property, Borrower will
perform or cause to be performed the Remedial Work in compliance with such law,
regulation, order or agreement. All Remedial Work will be performed by one or
more contractors, selected by Borrower and under the supervision of a consulting
environmental engineer selected by Borrower, and approved in advance by Lenders.
All costs and expenses of Remedial Work will be paid by Borrower including
without limitation the charges of such contractor(s) and the consulting
environmental engineer, and Lenders' reasonable attorneys' and paralegals' fees
and costs incurred in connection with monitoring or review of all Remedial Work.
In the event that Borrower fails to timely commence, or cause to be commenced,
or fails to diligently prosecute to completion, such Remedial Work, Lenders may,
but will not be required or have any obligation to, cause such Remedial Work to
be performed, and all costs and expenses thereof, or incurred in connection
therewith, will thereupon constitute Claims. All such Claims will be due and
payable by Borrower upon demand therefor by Lenders.
5. Permitted Contests. Notwithstanding any provision of this
Agreement to the contrary, provided that (i) no default has occurred and is
continuing under the Loan Agreement, (ii) no Lenders nor any assignee of any
Lenders' interest (including any person having a beneficial interest) in the
Property, the Loan and the Loan Documents will be exposed or subjected to civil
or criminal liability, and (iii) the lien and security interest of Lenders or
any such assignee in the Property, the Loan, the Loan Documents, or the payment
of any sums to be paid under the Loan Documents, is not jeopardized or in any
way adversely affected, Borrower may contest or cause to be contested, by
appropriate action, the application, interpretation or validity of any
Environmental Laws or any agreement requiring any Remedial Work pursuant to a
good faith dispute regarding such application, interpretation or validity of
such Environmental Laws or agreement requiring
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such Remedial Work. During the pendency of any such permitted contest, Borrower
may delay performance of Remedial Work or compliance with the Environmental Laws
or agreement requiring such Remedial Work, provided that (i) Borrower actually
contests and prosecutes such contest by appropriate proceedings conducted in
good faith and with due diligence to resolution, (ii) prior to any such delay in
compliance with any Environmental Laws or any Remedial Work requirement on the
basis of a good faith contest of such requirement, Borrower will have given
Lenders written notice that Borrower intends to contest or will contest or cause
to be contested the same, and will have given such security or assurances as
Lenders reasonably may request to ensure compliance with the legal requirements
pertaining to the Remedial Work (and payment of all costs, expenses, interest
and penalties in connection therewith) and to prevent any sale, forfeiture or
loss of all or any part of the Property by reason of such noncompliance, delay
or contest, and (iii) prior to any such delay in compliance with any
Environmental Laws or any Remedial Work requirement on the basis of a good faith
contest of such requirement, Borrower will have taken such steps as may be
necessary to prevent or mitigate any continuing occurrence of any existing or
suspected Hazardous Condition giving rise to the contested Remedial Work
requirement. Subject to the terms and conditions set forth above, during the
pendency of any such permitted contest resulting in a delay of performance of
any required Remedial Work, Lenders agree that it will not perform such Remedial
Work requirement on behalf of Borrower.
6. Subrogation of Indemnity Rights. If Borrower fails to perform
its obligations under paragraphs 3 and 4 above, Lenders will be subrogated to
any rights Borrower may have under any indemnifications from any present, future
or former owners, tenants or other occupants or users of the Property relating
to the matters covered by this Agreement.
7. Assignment by Lenders. No consent by Borrower will be required
for any assignment or reassignment of the rights of Lenders hereunder to one or
more purchasers of the Loan, the Loan Documents or Lenders' interest in the
Property under the Deed of Trust.
8. Merger, Consolidation or Sale of Assets. Subject to
limitations regarding disposition of any interest or control in Borrower as may
be set forth in the Loan Documents, in the event of a disposition involving
Borrower or all or a substantial portion of the assets of Borrower to one or
more persons or other entities or the merger or consolidation of Borrower with
another entity, the surviving entity or transferee of assets, as the case may
be, will (i) be formed and existing under the laws of a state, district or
commonwealth of the United States of America, and (ii) deliver to Lenders an
acknowledged instrument in recordable form assuming all obligations, covenants
and responsibilities of Borrower under this Agreement.
9. Survival; Independent Obligations. Notwithstanding anything to
the contrary contained in the Loan Agreement, the obligations of Borrower under
this Agreement will
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survive (a) the consummation of the Loan transaction described above; (b)
satisfaction of all terms and conditions to be performed by or on behalf of
Borrower under the Loan Agreement; (c) termination, in accordance with their
respective terms, of the Loan transaction and the Loan Agreement; (d) any
assumption of Borrower's obligations under the Loan Agreement by a successor to
Borrower (whether or not Lenders approved such assumption and whether or not
Borrower was released from liability under the Loan Agreement); (e) conveyance
of title to all or any portion of the Property to any third party, and
subsequent reconveyance of all or any portion of the Property by any such third
party to subsequent transferees; and (f) conveyance of title to the Property to
Lenders through power of sale, process of foreclosure, or by conveyance in lieu
of foreclosure of the Deed of Trust; provided, however, that Borrower will not
be liable for damages resulting from Hazardous Conditions which are determined
either by a written agreement or stipulation between Borrower and Lenders or, if
Borrower and Lenders are unable to agree or stipulate, a final judicial or
administrative action (after all available appeals have been taken or waived) to
have been introduced to the Property from and after the date upon which Lenders
take possession of the Property pursuant to an Order of Receivership, power of
sale, process of foreclosure, or deed in lieu of foreclosure; provided, however,
that the obligations of Borrower under this Agreement will finally cease and
terminate upon the final expiration of any applicable statute of limitation of
actions as to any potential Claim.
The obligations of Borrower under this Agreement are separate and
distinct from the obligations of Borrower under the Loan Agreement. This
Agreement may be enforced by Lenders without regard to any other rights and
remedies Lenders may have against Borrower under the Loan Agreement and without
regard to any limitations on Lenders' recourse as may be provided in the Loan
Agreement; provided, however, that a default by Borrower under this Agreement
will constitute a default under the Loan Agreement. Enforcement of this
Agreement will not be deemed to constitute an action for recovery of Borrower's
indebtedness under the Loan Agreement nor for recovery of a deficiency judgment
against Borrower following exercise of Borrower's remedies under the Deed of
Trust. Borrower expressly and specifically agrees that Lenders may bring and
prosecute a separate action or actions against Borrower hereunder whether or not
Lenders have brought an action against Borrower under the Loan Agreement.
10. Default Interest. Any Claims and other payments required to be
paid by Borrower to Lenders under this Agreement which are not paid on demand
therefor will thereupon be considered "Delinquent," and will result in and
constitute a default hereunder. In addition to all other rights and remedies of
Lenders against Borrower as provided herein, or under applicable law, Borrower
will pay to Lenders, immediately upon demand therefor, Default Interest (as
defined below) on any such payments which are or have become Delinquent. Default
Interest will be paid by Borrower from the date such payment becomes Delinquent
through and including the date of payment of such Delinquent sums. As used
herein, "Default Interest" will be equal to the rate of interest charged for a
payment default
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under the Loan Agreement, but in any event not to exceed the maximum rate of
interest permitted to be contracted for under Texas law. If, in any circumstance
whatsoever, interest would otherwise be payable to Lenders in excess of the
maximum lawful amount, and if in any circumstance Lenders shall ever receive
anything of value deemed interest by applicable law in excess of the maximum
lawful amount, and if permitted by applicable law, an amount equal to any
excessive interest shall be applied to the reduction of advances under the Loan
Agreement and not to the payment of interest, or if such excessive interest
exceeds the unpaid advances under the Loan Agreement, such excess shall be
refunded to Borrower. Borrower expressly and specifically agrees that any
Default Interest charged to Borrower hereunder will in no manner or respect
constitute a penalty or interest under the Loan Agreement, with the express
understanding that this Agreement and Borrower's obligations hereunder
constitute separate obligations of Borrower independent of the Loan Agreement.
11. Administrative Agent for Lenders. The Lenders have appointed
FUNB to act as administrative agent on behalf of all of the Lenders in
connection with the Loan. Accordingly, FUNB shall be entitled to exercise the
rights and remedies of the Lenders hereunder as agent for each of the Lenders.
Any notice provided by FUNB to the Borrower shall be deemed provided to Borrower
by each of the Lenders, and any notice from Borrower which states it is to FUNB
as agent for the Lenders hereunder, shall be deemed to be given to each of the
Lenders.
12. Miscellaneous. If there is more than one party executing this
Agreement as an indemnitor, each such party agrees that (i) the obligations of
Borrower hereunder are joint and several, (ii) a release of any one or more such
parties or any limitation of this Agreement in favor of or for the benefit of
one or more such parties will not in any way be deemed a release of or
limitation in favor of or for the benefit of any other party, and (iii) a
separate action hereunder may be brought and prosecuted against one or more such
parties. If any term of this Agreement or any application thereof will be
invalid, illegal or unenforceable, the remainder of this Agreement and any other
application of such term will not be affected thereby. No delay or omission in
exercising any right hereunder will operate as a waiver of such right or any
other right. This Agreement will be binding upon, inure to the benefit of and be
enforceable by Borrower and Lenders, and their respective successors and
assigns. This Agreement will be governed and construed in accordance with the
laws of the State of Texas. The parties hereby stipulate that jurisdiction and
venue for purposes of enforcement of this Agreement and adjudication of the
respective rights and obligations of the parties shall be in the Texas circuit
court in the judicial circuit in which the Property is located.
13. Conflict. In the event of conflict between the terms and
conditions hereunder and the terms and conditions of the Loan Agreement, the
terms and conditions of the Loan Agreement will govern.
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14. Waiver of Defenses. In any action, suit or proceeding relating
to this Agreement, Borrower and Lenders waive the right to interpose a defense
of laches, failure of consideration or mutuality of remedy.
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IN WITNESS WHEREOF, Borrower and Lenders have executed this Agreement
as of the date first above written.
BORROWER:
XXXXX EQUITY, INC., a Florida corporation
By:/s/ G. Xxxxx Xxxxxxx
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Name: G. Xxxxx Xxxxxxx
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Title: Treasurer
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LENDER:
FIRST UNION NATIONAL BANK, a
national association, as Agent
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: J. Xxxxxx Xxxxxxxx
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Title:Vice President
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EXHIBIT A
DESCRIPTION OF PROPERTY
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