EXHIBIT 10.12
HAZARDOUS SUBSTANCES INDEMNITY AGREEMENT
THIS HAZARDOUS SUBSTANCES INDEMNITY AGREEMENT (this "Agreement"), made
as of the 6th day of October, 2004, is by FB DISTRO DISTRIBUTION CENTER, LLC, a
Delaware limited liability company ("Borrower"), whose address is c/o 0000 Xxxxx
Xxxx 000 Xxxx, Xxxxxxxxxxx, Xxxxxxx 00000-0000 and by CHARMING SHOPPES, INC., a
Pennsylvania corporation ("Charming"), whose address is 000 Xxxxx Xxxx,
Xxxxxxxx, Xxxxxxxxxxxx 00000, jointly and severally (Borrower and Charming being
referred to herein collectively as "Indemnitors" and individually as
"Indemnitor"), in favor of BANKATLANTIC COMMERCIAL MORTGAGE CAPITAL, LLC, a
Florida limited liability company ("Holder"), whose address is 000 Xxxxxxx
Xxxxxxx, Xxxxx 000, Xxxx Xxxxx, Xxxxxxx 00000.
W I T N E S S E T H:
WHEREAS, Holder has extended to Borrower a loan in the principal amount
of Thirteen Million and 00/100 ($13,000,000.00) Dollars (the "Loan"); and
WHEREAS, the Loan is evidenced by a Mortgage Note dated of even date
herewith (the "Note"), executed by Borrower and payable to the order of Holder
in the stated principal amount of Thirteen Million and 00/100 ($13,000,000.00)
Dollars and is secured by a Mortgage, Assignment of Leases and Rents and
Security Agreement dated of even date herewith (the "Security Instrument"), from
Borrower, as mortgagor, to Holder, as mortgagee, encumbering that certain real
property situated in the City of Greencastle, County of Xxxxxx, State of
Indiana, 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 Security Instrument 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, Holder has required that
Indemnitors indemnify Holder with respect to hazardous wastes on, in, under or
affecting the Property as herein set forth.
NOW, THEREFORE, to induce Holder 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 Holder, as follows:
1. Indemnity. Indemnitors hereby, jointly and severally assume liability
for, and hereby agree to pay, protect, defend (at trial and appellate levels)
and with attorneys, consultants and experts reasonably acceptable to Holder, and
save Holder harmless from and against, and hereby indemnify Holder from and
against any and all present or future 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
Holder or the Property, and arising directly or indirectly from or out of: (i)
the violation of any present or future local, state or federal law, rule or
regulation pertaining to environmental regulation, contamination or clean-up
(collectively, "Environmental Laws"), including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42
U.S.C. Section 9601 et seq. and 40 CFR Section 302.1 et seq.), the Resource
Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901 et seq.), the
Federal Water Pollution Control Act (33 U.S.C. Section 1251 et seq.) and 40 CFR
Section 116.1 et seq.), and the Hazardous Materials Transportation Act (49
U.S.C. Section 1801 et seq.), and those relating to Lead Based Paint (as
hereinafter defined, all as same have been or may be amended, relating to or
affecting the Property, whether or not caused by or within the control of
Indemnitors; (ii) the actual or alleged presence, release or threat of release
of any hazardous, toxic or harmful substances, wastes, materials, pollutants or
contaminants (including, without limitation, asbestos, polychlorinated
biphenyls, petroleum products, flammable explosives, radioactive materials,
paint containing more than 0.5% lead by dry weight ("Lead Based Paint"), Mold
(as hereinafter defined), infectious substances or raw materials which include
hazardous constituents) or any other substances or materials which are included
under or regulated by Environmental Laws (collectively, "Hazardous Substances"),
now or hereafter on, in, under or affecting all or any portion of the Property
or any surrounding areas, regardless of whether or not caused by or within the
control of Indemnitors; (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 cost of assessment,
containment and/or removal of any and all Hazardous Substances from all or any
portion of the Property or any surrounding areas, the 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 costs incurred to
comply with the Environmental Laws in connection with all or any portion of the
Property or any surrounding areas. "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 Paragraph 1. "Mold" as used in this Agreement shall mean fungi
that reproduces through the release of spores or the splitting of cells or other
means, including but not limited to mold, mildew, fungi, fungal spores,
fragments and metabolites such as mycotoxins and microbial volatile organic
compounds .
2. Representations Regarding Hazardous Substances. Except as set forth
in the Environmental Report (as such term is defined in the Security Agreement),
Indemnitors hereby represent and warrant to and covenant and agree with Holder
as follows:
(a) To the best of Indemnitors' present knowledge, information and
belief, the Property is not in direct or indirect violation of any Environmental
Law;
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(b) No Hazardous Substances are located on or, to the best of
Indemnitors' present knowledge, information and belief, have been handled,
generated, stored, processed or disposed of on or released or discharged from
the Property (including underground contamination) except for those substances
used by Borrower or any tenants at the Property in the ordinary course of their
business and in compliance with all Environmental Laws;
(c) Indemnitors have received no notice that the Property is subject to,
and to the best of their present knowledge, information and belief, the Property
is not subject to any private or governmental lien or judicial or administrative
notice or action relating to Hazardous Substances;
(d) There are no underground storage tanks or other underground storage
receptacles for Hazardous Substances in use or closed and existing on the
Property;
(e) Indemnitors have received no notice of, and to the best of
Indemnitors' present knowledge, information and belief, 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 Indemnitors know of any basis for such a
claim; and
(f) Indemnitors have received no notice that, and to the best of
Indemnitors' present knowledge, information and belief, there has been no claim
by any party that, any use, operation or condition of the Property has caused
any nuisance or any other liability or adverse condition on any other property
nor do Indemnitors know of any basis for such a claim.
(g) No Mold is present in the indoor air of the Property at
concentrations exceeding ambient air levels and no visible Mold is present on
any building materials or surfaces at the Property for which the EPA Mold
Guidelines (as defined below) recommends or requires removal thereof by
remediation professionals, and Indemnitors are not aware of any conditions at
the Property that are likely to result in the presence of Mold in the indoor air
at concentrations that exceed ambient air levels or on building materials or
surfaces that would require such removal.
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 or any tenants at
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 of space in the improvements (except in the ordinary
course of such tenant's business 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 any asbestos or any asbestos-containing materials
(collectively, "asbestos"). Indemnitors acknowledge their
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responsibility to be aware of, and fully advised concerning, all applicable
Environmental Laws in effect during the term of the Loan. Indemnitors further
acknowledge and agree that Holder has no duty to provide Indemnitors with any
information regarding the Environmental Laws or any interpretation thereof.
(b) Indemnitors shall immediately notify Holder should Indemnitors, or
either of them, become aware of (i) any Hazardous Substances, or other potential
environmental problem or liability, with respect to the Property, except to the
extent such Hazardous Substances, or other potential environmental problem or
liability is disclosed in the Environmental Report, (ii) any lien, action or
notice affecting the Property or Borrower resulting from any violation or
alleged violation of the Environmental Laws, except to the extent such lien,
action or notice is disclosed in the Environmental Report, (iii) the institution
of any investigation, inquiry or proceeding concerning Borrower or the Property
pursuant to any Environmental Law or otherwise relating to Hazardous Substances,
except to the extent such investigation, inquiry or proceeding is disclosed in
the Environmental Report, or (iv) the discovery of any occurrence, condition or
state of facts which would render any representation or warranty contained in
this Agreement incorrect in any respect if made at the time of such discovery.
Indemnitors shall, promptly and when and as required and regardless of the
source of the contamination, at their own expense, take all actions as shall be
necessary or advisable for the clean-up of any and all portions of the Property
or other affected property, including, without limitation, all investigative,
monitoring, removal, containment and remedial actions in accordance with all
applicable Environmental Laws (and in all events in a manner reasonably
satisfactory to Holder), and shall further pay or cause to be paid, at no
expense to Holder, all clean-up, administrative and enforcement costs of
applicable governmental agencies which may be asserted against the Property. In
the event Indemnitors fail to do so, Holder may cause the Property or other
affected property to be freed from any Hazardous Substances or otherwise brought
into conformance with Environmental Laws and any cost incurred in connection
therewith shall be included in Costs and shall be paid by Indemnitors in
accordance with the terms of Paragraph 4(c) hereof. In furtherance of the
foregoing, Indemnitors hereby grant to Holder access to the Property and an
irrevocable license to remove any items deemed by Holder to be Hazardous
Substances and to do all things Holder shall deem necessary to bring the
Property into conformance with Environmental Laws.
(c) Upon the request of Holder, at any time and from time to time after
the occurrence of a default under this Agreement or the Loan Documents or at
such other time as Holder has reasonable grounds to believe that Hazardous
Substances are or have been released, stored or disposed of on or around the
Property or that the Property may be in violation of the Environmental Laws,
Indemnitors shall provide, at Indemnitors' sole expense, an inspection or audit
of the Property prepared by a hydrogeologist or environmental engineer or other
appropriate consultant approved by Holder indicating the presence or absence of
Hazardous Substances on the Property or an inspection or audit of the
improvements located on the Property prepared by an engineering or consulting
firm approved by Holder indicating the presence or absence of asbestos on the
Property. If Indemnitors fail to provide such inspection or audit within thirty
(30) days after such request, Holder may order the same, and Indemnitors hereby
grant to Holder access to the Property and an irrevocable license to undertake
such inspection or audit. The cost of such inspection or audit shall be included
in Costs and shall be paid by Indemnitors in accordance with the terms of
Paragraph 4(c) hereof.
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(d) If prior to the date hereof, it was determined that the Property
contains Lead Based Paint, Borrower had prepared an assessment report describing
the location and condition of the Lead Based Paint (a "Lead Based Paint
Report"). If at any time hereafter Lead Based Paint is suspected of being
present on the Property, Indemnitors agree, at their sole cost and expense and
within twenty (20) days thereafter, to cause to be prepared a Lead Based Paint
Report prepared by an expert, and in form, scope and substance, acceptable to
Holder.
(e) If prior to the date hereof, it was determined that the Property
contains asbestos, Borrower had prepared an assessment report describing the
location and condition of the asbestos (an "Asbestos Report"). If at any time
hereafter asbestos is suspected of being present on the Property, Indemnitors
agree, at their sole cost and expense and within twenty (20) days thereafter, to
cause to be prepared an Asbestos Report prepared by an expert, and in form,
scope and substance, acceptable to Holder.
(f) Indemnitors agree that if it has been, or if at any time hereafter
it is, determined that the Property contains Lead Based Paint or asbestos, on or
before thirty (30) days following (i) the date hereof, if such determination was
made prior to the date hereof or (ii) such determination, if such determination
is hereafter made, as applicable, Indemnitors shall, at their sole cost and
expense, develop and implement, and thereafter diligently and continuously carry
out (or cause to be developed and implemented and thereafter diligently and
continually to be carried out), an operations, abatement and maintenance plan to
monitor, maintain and remediate any such Lead Based Paint and/or asbestos(as
applicable) affecting the Property, which plan shall be prepared by an expert,
and be in form, scope and substance, acceptable to Holder and sufficient to
cause the Property to comply with any applicable law and recommendations
contained in such plan (such plan, together with any Lead Based Paint Report
and/or Asbestos Report, as applicable, the "O&M Plan"). If an O&M Plan has been
prepared prior to the date hereof, Indemnitors agree to diligently and
continually carry out (or cause to be carried out) the provisions thereof.
Compliance with the O&M Plan shall require or be deemed to require, without
limitation, the proper preparation and maintenance of all records, papers and
forms required under the Environmental Laws.
(g) Indemnitors agree that if prior to the date hereof, or if at any
time hereafter, any inspection or audit reveals (or revealed, as applicable) the
presence of Mold in the indoor air of the Property at concentrations exceeding
ambient air levels or visible Mold on any building materials or surfaces at the
Property for which the EPA Mold Guidelines recommends or requires removal
thereof by remediation professionals, then, on or before thirty (30) days
following (i) the date hereof, if such inspection or audit was made prior to the
date hereof or (ii) such inspection or audit, if such inspection or audit is
hereafter made, as applicable, Indemnitors shall, at their sole cost and
expense, develop and implement, and thereafter diligently and continuously carry
out (or cause to be developed and implemented and thereafter diligently and
continually to be carried out), an operations, abatement and maintenance plan
(the "Mold O&M Plan") to monitor, maintain and remediate any water filtration
and Mold issues affecting the Trust Property, which plan shall be prepared by an
expert, and be in form, scope and substance acceptable to Holder and sufficient
to cause the Property to comply with all applicable laws and all EPA Mold
Guidelines and in accordance with the Mold O&M Plan. If a Mold O&M Plan has been
prepared prior to the date hereof, Indemnitors agree to diligently and
continually carry out (or cause to be carried out) the provisions thereof.
Compliance with the Mold O&M Plan shall
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require or be deemed to require, without limitation, the proper preparation and
maintenance of all records, papers and forms required under the Environmental
Laws. For purposes hereof, "EPA Mold Guidelines"shall mean the guidelines set
forth in "Mold Remediation in Schools and Commercial Buildings" prepared by the
U.S. Environmental Protection Agency.
(h) (i) By entering into this Agreement, Holder acknowledges that is has
knowledge of that certain environmental condition for which an indemnity was
provided to FB Distro, Inc. by IBM (as defined below) pursuant to that certain
Contract dated as of October 26, 1987 by and between IBM to FB Distro, Inc.
(ii) Notwithstanding anything to the contrary set forth in this
Agreement, Holder shall not require or cause, nor shall Indemnitors be required
hereunder to install groundwater monitoring xxxxx on the Property in violation
of Section E of that certain Special Warranty Deed, recorded on October 29,
1987, given by International Business Machines Corp. ("IBM") to FB Distro, Inc.
4. Indemnification Procedures.
(a) If any action shall be brought against Holder based upon any of the
matters for which Holder is indemnified hereunder, Holder shall notify
Indemnitors in writing thereof and Indemnitors shall promptly assume the defense
thereof, including, without limitation, the employment of counsel reasonably
acceptable to Holder and the negotiation of any settlement; provided, however,
that any failure of Holder to notify Indemnitors of such matter shall not impair
or reduce the obligations of Indemnitors hereunder. Holder 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
Holder against any claim, loss or liability for which Holder is indemnified
hereunder, Holder may, at its sole option and election, defend or settle such
claim, loss or liability. The liability of Indemnitors to Holder 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 costs and expenses, including, without limitation
attorneys' fees and disbursements, incurred by Holder 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. Holder's good faith in any such settlement shall be conclusively
established if the settlement is made on the advice of independent legal counsel
for Holder.
(b) Indemnitors shall not, without the prior written consent of Holder:
(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 Holder of a full and complete written
release of Holder (in form, scope and substance satisfactory to Holder 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 Holder or obligate Holder to pay any sum or
perform any obligation as determined by Holder in its sole discretion.
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(c) All Costs shall be immediately reimbursable to Holder when and as
incurred and, in the event of any litigation, claim or other proceedings without
any requirement of waiting for the ultimate outcome of such litigation, claim or
other proceedings and Indemnitors shall pay to Holder any and all Costs within
ten (10) days after written notice from Holder 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 ten-day period, shall bear interest at the Default Interest
Rate (as defined in the Note) and such costs and interest shall be additional
indebtedness of Borrower secured by the Security Instrument and by the other
Loan Documents securing all or part of the Loan.
5. Reinstatement of Obligations. If at any time all or any part of any
payment made by Indemnitors or received by Holder 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 Holder, 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 Holder to proceed against any other person or
to proceed against or exhaust any security held by Holder at any time or to
pursue any other remedy in Holder's power or under any other agreement before
proceeding against Indemnitors hereunder;
(b) The defense of the statute of limitations in any action hereunder;
(c) 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
Holder to file or enforce a claim against the estate (in administration,
bankruptcy or any other proceedings) of any other person or persons;
(d) 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 Holder, 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 Holder;
(e) Any defense based upon an election of remedies by Holder;
(f) Any right or claim of right to cause a marshalling of the assets of
either Indemnitor.
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(g) Any principle or provision of law, statutory or otherwise, which is
or might be in conflict with the terms and provisions of this Agreement;
(h) Any duty on the part of Holder to disclose to Indemnitors any facts
Holder may now or hereafter know about the Property, regardless of whether
Holder 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 Indemnitors hereunder;
(i) Any lack of notice of disposition or of manner of disposition of any
collateral for the Loan;
(j) Any invalidity, irregularity or unenforceability, in whole or in
part, of any one or more of the Loan Documents;
(k) Any lack of commercial reasonableness in dealing with the collateral
for the Loan;
(l) Any deficiencies in the collateral for the Loan or any deficiency in
the ability of Holder 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;
(m) An assertion or claim that the automatic stay provided by 11 U.S.C.
Section 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
Holder to enforce any of its rights, whether now or hereafter required, which
Holder may have against Charming or the collateral for the Loan;
(n) 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
(o) Any action, occurrence, event or matter consented to by Indemnitors
under Paragraph 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, except as set forth in Section 8 herein.
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(b) Unsecured Obligations. Indemnitors hereby acknowledge that Holder's
appraisal of the Property is such that Holder is not willing to accept the
consequences of the inclusion of Indemnitors' indemnity set forth herein among
the obligations secured by the Security Instrument and the other Loan Documents
and that Holder 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 Security Instrument and secured thereby, the obligations of Indemnitors
under this Agreement are not secured by the lien of the Security Instrument or
the security interests or other collateral described in the Security Instrument
or the other Loan Documents, it being the intent of Holder to create separate
obligations of Indemnitors hereunder which can be enforced against Indemnitors
without regard to the existence of the Security Instrument or other Loan
Documents or the liens or security interests created therein, subject to the
limitation on Indemnitors' liability set forth in Section 8 herein.
(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 Holder under the Security Instrument 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.
(d) No Subrogation; No Recourse Against Holder. Notwithstanding the
satisfaction by Charming of any liability hereunder, Charming 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, Charming
expressly waives any and all rights of subrogation to Holder against Borrower,
and Charming hereby waives any rights to enforce any remedy which Holder 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, Charming
hereby subordinates any and all indebtedness of Borrower now or hereafter owed
to Charming to all indebtedness of Borrower to Holder, and agrees with Holder
that Charming shall not demand or accept any payment of principal or interest
from Borrower, shall not claim any offset or other reduction of Charming
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 Holder by reason of any
action Holder may take or omit to take under the provisions of this Agreement or
under the provisions of any of the Loan Documents.
(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 Holder 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. Section 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.
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(f) Financial Statements. Each Indemnitor hereby agrees, as a material
inducement to Holder to make the Loan to Borrower, to furnish to Holder promptly
upon demand by Holder 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 reasonably acceptable to Holder. Each
Indemnitor hereby warrants and represents unto Holder that any and all balance
sheets, net worth statements and other financial data which have heretofore been
given or may hereafter be given to Holder with respect to said Indemnitor did or
will at the time of such delivery fairly and accurately present, in all material
respects, the financial condition of said Indemnitor. So long as shares in
Charming are publicly traded on a nationally recognized exchange, then Charming
shall not be required to provide Holder with any other financial statements
other than the then current financial statements and annual reports as are
publicly disseminated by Charming.
(g) Rights Cumulative; Payments. Holder's rights under this Agreement
shall be in addition to all rights of Holder under the Note, the Security
Instrument 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 Security Instrument and the Other Loan
Documents.
(h) No Limitation on Liability. Indemnitors hereby consent and agree
that Holder 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 Security Instrument 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 Indemnitors 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, Holder's voluntary act or otherwise; (vi)
the release or substitution in whole or in part of any security for the Loan;
(vii) Holder's failure to record the Security Instrument or to file any
financing statement (or Holder'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 terms 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 Holder 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 Indemnitors any recourse against Holder. Nothing contained in this
Paragraph shall be construed to require Holder 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
10
supersedes (except as to the Security Instrument) 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; Binding Effect; Waiver of Acceptance. This Agreement
shall be governed by and construed in accordance with the laws of the State in
which the Property is located, 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. This Agreement shall bind
and inure to the benefit of each Indemnitor and Holder and their respective
officers, directors, shareholders, agents and employees 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 Holder, which consent may be withheld by
Holder in its sole discretion. Each Indemnitor hereby waives any acceptance of
this Agreement by Holder, and this Agreement shall immediately be binding upon
Indemnitors.
(k) Notice. All notices, demands, requests or other communications to be
sent by one party to the other hereunder or required by law (collectively,
"Notices") shall be in writing and shall be deemed to have been validly given or
served by delivery of the same in person to the intended addressee, or by
depositing the same with Federal Express or another reputable private courier
service for next business day delivery to the intended addressee at its address
set forth on the first page of this Agreement or at such other address as may be
designated by such party as herein provided, or by depositing the same in the
United States mail, postage prepaid, registered or certified mail, return
receipt requested, addressed to the intended addressee at its address set forth
on the first page of this Agreement or at such other address as may be
designated by such party as herein provided. All Notices to be sent to Holder
shall be addressed to the attention of the Xxxxxxx Xxxxxxxxx. All Notices shall
be deemed to have been given on the date they are actually received; provided
that rejection or other refusal to accept any Notice offered for delivery or the
inability to deliver a Notice because of changed address of which no notice was
given as herein required shall be deemed to be receipt of the Notice. By giving
to the other party hereto at least fifteen (15) days' prior written notice
thereof in accordance with the provisions hereof, the parties hereto shall have
the right from time to time to change their respective addresses and each shall
have the right to specify as its address any other address within the United
States of America.
(l) 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
11
a weekday, Monday through Friday, except a legal holiday or a day on which
banking institutions in New York are authorized by law to be closed.
(m) 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.
(n) Attorneys' Fees. In the event it is necessary for Holder 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 Holder any and
all costs and expenses, including, without limitation, reasonable attorneys'
fees, incurred by Holder as a result thereof and such costs, fees and expenses
shall be included in Costs.
(o) Successive Actions. A separate right of action hereunder shall arise
each time Holder 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.
(p) 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, are joint and several.
(q) Reliance. Holder 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.
(r) 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.
(s) SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL.
(1) 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 IN WHICH THE PROPERTY IS
LOCATED, 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
12
JURISDICTION OVER THE COUNTY IN WHICH THE PROPERTY IS LOCATED, (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 HOLDER TO BRING ANY
ACTION, SUIT OR PROCEEDING IN ANY OTHER FORUM HAVING JURISDICTION). INDEMNITORS
FURTHER CONSENT AND AGREE TO SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER LEGAL
PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY REGISTERED OR CERTIFIED U.S.
MAIL, POSTAGE PREPAID, TO THE INDEMNITORS AT THE ADDRESS FOR NOTICES DESCRIBED
IN PARAGRAPH 7(k) HEREOF, AND CONSENT AND AGREE 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).
(2) HOLDER AND 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 HOLDER OR INDEMNITORS, OR ANY OF
THEIR DIRECTORS, OFFICERS, PARTNERS, MEMBERS, EMPLOYEES, AGENTS OR ATTORNEYS, OR
ANY OTHER PERSONS AFFILIATED WITH HOLDER OR INDEMNITORS, IN EACH OF THE
FOREGOING CASES, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.
(t) Waiver by Indemnitors. Borrower and Charming covenant and agree that
upon the commencement of a voluntary or involuntary bankruptcy proceeding by or
against Borrower, neither Borrower nor Charming shall seek a supplemental stay
or otherwise pursuant to 11 U.S.C. Section 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 Holder to enforce
any rights of Holder against Charming by virtue of this Agreement or otherwise.
(u) Decisions. Wherever pursuant to this Agreement (i) Holder exercises
any right given to it to approve or disapprove, (ii) any arrangement or term is
to be satisfactory or acceptable to Holder, or (iii) any other decision or
determination is to be made by Holder, the decision of Holder to approve or
disapprove or to accept or not accept, all decisions that arrangements or terms
are satisfactory or not satisfactory and all other decisions and determinations
made by Holder, shall be in the sole and absolute discretion of Holder and shall
be final and conclusive, except as may be otherwise expressly and specifically
provided herein.
(v) Costs. Wherever pursuant to this Agreement it is provided that
Indemnitors shall pay any costs and expenses, such costs and expenses shall
include, but not be limited to, legal fees and disbursements of Holder, whether
retained firms, the reimbursement for the expenses of in-house staff or
otherwise.
13
(w) Secondary Market. Holder may sell, transfer and deliver the Loan
Documents to one or more investors in the secondary mortgage market. In
connection with such sale, Holder may retain or assign responsibility for
servicing the Loan or may delegate some or all of such responsibility and/or
obligations to a servicer, including, but not limited to, any subservicer or
master servicer, on behalf of the investors. All references to Holder herein
shall refer to and include, without limitation, any such servicer, to the extent
applicable.
8. Limitation on Liability. (i) Notwithstanding anything contained in
this Agreement to the contrary, the liability of Borrower pursuant to this
Agreement shall not exceed 25% of the then outstanding principal balance of the
Loan less: (a) any payments made by Borrower to Holder pursuant to the Loan
Documents (not including any payments of principal or interest thereunder), and
(b) any payments by Charming pursuant to that certain Guaranty, dated as of the
date hereof, given by Charming to Holder (not including any payments of
principal or interest thereunder).
(ii) Notwithstanding anything contained in this Agreement to the
contrary, the total cumulative liability of Charming pursuant to this Agreement
and that certain Guaranty, dated as of the date hereof, given by Charming to
Holder (the "Guaranty") (other than for all principal due under the Loan
Documents for which there shall be no limitation) shall not exceed 25% of the
then outstanding principal balance of the Loan less: (a) any payments made by
Borrower to Holder pursuant to the Loan Documents (not including any payments of
principal thereunder), and (b) any payments by Charming pursuant to the Guaranty
(not including any payments of principal thereunder).
[Remainder of Page Left Intentionally Blank; Signature Page Follows]
14
IN WITNESS WHEREOF, Indemnitors have executed this Hazardous Substances
Indemnity Agreement as of the day and year first above written.
FB DISTRO DISTRIBUTION CENTER, LLC,
a Delaware limited liability company
By: FB Distro, Inc.,
an Indiana corporation,
its Sole Member
By:___________________________
Name:
Title:
CHARMING SHOPPES, INC.,
a Pennsylvania corporation
By:___________________________
Name:
Title:
ACKNOWLEDGMENTS
COMMONWEALTH OF PENNSYLVANIA:
COUNTY OF ________________________:
The foregoing instrument was acknowledged before me this ___ day of
October, 2004, by _________________________, who acknowledged himself/herself to
be the _____________ of FB Distro, Inc., an Indiana corporation, the sole member
of FB Distro Distribution Center, LLC, a Delaware limited liability company, and
that he/she as such officer, being authorized to do so, executed the foregoing
instrument, and acknowledged that he/she executed the same for the purposes
therein contained.
In witness whereof, I hereunto set my hand and official seal.
__________________________
Notary Public
My Commission Expires:
COMMONWEALTH OF PENNSYLVANIA:
COUNTY OF ________________________:
The foregoing instrument was acknowledged before me this ___ day of
October, 2004, by _________________________, who acknowledged himself/herself to
be the _____________ of Charming Shoppes, Inc., a Pennsylvania corporation, and
that he/she as such officer, being authorized to do so, executed the foregoing
instrument, and acknowledged that he/she executed the same for the purposes
therein contained.
In witness whereof, I hereunto set my hand and official seal.
__________________________
Notary Public
My Commission Expires:
EXHIBIT A
LEGAL DESCRIPTION
