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Exhibit 10.6
ENVIRONMENTAL INDEMNIFICATION AGREEMENT
THIS ENVIRONMENTAL INDEMNIFICATION AGREEMENT (the "Agreement") dated as of
the 5th day of February, 2001, between EDAC TECHNOLOGIES CORPORATION, a
Wisconsin corporation having its principal offices at 0000 Xxx Xxxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxxxxx 00000 ("Guarantor") and FARMINGTON SAVINGS BANK, a state
banking corporation (the "Bank") ("Indemnified Party"), having a principal
address at 00 Xxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxx 00000. The Guarantor is
hereinafter sometimes referred to as the "Indemnifying Party".
WITNESSETH:
WHEREAS, the Guarantor owns the real property more particularly described
in Schedule A attached hereto (such real property, including, without
limitation, all improvements thereon, being hereinafter called the "Premises");
WHEREAS, on the date hereof, the Bank has made a commercial mortgage loan
to the Guarantor in the original principal amount of $2,000,000.00 (the "Loan"),
evidenced by a promissory note of even date herewith, copies of which are
attached hereto as Exhibit A and made a part hereof (the "Note");
WHEREAS, as a condition precedent to funding the Loan, the Bank requires
the execution of this Agreement to the Bank.
NOW THEREFORE, in order to induce the Bank to accept the Premises as
security for the Loan and to make the Loan and in consideration of the matters
described in the foregoing Recitals, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
the Bank, the parties hereto agree as follows:
1. Recitals. The Recitals are incorporated herein by this reference.
2. Definitions. For purposes of this Agreement.
(a) "Hazardous Materials" means and includes those substances deemed
hazardous under any Hazardous Material Law (as defined below), including,
without limitation, asbestos or any substance containing asbestos, the group of
organic compounds known as polychlorinated biphenyls, flammable explosives,
radioactive materials, chemicals, known to cause cancer or reproductive
toxicity, pollutants, effluents, contaminants, emissions or related materials
and any items included in the definition of hazardous or toxic waste materials
or substances under any Hazardous Material Law;
(b) "Hazardous Materials Laws" collectively means and includes any present
and future local, state and federal law relating to the environment and
environmental conditions, including, without limitation, the Resource
Conservation and Recovery act of 1976 "RCRA"), 42
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U.S.C. Section 6901 et seq., the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA"), 42 U.S.C. Sections 9601-9657,
as amended by the Superfund Amendments and Reauthorization Act or 1986 ("XXXX"),
the Hazardous Materials Transportation Act, 49 U.S.C. Section 6901, et seq., the
Federal Water Pollution Control Act, as amended by the Clean water Act or 1977,
33 U.S.C. Sections 1251 et seq. the Clean air Act 42 U.S.C. Section 741 et seq.
the Toxic Substances Control Act, 15 U.S.C. Sections 2601-2629, the Safe
Drinking Water Act, 42 U.S.C. Sections 300f-300j, Title 22a of the Connecticut
General Statutes and all the regulations, rules, orders, decrees, ordinances,
codes, authorizations, certificates, permits, licenses and any other legal
requirements now or hereafter promulgated or issued thereunder which are
applicable to the Premises, the Company and/or the operations at the Premises;
(c) Any capitalized terms used in this Agreement and not otherwise defined
shall have the meaning given to them in the Loan Agreement.
3. Covenants.
Except as disclosed in the Loan Agreement or as disclosed in the
environmental reports provided by the Borrower to the Bank, the Indemnifying
Party agrees that, until such time as all sums due and payable under the Note
have been paid in full:
(a) The Indemnifying Party will comply fully with all Hazardous Materials
Laws applicable to their business operations and the Premises.
(b) Without limiting the applicability of the preceding subparagraph 3(a),
the Indemnifying Party will comply fully with (i) the requirements of any
Hazardous Materials Laws with respect to the reporting to the U.S. Environmental
Protection Agency ("EPA"), the Connecticut Department of Environmental
Protection ("DEP") or any other applicable governmental agency of any release or
discharge of Hazardous Materials; (ii) the applicable federal and Connecticut
laws and regulations with respect to underground storage tanks, and (iii) any
remediation of the Premises required by the DEP or the EPA.
(c) The Indemnifying Party will not generate, use or store, or permit any
occupant of the Premises to generate, use, or store, on the Premises, any
Hazardous Materials, except in compliance with the Hazardous Materials Laws.
(d) The Indemnifying Party will not cause or suffer to exist any release,
discharge, spillage, uncontrolled loss, seepage or emanation of any Hazardous
Materials to the air, ground or water, on, within or about the Premises, except
as may be permitted by the Hazardous Materials Laws.
(e) No substances containing Polychlorinated Biphenyls (PCB'S) will be used
or stored at the Premises, except in compliance with the Hazardous Materials
Laws.
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(f) No asbestos will be used or stored on any part of the Premises, except
in compliance with the Hazardous Materials Laws.
(g) No lagoons, waste piles or surface impoundments, dry xxxxx or similar
items will be created or suffered to exist on the Premises or the Adjacent
Property, except in compliance with the Hazardous Materials Laws.
(h) The Indemnifying Party will promptly notify the Bank of all written
orders or notices of violations received by any of the Indemnifying Parties from
the DEP, the EPA or any similar organization pertaining to the Guarantor, the
Premises or any occupant thereof.
(i) The Indemnifying Party will promptly notify the Bank of all actions
pending, of that have been threatened in writing, against the Guarantor, or
pertaining to the Premises by any party seeking to enforce any Hazardous
Materials Law or seeking damages or other relief based on the alleged violation
of any Hazardous Materials Law by the Indemnifying Party.
(j) The Premises will not be utilized as a dump, landfill or other waste
treatment or disposal facility.
4. Indemnity.
The Indemnifying Party hereby unconditionally agrees to indemnify, defend,
and hold the Bank harmless against any loss, liability, damage, expense or claim
arising under any Hazardous Materials Law, and any other loss, liability,
damage, expense or claim which may be incurred by or asserted against the Bank
directly or indirectly resulting from the presence of Hazardous Materials on the
Premises ("Indemnity" or "Indemnities"), in accordance with the provisions of
this Agreement.
The Indemnifying Party shall pay all such amounts prior to the entry of any
final judgments or penalties against the Bank which have been indemnified under
this Agreement. In the event that such payment is not made, the Bank, at its
sole discretion, may proceed to file suit against the Indemnifying Party to
compel such payment.
Promptly following completion of any actions imposed upon the Indemnifying
Party under any Hazardous Materials Law, the Indemnifying Party shall obtain and
deliver to the Bank an environmental report in form and substance reasonably
acceptable to the Bank from an environmental consultant reasonably acceptable to
the Indemnified Parties, stating that all required action has been taken.
Notwithstanding the provisions of paragraphs 4, 8 and 9(b) hereof, the
Indemnifying Party shall have no obligations hereunder with regard to any
condition or event that first arises after the earliest of the date that the
Bank takes possession of the Premises, or the date that title to the
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Premises shall vest in the Bank or other holder of the mortgage in favor of the
Bank to secure the Note by strict foreclosure thereof, or title passes to the
purchaser at a foreclosure sale of said mortgage.
5. Duration of Indemnity.
The duration of the Indemnities hereunder shall be for the period during
which any amounts are outstanding under the Loan or the Note.
6. Notices from Indemnifying Party.
The Indemnifying Party shall, promptly after obtaining knowledge thereof,
advise the Bank in writing of (a) any governmental or regulatory actions
instituted or threatened in writing under any Hazardous Materials Law affecting
the Premises or any Indemnity hereunder including, without limitation, (i) any
written notice of inspection, abatement or noncompliance, (ii) all claims made
of threatened in writing by any third party against any Indemnifying Party or
the Premises relating to any Hazardous Material or a violation of a Hazardous
Materials Law, and (iii) the discovery of any occurance or condition on the
Premises, or (b) receipt of written notice of any condition or occurance on any
real property adjoining the Premises which could subject any Indemnifying Party
or the Premises to a claim under any Hazardous Materials Law or to any
restrictions on ownership, occupancy, transferability or use of the Premises
under any Hazardous Materials Law. The Indemnifying Party shall deliver to the
Bank any documentation or records as the Bank may reasonably request and which
are susceptible of being obtained by the Indemnifying Party without undue cost
or expense and without the necessity for initiating legal proceedings to obtain
the same, which the Bank agrees shall be held and reviewed in confidence, unless
disclosure thereof would be required by law.
7. Notice of Claims Against the Bank.
The Bank shall provide the Indemnifying Party with written notice of any
claim or demand which the Bank has determined could give rise to a right of
indemnification under this Agreement. The Indemnifying Party agrees that in any
action, suit or proceeding brought against the Bank, the affected party may be
represented by counsel(s) of its choice without affecting or otherwise impairing
the Indemnities and the Indemnifying Party agrees to pay such fees and
disbursements. The Indemnifying Party shall not settle or compromise such
action, suit or proceeding without the Bank's prior written consent, which
consent shall not be unreasonably withheld.
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8. Payment of Indemnified Parties' Expenses.
If the Bank retains counsel for advice or other representation in any
litigation, contest, dispute, suit or proceeding (whether instituted by the
Bank, the Indemnifying Party, or any other party, including any governmental
agency charged with enforcement of any Hazardous Materials Law) in any way
relating to this Agreement and the Indemnities described herein, or to enforce
the Indemnities hereunder, then all of the reasonable attorneys' fees arising
from such services and all directly related expenses and court costs shall be
jointly and severally payable by the Indemnifying Party within 30 days of
demand.
9. Obligations Absolute and Waivers.
(a) The obligation of the Indemnifying Party may only be modified by a
written amendment to this Agreement signed by the Indemnifying Party and the
Bank. The obligations of the Indemnifying Party hereunder shall remain in full
force without regard to, and shall not be impaired by, the following, any of
which may be taken in such manner, upon such terms and at such times as the Bank
in its sole discretion deems advisable without the consent of, or notice to the
Indemnifying Party nor shall any of the following give the Indemnifying Party
any recourse or right of action against the Bank: (1) any express or implied
amendments, modification, renewal, addition, supplement, extension or
acceleration of or to the Loan; (2) any exercise or non-exercise by the Bank of
any right or privilege under any of the documents evidencing any security on the
Loans (collectively the "Loan Documents"); (3) any bankruptcy, insolvency,
reorganization, composition, adjustment, dissolution, liquidation or other like
proceeding relating to the Indemnifying Party or any of their respective
affiliates or any action taken with respect to this Agreement by any trustee or
receiver, or by any court, in any such proceeding, whether or not the
Indemnifying Party shall have had notice or knowledge or any of the foregoing;
(4) any release, waiver or discharge of the Indemnifying Party or any endorser
or other guarantor from liability under any of the Loan Documents or the grant
to the Bank of a security interest, lien or encumbrance on or against the
Premises; (5) any subordination, compromise, settlement, release (by operation
of law or otherwise), discharge, collection, or liquidation of any of the Loan
Documents, or any collateral described in any of the Loan Documents or
otherwise, or any substitution with respect thereto; (6) any assignment of other
transfer of any of the Loan Documents, in whole or in part; (7) any acceptance
of partial performance of any of the obligation under the Loan Documents; (8)
any consent to the transfer of any collateral described in the Loan Documents or
otherwise; and (9) any bid or purchase at any sale of the collateral described
in the Loan Documents.
(b) The Indemnifying Party unconditionally waives any defense to the
enforcement of this Agreement, including, without limitation: (1) all
presentments, demands for performance, notices of nonperformance, protests,
notices of protest, dishonor, nonpayment, partial payment, default and protest,
notices of acceptance of this Agreement and all other notices and formalities to
which the Indemnifying Party may be entitled (except notices specifically
required to be given by the Bank pursuant to this Agreement); (2) any right to
require the Bank to proceed against the
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Indemnifying Party or any other guarantor, or to proceed against or exhaust any
collateral in the Loan Documents or to pursue any other remedy whatsoever; (3)
any defense arising by reason of any invalidity or unenforceability of any of
the Loan Documents or any disability of the Indemnifying Party or any other
guarantor or of the manner in which the Bank has exercised its remedies under
the Loan Documents; (4) any defense based upon an election of remedies by the
Bank, including, without limitation, any election to proceed by judicial or
nonjudicial foreclosure of any security, whether real property or personal
property, or by deed in lieu thereof, and whether or not every aspect of any
foreclosure sale is commercially reasonable or any election of remedies,
including but not limited to remedies relating to real property or personal
property security, which destroys or otherwise impairs the subrogation rights of
the Indemnifying Party or the rights of the Indemnifying Party to proceed
against any of the other Indemnifying Parties or any other guarantor for
reimbursement, or both; (5) any duty of the Bank to advise the Indemnifying
Party of any information known to the Bank regarding the financial condition of
any of the Indemnifying Parties and all other circumstances affecting the
ability of the Indemnifying Party to perform its obligations to the Bank, it
being agreed that the Indemnifying Parties jointly and severally assume the
responsibility for being and keeping informed regarding such condition or any
such circumstances; and (6) any right of subrogation and any rights to enforce
any remedy which the Bank now has or may hereafter have against the Indemnifying
Party and any benefit of and any right to participate in, any security now or
hereafter held by the Bank, until all obligations under the Loan Documents have
been fully paid and performed.
10. No Waiver.
The obligations of the Indemnifying Party hereunder shall in no way be
impaired, reduced or released by reason of any omission or delay by the Bank to
exercise any right described herein or in connection with any notice (except for
notices required of the Bank pursuant to this Agreement) demand, warning, or
claim regarding violations of any Hazardous Materials Laws.
11. Recourse.
The Indemnifying Party agrees that the Indemnities are separate,
independent or and in addition to the undertakings under the Note and Loan
Documents. The Indemnifying Party agrees that a separate action may be brought
to enforce the provisions of this Agreement which shall in no way be deemed to
be an action on the Note, whether or not the Bank would be entitled to a
deficiency judgement following a judicial foreclosure or sale under the Loan
Documents.
The Indemnifying Party waives any right to require that any action be
brought by the Bank against any other person or that any other remedy under the
Loan Documents be exercised prior to the exercise by the Bank of any of its
remedies hereunder. The Bank may, at its option, proceed against the
Indemnifying Party in the first instance to collect monies when due or to obtain
performance under this Agreement without first resorting to the Loan Documents
or any other remedy under the Loan Documents.
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12. Successors and Assigns.
Subject to the provisions of Paragraph 5 hereof, this Agreement and the
Indemnities contained in this Agreement shall be continuing, irrevocable and
binding on the Indemnifying Party and his respective heirs, successors and
assigns, and this Agreement shall be binding upon and shall inure to the benefit
of the Bank and its respective successors and assigns.
13. Notice.
Any notices which any party may be required or may desire to give, shall
unless otherwise specified, be in writing and shall be given in the manner
provided for in the Loan Documents.
14. Other Agreements.
To the extent there are any inconsistencies between this Agreement and any
of the other Loan Documents, this Agreement shall control.
15. Amendment and Waiver.
This Agreement may not be amended except by a writing signed by both
parties nor shall observance of any term of this Agreement be waived except with
the written consent of the Bank.
16. Governing Law.
This Agreement shall be governed and construed as to interpretation,
enforcement, validity, construction effect and in all other respects by the
laws, statutes and decisions of the State of Connecticut.
17. Counterparts.
This Agreement may be executed in any number of counterparts each of which
shall be deemed an original and all of which taken together shall constitute one
and the same agreement.
18. Severability.
All provisions contained in this Agreement are severable and the invalidity
or unenforceability of any provision shall not effect or impair the validity or
enforceability of the remaining provisions of this Agreement.
19. Heading.
The descriptive headings of the paragraphs of this Agreement are inserted
for convenience only and do not constitute a part of this Agreement.
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IN WITNESS HEREOF, this Agreement has been executed as of the date first
above written.
INDEMNIFIED PARTY: INDEMNIFYING PARTY:
FARMINGTON SAVINGS BANK EDAC TECHNOLOGIES CORPORATION
By /s/ Xxxxxx X. Xxxxxx By /s/ Xxxxxx X. Xxxxxxxxx
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Xxxxxx X. Xxxxxx Xxxxxx Xxxxxxxxx
1st Senior Vice President Executive Vice President
STATE OF CONNECTICUT )
) ss. Farmington February 5, 2001
COUNTY OF HARTFORD )
Before me the undersigned officer, personally appeared XXXXXX XXXXXXXXX,
who acknowledged himself to be the Executive Vice President of EDAC TECHNOLOGIES
CORPORATION., a Wisconsin corporation, and that he, as such, being authorized to
do so, executed the foregoing instrument for the purposes contained therein by
signing his name as the Executive Vice President of said corporation.
/s/ Xxxxxx X. Xxxxxxx
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Commissioner of Superior Court
STATE OF CONNECTICUT )
) ss. Farmington February 5, 2001
COUNTY OF HARTFORD )
Personally appeared XXXXXX X. XXXXXX, 1st Senior Vice President of
FARMINGTON SAVINGS BANK, signer of the foregoing instrument, who acknowledged
the same to be his free act and deed and the free act and deed of said company,
before me.
/s/ Xxxxxx X. Xxxxxxx
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Commissioner of the Superior Court
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