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Exhibit 10(k)(6)(b)
ENVIRONMENTAL INDEMNIFICATION AGREEMENT
FROM
XXXXX EQUITY, INC.
TO
FIRST UNION NATIONAL BANK OF FLORIDA
AND
XXXXXX GUARANTY TRUST COMPANY OF NEW YORK
DATED AS OF APRIL 7, 1997
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ENVIRONMENTAL INDEMNIFICATION AGREEMENT
THIS ENVIRONMENTAL INDEMNIFICATION AGREEMENT (this "Agreement") is
made and executed as of this 7th day of April, 1997, from
XXXXX EQUITY, INC., a Florida corporation ("Borrower"), whose address is 0000
Xxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxxxx, Xxxxxxx 00000 Attention:
X.X. Xxxxxx, Executive Vice President,
to and in favor of
FIRST UNION NATIONAL BANK OF FLORIDA, a national banking association ("FUNB"),
whose address is 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000 Attention:
Real Estate Portfolio Management, and XXXXXX GUARANTY TRUST COMPANY OF NEW
YORK, a New York banking corporation ("MGT"), whose address is 00 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 Attention: Xxxxxxx X'Xxxxxxx (FUNB and MGT together
being referred to as "Lender"),
which terms Borrower and Lender, 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 Lender pursuant to that certain
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
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 and Security Agreement in favor of Lender (the "Deed of Trust")
encumbering real property located in Guilford County, North Carolina, and being
more particularly described on attached Exhibit A (the "Property").
C. As a condition precedent to and as a material inducement for
Lender's agreement to provide the Loan to Borrower, Lender has required
Borrower to execute and deliver this Agreement, it being acknowledged and
understood by Borrower that Lender otherwise is not willing to make or provide
the Loan.
D. Borrower has obtained a Phase I Environmental Site Assessment
dated January 16, 1997, prepared by Law Engineering & Environmental
Services, Inc. (the "Environmental Assessment"), and has delivered a copy of
the same to Lender. Lender intends to rely on the Environmental Assessment in
making the Loan.
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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 Lender to make
or provide the Loan to Borrower, Borrower hereby covenants and agrees with
Lender 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) G.S. 14-284.2, G.S.95-173 - 218 (Hazardous Chemicals
Right to Know Act), G.S. 104E (North Carolina Radiation Protection Act), G.S.
130A-290 - 310.23, G.S. 143-215.75 - 215.104 (Oil Pollution and Hazardous
Substances Control Act of 1978), G.S. 143-434 -470.1 (North Carolina Pesticides
Law of 1971), General Statutes of North Carolina, and rules and regulations
promulgated thereunder.
(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 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.
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(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 Lender takes 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 Lender.
(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
Lender 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 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 harmless Lender, which for purposes of this paragraph
will be deemed to include the directors, officers, shareholders, employees and
agents of Lender, from and
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against any Claims other than claims arising from Lender's or such other
included parties' gross negligence or willful misconduct, including, without
limitation, any claims relating to an Existing Condition. In the event that
Lender suffers or incurs any Claims, Borrower will pay to Lender the total of
all such Claims suffered or incurred by Lender upon demand therefor by Lender.
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 Lender.
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 Lender's 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,
Lender 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 Lender.
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) neither Lender nor any assignee of
its interest (including any person having a beneficial interest) in the
Property, the Loan and the Loan Agreement will be exposed or subjected to civil
or criminal liability, and (iii) the lien and security interest of Lender or
any such assignee in the Property, the Loan, the Loan Agreement, or the payment
of any sums to be paid under the Loan Agreement, 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 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 Lender 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 Lender
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
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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 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, Lender agrees 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, Lender 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 Lender. No consent by Borrower will be required for
any assignment or reassignment of the rights of Lender hereunder to one or more
purchasers of the Loan, the Loan Agreement or Lender's 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 Agreement, 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 Lender 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 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 Lender 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 Lender 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 Lender of, if Borrower and Lender 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 Lender takes possession of the
Property pursuant to an Order
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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 Lender without regard to any other rights and
remedies Lender may have against Borrower under the Loan Agreement and
without regard to any limitations on Lender's 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 Lender may bring and prosecute a separate action or actions against
Borrower hereunder whether or not Lender has brought an action against
Borrower under the Loan Agreement.
10. Default Interest. Any Claims and other payments required to be paid
by Borrower to Lender 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 Lender against Borrower as provided herein, or under applicable law,
Borrower will pay to Lender, 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 under the Loan Agreement, but
in any event not to exceed the maximum rate of interest permitted to be
contracted for under North Carolina law. 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. 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 Lender, and their respective successors and assigns. This
Agreement will be governed and construed in accordance with the laws of the
State of North Carolina. The parties hereby stipulate that jurisdiction and
venue for purposes of enforcement of this Agreement and
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adjudication of the respective rights and obligations of the parties shall be
in the North Carolina circuit court in the judicial circuit in which the
Property is located.
12. 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.
13. Waiver of Defenses. In any action, suit or proceeding relating to
this Agreement, Borrower and Lender waive the right to interpose a defense of
laches, failure of consideration or mutuality of remedy.
IN WITNESS WHEREOF, Borrower and Lender have executed this Agreement
as of the date first above written.
BORROWER:
XXXXX EQUITY, INC.,
Attest: a Florida corporation
By: /s/ Xxxxx X. Xxxxx By: /s/ G. Xxxxx Xxxxxxx
-------------------------- ----------------------------
Name: Xxxxx X. Xxxxx Name: G. Xxxxx Xxxxxxx
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Its Asst. Secretary Title: Treasurer
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[AFFIX CORPORATE SEAL]
LENDER:
FIRST UNION NATIONAL BANK OF
FLORIDA, a national banking association
Attest:
By: /s/ Xxxx Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------- ----------------------------
Name: Xxxx Xxxxxxxx Name: Xxxxxxx X. Xxxxxxxx
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Its Vice President Its Sr. Vice President
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[AFFIX CORPORATE SEAL]
XXXXXX GUARANTY TRUST
COMPANY OF NEW YORK,
a New York banking corporation
Attest:
By: /s/ Silke Ossenkohp By: /s/ Xxxxxxx X. X'Xxxxxxx
------------------------- -------------------------------
Name: Silke Ossenkohp Name: Xxxxxxx X. X'Xxxxxxx
----------------------- -----------------------------
Its Asst. Secretary Its Vice President
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[AFFIX CORPORATE SEAL]
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EXHIBIT A
DESCRIPTION OF PROPERTY
[NOT INCLUDED IN FORM 8-K FILING WITH SECURITIES AND EXCHANGE COMMISSION]
