EXHIBIT 10.5
INDEMNITY
(ADA/ENVIRONMENTAL)
This Indemnity ("Indemnity") is made this _____ day of _____________,
2003, by NAVARRE CORPORATION, a Minnesota corporation, ("Borrower"), to and for
the benefit of THE BUSINESS BANK ("Lender").
RECITALS
A. Borrower has applied to Lender for a loan ("Loan") in the
principal amount of Four Million Five Hundred and Fifty Thousand and 00/100
Dollars ($4,550,000.00). The Loan is evidenced by a Promissory Note (the "Note")
and is secured by a Mortgage and Security Agreement and Fixture Financing
Statement (the "Mortgage") on real property located in Hennepin County,
Minnesota (the "Premises").
B. The Borrower is hereinafter referred to as "Indemnitor".
C. Lender is unwilling to make the Loan to Borrower without an
indemnity from Indemnitor against certain matters relating to environmental
protection and clean-up and to providing access to or removal of existing
barriers to access to the Premises. To induce Lender to enter into and make the
Loan, Indemnitor has agreed to provide Lender such indemnity on the terms set
forth below.
NOW, THEREFORE, as a material inducement to Lender to make the Loan,
Indemnitor hereby agrees as follows:
1. Definitions. As used in this Indemnity:
a. Governmental Authority. The term "Governmental Authority"
means any federal, state or local governmental authority or
department now or hereafter authorized to regulate materials
and substances in the environment.
b. Hazardous Materials, Pollutants. The term "Hazardous
Materials, Pollutants" means any hazardous, toxic or dangerous
substance, waste or material which is or becomes regulated
under any federal, state or local statute, ordinance, rule,
regulation or other law now or hereafter in effect pertaining
to environmental protection, contamination or clean-up,
including without limitation any substance, waste or material
which now or hereafter is (i) designated as a "hazardous
substance" under or pursuant to the Federal Water Pollution
Control Act (33 U.S.C. Section 1257 et seq.), (ii) defined as
a "hazardous waste" under or pursuant to the Resource
Conservation and Recovery Act (42 U.S.C. Section 6901 et
seq.), or (iii) defined as a "hazardous substance" in (or for
purposes of) the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. Section 9601 et
seq.), and further including petroleum products, asbestos,
formaldehyde and urea.
c. ADA or similar laws. The term "ADA or similar laws" means the
Federal Americans With Disabilities Act of 1990 or any
federal, state or local statute,
ordinance, rule or regulation pertaining to the providing of
access or the removal of existing barriers to access for
persons with disabilities.
2. Indemnification. Indemnitor is aware that Lender is relying on
this Indemnity in making the Loan, and Indemnitor hereby indemnifies and agrees
to hold harmless Lender and its officers, directors, employees and agents from
and against any and all liabilities, losses, claims, damages and expenses,
including reasonable attorneys' fees and disbursements (collectively
"Liabilities") to which Lender or any of the foregoing persons may become
subject, insofar as such Liabilities arise out of or are based upon any of the
following:
a. Any violation or alleged violation, with respect to the
Premises, of any federal, state or local statute, ordinance,
rule, regulation or other law now or hereafter in effect
pertaining to environmental protection, contamination or
clean-up, or any governmental or judicial claim, order or
judgment with respect to the clean-up of any Hazardous
Materials or Pollutants at or with respect to the Premises;
b. Any damages to third persons for personal injury or property
damage arising from the releasing, spilling, leaking, pumping,
emitting, pouring, emptying or dumping of Hazardous Materials
or Pollutants into waters or onto lands, whether or not
located within the boundaries of the Premises.
c. Any violation or alleged violation with respect to the
Premises of the ADA or similar laws and any and all expense,
cost, loss, liability, including reasonable attorneys fees
incurred by Lender in connection with such matters.
3. No Limitations.
a. Indemnitor's obligations under this Indemnity shall not be
subject to any non-recourse or other limitation of liability
provisions in the Note, the Mortgage or any other instrument
or document evidencing or securing the Loan or otherwise
executed in connection therewith, and Indemnitor acknowledges
that the obligations hereunder are unconditional and are not
limited by any such non-recourse or similar limitation of
liability provisions.
b. Indemnitor acknowledges and agrees that the covenants and
obligations of Indemnitor set forth in this Indemnity are
separate obligations from the obligations evidenced and
secured by the Note, Mortgage and other loan documents, and
that the covenants and obligations of Indemnitor set forth in
this Indemnity are not secured by the Mortgage or any other
instrument or document securing the Loan. Indemnitor further
acknowledges and agrees that the covenants and obligations of
Indemnitor set forth in this Indemnity shall survive any
repayment of the Loan, discharge of the Indemnitor by
operation of law or foreclosure of the Mortgage, whether
judicial or non-judicial, to the maximum extent permitted by
law, and if title to the Premises or any interest therein or
portion thereof is transferred pursuant to foreclosure
proceedings (whether judicial or non-judicial), or by deed in
lieu of foreclosure or otherwise in connection with any Event
of Default (as defined in the Mortgage), then the
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covenants and obligations of Indemnitor set forth in this
Indemnity shall survive such transfer, and shall continue in
effect for so long as a valid claim may be lawfully asserted
with respect to matters for which Lender and its officers,
directors, employees and agents are indemnified under this
Indemnity. Notwithstanding the foregoing, the indemnity
contained herein, it shall not apply with respect to any loss,
damage, liability, cost or expense which Indemnitor provides
by a preponderance of the evidence was caused solely by or
resulted solely from any act or omission of any person, other
than an Indemnitor or an agent, employee, invitee or
contractor of an Indemnitor and which occurred after the
Lender or anyone claiming by, through or under the Lender
acquired title to the Mortgaged Property by foreclosure of the
Mortgage or deed in lieu of foreclosure or otherwise and took
control of the Mortgaged Property.
c. The provisions of this paragraph 3 shall control over any
provision of the Note, the Mortgage or any other loan document
which may be to the contrary, and the Note, the Mortgage and
any and all such other loan documents shall be construed
accordingly.
4. Time of Payment. The Liabilities for which Lender and its
officers, directors, employees and agents are indemnified under this Indemnity
shall be reimbursable to Lender as Lender's obligations to make payments with
respect thereto are incurred, without any requirement of waiting for ultimate
outcome of any litigation, claim or other proceeding, and Indemnitor shall pay
such Liability to Lender as so incurred and on demand by notice from Lender
itemizing the amounts incurred to the date of such notice. In addition to any
remedy otherwise available for failure to periodically pay such amounts, such
amount shall bear interest at the Note rate (or the maximum amount permitted by
applicable law, if such be less) from the date such amounts are demanded by
Lender to date of reimbursement.
5. Waivers. Indemnitor waives any acceptance of this Indemnity by
Lender. The failure of Lender or any other person indemnified hereunder to
enforce any right or remedy hereunder, or promptly to enforce any such right or
remedy, shall not constitute a waiver thereof, nor give right to any estoppel
against Lender or such other person, nor excuse Indemnitor from any obligations
hereunder. Any waiver of such right or remedy must be in writing and signed by
Lender or such other person.
6. Enforcement. This Indemnity is subject to enforcement at law
and/or equity, including actions for damages and/or specific performance.
7. Costs and Expenses. Indemnitor agrees to pay on demand all
costs and expenses of the Lender, including but not limited to reasonable
attorneys fees and costs, environmental consultant and appraisal costs, incurred
by Lender in connection with the enforcement of the Indemnity and the collection
of any amounts due hereunder.
8. Successors and Assigns. This Indemnity shall bind the
Indemnitor and its heirs, devisees, legatees, administrators, executors,
successors and assigns and inure to the benefit of the Lender and its successors
and assigns.
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9. Governing Law. This Indemnity shall be construed, enforced and
otherwise governed by the laws of the State of Minnesota.
IN WITNESS WHEREOF, this Indemnity has been executed as of the day and
year first above written.
NAVARRE CORPORATION, a
Minnesota corporation
By _____________________________
Its ____________________________
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