EXHIBIT 10.8
INDEMNITY AGREEMENT REGARDING HAZARDOUS MATERIALS
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THIS INDEMNITY AGREEMENT REGARDING HAZARDOUS MATERIALS (this "Agreement"),
is made as of this 2nd day of December, 1999, by Harry's Farmers Market, Inc.
("Borrower"), a corporation organized under the laws of the state of Georgia,
and Karalea, Inc. ("Karalea"), a corporation organized under the laws of the
state of Georgia, and Marthasville Trading Company, Inc. ("Marthasville"), a
corporation organized under the laws of the state of Georgia (hereinafter,
Karalea and Marthasville shall singly and collectively be referred to as the
"Guarantor"); for the benefit of BACK BAY CAPITAL FUNDING, LLC, a Delaware
limited liability company ("Lender"). Unless otherwise defined herein, all
capitalized terms used herein shall have the meaning provided for in that
certain Loan and Security Agreement of even date herewith by and between the
Borrower and the Lender (together with any and all restatements, renewals,
amendments, extensions and modifications thereof, the "Loan Agreement").
W I T N E S S E T H:
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WHEREAS, Borrower is the owner or lessor of certain real property located
in Gwinnett, Xxxxxx, Xxxx and DeKalb Counties, Georgia, more particularly
described in Exhibit A-1 and attached hereto and incorporated herein by this
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reference, and Karalea is the owner of certain real property located in Xxxx
County, Georgia, more particularly described in Exhibit A-2 and attached hereto
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and incorporated herein by this reference (hereinafter, collectively, the
"Land"), (the Land, together with all improvements now or hereafter located in,
on or under the Land, collectively, the "Property");
WHEREAS, Lender has made and Borrower has accepted a loan in the aggregate
amount of $24,500,000.00 (the "Loan"), which Loan is evidenced by, among other
documents, instruments and agreements, the Loan Agreement, that certain
Revolving Credit Note of even date from Borrower to Lender in the face amount of
$5,000,000.00 (the "Term Note") and that certain Term Note of even date from
Borrower to Lender in the face amount of $19,500,000.00 (the "Revolving Credit
Note");
WHEREAS, as security for the Borrower's Liabilities, the Borrower has,
among other things, executed and delivered to the Lender that certain Deed to
Secure Debt and Security Agreement of even date conveying that portion of the
Propery described on Exhibit A-1 and to be recorded in the public records of the
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aforesaid counties (together with all amendments, modifications, consolidations,
increases, supplements and extensions thereof, the "Borrower Security Deed");
WHEREAS, Marthasville and Karalea have each executed and delivered to the
Lender their respective Guaranties of even date herewith (collectively, the
"Guaranty") pursuant to which Marthasville and Karalea have each guarantied the
Liabilities (as defined in said Guaranty) of the Borrower to the Lender;
WHEREAS, as security for Karalea's Liabilities pursuant to its Guaranty,
Karalea has, among other things, executed and delivered to the Lender that
certain Deed to Secure Debt and Security Agreement of even date conveying that
portion of the Propery described on Exhibit A-2 and to be recorded in the public
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records of the aforesaid county (together with all amendments, modifications,
consolidations, increases, supplements and extensions thereof, the "Karalea
Security Deed") (hereinafter, the
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Borrower Security Deed and the Karalea Security Deed shall collectively be
referred to as the "Security Deed");
WHEREAS, as a condition to making the Loan, Lender requires Borrower and
Guarantor to provide certain indemnities concerning Hazardous Materials (as
hereinafter defined) presently upon, in or under the Property, or hereafter
placed or otherwise located thereon or therein;
WHEREAS, to induce Lender to make the Loan to Borrower, Borrower and
Guarantor have agreed to provide this Agreement for Lender's benefit.
NOW, THEREFORE, for and in consideration of the sum of Ten and No/100
($10.00) Dollars and other good and valuable consideration, the receipt and
sufficiently of which are hereby acknowledged, Lender, by its acceptance of
delivery hereof, and Guarantor and Borrower hereby agree as follows:
1. Definitions. The following definitions shall apply for purposes of this
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Agreement:
(1) "Environmental Law" shall have the meaning set forth in the Loan
Agreement.
(2) "Hazardous Materials" shall have the meaning set forth in the Loan
Agreement
(3) "Indemnified Parties" shall mean Lender, Lender's parent, subsidiaries
and affiliates, and any Participant, and each of their respective
shareholders, directors, officers, employees and agents, and the successors
and assigns of any of them; and "Indemnified Party" shall mean any one of
the Indemnified Parties.
(4) "Release" shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, storing, escaping, leaching, dumping, or
discarding, burying, abandoning, or disposing into the environment.
(5) "Threat of Release" shall mean a substantial likelihood of a Release
which requires action to prevent or mitigate damage to the environment
which may result from such Release.
2. Indemnity Agreement. Borrower and Guarantor, each jointly and severally,
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covenant and agree, at their sole cost and expense, to indemnify, defend (at
trial and appellate levels and with attorneys, consultants and experts
acceptable to Lender) and hold each Indemnified Party harmless against and from
any and all liens, damages, losses, liabilities, obligations, settlement
payments, penalties, assessments, citations, directives, claims, litigation,
demands, defenses, judgments, suits, proceedings, costs, disbursements or
expenses of any kind or of any nature whatsoever (including, without limitation,
reasonable attorneys', consultants' and experts'
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fees and disbursements incurred in investigating, defending against, settling or
prosecuting any claim, litigation or proceeding) which may at any time be
imposed upon, incurred by or asserted or awarded against such Indemnified Party
or the Property and, and arising directly or indirectly from or out of, and
arising or occurring prior to any transfer of the Property (as permitted
pursuant to the Loan Agreement) or a Foreclosure Transfer Event: (A) the Release
or Threat of Release of any Hazardous Materials 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 Borrower; (B) the violation of any
Environmental Laws relating to or affecting the Property or the Borrower,
whether or not caused by or within the control of Borrower; (C) the failure of
Borrower to comply fully with the terms and conditions of this Agreement; (D)
the violation of any Environmental Laws in connection with other real property
of Borrower which gives or may give rise to any rights whatsoever in any party
with respect to the Property by virtue of any Environmental Laws; or (E) the
enforcement of this Agreement, including, without limitation, (i) the costs of
assessment, containment and/or removal of any and all Hazardous Materials from
all or any portion of the Property or any surrounding areas, (ii) the costs of
any actions taken in response to a Release or Threat of Release of any Hazardous
Materials on, in, under or affecting all or 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 (iii) costs
incurred to comply with the Environmental Laws in connection with all or any
portion of the Property or any surrounding areas. Lender's and the other
Indemnified Parties' rights under this Agreement shall be in addition to all
rights of Lender under each of the Security Deeds, the Term Note, the Revolving
Credit Note, the Loan Agreement, the Guaranty, and under any other Loan
Document, and payments by Borrower or Guarantor under this Agreement shall not
reduce Borrower's obligations and liabilities under any of the Loan Documents.
Notwithstanding the foregoing, the indemnification provided for herein shall not
apply to any matters resulting from the gross negligence or wilful misconduct of
any Indemnified Party. As used herein, "Foreclosure Transfer Event" shall mean a
transfer of title to any Property such that the lien of the Security Deed is
foreclosed at a foreclosure sale under the Security Deed pursuant to a judicial
decree or power of sale contained therein, or a conveyance by deed in lieu of
such foreclosure.
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3. Survival.
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(1) The indemnity set forth above in Paragraph 2 shall survive the
repayment of the Loan, any transfer of the Property (as permitted pursuant
to the Loan Agreement), and any exercise by Lender of any remedies under
the Security Deed, including without limitation, the power of sale, or any
other remedy in the nature of foreclosure, and shall not merge with any
deed given by Borrower to Lender in lieu of foreclosure or any deed under a
power of sale.
(2) It is agreed and intended by Borrower, Guarantor and Lender
that the indemnity set forth above in Paragraph 2 may be assigned or
otherwise transferred by Lender to its successors and assigns and to any
subsequent purchaser of all or any portion of the Property by, through or
under Lender, without notice to Borrower or Guarantor and without any
further consent of Borrower or Guarantor. To the extent consent of any such
assignment or transfer is required by law, advance consent to any such
assignment or transfer is hereby given by Borrower and Guarantor in order
to maximize the extent and effect of the indemnity given hereby.
4. No Waiver. The liabilities of Borrower and Guarantor under this
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Agreement shall in no way be limited or impaired by, and Borrower and
Guarantor hereby consent to and agree to be bound by, any amendment or
modification of the provisions of the Loan Documents to or with Lender by
Borrower or Guarantor or any person who succeeds Borrower as owner of the
Property. In addition, notwithstanding any terms of any of the Loan
Documents to the contrary, the liability of Borrower and Guarantor under
this Agreement shall in no way be limited or impaired by: (i) any
extensions of time for performance required by any of the Loan Documents;
(ii) any sale, assignment or foreclosure of either of the Security Deeds or
any sale or transfer of all or part of the Property; (iii) any exculpatory
provision in any of the Loan Documents limiting Lender's recourse to
property encumbered by the Security Deeds or to any other security, or
limiting Lender's rights to a deficiency judgment against Borrower; (iv)
the accuracy or inaccuracy of the representations and warranties made by
Borrower under any of the Loan Documents; (v) the release of Borrower or
any other person from performance or observance of any of the agreements,
covenants, terms or conditions contained in the Loan Documents by operation
of law, Lender's voluntary act, or otherwise; (vi) the release or
substitution, in whole or in part, of any security for either of the
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Term Note or the Revolving Credit Note; or (vii) Lender's failure to record the
Security Deeds or file any UCC-1 financing statements (or Lender's improper
recording or filing of any thereof) or to otherwise perfect, protect, secure or
insure any security interest or lien given as security for either of the Term
Note or the Revolving Credit Note; and, in any such case, whether with or
without notice to Borrower or Guarantor and with or without consideration.
5. Waiver by Borrower and Guarantor. Borrower and Guarantor waive any right
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or claim of right to cause a marshalling of Borrower's assets or to cause Lender
to proceed against any of the security for the Loan before proceeding under this
Agreement against Borrower and Guarantor or to proceed against Borrower and
Guarantor in any particular order; Borrower and Guarantor agree that any
payments required to be made hereunder shall become due on demand; Borrower and
Guarantor expressly waive and relinquish all rights and remedies (including any
rights of subrogation) accorded by applicable law to indemnitors or guarantors.
6. Delay. No delay on Lender's part in exercising any right, power or
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privilege under any of the Loan Documents shall operate as a waiver of any
privilege, power or right hereunder.
7. Releases. Any one or more of Borrower and Guarantor or any other party
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liable upon or in respect of this Agreement or the Loan may be released without
affecting the liability of any party not so released.
8. Counterparts. This Agreement may be executed in one or more counterparts,
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each of which shall be deemed an original. Said counterparts shall constitute
but one and the same instrument and shall be binding upon each of the
undersigned individually as fully and completely as if all had signed but one
instrument so that the joint and several liability of each of the undersigned
hereunder shall be unaffected by the failure of any of the undersigned to
execute any or all of the said counterparts.
9. Notices. All notices, demands, and other communications made in respect of
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this Agreement shall be made to the following addresses, each of which may be
changed upon seven (7) days written notice to all others given by certified
mail, return receipt requested:
If to the Lender:
Back Bay Capital Funding, LLC
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention : Xxxxxxx Xxxxxxx
Managing Director
Fax : (000) 000-0000
With a copy to:
Xxxxxx & Xxxxxxxxxx LLP
Xxxxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
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Attention : Xxxxx X. Xxxxxx, Esquire
Fax : 000 000 0000
If to the Borrower:
Harry's Farmers Market, Inc.
0000 Xxxxx Xxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Attention : Xxxxx Xxxxxx
Fax :
If to the Guarantors:
Karalea, Inc.
0000 Xxxxx Xxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Attention : Xxxxx Xxxxxx
Fax :
Marthasville Trading Company, Inc.
0000 Xxxxx Xxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Attention : Xxxxx Xxxxxx
Fax
With respect to
each of the Borrower
and the Guarantors
with a copy to:
Xxxxxx & Bird, LLP
One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention : Xx XxXxxxxxx, Esquire
Fax: : (000) 000-0000
Except as otherwise specifically provided herein, notices shall be deemed made
and correspondence received, as follows (all times being local to the place of
delivery or receipt):
(1) By mail: the sooner of when actually received or Three (3) days
following deposit in the United States mail, postage prepaid.
(2) By recognized overnight express delivery: the Business Day following
the day when sent.
(3) By Hand: If delivered on a Business Day after 9:00 AM and no later than
Three (3) hours prior to the close of customary business hours of the recipient,
when delivered. Otherwise, at the opening of the then next Business Day.
(4) By Facsimile transmission (which must include a header on which the
party sending such transmission is indicated): If sent on a Business Day after
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9:00 AM and no later than Three (3) hours prior to the close of customary
business hours of the recipient, one (1) hour after being sent. Otherwise,
at the opening of the then next Business Day.
(5) Rejection or refusal to accept delivery and inability to deliver
because of a changed address or Facsimile Number for which no due notice
was given shall each be deemed receipt of the notice sent.
10. Amendments. No provision of this Agreement may be changed, waived,
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discharged or terminated orally, by telephone or by any other means except by an
instrument in writing signed by the party against whom enforcement of the
change, waiver, discharge or termination is sought.
11. Binding Effect. Except as herein provided, this Agreement shall be
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binding upon Borrower and Guarantor and their respective heirs, personal
representatives, successors and assigns, and shall inure to the benefit of
Lender, the other Indemnified Parties, and their respective successors and
assigns. Notwithstanding the foregoing, Borrower and Guarantor, without the
prior written consent of Lender in each instance, may not assign, transfer or
set over to another, in whole or in part, all or any part of its or their
benefits, rights, duties and obligations hereunder, including, but not limited
to, performance of and compliance with conditions hereof.
12. Governing Law This Agreement and all rights and obligations
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hereunder, including matters of construction, validity, and performance, shall
be governed by the law of The Commonwealth of Massachusetts.
13. Consent to Jurisdiction.
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(1) The Borrower and each Guarantor agree that any legal action,
proceeding, case, or controversy against the Borrower or any Guarantor with
respect to this Agreement may be brought in the Superior Court of Suffolk
County Massachusetts or in the United States District Court, District of
Massachusetts, sitting in Boston, Massachusetts, as the Lender may elect in
the Lender's sole discretion. By execution and delivery of this Agreement,
the Borrower and the Guarantor, for themselves and in respect of their
property, accept, submit, and consent generally and unconditionally, to the
jurisdiction of the aforesaid courts.
(2) The Borrower and each Guarantor WAIVE personal service of any
and all process upon it, and irrevocably consents to the service of process
out of any of the aforementioned courts in any such action or proceeding by
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the mailing of copies thereof by certified mail, postage prepaid, to the
Borrower and to each Guarantor at their respective addresses for notices as
specified herein, such service to become effective five (5) Business Days
after such mailing.
(3) The Borrower and each Guarantor WAIVE any objection based on forum
non conveniens and any objection to venue of any action or proceeding
instituted under this Agreement and consent to the granting of such legal
or equitable remedy as is deemed appropriate by the Court.
(4) Nothing herein shall affect the right of the Lender to bring legal
actions or proceedings in any other competent jurisdiction.
(5) The Borrower and each Guarantor agree that any action commenced by
the Borrower or any Guarantor asserting any claim arising under or in
connection with this Agreement shall be brought solely in the Superior
Court of Suffolk County Massachusetts or in the United States District
Court, District of Massachusetts, sitting in Boston, Massachusetts, and
that such Courts shall have exclusive jurisdiction with respect to any such
action.
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IN WITNESS WHEREOF, Borrower and Guarantor have caused this Agreement to be
executed under seal as of the day and year first written above.
BORROWER:
HARRY'S FARMERS MARKET, INC.
By: /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
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Title: Sr. Vice President and CFO
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GUARANTORS:
KARALEA, INC.
By: /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
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Title: Sr. Vice President and CFO
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MARTHASVILLE TRADING COMPANY, INC.
By: /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
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Title: Sr. Vice President and CFO
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