ENVIRONMENTAL INDEMNITY AGREEMENT
ENVIRONMENTAL INDEMNITY AGREEMENT (this "Agreement") made
this 27th day of February, 1998 by XXXX INTERNATIONAL HOLDINGS,
INC., a Delaware corporation ("HOLDINGS"), DEFLECTA-SHIELD
CORPORATION, a Delaware corporation, XXXX INDUSTRIES,
INCORPORATED, a Minnesota corporation, BELMOR AUTOTRON CORP., a
Delaware corporation, DFM CORP., an Iowa corporation, XXXX
ACQUISITION CORP., a Minnesota corporation, BAC ACQUISITION CO.,
a Delaware corporation, TRAILMASTER PRODUCTS, INC., a Delaware
corporation, and DELTA III, INC., a Delaware corporation (each of
the foregoing is referred to herein as an "INDEMNITOR" and,
collectively, "INDEMNITORS"), in favor of XXXXXX FINANCIAL, INC.,
as Agent (the "AGENT") for the benefit of all Lenders (as such
term is defined below).
PRELIMINARY STATEMENT
---------------------
WHEREAS,
A. Indemnitors are entering into that certain Credit
Agreement dated as of the date hereof with Agent and certain
financial institutions from time to time party thereto
(collectively, "Lenders") (as it may be amended, restated,
supplemented or otherwise modified and in effect from time to
time, the "Credit Agreement") providing, for loans and other
financial accommodations to be made by Lenders and Borrowers.
B. Certain of the Indemnitors are owners or lessors of the
real properties (such properties each a "Mortgaged Property" and
collectively "Mortgaged Properties") particularly described in
Schedules 5.12(A) and 5.12(B) to the Credit Agreement, which
Schedules are incorporated herein by reference and made a part
hereof.
C. As a condition to making the loans and financial
accommodations to the Borrowers, the Agent for the benefit of all
Lenders requires that the Indemnitors provide certain indemnities
concerning Hazardous Materials and compliance with Environmental
Laws (as those terms are hereinafter defined).
D. To induce the Agent to make the loans and financial
accommodations to the Borrowers, the Indemnitors have agreed to
enter into this Agreement.
NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Agent and the Indemnitors
hereby agree as follows:
1.1 All capitalized terms not defined herein shall have the
meaning defined in the Credit Agreement. Unless defined
otherwise in the Credit Agreement, the following terms shall have
the following meanings:
"Environmental Complaint" - shall mean any judgment,
lien, order, complaint, notice, citation, action, proceeding or
investigation pending before any Governmental Authority,
including, without limitation, any environmental regulatory body,
with respect to or threatened against or affecting any Indemnitor
or relating to its business, assets, property or facilities or
the Mortgaged Properties, in connection with any Hazardous
Material or any Hazardous Discharge or any Environmental Law.
"Governmental Authority" - shall mean any federal,
state, or local government, governing body, agency, court,
tribunal, authority, subdivision, bureau or other recognized body
having jurisdiction to enact, promulgate, interpret, enforce,
review or repeal any Environmental Law.
"Hazardous Discharge" - shall mean any release of a
Hazardous Material caused by the seeping, spilling, leaking,
pumping, pouring, emitting, using, emptying, discharging,
injecting, escaping, leaching, dumping or disposing of any
Hazardous Material into the environment, and any liability for
the costs of any cleanup or other remedial action.
1.2 The Indemnitors covenant and agree, at their sole cost
and expense, jointly and severally to indemnify, protect, and
save the Agent and the Lenders harmless against and from any and
all losses, liabilities, obligations, penalties, charges, fees,
claims, litigation demands, defenses, costs, judgments, suits,
proceedings, response costs, damages (including reasonable
consequential damages), disbursements or expenses of any kind or
of any nature whatsoever (including, without limitation,
reasonable attorneys' fees and disbursements generally, at trial
and appellate level, and experts' fees, disbursements and
expenses incurred in investigating, defending against or
prosecuting any litigation, claim or proceeding) which may at any
time be imposed upon, incurred by or asserted or awarded against
the Agent and/or the Lenders and arising from or out of:
(a) any of the Indemnitors' failure to comply with
(i) the provisions of the Credit Agreement regarding
Environmental Laws, Environmental Complaints, Hazardous Discharge
and Hazardous Materials, (ii) Environmental Laws, or (iii) any
Environmental Complaint as those terms are defined herein or in
any of the Loan Documents, or the Indemnitors' breach of any
representation or warranty in any Loan Document regarding
Hazardous Materials, Environmental Laws, an Environmental
Complaint and a Hazardous Discharge, or
(b) any Hazardous Materials on, in, under or affecting
all or any portion of any of the Mortgaged Properties or
emanating from any of the Mortgaged Properties and affecting any
surrounding areas, or
(c) the enforcement of this Agreement or the assertion
by the Indemnitors of any defense to its obligations hereunder
(unless such defense is sustained), whether any of such matters
arise before or after foreclosure of any of the Mortgages or
other taking of title to all or any portion of the Mortgaged
Properties by the Agent or any of the Lenders or any affiliate of
the Agent or any of the Lenders, including, without limitation:
(i) the costs to correct, contain, cleanup,
remove, resolve or minimize the impact of any and all Hazardous
Materials from all or any portion of the Mortgaged Properties or
any area surrounding or adjoining the Mortgaged Properties,
(ii) additional costs required to take necessary
precautions to protect against a Hazardous Discharge on, in,
under or affecting any of the Mortgaged Properties into the air,
any body of water, any other public domain or any surrounding or
adjoining areas, and the
(iii) costs incurred to comply, in connection
with all or any portion of any of the Mortgaged Properties or any
area surrounding or adjoining any of the Mortgaged Properties,
with the Environmental Laws.
All corrective work referred to in clause (i) above,
all work and other actions to take precautions against Hazardous
Discharge referred to in clause (ii) above and all work and other
actions performed in order to comply with the Environmental Laws
referred to in clause (iii) above are hereinafter collectively
referred to as the "Work".
1.3 Agent and the Lenders' rights under this Agreement,
shall be in addition to all rights of such parties under any of
the Loan Documents. Payments by the Indemnitors, as required
under this Agreement shall not reduce any of the Indemnitors'
obligations and liabilities under any of the Loan Documents.
2. The Indemnitors shall have the right (i) to contest (a
"Contest") by appropriate administrative, legal or equitable
proceedings, diligently prosecuted, in good faith, in their name
or in the name of the Agent or Lenders if required by law, at the
sole cost and expense of the Indemnitors, the validity or
applicability of any Environmental Laws, or any Environmental
Complaint against any of the Mortgaged Properties or the
Indemnitors, and (ii) to postpone compliance with the
Environmental Laws until the final determination of such Contest
without violating the provisions of this Agreement or any Loan
Documents, provided, however:
-------- -------
(a) enforcement proceedings with respect to any and
all Environmental Laws are deferred or stayed during the pendency
of the Contest,
(b) the Agent and Lenders shall not be subject to any
civil or criminal or other penalties or liabilities, costs or
expenses by reason of any such Contest or postponement in
complying with the Environmental Laws,
(c) the lien of the Mortgages shall not be impaired in
the sole judgment of the Agent and no default shall exist and be
continuing under any Loan Document and the Agent shall not have
completed foreclosure or a sale under power of sale or accepted a
deed in lieu of foreclosure or otherwise (i) enforced or
commenced to enforce any of the Agent's or Lenders' rights or
remedies under the Loan Documents, or (ii) taken title to all or
any portion of the Mortgaged Properties,
(d) the Indemnitors shall (i) post a bond or any other
security which shall be required of them in connection with the
Contest or, (ii) at the Agent's request, if no such bond or
security has been posted, shall post a bond issued by a surety
reasonably satisfactory to the Agent, or any other security
reasonably satisfactory to the Agent, in form, substance and
amount, to secure the payment for all of the work, labor and
services required to effect a proper and complete cure or
correction of the condition which constitutes the basis for the
Contest,
(e) any Contest shall be instituted promptly after any
of the Indemnitors receive notice of the existence of any
Environmental Law which imposes an obligation upon Indemnitor,
Agent or Lender or any Indemnitor receives notice of any
Environmental Complaint which asserts any obligation or liability
affecting any Indemnitor, Agent or Lender or all or any portion
of any of the Mortgaged Properties, and such Contest shall at all
times be diligently prosecuted until a final disposition is
obtained that negates such assertion of obligation or liability,
and
(f) the Indemnitors shall notify the Agent in writing
within ten (10) days after commencement of a Contest, and shall
give the Agent a monthly report, during the period of a Contest,
on the Indemnitors' progress with respect thereto, and shall
promptly give the Agent such other information with respect
thereto as the Agent shall reasonably request, and
The Agent will, at the expense of the Indemnitors, execute
and deliver any documents jurisdictionally necessary or proper to
prosecute such Contest proceedings. The Agent, at the cost and
expense of the Indemnitors, shall have the right (but not the
obligation) to join in any Contest.
3.1 If the Indemnitors fail to commence a Contest, or once
commenced the Indemnitors fail to prosecute such Contest with due
diligence, or a Governmental Authority determines that the
Contest is unsuccessful and such determination is not or ceases
to be subject to further appeal, then the Indemnitors shall
promptly perform the Work and comply with the Environmental Laws
and all other applicable laws to correct, contain, cleanup,
remove, resolve or minimize the impact of such Hazardous
Material, Environmental Discharge or Environmental Complaint
which shall be the subject of the Work.
3.2 It is expressly understood and agreed that failure by
the Agent to object to any actions taken by the Indemnitors shall
not be construed to be an approval by the Agent of such actions.
It is further expressly understood and agreed that this Agreement
shall not be construed as creating any obligation for the Agent
to initiate any Contests of the nature described in above
Paragraph 2, to review any plans for any Work or to perform or
review the Indemnitors' or any other party's observance and
performance of, any Work. The Agent shall have the right, but
not the obligation, to exercise any of its rights to cure as
provided in this Agreement or the Loan Documents or, subject to
Section 2.3 of the Credit Agreement, to enter on to any of the
Mortgaged Properties, or to commence and prosecute a Contest or
to take such other actions as it deems necessary or advisable to
perform the Work. The Indemnitors shall cooperate with the Agent
and such above-described other parties. All reasonable
professional, legal or reasonable administrative costs, expenses
and disbursements incurred by the Agent or the Lenders in
connection with this Agreement shall be paid by the Indemnitor on
demand and shall be secured by the Security Documents.
4. The liability of the Indemnitors under this Agreement
shall in no way be limited or impaired by, and the Indemnitors
hereby consent and agree to be bound by, any amendment or
modification of the provisions of the Loan Documents to or with
the Agent by the Indemnitors or any person who succeeds any of
the Indemnitors as owner of the Mortgaged Properties. In
addition, the liability of the Indemnitors under this Agreement
shall in no way be limited or impaired by (a) any extensions of
time for performance required by any of the Loan Documents, (b)
any sale, assignment or foreclosure of the Notes or Mortgages or
any sale or transfer of all or part of the Mortgaged Properties,
(c) any exculpatory provisions in any of the Loan Documents
limiting the Agent's recourse to property encumbered by the
Mortgages or to any other security, or limiting the Agent's
rights to a deficiency judgment against any of the Indemnitors,
(d) the accuracy or inaccuracy of the representations and
warranties made by the Agent under any of the Loan Documents, (e)
the release of any of the Indemnitors or any other person from
performance or observance of any of the agreements, covenants,
terms or conditions contained in any of the Loan Documents by
operation of law, the Agent's voluntary act, or otherwise, (f)
the release or substitution in whole or in part of any security
under the Loan Documents, (g) the Agent's failure to record any
of the Mortgages or file any UCC financing statements (or the
Agent's improper recording or filing of any thereof) or to
otherwise perfect, protect, secure or insure any security
interest or lien given as security under the Loan Documents, or
(h) the invalidity, irregularity or unenforceability, in whole or
in part, of the Loan Documents; and, in any such case, whether
with or without notice to the Indemnitors and with or without
consideration.
5.1 The Indemnitors hereby waive any right or claim of
right to cause a marshaling of the Indemnitors' assets or to
cause the Agent to proceed against any of the security under the
Loan Documents before proceeding under this Agreement against the
Indemnitors or to proceed against any of the Indemnitors (if the
Indemnitors are more than one person or entity) in any particular
order.
5.2 The Indemnitors agree that any payments required to be
made hereunder shall become due on demand. Any amount claimed
hereunder by the Agent, not paid by the Indemnitors within thirty
(30) days after written demand therefor by the Agent with an
explanation of the amounts claimed, shall bear interest at the
Default Rate of Interest as set forth in the Credit Agreement.
5.3 THE INDEMNITORS HEREBY UNCONDITIONALLY WAIVE, IN ANY
SUIT, ACTION OR PROCEEDING BROUGHT BY THE AGENT IN CONNECTION
WITH THIS AGREEMENT, ANY AND EVERY RIGHT THEY MAY HAVE TO A TRIAL
BY JURY.
5.4 The Indemnitors hereby waive and relinquish all rights
and remedies (including any rights of subrogation) accorded by
applicable law to indemnitors or guarantors.
6. No delay on the Agent's part in exercising any right,
power or privilege under any of the Loan Documents shall operate
as a waiver of any such privilege, power or right.
7. Any one or more person or entity comprising the
Indemnitors, or any other party liable upon or in respect of this
Agreement or under the Loan Documents, may be released without
affecting the liability of any party not so released.
8. The obligations and liabilities of each Indemnitor
under this Agreement shall be joint and several. This Agreement
may be executed in one or more counterparts, each of which shall
be deemed an original. Said counterparts shall constitute but
one and the same instrument and shall be binding upon, and shall
inure to the benefit of, each of the undersigned individually as
fully and completely as if all had signed but one instrument.
The joint and several liability of each Indemnitor who executes
such counterpart of this Agreement shall be unaffected by failure
of any other Indemnitor to execute this Agreement or any
counterpart.
9. All notices or other communications required or
otherwise given pursuant to this Agreement shall be made in
accordance with the Section 9.3 of the Credit Agreement.
10. No provision of this Agreement may be changed, waived,
discharged or terminated except by an instrument in writing
signed by the party against whom enforcement of the change,
waiver, discharge or termination is sought.
11. Except as herein provided, this Agreement shall be
binding upon and inure to the benefit of the Indemnitors, the
Agent and the Lenders and their respective heirs, personal
representatives, successors and assigns including, as to the
Agent and the Lenders, without limitation, any holder of any of
the Notes and any affiliate of the Agent and/or the Lender, who
acquires all or part of any of the Mortgaged Properties by any
sale, assignment or foreclosure under such Mortgage, by deed or
other assignment in lieu of foreclosure, or otherwise.
Notwithstanding the foregoing, the Indemnitors, without the prior
written consent of the Agent, 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. Consent of the Agent to any transfer
described in the preceding sentence shall not be deemed a waiver
of the requirement to obtain the Agent's consent to any other
transfer described therein.
12.1 This Agreement and the rights and obligations of the
parties hereunder shall in all respects be governed by, and
construed and enforced in accordance with, the laws of the State
of New York (without giving effect to New York's principles of
conflicts of law).
12.2 EACH INDEMNITOR HEREBY CONSENTS TO THE JURISDICTION OF
ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF NEW YORK
AND THE STATE OF NEW YORK AND IRREVOCABLY AGREES THAT, SUBJECT TO
AGENT S ELECTION ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT SHALL BE LITIGATED IN SUCH COURTS.
EACH INDEMNITOR EXPRESSLY SUBMITS AND CONSENTS TO THE
JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS. EACH INDEMNITOR HEREBY WAIVES PERSONAL
SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE
OF PROCESS MAY BE MADE UPON SUCH INDEMNITOR BY CERTIFIED OR
REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO SUCH
INDEMNITOR, AT THE ADDRESS SET FORTH IN THIS AGREEMENT AND
SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME
HAS BEEN POSTED.
13. EACH INDEMNITOR AND AGENT HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF THIS AGREEMENT. EACH INDEMNITOR AND AGENT
ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER
INTO A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE WAIVER
IN ENTERING INTO THIS AGREEMENT AND THAT EACH WILL CONTINUE TO
RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH
INDEMNITOR AND AGENT WARRANT AND REPRESENT THAT EACH HAS HAD THE
OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH LEGAL COUNSEL, AND
THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.
14. In no event shall the Agent or any Lender be bound by
any obligations or liabilities of the Indemnitors hereunder,
notwithstanding any ownership by the Agent or Lender, or any
entity affiliated with, or controlled by, the Agent or Lender, of
all or any portion of any of the Mortgaged Properties.
15. The Indemnitors hereby waive, release and agree not to
make any claim or bring any cost recovery action against the
Agent under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (42 U.S.C. 9601, et seq.),
as the same may be amended, from time to time, or any state
equivalent, or any similar law now existing or hereafter enacted
unless resulting from any act or omission of Agent or Lender. It
is expressly understood and agreed that to the extent that the
Agent is strictly liable under any Environmental Laws, the
Indemnitors' obligations to the Agent and each Lender under this
Agreement shall likewise be without regard to fault on the part
of the Indemnitor with respect to the violation or condition
which results in liability to the Agent and/or any Lender.
[Signature Pages to Follow]
IN WITNESS WHEREOF, the Indemnitors and the Agent have
caused this Agreement to be executed as of the date first written
above.
XXXX INTERNATIONAL HOLDINGS, INC.
By: /s/ Xxx X. Xxxxxxxx
--------------------------------
Name: Xxx X. Xxxxxxxx
Title: Chairman of the Board of
Directors
XXXX INDUSTRIES, INCORPORATED
By: /s/ Xxx X. Xxxxxxxx
--------------------------------
Name: Xxx X. Xxxxxxxx
Title: Chairman of the Board of
Directors
DEFLECTA-SHIELD CORPORATION
By: /s/ Xxx X. Xxxxxxxx
--------------------------------
Name: Xxx X. Xxxxxxxx
Title: Chairman of the Board of
Directors
BELMOR AUTOTRON CORP.
By: /s/ Xxx X. Xxxxxxxx
--------------------------------
Name: Xxx X. Xxxxxxxx
Title: Chairman of the Board of
Directors
DFM CORP.
By: /s/ Xxx X. Xxxxxxxx
--------------------------------
Name: Xxx X. Xxxxxxxx
Title: Chairman of the Board of
Directors
[Signatures Continued on the Following Page]
[Signature Page to Environmental Indemnity Agreement]
XXXX ACQUISITION CORP.
By: /s/ Xxx X. Xxxxxxxx
----------------------------------
Name: Xxx X. Xxxxxxxx
Title: Chairman of the Board of
Directors
BAC ACQUISITION CO.
By: /s/ Xxx X. Xxxxxxxx
----------------------------------
Name: Xxx X. Xxxxxxxx
Title: Chairman of the Board of
Directors
TRAILMASTER PRODUCTS, INC.
By: /s/ Xxx X. Xxxxxxxx
----------------------------------
Name: Xxx X. Xxxxxxxx
Title: Chairman of the Board of
Directors
DELTA III, INC.
By: /s/ Xxx X. Xxxxxxxx
----------------------------------
Name: Xxx X. Xxxxxxxx
Title: Chairman of the Board of
Directors
ACKNOWLEDGED AND ACCEPTED BY:
XXXXXX FINANCIAL, INC.,
as Agent
By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Senior Vice President
[Signature Page to Environmental Indemnity Agreement]
STATE OF NEW YORK )
) SS
COUNTY OF NEW YORK )
I, Xxxxxxx Xxxxxx, a Notary Public in and for said County,
in the State aforesaid, DO HEREBY CERTIFY that
Xxx X. Xxxxxxxx, personally known to me to be the
Chairman of the Board of Directors of each of XXXX INTERNATIONAL
HOLDINGS, INC., a Delaware corporation, DEFLECTA-SHIELD
CORPORATION, a Delaware corporation, XXXX INDUSTRIES,
INCORPORATED, a Minnesota corporation, BELMOR AUTOTRON CORP., a
Delaware corporation, DFM CORP., an Iowa corporation, XXXX
ACQUISITION CORP., a Minnesota corporation, BAC ACQUISITION CO.,
a Delaware corporation, TRAILMASTER PRODUCTS, INC., a Delaware
corporation, and DELTA III, INC., a Delaware corporation, the
person who executed the foregoing instrument, who being by me duly
sworn, did depose and say he is the Chairman of the Board of
Directors of each such corporations described in and which
executed the foregoing instrument; that said instrument is signed
on behalf of each such corporation by order its respective Board
of Directors; and that he acknowledged said instrument to be the
free act and deed of each such corporations.
GIVEN under my hand and notarial seal this 24th day of
February, 1998.
/s/ Xxxxxxx Xxxxxx
-------------------------------------
Notary Public
My commission expires: 9/22/99
-------------------------------------
STATE OF NEW YORK )
) SS
COUNTY OF NEW YORK )
I, Xxxxxxxx X. XxXxxxx, a Notary Public in and for
said County, in the State aforesaid, DO HEREBY CERTIFY that
Xxxxxx X. Xxxxxxxxx, personally known to me to be a
Senior Vice President of Xxxxxx Financial, Inc., the person
who executed the foregoing instrument, who being by me duly
sworn, did depose and say he is the officer of such corporation
described in and which executed the foregoing instrument; that
said instrument is signed on behalf of such corporation by order
of its Board of Directors; and that he acknowledged said
instrument to be the free act and deed of such corporation.
GIVEN under my hand and notarial seal this 23rd day of
February, 1998.
/s/ Xxxxxxxx X. Xx Xxxxx
------------------------------------
Notary Public
My commission expires: 12/31/99
------------------------------------
