ENVIRONMENTAL INDEMNITY AGREEMENT

 

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                                  EXHIBIT 10.5

 

                                                            LOAN NO.: 94-0950936

 

                        ENVIRONMENTAL INDEMNITY AGREEMENT

 

     THIS ENVIRONMENTAL INDEMNITY AGREEMENT (the "Indemnity") is entered into as

of September 9, 2005, by the undersigned TABB Realty, LLC, a Michigan limited

liability company ("Borrower") in favor of PNC Bank, National Association

("Lender").

 

                                    RECITALS:

 

     A. Contemporaneously with this Indemnity, Borrower has executed and

delivered its Promissory Note (the "Note") to Lender evidencing Lender's loan to

Borrower in the amount of $100,000,000.00 (the "Loan").

 

     B. The Note is secured by, among other security: (i) the Security

Instruments (as defined in the Note), which Security Instruments encumber the

property described therein (the "Mortgaged Property") and including, without

limitation, the real property more particularly described in Exhibit A attached

hereto, and the Other Security Documents (as defined in the Security

Instruments). The Note, the Security Instruments and the Other Security

Documents are hereinafter collectively referred to as the "Loan Documents".

 

     C. As a condition to making the Loan, Lender has required that Borrower

indemnify Lender with respect to the matters set forth herein.

 

     NOW, THEREFORE, in consideration of the foregoing, of Lender making the

Loan and other valuable consideration, the receipt and adequacy of which is

hereby acknowledged, Borrower agrees as follows:

 

     1. Certain Defined Terms. Unless otherwise expressly herein provided, each

defined term in this Indemnity, as indicated by the initial capitalization

thereof, shall have the meaning set forth in the Loan Documents. As used herein,

the singular shall include the plural and the masculine shall include the

feminine and neuter and vice versa, if the context so requires. The following

terms shall have the following meanings:

 

     (a) "Affiliates" the respective successors, assigns and participants,

parent, subsidiary and affiliated corporations and entities of any Borrower, and

the respective partners, directors, officers, agents, attorneys and employees of

each of the foregoing.

 

     (b) "CERCLA" means the Comprehensive Environmental Response, Compensation,

and Liability Act of 1980 (42 U.S.C. Section 9601 et seq.), as heretofore or

hereafter amended from time to time.

 

     (c) "Environmental Laws" means all present and future laws (whether common

law, statute, rule, regulation or otherwise), permits and other requirements of

governmental authorities relating to the environment or to any Hazardous

Material or Hazardous Material Activity, including, without limitation, CERCLA;

the Hazardous Materials Transportation Act; the Resource Conservation and

Recovery Act; the Toxic Substance Control Act; the Clean Air Act; the Federal

Water Pollution Control Act; the Hazardous Substance Control Act; the Emergency

Planning and Community Right to Know Act; the Occupational Safety

 

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and Health Act; the Underground Tank Act of 1984; any so-called "Super-Fund" or

"Super-Lien" law, or any other federal, state or local statute, law, ordinance,

code, rule, regulation, order or decree regulating, relating to, or imposing

liability or standards of conduct concerning any hazardous, toxic or dangerous

waste, substance or material, as of now or at any time hereafter in effect.

 

     (d) "Environmental Report" shall mean the following Phase I Environmental

Site Assessments prepared for each property comprising the Mortgaged Property in

favor of Lender:

 

          (1)  500 N. Dunham, Dundee, Michigan prepared by EBI dated July 19,

               2005;

 

          (2)  1351 Hix Road, Westland, Michigan prepared by EBI dated July 18,

               2005;

 

          (3)  3310 W. Springfield, Champaign, Illinois prepared by EBI dated

               July 19, 2005;

 

          (4)  108 Industrial Drive, East Longmeadow, Massachusetts prepared by

               EBI dated July 14, 2005

 

          (5)  435 Rousch Road, Lima, Ohio prepared by AEC dated July 12, 2005;

 

          (6)  850 W. Smith Road, Medina, Ohio prepared by AEC dated July 14,

               2005;

 

          (7)  18015 St. Route 65, Jackson Center, Ohio prepared by AEC July 14,

               2004;

 

          (8)  300 Washington Street, Jackson Center, Ohio prepared by AEC dated

               July 14, 2005;

 

          (9)  3201 Miller Park North, Garland, Texas prepared by RCI dated July

               22, 2005;

 

          (10) 222 & 213 Kerry Street and 313, 215 & 217 E. Wallisville Road,

               Highlands, Texas prepared by RCI dated July 25, 2005;

 

          (11) 4211 Amberjack Blvd., Plant City, Florida prepared by EBI dated

               July 19, 2005;

 

          (12) 7150 Jefferson Metropolitan Parkway, McCalla, Alabama prepared by

               AEC dated July 14, 2005;

 

          (13) 4101 Pardue Road, Pineville, Louisiana prepared by RCI dated July

               25, 2005; and

 

          (14) 41605 Ann Arbor Road, Plymouth, Michigan prepared by EBI dated

               July 22, 2005

 

     (e) "Foreclosure Transfer" means the transfer of title to all or any part

of the Mortgaged Property in connection with a foreclosure of the Security

Instruments, including, without limitation, a sale pursuant to judicial decree

or power of sale, or by deed in lieu of such foreclosure.

 

     (f) "Hazardous Material" means, at any time: (I) any substance that is then

defined or listed in, or otherwise classified, designated or regulated pursuant

to any applicable Environmental Laws as a "hazardous substance", "hazardous

material", "hazardous waste", "infectious waste", "toxic substance", "toxic

pollutant" or any other formulation intended to define, list, or classify

substances by reason of deleterious properties such as

 

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radioactivity, ignitability, corrosivity, reactivity, carcinogenicity, toxicity,

explosiveness, reproductive toxicity or "EP toxicity"; (ii) any petroleum and

petroleum byproducts, drilling fluids, produced waters and other wastes

associated with the exploration, development or production of crude oil, natural

gas or geothermal resources; (iii) asbestos and polychlorinated biphenyls; and

(iv) any other material or substance, naturally occurring or otherwise, which

causes or poses a threat to cause a contamination or nuisance on the Mortgaged

Property or any adjacent property or a hazard to the environment or to the

health or safety of persons on the Mortgaged Property or any adjacent property.

 

     (g) "Hazardous Material Activity" means any actual, proposed or threatened

storage, holding, existence, release, emission, discharge, generation,

processing, abatement, removal, disposition, handling or transportation of any

Hazardous Material from, under, into or on the Mortgaged Property or surrounding

property.

 

     (h) "Borrower" means any person or entity executing this Indemnity, and

their respective successors and assigns.

 

     (I) "Lender" means Lender, any person or entity that may acquire the

Mortgaged Property in connection with any Foreclosure Transfer and their

respective successors, assigns and participants, parent, subsidiary and

affiliated corporations and entities, and the respective partners, directors,

officers, agents, attorneys and employees of each of the foregoing.

 

     (j) "Losses" means any and all losses, liabilities, damages, demands,

claims, actions, judgments, causes of action, assessments, penalties, costs and

expenses (including, without limitation, all fees and costs of any attorneys and

accountants, including on appeal and in any bankruptcy case or proceeding) and

all consequential damages.

 

     (k) "Environmental Losses" means Losses suffered or incurred by Lender

arising out of or as a result of: (I) any breach of any representation,

warranty, covenant or agreement contained herein; (ii) the occurrence of any

Hazardous Material Activity prior to a Foreclosure Transfer; (iii) any violation

of any applicable Environmental Laws relating to the Mortgaged Property or the

ownership, use, maintenance, occupancy or operation thereof prior to a

Foreclosure Transfer; (iv) any investigation, inquiry, order, hearing, action,

or other proceeding by or before any governmental agency in connection with any

Hazardous Material Activity occurring or allegedly occurring prior to a

Foreclosure Transfer; or (v) any claim, demand or cause of action, or any action

or other proceeding, whether meritorious or not, brought or asserted against

Lender to the extent directly or indirectly relating to, arising from or based

on any of the matters described in clauses (I), (ii), (iii) or (iv) above, or

any allegation of any such matters.

 

     2. Indemnity. Borrower hereby assumes liability for and agrees to pay,

protect, indemnify, defend and hold harmless Lender from and against any and all

Environmental Losses, excluding any such losses arising from Lender's gross

negligence or willful misconduct. A separate right of action hereunder shall

arise each time Lender acquires knowledge of any matter indemnified by Borrower

under this Indemnity. Separate successive actions may be brought hereunder to

enforce any of the provisions hereof at any time and from time to time. No

action hereunder shall preclude any subsequent action, and Borrower hereby

waives and covenants not to assert any defense in the nature of splitting of

causes of action or merger or judgments. Each person or party executing the

Indemnity agrees that the liability hereunder shall be joint and several.

 

     3. Covenants and Representations. Borrower hereby represents and warrants

to Lender that, to

 

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the best of its knowledge, after due inquiry and investigation, the Mortgaged

Property is not subject to any private or governmental lien or judicial or

administrative notice or action relating to any Hazardous Material; and except

as disclosed to Lender in the Environmental Report: (a) the Mortgaged Property

is not in violation of any Environmental Laws; (b) no Hazardous Material is

present at the Mortgaged Property; (c) no Hazardous Material has been

discharged, generated, treated, disposed of or stored on, incorporated in, or

removed or transported from the Mortgaged Property otherwise than in compliance

with all Environmental Laws; and (d) no underground storage tanks exist on any

of the Mortgaged Property. Until a Foreclosure Transfer, Borrower shall keep the

Mortgaged Property free from Hazardous Material and in compliance with all

Environmental Laws. Borrower shall notify Lender within five (5) business days

after it becomes aware of the existence of any Hazardous Material on, or any

alleged or actual violation of any Environmental Laws with respect to, the

Mortgaged Property. Borrower shall remove any such Hazardous Material and/or

cure any such violations, as applicable, as required by law, p