EXHIBIT 10-3
INDEMNITY AGREEMENT
This Indemnity Agreement (this "Agreement") is made as of August 2, 2005,
between PREMIER TOOL & DIE CAST CORP., a Michigan corporation ("Premier") and
LEXINGTON PRECISION CORPORATION, a Delaware corporation ("Lexington").
RECITALS
A. Premier and Lexington have entered into an Equipment Purchase Agreement
(the "Purchase Agreement"), dated as of the date hereof, pursuant to which
Premier has purchased certain machinery, equipment and inventory (the "Purchased
Assets") from Lexington, as more particularly defined in the Purchase Agreement.
B. Premier desires to have Lexington manufacture certain die castings to
be sold to Premier's customers (the "Products") at Lexington's facility located
at 201 Winchester Road, Lakewood, New York (the "Premises") using the Purchased
Assets.
C. Lexington is willing to manufacture Products at the Premises for the
convenience of Premier and on the condition that Premier enter into this
Agreement, and otherwise would cease all operations at the Premises.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, parties hereto hereby agree as
follows:
1. Environmental Indemnity by Premier. Premier shall indemnify, defend and
hold Lexington and its officers, directors, employees, agents and subsidiaries
("Lexington Parties") harmless from and against any and all damages,
liabilities, claims, actions, costs, expenses, and penalties (including
reasonable attorneys' and consultants' fees and professional fees and expenses
incurred to enforce this Agreement)(collectively, "Losses and Expenses") that
may be imposed upon, incurred by or asserted against the Lexington Parties
arising or resulting from (i) any violation of any Environmental Law with regard
to the Premises occurring or arising from events that occurred at any time on or
after the Effective Date until such date as all the Purchased Assets and any
other property of Premier is removed from the Premises (the "Covered Period"),
(ii) any Environmental Claim the underlying basis of which occurred with regard
to the Premises at any time during the Covered Period, (iii) any Release or
threatened Release of a Hazardous Substance at or from the Premises occurring or
arising from an event occurring at any time during the Covered Period. Lexington
shall have the right to determine how to handle or satisfy any and all
investigation or cleanup requirements that may be imposed under any applicable
Environmental Law or other laws. Notwithstanding the foregoing, Premier shall
have no liability to Lexington for any Losses and Expenses caused by any actions
taken at the Premises by any environmental consultants acting for and at the
direction of Lexington, nor shall Premier have any liability for any Losses and
Expenses caused by any other actions taken at the Premises solely by Lexington
employees who are not employed by Lexington Die Casting, unless such actions
have been approved in writing by Premier.
-2-
2. Environmental Indemnity by Lexington. Lexington shall indemnify, defend
and hold Premier and its officers, directors, employees, agents and subsidiaries
("Premier Parties") harmless from and against any and all Losses and Expenses
that may be imposed upon, incurred by or asserted against the Premier Parties
arising or resulting from any Environmental Claim the underlying basis of which
occurred with regard to the Premises prior to the Effective Date.
3. General Indemnity by Premier. Premier shall indemnify and hold the
Lexington Parties harmless from all Losses and Expenses, that may be imposed
upon, incurred by or asserted against the Lexington Parties by reason of or
arising out of (i) any bodily injury, sickness, disease or death caused or
allegedly caused by any Products manufactured or produced by Lexington or any
Products sold by Premier on or after the Effective Date, or (ii) any loss or
destruction of, or damage to, the Purchased Assets, or (iii) any loss or
destruction of, or damage to, the Premises or any improvements or other tangible
property located at the Premises occurring at any time during the Covered
Period, (iv) in regard to the manufacture or production of Products by Lexington
on or after the Effective Date, any defect in any Products manufactured or
produced by Lexington or sold by Premier on or after the Effective Date, or any
failure of any Products manufactured or produced by Lexington or sold by Premier
on or after the Effective Date to meet the specifications of Premier or any
customer of Premier. Notwithstanding the foregoing, Premier shall have no
liability to Lexington for any Losses and Expenses caused by any actions taken
at the Premises by any environmental consultants acting for and at the direction
of Lexington, nor shall Premier have any liability for any Losses and Expenses
caused by any other actions taken solely by Lexington employees who are not
employed by Lexington Die Casting, unless such actions have been approved in
writing by Premier.
4. Defined Terms. As used herein, the following terms shall have the
following meanings:
"Effective Date" means May 16, 2005.
"Environment" means all air, surface water, groundwater, surface and
subsurface soil, fish, wildlife, biota, flora, wetlands and all other natural
resources.
"Environmental Claims" mean any and all actions, suits, orders, claims,
liens, notices, investigations, proceedings or complaints, whether any of the
foregoing are administrative, judicial or otherwise, related to any
Environmental Law that have been brought, issued, asserted or alleged by: (i) a
federal, state or local agency or body or a citizen or citizen group for
compliance, injunctive relief, damages (including but not limited to natural
resource damages), penalties, removal, response, remedial or other action
pursuant to an Environmental Law related to the presence of a Hazardous
Substance, contamination, pollution or a condition at, in, under or on the
Premises or related to waste or material sent for treatment, storage, recycling
or disposal from the Premises; and/or (ii) a third party seeking damages and/or
injunctive relief related to actual or alleged personal injury, medical
monitoring, wrongful death, and/or property damage resulting from construction,
operation or maintenance of the Premises and/or the Release or threatened
Release of a Hazardous Substance, or contamination, pollution or a condition,
at, in, under or on the Premises or for a violation of an Environmental Law at
or related to the Premises.
"Environmental Laws" means all current and future federal, state and local
laws, statutes, ordinances, codes, permits, licenses, orders, approvals, rules,
regulations and common law
-3-
relating to the protection of the Environment and/or governing the use,
handling, generation, treatment, recycling, storage, manufacture, transportation
or disposal of Hazardous Substances, including without limitation, as amended:
the Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. Sections 9601 et seq.; the Resource Conservation and Recovery Act, 42
U.S.C. Sections 6901 et seq.; the Clean Air Act, 42 U.S.C. Sec. 7401 et. seq.,
the Federal Water Pollution Control Act, 33 U.S.C. Sections 1251 et seq.; the
Toxic Substances Control Act, 15 U.S.C. Sections 2601 et seq.; the Emergency
Planning and Community Right-To-Know Act, 42 U.S.C. Sections 11001 et seq.; all
comparable state and local laws, statutes, codes and ordinances; and all rules
and regulations promulgated under any of the foregoing.
"Hazardous Substances" means, without regard to amount or concentration,
petroleum, petroleum distillates, petroleum products, mineral oil, natural gas,
radioactive materials and substances, asbestos, polychlorinated biphenyls
("PCBs"), radon and any materials or substances that are regulated under or
defined as, or otherwise included in the definition of, "hazardous substances,"
"hazardous materials," "solid wastes," "waste water," "hazardous wastes," "toxic
substances," "toxic pollutants," "regulated materials," "pollutants" or
"contaminants" in any applicable Environmental Law, and constituents and
degradation products of any of the foregoing.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, migrating, leaching, dumping or
disposing of a Hazardous Substance into the environment, including without
limitation, the abandonment, discarding, burying or disposal of barrels,
containers and other receptacles containing any Hazardous Substances.
5. Procedures.
(a) The indemnification obligations of Premier set forth in Section 1 of
this Agreement shall include, without limitation, all Losses and Expenses
incurred by Lexington to take any actions required by any federal, state or
local governmental agency or political subdivision, which requirements or
necessity arise from the presence upon, about or beneath the Premises of any
Hazardous Substances, provided that the introduction of such Hazardous
Substances shall have originated during the term of this Agreement. Losses and
Expenses shall include, but not be limited to, the investigation of the
environmental condition of the Premises, the preparation of any feasibility
studies or reports, the performance of any clean-up, remedial, removal or
restoration work, and any actions necessary to restore the Premises to the
condition existing prior to the introduction of the Hazardous Substance upon,
about or beneath the Premises, notwithstanding any lesser standard of
remediation allowable under applicable law or governmental policies.
(b) Notwithstanding any of Premier's and Lexington's obligations in
Sections 1, 2 and 3 of this Agreement to the contrary, in no event shall
Premier's obligations to indemnify, defend, protect and hold harmless the
Lexington Parties or Lexington's obligations to indemnify, defend, protect and
hold harmless the Premier Parties pursuant to Section 1 or 2, as applicable,
apply to the extent that any claim is asserted by Lexington or Premier for its
own loss of profit, revenue or business reputation as a consequence of a Release
or threatened Release of a Hazardous Substance or to the extent Lexington or
Premier asserts any Loss or Expense with respect to any Environmental Claim not
owed to or imposed on Premier or Lexington by a third party.
-4-
(c) A party seeking indemnification from the other party under Section 1,
2 or 3, as applicable, of this Agreement shall give notice to the other party of
any matter covered by indemnification hereunder promptly upon learning of the
existence of such matter provided, however, that a party's failure to promptly
(within thirty (30) days) give notice of such matter to the other party shall
relieve that party of its responsibilities under Section 1, 2 or 3, as
applicable, to the extent that the indemnifying party is materially prejudiced
thereby.
(d) Upon receipt of timely notice, the indemnifying party, at its own
expense, will assume the defense of any third party claim, action or suit (a
"Third Party Claim") on behalf of the indemnified party and conduct the defense
with due diligence and in good faith with counsel selected by the indemnifying
party that is reasonably acceptable to the indemnified party; provided, however,
that any indemnified party shall have the right, in its discretion, to
participate in the defense of any Third Party Claim at its sole cost and
expense. The indemnifying party shall have the right to control the defense of
any claims for which indemnity is sought by the indemnified party. In addition,
the indemnified party shall have the right to participate in the defense of any
action and employ one law firm as counsel, at the sole cost and expense of the
indemnifying party, in any action, suit or proceeding if, in the indemnified
party's reasonable judgment at any time, either a conflict of interest between
the indemnified party and the indemnifying party exists or there may be defenses
available to the indemnified party which are different from or in addition to
those available to the indemnifying party and the representation of both parties
by the same counsel would be inappropriate. The indemnifying party pursuant to
this Section 5(d) may settle any Third Party Claim if it pays the costs of such
settlement and such settlement includes a release of any indemnified party by
the third party asserting the Third Party Claim from all liability with respect
to such Third Party Claim, provided, however, in the case of a settlement which
imposes any relief on any indemnified party other than the payment of monetary
damages, no settlement shall be made without the consent of the indemnified
party. If the indemnifying party fails to defend any Third Party Claim, the
indemnified party may, at its option, without relieving the indemnifying party
from its obligations, defend such Third Party Claim at the sole cost and expense
of the indemnifying party, and indemnifying party will promptly reimburse
indemnified parties for all attorneys' fees and expenses. In such case the
indemnified party will not settle a Third Party Claim without the consent of the
indemnified party, which shall not be unreasonably withheld, unless the
indemnified party waives any right to indemnification in connection therewith
(other than for the costs and expenses of defense) and such settlement imposes
no liability on the indemnifying party. Notwithstanding anything herein to the
contrary, no settlement of an Environmental Claim by an indemnified party shall
be effected without the consent of the indemnifying party, unless the
indemnified party waives any right to indemnification in connection therewith
and such settlement imposes no liability or obligations on the indemnifying
party.
(e) The indemnified party shall fully cooperate with indemnifying party in
good faith, and at its own expense in defending any claims hereunder. The
indemnified parties shall provide reasonable access to its employees, and shall
make available witnesses and documents as may be necessary for the defense of
the indemnified matter.
(f) Premier and Lexington agree that the provisions of this Agreement
shall be the exclusive remedy of the parties in respect of any Losses and
Expenses or other liabilities arising out of or in connection with any
Environmental Laws or in respect of any Environmental Claim and the parties
waive any other remedy arising under any Environmental Laws or other applicable
law.
-5-
(g) Lexington shall have the right to determine how to handle or satisfy
any and all investigation or cleanup requirements that may be imposed under
applicable Environmental Laws for which indemnification is provided pursuant to
Section 1 or 3 of this Agreement.
(h) The obligations of Premier and Lexington set forth in this Agreement
shall survive until fully performed, without regard to any limitations imposed
by any applicable law.
(i) IN NO EVENT WILL EITHER PREMIER OR LEXINGTON BE LIABLE TO THE OTHER
PARTY FOR ANY SPECIAL, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES OF
WHATEVER KIND OR NATURE PURSUANT TO THIS AGREEMENT, EXCEPT TO THE EXTENT THAT
EITHER LEXINGTON OR PREMIER, AS APPLICABLE, IS REQUIRED TO PAY SUCH DAMAGES TO
AN UNAFFILIATED THIRD PARTY PURSUANT TO A FINAL NONAPPEALABLE COURT ORDER OR
JUDGMENT IN RESPECT OF ANY CLAIM FOR WHICH SUCH PARTY WOULD BE ENTITLED TO
INDEMNIFICATION PURSUANT TO SECTION 1, 2 OR 3 OF THIS AGREEMENT BUT FOR THE
LIMITATIONS SET FORTH IN THIS SECTION 5(i).
6. Governing Law; Jurisdiction; Consent to Service of Process.
(a) This Agreement shall be governed by and construed exclusively in
accordance with the internal laws of the State of New York, without reference to
its principles of conflicts of laws.
(b) The parties hereto hereby irrevocably submit to the exclusive
jurisdiction of any federal or state court located within the State of New York
in connection with any dispute arising out of or relating to this Agreement and
each party hereby irrevocably agrees that all claims in respect of such dispute
or any suit, action or proceeding related thereto may be heard and determined in
such courts. The parties hereby irrevocably waive, to the fullest extent
permitted by applicable law, any objection that they may now or hereafter have
to the laying of venue of any such dispute brought in such court or any defense
of inconvenient forum for the maintenance of such dispute. Each of the parties
hereto agrees that a judgment in any such dispute may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Each of the parties hereto hereby consents to process being served by any party
to this Agreement in any suit, action or proceeding by the mailing of a copy
thereof in accordance with the provisions of Section 7(d) hereof.
7. General Provisions.
(a) Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto, their respective successors and assigns. No party
may assign its rights or obligations hereunder except with the written consent
of the other party.
(b) Counterparts and Facsimile Signatures. This Agreement may be executed
in two or more counterparts, each of which shall be deemed an original, and all
of which shall constitute one and the same instrument. Signatures sent by
facsimile shall constitute and be binding to the same extent as originals.
-6-
(c) Section Headings. The section headings in this Agreement are included
for purposes of convenience only and shall not affect in any way the
construction or interpretation of any of the provisions of this Agreement.
(d) Notices. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed to have been given on the
date when delivered personally, the next business day after delivery to a
nationally recognized overnight delivery service for next business day delivery,
or on the fifth day after mailing if mailed by first class mail, registered or
certified, postage prepaid, and properly addressed as follows or to such other
address as either party may designate by notice to the other party in accordance
with this Section:
If to Lexington: Lexington Precision Corporation
40 East 52nd Street
New York, New York 10022
Attention: Michael A. Lubin
Chairman of the Board
If to Premier: Premier Tool & Die Cast Corp.
9886 North Tudor Road
Berrien Springs, MI 49103
Attention: Paul Brancaleon
President
(e) Severability. The holding of any provision of this Agreement to be
invalid or unenforceable by a court of competent jurisdiction shall not affect
any other provision of this Agreement, and such other provisions shall remain in
full force and effect. If any provision of this Agreement shall be declared by a
court of competent jurisdiction to be invalid, illegal or incapable of being
enforced in whole or in part, such provision shall be interpreted so as to
remain enforceable to the maximum extent permissible consistent with applicable
law and the remaining conditions and provisions or portions thereof shall
nevertheless remain in full force and effect and enforceable to the extent they
are valid, legal and enforceable.
(f). Amendment. Neither this Agreement nor any of its provisions may be
waived, modified, amended, discharged or terminated except by an instrument in
writing signed by the parties hereto.
[Signatures are on next page]
-7-
THIS INDEMNITY AGREEMENT has been executed by the parties hereto as of the
day and year first above written.
PREMIER TOOL & DIE CAST CORP.
By: /s/ Paul Brancaleon
---------------------------
Name: Paul Brancaleon
Title: President
LEXINGTON PRECISION
CORPORATION
By: /s/ Michael A. Lubin
--------------------------
Name: Michael A. Lubin
Title: Chairman