Exhibit 10.17


ENVIRONMENTAL
INDEMNITY AGREEMENT


THIS ENVIRONMENTAL INDEMNITY AGREEMENT (the “Agreement”) is made as of the
26th day of October, 2004 by THE ENTITIES IDENTIFIED ON THE SIGNATURE PAGES OF THIS
AGREEMENT AS BORROWER (collectively, “Borrower”) and BLUELINX
HOLDINGS, INC., a Delaware corporation, with an office at 4300
Wildwood Parkway, Atlanta, Georgia 30339 (“Sponsor”; Borrower and Sponsor,
collectively, “Indemnitor”)
in favor of COLUMN FINANCIAL, INC., a Delaware corporation, having an
address at 11 Madison Avenue, New York, New York 10010 (“Indemnitee”)
and other Indemnified Parties (defined below).


RECITALS:


A.            Indemnitee is prepared to make a loan (the “Loan”) to
Borrower in the principal amount of One Hundred Sixty-Five Million and No/100 Dollars
($165,000,000) pursuant to a Loan Agreement of even date herewith between
Borrower and Indemnitee (as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time, the “Loan Agreement”),
which Loan shall be evidenced by that certain Promissory Note of even date
herewith given by Borrower in favor of Indemnitee (as amended, restated,
replaced, supplemented or otherwise modified from time to time, the “Note”)
and secured by, among other things, certain mortgages, deeds of trust and/or
deeds to secure debt, each of even date herewith, given by Borrower to
Indemnitee (as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time, collectively, the “Mortgages”)
encumbering the real properties described therein (said real properties being
collectively referred to as the “Land”; the Land, together with all structures, buildings and
improvements now or hereafter located on the Land, being collectively referred
to as the “Properties”).


B.            Indemnitee is unwilling to make the Loan unless
Indemnitor agrees to provide the indemnification, representations, warranties,
covenants and other matters described in this Agreement for the benefit of the
Indemnified Parties.


C.            Indemnitor is entering into this Agreement to induce
Indemnitee to make the Loan.


AGREEMENT:


NOW THEREFORE, in consideration of the premises and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Indemnitor hereby represents, warrants, covenants and
agrees for the benefit of the Indemnified Parties as follows:


1.             Environmental Representations and Warranties. 
Except as otherwise disclosed by those certain Phase I environmental
reports (or Phase II environmental reports, if required by
Indemnitee) with respect to the Properties delivered to Indemnitee by
Indemnitor in connection with the origination of the Loan (hereinafter referred
to as the “Environmental


 

















 


Report”) (a) all Hazardous Substances
(defined below) and underground storage tanks in, on or under any Property
are in compliance with all Environmental Laws (defined below) and with
permits issued pursuant thereto; (b) there are no past or present Releases
(defined below) of Hazardous Substances in, on, under or from any Property
which have not been (or are not being) fully remediated in accordance with
Environmental Law; (c) Indemnitor has no actual knowledge of, and has not
received any written notice from, any Person (including, but not limited to, a
Governmental Authority) relating to a threat of any Release of Hazardous
Substances migrating to any Property; (d) there is no past or present
non-compliance with Environmental Laws, or with permits issued pursuant
thereto, in connection with any Property which has not been fully remediated in
accordance with Environmental Law; (e) Indemnitor does not know of, and
has not received any written notice from any Person (including, but not limited
to, a Governmental Authority) relating to Hazardous Substances or Remediation (defined
below) thereof, of possible liability of Indemnitor pursuant to any
Environmental Law, any other environmental conditions in violation of
Environmental Law in connection with any Property, or any administrative or
judicial proceedings in connection with any of the foregoing; and
(f) Indemnitor has truthfully and fully delivered or made available for
inspection to Indemnitee all written information relating to conditions in, on,
under or from each Property that is known to Indemnitor or all information that
is contained in files and records of Indemnitor, including but not limited to
any reports relating to Hazardous Substances in, on, under or from any Property
and/or to the environmental condition of any Property.


2.             Environmental Covenants. 
Indemnitor covenants and agrees that: (a) all uses and operations
on or of each Property, whether by Indemnitor or any other Person, shall be in
compliance in all material respects with all Environmental Laws and permits
issued pursuant thereto; (b) Indemnitor shall use commercially reasonable
efforts to prevent any Releases of Hazardous Substances in, on, under or from
any Property, except those that are both (i) in compliance with all
Environmental Laws and with permits issued pursuant thereto and (ii) fully
disclosed to Indemnitee in writing; (c) there shall be no Hazardous
Substances in, on, or under any Property, except those that are in material
compliance with all applicable Environmental Laws and with permits issued
pursuant thereto; (d) Indemnitor shall keep each Property free and clear
of all liens and other encumbrances imposed pursuant to any Environmental Law,
whether due to any act or omission of Indemnitor or any other Person (the “Environmental Liens”);
(e) Indemnitor shall, at its sole cost and expense, fully and
expeditiously cooperate in all activities pursuant to Paragraph 3
of this Agreement, including, but not limited to, providing all relevant
information and making knowledgeable persons available for interviews upon
reasonable prior notice during business hours; (f) Indemnitor shall, at
its sole cost and expense, perform any environmental site assessment or other
investigation of environmental conditions in connection with the Properties, if
any, to the extent required by any Environmental Law or Governmental Authority
(including, but not limited to, sampling, testing and analysis of soil, water,
air, building materials, and other materials and substances whether solid,
liquid or gas as applicable and required), and share with Indemnitee all
reports and results thereof, and Indemnitee and the other Indemnified Parties
shall be entitled to rely on such reports and results thereof;
(g) Indemnitor shall, at its sole cost and expense, comply with all
reasonable written requests of Indemnitee to (i) effectuate Remediation of
any condition (including, but not limited to, a Release of a Hazardous
Substance) in, on, under or from any Property; (ii) comply with any
Environmental Law; (iii) comply with any directive from any Governmental
Authority; and (iv) take any other reasonable action necessary or
appropriate for protection of human health or


 


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the environment;
(h) Indemnitor shall not do, or allow Master Tenant or any other tenant or
user of any Property to do, any act that materially increases the dangers to
human health or the environment, poses an unreasonable risk of harm to any
Person (whether on or off the Properties), impairs or may impair the value of
any Property, is contrary to any requirement of any insurer, constitutes a
public or private nuisance, constitutes waste, or violates any covenant,
condition, agreement or easement relating to environmental matters which is
applicable to any Property; and (i) Indemnitor shall, to the extent Indemnitor
has knowledge of the same, immediately notify Indemnitee in writing of
(i) any presence or Releases or threatened Releases of Hazardous
Substances in, on, under, from or migrating towards any Property; (ii) any
material non-compliance with any Environmental Laws related in any way to any
Property; (iii) any Environmental Lien encumbering any Property;
(iv) any required Remediation of environmental conditions relating to any
Property; and (v) any written notice from any source whatsoever (including,
but not limited to, a Governmental Authority) alleging a Release or
requiring Remediation at any Property, alleging direct or indirect liability of
Indemnitor pursuant to any Environmental Law, other Hazardous Substances
affecting any Property in violation of Environmental Law, or any actual or
threatened administrative or judicial proceedings in connection with or
relating to any of the subject matters of this Agreement.


3.             Indemnified Rights/Cooperation and Access. 
In the event the Indemnified Parties reasonably believe that there has
been or may be a Release, a material violation of the Environmental Laws or an
environmental hazard at any Property that, in the sole, but reasonable,
discretion of the Indemnified Parties, endangers any tenants or other occupants
of such Property or their guests or the general public or materially and
adversely affect the value of such Property, upon reasonable notice from the
Indemnitee, Indemnitor shall, at Indemnitor’s sole cost and expense, promptly
cause an engineer or consultant reasonably satisfactory to the Indemnified
Parties to conduct an environmental assessment or audit (the scope of which
shall be determined in the sole, but reasonable, discretion of the Indemnified
Parties) and take any samples of soil, groundwater or other water, air, or
building materials or any other invasive testing reasonably requested by
Indemnitee and promptly deliver to Indemnitee the results of any such
assessment, audit, sampling or other testing; provided, however, if such
results are not delivered to the Indemnified Parties within a reasonable
period, upon reasonable notice to Borrower, the Indemnified Parties and any
other Person designated by the Indemnified Parties, including, but not limited
to, any receiver, any representative of a governmental entity, and any
environmental consultant, shall have the right, but not the obligation, to
enter upon such Property at all reasonable times to assess any and all aspects
of the environmental condition of such Property and its use, including but not
limited to, conducting any environmental assessment or audit (the scope of
which shall be determined in the sole, but reasonable, discretion of the
Indemnified Parties) and taking samples of soil, groundwater or other water,
air, or building materials, and reasonably conducting other invasive
testing.  Indemnitor shall cooperate
with and provide, or cause to be provided, the Indemnified Parties and any such
Person designated by the Indemnified Parties with reasonable access to the
applicable Property.  In performing any
such assessment or audit, Indemnified Parties shall use commercially reasonable
efforts to minimize interference with the use and operation of such Property by
Borrower or any tenants thereof and to avoid exacerbating the applicable Release,
violation of Environmental Laws or environmental hazard.


 


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4.             Indemnification. 
(a)  Indemnitor covenants and
agrees, at its sole cost and expense, to protect, defend, indemnify, release
and hold Indemnified Parties harmless from and against any and all Losses
(defined below) imposed upon or incurred by or asserted against any Indemnified
Parties and directly or indirectly arising out of or in any way relating to any
one or more of the following, except in each case, to the extent caused by or
arising from the gross negligence or willful misconduct of Indemnitee:
(i) any presence of any Hazardous Substances in, on, above, or under any
Property; (ii) any past, present or threatened Release of Hazardous Substances
in, on, above, under or from any Property; (iii) any activity by
Indemnitor, any Affiliate of the Indemnitor, and/or any tenant or other user of
any Property in connection with any actual, proposed or threatened use,
treatment, storage, holding, existence, disposition or other Release,
generation, production, manufacturing, processing, refining, control,
management, abatement, removal, handling, transfer or transportation to or from
any Property of any Hazardous Substances at any time located in, under, on or
at such Property; (iv) any activity by Indemnitor, any Affiliate of the
Indemnitor, and/or any tenant or other user of any Property in connection with
any actual or proposed Remediation of any Hazardous Substances at any time
located in, under, on or at any Property, whether or not such Remediation is
voluntary or pursuant to court or administrative order, including, but not
limited to, any removal, remedial or corrective action; (v) any past,
present or threatened non-compliance or violation of any Environmental Laws (or
the terms and conditions, if any, of any permit issued pursuant to any
Environmental Law or the failure to obtain any necessary permits under any
Environmental Law) in connection with any Property or operations thereon,
including, but not limited to, any failure by Indemnitor, any Affiliate of the
Indemnitor, and/or any tenant or other user of such Property to comply with any
order of any Governmental Authority in connection with any Environmental Law;
(vi) the imposition, recording or filing or the threatened imposition,
recording or filing of any Environmental Lien encumbering any Property;
(vii) any administrative processes or proceedings or judicial proceedings
in any way connected with any matter addressed in this Agreement; (viii) any
past, present or threatened injury to, destruction of or loss of natural
resources in any way connected with any Property, including, but not limited
to, costs to investigate and assess such injury, destruction or loss;
(ix) any acts of Indemnitor, any Affiliate of the Indemnitor, and/or any
tenant or other user of any Property in arranging for the disposal or
treatment, or arranging with a transporter for transport for disposal or
treatment, of Hazardous Substances at any facility or incineration vessel
containing such or similar Hazardous Substances; (x) any acts of
Indemnitor, any Affiliate of the Indemnitor, and/or any tenant or other user of
any Property in accepting any Hazardous Substances for transport to disposal or
treatment facilities, incineration vessels or sites from which there is a
Release, or a threatened Release of any Hazardous Substance which causes the
incurrence of costs for Remediation; (xi) any personal injury, wrongful
death, or property or other damage due to exposure from Hazardous Substances
arising under any statutory or common law or tort law theory, including, but
not limited to, damages assessed for private or public nuisance or for the
conducting of an abnormally dangerous activity on or near any Property; and
(xii) any misrepresentation or inaccuracy in any representation or
warranty or material breach or failure to perform any covenants or other
obligations relating to Environmental Laws pursuant to this Agreement, the Loan
Agreement or any Mortgage.  Nothing in
this Agreement or the other Loan Documents shall preclude Indemnitor from
pursuing any remedies or recourse against any third parties (including any
governmental entities or other Persons) for liabilities, costs or obligations
for any matter subject to indemnification under this Agreement.


 


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(b)           Notwithstanding anything to the
contrary contained herein, if
and so long as a pollution liability insurance policy with respect to the
Properties obtained by Indemnitor and reasonably approved by Indemnitee is in
effect and names Indemnitee as an insured or additional insured thereunder,
Indemnitee shall first proceed as to any claim to be made pursuant to this
Agreement under said pollution liability insurance policy and any Losses to be
paid by Indemnitor hereunder shall be reduced by the amount, if any, that
Indemnitee actually collects (net of actual costs and expenses incurred by
Indemnitee in the collection thereof) under said pollution liability insurance
policy.


5.             Duty
to Defend and Attorneys and Other Fees and Expenses. 
Upon written request by any Indemnified Party, Indemnitor shall defend
such Indemnified Party(ies) against any claim for which indemnification is
required hereunder (if requested by any Indemnified Party, in the name of the
Indemnified Party), by attorneys and other professionals reasonably approved by
the Indemnified Parties; it being agreed by Indemnified Parties that Schulte
Roth & Zabel LLP is hereby approved. 
Notwithstanding the foregoing, if any action shall be brought in which
the named defendants therein include both Indemnitor and an Indemnified Party
and such Indemnified Party reasonably believes, and advised Indemnitor in
writing, that there are legal defenses available to it that are different from
or in addition to those available to Indemnitor, then such Indemnified Party
shall have the right, at the sole cost and expense of Indemnitor, to engage a
separate counsel in any such action and to participate in the defense thereof.  Upon demand, Indemnitor shall pay or, in the
sole and absolute discretion of the Indemnified Parties, reimburse, the
Indemnified Parties for the payment of the reasonable fees and disbursements of
attorneys, engineers, environmental consultants, laboratories and other
professionals in connection therewith.


6.             Definitions. 
Capitalized terms used herein and not specifically defined herein shall
have the respective meanings ascribed to such terms in the Loan Agreement.  As used in this Agreement, the following terms
shall have the following meanings:


The term “Environmental Law”
means any present and future federal, state and local laws, statutes,
ordinances, rules, regulations and the like, as well as common law, governing
the protection of human health or the environment, relating to Hazardous
Substances, relating to liability for or costs of other actual or threatened
danger to human health or the environment. 
The term “Environmental
Law” includes, but is not limited to, the following statutes, as
amended, any successor thereto, and any regulations promulgated pursuant
thereto, and any state or local statutes, ordinances, rules, regulations and
the like addressing similar issues:  the
Comprehensive Environmental Response, Compensation and Liability Act; the Emergency
Planning and Community Right-to-Know Act; the Hazardous Substances
Transportation Act; the Resource Conservation and Recovery Act (including but
not limited to Subtitle I relating to underground storage tanks); the Solid
Waste Disposal Act; the Clean Water Act; the Clean Air Act; the Toxic
Substances Control Act; the Safe Drinking Water Act; the Occupational Safety
and Health Act; the Federal Water Pollution Control Act; the Federal
Insecticide, Fungicide and Rodenticide Act; the Endangered Species Act; the
National Environmental Policy Act; and the River and Harbors Appropriation
Act.  The term “Environmental Law”
also includes, but is not limited to, any present and future federal, state and
local laws, statutes ordinances, rules, regulations, permits or authorizations
and the like, as well as common law, that (a) condition transfer of
property upon a negative declaration or other


 


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approval of a
Governmental Authority of the environmental condition of such property;
(b) require notification or disclosure of Releases of Hazardous Substances
or other environmental condition of property to any Governmental Authority or
other Person, whether or not in connection with transfer of title to or interest
in such property; (c) impose conditions or requirements in connection with
environmental permits or other authorization for lawful activity;
(d) relate to nuisance, trespass or other causes of action arising out of
environmental condition at any Property; or (e) relate to wrongful death,
personal injury, or property or other damage in connection with the
environmental condition at any Property.


The term “Hazardous Substances”
includes, but is not limited to, any and all substances (whether solid, liquid
or gas) defined, listed, or otherwise classified as pollutants, hazardous
wastes, hazardous substances, hazardous materials, extremely hazardous wastes,
or words of similar meaning or regulatory effect under any present or future
Environmental Laws or that may have a negative impact on human health or the
environment, including, but not limited to, mold, mycotoxins, microbial matter,
airborne pathogens (naturally occurring or otherwise), petroleum and petroleum
products, asbestos and asbestos-containing materials, polychlorinated
biphenyls, lead, radon, radioactive materials, flammables and explosives, but
excluding substances of kinds and in amounts ordinarily and customarily used or
stored in properties similar to the Properties for the purposes of cleaning or other
maintenance or operations and otherwise in compliance with all Environmental
Laws.


The term “Indemnified Parties”
includes Indemnitee, any Person who is or will have been involved in the
origination of the Loan, any Person who is or will have been involved with the
servicing of the Loan, any Person in whose name the encumbrance created by any
Mortgage is or will have been recorded, any Person who may hold or acquire or
will have held a full or partial interest in the Loan (including, but not
limited to, Investors (defined below), as well as custodians, trustees and
other fiduciaries who hold or have held a full or partial interest in the Loan
for the benefit of third parties) as well as the respective directors,
officers, shareholders, partners, employees, agents, servants, representatives,
contractors, subcontractors, affiliates, subsidiaries, participants, successors
and assigns of any and all of the foregoing (including, but not limited to, any
other Person who holds or acquires, or will have held, a participation or other
full or partial interest in the Loan or any Property, whether during the term
of the Loan or as a part of, or following, a foreclosure of the Loan and
including, but not limited to, any successors by merger, consolidation or acquisition
of all or a substantial portion of Indemnitee’s assets and business).


The term “Investors”
means collectively, any purchaser, transferee, assignee, servicer, participant
or investor of, or in, the Loan or the Securities.


The term “Legal Action”
means any claim, suit or proceeding, whether administrative or judicial in
nature.


The term “Losses”
includes any losses, damages, costs, fees, expenses, claims, suits, judgments,
awards, liabilities (including, but not limited to, strict liabilities),
obligations, debts, diminutions in value, fines, penalties, charges, costs of
Remediation (whether or not performed voluntarily), amounts paid in settlement,
foreseeable and unforeseeable consequential damages, litigation costs,
reasonable fees of attorneys, engineers, environmental consultants, and


 


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investigation
costs (including, but not limited to, reasonable costs for sampling, testing
and analysis of soil, water, air, building materials, and other materials and
substances whether solid, liquid or gas), of whatever kind or nature, and
whether or not incurred in connection with any judicial or administrative
proceedings, actions, claims, suits, judgments or awards.


The term “Release”
includes, but is not limited to, any release, deposit, discharge, emission,
leaking, leaching, spilling, seeping, migrating, injecting, pumping, pouring,
emptying, escaping, dumping, disposing or other movement of Hazardous
Substances.


The term “Remediation”
includes, but is not limited to, any response, remedial, removal, or corrective
action; any activity to clean up, detoxify, decontaminate, contain or otherwise
remediate any Hazardous Substance; any actions to prevent, cure or mitigate any
Release of any Hazardous Substance; any action to comply with any Environmental
Laws or with any permits issued pursuant thereto; any inspection,
investigation, study, monitoring, assessment, audit, sampling and testing,
laboratory or other analysis, or evaluation relating to any Hazardous Substances
or to anything referred to herein.


7.             Unimpaired Liability. 
The liability of Indemnitor under this Agreement shall in no way be
limited or impaired by, and Indemnitor hereby consents to and agrees to be
bound by, any amendment or modification of the provisions of the Note, the Loan
Agreement, any Mortgage or any other Loan Document to or with Indemnitee by
Borrower and/or Sponsor or any Person who succeeds Borrower or any Person as
owner of the Properties.  In addition,
the liability of Indemnitor under this Agreement shall in no way be limited or
impaired by (a) any extensions of time for performance required by the
Note, the Loan Agreement, any Mortgage or any of the other Loan Documents,
(b) any sale or transfer of all or part of any Property, (c) except
as provided herein, any exculpatory provision in the Note, the Loan Agreement,
any Mortgage, or any of the other Loan Documents limiting Indemnitee’s recourse
to the Properties or to any other security for the Note, or limiting
Indemnitee’s rights to a deficiency judgment against Borrower, (d) the
accuracy or inaccuracy of the representations and warranties made by Borrower
and/or Sponsor under the Note, the Loan Agreement, any Mortgage or any of the
other Loan Documents or herein, (e) the release of Indemnitor or any other
Person from performance or observance of any of the agreements, covenants,
terms or condition contained in any of the other Loan Documents by operation of
law, Indemnitee’s voluntary act, or otherwise, (f) the release or substitution
in whole or in part of any security for the Note, or (g) Indemnitee’s
failure to record any Mortgage or file any UCC financing statements (or
Indemnitee’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 the Note; and, in any such case, whether with or without notice to
Indemnitor and with or without consideration.


8.             Enforcement. 
Except as provided in Section 4(b) hereof, Indemnified Parties may
enforce the obligations of Indemnitor without first resorting to, or exhausting
any security or collateral under, or without first having recourse pursuant to,
the Note, the Loan Agreement, any Mortgage, or any other Loan Documents or any
Property, through foreclosure proceedings or otherwise, provided, however, that
nothing herein shall inhibit or prevent Indemnitee from suing on the Note,
foreclosing, or exercising any power of sale under, any Mortgage, or exercising
any other rights and remedies thereunder. 
This Agreement is not collateral or security for the debt of Borrower
pursuant to the Loan, unless Indemnitee expressly


 


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elects in writing to make
this Agreement additional collateral or security for the debt of Borrower
pursuant to the Loan, which Indemnitee is entitled to do in its reasonable
discretion.  It is not necessary for an
Event of Default to have occurred for Indemnified Parties to exercise their
rights pursuant to this Agreement. 
Notwithstanding any provision of the Loan Agreement, the obligations
pursuant to this Agreement are exceptions to any non-recourse or exculpation
provision of the Loan Agreement or any other Loan Document and Indemnitor is
fully and personally liable for such obligations, and such liability is not
limited to the original or amortized principal balance of the Loan or the value
of the Properties.


9.             Survival. 
The obligations and liabilities of Indemnitor under this Agreement shall
fully survive indefinitely notwithstanding any termination, satisfaction,
assignment, entry of a judgment of foreclosure, exercise of any power of sale,
or delivery of a deed in lieu of foreclosure of any Mortgage.  Notwithstanding the provisions of this Agreement
to the contrary, the liabilities and obligations of Indemnitor hereunder shall
not apply to the extent that Indemnitor can prove that such liabilities and
obligations: (a) arose from Hazardous Substances that were not present on
or a threat to any Property prior to the date that Indemnitee or its nominee
acquired title to such Property, whether by foreclosure, exercise of power of
sale or otherwise, (b) were not the result of any act or negligence of
Indemnitor or any of Indemnitor’s affiliates, agents or contractors, and (c)
were the result of any act of gross negligence or willful misconduct of any of
the Indemnified Parties or any of their respective Affiliates, agents or
contractors.


10.          Interest. 
Any amounts payable to any Indemnified Parties under this Agreement
shall become immediately due and payable on demand and, if not paid within
thirty (30) days of such demand therefor, shall bear interest at the
lesser of (a) the Default Rate or (b) the Maximum Legal Rate which
Indemnitor may by law pay or Indemnified Parties may charge and collect, from
the date payment was due, provided that the foregoing shall be subject to the
provisions of Article 4 of the Note.


11.          Waivers. 
(a)  Indemnitor hereby waives (i) any right or claim of
right to cause a marshaling of Indemnitor’s assets or to cause Indemnitee or
other Indemnified Parties to proceed against any of the security for the Loan
before proceeding under this Agreement against Indemnitor; (ii) and
relinquishes all rights and remedies accorded by applicable law to indemnitors
or guarantors, except any rights of subrogation which Indemnitor may have,
provided that the indemnity provided for hereunder shall neither be contingent
upon the existence of any such rights of subrogation nor subject to any claims
or defenses whatsoever which may be asserted in connection with the enforcement
or attempted enforcement of such subrogation rights including, without
limitation, any claim that such subrogation rights were abrogated by any acts
of Indemnitee or other Indemnified Parties; (iii) the right to assert a
counterclaim, other than a mandatory or compulsory counterclaim, in any action
or proceeding brought against or by Indemnitee or other Indemnified Parties;
(iv) notice of acceptance hereof and of any action taken or omitted in
reliance hereon; (v) presentment for payment, demand of payment, protest
or notice of nonpayment or failure to perform or observe, or other proof, or
notice or demand; and (vi) all homestead exemption rights against the
obligations hereunder and the benefits of any statutes of limitations or
repose.  Notwithstanding anything to the
contrary contained herein, Indemnitor hereby agrees to postpone the exercise of
any rights of subrogation with respect to any collateral securing the Loan until
the Loan shall have been paid in full.


 


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(b)           EACH
OF INDEMNITOR AND INDEMNIFIED PARTIES (BY THEIR ACCEPTANCE HEREOF) HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM, WHETHER IN CONTRACT, TORT OR OTHERWISE,
RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY ACTS OR OMISSIONS
OF THE OTHER IN CONNECTION THEREWITH. 
EACH OF THE INDEMNITOR AND INDEMNIFIED PARTIES IS HEREBY AUTHORIZED TO
FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS
WAIVER AS AGAINST THE OTHER.


12.          Subrogation. 
Indemnitor shall take any and all reasonable actions, including
institution of legal action against third parties, necessary or appropriate to
obtain reimbursement, payment or compensation from such Persons responsible for
the presence of any Hazardous Substances at, in, on, under or near any Property
or otherwise obligated by law to bear the cost.  Indemnified Parties shall be and hereby are subrogated to all of
Indemnitor’s rights now or hereafter in such claims.


13.          Indemnitor’s Representations and
Warranties.  Indemnitor represents and warrants that:


(a)           it has the full power and authority
to execute and deliver this Agreement and to perform its obligations hereunder;
the execution, delivery and performance of this Agreement by Indemnitor has
been duly and validly authorized; and all requisite action has been taken by
Indemnitor to make this Agreement valid and binding upon Indemnitor,
enforceable in accordance with its terms, subject only to applicable
bankruptcy, insolvency and similar laws affecting the rights of creditors
generally, and subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law);


(b)           its execution of, and compliance
with, this Agreement will not result in the breach of any term or provision of
the charter, by-laws, partnership or trust agreement, or other governing
instrument of Indemnitor or result in the breach of any term or provision of,
or conflict with or constitute a default under, or result in the acceleration
of any obligation under, any agreement, indenture or loan or credit agreement
or other instrument to which Indemnitor or any Property is subject, or result
in the violation of any law, rule, regulation, order, judgment or decree to
which Indemnitor or any Property is subject;


(c)           to the best of Indemnitor’s
knowledge, there is no action, suit, proceeding or investigation pending or
threatened against it which, either in any one instance or in the aggregate,
could be reasonably expected to result in any material adverse change in the
business, operations, financial condition, properties or assets of Indemnitor,
or in any material impairment of the right or ability of Indemnitor to carry on
its business substantially as now conducted, or in any material liability on
the part of Indemnitor, or which would draw into question the validity of this
Agreement or of any action taken or to be taken in connection with the
obligations of Indemnitor contemplated herein, or which could be reasonably
expected to impair materially the ability of Indemnitor to perform under the
terms of this Agreement;


 


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(d)           it does not believe, nor does it have
any reason or cause to believe, that it cannot perform each and every covenant
contained in this Agreement;


(e)           to the best of Indemnitor’s
knowledge, no approval, authorization, order, license or consent of, or registration
or filing with, any governmental authority or other Person, and no approval,
authorization or consent of any other party is required in connection with this
Agreement; and


(f)            this Agreement constitutes a valid,
legal and binding obligation of Indemnitor, enforceable against it in
accordance with the terms hereof, subject only to applicable bankruptcy,
insolvency and similar laws affecting the rights of creditors generally, and
subject, as to enforceability, to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law).


14.          No Waiver. 
No delay by any Indemnified Party in exercising any right, power or
privilege under this Agreement shall operate as a waiver of any such privilege,
power or right.


15.          Notice of Legal Actions. 
Each party hereto shall, within five (5) Business Days of receipt
thereof, give written notice to the other party hereto of (a) any notice,
advice or other communication from any Governmental Authority or any source
whatsoever with respect to Hazardous Substances on, from or affecting any
Property, and (b) any legal action brought against such party or related
to any Property, with respect to which Indemnitor may have liability under this
Agreement.  Such notice shall comply
with the provisions of Section 19 hereof.


16.          Examination of Books and Records. 
Upon the occurrence and during the continuation of an Event of Default,
Indemnified Parties and their accountants shall have the right to examine the
records, books, management and other papers of Indemnitor which reflect upon
its financial condition, at any Property or at the office regularly maintained
by Indemnitor where the books and records are located.  Indemnified Parties and their accountants
shall have the right to make copies and extracts from the foregoing records and
other papers.


17.          Transfer of Loan. 
Indemnitee may, at any time, sell, transfer or assign the Note, the Loan
Agreement, any Mortgage, this Agreement and the other Loan Documents, and any
or all servicing rights with respect thereto, or grant participations therein
or issue mortgage pass-through certificates. 
Indemnitee may forward to each purchaser, transferee, assignee, servicer
or participant (the foregoing entities hereinafter collectively referred to as
the “Investor”)
and each prospective Investor, all documents and information which Indemnitee
now has or may hereafter acquire relating to Indemnitor and the Properties,
whether furnished by Indemnitor, any guarantor or otherwise, as Indemnitee
determines necessary or desirable. 
Indemnitor and any guarantor agree to cooperate as set forth in, and in
accordance with the terms of, the Loan Agreement with Indemnitee in connection
with any transfer made pursuant to this Section, including, without limitation,
the delivery of an estoppel certificate and such other documents as may be
reasonably requested by Indemnitee. 
Indemnitor shall also furnish, and Indemnitor hereby consents to
Indemnitee furnishing to such Investors or such prospective Investors, any and
all information concerning the financial condition of the Indemnitor and any
and all information concerning the Properties and the Leases as may be
requested by Indemnitee,


 


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any Investor or any
prospective Investor in connection with any sale, transfer, assignment or
participation interest.


18.          Taxes. 
Indemnitor has filed all federal, state, county, municipal, and city
income and other tax returns required to have been filed by it and has paid all
taxes and related liabilities which have become due pursuant to such returns or
pursuant to any assessments received by it. 
Indemnitor has no knowledge of any basis for any additional assessment
in respect of any such taxes and related liabilities for prior years.


19.          Notices. 
All notices or other written communications hereunder shall be made in
accordance with Section 10.6 of the Loan Agreement, provided that all
notices or other written communications to Sponsor shall be delivered c/o
Borrower at the same address and/or facsimile number of Borrower set forth in
Section 10.6 of the Loan Agreement.


20.          Duplicate Originals; Counterparts. 
This Agreement may be executed in any number of duplicate originals and
each duplicate original shall be deemed to be an original.  This Agreement may be executed in several
counterparts, each of which counterparts shall be deemed an original instrument
and all of which together shall constitute a single Agreement.  The failure of any party hereto to execute
this Agreement, or any counterpart hereof, shall not relieve the other
signatories from their obligations hereunder.


21.          No Oral Change. 
This Agreement, and any provisions hereof, may not be modified, amended,
waived, extended, changed, discharged or terminated orally or by any act or
failure to act on the part of Indemnitor or any Indemnified Party, but only by
an agreement in writing signed by the party against whom enforcement of any
modification, amendment, waiver, extension, change, discharge or termination is
sought.


22.          Headings, etc. 
The headings and captions of various paragraphs of this Agreement are
for convenience of reference only and are not to be construed as defining or
limiting, in any way, the scope or intent of the provisions hereof.


23.          Number and Gender/Successors and Assigns;
Joint and Several Liability.  (a) All
pronouns and any variations thereof shall be deemed to refer to the masculine,
feminine, neuter, singular or plural as the identity of the Person or Persons
referred to may require.  Without limiting
the effect of specific references in any provision of this Agreement, the term
“Indemnitor” shall be deemed to refer to each and every Person comprising an
Indemnitor from time to time, as the sense of a particular provision may
require, and to include the heirs, executors, administrators, legal
representatives, successors and assigns of Indemnitor, all of whom shall be
bound by the provisions of this Agreement, provided that no obligation of
Indemnitor may be assigned except with the written consent of Indemnitee.  Each reference herein to Indemnitee shall be
deemed to include its successors and assigns. 
This Agreement shall inure to the benefit of Indemnified Parties and
their respective successors and assigns forever.


(b)           If Indemnitor is comprised of more
than one Person, all representations, warranties, covenants (both affirmative
and negative) and all other obligations of Indemnitor hereunder shall be the
joint and several obligation of each entity making up Indemnitor and a


 


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Default or Event of
Default by any such Person shall be deemed a Default or Event of Default by all
such entities and Indemnitor.  The
representations, covenants and warranties contained herein shall be read to
apply to the individual entities comprising Indemnitor when the context so
requires but a breach of any such representation, covenant or warranty or a
breach of any obligation under this Agreement shall be deemed a breach by all
such entities and Indemnitor, entitling Lender to exercise all of its rights
and remedies under this Agreement and the other Loan Documents and under
applicable law.


24.          Release of Liability. 
Any one or more parties liable upon or in respect of this Agreement may
be released without affecting the liability of any party not so released.


25.          Rights Cumulative. 
The rights and remedies herein provided are cumulative and not exclusive
of any rights or remedies which Indemnitee has under the Note, any Mortgage,
the Loan Agreement or the other Loan Documents or would otherwise have at law
or in equity.


26.          Inapplicable Provisions. 
If any term, condition or covenant of this Agreement shall be held to be
invalid, illegal or unenforceable in any respect, this Agreement shall be
construed without such provision.


27.          Governing Law. 
This Agreement shall be governed in accordance with the terms and
provisions of Section 10.3 of the Loan Agreement.


28.          Miscellaneous. 
(a) Wherever pursuant to this Agreement (i) Indemnitee
exercises any right given to it approve or disapprove, (ii) any
arrangement or term is to be satisfactory to Indemnitee, or (iii) any
other decision or determination is to be made by Indemnitee, the decision of
Indemnitee to approve or disapprove, all decisions that arrangements or terms
are satisfactory or not satisfactory and all other decisions and determinations
made by Indemnitee, shall be in the sole and absolute discretion of Indemnitee
and shall be final and conclusive, except as may be otherwise expressly and
specifically provided herein.


(b)           Wherever pursuant to this Agreement
it is provided that Indemnitor pay any costs and expenses, such costs and
expenses shall include, but not be limited to, legal fees and disbursements of
Indemnitee, whether retained firms, the reimbursements for the expenses of the
in-house staff or otherwise.


29.          Assignment
of Contract Right.  As security for the full and
timely payment and the performance and observance of all obligations,
covenants, conditions and warranties on the part of Indemnitor to be performed
or observed under this Agreement, Borrower hereby assigns, transfers and
pledges to Lender, all of its rights under Sections 8.4 and 9.9 of that certain
Purchase and Sale Agreement, dated as of May 7, 2004, between Georgia-Pacific
Corporation and ABP Distribution Inc., as assigned to Borrower.


[NO FURTHER TEXT ON THIS PAGE]


 


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IN WITNESS WHEREOF, this Agreement has been executed by Indemnitor and
is effective as of the day and year first above written.


INDEMNITOR:


 


 


	
  ABP AL (MIDFIELD) LLC

  	
   

  	
  ABP AR (LITTLE ROCK) LLC

  
	
  ABP CA (CITY OF INDUSTRY) LLC

  	
   

  	
  ABP CA (NATIONAL CITY) LLC

  
	
  ABP CA (NEWARK) LLC

  	
   

  	
  ABP CA (NORTH HIGHLANDS) LLC

  
	
  ABP CA (RIVERSIDE) LLC

  	
   

  	
  ABP CO I (DENVER) LLC

  
	
  ABP CO II (DENVER) LLC

  	
   

  	
  ABP CT (NEWTON) LLC

  
	
  ABP FL (LAKE CITY) LLC

  	
   

  	
  ABP FL (MIAMI) LLC

  
	
  ABP FL (PENSACOLA) LLC

  	
   

  	
  ABP FL (TAMPA) LLC

  
	
  ABP FL (YULEE) LLC

  	
   

  	
  ABP GA (LAWRENCEVILLE) LLC

  
	
  ABP IA (DES MOINES) LLC

  	
   

  	
  ABP IL (UNIVERSITY PARK) LLC

  
	
  ABP IN (ELKHART) LLC

  	
   

  	
  ABP KY (INDEPENDENCE) LLC

  
	
  ABP LA (BATON ROUGH) LLC

  	
   

  	
  ABP LA (NEW ORLEANS) LLC

  
	
  ABP LA (SHREVEPORT) LLC

  	
   

  	
  ABP MA (BELLINGHAM) LLC

  
	
  ABP MD (BALTIMORE) LLC

  	
   

  	
  ABP ME (PORTLAND) LLC

  
	
  ABP MI (DETROIT) LLC

  	
   

  	
  ABP MI (GRAND RAPIDS) LLC

  
	
  ABP MN (EAGAN) LLC

  	
   

  	
  ABP MN (MAPLE GROVE) LLC

  
	
  ABP MO (BRIDGETON) LLC

  	
   

  	
  ABP MO (KANSAS CITY) LLC

  
	
  ABP MO (SPRINGFIELD) LLC

  	
   

  	
  ABP MS (PEARL) LLC

  
	
  ABP NC (BUTNER) LLC

  	
   

  	
  ABP NC (CHARLOTTE) LLC

  
	
  ABP ND (NORTH FARGO) LLC

  	
   

  	
  ABP NJ (DENVILLE) LLC

  
	
  ABP NM (ALBUQUERQUE) LLC

  	
   

  	
  ABP NY (YAPHANK) LLC

  
	
  ABP OH (TALMADGE) LLC

  	
   

  	
  ABP OK (TULSA) LLC

  
	
  ABP OR (BEAVERTON) LLC

  	
   

  	
  ABP PA (ALLENTOWN) LLC

  
	
  ABP PA (STANTON) LLC

  	
   

  	
  ABP SC (CHARLESTON) LLC

  
	
  ABP SD (SIOUX FALLS) LLC

  	
   

  	
  ABP TN (ERWIN) LLC

  
	
  ABP TN (MEMPHIS) LLC

  	
   

  	
  ABP TN (NASHVILLE) LLC

  
	
  ABP TX (EL PASO) LLC

  	
   

  	
  ABP TX (FORT WORTH) LLC

  
	
  ABP TX (HARLINGEN) LLC

  	
   

  	
  ABP TX (HOUSTON) LLC

  
	
  ABP TX (LUBBOCK) LLC

  	
   

  	
  ABP TX (SAN ANTONIO) LLC

  
	
  ABP VA (RICHMOND) LLC

  	
   

  	
  ABP VA (VIRGINIA BEACH) LLC

  
	
  ABP VT (SHELBURNE) LLC

  	
   

  	
  ABP WA (WOODINVILLE) LLC

  
	
  ABP WI (WAUSAU) LLC

  	
   

  	
   

  



 


 


 


	
   

  	
  By:

  	
  /s/
  David Morris

  
	
   

  	
   

  	
  Name:

  	
  David
  Morris

  
	
   

  	
   

  	
  Title:

  	
  Secretary
  and Vice President

  



 


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