Hazardous Materials Indemnity Agreement

HAZARDOUS MATERIALS INDEMNITY AGREEMENT


THIS HAZARDOUS MATERIALS INDEMNITY AGREEMENT (the "AGREEMENT") is made as of August 2, 1999, by PARK MEDICAL ASSOCIATES GENERAL PARTNERSHIP, a North Carolina general partnership, and DIANE B. RIVERS (individually and collectively, the "INDEMNITOR"), for the benefit of GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation ("LENDER").


RECITALS


A. Contemporaneously with the execution of this Agreement, PARK MEDICAL ASSOCIATES (the "BORROWER") has executed and delivered to Lender that certain Loan Agreement (the "LOAN AGREEMENT"), between the Borrower and Lender, and that certain Promissory Note (the "NOTE") in the amount of $4,000,000.00 in evidence of the loan (the "LOAN") made by Lender to Borrower.


B. The Loan is secured in part by that certain Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated the date hereof given by the Borrower to the Lender (the "MORTGAGE"). The Mortgage secures Borrower's interest in and to the "Mortgaged Property" described in the Mortgage (the "MORTGAGED PROPERTY").


C. Lender has required, as a condition of funding the Loan, that Indemnitor indemnify and hold Lender harmless against and from certain obligations for which Lender may incur liability, by reason of the threat or presence of any hazardous substance at or near the Mortgaged Property.


D. Indemnitor is the Borrower and/or the owner of a direct or indirect interest in Borrower, and Indemnitor will directly benefit from Lender's making the Loan to Borrower.


NOW, THEREFORE, in consideration of the premises, Ten Dollars ($10.00), and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Indemnitor, intending to be legally bound, hereby agrees as follows:


1. RECITALS. The foregoing recitals are incorporated into this Agreement by this reference.


2. CERTAIN DEFINITIONS. As used herein, the following terms have the meanings indicated:


2.1 "ENVIRONMENTAL LAWS" means any federal, state or local law (whether imposed by statute, ordinance, rule, regulation, administrative or judicial order, or common law), now or hereafter enacted, governing health, safety, industrial hygiene, the environment or natural resources, or Hazardous Materials, including, without limitation, such laws governing or regulating (a) the use, generation, storage, removal, recovery, treatment, handling, transport, disposal, control, release discharge of, or exposure to, Hazardous Materials, (b) the transfer of property upon a negative declaration or other approval of a governmental authority of the environmental condition of such property, or (c) requiring notification or disclosure of releases of Hazardous Materials or other environmental conditions whether or not in connection with a transfer of title to or interest in property.


2.2 "HAZARDOUS MATERIALS" means (a) petroleum or chemical products, whether in liquid, solid, or gaseous form, or any fraction or by-product thereof, (b) asbestos or asbestos-containing materials, (c)
polychlorinated biphenyls (PCBs), (d) radon gas, (e) underground storage
tanks, (f) any explosive or radioactive substances, (g) lead or lead-based
paint, or (h) any other substance, material, waste or mixture which is or
shall be listed, defined, or otherwise determined by any governmental
authority to be hazardous, toxic, dangerous or otherwise regulated,
controlled or giving rise to liability under any Environmental Laws.


2.3 "SITE ASSESSMENT" means an environmental engineering report for the
Mortgaged Property prepared by an engineer engaged by Borrower and approved
by Lender, and in a manner satisfactory to Lender, based upon an
investigation relating to and making appropriate inquiries concerning the
existence of Hazardous Materials on or about the Mortgaged Property, and
the past or present discharge, disposal, release or escape of any such
substances, all consistent with ASTM Standard E1527-93 (or any successor
thereto published by ASTM) and good customary and commercial practice.


Other capitalized terms used in this Agreement and not defined shall have the meanings assigned to such terms in the Loan Agreement.


3. INDEMNITY.


3.1 In accordance with the terms of the Loan Agreement, all risk of loss associated with noncompliance with Environmental Laws, or with the presence of any Hazardous Material at, upon, within, contiguous to or otherwise affecting the Mortgaged Property lies solely with Borrower and the Borrower has agreed to bear all risks and costs associated with any loss (including any loss in value attributable to Hazardous Materials), damage or liability therefrom, including all costs of removal of Hazardous Materials or other remediation required by Lender or by law. Indemnitor shall at all times indemnify, defend and hold Lender and its shareholders, directors, officers, employees and agents harmless from and against any and all loss, liabilities, damages, claims, costs and expenses (including reasonable costs of defense and consultant fees, investigation and laboratory fees, court costs, and other litigation expenses) of any nature whatsoever proffered or incurred by Lender (hereinafter collectively referred to as "LIABILITIES"), whether as mortgagee under the Mortgage, as a mortgagee in possession, or as successor-in-interest to Borrower by foreclosure deed or deed in lieu of foreclosure, and whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute or common law, including those Liabilities arising from the joint, concurrent or comparative negligence of Lender and including any Liabilities arising out of or associated, in any way, with:


(a) the non-compliance of the Borrower or the Mortgaged
Property with Environmental Laws;


(b) any discharge or release of Hazardous Materials, the
threat of discharge or release of any Hazardous Materials or the storage or
presence of any Hazardous Materials affecting the Mortgaged Property or any
contiguous real estate;


(c) any personal injury (including wrongful death) or
property damage (real or personal) arising out or related to Hazardous
Materials;


(d) any lawsuit brought or threatened, settlement reached,
or government order relating to such Hazardous Materials;


(e) a breach of any representation, warranty or covenant
contained in any of the Loan Documents relating to Hazardous Materials or
Environmental Laws.


(f) the imposition of any environmental lien encumbering
the Mortgaged Property;


provided, however, Indemnitor shall not be liable under such indemnification to the extent such Liabilities result solely from Lender's gross negligence or willful misconduct. Indemnitor's obligations under this Agreement shall arise upon the discovery of the presence of any Hazardous Material, whether or not the Environmental Protection Agency, any other federal agency or any state or local environmental agency has taken or threatened any action in connection with the presence of any Hazardous Materials and whether or not the existence of any such Hazardous Material or potential liability on account thereof is disclosed in the Site Assessment, and shall continue notwithstanding the repayment of the Loan or any transfer or sale of any right, title and interest in the Mortgaged Property (by foreclosure, deed in lieu of foreclosure or otherwise).


3.2 Indemnitor hereby acknowledges and agrees that the provisions of this Agreement shall supersede any provisions in the Loan Documents which in any way limit the personal liability of Indemnitor, including those contained in Article 12 of the Loan Agreement, and that Indemnitor shall be personally liable for any and all obligations arising under this Agreement even if the amount of liability incurred exceeds the amount of the Loan. All of the representations, warranties, covenants and indemnities of this Agreement shall survive the repayment of the Note and/or the release of the lien of the Mortgage from the Mortgaged Property, and shall survive the transfer of any or all right, title and interest in and to the Mortgaged Property by Borrower to any party. Indemnitor hereby acknowledges and agrees that, notwithstanding anything contained in any of the Loan Documents to the contrary, this Agreement and the obligations of Indemnito ...