Environmental And Ada Indemnification Agreement

ENVIRONMENTAL AND ADA INDEMNIFICATION AGREEMENT EXHIBIT 10.7


THIS AGREEMENT is made as of December 3, 1997, by REUTER MANUFACTURING, INC., a corporation organized under the laws of the State of Minnesota ("Borrower"), in favor of U.S. Bank National Association, a national banking association ("Lender").


RECITALS


A. Lender has agreed to lend to Borrower $2,400,000.00 (the "Loan"), which Loan is secured in part by a Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture Financing Statement of even date herewith (the "Mortgage") pertaining to certain land described in the Mortgage and improvements thereon (collectively the "Property") owned by Borrower and located in Hennepin County, Minnesota; and


B. Lender has refused to make the Loan to Borrower unless this Agreement is executed and delivered by Borrower.


NOW, THEREFORE, in consideration of Lender's agreement to make the Loan to Borrower, Borrower hereby warrants and represents to, and covenants and agrees with, Lender as follows:


1. DEFINITIONS. As used in this Agreement, the following terms shall have the following meanings:


(a) "Accessibility Regulation" means a Law relating to accessibility of
facilities or properties for disabled, handicapped and/or physically
challenged persons, including, without limitation, the Americans With
Disabilities Act of 1991, as amended.


(b) "Environmental Regulation" means a Law relating to the environment
and/or to human health or safety, or governing, regulating or
pertaining to the generation, treatment, storage, handling,
transportation, use or disposal of any Hazardous Substance.


(c) "Hazardous Substance" means any substance or material defined in or
governed or regulated by any Environmental Regulation as a dangerous,
toxic or hazardous pollutant, contaminant, chemical, waste, material
or substance, and also expressly includes urea-formaldehyde,
polychlorinated biphenyls, dioxin, radon, lead-based paint, asbestos,
asbestos containing materials, nuclear fuel or waste, radioactive
materials, explosives, carcinogens and petroleum products, including
but not limited to crude oil or any fraction thereof, natural gas,
natural gas liquids, gasoline and synthetic gas, and any other waste,
material,


substance, pollutant or contaminant the presence of which on, in, about or under the Property would subject the owner or operator thereof to any damages, penalties, fines or liabilities under any applicable Environmental Regulation.


(d) "Law" means any federal, state or local law, statute, code, ordinance,
rule, regulation or requirement.


2. WARRANTIES AND REPRESENTATIONS. Borrower warrants and represents to Lender that to Borrower's knowledge, and except as otherwise described in documents identified on Exhibit A attached hereto and in the letter of undertaking regarding environmental matters from Borrower to Lender of even date herewith:


(a) There is not located on, in, about or under the Property any Hazardous
Substances except for Hazardous Substances of the type ordinarily
used, stored or manufactured in connection with the operation of the
Property as it is presently operated, and such existing Hazardous
Substances have been and are used, stored and manufactured in
compliance with all Environmental Regulations. The Property is
operated as an office/manufacturing facility.


(b) The Property is not presently used, and has not in the past been used,
as a landfill, dump, disposal facility or gasoline station, or for
industrial, or for military purposes, or for the storage, generation,
production, manufacture, processing, treatment, disposal, handling,
transportation or deposit of any Hazardous Substances.


(c) There has not in the past been, and no present threat now exists of, a
spill, discharge, emission or release of a Hazardous Substance in,
upon, under, over or from the Property or from any other property
which would have an impact on the Property.


(d) The Property is in compliance with, and there are no past or present
investigations, administrative proceedings, litigation, regulatory
hearings or other actions completed, proposed, threatened or pending,
alleging noncompliance with or violation of, any Environmental
Regulations respecting the Property, or relating to any required
environmental permits covering the Property.


(e) Borrower has disclosed to Lender all reports and investigations
commissioned by or in the possession or control of Borrower and
relating to Hazardous Substances and the Property.


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(f) There are not now, nor have there ever been, any above ground or
underground storage tanks located in or under the Property. All
storage tanks identified on Exhibit A have been registered and/or
permitted as required by Environmental Regulations, and evidence of
such registration and/or permitting has been given to Lender. There
are no wells on or under the Property.


3. COVENANTS AND AGREEMENTS. Borrower covenants and agrees as
follows:


(a) Except for substances normally used for maintenance or operation of
the Property which are used, stored and disposed of in accordance with
all applicable Environmental Regulations, Borrower shall not, nor
shall it permit others to, place, store, locate, generate, produce,
create, process, treat, handle, transport, incorporate, discharge,
emit, spill, release, deposit or dispose of any Hazardous Substance
in, upon, under, over or from the Property. Borrower shall cause all
Hazardous Substances found on or under the Property, which are not
permitted under the foregoing sentence, to be properly removed
therefrom and properly disposed of at Borrower's cost and expense.
Borrower shall not install or permit to be installed any underground
storage tank on or under the Property. Borrower shall give written
notice to Lender prior to a change in the operations on the Property.


(b) In the event that (i) Lender reasonably believes that a violation of
an Environmental Regulation may have occurred in connection with the
Property; (ii) Lender receives notice from Borrower or otherwise has
knowledge that an event described in subparagraph 3(d) has occurred;
(iii) Lender reasonably believes that a representation or warranty of
Borrower in Paragraph 2 was untrue in any material respect when made
or has become untrue in any material respect; (iv) Lender receives
notice from Borrower or ...