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INDEMNIFICATION AGREEMENT
This indemnification agreement (the "Indemnification Agreement") is
made and entered into this 9th day of March, 2001, between Xxxxxx Telecom
Limited Partnership, a South Carolina limited partnership (the "Seller") and
WW-Golf & Services, LLC, a South Carolina limited liability company (the
"Purchaser").
WITNESSETH:
WHEREAS, Purchaser and Seller have entered into a purchase and sale
agreement dated October 18, 2000 (the "Purchase and Sale Agreement") relating to
the assets of Fox Squirrel Country Club, and
WHEREAS, in connection with the transaction contemplated by the
Purchase and Sale Agreement, Seller engaged Applied Resource Management, P.C.
(the "Environmental Consultant") to conduct a Phase I environmental report
pursuant to Section 4.3 of the Purchase and Sale Agreement, and
WHEREAS, in connection with such Phase I environmental report, the
Environmental Consultant caused to have taken soil samples from the site (the
"Site"), as further described in Exhibit "A" hereto, whence an underground
storage tank was removed in December 2000, and
WHEREAS, the Environmental Consultant has advised Seller that
laboratory tests of such soil samples demonstrate that the concentration of
petroleum fuel hydrocarbons in a portion of the subsurface at the Site exceeds
permitted levels under applicable North Carolina environmental laws (the
"Contamination"), and
WHEREAS, Seller has undertaken certain remediation work at the Site but
it is not certain at this time if such remediation work is sufficient to obtain
from the North Carolina Department of Environment and Natural Resources Office
(NCDENR) written confirmation that no further remediation action in respect of
the Contamination at the Site is required, and
WHEREAS, Seller and Purchaser each desires that the transaction
contemplated by the Purchase and Sale Agreement close as quickly as practicable
with Purchaser not bearing the risk relating to the Contamination at the Site.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Purchaser and Seller agree as
follows:
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1. REMEDIATION OF THE CONTAMINATION.
The Contamination to which this Indemnification Agreement relates is
described in the report furnished to Seller by the Environmental Consultant
attached hereto as Exhibit "B." Seller shall be fully responsible for the
remediation of the Contamination at the Site in accordance with all applicable
environmental laws and all costs associated therewith.
2. INDEMNIFICATION OF PURCHASER BY SELLER.
Effective upon the closing of the transaction contemplated by the
Purchase and Sale Agreement, Seller hereby agrees to indemnify and hold harmless
Purchaser and its successors and/or assigns from and against any and all
damages, losses, claims, liabilities, and expenses (including reasonable
attorney's fees) assessed, incurred, paid, or sustained by or against Purchaser
with respect to, or arising out of, directly or indirectly, the Contamination at
the Site. In no event shall this indemnification relate to any environmental
condition (including, without limitation, a condition relating to the
underground migration of any hazardous substance under the land being conveyed
to Purchaser by Seller from areas outside of the Site) other than the
Contamination at the Site. Commencing the date hereof and for the duration of
this indemnification, Seller shall promptly furnish Purchaser with all
environmental reports, official correspondence and notices relating to the
Contamination at the Site
3. DURATION OF INDEMNIFICATION.
The indemnification covered by this Indemnification Agreement shall
commence upon the closing of the transaction contemplated by the Purchase and
Sale Agreement, and shall survive until Seller delivers to Purchaser a written
notice from NCDENR (or such successor agency as may then exist) stating or to
the effect that, after giving effect to remediation work performed by or on
behalf of Seller, no further remediation action is required in respect of the
Contamination at the Site (the "Closure Letter"), whereupon this Indemnification
Agreement shall become null and void, and of no further force and effect. If the
transaction contemplated by the Purchase and Sale Agreement does not close, this
Indemnification Agreement shall be null and void, and of no force and effect.
4. EXTENSION OF MATURITY DATE OF PROMISSORY NOTE.
If Seller has not delivered to Purchaser a copy of the Closure Letter
by the date that is six (6) months prior to the maturity date of the promissory
note of even date herewith issued by Purchaser, as maker, to Seller, Purchaser
shall have the right to extend the maturity date of the promissory note to the
date that is six (6) months after the date Seller delivers to Purchaser a copy
of the Closure Letter, but in no event shall the maturity date, as extended, be
later than
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twenty (20) years from the date hereof. In order to exercise such right to
extend, Purchaser must give written notice to Seller and Seller must receive
said notice at least five (5) months but not more than six (6) months prior to
the maturity date of the promissory note. If proper notification of Purchaser's
exercise of its right hereunder is not given and/or not received, such right
shall automatically expire and the maturity date shall not be extended.
Notwithstanding the foregoing, Purchaser shall have no right to extend the
maturity date of the promissory note hereunder: (a) during the period commencing
with the giving of any notice of default under the promissory note or any
related loan agreement and continuing until such default is cured; or (b) during
the time Purchaser is in breach of the promissory note or any related loan
agreement. The period of time within which Purchaser may exercise its right to
extend the maturity date of the promissory note shall not be extended or
enlarged by reason of Purchaser's inability to exercise its right because of the
provisions of this Paragraph 4. Purchaser's right to extend the maturity date of
the promissory note hereunder shall terminate and be of no further force or
effect, notwithstanding Purchaser's timely exercise of its right, if, within
thirty (30) days of such exercise, Seller delivers to Purchaser a copy of the
Closure Letter or if, after such exercise and prior to the maturity date: (a)
Purchaser fails to make any scheduled payment of principal and/or interest under
the promissory note within thirty (30) days of when due; or (b) Purchaser
commits a breach of the promissory note or any related loan agreement.
Purchaser's right to extend the maturity date hereunder is personal to the
original Purchaser, and cannot be assigned, transferred or exercised by anyone
other than said original Purchaser and only while the said original Purchaser is
in full possession of the Site and all or substantially all of the assets
purchased by Purchaser pursuant to the Purchase and Sale Agreement and without
the intention of thereafter assigning or transferring.
5. ASSIGNMENT
Purchaser's rights hereunder (except for Purchaser's right to extend
the maturity date of the promissory note set forth in Paragraph 4 hereof, which
right may not be assigned or transferred in any respect whatsoever) may not be
assigned and/or transferred to any party other than a purchaser of all or
substantially all of the assets of Fox Squirrel Country Club pursuant to the
terms and subject to the conditions of Paragraph 23 of the Purchase and Sale
Agreement, provided that such purchaser acquires the land that includes the
Site. Seller may not assign its obligations hereunder without the written
consent of indemnitee, which consent shall not be unreasonably withheld.
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In witness hereof, the parties have duly executed this Indemnification
Agreement as of the day and year first above written.
PURCHASER: SELLER:
WW-GOLF & SERVICES, LLC XXXXXX TELECOM LIMITED
PARTNERSHIP
By: /S/ XXXXXX XXXXX By: /S/ XXXXX X. XXXXXXX
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Xxxxxx Xxxxx Xxxxx X. Xxxxxxx
President, Foreward Golf, Inc., Vice President of Grace Property
Manager Management, Inc., its general partner
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EXHIBIT "A"
Description of the Site
Beginning at a point on the Southern line of Xxx 00, Xxxxxxx 00, xxxx
xxxxx being North 70 degrees 57 minutes West 165 feet from the intersection of
the Western right-of-way of South Shore Drive and the Southern line of Xxx 00,
Xxxxxxx 00 (XXX XXXXX XX XXXXXXXXX), thence South 19 degrees 28 minutes West to
the Northern exterior wall of the Fox Squirrel Country Club club house, thence
North 70 degrees 57 minutes West 40 feet to a point, thence North 19 degrees 28
minutes EAST 30 feet to a point, thence South 70 degrees 57 minutes East 40 feet
to the POINT OF BEGINNING.
