ENVIRONMENTAL
INDEMNITY AGREEMENT
This Agreement , which is dated as of
____________________, 2007, is executed by NorthCut Refining,
LLC, a Wyoming limited liability company
(“Borrower”) and Interline Resources Corporation, a
Utah corporation (whether one or more, the
“Guarantor”; the Borrower and the Guarantor being
hereafter sometimes referred to individually as an
“Obligor” and collectively as the
“Obligors”) as a condition to, and to induce Private
Capital Group, Inc., a Utah corporation as serving agent for the
Participants in the Loan existing or hereafter participating
(“Lender”) to make, a loan (the “Loan”)
to Borrower evidenced or to be evidenced by a Note dated
September ___, 2007 made by Borrower payable to the order of
Lender in the principal face amount of $11,500,000, which Loan
is secured or to be secured by a Deed of Trust, Assignment of
Rents and Leases, Security Agreement and Financing Statement
(the “Deed of Trust”) dated September ___, 2007,
encumbering certain real and personal property as therein
described (collectively, the “Property”) including
the land described in Exhibit A which is attached hereto
and made a part hereof. The term “Loan
Documents” is used herein as defined in the Deed of Trust.
This Agreement is one of the Loan Documents.
1.
Certain Definitions . As used in
this Agreement:
(a)
“ Environmental Claim ” means
any investigative, enforcement, cleanup, removal, containment,
remedial or other private or governmental or regulatory action
at any time threatened, instituted or completed pursuant to any
applicable Environmental Requirement (hereinafter defined),
against Borrower or any Obligor against or with respect to the
Property or any condition, use or activity on the Property
(including any such action against Lender), and any claim at any
time threatened or made by any person against any Obligor or
against or with respect to the Property or any condition, use or
activity on the Property (including any such claim against
Lender), relating to damage, contribution, cost recovery,
compensation, loss or injury resulting from or in any way
arising in connection with any Hazardous Material (hereinafter
defined) or any Environmental Requirement.
(b)
“ Environmental Requirement ”
means any Environmental Law (hereinafter defined), agreement or
restriction (including but not limited to any condition or
requirement imposed by any insurance or surety company), as the
same now exists or may be changed or amended or come into effect
in the future, which pertains to health, safety, any Hazardous
Material, or the environment, including but not limited to
ground or air or water or noise pollution or contamination, and
underground or aboveground tanks.
(c)
“ Hazardous Material ” means
any substance, whether solid, liquid or gaseous: which is
listed, defined or regulated as a “hazardous
substance”, “hazardous waste” or “solid
waste”, or otherwise classified as hazardous or toxic, in
or pursuant to any Environmental Requirement; or which is or
contains asbestos, radon, any polychlorinated biphenyl, urea
formaldehyde foam insulation, explosive or radioactive material,
or motor fuel or other petroleum hydrocarbons; or which causes
or poses a threat to cause a contamination or nuisance on the
Property or any adjacent property or a hazard to the environment
or to the health or safety of persons on the Property.
(d)
“ Environmental Law ” means
any federal, state or local law, statute, ordinance, code, rule,
regulation, license, authorization, decision, order, injunction,
decree, or rule of common law, and any judicial interpretation
of any of the foregoing, which pertains to health, safety, any
Hazardous Material, or the environment (including but not
limited to ground or air or water or noise pollution or
contamination, and underground or above ground tanks) and shall
include without limitation, the Solid Waste Disposal Act, 42
U.S.C. § 6901 et seq. ; the Comprehensive
Environmental Response, Compensation and Liability Act of 1980,
42 U.S.C. § 9601 et seq .
(“CERCLA”), as amended by the Superfund Amendments
and Reauthorization Act of 1986 (“SARA”); the
Hazardous Materials Transportation Act, 49 U.S.C. § 1801
et seq .; the Federal Water Pollution Control Act, 33
U.S.C. § 1251 et seq .; the Clean Air Act, 42 U.S.C.
§ 7401 et seq .; the Toxic Substances Control
Act, 15 U.S.C. § 2601 et seq .; the Safe Drinking
Water Act, 42 U.S.C. § 300f et seq .; Nevada Revised
Statutes Chapter 459, Hazardous Material, and any other state or
federal environmental statutes, and all rules, regulations,
orders and decrees now or hereafter promulgated under any of the
foregoing, as any of the foregoing now exist or may be changed
or amended or come into effect in the future.
(e)
“On” or “on”, when used
with respect to the Property or any property adjacent to the
Property, means “on, in, under, above or about”.
2.
Representations and Warranties .
Each Obligor, after due inquiry and investigation in
accordance with good commercial or customary practices to
determine whether contamination is present on the Property or
elsewhere in connection with any activity on the Property,
hereby represents and warrants to, and covenants with, Lender,
without regard to whether Lender has or hereafter obtains any
knowledge or report of the environmental condition of the
Property, as follows:
(a)
During the period of Borrower’s ownership
of the Property, the Property has not been used for industrial
or manufacturing purposes, for landfill, dumping or other waste
disposal activities or operations, for generation, storage, use,
sale, treatment, processing, recycling or disposal of any
Hazardous Material, for underground or aboveground storage
tanks, or for any other use that could give rise to the release
of any Hazardous Material on the Property; to the best of
Obligors’ knowledge, no such use of the Property occurred
at any time prior to the period of Borrower’s ownership of
the Property; and to the best of Obligor’s knowledge, no
such use on any adjacent property occurred at any time prior to
the date hereof;
(b)
To the best of Obligors’ knowledge, there
is no Hazardous Material, storage tank (or similar vessel)
whether underground or otherwise, sump or well currently on the
Property;
(c)
Obligors have received no notice and have no
knowledge of any Environmental Claim or any completed, pending
or proposed or threatened investigation or inquiry concerning
the presence or release of any Hazardous Material on the
Property or any adjacent property or concerning whether any
condition, use or activity on the Property or any adjacent
property is in violation of any Environmental Requirement;
(d)
The present conditions, uses and activities on
the Property do not violate any Environmental Requirement and
the use of the Property which Borrower (and each tenant and
subtenant, if any) makes and intends to make of the Property
complies and will comply with all applicable Environmental
Requirements;
(e)
The Property does not appear on and to the best
of Obligors’ knowledge has never been on the National
Priorities List, any federal or state “superfund” or
“superlien” list, or any other list or database of
properties maintained by any local, state or federal agency or
department showing properties which are known to contain or
which are suspected of containing a Hazardous Material;
(f)
Obligors have never applied for and been denied
environmental impairment liability insurance coverage relating
to the Property; and
(g)
No Obligors, nor to Obligors’ knowledge
any tenant or subtenant, has obtained or is required to obtain
any permit or authorization to construct, occupy, operate, use
or conduct any activity on any of the Property by reason of any
Environmenta