Exhibit 10.17
CONFORMED COPY
TAX MATTERS AGREEMENT
Dated as of June 18, 2004
BY AND AMONG
FORTRESS BROOKDALE ACQUISITION LLC,
"Seller"
BLC SENIOR HOLDINGS, INC.,
"Indemnitor"
AND
PROVIDENT SENIOR LIVING TRUST
"Acquiror"
TAX MATTERS AGREEMENT
This TAX MATTERS AGREEMENT (this "Agreement") is dated as of June
18, 2004, by and among Fortress Brookdale Acquisition LLC, a Delaware limited
liability company ("Seller"), BLC Senior Holdings, Inc., a Delaware
corporation ("Indemnitor") and Provident Senior Living Trust, a Maryland real
estate investment trust ("Acquiror").
WITNESSETH
WHEREAS, Seller, Indemnitor and Acquiror have entered into a Stock
Purchase Agreement dated as of the date hereof (the "Purchase Agreement"),
pursuant to which, among other things, Acquiror has agreed to acquire all the
outstanding shares of common stock of Brookdale Living Communities, Inc., a
Delaware corporation (the "Company");
WHEREAS, upon the acquisition of all the outstanding shares of
common stock of the Company by Acquiror, the Company and each of its
wholly-owned corporate subsidiaries are intended to become qualified REIT
subsidiaries pursuant to Section 856(i) of the Code (defined below), the
Company and each of its wholly-owned direct and indirect corporate
subsidiaries will be deemed to liquidate under Section 332 of the Code for
Federal income tax purposes, and the tax year for the Company and various of
its subsidiaries will end on the Closing Date;
WHEREAS, after being deemed liquidated under Section 332 of the
Code, the Company and each of its wholly-owned corporate subsidiaries are
intended to be converted to limited liability companies that are not
classified as corporations for Federal income tax purposes;
WHEREAS, after being converted to limited liability companies, all
the equity interests in the Company and each of its wholly-owned corporate
subsidiaries are intended to be contributed by the Acquiror to an entity that
is classified as a partnership for Federal income tax purposes in which the
Acquiror, directly or through one or more entities disregarded for Federal
income tax purposes, will be a partner; and
WHEREAS, as a condition to entering into the Purchase Agreement
and the Transaction Agreements (as defined in the Purchase Agreement), and as
an inducement to do so, the parties hereto are entering into this Agreement;
NOW, THEREFORE, in consideration of the promises and mutual
agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
Section 1. Definitions. For purposes of this Agreement, the
following terms shall apply:
(a) "Acquiror" shall have the meaning set forth in the
Introductory Paragraph.
(b) "Code" shall mean the Internal Revenue Code of 1986,
as amended.
(c) "Final Determination" shall mean (i) a decision,
judgment, decree, or other order by any court of competent jurisdiction,
which decision, judgment, decree, or other order has become final after
all allowable appeals by either party to the action have been exhausted
or the time for filing such appeal has expired, (ii) a closing agreement
entered into under Section 7121 of the Code, or any final settlement
agreement entered in connection with any administrative or judicial
proceeding, or (iii) the expiration of time for instituting a claim for
refund, or if such claim was filed, the expiration of time for
instituting a suit with respect thereto.
(d) "Indemnitor" shall have the meaning set forth in the
Introductory Paragraph.
(e) "Indemnity Amount" shall mean the amount payable by
Indemnitor to an Acquiror pursuant to Section 3.
(f) "Pre-Closing Period" shall mean any taxable year or
period that ends on or before the Closing Date.
(g) "Post-Closing Period" shall mean any taxable year or
period that begins after the Closing Date.
(h) "REIT" shall mean a real estate investment trust,
within the meaning of Sections 856 et. seq., of the Code.
(i) "Seller" shall have the meaning set forth in the
Introductory Paragraph.
(j) "Straddle Period" shall mean, with respect to any
taxable year or period of an entity or group of entities that begins on
or before the Closing Date but ends after the Closing Date, the portion
of such taxable year or period that (i) begins on the first day of such
taxable year or period, and (ii) ends on the Closing Date.
(k) "Tax" and/or "Taxes" shall mean all Federal, state,
local and foreign taxes, charges, fees, duties (including customs
duties), levies or other assessments, including without limitation,
income, gross receipts, net proceeds, ad valorem, turnover, real and
personal property (tangible and intangible), sales, use, franchise,
excise, value added, stamp, transfer, leasing, lease, user, transfer,
fuel, excess profits, occupational, interest equalization, windfall
profits, severance, license, payroll, environmental, capital stock,
disability, employee's income withholding, other withholding, and
unemployment taxes, which are imposed by any governmental authority, and
such term shall include any interest, penalties or additions to tax
attributable thereto.
(l) "Tax Authority" shall mean any governmental authority
having jurisdiction over the assessment, determination, collection, or
imposition of any Tax.
(m) "Tax Return" shall mean a report, return or other
information return required to be supplied to a governmental entity with
respect to Taxes (and any
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amendments thereto) including, combined or consolidated returns for any
group of entities.
(n) Any capitalized terms used herein and not defined
herein, shall have the meaning assigned to it in the Purchase Agreement.
Section 2. Tax Liability for Straddle Period. For purposes of this
Agreement, the Tax liability of any entity with respect to a Straddle Period
shall be computed as follows: (i) in the case of Taxes of an entity that are
either based upon or related to income or receipts, the Tax liability for the
Straddle Period shall be deemed equal to the amount that would be payable if
the period for which such Tax is assessed had ended on and included the
Closing Date, not including transactions occurring on the Closing Date after
the Closing, determined, to the extent permissible under applicable laws and
commercially practicable, in a manner which is consistent with such entity's
accounting practices and business operations as in effect prior to the Closing
Date; (ii) in the case of Taxes that are incurred as a result of any sale,
transfer, assignment or distribution of property, or other similar transaction
engaged in, by any such entity, the Tax liability for the Straddle Period
shall be the amount due with respect to any such sale, transfer, assignment,
distribution, or other similar transaction occurring on or prior to the
Closing Date (not including transactions occurring on the Closing Date but
after the Closing); and (iii) in the case of all other Taxes, Tax liability
attributable to the Straddle Period shall be equal to the Taxes imposed with
respect to the Tax period that includes the Straddle Period multiplied by a
fraction, the numerator of which is the number of days in the Straddle Period
through and including the Closing Date and the denominator of which is the
number of days in the Tax period with respect to which such Taxes are imposed;
provided, however, that notwithstanding the foregoing provisions of this
section, with respect to real property Taxes, Section 2.04 of the Purchase
Agreement shall govern.
Section 3. Amount and Scope of Indemnification.
(a) Indemnitor shall indemnify, defend, and hold harmless
Acquiror against and reimburse Acquiror for all Taxes, losses, damages,
cost, expenses, liabilities, obligations and claims of any kind
(including reasonable attorneys' fees and costs of investigation) in
connection with Taxes of the Company and the Company Subsidiaries that
are attributable to a Pre-Closing Period, including without limitation
Taxes properly allocable to a Straddle Period under Section 2, or that
Acquiror may at any time suffer or incur, or become subject to, as a
result of or in connection with the material inaccuracy of any
representation or warranty made by Indemnitor in Section 3.19 (other
than Section 3.19(l)) of the Purchase Agreement or in the schedules
referred to in Section 3.19 of the Purchase Agreement. Acquiror, if and
to the extent it qualifies as a REIT with respect to any taxable period
and jurisdiction, shall not be required to make additional distributions
to its shareholders to reduce or eliminate its liability for Taxes
otherwise indemnified against hereunder, whether or not such
distributions are required to be made to maintain the Acquiror's status
as a REIT, but to the extent Acquiror is permitted to, and chooses to,
make any such additional distributions to its shareholders, any
reduction in Acquiror's liability for Taxes as a result of such
additional distributions shall be taken into account in computing the
Indemnity Amount hereunder.
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(b) In the event Acquiror makes a claim for
indemnification hereunder, Acquiror shall provide Indemnitor with a
written statement setting forth in reasonable detail the basis of the
claim for indemnification and the calculation of the amount owing under
Section 3(a) (the "Indemnity Amount").
(c) Any payment determined due to Acquiror pursuant to
this Section 3 shall be paid within the later of (i) twenty (20)
business days after written notice from Acquiror to Indemnitor that such
amounts are due and payable, or (ii) ten (10) business days prior to the
due date for any return (including without limitation any return of
estimated income taxes) on which Acquiror would reflect such income or
gain.
(d) Upon request of Indemnitor, the basis of the claim and
the accuracy of Acquiror's calculation of the Indemnity Amount payable
to Acquiror pursuant to Section 3 shall be verified by an independent,
nationally recognized accounting firm (other than the preparer of
Acquiror's or Indemnitor's Tax Returns or financial statements)
acceptable to Indemnitor and Acquiror. In the event that the parties are
unable to agree on an acceptable accounting firm, each shall select one
accounting firm as its representative and the two accounting firms so
selected shall select a third firm to perform the requisite
verification. In order to enable such accountants to verify the basis
and accuracy of such claim, Acquiror and Indemnitor shall provide to
such accountants all information reasonably necessary for such
verification, including without limitation any computer analyses used by
Acquiror or Indemnitor to calculate or question, as the case may be,
such amount or amounts. In conducting its verification, the accounting
firm shall consult with, and consider in good faith the opinions and
positions of, Acquiror and Indemnitor as to the proper resolution of any
matters at issue. The review and determination of such calculations by
such accounting firm pursuant to this Section 3(d) shall be final. The
parties hereto agree that, if the accounting firm is required to resolve
any matters relating to the computations, the accounting firm (i) shall
provide Acquiror and Indemnitor with a written notification that
describes in reasonable detail the matter or matters at issue, and (ii)
prior to its resolution of the matter or matters at issue, shall provide
Acquiror and Indemnitor with an opportunity to set forth their positions
concerning the proper resolution of the matter or matters at issue in
accordance with a procedure reasonably acceptable to both Acquiror and
Indemnitor. The cost of such verification shall be borne by Indemnitor
unless it is the determination of such verification that the actual
amount or amounts payable (exclusive of interest and penalties)
deviates, in a manner favorable to Indemnitor, by more than 10% from the
amount originally determined by Acquiror, in which case such cost shall
be borne by Acquiror.
(e) At the request and expense of Indemnitor, Acquiror
shall seek any refund of any Tax. In the event Acquiror receives a
refund of (i) any amount which gave rise to an indemnification payment
hereunder, or (ii) any Tax paid by Company prior to the Closing Date
with respect to a Pre-Closing Period or Straddle Period, Acquiror shall
refund such indemnification payment to Indemnitor; provided, however,
that if either party has notified the other that there may be an amount
due to Acquiror from Indemnitor pursuant to this Agreement or the
Purchase Agreement, Acquiror may withhold payment until resolution of
that claim has occurred.
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(f) Acquiror agrees not to file any amended return of the
Company, or any of its affiliates with respect to a Pre-Closing Period
or Straddle Period without the prior written consent of the Indemnitor.
(g) The Indemnity Amount shall be reduced for the Tax
benefits from any net operating loss carryover or other Tax attributes
of the Company or the Company Subsidiaries as of the Closing that
Acquiror or its Affiliates actually utilize after the Closing. To the
extent that Acquiror or an Affiliate realizes an actual Tax benefit as a
result of the event giving rise to the indemnity payment hereunder (such
as, by way of example but not limitation, a savings in Federal income
Taxes resulting from an increase in deductible state Taxes that are
indemnified, in a case in which the indemnity payment itself does not
give rise to gross income for Federal income tax purposes), Acquiror
shall promptly rebate to Indemnitor the amount of such Tax benefit.
Section 4. Exclusions. (a) Notwithstanding any other provision of
this Agreement, Indemnitor shall not have any liability for indemnification
under this Agreement for any Tax liability attributable, in whole or in part,
to:
(i) any fraud, willful misconduct or gross
negligence of Acquiror or officer, director, employee or agent thereof;
(ii) any Tax resulting from a determination that
Acquiror is not treated as the owner of the Leased Property for income
tax purposes (including, but not limited to, any adverse effect on
Acquiror's status as a REIT); or
(iii) the willful failure of Acquiror to comply on a
timely basis with certification, information, documentation, reporting
or other similar requirements imposed on such Acquiror, or the willful
failure of Acquiror to comply with its obligations set forth in Section
5, to the extent Indemnitor demonstrates that its ability to contest
such Tax liability is actually prejudiced by such willful failure of
Acquiror.
(b) Acquiror, Indemnitor and Seller agree, for themselves
and on behalf of their respective existing and future affiliates and
representatives, that notwithstanding any provision to the contrary in
this Agreement, the Purchase Agreement or any other Transaction
Agreement, with respect to each indemnification obligation in this
Agreement, in no event shall the Indemnitor have liability to the
Acquiror for any punitive, incidental, indirect or consequential
damages, damages for the loss of profits or other special damages
(including, but not limited to, any adverse effect on Acquiror's status
as a REIT, unless such failure is due to Indemnitor's or Seller's
willful misconduct, recklessness or gross negligence), and in no event
shall Taxes (subject to the immediately preceding parenthetical clause)
include any of the foregoing.
(c) Notwithstanding anything to the contrary in this
Agreement, no liability shall be imposed upon Indemnitor for any
liability for Taxes for amounts that are required to be paid by
Indemnitor, or any affiliate, as Tenant, to Acquiror, or any of its
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affiliates, as Landlord, under the Transaction Documents, including but
not limited to transfer and similar Taxes relating to the transactions
contemplated thereunder.
(d) Notwithstanding anything to the contrary in this
Agreement or any other Transaction Agreement, Seller shall have no
liability for Taxes to the Acquiror or any of its affiliates.
(e) Notwithstanding anything to the contrary in this
Agreement, Indemnitor shall not be liable for any Taxes arising from
transactions that occur following the Closing, including transactions
occurring on the Closing Date after the Closing, and Acquiror shall not
be liable for any Taxes of the Company and the Company Subsidiaries
arising from transactions that occur at or preceding the Closing.
Section 5. Preparation of Tax Returns. Indemnitor will be
responsible for the preparation and filing of all Tax Returns for Company and
the Company Subsidiaries for all Pre-Closing Periods, and will pay all
third-party costs and expenses incurred in preparing and filing such Tax
Returns. Acquiror will be responsible for the preparation and filing of all
Tax Returns for Company and the Company Subsidiaries for all Post-Closing
Periods and any Tax period that includes a Straddle Period. All Tax Returns of
the Company and the Company Subsidiaries for any Pre-Closing Period and any
Straddle Period shall be prepared in a manner consistent with the applicable
entity's past practices as in effect prior to the Closing Date; provided,
however, that such past practices are in accordance with the Code and the
regulations thereunder. Acquiror shall submit any Tax Return that includes a
Straddle Period to Indemnitor for review and consent, which consent shall not
be unreasonably withheld. Each of Acquiror, Seller and Indemnitor agrees to
reasonably cooperate in making available information necessary to the
preparation and filing of such Tax Returns and each agrees to make available,
at its expense, records and employees of Company, Indemnitor, Seller and
Acquiror necessary for the preparation or such Tax Returns. Acquiror and its
accountants will be provided for their review, a draft of each material Tax
Return with respect to any period (or portion thereof) ending on or before the
Closing Date at least 20 days prior to the date Indemnitor intends to file
such Tax Return. To the extent that positions previously taken on Tax Returns
of the Company and the Company Subsidiaries require further explication or
substantiation in order for the Acquiror to prepare Tax Returns with respect
to Post-Closing Periods, the Indemnitor and the Seller shall provide or cause
to be provided such information and background with respect to such matters as
the Acquiror may from time to time reasonably request.
Section 6. Contests Pertaining to Tax.
(a) Acquiror shall promptly notify Indemnitor (but in no
event later than 5 Business Days following the receipt by Acquiror) of
(i) the assertion of any claim or any dispute of any Tax reporting
position, the commencement of any audit or examination of Company or any
Company Subsidiary by any Tax Authority with respect to any Pre-Closing
Period or Straddle Period and (ii) the receipt by it from the Internal
Revenue Service of a written, proposed or final revenue agent's report,
a 30-day letter or a notice of deficiency (as described in 6212 of the
Code) or similar written notice from a Tax authority of a state, local,
or foreign government, in which an adjustment is proposed or determined
to the Taxes for which Indemnitor may be required to provide
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indemnification pursuant to this Agreement (a "Tax Claim"); provided,
however, that any failure to provide such notice shall not relieve
Indemnitor of any obligation to indemnify Acquiror hereunder except,
notwithstanding anything to the contrary contained in Section 4(iii), to
the extent that the Indemnitor's ability to contest such adjustment is
prejudiced in Indemnitor's discretion by such failure of the Acquiror.
(b) Indemnitor shall have the sole right to represent the
interests of the Company and the Company Subsidiaries, and to settle any
dispute with respect to Taxes arising, in any Tax audit or
administrative or court proceeding relating to Pre-Closing Periods or to
any Straddle Period of the Company or any Company Subsidiary, as the
case may be, and to employ counsel of Indemnitor's choice at
Indemnitor's expense to carry out such representation; provided,
however, that Indemnitor shall notify Acquiror of its intention to
represent such interests within ten (10) Business Days of Indemnitor's
receipt of the notice from Acquiror in accordance with Section 6(a).
Acquiror agrees that it will cooperate fully with Indemnitor and
Indemnitor's counsel in the defense against or compromise of any claim
in any said proceeding. Acquiror shall execute and deliver to Indemnitor
any power of attorney or other document requested by Indemnitor in
connection with any audit or administrative or court proceeding with
respect to which Indemnitor is representing the interests of the Company
or any Company Subsidiary (or successor-in-interest) in any proceeding
described in this Section 6. In connection with any audit or
administrative or court proceeding with respect to which Indemnitor is
representing the interests of the Company or any Company Subsidiary (or
any successor-in-interest), Indemnitor shall consult in good faith with,
and keep reasonably informed, Acquiror and its counsel and shall provide
Acquiror with copies of any documents, reports or claims issued by or
sent to the relevant auditing agent or Tax Authority, as well as a
reasonable opportunity to review and comment thereon, but the decisions
regarding what actions are to be taken shall be made by Indemnitor in
its reasonable judgment, taking into account the reasonable requests and
interests of the Acquiror.
(c) Acquiror shall not make payment of any claim for at
least ten (10) days after giving written notice of such claim to
Indemnitor if such forbearance is permitted by law. If the conduct of
the contest requires Acquiror to pay the tax claimed and file or xxx for
a refund, Indemnitor shall advance to such Acquiror, on an interest-free
basis, sufficient funds to pay the tax and any interest, penalties and
additions to tax payable with respect thereto (to the extent such amount
is subject to Indemnitor's indemnity obligations hereunder). Acquiror
shall as promptly as practicable use such funds to pay such tax,
interest, penalties or additions to tax, as the case may be.
(d) If Acquiror receives any settlement offer from the
Internal Revenue Service or similar notice from a Tax authority of a
state, local, or foreign government with respect to a claim for which
Acquiror seeks indemnity from Indemnitor, such Acquiror shall promptly
inform Indemnitor of the receipt of such settlement offer. If Indemnitor
recommends acceptance of such settlement offer, but Acquiror declines to
accept such offer in writing within thirty (30) days: (i) the obligation
of Indemnitor to make indemnity payments under this Agreement as the
result of any such contest or proceedings shall not exceed the
obligation that it would have had if such contest had been settled or
proceeding terminated on such date on the basis of the settlement offer
the
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acceptance of which was recommended by Indemnitor; and (ii) Indemnitor
shall have no further liability for costs or other expenses in respect
of such contest. Acquiror shall not settle any claim without
Indemnitor's consent; provided, however, that Acquiror shall not be
required to contest any proposed adjustment and may settle any such
proposed adjustment if (i) Acquiror shall waive its right to indemnity
with respect to such adjustment and shall refund to Indemnitor any
amount previously paid or advanced by Indemnitor with respect to such
adjustment or the contest of such adjustment.
(e) If Indemnitor shall have duly complied with all the
terms of this Section 6, Indemnitor's liability for indemnification, if
any, under Section 3(a), shall be deferred (subject to the provisions of
Section 6(c) hereof) until a Final Determination of the liability of
such Acquiror. At such time, Indemnitor shall become obligated for the
payment of any indemnification hereunder resulting from the outcome of
such contest, and Acquiror shall become obligated to refund to
Indemnitor any amount received as a refund by Acquiror or credited to
Acquiror attributable to advances by Indemnitor hereunder. Within thirty
(30) days following such Final Determination, any amounts due hereunder
shall be paid first by set off against each other and either (i)
Indemnitor shall pay to Acquiror any excess of the full amount due
hereunder over the amount of any advances previously made by Indemnitor
and applied against Indemnitor's indemnity obligation as aforesaid or
(ii) Acquiror shall repay to Indemnitor any excess of such advances over
such full amount due hereunder, together with the portion of any
interest received by such Acquiror that is properly attributable to such
excess amount of such advances during the period such advances were
outstanding, and, if Indemnitor shall have indemnified such Acquiror
with respect to the adverse tax consequences of any advances or payments
hereunder, the amount of tax savings, if any, resulting from any payment
pursuant to this sentence.
Section 7. Cooperation. Acquiror agrees to consider in good faith
any action (including filing claims for refund and amended Tax Returns) which
it is reasonably requested to take by Indemnitor that would minimize the net
amount of any indemnity payment due from Indemnitor hereunder.
Section 8. Treatment of Payments. The parties hereto shall, for
all tax and financial accounting purposes, to the extent permitted by law,
treat the assumption and payment of liabilities hereunder by Indemnitor as a
distribution by Indemnitor to the Company occurring prior to the Closing, and,
accordingly, as not includible in the taxable income of Acquiror.
Correspondingly, the parties hereto shall, for all tax and financial
accounting purposes, to the extent permitted by law, treat any payment
hereunder from Acquiror to Indemnitor as a capital contribution by the Company
to Indemnitor occurring prior to the Closing, and, accordingly, as not
includible in the taxable income of Indemnitor.
Section 9. Elections. So long as the Company and the Company
Subsidiaries remain incorporated as corporations under applicable law, the
Acquiror will not elect to treat Company or its wholly-owned direct or
indirect corporate subsidiaries as anything other than a qualified REIT
subsidiary pursuant to Section 856(i) of the Code. Notwithstanding the
preceding sentence, the Acquiror may, after Closing, cause the Company and one
or more of the Company Subsidiaries to convert from corporations into limited
liability companies pursuant to
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state law. To such extent, the Company and any such Company Subsidiaries that
are wholly-owned, directly or indirectly, by Company, shall thereafter be
treated as disregarded entities for Federal income Tax purposes and, to the
extent permitted thereby, for purposes of applicable state, local and foreign
Taxes. Acquiror may also transfer ownership of such disregarded entities to an
entity controlled by the Acquiror that is classified as a partnership or as a
disregarded subsidiary of Acquiror for Federal income Tax purposes. The
parties hereto shall treat the Tax year of the Company, and, to the extent
permitted by law, of any Company Subsidiaries, as ending on the Closing Date
for Federal income Tax purposes and, to the extent permitted by law, for all
state, local and foreign Tax purposes, and shall take no position inconsistent
therewith.
Section 10. Notices. All notices, demands, declarations, consents,
directions, approvals, instructions, requests and other communications
required or permitted by the terms of this Agreement shall be given in the
same manner as in the Purchase Agreement.
Section 11. Miscellaneous.
(a) Except as otherwise provided herein, the terms and
conditions of this Agreement shall be binding upon and inure solely to
the benefit of the parties hereto and their respective successors and
assigns, and nothing in this Agreement, express or implied, is intended
to confer upon any party other than the parties hereto or their
respective successors and assigns any rights or remedies of any nature
whatsoever under or by reason of this Agreement.
(b) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT GIVING EFFECT TO ANY CONFLICTS OF LAW PRINCIPLES OF SUCH STATE
THAT MIGHT REFER THE GOVERNANCE, CONSTRUCTION OR INTERPRETATION OF THIS
AGREEMENTS TO THE LAWS OF ANOTHER JURISDICTION. EACH OF SELLER,
INDEMNITOR AND ACQUIROR AGREES IRREVOCABLY AND UNCONDITIONALLY TO:
(i) submit for itself and its property in any Action
relating to this Agreement, or for recognition and enforcement of any
judgment in respect thereof, to the exclusive jurisdiction of the Courts
of the State of New York sitting in the County of New York, the court of
the United States of America for the Southern District of New York, and
appellate courts having jurisdiction of appeals from any of the
foregoing, and agrees that all claims in respect of any such Action
shall be heard and determined in such New York State court or, to the
extent permitted by law, in such federal court;
(ii) consent that any such Action may and shall be
brought in such courts and waives any objection that it may now or
hereafter have to the venue or jurisdiction of any such Action in any
such court or that such Action was brought in an inconvenient court and
agrees not to plead or claim the same;
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(iii) waive all right to trial by jury in any Action
(whether based on contract, tort or otherwise) arising out of or
relating to any of this Agreement, or its performance under or the
enforcement of this Agreement;
(iv) agree that service of process in any such Action
may be effected by mailing a copy of such process by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such party at its address as provided in Section 10; and
(v) agree that nothing in this Agreement shall
affect the right to effect service of process in any other manner
permitted by the Laws of the State of New York.
(c) This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all
of which shall constitute one and the same agreement.
(d) When a reference is made in this Agreement to
Sections, such reference shall be to a Section of this Agreement, unless
otherwise indicated. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation."
(e) Except as described in Sections 3, 5 and 6 above, each
party shall pay all costs and expenses that it incurs with respect to
the negotiation, execution, delivery and performance of this Agreement.
If any action at law or in equity is necessary to enforce or interpret
the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorneys' fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
(f) Any term of this Agreement may be amended, and the
observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively),
only with the written consent of Acquiror and Indemnitor.
Section 12. Term. Except as otherwise provided herein, with
respect to indemnification under Section 3(a) for Taxes, the term of this
Agreement shall extend from the date hereof until such time as the applicable
statute of limitations (including any extensions thereof) bars a claim by the
Internal Revenue Service or relevant foreign, state or local Tax authority for
a Tax otherwise indemnifiable under this Agreement.
Section 13. Termination. This Agreement shall automatically
terminate upon the termination of the Purchase Agreement in accordance with
its terms. In the event of the termination of this Agreement pursuant to this
Section 13, except as expressly provided in the Purchase Agreement, no party
hereto shall have any liability to any other party with respect to this
Agreement or the transactions contemplated hereby and this Agreement shall be
of no further force or effect.
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Section 14. Release. Acquiror, Indemnitor and their respective
existing and future Affiliates (collectively, the "Releasing Parties") do
hereby absolutely release and discharge Seller and its existing and future
Affiliates and Representatives (collectively, the "Releasees") from any and
all claims, actions, causes of action, suits, debts, dues, sums of money,
accounts, reckonings, bonds, bills, covenants, contracts, controversies,
agreements, demands, costs and judgments of whatsoever kind or nature, whether
known or unknown, absolute or contingent, direct or indirect at law or in
equity, which any of the Releasing Parties ever had or now has or have or
hereafter can, shall or may have, for, upon or by reason of any matter, cause
or thing whatsoever to the extent arising from, in connection with, related to
or as a result of (a) the Purchase Agreement and the transactions contemplated
thereby and the consummation thereof, relating to any period from the
beginning of the world to the end of time, regardless of when brought, (b) the
Transaction Agreements and the transactions contemplated thereby and the
consummation thereof, relating to any period from the beginning of the world
to the end of time, regardless of when brought, (c) the Private Placement and
the transactions contemplated thereby and the consummation thereof, relating
to any period from the beginning of the world to the end of time, regardless
of when brought and (d) any action or inaction of any of the Releasees
relating to or associated with the transactions contemplated by the Purchase
Agreement, the Transaction Agreements and the Private Placement, the
transactions contemplated thereby and the consummation thereof, relating to
any period from the beginning of the world to the end of time, regardless of
when brought, except, in each case, for the obligations of Seller under
Section 2.06(b) of the Purchase Agreement (subject to Sections 7.05 and 7.06
thereof) and Sections 5.04(a) and 7.06 of the Purchase Agreement.
Section 15. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced under any Law or
as a matter of public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated by this Agreement
is not affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties to this Agreement shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in a mutually acceptable manner in order that
the transactions contemplated by this Agreement be consummated as originally
contemplated to the greatest extent possible.
Section 16. Entire Agreement. Except as otherwise provided in this
Agreement, or as otherwise expressly agreed in writing by the parties, this
Agreement and the other Transaction Documents constitute the entire agreement
and supersede all other prior or contemporaneous oral or written agreements
and understandings among the parties, or any of them, with respect to the
subject matter hereof, and there are no warranties, representations or other
agreements, express or implied, made to any party by any other party in
connection with the subject matter hereof or thereof except as specifically
set forth herein or therein or in the documents delivered pursuant hereto or
in connection herewith.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
FORTRESS BROOKDALE ACQUISITION LLC
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: Secretary
BLC SENIOR HOLDINGS, INC.
By: /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
Title: Chairman, Chief Executive Officer
PROVIDENT SENIOR LIVING TRUST
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
------------------------------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
Title: Chief Executive Officer
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