INDEMNITY AGREEMENT
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THIS INDEMNITY AGREEMENT (this "Agreement"), made as of August 24,
1999, from BROOKDALE LIVING COMMUNITIES, INC., a Delaware corporation having an
office at 00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, Attention:
Xxxxxx X. Xxxxxxxx, Facsimile Number (000) 000-0000 ("Guarantor") to the
Indemnified Parties (as hereinafter defined) including AH Battery Park Owner,
LLC, an Ohio limited liability company having an address 000 Xxxxxxxxxx Xxxxx,
Xxxxx 000, Xxxxxxx, Xxxxxxxxxxxx 00000, Attention: Xxxxx X. Xxxxxxx, Facsimile
Number (000) 000-0000 (together with its successors and assigns, "Owner").
RECITALS
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WHEREAS, the sole member of Owner is AH Battery Park Member, LLC, an
Ohio limited liability company (the "Member");
WHEREAS, Owner intends to develop a congregate housing facility with an
assisted living component for the elderly in Battery Park City, New York, which
is currently referred to as "The Hallmark at Battery Park" (the "Project");
WHEREAS, Owner has obtained a loan from Key Corporate Capital, Inc.,
Fleet National Bank and European American Bank (collectively, the "Senior
Lender") for the acquisition, development and construction of the Project, in
the amount of up to $49,125,000 (the "Senior Loan");
WHEREAS, Owner and Brookdale Living Communities of New York-BPC, Inc.,
a Delaware corporation and an affiliate of Guarantor ("Manager"), are entering
into a certain management agreement dated the date herewith and a certain
development agreement dated the date herewith (collectively the "Management
Agreement"), pursuant to which Manager shall manage, operate and develop the
Property;
WHEREAS, Owner purchased Manager's interests in the Project from
Manager; and
WHEREAS, Owner is unwilling to enter into the Management Agreement
unless Guarantor indemnifies Owner against certain liabilities including those
arising under Environmental Laws (as herein defined), relating to the property
where the Project is located, which property consists of the fee simple interest
in the land (being more particularly described in the documents evidencing the
Senior Loan) and all buildings, structures and other improvements now or
hereafter situated on such land (the "Property").
NOW, THEREFORE, in consideration of entering into the Management
Agreement and the covenants, agreements, representations and warranties set
forth in this Agreement, the parties hereby covenant, agree, represent and
warrant as follows:
1. Defined Terms. Unless the context otherwise requires,
capitalized terms used but not otherwise defined herein but defined in the
Building Loan Agreement dated as of the date hereof between Owner and Senior
Lender (the "Loan Agreement") shall have the meanings provided therefore in the
Loan Agreement, and the following terms shall have the following meanings:
"Environmental Claim" means any written request for information by a
Governmental Authority, or any written notice, notification, claim,
administrative, regulatory or judicial action, suit, judgment, demand or other
written communication by any Person or Governmental Authority requiring,
alleging or asserting liability with respect to any of the Indemnified Parties
or the Property, whether for damages, contribution, indemnification, cost
recovery, compensation, injunctive relief, investigatory, response, remedial or
cleanup costs, damages to natural resources, personal injuries, fines or
penalties arising out of, based on or resulting from (i) the presence, Use,
Release or threatened Release into the environment of any Hazardous Substance in
violation of any Environmental Law originating at or from, or otherwise
affecting, the Property, (ii) any fact, circumstance, condition or occurrence
forming the basis of any violation, or alleged violation, of any Environmental
Law by any of the Indemnified Parties or otherwise affecting the Property or
(iii) any alleged injury or threat of injury to health, safety or the
environment by any of the Indemnified Parties or otherwise affecting the
Property arising from actions which are in violation of Environmental Laws.
"Environmental Laws" means any and all applicable federal, state, local
and foreign laws, rules, regulations or municipal ordinances each as amended
from time to time, and any permits, approvals, licenses, registrations, filings
and authorizations, in each case as in effect as of the relevant date, relating
to the environment, health or safety, and pertaining to or imposing liability or
standards of conduct concerning environmental regulation, contamination or
clean-up, including the Comprehensive Environmental Response, Compensation and
Liability Act, the Resource Conservation and Recovery Act, the Emergency
Planning and Community Right-to-Know Act of 1986, the Hazardous Substances
Transportation Act, the Solid Waste Disposal Act, the Clean Water Act, the Clean
Air Act, the Toxic Substance Control Act, the Safe Drinking Water Act, the
Occupational Safety and Health Act, any state super-lien and environmental
clean-up statutes and all amendments to and regulations in respect of the
foregoing laws.
"Guarantor" has the meaning provided in the first paragraph of this
Agreement.
"Hazardous Substance" means, collectively, (i) any petroleum or
petroleum products or waste oils, explosives, radioactive materials, asbestos,
urea formaldehyde foam insulation, polychlorinated biphenyls ("PCBs"), lead in
drinking water, and lead based paint, the presence, generation, use,
transportation, storage or disposal of or exposure to which (x) is regulated or
could lead to liability under any Environmental Law or (y) is subject to notice
or reporting requirements under any Environmental Law, (ii) any chemicals or
other materials or substances which are now or hereafter become defined as or
included in the definition of "hazardous substances," "hazardous wastes,"
"hazardous materials," "extremely hazardous
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wastes," "restricted hazardous wastes," "toxic substances," "toxic pollutants,"
"contaminants," "pollutants" or words of similar import under any Environmental
Law and (iii) any other chemical or any other material or substance, exposure to
which is now or hereafter prohibited, limited or regulated under any
Environmental Law.
"Indemnified Parties" is defined in Section 2(a) of this Agreement.
"Owner" has the meaning provided in the Recitals to this Agreement.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, estate, trust, unincorporated association, or any
other entity, any federal, state, county or municipal government or any bureau,
department or agency thereof and any fiduciary acting in such capacity on behalf
of any of the foregoing.
"Release" means, with respect to any Hazardous Substances, any release,
threatened release, spill, emission, leaking, pumping, injection, deposit,
disposal, discharge, dispersal, leaching or migration into the indoor or outdoor
environment, including, without limitation, the movement of Hazardous Substances
through ambient air, soil, surface water, ground water, wetlands, land or
subsurface strata.
"Remedial Work" means any investigation, site monitoring, containment,
cleanup, removal, restoration or other work of any kind reasonably necessary or
required under an applicable Environmental Law.
"Use" means, with respect to any Hazardous Substance, the generation,
manufacture, processing, distribution, handling, use, treatment, recycling or
storage of such Hazardous Substance in violation of Environmental Laws or
transportation to or from the property of such Person of such Hazardous
Substance in violation of Environmental Laws.
2. Indemnification.
(a) Guarantor agrees to indemnify, reimburse, defend and
hold harmless Owner, Member, Alliance Holdings, Inc. and their directors,
officers, employees, partners, members, managers, shareholders and agents
(individually, an "Indemnified Party" and collectively, the "Indemnified
Parties") for, from and against all demands, claims, actions or causes of
action, assessments, losses, damages, liabilities, costs and expenses,
including, without limitation, interest, penalties, consequential damages,
reasonable attorneys' fees, reasonable disbursements and expenses, and
reasonable consultants' fees, disbursements and expenses, including costs of
Remedial Work (collectively "Losses"), asserted against, resulting to, imposed
on, or incurred by any of them, directly or indirectly, in connection with any
of the following:
i) events, circumstances, or conditions which are alleged
to, or do, form the basis for an Environmental Claim;
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ii) the presence, Use or Release of Hazardous Substances
at, on, in, under or from the Property, which presence, use or release
requires or could reasonably require Remedial Work;
iii) any Environmental Claim against any Person whose
liability for such Environmental Claim Guarantor has or may have
assumed or retained either contractually or by operation of law;
iv) any failure of Guarantor to fulfill each and every
obligation undertaken pursuant to this Agreement;
v) events, circumstances, or conditions relating to the
Project or the Manager which occur, are alleged to, or do, form the
basis for any claim under any applicable laws except to the extent
caused directly by Owner or any of the Indemnified Parties;
vi) any failure of the Manager to fulfill each and every
obligation undertaken pursuant to the Management Agreement; or
vii) anything occurring at or around, or in connection with,
the Project during the term of the Management Agreement except to the
extent caused directly by Owner or any of the Indemnified Parties.
It is specifically acknowledged and agreed that Xxxxx X. Xxxxxxx
is an Indemnified Party.
(b) Nothing in this Agreement shall be deemed to deprive an
Indemnified Party of any rights or remedies provided to such Indemnified Party
elsewhere in this Agreement or otherwise available to such Indemnified Party
under law. Guarantor waives and releases each Indemnified Party from any rights
or defenses Guarantor may have under common law or Environmental Laws for
liability arising from or resulting from the presence, Use or Release of
Hazardous Substances except to the extent directly caused by the gross
negligence, fraud or willful misconduct of such Indemnified Party.
3. Payment. All payments due to an Indemnified Party under
this Agreement shall be payable to such Indemnified Party within ten (10) days
after written demand therefor, and shall bear interest at ten percent (10%) per
annum from the date such payment is due until the date of payment.
4. Governing Law; Waiver of Jury Trial; Consent to Venue.
(a) The parties agree that the State of Ohio has a
substantial relationship to the parties and to the underlying transaction
embodied hereby, and in all respects, including, without limitation, matters of
construction, validity and performance, this Agreement and the obligations
arising hereunder shall be governed by, and construed in accordance with, the
laws of the State
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of Ohio applicable to contracts made and performed in such State and any
applicable law of the United States of America subject, however, as to
performance, to the Environmental Laws governing the Project. To the fullest
extent permitted by law, Guarantor hereby unconditionally and irrevocably waives
any claim to assert that the law of any other jurisdiction governs this
Agreement, and this Agreement shall be governed by and construed in accordance
with the laws of the State of Ohio subject, however, as to performance, to the
Environmental Laws governing the Project.
(b) THE GUARANTOR, AFTER CONSULTING OR HAVING HAD THE
OPPORTUNITY TO CONSULT WITH COUNSEL, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY RELATED INSTRUMENT OR AGREEMENT, OR ANY OF
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, OR ANY COURSE OF CONDUCT,
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE GUARANTOR. THE
GUARANTOR SHALL NOT SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE, ANY
ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A
JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED UNLESS THE FAILURE TO SO CONSOLIDATE
WOULD RESULT IN A MANDATORY LOSS OF SUCH CLAIM. IN THE EVENT OF A DISPUTE UNDER
THIS AGREEMENT, THE GUARANTOR HEREBY AGREES THAT EXCLUSIVE JURISDICTION AND
VENUE LIES IN A COURT OF COMPETENT JURISDICTION IN FRANKLIN COUNTY, OHIO.
5. Modification, Waiver in Writing. No modification,
amendment, extension, discharge, termination or waiver of any provision of this
Agreement or consent to any departure by Guarantor therefrom, shall in any event
be effective unless the same shall be in a writing signed by the party against
whom enforcement is sought, and then such waiver or consent shall be effective
only in the specific instance, and for the purpose, for which given. Except as
otherwise expressly provided herein, no notice to or demand on Guarantor shall
entitle Guarantor to any other or future notice or demand in the same, similar
or other circumstances.
6. Delay Not a Waiver. Neither any failure nor any delay
on the part of any Indemnified Party in insisting upon strict performance of any
term, condition, covenant or agreement or exercising any right, power, remedy or
privilege hereunder, shall operate as or constitute a waiver thereof, nor shall
a single or partial exercise thereof preclude any other future exercise, or the
exercise of any other right, power, remedy or privilege. In particular, and not
by way of limitation, by accepting payment after the due date of any amount
payable under this Agreement, an Indemnified Party shall not be deemed to have
waived any right either to require prompt payment when due of all other amounts
due under this Agreement, or to declare a default for failure to effect prompt
payment of any such other amount.
7. Notices. All notices, consents, approvals and requests
required or permitted hereunder shall be given in writing and shall be effective
for all purposes if hand delivered or sent by (a) hand delivery, with proof of
attempted delivery, (b) certified or registered
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United States mail, postage prepaid, (c) expedited prepaid delivery service,
either commercial or United States Postal Service, with proof of attempted
delivery, or (d) by telecopier (with answerback acknowledged) provided that such
telecopied notice must also be delivered by one of the means set forth in (a),
(b) or (c) above, addressed if to any Indemnified Party at the address of Owner
set forth on the first page hereof, and if to Guarantor at its designated
address set forth on the first page hereof, or at such other address and Person
as shall be designated from time to time by any party hereto, as the case may
be, in a written notice to the other parties hereto in the manner provided for
in this Section 7. A copy of all notices, consents, approvals and requests
directed to Owner shall be delivered concurrently to the following: Squire,
Xxxxxxx & Xxxxxxx L.L.P., 00 Xxxxx Xxxx Xxxxxx, Xxxxx 0000, Xxxxxxxx, Xxxx
00000, Attention: Xxxx X. Xxxxxxxx, Esq., Facsimile Number (000) 000-0000. A
copy of all notices, consents, approvals and requests directed to Guarantor
shall be delivered concurrently to each of the following: Brookdale Living
Communities, Inc., 00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000,
Attention: Xxxxxx X. Xxxxxxxx, Xx., Facsimile Number (000) 000-0000; Brookdale
Living Communities, Inc., 00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx
00000, Attention: Xxxxxx X. Xxxxxx, Esquire, Facsimile Number (000) 000-0000;
and Brookdale Living Communities, Inc., 00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxx X. Xxxxxx, Esquire, Facsimile Number
(000) 000-0000. A notice shall be deemed to have been given: (a) in the case of
hand delivery, at the time of delivery; (b) in the case of registered or
certified mail, when delivered or the first attempted delivery on a Business
Day; (c) in the case of expedited prepaid delivery upon the first attempted
delivery on a Business Day; or (d) in the case of telecopier, upon receipt of
answerback confirmation received prior to 5:00 p.m. local time on a Business Day
or if confirmation received thereafter on the next succeeding Business Day,
provided that such telecopied notice was also delivered as required in this
Section 7. A party receiving a notice which does not comply with the technical
requirements for notice under this Section 7 may elect to waive any deficiencies
and treat the notice as having been properly given.
8. Assignment. Guarantor shall not shall have the right to
assign this Agreement and the obligations hereunder to any Person without the
consent of Xxxxx X. Xxxxxxx. All references to "Indemnified Parties" hereunder
shall be deemed to include the heirs, successors and assigns of the Indemnified
Parties.
9. Severability. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
10. Heading and Recitals. The information set forth in the
heading and recitals hereof are hereby incorporated herein as a part of this
Agreement with the same effect as if set forth in the body hereof.
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11. Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument.
12. Intentionally Omitted.
13. Survival. This Agreement shall survive in perpetuity.
Notwithstanding the foregoing, Guarantor shall not indemnify any Indemnified
Party with respect to any Losses incurred in connection with, or as a direct
result of, any or all of the matters described above in Section 2(a)(i) through
2(a)(iii) to the extent that Guarantor can establish directly and solely that
such Losses result from Hazardous Substances being placed on, above or under the
Property by the affirmative act or gross negligence of such Indemnified Party.
Guarantor agrees that this Agreement shall continue to be effective or shall be
reinstated as the case may be, if at any time any payment is made by Guarantor
to any Indemnified Party and such payment is rescinded or must otherwise be
returned by such Indemnified Party upon insolvency, bankruptcy, liquidation,
reorganization, readjustment, composition, dissolution, receivership,
conservatorship, winding up or other similar proceeding involving or affecting
Guarantor, all as though such payment had not been made.
14. Time of the Essence. Time is of the essence with
respect to each and every covenant, agreement and obligation of Guarantor under
this Agreement.
15. Termination. Notwithstanding anything to the contrary
contained herein, upon the sale of the Property by Owner or a sale of the equity
interest in Owner or Member to an unrelated third party purchaser, this
Agreement and the indemnity obligation provided hereunder shall terminate,
except to the extent any such obligations exist and remain unpaid or otherwise
unsatisfied; provided, however, that if subsequent to any such sale, Losses are
incurred as set forth in Section 2(a) and it is proven that such Losses occurred
as a result of actions or omissions of Manager or Guarantor, then the
indemnification provided herein shall continue to be effective or shall be
reinstated, as the case may be.
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IN WITNESS WHEREOF, the Guarantor has caused this Indemnity Agreement
to be duly executed by its duly authorized representative, all as of the day and
year first above written.
GUARANTOR:
BROOKDALE LIVING COMMUNITIES, INC.,
a Delaware corporation
By: /s/ Xxxx X. Xxxxxxx
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Name: Xxxx X. Xxxxxxx
Its: President
