HAZARDOUS SUBSTANCE
INDEMNIFICATION AGREEMENT
This HAZARDOUS SUBSTANCE INDEMNIFICATION AGREEMENT ("Indemnity") is
made as of the 1st day of July, 1998, by Brookdale Living Communities of
Connecticut-WH, Inc., a corporation organized and existing under the laws of
Delaware, whose address is c/o Brookdale Living Communities, Inc., 00 Xxxx
Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000 ("Operator"), and Brookdale
Living Communities, Inc., a corporation organized and existing under the laws of
Delaware whose address is 00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx
00000, Attention: Xxxxxx X. Xxxxxxxx, Xx. ("Parent"). Operator and Parent are
hereinafter collectively referred to as "Indemnitors" and each individually as
an "Indemnitor") to and in favor of XXXXXX FINANCIAL, INC., a Delaware
corporation, with a mailing address at 000 Xxxx Xxxxxx Xxxxxx, 00xx Xxxxx,
Xxxxxxx, Xxxxxxxx 00000 (XXXXXX FINANCIAL, INC. and its successors and assigns
are hereinafter collectively referred to as "Lender").
RECITALS
A. Substantially contemporaneously herewith, Lender is entering into a
financing transaction ("Loan") with The Xxxxxxxxx Business Trust, S.T., a
Delaware business trust ("Borrower"), which Loan is evidenced by a certain Fixed
Rate Program Promissory Note Secured by Mortgage ("Note") in the principal
amount of TWELVE MILLION AND NO/100 DOLLARS ($12,000,000) of even date herewith
executed and delivered by Borrower, as maker, to the order of Lender, as payee,
secured by, inter alia, an Open-End Mortgage Deed, Assignment of Rents and
Security Agreement and Fixture Filing of even date herewith ("Mortgage")
encumbering certain real property located in West Hartford, Connecticut and more
fully described on Exhibit A attached hereto and incorporated herein ("Land")
(the Note, the Mortgage, and any other documents evidencing or securing the
indebtedness of Borrower to Lender or executed in connection therewith, and any
modification, renewal, or extension thereof are hereinafter collectively
referred to as the "Borrower Loan Documents"). Substantially contemporaneously
herewith, Borrower and Operator are entering into a lease (the "Operator Lease")
of the Property (as defined in the Mortgage) pursuant to which Operator will
operate, manage and maintain the Property. In connection therewith, Operator has
executed a guaranty of certain obligations of Borrower under the Borrower Loan
Documents ("Guaranty") which Guaranty is secured by an Open-End Leasehold
Mortgage Deed, Assignment of Rents and Security Agreement and Fixture Filing
("Leasehold Mortgage") against Operator's interest in the Property under the
Operator Lease. The Guaranty, this Indemnity and all other documents executed by
Operator which evidence or secure the Guaranteed Obligations (as defined in the
Guaranty) are collectively referred to as the "Guaranty Documents".
B. Lender has required this Indemnity as a condition of Lender's
disbursing the Loan and accepting the Guaranty.
C. Parent owns all of the outstanding stock of Operator, and it is in
each of Parent's and Operator's direct financial interest and benefit to induce
Lender to make the Loan by executing and delivering this Indemnity.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Indemnity.
Each Indemnitor hereby agrees, jointly and severally, unconditionally,
absolutely and irrevocably, to indemnify, defend (with counsel reasonably
acceptable to Lender and at Indemnitor's sole cost) and hold harmless Lender and
its officers, directors, employees, shareholders, agents and affiliates
(collectively the "Lender's Group"), against and in respect of any and all
liabilities, obligations, deficiencies, demands, claims, actions, or causes of
action, assessments, losses, costs, expenses (including, without limitation,
court costs and reasonable attorneys' fees and expenses), interest, fines,
penalties, actual and punitive damages, and all costs and expenses of any and
all investigations, remedial measures, proceedings, arbitrations, mediations,
judgments, settlements, and compromises whatsoever (collectively the
"Liabilities") sustained or incurred by Lender's Group resulting from or arising
out of or by virtue of a claim made by any party resulting from:
(a) The presence on or under, or the escape, seepage, leakage, spillage,
discharge, emission, disposal (whether arranged or otherwise) or
release from, the Land into or upon any land, the atmosphere, or any
watercourse, body of water or wetland, of any "Hazardous Materials" (as
hereinafter defined).
(b) Any failure of the Land, any improvements located thereon or activities
thereon to comply with all applicable "Environmental Laws" (as hereinafter
defined). (c) Any personal injury relating to the presence of any Hazardous
Materials on or from the Land or the improvements located thereon.
The term "Environmental Laws" shall include any federal, state or local
laws or regulations relating to health, safety or protection of the environment.
The term "Hazardous Materials" shall include Hazardous Substances, as defined by
the Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. ss.9601 et seq., any petroleum or petroleum products, asbestos or
asbestos containing material, or any other hazardous substances, hazardous
wastes or hazardous materials as defined by other Environmental Laws.
Notwithstanding anything contained herein to the contrary, the
Indemnitors shall not be responsible for indemnifying or holding Lender harmless
from and against Liabilities incurred in connection with or as a result of, any
of the matters described in clauses (a) through (c) above inclusive to the
extent that such Liabilities result from Hazardous Materials being placed on,
above or under, or emitted from, the Land and/or improvements located thereon,
(i) by Lender or its agents or (ii) subsequent to (and not resulting from any
condition existing prior to) Indemnitors vacating, and relinquishing possession
and control of, the Property and Lender or any successor in title to Borrower
(other than Indemnitors or any of their respective affiliates) as a foreclosure
purchaser or designee of Lender taking actual possession of, or title to, the
Property. As used herein, the term "Property" shall mean "Property" as defined
in the Mortgage.
2. Indemnification Procedure.
(a) Notice. Each Indemnitor shall notify Lender promptly (and in any event
within 10 business days) upon receipt of any inquiry, notice, claim,
charge, cause of action or demand pertaining to the matters indemnified
under Paragraph 1 above, including, without limitation, any notice of
inspection, abatement or noncompliance, stating the nature and basis of
such inquiry or notification. For identical notices from different
Indemnitors, only one such notice needs to be provided to Lender. Each
Indemnitor shall promptly deliver to Lender any and all documentation
or records as Lender may reasonably request in connection with such
notice or inquiry and shall keep Lender advised of any subsequent
developments. If any person or entity entitled to indemnification under
this Indemnity ("Indemnified Party") asserts a claim for
indemnification or receives notice of the assertion of any claim or of
the commencement of any action or proceeding against such Indemnified
Party, Indemnified Party shall give written notice together with a
statement of any available information regarding such claim to
Indemnitors within 30 days after learning of such claim or within such
shorter time as may be necessary to give Indemnitors a reasonable
opportunity to respond to such claim. Indemnitors shall have the right,
upon written notice to Indemnified Party within 30 days after receipt
from Indemnified Party of notice of such claim, to conduct at
Indemnitors' expense the defense against such claim in Indemnitors' own
name, or if necessary in the name of Indemnified Party with counsel
acceptable to Indemnified Party.
(b) Effect of Failure to Give Notice. If Indemnitors shall fail to give such
notice to defend set forth in Paragraph 2.(a), Indemnitors shall be deemed to
have elected not to conduct the defense of the subject claim, and in such event,
Indemnified Party shall have the right to conduct such defense in good faith and
to compromise and settle the claim without the prior consent of Indemnitors, and
Indemnitors will be liable for all costs, expenses, settlement amounts or other
Liabilities paid or incurred in connection therewith. (c) Parties to Cooperate.
If Indemnitors elect to conduct the defense of the subject claim, Indemnified
Party will cooperate with and make available to Indemnitors such assistance and
materials as may be reasonably requested by Indemnitors, all at the expense of
Indemnitors, and Indemnified Party shall have the right at Indemnitors' expense
to participate in the defense assisted by counsel provided in accordance with
Paragraph 2(a), provided that Indemnified Party shall have the right to
compromise and settle the claim only with the prior consent of Indemnitors,
which consent shall not be unreasonably withheld or delayed. Without the prior
written consent of Indemnified Party, Indemnitors will not enter into any
settlement of any claim or cease to defend against a claim, if pursuant to or as
a result of such settlement or cessation, (i) injunctive or other equitable
relief would be imposed against Indemnified Party, or (ii) such settlement or
cessation would lead to liability or create any financial or other obligation on
the part of the Indemnified Party for which Indemnified Party is not entitled to
indemnification hereunder. Indemnitors shall not be entitled to control, and
Indemnified Party shall be entitled to have sole control over, the defense or
settlement of any claim to the extent that claim seeks an order, injunction or
other equitable relief against Indemnified Party which, if successful, could
materially interfere with the business, operations, assets, condition (financial
or otherwise) or prospects of Indemnified Party (and the cost of such defense
shall constitute an amount for which Indemnified Party is entitled to
indemnification under this Indemnity). If a firm decision is made to settle a
claim, which offer Indemnitors are permitted to settle under this Paragraph
2.(c), and Indemnitors desire to accept and agree to such offer, Indemnitors
will give written notice to Indemnified Party to that effect. If Indemnified
Party fails to consent to such firm offer within 30 calendar days after such
notice is given as provided herein, Indemnified Party may continue to contest or
defend such claim and, in such event, the maximum liability of Indemnitors as to
such claim will not exceed the amount of such settlement offer, plus costs and
expenses paid or incurred by Indemnified Party through the end of such 30 day
period. (d) Effect of Judgment. Any judgment entered or settlement agreed upon
in the manner provided herein shall be binding upon Indemnitors, and shall
conclusively be deemed to be an obligation with respect to which Indemnified
Party is entitled to prompt indemnification hereunder. (e) Failure to Give
Timely Notice. A failure by an Indemnified Party to give timely, complete or
accurate notice as provided in Paragraph 2.(c) will not affect the rights or
obligations of any party hereunder except and only to the extent that, as a
result of such failure, any party entitled to receive such notice was deprived
of its right to recover any payment under its applicable insurance coverage or
was otherwise directly and materially damaged as a result of such failure to
give timely notice. (f) Reduction of Loss. To the extent any Liabilities of an
Indemnified Party are reduced by receipt of payment (i) under insurance policies
which are not subject to retroactive adjustment or other reimbursement to the
insurer in respect of such payment, or (ii) from third parties not affiliated
with the Indemnified Party, such payments (net of the expenses of the recovery
thereof) (such net payment being referred to herein as a "Reimbursement") shall
be credited against such Liabilities; provided, however, (y) the pendency of
such payments shall not delay or reduce the obligation of Indemnitors to make
payment to Indemnified Party in respect of such Liabilities, and (z) Indemnified
Party shall have no obligation, hereunder or otherwise, to pursue payment under
or from any insurer or third party in respect of such Liabilities. If any
Reimbursement is obtained subsequent to payment by any Indemnitors in respect to
any Liabilities, such Reimbursement shall be promptly paid over to such
Indemnitor. (g) Subrogation. Indemnitors shall be subrogated to Indemnified
Party's rights of recovery to the extent of any Liabilities satisfied by
Indemnitors. Indemnified Party shall execute and deliver such instruments and
papers as are necessary to assign such rights and assist in the exercise
thereof. 3. Survival.
Subject to the provisions of the last paragraph of Paragraph 1 hereof,
the provisions of and undertakings and indemnification set out in this Indemnity
shall continue in full force and effect and shall survive the satisfaction,
termination, suspension or cancellation of the indebtedness evidenced by the
Note, the release of the Mortgage, the acceptance by Lender of a deed in lieu of
foreclosure with respect to the Land, a foreclosure of the Land and/or the
exercise by Lender of any of its rights under any Loan Document. This Indemnity
shall be continuing, irrevocable and binding on each of the Indemnitors, jointly
and severally, and their respective successors and assigns, and shall inure to
the benefit of Lender. Indemnitors' obligations hereunder may not be assigned.
The dissolution of an Indemnitor shall not affect this Indemnity or any of
Indemnitors' obligations hereunder.
4. Controlling Provisions.
The provisions of this Indemnity shall govern and control over any
inconsistent provision of any other Borrower Loan Document or Guaranty Document,
including, without limitation, Paragraph 10 of the Note, Section 5.13 of the
Guaranty and any other exculpatory or non-recourse provisions.
5. Waivers.
Each Indemnitor hereby waives notice of the following events or
occurrences: (a) Lender's acceptance of this Indemnity; (b) any Indemnitor's
heretofore, now or at any time or times hereafter, granting to Lender of
security interests, liens or encumbrances in any of such Indemnitor's assets or
Lender's heretofore, now or from time to time hereafter obtaining, amending,
substituting for, releasing, waiving or modifying any such security interests,
liens or encumbrances; (c) Lender's heretofore, now or at any time or times
hereafter, obtaining, releasing, waiving or modifying the Mortgage or the
Leasehold Mortgage or any other lien or encumbrance in any other party's assets
given to Lender to secure the Note, the Guaranty or this Indemnity; (d) Lender's
heretofore, now or at any time or times hereafter, amending or modifying any of
the Borrower Loan Documents or the Guaranty Documents other than this Indemnity;
and (e) presentment, demand, notices of default, non-payment, partial payment
and protest, and all other notices or formalities to which any Indemnitor may be
entitled except as otherwise provided herein or in any of the other Guaranty
Documents or the Borrower Loan Documents. Indemnitors agree that Lender
heretofore, now or at any time or times hereafter, may do any or all of the
foregoing in such manner, upon such terms and at such times as Lender, in its
sole and absolute discretion, deems advisable, without in any way, manner or
respect impairing, affecting, reducing or releasing Indemnitor from its
obligations hereunder and Indemnitors hereby consent to each and all of the
foregoing events or occurrences.
6. Notice.
Any notice to Parent or Operator provided for herein shall be given by
mailing such notice by Federal Express or any other overnight carrier addressed
to Parent and Operator at Parent's address stated above marked "Attention:
Xxxxxx X. Xxxxxxxx, Xx." or at such other address as Parent may designate by
notice to Lender as provided herein. A copy of any such notice to Operator or
Parent shall be delivered concurrently to each of the following by Federal
Express or any other overnight courier: Brookdale Living Communities, Inc., 00
Xxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X.
Xxxxxx, Esquire; and Xxxxx X. Xxxxxxxxxx, III, Esquire, Murtha, Cullina, Xxxxxxx
and Xxxxxx LLP, 000 Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx. Any notice provided
for herein shall be deemed to have been given to Parent and Operator on the
first business day following such mailing in the manner designated herein. Any
notice to Lender shall be given as set forth in the Leasehold Mortgage.
7. Governing Law.
This Indemnity shall be governed by the internal laws of the State of
Illinois.
8. Jury Trial Waiver.
EACH INDEMNITOR, AND LENDER BY ITS ACCEPTANCE OF THIS INDEMNITY, HEREBY
WAIVES ITS (HIS) RESPECTIVE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING
BASED UPON, OR RELATED TO, THE SUBJECT MATTER OF THIS INDEMNITY AND THE BUSINESS
RELATIONSHIP THAT IS BEING ESTABLISHED. THIS WAIVER IS KNOWINGLY, INTENTIONALLY
AND VOLUNTARILY MADE BY EACH INDEMNITOR AND BY LENDER, AND EACH INDEMNITOR
ACKNOWLEDGES THAT NEITHER LENDER NOR ANY PERSON ACTING ON BEHALF OF LENDER HAS
MADE ANY REPRESENTATIONS OF FACT TO INDUCE THIS WAIVER OF TRIAL BY JURY OR HAS
TAKEN ANY ACTIONS WHICH IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. EACH INDEMNITOR
AND LENDER ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A
BUSINESS RELATIONSHIP, THAT EACH INDEMNITOR AND LENDER HAVE ALREADY RELIED ON
THIS WAIVER IN ENTERING INTO THIS INDEMNITY AND THAT EACH OF THEM WILL CONTINUE
TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH INDEMNITOR AND
LENDER FURTHER ACKNOWLEDGE THAT THEY HAVE BEEN REPRESENTED (OR HAVE HAD THE
OPPORTUNITY TO BE REPRESENTED) IN THE SIGNING OF THIS INDEMNITY AND IN THE
MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL.
9. Severability.
If any provision of this Indemnity or the application thereof to any
party or circumstance is held invalid or unenforceable, the remainder of this
Indemnity and the application of such provision or provisions to the other
parties and circumstances will not be affected thereby, the provisions of this
Indemnity being severable in any such instance.
10. Limitation of Liability.
No officer, director, shareholder, agent or representative of Parent
shall be personally liable for any amount due or claim made by any Indemnified
Party under this Indemnity.
IN WITNESS WHEREOF, the undersigned have executed this Hazardous
Substance Indemnification Agreement as of the date first written above.
PARENT:
BROOKDALE LIVING COMMUNITIES, INC., a Delaware corporation
By____________________________________________________________
Name__________________________________________________________
Title_________________________________________________________
OPERATOR:
BROOKDALE LIVING COMMUNITIES OF CONNECTICUT-WH, INC., a Delaware corporation
By____________________________________________________________
Name__________________________________________________________
Title_________________________________________________________
ACKNOWLEDGMENT
STATE OF )
) SS
COUNTY OF )
I, ______________________________, a Notary Public in and for said
County, in the State aforesaid, DO HEREBY CERTIFY that
_____________________________ and _______________________________, who are
personally known to me to be the ____________ President and ___________
Secretary of Brookdale Living Communities, Inc., a Delaware corporation, and the
same persons whose names are subscribed to the foregoing instrument, appeared
before me this day in person, and acknowledged that they signed and delivered
the said instrument as ____________ President and ___________ Secretary of said
corporation and that the said ___________ Secretary then and there caused the
corporate seal of said corporation to be affixed thereto, pursuant to authority
given by the Board of Directors of said corporation, as (his/her) own free and
voluntary act and as the free and voluntary act of said corporation, for the
uses and purposes therein set forth.
GIVEN under my hand and Notarial Seal this ____ day of _____________,
1998.
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Notary Public
My Commission Expires:
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ACKNOWLEDGMENT
STATE OF )
) SS
COUNTY OF )
I, ______________________________, a Notary Public in and for said
County, in the State aforesaid, DO HEREBY CERTIFY that
_____________________________ and _______________________________, who are
personally known to me to be the ____________ President and ___________
Secretary of Brookdale Living Communities of Connecticut-WH, Inc., a Delaware
corporation, and the same persons whose names are subscribed to the foregoing
instrument, appeared before me this day in person, and acknowledged that they
signed and delivered the said instrument as ____________ President and
___________ Secretary of said corporation and that the said ___________
Secretary then and there caused the corporate seal of said corporation to be
affixed thereto, pursuant to authority given by the Board of Directors of said
corporation, as (his/her) own free and voluntary act and as the free and
voluntary act of said corporation, for the uses and purposes therein set forth.
GIVEN under my hand and Notarial Seal this ____ day of _____________,
1998.
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Notary Public
My Commission Expires:
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EXHIBIT A
LEGAL DESCRIPTION
