UNDERTAKING AND INDEMNITY AGREEMENT
THIS UNDERTAKING AND INDEMNITY AGREEMENT (the
"Agreement") is entered into as of the 23rd day of
October,1995, by and between EMERITUS CORPORATION,
a Washington corporation ("EMERITUS"), P. XXXXX
XXXX AND XXXXXX X. XXXX (collectively "PATT") and
PAINTED POST PARTNERSHIP, a Pennsylvania general
partnership (the "PARTNERSHIP"), with reference to
the following facts:
A. The Partnership is the owner, and Patt is
the licensed operator, of the real property and
the improvements and the personal property
comprising that adult home known as Green Xxxxxxx
Painted Post and located at 000 Xxxxxxxxx Xxxxx,
Xxxxxxx Xxxx, Xxx Xxxx (the "Facility"). In
addition, the Partnership is the employer of
certain persons associated with, and is the holder
of certain licenses necessary for, the operation
of the Facility and has made the same available to
Patt in connection with its operation of the
Facility.
B. By Asset Purchase Agreement dated July
31, I 995, as assigned and amended by Assignment
and Assumption Agreement dated August 31,1995 and
Consent To Assignment Of and First Amendment To
Asset Purchase Agreement dated September 1,1995,
Emeritus Corporation, a Washington corporation
("Emeritus") agreed to acquire the Facility from
the Partnership, which is the owner of the real
and personal property comprising the Facility.
C. In order to finance its acquisition of
the Facility and three other facilities in
Pennsylvania and Delaware owned by affiliates of
the Partnership (the "Other Facilities"), Emeritus
assigned its right to acquire the Facility and the
Other Facilities to Health Care Property
Investors, Inc. and to HCPI Trust (collectively,
"HCPI").
D. Under the terms of its agreement with
HCPI, HCPI will lease the Facility back to the
Partnership under the terms of a Lease Agreement
of even date herewith (the "Facility Lease"),
which in turn has agreed to assign the Facility
Lease to Patt, as the licensed operator of the
Facility, and HCPI will lease the Other Facilities
to Emeritus, all of which will occur concurrently
with HCPI's acquisition of title thereto. Patt has
further agreed to assign the Facility Lease to
Emeritus' affiliate, Painted Post Partners, a
Washington general partnership ("Painted Post
Partners") at such time as it becomes the licensed
operator of the Facility.
E. By Agreement to Provide Administrative
Services of even date herewith (the
"Administrative Services Agreement"), Emeritus has
agreed to provide certain administrative services
to Patt in connection with the day to day
operations of the Facility pending an assignment
of the Lease to Painted Post Partners. In order to
facilitate the provision by Emeritus of the
services provided thereunder, the Partnership is
willing to continue to make the employees and the
licenses controlled by it available to Patt until
the Lease is assigned to Painted Post Partners and
to confirm that obligation in writing for the
benefit of Patt and Emeritus.
I. In light of the fact that the Partnership
and Patt agreed as an accommodation to Emeritus to
lease the Facility from HCPI, Emeritus has agreed
to indemnify Patt and the Partnership from and
against any and all costs, expenses, damages and
liability which it or they may incur with respect
to the Facility and the Facility Lease from and
after the Effective Date hereof(as defined below).
J. The Administrative Services Agreement
contains certain indemnity provisions which Patt
and Emeritus are desirous of expanding upon in
order to ensure that the intent of the parties is
met.
NOW, THEREFORE, in consideration of the
foregoing premises and the mutual covenants of the
parties set forth herein, IT IS HEREBY AGREED AS
FOLLOWS:
AGREEMENT
INDEMNITY.
Emeritus does hereby agree to indemnify,
defend and hold harmless Patt and the Partnership
and the partners thereof entirely from and against
any and all liabilities, losses, damages,
expenses, costs, suits, legal or administrative
proceedings, or expenses of whatsoever nature
(including, without limitation, sums paid in
settlement thereof, fines, penalties, operating
expenses incurred by Emeritus (or by the
Partnership and/or Patt, with the understanding
and approval of Emeritus) and not covered by the
revenues of the Facility, fees due and paid or
payable to Emeritus under the Administrative
Services Agreement, including fees accrued prior
to the date of the assignment of the
Administrative Services Agreement to Painted Post
Partners, rent and any other sums due under the
Facility Lease, including sums due in connection
with the performance by Patt or the Partnership of
its or their obligations under the Facility Lease,
consequential damages, attorney's fees including
attorney's fees incurred to enforce this Agreement
or to collect any sums due hereunder, and court
costs) incurred by Patt and the Partnership from
and after the Effective Date (as defined below) in
connection with the operation of the Facility or
the performance by the Partnership or Patt of its
or their obligations under the Facility Lease
(collectively, the "Losses, Costs and Expenses");
provided, however, that nothing herein shall be
construed as obligating Emeritus to indemnify Patt
or the Partnership from any Losses, Costs and
Expenses which result from an Event of Default by
Patt (as defined herein).
Patt does hereby agree to indemnify, defend
and hold harmless Emeritus entirely from and
against any Losses, Costs and Expenses which
Emeritus may incur as a result of the occurrence
of an Event of Default by Patt. For purposes
hereof, it shall be deemed to be an Event of
Default by Patt if Patt shall take any action in
exercising the rights granted to it or performing
the obligations imposed on it under the
Administrative Services Agreement which are not
otherwise the responsibility of Emeritus under the
provisions of this Indemnity Agreement and, as a
result thereof, Emeritus incurs any Losses, Costs
and Expenses as a result thereof unless (i) such
action was recommended, suggested or approved by
Emeritus, (ii) Emeritus, fails within ten (10)
days after receiving written notice of Patt's
intention to take any such action, to notify Patt
in writing of Emeritus' objections thereto or
(iii) Patt takes such action as a result of
Emeritus' failure to perform one or more of its
obligations under the Administrative Services
Agreement as and when the same are to be performed
pursuant thereto or within any cure period
provided for therein. Notwithstanding anything to
the contrary contained herein or in the
Administrative Services Agreement, Patt shall not
be required to pay Emeritus any fee otherwise
required to be paid to Emeritus pursuant to the
Administrative Services Agreement other than from
revenues generated by the Facility.
The foregoing indemnity obligations of each
of Emeritus and Patt to the other shall terminate
upon the assignment of the Facility Lease and the
Administrative Services Agreement to Painted Post
Partners except with respect to any acts or
omissions occurring prior to the date of said
assignment with respect to which the indemnity
obligations of each party shall survive until a
full and final resolution of any matters related
thereto whether raised before or after the date of
said assignment. Except as specifically set forth
herein, each of Emeritus and Patt shall be
released from any further obligations to the other
hereunder upon the effective date of said
assignment.
2. UNDERTAKING
In order to facilitate the performance by
Patt of its obligations under the Lease and by
Emeritus of its obligations under the
Administrative Services Agreement, the Partnership
does hereby agree to continue to make available to
Patt the persons in its employ and the licenses
held by it in connection with the operation of the
Facility. This undertaking shall terminate upon
the assignment of the Facility Lease by Patt and
the Partnership to Painted Post Partners in
accordance with the terms thereof.
3. ATTORNEY'S FEES
In any action or arbitration brought to
enforce or interpret any part of this Agreement,
the prevailing party shall be entitled to recover
from the other the costs and expenses of
maintaining such an action, including without
limitation, reasonable attorney's fees and
expenses incurred before such action is commenced,
before trial, at trial, and on appeal, whether
such action is at law, in equity or in a
bankruptcy proceeding.
4. AMENDMENT OR MODIFICATION
This Agreement may not be amended or modified
in any respect whatsoever except by instrument in
writing signed by the parties hereto. This
Agreement and the documents and agreements
delivered pursuant hereto or in connection
herewith constitute the entire agreement between
the parties hereto and supersede all prior
negotiations, discussions, writings and agreements
between them. In the event any of the provisions
of this Agreement conflict with any of the
provisions of the Administrative Services
Agreement, the provisions of this Agreement shall
control.
5. SUCCESSORS AND ASSIGNS
The terms of this Agreement shall be binding
upon and inure to the benefit of and be
enforceable by and against the heirs and
successors of the parties hereto, including, but
not limited to, Painted Post Partners and its
general partners, Xxxxxxx X. Xxxxxxxxxx and Xxxxxx
X. Xxxx, upon the assignment of the Facility Lease
to Painted Post Partners by the Partnership and
Patt.
6. GOVERNING LAW
This Agreement shall be governed by and
construed in accordance with the laws of the State
of Washington.
7. SEVERABILITY
Should any one or more of the provisions of
this Agreement be determined to be invalid,
unlawful or unenforceable in any respect, the
validity, legality and enforceability of the
remaining provisions hereof shall not in any way
be affected or impaired thereby.
8. COUNTERPARTS
This Agreement may be executed in
counterparts, each of which shall be deemed to be
an original, but all of which taken together shall
constitute but one and the same instrument.
9. EFFECTIVE DATE
This Agreement shall be effective as of
October 23, I995 (the "Effective Date")
IN WITNESS WHEREOF, this Agreement has been
executed by the parties as of the date first set
forth above.
EMERITUS CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxxx
----------------------------
Its: President
PAINTED POST PARTNERSHIP
By: /s/
----------------------------
Its: G.P.
P. XXXXX XXXX
/s/ P. Xxxxx Xxxx
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XXXXXX X. XXXX
/s/ Xxxxxx X. Xxxx
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