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EXHIBIT 10.76
ENVIRONMENTAL INDEMNIFICATION AGREEMENT
THIS ENVIRONMENTAL INDEMNIFICATION AGREEMENT (this "Agreement") is made
and entered into as of January 30, 1998, by BALANCED CARE CORPORATION, a
Delaware corporation ("Indemnitor") to and for the benefit of AHP OF INDIANA,
INC., a Delaware limited partnership ("Landlord") and American Health
Properties, Inc., a Delaware corporation.
R E C I T A L S
A. Indemnitor and American Health Properties, Inc., a Delaware
corporation ("American Health") have entered into that certain Facility
Agreement of even date herewith (the "Facility Agreement") and, pursuant to the
Facility Agreement, and concurrently with Indemnitor's delivery of this
Agreement to Landlord, (i) Landlord has executed that certain Assignment of Real
Property Acquisition Rights (the "Acquisition Agreement") of even date herewith
pursuant to which Landlord has agreed to acquire that certain real property
located in [Vanderburgh] County, [Indiana] more particularly described in
Exhibit A attached hereto (the "Land"), on the terms and subject to the terms
set forth therein, (ii) BCC Development and Management Co., a Delaware
corporation ("Developer") a Person which is wholly-owned by Indemnitor and
Landlord have entered into that certain Development Agreement of even date
herewith (the "Development Agreement") pursuant to which Developer (which is a
wholly-owned subsidiary of Indemnitor) has agreed to construct a [___] unit
assisted living facility (the "Facility") upon the Property for the fees and on
the terms stated therein, (iii) _____________, a [Delaware limited liability
company] and Landlord have entered into that certain Lease, of even date
herewith (the "Lease"), pursuant to which Tenant has agreed to lease the
"Property" (as such term is defined in the Lease) from Landlord, in accordance
with the terms and conditions set forth therein, and (iv) Balanced Care at
Xxxxxxxx, Inc., a Delaware corporation ("Manager") and Tenant have entered into
that certain Management Agreement for the Facility pursuant to which Manager
will manage the Facility on behalf of Tenant for the compensation and on the
terms and subject to the conditions provided in the Management Agreement. All
capitalized terms used herein shall be defined as stated in the Facility
Agreement unless stated to the contrary herein.
B. Indemnitor has guaranteed the obligations of Developer under the
Development Agreement and of Manager under the Management Agreement.
C. Landlord has required the execution and delivery of this
Agreement by Indemnitor as a condition precedent to the acquisition by Landlord
of the Land and Landlord would not be willing to acquire the Land, develop the
Property or enable Indemnitor or Developer, Indemnitor's subsidiary, to earn the
compensation provided in the Development Agreement or the Management Agreement
in the absence of the execution and delivery by Indemnitor of this Agreement.
NOW, THEREFORE, as an inducement to Landlord to acquire the Land and
thereafter cause Developer to develop and, upon completion, manage the Property,
and for other good
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and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Indemnitor, intending to be legally and fully bound, hereby
covenants and agrees to and for the benefit of Landlord as follows:
1. Recitals. The recitals set forth above are true and correct and
are by this reference incorporated herein.
2. Hazardous Substances. "Hazardous Substances" shall mean any
hazardous or toxic material or waste which is regulated by any authority of or
operating under the authority of any local or municipal government, the State,
or the United States of America or which may require remediation at the behest
of any governmental or quasi-governmental agency or which may cause a detriment
to or impair the value or beneficial use of the Land or Improvements or cause a
health, safety or environmental hazard on, under or about any portion of the
Property, including, without limitation, any material or substance which is: (1)
petroleum or a petroleum by-product or a fraction, derivative or product of the
decay or decomposition thereof; (2) asbestos or an asbestos containing material
in any form; (3) a hydrocarbon or similar substance; (4) PCB; (5) formaldehyde;
(6) medical waste, (7) radioactive, (8) flammable or explosive; (9) leaked or
released from any underground storage tanks; (10) listed as a "toxic pollutant"
pursuant to Section 311 of the Federal Pollution Control Act (33 U.S.C. Section
1317) including any amendments thereto; (11) defined as a "hazardous waste"
pursuant to Section 1004 of the Federal Resource Conservation and Recovery Act,
42 U.S.C. Section 6901 et seq. (42 U.S.C. Section 6903) including any amendments
thereto; (12) defined as a "hazardous substance" pursuant to Section 101 of the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended by the Superfund Amendments and Reauthorization Act of 1986 (42 U.S.C.
Section 9601) including any amendments thereto; (13) listed in the United States
Department of Transportation Table (49 CFR ss. 172.101) or by the U.S.
Environmental Protection Agency as a hazardous substance; (14) any material,
waste or substance which is governed, regulated, listed and/or defined under any
Applicable Laws of the State or in the regulations or judicial or administrative
orders, decisions or decrees promulgated pursuant to any of the foregoing State
or federal laws. The foregoing list of definitions and statutes is intended to
be illustrative and not exhaustive, and such list shall not be deemed to include
all definitions and laws applicable to the subject matter contained herein, all
such laws being included within the definition of Applicable Laws.
3. Compliance with Laws and Regulations. Indemnitor hereby
represents, warrants, covenants and agrees to and with Landlord that all
operations or activities upon, or any use or occupancy of the Property, or any
portion thereof, by Indemnitor, any Affiliates of Indemnitor (wherein the term
"Affiliates" shall mean any person or entity controlling, controlled by or under
common control with Indemnitor, and the term "control" shall mean the power,
directly or indirectly, to direct the management or policies of such person or
entity), any agent, contractor or employee of Indemnitor or Affiliates
("Agents"), or any tenant or subtenant of Indemnitor of the Property, or any
portion thereof, shall always be in all respects in compliance with any and all
federal, State or local laws, regulations, rules, ordinances, common law, court
or administrative orders or governmental or insurance requirements relating to
Hazardous Substances, including but not limited to the discharge and
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removal of Hazardous Substances, that Indemnitor shall pay immediately when due
the costs of removal of any Hazardous Substances which are at any time at, under
or about the Land as and to the extent required (i) to comply with applicable
federal, State or local laws, regulations, rules ordinances, common law, court
or administrative orders and governmental or insurance requirements or (ii) to
avoid the potential for any release of such Hazardous Substances or (iii) to
prevent any liability to Indemnitor, Indemnitee or the Agents or Affiliates of
either arising from the presence of such Hazardous Substances, and Indemnitor,
Affiliates and Agents will keep the Property free of any lien imposed pursuant
to laws, regulations, ordinances, court or administrative orders or governmental
or insurance requirements relating to Hazardous Substances. Indemnitor further
covenants that neither Indemnitor, the Agents, nor the Affiliates will permit or
suffer the release or disposal of any Hazardous Substances over or upon the
Property. Indemnitor also covenants that neither Indemnitor, the Agents, nor the
Affiliates will have any Hazardous Substance upon the Property except in strict
and absolute compliance with all applicable laws, regulations, rules,
ordinances, common law, court or administrative orders or governmental or
insurance requirements and in quantities which are customary for the operation
of the Property for the "Primary Intended Use" thereof (as defined in the
Lease). In addition, Indemnitor covenants and agrees that none of the
Indemnitor, the Agents, and the Affiliates will allow the manufacture, voluntary
transmission or (except in strict and absolute compliance with applicable
Federal, state and local laws, statutes, ordinances, codes, common law, rules,
regulations, orders, decrees, other applicable requirements of governmental
authorities) presence of any Hazardous Substances over or upon the Property.
Landlord shall have the right at any time to conduct an environmental audit of
the Property and Indemnitor shall cooperate in the conduct of such environmental
audit. Furthermore, none of Indemnitor, the Affiliates nor the Agents have
installed or permitted to be installed, and none of Indemnitor, the Agents, nor
the Affiliates shall install or permit to be installed, in or on the Property
friable asbestos or any substance containing asbestos and deemed hazardous by
federal State or local laws, statutes, ordinances, rules or regulations
respecting such material, and with respect to any such material currently
present in the Property, shall promptly either (A) remove any material which
such regulations deem hazardous and require be removed or (B) otherwise comply
with such federal, State and local regulations, at Indemnitor's expense; and
that Indemnitor warrants and represents that it has not at any time engaged in
or permitted, nor to the best of Indemnitor's knowledge, after due inquiry, has
any tenant of Indemnitor, Agent, Affiliate or, based on the Phase I
Environmental Report of _____________________ regarding the Land, dated as of
_______________ (the "Report") , any other occupant of the Property, or any
portion thereof, engaged in or permitted any material dumping, discharge,
disposal, spillage or leakage (whether legal or illegal, accidental or
intentional) of such Hazardous Substances, at, on, in or about the Property, or
any portion thereof. Indemnitor hereby further represents, warrants and
covenants to and with Landlord that to the best of Indemnitor's knowledge,
information and belief, except for uses and temporary storage of Hazardous
Substances reasonably necessary to the customary operation of an assisted living
facility, as appropriate, which, if required, is duly licensed or authorized by
appropriate governmental authorities or otherwise permitted by applicable law:
(a) None of the Property will contain any chemical,
material, substance or waste, the use, generation, treatment, storage, handling
or presence of which is prohibited,
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limited or regulated by any Federal, state, county, regional, local or other
governmental authority, or which, even if not so regulated, is known to pose a
hazard to the health and safety of the occupants of any of the Property or of
any other property adjacent to or adjoining any of the Property;
(b) None of the Property will be used for any activities
involving, directly or indirectly, the use, generation, treatment, storage,
handling, transport, disposal or release of any Hazardous Substances;
(c) None of the Property, nor any part of the Property, nor
Indemnitor is subject to any existing, pending, or threatened investigation or
inquiry by any governmental authority, or any remedial obligations under any
applicable federal, State or local laws, statutes, rules, regulations, common
law or orders, or government or insurance requirements, pertaining to health,
safety or the environment; and
(d) Indemnitor shall promptly notify Landlord in writing of
any order, receipt of any notice of violation or non-compliance with any
applicable law, rule, regulation, standard or order, any threatened or pending
action by any regulatory agency or their governmental authority, or any claims
made by any third party relating to Hazardous Substances on, emanations on or
from, releases on or from, or threats of releases on or from any of the
Property; and shall promptly furnish the Landlord with copies of any
correspondence, notices, or legal pleadings in connection therewith. Landlord
shall have the right, but shall not be obligated, to notify any governmental
authority of any state of facts which may come to its attention with respect to
Hazardous Substances on, released from or emanating from any part of the
Property.
4. Indemnification. Indemnitor agrees, with the right to
participate in the applicable proceedings, to indemnify, protect, defend (with
counsel reasonably approved by Landlord) and hold Landlord, and the partners,
employees and agents of Landlord, harmless from any claims (including, without
limitation, third party claims for personal injury or real or personal property
damage), or natural resources damage, actions, administrative proceedings
(including informal proceedings), judgments, damages, punitive damages,
penalties, fines, costs, liabilities (including sums paid in settlements of
claims), interest or losses, including reasonable attorneys' and paralegals'
fees and expenses (including any such fees and expenses incurred in enforcing
this Agreement or collecting any sums due hereunder), consultant fees, and
expert fees, together with all other costs and expenses of any kind or nature
(collectively, the "Costs") that arise directly or indirectly from or in
connection with the presence, suspected presence, release or threatened release
of any Hazardous Substance in or into the air, soil, surface water, groundwater
or soil vapor at, on, about, under or within the Property, or any portion
thereof, to the extent that such Costs result from events caused, directly or
indirectly, by Indemnitor, the Affiliates, Agents, or tenants or subtenants of
same which are not attributable to the gross negligence or willful misconduct of
Landlord. The indemnification provided in this Paragraph 4 shall specifically
apply to and include claims or actions (i) brought by Tenant or any occupant of
the Facility or the Property or any portion thereof or (ii) brought on behalf of
employees of Indemnitor or Affiliates, or contractors, or employees of
contractors of Indemnitor or Affiliates and Indemnitor hereby expressly waives
any immunity
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to which Indemnitor may otherwise be entitled under any industrial or worker's
compensation laws. In the event Landlord shall suffer or incur any such Costs,
Indemnitor shall pay to Landlord the total of all such Costs suffered or
incurred by Landlord upon demand therefor by Landlord. Without limiting the
generality of the foregoing, the indemnification provided by this Paragraph 4
shall specifically cover Costs, including capital, operating and maintenance
costs, incurred in connection with any investigation or monitoring of site
conditions, any clean-up, containment, remedial, removal or restoration work
required or performed by any Federal, state or local governmental agency or
political subdivision or performed by any non-governmental entity or person
because of the presence, suspected presence, release or suspected release of any
Hazardous Substance in or into the air, soil, groundwater, surface water or soil
vapor at, on, about, under or within the Property (or any portion thereof), and
any claims of third parties for loss or damage due to such Hazardous Substance,
to the extent that such Costs result from events caused, directly or indirectly,
by Indemnitor, the Affiliates, Agents, or tenants or subtenants of same, which
are not attributable to the gross negligence or willful misconduct of Landlord.
In addition, to the extent that such Costs, claims, losses or damages result
from events caused, directly or indirectly by Indemnitor, the Affiliates,
Agents, or tenants or subtenants of same, and are not attributable to the gross
negligence or willful misconduct of Landlord, the indemnification provided by
this Paragraph 4 shall include, without limitation, all loss or damage sustained
by Landlord or any third party due to any Hazardous Substance (i) that is
present or suspected to be present in the air, soil, groundwater, surface water
or soil vapor at, on, about, under or within the Property (or any portion
thereof) on or before the date of this Agreement, or (ii) that migrates, flows,
percolates, diffuses or in any way moves onto, into or under the air, soil,
groundwater, surface water or soil vapor at, on, about, under or within the
Property (or any portion thereof) after the date of this Agreement, irrespective
of whether such Hazardous Substance shall be present or suspected to be present
in the air, soil, groundwater, surface water or soil vapor at, on, about, under
or within the Property (or any portion thereof) as a result of any release,
discharge, disposal, dumping, spilling, or leaking (accidental or otherwise)
onto the Property (or any portion thereof) occurring before, on or after the
date of this Agreement or caused by any person or entity.
5. Remedial Work. In the event any investigation or monitoring of
site conditions or any clean-up, containment, restoration, removal or other
remedial work (collectively, the "Remedial Work") is required under any
applicable Federal, state or local law or regulation, by any judicial order, or
by any governmental entity, or in order to comply with any agreements affecting
the Property because of, or in connection with, any occurrence or event
described in Paragraph 4 above, Indemnitor shall perform or cause to be
performed the Remedial Work in compliance with such law, regulation, order or
agreement; provided, that Indemnitor may withhold such compliance pursuant to a
good faith dispute regarding the application, interpretation or validity of the
law, regulation, order, or agreement, subject to the requirements of Paragraph 6
below; provided, however, that Landlord shall reasonably cooperate with
Indemnitor to the extent necessary to deliver such authorization as may be
required in order for Indemnitor to perform its obligations under this
Paragraph. All Remedial Work shall be performed by one or more duly licensed
contractors, selected by Indemnitor and approved in advance in writing by
Landlord, and under the supervision of a consulting engineer, selected by
Indemnitor and approved in advance in writing by Landlord.
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All costs and expenses of such Remedial Work shall be paid by Indemnitor
including, without limitation, the charges of such contractor(s) and/or the
consulting engineer, and Landlord's reasonable attorneys and paralegals' fees
and other reasonable costs incurred in connection with monitoring or review of
such Remedial Work. In the event Indemnitor shall fail timely to commence, or
cause to be commenced, or fail diligently to prosecute to completion, such
Remedial Work, Landlord may, but shall not be required, to cause such Remedial
Work to be performed, and all costs and expenses thereof, or incurred in
connection therewith, shall be Costs within the meaning of Paragraph 4 above.
All such Costs shall be due and payable upon demand therefor by Landlord.
6. Permitted Contests. Notwithstanding any provision of this
Agreement to the contrary, Indemnitor will be permitted to contest or cause to
be contested, subject to compliance with the requirements of this Paragraph 6,
by appropriate action any Remedial Work requirement, and Landlord shall not
perform such requirement on its behalf, so long as Indemnitor has given Landlord
written notice that Indemnitor is in good faith contesting or shall contest or
cause to be contested the same, and Indemnitor actually contests or causes to be
contested the application, interpretation or validity of the governmental law,
regulation, order agreement pertaining to the Remedial Work by appropriate
proceedings conducted in good faith with due diligence; provided, such contest
shall not subject the Landlord or any assignee of its interest (including any
person having a beneficial interest) in the Property to civil liability and does
not jeopardize any such party's interest in the Property or affect in any way
the payment of any sums to be paid under the Lease. Indemnitor shall give such
security or assurances as may be reasonably required by Landlord to insure
compliance with the legal requirements pertaining to the Remedial Work (and
payment of all costs, expenses, interest and penalties in connection therewith)
and to prevent any sale, forfeiture or loss by reason of such nonpayment or
noncompliance.
7. Subrogation of Indemnitor's Rights. If Indemnitor fails to
perform its obligations under Paragraph 4 above, Landlord shall be subrogated to
any rights Indemnitor or Affiliates may have under any indemnifications from any
present, future or former owners, tenants or other occupants or users of the
Property (or any portion thereof), relating to the matters covered by this
Agreement.
8. Merger, Consolidation or Sale of Assets. In the event of a
dissolution of either Indemnitor or other disposition involving either
Indemnitor or all or substantially all the assets of either Indemnitor to one or
more persons or other entities, the surviving entity or transferee of assets, as
the case may be, shall (i) be formed and existing under the laws of a state,
district or commonwealth of the United States of America, and (ii) deliver to
Landlord an acknowledged instrument in recordable form assuming all obligations,
covenants and responsibilities of such Indemnitor under this Agreement.
9. Independent Obligations; Survival. The obligations of Indemnitor
under this Agreement shall survive the expiration or termination of the Lease.
The obligations of Indemnitor under this Agreement are separate and distinct
from the obligations of Indemnitor's Affiliates under the Transaction Documents
(including but not limited to any such obligation which may arise in connection
with the Lease) but shall not be construed to
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permit multiple recoveries by Landlord against Indemnitor in respect of such
breach. This Agreement may be enforced by Landlord without regard to any other
rights and remedies Landlord may have against Indemnitor under the Transaction
Documents and without regard to any limitations on Landlord's recourse and/or
specific performance as may be provided therein. Indemnitor expressly and
specifically agrees that a separate action or actions may be brought and
prosecuted against Indemnitor.
10. Default Rate. Any Costs and other payments required to be paid
by Indemnitor to Landlord under this Agreement which are not paid on demand
therefor shall thereupon be considered delinquent. In addition to all other
rights and remedies of Landlord against Indemnitor as provided herein, or under
applicable law, Indemnitor shall pay to Landlord, immediately upon demand
therefor, the lesser of the Default Rate under the Facility Agreement or the
maximum rate permitted by law ("Default Rate") on any such payments which are or
have become delinquent. The Default Rate shall be paid by Indemnitor from the
date such payment becomes delinquent through and including the date of payment
of such delinquent sums. The Default Rate shall not in any event be greater than
the maximum rate of interest permitted to be contracted for by law.
11. Miscellaneous. Indemnitor agrees that (i) the obligations of the
Indemnitor hereunder are joint and several with the obligations of any other
person indemnifying Landlord with respect to the matters which are the subject
of this Agreement, (ii) a release of any one such indemnitor or any limitation
of any agreement of indemnity or similar agreement in favor of or for the
benefit of any such indemnitor shall not in any way be deemed a release of or
limitation in favor of or for the benefit of Indemnitor under this Agreement,
and (iii) a separate action hereunder may be brought and prosecuted against
Indemnitor and any other person indemnifying Landlord with respect to the
matters which are the subject of this Agreement. If any term of this Agreement
or any application thereof shall be invalid, illegal or unenforceable, the
remainder of this Agreement and any other application of such term shall not be
affected thereby. No delay or omission in exercising any right hereunder shall
operate as a waiver of such right or any other right. This Agreement shall be
binding upon, inure to the benefit of and be enforceable by Indemnitor and
Landlord, and their respective successors and assigns, including (without
limitation), any assignee or purchaser of all or any portion of the Landlord s
interest in the Property. This Agreement shall be governed and construed in
accordance with the laws of the State of [Indiana].
12. Assignment. Landlord shall not assign this Agreement nor any of
its rights hereunder without the prior written consent of Indemnitor, which
consent will not be unreasonably withheld.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the ____ day of February 1998, to be effective as of the day and
year first above written.
"Indemnitor"
BALANCED CARE CORPORATION,
a Delaware corporation
By /s/ Signature Illegible
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Name:
Title:
"Landlord"
AHP OF INDIANA, INC.,
an Indiana corporation
By /s/ Signature Illegible
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Name:
Title:
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Schedule to Exhibit 10.76 filed pursuant to Instruction 2 to Item
601(a) of Regulation S-K
Environmental Indemnification Agreement
Location Landlord Manager
Jackson, TN AHP of Tennessee, Inc. Balanced Care at Xxxxxxx, Inc.
