ENVIRONMENTAL INDEMNITY AGREEMENT
THIS ENVIRONMENTAL INDEMNITY AGREEMENT (this "Agreement"),
made as of June ____, 1998, 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, Telefax Number (000) 000-0000
(the "Guarantor") to the Indemnified Parties (as hereinafter defined) including
AH Texas Owner Limited Partnership, an Ohio limited partnership having an
address at 000 Xxxx xx Xxxxxxx Xxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxxxx 00000,
Attention: Xxxxx X. Xxxxxxx, Telefax Number (000) 000-0000 (together with its
successors and assigns, "Owner").
RECITALS
WHEREAS, the sole partners of Owner are AH Texas Subordinated,
LLC, an Ohio limited liability company which itself is the sole limited partner
of Owner (the "Limited Partner"), and AH Texas CGP, Inc., an Ohio corporation
(the "General Partner"), which acts as the sole general partner of Owner;
WHEREAS, the Limited Partner is the sole shareholder of the General
Partner;
WHEREAS, Owner intends to develop a congregate housing
facility with an assisted living component for the elderly in Austin, Texas,
which is currently referred to as "The Heritage at Xxxxxx Ranch" (the
"Project");
WHEREAS, Owner has obtained a loan from Nomura Asset Capital
Corporation (the "Senior Lender") for the acquisition, development and
construction of the Project, in the amount of up to $24,250,000 (the "Senior
Loan");
WHEREAS, Owner and BLC of Texas-IL, L.P., a Delaware limited
partnership and an affiliate of Guarantor (the "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 the Project from the Manager; and
WHEREAS, Owner is unwilling to enter into the Management
Agreement unless Guarantor indemnifies Owner against certain liabilities 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 Loan
Agreement dated as of the date hereof among Owner, Manager 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.
"General Partner" has the meaning provided in the Recitals to this
Agreement.
"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 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, Limited Partner, General Partner 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;
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; or
iv) any failure of Guarantor to fulfill each and every
obligation undertaken pursuant to this Agreement.
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 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 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: Xxxxx X. Xxxx, Esq.,
Telefax 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., Telefax Number
(000) 000-0000; Brookdale Living Communities, Inc., 00 Xxxx Xxxxxx Xxxxx, Xxxxx
0000, Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxx, Esquire, Telefax
Number (000) 000-0000; Brookdale Living Communities, Inc., 00 Xxxx Xxxxxx Xxxxx,
Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxx X. Xxxxxx, Esquire,
Telefax Number (000) 000-0000; and Xxxxx X. Xxxxxx, Esq., Winston & Xxxxxx, 00
Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, Telefax 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.
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 Guaranty 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, this Guaranty and the indemnity obligations provided hereunder
shall terminate on the date upon which Manager or Guarantor (or their
affiliates) no longer has an interest in the Property, whether as manager,
developer, lessee, lessor, owner or otherwise; provided, however, that the
indemnification provided herein shall continue to be effective or shall be
reinstated, as the case may be, to the extent that (a) any such obligations
exist and remain unpaid or otherwise unsatisfied, (b) such Losses are incurred
by Xxxxx X. Xxxxxxx, Alliance Holdings, Inc. or any of its directors, officers,
employees, shareholders and agents, or (c) if subsequent to any such date,
Losses are incurred as set forth in Section 2(a) and such Losses were the result
of events, circumstances or conditions which occurred prior to or during the
period when Manager (or its affiliates) had an interest in the Property.
16. Intentionally Omitted.
17. INTERCREDITOR AGREEMENT. THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER ARE ALL SUBJECT TO THE TERMS AND CONDITIONS OF THE
INTERCREDITOR AGREEMENT.
IN WITNESS WHEREOF, the Guarantor has caused this
Environmental 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:
Name: Xxxxxx X. Xxxxxxxx, Xx.
Title: Executive Vice President
