INDEMNITY AGREEMENT
THIS INDEMNITY AGREEMENT (this "Agreement"), made as of July 1, 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, Xx., Telefax Number (000) 000-0000 (the "Guarantor") to
WILMINGTON TRUST COMPANY, a Delaware banking corporation (the "Trustee") having
an office at Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx
00000-0000, BANK HAPOALIM B.M., a bank chartered under the laws of Israel,
acting through its San Xxxxxxxxx Xxxxxx ("BH"), having an office at 000
Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxxxxxx, Xxxxxxxxxx, 00000, Attention: Xxx
Xxxxxxx, Telefax Number (000) 000-0000 (together with its successors and assigns
pursuant to Section 9 hereof).
RECITALS
WHEREAS, pursuant to a Trust Agreement dated as of the date hereof
between the Trustee and BH (as modified and supplemented and in effect from time
to time, the "Trust Agreement"), The Xxxxxxxxx Business Trust, S.T. (the
"Trust") is being formed with an initial capital contribution made by BH to the
Trust (the "Capital Contribution");
WHEREAS, the Trust and Brookdale Living Communities of Connecticut -
WH, Inc. (the "Operator") are entering into a certain lease dated the date
herewith (the "Lease"), pursuant to which Operator shall manage and operate the
Property;
WHEREAS, BH, as lender, and the Trust, as borrower, are parties to a
Loan Agreement, dated as of the date hereof, pursuant to which BH is making a
loan to the Trust (the "B Loan");
WHEREAS, BH is unwilling to make the Capital Contribution and is
unwilling to make the B Loan unless Guarantor indemnifies each Indemnitee
against certain liabilities, including those arising under Environmental Laws
(as herein defined), relating to the property being financed in connection with
the transactions contemplated by the Operative Documents, which property
consists of the fee simple interest in the land more particularly described in
the Mortgage and all buildings, structures and other improvements now or
hereafter situated on such land (the "Facility") and from claims that may be
imposed upon any Indemnitee by third parties in connection with the Facility;
and
NOW, THEREFORE, in consideration of the making of the Capital
Contribution by BH and the covenants, agreements, representations and warranties
set forth in this Agreement, the parties hereby covenant, agree, represent and
warrant as follows:
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Indemnity Agreement
Section 1. Defined Terms. Unless the context otherwise requires,
capitalized terms used but not otherwise defined herein shall have the meanings
provided therefore in the Lease, dated as of the date hereof, between the
Operator and the Trust (the "Lease") and the following terms shall have the
following meanings:
"After Tax Basis" shall have the meaning as set forth in the Lease.
"BH" is defined in the first paragraph of this Agreement.
"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 Indemnitee (solely with
respect to matters arising at or involving the Facility), Operator or the
Facility, 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
Facility, (ii) any fact, circumstance, condition or occurrence forming the basis
of any violation, or alleged violation, of any Environmental Law by any
Indemnitee (solely with respect to matters arising at or involving the
Facility), Operator or otherwise affecting the Facility or (iii) any alleged
injury or threat of injury to health, safety or the environment by any
Indemnitee (solely with respect to matters arising at or involving the
Facility), Operator or otherwise affecting the Facility 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, or the Release or threatened Release of
Hazardous Substances into the indoor or outdoor environment, including, without
limitation, ambient air, soil, surface water, ground water, wetlands, land or
subsurface strata or otherwise relating to the presence or Use of Hazardous
Substances.
"Environmental Reports" means the environmental audit reports, with
respect to the Facility, delivered to Lender prior to the date hereof and in
connection with the Loan, and any amendments or supplements thereto delivered to
Lender prior to the date hereof.
"Guarantor" has the meaning provided in the first paragraph of this
Agreement.
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Indemnity Agreement
"Governmental Authority" means any national or federal government, any
state, regional, local or other political subdivision thereof and any Person
with jurisdiction exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"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.
"Indemnitee" means the Trustee, BH and their respective successors,
permitted assigns, directors, shareholders, partners, officers, employees and
agents.
"Operative Documents" shall have the meaning as set forth in the Lease.
"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 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.
"Trust" has the meaning provided in the Recitals to this Agreement.
"Trust Agreement" has the meaning provided in the Recitals to this
Agreement.
"Trustee" has the meaning provided in the first paragraph of this
Agreement.
"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.
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Indemnity Agreement
Section 2. Indemnification.
(a) The Guarantor agrees to indemnify each Indemnitee in the same
manner and to the same extent as the Lessee has agreed to indemnify each
Indemnitee (as defined in the Lease) in Article XXVI of the Lease except with
respect to (i) any Claims (as defined in the Lease) which arise with respect to
any Environmental Claims or other environmental matters, it being understood
that Guarantor's indemnification obligations with respect to Environmental
Claims and other environmental matters shall be limited to the provisions set
forth herein without regard to any indemnification of Environmental Claims or
other environmental matters set forth in Article XXVI of the Lease and (ii) any
Basic Rent, Supplemental Rent, Shortfall Amount or any Claims for amounts
arising under Sections 26.6, 26.7, 26.8 or 26.9 of the Lease, it being
understood that Guarantor shall have no indemnification obligations with respect
to any Claims related thereto (the matters set forth in clauses (i) and (ii)
above being herein called the "Excluded Claims"). For purposes of enforcing and
interpreting the indemnity provided in this Section 2(a), the capitalized terms
contained in Article XXVI of the Lease shall have the meanings as set forth in
Appendix 1 to the Lease or as defined in Article XXVI of the Lease, as
applicable. Further, the Guarantor agrees to indemnify BH for all Claims of
whatever kind or nature arising in connection with (a) BH's agreement to
indemnify the Trustee pursuant to Section 6.5 of the Trust Agreement and (b) the
Trust's indemnification of the Lender pursuant to the Xxxxxx/Lessor
Indemnification, but not including any Excluded Claims.
(b) Subject to the limitations set forth in Section 14 hereof,
Guarantor agrees to indemnify, reimburse, defend (with counsel satisfactory to
each Indemnitee in each Indemnitee's reasonable discretion), and hold harmless
each Indemnitee, on an After-Tax Basis, 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 Indemnitee, 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 Facility, 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;
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Indemnity Agreement
(iv) the breach of any representation, warranty or covenant
set forth in Section 11 of the Xxxxxx Fee Mortgage and Section 11 of
the Xxxxxx Leasehold Mortgage; or
(v) any failure of Guarantor to fulfill each and every
obligation undertaken pursuant to this Agreement.
(c) Nothing in this Agreement shall be deemed to deprive any Indemnitee
of any rights or remedies provided to it elsewhere in this Agreement or in the
other Operative Document or otherwise available to it under law. Guarantor
waives and releases each Indemnitee 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 any Indemnitee.
(d) With respect to those matters for which Guarantor has agreed to
indemnify each Indemnitee hereunder, and to the maximum extent permitted by
applicable law, Guarantor waives and releases each Indemnitee 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 fraud, gross negligence
or willful misconduct of any Indemnitee.
Section 3. Payment. All payments due to any Indemnitee under this
Agreement shall be payable to such Indemnitee within ten (10) days after written
demand therefor, and shall bear interest at the Overdue Rate from the date such
payment is due until the date of payment.
Section 4. Governing Law.
(a) The parties agree that the State of Connecticut 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
Connecticut applicable to contracts made and performed in such State and any
applicable law of the United States of America. 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 Connecticut.
(b) Any legal suit, action or proceeding against any Indemnitee or
Guarantor arising out of or relating to this Agreement shall be instituted in
any federal or state court in New York, New York, pursuant to ss. 5-1402 of the
New York General Obligations Law, and Guarantor waives any objection which it
may now or hereafter have to the laying of venue of any such suit,
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Indemnity Agreement
action or proceeding, and Guarantor hereby irrevocably submits to the
jurisdiction of any such court in any suit, action or proceeding. Guarantor does
hereby designate and appoint CT Corporation Systems, 0000 Xxxxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, as its authorized agent to accept and acknowledge on its behalf
service of any and all process which may be served in any such suit, action or
proceeding in any federal or state court in New York, New York, and agrees that
service of process upon said agent at said address (or at such other office in
New York, New York as such agent shall designate in writing in accordance with
the terms hereof) with a copy of same to Guarantor in the manner hereinafter
described and written notice of said service of Guarantor mailed or delivered to
Guarantor in the manner provided herein shall be deemed in every respect
effective service of process upon Guarantor in any such suit, action or
proceeding in the State of New York. Guarantor (i) shall give prompt notice to
each Indemnitee of any changed address of its authorized agent hereunder, (ii)
may at any time and from time to time designate a substitute authorized agent
with an office in New York, New York (which office shall be designated as the
address for service of process), and (iii) shall promptly designate such a
substitute if its authorized agent ceases to have an office in New York, New
York or is dissolved without leaving a successor.
Section 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.
Section 6. Delay Not a Waiver. Neither any failure nor any delay on the
part of any Indemnitee 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, neither Indemnitee shall 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.
Section 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 BH at its address set forth on the first page
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Indemnity Agreement
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 Guarantor shall be
delivered concurrently to each of the following: Brookdale Living Communities of
Connecticut - WH, Inc., 00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx
00000, Attention: Xxxxxx X. Xxxxxxxx, Xx., Telefax Number (000) 000-0000;
Brookdale Living Communities of Connecticut - WH, Inc., 00 Xxxx Xxxxxx Xxxxx,
Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxx, Esquire,
Telefax Number (000) 000-0000; and Xxxxx X. Xxxxxxxxxx, III, Esquire, Murtha,
Cullina, Xxxxxxx and Xxxxxx LLP, 185 Asylum Street, CityPlace I, Xxxxxxxx,
Xxxxxxxxxxx 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.
Section 8. Trial by Jury. GUARANTOR AND EACH INDEMNITEE, TO THE FULLEST
EXTENT THAT IT MAY LAWFULLY DO SO, WAIVES TRIAL BY JURY IN ANY ACTION OR
PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY TORT ACTION, BROUGHT BY ANY PARTY
HERETO WITH RESPECT TO THIS AGREEMENT.
Section 9. Assignment. BH shall have the right to assign this Agreement
and the obligations hereunder to any Institutional Lender (as defined in the
Lease), at any time. The Trustee shall have the right to assign this Agreement
and the obligations hereunder to any successor trustee of the Trust. All
references to each "Indemnitee" hereunder shall be deemed to include the
successors and assigns of each Indemnitee, including any trustee or servicer.
Section 10. 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.
Section 11. 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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Indemnity Agreement
Section 12. 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.
Section 13. Estoppel Certificates. Guarantor and the Indemnities each
hereby agree at any time and from time to time upon not less than 15 days prior
written notice by Guarantor or the Indemnitees to execute, acknowledge and
deliver to the party specified in such notice, a statement, in writing,
certifying that this Agreement is unmodified and in full force and effect (or if
there have been modifications, that the same, as modified, is in full force and
effect and stating the modifications hereto), and stating whether or not, to the
best knowledge of such certifying party, there exists any matter giving rise to
a claim under Section 2, and, if so, specifying each such matter; provided,
however, that it shall be a condition precedent to the Indemnitees obligation to
deliver the statement pursuant to this Section 13, that each Indemnitee shall
have received, together with Guarantor's request for such statement, an
officer's certificate signed by an authorized officer of Guarantor stating that
to the best of Guarantor's knowledge, no matter which could give rise to a claim
under Section 2 exists as of the date of such certificate (or specifying each
such matter).
Section 14. Survival. This Agreement shall survive (in perpetuity) the
closing and disbursement of the funds evidenced by the BH Debt and the
termination of the Lease, reconveyance, discharge or foreclosure of the
Mortgage, conveyance by deed in lieu of foreclosure, transfer, and any
subsequent conveyance of the Facility. Notwithstanding the foregoing, Guarantor
shall not indemnify any Indemnitee 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(b)(i) through 2(b)(iv) to the extent that Guarantor can
establish directly and solely that such Losses result from Hazardous Substances
being placed on, above or under the Facility (a) by the affirmative act or gross
negligence of any Indemnitee or any employees, agents or bailees of any
Indemnitee or (b) subsequent to the termination of the Lease and return of the
Facility to Borrower or conveyance of the Facility as provided in Article XXIV
of the Lease.
Section 15. Time of the Essence. Time is of the essence with respect to
each and every covenant, agreement and obligation of Guarantor under this
Agreement.
Section 16. Liability. The liability of Guarantor under this Agreement
shall in no way be limited or impaired by (a) any amendment or modification of
the Operative Documents made in accordance therewith, (b) any extensions of time
for performance required by any of the Operative Documents, or (c) the release
or substitution in whole or in part, of any security for the BH Debt or other
evidence of debt issued pursuant to the Operative Documents; and in any of such
cases, whether with or without notice to Guarantor and with or without
consideration.
[Signature on the following page]
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Indemnity Agreement
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: ____________________________
Name:
Title:
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