EXHIBIT 10.16
INDEMNITY AND GUARANTY AGREEMENT
THIS INDEMNITY AND GUARANTY AGREEMENT (this "Agreement"), made as of the
1st day of May, 2002. by CAPSTEAD MORTGAGE CORPORATION, a Maryland corporation
("Indemnitor") in favor of (i) BROOKDALE LIVING COMMUNITIES, INC., a Delaware
corporation ("BLCI"), (ii) BLC PROPERTIES I, LLC, a Delaware limited liability
company ("BLC Properties"), (iii) BLC-ISLAND LAKE, LLC, a Delaware limited
liability company, (iv) BLC-WINDSONG, LLC, a Delaware limited liability company,
(v) BLC- ROSWELL, LLC, a Delaware limited liability company, (vi)
BLC-WILLIAMSBURG, LLC, a Delaware limited liability company, (vii) BLC-CLUB
HILLS, L.P., a Delaware limited partnership, (viii) BLC-MONTROSE, LLC, a
Delaware limited liability company, and (ix) BLC-PINECASTLE, LLC, a Delaware
limited liability company, (the entities described in clauses (iii) through (ix)
are herein collectively referred to as the "Brookdale Lessees" and, together
with BLCI and BLC Properties, as "BLC".
RECITALS
A. Indemnitor is the owner of all of the outstanding ownership interests
in (i) CMCP Properties, LLC ("CMCP Properties") which in turn is the owner or
indirect owner of all of the outstanding ownership interests in (ii) CMCP-Island
Lake, LLC, a Delaware limited liability company, (iii) CMCP-Windsong, LLC, a
Delaware limited liability company, (iv) CMCP-Roswell, a Delaware limited
liability company, (v) CMCP- Williamsburg, LLC, a Delaware limited liability
company, (vi) CMCP-Pinecastle, LLC, a Delaware limited liability company, (vii)
CMCP-Windsong, LLC, a Delaware limited liability company, (viii) CMCP-Club Hill,
L.P., a Texas limited partnership (the entities described in clauses (ii)
through (viii) are herein collectively referred to as the "Capstead Lessors"
and, together with CMCP Properties, as "CMCP").
B. CMCP Properties and BLC Properties are parties to a certain Master
Lease Agreement (the "Master Lease") of even date herewith and each of the
Capstead Lessors is the landlord under a Property Lease (the "Property Leases")
with one of the Brookdale Lessees for seven (7) independent living or assisted
living or skilled nursing facilities each described in the respective Property
Lease (the "Facilities"). The Master Lease and the seven (7) Property Leases are
herein collectively referred to as the "Lease Documents".
C. As a condition to entering into the Lease Documents, BLC has required
that Indemnitor indemnify BLC from and against and guarantee payment to CMCP of
those items described herein as the "Guaranteed Obligations".
D. The Lease Documents are of substantial benefit to Indemnitor and,
therefore, Indemnitor desires to indemnify BLC from and against and guarantee
payment to BLC of the Guaranteed Obligations.
NOW, THEREFORE, to induce BLC to enter into the Lease Documents with CMCP
and in consideration of the foregoing premises and for other good and valuable
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consideration, the receipt and sufficiency of which are hereby acknowledged,
Indemnitor hereby covenants and agrees for the benefit of BLC, as follows:
1. Indemnity and Guaranty. Indemnitor hereby assumes liability as a
primary obligor for, hereby unconditionally guarantees payment to BLC of, hereby
agrees to pay, protect, defend and save BLC harmless from and against, and
hereby indemnifies BLC from and against any and all liabilities, obligations,
losses, damages, costs and expenses (including, without limitation, reasonable
attorneys' fees), causes of action. suits, claims, demands and judgments of any
nature or description whatsoever which may at any time be imposed upon, incurred
by or awarded against BLC as a result of:
(a) any action by CMCP that adversely affects BLC's rights under
Paragraph 14 of the Master Lease regarding BLC's option to
purchase the Facilities;
(b) any action by CMCP that adversely affects BLC's rights under
Paragraph 3(b) of the Master Lease regarding BLC's rights to
renew the term of each of the Property Leases; or
(c) the failure of CMCP to comply with the terms of Paragraph
12(b) of the Master Lease regarding CMCP's obligations in
connection with the TEB Pool Refunding (as such term is
defined in the Master Lease );
collectively, the "Guaranteed Obligations."
This is a guaranty of payment and performance and not of collection. The
liability of Indemnitor under this Agreement shall be direct and immediate and
not conditional or contingent upon the pursuit of any remedies against CMCP or
any of them, or any other person (including, without limitation, other
guarantors, if any). Indemnitor waives any right to require that an action be
brought against CMCP or any of them, or any other person. In the event, on
account of the Bankruptcy Reform Act of 1978, as amended, or any other debtor
relief law (whether statutory, common law. case law or otherwise) of any
jurisdiction whatsoever, now or hereafter in effect, which may be or become
applicable, CMCP shall be relieved of any obligation or liability as provided in
the Lease Documents, Indemnitor shall nevertheless be fully liable therefor, or
in connection therewith, as applicable, in either case, to the fullest extent
provided for in this Agreement. In the event of a default under the Lease
Documents resulting in a Guaranteed Obligation which is not cured within any
applicable grace or cure period, BLC shall have the right to enforce its rights,
powers and remedies thereunder or hereunder, in any order, and all rights.
powers and remedies available to BLC in such event shall be non-exclusive and
cumulative of all other rights. powers and remedies provided thereunder or
hereunder or by law or in equity. If the Guaranteed Obligations are partially
paid or discharged by reason of the exercise of any of the remedies available to
BLC, this Agreement shall nevertheless remain in full force and effect, and
Indemnitor shall remain liable for all remaining Guaranteed Obligations, even
though
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any rights which Indemnitor may have against CMCP may be destroyed or
diminished by the exercise of any such remedy.
2. Indemnification Procedures.
(a) If any action shall be brought against BLC based upon any of
the matters for which BLC is indemnified hereunder, BLC shall
notify Indemnitor in writing thereof and Indemnitor shall
promptly assume the defense thereof, including, without
limitation, the employment of counsel reasonably acceptable to
BLC and the negotiation of any settlement. In the event
Indemnitor shall fail to discharge or undertake to defend BLC
against any claim, loss or liability for which BLC is
indemnified hereunder, BLC may, at its sole option and
election, defend or settle such claim, loss or liability. The
liability of Indemnitor to BLC hereunder shall be conclusively
established by such settlement, provided such settlement is
made in good faith, the amount of such liability to include
both the settlement consideration and the costs and expenses,
including, without limitation, reasonable attorneys' fees and
disbursements, incurred by BLC in effecting such settlement.
(b) Indemnitor shall not, without the prior written consent of
BLC: (i) settle or compromise any action, suit, proceeding or
claim or consent to the entry of any judgment that does not
include as an unconditional term thereof the delivery by the
claimant or plaintiff to BLC of a full and complete written
release of BLC (in form, scope and substance satisfactory to
BLC in its sole discretion) from all liability in respect of
such action, suit, proceeding or claim and a dismissal with
prejudice of such action, suit, proceeding or claim; or (ii)
settle or compromise any action, suit, proceeding or claim in
any manner that may adversely affect BLC or obligate BLC to
pay any sum or perform any obligation as determined by BLC in
its reasonable discretion.
3. Reinstatement of Obligations. If at any time all or any part of any
payment made by Indemnitor or received by BLC from Indemnitor under or with
respect to this Agreement is or must be rescinded or returned for any reason
whatsoever (including, but not limited to, the insolvency, bankruptcy or
reorganization of Indemnitor or CMCP or any of them), then the obligations of
Indemnitor hereunder shall, to the extent of the payment rescinded or returned,
be deemed to have continued in existence, notwithstanding such previous payment
made by Indemnitor, or receipt of payment by BLC, and the obligations of
Indemnitor hereunder shall continue to be effective or be reinstated, as the
case may be, as to such payment, all as though such previous payment by
Indemnitor had never been made.
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4. Waivers by Indemnitor. To the extent permitted by law, Indemnitor
hereby waives and agrees not to assert or take advantage of:
(a) Any right to require BLC to proceed against CMCP or any of
them, or any other person or to proceed against or exhaust any
security held by BLC at any time or to pursue any other remedy
in BLC's power or under any other agreement before proceeding
against Indemnitor hereunder;
(b) Any defense that may arise by reason of the incapacity, lack
of authority, death or disability of any other person or
persons or the failure of BLC to file or enforce a claim
against the estate (in administration, bankruptcy or any other
proceeding) of any other person or persons;
(b) Demand, presentment for payment, notice of nonpayment, intent
to accelerate, acceleration, protest, notice of protest and
all other notices of any kind, or the lack of any thereof,
including, without limiting the generality of the foregoing,
notice of the existence, creation or incurring of any new or
additional indebtedness or obligation or of any action or
non-action on the part of CMCP, BLC, any endorser or creditor
of CMCP or of Indemnitor or on the part of any other person
whomsoever under this or any other instrument in connection
with any obligation or evidence of indebtedness held by BLC;
(d) Any defense based upon an election of remedies by BLC;
(e) Any right or claim or right to cause a marshalling of the
assets of Indemnitor;
(f) Any principle or provision of law, statutory or otherwise,
which is or might be in conflict with the terms and provisions
of this Agreement;
(g) Any duty on the part of BLC to disclose to Indemnitor any
facts BLC may now or hereafter know about CMCP or the
Facilities, regardless of whether BLC has reason to believe
that any such facts materially increase the risk beyond that
which Indemnitor intends to assume or has reason to believe
that such facts are unknown to Indemnitor or has a reasonable
opportunity to communicate such facts to Indemnitor, it being
understood and agreed that Indemnitor is fully responsible for
being and keeping informed of the financial condition of CMPC,
of the condition of the Facilities and of any and all
circumstances bearing on the risk that liability may be
incurred by Indemnitor hereunder;
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(h) Any invalidity, irregularity or unenforceability, in whole or
in part, of anyone or more of the Lease Documents;
(i) Any assertion or claim that the automatic stay provided by 11
U.S.C. Section 362 (arising upon the voluntary or involuntary
bankruptcy proceeding of CMCP) or any other stay provided
under any other debtor relief law (whether statutory, common
law, case law or otherwise) of any jurisdiction whatsoever,
now or hereafter in effect, which may be or become applicable,
shall operate or be interpreted to stay, interdict, condition,
reduce or inhibit the ability of BLC to enforce any of its
rights, whether now or hereafter required, which BLC may have
against Indemnitor; and
j) Any modifications of the Lease Documents or any obligation of
CMCP relating to the Lease Documents by operation of law or by
action of any court, whether pursuant to the Bankruptcy Reform
Act of 1978, as amended, or any other debtor relief law
(whether statutory, common law, case law or otherwise) of any
jurisdiction whatsoever, now or hereafter in effect, or
otherwise.
5. General Provisions.
(a) Fully Recourse. All of the terms and provisions of this
Agreement are recourse obligations of Indemnitor and not
restricted by any limitation on personal liability.
(b) Survival. This Agreement shall be deemed to be continuing in
nature and shall remain in full force and effect and shall
survive the exercise of any remedy by BLC under the Lease
Documents.
(c) No Subrogation; No Recourse Against BLC. Notwithstanding the
satisfaction by Indemnitor of any liability hereunder,
Indemnitor shall not have any right of subrogation,
contribution, reimbursement or indemnity whatsoever or any
right of recourse to or with respect to the assets or property
of CMCP. In connection with the foregoing, Indemnitor
expressly waives any and all rights of subrogation to BLC
against CMCP prior to full and final payment and performance
of the Guaranteed Obligations. Indemnitor shall not have any
right of recourse against BLC by reason of any action BLC may
take or omit to take under the provisions of this Agreement or
under the provisions of any of the Lease Documents.
(d) Rights Cumulative; Payments. BLC's rights under this Agreement
shall be in addition to all rights of BLC under the Lease
Documents. Further, payments made by Indemnitor under this
Agreement shall reduce only the parallel obligation of CMCP
under the Lease
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Documents and shall otherwise not reduce in any respect any of
CMCP's other obligations and liabilities under the Lease
Documents.
(e) No Limitation on Liability. Indemnitor hereby consents and
agrees that BLC may at any time and from time to time without
further consent from Indemnitor do any of the following
events, and the liability of Indemnitor under this Agreement
shall be unconditional and absolute and shall in no way be
impaired or limited by any of the following events, whether
occurring with or without notice to Indemnitor or with or
without consideration: (i) any extensions of time for
performance required by any of the Lease Documents; (ii) any
assignment of the Lease Documents or any sale or transfer of
the Facilities; (iii) any change in the composition of CMCP,
or any of them, including, without limitation, the withdrawal
or removal of Indemnitor from any current or future position
of ownership, management or control of CMCP, or any of them;
(iv) the release of CMCP, or any of them, or of any other
person or entity from performance or observance of any of the
agreements, covenants, terms or conditions contained in any of
the Lease Documents by operation of law, BLC's voluntary act
or otherwise; or (v) the modification of the terms of anyone
or more of the Lease Documents. No such action which BLC shall
take or fail to take in connection with the Lease Documents
nor any course of dealing with CMCP or any other person, shall
limit, impair or release Indemnitor's obligations hereunder,
affect this Agreement in any way or afford Indemnitor any
recourse against BLC. Nothing contained in this Section shall
be construed to require BLC to take or refrain from taking any
action referred to herein.
(f) Entire Agreement; Amendment; Severability. This Agreement
contains the entire agreement between the parties respecting
the matters herein set forth and supersedes all prior
agreements, whether written or oral, between the parties
respecting such matters. Any amendments or modifications
hereto, in order to be effective, shall be in writing and
executed by the parties hereto. A determination that any
provision of this Agreement is unenforceable or invalid shall
not affect the enforceability or validity of any other
provision, and any determination that the application of any
provision of this Agreement to any person or circumstance is
illegal or unenforceable shall not affect the enforceability
or validity of such provision as it may apply to any other
persons or circumstances.
(g) Governing Law; Binding Effect; Waiver of Acceptance. This
Agreement shall be governed by and construed in accordance
with
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the laws of the State of Texas. This Agreement shall bind
Indemnitor and the successors and assigns of Indemnitor and
shall inure to the benefit of BLC and the officers, directors,
share BLC's, agents and employees of BLC and their respective
heirs, successors and assigns. Notwithstanding the foregoing,
Indemnitor shall not assign any of its rights or obligations
under this Agreement without the prior written consent of BLC,
which consent may be withheld by BLC in its sole discretion.
Indemnitor hereby waives any acceptance of this Agreement by
BLC, and this Agreement shall immediately be binding upon
Indemnitor.
(h) Notices. All notices, demands, requests or other
communications to be sent by one party to the other hereunder
or required by law shall be in writing and shall be deemed to
have been validly given or served by delivery of the same in
person to the intended addressee, or by depositing the same
with Federal Express or another reputable private courier
service for next business day delivery or by depositing the
same in the United States mail, postage prepaid, registered or
certified mail, return receipt requested or by facsimile
transmission (with confirmation of receipt) addressed as
follows:
If to Indemnitor: Capstead Mortgage Corporation
0000 Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to: Xxxxxxx & Xxxxx, LLP
0000 Xxxx Xxxxxx Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to BLC: Brookdale Living Communities, Inc.
000 X. Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: R. Xxxxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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with a copy to: Brookdale Living Communities, Inc.
000 X. Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Telephone: (312) 977 -3720
Facsimile: (000) 000-0000
All notices, demands and requests shall be effective upon such
personal delivery, or one (1) business day after being
deposited with the private courier service or facsimile
transmission, or two (2) business days after being deposited
in the United States mail as required above. Rejection or
other refusal to accept or the inability to deliver because of
changed address of which no notice was given as herein
required shall be deemed to be receipt of the notice, demand
or request sent. By giving to the other party hereto at least
five (5) days' prior written notice thereof in accordance with
the provisions hereof, the parties hereto shall have the right
from time to time to change their respective addresses and
each shall have the right to specify as its address any other
address within the United States of America.
(i) No Waiver; Time of Essence; Business Day. The failure of any
party hereto to enforce any right or remedy hereunder, or to
promptly enforce any such right or remedy, shall not
constitute a waiver thereof nor give rise to any estoppel
against such party nor excuse any of the parties hereto from
their respective obligations hereunder. Any waiver of such
right or remedy must be in writing and signed by the party to
be bound. This Agreement is subject to enforcement at law or
in equity, including actions for damages or specific
performance.
(j) Captions for Convenience. The captions and headings of the
sections and paragraphs of this Agreement are for convenience
of reference only and shall not be construed in interpreting
the provisions hereof.
(k) Successive Actions. A separate right of action hereunder shall
arise each time BLC acquires knowledge of any matter
indemnified or guaranteed by Indemnitor under this Agreement.
Separate and successive actions may be brought hereunder to
enforce any of the provisions hereof at any time and from time
to time. No action hereunder shall preclude any subsequent
action, and Indemnitor hereby waives and covenants not to
assert any defense in the nature of splitting of causes of
action or merger of judgments.
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(l) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be effective only upon
delivery and thereafter shall be deemed an original, and all
of which shall be taken to be one and the same instrument, for
the same effect as if all parties hereto had signed the same
signature page. Any signature page of this Agreement may be
detached from any counterpart of this Agreement without
impairing the legal effect of any signatures thereon and may
be attached to another counterpart of this Agreement identical
in form hereto but having attached to it one or more
additional signature pages.
(m) Waiver of Jury Trial. BLC AND INDEMNITOR, TO THE FULL EXTENT
PERMITTED BY LAW, HEREBY KNOWINGLY, INTENTIONALLY AND
VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL,
WAIVE, RELINQUISH AND FOREVER FORGO THE RIGHT TO A TRIAL BY
JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF,
OR IN ANY WAY RELATING TO THIS AGREEMENT OR ANY CONDUCT, ACT
OR OMISSION OF BLC OR INDEMNITOR, OR ANY OF THEIR DIRECTORS,
OFFICERS, PARTNERS, MEMBERS. EMPLOYEES, AGENTS OR ATTORNEYS,
OR ANY OTHER PERSONS AFFILIATED WITH BLC OR INDEMNITOR, IN
EACH OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT,
TORT OR OTHERWISE.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, Indemnitor has executed this Indemnity as of the day
and year first above written.
CAPSTEAD MORTGAGE CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President
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