Loan No. 98-674
HAZARDOUS SUBSTANCE
INDEMNIFICATION AGREEMENT
This HAZARDOUS SUBSTANCE INDEMNIFICATION AGREEMENT ("Indemnity") is
made as of the 14th day of October, 1998, by Brookdale Living Communities of New
Mexico-SF, Inc., a corporation organized and existing under the laws of
Delaware, whose address is c/o Brookdale Living Communities, Inc., 00 Xxxx
Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000 ("Operator"), and Brookdale
Living Communities, Inc., a corporation organized and existing under the laws of
Delaware whose address is 00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx
00000, Attention: Xxxxxx X. Xxxxxxxx, Xx. ("Parent"). Operator and Parent are
hereinafter collectively referred to as "Indemnitors" and each individually as
an "Indemnitor") to and in favor of XXXXXX FINANCIAL, INC., a Delaware
corporation, with a mailing address at 000 Xxxx Xxxxxx Xxxxxx, 00xx Xxxxx,
Xxxxxxx, Xxxxxxxx 00000 (XXXXXX FINANCIAL, INC. and its successors and assigns
are hereinafter collectively referred to as "Lender").
RECITALS
A. Substantially contemporaneously herewith, Lender is entering into a
financing transaction ("Loan") with The PDL Business Trust, a Delaware business
trust ("Borrower"), which Loan is evidenced by a certain Fixed Rate Program
Promissory Note Secured by Mortgage ("Note") in the principal amount of TWELVE
MILLION TWO HUNDRED AND FIFTY THOUSAND AND NO/100 DOLLARS ($12,250,000) of even
date herewith executed and delivered by Borrower, as maker, to the order of
Lender, as payee, secured by, inter alia, a Ground Leasehold Mortgage,
Assignment of Rents and Security Agreement and Fixture Filing of even date
herewith ("Ground Lease Mortgage") encumbering certain real property located in
Santa Fe, New Mexico and more fully described on Exhibit A attached hereto and
incorporated herein ("Land") (the Note, the Ground Lease Mortgage, and any other
documents evidencing or securing the Loan or executed in connection therewith,
and any modification, renewal, or extension thereof are hereinafter collectively
referred to as the "Borrower Loan Documents"). Substantially contemporaneously
herewith, Borrower and Operator are entering into a lease (the "Operator Lease")
of the Property (as defined in the Ground Lease Mortgage) pursuant to which
Operator will operate, manage and maintain the Property. In connection
therewith, Operator has executed a guaranty of certain obligations of Borrower
under the Borrower Loan Documents ("Guaranty") which Guaranty is secured by a
Sub-Leasehold Mortgage, Assignment of Rents and Security Agreement and Fixture
Filing ("Sub-Leasehold Mortgage") against Operator's interest in the Property
under the Operator Lease. The Guaranty, this Indemnity and all other documents
executed by Operator which evidence or secure the Guaranteed Obligations (as
defined in the Guaranty) are collectively referred to as the "Guaranty
Documents".
B. Lender has required this Indemnity as a condition of Lender's
disbursing the Loan and accepting the Guaranty.
C. Parent owns all of the outstanding stock of Operator, and it is in
each of Parent's and Operator's direct financial interest and benefit to induce
Lender to make the Loan by executing and delivering this Indemnity.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Indemnity.
Each Indemnitor hereby agrees, jointly and severally, unconditionally,
absolutely and irrevocably, to indemnify, defend (with counsel reasonably
acceptable to Lender and at Indemnitor's sole cost) and hold harmless Lender and
its officers, directors, employees, shareholders, agents and affiliates
(collectively the "Lender's Group"), against and in respect of any and all
liabilities, obligations, deficiencies, demands, claims, actions, or causes of
action, assessments, losses, costs, expenses (including, without limitation,
court costs and reasonable attorneys' fees and expenses), interest, fines,
penalties, actual and punitive damages, and all costs and expenses of any and
all investigations, remedial measures, proceedings, arbitrations, mediations,
judgments, settlements, and compromises whatsoever (collectively the
"Liabilities") sustained or incurred by Lender's Group resulting from or arising
out of or by virtue of a claim made by any party resulting from:
(a) The presence on or under, or the escape, seepage, leakage, spillage,
discharge, emission, disposal (whether arranged or otherwise) or
release from, the Land into or upon any land, the atmosphere, or any
watercourse, body of water or wetland, of any "Hazardous Materials" (as
hereinafter defined).
(b) Any failure of the Land, any improvements located thereon or activities
thereon to comply with all applicable "Environmental Laws" (as
hereinafter defined).
(c) Any personal injury relating to the presence of any Hazardous Materials
on or from the Land or the improvements located thereon.
The term "Environmental Laws" shall include any federal, state or local
laws or regulations relating to health, safety or protection of the environment.
The term "Hazardous Materials" shall include Hazardous Substances, as defined by
the Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. ss.9601 et seq., any petroleum or petroleum products, asbestos or
asbestos containing material, or any other hazardous substances, hazardous
wastes or hazardous materials as defined by other Environmental Laws.
Notwithstanding anything contained herein to the contrary, the
Indemnitors shall not be responsible for indemnifying or holding Lender harmless
from and against Liabilities incurred in connection with or as a result of, any
of the matters described in clauses (a) through (c) above inclusive to the
extent: (A) that such Liabilities result from Hazardous Materials being placed
on, above or under, or emitted from, the Land and/or improvements located
thereon, (i) by Lender or its agents or (ii) subsequent to (and not resulting
from any condition existing prior to) Indemnitors vacating, and relinquishing
possession and control of, the Property and Lender or any successor in title to
Borrower (other than Indemnitors or any of their respective affiliates) as a
foreclosure purchaser or designee of Lender taking actual possession of, or
title to, the Property; or (B) as long as necessary, and only to the extent
necessary for the indemnification herein contained to be effective and
enforceable, this agreement to indemnify Lender shall not extend to liability,
claims, damages, losses or expenses arising out of: (1) the preparation or
approval of maps, drawings, opinions, reports, surveys, change orders, designs
or specifications by the Lender or the agents or employees of the Lender; or (2)
the giving of or the failure to give directions or instructions by the Lender or
the agents or employees of the Lender, where such giving or failure to give
directions or instructions is the primary cause of bodily injury to persons or
damage to property. As used herein, the term "Property" shall mean "Property" as
defined in the Ground Lease Mortgage.
2. Indemnification Procedure.
(a) Notice. Each Indemnitor shall notify Lender promptly (and in any event
within 10 business days) upon receipt of any inquiry, notice, claim,
charge, cause of action or demand pertaining to the matters indemnified
under Paragraph 1 above, including, without limitation, any notice of
inspection, abatement or noncompliance, stating the nature and basis of
such inquiry or notification. For identical notices from different
Indemnitors, only one such notice needs to be provided to Lender. Each
Indemnitor shall promptly deliver to Lender any and all documentation
or records as Lender may reasonably request in connection with such
notice or inquiry and shall keep Lender advised of any subsequent
developments. If any person or entity entitled to indemnification under
this Indemnity ("Indemnified Party") asserts a claim for
indemnification or receives notice of the assertion of any claim or of
the commencement of any action or proceeding against such Indemnified
Party, Indemnified Party shall give written notice together with a
statement of any available information regarding such claim to
Indemnitors within 30 days after learning of such claim or within such
shorter time as may be necessary to give Indemnitors a reasonable
opportunity to respond to such claim. Indemnitors shall have the right,
upon written notice to Indemnified Party within 30 days after receipt
from Indemnified Party of notice of such claim, to conduct at
Indemnitors' expense the defense against such claim in Indemnitors' own
name, or if necessary in the name of Indemnified Party with counsel
acceptable to Indemnified Party.
(b) Effect of Failure to Give Notice. If Indemnitors shall fail to give
such notice to defend set forth in Paragraph 2.(a), Indemnitors shall
be deemed to have elected not to conduct the defense of the subject
claim, and in such event, Indemnified Party shall have the right to
conduct such defense in good faith and to compromise and settle the
claim without the prior consent of Indemnitors, and Indemnitors will be
liable for all costs, expenses, settlement amounts or other Liabilities
paid or incurred in connection therewith.
(c) Parties to Cooperate. If Indemnitors elect to conduct the defense of
the subject claim, Indemnified Party will cooperate with and make
available to Indemnitors such assistance and materials as may be
reasonably requested by Indemnitors, all at the expense of Indemnitors,
and Indemnified Party shall have the right at Indemnitors' expense to
participate in the defense assisted by counsel provided in accordance
with Paragraph 2(a), provided that Indemnified Party shall have the
right to compromise and settle the claim only with the prior consent of
Indemnitors, which consent shall not be unreasonably withheld or
delayed. Without the prior written consent of Indemnified Party,
Indemnitors will not enter into any settlement of any claim or cease to
defend against a claim, if pursuant to or as a result of such
settlement or cessation, (i) injunctive or other equitable relief would
be imposed against Indemnified Party, or (ii) such settlement or
cessation would lead to liability or create any financial or other
obligation on the part of the Indemnified Party for which Indemnified
Party is not entitled to indemnification hereunder. Indemnitors shall
not be entitled to control, and Indemnified Party shall be entitled to
have sole control over, the defense or settlement of any claim to the
extent that claim seeks an order, injunction or other equitable relief
against Indemnified Party which, if successful, could materially
interfere with the business, operations, assets, condition (financial
or otherwise) or prospects of Indemnified Party (and the cost of such
defense shall constitute an amount for which Indemnified Party is
entitled to indemnification under this Indemnity). If a firm decision
is made to settle a claim, which offer Indemnitors are permitted to
settle under this Paragraph 2.(c), and Indemnitors desire to accept and
agree to such offer, Indemnitors will give written notice to
Indemnified Party to that effect. If Indemnified Party fails to consent
to such firm offer within 30 calendar days after such notice is given
as provided herein, Indemnified Party may continue to contest or defend
such claim and, in such event, the maximum liability of Indemnitors as
to such claim will not exceed the amount of such settlement offer, plus
costs and expenses paid or incurred by Indemnified Party through the
end of such 30 day period.
(d) Effect of Judgment. Any judgment entered or settlement agreed upon in
the manner provided herein shall be binding upon Indemnitors, and shall
conclusively be deemed to be an obligation with respect to which
Indemnified Party is entitled to prompt indemnification hereunder.
(e) Failure to Give Timely Notice. A failure by an Indemnified Party to
give timely, complete or accurate notice as provided in Paragraph 2.(c)
will not affect the rights or obligations of any party hereunder except
and only to the extent that, as a result of such failure, any party
entitled to receive such notice was deprived of its right to recover
any payment under its applicable insurance coverage or was otherwise
directly and materially damaged as a result of such failure to give
timely notice.
(f) Reduction of Loss. To the extent any Liabilities of an Indemnified
Party are reduced by receipt of payment (i) under insurance policies
which are not subject to retroactive adjustment or other reimbursement
to the insurer in respect of such payment, or (ii) from third parties
not affiliated with the Indemnified Party, such payments (net of the
expenses of the recovery thereof) (such net payment being referred to
herein as a "Reimbursement") shall be credited against such
Liabilities; provided, however, (y) the pendency of such payments shall
not delay or reduce the obligation of Indemnitors to make payment to
Indemnified Party in respect of such Liabilities, and (z) Indemnified
Party shall have no obligation, hereunder or otherwise, to pursue
payment under or from any insurer or third party in respect of such
Liabilities. If any Reimbursement is obtained subsequent to payment by
any Indemnitors in respect to any Liabilities, such Reimbursement shall
be promptly paid over to such Indemnitor.
(g) Subrogation. Indemnitors shall be subrogated to Indemnified Party's
rights of recovery to the extent of any Liabilities satisfied by
Indemnitors. Indemnified Party shall execute and deliver such
instruments and papers as are necessary to assign such rights and
assist in the exercise thereof.
3. Survival.
Subject to the provisions of the last paragraph of Paragraph 1 hereof,
the provisions of and undertakings and indemnification set out in this Indemnity
shall continue in full force and effect and shall survive the satisfaction,
termination, suspension or cancellation of the indebtedness evidenced by the
Note, the release of the Ground Lease Mortgage, the acceptance by Lender of a
deed in lieu of foreclosure with respect to the Land, a foreclosure of the Land
and/or the exercise by Lender of any of its rights under any Loan Document. This
Indemnity shall be continuing, irrevocable and binding on each of the
Indemnitors, jointly and severally, and their respective successors and assigns,
and shall inure to the benefit of Lender. Indemnitors' obligations hereunder may
not be assigned. The dissolution of an Indemnitor shall not affect this
Indemnity or any of Indemnitors' obligations hereunder.
4. Controlling Provisions.
The provisions of this Indemnity shall govern and control over any
inconsistent provision of any other Borrower Loan Document or Guaranty Document,
including, without limitation, Paragraph 10 of the Note, Section 5.13 of the
Guaranty and any other exculpatory or non-recourse provisions.
5. Waivers.
Each Indemnitor hereby waives notice of the following events or
occurrences: (a) Lender's acceptance of this Indemnity; (b) any Indemnitor's
heretofore, now or at any time or times hereafter, granting to Lender of
security interests, liens or encumbrances in any of such Indemnitor's assets or
Lender's heretofore, now or from time to time hereafter obtaining, amending,
substituting for, releasing, waiving or modifying any such security interests,
liens or encumbrances; (c) Lender's heretofore, now or at any time or times
hereafter, obtaining, releasing, waiving or modifying the Ground Lease Mortgage
or the Sub-Leasehold Mortgage or any other lien or encumbrance in any other
party's assets given to Lender to secure the Note, the Guaranty or this
Indemnity; (d) Lender's heretofore, now or at any time or times hereafter,
amending or modifying any of the Borrower Loan Documents or the Guaranty
Documents other than this Indemnity; and (e) presentment, demand, notices of
default, non-payment, partial payment and protest, and all other notices or
formalities to which any Indemnitor may be entitled except as otherwise provided
herein or in any of the other Guaranty Documents or the Borrower Loan Documents.
Indemnitors agree that Lender heretofore, now or at any time or times hereafter,
may do any or all of the foregoing in such manner, upon such terms and at such
times as Lender, in its sole and absolute discretion, deems advisable, without
in any way, manner or respect impairing, affecting, reducing or releasing
Indemnitor from its obligations hereunder and Indemnitors hereby consent to each
and all of the foregoing events or occurrences.
6. Notice.
Any notice to Parent or Operator provided for herein shall be given by
mailing such notice by Federal Express or any other overnight carrier addressed
to Parent and Operator at Parent's address stated above marked "Attention:
Xxxxxx X. Xxxxxxxx, Xx." or at such other address as Parent may designate by
notice to Lender as provided herein. A copy of any such notice to Operator or
Parent shall be delivered concurrently to each of the following by Federal
Express or any other overnight courier: Brookdale Living Communities, Inc., 00
Xxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X.
Xxxxxx, Esquire; and Xxxxxxx X. Xxxxxxx, Xxxxx, Xxxxxx, XxxXxx & Xxxxxxxxxx,
P.C., 000 Xxxxx Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxxxxx 00000. Any notice
provided for herein shall be deemed to have been given to Parent and Operator on
the first business day following such mailing in the manner designated herein.
Any notice to Lender shall be given as set forth in the Sub-Leasehold Mortgage.
7. Governing Law.
This Indemnity shall be governed by the internal laws of the State of
Illinois.
8. Jury Trial Waiver.
EACH INDEMNITOR, AND LENDER BY ITS ACCEPTANCE OF THIS INDEMNITY, HEREBY
WAIVES ITS RESPECTIVE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED
UPON, OR RELATED TO, THE SUBJECT MATTER OF THIS INDEMNITY AND THE BUSINESS
RELATIONSHIP THAT IS BEING ESTABLISHED. THIS WAIVER IS KNOWINGLY, INTENTIONALLY
AND VOLUNTARILY MADE BY EACH INDEMNITOR AND BY LENDER, AND INDEMNITOR AND LENDER
EACH ACKNOWLEDGE THAT NEITHER OF THEM NOR ANY PERSON ACTING ON BEHALF OF EITHER
OF THEM HAS MADE ANY REPRESENTATIONS OF FACT TO INDUCE THIS WAIVER OF TRIAL BY
JURY OR HAS TAKEN ANY ACTIONS WHICH IN ANY WAY MODIFY OR NULLIFY ITS EFFECT.
EACH INDEMNITOR AND LENDER ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT
TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH INDEMNITOR AND LENDER HAVE
ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS INDEMNITY AND THAT EACH OF
THEM WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH
INDEMNITOR AND LENDER FURTHER ACKNOWLEDGE THAT THEY HAVE BEEN REPRESENTED (OR
HAVE HAD THE OPPORTUNITY TO BE REPRESENTED) IN THE SIGNING OF THIS INDEMNITY AND
IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL.
9. Severability.
If any provision of this Indemnity or the application thereof to any
party or circumstance is held invalid or unenforceable, the remainder of this
Indemnity and the application of such provision or provisions to the other
parties and circumstances will not be affected thereby, the provisions of this
Indemnity being severable in any such instance.
10. Limitation of Liability.
No officer, director, shareholder, agent or representative of Parent
shall be personally liable for any amount due or claim made by any Indemnified
Party under this Indemnity.
[next page is signature page]
IN WITNESS WHEREOF, the undersigned have executed this Hazardous
Substance Indemnification Agreement as of the date first written above.
PARENT:
BROOKDALE LIVING COMMUNITIES, INC., a Delaware corporation
By____________________________
Name__________________________
Title_________________________
OPERATOR:
BROOKDALE LIVING COMMUNITIES OF NEW MEXICO-SF, INC., a Delaware corporation
By____________________________
Name__________________________
Title_________________________
Acknowledged and Accepted:
XXXXXX FINANCIAL, INC.
By:_________________________
Its:_______________________
ACKNOWLEDGMENT
STATE OF ILLINOIS)
) SS
COUNTY OF XXXX
I, ______________________________, a Notary Public in and for said
County, in the State aforesaid, DO HEREBY CERTIFY that
_____________________________, who is personally known to me to be the
____________ President and ___________ Secretary of Brookdale Living
Communities, Inc., a Delaware corporation, and the same person whose name is
subscribed to the foregoing instrument, appeared before me this day in person,
and acknowledged that he/she signed and delivered the said instrument as
____________ President and ___________ Secretary of said corporation and that
the said ___________ Secretary then and there caused the corporate seal of said
corporation to be affixed thereto, pursuant to authority given by the Board of
Directors of said corporation, as (his/her) own free and voluntary act and as
the free and voluntary act of said corporation, for the uses and purposes
therein set forth.
GIVEN under my hand and Notarial Seal this ____ day of October, 1998.
-------------------------------------
Notary Public
My Commission Expires:
----------------------
ACKNOWLEDGMENT
STATE OF ILLINOIS )
) SS
COUNTY OF XXXX )
I, ______________________________, a Notary Public in and for said
County, in the State aforesaid, DO HEREBY CERTIFY that
_____________________________ and _______________________________, who are
personally known to me to be the ____________ President and ___________
Secretary of Brookdale Living Communities of New Mexico-SF, Inc., a Delaware
corporation, and the same persons whose names are subscribed to the foregoing
instrument, appeared before me this day in person, and acknowledged that they
signed and delivered the said instrument as ____________ President and
___________ Secretary of said corporation and that the said ___________
Secretary then and there caused the corporate seal of said corporation to be
affixed thereto, pursuant to authority given by the Board of Directors of said
corporation, as (his/her) own free and voluntary act and as the free and
voluntary act of said corporation, for the uses and purposes therein set forth.
GIVEN under my hand and Notarial Seal this ____ day of _____________,
1998.
-----------------------------------
Notary Public
My Commission Expires:
----------------------
EXHIBIT A
LEGAL DESCRIPTION
Parcel I
A tract of land within The City and County of Santa Fe, New Mexico, more
particularly described as follows:
Beginning at a cross in concrete on the southerly R.O.W. line of Alta Vista
Street, from whence the center of the sanitary sewer manhole No. C11a-5 bears
North 40 deg. 00' West, 10.36 feet; thence, from said point and place of
beginning, along said south R.O.W. line South 73 deg. 22' 25" East, 244.89 feet
to a cross in concrete; thence leaving said south R.O.W. line, South 16 deg. 35'
50" West, 571.58 feet to a capped rebar; thence, North 84 deg. 26' 50" West,
249.54 feet to a capped rebar; thence North 16 deg. 36" East, 619.41 feet to the
true point and place of beginning.
All as shown on plat of survey entitled "ALTA/ACSM land title survey prepared
for Xxxxx de Xxxx Limited Partnership 000 Xxxx Xxxxx Xxxxxx, Xxxx of Santa Fe,
Santa Fe County, New Mexico" recorded on July 31, 1998 as Document No. 1035,001
in Plat Book 392, page 11, and re-recorded in Plat Book 397, Page 009, as
Reception No. 1044,176, records of Santa Fe County, New Mexico.
Parcel II
Together with that certain non-exclusive 30 foot entrance easement for ingress
and egress as created by the dedication thereof and as shown on that certain
plat entitled Survey For Escuela Replat of Tract "A" Into Tract "A1" and Tract
"A2" For Xxxxx De Xxxx Project 000 Xxxx Xxxxx, Xxxxx Xx , Xxx Xxxxxx, filed
December 18, 1995, and recorded in Plat Book 160, Page 18, records of Santa Fe
County, New Mexico, (subject to all applicable terms, provisions and ordinances
relating thereto.)
