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 Michigan 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 Michigan Subordinated, LLC, an
Ohio limited liability company which itself is the sole limited partner of Owner
(the "Limited Partner"), and AH Michigan 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 an independent living facility with a
non-licensed assisted living component for the elderly in Southfield, Michigan,
which is currently referred to as "The Heritage at Southfield" (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 $26,625,000 (the "Senior Loan");
WHEREAS, Owner and Brookdale Living Communities of Michigan, Inc., a
Delaware corporation 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,
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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 we 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 b 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 xxxx 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 COUNTERCLAI 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.
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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.
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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 negligenc 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 thoug
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.
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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 arc
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
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