EXHIBIT 10.3.1
CONFORMED COPY
TAX MATTERS AGREEMENT
Dated as of June 18, 2004
BY AND AMONG
FORTRESS BROOKDALE ACQUISITION LLC,
"Seller"
BLC SENIOR HOLDINGS, INC.,
"Indemnitor"
AND
PROVIDENT SENIOR LIVING TRUST
"Acquiror"
TAX MATTERS AGREEMENT
This TAX MATTERS AGREEMENT (this "Agreement") is dated as of June
18, 2004, by and among Fortress Brookdale Acquisition LLC, a Delaware limited
liability company ("Seller"), BLC Senior Holdings, Inc., a Delaware corporation
("Indemnitor") and Provident Senior Living Trust, a Maryland real estate
investment trust ("Acquiror").
WITNESSETH
WHEREAS, Seller, Indemnitor and Acquiror have entered into a Stock
Purchase Agreement dated as of the date hereof (the "Purchase Agreement"),
pursuant to which, among other things, Acquiror has agreed to acquire all the
outstanding shares of common stock of Brookdale Living Communities, Inc., a
Delaware corporation (the "Company");
WHEREAS, upon the acquisition of all the outstanding shares of
common stock of the Company by Acquiror, the Company and each of its
wholly-owned corporate subsidiaries are intended to become qualified REIT
subsidiaries pursuant to Section 856(i) of the Code (defined below), the Company
and each of its wholly-owned direct and indirect corporate subsidiaries will be
deemed to liquidate under Section 332 of the Code for Federal income tax
purposes, and the tax year for the Company and various of its subsidiaries will
end on the Closing Date;
WHEREAS, after being deemed liquidated under Section 332 of the
Code, the Company and each of its wholly-owned corporate subsidiaries are
intended to be converted to limited liability companies that are not classified
as corporations for Federal income tax purposes;
WHEREAS, after being converted to limited liability companies, all
the equity interests in the Company and each of its wholly-owned corporate
subsidiaries are intended to be contributed by the Acquiror to an entity that is
classified as a partnership for Federal income tax purposes in which the
Acquiror, directly or through one or more entities disregarded for Federal
income tax purposes, will be a partner; and
WHEREAS, as a condition to entering into the Purchase Agreement and
the Transaction Agreements (as defined in the Purchase Agreement), and as an
inducement to do so, the parties hereto are entering into this Agreement;
NOW, THEREFORE, in consideration of the promises and mutual
agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
Section 1. Definitions. For purposes of this Agreement, the
following terms shall apply:
(a) "Acquiror" shall have the meaning set forth in the Introductory
Paragraph.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(c) "Final Determination" shall mean (i) a decision, judgment,
decree, or other order by any court of competent jurisdiction, which
decision, judgment, decree, or other order has become final after all
allowable appeals by either party to the action have been exhausted or the
time for filing such appeal has expired, (ii) a closing agreement entered
into under Section 7121 of the Code, or any final settlement agreement
entered in connection with any administrative or judicial proceeding, or
(iii) the expiration of time for instituting a claim for refund, or if
such claim was filed, the expiration of time for instituting a suit with
respect thereto.
(d) "Indemnitor" shall have the meaning set forth in the
Introductory Paragraph.
(e) "Indemnity Amount" shall mean the amount payable by Indemnitor
to an Acquiror pursuant to Section 3.
(f) "Pre-Closing Period" shall mean any taxable year or period that
ends on or before the Closing Date.
(g) "Post-Closing Period" shall mean any taxable year or period that
begins after the Closing Date.
(h) "REIT" shall mean a real estate investment trust, within the
meaning of Sections 856 et. seq., of the Code.
(i) "Seller" shall have the meaning set forth in the Introductory
Paragraph.
(j) "Straddle Period" shall mean, with respect to any taxable year
or period of an entity or group of entities that begins on or before the
Closing Date but ends after the Closing Date, the portion of such taxable
year or period that (i) begins on the first day of such taxable year or
period, and (ii) ends on the Closing Date.
(k) "Tax" and/or "Taxes" shall mean all Federal, state, local and
foreign taxes, charges, fees, duties (including customs duties), levies or
other assessments, including without limitation, income, gross receipts,
net proceeds, ad valorem, turnover, real and personal property (tangible
and intangible), sales, use, franchise, excise, value added, stamp,
transfer, leasing, lease, user, transfer, fuel, excess profits,
occupational, interest equalization, windfall profits, severance, license,
payroll, environmental, capital stock, disability, employee's income
withholding, other withholding, and unemployment taxes, which are imposed
by any governmental authority, and such term shall include any interest,
penalties or additions to tax attributable thereto.
(l) "Tax Authority" shall mean any governmental authority having
jurisdiction over the assessment, determination, collection, or imposition
of any Tax.
(m) "Tax Return" shall mean a report, return or other information
return required to be supplied to a governmental entity with respect to
Taxes (and any
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amendments thereto) including, combined or consolidated returns for any
group of entities.
(n) Any capitalized terms used herein and not defined herein, shall
have the meaning assigned to it in the Purchase Agreement.
Section 2. Tax Liability for Straddle Period. For purposes of this
Agreement, the Tax liability of any entity with respect to a Straddle Period
shall be computed as follows: (i) in the case of Taxes of an entity that are
either based upon or related to income or receipts, the Tax liability for the
Straddle Period shall be deemed equal to the amount that would be payable if the
period for which such Tax is assessed had ended on and included the Closing
Date, not including transactions occurring on the Closing Date after the
Closing, determined, to the extent permissible under applicable laws and
commercially practicable, in a manner which is consistent with such entity's
accounting practices and business operations as in effect prior to the Closing
Date; (ii) in the case of Taxes that are incurred as a result of any sale,
transfer, assignment or distribution of property, or other similar transaction
engaged in, by any such entity, the Tax liability for the Straddle Period shall
be the amount due with respect to any such sale, transfer, assignment,
distribution, or other similar transaction occurring on or prior to the Closing
Date (not including transactions occurring on the Closing Date but after the
Closing); and (iii) in the case of all other Taxes, Tax liability attributable
to the Straddle Period shall be equal to the Taxes imposed with respect to the
Tax period that includes the Straddle Period multiplied by a fraction, the
numerator of which is the number of days in the Straddle Period through and
including the Closing Date and the denominator of which is the number of days in
the Tax period with respect to which such Taxes are imposed; provided, however,
that notwithstanding the foregoing provisions of this section, with respect to
real property Taxes, Section 2.04 of the Purchase Agreement shall govern.
Section 3. Amount and Scope of Indemnification.
(a) Indemnitor shall indemnify, defend, and hold harmless Acquiror
against and reimburse Acquiror for all Taxes, losses, damages, cost,
expenses, liabilities, obligations and claims of any kind (including
reasonable attorneys' fees and costs of investigation) in connection with
Taxes of the Company and the Company Subsidiaries that are attributable to
a Pre-Closing Period, including without limitation Taxes properly
allocable to a Straddle Period under Section 2, or that Acquiror may at
any time suffer or incur, or become subject to, as a result of or in
connection with the material inaccuracy of any representation or warranty
made by Indemnitor in Section 3.19 (other than Section 3.19(l)) of the
Purchase Agreement or in the schedules referred to in Section 3.19 of the
Purchase Agreement. Acquiror, if and to the extent it qualifies as a REIT
with respect to any taxable period and jurisdiction, shall not be required
to make additional distributions to its shareholders to reduce or
eliminate its liability for Taxes otherwise indemnified against hereunder,
whether or not such distributions are required to be made to maintain the
Acquiror's status as a REIT, but to the extent Acquiror is permitted to,
and chooses to, make any such additional distributions to its
shareholders, any reduction in Acquiror's liability for Taxes as a result
of such additional distributions shall be taken into account in computing
the Indemnity Amount hereunder.
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(b) In the event Acquiror makes a claim for indemnification
hereunder, Acquiror shall provide Indemnitor with a written statement
setting forth in reasonable detail the basis of the claim for
indemnification and the calculation of the amount owing under Section 3(a)
(the "Indemnity Amount").
(c) Any payment determined due to Acquiror pursuant to this Section
3 shall be paid within the later of (i) twenty (20) business days after
written notice from Acquiror to Indemnitor that such amounts are due and
payable, or (ii) ten (10) business days prior to the due date for any
return (including without limitation any return of estimated income taxes)
on which Acquiror would reflect such income or gain.
(d) Upon request of Indemnitor, the basis of the claim and the
accuracy of Acquiror's calculation of the Indemnity Amount payable to
Acquiror pursuant to Section 3 shall be verified by an independent,
nationally recognized accounting firm (other than the preparer of
Acquiror's or Indemnitor's Tax Returns or financial statements) acceptable
to Indemnitor and Acquiror. In the event that the parties are unable to
agree on an acceptable accounting firm, each shall select one accounting
firm as its representative and the two accounting firms so selected shall
select a third firm to perform the requisite verification. In order to
enable such accountants to verify the basis and accuracy of such claim,
Acquiror and Indemnitor shall provide to such accountants all information
reasonably necessary for such verification, including without limitation
any computer analyses used by Acquiror or Indemnitor to calculate or
question, as the case may be, such amount or amounts. In conducting its
verification, the accounting firm shall consult with, and consider in good
faith the opinions and positions of, Acquiror and Indemnitor as to the
proper resolution of any matters at issue. The review and determination of
such calculations by such accounting firm pursuant to this Section 3(d)
shall be final. The parties hereto agree that, if the accounting firm is
required to resolve any matters relating to the computations, the
accounting firm (i) shall provide Acquiror and Indemnitor with a written
notification that describes in reasonable detail the matter or matters at
issue, and (ii) prior to its resolution of the matter or matters at issue,
shall provide Acquiror and Indemnitor with an opportunity to set forth
their positions concerning the proper resolution of the matter or matters
at issue in accordance with a procedure reasonably acceptable to both
Acquiror and Indemnitor. The cost of such verification shall be borne by
Indemnitor unless it is the determination of such verification that the
actual amount or amounts payable (exclusive of interest and penalties)
deviates, in a manner favorable to Indemnitor, by more than 10% from the
amount originally determined by Acquiror, in which case such cost shall be
borne by Acquiror.
(e) At the request and expense of Indemnitor, Acquiror shall seek
any refund of any Tax. In the event Acquiror receives a refund of (i) any
amount which gave rise to an indemnification payment hereunder, or (ii)
any Tax paid by Company prior to the Closing Date with respect to a
Pre-Closing Period or Straddle Period, Acquiror shall refund such
indemnification payment to Indemnitor; provided, however, that if either
party has notified the other that there may be an amount due to Acquiror
from Indemnitor pursuant to this Agreement or the Purchase Agreement,
Acquiror may withhold payment until resolution of that claim has occurred.
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(f) Acquiror agrees not to file any amended return of the Company,
or any of its affiliates with respect to a Pre-Closing Period or Straddle
Period without the prior written consent of the Indemnitor.
(g) The Indemnity Amount shall be reduced for the Tax benefits from
any net operating loss carryover or other Tax attributes of the Company or
the Company Subsidiaries as of the Closing that Acquiror or its Affiliates
actually utilize after the Closing. To the extent that Acquiror or an
Affiliate realizes an actual Tax benefit as a result of the event giving
rise to the indemnity payment hereunder (such as, by way of example but
not limitation, a savings in Federal income Taxes resulting from an
increase in deductible state Taxes that are indemnified, in a case in
which the indemnity payment itself does not give rise to gross income for
Federal income tax purposes), Acquiror shall promptly rebate to Indemnitor
the amount of such Tax benefit.
Section 4. Exclusions. (a) Notwithstanding any other provision of
this Agreement, Indemnitor shall not have any liability for indemnification
under this Agreement for any Tax liability attributable, in whole or in part,
to:
(i) any fraud, willful misconduct or gross negligence of
Acquiror or officer, director, employee or agent thereof;
(ii) any Tax resulting from a determination that Acquiror is
not treated as the owner of the Leased Property for income tax purposes
(including, but not limited to, any adverse effect on Acquiror's status as
a REIT); or
(iii) the willful failure of Acquiror to comply on a timely
basis with certification, information, documentation, reporting or other
similar requirements imposed on such Acquiror, or the willful failure of
Acquiror to comply with its obligations set forth in Section 5, to the
extent Indemnitor demonstrates that its ability to contest such Tax
liability is actually prejudiced by such willful failure of Acquiror.
(b) Acquiror, Indemnitor and Seller agree, for themselves and on
behalf of their respective existing and future affiliates and
representatives, that notwithstanding any provision to the contrary in
this Agreement, the Purchase Agreement or any other Transaction Agreement,
with respect to each indemnification obligation in this Agreement, in no
event shall the Indemnitor have liability to the Acquiror for any
punitive, incidental, indirect or consequential damages, damages for the
loss of profits or other special damages (including, but not limited to,
any adverse effect on Acquiror's status as a REIT, unless such failure is
due to Indemnitor's or Seller's willful misconduct, recklessness or gross
negligence), and in no event shall Taxes (subject to the immediately
preceding parenthetical clause) include any of the foregoing.
(c) Notwithstanding anything to the contrary in this Agreement, no
liability shall be imposed upon Indemnitor for any liability for Taxes for
amounts that are required to be paid by Indemnitor, or any affiliate, as
Tenant, to Acquiror, or any of its
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affiliates, as Landlord, under the Transaction Documents, including but
not limited to transfer and similar Taxes relating to the transactions
contemplated thereunder.
(d) Notwithstanding anything to the contrary in this Agreement or
any other Transaction Agreement, Seller shall have no liability for Taxes
to the Acquiror or any of its affiliates.
(e) Notwithstanding anything to the contrary in this Agreement,
Indemnitor shall not be liable for any Taxes arising from transactions
that occur following the Closing, including transactions occurring on the
Closing Date after the Closing, and Acquiror shall not be liable for any
Taxes of the Company and the Company Subsidiaries arising from
transactions that occur at or preceding the Closing.
Section 5. Preparation of Tax Returns. Indemnitor will be
responsible for the preparation and filing of all Tax Returns for Company and
the Company Subsidiaries for all Pre-Closing Periods, and will pay all
third-party costs and expenses incurred in preparing and filing such Tax
Returns. Acquiror will be responsible for the preparation and filing of all Tax
Returns for Company and the Company Subsidiaries for all Post-Closing Periods
and any Tax period that includes a Straddle Period. All Tax Returns of the
Company and the Company Subsidiaries for any Pre-Closing Period and any Straddle
Period shall be prepared in a manner consistent with the applicable entity's
past practices as in effect prior to the Closing Date; provided, however, that
such past practices are in accordance with the Code and the regulations
thereunder. Acquiror shall submit any Tax Return that includes a Straddle Period
to Indemnitor for review and consent, which consent shall not be unreasonably
withheld. Each of Acquiror, Seller and Indemnitor agrees to reasonably cooperate
in making available information necessary to the preparation and filing of such
Tax Returns and each agrees to make available, at its expense, records and
employees of Company, Indemnitor, Seller and Acquiror necessary for the
preparation or such Tax Returns. Acquiror and its accountants will be provided
for their review, a draft of each material Tax Return with respect to any period
(or portion thereof) ending on or before the Closing Date at least 20 days prior
to the date Indemnitor intends to file such Tax Return. To the extent that
positions previously taken on Tax Returns of the Company and the Company
Subsidiaries require further explication or substantiation in order for the
Acquiror to prepare Tax Returns with respect to Post-Closing Periods, the
Indemnitor and the Seller shall provide or cause to be provided such information
and background with respect to such matters as the Acquiror may from time to
time reasonably request.
Section 6. Contests Pertaining to Tax.
(a) Acquiror shall promptly notify Indemnitor (but in no event later
than 5 Business Days following the receipt by Acquiror) of (i) the
assertion of any claim or any dispute of any Tax reporting position, the
commencement of any audit or examination of Company or any Company
Subsidiary by any Tax Authority with respect to any Pre-Closing Period or
Straddle Period and (ii) the receipt by it from the Internal Revenue
Service of a written, proposed or final revenue agent's report, a 30-day
letter or a notice of deficiency (as described in 6212 of the Code) or
similar written notice from a Tax authority of a state, local, or foreign
government, in which an adjustment is proposed or determined to the Taxes
for which Indemnitor may be required to provide
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indemnification pursuant to this Agreement (a "Tax Claim"); provided,
however, that any failure to provide such notice shall not relieve
Indemnitor of any obligation to indemnify Acquiror hereunder except,
notwithstanding anything to the contrary contained in Section 4(iii), to
the extent that the Indemnitor's ability to contest such adjustment is
prejudiced in Indemnitor's discretion by such failure of the Acquiror.
(b) Indemnitor shall have the sole right to represent the interests
of the Company and the Company Subsidiaries, and to settle any dispute
with respect to Taxes arising, in any Tax audit or administrative or court
proceeding relating to Pre-Closing Periods or to any Straddle Period of
the Company or any Company Subsidiary, as the case may be, and to employ
counsel of Indemnitor's choice at Indemnitor's expense to carry out such
representation; provided, however, that Indemnitor shall notify Acquiror
of its intention to represent such interests within ten (10) Business Days
of Indemnitor's receipt of the notice from Acquiror in accordance with
Section 6(a). Acquiror agrees that it will cooperate fully with Indemnitor
and Indemnitor's counsel in the defense against or compromise of any claim
in any said proceeding. Acquiror shall execute and deliver to Indemnitor
any power of attorney or other document requested by Indemnitor in
connection with any audit or administrative or court proceeding with
respect to which Indemnitor is representing the interests of the Company
or any Company Subsidiary (or successor-in-interest) in any proceeding
described in this Section 6. In connection with any audit or
administrative or court proceeding with respect to which Indemnitor is
representing the interests of the Company or any Company Subsidiary (or
any successor-in-interest), Indemnitor shall consult in good faith with,
and keep reasonably informed, Acquiror and its counsel and shall provide
Acquiror with copies of any documents, reports or claims issued by or sent
to the relevant auditing agent or Tax Authority, as well as a reasonable
opportunity to review and comment thereon, but the decisions regarding
what actions are to be taken shall be made by Indemnitor in its reasonable
judgment, taking into account the reasonable requests and interests of the
Acquiror.
(c) Acquiror shall not make payment of any claim for at least ten
(10) days after giving written notice of such claim to Indemnitor if such
forbearance is permitted by law. If the conduct of the contest requires
Acquiror to pay the tax claimed and file or xxx for a refund, Indemnitor
shall advance to such Acquiror, on an interest-free basis, sufficient
funds to pay the tax and any interest, penalties and additions to tax
payable with respect thereto (to the extent such amount is subject to
Indemnitor's indemnity obligations hereunder). Acquiror shall as promptly
as practicable use such funds to pay such tax, interest, penalties or
additions to tax, as the case may be.
(d) If Acquiror receives any settlement offer from the Internal
Revenue Service or similar notice from a Tax authority of a state, local,
or foreign government with respect to a claim for which Acquiror seeks
indemnity from Indemnitor, such Acquiror shall promptly inform Indemnitor
of the receipt of such settlement offer. If Indemnitor recommends
acceptance of such settlement offer, but Acquiror declines to accept such
offer in writing within thirty (30) days: (i) the obligation of Indemnitor
to make indemnity payments under this Agreement as the result of any such
contest or proceedings shall not exceed the obligation that it would have
had if such contest had been settled or proceeding terminated on such date
on the basis of the settlement offer the
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acceptance of which was recommended by Indemnitor; and (ii) Indemnitor
shall have no further liability for costs or other expenses in respect of
such contest. Acquiror shall not settle any claim without Indemnitor's
consent; provided, however, that Acquiror shall not be required to contest
any proposed adjustment and may settle any such proposed adjustment if (i)
Acquiror shall waive its right to indemnity with respect to such
adjustment and shall refund to Indemnitor any amount previously paid or
advanced by Indemnitor with respect to such adjustment or the contest of
such adjustment.
(e) If Indemnitor shall have duly complied with all the terms of
this Section 6, Indemnitor's liability for indemnification, if any, under
Section 3(a), shall be deferred (subject to the provisions of Section 6(c)
hereof) until a Final Determination of the liability of such Acquiror. At
such time, Indemnitor shall become obligated for the payment of any
indemnification hereunder resulting from the outcome of such contest, and
Acquiror shall become obligated to refund to Indemnitor any amount
received as a refund by Acquiror or credited to Acquiror attributable to
advances by Indemnitor hereunder. Within thirty (30) days following such
Final Determination, any amounts due hereunder shall be paid first by set
off against each other and either (i) Indemnitor shall pay to Acquiror any
excess of the full amount due hereunder over the amount of any advances
previously made by Indemnitor and applied against Indemnitor's indemnity
obligation as aforesaid or (ii) Acquiror shall repay to Indemnitor any
excess of such advances over such full amount due hereunder, together with
the portion of any interest received by such Acquiror that is properly
attributable to such excess amount of such advances during the period such
advances were outstanding, and, if Indemnitor shall have indemnified such
Acquiror with respect to the adverse tax consequences of any advances or
payments hereunder, the amount of tax savings, if any, resulting from any
payment pursuant to this sentence.
Section 7. Cooperation. Acquiror agrees to consider in good faith
any action (including filing claims for refund and amended Tax Returns) which it
is reasonably requested to take by Indemnitor that would minimize the net amount
of any indemnity payment due from Indemnitor hereunder.
Section 8. Treatment of Payments. The parties hereto shall, for all
tax and financial accounting purposes, to the extent permitted by law, treat the
assumption and payment of liabilities hereunder by Indemnitor as a distribution
by Indemnitor to the Company occurring prior to the Closing, and, accordingly,
as not includible in the taxable income of Acquiror. Correspondingly, the
parties hereto shall, for all tax and financial accounting purposes, to the
extent permitted by law, treat any payment hereunder from Acquiror to Indemnitor
as a capital contribution by the Company to Indemnitor occurring prior to the
Closing, and, accordingly, as not includible in the taxable income of
Indemnitor.
Section 9. Elections. So long as the Company and the Company
Subsidiaries remain incorporated as corporations under applicable law, the
Acquiror will not elect to treat Company or its wholly-owned direct or indirect
corporate subsidiaries as anything other than a qualified REIT subsidiary
pursuant to Section 856(i) of the Code. Notwithstanding the preceding sentence,
the Acquiror may, after Closing, cause the Company and one or more of the
Company Subsidiaries to convert from corporations into limited liability
companies pursuant to
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state law. To such extent, the Company and any such Company Subsidiaries that
are wholly-owned, directly or indirectly, by Company, shall thereafter be
treated as disregarded entities for Federal income Tax purposes and, to the
extent permitted thereby, for purposes of applicable state, local and foreign
Taxes. Acquiror may also transfer ownership of such disregarded entities to an
entity controlled by the Acquiror that is classified as a partnership or as a
disregarded subsidiary of Acquiror for Federal income Tax purposes. The parties
hereto shall treat the Tax year of the Company, and, to the extent permitted by
law, of any Company Subsidiaries, as ending on the Closing Date for Federal
income Tax purposes and, to the extent permitted by law, for all state, local
and foreign Tax purposes, and shall take no position inconsistent therewith.
Section 10. Notices. All notices, demands, declarations, consents,
directions, approvals, instructions, requests and other communications required
or permitted by the terms of this Agreement shall be given in the same manner as
in the Purchase Agreement.
Section 11. Miscellaneous.
(a) Except as otherwise provided herein, the terms and conditions of
this Agreement shall be binding upon and inure solely to the benefit of
the parties hereto and their respective successors and assigns, and
nothing in this Agreement, express or implied, is intended to confer upon
any party other than the parties hereto or their respective successors and
assigns any rights or remedies of any nature whatsoever under or by reason
of this Agreement.
(b) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO ANY CONFLICTS OF LAW PRINCIPLES OF SUCH STATE THAT MIGHT
REFER THE GOVERNANCE, CONSTRUCTION OR INTERPRETATION OF THIS AGREEMENTS TO
THE LAWS OF ANOTHER JURISDICTION. EACH OF SELLER, INDEMNITOR AND ACQUIROR
AGREES IRREVOCABLY AND UNCONDITIONALLY TO:
(i) submit for itself and its property in any Action relating
to this Agreement, or for recognition and enforcement of any judgment in
respect thereof, to the exclusive jurisdiction of the Courts of the State
of New York sitting in the County of New York, the court of the United
States of America for the Southern District of New York, and appellate
courts having jurisdiction of appeals from any of the foregoing, and
agrees that all claims in respect of any such Action shall be heard and
determined in such New York State court or, to the extent permitted by
law, in such federal court;
(ii) consent that any such Action may and shall be brought in
such courts and waives any objection that it may now or hereafter have to
the venue or jurisdiction of any such Action in any such court or that
such Action was brought in an inconvenient court and agrees not to plead
or claim the same;
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(iii) waive all right to trial by jury in any Action (whether
based on contract, tort or otherwise) arising out of or relating to any of
this Agreement, or its performance under or the enforcement of this
Agreement;
(iv) agree that service of process in any such Action may be
effected by mailing a copy of such process by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to such
party at its address as provided in Section 10; and
(v) agree that nothing in this Agreement shall affect the
right to effect service of process in any other manner permitted by the
Laws of the State of New York.
(c) This Agreement may be executed in two or more counterparts, each
of which shall be deemed to be an original, but all of which shall
constitute one and the same agreement.
(d) When a reference is made in this Agreement to Sections, such
reference shall be to a Section of this Agreement, unless otherwise
indicated. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include," "includes"
or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation."
(e) Except as described in Sections 3, 5 and 6 above, each party
shall pay all costs and expenses that it incurs with respect to the
negotiation, execution, delivery and performance of this Agreement. If any
action at law or in equity is necessary to enforce or interpret the terms
of this Agreement, the prevailing party shall be entitled to reasonable
attorneys' fees, costs and necessary disbursements in addition to any
other relief to which such party may be entitled.
(f) Any term of this Agreement may be amended, and the observance of
any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with
the written consent of Acquiror and Indemnitor.
Section 12. Term. Except as otherwise provided herein, with respect
to indemnification under Section 3(a) for Taxes, the term of this Agreement
shall extend from the date hereof until such time as the applicable statute of
limitations (including any extensions thereof) bars a claim by the Internal
Revenue Service or relevant foreign, state or local Tax authority for a Tax
otherwise indemnifiable under this Agreement.
Section 13. Termination. This Agreement shall automatically
terminate upon the termination of the Purchase Agreement in accordance with its
terms. In the event of the termination of this Agreement pursuant to this
Section 13, except as expressly provided in the Purchase Agreement, no party
hereto shall have any liability to any other party with respect to this
Agreement or the transactions contemplated hereby and this Agreement shall be of
no further force or effect.
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Section 14. Release. Acquiror, Indemnitor and their respective
existing and future Affiliates (collectively, the "Releasing Parties") do hereby
absolutely release and discharge Seller and its existing and future Affiliates
and Representatives (collectively, the "Releasees") from any and all claims,
actions, causes of action, suits, debts, dues, sums of money, accounts,
reckonings, bonds, bills, covenants, contracts, controversies, agreements,
demands, costs and judgments of whatsoever kind or nature, whether known or
unknown, absolute or contingent, direct or indirect at law or in equity, which
any of the Releasing Parties ever had or now has or have or hereafter can, shall
or may have, for, upon or by reason of any matter, cause or thing whatsoever to
the extent arising from, in connection with, related to or as a result of (a)
the Purchase Agreement and the transactions contemplated thereby and the
consummation thereof, relating to any period from the beginning of the world to
the end of time, regardless of when brought, (b) the Transaction Agreements and
the transactions contemplated thereby and the consummation thereof, relating to
any period from the beginning of the world to the end of time, regardless of
when brought, (c) the Private Placement and the transactions contemplated
thereby and the consummation thereof, relating to any period from the beginning
of the world to the end of time, regardless of when brought and (d) any action
or inaction of any of the Releasees relating to or associated with the
transactions contemplated by the Purchase Agreement, the Transaction Agreements
and the Private Placement, the transactions contemplated thereby and the
consummation thereof, relating to any period from the beginning of the world to
the end of time, regardless of when brought, except, in each case, for the
obligations of Seller under Section 2.06(b) of the Purchase Agreement (subject
to Sections 7.05 and 7.06 thereof) and Sections 5.04(a) and 7.06 of the Purchase
Agreement.
Section 15. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced under any Law or as
a matter of public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated by this Agreement is not
affected in any manner materially adverse to any party. Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the parties to this Agreement shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the transactions
contemplated by this Agreement be consummated as originally contemplated to the
greatest extent possible.
Section 16. Entire Agreement. Except as otherwise provided in this
Agreement, or as otherwise expressly agreed in writing by the parties, this
Agreement and the other Transaction Documents constitute the entire agreement
and supersede all other prior or contemporaneous oral or written agreements and
understandings among the parties, or any of them, with respect to the subject
matter hereof, and there are no warranties, representations or other agreements,
express or implied, made to any party by any other party in connection with the
subject matter hereof or thereof except as specifically set forth herein or
therein or in the documents delivered pursuant hereto or in connection herewith.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
FORTRESS BROOKDALE ACQUISITION LLC
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: Secretary
BLC SENIOR HOLDINGS, INC.
By: /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
Title: Chairman, Chief Executive Officer
PROVIDENT SENIOR LIVING TRUST
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
----------------------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
Title: Chief Executive Officer
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