Exhibit 10.61

 

HAZARDOUS MATERIALS INDEMNITY AGREEMENT

 

THIS HAZARDOUS MATERIALS INDEMNITY AGREEMENT (the "Agreement") is made as of
March 21, 2014, by BR CARROLL LANSBROOK, LLC, a Delaware limited liability
company ("Borrower"), for the benefit of GENERAL ELECTRIC CAPITAL CORPORATION, a
Delaware corporation ("Lender").

 

RECITALS

 

A. Pursuant to that certain Loan Agreement of even date herewith between
Borrower and Lender (the "Loan Agreement"), Lender is making a loan to Borrower
in the original principal amount of $48,000,000.00 (the "Loan").

 

B.             The Loan is secured in part by Borrower's interest in and to the
"Project" (the "Project") as such term is defined in the Loan Agreement.

 

C.             Lender has required, as a condition of funding the Loan, that
Borrower indemnify and hold Lender harmless against and from certain obligations
for which Lender may incur liability, whether as beneficiary under that certain
Amended and Restated Mortgage, Assignment of Rents and Leases, Security
Agreement and Fixture Filing of even date herewith (the "Mortgage"), as
mortgagee in possession or by foreclosure, by reason of the threat or presence
of any Hazardous Materials (as hereinafter defined) at or near the Project.

 

NOW, THEREFORE, in consideration of the premises, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Borrower, intending to be legally bound, hereby agrees as follows:

 

1.             Recitals. The foregoing recitals are incorporated into this
Agreement by this reference.

 

2.             Definitions. As used herein, the following terms have the
meanings indicated:

 

"Environmental Laws" means any federal, state or local law (whether imposed by
statute, ordinance, rule, regulation, administrative or judicial order, or
common law), now or hereafter enacted, governing health, safety, industrial
hygiene, the environment or natural resources, or Hazardous Materials,
including, without limitation, such laws governing or regulating (a) the use,
generation, storage, removal, recovery, treatment, handling, transport,
disposal, control, release, discharge of, or exposure to, Hazardous Materials,
(b) the transfer of property upon a negative declaration or other approval of a
governmental authority of the environmental condition of such property, or (c)
requiring notification or disclosure of releases of Hazardous Materials or other
environmental conditions whether or not in connection with a transfer of title
to or interest in property.

 

 

 

 

"Hazardous Materials" means (a) petroleum or chemical products, whether in
liquid, solid, or gaseous form, or any fraction or by-product thereof, (b)
asbestos or asbestos-containing materials, (c) polychlorinated biphenyls (pcbs),
(d) radon gas, (e) underground storage tanks, (f) any explosive or radioactive
substances, (g) lead or lead-based paint, or (h) any other substance, material,
waste or mixture (i) which is or shall be listed, defined, or otherwise
determined by any governmental authority to be hazardous, toxic, dangerous or
otherwise regulated, controlled or giving rise to liability under any
Environmental Laws, (ii) the presence of which on, under or about the Project
requires reporting, investigation or remediation under Environmental Laws, (iii)
which causes or threatens to cause a nuisance on the Project or any adjacent
property, or (iv) which, were it to emanate or migrate from the Project, could
constitute a trespass. Notwithstanding anything to the contrary contained
herein, the term "Hazardous Materials" will not include substances which
otherwise would be included in such definition but which are of kinds and in
amounts ordinarily and customarily used or stored in similar properties
including, without limitation, substances used for the purposes of cleaning,
maintenance or operations, substances typically used in construction and typical
products used in properties like the Project and which are otherwise in
compliance with all applicable Environmental Laws. Furthermore, the term
"Hazardous Materials" will not include substances which otherwise would be
included in such definition but which are of kinds and in amounts ordinarily and
customarily held by and used by residential tenants in compliance with all
applicable Environmental Laws.

 

"Initial Site Assessment" means that certain Phase I Environmental Assessment
dated January 17, 2014, prepared by Blackstone Consulting.

 

"Site Assessment" means the Initial Site Assessment and each subsequent
environmental engineering report for the Project prepared in a manner
satisfactory to Lender by an engineer engaged or approved by Lender, based upon
an investigation relating to and making appropriate inquiries concerning the
existence of Hazardous Materials on or about the Project, and the past or
present discharge, disposal, release or escape of any such substances, all
consistent with ASTM Standard E1527-05 (or any successor thereto published by
ASTM) or ASTM Standard E1903-97 (2002) (or any successor thereto published by
ASTM), as applicable, and other good customary and commercial practice.

 

Other capitalized terms used in this Agreement and not defined shall have the
meanings assigned to such terms in the Loan Agreement.

 

3.             Representations and Warranties. Borrower represents and warrants
to Lender that, to Borrower's knowledge, except as set forth in the Site
Assessment, (1) no Hazardous Material is now or was formerly used, stored,
generated, manufactured, installed, disposed of or otherwise present at or about
the Project or any property adjacent to the Project, (2) all permits, licenses,
approvals and filings required by Environmental Laws with respect to the Project
have been obtained, and the use, operation and condition of the Project do not,
and did not previously, violate any Environmental Laws, (3) no civil, criminal
or administrative action, suit, claim, hearing, investigation or proceeding has
been brought or been threatened, nor have any settlements been reached by or
with any parties or any Liens imposed in connection with the Project concerning
Hazardous Materials or Environmental Laws, (4) no underground storage tanks
exist at the Project, and (5) Borrower has delivered to Lender copies of all
written reports, notices and other documentation in its possession relating to
the environmental condition of the Project.

 

 

 

 

4.             Covenants.

 

4.1           Borrower shall (a) comply with applicable Environmental Laws; (b)
notify Lender promptly upon Borrower's discovery of any spill, discharge,
release or presence of any Hazardous Material at, upon, under, within,
contiguous to or otherwise affecting the Project; (c) to the extent required by
the applicable governmental authority, promptly remove such Hazardous Materials
and remediate the Project in full compliance with Environmental Laws and in
accordance with the recommendations and specifications of an independent
environmental consultant reasonably approved by Lender; and (d) promptly forward
to Lender copies of all orders, notices, permits, applications or other
communications and reports in connection with any spill, discharge, release or
the presence of any Hazardous Material or any other matters relating to the
application of Environmental Laws to the Project or Borrower.

 

4.2           Borrower shall not cause, shall prohibit any other Person within
the control of Borrower from causing, and shall use prudent, commercially
reasonable efforts to prohibit other Persons (including tenants) from causing
(a) any spill, discharge or release, or the use, storage, generation,
manufacture, installation, or disposal, of any Hazardous Materials at, upon,
under, within or about the Project or the transportation of any Hazardous
Materials to or from the Project, (b) any underground storage tanks to be
installed at the Project, or (c) any activity that requires a permit or other
authorization under Environmental Laws to be conducted at the Project.

 

4.3           Borrower shall provide to Lender, at Borrower's cost and expense,
promptly upon the written request of Lender from time to time, a Site Assessment
or, if required by Lender, an update to any existing Site Assessment, to assess
the presence or absence on the Project of any Hazardous Materials and the
potential costs in connection with abatement, cleanup or removal of any
Hazardous Materials found on, under, at or within the Project. Lender may
request only one such Site Assessment or update per year, unless each additional
Site Assessment or update requested by Lender is based on either (a) information
provided under Section 4.1, (b) a reasonable suspicion of Hazardous Materials
located on or constituting a threat to the Project, (c) a breach of
representations under Section 3, or (d) a continuing Event of Default under the
Loan Documents.

 

 

 

 

5.             Allocation of Risks and Indemnity.

 

5.1           As between Borrower and Lender, all risk of loss associated with
non-compliance with Environmental Laws, or with the presence of any Hazardous
Material at, upon, within, contiguous to or otherwise affecting the Project,
shall lie solely with Borrower. Accordingly, Borrower shall bear all risks and
costs associated with any loss (including any loss in value attributable to
Hazardous Materials), damage or liability therefrom, including all costs of
removal of Hazardous Materials or other remediation required by law.
Notwithstanding any limitations contained in Section 13.16 of the Loan Agreement
with respect to consequential damages, Borrower shall at all times indemnify,
defend and hold Lender harmless from and against any and all claims, suits,
actions, debts, damages, losses, liabilities, litigations, judgments, charges,
costs and expenses (including reasonable costs of defense), of any nature
whatsoever proffered or incurred by Lender, whether as mortgagee or beneficiary
under the Mortgage, as mortgagee in possession, or as successor-in-interest to
Borrower by foreclosure deed or deed in lieu of foreclosure, and whether based
in contract, tort, implied or express warranty, strict liability, criminal or
civil statute or common law, including those arising from the joint, concurrent
or comparative negligence of Lender, under or on account of the Environmental
Laws, including the assertion of any lien thereunder, with respect to: (a) a
breach of any representation, warranty or covenant of Borrower contained in this
Agreement; (b) any acts performed by Lender pursuant to the provisions of this
Agreement; (c) any discharge of Hazardous Materials, the threat of discharge of
any Hazardous Materials or the storage or presence of any Hazardous Materials
affecting the Project whether or not the same originates or emanates from the
Project or any contiguous real estate, including any loss of value of the
Project as a result of the foregoing; (d) any costs of removal or remedial
action incurred by the United States Government or any costs incurred by any
other Person or damages from injury to, destruction of, or loss of natural
resources including reasonable costs of assessing such injury, destruction or
loss incurred pursuant to any Environmental Laws; (e) liability for personal
injury or property damage arising under any statutory or common law tort theory,
including without limitation damages assessed for the maintenance of a public or
private nuisance or for the carrying on of an abnormally dangerous activity at,
upon, under or within the Project; and/or (f) any other environmental matter
affecting the Project within the jurisdiction of the Environmental Protection
Agency, any other federal agency or any state or local environmental agency. The
foregoing notwithstanding, Borrower shall not be liable under the foregoing
indemnification to the extent any such loss, liability, damage, claim, cost or
expense results solely from Lender's gross negligence or willful misconduct.
Borrower's obligations under this Agreement shall arise upon the discovery of
the presence of any Hazardous Material, whether or not the Environmental
Protection Agency, any other federal agency or any state or local environmental
agency has taken or threatened any action in connection with the presence of any
Hazardous Materials and whether or not the existence of any such Hazardous
Material or potential liability on account thereof is disclosed in the Site
Assessment, and shall continue notwithstanding the repayment of the Loan or any
transfer or sale of any right, title and interest in the Project (by
foreclosure, deed in lieu of foreclosure or otherwise). Notwithstanding the
foregoing, subject to the conditions specified below in this Section 5.1,
Borrower shall not be liable under this Section 5.1 for such indemnified matters
directly created or arising from (x) events or conditions caused or created by
Lender or (y) Hazardous Materials first existing after Lender acquires title to
the Project by foreclosure or acceptance of a deed in lieu thereof, but only if
(i) Borrower delivers to Lender, not more than ninety (90) days and not less
than thirty (30) days prior to the date Lender acquires title to the Project, a
current Site Assessment evidencing (A) the presence of no Hazardous Materials on
the Project other than those Hazardous Materials identified in the Initial Site
Assessment or in any subsequent Site Assessment previously delivered to Lender
pursuant to Section 2.3(3)(g) or at Lender's request and approved by Lender
(provided that as to any Hazardous Materials reflected in the Initial Site
Assessment or subsequent Site Assessment, none shall have spread or worsened in
any manner or otherwise impaired or adversely affected the Project) and (B) no
violation of any Environmental Laws with respect to the Project, and (ii) such
loss, liability, damage, claim, cost or expense does not directly or indirectly
arise from or relate to any release of or exposure to any Hazardous Material
(including personal injury or damage to property), non-compliance with any
Environmental Laws, or remediation existing or occurring prior to the date
Lender acquires title to the Project.

 

 

 

 

5.2           If (a) any discharge of Hazardous Materials or the threat of a
discharge of Hazardous Material affecting the Project occurs, whether
originating or emanating from the Project or any contiguous real estate, and/or
(b) Borrower fails to comply with any Environmental Laws or related regulations,
Lender may at its election, but without the obligation so to do, give such
notices and/or to the extent required by the applicable governmental authority
or Environmental Law, cause such work to be performed at the Project and/or take
any and all other actions as Lender shall reasonably deem necessary or advisable
in order to abate the discharge of any Hazardous Material, remove the Hazardous
Material or cure Borrower's noncompliance.

 

5.3           Borrower acknowledges that Lender has agreed to make the Loan in
reliance upon Borrower's representations, warranties and covenants in this
Agreement. For this reason, it is the intention of Borrower and Lender that the
provisions of this Agreement shall supersede any provisions in the other Loan
Documents which in any way limit the personal liability of Borrower, including
but not limited to those contained in Article 12 of the Loan Agreement, and that
Borrower shall be personally liable for any and all obligations arising under
this Agreement even if the amount of liability incurred exceeds the amount of
the Loan. All of the representations, warranties, covenants and indemnities of
this Agreement shall survive the repayment of the Loan and/or the release of the
lien of the Mortgage from the Project, and shall survive the transfer of any or
all right, title and interest in and to the Project by Borrower to any party,
whether or not affiliated with Borrower. Borrower hereby acknowledges and agrees
that, notwithstanding anything contained in any of the other Loan Documents to
the contrary, (a) this Agreement and the obligations of Borrower under this
Agreement shall not be secured by the Mortgage, or any other mortgages, deeds of
trust or other security documents from time to time securing any obligations of
Borrower in connection with the Loan; and (b) Borrower shall have no obligation
or liability under any of the other Loan Documents for any obligation or
liability of Borrower under this Agreement. Borrower acknowledges that Lender's
assessment of the value of the Project is such that Lender would not make the
Loan but for the personal liability undertaken by Borrower for the obligations
under this Agreement.

 

5.4           Notwithstanding any provision in this Agreement or elsewhere in
the Loan Documents, Lender does not waive and expressly reserves all rights and
benefits now or hereafter accruing to Lender under any "security interest" or
"secured creditor" exception under applicable Environmental Laws, as the same
may be amended. No action taken by Lender pursuant to the Loan Documents shall
be deemed or construed to be a waiver or relinquishment of any such rights or
benefits under any "security interest exception".

 

6.             Attorneys' Fees.       In the event that either party brings an
action or proceeding against the other to enforce or interpret any term or
condition hereof, the party prevailing in such action or proceeding shall be
entitled to receive from the party not prevailing its reasonable attorneys'
fees, costs and expenses of suit actually incurred.

 

 

 

 

7.             Interest. In the event that Lender incurs any obligations, costs
or expenses under this Agreement, Borrower shall pay Lender immediately on
demand, and if such payment is not received within ten (10) days, interest on
such amount shall, after the expiration of the ten (10) day period, accrue at
the Default Rate until such amount, plus interest, is paid in full.

 

8.             Notices. All notices which Borrower or Lender may be required or
permitted to give under this Agreement shall be made in the same manner as is
set forth in Section 13.1 of the Loan Agreement, the provisions of which section
are incorporated herein by this reference.

 

9.             Waivers. No course of dealing on the part of Lender, its
officers, employees, consultants or agents, nor any failure or delay by Lender
with respect to exercising any right, power or privilege of Lender hereunder,
shall operate as a waiver thereof.

 

10.           Severabilitv. If any provision of this Agreement is held to be
illegal, invalid or unenforceable, such provision shall be fully severable; this
Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part hereof; the remaining
provisions hereof shall remain in full effect and shall not be affected by the
illegal, invalid, or unenforceable provision or by its severance herefrom; and
in lieu of such illegal, invalid or unenforceable provision there shall be added
automatically as a part of this Agreement a provision as similar in terms to
such illegal, invalid or unenforceable provision as may be possible to be legal,
valid and enforceable.

 

11.           Inconsistencies Among the Loan Documents. Nothing contained herein
is intended to modify in any way the obligations of Borrower under the Loan
Agreement, the Mortgage or any other Loan Document. If any conflict or
inconsistency exists between this Agreement and any of the other Loan Documents,
the terms of this Agreement shall control.

 

12.           Successors and Assigns. This Agreement shall be binding upon
Borrower's successors, assigns, heirs, personal representatives and estate and
shall inure to the benefit of Lender and its successors and assigns.

 

13.           Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall constitute an original, but all of which shall
constitute one document.

 

14.           Governing Law. The validity, construction, enforcement,
interpretation and performance of this Agreement, and the obligations arising
hereunder, and any claim, controversy or dispute arising under or related
hereto, the transactions contemplated hereby or the rights, duties and
relationship of the parties hereto, shall be governed by, and construed in
accordance with, the laws of the State of Florida applicable to contracts made
and performed in such State, without regard to the principles thereof regarding
conflict of laws, and any applicable laws of the United States of America.

 

 

 

 

15.           WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY LAW,
BORROWER AND LENDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE
RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTION OF EITHER PARTY OR
ANY EXERCISE BY ANY PARTY OF THEIR RESPECTIVE RIGHTS HEREUNDER OR IN ANY WAY
RELATING TO THE LOAN OR THE PROJECT (INCLUDING, WITHOUT LIMITATION, ANY ACTION
TO RESCIND OR CANCEL THIS AGREEMENT, AND ANY CLAIM OR DEFENSE ASSERTING THAT
THIS AGREEMENT WAS FRAUDULENTLY INDUCED OR IS OTHERWISE VOID OR VOIDABLE). THIS
WAIVER IS A MATERIAL INDUCEMENT FOR LENDER TO MAKE THE LOAN.

 

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IN WITNESS WHEREOF, Borrower has executed this Hazardous Materials Indemnity
Agreement as of the date first above written.

 

  BORROWER:       BR CARROLL LANSBROOK, LLC, a Delaware limited liability
company         By: /s/ Jordan Ruddy   Name: Jordan Ruddy   Title: Chief
Operating Officer

 

Signature Page to Hazardous Materials Indemnity Agreement