ESCROW AGREEMENT
AMONG
PEAK MEDICAL OF IDAHO, INC.,
MONARCH PROPERTIES, LP
AND
FIDELITY NATIONAL TITLE
INSURANCE COMPANY OF NEW YORK
DATED AS OF JUNE 23, 1998
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is executed and delivered as of
the 23rd day of June, 1998 (the "Effective Date") among PEAK MEDICAL OF IDAHO,
INC., a Delaware corporation ("Lessee"), MONARCH PROPERTIES, LP, a Delaware
limited partnership ("Purchaser") and FIDELITY NATIONAL TITLE INSURANCE COMPANY
OF NEW YORK ("Escrow Agent").
The circumstances underlying the execution and delivery of this Agreement
are as follows:
A. Concurrently herewith, Purchaser has purchased from IHS Acquisition No.
104, Inc. ("IHS No. 104") and IHS Acquisition No. 105, Inc. ("IHS No. 105") (IHS
No. 104 and IHS No. 105, collectively, "Sellers"), subject to two (2) Leases,
each dated as of June 1, 1998, from Sellers to Lessee (collectively, the
"Leases"), two (2) health care facilities (the "Facilities") listed on attached
EXHIBIT A.
B. A condition of Purchaser's acquisition of the Facilities is the
agreement of Lessee to complete certain repairs and improvements to the
Facilities after the effective date of Purchaser's acquisition and the payment
to Escrow Agent by Lessee of a certain amount to be held by Escrow Agent and
paid to Lessee or other payees designated by Lessee upon completion of such
repairs and improvements or paid to Purchaser in the event of the failure of
Lessee to complete such repairs and improvements, all in accordance with the
terms and conditions set forth below.
C. Capitalized words not defined herein shall have the definitions given
them in the Leases.
NOW, THEREFORE, Lessee, Purchaser and Escrow Agent agree as follows:
1. ESCROW DEPOSIT. Escrow Agent acknowledges the receipt of Twenty-Five
Thousand Seven Hundred Twenty-Five Dollars ($25,725.00) and agrees to hold and
deliver such sum according to the terms and conditions hereinafter set forth.
2. CAPITAL EXPENDITURES. Lessee agrees that, within three hundred and
sixty-five (365) days from the date of this Agreement, that Lessee will complete
the capital repair and improvement activities described under the heading
"Action Required" and set forth opposite the name of the applicable Facility on
attached EXHIBIT B.
3. INSPECTION BY PURCHASER. Lessee shall (a) give Purchaser at least ten
(10) business days' prior written notice of any request for a disbursement of
escrowed funds, which notice shall include a copy of the certificate to be
delivered to Escrow Agent as required by
1
Section 4 hereof with respect to such disbursement, and (b) and Lessee shall
give Purchaser's representative or representatives access to the Leased Property
at reasonable times, upon one business day's prior notice, for the purpose of
inspecting the capital repair and improvement work.
4. REQUESTS FOR DISBURSEMENT OF ESCROWED FUNDS. Lessee shall present each
request for disbursement of escrowed funds to Purchaser in writing for its
approval, which shall not unreasonably be withheld or delayed. Each request
shall meet the requirements of Paragraph 5, below.
5. DISBURSEMENT OF ESCROWED FUNDS. Within two (2) business days following
receipt of Lessee's written request, Escrow Agent shall disburse to Lessee or to
such payees as may be designated by Lessee in its request for disbursement, out
of the funds held in escrow, the out-of-pocket costs and expenses incurred by
Lessee in connection with the performance by it of its obligations under
Paragraph 2 (the "Capital Expenditures"), upon presentation of a request for
disbursement, provided:
(A) No more than one (1) request for disbursement is submitted in any
calendar month;
(B) The total monthly request for disbursement is not less than Ten
Thousand Dollars ($10,000), except for the final request for
disbursement which shall be in the amount of the undisbursed
balance of escrowed funds, and the requested disbursement
per-payee is not less than Two Thousand Dollars ($2,000);
(C) The request for disbursement is accompanied by:
(i) a certificate of Lessee executed by an officer of Lessee,
certifying that a portion of the work set forth on EXHIBIT B
has been completed, describing such portion of the work in
detail, and stating that the disbursement is sought for
costs and expenses incurred in completing such work;
(ii) either (x) evidence of the written approval of such
disbursement by Purchaser or (y) if Escrow Agent has not
received a Notice from Purchaser disapproving the proposed
disbursement, a statement of Lessee in the certificate
described in subsection (iii)(a), above to the effect that
notice of the request for disbursement, including a copy of
such certificate, was sent to Purchaser at least ten (10)
business days prior to the submission of the request.
2
(D) Overhead incurred by Lessee or any Affiliate of Lessee shall not
be deemed to be a cost or expense incurred by Lessee in
connection with the performance by it of its obligations under
Paragraph 2.
6. INVESTMENT OF ESCROWED FUNDS. Escrow Agent shall invest the funds held
in escrow by it in a separate money market account at Chase Manhattan Bank.
Interest earned on such funds shall belong to Lessee and be paid to Lessee in
accordance with its instructions to Escrow Agent. Lessee's Federal Tax
Identification Number is 00-0000000.
7. DISPUTES. In the event of any dispute among the parties hereto as to the
disposition of any funds held in escrow that is not resolved within ninety (90)
days after notice to the parties from Escrow Agent, Escrow Agent is hereby
authorized to deposit such funds with any court of competent jurisdiction and
commence an interpleader action naming the other parties hereto as defendants
with respect thereto, and upon such deposit Escrow Agent shall be relieved of
any further liability hereunder.
8. LIMITATION OF LIABILITY OF ESCROW AGENT. Escrow Agent shall have no
liability hereunder, except for damages, if any, resulting from Escrow Agent's
negligence or willful misconduct; it being understood that by its acceptance of
this escrow agency, Escrow Agent is acting in the capacity of a depositary and
is not as such responsible or liable for the sufficiency, correctness,
genuineness and/or receipt of instruments, documents or notices deposited and/or
received under this Escrow Agreement. Upon notice to the other parties hereto,
Escrow Agent may reimburse itself for any reasonable expenses, including
attorneys fees, which Escrow Agent may incur as a result of any legal
proceedings affecting this Escrow Agreement and/or the Escrow Agent's duties as
depository hereunder.
9. FAILURE TO COMPLETE WORK. In the event the work described on EXHIBIT B
has not been completed on or before the date specified in Section 2 hereof,
Purchaser may give Lessee and Escrow Agent written notice of such failure, and
in the event such work is not completed within fifteen (15) business days after
such notice, Purchaser (a) shall have the right to cause its employees, agents
and contractors to enter upon the Leased Property and complete such work at the
expense of Lessee, and to demand and receive any funds then remaining in escrow
to be applied towards reimbursement or payment for such expense, or (b) to
declare such failure to be an Event of Default under the Leases, entitling
Purchaser to the remedies provided in the Leases and by law, including, among
such remedies, the right to demand and receive any then undisbursed funds in
escrow.
10. NOTICES. Any notice, request or other communication to be given by any
party hereunder shall be in writing and shall be sent by registered or certified
mail, postage prepaid, by overnight delivery, hand delivery or facsimile
transmission to the following address:
3
To Lessee: Peak Medical of Idaho, Inc.
0000 Xxxxxxxxx Xxxxxxxxx, X.X.
Xxxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Copy to: Xxxx Xxxxxx, Esq.
Telephone No.: 000-000-0000
Fax No.: 000-000-0000
To Purchaser: Monarch Properties, LP
0000 Xxxxxxx Xxx Xxxxxxxxx - Xxxxx 000
Xxxxxx, Xxxxxxx 00000
Attn: Xxxx X. Xxxxx
Telephone No.: 000-000-0000
Fax No.: 000-000-0000
With copy to: LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxx X. Xxxxxx, Xx.
Telephone No.: 000-000-0000
Fax No.: 000-000-0000
To Escrow Agent: Fidelity National Title Insurance Company
of New York
0 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxxxx
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
Notices shall be deemed given upon actual receipt.
11. CHOICE OF LAW; SEVERABILITY. This Agreement shall be construed in each
and every respect in accordance with the laws of the State of New York. If any
provision in this Agreement is in conflict with such laws, or is otherwise
unenforceable for any reason whatsoever, such provision shall be deemed null and
void to the extent of such conflict or unenforceability, and it shall be severed
from and shall not invalidate any other provision of this Agreement
SIGNATURE PAGE FOLLOWS
4
IN WITNESS WHEREOF, the parties hereby execute this Escrow Agreement as of
the day and year first set forth therein.
PEAK MEDICAL OF IDAHO, INC.
By:
Name: Xxxxxxx X. Xxxxxxxx
Title: President
MONARCH PROPERTIES, LP
By: MP Operating, Inc., as General Partner
By:
Name: Xxxx X. Xxxxx
Title: President and Chief Executive Officer
FIDELITY NATIONAL TITLE INSURANCE
COMPANY OF NEW YORK
By:
Name: Xxxxxx Xxxxxxxx
Title: Senior Vice President
5
