EXHIBIT 10.79
INDEMNITY AGREEMENT
AMONG
INTEGRATED HEALTH SERVICES, INC.,
LYRIC HEALTH CARE LLC,
LYRIC HEALTH CARE HOLDINGS III, INC.
AND
THE ENTITIES LISTED ON ATTACHED EXHIBIT A
DATED AS OF DECEMBER 31, 1998
INDEMNITY AGREEMENT
THIS INDEMNITY AGREEMENT (this "Indemnity Agreement") is executed and
delivered as of the 31st day of December, 1998 (the "Effective Date") among
INTEGRATED HEALTH SERVICES, INC., a Delaware corporation ("IHS"), LYRIC HEALTH
CARE LLC, a Delaware limited liability company ("Lyric LLC"), LYRIC HEALTH CARE
HOLDINGS III, INC., a Delaware corporation ("Lyric III") and each of the
entities described on attached Exhibit A (collectively, the "Lyric Entities,"
together with Lyric LLC and Lyric III, collectively, the "Lyric Indemnified
Parties").
The circumstances underlying the execution and delivery of this Agreement
are as follows:
A. Capitalized terms used but not otherwise defined herein have the
respective meanings given them in the Facilities Purchase Agreement, dated as of
the date hereof, among the Lyric Entities, IHS and Monarch Properties, LP, a
Delaware limited partnership ("Monarch") (the "Purchase Agreement"), or, if not
defined in the Purchase Agreement, then the respective meanings given them in
the Master Lease, dated as of the date hereof, between Lyric III and Monarch.
B. Lyric III is a wholly owned subsidiary of Lyric LLC. The Lyric Entities
are corporations and a partnership that are wholly owned by Lyric III. IHS is a
50% member of Lyric LLC. The Lyric Entities also are the respective owners of
Sellers' Assets. Sellers sold and Monarch acquired and leased to Lyric III,
Sellers' Assets. The sale and lease of Seller's Assets will benefit IHS.
C. As a condition precedent to its agreement to sell the Sellers' Assets,
the Lyric Indemnified Parties have required that IHS indemnify the Lyric
Indemnified parties on the terms and conditions hereinafter set forth with
respect to litigation matters.
NOW, THEREFORE, IHS and the Lyric Indemnified Parties agree as follows:
1. INDEMNIFICATION. IHS shall indemnify and hold the Lyric Indemnified
Parties harmless from and against any and all damages, losses, liabilities,
costs, actions, suits, proceedings, demands, assessments, and judgments,
including, but not limited to, reasonable and documented attorneys' fees and
reasonable costs and expenses of litigation ("Claims"), arising out of or in any
manner related to any and all Claims that relate to any litigation, arbitration
proceeding, governmental investigation, citation, suit, action, proceeding or
claim of any kind relating to matters occurring prior to the Effective Date,
including, but not limited to, the matters disclosed on Schedule 7.5 to the
Purchase Agreement, involving IHS, any of the Lyric Indemnified Parties or any
of the Facilities.
2. PROCEDURE. If the Lyric Indemnified Parties assert that IHS is subject
to a claim for indemnification hereunder, the Lyric Indemnified Parties shall
describe the claim in sufficient
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detail in order to permit IHS to evaluate the nature and cause of the claim. If
the asserted claim arises or is in connection with a claim, suit, or demand
filed by a third party, IHS shall be entitled to defend against such claim with
counsel reasonably satisfactory to the Lyric Indemnified Parties. The Lyric
Indemnified Parties may also employ counsel of their own, but the costs of the
Lyric Indemnified Parties' separate counsel shall be borne by the Lyric
Indemnified Parties as long as IHS continues to so defend. If IHS fails to
respond or does not admit responsibility for indemnification, the Lyric
Indemnified Parties may take such necessary steps to defend themselves and any
reasonable costs associated therewith may be included as part of the asserted
claim for indemnification. If the claims do not arise from a third party, within
thirty (30) days of receipt of written notice from the Lyric Indemnified Parties
describing the claim in reasonable detail, IHS shall notify the Lyric
Indemnified Parties as to whether or not it believes such claim is covered by
this Indemnity Agreement, and if IHS believes such claim is not covered,
including the specific reasons for its position. With respect to claims by third
parties, (a) if the Lyric Indemnified Parties decline to accept a bona fide
offer of settlement that is recommended by the IHS, which settlement without
cost to the Lyric Indemnified Parties releases the Lyric Indemnified Parties
from all liability, the maximum liability of IHS shall not exceed that amount
for which it would have been liable had such settlement been accepted, and (b)
if IHS declines to accept a bona fide offer of settlement recommended by the
Lyric Indemnified Parties, IHS shall be liable for whatever outcome results from
such third party claim; provided, however, that IHS shall not settle any claim
covered by this Indemnity Agreement without either the written consent of the
Lyric Indemnified Parties or a full and complete release of the Lyric
Indemnified Parties.
3. 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 or hand delivery to the following
address:
To IHS: Integrated Health Services, Inc.
00000 Xxx Xxx Xxxxxxxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Telephone No.: 410/000-0000
Facsimile No.: 410/998-8695
To the Lyric Lyric Health Care LLC
Indemnified Parties: 00000 Xxx Xxx Xxxxxxxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Telephone No.: 410/000-0000
Facsimile No.: 410/998-8695
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With copy to Xxxx X. Xxxxxx, Xx., Esq.
(which shall not LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P.
constitute notice): 000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telephone No.: 212/000-0000
Facsimile No.: 212/424-8500
Notices shall be deemed given upon actual receipt.
4. CHOICE OF LAW. This Indemnity Agreement shall be governed by and
construed in accordance with the laws of New York, except as to matters which
under the laws of the State, or under applicable procedural conflicts of laws
rules, require the application of laws of the States in which the Leased
Property is located.
IHS CONSENTS TO IN PERSONAM JURISDICTION BEFORE THE STATE AND FEDERAL
COURTS OF THE STATES OF NEW YORK AND THE STATES IN WHICH THE LEASED PROPERTY IS
LOCATED, AND AGREES THAT ALL DISPUTES CONCERNING THIS INDEMNITY AGREEMENT BE
HEARD IN THE STATE AND FEDERAL COURTS LOCATED IN THE STATE OF NEW YORK OR THE
STATES IN WHICH THE LEASED PROPERTY IS LOCATED. IHS AGREES THAT SERVICE OF
PROCESS MAY BE EFFECTED UPON IT UNDER ANY METHOD PERMISSIBLE UNDER THE LAWS OF
THE STATE OF NEW YORK OR THE STATES IN WHICH THE LEASED PROPERTY IS LOCATED AND
IRREVOCABLY WAIVES ANY OBJECTION TO VENUE IN THE STATE AND FEDERAL COURTS OF THE
STATE OF NEW YORK OR THE STATES IN WHICH THE LEASED PROPERTY IS LOCATED.
SIGNATURE PAGE FOLLOWS
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IN WITNESS WHEREOF, the parties hereby execute this Indemnity Agreement as
of the day and year first set forth above.
INTEGRATED HEALTH SERVICES, INC.
By: (Seal)
-----------------------------
Name: Xxxxxx X. Xxxxx
---------------------------
Title: Senior Vice President
--------------------------
LYRIC HEALTH CARE LLC
By: Integrated Health Services, Inc., its Member
By: (Seal)
-----------------------------
Name: Xxxxxx X. Xxxxx
---------------------------
Title: Senior Vice President
--------------------------
LYRIC HEALTH CARE HOLDINGS, III, INC.
By: (Seal)
-----------------------------
Name: Xxxxxx X. Xxxxx
---------------------------
Title: Senior Vice President
--------------------------
BETHAMY LIVING CENTER
MANAGEMENT COMPANY, THE GENERAL
PARTNER OF BETHAMY LIVING CENTER
LIMITED PARTNERSHIP
BRIAR HILL, INC.
CEDARCROFT HEALTH SERVICES, INC.
IHS ACQUISITION NO. 103, INC.
IHS ACQUISITION NO. 114, INC.
IHS ACQUISITION NO. 121, INC.
IHS ACQUISITION NO. 124, INC.
IHS ACQUISITION NO. 125, INC.
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IHS ACQUISITION NO. 127, INC.
IHS ACQUISITION NO. 128, INC.
IHS ACQUISITION NO. 129, INC.
IHS ACQUISITION NO. 131, INC.
IHS ACQUISITION NO. 132, INC.
IHS ACQUISITION NO. 133, INC.
IHS ACQUISITION NO. 134, INC.
IHS ACQUISITION NO. 136, INC.
IHS ACQUISITION NO. 138, INC.
IHS ACQUISITION NO. 139, INC.
IHS ACQUISITION NO. 140, INC.
IHS ACQUISITION NO. 168, INC.
IHS ACQUISITION NO. 170, INC.
IHS ACQUISITION NO. 171, INC.
IHS ACQUISITION NO. 174, INC.
INTEGRATED OF AMARILLO, INC.
INTEGRATED HEALTH SERVICES AT
BRIARCLIFF HAVEN, INC.
INTEGRATED HEALTH SERVICES AT
CENTRAL FLORIDA, INC.
INTEGRATED HEALTH SERVICES AT
COLORADO SPRINGS, INC.
INTEGRATED HEALTH SERVICES AT
HANOVER HOUSE, INC.
MANCHESTER INTEGRATED HEALTH,
INC.
REST HAVEN NURSING CENTER
(WHITEMARSH), INC.
By: (Seal)
-----------------------------
Name: Xxxxxx X. Xxxxx
---------------------------
Title: Senior Vice President
--------------------------
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EXHIBIT A
LYRIC ENTITIES
--------------
-----------------------------------------------------------------------------------------------------------------------
LYRIC ENTITY STATE OF INCORPORATION FACILITY D/B/A/
-----------------------------------------------------------------------------------------------------------------------
Integrated Health Services at Delaware Integrated Health Services of Colorado
Colorado Springs, Inc. Springs
-----------------------------------------------------------------------------------------------------------------------
IHS Acquisition No. 103, Inc. Delaware Horizon Healthcare & Specialty Center
-----------------------------------------------------------------------------------------------------------------------
Integrated Health Services at Central Delaware Integrated Health Services of Vero
Florida, Inc. Beach
-----------------------------------------------------------------------------------------------------------------------
Briar Hill, Inc. Florida Integrated Health Services of Florida at
Auburndale
-----------------------------------------------------------------------------------------------------------------------
Bethamy Living Center Limited Florida Integrated Health Services of Florida at
Partnership Clearwater
-----------------------------------------------------------------------------------------------------------------------
Integrated Health Services at Central Delaware Integrated Health Services of Florida at
Florida, Inc. Fort Xxxxxx
-----------------------------------------------------------------------------------------------------------------------
Integrated Health Services at Georgia Integrated Health Services of Atlanta at
Briarcliff Haven, Inc. Briarcliff Haven
-----------------------------------------------------------------------------------------------------------------------
IHS Acquisition No. 114, Inc. Delaware Xxxxxxx Xxxxx
-----------------------------------------------------------------------------------------------------------------------
Cedarcroft Health Services, Inc. Pennsylvania Integrated Health Services of St. Louis
at Big Bend Xxxxx
-----------------------------------------------------------------------------------------------------------------------
Manchester Integrated Health, Inc. Pennsylvania Integrated Health Services of New
Hampshire at Manchester
-----------------------------------------------------------------------------------------------------------------------
IHS Acquisition No. 121, Inc. Delaware Ruidoso Care Center
-----------------------------------------------------------------------------------------------------------------------
IHS Acquisition No. 125, Inc. Delaware Meadowview Care Center
-----------------------------------------------------------------------------------------------------------------------
IHS Acquisition No. 124, Inc. Delaware Washington Square
-----------------------------------------------------------------------------------------------------------------------
IHS Acquisition Xx. 000, Xxx. Xxxxxxxx XXX - Xxxxxxx Xxxx
-----------------------------------------------------------------------------------------------------------------------
IHS Acquisition No. 127, Inc. Delaware Midwest City Nursing
-----------------------------------------------------------------------------------------------------------------------
Rest Haven Nursing Center Pennsylvania Integrated Health Services at
(Whitemarsh), Inc. Whitemarsh
-----------------------------------------------------------------------------------------------------------------------
Integrated of Amarillo, Inc. Texas Amarillo Specialty Hospital
-----------------------------------------------------------------------------------------------------------------------
Integrated of Amarillo, Inc. Texas Integrated Health Services of Amarillo
-----------------------------------------------------------------------------------------------------------------------
IHS Acquisition No. 128, Inc. Delaware Doctors Healthcare Center
-----------------------------------------------------------------------------------------------------------------------
IHS Acquisition No. 140, Inc. Delaware Harbor View Care Center
-----------------------------------------------------------------------------------------------------------------------
IHS Acquisition Xx. 000, Xxx. Xxxxxxxx Xxxxxxxx Xxxxxxx
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
LYRIC ENTITY STATE OF INCORPORATION FACILITY D/B/A/
-----------------------------------------------------------------------------------------------------------------------
IHS Acquisition No. 132, Inc. Delaware Heritage Gardens
-----------------------------------------------------------------------------------------------------------------------
IHS Acquisition No. 138, Inc. Delaware Heritage Manor Longview
-----------------------------------------------------------------------------------------------------------------------
IHS Acquisition No. 129, Inc. Delaware Heritage Manor Plano
-----------------------------------------------------------------------------------------------------------------------
IHS Acquisition No. 133, Inc. Delaware Heritage Place of Grand Prairie
-----------------------------------------------------------------------------------------------------------------------
IHS Acquisition No. 131, Inc. Delaware Horizon Healthcare - El Paso
-----------------------------------------------------------------------------------------------------------------------
IHS Acquisition No. 170, Inc. Delaware HSH- Corpus Christi
-----------------------------------------------------------------------------------------------------------------------
IHS Acquisition No. 171, Inc. Delaware HSH- El Paso
-----------------------------------------------------------------------------------------------------------------------
Integrated Health Services at Delaware Mountain View Place
Hanover House, Inc.
-----------------------------------------------------------------------------------------------------------------------
IHS Acquisition No. 139, Inc. Delaware Parkwood Place
-----------------------------------------------------------------------------------------------------------------------
IHS Acquisition No. 174, Inc. Delaware Plano Specialty Hospital
-----------------------------------------------------------------------------------------------------------------------
IHS Acquisition No. 136, Inc. Delaware Silver Springs Nursing and
Rehabilitation Center
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