EXHIBIT 10.78
INDEMNITY AGREEMENT
BETWEEN
INTEGRATED HEALTH SERVICES, INC.
AND
MONARCH PROPERTIES, LP
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") between
INTEGRATED HEALTH SERVICES, INC., a Delaware corporation ("IHS") and MONARCH
PROPERTIES, LP, a Delaware limited partnership ("Monarch").
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 entities described on EXHIBIT A hereto (each a
"Seller" and, collectively, "Sellers"), IHS and 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 Health Care Holdings III, Inc. ("Lyric Holdings") and Monarch.
B. Lyric Holdings is a wholly owned subsidiary of Lyric Health Care LLC.
Sellers are corporations that are wholly owned by Lyric Holdings. IHS is a 50%
member of Lyric Health Care LLC. Sellers also are the respective owners of
Sellers' Assets. Sellers desire to sell, and Purchaser desires to acquire and
lease to Lyric Holdings, Sellers' Assets. The purchase and lease of Seller's
Assets will benefit IHS.
C. As a condition precedent to its agreement to purchase Sellers' Assets,
Monarch has required that IHS indemnify Monarch on the terms and conditions
hereinafter set forth with respect to certain environmental matters.
NOW, THEREFORE, IHS and Monarch agree as follows:
1. INDEMNIFICATION. IHS shall indemnify and hold Monarch 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, arising out of or in any manner related to the claims of third
parties resulting from:
(a) Any failure of Sellers and Lyric Holdings to complete as and when
required to do so by the terms of the Escrow Agreement the environmental
remediation described on Exhibit B thereof; and
(b) Any failure of Sellers and Lyric Holdings to complete if, as and
when required to do so by the terms of the Master Lease, such environmental
remediation as may be required by Article 18 thereof.
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2. PROCEDURE. If Monarch asserts that IHS is subject to a claim for
indemnification hereunder, Monarch shall describe the claim in sufficient 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 Monarch. Monarch may also employ counsel of its own,
but the costs of Monarch's separate counsel shall be borne by Monarch as long as
IHS continues to so defend. If IHS fails to respond or does not admit
responsibility for indemnification, Monarch may take such necessary steps to
defend itself 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 Monarch
describing the claim in reasonable detail, IHS shall notify Monarch 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 Monarch
declines to accept a bona fide offer of settlement that is recommended by the
IHS, which settlement without cost to Monarch releases Monarch 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 Monarch, 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 Monarch or a full and complete
release of Monarch.
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
Copy to: Xxxxxxxx X. Xxxxxx, Esq.
Telephone No.: 410/000-0000
Facsimile No.: 410/998-8695
To Monarch: Monarch Properties, LP
0000 Xxxxxxx Xxx Xxxxxxxxx - Xxxxx 000
Xxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxx
Telephone No.: 941/000-0000
Facsimile No.: 941/596-3266
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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
------------------------
MONARCH PROPERTIES, LP
By: MP Operating, LLC, its General Partner
By: MP Operating, Inc., its Manager
By: (Seal)
---------------------------
Name: Xxxxxxx Xxxxxxx
-------------------------
Title: Chief Financial Officer
------------------------
S-1
EXHIBIT A
SELLERS
-------
-----------------------------------------------------------------------------------------------------------------------
SELLER NAME 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
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
SELLER NAME 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
-----------------------------------------------------------------------------------------------------------------------
