ESCROW AGREEMENT
AMONG
THE ENTITIES DESCRIBED ON ATTACHED EXHIBIT A,
LYRIC HEALTH CARE HOLDINGS III, 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 the entities described
on attached EXHIBIT A (each a "Seller" and, collectively, "Sellers"), LYRIC
HEALTH CARE HOLDINGS III, INC., a Delaware corporation ("Lyric Holdings"),
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 Sellers and leased
to Lyric Holdings various health care facilities ("Facilities") pursuant to a
Master Lease of even date herewith ("Master Lease"). Lyric Holdings has
concurrently subleased the Facilities to Sellers pursuant to various Facility
Subleases of even date herewith.
B. A condition of Purchaser's acquisition of the Facilities is the
agreement of Sellers and Lyric Holdings to complete certain repairs and
improvements to the Facilities after the closing, and the payment to Escrow
Agent by Sellers of a portion of the Purchase Price to be held by Escrow Agent
and paid to Lyric Holdings or other payees designated by Lyric Holdings upon
completion of such repairs and improvements or paid to Purchaser in the event of
the failure of Sellers and Lyric Holdings 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 Master Lease.
NOW, THEREFORE, Sellers, Lyric Holdings and Purchaser agree as follows:
1. ESCROW DEPOSIT. Escrow Agent acknowledges the receipt of [Insert Amount]
($__________) and agrees to hold and deliver such sum according to the terms and
conditions hereinafter set forth.
2. CAPITAL EXPENDITURES. Sellers and Lyric Holdings jointly and severally
agree that, within three hundred and sixty-five (365) days from the date of this
Agreement, they 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.
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3. INSPECTION BY PURCHASER. Sellers and Lyric Holdings shall (i) 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 Section 4 hereof with
respect to such disbursement, and (b) 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. Lyric Holdings 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 Lyric Holdings' written request, Escrow Agent shall disburse to Lyric
Holdings or to such payees as may be designated by Lyric Holdings in its request
for disbursement, out of the funds held in escrow, the out-of-pocket costs and
expenses incurred by Lyric Holdings or any one or more of the Sellers 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
[Fifty Thousand Dollars ($50,000)], 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 [Ten Thousand Dollars ($10,000)];
(C) The request for disbursement is accompanied by:
(i) a certificate of Lyric Holdings, executed by an officer of
Lyric Holdings, certifying that a portion of the work set
forth on EXHIBIT B hereto 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 Lyric Holdings in the
certificate described in
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subsection (i) 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.
(D) Overhead incurred by Lyric Holdings or any Affiliate of Lyric
Holdings shall not be deemed to be a cost or expense incurred by
Lyric Holdings or any one or more of the Sellers 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 Lyric Holdings and be paid to
Lyric Holdings in accordance with its instructions to Escrow Agent. Lyric
Holdings Federal Tax Identification Number is [Insert].
7. DISPUTES. In the event of any dispute between 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 shall reimburse itself for any reasonable expenses from the Escrow
Account, 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 Lyric Holdings, Sellers and Escrow Agent written notice of
such failure, and in the event such work is not completed within twenty (20)
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 Lyric Holdings, 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
Master Lease,
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entitling Purchaser to the remedies provided in the Master Lease 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 or hand delivery to the following
address:
To Sellers and Lyric Holdings:
Lyric Health Care LLC
00000 Xxx Xxx Xxxxxxxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx and
Xxxxxxxx X. Xxxxxx, Esq.
Telephone No.: 410/000-0000
Facsimile No.: 410/998-8695
To Purchaser: Monarch Properties, LP
0000 Xxxxxxx Xxx Xxxxxxxxx
Xxxxxx, Xxxxxxx 00000
Attn: Xxxx X. Xxxxx
Telephone No.: 941/000-0000
Facsimile No.: 941/566-6082
With copy to LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P.
(which shall not 000 Xxxx 00xx Xxxxxx
constitute notice): Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxx X. Xxxxxx, Xx.
Telephone No.: 212/000-0000
Facsimile No.: 212/424-8500
To Escrow Agent: Fidelity National Title Insurance Company
of New York
0 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxxxx
Telephone No.: 212/000-0000
Facsimile No.: 212/481-8747
Notices shall be deemed given upon actual receipt.
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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 PAGES FOLLOW
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IN WITNESS WHEREOF, the parties hereby execute this Escrow Agreement as of
the day and year first set forth therein.
SELLERS:
[INSERT EACH SELLER]
By:
-----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
LYRIC:
LYRIC HEALTH CARE LLC
By: Integrated Health Services, Inc.
Its: Managing Director
By:
-----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
LYRIC HOLDINGS:
LYRIC HEALTH CARE HOLDINGS III, INC.
By:
-----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
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PURCHASER:
MONARCH PROPERTIES, LP
By: MP Operating, Inc.
Its: General Partner
By:
-----------------------------------------
Name: Xxxx X. Xxxxx
Title: President and Chief Executive
Officer
ESCROW AGENT:
FIDELITY NATIONAL TITLE INSURANCE
COMPANY OF NEW YORK
By:
-----------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Senior Vice President
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