FACILITY FRANCHISE AGREEMENT
AMONG
LYRIC HEALTH CARE LLC,
[INSERT SUBSIDIARY]
AND
INTEGRATED HEALTH SERVICES FRANCHISING CO., INC.
DATED AS OF JUNE 23, 1998
FACILITY FRANCHISE AGREEMENT
THIS FACILITY FRANCHISE AGREEMENT (this "Agreement") made as of June 23,
1998 among LYRIC HEALTH CARE LLC, having an office at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Lyric"); [INSERT SUBSIDIARY],
having an office at [Insert Address] ("Franchisee"); and INTEGRATED HEALTH
SERVICES FRANCHISING CO., INC., having an office at ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Franchisor").
INTRODUCTORY STATEMENT
Pursuant to a Master Lease, dated as of the date hereof, between Monarch
Properties, LP, as lessor, and Lyric Health Care Holdings III, Inc.
("Holdings"), as lessee, and a Facility Sublease, dated as of the date hereof,
between Holdings, as sublessor, and Franchisee, as sublessee, Franchisee is the
sublessee and operator of a health care facility named [Insert Facility Name]
located at [Insert Facility Address], together with the equipment, furnishings,
and other tangible personal property to be used in connection therewith (the
"Facility"). Franchisee is wholly owned, directly or indirectly, by Lyric.
Lyric and Franchisor have entered into an Amended and Restated Master
Franchise Agreement, dated as of the date hereof (the "Master Franchise
Agreement") franchising the use of the "Trade Names" and the "Proprietary
Materials" (including the "IHS Systems") as defined therein. Franchisee desires
to obtain all the rights and benefits which are granted to "Franchisees" under
the Master Franchise Agreement; and Franchisor and Lyric are willing to accord
such rights and benefits to Franchisee, upon the terms and conditions set forth
below.
NOW, THEREFORE, in consideration of their mutual promises, and intending to
be legally bound hereby, the parties agree as follows:
ARTICLE 1. DEFINITIONS
1.1 Words and phrases defined in the Master Franchise Agreement shall have
the same meanings in this Agreement, unless otherwise defined herein.
1.2 In this Agreement:
(a) "Included Provisions" means all provisions of the Master Franchise
Agreement except the Excluded Provisions.
(b) "Excluded Provisions" means the following Sections and/or Articles
of the Master Franchise Agreement: Section 2.1(b); Section 5.1; Section
12.2; Section 12.3; Section 12.4; Article 15; Section 16.2; Article 23; and
Article 29.
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(c) "Territory" means the area within a fifteen-mile radius of the
Facility.
1.
Other words and phrases are defined in this Agreement.
ARTICLE 2. GRANT OF FRANCHISE
2.1 Franchisor hereby grants to Franchisee, but only with respect to the
Facility described in the Introductory Statement and the Territory described in
Section 1.2(c) above, all rights and benefits granted to Lyric or a "Franchisee"
under the Master Franchise Agreement, except for any rights of Lyric under the
Excluded Provisions.
2.2 Franchisee accepts the foregoing grant and hereby assumes and agrees to
keep, observe, and perform, but only with respect to the Facility described in
the Introductory Statement and the Territory described in Section 1.2(c) above,
all obligations and responsibilities of a "Franchisee" and/or Lyric under the
Master Franchise Agreement, except for any obligations of Lyric under the
Excluded Provisions.
2.3 In furtherance (and not in limitation) of the foregoing, the Included
Provisions are incorporated by reference in this Agreement. References to
"Lyric" in the Included Provisions shall be deemed to include "Franchisee."
ARTICLE 3. ANNUAL FEE
3.1 Franchisee shall pay to Lyric an"Annual Fee" equal to one percent (1%)
of Franchisee's annual Gross Revenues. Franchisee's Annual Fee shall be paid in
installments, and otherwise upon the same terms and conditions, as Lyric's
Annual Continuing Fee under the Master Franchise Agreement; and references to
the "Annual Continuing Fee" in the Included Provisions shall be deemed to mean
the Annual Fee under this Agreement.
ARTICLE 4. TERMINATION
4.1 This Agreement may be terminated by Franchisor--even if the Master
Franchise Agreement does not terminate--upon the occurrence of a default or
other failure by Franchisee under Article 17 of the Included Provisions.
Termination of this Agreement shall not per se terminate the Master Franchise
Agreement (although such termination may otherwise result from, or allow,
termination of the Master Franchise Agreement according to its terms).
Franchisee may not terminate this Agreement prior to the expiration of its term
(whether because of Franchisor's breach, material or otherwise) except with the
prior written consent of Franchisor.
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ARTICLE 5. REPRESENTATIONS AND WARRANTIES
5.1 Representations and Warranties of Franchisee. Franchisee represents and
warrants to Franchisor that:
(a) Franchisee is a corporation duly organized, validly existing and
in good standing under the laws of the State of [Insert];
(b) Franchisee's execution and delivery of this Agreement, and
Franchisee's performance of its obligations under this Agreement, have been
duly authorized by all necessary corporate action;
(c) this Agreement is the legal, valid, and binding obligation of
Franchisee, enforceable in accordance with its terms; and
(d) Franchisee has reviewed carefully and acknowledges and accepts
Article 28 of the Included Provisions.
ARTICLE 6. NOTICES
6.1 Any notice or other communication by either party to the other shall be
in writing and shall be given and be deemed to have been duly given, upon the
date delivered if delivered personally (including by commercial express service)
or upon the date received if mailed postage pre-paid, registered, express, or
certified mail, addressed as follows:
To Franchisee: [Insert Subsidiary]
▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Copy to: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
To Lyric: Lyric Health Care LLC
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Copy to: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
To Franchisor: Integrated Health Services Franchising Co., Inc.
▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Copy to: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
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ARTICLE 7. ASSIGNMENT
7.1 Assignment by Franchisee. Franchisee shall have no right to assign this
Agreement. Franchisee's interest in this Agreement may be assigned only as part
of an assignment of the interest of Lyric and all Franchisees in the Master
Franchise Agreement and all Facility Franchise Agreements pursuant to Section
16.2 of the Master Franchise Agreement.
7.2 Assignment by Franchisor. Franchisor shall have the same assignment
rights with respect to this Agreement as it does with respect to the Master
Franchise Agreement.
ARTICLE 8. WAIVER OF COVENANT NOT TO COMPETE POST-TERM
8.1 In the event that Franchisor fails to extend the term of this
Agreement, Franchisor shall be deemed to have waived section 13.2 of the Master
Franchise Agreement concerning the covenant of Lyric and Franchisee not to
compete post-term unless Franchisor provides notice to Franchisee at least six
(6) months prior to the expiration date of this Agreement that section 13.2 of
the Master Franchise Agreement is not waived.
SIGNATURE PAGE FOLLOWS
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Facility Franchise Agreement as of the day and year first above written.
FRANCHISEE: FRANCHISOR:
[INSERT SUBSIDIARY] INTEGRATED HEALTH
SERVICES FRANCHISING CO., INC.
By: By:
--------------------------- ---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------- -------------------------
Title: Senior Vice President Title: Senior Vice President
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LYRIC:
LYRIC HEALTH CARE LLC
By: Integrated Health Services, Inc.
Its: Member
By:
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Senior Vice President
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CONSENTED TO BY:
LYRIC HEALTH CARE HOLDINGS III, INC.
By:
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Senior Vice President
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