Exhibit 10.3
FORM OF
ADMINISTRATIVE SERVICES AGREEMENT
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THIS ADMINISTRATIVE SERVICES AGREEMENT ("Agreement") is made and entered
into as of the _____ day of __________, 1996, by and between ATRIA COMMUNITIES,
INC., a Delaware corporation ("Atria"), and VENCOR, INC., a Delaware corporation
("Vencor").
RECITALS:
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A. Atria is a newly-formed corporation formed for the purpose of acquiring
substantially all of the assisted and independent living communities of Vencor
(the "Communities").
B. The parties will convey the Communities to Atria in connection with an
initial public offering of shares of Atria's common stock (the "Common Stock").
C. Atria desires to receive certain services from Vencor to smooth the
transition of Atria from being a wholly-owned subsidiary of Vencor to being a
separate company.
D. The parties desire to enter into this Agreement to set forth their
understanding with respect to such services which shall be provided by Vencor to
Atria in exchange for cash.
AGREEMENT:
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NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto hereby agree as follows:
1. Services. Vencor shall provide those services set forth in Exhibit 1 to
this Agreement to Atria. Atria and Vencor may agree to increase or decrease the
number of additional services, if necessary; provided, that, such arrangement is
made in writing and executed by both Atria and Vencor. The amount of time that
Atria will receive for each such services from Vencor is set forth in Exhibit 1
as full-time equivalents ("FTEs"). If Atria needs more than the amount of FTE's
set forth in Exhibit 1, Atria and Vencor will negotiate in good faith a
modification to this Agreement. Notwithstanding the provisions of this Section,
Vencor shall not be required to make available any such services to the extent
that doing so would unreasonably interfere with the performance by any employee
of such employee's duties for such employee's employer or otherwise cause
unreasonable burden to such employee's employer.
2. Payments. Atria shall pay $54,577.08 to Vencor for each month of
services to be rendered in the next month by Vencor to Atria on the first of
each month. For any
period for which such services would be provided to Atria on less than a full-
month basis, Atria shall pay the appropriate pro rata amount to Vencor.
3. Representations and Warranties.
a. Vencor hereby represents to Atria with respect to itself that:
(1) it is a corporation duly organized and validly existing;
(2) it has the full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby;
(3) this Agreement constitutes a valid and legally binding
obligation, enforceable with its terms.
b. Atria hereby represents and warrants to Vencor as follows:
(1) Atria is a corporation duly organized and validly existing;
(2) Atria has the full corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby;
(3) this Agreement constitutes a valid and legally binding
obligation of Atria, enforceable in accordance with its terms.
4. Term. The Term of this Agreement shall be for one year from the date of
this Agreement; provided, however, that Atria shall have the right to terminate
this Agreement upon thirty (30) days' written notice to Vencor at any time.
Thirty (30) days prior to the expiration of this Agreement, Atria may give
written notice to Vencor that this Agreement shall be extended for an additional
one year period; provided, however, that, Atria or Vencor may give sixty (60)
days' written notice to the other terminating this Agreement at any time during
such second year period of this Agreement.
5. Miscellaneous.
a. This Agreement may be modified or amended from time to time only by
a written instrument executed by the parties hereto.
b. Captions contained in this Agreement are inserted only as a matter
of convenience and reference, and in no way define, limit, extend or describe
the scope of this Agreement, or the intent of any provision hereof. All
references to sections herein shall refer to sections of this Agreement unless
the context clearly requires otherwise.
c. This Agreement shall be binding upon, and inure to the benefit of,
the parties hereto and their respective successors and assigns.
d. This Agreement shall be governed by, and construed in accordance
with, the laws of the Commonwealth of Kentucky, without regard to its conflicts
of law rule.
e. This Agreement embodies the entire understanding between the
parties hereto with respect to subject matters covered hereby and supersedes any
prior agreement or understanding between the parties with respect to such
matters.
f. This Agreement may be executed in multiple counterpart copies, each
of which shall be considered an original and all of which shall constitute one
and the same instrument.
g. This Agreement is not assignable.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first above written.
ATRIA COMMUNITIES, INC.
A Delaware Corporation
By: __________________________________
Title: _______________________________
VENCOR, INC.
A Delaware Corporation
By: ___________________________________
Title: ________________________________
EXHIBIT 1
SERVICES TO BE PROVIDED BY VENCOR TO ATRIA
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Full Time Avg. Comp.
Services Equivalents and Benefits 1996 Estimate
- -------- ----------- ------------- -------------
Staff Accounting 2.00 $48,000 $ 96,000
Accounts Payable 0.50 30,000 15,000
Payroll 0.25 30,000 7,500
H/R and Benefits 0.50 60,000 30,000
Risk Management/Insurance 0.25 84,000 21,000
Tax 1.00 78,000 78,000
Legal 0.50 96,000 48,000
SEC Reporting 0.25 84,000 21,000
Treasury Support 0.50 84,000 42,000
Market Planning 1.25 60,000 75,000
MIS Personnel 0.50 72,000 36,000
Other:
MIS System 100,000
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Total before overhead
and Profit 5.00 $ 4,400 $569,500
Overhead and Profit (@15%) 85,425
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Total Cost 7.50 $62,600 $654,925
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