EXHIBIT 10.3
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 based on the fair market value of the services
provided by Vencor to Atria.
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 add 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. The services to be provided in accordance with this
Agreement are based on past utilization of such services and if such usage
during the term of this Agreement materially change, the parties to this
Agreement will make appropriate modifications to this Agreement.
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 after
the first year 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. Neither Atria nor Vencor shall have any obligation to refer any
resident or patients, as the case may be, of either of them or any
other person to Atria or Vencor for the provision of any
service or item of any kind. Atria and Vencor hereby acknowledge
that the
compensation for services provided for in this Agreement
are set in advance, are consistent with the fair market value in
arms-length commercial transactions and are not determined in a
manner that takes into account in any way any volume or value of
referrals or business generated between the parties.
c. If Vencor or Atria shall determine upon advice of counsel that
the continuation of this Agreement will likely be deemed to be a
violation of any applicable federal or state law regarding fraud
and abuse, referral prohibitions, or any similar matter, either
party upon receiving such advice of counsel may at any time give
the other party written notice of such advice and if, after
consultation, the parties have not determined to their reasonable
satisfaction that no such violation exists and the parties have
not amended this Agreement to remove that risk to the other
party's reasonable satisfaction, then either party may terminate
this Agreement effective as of the date sixty (60) days after its
initial written notice to the other party.
d. 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.
e. This Agreement shall be binding upon, and inure to the benefit
of, the parties hereto and their respective successors and
assigns.
f. 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.
g. 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.
h. 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:
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Title:
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VENCOR, INC.
A Delaware Corporation
By:
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Title:
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EXHIBIT 1
Services To Be Provided By Vencor To Atria
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Full Time Avg. Comp. Cost of
Services Equivalents and Benefits Services
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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
MIS System 100,000
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Total before overhead and Profit $569,500
Overhead and Profit (@15%) 85,425
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Total Cost $654,925
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