EXHIBIT 10.10
TRANSITION SERVICES AGREEMENT
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THIS TRANSITION SERVICES AGREEMENT (this "Agreement") is made and
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entered into as of the 30/th/ day of April, 1998, by and between Vencor, Inc., a
Delaware corporation ("Vencor"), and Vencor Healthcare, Inc., a Delaware
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corporation ("Healthcare Company").
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RECITALS
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WHEREAS, Vencor and Healthcare Company are parties to an Agreement and
Plan of Reorganization, dated as of the date hereof (the "Reorganization
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Agreement"), which provides for certain reorganization transactions (the
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"Reorganization Transactions"), including but not limited to, certain internal
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mergers and stock and asset transfers that (a) allocate the assets and
liabilities relating to substantially all of the Vencor-owned land, buildings
and other improvements and real estate related assets (the "Real Estate
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Business") to Vencor, which will change its name to "Ventas, Inc." immediately
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prior to the Distribution (as defined herein), and (b) allocate the other assets
and liabilities relating to the historical operations of Vencor (the "Healthcare
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Business") to Healthcare Company, which will change its name to "Vencor, Inc."
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immediately prior to the Distribution;
WHEREAS, Vencor and Healthcare Company are parties to a Distribution
Agreement, dated as of the date hereof (the "Distribution Agreement"), which
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provides for the distribution (the "Distribution") by Vencor to the holders of
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common stock, par value $.25 per share, of Vencor ("Vencor Common Stock") of
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all the outstanding shares of common stock, par value $.25 per share, of
Healthcare Company ("Healthcare Company Common Stock") on the basis of one share
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of Healthcare Company Common Stock for every share of Vencor Common Stock;
WHEREAS, pursuant to the Reorganization Agreement substantially all of
the assets and employees that provided certain administrative and support
services to Vencor prior to the Distribution will be transferred to Healthcare
Company in connection with the Reorganization Transactions; and
WHEREAS, Vencor desires to receive from Healthcare Company and the
Healthcare Company subsidiaries following the Reorganziation Transactions and
the Distribution (collectively, the "Healthcare Company Group"), and Healthcare
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Company has agreed to cause the Healthcare Company Group to provide to Vencor,
for a transitional period of time following the Reorganization Transactions and
the Distribution such administrative and support services on the terms set forth
in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings contained herein, and subject to and on the terms and conditions
herein set forth, the parties hereto agree as follows:
Section 1. Services. Healthcare Company shall cause the Healthcare
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Company Group to provide those administrative and support services set forth in
Exhibit 1 to this Agreement (the "Services") to Vencor or any subsidiary of
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Vencor (including any limited partnerships) designated by Vencor to receive such
Services. Additional administrative and support services may be provided to
Vencor by the Healthcare Company Group if such arrangement is agreed to in
writing and executed by both Vencor and Healthcare Company on behalf of the
Healthcare Company Group. The Healthcare Company Group will provide each
Service to Vencor for the full-time equivalents ("FTEs") per month set forth in
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Exhibit 1. If Vencor requests additional FTEs per month for any Service, Vencor
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and Healthcare Company will negotiate in good faith a modification to this
Agreement with respect to the provision of additional FTEs for such Service.
Section 2. Payments. Vencor shall pay $200,000 (the "Monthly Fee") to
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Healthcare Company on or prior to the first day of each month as payment for the
Services to be rendered by the Healthcare Company Group to Vencor during such
month. For any period for which Services are to be provided by the Healthcare
Company Group to Vencor on less than a full-month basis, Vencor shall pay
Healthcare Company the pro rata amount of the Monthly Fee equal to such portion
of the month for which Services are to be provided.
Section 3. Representations and Warranties.
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(a) Healthcare Company hereby represents and warrants to Vencor that:
(1) Healthcare Company is a corporation duly organized and
validly existing and in good standing under the laws of its
jurisdiction of incorporation;
(2) Healthcare Company has the requisite corporate power and
authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby; and
(3) this Agreement constitutes a valid and legally binding
obligation of Healthcare Company, enforceable in accordance
with its terms, subject to bankruptcy, insolvency,
reorganization and similar laws of general
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applicability relating to or affecting creditors' rights and
to general equity principles.
(b) Vencor hereby represents and warrants to Healthcare Company that:
(1) Vencor is a corporation duly organized and validly existing
and in good standing under the laws of its jurisdiction of
incorporation;
(2) Vencor has the requisite corporate power and authority to
execute and deliver this Agreement and to consummate the
transactions contemplated hereby; and
(3) this Agreement constitutes a valid and legally binding
obligation of Vencor, enforceable in accordance with its
terms, subject to bankruptcy, insolvency, reorganization and
similar laws of general applicability relating to or
affecting creditors' rights and to general equity
principles.
Section 4. Limitation of Liability. No member of the Healthcare
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Company Group, nor any officer, director, employee or agent of any member of the
Healthcare Company Group (each, a "Representative"), shall be liable to Vencor
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for any error of judgment or for any Loss (as defined herein) incurred by Vencor
in connection with the matters to which this Agreement relates, except for
Losses resulting from the willful misconduct or fraud on the part of the
Healthcare Company Group or any of its Representatives.
Section 5. Indemnity. Vencor shall indemnify and hold harmless the
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Healthcare Company Group and all of its Representatives from and against any and
all losses, liabilities, claims, damages, costs and expenses (including
reasonable attorneys' fees and other expenses of litigation) ("Losses") to which
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the Healthcare Company Group or any of its Representatives may become subject
arising out of the provision hereunder by Healthcare Company Group, its
Representatives or any third party of Services to Vencor, except for Losses
resulting from the willful misconduct or fraud of the Healthcare Company Group
or any of its Representatives.
Section 6. Term. This Agreement shall be continuously in effect until
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the earlier of (i) December 31, 1998 or (ii) its termination upon 45 days' prior
written notice by Vencor. Notwithstanding anything herein to the contrary, if
there is a change of control (as defined below) of Vencor at any time prior to
the end of the Term, Healthcare Company may terminate this Agreement upon not
less than 30 days' prior written notice
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to Vencor. A "change of control" of Vencor shall include, without limitation,
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(a) a change in the composition of the board of directors of Vencor such that at
the end of any period of twelve (12) consecutive months the persons constituting
a majority of such board of directors are not the same as the persons
constituting a majority at the start of such period (or persons appointed by
such majority), (b) the sale or other disposition by Vencor of (i) any part of
its interest in Vencor or (ii) all or substantially all of the assets of Vencor
(other than a bona fide pledge in connection with a financing), or (c) a merger
or consolidation involving Vencor, which results in the stockholders of Vencor
immediately prior to such event owning less than 50% of the capital stock of the
surviving entity.
Section 7. Miscellaneous.
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(a) This Agreement may be modified or amended from time to time
only by a written instrument executed by the parties hereto.
(b) Vencor shall not have any obligation to refer any resident or
patients to the Healthcare Company Group for the provision of any service or
item of any kind. Vencor and Healthcare Company hereby acknowledge that the
compensation for Services provided for in this Agreement is set in advance, is
consistent with the fair market value of such Services and reflects arms' length
negotiations between the parties hereto and is 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 Healthcare Company or Vencor 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 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 the risk of such violation 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.
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(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 RULES. ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST ANY PARTY ARISING
OUT OF OR RELATING TO THIS AGREEMENT SHALL BE INSTITUTED IN ANY FEDERAL OR
COMMONWEALTH COURT IN THE COMMONWEALTH OF KENTUCKY. EACH PARTY HEREBY (I)
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH
PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM,
AND (II) IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUCH
SUIT, ACTION OR PROCEEDING.
(g) This Agreement embodies the entire understanding between the
parties hereto with respect to the matters covered herein and supersedes any
prior agreement or understanding between the parties with respect to such
matters.
(h) This Agreement may be executed in counterparts, each of which
shall constitute an original and all of which, when taken together, shall
constitute one Agreement.
(i) Neither party may assign, delegate or otherwise transfer any of
its rights or obligations under this Agreement without the prior written consent
of the other party.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first above written.
VENCOR, INC.
By:
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Name:
Title:
HEALTHCARE COMPANY, INC.
By:
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Name:
Title:
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EXHIBIT 1
Services To Be Provided By Healthcare Company Group To Vencor
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Services Full Time
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Staff Accounting .75
Fixed Assets .50
Accounts Payable .25
Payroll .50
H/R and Benefits .50
Risk Management/Insurance .25
Tax 1.00
Legal 1.00
SEC Reporting .50
Treasury Support .25
Market Planning .25
Development .50
MIS Personnel 1.00
