EXHIBIT 10.33
_____________________________________________________________________________
SERVICES AGREEMENT
dated as of January 31, 1990
between
NATIONAL MEDICAL ENTERPRISES, INC.
and
THE HILLHAVEN CORPORATION
_____________________________________________________________________________
TABLE OF CONTENTS
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Page
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I. CERTAIN MANAGEMENT RELATED SERVICES................... 2
1.01. Services to be Made Available by NME........... 2
1.02. Services to be Made Available by the Company... 3
1.03. Limitations on Obligation to Provide Services.. 4
1.04. Standards and Levels of Services............... 6
1.05. Payment for Services........................... 6
1.06. Term for Which Services to be Provided.......... 9
II. JOINT PURCHASING AGREEMENTS........................... 10
2.01. Joint Purchasing............................... 10
2.02. Limitation on Joint Purchasing Obligations..... 12
III. USE OF PREMISES....................................... 12
3.01. Old Hillhaven Operations....................... 12
3.02. Medical Ambulatory Care, Inc................... 13
IV. MISCELLANEOUS......................................... 13
4.01. Independent Contractor Status.................. 13
4.02. Insurance...................................... 13
4.03. Disclaimer; Limited Liability.................. 14
4.04. Confidentiality................................ 14
4.05. Retention of Records........................... 15
4.06. Entire Agreement; Amendment.................... 16
4.07. Waivers........................................ 17
4.08. Legal Enforceability........................... 17
4.09. Further Assurances............................. 18
4.10. Assignment..................................... 18
4.11. Dispute Resolution Procedures.................. 19
4.12. Parties in Interest............................ 20
4.13. Governing Law.................................. 21
4.14. Notices........................................ 21
4.15. Construction................................... 22
4.16. Counterparts................................... 22
i January 4, 1990
THIS SERVICES AGREEMENT, dated as of January 31, 1990 (the
"Agreement"), is by and between NATIONAL MEDICAL ENTERPRISES, INC., a Nevada
corporation ("NME"), on behalf of itself and its affiliates other than the
Company Group (as hereinafter defined) (NME and such affiliates being herein
sometimes collectively referred to as the "NME Group"), and THE HILLHAVEN
CORPORATION, a Nevada corporation (the "Company"), on behalf of itself and its
affiliates other than the NME Group (the Company and such affiliates being
herein sometimes collectively referred to as the "Company Group").
WHEREAS, NME and the Company are, as of the date hereof, entering into
a Reorganization and Distribution Agreement providing for a reorganization of
certain of the businesses heretofore conducted by NME's long-term care group and
a pro rata distribution to the holders of NME's capital stock, as of the record
date established by NME in connection therewith, of approximately 85% of the
outstanding shares of common stock, par value $0.15 per share, of the Company
(the "Distribution") on or about January 31, 1990 (the date on which the
Distribution shall actually occur being herein referred to as the "Distribution
Date").
WHEREAS, as a result of said reorganization and the Distribution,
substantially all of NME's long-term care business will be conducted by the
Company Group, and the Company will become a separate publicly held company.
WHEREAS, by reason of the expertise and experience of certain
personnel of NME and the Company, such personnel are uniquely suited to perform
certain services for the other that would otherwise be unavailable to the other.
WHEREAS, the Company and NME desire to provide for access to such
personnel and for the exchange of certain services for a limited period of time
following the Distribution.
NOW, THEREFORE, in consideration of the mutual promises contained
herein and other valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I.
CERTAIN MANAGEMENT RELATED SERVICES
SECTION 1.01. Services to be Made Available by NME. Subject to the
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terms and provisions of this Agreement, NME shall provide, deliver and/or make
available, or cause to be provided, delivered and/or made available to members
of the Company Group, and the Company Group shall accept, (i) the services set
forth in Schedule 1 hereto, (ii) such other services of a substantial character
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as the parties may from time to time hereafter agree upon and (iii) such
Incidental Services (as hereinafter defined)
2 January 4, 1990
as the Company may from time to time reasonably request (subject, in each case,
however, to the provisions of Section 1.03 below). For the purposes of this
Agreement, "Incidental Services" shall mean occasional consulting or advisory
services and access to personnel and data which involve an insubstantial
commitment of the resources of the party providing such services (the
"Provider"), which determination shall be made by the Provider in the exercise
of its reasonable judgment.
The foregoing services may be rendered by NME or by another member of
the NME Group or by third parties as NME shall determine (including the specific
individuals and corporate facilities by which the services are rendered);
provided, however, that before any services which heretofore have been rendered
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by NME or another member of the NME Group are contracted out to third parties,
NME shall so notify the Company and the Company may discontinue such services
upon notice to NME in accordance with the provisions of this Agreement.
SECTION 1.02. Services to be Made Available by the Company. Subject
--------------------------------------------
to the terms and provisions of this Agreement, the Company shall provide,
deliver and/or make available, or cause to be provided, delivered and/or made
available to members of the NME Group, and the NME Group shall accept, (i) the
services set forth in Schedule 2 hereto, (ii) such other services of a
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substantial character as the parties may from time to time
3 January 4, 1990
hereafter agree upon and (iii) such Incidental Services as NME may from time to
time reasonably request (subject, in each case, however, to the provisions of
Section 1.03 below).
The foregoing services may be rendered by the Company or another
member of the Company Group or by third parties as the Company shall determine
(including the specific individuals and corporate facilities by which the
services are rendered); provided, however, that before any services which
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heretofore have been rendered by the Company or another member of the Company
Group are contracted out to third parties, the Company shall so notify NME and
NME may discontinue such services upon notice to the Company in accordance with
the provisions of this Agreement.
The services to be provided pursuant to Sections 1.01 and 1.02 above
are herein collectively referred to as the "Services."
SECTION 1.03. Limitations on Obligation to Provide Services.
---------------------------------------------
(a) Notwithstanding the provisions of Section 1.01 or 1.02, neither
party shall be required to make available to the other any Services to the
extent that doing so would (i) violate the terms of any contract or obligation
of such party in effect at that time or (ii) require, in the opinion of such
party's
4 January 4, 1990
legal counsel, the procurement of additional licenses or permits not required by
such party for the operation of its own business.
(b) The provisions of Sections 1.01 and 1.02 shall apply only to
Services relating to or arising out of or in connection with matters which the
Provider is in a position to provide by reason of past participation,
involvement or familiarity with such matters and, in addition, which the other
party (the "Recipient") has a reasonable requirement to obtain from the
Provider. Except as may be necessary to effect a separation of matters relating
to the NME Group from those relating to the Company Group directly or indirectly
arising out of the reorganization and Distribution, nothing in this Agreement
will require the Provider to provide or develop additional systems or support
programs or to render Services in quantities substantially greater than the
quantities taken by the operations of the Recipient during the twelve-month
period immediately preceding the Distribution Date, or in a manner or methods
different from the manner or methods employed for the benefit of the Provider,
or, in performing Services hereunder, to make any change or addition which will
require capital expenditures.
(c) The duties of the parties under this Agreement are subject to
interruption or discontinuance at any time and from time to time, without
liability to the other party or any other person for any loss, damage or expense
which may result there-
5 January 4, 1990
from, for force majeure or other causes beyond such party's control.
SECTION 1.04. Standards and Levels of Services.
--------------------------------
(a) The standards and technologies employed in the provision of each
Service shall be as determined from time to time by the Provider hereunder in
accordance with the Provider's then-existing requirements for comparable
services for itself and its affiliates but giving due consideration to the
historical requirements for such Service by the Recipient.
(b) The Provider will use reasonable efforts to make the Services
available in substantially the same manner as it makes the same Services
available for its own operations, but the Provider shall not be liable to the
Recipient or any other person for any loss, damage or expense which may result
therefrom, for negligent performance by the Provider or from changing its manner
of rendering the Services if the Provider deems the same necessary or desirable
in the conduct of its own operations.
SECTION 1.05. Payment for Services.
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(a) The Recipient agrees to pay the Provider for the Services
requested pursuant to Section 1.01 or 1.02, upon presentation to it of
reasonably detailed invoices therefor, the
6 January 4, 1990
applicable fee therefor set forth in Schedule 1 or 2 hereto or, if no specific
fee is so set forth or in the case of Services not specifically set forth in
Schedule 1 or 2, such amount as the parties may in good faith agree upon;
provided, however, that no fee shall be charged hereunder with respect to the
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provision of Incidental Services (other than the reimbursement to the Provider
of actual out-of-pocket expenses incurred by it in rendering such Incidental
Services).
For the purposes of such Schedules 1 and 2, "Cost" shall mean the
direct and indirect expenses incurred by the Provider in connection with
furnishing the applicable Service (including, but not by way of limitation, the
salaries and related fringe benefits (calculated at the rate of 30% of base
salary) of the Provider's employees allocable to the provision of the applicable
Services, all travel and out-of-pocket expenses incurred by such employees in
rendering such Services, applicable data processing charges and all other
out-of-pocket costs). In any case where such Schedules provide that the
applicable fees for a Service may subsequently be adjusted to "Fair Market
Value" at the option of the Provider, the Provider shall give written notice to
the Recipient of its intention to do so, effective sixty days after the
Recipient's receipt of such notice (the "Effective Date"). For the purposes
hereof, "Fair Market Value" shall mean the cost at which a particular Service
could be obtained from an unaffiliated third party in any arms' length
7 January 4, 1990
transaction. Following receipt of any such notice, the parties shall negotiate
in good faith to arrive at the Fair Market Value of the applicable Service. In
the event the parties are unable to agree upon such Fair Market Value within
thirty days after the Recipient's receipt of the Provider's notice, the
Recipient may, at its option, elect to discontinue such Service as of a date
specified by the Recipient, but in no event later than the Effective Date. If
the Recipient does not so elect, the issue of Fair Market Value shall be
promptly submitted to arbitration in Los Angeles, California, at the equal
expense of NME and the Company, pursuant to the rules then obtaining of the
American Arbitration Association. The decision of such arbitrator(s) shall be
final and binding on the parties hereto, and judgment may be entered thereon in
any court of competent jurisdiction. Pending such determination, the Provider
shall continue to provide such Services without interruption and the Recipient
thereof shall continue to pay there for at the rate in effect prior to receipt
of the Provider's notice; provided, however, that the Fair Market Value rate
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determined in such arbitration shall be retroactively effective as of the
Effective Date. The difference between the prior rate in effect and the Fair
Market Value for the period between the Effective Date and the date of the
determination of Fair Market Value shall be paid by the Recipient within thirty
days after the determination of Fair Market Value.
8 January 4, 1990
(b) Invoices for Services rendered hereunder shall be rendered within
thirty days after the end of each calendar month, covering the Services rendered
pursuant to this Agreement during the preceding calendar month, and payment
therefor shall be made within thirty days after receipt of such invoice. The
Provider shall cause to be kept accurate books and records with respect to the
costs and expenses incurred in connection with the Services provided hereunder
where the fees to be paid there for are based on such costs or expenses and the
Recipient shall be permitted to inspect such books and records with respect to
such costs and expenses during normal business hours upon reasonable notice.
SECTION 1.06. Term for Which Services to be Provided.
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(a) Subject to the provisions of Section 1.03 above and further
provisions hereof, the Services called for hereby shall be provided for the
applicable term set forth in Schedule l or 2 hereto or, if no specific term is
so set forth, for such period as shall be mutually agreed upon by the parties.
To the extent that any of the Services are rendered by a Provider after the time
Bet forth above, at the request of the Recipient as part of ongoing projects,
the term therefor shall be deemed extended accordingly.
(b) Notwithstanding any other provision of this Agreement, the
obligation of the Provider to provide Services and
9 January 4, 1990
of the Recipient to accept Services may be terminated by mutual agreement of the
parties (which shall not be unreasonably withheld by either party). In addition,
if the Recipient desires to discontinue one or more of the Services, or a part
of a particular Service, during the term of this Agreement, the Recipient shall
give the Provider at least 90 days' prior written notice requesting
discontinuance of such Service or part thereof and specifying the date of
discontinuance. If the requested discontinuance by the Recipient would result in
the Provider incurring or absorbing expenses which the Provider would not have
incurred or absorbed but for the discontinuance prior to the expiration of the
term contemplated hereby, the Recipient shall reimburse the Provider for such
reasonable expenses. Once so discontinued, a Service need not again be
rendered by the Provider unless the Provider, in its sole discretion, is willing
to do so upon terms and conditions to be agreed upon.
ARTICLE II.
JOINT PURCHASING AGREEMENTS
SECTION 2.01. Joint Purchasing. NME and the Company acknowledge that
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various members of their respective Groups participate in joint or shared
purchasing arrangements, as more fully described in Schedule 3 hereto, and as
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amended from time to time. Following the Distribution, the parties agree to
cooperate with each other with respect to such joint or shared purchasing
10 January 4, 1990
arrangements. The primary negotiating party (as outlined in Schedule 3, but as
may be from time to time changed by agreement of the parties) agrees to use all
reasonable efforts to consider the unique needs of the other party when
negotiating the respective agreements. Each party agrees that in each case
where such party has had negotiating responsibility for any shared purchasing
arrangement, such party (herein referred to as the "Contracting Party") shall
give the other party (the "Joint Purchaser") the opportunity to continue to
participate in such joint or shared purchasing arrangements for a period of up
to three years after the Distribution Date on terms no less favorable than those
of the Contracting Party. It is the parties' intention that this opportunity to
participate in shared or joint arrangements continue notwithstanding anticipated
changes in the contracting or joint purchase relationships.
In areas where regional contracts become beneficial to both parties,
the Company and NME will use all reasonable efforts to coordinate and negotiate
agreements to the mutual benefit of each party. In particular, food and
nutritional agreements are well suited to this approach and are the primary
responsibility of NME with advice and consent of the Company.
It is expressly understood and agreed, however, that neither party
shall be under any obligation, express or implied, to continue to so
participate, if after a good faith effort to
11 January 4, 1990
resolve disputes, the party concludes that participation in the arrangement is
not in its best interest.
Neither party shall be entitled to compensation hereunder for normal
administrative expenses incurred by such party in administering such agreements.
SECTION 2.02. Limitation on Joint Purchasing Obligations.
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Notwithstanding the foregoing provisions, neither party shall be required to
continue any joint or shared purchasing arrangement to the extent that to do so
would violate the contractual arrangement such party has with any third party
supplier or vendor or is otherwise unacceptable to such third party supplier or
vendor.
ARTICLE III.
USE OF PREMISES
SECTION 3.01. Old Hillhaven Operations. The Company shall provide
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NME with the use of such office space and attendant services, facilities and
equipment located at the Company's headquarters at 0000 Xxxxxxxx Xxxxx, Xxxxxx,
Xxxxxxxxxx, as shall be reasonably required for NME's personnel (not to exceed
ten people) engaged in the management of the operations of Old Hillhaven and the
Old Hillhaven Subsidiaries (as such terms are defined in the Distribution
Agreement) until such time as NME
12 January 4, 1990
shall have relocated such operations to other facilities, but in no event later
than December 31, 1990. The foregoing shall be made available to NME free of
charge.
SECTION 3.02. Medical Ambulatory Care, Inc. The Company shall
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provide Medical Ambulatory Care, Inc., a subsidiary of NME ("MAC"), with the use
of such office space and attendant services, facilities and equipment located at
the Company's headquarters at 0000 Xxxxx 00xx Xxxxxx, Xxxxxx, Xxxxxxxxxx as are
currently utilized by MAC until such time as MAC shall have relocated its
operations to other facilities, but in no event later than May 31, 1990 for a
fee of $5,980 per month (which sum includes a charge of $1,500 per month for
utilities and other services).
ARTICLE IV.
MISCELLANEOUS
SECTION 4.01. Independent Contractor Status. Each party shall render
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and perform the services as an independent contractor in accordance with its own
standards, subject to its compliance with the provisions of this Agreement and
with all applicable laws, ordinances and regulations.
SECTION 4.02. Insurance. Except to the extent otherwise provided in
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the Distribution Agreement or the Insurance
13 January 4, 1990
Agreement (as defined in the Distribution Agreement), neither party shall have
any obligation to obtain or provide the other party with any level of insurance
in respect of the services provided or received under this Agreement, or to
provide the other party with the benefits of any such insurance now or hereafter
held by such party.
SECTION 4.03. Disclaimer; Limited Liability.
-----------------------------
(a) Neither party makes any express or implied representations,
warranties, or guarantees relating to the services or the quality or results of
services to be performed under this Agreement.
(b) Neither party shall be liable to the other for any expense,
claim, loss or damage, including, but not by way of limitation, indirect,
special, consequential or exemplary damages suffered by such party, other than
by reason of such party's intentional failure to perform, or gross negligence in
performing, the services under this Agreement.
SECTION 4.04. Confidentiality. Subject to any contrary requirement
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of law and the right of each party to enforce its rights hereunder in any legal
action, each party shall keep strictly confidential, and shall cause it;
employees and agents to keep strictly confidential, any information of or
14 January 4, 1990
concerning the other party which it or any of its agents or employees may
acquire pursuant to, or in the course of performing its obligations under, any
provision of this Agreement; provided, however, that such obligation to maintain
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confidentiality shall not apply to information which (i) at the time of
disclosure was in the public domain, (ii) after disclosure enters the public
domain not as a result of acts by the receiving party, (iii) was already
independently in the possession of the receiving party at the time of disclosure
or (iv) is received by the receiving party from a third party who did not
receive such information from the disclosing party under an obligation of
confidentiality. The confidentiality obligations contained in this Section 4.04
shall expire three (3) years after the furnishing of such information.
SECTION 4.05. Retention of Records. Each of NME and the Company
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shall retain, and shall cause each member of its respective Group to retain,
pursuant to NME's Record Retention Program, a copy of which has been made
available to each party, all information relating to the other and the other's
subsidiaries, except as otherwise required by law or except to the extent that
such information is in the public domain or in the possession of the other
party; provided, that after the expiration of the applicable retention period
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set forth in such Program, such information shall not be destroyed or otherwise
disposed of at any time, unless, prior to such destruction or disposal, (a) the
party proposing to destroy or otherwise dispose
15 January 4, 1990
of such information, shall provide no less than 90 days prior written notice to
the other, specifying in reasonable detail the information proposed to be
destroyed or disposed of and (b) if a recipient of such notice shall request in
writing prior to the scheduled date for such destruction or disposal that any of
the information proposed to be destroyed or disposed of be delivered to such
requesting party, the party proposing the destruction or disposal shall promptly
arrange for the delivery of such of the information as was requested at the
expense of the party requesting such information.
SECTION 4.06. Entire Agreement; Amendment. This Agreement, the
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Distribution Agreement and the other agreements referred to herein or therein or
entered into in connection herewith or therewith set forth the entire agreement
and understanding of the parties with respect to the transactions contemplated
hereby and supersede all prior agreements, arrangements and understandings
relating to the subject matter hereof. No representation, promise, inducement or
statement of intention has been made by either party hereto which is not
embodied in this Agreement or such other agreements, the Schedules or Exhibits
hereto or thereto, or the written statements or other documents delivered
pursuant hereto or thereto, and neither party hereto shall be bound by or liable
for any alleged representation, promise, inducement or statement of intention
not so set forth. This Agreement may be amended or modified only by
16 January 4, 1990
a written instrument executed by both parties hereto or by their successors and
permitted assigns.
SECTION 4.07. Waivers. No failure or delay on the part of NME or the
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Company in exercising any power or right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. No modification or waiver of any provision of this Agreement
nor consent to any departure by NME or the Company there from shall in any event
be effective unless the same shall be in writing, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for
which given.
SECTION 4.08. Legal Enforceability. Any provision of this Agreement
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which is prohibited or unenforceable in any jurisdiction shall as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof. Any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision or remedies otherwise available to any party
hereto. Without prejudice to any rights or remedies otherwise available to any
party hereto, each party hereto acknowledges that damages would be an
17 January 4, 1990
inadequate remedy for any breach of the provisions of this Agreement and agrees
that the obligations of the parties hereunder shall be specifically enforceable.
SECTION 4.09. Further Assurances. Subject to the provisions hereof,
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each of NME and the Company shall make, execute, acknowledge and deliver such
other instruments and documents, and take all such other actions as may be
reasonably required in order to effectuate the purposes of this Agreement and to
consummate the transactions contemplated hereby. Subject to the provisions
hereof, each of NME and the Company shall, in connection with entering into this
Agreement, performing its obligations hereunder and taking any and all actions
relating hereto, comply with all applicable laws, regulations, orders and
decrees, obtain all required consents and approvals and make all required
filings with any governmental agency, other regulatory or administrative agency,
commission or similar authority and promptly provide the other with all such
information as the other may reasonably request in order to be able to comply
with the provisions of this Section.
SECTION 4.10. Assignment. This Agreement shall not be assignable or
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otherwise transferable, in whole or in part, directly or indirectly, voluntarily
or by operation of law, whether by merger, sale of assets or otherwise, by
either party hereto without the prior written consent of the other, and any
18 January 4, 1990
attempt to assign any rights or obligations arising under this Agreement without
such consent shall be void; provided, however, that (i) this Agreement and all
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of the provisions hereof shall be binding upon, inure to the benefit of and be
enforceable by NME and the Company and their respective affiliates and
successors and permitted assigns and (ii) in the event of any sale or other
disposition of any member of the NME Group or the Company Group that is a
recipient of any services hereunder, the provisions of this Agreement inuring to
the benefit of such member may be assigned to the purchaser of such member
provided that such purchaser shall execute and deliver to the other party an
instrument in form and substance satisfactory to the other party agreeing to
assume and be bound by the terms and provisions hereof.
SECTION 4.11. Dispute Resolution Procedures. Except as otherwise
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provided in Section 1.05(a) above with respect to disputes over the
determination of Fair Market Value, all disputes arising out of or relating to
this Agreement shall be resolved pursuant to the reference procedure set forth
in California Code of Civil Procedure Sections 638 et seq. The parties hereby
-- ---
agree to submit to the jurisdiction of the Superior Court of the County of Los
Angeles, State of California (the "Superior Court") for such purpose. Either
party may initiate the procedure set forth in this Section by providing the
other party with notice setting forth the nature of the dispute
19 January 4, 1990
(the "Reference Notice"). The parties shall designate to the Superior Court a
referee who is an active attorney or retired judge living in the County of Los
Angeles who shall resolve the dispute. If the parties are unable to designate a
referee within 20 days after the receipt of the Reference Notice, the parties
shall request that the Superior Court appoint a referee. In connection with any
proceeding pursuant to this Section, the parties shall have all discovery rights
which would have been available had the matters which are the subject of the
dispute been decided by the Superior Court. Discovery proceedings may be noticed
and commenced immediately after delivery of the Reference Notice. The hearing
before the referee shall begin no later than 60 days after the receipt of the
Reference Notice. All discovery in connection with the reference proceeding
shall be concluded no later than 15 days prior to the commencement of the
hearing. Judgment upon the award rendered by the referee shall be entered in the
Superior Court. Nothing in this Section shall be construed to impair the right
of either party to appeal from such judgment.
SECTION 4.12. Parties in Interest. Nothing in this Agreement,
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expressed or implied, is intended or shall be construed to confer any right,
benefit or remedy upon any person, firm or corporation other than NME and the
Company and their respective affiliates and successors and permitted assigns.
20 January 4, 1990
SECTION 4.13. Governing Law. This Agreement shall be governed by and
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construed and enforced in accordance with the laws of the State of California.
SECTION 4.14. Notices. All notices, consents, requests,
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instructions, approvals and other communications hereunder shall be in writing
and shall be deemed to have been duly given, if delivered in person or by
courier, telegraphed, telexed or by facsimile transmission or mailed, by
certified or registered mail, postage prepaid at the following address (or at
such other address provided by one party to the other in writing):
If to NME:
National Medical Enterprises, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxx Xxxxxx Xxx 0000
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxx
Senior Vice President, Corporate
Financing and Accounting
with copies to:
National Medical Enterprises, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxx Xxxxxx Xxx 0000
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: General Counsel
and
21 January 4, 1990
NME Properties, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000-0000
Telecopy No. (000) 000-0000
Attention: Senior Vice President -
Operations
If to the Company:
The Hillhaven Corporation
0000 Xxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000-0000
Telecopy No.: (000) 000-0000
Attention: President
with a copy to:
The Hillhaven Corporation
0000 Xxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000-0000
Telecopy No.: (000) 000-0000
Attention: General Counsel
SECTION 4.15. Construction. In this Agreement,
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(i) unless the context otherwise requires, the terms "herein,"
"hereof," "hereto" and "hereunder" refer to this Agreement; and
(ii) the titles and headings of the sections and subsections hereof
and the table of contents hereof are inserted for convenience of reference only
and are not intended to be a part of or to affect the meaning or interpretation
of this Agreement.
22 January 4, 1990
SECTION 4.16. Counterparts. This Agreement may be executed in
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several counterparts, each of which shall be deemed an original, but such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
NATIONAL MEDICAL ENTERPRISES, INC.
By /S/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
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Title: Senior Vice President
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THE HILLHAVEN CORPORATION
By /S/ Xxxxxxxxxxx X. Xxxxxx
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Name: Xxxxxxxxxxx X. Xxxxxx
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Title: President
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23 January 4, 1990
Schedule 1
to
Services Agreement
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SERVICES TO BE PROVIDED BY NME
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Description of Service Fee Term
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1A. Advice and assistance with respect
to the restructuring and/or sale of At the hourly 3 years
retirement housing and nursing rates set forth in
home partnerships. Schedule 1-A
attached for the
personnel
indicated. In
other cases, at
NME's Cost.
1B. Consulting services of Free of charge, Remainder
Messrs. Xxxxxx X. Xxxx and Xxxxxx other than pass- of term of
Xxxxxxxx under consulting through of any consulting
agreements dated December 3, 1986 additional charges agreements
and March 2, 1988, respectively. to NME under said
consulting
agreements
directly
attributable to
services rendered
to the Company.
Schedule 3
to
Services Agreement
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SHARED PURCHASING AGREEMENTS
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Primary
Negotiating
Responsibility Categories
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Equipment
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*Company Food Distribution Systems
Company Bathing Tubs/Systems
NME Micro Computers
*Company Charting Systems
NME Wheelchair Replacement Parts
NME Scales, including Electronic
NME Xxxxx Lifts
NME Therapy Tubs
NME Pressure Packs
*Company Physical Therapy Equipment
*Company Dietary Equipment
*Company Wire Shelving, Carts
NME Wheelchairs, Patient Aids
NME Electronic Thermometers
NME Patient Aids
*NME Mailing Machines, Scales
*Company Enteral Feeding Pumps
Company Small Volume Copiers
*NME Large Volume Copiers
NME Televisions
Supplies
--------
*NME Overnight Express
NME Needles and Syringes
*Company Office Supplies and Computer Supplies
*Company Laundry/Dietary Chemicals
*NME Medical Distributor Agreement
*Company General Electric Lamps
NME Respiratory Supplies
*Company Housekeeping Chemicals
*NME Dressings
*NME Urologicals
NME Surgical Tapes
NME Business Forms
*Company Patient Safety Aids
Company Paint and Accessories
*NME Vaseline Gauze Dressings
Company Arts and Craft Supplies
*Company Paper Products
*Company Poly Bags
_____________________
* Require advance planning and coordination prior to negotiating
contract.
January 4, 1990
Schedule 3
to
Services Agreement
------------------
SHARED PURCHASING AGREEMENTS (continued)
----------------------------
Primary
Negotiating
Responsibility Pharmaceuticals
-------------- ---------------
*NME Pharmaceutical Contract Vendors
*NME Prime Vendor Wholesalers
*NME I.V. Solutions and Sets
January 4, 1990
Schedule 2
to
Services Agreement
------------------
SERVICES TO BE PROVIDED BY THE COMPANY(continued)
--------------------------------------
Description of Service Fee Term
---------------------- --- ----
- Maintain and distribute reports In addition to the
on fixed asset management foregoing fees, to
system which automatically the extent that
interface with accounts payable custom reports are
and general ledger requested by MAC,
applications. NME shall
reimburse the
- Process summarized financial Company for the
information from automatic Company's Cost for
interfaces with all applications any systems
in the form of a general ledger analysts or
(monthly and year-to-date). programmers
preparing such
- Process monthly and customized reports.
financial reports, such as:
income statements, balance
sheets, operational analysis
with budget interface, variance
reports, cost report trial
balances and income tax
schedules.
- Maintain and transmit bank
reconciliation interface data to
Bank of New York.
- Provide hardware support for
micro computers and software
support for accounting
application enhancements and
micro computer software.
January 4, 1990
Schedule 2
to
Services Agreement
------------------
SERVICES TO BE PROVIDED BY THE COMPANY (continued)
--------------------------------------
Description of Service Fee Term
---------------------- --- ----
2C. Accounting services and financial Free of charge At least
information preparation for Old through completion through
Hillhaven and the Old Hillhaven of all reports for completion of
Subsidiaries, including, without NME's fiscal year all reports
limitation, balance sheet and ending May 31, for NME's
income statement preparation, 1990. Thereafter, fiscal year
general ledger maintenance and at Company's Cost, ending
preparation of such other determined May 31, 1990
financial reports and information pursuant to Thereafter,
as NME may reasonably request. Section 1.05(a). as agreed
upon by the
parties.
Data processing, information Free of charge, 5 years.
system services and related support except to the Thereafter,
facilities related to the extent that custom for such
maintenance of accounting systems reports are longer term
and preparation of financial requested by NME, as shall be
information for Old Hillhaven and in which case NME agreed upon.
the Old Hillhaven Subsidiaries as shall reimburse
may from time to time be required the Company for
after the services described in the Company's Cost
Item 2C above are no longer to be for any systems
furnished. analysts or
programmers
preparing such
reports.
January 4, 1990
Schedule 2
to
Services Agreement
------------------
SERVICES TO BE PROVIDED BY THE COMPANY
--------------------------------------
Description of Service Fee Term
---------------------- --- ----
2A. Advice and assistance in connection Company's Cost 3 years
with the management and operations subject to
of Westminster Health Care Limited adjustment to Fair
and subsidiaries. Market Value at
the option of the
Provider after
initial six-month
term.
2B. Accounting application hardware, $3,000 per month 3 years
software and data processing through May 31,
support to MAC, including the 1990. Thereafter,
following: at the rate of
$5,000 per month
- Process accounts receivable as from time to
input, maintain history files time adjusted to
and distribute operational reflect usage or
reports, insurance invoices, volume changes
UB-82 intermediary invoices and subsequent to the
medical primary and cross-over Distribution Date,
invoices. as hereinafter
provided.
- Process accounts payable batch
terminal input, maintain history From and after
files and distribute processing June 1, 1990, the
reports, vendor reports, annual rate in effect
1099's and checks. shall be increased
2% for each
- Process payroll input, maintain increase in the
history file and distribute number of MAC
processing reports, payroll units required to
registers, quarterly tax be processed by
reports, annual W-2's and the Company from
checks. the number of MAC
units being
processed as of
the Distribution
Date.
January 4, 1990
Schedule 1-A
to
Services Agreement
------------------
SCHEDULE OF HOURLY RATES FOR
----------------------------
CONSULTING SERVICES
-------------------
Distribution June 1, June 1,
Date through 1991 through 1992 through
May 31, 1991 May 31, 1992 May 31, 1993
------------ ------------ ------------
Senior Vice President - $90 $100 $110
Operations
Vice President, Finance 70 77 85
Controller 45 50 55
Tax Manager 40 45 50
All other administrative
and accounting staff 30 35 40
January 4, 1990
