ADMINISTRATIVE SERVICES AGREEMENT
AGREEMENT entered into as of this 15th day of November, 1997 by and
between Manor Care, Inc., a Delaware corporation (together with its
subsidiaries and affiliates, other than In Home Health, Inc., hereinafter
referred to as "Manor Care") and In Home Health, Inc., a Minnesota
corporation (together with its subsidiaries, hereinafter referred to as "In
Home").
WHEREAS, Manor Care and In Home desire to formalize the provision
of services by Manor Care to In Home;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and sufficient consideration, the receipt of which is
acknowledged the parties agree as follows:
1. SCOPE OF AGREEMENT. Manor Care will, consistent with the
terms of this Agreement, provide, or cause to be provided to In Home, those
certain corporate, administrative and management services listed on Exhibit A
(each service individually referred to as a "Service" and all services
collectively referred to as the "Services") attached hereto and made part of
this Agreement, and In Home, in consideration thereof, shall pay Manor Care
in accordance with Section 3 below.
2. TERM. This Agreement shall have a retroactive commencement
date of June 1, 1997 and shall terminate as September 30, 1998. Thereafter,
Manor Care agrees to renegotiate the expenses associated with providing
future service.
3. FEES AND PAYMENT.
A. In Home will pay Manor Care a "Management Fee" equal to
Twenty-four Thousand Five Hundred Eighty-three Dollars ($24,583.00) per month
for certain corporate, administrative and management services listed in
Exhibit A, attached hereto. The estimate includes $21,667 per month to pay
for 75% of our President and CEO and his staff. The $21,667 monthly
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charge to pay for CEO and staff will be adjusted when a CEO is found and is
paid for by In Home Health.
B. In addition to a management Fee of $7,000 per month for
the period June 1, 1996 through May 31, 1997, In Home has also paid Manor
Care an additional Sixty-five Thousand Four Hundred Fifteen Dollars
($65,415.00) for outside legal services provided through Manor Care for In
Home from June 1, 1996 through May 31, 1997. Manor Care acknowledges such
payment.
C. The total payment due from In Home to Manor Care for the
months for June, July, August and September of 1997 is One Hundred
Sixty-three Thousand Seven Hundred Forty-seven Dollars ($163,747.00)
consisting of four (4) months of Point A and all of Point B.
D. The total FY 1998 Management Fee is Two Hundred
Ninety-five Thousand Dollars ($295,000.00).
E. In Home will receive a cost allocation from Manor Care's
home office cost report (relating to provisions addressed in Subsections A-C
of this Section 3) to include within In Home's cost report for allowable
reimbursement from Medicare. Any changes in this allocation process requires
the approval of the Audit Committee of In Home.
F. The Audit Committees of Manor Care and the special
committee of the In Home Board of Directors will retrospectively review and
agree to each company's fiscal year charges for the administrative service
fees described herein, and prospectively review and agree to the succeeding
year's budgeted administrative service fees. This will be done in both FY
1998 and all subsequent years during which this Agreement is in effect.
G. Manor Care shall xxxx In Home on the 15th of January,
April, July and October for the Management Fee for the prior three months and
shall xxxx In Home monthly for any additional
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charges incurred by In Home during the prior month. Such additional charges
include outside legal fees, airplane use fees, and other items properly
charged to In Home. Payments shall be due 15 days after receipt of any
invoice.
4. PERFORMANCE OF SERVICES. Manor Care shall perform the
Services with the same degree of care, skill and prudence customarily
exercised for its own operations.
5. LIMITATION ON LIABILITY; INDEMNIFICATION. Except as provided
in the following sentence, neither party shall have any liability under this
Agreement to the other party for damage or loss of any type suffered by the
other party or any third party as a result of the performance or
non-performance of the Services provided hereunder and neither party will be
responsible for general, special, indirect, incidental or consequential
damages, whether known or unknown, that the other party or any third party
may incur or experience on account of entering into or relying on this
Agreement. Each party shall indemnify, defend and hold the other party, its
directors, officers and employees harmless from and against all damages,
losses and out-of-pocket expenses (including attorney fees) caused by or
arising out of any willful failure to perform any obligation or agreement
herein.
6. ASSIGNMENT. In Home shall not assign or transfer any of its
rights under this Agreement without the prior written consent of Manor Care.
In Home acknowledges and consents to Manor Care's transfer and
assignment of its rights and obligations under this Agreement to New
ManorCare Health Services, Inc. (to be renamed ManorCare Health Services,
Inc.) with principal offices at 00000 Xxxxxxxxxx Xxxx, Xxxxxxxxxxxx, Xxxxxxxx
00000.
7. NOTICES. All notices, requests, demands and other
communications provided for by
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this Agreement shall be in writing and shall be deemed to have been given the
earlier of when actually received or three (3) business days after such
writing is deposited in the United States mail, registered or certified mail,
return receipt requested, or sent by Federal Express or other similar
overnight courier services, addressed to the parties as stated below or to
such other address as a party may designate by notice:
If to Manor Care:
ATTN: General Counsel
Manor Care, Inc.
00000 Xxxxxxxxxx Xxxx, 0xx Xxxxx
Xxxxxxxxxxxx, XX 00000-0000
If to In Home:
ATTN: Chief Financial Officer
In Home Health, Inc.
Xxxxxxx Xxxxxx, Xxxxx 000
000 Xxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000-0000
8. GOVERNING LAW. This Agreement shall be governed by the laws
of the State of Minnesota.
9. ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding between the parties and supersedes all proposals, commitments,
writings, negotiations and understandings, oral and written, and all other
communications between the parties relating to the subject matter of this
Agreement. This Agreement may not be amended or otherwise modified except in
writing duly executed by all of the parties. A waiver by any party of any
breach or violation of this Agreement shall not be deemed or construed as a
waiver of any subsequent breach or violation thereof.
10. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of
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which shall be deemed an original, but all of which together shall constitute
one and the same document.
11. SEVERABILITY. Should any part, term or condition hereof be
declared illegal or unenforceable or in conflict with any other law, the
validity of the remaining portions or provisions of this Agreement shall not
be affected thereby, and the illegal or unenforceable portions of the
Agreement shall be and hereby are redrafted to conform with applicable law,
while leaving the remaining portions of this Agreement intact.
12. FORCE MAJEURE. No party shall be deemed to have breached this
Agreement or be held liable for any failure or delay in the performance of
all or any portion of its obligations under this Agreement if prevented from
doing so by a cause or causes beyond its control. Without limiting the
generality of the foregoing, such causes include acts of God or the public
enemy, fires, floods, storms, earthquakes, riots, strikes, lock-outs, wars
and war-operations, restraints of government power, communication line or
other utility failure or other circumstances beyond such party's control, or
by reason of the judgment, ruling or order of any court or agency of
competent jurisdiction or change of law or regulation subsequent to the
execution of this Agreement.
13. SUCCESSORS AND ASSIGNS. Subject to the provisions of Section
6, this Agreement is solely for the benefit of the parties and their
respective successors and assign. There are no third party beneficiaries of
or to this Agreement.
14. HEADINGS. Section headings are for convenience only and do
not control or affect the meaning or interpretation of any terms or
provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
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MANOR CARE, INC.
By: /s/ Xxxxx X. Xxxxx
-------------------------------
Its Sr. Vice President, Gen'l
Counsel and Secretary
-------------------------------
IN HOME HEALTH, INC.
By: /s/ Xxxxxx X. Xxxxx
-------------------------------
Its CFO
-------------------------------
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EXHIBIT A
SERVICE TO BE PROVIDED
1. LEGAL SERVICES. Manor Care will provide ongoing legal
services necessary to support the day-to-day business activities of In Home.
Such services include, but are not limited to, legal support for development
and implementation of a corporate compliance plan, acquisitions, preparation
and filing of necessary reporting disclosures with the SEC and provision of
public reports to investors upon request, labor and contracting matters.
This Agreement constitutes prior written approval of In Home for Manor Care
to engage outside legal services on behalf of In Home when necessary and to
supervise such outside counsel. In Home will be billed directly for the cost
of outside counsel.
2. INSURANCE SERVICES. Manor Care will assist in providing to In
Home general and professional liability, workers' compensation, comprehensive
automobile liability and property insurance.
3. OTHER SERVICES. As may be requested by In Home, Manor Care
will, from time to time, provide services not described above, including, but
not limited to, Government Relations, Purchasing and Reimbursement (the
"Other Services").
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