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HomeMy WebLinkAbout97-05600 ,I ~ ~ '.. - '.. -..0 . ~i c ~ ~ . cf~ . . - . 't " ~!/ I I ! i ! I ( ~ , '"' , .. .~ ... '-' () 0() ~ ~ Qoo ~I I . (- (1\ , '" " , ll' '1,' , ~ ~ ';:I p ;;J g 6'Ji " " '" :r "]" " .. 4' ~ - 0- o ~J /.., ,:l " l. . ~~ : ,,;.1 co ."- " l.) r-. ..1 0" (.) ~ ;i il Iii ~ .9~1 ~p~ PI ~ i~h~! I II ~ ~ b Ilil ~ . ~ ~BB ~i~~~ ~ 5 i5 ~jj~ ~a~~ '" ~ g I:\~ '" to g ~ ~ Cl ~ a.... O:~5!~ It ':l ffi z N ~ o~~~~~ ~ j~ ~~~~ . z L3 ll. :J ~ 01 m u; N ~ ~ ~ :.J ~ , . ". .' . " 4 .' .. CENTRAL PA REHABILITATION SERVICES, INC. and REHAB SERVICES OF CENTRAL PA, INC. , IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA Plaintiffs vs. CIVIL ACTION - LAW CENTRAL PENNSYLVANIA REHABILITATION SERVICES, INC. and REHAB SERVICES OF CENTRAL PENNSYLVANIA, INC., Defendants NO. 97-5600 CIVIL CIVIL ACTION AFFIUAVr;.,O:r;;;; ;:;,,~~ /R~~!2._ , \!l(J~ \ , certifies and says: 1. He or she is a competent adult, age Sf:; years, who is not a party to the above action. 2. On (JrMu J3, 1997, at c;..:30 o'clock -I!-.M., service of the Complaint filed in the above action was made by the undersigned upon the Defendant, REHAB SERVICES OF CENTRAL PE~~~A, INC., by handing a true and attested copy co:'laint to :~1ff"'tJ7tt//(.rt:t5 ~ who is an executive or the manager, clerk or other person for the time of said officer being in charge of the office and place of business of said Defendant. 3. Service occurred at 38 Pond Street, Franklin, Massachusettes, which is said Defendant's office and place of business. 4. I understand that false statements herein are made subject to the penalties of 18PA.C.S., Section 4904, relating .- ... . . , .~ .: ,~ (~ J ( r <C; I , ., " , t' ; , , " I '__4 ..", , " , i , 1-' , [ " " I , " " I i.' " )(1.. , r- ", l L:~ CJ , A '# . . - ' , .. . . ~'--'~'_S ...,... CENTRAL PA REHABILITATION SERVICES, INC. and REHAB SERVICES OF CENTRAL PA, INC. , IN THE COURT OF COMMON PI,EAS OF CUMBERLAND COUNTY, PENNSYLVANIA Plaintiffs vs. CIVIL ACTION - LAW CENTRAL PENNSYLVANIA REHABILITATION SERVICES, INC. and REHAB SERVICES OF CENTRAL PENNSYLVANIA, INC., Defendants NO. 97-5600 CIVIL CIVIL ACTION AFFIDAV1~ O~ RETURN OF SERVICE . . 7"tJ:;fdvt/- /J1, tVluf/, ./ fJ~......,- , certifies and says: l. He or she is a competent adult, age 56 years, who is not a party to the above action. 2. On aCidYL .23. 1997, at ;a :30 o'clock ~.M., service of the Complaint filed in the above action was made by the undersigned upon the Defendant, CENTRAL PENNSYLVANIA REHABILITATION SERVICES, INC., by handing a true and attested copy of said Complaint to ~~d.U~~~~;1~ ~1dC'1f: ~ L. who is an executive officer or the manager, clerk or other person for the time being in charge of the office and pl?ce of business of said Defendant. 3. Service occurred at 38 Pond Street, Franklin, Massachusettes, which is said Defendant's office and place of business. 4. I understand that false statements herein are made subject to the penalties of 18PA.C.S., Section 4904, relating " - to unsworn falisification. Date: J'Jd-a1J.-'Vl.. .;tJ, 1997 U' /!.vLL lL~ . Process Server C IlMMti:- - ~- " -2- " ~" " , (~ 'I" e; I " .. , -, " . t,JI_ I.....,: , , ( " , , , .>'.., \ ,.- . C " , , r-- , t}i - : - '. I \;\"1 l~' ( 'u...- . .- .' I f'- .- LJ <1' l.) J' U CENTRAL PA REHABILITATION SERVICES, INC. and REHAB SERVICES OF CENTRAL PA, INC. , IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA Plaintiffs vs. CIVIL ACTION - LAW CENTRAL PENNSYLVANIA REHABILITATION SERVICES, INC. and REHAB SERVICES OF CENTRAL PENNSYLVANIA, INC., Defendants NO. 97-5600 CIVIL CIVIL ACTION TO: CENTRAL PENNSYLVANIA REHABILITATION SERVICES, INC. 38 Pond Street Franklin, Massachusetts 02038 REHAB SERVICES OF CENTRAL PENNSYLVANIA,INC. 38 Pond Street Franklin, Massachusetts 02038 Date of Notice: November 17, 1997 NOTICE OF INTENT TO ENTER DEFAULT JUDGMENT YOU ARE IN DEFAULT BECAUSE YOU HAVE FAILED TO TAKE ACTION REQUIRED OF YOU IN THIS CASE. UNLESS YOU ACT WITHIN TEN DAYS FROM THE DATE OF THIS NOTICE, A JUDGMENT MAY BE ENTERED AGAINST YOU WITHOUT A HEARING AND YOU MAY LOSE YOUR PROPERTY OR OTHER IMPORTANT RIGHTS. YOU SHOULD TAKE THIS NOTICE TO A LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE FOLLOWING OFFICE TO FIND OUT WHERE YOU CAN GET LEGAL HELP. Court Administrator Fourth Floor Cumberland County Court House One Court House Square Carlisle, Pennsylvania 17013-3387 (717) 240-6200 By: ~~ Marlin R. McCaleb Attorney for Plaintiffs L.\NIlFIKf.", MAMLlN n McCALEB 3 -!l j l- t -8 CT N] 7 ()o ~ ""'2 '1 .- - (: ]. -:I Bi L ~. c:; ~ .i' , 1 . .1 g +l 11 ,. (~) _.0 ~ "'- , d- .J , <...l '.',1 "4 c. I " t__" 0 ! :~: j I c:.;. l.' r- c c,' ~..) IIIW n..I' I', M^'lUN 14 Mll^LUI "' CENTRAL PA REHABILITATION SERVICES, INC. and REHAB SERVICES OF CENTRAL PA, INC. , IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA Plaintiffs vs. CIVIL ACTION - LAW CENTRAL PENNSYLVANIA REHABILITATION SERVICES, INC. and REHAB SERVICES OF CENTRAL PENNSYLVANIA, INC., Defendants NO. q "I" ,,-t.. UU CIVIL -r.LL~- CIVIL ACTION NOTICE TO DEFEND You have been sued in Court. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this Complaint and Notice are served, by entering a written appearance personally or by attorney and filing in writing with the Court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so the case may proceed without you and a judgment may be entered against you by the Court without further notice for any money claimed in the Complaint or for any other claim or relief requested by the Plaintiffs. You may lose money or property or other rights important to you. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE, IF YOU DO NOT HAVE A LAWYER OR CANNOT APFORD ONE, GO TO OR TELEPHONE THE OFPICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP. Court Administrator Fourth Floor Cumberland County Court House One Court House Square Carlisle, Pennsylvania 17013-3387 (717) 240-6200 ~~~~ Marlin R. McCaleb Attorney for Plaintiffs .t, .~ ., , . . . CENTRAL PA REHABILITATION SERVICES, INC. and REHAB SERVICES OF CENTRAL PA, INC. , IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLV~IA Plaintiffs vs. CIVIL ACTION - LAW NO. 9'1. Hd.rv CIVIL rtA--h CENTRAL PENNSYLVANIA REHABILITATION SERVICES, INC. and REHAB SERVICES OF CENTRAL PENNSYLVANIA, INC., Defendants CIVIL ACTION COMPLAINT 1. Plaintiff CENTRAL PA REHABILITATION SERVICES, IN~. ("CPARS") is a Pennsylvania corporation having an office and place of business at 2120 Fisher Road, Mechanicsburg, Cumberland County, Pennsylvania. 2. Plaintiff REHAB SERVICES OF CENTRAL PA, INC. ("RSCPA") is a Pennsylvania corporation having an office and place of business at 2120 Fisher Road, Mechanicsburg, Cumberland County, Pennsylvania. 3. Defendant CENTRAL PENNSYLVANIA REHABILITATION SERVICES, 1.\'....'.111" INC. ("CPRS") is a Pennsylvania Corporation with a registered office at 75 Evelyn Drive, Millersburg, Dauphin County, Pennsylvania, but whose actual office is now at 38 Pond Street, Franklin, Massachusetts 02038. MI\Hl IN It M,( .'\1111 4. Defendant REHABILITATION SERVICES OF CENTRAL PENNSYLVANIA, INC. ("RSCP") is a Pennsylvania corporation with a registered office at 75 Evelyn Drive, Millersburg, Dauphin County, Pennsylvania, but whose actual office is now at 38 Pond Street, Franklin, Massachusetts. 5. At all times relevant and material to these causes of action, to and including February 27, 1997, Defendants operated offices for the practice of physical, occupational and speech therapy at 2120 Fisher Road, Mechanicsburg, Cumberland County, Pennsylvania, and elsewhere in Dauphin and Perry Counties, Pennsylvania. 6. On February 28, 1997, in the Borough of Mechanicsburg, Cumberland County, Pennsylvania, Plaintiffs and Defendants entered into and executed an Asset Purchase Agreement providing for the sale by Defendants and the purchase by Plaintiffs of certain assets of Defendants used and/or acquired in their practices of physical, occupational and speech therapy. A true copy of said Asset Purchase Agreement and the pertinent Schedules thereto is attached hereto and made a part hereof by reference, marked Exhibit "A." I^W '"11" . MAHLlN II k1l ( 1\1111 "2- 10. said Schedule 2.2(c) set forth the following claims of creditors, among others, to be assumed and paid by Plaintiffs: Commonwealth Telephone Company: Millersburg Area Authority: PP&L Company: Sprint Publishing (Credit World Services) : $ 706.90 504.45 1,552.47 TOTAL: 2.456.50 $ 2,763.82 11. Despite the amounts listed for the creditors on said Schedule 2.2(c) as set forth in Paragraph 10, above, that the actual amounts owed to those creditors as of February 28, 1997, were as follows: Commonwealth Telephone Company: $ Millersburg Area Authority: PP&L Company: Sprint Publishing (Credit World Services) : 1,342.25 1,088.06 5,217.47 3.812.20 7,647.78 TOTAL: $ 12. Plaintiffs paid to the creditors set forth in Paragraph 11, above, the full amount of their claims, to wit: $7,647.78, which was $5,789.30 more than the amount shown on said Schedule 2.2(c), so that Plaintiffs could maintain the good will of, and continue to receive the services provided, by those creditors in the future operation of Plaintiffs' practices of physical, occupational and speech therapy. IliA "jll< I., M^,illt~ II k1l I ^Il./t -4- I ^".. "1110 f', M,\HUN 14 M, I 1\, I II 13. Subsequent to the purchase of assets on Feb~uary 28, 1997, Plaintiffs learned of a claim by Browning-Ferris Industries in the amount of $94.00 for medical waste disposal services rendered to Defendants prior to February 28, 1997, and a claim from Physicians Telephone Directory in the amount of $85.00 for professional directory listing services rendered to Defendants prior to February 28, 1997, which claims were not set forth on the said Schedule 2.2(c). 14. Plaintiffs paid the full amount of the claims set forth in Paragraph 13, above, in the total amount of $179.00, so that Plaintiffs could maintain the good will of, and continue to receive the services provided by, those creditors in the future operation of Plaintiffs' practices of physical, occupational and speech therapy. 15. Subsequent to the purchase of assets on February 28, 1997, Plaintiffs were notifiea by Veritus, Inc./Medicare of a claim against Defendants in the amount of $14,260.00 for Medicare reimbursements overpaid to Defendants in calendar year 1994, which claim was not set forth on said Schedule 2.2(c). 16. Plaintiffs involuntarily paid to Medicare the sum of -5- $12,419.38 when Veritus, Inc./Medicare withheld that amount from Medicare reimbursements owed to Plaintiffs and applied the amount withheld to the obligation of Defendants as set forth in Paragraph 15, above. 17. Plaintiffs have demanded reimbursement and payment from Defendants in the total amount of $18,387.68 pursuant to the indemnification provisions of the Asset Purchase Agreement, but Defendants have failed and refused to pay said sum or any part thereof to Plaintiffs. WHEREFORE, Plaintiffs demand judgment in their favor and against the Defendants herein in the amount of $18,387.68, together with interest and costs of suit, and reasonable attorney fees as provided in the Asset Purchase Agreement, all of which does not exceed the jurisdictional amount requiring arbitration referral by Cumberland County Local Rule No. 1301- 1. SECOND COUNT CPARS, Plaintiff VB. CPRS, Defendant In the alternative, Plaintiff CPARS avers the following claim against Defendant CPRS: 18. The averments of Paragraphs 1 through 17, inclusive, above, -6- are incorporated herein and made a part hereof by reference thereto. 19. On February 28, 1997, Defendant CPRS waR a certified Medicare provider with a service provider number, meaning that it was eligible for Medicare payment or reimbursement for therapy ,services provided, even though said Defendant was no longer able to provide such services in Cumberland, Perry and Dauphin Counties, Pennsylvania, because of the aforesaid sale of its assets. 20. On February 28, 1997, Plaintiff CPARS was not a certified Medicare provider, nor did said Plaintiff have a service provider number, so that plaintiff was not eligible for Medicare payment or reimbursement for therapy services to be provided, although plaintiff CPARS had applied for certification and expected to receive a service provider number within a few weeks. after which said Plaintiff would then be eligible for Medicare payment or reimbursement for thera~y services provided. 21. On February 28, 1997, in the Borough of Mechanicsburg, Cumberland County, Pennsylvania, Plaintiff CPARS and Defendant CPRS entered into and executed a Therapy Services Agreement, -7- whereby Plaintiff CPARS agreed to perform therapy services for Defendant CPRS, which services would be billed to Medicare and to co-insurance payors by Defendant CPRS under said Defendant's service provider number. and Defendant CPRS agreed to pay to Plaintiff CPARS for such services at the rates set forth in the Agreement, whether or not Defendant CPRS received payment or reimbursement from Medicare. A true copy of said Therapy Services Agreement is attached hereto and made a part hereof by reference, marked Exhibit "B". 22. In reliance upon the said Therapy Services Agreement, Plaintiff CPARS performed therapy services for Defendant CPRS in March, 1997, having a total value, as per the rates set forth in the Agreement, of $24,803.00, which amount was billed to Medicare and to the co-insurance payors by Defendant CPRS. 23. Plaintiff CPARS has received a total payment from Medicare and/or co-insurance payors for its March, 1997, therapy services in the amount of $11,166.31, leaving a balance due and owing to plaintiff CPARS by Defendant CPRS in the amount of $13,636.69. 24. Despite repeated demands therefor, Defendant CPRS has failed and refused to pay to Plaintiff CPARS said sum of l.'N .'111' I M^Hl.It.l 11 M. I ,\1 Fit -8- f- . $13,636.69, or any part thereof. WHEREFORE, Plaintiff CPARS demands judgment in its favor and against the Defendant CPRS herein in the amount of $13,636.69, together with interest and cost of suit, which amount does not exceed the jurisdictional amount requiring arbitration referral by Cumberland County Local Rule No. 1301- ~ik(J~ Marlin R. Mccaleb Attorney I.D. No. 06353 219 East Main Street P.O. Box 230 Mechanicsburg, Pennsylvania 17055 (717) 691-7770 FAX: (717) 691-7772 Attorney for Plaintiffs 1. Date: (JhJd6- , 1997 .3 1.\W flllH ", M^'lllt~ " M, (-^llll -9- VERIFICATION RICHARD M. TRIBBITT certifies and states as follows: that I am the President of CENTRAL PA REHABILITATION SERVICES, INC., a corporation, one of the Plaintiffs in the foregoing Complaint; that as such President and being authorized so to do, I do make this affidavit on behalf of the said corporation; and that the facts set forth herein true and correct to the best of my knowledge, information and belief. I understand that false statements herein are made subject to the penalties of 18 Pa.C.S., Section 4904, relating to unsworn falsification. Date: ;',' .,,1/7 , 1997 ;' I Aw 111110 I', MA'"lt,14 MIII\IIII -10- - ASSET PURCHASE AGREEMENT THIS AGREEMENT made and entered into this ~~day of February, 1997, by and between CENTRAL PENNSYLVANIA REP.ABILITATION SERVICES, INC. ("CPRS") and REHAB SERVICES OF CENTRAL PENNSYLVANIA, INC. ("RSCP"), both being Pennsylvania corporations, parties of the first part, hereinafter collectively referred to as "Sellers", and RICHARD M. TRIBBITT and VICKY L. TRIBBITT, his wife ("Tribbitts"), parties of the second part, and CENTRAL PA REHABILITATION SERVICES, INC. ("CPARS") and REHAB SERVICES OF CENTRAL PA, mc. ("RSCPA"), both being Pennsylvania Close Corporations, parties of the third part, hereinafter collectively referred to as "Purchasers", witnesses that: WHEREAS, Sellers own and operate offices for the practice of physical therapy, occupational therapy and speech therapy in Millersburg, Mechanicsburg and Shermans Dale, Pennsylvania ("Clinics"); and WHEREAS, Sellers entered into a cer~ain Letter of Intent daced February 6, 1997, with Tribbitts for the sale by Sellers and the purchase by Tribbitts of the assets of those Cl~nics; and WHEREAS, Tribbitts have assigned most of their rights and obligations in and under the said Letter of Intent to Purchasers, exceot for their obliaation to assume those liabilities of Sellers that are owed-to Tribbitts, which said obligation they expressly recain without merger and agree to immediately convey, togecher with good will, to Purchasers at Closing. Sellers shall have no responsibil~:y or liability for the conveyance from Tr~bbitts to Purchasers as described in the preceeding sentence, except that for the convenience of the parties and to save additional documentation and closing coscs, the parties agree thac Sellers shall convey all assets and liabilities assumed directly to Purchasers at Closing; and WHEREAS, Seller and Purchasers have come to an aareement upon the final terms and conditions of sa~d sale and purchase of assets and wish to document said terms and condit~ons as more fully set forth herein. NOW, THEREFORE, in consideration of the foregoing, as well as in consideration or the mutual promises, covenants and agreements hereinaf~er see forth, the par~ies hereto covenant and agree as follows: SECTION 1. SUBJECT MATTER. 1.1 At the Closing, Sellers shall sell, grant, convey, transfer, assign and deliver to Purchasers, upon the terms and subject to the conditions of this Aareement, free and clear of all liens, encumbrances and charges~excepc as specifically set EXIlIBIT "A" forth in this Agreement, the following assets of CPRS and RSCP: (a) all of the furniture, equipment, fixtures and leasehold improvements owned by Sellers and located at the Clinics as of dace of Closing, including but no~ limited to the items set forth on Schedule 1.1(a) attached hereto; (b) all accounts receivable owed to and owned by Sellers as of the date of Closing, including accounts for services rendered but not yet billed as of date of Closi~g, as set forth on Schedule 1.1(b); (c) all supplies and inventories located at the Cli~ics as of the dace of Closing; (d) all patient lists of the Clinics as of the date of Closing; (e) all contracts for services to be performed as c: the date of Closing and all provider numbers of Sel:ers, except for the Medicare provider number of CPRS. as set forth on Schedule 1.1(e) attached hereco. (f) all existing leases for the Clinics; (g) telephone numbers and yellow pages advertising; (h) consent to the use of corporate names similar t= Sellers; (i) covenants not to compete as set forch in Sectic~ 8, below. 1.2 At the Closing, Purchasers shall purchase frcm Eellers, upon the terms and subject to the conditions of this Agres~ent, and in reliance upon the representations and warranties =: Sellers in this Agreement and the exhibits or schedules a::ached hereto, the assets co be acquired as aforesaid, and, as consideration therefor. shall pay to Sellers the purchase ~rice as more fully set forth in Section 2, below. . 1.3 This is an Agreemenc only for the acquisition c: certain of Sellers' assets as enumerated herein, includi~= accounts receivable, but does not include Sellers' cash c~ hand, which shall remain the sole and separate property of Sel:srs. Except as provided in Paragraph 2.2(c), below, all liabi:~:ies and'obligations of Sellers, whether known or unknown, dire=: or contingent, in litigation or threatened cr not yet asser:sd but attributable to services rendered or purchased by or prcd~=:s sold or purchased by Sellers prior to the Closing, are a~= shall -2- EXHIBIT "^" remain the responsibility of Sellers. Without limiting the generality of the foregoing, specifically retained by Sellers are any liabilities of the Sellers with respect to any federal, state, local or foreign income, franchise, payroll or other taxes imposed upon the Sellers, any obligation of Sellers for any employee grievance pending at the Closing date, any obligations of Sellers arising out of any litigation pending at the Closing date, or any claim by Richard's Healthcare for services rendered before the Closing date, for all of which Sellers shall remain responsible. In no event shall Purchasers assume or incur any liability or obligation with respect to any income or other tax payable by Sellers incident to or arising as a consequence of the consummation by Sellers of this Agreement, or any cost or expense incurred by Sellers incident to or arising as a consequence of such consummation of the negotiations in connection with this Agreement. SECTION 2. CONSIDERATION. 2.1 The full purchase price and consideration for this sale and purchase of assets shall be the sum of $1,050,000.00, plus Purchasers' assumption of certain of Sellers' liabilities as more fully enumerated and identified in Schedule 2.2(cl attached hereto and made a part hereof, all of which shall be allocated among the assets to be acquired as follows: (a) AS$ets of CPRS: (1) equipment, furniture, fixtures: (2) accounts receivable: (3) supplies and inventories: (4) good will and covenant not to compete: (5) liabilities assumed: $ 556,000.00 275,000.00 2,000.00 145,000.00 1'35.000.001 $ 843,000.00 Total: (b) Assets of RSCP: (1) accounts receivable: (2) good will and covenant not to compete: S 125,000.00 82.000.00 $ 207,000.00 Total: (c) Assets of Tribbitts: (1) good will: $ 100,000.00 (2) liabilities assumed (owed by Sellers to Tribbitts): 1100.000.001 Total: 0.00 2.2 Said purchase price and consideration shall be paid by .3. EXHIBIT nAn Purchasers to Sellers at Closing as follows: (a) an amount equal to $900,000.00 less the total amount, if any, of all funds advanced by Tribbitts to Sellers during February, 1997, for operating expenses for the Clinics, as well as rent and interest owed to Tribbitts for the month of February and maintenance expenses owed to Buildings & Grounds for the month of FebLuary, all as set forth in Schedule 2.2 (a) (which funds are hereby credited against the cash portion of the purchase price), to be paid in cash to or at the direction of Sellers by bank wire transfer, certified check, cashier's check or attorney's trust or escrow account check. (b) the execution and delivery to Sellers of a promissory note in the principal amount of $150,000.00, with simple interest at the rate of 9% per annum, monthly payments of at l.east $2,413.36 amortized over 7 years, and a balloon payment after five years, as provided in the amortization schedule attached hereto as Schedule 2.2 (b); (c) Purchasers' written assumption of Sellers' liabilities to the extent and only as set forth in Schedule 2.2(c) attached hereto and made a part hereof, and no others. Purchasers' assumption hereunder is expressly limited to the creditors and amounts as set forth on Schedule 2.2(c). Amounts in excess of that set forth on Schedule 2.2(c) for a particular claim, or claims not included in Schedule 2.2(c), and the entire amount of any claim by Richard's Healthcare, shall remain the liability of Sellers, who hereby agree to indemnify and save Purchasers harmless therefrom in accordance with Paragraph 10.2, below; (d) Purchasers' written assumption of the existing leases for. the Clinics. 2.3 As security for the prompt payment of the promissory note from Purchasers to Seller herein, Purchasers hereby grant to Sellers a present and continuing security interest in all of Purchasers' accounts receivable, whether acquired hereby or generated after Closing. Purchasers will execute and deliver to Sellers financing statements, together with other information, documents or copies as may be necessary to perfect Sellers' security interests against the rights or interests of third persons, except that Sellers' security interests may be subordinate to any similar security interest required by Community Banks, N.A., in lending funds to Purchasers to complete this transaction but Sellers security interests shall never be .4- EXHIBIT "A" subordinate to any security interest greater than the aggregate amount borrowed by Purchasers from Community Banks, N.A. on the date of Closing. SECTION 3. CLOSING. 3.1 The Closing of this sale and purchase of assets shall be held on February 28, 1997, at or about ll:30 o'clock A.M., at the offices of Marlin R. McCaleb, Esquire. 219 East Main Street, Mechanicsburg, Pennsylvania. 3.2 At the Closing, Sellers shall deliver to Purchasers such bills of sale, endorsements, assignments and other good and sufficient instruments of conveyance and transfer, in form and substance reasonably satisfactory to Purchasers' counsel, as shall be effective to vest in Purchasers all of Sellers' right, title and interest in and to the assets to be acquired. The assignments shall include an assignment of all contracts for services and provider numbers as set forth in Schedule 1.1(e) attached hereto and made a part hereof. To f.acilitate the assignment of accounts receivable, the parties shall enter into a Collection Agreement at Closing that will provide for the disposition of accounts receivable represented by checks or other drafts payable to Sellers. 3.3 purchase hereof. At the Closing, Purchasers shall pay to Sellers the price and consideration in accordance with Section 2 3.4 At or prior to the Closing, Sellers shall deliver all necessary releases of liens and Uniform Commercial Code termination statements in forms reasonably acceptable to Purchasers' counsel so that Sellers' title to the assets to be acquired is in conformity with Paragraph 4.3 hereof. , 3.5 At the Closing Sellers shall assign to Purchasers all of Selle=s' rights, title and interests as tenants in and under the existing leases for the Clinics and Purchasers shall assume and pay the rent accruing under said leases from and after the date of Closing. Sellers shall be released from further obligation under the leases held by Tribbitts. Sellers shall also be released from the lease for the Shermans Dale office or Purchasers hereby agree to indemnify and save Sellers harmless from any liability thereunder in accordance with Paragraph 10.3, below. SECTION 4. REPRESENTATIONS AND WARRANTIES OF SELLER. To the best of their knowledge and belief, Sellers represent and warrant as follows: -5. EXHIBIT "A" 4.1 Each Seller is a corporation duly organized, validly existing and in good standing under the laws of the Commonwealth of Pennsylvania, each has the corporate power and authority to own its properties and assets and to carry on its business and each has the corporate power to enter into this Agreement and to carry out its obligations hereunder. 4.2 This sale and purchase of assets, and the terms and conditions of this Agreement, have been approved by the shareholders and the Boards of Directors of CPRS and RSCP. 4.3 Sellers own outright, and have good and marketable title to, all of the assets to be acquired hereunder free and clear of all liens, pledges, mortgages, security interests, conditional sales contracts or other encumbrances or conflicting claims of any nature whatsoever, except only certain claims and liens in favor of Tribbitts as more fully set forth in a certain letter agreement dated January 22, 1997, and Sellers shall be released from liability on all such claims and liens in f~vor of Tribbitts at Closing. 4.4 Sellers have filed or will cause to be filed all federal, state and local income, unemployment and payroll withholding tax returns and reports of the Sellers due as of date of Closing and have paid or caused to be paid all taxes or assessments of taxes due as of date of Closing, except taxes or assessments that are being contested in good faith and which have been adequately reserved against (with proof of such reserves having been given to Purchasers). Such returns may not have been audited and Sellers have received no notice of, and to the knowledge of Sellers there is no, pending or threatened proceedings or claims by any governmental agency for assessment or collection of taxes from Sellers. All such returns that have been filed and provided or displayed to Purchasers are true, complete and accurate, have been prepared on the same basis as that of previous years and in accordance with all applicable laws, regulations and requirements, and accurately reflect the taxable income (or other measure of tax) of Sellers. 4.5 There is no dispute, claim, action, suit, proceeding, arbitration or governmental investigation, either administrative or judicial, pending, or to the knowledge of Sellers, threatened against Sellers, their Clinics or the assets being acquired by Purchasers, and Sellers are not in default with respect to any order, writ, injunction or decree of any court or governmental department, commission, board, bureau, agency or instrumentality, which involves the possibility of any judgment or liability which may result in any material adverse change in the financial condition of Sellers, their Clinics or the assets being acquired by Purchasers. -6- EXHIBIT "A" 4.6 Sellers are not parties to any debenture, note, conditional sale, loan or other borrowing agreement with respect to their Clinics or any of the assets used therein, including but not limited to the assets being ac~uired pursuant to this Agreement, except as provided in Paragraph 4.3, above. 4.7 Sellers neither own, have in existence, have any rights or interest in or to, nor use in their Clinics: (a) any trademark, registered trade or registered . fictitious name or any copyright, invention, letters patent or application for letters patent; (b) any equipment lease by which Sellers lease from any person or entity any of the equipment, apparatus, furniture, fixtures or other personal property being conveyed hereunder (except that to the extent there is a lease for the copier it is being assigned to Purchasers); (c) any agreement or other arrangement under which the Sellers have agreed or are obligated to render services at any time after the Closing date, except for contracts being conveyed hereunder as set forth in Schedule 3.2; 4.8 Sellers are not subject to any judgment, order, writ, injunction or decree which materially adversely affects, or, so far as the Sellers can now foresee, may in the future materially adve~sely affect the Clinics or the assets being acquired by Purchasers hereunder. 4.9 Sellers have complied with and are not in default under, or in violation of, any law, ordinance, rule, regulation or order (including, without limitation, any environmental, zoning, safety, health or price or wage control law, ordinance, rule, regulation or order) applicable to their Clinics as presently constituted which materially adversely affects, or, so far as the Sellers can now foresee, may in the future materially adversely affect their Clinics or the assets being acquired by Purchasers hereunder. 4.10 No representation or warrant)' by Sellers in this Agreement or in any other exhibit, list, certificate or document delivered pursuant to this Agreement, contains or will contain at Closing any untrue statement of material fact or omits or will omit to state any material fact necessary to make any statement herein and therein not misleading. 4.11 All financial information, including but not limited to records of liabilities, furnished by Sellers to Purchasers on -7- EXHIBIT nA" or before the date of Closing are true, complete and accurate a~ of the date that they were prepared, and are in accordance with the books and recorns of Sellers as of the date when they were prepared. 4.12 As of the date of Closing, with respect to any pension, profit-sharing, stock bonus, stock option, employment or severance agreements, deferred compensation plan, or other employment plan (" Plan") maintained by or on behalf of Sellers for the benefit of Sellers' employees: (a) are in substantial compliance with the Employee Retirement Income Security Act of 1974, as amended and the regulations promulgated thereunder ("ERISA") and the Internal Revenue Code (" IRC"); (b) Sellers have not engaged in any activity with respect to any such plan that could subject Sellers to any tax or penalty imposed under ERISA or the IRC; (c) no event has occurred and there exist no conditions or set of circumstances in connection with which Sellers could be, directly or indirectly, subject to any material liability under ERISA, the IRC or any other law, regulation or governmental order; (d) there is no material pending or threatened litigation relating to any Plan; (e) no Plan has been terminated, no filing for termination has been made by Sellers, and no proceeding has been initiated by the Pension Benefit Guaranty Corporation ("PBGC") to terminate any such Plan, and sellers have not incurred and do not reasonably expect to incur any liability, directly or indirectly, with respect to any Plan termination, whether by the PBGC or otherwise; (fl all contributions required to be made under the terms of any Plan, as of the date of Closing, have been timely made, or if nct due until after the date of Closing will be timely made; and (g) the consummation of the t~ansactions contemplated by this Agreement will not result in any liability of Sellers with respeCt to any such Plan. 4.13 There have been no amendments to the Articles of Incorporation or the By-Laws of Sellers since March 31, 1993. 4.14 The total amount of all liabilities of Sellers for which Sellers remain liable as provided in Paragraph 1.3, above, does not exceed the sum of $1,100,000.00 being paid by ?urchasers to Sellers as provided in Paragraph 2.1, above. SECTION 5. REPRESENTATIONS AND WARRANTIES OF PURCHASER. 5.1 Each Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the Commonwealth of Pennsylvania, each has the corporate power and authority to own its properties and assets and to carryon its business and each has the corporate power to enter into this Agreement and to car~1 out its obligations hereunder. -8- EXHIBIT "A" 5.2 This sale and purchase of assets, and the terms and conditions of this Agreement, have been approved by the shareholders of CPARS and RSCPA. 5.3 This Agreement and the Note described in parag.aph 2.2(b), above, do not violate or breach the Articles of Incorporation or the By-Laws of Purchasers. This Agreement constitutes, and the Note when issued will constitute, the legal, valid and binding obligations of Purchasers, enforceable in accordance with their terms, except as enforceability may be limited by bankruptcy, reorganization, insolvency or other laws affecting creditors rights generally or equitable principles of specific performance. 5.4 Purchasers hereby agree to indemnify and save Sellers harmless from any liability for the liabilities being assumed by Purchasers as set forth in Paragraph 2.2(c), above, in accordance with Paragraph 10.3, below. SECTION 6. CONDITIONS PRECEDENT TO PURCHASERS' OBLIGATIONS. All obligations of the Purchasers under this Agreement are subject to the fulfillment, prior to or at the Closing, of each of the following conditions unless otherwise waived in writing by Purchasers: 6.1 Sellers' representations and warranties contained in this Agreement or in any list, certificate or document delivered pursuant to the provisions hereof shall be true at and as the time of Closing. 6.2 Sellers shall have performed and complied with all agreements and conditions required by this Agreement to be performed or complied with by them prior to or at the Closing. 6.3 There shall not have been a material adverse change, occurrence or casualty in or to the assets being acqui=ed hereunder, whether covered by insurance or not. 6.4 Sellers shall have delivered to Pu=chasers the documents and other items described in Paragraphs 3.2, 3.4 and 3.5 hereof. ,6.5 Sellers shall have delivered to Purchasers true copies, certified by the corporate secretaries, of the resolutions of the shareholders and of the Boards of Directors of CPRS and RSCP approving and authorizing this transaction and of the Articles of Incorporation and the By-Laws of CPRS and RSCP as the same are in force on the date of Closing. 6.6 Sellers shall have delivered to Purchasers the written .9- EXHIBIT "A" certificates of the corporate secretaries identifying the directors and shareholders of CPRS and RSCP as of the dates of the resolutions described in Paragraph 6.5, above, and the officers of CPRS and RSCP as of the date of Closing. 6.7 Sellers shall have delivered to Purchasers the written certificates of the Presid~nts of CPRS and RSCP confirming the satisfaction of the conditions set forth in Paragraphs 6.1, 6.2 and 6.3, above. 6.8 There shall not be any pending, or to the knowledge of Sellers, threatened action, proceeding or investigation by or before any court, arbitrator, governmental body or agency which shall seek to restrain, prohibit or invalidate the transactions contemplated hereby or which, if adversely determined, would result in a breach of a representation, warranty or covenant by either party herein. . 6.9 Sellers shall have delivered to Purchasers a favorable written opinion of Sellers' counsel, dated as of the closing date, addressed to Purchasers. SECTION 7. CONDITIONS PRECEDENT TO SELLERS' OBLIGATIONS. All obligations of the Sellers under this Agreement are subject to the fulfillment, prior to or at the Closing, of the following conditions: 7.1 Purchasers' representations and warranties contained in this Agreement shall be true at and as of the time of Closing. 7.2 Purchasers shall have performed and complied with all agreements and conditions required by this Agreement to be performed or complied with by them prior to or at the Closing. 7.3 Purchasers shall have paid the purchase price to Sellers as described in Section 2, above, including without limitation payment of the cash portion of the purchase price and execution and delivery of the note and related financing statements pertaining to the balance of the purchase price. 7.4 Purchasers shall have delivered to Sellers true copies, certified by the corporate secretaries, of the resolutions of the shareholders of CPARS and RSCPA approving and authorizing this transaction ~nd of the Articles of Incorporation and the By-Laws of CPARS and RSCPA as the same are in force on the date of Closing. 7.5 Purchasers shall have delivered to Sellers the written certificates of the corporate secretaries identifying the shareholders of CPARS and RSCPA as of the dates of the -10- EXHIBIT "A" resolutions described in Paragraph 7.4, above, and the officers as of the date of Closing. 7.6 Purchasers shall have delivered to Sellers the written certificates of the Presidents of CPARS and RSCPA confirming the satisfaction of the conditions set forth in Paragraphs 7.1 and 7.2, above. 7.7 There shall not be any pending or threatened action, proceeding or investigation by or before any court, arbitrator, governmental body or agency which shall seek to restrain, prohibit or invalidate the transactions contemplated hereby or which, if adversely determined, would result in a breach of a representation, warranty or covena~t of either party herein. 7.8 Purchasers shall have delivered to Sellers a favorable wri~ten opinion of Purchasers' counsel, dated as of the Closing date, addressed to Sellers. SECTION 8. COVENANT NOT TO COMPETE. 8.1 In consideration of that portion of the purchase price allocated to these covenants, Sellers, Consolidated Health Care Associates, Inc. ("CHCA"), PTS Rehab, Inc. ("PTS") and Robert M. Whitty, individually, agree that for a term of 5 years after the date of Closing, they will not engage directly or indirectly, whether individually or in partnership or in conjunction with any other person, firm, association, syndicate or corporation, as principal, agent, shareholder, employee, officer, director, consultant or in any manner whatsoever, in the conduct or operation of an office for the practice of physical therapy, occupational therapy or speech therapy within 25 miles of the Millersburg, Mechanicsburg or Shermans Dale offices of Purchasers. 8.2 The parties agree that the limitations set forth in Paragraph 8.1, above, are reasonable in time and geographic scope, and if any provision thereof is held invalid or unenforceable, the remainder shall nevertheless remain in full force and effect. In part~c~lar, Sellers, CHCA, PTS and Robert M. Whitty agree that if any court of competent jurisdiction shall determine that the duration or geographical limit of the foregoing non-competition covenant is invalid or unenforceable, it is the intent~on of the parties that it shall not be terminated thereby but shall be deemed to be amended to the extent required to render it valid and enforceable, such amendment to apply only with respect to the jurisdiction of the court making such adjudication. 8.3 Sellers, CHCA, PTS and Robert M. Whitty further acknowledge and agree that any violation of any of the covenants -11- EXHIBIT "A" of this Section 8 would cause substantial and irreparable injury to Purchasers, whereupon Sellers, CHCA and PTS, and Robert M. Whitty, jointly and severally, may be enjoined from any breach or threatened breach thereof, in addition to, but not in limitation of, 'any other rights or remedies to Purchasers are or may be entitled to at law or in equity or under this Agreement or otherwise. 8.4 CHCA, PTS and Robert M. Whitty join in the execution of this Agreement for the purpose of accepting and agreeing to all terms and conditions of this Section 8 and to be bound thereby. SECTION 9. BULK SALES. 9.1 Sellers shall furnish Purchasers with a list of Sellers' existing creditors signed and sworn to by Sellers, containing the business address and amount due to each creditor. Sellers shall provide Purchasers with a written opinion of Sellers' cuunsel that the bulk sales provisions of Massachusetts law (M.G.L.A. c. 106, 55 6-101 et seq.) do not apply to this transaction, setting forth the reasons therefor and the legal authorities relied upon. 9.2 Prior to closing, Sellers have prepared and cau~ed to be filed Form REV-181, Application for Tax Clearance Certificate, with the Pennsylvania Department of Revenue and the Pennsylvania Department of Labor and Industry, for all corporate income, unemployment compensation and payroll withholding taxes. Sellers shall pay all taxes determined by either Department to be due and owing by Sellers and Sellers hereby agree to indemnify and save Purchasers harmless from the same in accordance with Paragraph 10.2, below. SECTION 10. INDEMNIFICATION. 10.1 All representations, warranties and agreements made by Sellers and Purchasers in this Agreement or in any document or certificate delivered pursuant hereto shall be deemed and construed to survive the Closing. , 10.2 Sellers shall defend, indemnify and hold Purchasers harmless from and against any and all liabilities and obligations of, or claims against, Sellers and all actual or potential claims, demands, liabilities. damages, losses and out-of-pocket expenses including reasonable attorneys and accountants fees, whether or not reduced to judgment, order or award, caused by or arising out of the breach of any,agreement of or any representation or warranty or indemnification made by Sellers in this Agreement or in any exhibit, list, certificate or document delivered by Sellers pursuant hereto, excepting only for those liabilities expressly assumed by Purchasers as provided in -12. EXHIBIT "A" Section 2, above. 10.3 Purchasers shall defend, indemnify and hold Sellers harmless from and against all actual or potential claims, demands, liabilities, damages, losses and out-of-pocket expenses including reasonable attorneys and accountants fees, caused by or arising out of the breach of any agreement of or any representation or warranty or indemnification made by Purchasers in this Agreement or in any exhibit, list, certificate or document delivered by Purchaser pursuant hereto, including those liabilities expressly assumed by Purchasers as provided in Section 2, above. 10.4 Promptly after receiving notice of a claim, or service of process by or from any third person in any litigation, in respect of which indemnity may be sought from the other party pursuant to this Section 10, the party so served or notified shall notify the indemnifying party of the claim or the commencement of such litigation and the indemnifying party shall be entitled to assume the defense thereof at its expense with counsel of its own choosing. The indemnifying party shall not settle or compromise any claim without the consent of the party to be indemnified. 10.5 If and to the extent that any party, after compliance with the terms of Paragraph 10.4, above, is required to pay any claim, liability or expense for which it is indemnified against by another party as provided in Paragraph 10.2 or 10.3, above, the indemnified party shall have the right of set off of such payment, dollar for dollar, against any any amounts owed by it to the indemnifying party, including with respect to Purchasers any amounts of principal and/or interest owed by them to Sellers under the promissory note described in Section 2, above. This right of set off shall be in addition to, but not in limitation of, any other rights or remedies that Purchasers may have against Sellers at law or in equity, or under this Agreement or otherwise. 10.6 All obligations for indemnification shall terminate on the tenth anniversary of this Agreement, except with respect to any claims then pending, unless otherwise mutually agreed. SECTION 11. POST-CLOSING MATTERS. 11.1 At the request of Purchasers from time to time, sellers will execute and deliver such further reasonable instruments and will take such other reasonable action more effectively to consummate the transactions contemplated by this Agreement and to put Purchasers into ownership, possession and control of all of the assets being acquired hereunder to the exclusion of all others whose claims may have arisen prior to the -13- EXHIBIT "A" Closing date. 11.2 Sellers shall be responsible for all present or future litigation and claims for injury and related expenses arising out of their operation of the Clinics up to the time of Closing, and Sellers shall be responsible for all claims for injury arising out of services rendered by them or their agents and employees prior to the Closing date. Sellers shall direct or control, or continue to direct or control, as the case may be, the conduct of such litigation. Purchasers shall cooperate with any reasonable requests of the Sellers or their attorneys in the defense of such litigation, including the availability of records, books or other documents included in the assets to be acquired hereby. To the extent that testimony of Purchasers' employees is necessary, Purchasers shall make them available consistent with the needs of the business and shall be reimbursed for all out-of-pocket expenses incurred by Purchasers or individual employees and pro- rata salaries and payroll costs for the time such employees devote to complying with the requests of sellers hereunder. 11.3 Purchasers shall have no liability for, and Sellers agree to defend, indemnify and hold the Purchasers harmless with respect to any claims for wages or otherwise arising out of services rendered prior to the Closing date by any persons employed prior to the Closing by Sellers, in accordance with Paragraph 10.2, above. Sellers shall have no liability for, and Purchasers agree to defend, indemnify and hold the Sellers harmless with respect to any claims for wages or otherwise arising out of services rendered from and after the Closing date by any persons employed from and after the Closing by Purchasers, in accordance with Paragraph 10.3, above. An employee of Sellers who participated in any Plan described in Paragraph 4.12, above, shall have the rights, upon termination of employment with Sellers, as provided in that Plan, including, to the extent permitted by the Plan, ERISA and the IRC, the right to rollover any lump sum distribution in the Plan into another plan in which the employee is then a participant (if permitted by the other Plan) . 11.4 Upon receipt of a Tax Clearance Certificate as described in Paragraph 9.2, above, Sellers shall immediately provide Purchasers with a true copy of same. , 11.5 Sellers shall arrange with Capital Healthcare Financing I"Capital") for the termination of the Intercreditor Agreement dated January 22, 1997, between Capital on the one part and Tribbitts on the other part. 11.6 In the event of a default in payment by CPRS of any amount owed by it under a Therapy Services Agreement of this same date, between CPRS and CPARS, or under a Lease Agreement of this -14- EXHIBIT "An same date, between CPRS and Tribbitts, Purchasers shall have the right of set off, dollar for dollar, against any amounts of principal and/or interest owed by them to Sellers under the promissory note described in Section 2, above. SECTION 12. MISCELLANEOUS. 12.1 This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the Commonwealth of Pennsylvania and any actions to enforce, or to recover damages for the breach of, any of the terms and conditions hereof shall be brought only in the state or federal courts of Pennsylvania. 12.2 Each party hereto shall pay its own expenses incidental to the preparation of this Agreement and the consummation of the transactions contemplated hereby. 12.3 This Agreement shall not be assignable by either party without the prior written approval of the other party. To the extent assignable, this Agreement shall be binding upon, and inure to the benefit of, the Purchasers and their successors and assigns and the Seller and their successors and assigns. 12.4 Any notice, communication, demand or other writing (a "notice") required or permitted to be given, made or accepted by any party to this Agreement shall be given by personal delivery or by depositing the same in the United States mail, properly addressed, postage prepaid and registered or certified with return receipt requested. A notice given by personal delivery shall be effective upon delivery and a notice given by registered or certified mail shall be deemed effective on the second day after such deposit. For purposes of notice, the addresses of the parties shall be, until changed by a notice given in accordance herewith, as follows: If to the Purchaser: Central PA Rehabilitation Services, Inc. 75 Evelyn Drive Millersburg, PA 17061 Rehab Services of Central PA, Inc. 75 Evelyn Drive Millersburg, PA 17061 With a required copy to: Marlin R. McCaleb, Esquire 219 East Main Street P.O. Box 230 Mechanicsburg, PA 17055 -15- EXHIBIT "A" . If to the Seller: Central Pennsylvania Rehabilitation Services, Inc. c/o Consolidated Health Care Associates, Inc. 38 Pond Street Franklin, MA 02038 Rehab Services of Central Pennsylvania, Inc. c/o Consolidated Health Care Associates, Inc. 38 pond Street Franklin, MA 02038 With a required copy to: Blake J. Godbout, Esquire DiMaria & Godbout 15 Broad Street Boston, MA 02109 , 12.5 This document states the entire agreement reached between the parties hereto with respect to the transactions contemplated hereby and supersedes all prior or contemporaneous agreements, understandings, representations and warranties between the parties, and may not be amended except by written instrument executed by the parties hereto. IN WITNESS liHEREOF, the parties have caused this Agreement to be executed the day and year first above written, intending thereby to be legally bound. CENTRAL PENNSYLVANIA REHABILITATION SERVICES, INC. By: ?.....# .AI A/..4I' Robert~~~hitty President " REHAB SERVICES OF CENTRAL ~/It~ Robert M. Witty President PENNSYLVANIA, INC. " By: E ASSOCIATES, INC. By: Robert M. W ' President -16- EXHIBIT "A" . PTS REHAB, INC. "?J.l4~ Robert M. W tty President By: /~d~ Robert . Whitty (indi idually) (Robert M. Whitty executes this Agreement only for. the purpose of accepting the terms and conditions of 8 and is not obligated under the provision of any other Section. ) (SEAL) Section INC. By: By: INC. REHAB /" )/ " I" tL' - /' I , ,. / I '-j;~;1?i- Richar M. Tr~bbitt ( indi,fidually) ,-- i ---- . J., !;(, /t.,~,~ Vicky L. T:ibbitt (indi viduallyl (SEAL) (SEAL) -17- EXHIBIT "l1" ~ ,. ',/ . 'e-..w~,iJ"'l'~1I\N !~.- I ,r I I! ';.""..H,:" - -, '-r-~. -' ! ' iif;==3~~I_"_~s,~,~:: ~~;:L~~ ~::, kNnoKl'i ~. i.---1 i .HI 41_, -~-oO' ~/:.'tJ~. I "Ii . ll:lL t .~- q~;:~. rw.,.-...v;;.n._-_1.!~ - iUii, ..... \lo.-IntIU~2'o.w'.~ 1"IllAiiMG .--.r----....~-..r44~ ~-Wlii~-~;--"".oM.----i ;I~~~-~. . . .~lfI!_.~U!6]! _____...L~H!J~i]~>!...... ffe~ ~_C--.J ,dlf "'11M" 'h......., .... ..... ' , - L.... J" ... \AI '__.------.J 'Amnt...,. ..... t .-- ..-- ~fn.~ISMt;; -'-~--rHhOl~ re..;.m.-~ ,. - -~ -r--nt6t--....... I I SiiiWw., r,'Unl ~iO.... 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W~.."'. ~ 11' n ~UOI lUlfOOI >lO 00 ' lS5'il' "10)' , --mJ4' -4---,r62 ~ l1n)-- ~OO 0-00- 504445 7S00 lSi1~ S..oJO!al 31600001 lifH" 000 I ,eo' , ~"'.n ! 2lA 00 I I.S!fi1 '~361 !if111 ---rooo 00 r lUi iD20 CUll., 1(000...ly PIlnon 118ea' 000' :U:U~O' 11000-- ---.0 00 ' --,mr ell/) '!~!L'Otal ............ -suo;fOIIl ...n16 '111",,)10 ,00 '-91 ,'00 11J13. lien, !oi12 ; eilifh .- ----"4""------' -- .-" -:--6tDOu-=:~ --_' ni5"Qa U.70' \linO" NOli EMnId 1"'"".., irorn In-' Eenoc,.nd-;i\GTT4l/1t.ai'Donaii"M4t1rn.IOt\l'l'!.l!.!!!I~"fJtii'rN:I!l~"'lq~. 'GGid~IICO!~ Scii!.d...'- ;?..:J, (c) EXHIBIT "A" llumAl'Y SERVICES AGR~EMBNT nns AGREEMENT, made and executed as of this :2 f."L.. day of ~ 1997, by and behveen CENTRAL P A REHABIUTATION SERVICES, INC., a PeMsylvania business corporation, (herelnaiter called "CPARS") and CENTRAL PENNSYLVANIA .REHABILIT A nON SERVICES, INC., a Pennsylvania business corporation (hereinaiter called "O'RS"); WITNESSETH WHEREAS, CPRS is a certified Medicare provider of physical therapy services through outpatient rehabilitation clinics located at MilIersburg, Mechanicsburg, and Shermans Dale, Pennsylvania, (the "Practice"); and WHEREAS, CPRS desires to engage CP ARS to provide certain services for or with respect to the operation of the Practice. to which CPARS is agreeable, as hereinafter set forth. NOW, TIIEREFORE, In consideration of the foregoing premises and the mutual covenants herein contained, the parties hereto. each intending to be legally bound herebj', do now covenant and agree as follows: 1. En~a~ement. CPRS does hereby engage and retain O'ARS, which engagement CP ARS accepts, to provide the services herelnaiter specified rega:tding the operation of the Practice. EXHIBIT "B" ~~3 FO: SEP l~ '97 13:5~ . . 2. Services. During the term of this Agreement, CP ARS shall provide or cause to be provided the services to CPRS for or with respect to the operation of the Practice as set forth in Exhibit" A", in compliance with Title 18 of the Social Security Act. CPRS shall exercise professional responsibility over such services rendered by CP ARS. 3. Em. For and In consideration of the services of CP ARS provided under this Agreement, CPRS shall pay to Cl'ARS as follows: a. 592.00 per evaluation; and b. 575.00 per physical therapy treatment. On the first day of each month during the term of this Agreement, CPARS shall submit to O'RS an invoice detailing the evaluations and treatments performed during the preceding month. CPRS shall pay CP ARS within flIteen (15) days of receipt of the submitted Invoice. Notwithstanding the foregoing, the amounts payable by CPRS to CP ARS under this Agreement shall not exceed the amounts payable to CPRS by Medicare Part B for the services rendered by CP ARS (ir.cluding any deductible! and cc-insurance payments from the patients) less the amounts paid by CPRS lor the rental of its facilities. CPRS shall be required to pay this amount to CP ARS notwithstanding 2OQ2!.1 2 EXHIBIT "B" . . the refusal bj' the government reimburs~ment source to pay CPRS for such services. 4. Imn. The t.erm of this Agreement shall be three (3) months commencing as of the date of this Agreement and shall automati~ally renew thereafter on a month to month basis. At any tlme, CP ARS may terminate this Agreement for any reason or cause whatsoever, but no such termination shall occur or be effective until the expiration of five (5) days after CP ARS gives written notice thereof to CPRS. After the initial term of this Agreement, CPRS may terminate it for any reason or cause whatsoever, but no such termination shall occur or be effective until the expiration of five (5) days after CPRS gives written notice of termination to CP ARS. 5. Records. (a) CP ARS shall keep and maintain such records of the services rendered by CPARS to patients of CPRS as may be required by any fiscal intermediary, federal or state government egency. (b) In the event that Section 952 of the Omnibus Budget Reconciliation Act of 1980 and the regulations promulgated thereWlder ("Section 952"),42 U.S.C. 91395 x(v)(l)(I), 42 C.F.R. S420.302, are applicable to the services rendered by CP ARS under this Ag:o:eement, then CP ARS shall comply Wltll four 9?3 POol 5EP 12 . , yem after the e.'<piration of an)' senic!!! provided to CPRS, with requests by the Comptroller General of the United States, the Secretary of the Department of Health , and Human Services ("HHS"), and their duly authorized representatives ior access to this Agreement, and to the books, documents, and records maintained by CP ARS necessary to verify the nature md extent of the costs of services provided by CP ARS to CPRS. The access mUllt be requested in accordance with the pro\isions of Section 952. a> ARS will notify CPRS immediately of any requests made pursuant to this provision. 6. Notices. Any notice required by or given under this Agreement to either of the parties hereto shall be sufficient if sent by United States certified mail, return receipt requested. with postage prepaid, and addressed in the case of the parties' its current principal business office, or in the case of either such party to any other address that such party may have specified in a writing sent in accordance with the provisions of this paragraph. 7. Construction. This Agreement shall be governed by, construed under and enforced in accordance with the laws of the Commonwealth of PeMSylvania. The captions of the numbered paragraphs of this Agreement have been inserted for convenience only and shall not control, limit or affect the meaning, Interpretation or construction of this Agreement. Where herein used, :lDQl8.\ -l EXIIIBIT "B" SEP 12 'S7 the plural shall lnclude the singular, and the singular shall Include the plural. The use in this Agreement of the words "herein", "hereof", "hereunder" and other similar compounds of the. words "here" shall reLer to this entire Agreement, and not of any particular provision or paragraph hereof, unless the context otherwise clearly requires. 8. ~ini Effect. This Agreement shall inure to the benefit of the named parties hereto, and their respective successors and assigns. 9. Entire Asreement. This Agreement. embodies the entire agreement and understanding between the named parties hereto, and shall not be ',aried, contradicted, amended or modified by an}' other agreements, promises, representatior.s, terms or conditions unless the sar.'le are made in writing and executed by both of the parties hereto after the date hereof. [REST OF P AGE IS INTENTIONALLY LEFT BLANK] ~.1 5 . IN WITNESS WHEREOF, the said parties hereto, each intending to be legally bound hereby, have duly executed this Agreement on this da)', month and year first above written. ATIEST: ~ L -Wt:rr I /Secretary ATIEST: :2llO:2s.l CENTRAL P A REHABILIT ATlON SERVICES, INC. D. / By: J , ~" President CENTRAL PENNSYL V ANlA REHABILITATION SERVICES, INe. By7~4d.~ - sident 6 , . EXHIBIT A CP ARS will provide therapy services under the terms and conditions ot this Agreement and in accordance with any applicable requirements of all federal laws, rules and/ or regulations and CPRS. CPARSsha11: 20023-1 * Provide qualified, licensed professionals. Screen all admissions for potential rehabilitation services and saeen all current patients for potential rehabilitation sen'ices on a scheduled ongoing basis. * * Accept patients for treatment in accordance with CPRS's admission policy. . Evaluate and trl!at all physic:lan referred patients needing rehabilitation services. . Provide necessary written documentation of senicls as required by State and Federal regulations, and maintain a complete and timely clinical record on each patient that includes diagnosis, medicill history, physician's orders, and progress notes relating to all service received. * Provide administrative and clinical management supervision of all therapists, therapy services. documentation and in.services. * Maintain liaison with attending physician with regard to the progress of the patient and the need lor revisions to the required plan oi treatment. 7 EXHIBIT "B"