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HomeMy WebLinkAbout97-07196 1\,' '1,,: I. ".JJ-;.'~' ;1' " -q' , No, .9,. '7/~' CIIII TIm '\ , ' , il " I' ' VI ;1, . " ~.,~,.~.,.. i,I"", , ' ~t , COIIrtot Common Plea. .' . 'Camb.Co., ' .' ,I '\ , " , , !d , ," , , ii' " ,J ;; , ,) ',.j l'i'J~, /j':,r tn';;" "l !',~I~ " ,~ ;~I~R 1 ('.:i;'~~_ 'f/l!t:P' ,,\r .,' h" -,'1,_'[: liJ1, iiU,.j ",,1.1: ~!'" "Ii ~iql {,f :!i';~JU :.il~ ,,:/;11- ,."tj ,u.. ';, i; - ':V~ : / '-'~:'\ 'h '.;\ I" l;'.f,; 'i, I-fi 4 ~:~ (If W1f~; .1 ,II;:~1 "I...i'i"~ '),.j~ " , .'!~:~ " _,~i:';'~~ , ;~~.~ '-!f~: ,.I ~t- ",~ ,,'r~\ ':~_x~ ,;-u;_,~ , ~ ~~ r ,,. ',,',,' 'I, "~I 'i:~\ '.lif. ; , '\\ I -i' , H! ;,r. !J~ di' 1}!:1 .Il i"~ -', ,~-' . ',' hi'/' ilL '. ,I' I' " r Johnson, Dume, Stewart & Weidner By: David J. Lanza 1.0. No. 55782 301 Market Street P. O. Box 109 Lemoyne. Pennsylvania 17043-0109 (717) 761-4540 Attorneys for Plaintiff HOLY SPIRIT HOSPITAL OF THE SISTERS OF CHRISTIAN CHARITY. IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. CIVIL ACTION - LAW Plaintiff v, TRANSACT HEALTH SYSTEMS. INC. and TRANSOP, INC. Defendents COMPLAINT PURSUANT TO Ps.R.C.P. 29611bJ FOR CONFESSION OF JUDGMENT FOR MONEY DAMAGES. 1 . The Plaintiff Is Holy Spirit Hospital of the Sisters of Christian Charity. a Pennsylvania not- for-profit corporation with a place of business at 603 N, 21" Street. Camp Hili, Cumberland County, Pennsylvania 17011, 2. The Defendant. Transact Health Systems. Inc" Is a businass entity of undatermlned nature with a place of business at 2666 Haymakar Road. Monroevllle, Allegheny County, Pennsylvania 16.146. 3. The Defendant. TransOp. Inc" Is a business entity of undetermined nature with a place of business at 700 McKnight Road, Suite 701. Pittsburgh. Allegheny County. Pennsylvania 16237. 4, In January. 1994, Defendants executed and delivered to Plaintiff a Promissory NOte. a .. , I' ", UEXHIBIT A" I "d, " J PROl'tDSSORY NOTE $117,500.00 On or before July I. 199~, FOR VALUE RECEIVED, TRANSACT HEALTH SYSTEMS, INC., and TRANSOP, INC. domestic corporations, hereinafter called 'Makers', jl)lntly and severally promise to pay to the order of HOLY SPIRIT HOSPITAL OF THE SISTERS OF CHRISTIAN CHARITY, a domestic nonprofit corporation, hereinarrer called 'Payee', the rate of six (6%) percent per annum (computed on the basis of a year of 36~.days), whir.h said principal and Interest shall be paid as follows: 1. Interest Only. Makers shall pay to Payee Interest at the rate of six (6%) per annum, monthly In arrears. beginning February 1, 1994 through July I. 199~ which said interest shall be paid on the outstanding principal balance of this obligation as the SllJ11e ~halllncrease or decrease from time to time, . 2. Principal and Inlerest. Beginning July I, 1995 the then remaining principal balance shall be paid by Makers to Payee in twelve (12) consecutive equal monthly installmeD!s together with interest at the rate of six (6%) percent and the principal balance. together with accrued and unpaid interest shall be paid, in full, on or before June I, 1996 ('Marurity Date'), 3. Prepayment. Makers shall have the right to prepay. in whole or in part, the principal balance at any time without pe~alty, In the event that Makers shall fall to make monthly payment on account of interest by not later than the firreen (15th) calendar day of the month in which said interest paymeD! is due or in the event that Makers shall fail to pay any required monthly installment on aCCOUD! of principal and Interest by the fifteenth (I ~th) calendar day in which said principal and Imerest installment Is due then Makers shall be In default with respect to the terms and conditions of this Promissory Note and the then remaining principal together with any accrued and unpaid Intereslshall be paid, In full.~ upon written demand by Payce to Makers and Makers shall pay said sum, in full, within fifteen (I~) calendar days arrer said written demand, Said written demand shall be from Payee to Makers by registered or cenified mall. postage prepaid. addressed to Makers at 701 McKnight Park Drive, Pittsburgh. PA 15237, which said notice shall be deemed received two (2) calendar days after the date of mailing as evidenced by the postmark, In the event of any uncured default, Makers authorize any attorney to appear before the Prothonotary of any coun of record of the Commonwealth of Pennsylvania or In United States of America at any time after this Note becomes due. whether by acceleration or otherwise, and to waive the issuing and serving of process and conless judgment in favor of Payee against Makers for the lIII10unt of the unpaid principal together with any accrued and unpaid Interest due under this Promissory Note. together with costs of suit, and to release all errors and waive all rights of appeal, . Makers waive demand and presentment for payment, notice of dishonor. notice of protest and protest of this Note, I.'! , >I., " , , II I' " . II I, "EXHIBIT B" Ii .' 000374'OO3UIDc.cm~cr 7. 19~3IIRDIDKI,131146 TERMINATION AGREEMENT t7 nus TERMII'ATION AGREEMENT ("Agreement"), made and entered Into this i!I&t. day of L~ ,1993, by and between TRANSACT HEALTH SYSTEMS, INC., a domC$tlc corporation, herelnal\er called 'Trwact' and HOLY SPIRIT HOSPITAL OF TIlE SISTERS OF CHRISTIAN CHARITY, a domestic nonprofit corporation, herelnal\er called "Holy Spirit." WIT N E SSE T H: WHEREAS, Trwact and Holy Spirit have previously entered Into a License and Consultant Agreement, dated 1anuary 24, 1992; and WHEREAS, differences have arisen between Transact and Holy Spirit with respect to the operation and management of a program facility {"Program Facility") utlllzlng the Trwact program, as more fully dC$crlbed In said License and Consultant Agreement; and WHEREAS, Transact and Holy Spirit have mutually agr~ed, under the terms and conditions herelnal\er provided, to terminate the License and Consultant Agreement effective as of 1anuary I, 1994; and WHEREAS, Trwact and Holy Spirit desire to confirm their understanding in writing, NOW, THEREFORE, the parties hereto. each Intending to be legally bound, agree as follows: 1. Recitals. The recitals set forth above are Incorporated herein by reference, 2. License and Consultant Agreement. The License and Consultant Agreement, dated 1anuary 24, 1992, between Transact and Holy Spirit Is Incorporated hueln by reference hereinafter called "License Agreement," , 3. T~rnli",llion/Uc~ns~ Al:rl:l:n1~I1l. Transact and Holy Spirit agree that the License Agreement shall I and the same Is hereby terminated as of the Effective Date set fonh In Paragraph 12 hereof, under and subject to the following specific terms and conditions: . I I ~ 000374-0038JIO<wnb<r 7, 19?JI J ROIOKlIJ I ~~6 A. Termination Fee. Holy Spirit shall pay to Transact a termination fee in the amount of One Hundred Twenty.Five Thousand ($125,000,00) Dollars, which said termination fee shall be paid, In full, on lanuary 5, 1994. D. Assignment or Commercial Lease. Holy Spirit has previously entered into a Commercial Lease, dated November 10,1992 with Lemoyne Squllfe Associates (Landlord) pertaining to 3,020 square feet of office space located in a two story office building municipally known and numbered as 4 Lemoyne Drive, Lemoyne Square, Borough of Lemoyne, Pennsylvania, at which the operation of the Program Facility \~ conduclP.d, Holy Spirit shall, upon the execution of this Agreement, deliver to Transact an assignment of said Commercial Lease together with the requisite consent of Landlord as required pursuant to Paragraph 17. Part II, Commercial Lease, Transact shall be responsible for payment of rent. together with other charges reserved pursuant to said Commercial Lease, as of the Effective Date, Said assignment shall be further under and subject to the following terms and conditions, together with other terms and conditions set forth in the assignment: (1) Reassignment. Holy Spirit shall, upon sixty (60) calendar days' prior wrinen notice, accept a reassignment of the Commercial Lease provided, however, that Transact shall be and remain responsible for all rent payments, together with other payments due under the Commercial Lease, through the effective date of the reassignment. (2) Right or Early Termination. Transact shall not exercise the right of early termination, as set forth in Paragraph 7, Part 1. Commercial Lease. without providing at least thlny (30) calendar days' prior written notice to Holy Spirit and without Holy Spirit's consent. which said consent shall not be unreasonably withheld or delayed, If Transact shali desire to execut~ the right of early termination then Holy Spirit shall have the right, at Its option, to request a reassignment of the Commercial Lease in lieu of Transact's exercising the right of early termination, C. Continuation or Program. Transact shall continue the operation of the Transact program, as contemplated In the License Agreement, in its present location, without any disruption or discontinuance of patient care, Transact's obligation to continue the Transact program, as h~reln provided, shall be effective I I I ~ I n OOOl1.&,OOJ'J/O.,,,"b,, 7, 199JIJROIOKL/J I :.&6 through April I, 1994, After April I, 1994 TralUact shall not have any continuing obligation to operate the program at hs presentlo~atlon Dr otherwise, D. Tron.!octl\laterlol. Pursuant to Article II, Section 7, License Agreement, all goods, produc15 or other Items whal$oevt.r bearing the Trwact mark shall be~ome thP. property of Tranuct and Trwact will retUnd to Holy Spirit the pur~hase price of any such goods, produ~ts or other Items which are In good usable condition, Holy Spirit and Trwact shall Identify the Items to be reimbursed by Trwact on or before December 20, 1993, and Trwact shall payor refund the purchase price of those Items to Holy Spirit by January 5, 1994. E. Business Equipment and Ornce Furniture. All existing furniture and business equipment located within the lea.sed premises shall be transferred to Transa~t, by a separate bill of sale. without addhlonal cOn.!lderatlon. Holy Spirit shall. upon the Effective Date, execute and deliver to Trwact a bill ohale, without any warranties expresse~ or Implied except as to ownership, transferring said business equipment and office furniture to Trwa~t. In the event that Holy Spirit shall accept a reassignment of the Commercial Lease under the terms and .:ondltlons set forth in Paragraph 3-B(I) or Paragraph 3-B(2). then su~h of the furniture and ' business equipment trwferred to Trwact shall be re-transferred to Holy Spirit effective as of the date of said rea.~slgnment of the Commercial Lease; this shall not apply to replacement furniture or business equipment. Further, In the event that Holy Spirit shall accept the reassignment of the Commercial I.ease. as described , above, but Trwa.;t shall elect to relocate the Program Facility to another location within a radius of thirty (30) miles from the ~urrentlocation then Transa~t shall not be required to re-transfer said furniture and busine.u equipment to Holy Spirit, F. Accolln15 Payable and Accounts Receivable. (I) Accounts Payable. Holy Spirit shall be and remain responsible for the payment of all accounl$ payable and other payables. Including, but not limited to, rent and all charges payable pursuant to the Commercial Lea.se. salaries. statutory wlthholdings and janitorial, on a pronta basis. up to. but exclusive of, the Effective Date, Transact and Holy Spirit agree to cooperate -3- OOOJ14,OOll)/D.<.mb" 7, I ~~JIlRDIDKlI) 114~ with r0e3pect to the identification of accounts payable and other current pay abies and with respect to the proration of accounts payable and other payables as of the Effective Date, (2) Accounl$ Receivable. Holy Spirit will collect all accounts receivable for services through, but exclusive of, the Effective Date, Transact and Holy Spirit agree to cooperate with respect to the collection of accounts receivable, Transact shall be responsible, as of the Effective Date, to bill for all services provided tt.ereafter, Holy Spirit shall not have any conthlulng obllgatlon to provide billing services for services Incurred subsequent to the Effective Date. G. Lolln. Holy Spirit agrees to loan to Transact a sum not to exceed One Hundred Thlny-Flve Thousand ($135,000,00) Dollars which said loan shall be made In three (3) equal advances of Fony-Flve Thousand ($45,000,00) Dollars each, The first advance on account of said loan in the amount of Fony-Five Thousand ($45,000,00) Dollars shall be mad~ by Holy Spirit to Transact on the Effective Date; the second such advance by Hospital to Transact in the amount of Forty.Flve Thousand (S45,OOO.00) Dollars shall be made on or after February I, 199~ upon written request by Transact; the third (linal) advance by Holy Spirit to Transact shall be made on oc aner March I. 199~ upon written request by Transact, With r0e3peCtto the third (linal) advance to be made by Holy Spirit to Transact on or after March I, 1994, Holy Spirit agrees that of said amount only Twenty-Seven Thousand Five Hundred (S27,5OO,OO) Dollars shall be repaid by Transact to Holy Spirit and the balance of said advance, Seventeen Thousand Five Hundred (S 17,500,00) Dollars, shall be forgiven by Holy Spirit and shall be deemed additional consideration in connection with the termination of the License Agreement, Transact shall pay to Holy Spirit interest at the rate of six (6%) percent per annum which said Interest shall begin accruing when Holy Spirit shall make the first advance (on the Effective Date) and shall continue to accrue on outstanding principal balance as the same shall Increase or decrease from time to time, Transact shall pay interest, at the rate of six (6%) percent per annum, monthly. in arNars. beginning February I, 1994 (for interest accruing as of the date of the first advance) and the first day of each month thereafter through July 1, 1995. at which time the then remaining principal, together with interest, shall be paid by Transact to Hol~' Spirit in twelve (12) consecutive equal monthly Installments, The maximum amount of the loan to be repaid by Transact to Holy Spirit shall be One Hundred Seventeen Thousand Five Hundred (SI17,500,OO) Dollars, Said loan shall be evidenced by a Note, containing a confession of judgment clause I in the event of a default. and permitting Transact to prepay, In whole or in pan. the principal halance at any I I 4 I I I pool74.00J8J/D...lllb.r 7, 199J/JRD/DKLlJ 1246 time without penalty; the loan 5hall be 5ecured by an 3.l5lgnment of accounts receivable, Inventory, bU51ne.\5 equipment and oft1ce furniture, Transact (Debtor) shall execute and deliver Flnandng Statements (Uec-I) evidencing Holy Splrlt'5 (Secured Party) security Interest In accounts receivable, inventory. business equipment and office furniture which said Financing Statements shall be flied in the Office of the Prothonotary of Cumberland County and Department of State, H. Holy SplrH Employees. Holy Spirit employees currently providing servkes at the program facility will continue to be employees of Holy Spirit through December 31. 1993, From the date of this Agreement through the Effective Date Holy Spirit and Transact will. either in conjunction or separately, meet with each employee, Holy Spirit intends, at Ihls polnl, 10 terminate each said employee and Tramact inlends, at this point, to offer employment to each of those employees, Any employee that Is currentiy employed by Holy Spirit that elects not to resign will be reviewed by Holy Spirit on a case-to-case basis to de.termine If a position Is available for such employee and If that employee will be offered continued employment by Holy Spirit, Transact agrees, during the interim period and prior to December 31, 1993, to advise each employee to whom Transact Intends to offer employment of the anticipated compensation together with benefits that will be provided by Transact. If Holy Spirit shall terminate any employee's employment said termination 5hall be effective at midnight, December 31, 1993, This Subparagraph 3.H shall not create or provide any benefit to any Holy Spirit employee and no such employee shall be deemed a third party beneficiary of this provision or otherwise, II 4. New Entity. Transact may, at its option, organize a new entity to operate the Transact program. In the event that Transact shall elect to organize a new entity then, In that event, the loan, as described III Paragraph 3-G shall be from Holy Spirit to Transact and the new entity, Transact and the new entity shall be co-makers with respect to the Note described in Paragraph 3-G and shall be jointly and severally liable for the obligations set fonh in the Note, In addition, the new entity (3.1 Debtor) shall execute the Flnandng Statements and the assignment of accounts receivable, Inventory, business equipment and office furniture as provided in Paragraph 3-G, In the event that Transact shall elect to organize a new entity to manage and operate the Transact program then, in that event, the new entity shall execute a Joinder to this Agreement agreeing 10 be bound by the terms and condilions set fonh In Paragraph 3.B. Paragraph 3-C. Paragraph 3.E. Paragraph 3-F and Paragraph 3.G, In addition, said Joinder shall spedfy to whether I Transact or the new entity shall be paid the termination fee as set forth in Paragraph 3.A, I ~ I I I I 0003H,003831D...mb.r. 7, 1993/JRD/OKL/3IH6 Said Joinder shall be prepared by Transact, executed by the new entity and specific subject to the written approval of Holy Spirit. 5. Existing Holy Spirit Program. Transact acknowledges that Holy Spirit presently offers at sites other than the Program Facility, outpatient or ambulatory services to patients with developmental, learning or behavioral problems utlllllng methods of treatment different than the Transact program and that Holy SpIrit shall have the right to continue to offer said program subsequent to the termInation of thIs Agreement, provided, that Holy Spirit will not provide outpatient or ambulatory servkes to patients with developmental, learning or behavioral problems using the same treatment method utlllled by Transact In connection with the Transact program, 6. Public DlsclOllure. In the event that either Holy Spirit or Transact (to Include a new entity, If applicable) shall elect to make a public announcement with respect to the transition of management, ownership and control of the Transact clinIc, then Holy Spirit or Transact (to Include the new entity, If applicable) shall not make any public announcement (news release or otherwise) without the prior written consent of the other party which said consent shall not be unreasonably withheld and delayed, Transact and Holy Spirit agree to exert their best efforts to coordinate and approve any public announcement with respect to the transition and ownershil', management and control of the Transact program, In addition te, the foregoing, Transact (or the new entity, If applicable) shall present to Holy Spirit the means or methods by which Transact (or the new entity, if applicable) Imends to communicate to patIents (to Include patients' parents) that Holy Spirit Is no longer affiliated with the Transact program, Transact (or the new entity, as applicable) shall meet with Holy Spirit prior to the Effective Date to develop the language by which and the means or methods by which said communications shall be made to patients (to include patients' parents) that Holy Spirit is no longer affiliated with the Transact program, 7. Resignation. Program Director. By the execution of this Agreement, Transact acknowledges that the Medical Director of the Transact program has submitted a resignation to Holy Spirit Hospital effective as of December 31, 1993, I 8. Mutual Release. Transact and Holy Spirit hereby release the other from any claim, action or cause of action arising out of or relating to the License Agreement, the management, operation and control of the Transact I program except a.~ otherwise provided in this Agreement, The foregoing mutual release shall nOI be construed to i I -6. I I I I I I 0003N.OO383/Dcccmbcr 7. 1993/IRDIDKL/3IH6 release Holy Spirit or Transact, as 3ppllcable, with respect to any claim 3.lserted by a patient or the parent or natural guardian of a patient with respect to professional malpractice or otherwise, 9. Prores.slonal Liability 111surance. Transact (or new entity, If applicable) shall provide professional liability Insurance for the physicians and employees of the Transact Program which said professlonalllablllty Insurance shall be effective as of the Effective Date, Holy Spirit may, at its option, and its sole cost and expense, acquire whatever professlonalllabUlty (Nurance It desires to protect Holy Spirit's Interest or to protect Holy Spirit against ''lIhlrA mnllnnt"trt"P. d~ . ,0?037oHlO3Y3/Dc..mbcr 7. 1993/1RD/DKL/31!46 14. Governlna Law. This Agreemenl shall be governed by and conslrued In accordtnce willi lhe laws of lhe conunonweallh of Pennsylvania, 15. Entire ^areement. This Agreemenl contains the entire understanding by and between Transact and Holy Splrll with re.1pect 10 lhe subject maner set forth herein and lhere are no olher agreemenlS, repr~enlatlons or warranlle.1, ellher oral or wrlnen, bearing upon lhe subjecl maner lie rein except as specifically set forth in this Agreement. IN WITNESS WHEREOF, lhe parties hereto, by lIS duly aulhorlzed officers. have caused this Tennlnatlon Agreemenlto be executed lhe day and year firs! above wrlnen, (SEAL) By: President A TIEST: ~"..1) ~ o..~~1L. ~th. (As st t) Secret Holy Spirit: HOLY SPIRIT HOSPITAL OF TIlE SISTERS OF CHRISTIAN CHARITY By:, ,Lt;v f,.,...:...u'7.u....;) u,/ I rr (SEAL) ~ resident -8- , ' ~ <- r , '-.I" '0 "C\ ,j'r. U) r; . . .......... ~ Vi N ....... '" ~ N 8~ ,p "0 I~ x: L~ .~ ~ Q.. q~ ~ -..::;., . () ~ - ~~0 ~ ~ M ~I~ t.\ ,~~ ~ ~. \;,'\ jE I::J 15 r- - ~~) ~ ~ , ,