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HomeMy WebLinkAbout01-0090 IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA LAWRENCE C. HABER, Pl~;ntiff THE STEVENS CENTER and, NORTHWESTERN HUMAN SERVICES, Defendants Civil Action - Law ~ No.; JURY TRIAL DEMANDED NOTICE TO DEFEND You have been sued in cout~ If you wish to defend against the clareas set forth in the following pages, you must take action within twenty 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 plaintiff. You may lose money or property or other rights important to you. YOU SHOULD TAKJE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW' TO FIND OUT WHERE YOU CAN GET LEGAL HELP. Cumberland County Bar Association 2 Liberty Avenue Carlisle, PA 17013 (717) 2A-9-3166 IN ~ COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA LAWRENCE C. HABER, Plahltiff THE STEVENS CENTER and NORTHWESTERN HUMAN SERVICES, Defendant~ Civil Action - Law No.: 01- JURY TR/AL DEMANDED COMPLAINT PARTIES AND JURISDICTION 1. The Plaintiffis Lawrence C. Haber, an adult individual residing at 23 Surrey Lane, Mechanicsburg, Cumberland County, Pennsylvania 17055. 2. The Stevens Center, the Defendant, (hereinafter "TSC"), is a business with its principle place of business at 33 State Avenue, Carlisle, Cumberland County, Pennsylvania 17013 and a registered service address at 850 Bicentennial Drive, Carlisle, Pennsylvania 17103. 3. Northwest Human Services, the Defendant, (hereinafter "NHS"), is a non-profit corporation wifla a place of business at 1320 Lingtestown Road, Harrisburg, Pennsylvania 17110. 4. This courthas jurisdiction over this matter pursuant to Section 260.9a of the Pennsylvania Wage Payment and Collection Law, 43 P.S. Section 260 et seq. VENUE 5. Paragraphs 1-4 are incorporated herein by reference. 6. Venue is proper in this court because the cause of action arose in Cumberland County. FACTS 7. Paragraphs 1-6 are incorporated herein by reference. 8. Plaintiff began working for TSC on or about January 1991. 9. Plaintiffs employmentwas terminated for economic reasons on or about May 2000. 10. At the time of the termination, Plaintiffwas the president and CEO of TSC. His anw,~lized salary was $103,744.80. 11. In addition to a salary, TSC had paid for the leasing and maintenance of an automobile for Plaintiff's use. In March 2000, TSC suddenly ceased payments, and Plaintiff made the following payments on behalf of TSC: 3/23/00 $417.26 4/16/00 $416.31 5/19/00 $816.59 1Z Sometime prior to Plaintiff's termination, Plaintiffhad a conversation with TSC's Board President, Laurie Kalinak. At l~at time, Ms. Kalinak explained to Plaintiff that the Board of Directors would be terminating him, but that he would be paid any unused vacation pay, as well as 60 days severance pay, m consideration of all his years of good work. 13. This promise was confirmed in writing on 6/15/00 by TSC's treasurer, James D. Flower, Jr., wherein he stated that he was "authorized by the President of the Board to confirm the Board's decision concerning termination pay." The promise to pay out unused vacation pay as well as 60 days termination pay was reiterated therein. A true and correct copy o£that correspondence is attached hereto as Exhibit A. 14. By correspondence of 6/27/00, Plaintiff acknowledged Attoroey Flower's correspondence, and offered to accept the severance pay in bi-monthly installments, as opposed to a one-time payment, because he was aware of TSC's financial problems. At that time he asked for clarification on the method of payment. A trae and correct copy of that correspondence is attached hereto as Exhibit B. 15. TSC failed to reply to Plaintiff's inquiries. Plaintiff followed with additional written requests for the promised severance pay, among other matters, by correspondence dated 7/26/00 and 9/4/00. A true and correct copy of each letter is attached hereto as Exhibits C and D. 16. Upon information and belief, TSC became part of Northwestern Human Services effective 9/1/00. Therefore, that Defendant may have some or all responsibility for any liability of TSC regarding the subject matter of this suit. 17. Plaintiff made one last request in writing for the unpaid amounts, through legal counsel, by letter dated 9/16/00. COU2qT I - PENNSYLVANIA WAGE PAYMENT AND COLLECTION LAW 18. Paragraphs 1-17 are incorporated herein by reference. 19. Defendant TSC, at all times relevant to this suit, was an employer as defined by 43 P.S. Section 260.2~ 20. Defendant TSC promised Plaintiff severance pay equal to 60 days pay. Additionally, Defendant TSC had provided Plaintiffwith a leased automobile as a additional fringe benefit or wage supplement as defined by 43 P.S. Section 260.2a. 21. Severance or, "separation" pay, comes within the definition of "Fringe benefits or wage supplements" as defined by 43 P.S. Section 260.2a. 22. Plaintiff made a written demand for the severance pay on 6/27/00, 7/26/00, 9/4/00 and through counsel on 9/16/00. Such payments, to date, remain unpaid. 23. 24. Therefore, Defendant TSC has violated the PA Wage Payment and Collection Law by withholding the promised wage supplements. 25. Defendant TSC or NHS is therefore liable to Plaintiff for such promised, but unpaid REMEDIES 26. Paragraphs 1-25 are incorporated herein by reference. 27. WHEREFORE, Plaintiff requests the Court to award the following, an amount expected to be in excess of $25,000: a. Paymentofthe 60 days pay; b. Remabursement for the automobile-related expenses Plaintiff paid on behalf of Defendant TSC; c. Statutory interest on (a) and (b); d. Liquidated damages pursuant to 43 P.S. Section 260.10; e. Attorney fees and costs of litigation pursuant to 43 P.S. Section 260.9a(~). Respectfully submitted, Fred Hait & Associates Attorneys for Plaintiffs 'No~'a ff.. Gibson, P'3r~D gt81918 17 E. High Street, Suite 101 Carlisle, PA 17013 (717) 2494500 (717) 249-2411 (fax) AFFIDAVIT I verify that any facts not of record set forth in the foregoing Complaint are true and correct to fl~e best of my knowledge, information and belief. I acknowledge that any false statements herein are made subject to fine penalties of 18 Pa.C.S. Section 4904 relating to unsworn falsification to authorities. Lawrence C. Haber ]AMPS D. PLO WEP~ J~ LAW 0 FFICF. S FLOWER, FLOWER & LIND~AY A PROFESSIONAL CORPORATION 11 EAST HIGH STREET CAF.LISLE, PENNSYLVANIA 17013-3016 June 15, 2000 Dr. Lawrence C. Haber 23 Surrey Lane Mechanicsburg, PA 17055 RE: The Stevens Center Dear Larry: I have been authorized by the President of the Board to confirm the Board's decision concerning termination pay. We understand that you have vacation pay which is currently in the proces~ of being paid out to you, and which will be paid in full. The Board also wishes to pay you 60 days termination pay in deference to the many years of service which you gave to the Stevens Center and to wish you well in whichever new endeavor you wish to pursue. Although we would like to pay this immediately, we are presently under great financial pressure and our first priodty must be the employees who continue to work for the Stevens Center. The Board consequently intends to pay the 60 days severance pay as soon as it is financial feasible, which we hope will be in the near future. Several of the staff currently at the Center have complained that they felt a recent · .. ,,. ,. ,,...o~ i~r,,,,,i With tensions and emotions high at the Center, ,,is~* by ~ _u to the Cvn.v. ,.,.~ d .... ~..ve. we would ask you not to visit the Center at this time. Very truly yours, FLOWER, FLOWER & LINDSAY, P.C. ~lower, Jr. JDFjr/tjb cc: Laurie Kaiinak Member of Board of Directors EXHIBIT Lawrence*Haber, Ph.D. 23 Surrey Lane Mechanicsburg, PA 17050 June 27, 2000 Lee Cavanaugh Administrative Director The Stevens Center 33 State Avenue Carlisle, PA 17013 Re: Cobra and Severance Pay Questions Dear Mr. Cavanaugh: I want to make sure that there is no interruption of my health insurance. It is my understanding that the Center was covering the cost of my insurance until July 2, 2000 and that my wife's coverage was being deducted from my vacation pay. I have requested that under Cobra she and I be switched to individual coverage. I need to know the amount of premium we are to pay and when it is due. I believe I am near the end of my accrued vacation pay. I would like to know when this pay would be running out. I have been informed by the Board in a letter from Jim Flowers, Jr., that the Board has agreed to sixty days severance or termination pay. I have indicated to him that because of the Center's cash flow, I would be willing to accept this severance on a bi- monthly basis rather than a lump sum, similar to the way I received my vacation pay. I would like to know the Center's intentions as to which method will be utilized. Is severance pay considered salary for IRS purposes? That is to say will I be receiving a payroll check or a payable one? Thank you for your attention to this matter. Lawrence Haber CC: Sheila Fox Jim Flower, Jr. EXHIBIT Lawrence Haber, Ph.D. 23 Surrey Lane Mechanicsburg, PA 1;'050 July 26, 2000 Lee Cavanaugh Administrative Director The Stevens Center 33 State Avenue Carlisle, PA 17013 Re: Cobra and Severance Pay Questions Dear Mr. Cavanaugh: I have left three (3) messages over the last two (2) weeks requesting the following information. I would appreciate the courtesy of a reply. 1. For the paydate of July 15~ I received only one check from the Center not the two I normally receive and for an amount lower than my previous checks. There was no explanation of the reason and I would like it explained or corrected. 2. I have never been informed of the amount of premium I am to pay and when it is due for my Cobra Coverage. Please inform me of such so that I may make the appropriate arrangements. 3. I would like to know the status of my severance pay. I would like to know when it will be paid and if it will be paid as a lump sum or in bi-weekly installments. Thank you for your attention to this matter. Lawrence Haber CC: Sheila Fox Jim Flower, Jr. EXHIBIT Lawrence Haber, Ph.D. 23 Surrey Lane Mechanicsburg, PA 17050 September 4, 2000 Jim Flower, Jr. Attorney-at-Law 11E. High Street Carlisle, PA 17013 Dear Jim: On July 26th I wrote the Stevens Center a letter, which was copied to you concerning several questions that I had about my health insurance and severance. The letter was written after a number of phone calls went unanswered. I have never received a reply to my phone calls or letter. I spoke with you at Rotary in Mid August and you said that you would see that I would receive an answer to my questions. I still have not received any communication answering my questions. Today, my health coverage was refused at the pharmacy as no longer in effect and furthermore the cancellation was effective at the beginning of July. I have repeatedly asked what the Cobra premium is, when it is due and to whom and where I should send a check. While I realize things have been chaotic at the Center and I have been patient in waiting to resolve the severance issue, I cannot afford to be without Health Coverage for my wife and myself. I would greatly appreciate your intervention. Please speak with me at your earliest. I would hate to have to engage legal counsel to protect and enfome my rights. I am attaching a copy of the original letter for your information. Lawrence Haber, Ph.D. [717] 576-1379 [717] 766-5985 Home [717] 796-0980 Fax Ichaber@bellaflantic.net EXHIBIT KELLEY & MURPHY, ATTORNEYS-AT-LAW BY: PATRICK G. MURPHY, ESQUIRE ATTORNEY I.D. NO. 34815 UNION MEETING CORPORATE CENTER V SUITE 160, 925 HARVEST DRIVE BLUE BELL, PA 19422 (215) 643-6500 ATTORNEY FOR DEFENDANTS IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA LAWRENCE C. HABER CIVIL ACTION LAW THE STEVENS CENTER AND NORTHWESTERN HUMAN SERVICES NO. 01-90 ENTRY OF APPEARANCE TO THE PROTHONOTARY: Kindly enter my appearance on behalf of The Stevens Center and Northwestern Human Services with regard to the above-referenced matter. KELLEY & MURPHY ~Patrick G. IVturphy;Esqq~fe KELLEY & MU-RPHY, ATTORNEYS-AT-LAW BY: PATRICK G. MURPHY, ESQUIRE ATTORNEY I.D. NO. 34815 UNION IVIEETING CORPORATE CENTER V SUITE 160, 925 HARVEST DRIVE BLUE BELL, PA 19422 (215) 643-6500 ATTORNEY FOR DEFENDANTS IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA LAWRENCE C. HABER V. THE STEVENS CENTER AND NORTHWESTERN HUMAN SERVICES CIVIL ACTION LAW NO. 01-90 ORDER AND NOW, this day of ,2001, upon consideration of the Defendants' Preliminary Objections it is hereby ORDERED that said Preliminary Objections are sustained and it is further ORDERED that Plaintiff's Complaint is DISMISSED with Prejudice as to the Defendants. BY THE COURT: KELLEY & MURPHY, ATTORNEYS-AT-LAW BY: PATRICK G. MURPHY, ESQUIRE ATTORNEY I.D. NO. 34815 UNION MEETING CORPORATE CENTER V SUITE 160, 925 HARVEST DRIVE BLUE BELL, PA 19422 (215) 643-6500 YOU AnE gOll D TO , IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA LAWRENCE C. HABER THE STEVENS CENTER AND NORTHWESTERN HUMAN SERVICES CIVIL ACTION LAW NO. 01-90 PRELIMINARY OBJECTIONS OF DEFENDANTS, THE STEVENS CENTER AND NORTHWESTERN HUMAN SERVICES TO PLAINTIFF'S COMPLAINT TO THE HONORABLE THE JUDGES OF THE SAID COURT: Defendants, The Stevens Center, (hereinafter referred to as "TSC"), and Northwestern Human Services, (hereinafter referred to as "NHS") by and through their attorneys Kelley & Murphy hereby file these Preliminary Objections to Plaintiff's Complaint and in support thereof states: I. Backeround 1. On or about January 5, 2001 plaintiff`filed a Complaint against defendants seeking damages in excess of $25,000.00 plus other relie£ Attached hereto as Exhibit "A' and incorporated by reference is a copy of plaintiff's Complaint. KELLEY & MURPHY, ATTORNEYS-AT-LAW BY: PATRICK G. MURPHY, ESQUIRE ATTORNEY I.D. NO. 34815 UNION MEETING CORPORATE CENTER V SUITE 160, 925 HARVEST DRIVE BLUE BELL, PA 19422 (215) 643-6500 ATTORNEY FOR DEFENDANTS IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA LAWRENCE C. HABER THE STEVENS CENTER AND NORTHWESTERN HUMAN SERVICES CIVIL ACTION LAW NO. 01-90 PRELIMINARY OBJECTIONS OF DEFENDANTS. THE STEVENS CENTER AND NORTHWES'rERN HUMAN SERVICES TO PLAINTIFF'S COMPLAINT TO THE HONORABLE THE JUDGES OF THE SAID COURT: Defendants, The Stevens Center, (hereinafter referred to as "TSC"), and Northwestern Human Services, (hereinafter referred to as "NHS") by and through their attorneys Kelley & Murphy hereby file these Preliminary Objections to Plaintiff's Complaint and in support thereof states: I. Background 1. On or about January 5, 2001 plaintiff filed a Complaint against defendants seeking damages in excess of $25,000.00 plus other relief. Attached hereto as Exhibit "A' and incorporated by reference is a copy of plaintiff's Complaint. 2. Plaintiffincorrectly avers that TSC became part of NHS on or about September 1, 2000. See Exhibit "A" ¶16. 3. Plaintiff alleges that he has a claim against TSC for "wages" as defined in the Pennsylvania Wage Payment Collection Law. See Exhibit "A" ¶ 24. 4. Plaintiff alleges that TSC or NHS is liable for said "wages". See Exhibit "A" ¶ 25. 5. Plaintiff's claim for wages is alleged to be encompassed in a letter from counsel regarding a payment of"termination" pay. See Exhibit "A" to Plaintiff's Complaint. 6. Plaintiff does not allege any basis upon which NHS can be considered a successor corporation. II. Defendants' Preliminary Objections Pursuant to Pa. R.C.P. 1028 (a)(4) and (5) 7. Defendants incorporate by reference paragraphs 1 through 6 as if same were fully set forth herein. 8. NHS is not the successor to the Stevens CenterL 9. The Stevens Center was a nonprofit corporation organized pursuant to the laws of the Commonwealth of Pennsylvania. 10. On or about November 16, 2000 the Stevens Center filed Articles of Division of a nonprofit corporation. Attached hereto as Exhibit "B" is a copy of the Articles of Division along with Schedules "A"-"C" filed with the Pennsylvania Department of State Corporation Bureau. 11. The Corporation which acquired some assets and some liabilities of the Stevens Center was Northwestern Human Services of Pa. I Counsel for Plaintiff, was advised in a letter of September 19 and 21, 2000 that NHS was not the successor corporation. 2 12. Northwestern Human Services of Pa and Northwestern Human Services are two separate and distinct entities. 13. Pursuant to the Articles of Division two (2) separate and distinct nonprofit corporations were created, (1) The Stevens Center; and (2) HSC Residuary Corporation. 14, HSC Residuary Corporation became the successor corporation to the Stevens Center as is confirmed in the Articles of Division. 15. As the Department of State records reflect, Northwestern Human Services did not become the successor corporation to The Stevens Center. Accordingly, NHS is not a proper party and should be dismissed. 16. As the Department of State records reflect The Stevens Center is not a proper party and should be dismissed. 17. As the Department of State records reflect the successor corporation to The Stevens Center became the HSC Residuary Corporation. 18. As Exhibit "C" to the Articles of Division clearly states the claim of plaintiffvested in H.S.C.R.C. (HSC Residuary Corporation). WHEREFORE, defendants respectfully request that this Honorable Court enter an order sustaining their Preliminary Objections and dismissing plaintiWs complaint with prejudice as to defendants. III. Defendants' Preliminary Objection to Count I Pursuant to Pa. R.C.P, 1028(a)(4) Allegation of Violation of Pennsylvania Wage Payment and Collection Law 19. Defendants incorporate by reference paragraphs 1 through 18 as if same were fully set forth herein. 20. 21. benefit plan. 22. Plaintiff's claim for "severance pay" does not arise from any employment contract. Plaintiff's claim for "severance pay" does not arise from any specific employee Plaintiff's claim, should one exist, arises solely upon the letter attached to his complaint as Exhibit "A". 23. Plaintiff's claim for severance pay does not arise to the level of wages or fringe benefits as encompassed pursuant to the Pennsylvania Wage Payment and Collection Law. 24. As plaintiff's claim for severance pay is not covered by the Pennsylvania Wage Payment and Collection Law, plaintiff is not entitled to the statutory remedies of liquidated damages, attorney fees, costs and statutory interest. WHEREFORE, defendants respectfully request that this Honorable Court enter an order sustaining its preliminary objections and dismiss its complaint with prejudice against defendants. Respectfully Submitted, ~.,LLE~& MURPHY, Attorneys At Law Attorney for Defendant~ 4 CERTIFICATE OF SERVICE I, PATRICK G. MURPHY, ESQUIRE, hereby certifies that on the 24'~ day of January, 2001, a true and correct copy of the foregoing Preliminary Objections of Defendants, The Stevens Center and Northwestern Human Services to Plaintiff's Complaint was served upon the following persons, via regular mail, postage prepaid, at the address set forth below: Nora S. Gibson, Esquire Fred Hait & Associates 17 E. High Street, Suite 101 Carlisle, PA 17013 KELLEY & MURPHY, Exhibit A IN TIt1~- COI~ OF COMMON ~ OF CL~BEIL~D COUNT~ PENNSYLVANIA 'I'HE ~ t r.v ENS CENTER ~ud, : NOR~TEB. N I..~M, AN : SERVICES, : NOT/CE TO DEFEND You have been sued in court. I£7~u ~dah m de~d ~ the cblms se~ ford~ i~ ~ ~e court ~ut deCensee or obiec~ons to ~he cla~e set R~ ~st ro~ You are ~med that ifrou F~I to do so ~c case may ~ ~d~out you ~nd · ~ud&men~ may be entered ~nst ~u br the c~r~id~out ~ur~et no,ce for a~y money compla~t or ~or my Other clash ot relief requested by d~e pl.~in~. You mey YOU SHOULD TAK]~ THIS PAPE~ TO YOUR LAWIf~.~ AT ONCE. IF YOU DO NOT HAVE A LAWYF. R OR CANNOT AFFORD ONF~ GO TO OR T~I,LrpHO~ TH~ OFF[C~ SET FORTH BFJ.~WTO FIND OUT ~ YOU CAN GET LEGAL Cumbcrbad Coun~ 1~' IN 1'~ COURT OF COMMON OF CUMB~ COUNTY, PENNS~V&NIA THE STK~NS ~R md NO~Ti~RN HUM,tN JURY ll[IAL DEMANDED PAR'~'~ ~-~ AND.,[UR r~r~lCT~ON 1. Thc Pl~inliffis P~l.~ 17110. t.~:t90:0T 7. Pm'agr~hs 1-6 are inco~pora~-I het~n by ~.~c~mce. 8. Pldn~ffbelpm ~ork~orTSC c~or~boutJ~nun~ 1991, 9. Plaintil=Fs employmmt wns termin,~d ~r economo t'~so~s on or'~oc ~f~y 10. At ~he drne of~e rem',~6on, Plnin'dtTw-~ ~he president md ~ o£TSC. ~s annu~d ~ $10%744.80. I1. In ~ddition ~o s ~alarn TSC h~ paid ~or ~he t.~.i,g mi main~mce of ~n atr. mnobile d~e ~ollowlng p~tnm~s on behnEo£TSC: ~1~/00 MI ?~.~ 4/16/00 $416.3t ~ltglOO ~a~ Sometime prioc ,o Plain~Fs ~atien, l:~.~l='had f cc.~ve~atlc~ ~ TSC's ~x~d Prcsiden% Zam~ ~a~innk. At ~t 6me, ~. ~ es~[a~ted m Plaintit~F~ I~e ~ would b~ ~enn~ him, but d~et he ~mul8 be p~d an), unused ~aca~n Fay. as ~ ns 60 clays seveeance pny, in conddem6an ot~ nil his yegs oF~ood This pm,~_-e wee a:,n~-med in wtimg on 6/15/00 by TSC'e tte~suze~.f~nes 11 Flc,.,~. ]r~ ~here~ he stated ~hs~ he ~ "au~orized by d~c ~r ~f~he l~ard to c~n~urn be ~=~.~'~ decision c0ncemMg mnninati~ p~y," The promise m ~ our ~ opted ~ a o~e-~e ~ ~c he ~ ~ ~f~C's ~ ~b~ ~ HIFIOA KI;~31S~IH.L~OH H~c30:0I TRm~'~ 'UHr 7/26/00 and 9/4/00. A mae and cortt~ copy of ~r3a letter is atari, ed hereto F.x~bits C md D- 16. Upon ~n~otmation and belief, TSC became part of Nom'-~e~e:n Human effe~nn~ 9/1/00. Th~ that De~dmt may hxee sarae or all realX~s~ility for any j hbility ofTSC ~ ~e aub~-t mat~ o£~b su~ 17. l~lain~ made o~e ~t requeat in ~i~g for ~e ,apa~d ~oun~. d~ou8~ ~ counsel. ~OL71~T~ ! - P~NNSYT-V~A ~;VAGI~.pAyLM~a~T ~ COt r ~.C~L'~ON tAW ~_~ Theref~c, Defendm t ~ hes ~iole~-d ~he PA W~ l~nm~ ~d Collec~on L~ b~ ~id~holdmg ~e l~omis~l ~ suppler~ncs. 2~. P~hs 1-25 ~e incorpo~-d h~in by ref~'~nc~ 2'/. WHEREFORE, Plain6ff~ ~he Cc~-t t~ award dxe folI~wlng, an amotmt ~ ~o be in ~,c~ off. J,000: b. lqe~m~emmc ~or ~c ~mobile-~.L~ ~ pI.a~tiffpaid on behIlfr of e. At~e~ £~e~ md ~ of Ii. on pm~tmnt m 4~ 1=.$. ,%-etlon 2~O.~J(F). for 9' d SL~'ON coe~ecttod~¢besto o on~ndbe~eR ~acknow · ' :',,~" s'azcmmts ht, rek~ ere made subject co ~e pengzles oF 18 I~.CS. Scc~n 4904 rela~g to ........ '~ L~ttmce C. Z' d S2,E' ON Dr. Lawrence C. Haber 23 Sun'ey Lane Mechanicsburg, PA 17055 June 15, 2000 RE: The Stevens Center Dear Larry: [ have been authorized by the President of the 8oard to confirm the B,o,a~'s de n ". ~:" '?'. y:w t?? .rKnn concerning termS'intron pa · understand the u ha~e ~calJon pay w ~s curro tly :, ,: in the process of being pa~d out to you, end which will be paid in fu~. The Beard also w~hes'to'pay'you 60 days termination pay in deference to the many yearn of sewice whic~ you gave to the Stevens Center end to wish you well In whic~haver new end .eavor you w~ to pursue. Although we would like to pay this immediately, we are presently under groat financial pressure and our fast priority must be the employees who continue to work for the Stevens Center. The Board consequently inten~ to pay the 60 days severance pay ,as soon as it is financial feasible, which we hope will be in the near future. Several of the staff currently at the Center have"complained that they felt a rec~,nt ' :-..~"'. · ,,is~ by you to ~e G~qter was dist,Jptive, ~,,nt~ tensic~q~ ~ emotions h,~gh Mt.he Cent~.r.,, , we would ask you net to visit the Cehter. at this time. · 8'd ~'ON Ve~ truly yours, FLOWER, FLOWER & LINOSAY, P,C. e~srD. Flower, Jr. ExHI. BIT Law~nc, e l.~.ber, Ph.D. 23 ,~rrey Lane Mm;hanicsburg, PA 17050 June27. 2000 Lee Cavenaugh Administrative Director The S~evens Center 33 State Avenue Car~iste, PA 17013 Re: Cabra ~nd Severance Pay Questions Dear Mr. Cmmnaugh.* I want to make sure that there is no interruption of my health insurance. It ~s my* understanding that the Center was coveting the cost of my insurance until July 2, 2000 and that my wife's coverage was being deducted from my vecm~on pay. t have ; reque~ied that under Cobra she and I be switched to individual coverage. I need to : know the amount o.f premium we are to pay and when it ia due. I I~elieve ! am near the end of my ac~ued vece§on pay. I ~muld lika to know'when thi~ pay w~uld be running out. , I have been informed by the Boarcl in a letter fmn~ Jim FloWers, Jr,, fret the Beard heal agreed tO r, ixt)-¢tay~ ~-verarme or termirration pay. I have indicated to him that bemuse ~f Ihe Center's cash tlow, I w~uM be willing te ma:apt INs ~evemnee on · bi- monthly basis rather than a lump sum, ,qrmlar to the way I received my veceffofl pay. would lika to know the Center's intentions as to which method will be ulilized. I$ saversnce pay considered salary for IRS purposes? The! is to say will I be receiving payroll check or a payable one? Thank yau for your attention to this ma~ter. ~: Lawrence Haber CC: Sheila Fox Jim Flower. Jr. ~.E ' ON EXHIBIT ~ hi)er, Ph.O. 23 Surrey L~ne MeGhanJosburg, PA 170S0 September 4, 2000 Jim Flower, Jr. Attorney-at-Law 1 IE. High-Skeet Carlisle, PA 17013 DearJim: On July 261h ! wrote the Stevens Center a letter, which was copied to you concerning severaJ questions that I had about my health insurance and severanee. The letter ~ Wl~tofl after e number of phone c~ls went una~. I have never received a reply to my pYmne celts or letter. I spoke with you at Rolary in Mid August and you said that you would see that I would receive an answer to my questions. I still ha'~.~t'recelved any ¢ommunica~on armworir~ my questions. Today, my hea~ coverage was refused at the pharma*o/as no longer in effect and furthermore the ceflmllalion wes effec~ve at thaMlginning of July, I have repeatedly asked wh~t the Cobra premium is, when it is due aM to whom and where I should send a check. WhM I realize things have been chaotic at ~e Center and I have been palient in wailing to resolve ~e severance issue, I cannot slford to be without Health Coverage for my wife aM myse/f. I would greatly apprKiate your intervention. Please speak wittl me ~! your earliest I would hate to have to engage legal ceunsel to protect and enforce my rights. I am attaching a copy of the originaJ letter for your information. Lawrence Haber, Ph.D. [717] 576-1379 [717] 766-5985 Hame [7171 7se.0 0 Fax Ichaber~bellM~antic. net OT 'd ~Z~ 'OI,J Exhibit B ' MicrOfilm Number Filed with the Depcrtr.nent of State an .Secretary of Yne Commonweeifh AP. TICLI::S OF DIVISION-NONPRORT CORPORATION 0SC3:15-5954 jRev 90) In ccmpiidnce with the rec:uirer.nenrs of 75 Pa.C.$. ~ 5954 irelating to arric!es of division) the undersigned busJr~ess corporation, deskfng to effect (: division, hereby states that: STEVENS CENTER ], The ne:me of the dividing corporation is: 2. (Check and complete one of the following]: The dividing corporation [s c~ dcmnestic nonprofit corporation c~nd the (a) address of its current regisTerea office in this Comr.ncnwecJth or (b) r~cr.ne of ifs ccmr.nercJd registered office provider end the county of venue is (the Oepcrtmenr is hereby authorized to correct the fdfcwing information to conform to the records of the OeccrTmem): {a) 33 STATE AVENUE CARLISLE PENNSYLVANIA 17013 CUMBERLAND Number cnd Street Cih/ State Zip Ccunp! c/a: Name Of CcmmnerciaJ ~egjstered Off[ce Provider COUnTy CC~parafion is lac.':ted for venue and cftT~cl pui:licetion purposes. The dividing ccrgcrcricn is a qualified foreign nonprofit c¢,rporafien incorporated under the laws cf c~nd the (a~ ~ddress of its current registered affTce in this Commonwealth or (b) name of if~ commercial regisT'ered o~oe provider and the counW of venue is (the Oe¢crtment is hereby authorized :o correct the following information to conform to the records of the Department]: Numnber and Street City State Zip Ccun,-y (bi c/c: Ncrne of Comnmerciai Registered Office Provider Ccuntv For a ccrporction represented by a cammerc!al registered oft~ce provider, the counU in IbJ shatl ~e deemed the ccunp/in ',vnicn :he corporation is Ioceted for venue (=nd atria'al publication purposes. The dividing corparction is a nonquolified foreign nonprofit comoration incorpcrcted under the fGws of and the address cf [ts principal office under the laws of such domicJliaw jurisdiction [sa Nurnber and Street City Sfcte 3. The~'~tafutebyorunderv,,nichitwcsincorporatedis: Act of April 29, 1874 4. Thedcteofff$~nccrbcrcTfcnis: March 15, 1932 as Welfare Association of Carlisle AGREEMENT AND PLAN OF REORGANIZATION DIVIDING the STEVENS CENTER (A PENNSYLVANIA NONPROFIT CORPORATION) INTO the STEVENS CENTER (A PENNSYLVANIA NONPROFIT CORPORATION) AND the HSC RESIDUARY CORPORATION (A PENNSYLVANIA NONPROFIT CORPORATION) AND AGREEMENT OF ACQUISITION OF THE RESULTING, STEVENS CENTER . BY NORTHWESTERN HUMAN SERVICES OF PENNSYLVANIA, INC. l(a This Agreement and Plan of Reorganization ("Agreement") is entered into this.~ day of 43~Lub~x , 2000 among the STEVENS CENTER, a Pennsylvania nonprofit corporation ("the Dividing Corporation"), its subsidiary, the STEVENS HOUSING CORPORATION, a Pennsylvania nonprofit corporation ("SHC'), and NORTHWESTERN HUMAN SERVICES OF PENNSYLVANIA, INC., a Pennsylvania nonprofit corporation ("NHS"). RECITALS A. The STEVENS CENTER, hereinafter referred to as "the Dividing Corporation", is a Pennsylvania nonprofit corporation organized and existing under the laws of the Commonwealth of Pennsylvania, as amended. B. The STEVENS HOUSING CORPORATION, hereinafter referred to as "SHC", is a wholly owned nonprofit subsidiary Pennsylvania Corporation of the Dividing Corporation which was organized and continues to exist under the laws of the Commonwealth of Permsylvania, as amended. C. NORTHWESTERN HUMAN SERVICES OF PA., hereinafter referred to as "NH$", is a Pennsylvania nonprofit corporation organized and existing under the laws of the Commonwealth of Pennsylvania, as amended. D. The Parties hereto desire that the Dividing Corporation be reorganized and divided into two (2) separate and distinct nonprofit corporations: the STEVENS CENTER ("TSC"), a new corporation, and the HSC RESIDUARY CORPO1C~.TION ("HSCRC"), the surviving corporation (the "Division") with the acquisition, immediately subsequent to such Division, of TSC by NHS (the "Reorganization"). E. The Dividing Corporation and its subsidiary SHC, as well as NHS, are non-stock, non-member nonprofit, 501(c)(3) corporations. The Dividing Corporation and its subsidiary, SHC, are non-member corporations. F. The Dividing Corporation has experienced certain financial difficulties which make it unwise, if not impossible, for it to continue the operation of its programs and day to day operations. G. On or about July i. 0, 2000, NHS has issued a non-binding Letter oflntent to acquire certain assets and certain permitted liabilities/encumbrances (the "LOI") which has been accepted and adopted by the Board of Trustees of the Dividing Corporation on or about July 20, 2000. H. Along with the LOI, NHS loaned to the Dividing Corporation that sum not to exceed Seventy Thousand ($70,000.00) Dollars which was evidenced by a Judgment Note executed by TSC on or about July 20, 2000 which was necessary for the Dividing Corporation to meet its payroll on July t5, 22000 for the payroll period covering June 15, 2000 to June 30, 2000. I. The LOI calls for closing on the transaction, then yet to be structured, on or before August 1, 2000 since the next payroll of TSC was July 31, 2000. However, on July 31; 2000, due to negotiations with certain banking institutions not having been successfully concluded, and since the Dividing Corporation was able to meet its own payroll without the assistance of NHS, Closing was postponed. J. As a result of the due diligence, the Parties became aware that certain debt of the Dividing Corporation that was to be vested in TSC was tax free debt and for such status to be maintained unimpaired would require that TSC be determined by the Internal Revenue Service (the "Service") to be a 501(c) (3) corporation prior to it being vested with the tax free debt and the assets encumbered as a result of such. K. The Dividing Corporation and NHS have determined to structure the transaction as follows: l) The Dividing Corporation will reorganize and divide into two (2) 2) separate and distinct nonprofit corporations being (1) The Stevens Center ("TSC"), the new corporation, and (2) the HSC Residuary Corporation (the "HSCRC"), thee surviving corporation; Certain assets ("Acquired Assets") and certain permitted liabilities/encumbrances ("Acquired Liabilites") of the Dividing Corporation which are respectively set forth in Exhibits "A" and "B" attached hereto and incorporated by reference (collectively, "Acquired Assets and Liabilities") shall be thc sole assets and sole l/abilities/encumbrances of TSC on or at the Effective Time of this Division and Reorganization automatically without further need for instrument, act, transfer, conveyance, or assignment; 3) 4) All other assets, liabilities and encumbrances of the Dividing Corporation which are, in part, set forth in E,'d~ibit "C" attached hereto and incorporated herein by reference, shall, upon the Effective Time of this Division and Reorganization of the Dividing Corporation, be the assets and liabilities of HSCRC without further need for instrument, act, conveyance, transfer or assignment; Subsequent to the Effective Time, on the Determination Date, TSC shall be vested without further need for instrument, act, transfer, conveyance or assignment, with the tax free debt and the assets encumbered as a result thereof as set forth in an Agreement with Keystone Bank by and through its successor in interest, Manufacturers and Traders Trust Company, of even date herewith and incorporated herein by reference and hereinafter referred to as "Tax Free Debt and Related Assets" and subsequent thereto the Dividing Corporation and HSCRC, its successor, shall have no further right, title and/or interest in and/or liability for the Tax Free Debt and Related Assets. Contemporaneously with the Effective Time, NHS shall acquire the new corporation, TSC, as a wholly owned subsidiary by the Board of Trustees of the Dividing Corporation existing prior to the Effective Time relinquishing/resigning at the Effective Time as Trustees of the New Corporation, TSC, and the Board of Trustees designated by NHS constituting the new Board of Trustees of TSC at the Effective Time. K. The Boards of Trustees of the Dividing Corporation and NHS have determined that this Agreement achieves substantially the same result as the acquisition of certain assets and liabilities as anticipated in the LOI from a business point of view while achieving an avoidance of transfer tax and contract assignment insuring no break in the continuity of programmatic services and flow of revenues related thereto. L. Furthermore, due to protracted negotiations with certain banking institutions and the continuation of cash flow problems, payroll shortfalls, programmatic continuity concerns, and employee continuation and morale issues, the Dividing Corporation and NHS, on September 1, 2000, entered into a Lease Agreement and Management Agreement whereby NHS would officially take over the management of the Dividing Corporation and its programs and the Dividing Corporation would assign its provider service agreements to NHS pending the conclusion of closing on this Division and Reorganization and occurrence of the Determination Date. M. The Boards of Trustees of the Dividing Corporation and NHS have therefore adopted resolutions approving this Agreement and Plan pursuant to 15 ?a.C.S.A. § 5952(c), 5924 (b) and 5922 (b)(1) on their meeting occurring on October 11, 2000 and October 5, 2000 respectively. NOW, THEREFORE, in consideration of the mutual covenants, agreements, undertakings, representations and warranties herein contained and with the intention of being legally bound hereby, the Parties hereto agree as follows: ARTICLE I GENERAL 1.01 Division. The Stevens Center, a Pennsylvania Nonprofit Corporation, hereinafter sometimes called the "Dividing Corporation", shall effect a division (the "Division") in accordance with and subject to the terms and conditions of this Agreement. At the Effective Time (as defined in Section 1.04 hereof) the Dividing Corporation shall be divided into two corporations: (i) the Stevens Center (TSC), a _Pennsylvania Nonprofit Corporation, the new corporation, and (ii) the HSC Residuary Corporation (HSCRC), a Pennsylvania Nonprofit Corporation, the surviving corporation, (TSC and HSCRC being hereinafter sometimes collectively referred to as the "Resulting Corporations") with the effect specified by NCL § 5957 (relating to effect of division). The Dividing Corporation shall survive the Division and shall thereafter be the HSC Residuary Corporation while the new corporation shall take the name of the Dividing Corporation and be thereafter known as the Stevens Center. 1.02 Further Assurances with Respect to Assets. The Dividing Corporation shall at any time, or from time to time, as and when requested by either of the Resulting Corporations, or by the successors or assigns of either of them, execute and deliver, or cause to be executed and delivered in its name by any of its duly authorized Officers, all such cooveyances, assignments, transfers, deeds, or other instruments, and shall take or cause to be taken such further or other action as either of the Resulting Corporations, or the successors or assigns of either of time, may deem necessary or desirable in order to evidence the transfer, vesting or devolution of any property, right, privilege or franchise or to vest or perfect in or confirm to either of the Resulting Corporations, or the successors or assigns of either of them, title to and possession of the respective property, rights, privileges, powers, immunities, franchises and interests referred to in, or identified pursuant to, this Agreement as transferred to or remaining with a Resulting Corporation and otherwise to carry out the intent and purposes thereof. 1.03 Further Assurances with Respect to Liabilities. Each of the Resulting Corporations shall at any time, or from time to time, as and when requested by the other Resulting Corporation, or by its successors and assigns, execute and deliver, or cause to be executed and delivered in its name by any of its duly authorized Officers, all such assumptions, acknowledgments or other instruments, and shall take or cause to be taken such further or other action as the other Resulting Corporation, or its successors and assigns, may deem necessary or desirable in order to evidence the apportioning of the debts and liabilities of the Dividing Corporation between the Resulting Corporations in the manner specified in, or pursuant to, this Agreement and otherwise to carry out the intent and purposes hereof. 1.04 Effectiveness. Articles of Division incorporating this Agreement, and such other documents and instruments as are required by, and complying in all respect with, the NCL shall be delivered to the Department of State of the Commonwealth of Pennsylvania on or after October 18, 2000. This Division shall become effective upon filing of Articles of Division in the Department of State (which time is herein called the "Effective Time"). 1.05 Court Al~proval. The Parties hereto shall submit the instant transaction to the Orphans' Court Division of the Court of Common Pleas of Cumberland County for approval/ratification promptly after the Effective Time. ARTICLE II - TSC AND SHC 2.01 TSC Articles of Incomoration. The Articles of Incorporation ot'TSC, the new Corporation, are attached hereto and incorporated herein by reference and marked Exhibit "D", hereinafter referred to as the "TSC Articles, and such shall be effective at the Effective Time. 7 2.02 TSC Bylaws. The Bylaws of the Dividing Corporation as amended and in effect immediately prior to the Effective Time shall at the Effective Time be the Bylaws of TSC until changed in the manner therein provided (hereinafter referred to as the "TSC Bylaws"). 2.03 TSC Trustees and Officers. The Trustees and Officers of the Dividing Corporation shall, at the Effective Time cease being the Officers and Trustees of TSC, the new corporation, and said existing Trustees and Officers of the Dividing Corporation shall resign and withdraw as Officers and Trustees of TSC, the new corporation, at the Effective Time and the Trustees and Officers appointed by NHS shall contemporaneously at the Effective Time become the Trustees and Officers of TSC. 2.04 SHC Articles of Incorporation. The Articles of Incorporation of SHC as amended and in effect immediately prior to the Effective Time shall, at the Effective Time, be the Articles of Incorporation of SHC until changed in the manner provided (hereinafter referred to as the "SHC Articles"). 2.05 SHC By-Laws. The By-laws of SHC as amended and in effect immediately prior to the Effective Time shall at the Effective Time be the By-laws of SHC until changed in the maimer therein provided (hereinafter referred to as the "SHC By-laws"). 2.06 SHC Trustees and Officers. The Trustees and Officers of SHC shall change at the Effective Time so that all existing Trustees and Officers of SHC shall resign and withdraw at the Effective Time and the Trustees and Officers appointed by NHS as the Officers and Trustees of TSC, the new corporation, shall contemporaneously at the Effective Time become the Trustees and Officers of SHC. ARTICLE III - HSCRC 3,01 Articles of Incorporation. The Articles of Incorporation of the Dividing Corporation, as amended, and in effect immediately prior to the Effective Time shall at the Effective Time be the Articles of Incorporation of HSCRC. 3.02 Bylaws. The Bylaws of the Dividing Corporation as amended and in effect immediately prior to the Effective Time shall at the Effective Time be the Bylaws of HSCRC until changed in the manner therein provided (hereinafter referred to as "HR_CRC Bylaws"). 3.03 Trustees and Officers. The Trustees and Officers of the Dividing Corporation shall at the Effective Time be the Trustees and Officers of the HSCRC, until changed in the manner provided in the HSCRC Bylaws. ARTICLE IV EFFECT OF DIVISION 4.01 Assets and Liabilities Generally. Except as otherwise provided in subsequent provisions of this Article IV, all of the assets, property, liabilities, and encumbrances, contingent or otherwise, of the Dividing Corporation, including all debts due on whatever account to it, and all liabilities of the Dividing Corporation, shall at the Effective Time be taken and deemed without further act or deed to be vested in HSCRC. 4.02 Acquired Assets and Liabilities. The assets and property set forth in Exhibit "A" (the "Acquired Assets") hereto, along with the liability and encumbrances set forth in Exhibit "B" (the "Acquired Liabilities") hereto shall, at the Effective Time, including, without limitation the corporate name the Stevens Center, be taken and deemed without further act or deed to be transferred to and vested in TSC (collectively referred to as the "Acquired Assets and Liabilities"). 4.03 TSC Post Division Liabilities. TSC shall at the Effective Time be tree of all of the debts, liabilities, and obligations of any nature, kind, or type, whatsoever, contingent or otherwise, of the Dividing Corporation except for those set forth in Exhibit "B" hereto as hereinabove provided for in Section 4.02. In no event shall TSC be viewed or determined to be a successor corporation to the Dividing Corporation, nor be deemed liable for the successor liability of the Dividing Corporation. All liabilities, if any, of the Dividing Corporation as a nonprofit corporation and/or corporation under NCL § 5103 and BCL § 1572 (relating to definitions) or otherwise, other than those set forth in Exhibit "B", shall without further act or deed be apportioned to and assumed by HSCRC. The Resulting Corporations shall each thenceforth be responsible as separate and distinct corporations only for such debts, liabilities and obligations as each corporation may undertake or incur in its own name, except as hereinafter provided in Section 4.04. The Dividing Corporation and HSCRC, jointly and severally, herewith indemnify and hold TSC harmless, including, without limitation, reasonable counsel fees, with respect to any debt, liability, obligation and/or the claim thereof of the Dividing Corporation and/or HSCRC which is not vested in TSC pursuant hereto. 4.04 Effect of Determination Date. On the Determination Date as hereinafter defined in Section 4.07, the Tax Free Debt and Related Assets as hereinabove defined shall be taken and deemed without further act or deed to be vested in TSC. 4.05 Acquisition of TSC. At the Effective Time, TSC shall be a wholly owned subsidiary of NHS without further act or deed, as hereinabove provided in Article II. 4.06 Notice to Office of Attorney General. IfNHS elects to discontinue all or substantially all the operations of TSC or SHC, within a reasonable time prior to the act of discontinuance, NHS shall provide written notice to the Commonwealth of Pennsylvania, Office of Attorney General of such proposed discontinuance and the Office of Attorney General shall have the right to and approve the disposition of the assets of TSC and SHC in a manner consistent with the 10 doctrine of"cy pres" currently codified at 20 Pa, C.S. § 6110 pursuant to 15 Pa,C.S. §§ 5547 and 5976 or 5929. 4.07 Determination Date. The Determination Date shall be that date subsequent to the Effective Time on which the Service shall issue its determination that TSC shall be considered a 501(c)(3) tax exempt nonprofit corporation. ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE DIVIDING CORPORATION, SHC AND THE OFFICERS AND TRUSTEES OF THE DIVIDING CORPORATION AND SHC The Dividing Corporation, SHC and each of the Officers and Trustees of The Dividing Corporation and SHC represent and warrant (except as indicated to the contrary below) to NwriS as follows: 5.01 Due Incorporation, etc. The Dividing Corporation and SHC are validly organized and existing corporations in subsistence under the laws of the Commonwealth of Pennsylvania and satisfactory evidence of such good standing has heretofore been or will promptly be delivered to NITS. The Dividing Corporation and SHC have requisite corporate powers to canT on their business as they are now being conducted, are qualified to do business and are in good standing in every jurisdiction in which the character and location of their assets or the nature of the business transacted by them requires such qualification, except where the failure to be so qualified and in good standing would not have a material and adverse effect on the Dividing Corporation and SHC. The copies of the Articles of Incorporation and By-laws, and all amendments thereto, of the Dividing Corporation and SHC, which have heretofore been or promptly will be delivered to NHS, are complete and correct. 5.02 Trustees. All Trustees and Officers of the Dividing Corporation and SHC prior to the Effective Time are listed on Schedule 5.02 not attached but incorporated by reference. 11 5.03 Financial Statements. The audited financial statements of the Dividing Corporation and SHC as of June 30, 1999, consisting of a balance sheet, statement of operations, and a statement of cash flows, for the twelve months ended that date which the Dividing Corporation and SHC has delivered to NHS have been certified by Smith, Elliot, Keanrs & Company, independent certified public accountants. Suctn financial statements present fairly the financial position of the Dividing Corporation and SHC and the results of its operations and changes in financial positions as of the date and for the period indicated, ia conformity with generally accepted accounting principles consistently applied during such period. As of August 31, 2000, there were no material obligations or liabilities (whether accrued, absolute, contingent or otherwise) of the Dividing Corporation or SHC not adequately reflected on the balance sheet (and the notes thereto) as of such date. 5.04 INTENTIONALLY DELETED. 5.05 (A) Asset Descril~tions. The Dividing Corporaiton and SHC have furnished, or will furnish at the time of the execution of this Agreement, to NHS, a list (the "Asset List"), Schedule 5.05(A) not attached, but incorporated by reference, dated the date of this Agreement, describing all assets owned by the Dividing Corporation and SHC. (B) Liabilities Descriptions. The Dividing Corporation and SHC have furnished, or will furnish at the time of the execution of this Agreement, to NHS, a list (the "Liabilities List"), Schedule 5.05(B) not attached, but incorporated by reference, dated the date of this Agreement, describing all liabilities of the Dividing Corporation and SHC. 5.06 Litigation List. The Dividing Corporation and SHC have also furnished, or will furnish at the time of the execution of this Agreement, to NHS, a written description (the "Litigation List"), Schedule 5.06 not attached, but incorporated by reference, dated the date of this Agreement, of 12 all civil or criminal actions, proceedings, arbitrations or investigations pending, or, to the best knowledge of the corporate officers or trustees of the Dividing Corporation and SHC, after such inquiry as they determine to be appropriate, threatened by or before any court, governmental agency, regulatory authority or arbitrator against the Dividing Corporation and SHC or any director or officer of the Dividing Corporation or SHC, in such capacity as either Plaintiff or Defendant. 5.07 No Material Adverse Chan=e. Since June 30, 1999, there has not been (i) any material adverse change in the financial condition, business properties or assets of the Dividing Corporation or SHC in the aggregate; (ii) any loss or damage to any of the properties or assets of the Dividing Corporation and SHC (whether or not covered by insurance) which has materiai[y and adversely affected the Dividing Corporation or SHC or impaired the ability of the Dividing Corporation or SHC to conduct its business; (iii) any other event or condition of any character which has materially and adversely affected the business of the Dividing Corporation or SHC; (iv) any mortgage or pledge of any of the properties or assets of the Dividing Corporation or SHC (other than as disclosed on the Document List); or (v) any increase paid or agreed to be paid in compensation, retirement benefits or other commitments to employees, other than in the ordinary course of the Dividing Corporation or SHC business. 5.08 Good Title. etc. The Dividing Corporation and SHC have title to all of its properties, including, without limitation, all property reflected on the balance sheet of the Dividing Corporation and SHC dated as of June 30, 1999 (but excluding property disposed of subsequent to September 1, 2000) and prior to the date hereof in the ordinary course of business), free and clear of any mortgage, lien, pledge, charge, claim or encumbrance. 13 5.09 Working Order. Except as described in Schedule 5.09 not attached hereto but incorporated herein by reference, all material machinery and equipment of the Dividing Corporation and SHC are in working order and repair (normal wear and tear and normal repair or maintenance excepted). Except as set forth in the Document List, the Dividing Corporation and SHC have the unrestricted right to use its properties for its operations as presently conducted and/or to transfer said property as they shall determine. 5.10 No Breach. Except as otherwise disclosed in writing, the Dividing Corporation and SHC have not breached, nor are in default under the terms of any indenture, agreement, employee benefit plan, lease or license to which it is subject or bound that is material to the business of the Dividing Corporation and SHC, and, to the best knowledge of the Officers and Trustees of the Dividing Corporation and SHC after such inquiry as they determine to be appropriate, each such indenture, agreement, employee plan, lease and license is valid and effective. The Dividing Corporation and SHC are not in default with respect to any Order of any Court, regulatory agency or other private or governmental authority, specifically pertaining to TSC and SHC. 5.11 This Agreement Not a Default. Compliance with the terms of this Agreement and consummation of the transactions contemplated by this Agreement will not materially violate or result in a material breach of or constitute a material default under any statute, ordinance or governmental regulation, or any provision of the Articles of Incorporation and By-laws of The Dividing Corporation and SHC, or the provisions of any indenture, mortgage, lien, lease, agreement, instrument, order, judgment, decree, or any other restriction of any kind or character to which any property of the Dividing Corporation or SHC are bound or by which the Dividing Corporation or SHC are bound. 14 5.12 No Other Commitments. Except for the making of capitat expenditures in amounts less than Five Thousand ($5,000.00) Dollars each and except for the mak/ng of capital expenditures which are disclosed in the Asset List (which includes all such expenditures which individually totaled Five Thousand ($5,000.00) Dollars or more), since June 30, 1999 the Dividing Corporation and SHC have not entered into any transaction or commitment other than in the ordinary course of business. 5.12 Information Accurate. All information in writing concerning the Dividing Corporation and SHC furnished at or prior to the Effective Time by or on behalf of the Dividing Corporation and SHC to NHS shall when furnished be tree and correct in all material respects without omission of any material fact necessary to be stated to make the information not misleading. 5.13 Due Authorization, etc. The execution and delivery of this Agreement by the Dividing Corporation and SHC and the performance by the Dividing Corporation and SHC of its obligations under this Agreement have been authorized by its Board of Trustees; and the Dividing Corporation and SHC have all requisite authority to enter into and perform this Agreement, subject only to the approval of this Agreement by the Attorney General of the Commonwealth of Pennsylvania and the Orphans Court of the Court of Common Pleas of Cumberland County. Subject to the foregoing, this Agreement is a valid and binding agreement to the Dividing Corporation and SHC and NHS, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, or other similar laws of general application affecting the enforcement of creditors' rights generally. 5.14 Consent. Except as provided in Section 5.13 hereof, no consent, approval or authorization of or registration, qualification, designation, declaration or filing with any governmental authority or private person or entity on the part of the shareholders of the Dividing Corporation and 15 SHC are required in connection with the execution and delivery of this Agreement or the consummation of any transaction contemplated hereby. 5.15 Intellectual Property. Except as described in Schedule 5.15 not attached hereto but incorporated herein by reference, the Dividing Corporation and SHC do not own or have any intellectual property, including, without limitation, patents, applications for patents, written disclosures of inventions, trade names, trademark registrations, or agreements, including agreements with its employees, under which TSC or SHC are either a licensee and/or licensor (and no such agreements are being negotiated). No amounts are or will at any time hereafter be owing to any employee of the Dividing Corporation or SHC in connection with any patent or invention. 5.16 Broker's or Finder's Fees, etc. No agent, broker, investment banker, person or firm acting on behalf of the Dividing Corporation or SHC or under the authority of the Dividing Corporation or SHC is or will be entitled to any broker's or finder's fee or any other commission or similar fee directly or indirectly from any of the parties hereto in colmection with any of the transactions contemplated herein. 5.17 ERiSA. There are no Plans subject to the Employee Retirement Income Security Act of 1974 ("ERiSA"). 5.18 iNTENTIONALLY DELETED. 5.19 Insurance. The Dividing Corporation and SHC keep all of its business and properties which are of an insurable nature insured, with insurers reasonably believed by the Dividing Corporation and SHC to be responsible against loss or damage or arranges with others to do so. 5.20 Comr)liance with Applicable Law. To the best knowledge of the Officers and Trustees of the Dividing Corporation and SHC, after inquiry as they determine to be appropriate, the 16 Dividing Corporation and SHC are in compliance in all material respects with all laws, regulations, governmental orders or judgments applicable to its business as a whole, and has all material licenses, permits and other governmental authorizations necessary for the conduct of its business as a xvhole. 5.21 Untrue Statements. No representation or warranty by the Dividing Corporation and SHC and/or its Officers or Trustees in this Agreement contain~ or will contain any untrue statement of a material fact, or omits or will omit to state a material fact necessary to make the statements contained therein not misleading. No written information, statement or certification furnished to NHS by the Dividing Corporation and SHC or its Officers or Trustees pursuant hereto or in connection with the transactions contemplated hereby, contains or will contain any untrue statement of a material fact, or omits or will omit to state a material fact necessary to make the statements contained therein not misleading. No breach under this Article V shall have occurred if any matter which is required to be disclosed on a particular list hereunder is not disclosed on that list, but appears on a different list furnished in accordance with this Article V. 5.22 Environmental Permits. etc. The Dividing Corporation and SHC and its Officers and Trustees warrant that to the best of their knowledge, the Dividing Corporation and SHC: (a) are not required to obtain any permits, licenses and other authorizations required under federal, state, local and foreign environmental laws, statutes and ordinances, including, but not limited to the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. § 9601 e_!t seq., the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq., the Federal Water Pollution Control Act, 33 U.S.C. §1251 et seq., the Clean Air Act, 41 U.S.C. § 2601 et seq., as amended, the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. §§ 136 to 1364, the Occupational Safety and Health Act of 1970, 29 U.S.C. §§ 651 to 678, and any applicable state or local la~v relating to the 17 protection of the environment, and including any rules, regulations, orders, decrees, plans, codes, judgments, injunctions, notices or demand letters, prohibitions, obligations, schedules, timetables, standards, conditions or requirements issues, entered, approved or promulgated thereunder, relating to pollution or protection of the environment, including laws relating to emissions, discharges, releases or threatened releases of pollutants, contaminants, chemicals, wastewater, industrial substances, toxic substances, hazardous substances (as defined in Section 101(14) of CERCLA, 41 U.S.C. § 9601(14)), or solid or hazardous wastes in, into, onto or upon the environment (including, without limitation, ambient air, surface water, ground water, or land), or otherwise relating to the manufacture, processing, distribution, use, treatment, collection, accumulation, storage, disposal, transport, or handling of pollutants, contaminants, chemicals, wastewater, or industrial, toxic or hazardous substances or wastes (collectively the "Environmental Laws"); and (b) is in compliance with all applicable Environmental Laws. The Dividing Corporation and SHC have not received (i) any notice of the violation or alleged violation of, or noncompliance or alleged noncompliance with, any of the Envirommental Laws, permits, licenses or other authorizations; (ii) any notice, demand, claim, order or request for the performance of, or the payment of costs or expenses for, any test, investigation, assessment, examination, cleanup, removal, remediation, mitigation, response, treatment or restoration with regard to environmental condition; or (iii) any notice, or have knowledge of, any environmental contamination or the disposal of any hazardous substance, pollutant or contaminant at, in, into, onto, upon, by or from any real property owned, operated, possessed or used by the Dividing Corporation and SHC or the environment; and there is not now and has not been, as a result of the Dividing Corporation and SHC's activities (y) any violation or alleged violation, or noncompliance or alleged noncompliance with, any of the Environmental Laws, permits, licenses, or other authorizations; or (z) any envirortmental contamination 18 of, or the disposal of any hazardous substance, pollutant or contaminant at, in, into, onto, upon, by or from any real property owned, operated, possessed or used by the Dividing Corporation and SHC or the environment. The Dividing Corporation and SHC have not disposed of, have not arranged for the disposal of, nor have any knowledge of the disposal of, any hazardous substance on any real property that is covered by this Agreement. ARTICLE VI CONDITIONS PRECEDENT TO CLOSING All obligations of NHS hereunder are subject to the fulfillment (unless specifically waived in writing by NItS subsequent to the execution of this Agreement) of each of the following conditions at or before the Closing Date: 6.01 Warranties True. All representations and warranties of the Dividing Corporation and SHC and their Trustees and Officers contained in this Agreement shall in all material respects be true on, and with the same force and effect as though made on, the Closing Date, except for changes permitted by this Agreement. 6.02 TSC and SHC Performance. The Dividing Corporation and SHC shall have performed in all material r~spects all obligations and agreements required of them and complied with all covenants applicable to them as contained in this Agreement, to be performed and complied with by them on or prior to the Closing Date. 6.03 Good Standing. There shall have been delivered to NHS evidence, whether in the form of telegrams, certificates or otherwise, satisfactory to NHS to establish that the Dividing Corporation and SHC in subsistence (i) in the state of its incorporation; and (ii) in every jurisdiction, in which the character and location of its assets or the nature of the business transacted by it requires that it be qualified to do business. 19 6.04 Opinion of Counsel for the Dividina Comoration and SHC. NHS shall have been furnished with an opinion, dated the Closing Date, of Martson, Deardorff, Williams and Otto, counsel for the Dividing Corporation and SHC, to the effect that: (1) The Dividing Corporation and SHC are validly organized and (2) (3) existing corporations in subsistence under the laws of the Commonwealth of Pennsylvania. The Dividing Corporation and SHC are duly qualified and in good standing as a foreign corporation authorized to do business in each jurisdiction where, because of the nature of its business or properties, such qualification is required, except where the failure to be so qualified and in good standing would not have a material or adverse affect on the financial condition, business properties or assets of the Dividing Corporation or SHC. The Dividing Corporation and SHC have all requisite corporate power under its statutes and articles to carry on its business as then being conducted; The Dividing Corporation and SHC are non-stock, non-member, nonprofit corporations and SHC is a wholly owned subsidiary of TSC. The execution, delivery and performance of this Agreement by the Dividing Corporation and SHC have been duly and validly authorized by its Board of Trustees in compliance with Pennsylvania Law and its Articles of Incorporation and Bydaws, 2O and this Agreement constitutes the valid and binding obligation of the Dividing Corporation and SHC, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization or other similar laws of general application affecting the enforcement of creditors' fights generally; (4) Except as may be specified by such counsel, all consents or approvals (including authorizations or orders of any private person, entity or governmental body) required for the Dividing Corporation and SHC to enter into and perform this Agreement and the transactions 'contemplated hereby, and all supplements thereto, have been obtained; (5) Except as may be specified by such counsel, all other actions and proceedings required by law to be taken by the Dividing Corporation and SHC at or prior to the Closing Date in connection with this Agreement and the transactions provided for herein have been duly and validly taken; (6) Except as may be specified by such counsel, they do not know after inquiry of TSC and SHC and its Officers and Trustees, of any material litigation, proceeding or governmental investigation pending or threatened against or relating to the Dividing Corporation or SHC, or any properties or business, or any litigation, proceeding or governmental investigations, pending or 2~ (8) threatened, relating to the transactions contemplated by this Agreement; The execution, delivery and performance of this Agreement by the Dividing Corporation and SHC will not materially violate or result in a material breach of or constitute a material default under any provision of the Dividing Corporation's or SHC's Articles of Incorporation or By-laws, or any indenture, mortgage, lien, lease agreement, instrument, order, judgment decree, or any other restriction of any kind or character to which any property of the Dividing Corporation and SHC is subject or bound; and The Articles of Division referred to in Section 1.04 have been duly executed by the Dividing Corporation in accordance with Pennsylvania Law. To the best of counsel's knowledge, upon the filing of the Articles of Division with the Department of State of the Commonwealth of Pennsylvania, the reorganization will become effective as provided in the Articles of Division. The Acquired Assets and Liabilities, at the Effective Time, will be the sole assets and liabilities of the Dividing Corporation and the Dividing Corporation shall have no other assets or liabilities and all other assets and liabilities of the Dividing Corporation immediately prior to the Effective Time shall, at the Effective Time, automatically and without any further action be the assets 22 and liabilities of HSCRC. Furthermore, the Board of Trustees and Officers of the Dividing Corporation and SHC shall automatically, at the Effective Time, be those Trustees as set forth in Schedule 6.04 not attached but incorporated by reference. In rendering such opinions, such counsel may rely, as to factual matters, upon certificates such counsel may request to be furnished by Officers, Directors, or Shareholders of the Dividing Corporation and SHC and upon such other documents and data as such counsel deem appropriate as a basis for its opinion. Such counsel may state that they are admitted to practice only in the Commonwealth of Pennsylvania, that they are not admitted to the Bar in any other state and are not expert in the law of any other state, and that to the extent their opinion concerns the laws of any other state, such counsel has relied upon the opinion of counsel reasonably satisfactory to such counsel who are admitted to practice in such state. ARTICLE VII BINDING AGREEMENT 7.01 Succession. All terms, covenants, representations, warranties and conditions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the Part/es hereto and their respective successors and permitted assigns. 7.02 Assignment. The Dividing Corporation shall not be permitted to assign its interest in this Agreement. 23 ARTICLE VIII SURVIVAL OF WARRANTIES 8.01 Survival Except as otherwise provided in the Agreement, ail representations, warranties and covenants of the Parties made herein or in connection herewith shall survive the Closing for a period of five (5) years. ARTICLE IX NOTICES AND PROVISIONS OF GENERAL APPLICATION 9.01 Notices. All notices, requests, waivers and other communications required or permitted to be given pursuant to this Agreement shall be in writing and shall be deemed to have been duly given if delivered personally, given by prepaid telegram or mailed registered or certified first-class mail, postage prepaid, as follows: the STEVENS CENTER 33 State Avenue Carlisle, PA 17013 With a copy to: Martson, Deardorff, Williams and Otto Ten East High Street Carlisle, PA 17013 With a copy to: STEVENS HOUSING CORPORATION 33 State Avenue Carlisle, PA 17013 Kelley & Murphy Suite 160,925 Harvest Drive Blue Bell, PA 19422 24 33 State Street Carlisle, PA 17013 HSC RESIDUARY CORPORATION With a copy to: With a copy to: Martson, Deardorff, Williams, & Otto Ten East High Street Carlisle, PA 17013 NORTHWESTERN HUMAN SERVICES OF PENNSYLVANIA 1320 Linglestown Road Second Floor Harrisburg, PA 17110 Joseph T. Kelley, Jr., Esquire Kelley & Murphy Suite 160, 925 Harvest Dr/ye Blue Bell, PA 19422 9.02 Place of Closinz, Closing Date. The Closing shall take place at the Carlisle, Pennsylvania offices of'The Stevens Center on October 12, 2000 at i 1:00 A.M., or at such other place, and at such time, as the Parties may mutually agree. The date of the Closing is herein called the "Closing Date". At Closing, the Parties to this Agreement Mil exchange certificates, opinions and other documents in order to determine whether the terms and conditions of this Agreement required to be satisfied at or prior thereto have been satisfied. If the terms and conditions required to be satisfied have been so satisfied, the Articles of Division shall be filed with the Department of Sate of the Commonwealth of Pennsylvania, pursuant to Permsylvania law, in order to consummate the Division, Reorganization and Acquisition. 25 Attest: 9.03 Entire Understandina. This Agreement constitutes the entire agreement and supersedes all prior Agreements, both written and oral, among the Parties hereto with respect to the subject matter hereof. 9.04 Waivers. The failure of any party at any time or times to require performance of any provision hereof shall in no manner affect its right at a later time to enforce the same. No waiver any party of any condition or of any breach of any term, covenant, representation or warranty contained in this Agreement shall be effective unless in writing, and no waiver in any one or more instances shall be deemed to be a further or continuing waiver of any such condition or breach in other instances or a waiver of any other condition or breach of any other term, covenant, representation or warranty. 9.05 Counteroarts. This Agreement may be executed simultaneously in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 9.06 Headings. The headings preceding the text of Sections of this Agreement are for convenience only and shall not be deemed part of this Agreement. 9.07 Apr>licable Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the Commonwealth of Pennsylvania. IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement and Plan of Division and Reorganization as of the date first above written. the STEVENS CENTER h . ~,¢-'-~, 9_ Its: STEVENS HOUSING CORPORATIOP'/ 26 Attest; Attest: BY: Its: b/ORTItWESTE _R~ tti~I&~/SERVICES 27 EXHIBIT "A" ACOUIRED ASSETS o STEVENS CENTER 1. Ail names, trade names, service and trademarks, patent copyrights and any and all other intellectual property, including without limitation, the "Stevens Center" and all of'/ts preceding names, the "Stevens Housing Corporation" and Steven Affordable Housing and any and all other properly set forth on Schedule 5.15, incorporated herein by reference. 2. The Stevens Housing Corporation, and ail of it assets and liabilities, including, without limitation, the following: Louther Place (L.P): which is Louther Place Limited Partnership 63-67 W. Louther Street Carlisle, PA 17013 LP was renovated in 1996 and consists of 17,530 sq ft, 17 Unit, 4 story apartment building - 10 one bedroom apartments - 7 two bedroom apartments. Such may be an histor/cally certifiable building, It was an old church, burned down and was re~rbished. Fully modernized five apartments for CRR (mentally retarded clients) and remainder for low income HUD housing. One apartment has been retrofitted for hearing impaired. LP is totally fitted with a sprinkler system on elevator. There is a laundry on each floor. First Floor 5,260 sq ft Second Floor 5,260 sq fl lA 1 Bedroom IB 2 Bedrooms lC 2 Bedrooms 2A 1 Bedroom 2B 1 Bedroom 2C I Bedroom 2D 1 Bedroom 2E 1 Bedroom 2F 2 Bedrooms 2G I Bedroom Third Floor 5,290 sqf; 3A 2 Bedrooms 3B 2 Bedrooms 3C 2 Bedrooms 3D 1 Bedroom 3E 1 Bedroom 2 Bedrooms 30 1 Bedroom Fourth Floor 1,690 sq ft No apartments Such has been valued as follows: I0 1 Bedroom ~ $20,000.00 and 7 2 Bedroom $28,000.00 for the total sum of $396,000.00. b) Silver Serin_* Courtyards. L.P. and its real estate under development 3. Ail contracts with any and all local, county, state, federal, andJor private sector person or entity wherein the Stevens Center provides services. 4. Al/Insurance Policies and contracts. 5. All Leases for Real Estate whether as a lessor and/or lessee, including, without limitation, the following: Hanover Manor 1 Lease Storage Space I Lease Shippensburg Office - 1 Lease Perry County Office 1 Lease Drop In Center (I00 High Street) I Lease (Also, three (3) equipment leases for copiers) 6. All Bank Accounts, cash, certificates of deposit. 7. All property, plant, equipment, supplies, furnishings and personalty of any nature whether tangible or intangible. 8. All licenses, permits, filings or authorizations, franchises, etc. with respect to the operation of TSC and SHC and the provision of their services, including, without limitation the following: 9. All those certain parcels of real estate which are cormmonly known and referred to as follows: (i) the Stevens Center, 33 State Avenue, Carlisle, PA 17013, this location constitutes the main building which is Flex Space built in 1994 single story constructed with several wings consisting of 21,715 sq ft on 2+ acres which is valued ~ $68 - $75/psfestimated to be $1,476.630.00 to $1,628,625.00; and (ii) 4648 E. Pomfret Street, Carlile, PA 17013 which is an old twin home which needs repairs and upgrades. 10. All prepaid expenses. 11. All other assets shall at the Effective Time be assigned and transferred to and vested in and accepted by HSC Residuary Corporation. 12. All other assets set forth on Schedule 505A ~ the Asset List incorporated herein by reference. 13. All accounts receivable. Any of the aforementioned assets, including, without limitation, 33 State Street, Carlisle, PA, and the accounts receivable which are encumbered by the Keystone Bank Tax Free debt are to be vested at the Effective Time in HSCRC until the Determination Date at which time such shall be vested in the Stevens Center, the new corporation. THE STEVENS CENTER Asset List Description Cash/Equivalents Trusts and Investments Accounts Receivable -Third Party/Clients Accounts Receivable - Cumberland County Accounts Receivable - Other Intercompany Receivables Prepaid Expenses Land and Buildings: 33 State Street, Carlisle (Book Value) 46-48 E. Pomfret St., Carlisle (Book Value Furniture and Equipment (Book Value) (See Furniture and Equipment Listing) Other Assets: Deferred Financing Fees Charter Membership, Community Behavioral HealthCare Network of Pennsylvania Start Up Costs Total Assets Amount 55,409 6,972 440,890 74,675 119,873 168,430 24,736 1,253,865 27,150 28,902 33,208 19,000 500 $2.253.610 Schedule 505A The Stevens Ceater Liabilities List Creditor/Purpose Keystone Bank, Mortgage 33 State Street Keystone Bank, Second Mortgage 33 State Street Keystone Bank, Line of Credit Keystone Bank, Line of Credit ~- ?'- Harris Savings Bank ~_~ ~- Cumberland County, Human Services Grant Funds c- 7-- Cavanaugh MichaJes, Ltd., (Note) >h~ ~: ~ Inter-Company Payable LPLP Rents E' 7- ×act Medicare Services ,~' -~ ~-7- Northwestern Human Services - Loan for Payroll ~-~" Employee Accrued Vacation ~ 6i30100 ~- Trade Creditors -See Detail Listing Below Total LJab/iJities Amount 447,299,53 593,705.26 499,964.69 74,966.66 150,000.00 4,007.$0 101,500.00 78,715.00 30,594.82 70,000.00 86,366.75 326,431.84 $ 2,463,552.15 Trade Creditors IAnyware Computers Adams Hanover Counseling Buchamam Ingersoll ~ Companion Technologies - PA Capital Blue Cross Capital Blue Cross ~ Capital Telecommunications Carl D. Bert Cavanaugh Michaels, Ltd. ~ Carlisle Chamber of Commerce Dauphin Oil Company DePaul Realty Company Eastern Maintenance Systems Keystone Financial ~ /'Fishers Lawn Service First Energy Fleet Fueling Ahold Financial Services GMAC Grace United Methodist Church Harris Business Banking A~' IMWRF Infinity Print Graphics dames Wilson Safe Harbour Amount 507.20 2,109.25 3,176.53 1,200.00 195.00 5,427.38 4,345.60 1,280.00 109,080.90 200.00 5,529.26 14,607.41 10,255.25 21,133.41 210.00 3,106.38 (27.4g) 4,915,49 38.16 560.00 495.83 50.00 556.50 10.505.00 Schedule 5.05B, Page 1 of 3 Trade Creditors f Keller Brothers, Inc. Henry S. Lehr, Inc. -~ Lowes Business Account Lindernan Moving Co, )nc. Lube 'N Go Martson Deardorff ;¢' Moorefie/d Communications Mobil Fleet MBNA America Minolta Leasing Services Paige A. Nelson Paychex Paychex, Inc. Patient Accounting Services, Inc. ~ PP&L PP&L PP&L Penn Community Providers PCPA Group Workers Comp Fund Perry Health Center Phoenix American Life Perry Health Center Philadelphia Child and Family Services Pitney - Bowes, Inc. Postmaster Purchase Power Print Image Richard L. Rovegno Staples Credit Plan The St. Paul The Sentinel Smith Elliott Kearns and Company ~)[" David W. Shively Alltel Tuckey Mechanical Services Terrnlnex International Toshiba American Info Systems Comcast Cable Transkrit, Inc. Sprint Sprint Yellow Pages SSprint Sprint print The Stevens Center Liabilities List /5. mount 2,449.17 16,324.00 352.38 613.83 72.74 19,493.22 1,258.65 (18.77) 244.23 3,798.54 1,585.00 398.55 83.10 33,580.22 497.54 240.27 41.63 3,573.67 3,081.00 273.83 1,628.46 273.83 2,000.00 854.32 100.00 2,659.14 2,310.16 1,825.00 388.81 3,435.40 459.98 7,788.86 475.00 1,062.24 1,290.00 40.00 1,099.86 18.19 1,660.31 3,303.17 2,742.00 864.70 253.51 72.72 Schedule 5.05B, Page 2 of 3 The Stevens Center Liabilities List Trade Creditor (/'Sprint ~ Steven Waiters ! Waste Management of Central PA Xitech ~ ~, TotaJ Trade Creditors Amount 74.10 70.00 284.21 1,998.00 326,431 Schedule 5,05B, Page 3 of 3 EXHIBIT "C" ASSETS AND LIABILITIES TO BE ASSIGNED TO AND VESTED IN H.S.C.R.C. The non-inclusive assets and liabilities to be assigned and/or vested in the H.S.C.R.C. without limitation as follows: I. All assets of the Dividing Corporation not included on Exhibit "A", including, without limitation, the safe deposit box(es) and contents, if any. 2. Ail liabilities of the Dividing Corporation not included on Exhibit "B", including, without limitation, i) The claims of Lawrence Haber, including, without limitation, those set forth by his counsel in her le~er of September 19, 2000, attached hereto. ii) Any possible wage and hour claim of relevant employeees or past employees and/or the government (federal, state, county, local) and/or any entity to which Stevens Center provided services, including, without limitation, such as is set forth in the E-Mail of A1 Vitelli of August 3, 2000. ii/) Any possible partial hospitalization claim of the OIG of HHS, OIG of the Commonwealth of Pennsylvania, the Department of Justice of the United States of America, whether civil or cr/minak iv) Any and all successor liability. The Tax Free Debt and Related Assets pending the occurrence of the Determination Date. The Dividing Corporations Tax Free Debt with Keystone Bank as set forth in an A~eement of even date herewith and the assets encumbered as a result thereof shalI vest in HSCRC pending the occurrence of the Determination Date at which time such shall vest in the Stevens Center, the new corporation. ii ' ' ' Microfilm Number Filed with the Department of State on Entity Number Secretary of the Commonwealth ARTICLES OF INCORPORATION-DOMESTIC NONPROFIT CORPORATION DSCB:IS-$306 IRev 90~ In compJJanoe with the requirements of 15 Pa.C.5. § 5306 (retafing to articJes of incorporation), the undersigned, desJrfn! to ]ncorporate a nonprofit corporation, hereby state(s) that: J. The name of the corporationis~ St:evens Center 2. The la} address of this corporation's initial registered office in this Commonwealth or (b) name of its commercial registere office provider and the county of venue is: la} 1320 Lin~lestown Road Harrisbur~ PA 17110 Dauehin Number and Street Cib, State Zip County lb) c/o: Name of Commercial Registered Office Provider County For o corporation represented by a commercial registered office provider, the COunty in lb} shall be deemed the county in which the corporcilion is located for venue and officic~l publication purposes. 3. The corporation is incorporated under the Nonprofit Corporation Law of 1988 for the folio'wing purpose or purposes: See exhibit A attachement$ and incorporated herein by reference 4. The corporation does not contemplate pecuniary gain or profii, incidental or otherwise. 5. The corporation is organized upon a nonstock basis. 7. ~'~J~~L~~~j~r~ .... I ~ ' 8. The name and address, including street and number, if any, of each incorporator is: Name Address Michael J. Breslin 1320 Lin~lestown Road. Harrisbu~ P~& 17110 9. The specified effectivedcfe, ifany, is: Noc aeoticable - effective on filing month day year 10. Additional provisions of the articles, if any, attach an 8 1/2 x I ] sheet. hour, if any 11. 12. 13. t4. 15. 7-he corporation is incorporated under the Nonprofit Corporation Law of the Commonwealth of Pennsylvania exclusively for charitable, educational and scientific purposes within the meaning of Section 501 (c) (3) of the Internal Revenue Code of 1986. The corporation does not contemplate pecuniary gain or profit, incidental or otherwise. The corporation is formed to provide persons, including minors, suffering from mental illness or retardation with mental health and related services designed to meet their physical, social and psychological needs and to promote their health, security, happiness and usefulness and to promote and foster affordable housing. The corporation is irrevocably dedicated to and (~perated exclusively for nonprofit purposes. No part of the income or assets of the corporation shall be distributed to, or inure to the benefit of, any individual. The term for which the corporation is to exist is perpetual. The corporation is empowered to do all manner of things which a nonprofit corporation may do under Pennsylvania law. The corporation may have one or more members as described in it Bylaws with such powers as are granted to the member (s) in the Bylaws. (a) No part of the activities of the corporation shall be the carrying on of propaganda, or otherwise attempting to influence legislation (except as otherwise provided by Section 501 (h) of the Internal Revenue Code of 1986, or corresponding provisions of any subsequent Federal tax laws), and the corporation shall not par[icipate in or intervene in (including the publishing or distributing of statements) any political campaign on behalf of (dr in opposition to) any candidate for public office. (b) Notwithstanding any other provision set forth herein, the corporation shall not carry on any activities not permitted to be carried on (i) by a corporation exempt from Federal income tax under Section 501 (c)(3) of the Internal Revenue Code of 1986, or corresponding provisior~s of any subsequent Federal tax laws, or (ii) by a corporation, contributions to which are deductible for Federal income tax purposes. (c) The Corporation shall be managed at all times with policies and practices that provide for equal rights, privileges and opp. ortunities to any person regardless of age, race, sex, religion, national origin or sexual preference. 16. 1'7. 18. In the event of the entire or partial termination, dissolution or winding up of the corporation in any manner or for any reason whatsoever, the assets of the corporation which remain after payment, or making provision for payment of all liabilities of the corporation, shall be distributed to and only to one or more nonprofit organizations exempt from Federal income tax under Section 501 © (3) of the Internal Revenue Code of 1986, or corresponding provision of any subsequent Federal tax laws, which have been created and operated for nonprofit purposes similar to those of the corporation, other than ones created for religious purposes. The corporation shall be governed by a Board of Trustees, the number of which shall be established in the Bylaws. The officers of the corporation shall be elected by the Board of Trustees in the manner prescribed in the Bylaws. DS. ~,:15-$306 fRev 90J-2 Articles of mcorooration this ~ dayof (Signature) SHERIFF' S RETURN CASE NO: 2001-00090 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND HABER LAWRENCE C VS STEVENS CENTER THE ET AL - OUT OF COUNTY R. Thomas Kline , duly sworn according to law, says, that he made and inquiry for the within named DEFENDANT NORTHWESTERN HUMAiq SERVICES but was unable to locate Them deputized the sheriff of DAUPHIN serve the within Sheriff or Deputy Sheriff who being a diligent search and , to wit: in his bailiwick. County, COMPLAINT & NOTICE He therefore Pennsylvania, to On January 25th , 2001 attached return from DAUPHIN Sheriff's Costs: Docketing 18.00 Out of County 9.00 Surcharge 10.00 Dep. Dauphin 30.50 .00 67.50 01/25/200 NO~A Ao GIBSON Sworn and subscribed to before me /~ day o f3~7 this A.D. Prothon6t~ry - this office was in receipt of the Sheriff of Cumberland County REGULAR SHERIFF'S RETURN - CASE NO: 2001-00090 P COMMONWEALTH OF PENNSYLVA/qIA: COUNTY OF CUMBERLAND HABER LAWRENCE C VS STEVENS CENTER THE ET AL CPL. MICHAEL BARRICK , Cumberland County,Pennsylvania, Sheriff or Deputy Sheriff of who being duly sworn according to law, was served upon the 8th day of January , by handing to together with says, the within COMPLAINT & NOTICE STEVENS CENTER (THE) DEPENDANT , at 0014:31 HOURS, on the at 850 BICENTENIAL DRIVE CARLISLE, PA 17013 LAURA RUSSEL (ADMIN. ASST) a true and attested copy of COMPLAINT & NOTICE 2001 and at the same time directing Her attention to the contents thereof. Sheriff's Costs: Docketing 6.00 Service 3.10 Affidavit .00 Surcharge 10.00 .00 19.10 Sworn and Subscribed to before me this ~.~ day of d P/rot honor ary ' So Answers: R. Thomas Kline oi/25/2OOl NORA A. GIBSON Mary Jane Snyder Real Estate Deputy William T. Tully Solicitor Dauphin County Harrisburg, Pennsylvania 17101 ph: (717) 255-2660 fax: (717) 255-2889 Jack Lotwick Sheriff Ralph G. McAllister Chief Deputy Michael W. Rinehart Assistant Chief Deputy Commonwealth of Pennsylvania County of Dauphin AND NOW: January i9, 2001 CIVIL ACTION COMPLAINT THE STEVENS CENTER & NORTHWESTERN HUMAN SERVICES to SHELLEY KERSTETTER, RECEPTIONIST : HABER LAWRENCE C VS : THE STEVENS CENTER & Sheriff's Return No. 0105-T - -2001 OTHER COUNTY NO. 01-90 at 10:25AM served the within upon by personally handing 1 true attested copy(ies) of the original CIVIL ACTION COMPLAINT and making known to him/her the contents thereof at 1320 LINGLESTOWN ROAD HARRISBURG, PA 17112-0000 Sworn and subscribed to before me this 22ND day of JANUARY, 2001 PROTHONOTARY SO Answers, Sheriff of Dauphin County, Pa. Deputy Sheriff Sheriff's Costs: $30.50 PD 01/10/2001 RCPT NO 145144 NMILLER In The Court of Common Pleas of Cumberland County, Pennsylvania Lawrence C. Uaber The Stevens Center, et. al. Serve: Northwestern Human Service~o' 01-90 P Now, 1 / 25 / 01 ,20 O O, I, SHERIFF OF CUMBERLAND COUNTY, PA, do hereby deputize the Sheriff of Dauphin Cotmty to execute this Writ, this deputation being made at the request and risk of the Plaintiff. Sheriff of Cumberland County, PA Affidavit of Service within ,20 , at o'clock __ M. served the upon by handing to a and made known to copy of the original ;he contems thereof. Sword and subscribed before me this __ day Of ,2O Sheriff of Coun/y, PA COSTS SERVICE MILEAGE ?~FFIDAVIT IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA LAWRENCE C. HABER, Plaintiff THE STEVENS CENTER and NORTHWESTERN HUMAN SERVICES, Defendants Civil Action - Law No.: 01-90 JURY TRIAL DEMANDED PLAINTIFF'S ANSWER TO DEFENDANTS' PRELIMINARY OBJECTIONS TO PLAINTIFF'S COMPLAINT Plaintiff, by and through his attorneys, Fred Halt & Associates, files his responses to Defendants' Preliminary Objecfons to Plaintiff's Complaint and states the following: 1. Admitted. 2. Paragraph 2 is a conclusion of law to which no response is required. To the extent that facts are alleged, Plaintiff, after a reasonable investigation, is without knowledge as to the truth or falsity of this allegation. 3. Admitted in part and denied in part. It is admitted that Plaintiffhas averred that Defendant is liable to him for unpaid wages under the Wage Payment and Collection Law. Paragraph 24 specifically cites "wage supplements," as defined by the WPCL. 4' Admitted. 5. Admitted in part and denied in part. It is admitted that Exhibit A to Plaintiff's complaint ev/dences a promise to Plaintiff for severance pay. It is denied that Exhibit A is the sole basis for Plaintiff's claim to unpaid wages under the WPCL. 6. Denied. Paragraph 16 of Plaintiffs Complaint avers Plaintiffs belief that NHS may be responsible for the unpaid amounts complained of. 7. Plaintiff incorporates by reference paragraphs 1 through 6 as if same were fully set forth herein. 8. Paragraph 8 is a conclusion of law to which no response is required. To the extent that facts are alleged, Plaintiff, after reasonable investigation, is without information to be able to admit or deny the allegation made. Defendant has provided Plaintiffwith correspondence denying a successor relationship and has provided a copy of Articles of Division- Nonprofit Corporation. However, at this time, Plaintiff is without knowledge as to the authenticity of the claims made or to the documents provided. It is further argued that the Articles of Division, attached as Exhibit B to Defendants' Preliminary Objections, go beyond the averments of the Complaint and, therefore, are not appropriate for consideration at this juncture. 9. Paragraph 9 is a conclusion of law to which no response is required. I0. Plaintiff, after reasonable investigation, is without information to be able to admit or deny the allegation in paragraph 10. Plaintiff reiterates that Exhibit B to Defendants' Preliminary Objections goes beyond the averments of the Complaint and, therefore, is not appropriate for consideration at this juncture. 11. Plaintiff, after reasonable investigation, is without information to be able to admit or deny the allegation in paragraph 11. Further, the statement made in paragraph 11 goes beyond the facts averred in PlaintiWs Complaint, and is not appropriate for consideration at this juncture. 12. Plaintiff, after reasonable investigation, is without information to be able to admit or deny the allegation in paragraph 11. Further, the statement made in paragraph 11 is a conclusion of law to which no response is required. 13. Plaintiff reiterates that Exhibit B to Defendants' Preliminary Objections goes beyond the averments of the Complaint and, therefore, is not appropriate for considerati(m at this juncture. To the extent an answer is required, Plaintiff, after reasonable investigation, is without knowledge to admit or deny the allegation in paragraph 13. To the extent that a conclusion of law is stated, no answer is required. 14. Plaintiff reiterates that Exhibit B to Defendants' Preliminary Objections goes beyond the averments of the Complaint and, therefore, is not appropriate for consideration at this juncture. To the extent an answer is required, Plaintiff, after reasonable investigation, is without knowledge to admit or deny the allegation in pat~raph 14. To the extent that a conclusion of law is stated, no answer is required. 15. Plaintiff reiterates that Exhibit B to Defendants' Preliminary Objections goes beyond the averments of the Complaint and, therefore, is not appropriate for consideration at this juncture. To the extent an answer is required, Plaintiff, after reasonable investigation, is without knowledge to admit or deny the allegation in paragraph 13. To the extent that a conclusion of law is stated, no answer is required. 16. Plainfiffreiterates that Exhibit B to Defendants' Preliminary Objections goes beyond the averments of the Complaint and, therefore, is not appropriate for consideration at this juncture. To the extent that a conclusion of law is stated, no answer is required. 17. Plaintiff reiterates that Exhibit B to Defendants' Preliminary Objections goes beyond the averments of the Complaint and, therefore, is not appropriate for consideration at this juncture. To the extent an answer is required, Plaintiff, after reasonable investigation, is without knowledge to admit or deny the allegation in paragraph 17. To the extent that a conclusion of law is stated, no answer is required. 18. Plaintiff reiterates that Exhibit B to Defendants' Preliminary Objections goes beyond the averments of the Complaint and, therefore, is not appropriate for consideration at this juncture. To the extent an answer is required, Plaintiff, after reasonable investigation, is without knowledge to admit or deny the allegation in paragraph 18. To the extent that a conclusion of law is stated, no answer is required. WHEREFORE, Plaintiff respectfully requests that this Honorable Court deny Defendants' Preliminary Objections to Plaintiffs Complaint. 19. Plaintiff incorporates by reference paragraphs 1 through 18 as if same were fully set forfia herein. 20. Paragraph 20 is a conclusion of law to which no response is required. 21. Paragraph 21 is a conclusion of law to which no response is required. 22. It is denied that Plaintiff's claim arises solely upon the letter attached to his Complaint as Exhibit A. As that letter states, Counsel for Defendant was merely confirming a decision that the Board had already made. Additionally, Defendant's Board President had previously promised Plaintiff severance pay in a separate conversation. 23. Paragraph 23 is a conclusion of law to which no response is required. 24. Paragraph 24 is a conclusion of law to which no response is required. WHEREFORE, Plaintiff respectfiflly requests that this Honorable Court deny Defendants' PreYtminary Objections to PlaintifFs Complaint. Date Respectfully submitted, FRED HAlT & ASSOCIATES Attorneys for Plaintiff Nora S. Gibson, PA ID #81918 ~"~-- The WelFmgton 17 E. High Street, Ste, 101 Carlisle, PA 17103 (717) 249-4500 CERTFICATE OF SERVICE I, Nora S. Gibson, hereby certify that on this l~ day of February, 2001, a true and correct copy of the foregoing Plaintiffs Reply to Defendants' Preliminary Objections to Plaintiff's Complaint was served upon the parties below by First Class Mail, postage pre- paid: Patrick G. Murphy, Esqff~re Kelley & Murphy, Attorneys at Law Union Meeting Corporate Center V Suite 160, 925 Harvest Drive Blue Bell, PA 19422 KELLEY & MURPHY, ATTORNEYS-AT-LAW BY: MICHAEL A. RICCIO, ESQUIRE ATTORNEY I.D. NO. 86961 UNION MEETING CORPORATE CENTER V SUITE 160, 925 HARVEST DRIVE BLUE BELL, PA 19422 (215) 643-6500 ATTORNEY FOR DEFENDANT IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA LAWRENCE C. HABER, THE STEVENS CENTER AND NORTHWESTERN HUMAN SERVICES NO. 01-90 CIVIL ACTION LAW ENTRY OF APPEARANCE TO THE PROTHONOTARY: Kindly enter my appearance as co-counsel on behalf of The Stevens Center and Northwestern Human Services with regard to the above-referenced matter. KELLEY & MURPHY Michael A. Riccio, Esquire PRAECIPE FOR LISTiNG CASE FOR ARGUMENT (Must be type written and submitted in duplicate) TO THE PROTHONOTARY OF CUMBERLAND COUNTY: Please list the within matter for the next Argument Court. LAWRENCE C. HABER, (Plaintiff) THESTEVENSCENTERAND NORTHWESTERN HUMAN SERVICES (Defendant) NO. 01-90 CIVIL ACTION LAW 1. State the matter to be argued (i.e., plaintiff's motion for new trial, defendant's demurrer to complaint, etc.): Defendant's Preliminary Objections to Plaintiff's Complaint 2. Identify counsel who will argue case: (a) Attorney for Plaintiff.' Brian J. Puhala, Esquire FRED HAIT & ASSOCIATES The Wellington 17 East High Street, Suite 101 Carlisle, PA 17013 (b) Attorney for Defendant: Patrick G. Murphy, Esquire or Michael A. Riccio, Esquire KELLEY & MLrRPHY, Attorneys at Law Suite 160, 925 Harvest Drive Blue Bell, PA 19422 for argument. I will notify all parties in writing within two (2) days that this case has been listed Argument Court Date: July 23, 2003 KELLEY & MURPHY, Attorneys At Law Dated: ~/4/o3 BY: Attorney for Defendants KELLEY & MURPHY, ATTORNEYS-AT-LAW BY: PATRICK G. MURPHY, ESQUIRE ATTORNEY I.D. NO. 34815 BY: MICHAEL A. RICCIO ATTORNEY I.D. NO. 86961 UNION MEETING CORPORATE CENTER V SUITE 160, 925 HARVEST DRIVE BLUE BELL, PA 19422 (215) 643-6500 J JL l0 2003 ATTORNEY FOR DEFENDANTS IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA LAWRENCE C. HABER : : V. : . THE STEVENS CENTER AND : NORTHWESTERN HUMAN SERVICES : CIVIL ACTION LAW NO. 01-90 MEMORANDUM OF LAW IN SUPPORT OF PRELIMINARY OBJECTIONS OF DEFENDANTS, THE STEVENS CENTER AND NORTHWESTERN HUMAN SERVICES, TO PLAINTIFF'S COMPLAINT I. FACTUAL BACKGROUND In January, 1991, Lawrence C. Haber (hereinafter referred to as "Plaintiff"), began working for the Stevens Center (hereinafter referred to as "Dividing Corporation") a non- profit corporation organized pursuant to the laws of the Commonwealth of Pennsylvania. Plaintiff alleges that in May 2000, his employment was terminated for economic reasons. Plaintiff also alleges that at the time of his termination, he was the President and CEO of the Dividing Corporation. Plaintiff alleges that prior to his termination, he had a conversation with the Dividing Corporation's Board President, who explained to him that he would be terminated and that he would be paid any unused vacation pay, plus sixty (60) days severance pay, in consideration of all his years of good work. Plaintiff also alleged that this conversation was confirmed in a June 15, 2000 letter to him from the Dividing Corporation's Treasurer. On or about November 16, 2000, Dividing Corporation filed with the Commonwealth of Pennsylvania Department of State: (i) Articles of Division and (ii) an Agreement and Plan of Division, Reorganization and Acquisition (hereinafter referred to as the "Agreement"). Pursuant to the Agreement, the following transactions took place: (i) the Dividing Corporation was divided into the Stevens Center (hereinafter referred tv as the "New Corporation") and HSC Residuary Corporation (hereinafter referred to as "HSC" or "Surviving Corporation"); (ii) The New Corporation was acquired by Northwestern Human Services of Pennsylvania, Inc., a Pennsylvania non-profit corporation and wholly owned subsidiary of the defendant, Northwestern Human Services, Inc. (hereinafter referred to as "NHS"); and (iii) the Dividing Corporation reorganized itself as HSC. Also pursuant to the Agreement, certain assets and liabilities were vested in the New Corporation, whereas certain other assets and liabilities were vested in HSC. See the Agreement attached hereto as Exhibit "A' and incorporated herein by reference. In particular, one of the liabilities assigned to and vested in HSC was the "claims of Lawrence Haber, including, without limitation, those set forth by his counsel in her letter of September 19, 2000..." See Agreement attached hereto as Exhibit "A", sections 1.01, 3.01-3.03, 6.04(8), and Exhibit C attached thereto. See also September 19, 20, and 21, 2000 letters attached hereto as Exhibit "B" and incorporated herein by reference. II. PROCEDURAL HISTORY On or about January 5, 2001 Plaintiff filed a Complaint against defendants seeking damages in excess of twenty-five thousand dollars ($25,000.00) plus other relief pursuant to the provisions of the Wage Payment and Collection Law ("WPCL"). Defendants subsequently filed Preliminary Objections to Plaintiff's Complaint on January 25, 2001. Thereafter, Plaintiff filed an Answer to Defendants' Preliminary Objections on or about February 14, 2001. Plaintiff, in his complaint, claims the New Corporation and/or NHS owe him: (i) Sixty (60) days severance pay; (ii) reimbursement of automobile related expenses; (ii) statutory interest; (iv) liquidated damages and (v) attorneys fees and costs of litigation. Defendants' Preliminary Objections are in the nature of a demurrer and non- joinder of a necessary party pursuant to Pa.R.C.P. 1028(a)(4) and (5). III. LEGAL STANDARD Rule 1028(a) of the Pennsylvania Rules of Civil Procedure provides, in relevant part: Preliminary objections may be filed by any party to any pleading and are limited to the following grounds: (1) ...; (2) ...; (3) ...; (4) legal insufficiency of a pleading (demurrer); and (5) lack of capacity to sue, nonjoinder of a necessary party or a misjoinder of a cause of action; and (6) In review of preliminary objections, facts that are well-pleaded, material and relevant will be considered as true, together with such reasonable inferences as may be drawn from such facts. See Mellon Bank, N.A.v. Fabinvi, 437 Pa. Super. 559, 650 A.2d 895 (1994). The test on preliminary objections is whether it is clear and free from doubt from all of the facts pleaded that the pleader will be unable to prove facts legally sufficient to establish his right to relief. See Bower v. Bower, 531 Pa. 54, 611 A.2d 181 (1992). Specifically, a demurrer tests the sufficiency of challenged pleadings. See Werner v.. Plater - Zvberk, 799 A.2d 776 (Pa. Super., 2002) appeal denied 569 Pa. 722, 806 A.2d 862 (Pa., 2002). IV. ARGUMENT Defendant's Preliminary Objections should be sustained pursuant to Pa.R.C.P. 1028 (a)(4) and (5) because: (i) neither New Corporation nor NHS is the successor to the Dividing Corporation or otherwise had a contractual relationship with the Plaintiff; (ii) Plaintiff's claim for severance pay does not arise from an employment contract or employee benefit plan; (iii) Plaintiff's claim for severance pay does meet the definition of "wages," "fringe benefits," or "wage supplements" as those terms are defined by the Pennsylvania Wage Payment and Collection Law, thus precluding Plaintiff's claims for statutory remedies of liquidated damages, attorneys fees, costs and statutory interest; (iv) Plaintiff has failed to join a necessary party, namely HSC; and (v) Plaintiff's claim for severance pay based upon the June 15, 2000 letter is unenforceable for lack of consideration. A. Plaintiff Does Not Make a Legally Sufficient Claim Under the Wage Payment and Collection Law PlaintifFs complaint is legally insufficient because Plaintiff fails to allege that defendants breached a contractual right or entitlement to severance pay. "The Wage Payment and Collection Law provides employees with a statutory remedy to recover wages and other benefits that are contractually due to them." Oberneder v. Link Coml~uter Corl~., 548 Pa. 201, 204, 696 A.2d 148, 150 (1997) (emphasis added). "Contractually agreed upon separation payments allegedly due to former corporate employees constituted "wages" within the meaning of the WPCL." See Bowers v, NETI Technologies, Inc., 862 F. Supp. 1310 (E.D.Pa. 1994) (under Pennsylvania law, vacation pay owed under employment contract upon termination is covered by WPCL). Plaintiff presumably relies on section 260.3(b) of the WPCL for relief. That section provides, in relevant part: Fringe benefits and wage supplements. Every employer who by agreement.., agrees to pay or provide fringe benefits or wage supplements, must.., pay or provide the fringe benefits or supplements, as required.., within 60 days of the date when proper claim was filed by the employee in situations where no required time for payment is specified. 43 P.S. §260.3(b). At no time does Plaintiff aver that his right to unused vacation pay or sixty (60) days severance pay was contractually due to him. Plaintiff simply alleges that, under the WPCL, severance pay constitutes "fringe benefits" or "wage supplements" and that the New Corporation has violated the WPCL by withholding the promised wage supplements. See Complaint ¶¶ 21, 24. Plaintiff goes on to allege that New Corporation or NHS is liable to him for such "promised, but unpaid, amounts." See Complaint ¶ 25. Plaintiff bases his claims on an alleged conversation between him and the Dividing Corporation's Board President and a June 15, 2000 letter from the Dividing Corporation's Board Treasurer, which plaintiff attaches as Exhibit "A" to his complaint. That letter, provides, in relevant part, "We understand that you have vacation pay which is currently in the process of being paid out to you, and which will be paid in full. The Board also wishes to pay you 60 days termination pay in deference to the many years of service which you gave to the Stevens Center .... Although we would like to pay this immediately, we are presently under great financial pressure and our first priority must be the employees who continue to work for the Stevens Center. The Board consequently intends to pay the 60 days severance pay as soon as it is financially feasible, which we hope will be in the near future." First, the severance pay sought by the Plaintiff was never contractually agreed upon, nor does Plaintiff make an allegation in that regard. Plaintiff's claim for "severance pay" does not arise from an employment contract or an employee benefit plan and, as such, said "severance pay" does not constitute a "fringe benefit or wage supplement" as defined by the WPCL. See 43 P.S. §260.2(a). As such, Plaintiff is not entitled to the statutory remedies of liquidated damages, attorneys fees, costs and statutory interest. Therefore, Plaintiff's complaint should be dismissed pursuant to Pa.R.C.P. 1028 (a)(4). Second, the alleged promise to pay is not a legally enforceable one because it is conditioned upon such being financially feasible, a condition which may never come to exist. This was not a firm promise to pay, but an anticipatory promise premised on the financial health of the Dividing Corporation. "In making a promise expressly conditional, contracting parties need not use any particular words. On the contrary, ·.. an intention to make a promise conditional may be manifested by the general nature of a promise or agreement, as well as in more formal ways, and if so manifested the condition is express." National Products Co., Inc. v. Atlas Financial Corp., 238 Pa. Super. 152, 159- 160, 364 A.2d 730, 735 (1975). The promises at issue here were clearly intended to be conditional as expressly manifested in the letter of June 15, 2000. As such, Plaintiff's complaint should be dismissed pursuant to Pa.R.C.P. 1028 (a)(4) for failure to allege a contractual right to payment under the WPCL. Third, the alleged promises made to the Plaintiff were made by officers of the Dividing Corporation prior to its division and any liability arising out of such promises cannot be imposed upon New Corporation or NHS as neither entity is the successor to the Dividing Corporation. See Section B, infra. Accordingly, Plaintiff's complaint should be dismissed pursuant to Pa.R.C.P. 1028 (a)(4) for failing to articulate a legally sufficient successor liability theory that would impose liability under the WPCL. Fourth, Plaintiff's Complaint is legally insufficient because the alleged promises made by the Dividing Corporation's Board President and Treasurer are unenforceable for lack of consideration. "Generally, past consideration is insufficient to support a subsequent promise." Sonia-Kal~lan Production, Inc. v. Zil~l~i, 1988 WL 92871, 8 (E.D.Pa., 1988) citing, Community Soorts, Inc. v. Denver Rinffsbv Rockets, Inc., 429 Pa. 565, 240 A.2d 832 (1968). Plaintiff cites his conversation with Dividing Corporation's Board President and the letter allegedly confirming same as the basis for enforcing the defendants' alleged promise. However, note that the letter and the alleged conversation provide that Dividing Inc., 2000 Pa. Super. 331, 763 A.2d 858 (2000). general rule: Corporation's Board wishes to pay Plaintiff sixty (60) days termination pay in deference to the many years of service. "Something given before a promise is made and therefore without reference to it is not by itself legal consideration for the promise." See Sonja~Kaplan, supra at 8. Thus, since Plaintiff provided his years of service prior to the defendants' alleged promise, Plaintiff has not provided legally sufficient consideration for such promise. Accordingly, Plaintiff's complaint should be dismissed pursuant to Pa.R.C.P. 1028(a)(4) for failure to allege a contractual right to payment under the WPCL. B. Neither New Corporation Nor NHS are the Successor to the Dividing Corooration Plaintiff's complaint does not state a legally sufficient claim upon which relief can be granted because, in consideration of ail of the well-pleaded facts, Plaintiff will not be able to prove that either New Corporation or NHS are the successor to the Dividing Corporation. Accordingly, Defendants' Preliminary Objections pursuant to Pa.R.C.P. 1028 (a)(4) and (5) should be sustained. It is clear that Plaintiff had no relationship with any entity other than HSC, the surviving corporation. Therefore, unless NHS or New Corporation is the successor to the Dividing Corporation, there can be no liability. In Pennsylvania, the general rule regarding successor liability is that the transferee of assets is not liable for the debts of the transferor. See Sehl v. Vista Linen Rental Service, However, there are exceptions to the (1) The successor corporation either expressly or impliedly agreed to assume the liabilities of the transferor corporation; (2) The sale is in effect a merger or consolidation; (3) (4) (5) (6) The successor corporation is merely a continuation of the transferor corporation; The transaction is fraudulently entered into to escape liability to creditors; The sale or transfer was not made for adequate consideration and protections were not implemented for the benefit of the transferor corporation's creditors; or In strict (product) liability cases, the successor corporation undertakes the same manufacturing operation as the transferor. Pursuant to the Agreement, neither New Corporation nor NHS assumed the claims of Plaintiff as a liability. That liability rests explicitly and exclusively with HSC. Furthermore, notwithstanding the general rule set forth above, an examination of Plaintiff's complaint reveals that Plaintiff will be unable to prove facts legally sufficient to establish that either the New Corporation or NHS is the successor to Dividing Corporation. It is reasonable to infer that Plaintiff's references to "TSC" in his Complaint are in fact allegations pertaining to Dividing Corporation because said allegations relate to a time prior to November 16, 2000, the date the Dividing Corporation's Articles of Division and the Agreement were filed with the Commonwealth's Corporations Bureau. Plaintiff's theory of liability simply, and incorrectly, alleges that Dividing Corporation became "part of" NHS on September 1, 2000, and as such, NHS may have some or all responsibility for any liability of Dividing Corporation regarding this suit. See ¶¶ 16, 24, and 25 of Plaintiff's complaint. At a minimum, in order for Plaintiff to advance a legally sufficient theory of successor liability, Plaintiff would have to allege: (i) that Dividing Corporation is liable or indebted to him for violations of the WPCL, (ii) that said debt or liability was transferred to NHS or New Corporation, and 0ii) additional facts supporting an argument that NHS and/or New Corporation fall into one of the six exceptions to the general rule regarding successor liability. Plaintiff's Complaint does not aver sufficient facts supporting Plaintiff's successor liability theory and is therefore subject to demurrer. However, neither New Corporation nor NHS is the successor to Dividing Corporation. Pursuant to the Agreement, liability for Plaintiff's claims, which, prior to Dividing Corporation's division and reorganization, presumably rested with Dividing Corporation, was explicitly transferred and vested in HSC. Plaintiff's claim is legally insufficient and therefore subject to demurrer because pursuant to the Agreement, Plaintiff's claim, the same claim which forms the basis of this lawsuit, was assigned to and vested in HSC, the successor to the Dividing Corporation on November 16, 2000, over one month before Plaintiff commenced this action. Counsel for Plaintiff was advised via correspondence of September 19 and 21, 2000 that NHS was not the Dividing Corporation's successor. See Exhibit "B" attached hereto. C. Plaintiff Has Failed To Join a Necessary Party Additionally, Plaintiff has failed to join a necessary party, namely HSC, the entity which, pursuant to the Agreement, specifically assumed liability for Plaintiff's claims. It should be noted that despite failing to join HSC as a defendant to this action, Plaintiff has instituted a similar lawsuit against HSC at Cumberland County Civil Action, Number 02- 120, which is presumably pending at this time. In Pennsylvania, a party is deemed to be "indispensable" when his or her rights are so connected with the claims of the litigants that no decree can be made without impairing those rights. See Vernon Tl~. Water Authority v. Vernon TI~., -- Pa. Cmwlth. --, 734 A.2d 935 (Pa. Cmwlth.App. 1999); See also Polydvne Inc. v. City of Philadell~hia, -- Pa. Cmwlth. --, 2002 WL 500284 (Pa. Cmwlth.App. 2002). The criteria to be considered in determining whether an absent party is indispensable are: (1) whether absent parties have a right or interest related to the claim; (2) if so, the nature of the right or interest; (3) whether that right or interest is essential to the merits of the issue; and (4) whether justice can be afforded without violating due process rights of absent parties. See Polydyne, supra. Defendants herein maintain that no decree can be made without impairing the rights of HSC because of the transfer of PlaintifFs claims from Dividing Corporation to HSC by virtue of the Agreement. Accordingly, PlaintifFs Complaint should be dismissed pursuant to Pa.R.C.P. 1028 (a)(5). V. CONCLUSION Reviewing all well-pleaded, material and relevant facts as true, along with reasonable inferences to be drawn therefrom, Plaintiff will be unable to prove facts legally sufficient to establish his right to relief against NHS or New Corporation because: (i) neither New Corporation nor NHS is the successor to the Dividing Corporation or otherwise had a contractual relationship with the Plaintiff; (ii) PlaintifFs claim for severance pay does not arise from an employment contract or employee benefit plan; (iii) PlaintifFs claim for severance pay does meet the definition of "wages," "fringe benefits," or "wage supplements" as those terms are defined by the Pennsylvania Wage Payment and Collection Law, thus precluding PlaintifFs claims for statutory remedies of liquidated damages, attorneys fees, costs and statutory interest; (iv) Plaintiff has failed to join a necessary party, namely HSC; and (v) Plaintiff's claim for severance pay based upon the June 15, 2000 letter is unenforceable for lack of consideration. Upon consideration of the defendants' Preliminary Objections and any response thereto, this Honorable Court should Order that Plaintiff's complaint is dismissed with prejudice pursuant to Pa.R.C.P. 1028(a)(4) and (5). Respectfully submitted, KELLEY AND MURPHY, Attorneys At Law ~ICHAEL A. ~CCIO, ESQUI~ Attorney for Defendants EXHIBIT "A" AGREEMENT DATED NOVEMBER 16, 2000 AGREEMENT AND PLAN OF KEORGAzNIZATION DIVIDID'G the STEVENS CENT.ER (A PENNSYLVzAxN'IA NONPROFIT CORPORATION) INTO the STEVENS CENTER (A PENNSYIuVANIA NONPROFIT CORPORATION) AND the HSC RESIDUARY CORPORATION (A PENNSYLVANIA NONPROFIT CORPORATION) AND AGREE~hd[ENT OF ACQUISITION OF THE RESULTING, STEVENS CENTER . B Y NORTHWESTEI~N HUMAzN SERVICES OF PENNSYL ¥'gaNrlA, lINC. ~. [-~----~ .~ ~ This Agreement and Plan ofReorganization t"Agreernent") is entered inro this ff?~' day of -O,.i~b,:~ , 2000 among the STEVENS CENTER, a Pennsylvania nonprofit corporation ("the Dividing Corporation"), its subs/diary, the STEVENS HOUSING CORPORATION, a Pennsylvania nonprofit corporation ("SHC"), and NORTHWESTERN HUMAN SERVICES OF PENNSYLVANIA, INC., a Permsylvania nonprofit corporation RECITALS A. The STEVENS CENTER, hereinafter referred to as "the Dividing Corporation", is a Pennsylvania nonprofit corporation organized and existing under the laws of the Commonweaith of Pennsylvania, as amended. B. The STEVENS HOUSING CORPORATION, hereinafter referred to as "SHC", is a wholly owned nonprofit subsidiary Pennsylvania Corpora/ion of the Dividing Corporation which was organized and continues to exist under the Iaws of the Commonwealth of Permsylvania, as amended. C. NORTHWESTERN HUMAN SERVICES OF PA., hereinafter refexed to as "NH$", is a Pennsylvania nonprofit corporation organized and existing under the laws of the Commonwealth of Permsylvania, as amended. D. The Part/es hereto desire that the Dividing Corporation be reorganized and divided into two (2) separate and distinct nonprofit corporations: the STEVENS CENTER ("TSC'), a new corporation, and the IlSC Pd:iSIDUAR¥ CORPORATION ("HSCRC"), the surviving corporation (the "Division") with the acquisition, imrnediatel7 subsequent to such Division, of TSC by NItS (the "Reorganization"). E. The Dividing Corporation and its subsidiary SHC, as welI as NHS, are non-stock, non-member nonprofit, 501(c)(3) corporations. The Dividing Corporation and its subsidiary, SI/C, are non-member corporations. ?. The Dividing Corporation has experienced certain financial difficulties which make it unwise, if not impossible, for it to continue the operation of its programs and day to day operations. G. On or about July i0, 2000, NHS has issued a non-binding Letter oflntent to acquire certain assets and certain permitted liabilities/encumbrances (the "LOI") which has been accepted and adopted by the Board of Trustees of the Dividing Corporation on or about July 20, 2000. Il. Along with the LOI, NHS loaned to the Dividing Corporation that sum not to exceed Seventy Thousand ($70,000.00) Dollars which was evidenced by a Judgment Note executed by TSC on or about July 20:2000 which was necessary for the Dividing Corporation to meet its payroll on July 15, 2000 for the payroll period covering June 15, 2000 to June 30, 2000. I. The LOI calls for closing on the transaction, then yet to be structured, on or before ,a. ugust 1, 2000 since the next payroll of TSC was July 3I, 2000. I/owever, on July 3~; 2000, due to 2 negotiations with certain banking institutions not having been successfully concluded, and since the Dividing Corporation was able to meet irs own payroll without tbe assistance of NHS, Closing was postponed. J. As a result of the due diligence, the Parties became aware that certain debt of the Dividing Corporation that was to be vested in TSC was tax fi'ce debt and for such status to be maintained unimpaired would require that TSC be determined by the Internal Revenue Service (the "Service") to be a 501(c) (3) corporation prior to it being vested with the tax free debt and the assets encumbered as a result of such. K. The Dividing Corporatiqn and NHS have determined to structure the transaction as follows: 1) The Dividing Corporation will reorganize and divide into two (2) 2) separate and distinct nonprofit corporations being (1) The Stevens Center ("TSC"), the new corporation, and (2) the HSC Residuary Corporation (the "FtSCRC"), th~ surviving corporation; Certain assets ("Acquired Assets") and certain permitted liabilities/encumbrances ("Acquired Liabilites") of the Dividing Corporation which are respectively set forth in Exhibits "A" and "B" attached hereto and incorporated by reference (collectively, "Acquired Assets and Liabilities") shah be the. sole assets and sole liabilities/encumbrances of TSC on or at the Effective Time of this Division and Reorganization automatically without further need for instrument, act, transfer, conveyance, or assignment; 3 4) 3) All other assets, liabilkies and encumbrances of the Dividing Corporation which are, ia part, set forth in Exhibit "C' attached hereto and incorporated herein by reference, shaH, upon the Effective Time of this Division and Reorganization of the Dividing Corporation, be the assets and liabilities of HSCR_C without further need for instrument, act, conveyance, transfer or assigirneat; Subsequent to the Bf£ective Time, on the Determination Date, TSC shall be vested without further need for instrument, act, transfer, conveyance or assignment, with the tax i?ee debt and the assets encumbered as a result thereof as set forth in an Agreement with Keystone Bank by and through its successor in interest, Manufacturers and Traders Trust Company, of even date herewith and incorporated herein by reference and hereinafter referred to as "Tax Free Debt and Related Assets" and subsequent thereto the Dividing Corporation and HSCRC, its successor, shall have no further right, t/tle and/or interest in and/or I/ability for the Tax Free Debt and R.elated Assets. Contemporaneously with the Effective Time, NHS shall acquire the new corporation, TSC, as a wholly owned subs/diary by the Board of Trustees of the D/v/ding Corporation existing prior to the Effective Time relinquishing/resigning at the Effective Time as Ts.~stees of the New Corporation, TSC, and the Board of Trustees designated by NHS constituting the new Board of Trustees of T$C at the Effective Time. K. The Boards of Trustees of the Dividing Corporation and NHS have dete,'ynined that this Agreement achieves substantially the same result as the acquisition of certain assets and liabilities as anticipated in the LOI from a business point of view while achieving an avoidance of transfer tax and contract assignment insuring no break in the continuity of'programmatic services and flow of revenues related thereto. L. Furthermore, due to protracted negotiations with certain banking institutions and the continuation of cash flow problems, payroll shortfalls, programmatic continuity concerns, and employee continuation and morale issues, the Dividing Corporation and NHS, on September 1, 2000, entered into a Lease Agreement and Management Agreement whereby NY:iS would officially take over the management of the Div/ding Corporation and its programs and the Dividing Corporation would assign its provider service agreements to NHS pending the conclusion of closing on this Division and Reorganization and occurrence of the Determination Date. M. The Boards of Trustees o£the Dividing Corporation and NHS have therefore adopted resolutions approving this Agreement and Plan pursuant to 15 Pa.C.S.A. § 5952(c), 5924 (b) and 5922 (b)(1) on their meeting occurring on October 11, 2000 and October 5, 2000 respectively. NOW, THEREFORE, in consideration of the mutual covenants, agreements, undertakings, representations and warrant/es herein contained and with the intention of being legally bound hereby, the Parties hereto agree as follows: ARTICLE I GENERAL 5 1.01 Division. The Stevens Center, a Pennsylvauia Nonprofit Corporation, hereinafter sometimes called the "Dividing Corporation", shalI effect a division (the ~'Division') in accordance with and subject to the terms and conditions of this Agreement. At the Effective Time (as defined in Section 1.04 hereof) the Dividing Corporation shall be divided into two corporations: (i) the Stevens Center (TSC), a_Pennsylvania Nonprofit Corporation, the new corporation, and (ii) the HSC Residuary Corporation (HSCRC), a PennsyIvania Nonprofit Corporation, the surviving corporation, (TSC and HSCRC being hereinafter sometimes collectively referred to as the "Resulting Corporations") with the effect specified by NCL § 5957 (feinting to effect of division). The Dividing Corporation shall survive the Divis:/on and shall thereafter be the ttSC Residuary Corporation while the new corporation shali take ti~e name of the Dividing Corporation and be thereafter known as the Stevens Center. 1.02 Further Assurances with Respect to Assets. The Dividing Corporation shall at any time, or from time to time, as and when requested by either of the Resulting Corporations, or by the successors or assigns of either of them, execute and deliver, or cause to be executed and delivered in its name by any of its duly authorized Officers, all such conwyances, assigrunents, transfers, deeds, or other instruments, and shall take or cause to be taken such further or other action as either of the Resulting Corporations, or the successors or assigns of either of time, may deem necessary or desirable in order to evidence the transfer, vesting or devolution of any property, i-ight, privilege or franchise or to vest or perfect in or confirm to either of the Resulting Corporations, or the successors or assigns of either of them, title to and possession of the respective property, rights, privileges, powers, immunities, franchises and interests referred to in, or identified pursuant to, this Agreement as transferred to or remaining with a Resulting Corporation and other4'ise to can7 out the intent and purposes thereof. 6 1.03 Further Assurances with Res:ect to Liabilities. Each of the Resulting Corporations shalI at any time, or from time to time, as and when requested by the other Resulting Corporation, or by its successors and assigns, execute and deliver, or cause to be executed and delivered in its name by any of its duIy authorized Officers, ail such assumptions, acknowledgments or other instruments, and shall take or cause to be taken such further or other action as the other Resulting Corporation, or its successors and assigns, may deem necessary or desirable in order to evidence the apporlionii!g of the debts and liabilities of the Dividing Corporation between the Resulting Corporations in the manner specified in, or pursuant to, this Agreement and other,vise to carry, out the intent and purposes hereof. 1.04 Effectiveness. A2-ticles of Division incorporating this Agreement, and such other documents and instruments as are required by, and complying in all respect with, the NCL shall be delivered to the Department of State of the Commonwealth of Permsylvania on or after October 18, 2000. This Division shall become effective upon filing of Articles of Division in the Department of State (which time is herein called the "Effective Time"). i.05 Court Avvrovai. The Parties hereto shall submit the instant transaction to the Orphans' Court Division of the Court of Common Picas of Cumberland County for approval/ratification promptly after the Effective Time. ARTICLE II - TSC AND SHC 2.01 TSC Articles of Incorporation. The Articles of Incorporation of TSC, the new Corporation, are attached hereto and incorporated herein by reference and marked Exhibit "D", hereinafter refer-red to as the "TSC Articles, and such shall be effective at the Effective Time. 2.02 TSC Bylaws. The Bylaws of the Dividing Corporation as amended and in effect immediately prior to the Effective Time shall at the Effective Time be the Bylaws of TSC until changed in the manner therein provided (hereinafter referred to as the "TSC Bylaws"). 2.03 TSC Trustees and Officers. The Trustees and Officers of the Dividing Corporation shall, at the Effective Time cease being the Officers and Trustees of TSC, the new corporation, and said existing Trustees and Officers of the Dividing Corporation shall resign and withdraw as Officers and Trustees of TSC, the new corporation, at the Effective Time and the Trustees and Officers appointed by NHS shall contemporaneously at the Effective Time become the Trustees and Officers of TSC. 2.04 SHC Articles of Incomoration. The Articles of Incorporation of SHC as amended and in effect irmmediately prier to the Effective T!me shall, at the Effective Time, be the A_~icles of Incorporation of SHC until changed in the manner provided (hereinafter referred to as the "SHC Articles"). 2.05 SHC By-Laws. The By-laws of SHC as amended and in effect immediately prior to the Effective Time shall at the Effective Time be the By-laws of SHC until changed in the roamer therein provided (hereinafter referred to as the "SlffC By-laws"). 2.06 St-lC Trustees and Officers. The Trustees and Officers of SI-lC shall change at the Effective Time so thor all existing Trustees and Officers of SHC shall resign and withdraw at the Effective Time and the Trustees and Of Scers appointed by NHS as the Officers and Trustees of TSC, the new corporation, shall contemporaneously at the Effective Time become the Trustees and Officers of SHC. ARTICLE III - HSCRC 3.01 Articles of Incorporation. The Articles of Incorporation of the Dividing Corporation, as amended, and in effect immediately prior' to the Effective Time shall at the Effettive Time be the Articles of Incorporation of HSCRC. 3.02 Bylaws. The Bylaws of the Dividing Corporation as amended and in effect immediately prior to the Effective Time shall at the Effective Time be the Bylaws of HSCRC until changed in the manner therein provided (hereinafter re~'erred to as "HRCRC Bylaws"). 3.03 Trustees and Officers. The Trustees and Officers of the Dividing Corporation shall at the Effective Time be the Trustees and Officers of the HSCRC, until changed in the manner provided in the HSCRC Bytaws. ARTICLE IV EFFECT OF DIVISION 4.01 Assets and Liabilities Generally. Except as otherwise provided in subsequent provisions of this Article IV, ail of the assets, property, liabilities, and encumbrances, contingent or otherwise, of the Dividing Corporation, including all debts due on whatever account: to it, and all liabilities of the Dividing Corporation; shali at the Effective Time be taken and deemed without further act or deed to be vested in HSC1KC. 4.02 Accmired Assets and Liabilities. The assets and property set forth in Ex&ibit "A" (the "Acquired Assets") hereto, along with the liability and encumbrances set forth in Exhibit "B" (the "Acquired Liabilities") hereto shall, at the Effective Time, including, without limitation the corporate name the Stevens Center, be taken and deemed without further act or deed to be transferred to and vested in TSC (collectively referred to as the "Acquired Assets and Liabilities"). 4.03 TSC Post Division Liabilities. TSC shall at the Effective Time be fl-ee of all of the debts, liabilities, and obligations of any nature, kind, or type, whatsoever, contingent or otherwise, of the Dividing Corporation except for those set forth in Exhibit "B" hereto as hereinabove provided lbr in Section 4.02. In no event shall TSC be viewed or determined to be a sttccessor corporation to the Dividing Corporation, nor be deemed liable for the successor liability of the Dividing Corporation. Ail !labilities, if any, of the Dividing Corporation as a nonprofit corporation and/or corporation under NCL § 5103 and BCL § I$72 (feinting to definitions) or otherwise, other than those set forth in Exhibit "B", shall without further act or deed be apportioned to and assumed by HSCR. C. The Resulting Corporations shalI each thenceforth be responsible as separate and distinct corporations only for such debts, liabilities and obligations as each corporation may undertake or incur in its own name, except as hereinafter provided in Section 4.04. The Dividing Corporation and HSCRC, jointly and severally, herewith indemnify and hold TSC harmless, including, without limitation, reasonable counsel fees, with respect to any debt, liability, obligation and/or the claim thereof of the Dividing Corporation and/or HSCRC which is not vested in TSC pursuant hereto. 4.04 Effect of Determination Date. On the Determination Date as hereinafter defined in Section 4.07, the Tax Free Debt and Related Assets as here/nabove defined shall be taken and deemed without further act or deed to be vested in TSC. 4.05 Acauisition of TSC. At the Effective Time, TSC shall be a wholly owned subs/diary of NHS without further act or deed, as hereinabove provided in Article II. 4.06 Notice to Office of Artomev General. IfNHS elects to discontinue all or substantially all the operations of TSC or SHC, within a reasonable time prior to the act of discontinuance, NHS shall provide written notice to the Commonwealth of Permsylvania, Office of Attorney General of such proposed discontinuance and the Office of Attorney General shalI have the r. ight to and approve the disposition of the assets of TSC and SI4C in a manner cons/stent with the I0 doctrine of%y pres" currently codified at 20 Pa. C.S. § 6110 pursuant to 15 Pa.C.S. §§ 5547 and 5976 or 5929. 4.07 Determination Date. The Determination Date shall be that date subsequent to the Effective Time on which the Service shall issue its determination that TSC shall be considered a 50t(c)(3) tax exempt nonprofit corporation. ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE DIVIDING CORPORATION. SHC AND THE OFFICERS AND TRUSTEES OF THE DIVIDING CORPORATION A. ND SIffC The Dividing Corporation, SHC and each of the Officers and Trustees of The Dividing Corporation and SHC represent and warrant (except as indicated to the contrary below) to i~HS as follows: 5.01 Due Incornoration. etc. The Dividing Corporation and SHC are validly organized and existing corporations in subsistence under the laws of the Commonwealth of Pennsylvania and satisfactory evidence of such good standing has heretofore been or will promptly be delivered to NIIS. The Dividing Corporation and SHC have requisite corporate powers to canT- on their business as they are now being conducted, are qualified to do business and are in good standing in every jurisdiction in which the character and location of their assets or the nature of the business tran. sacted by them requires such qualification, except where the failure to be so qualified and in good standing would not have a material and adverse effect on the Dividing Corporation and SHC. The copies of the Articles of Incorporation and By-laws, and ail amendments thereto, of the Dividing Corporation and SHC, which have heretofore been or promptly will be delivered to NHS, are complete and correct. 5.02 Trustees. Ali Trustees and Officers of the Dividing Corporation and SHC prior to the Effective Time are listed on Schedule 5.02 not attached but incorporated by reference. 11 5.03 FinanciaI Statements. The audited financial statements of the Dividing Corporation and SHC as of June 30, 1999, consisting ora balance sheet, statement of operations, and a statement of cash flows, for the twelve months ended that date which the Dividing Corporation and SHC has delivered to N'i-IS have been cea-tiffed by Smith, Elliot, Keanrs & Company, independent certified public accountants. Such l'inancial statements present ~'airly the financial position of the Dividing Corporation and SHC and the results of its operations and changes in financial positions as of the date and for the period indicated, in conformity with generally accepted accounting principles consistently appIied during such period. As of August 3 I, 2000, there were no material obligations or liabilities (whether accrued, absolute, contingent or otherwise) of the Dividing Corporation or SI-IC not adequately reflected on the balance sheet (and the notes thereto) as of such date. 5.04 INTENTIONALLY DELETED. 5.0J (A) Asset Descriotions. The Dividing Corporaiton and SHC have f~rnished, or will furnish at the time of the execution of this Ageement, to NtiS, a list (the "Asset List"), Schedule 5.05(A) not attached, but incorporated by reference, dated the date of this Agreement, describing all assets owned by the Dividing Corporation and SHC. (B) Liabilities Descriptions. The Dividing Corporation and SHC have flimished, or will furnish at the time of the execution of this Agreement, to NrHS, a list (the "Liabilities List"), ScheduIe $.05(B) not attached, but incorporated by reference, dated the date of this Agreement, describing ail liabilities of the Dividing Corporation and SHC. 5.06 Liti_oation List. The Dividing Corporation and SHC have also furnished, or wili furnish at the time of the execution of this Agreement, to NHS, a Written description (the "Litigation List"), Schedule 5.06 not attached, but incorporated by reference, dated the date of this Agreement, 12 ali civil or criminal actions, proceedings, arbitrations or investigations pending, or, to the best knowledge of the corporate officers or trustees of'the Dividing Corporation and SHC, after such inquiry as they deten'nine to be appropriate, threatened by or before any court, govemmenta! agency, regulatory authority or arbitrator against the Dividing Corporation and SHC or any director or officer of'the Dividing Corporation or SHC, in such capacity as either Plaintiff or Defendant. 5.07 No Material Adverse Chan~e. Since June 30, 1999, there has not been (i) any material adverse change in the financial condition, business properties or assets of the Dividing Corporation or St-lC in the aggregate; (ii) any foss or damage to any of the properties or assets of the Dividing Corporation and SHC (whether or not covered by insurance) which has materially and adversely affected the Dividing Corporation or SHC or impaired the ability of the Dividing Corporation or SHC to conduct its business; (iii) any other event or condition of any character which has materially and adversely affected the business of the Dividing Corporation or SHC; (iv) any mortgage or pIedge of any of the properties or assets of the Dividing Corporation or SHC (other than as disclosed on the Document List); or (v) any increase paid or agreed to be paid in compensation, retirement benefits or other commitments to employees, other than in the ordinary course of the Dividing Corporation or SHC business. 5.08 Good Title. etc. The Dividing Corporation and SHC have title to all of its properties, including, without limitation, ali property reflected on the balance sheet of the Dividing Corporation and SI-lC dated as of June ]0, 1999 (but excluding property disposed of subsequent to September l, 2000) and prior to the date hereof in the ordinary course of business), free and clear of any mortgage, lien, pledge, charge: claim or encumbrance. 5.09 'vVorkin_~ Order. Except as described in Schedule 5.09 not attached hereto but in. corporated herein by reference, all materfal machinery aad equipment of the Dividing Corporation and SFIC are in working order and repair (normal wear and tear and normal repair or maintenance excepted). Except as set forth in the Document List, the Dividing Corporation and SHC have the u~estricted right to use its properties for its operations as presently conducted and/or to transfer said property as they shall determine. 5.10 No Breach. Except as otherwise disclosed in writing, the Dividing Corporation and SHC have not breached, nor are in default under the terms of any indenture, agreement, employee benefit plan, lease or license to which it is subject or bound that is material to the business of the Dividing Corporation and SHC, and, to the best knowledge of the Officers and Trustees of the Dividing Corporation and St-lC after such inquiry as they determine to be appropriate, each such indenture, agreement, employee plan, lease and license is valid and effective. The Dividing Corporation and SHC are not in default with respect to any Order of any Court, regulatory agency or other private or governmental authority, specifically pertaining to TSC and SHC. 5.I 1 This Agreement Not a Default. Compliance with the terms of this Agreement and consummation of the transactions contemplated by this Agreement will not materially violate or result in a material breach of or constitute a material default under any statute, ordinance or governmental regulation, or any provision of the Articles of Incorporation and By-laws of The Dividing Corporation and SHC, or the provisions of any indenture, mortgage, lien, lease, agreement, instrument, order, judgment, decree, or any other restriction of any kind or character to which any property of'the Dividing Corporation or SHC are bound or by which the Dividing Corporation or SHC are bound. ]4 5. I2 No Other Commitments. Except for the making of capital expenditures in amounts less than Five Thousand ($5,000.00) Dollars each and except for the making of capital expenditures which are disclosed in the Asset List (which includes ail such expenditures which individually totaled Five Thousand ($5,000.00) Dollars or more), since June 30, I999 the Dividing Corporation and SHC have not entered into any transaction or commitment other than in the ordinary course of business. 5.12 Information Accurate. All information in writing concerning the Dividing Corporation and SHC furnished at or prior to the Effective Time by or on behalf of the Dividing Corporation and SHC to NHS shall when furnished be true and correct in all materiaI respects without omission of'any material fact necessary to be stated to make the information not misleading. 5.13 Due Authorization. ere. The execution and delivery of this Agreement by the Dividing Corporation and SHC and the performance by the Dividing Corporation and SHC of its obligations under this A~eement have been authorized by its Board of Trustees; and the Dividing Corporation and SHC have all requisite authority to enter into and perform this Agreement, subject only To the approval of this Agreement by the ~,~tturney General of the Commonwealth of Permsylvania and the Orphans Court of the Court of Common Pleas of Cumberland County. Subject to the foregoing, this Agreement is a valid and binding agreement to the Dividing Corporation and SHC and NHS, except as the enforceability thereof may be limited by bartkmptcy, insolvency, reorganization, or other similar laws of general application affecting the enforcement of creditors' rights generally. 5. I4 Consent. Except as provided in Section 5.13 hereof, no consent, approval or authorization of or registration, qualification, designation, declaration or filing with any governmental authority or private person or entity on the part of the shareholders of the Dividing Corporation and SHC are required in connection with the execution and delivery of this Agreement or the consummation of any transaction contemplated hereby. 5.15 Intellectual Property. Except as described in Sc{~edule 5.15 not attached hereto but incorporated herein by reference, the Dividing Corporation and SI-iC do not own or have any intellectual property, including, without limitation, patents, applications for patents, written disclosures of inventions, trade names, trademark registrations, or agreements, including ag-reements with its employees, under which TSC or SI4.C are either a licensee and/or licensor (and no such agreements are being negotiated). No amounts are or w/il at any time hereafter be owing to any employee of the Dividing Corporation or SHC in cormection wkh any paem or invention. 5.16 Broker's or Finder's Fees. etc. No agent, broker, investment banker, person or acting on behalf of the Dividing Corporation or SHC or under the authority of thc Dividing Corporation or SHC is or will be entitled to any broker's or finder's fee or any other commission or similar fee directly or indirectly from any of the parties hereto in cormection with any of the transactions contemplated herein. 5.17 ERiSA. There are no Plans subject to the Employee Retirement Income Security Act of i974 ("ERISA"). 5.18 INTENTIONALLY DELETED. 5.19 Insurance. The Dividing Corporation and SHC keep all of its business and properties which are of an insurable nature insured, with grist:rets reasonably believed by the Dividing Corporation and SI-lC to be responsible against loss or damage or arranges with others to do so. 5.20 Compliance with Aar~licable Law. To the best knowledge of the Officers and Trastees of the Dividing Corporation and SHC, after inquiry as they determine to be appropriate, the 16 Dividing Coq:oration and SPiC are in compliance in ail material respects with all laws, regulations, governmental orders orjudgments applicable to its business as a whole, and has ail material licenses, permits and other governmental authorizations necessary for the conduct of its business as a whole. 5.21 Untrue Statements. No representation or warran~ by the Dividing Corporation and SHC and/or its Officers or Trustees in this Agreement contain~ or will contain any untrue statement o£a material fact, or omits or will omit to state a mate,rial fact necessao' to make the statements contained therein not misleading. No written information, statement or certification furnished to NHS by the Dividing Corporation and SHC or its Officers or Trustees pursuant hereto or in con~ection with the transactions contemplated hereby, contains or will contain any untrue statement of a material fact, or omits or will omit to state a material fact necessary to make the statements contained therein not misleading. No breach under this Art/cie V shall have occurred if any matter which is requ'ired to be disclosed on a particular list hereunder is not disclosed on that list, but appears on a different list furnished in accordance with this Article V. 5.22 EnviroramentaI Permits. etc. The Dividing Corporation and SHC and its Officers and Trustees warrant that to the best of their knowledge, the Dividing Corporation and SHC: (a) are not required to obtain any permits, licenses and other authorizations required under federai, state, local and foreign environmental laws, statutes and ordinances, including, but not limited to the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. § 9601 e_!t seq., the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq., the Federal Water Pollution Control Act, 33 U.S.C. §I251 e_it seq., the CIean Air Act, 41 U.$.C. § 260I et se§., as amended, the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. §0 136 to 1364, the Occupational Safety and Health Act of 1970, 29 U.S.C. §~ 65I to 678, and any applicable state or locaJ law relating to the protection of the environme, nt, and including any rules, regulations, orders, decrees, plans, codes, judgments, injunctions, notices or demand letters, prohibitions, obligations, schedules, ti~qetables, standards, conditions or requirements issues, entered, approved or promulgated thereunder, feinting to pollution or protection of the environment, including laws relating to emissions, discharges, releases or threatened releases of pollutants~ contaminants, chemicals, wastewater, industrial substances, toxic substances, hazardous substances (as defined in Section 101[14) of CERCLA, 41 U.$.C. § 960i(14)), or solid or hazardous wastes in, into, onto or upon the environment (incIuding, without limitation, ambient air, surface water, ground water, or land), or otherTvise relating to the manufacture, processing, distribution, use, treatment, collection, accumulation, storage, disposal, transport, or handling of pollutants, contaminants, chemicals, wastewater, or industriaI, toxic or hazardous substances or wastes (collectively the "Envirortmental Laws"); and (b) is in compIiance with all applicable Environmental Laws. The Dividing Corporation and SHC hav~ not receiYed (i) any notice of the violation or alleged violation of, or noncompliance or alleged noncompllance with, any of the Envirommental Laws, permits, licenses or other authorizations; (iJ) any notice, demand, claim, order or request for the performance of', or the payment of costs or expenses for, any test, investigation, assessment, examination, cleanup, removal, remediation, mitigation, response, treatment or restoration with regard to envirommental condition; or (iii) any notice, or have knowledge of, any environmental contamination or the disposal of any hazardous substance, pollutant or contaminant at, in, into, onto, upon, by or from any real property owned, operated, possessed or used by the Dividing Corporation and SHC or the environment; and there is not now and has not been: as a result of the Dividing Corporation and SHC's activities (y) any v/ofat/on or alleged violation, or noncompliance or aIieged noncompliance with, any of the Environmental Laws, pe~Tnits, licenses, or other authorizations; or (z) any envirommentaf contamination oil or the disposal of any hazardous substance, pollutant or contaminant at, in, into, onto, upon, by or from any rem property owned, operated, possessed or used by the Dividing Corporation and SHC or the enviro~mlent. The Dividing Corporation arid SHC have not disposed of, have not arranged for the disposaI of, nor have any knowledge of the disposal o£, any hazardous substance on any real property that is covered by this A~eement. ARTICLE VI CONDITIONS PRECEDE~NT TO CLOSING All obligations of NHS hereunder are subject to the fulfillment (unless specifically waived in writing by N~S subsequent to the execution of this A~eement) of each of the following conditions at or be/~bre the Closing Date: 6.0I Warranties True. Ail representations and warranties of the Dividing Corporation and SHC and their Trustees and Officers contained in this Agreement shall in all material respects be true on, and with the same force and effect as though made on, the Closing Date, except for changes pen~nitted by this Agreement. 6.02 TSC and SHC Performance. The Dividing Corporation and SHC shall have performed in all material (..e..~pects all obligations and agreements required of them and complied with ail covenants applicable to them as contained in this Agreement, to be performed and complied with by t!iem on or prior to the Closing Date. 6.03 Good Standing. There shall have been delivered to NHS evidence, whether in the form of telegrams, certificates or other,vise, satisfactory to NHS to establish that the Dividing Corporation and S/dC in subsistence (i) in the state of its incorporation; and (ii) in everyjurlsdJ~tion, in which the character and location of its assets or the nature of the bus/ness transacted by it requires that it be qualified to do business. 19 6.04 _Opinion of Counsel for the Divfdfn~ Comorafion and SHC. NHS shalI have been furnished with an opinion: dated the Closing Date, o[Mar~son, Deardor£f, Williams and Otto, counsel for the Dividing Corporation and SHC, to the effect that: (I) The Dividing Corporation and SHC are validly organized and existing corporations in subsistence under the laws of the Commonwealth of Permsylvania. The Dividing Corporation and SHC are duly qualif~ed and in good standing as a foreig~n corporation authorized to do business in each jurisdiction where, because of the nature of its business or properties, such qualification is required, except where the failure to be so qualified and in good standing wou]d not have a material or adverse affect on the financia/ condition, business properties or assets of the Dividing Corporation or SHC. The Dividing Corporation and SHC have all requisite corporate power under/ts statutes and articles to can-5, on its business as tlzen being conducted; (2) The Dividing Corporation and SHC are non-stock, non-member, nonprofit corporations and SHC is a wholly owned subs/diary of' TSC. (3) The execution, delivery and performance of this Agreement by the Dividing Corporation and SHC have been duly and vahdiy authorized by frs Board of Trustees in compliance with Permsylvania La~v and its Articles o£lncorporation and Bydaws, 20 and this Agreement constitutes the valid and binding obligation of the Dividing Corporation and SHC: except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization or other similar laws of general application affecting the enforcement of creditors' rights generally; (4) Except as may be specified by such counsel, ali consents or approvals (including authorizations or orders of any private person, entity or goveramentaI body) required for the Dividing Corporation and SHC to enter into and perform this Agreement and the transactions 'contemplated hereby, and all supplements thereto, have been obtained; (5) Except as may be specified by such counsel, ail other actions and proceedings required by law to be taken by the Dividing Corporation and SHC at or prior to the Closing Date in connection with this Agreement and the transactions provided for herein have been duly and validly taken; (6) Except as may be specified by such counsel, they do not know after inquiry of TSC and SHC and its Officers and Trustees, of any material litigation, proceeding or governmental investigation pending or threatened against or relating to the Dividing Corporation or SHC, or any properties or business, or any litigation, proceeding or governn~entaI investigations, pending or 21 threatened, relating to the transactions contemplated by ti~is Agreement; The execution, delive~ and performance of this Agreement by the Dividing Corporation and SHC Mil not materially violate or result in a material breach of or constitute a material default under any provision of the Dividing Corporation's or SHC's Articles of Incorporation or By-laws, or any indenture, mortgage, lien, lease agreement, instrument, order, judgment decree, or any other restriction of any kind or character to which any property of the Dividing Corporation and SHC is subject or bound; and The Articles of Division refe~ed to in Section t.04 have been duly executed by the Dividing Corporation in accordance with Peansytvania Law. To the best of counsel's knowledge, upon the riling of the Articles of Division with the Department of State of the Commonwealth of Permsylvania, the reorganization will become effective as provided in the Articles of Division. The Acquired Assets and Liabilities, at the Effective Time, will be the sole assets and liabilities of the Dividing Corporation and the Dividing Corporation shall have no other assets or liabilities and ail other assets and liabilities of the Dividing Corporation immediately prior to the Effective Time shall, at the Effective Time, automatically and without any further action be the assets 22 and liabilities of HSCRC. Furthermore, the Board of Trustees and Officers of the Dividing Corporation and SHC shall automatically, at the Effective Time, be those Trastees as set forth in Schedule 6.04 not attached but incorporated by reference. In rendering such opinions, such counseI may rely, as to factual matters, upon certificates such counsel may request to be furnished by Officers, Directors, or Shareholders of the Dividing Corporation and SHC and upon such other documents and data as such counsel deem appropriate as a basis for/ts opinion. Such counsel may state that they are admitted to practice only in the Commonwealth of Permsylvania, that they are not admitted to the Bar in any other state and are not exper~ in the law of any other state, and that to the extent their opinion concerns the laws of any other state, such counsel has relied upon the opinion of counsel reasonably satisfactory to such counsel who are admitted to practice in such state. ARTICLE VII BINDING AGREEMENT 7.01 Succession. All terms, covenants, representations, warranties and conditions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the Bart/es hereto and their respective successors and permitted assigns. 7.02 Assi~mment. The Dividing Corporation shall not be permitted [o assign its interest 5n this Agreement. 23 ARTICLE VIII SURVIVAL OF WARRANTIES 8.01 Survival Except as otherwise provided in the Agreement, ali representations, wan'ant/es and covenants of the Part/es made herein or in connection herewith shall surviYe the Closing for a period of five (5) years. ARTICLE IX NOTICES AND PROVISIONS OF GENERAL APPLICATION 9.01 Notices. Ail notices, requests, waivers and other communications required or permitted to be given pursuant to this Agreement shall be in writing and shall be deemed to have been duly given if delivered personally, given by prepaid telegram or mailed registered or certified first-class mail, postage prepaid, as follows: the STEVENS CENTER 33 State Avenue Carlisle, PA 17013 With a copy to: Martson, Deardorff, Williams and Otto Ten East High Street Carlisle, PA 17013 With a copy to: STEVENS HOUSING CORPORATION 33 State Avenue Carlisle, PA 17013 Kelley & Murphy Suite 1 ~50, 925 Harvest Drive Blue Bell, PA 19422 24 33 State Street Carlisle, PA 17013 HSC RESIDUARY CORPORATION With a copy to: With a copy to: Martson, Deardorff, Williams, & Otto Ten East High Street Carlisle, PA 17013 NORTHWESTEI~N HUMAN SERVICES OF PEN1N'SYI, VANIA 1320 Lingl~stown Road Second Floor Harrisburg, PA 17110 Joseph T. Kelley, Jr., Esquire Kelley & Murphy Suite 160, 925 Harvest Drive Blue Bell, PA 19422 9.02 Place of Closinz. Closin~ Date. The Closing shall take place at the Carlisle, Pennsylvania offices o£The Stevens Center on October 12, 2000 at i 1:00 A.M., or at such other place, and at such time, as the Parties may mutually agree. The date of the Closing is herein cai[ed the "Closing Date". At Closing, the Parties to this Agreement will exchange ce~ificares, opinions and other documents in order to determine whether the terms and conditions of this Agreement required to be satisfied at or prior thereto have been satisfied. If the terms and conditions required to be satisfied have been sc satisfied, the Articles of Division shall be filed with the Department of Sate of the Commonwealth of Pennsylvania, pursuant to Permsylvania law, in order to consummate the Division, R. eorganization and Acquisition. 25 Attest: 9.03 Entire Understandint. This Agreement constitutes the entire agreement and supersedes all prior Agreements; both written and oral, among the Parties hereto with respect to the subject matter hereof. 9.04 Waivers. The failure of any party at any time or times to require performance of any provision hereof shalI in no mariner affect its right at a later time to enforce the same. No waiver any party of any condition or of any breach of any term, covenant, representation or warranty contained in this Agreement shall be effective unless in writing, and no waiver in any one or more instances shall be deemed to be a further or continuing waiver of any such condition or breach in other instances or a waiver of any other condition or breach of any other term, covenant, representation or warranty. 9.05 Counteroarts. This Agreement may be executed simultaneously in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 9.0~5 Headin2s. The headings preceding the text of Sections of this Ageement are for convenience only and shall not be deemed part of this Agreement. 9.07 Ar~r~licable Law. This AgTeement shall be governed by and construed and enforced in accordance with the laws of the Commonwealth of Pennsylvania. IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement and Plan of Division and Reorganization as of the date first above written. · the STEVENS CENTER -, STEVENS HOUSING CORPORATION 26 Attest: A. tt~st: ~ts: oF P~ BY: .~./~ Its: NORTHWESTE .RISL H&Z~L~N SERVICES 27 EXHIBIT "A" ACO UIRED ASSETS - STEVENS CENTER 1. Ail names, trade names, service and trademarks, patent copyrights and any and all other intellectual propert% including without limitation, the "Stevens Center" and ail of its preceding names, the "Stevens Housing Corporation" and Steven Affordable Housing and any and ali other property set forth on Schedr~le 5.15, incorporated herein by reference. 2. The Stevens Housing Corporation, and ail of it assets and liabilities, including, without limitation, the following: a) Louther Place (L.P): which is Lourher Place Limited Partnership 63-67 W. Louther'Street Carlisle, PA 17013 LiP was renovated in 1996 and consists of 17,530 sq it, 1'7 Unit, 4 story apartment building ~ 10 one bedroom apartments - 7 ~'wo bedroom apartments. Such may be an historically certif]able building. It was an old church, burned down and was refurbished. Fully modernized five apartments for CRR (mentalI7 retarded clients) and remainder for Iow income HUD housing. One apartment has been retrofitted forbearing impaired. LP is totally fitted with a spr]nkler system on elevator. There is a laundry on each floor. First Floor 5,260 sq ft Second Floor 5,260 sq ft IA 1 Bedroom lB 2 Bedrooms lC 2 Bedrooms 2A 1 Bedroom 2B 1 Bedroom 2C 1 Bedroom 2D ] Bedroom 2E 1 Bedroom 2F 2 Bedrooms 20 1 Bedroom Third Floor 5,290 sq fr 3A 2 Bedrooms 3B 2 Bedrooms 3C 2 Bedrooms 3D 1 Bedroom 3E I Bedroom 3F 2 Bedrooms 1 Bedroom Fourth Floor 1,690 sq fl No apa~ments Such has been valued as follows: 10 i Bedroom @ $20,000.00 and 7 2 Bedroom $28,000.00 for the total sum of $396,000.00. b) Silver Snr/n.~ Court-cards. L.P. and/ts real estate under development 3. Ail contracts with any and ail local, county, state, federal, and/or private sector person or entity wherein the Stevens Center provides services. 4. Ail Insurance Policie~ and contracts. 5. Ali Leases for Real Estate whether as a lessor and/or lessee, including, without limitation, the following: Hanover Manor 1 Lease Storage Space I Lease Shippensburg Office 1 Lease ?en-y County Office 1 Lease Drop In Center Hi~h Street) 1 Lease (Also, three (3) equipment leases for copiers) 6. Al/Bank Accounts, cash, certificates of deposit. 7. All property, plant, equipment, supplies, furnishings and personaI~ of any nature whether tangible or intangible. 8. Ali licenses, pen'nits, filings or authorizations, franchises, etc. with respect to the operation of TSC and SHC and ~e provision of their services, including, without limitation the following: 9. All those certain parcels of real estate which are commonly k:,nown and referred to as follows: (i) the Stevens Center, 33 State Avenue, Car/isle, PA 17013, this loc~tion constitutes the main building which is Flex Space built in 1994 single story constructed w/th several wings consisting of 21,715 sq ft on 2+ acres which is valued ~,~ $68 - $75/psfestimated to be $1,476.630.00 to $1,628,625.00; and (ii) 4648 E. Pomfret Street, Carlile, PA 17013 which is an old twin home which needs repairs and upgrades. 10. Ali prepaid expenses. I I. Ail other assets shall at the Effective Time be assigned and transferred to and vested in and accepted by H'SC Residuary Corporation. reference. 12. All other assets set forth on Schedule 505A - the Asset List inco~orated herein by' 13. Ail accounts receivable. Amy of the aforementioned assets, including, without Iimitation, 33 State Street, Carlisle, PA, and the accounts receivable which are encumbered by the Keystone Bank Tax Free debt are to be vested at the Effective Time in HSCRC untii the Determination Date at which time such shall be vested in the Stevens Center, the new corporation. TIIE STEVE~NS CENTER Asset List Description Cash/Equivalents Trusts and Investments Accounts Receivable - Third Party/Clients Accounts Receivable - Cumberland County. Accounts Receivable - Other Intercompany Receivables Prepaid Expenses Land and Buildings: 33 State Street, Carlisle (Book Value) 46-48 E. Pomfret St., Carlisle (Book Value Furniture and Equipment (Book Val.e) (See Furniture and Equipment Listing) Other Assets: Deferred Financing Fees Charter Membership, Community Behavioral Health Care Network of Pennsylvania Start Up Costs Total Assets Amount $ 55,409 6,972 440,890 74,675 119,873 168,430 24,7.36 ,253,865 27,150 28,902 33,208 19,000 500 Schedule 505A EXHIBIT "B" ACOUIRED LIABILITIES - STEVENS CENTER 1. Certain }iabilities/payables as set forth on Scnedu,e 5.05 (B) incorporated herein by reference and as designated therein, either at the Effective Time or Determination Date.. 2_ The obligations of Keystone Ban& as provided in the Agreement of even date herewith which shall be vested in the Stevens Center, the new corporation, on the Determination Date. 3. The ooh=at~ons of Hams Bank as provided in the Agreement of even date herewith which shall be vested in the Stevens Center, the new corporation, at the Effective Time. 4. All other liabilities of the Dividing Corporation shall at the Effective Time be vested in HSC Residuary Corporation, mclud,no ,hose ,~ be vested in the Stevens Center, the new corporation, at the Determination Date pending the occurrence of the Determination Date. The Stevens Center Liabilities List Creditor/Purpose Keystone Bank, Mortgage 33 State Street Keystone Bank, Second Mo~gage 33 State Street Keystone Ban)<, Line of Credit Keystone Bank, Line of Credit Harris Savings Bank Cumberland County, Human Services Grant Funds Cavanaugh MichaJes, Ltd., (Note) Inter-Company Fayab[e LPLP Rents XactMedicare Services .~ ~ Northwestern Human Services - Loan for Payroll Employee Accrued Vacation ~ 6[30/00 Trade Creditors. See Detail Listing Be/ow Total Liablilitles AmQunt 447,299.53 593,705.26 499,964.59 74,966.68 150,000.00 4,007.60 101,SO0.00 78,715.00 30,594.82 70,000.00 86,366.75 326,431.84 2,463,552.15 Trade Creditors /Any'ware Computers ~Adams Hanover Counseling ] Buchamam Ingersoll /Companion Technologies - PA z/ CapitalBiueCross ~Capital Blue Cross ~ Capital Telecommunications Carl D. Bert Cavanaugh Michaels, Ltd. Cariiste C~amber of Commerce Dauphin Cfi Company ~,DePauI Realty Company ~ Eastern Maintenance Systems Keystone Financial AFishers Lawn Service First Energy Fleet Fueling hold Financial Services GMAC Grace United Methodist Church Harris Business Banking IMWRF Infinity Print Graphics James Wilson Safe Harbour Amount $ 507.20 $ 2,109.25 3,176.53 1,200.00 195.00 5,427.38 4,345.60 1,280.00 109,080.90 200.00 5,529.26 14,607.41 10,255.25 21,133.41 210,00 3,106.38 (27.48) 4,915,49 38.16 560.00 495.83 50.00 556.50 10,505.00 ScheduleS.05B, Page1 of 3 The Stereos Center Liabilities List Trade Creditors /. Keller Brothers, Inc. Henry S. Lehr, Inc. ~ Lewes Business Account Lindeman Moving Co, Inc. Lube 'N Go Martson Deardorff ~' Meorefield Communications Mobil Fteet MRNA America Minolta Leasing Services Paige A. Nelson Payche× Payche×, Inc. Pal:lent Accounting Services, Inc. ~" PP&L PP&L PP&L Penn Community Providers PCPA Group Workers Comp Fund Perry Health Center Phoenix American Life Perry Health Center Philadelphia Child and Family Ser'zices Pitney ~ Rowes, Inc. Postmaster Purchase Power Print Image Richard L. Rovegno Si:ap/es Credit Plan The St. Paul The Sentinel Smith Biliott Kearns and Company~ David W. Shively Atltel Tuckey Mechanical Services Terminex international Toshiba American Info ,Systems Comcast Cable Transkrit, Inc. Sprint Sprint 'fei(ow Pages Sprint Sprint ~Sprint 2,449.17 16,324.00 352.38 613.83 72.74 19,493.22 1,258.6.5 (1~.77) 244.23 3,798..54 1,585.00 398.55 83.10 33,580.22 497.54 240.27 41.63 3,573.87 3,081.00 273.83 1,628.46 273.83 2,000.00 854.32 100.00 2,659.14 2,310.16 1,825.00 388.81 3,435.40 459.98 7,788.86 475.00 1,062.24 1,290.00 40.00 1,099.86 18.19 t,660.31 3,303,17 2,742.00 864.70 253.51 72,72 Schedule 5.05R, Page 2 of 3 2~he Stevens Center Liabilities List r. r~Creditor ,,~ ('.Sprint ~' ( ~( $[even Waiters /' WaSte Management of Central PA (XJtech ~' k. Total Trade Creditors ~0unt 74.10 70.00 284.2ff 1,998.00 328,431.84 Schedule 5.05B, Page 3 of 3 EXHIBIT "C" ASSETS AND LIABILITIES TO BE ASSIGN'ED TO A~'D VESTED IN H.S.C.R.C. The non-inclusive assets and 1/ab/lit/es to be assigned and/or vested in the H.S.C.R.C. without limitation as follows: i. Aii assets of the Dividing Corporation not included on Exhibit "A', including, without limitation, the safe deposit box(es) and contents, if any. 2. Ali liabilities of the Dividing Corporation not included on Exhibit "B", including, without limitation, i) The claims of Lawrence Haber, including, without iii) iv) limitation, those set forth by his counsel in her leaer of September I9, 2000, attached hereto. Any possible wage and hour claim o£relevant emploTeees or past employees and/or the government (federal, s. tate, county, local) and/or an7 entity to which Steverls Center provided services, including, without limitation, such as is set forth in the E-Ma//o£Al Vitelli of August 3, 2000. Any possible pa~ial hospitalization claim of the OIG of HHS, O/G oft/he Commonwealth of Pennsylvania~ the Department of Justice of the United States of America, whether civil or criminal. Any and all successor liability. The Tax Free Debt and Related Assets pending the occu~ence of the Determination Date. The Dividing Corporations Tax Free Debt with Keystone 8amk as set.forth in an A~eement of even date herewith and the assets encumbered as a result thereof shali vest in HSCRC pending the occurrence of the Determis. ation Date at which time suoh shall vest in the Stevens Center, the new corporatiom ,Microfilm Number__ Entity ?4umber Filed ,,vith the Oeparzment of Skate on Secretary of the Common'wealth ARTICLES OF INCORPORATION-DOMESTIC NONPROFIT CORPORATION In compliance with the requirements of 15 Pa.C.$. ~ 5306 (relating to articles of fncorporationj, the undersigned, desfr fo incorporate a nonprofit corporation, hereby stotels) that: I. The name of the corporation is: Sueveu$ Ceat¢~' 2. The fa) address of this corporation's initial registered office in ¢his Commonwealth or ID) name of its commercial register office provider and the county of venue is: (a) L320 Lin~lesto~zn Road Harrishurz PA 17110 Dauehin Number and Street City 5tote Zip County lb) c/o: Nome of CommercioJ Registered O~fice Provider County 3. The corporat~o~ is inco~orofed under ~he Nonprofit Corporo¢io~ Low of 1 ¢88 for the ~ollowing purpose or purposes: See exhibit A accachs~euts and incoruoraCed herein by ~eference 4. The corporoffon does sot co~empl~e pecunio~ g~in or p~ofi~, iaciOen~ol or otbe~i~e, 5. The corporafio~ is organized upon a nonsfock 7. ~~~ ~~~~ ~~ 8. The name and ~ddres2; intruding street and numbec Name Addres; Michael J. 5~es~in 1320 bin~ies~o~ Road, Barrisb~r~ FA ~7lLO The specified effective dote, if any,~s: ~Noc apelicabie - effecci~?e on fiT~n~ month dcy year ,-cd,her, al pro/r~lons of the eC, icles, it any, ar,ach on 8 1/_ x ] i sheet. hour, if on'? 11. 12. 13. 15. 7-he corporation is incorporated under the Nonprofit Corporation Law of the Commonwealth of Pennsylvania exclusively for charitable, educational and scientific purposes within the meaning of Section 501 (c) (3:) of the Internal Revenue Code of 1986. The corporation does not contemplate pecuniary gain or profit, incidental or otherwise. -The corporation is formed to provide persons, including minors, suffering from mental illness or retardation with mental health and related services designed to meet their physical, social and psychological needs and to promote their health, security, happiness and usefulness and to promote and foster affordable housing. The corporation is irrevocably dedicated to and 6perated exclusively for nonprofit purposes. No part of the income or assets of the corporation shall be distributed to, or inure to the benefit of, any individual. The term for which the corporation is to exist is perpetual. The corporation is empowered to do ail manner of things which a nonprofit corporation may do under Pennsylvania law. The corporation may have one or more members as described in it Bylaws with such powers as are granted to the member (s) in the Bylaws. (a) No part of the activities of the corporation sha~l be the carrying on of propaganda, or otherwise attempting to influence legislation (except as otherwise provided by Section 501 (h) of the Internal Revenue Code of 1986, . or corresponding provisions of any subsequent Federal tax laws), and the corporation shall not participate in or intervene in (including the publishing or distributing of statements) any political campaign on behalf of (dr in opposition to) any candidate for public off~ce. (b) No0/vithstanding any other provision set forth herein, the corporation shall not carry on any activities not permitted to be carried on (i) by a corporation exempt from Federal income tax under Section 501 (c)(3) of the Internal Revenue Code of 1986, or corresponding provisioris of any subsequent Federal tax I.aws, or (ii) by a corporation, contributions to which are deductible for Federal income tax purposes. (c) The Corporation shall be managed at all times with policies and practices that provide for equal rights, privileges and opportunities to any person regardless of age, race, sex, religion, national origin or sexual preference. 17. 18. 16. In the event of the entire or partial termination, dissolution or winding uR of the corporation in any manner or for any reason whatsoeyer, the assets of the corporation which remain after payment, or anaking provision for paymer)t of all liabilities of the corporation, shall be distributed (o and only to one or more n:onprofit orga~izaticms exempt from Federal income tax under section 501 © (3) Of the Intel'hal Revenue Code of 1986, or corresponding provision of any subsequent Federal tax laws which have been Created and operated for nonprofit ;purposes similar to those Of the corporation, other than ones created for reli~/ious purposes. The corporation shall be governed by a Board of Trustees, t.he number of which shall be established in the Bylaws. The officers of the corporation shall be elected by the Board of Trustees in the manner prescribed in the BylaW:s. D$~B;l$-5306 Rev 90)-2 t~Se AF~ICJ~S .Or ncor~o~afion tbis~ d'~y ~i: EXHIBIT "B" SEPTEMBER 19, 20 AND 21, 2000 LETTERS EXCHANGED BETWEEN PLAINTIFF'S AND DEFENDANT'S ATTORNEYS September21,2000 FAX NO: 717-249-2411 VIA FAX AND FIRST CLASS MAIL Jennifer C. Deitchman, Esquire McGraw, Hait & Deitchman 4 Liberty Avenue Carlisle, PA 17013 Re: Dr. Lawrence Haber/The Stevens Center Our File NO: 91 i0 Dear Ms. Deitchman: I am in receipt of your FAX of September 20, 2000. I respectfully disagree with your treatise on the Wage Payment Collection Law. Furthermore, NHS is not the successor of TSC. I have set forth NHS' legal status and relationship with TSC in my last letter to you. However, if you prefer to rely on the accuracy of a newspaper report over the representation of counsel, such is your prerogative. It appears to me that the claim you may have, if any, is with TSC and/or its Board and/or the author of the letter to the extent such may not have been authorized. Please direct all further communication in this respect to them. Very truly yours, JOSEPH T. KELLEY, JR. JTKJR/mb CC: M. Joseph Rocks, Chairman, President and CEO, w/enclosure Thomas Donaghue, Chief Financial Officer, w/enclosure Karen Snider, Chief Operating Officer, w/enclosure Michael Breslin, Regional Vice-President, w/enclosure Benjamin T. Warner, Esquire, w/enclosure, via FAX Steven Fishman, Esquire, w/enclosure, via FAX FRED H. HAlT~ JENNIFER C. DEITCHMAN NORA S. GIRSON TRUDY H. McGRAW, Of Counse! CORRESPOND TO: 4 LIBERTY AVENUE CARLISLE. PA 17013-3308 PHONE: {717) 249-4500 FAX: (717) 249-2411 McGRAW, HAlT & DEITCHMAN ATTORNEYS AT LAW September 20, 2000 AREAS OF PRACTICE: EMPLOYMENT DISCRIMINATION WORKERS' COMFENSATION PERSONAL iNJURY BRANCH OFFICE: FINANCIAL TRUST BLDG. 14 N. MAIN STREET, SUITE 307 CHAMSERSBURG. PA 17201 PH{3NE: (717) 263-7344 FAX: (717) 249-2411 Joseph T. Kelley, Jr., Esquire KELLEY & MUKPHY Union Meeting Corporate Center V 925 Harvest Drive, Suite 160 Blue Bell, PA 19422 VIA FACSIMILE (215) 643-8356 AND MAIL RE: NHS/TSC/DR. LAWRENCE HABER Dem' Mr. Kelley: Thank you for your prompt response. Initially, let me quantify that Dr. Haber's annual salary was $103,744.08. Sixty days severance pay would roughly equate to $17,290.80, although that figure is not to be deemed an admission in any way should further litigation ensue. This and my previous correspondence are by way of settlement negotiations and for the purpose of putting the entities involved on formal notice that Dr. Haber's has sought legal counsel with respect to this matter. Let me reiterate that we do believe that this is a wholly valid claim under the Pe,n_,~sylvania Wage Collection and Payment Law. The statement "The Board wishes to pay you 60 days termination pay in deference to the many years of service which you gave to the Stevens Center and to wish you well in whichever new endeavor,..." clearly triggers the WPCL's "fringe benefits and wage supplements" provisions. Thus, traditional contract law is supplanted by statutory provisions concerning wages, supplements and fringe benefits. Your argument that payment was conditional upon an event that might never occur is superceded by the WPCL's provision that where there is no definite time frame for payment, payment shaI1 be made within 60 days of the date when proper claim was filed. While we may argue when "proper claim was filed," TSC (or its successor) cannot escape responsibility for payment of these funds. If liability is found under the WPCL, attorney fees are mandatory under the provisions of that act. Moreover, a recent article that appeared in our local newspaper seems to contradict your statements concerning the financial situation of TSC. (See article cut from website of The Sentinel, enclosed). If indeed, the sale has been completed or if the debts have been refinanced, then the ability of TSC and/or NHS to pay this claim should not be an issue. Dr. Haber has been more than reasonable in awaiting payment of his severance ~vages and we do not intend to wait much longer while NHS and TSC point fingers as to who is responsible for this payment or mull over how they can avoid paying it. Therefore, if Dr. Haber does not receive the equivalent of 60 days salary on or before September 29, 2000, we shall determine the proper defendant(s) against whom to file suit and proceed accordingly. With respect to the health insurance issue, Dr. Haber has sent several letters to James D. Flower, Jr., requesting the details on how much he owed to continue coverage after TSC discontinued covering the premium payments. These went unanswered and Dr. Haber was informed through a pharmacy that his benefits had been terminated as of 7/2/00. It appears, however, that certain bills for office visits after that date were paid and we are, therefore, unsure about what, if anything, Dr. Haber must pay out of pocket as a result of the coverage termination or when exactly that termination occurred. He has since obtained alternate coverage. Therefore, it is uncertain whether this will be an issue, but I wanted to apprise you of all "loose ends" up front. The vehicle lease issue is likewise an ambiguous matter. TSC had covered the automobile lease and expenses, but in light of the Center's financial difficulties, Dr. Haber took it upon himself to make the payments return the vehicle at the expiration of the lease shortly after his separation from employment. Therefore, this may also be a non-issue, but if the parties are going to be arguing over consideration, it may arise. By copy of this letter upon Attorney Ben Warner, I am apprising him of our response to your letter and the timeframe we consider reasonable for resolving this claim without resorting to litigation. Thank you and Attorney Warner for your professional courtesy. Sincerely, Jennifer C. Deitchman Enclosure Cc: Benjamin T. Warner, Esq. (w/enc.) (via fax only: 243-1850) Lawrence Haber, Ph.D. (w/enc.) Stevens Center sold Amid little outward hoopla, Northwestern Human Services Friday completed a deal to purchase the Stevens Mental Health Center. An announcement that the Stevens board had voted unanimously to approve the purchase of the South Middleton Township center was circulated to staffers, who were expecting a deal to be completed but didn't know exactly when it would happen. "Everybody is very, very pleased, as I am," said M. Joseph Rocks, Northwestern president and chief executive officer, who was in Carlisle Friday for completion of an agreement to purchase the center. E~ut the acquisition of Stevens by the Montgomery County-based Northwestern is hardly business-as-usual for 1,200 of the center's clients, who will continue to receive outpatient and other services in the Carlisle area. The Stevens Center was in the midst of a severe financial crisis that brought it to the brink of closing, having totaled more than $1.i million in overdue bills and crisis borrowing to cover payroll and other expenses. But those debts have been refinanced. (from 9/2/00 Sentinel) September 19, 2000 FAX NO: 717-249-2411 VIA FAX AND FIRST CLASS MAIL Jennifer C. Deitchman, Esquire McGraw, Halt & Deitchman 4 Liberty Avenue Carlisle, PA 17013 Re: Dr. Lawrence Haber/The Stevens Center Our File NO: 9110 Dear Ms. Deitchman: I am in receipt of your letter of September 19, 2000. By copy of this letter to Benjamin T. Warner, Esquire, I am requesting the position of TSC with respect to this claim of Dr. Haber. This is my first notice of any such claim. Please quantify said claim. The present status of the relationship of NHS and TSC is that NHS is operating programs of TSC pursuant to a lease and management agreement with a view toward a more formal acquisition in the near future which has not yet been finally structured. Accordingly, Dr. Haber's claim will be considered by NHS in deciding on the acquisition and its form. Clearly, the amount of the claim will be critical in this analysis. Initially, my reaction to your letter is that (i) this is an arrangement with the current Stevens Center Board and your client; (ii) the June 15, 2000 letter is cast in the subjunctive (a conditional "wish" as soon as it is financially feasible) rather than in the form of a firm undertaking; (iii) the June 15, 2000 letter is without consideration (iv) the claim is otherwise unenforceable; the severance fee is not overdue, is not yet due and may never become due since it is conditioned upon such being financially feasible; (v) there is no basis for any legal fees; and (vi) I do not understand your claim as it relates to insurance lapses and/or the car lease payments and charitable deductions. However, prior to taking a formal position on behalf ofNHS, ! shall require (1) Jennifer C. Deitchman, Esquire -Page 2- -September 19, 2000- quantification of your claim in an itemized fashion, (2) clarification of the insurance lapse, car lease/charitable deduction, and (3) the position of TSC with respect to such. At such time I shall submit your claim to NHS for/ts management's response. Please review and advise. Very truly yours, JOSEPH T. KELLEY, JR. JTKJR/mb CC: M. Joseph Rocks, Chairman, President and Secretary, w/enclosure Thomas Donaghue, Chief Financial Officer, w/enclosure Karen Snider, Chief Operating Officer, w/enclosure Michael Breslin, Regional Vice-President, w/enclosure Benjamin T. Warner, Esquire, w/enclosure, via FAX Steven Fishman, Esquire, w/enclosure, via FAX McGRAW, HAIT & DEITCHMAN ATTORNEYS AT LAW September 19, 2000 Joseph Kelly, Jr., Esquire Kelly & Murphy 925 I*larvezt Drive, Suite 160 Blu~ Bell, PA 19422 VIA FACSIMILE ONLY # (215) 643-8356 RE: DR.. LAWRENCE HABER / THE STEVENS CENTER Mr. Kelly: I have been directed to you by Ben Warner at the law offices of Martson, Deatdorff, Williams & Otto a~ the representative of the purchaser or successor to the Stevens Center in Carlisle. You arc probably aware that Dr. t-Iaber was the former President and CEO oft,tie Center and that thc Board of Directors promised him 60 days severance pay upon his separatiorl frolrl employment at the Center. To date, he has not received his severance pay. Under the Pennsylvania Wage Payment and Collection Act, such paymemg constitute "fringe benefi~ or wage Sul~lements" and are due and payable to Dr. Haber. Thc Act indicates that where no required time frame is specified for payments of fringe benefits or wage supplements, payment is to be made within 60 days or- a proper claim filed by the employee. See 43 P,S. .~260.3. 1 count this to be from June 27, 2000 when Dr_ l-lal:~r wrote a letter to Lee Cavlmaugh inquiring about his vazation pay, payment~ for health it~uranee, and indicating that he would accept the ~everance in bi-monthly paymv"nta rather than a lump sum. (Copy enclosed) As such, the severance pay is overdue and Dx', Haber would be entitled to make a claim for lhese funds, as well as liquidat~l dmnages, attorney fees ~d costs of filing. I had b~en trying to Contact you by phone to determine whether we could avoid filing such a claim. I understand that resolution of this claim is dependenl upon the business relationship between Northweaem and the Stevens Center, and am currently not fu/ly aware of the nuances of that relationship. Therefore, please eau or f,x~ me a your earliest convenience to indicate whether yom' client will be accepting responsibility for payment of the sevenmee and whan Dr. Haber will be paid Ja full. At this point, he is demanding payment in a lump ~um (with appropriate tax deductions made), as well as a nominal ~mount aaso¢i,~ted with his h~ving to resort to legal representation to protect his On a related note, he is also interested in coverage for any lapses in it~surance coverage during the time frame when the Center did not inform him of what was required to eontlnue his insurance coverage, Upon receipt of the COBIL& notice, Dr. }tuber swilched hi~ coverage from the family phm to individual plans for himself and his wife. It is my tlilderstanfling that The Steveva Center pa/d the premiums through July 2, 2000, but did not notify him of th~ difference in premium payments required to continue the individual plans following July 2'~. There is approximately one month of lapse of coverage whleh may have some out of pocket expenses ~ssociated with it and I wanted to m~ you aware that this may al.go be an issue that we need to resolve. Finally, in light of the C~nt*r'a financial difficultie,, Dr. Haber paid his own automobile lvmse payments for the last few months of the lease tern,. While he i,~ no~ looking to recover those amounts, it seems that he should be able to take a charitable deduction for th~ tx~rtlon oft. he vehicle use directly related to Center business. We ma), or may not n~d to disem~ this issu~ with you ~ well. I am sorry t/let we were unable to connect by phone, but look forwva.d to di~eusslng this manet with you hopefully before the end of[he w~k. Sincerely c~: L~venmee C. B~q:~, ~.D. (w/o ~vx.] I~tll~bW~l, PA 170B0 June 27, 2000 P~GE 84 Admtnlelral#e Dtre~tor The Stevel~ C,e~ter 33 8t~e ,a~mue Carti~ie, PA 17{313 and ~everar~e P.y QU~tions Ommr Mr. Cavanaugh: I want to make aura that Ii,ere la no interruption of my health insurance, It is my undemtand~g that the Center was covering ~e cost of my insurance until July 2, 2000 and that my ~/Ife'l ~ wl~ being deducted from my vacation pay. I have requea~ Itlat under Cobra she and I be switched to individual coverage. I need to know the amount of premium ~e are to p~ and wflen ~t ia due. I believe I ~,~ near the end of n~j acc, rde~ vacation pay. I would like to know when this pay ~ be runNng ooL have be~m Itlforrfled by Ihe I~ma.d in a later fi'om Jim Flowers~ Jr., that the Board has agre~ ~ ~ dey~ ~ of ~n~on pay. I have indi~t~ tO him that ~ d ~ ~e ~ ~, I ~ ~ ~111~ to a~t ~is severan~ on a bi- ~n~ ~ ~r ~ a I~ ~m, s~r ~ ~ ~y I ~ived my va~fion pay. ~u~ 1~ ~o kn~ ~e Ce~Ks in.ions as ~ ~ich meth~ will be uti~iz~, Is Se~m~ ~ ~ti~ al~ ~ lES pu~es? That is to say will I be receiving Thank you for your a~d~ntk~n to this matter. CC: Sl",e~ Fox Jim Flower, Jr. June t~ 5, 2000 DF, Lawr~'~ce C. Haber 23 SL~rey Lena Mechanlcsburg, PA 17055 RE: The Stevens Center Dear Larry: J have been au~flodzed by fl~o President of the Board to confirm the Boar'd'~ d~ci~ion concerning terminat/on pay. We understand the! you have vacation pay which is currently in the proces.~ oF being paid [;ut to you, and which will be paid In fuji. The Board also wishes to pay you 00 days termination pay in deference to the many years of service which you gave to the Stevens Center and to wish you well in whichever new endeavor :you wish tO pursue. A~though we wou~ llke to pay t~i~ immediately, we are presently under gmat finan~l pressure and our flf~ prforfty must be the employees who continue to work for the Stevens Center, The Board consequendy Intends to pay the 60 day's severance pay as soon aS it IS financial feasible, which we hope u/ill be in the near future. Several of the eteff currently at the Center have complained that they folt a recent ,ns;t by )'~ to the Center was dt~ru¢.,ve. '¢. ,.b .e, ..~..n. -. ..... tactic. ,s high ~t, the Center, we ,a, auld ask you not to visit the Center. at this time, Very f~uiy yours, FLOWER, FLOWER & LINDSAY, P.C. ~S~D. Rower, Jr. cc: Lau~ K,,II.~ KELLEY & MURPHY, ATTORNEYS-AT-LAW BY: PATRICK G. MURPHY, ESQUIRE ATTORNEY I.D. NO. 34815 BY: MICHAEL A. RICCIO ATTORNEY I.D. NO. 86961 UNION MEETING CORPORATE CENTER V SUITE 160, 925 HARVEST DRIVE BLUE BELL, PA 19422 (215) 643-6500 ATTORNEY FOR DEFENDANTS IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA LAWRENCE C. HABER V. THE STEVENS CENTER AND NORTHWESTERN HUMAN SERVICES CIVIL ACTION LAW NO. 01-90 CERTIFICATE OF SERVICE I, PATRICK G. MURPHY, ESQUIRE, hereby certifies that on the 8T}~ day of July, ( 2003 a true and correct copy of the foregoing Memorandum of Law in Support of Preliminary Objections of Defendants to Plaintiff's Complaint was served upon the following persons, via regular mail, postage prepaid, at the address set forth below: Brian J. Puhala, Esquire FRED HAIT & ASSOCIATES The Wellington 17 East High Street, Suite 101 Carlisle, PA 17013 KELLEY & MURPHY, YS-AT-LAW IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA ! 003 LAWRENCE C HABER, Plaintiff THE STEVENS CENTER and NORTHWESTERN HUMAN SERVICES, Defendants CIVIL ACTION - LAW No. 01-90 PLAINTIFF'S BRIEF IN OPPOSITION TO PRELIMINARY OBJECTIONS OF DEFENDANTS, TIt~ STEVENS CENTER AND NORTH?WESTERN HUMAN SERVICES Statement of Facts Plaintiff began working for The Stevens Center (hereinafter referred to as "Dividing Corporation") in January 1991. His position with the Dividing Corporation was terminated in May 2000 due to economic conditions. At the time of his termination, Plaintiff was the president and chief executive officer of the Dividing Corporation earning an annual salary of $103,744.80. Prior to his termination in March 2000, Plaintiff was told of his impending termination by the president of the board of the Dividing Corporation, Laurie Kalinak. During this conversation, Plaintiff was told he would receive any unused vacation pay and sixty days severance pay. This promise was later repeating in writing in a letter dated June 15, 2000. This letter was attached to the Complaint as Exhibit A. It is true that this correspondence stated, "The Board consequently intends to pay the 60 days severance pay as soon as it is financial [sic] feasible, which we hope will be in the near future." This correspondence was acknowledged by Plaintiffin a letter dated June 27, 2000 addressed to Lee Cavanangh, the Administrative Director of the Dividing Corporation. See, Complaint Exhibit B. This letter and three messages were ignored by Mr. Cavanangh. Plaintiffwrote to him again on July 26, 2000. See, Complaint Exhibit C. Plaintiff still received no reply and wrote to the treasurer on September 4, 2000. See, Complaint Exhibit D. In that letter, Plaintiffreferenced a discussion he had with the treasurer at a Rotary meeting in August 2000. During that meeting, Plaintiff was told he would receive a response to his inquiries. However, he did not receive anything further. As a result, Claimant filed this action by Complaint on January 4, 2001. Defendants filed timely preliminary objections. Defendants argue that the facts as pleaded in the Complaint are insufficient to support a cause of action. In the Preliminary Objections, Defendants attached Articles of Division that addressed the division of The Stevens Center (Dividing Corporation) in to The Stevens Center (New Corporation) and HSC Residuary Corporation (Surviving Corporation). Argument In addressing preliminary objections in the nature of a demurrer, as is raised in this ease, the court is required to resolve issues solely on basis of pleadings; no testimony or other evidence outside complaint may be considered to dispose of legal issues presented by demurrer. Mellon Bank, N.A.v. Fabinvi, 531 Pa. 54, 611 A.2d 181 (1992). It is well-established that in the review of preliminary objections, the facts that are well- pleaded, material, and relevant will be considered as true, together with such reasonable inferences as may be drawn from such facts. Santiago v. Permsvlvania National Mutual Casualty Insurance Co.. 418 Pa. Super. 178, 183, 613 A.2d 1235, 1238 (1992). However, preliminary objections in the nature of a demurrer require the court to resolve the issues solely on the basis of the pleadings; no testimony or other evidence outside of the complaint may be considered to dispose of the legal issues presented by a demurrer. International Union of Operatine Engineers, Local No. 66 v. Linesville Construction Company, 457 Pa. 220, 322 A.2d 353 (1974) (emphasis added). In the instant case, Defendant raises the contents and interpretation of a document outside the Complaint. Specifically, the Agreement and Plan of Reorganization Dividing the Stevens Center into the Stevens Center and the HSC Residuary Corporation. This document was attached to the preliminary obje¢6ons filed by Defendants. This is very similar to the situation found in Fabin¥i. In that case, the defendant raised a demurrer to the first count of the complaint. Accordingly, the trial court was only free to address the issue of whether that complaint, on its face, failed ~o assert a cause of action as a matter of law. However, the Superior Court found that the trial coua considered factual matters beyond the complaint in finding that the purported lack of any written suretyship agreement jnstified a dismissal of the defendant's complaint as a result of the Statute of Frauds. The trial court's opinion specifically stated that it considered "the surrounding circumstances of the lease agreement" in determining that the Statute of Frauds applied. 650 A.2d at 899. For these reasons alone, the Preliminary Objections of Defendants must be dismissed. Defendants' arguments rest almost solely on not only the content of a document not referenced in the Complaint, but on the legal interpretation of that document, As the document was not referenced in the Complaint, this court cannot consider the additional evidence and factual allegations the document raises. Assuming, arguendo, that the Agreement and Plan of Reorganization (herein after referred to as "Articles of Division") can be properly considered by this court, Defendants' preliminary objections still must fail. The Articles of Division were executed on November 16, 2000. Prior to that Plaintiffwas told verbally by the president of the board of the Dividing Corporation and in writing by the treasurer of the Dividing Corporation that he was to receive his remaining vacation pay and sixty days severance pay. The statements of the President and the letter from the Treasurer are both binding promises to pay a severance package to Dr. Haber. While they may not constitute the actual contract of a severance agreement, these statements gave Dr. Itaber a reasonable belief that he was going to receive the vacation pay and severance pay. Dr. Haher followed up on this reasonable expectation with various letters and phone calls that were ignored. Defendants argue that the Complaint fails to allege a breach of a contractual right or entitlement to severance pay that is required by the Wage Payment Collection Law, 43 P.S. §§260.1 et seq. (WPCL). Fringe benefits or wage supplements are defined as "all monetary employer payments ... as well as separation, vacation, holiday or guaranteed pay." 43 P.S. §260.2a. Accrued and unpaid vacation time is considered wages under the Wage Payment Collection Law. Harding v. Duquesne Light Co., 882 F. Supp. 422 (W.D.Pa. 1995). Furthermore, contractually agreed upon severance pay is also wages within the meaning of the Wage Payment Collection Law. Bowers v. NETI Technologies. Inc., 862 F. Supp. 1310 (E.D.Pa. 1994) Thus, the questions is whether the statements made by the president and treasurer of the Dividing Corporation rose to the level ora contractual promise on the part of the Dividing Corporation. Vacation pay does not need to he contractually designated. In their brief, Defendants refer to §260.3(b) of 4 the WPCL; however, Defendants fail to fully state that section.~ That section addresses agreements for deduction of union dues and payments under other agreements. In th/s case, there is a definite question of whether there was an agreement to pay severance pay and vacation. That is matter to be ultimately determined by the factfinder and not to be disposed of in preliminary objections. Defendants further argue that the alleged promises were made by officers of the Dividing Corporation prior to its division and that any liability cannot be imposed on the new Stevens Center (New Corporation) or Northwestern Human Services as neither entity is the successor to the Dividing Corporation. Once again, assuming that the Articles of Division can be properly examined during these preliminary objections, that agreement does raise very interesting questions. The Articles of Incorporation of the Dividing Corporation became the Articles of Incorporation of HSC Residuary Corporation. Furthermore, the Trustees and Officers of the Dividing Corporation became the Trustees and Officers of riSC Residuary Corporation. Thus, it would appear that the Dividing Corporation and HSC Residuary Corporation are one in the same. Defendants are correct in reciting the law regarding successor liability. One of the exceptions mentioned in their brief is when the sale or transfer is fraudulently entered into to escape liability to creditors. Sehl v. Vista Linen Rental Service, Inc., 2000 Pa. Super. 33 I, 763 A.2d. 858 (2000). A close reading of the Articles of Division show that the original Stevens Center (Dividing Corporation) was split into two entities, the Stevens Center ~ 43 P.S. §260.3(b) Fringe benefits and wage supplements. Every employer who by agreement deducts union dues from employes' pay or agrees to pay or provide fringe benefits or wage supplements, must remit the deductions or pay or provide the fringe benefits or wage supplements, as required, within l0 days after such payments are required to be made to the union in case of dues or to a trust or pooled fund, or within l0 days after such payments are required to be made directly to the employe, or within 60 days oftbe date when proper claim was filed by the employe in situations where no required time for payment is specified. 5 CERTIFICATE OF SERVICE I certify that a tree and correct copy of the foregoing document was served upon the following person(s) by US Postal Service, first-class postage prepaid on the date appearing below: Patrick G, Murphy Esq Kelly & Murphy Union Meeting Corporate Center V Su/te 160,925 Harvest Drive Blue Bell PA 19422 Brian J Puhala Dated: July 20, 2003 7 #17. LAWRENCE C. HABER V. THE STEVENS CENTER AND NORTHWESTERN HUMAN SERVICES IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 2001-0090 CIVIL C1VIL ACTION - LAW IN RE: DEFENDANTS' PRELIMINARY OBJECTIONS BEFORE BAYLEY, GUIDO, JJ. ORDER OF COURT AND NOW, this 6TM day of AUGUST, 2003, the Defendants' Preliminary Objections are DENIED. Edward E. Guido, J. Brian J. Puhala, Esquire Patrick G. Murphy, Esquire Michael A. Riccio, Esquire :sld IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA LAWRENCE HABER, Plaintiff THE STEVENS CENTER and NORTHWESTERN HUMAN SERVICES, Defendants CIVIL ACTION LAW No. 01-90 JURY TRIAL DEMANDED PRAECIPE FOR DISCONTINUANCE TO THE PROTHONOTARY: Please mark the above captioned matter as discontinued with. prejudice. Dated: Respectfully Submitted, Attorneys for Plaintiff Fred H. Hait7 ID # 3~;331 - The Wellington 17 East High Street Suite Carlisle PA 17013-3047 (717) 2,49-4500