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HomeMy WebLinkAbout01-0090 FX ~. "."1 IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA LAWRENCE C. HABER, Plaintiff v. Civil Action - Law No.; r!J/- 110 ~ THE STEVENS CENTER and, NORTHWESTERN HUMAN SERVICES, Defendants JURY TRIAL DEMANDED NOTICE TO DEFEND You have been sued in court. If you wish to defend against the chUms 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 TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IFYOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR 1ELEPHONE 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) 249-3166 , . ,'~ 1"1 .. IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA LAWRENCE C. HABER, Plaintiff v. Civil Action. Law No.: 0 J. era ~ 1Lu'>'-' THE STEVENS CENTER and NORTHWESTERN HUMAN SERVICES, Defendants JURY TRIAL DEMANDED COMPLAINT PARTIES AND TURISDICTION . 1. The Plaintiff is 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 171 03. 3. Northwest Human Services, the Defendant, (hereinafter "NHS"), is a non-profit corporation with a place of business at 1320 LinglestoWll Road, Harrisburg, Pennsylvania 17110. 4. This court has 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. ~ !_H I ~-, ,_ " -~~r -I ~I t 'I FACTS 7. Paragraphs 1-6 are incorporated herein by reference. 8. Plaintiff began working for TSC on or about January 1991. 9. Plaintiff's employment was tenninated for economic reasons on or about May 2000. 10. At the time of the tennination, Plaintiff was the president and CEO ofTSC. His annualized 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 ofTSC: 3/23/00 $417.26 4/16/00 $416.31 5/19/00 $816.59 12 Sometime prior to Plaintiff's termination, Plaintiff had a conversation with TSC's Board President, Laurie Kalinak. At that 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, in consideration of all his years of good work. 13. 1ms 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 payout unused vacation pay as well as 60 days termination pay was reiterated therein. A true and correct copy of that correspondence is attached hereto as Exhibit A. 14. By correspondence of 6/27/00, Plaintiff acknowledged Attorney 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 ofTSC's financial problems. At <I . ", :r'~I""'1 ' - I --- ." r "I that time he asked for clarification on the method of payment. A true and correct copy of that correspondence is attached hereto as Exhibit B. 15. TSC failed to reply to Plaintiffs 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 infonnation and belief, TSC became part of Notthwestem 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. COUNT I - PENNSYLVANIA WAGE PAYMENT AND COT J.F.r.nON 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 260.2a. 20. Defendant TSC promised Plaintiff severance pay equal to 60 days pay. Additionally, Defendant TSC had provided Plaintiff with 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. 23. Such payments, to date, remain unpaid. .-,._,,_"_, 0',,; ",.". . 1-1.',-'- t, ~I -~.' - , " 'O~'"""'li' 24. Therefore, Defendant TSC has violated the P A 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 amounts. 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. Payment of the 60 days pay; b. Reimbursement 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(f). Respectfully submitted, Fred Hait & Associates Attorneys for Plaintiffs B'jC ~I ' - I~I"'- "_ I . ., '-;""1- - i ..,.~ AFFIDA VlT I verify that any facts not of record set forth in the foregoing Complaint are true and correct to the best of my knowledge, information and belief. I acknowledge that any false statements herein are made subject to the penalties of 18 Pa.C.S. Section 4904 relating to unsworn falsification to authorities. Date I L/t?/u d ~c~ Lawrence C. Haber . " II I' , .'- ~,. ~-"~ . . LAW OFFICES FLOWER, FLOWER & LINDSAY A PROPESSIONALCORPORATION II EAST HIGH STREET CARLISLE, PENNSYLVANIA t7013-3016 . ~ JAMES D. PLOWER JAMES D. PLOWER.JR. CAROL]. UNDSAY moMAS E. fLOWER. (717)243-5513 PAJO (717) 243-6510 FPLP.sq@aoLcom 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 confinn the Board's decision concerning termination pay. 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 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 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 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 visit by you to the Center was disruptive. Wit!:! tensions and emotions high at the Center, we would ask you not to visit the Center at this time. Very truly yours, FLOWER. FLOWER & LINDSAY. P.C. ~'OW'" Jc. JDFjr/tjb cc: Laurie Kalinak Member of Board of Directors EXHIBIT il IA '--I ,-, 1-1- "'~' " . Lawren~e'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 willi 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. 1 .. EXHIBIT f) 1.1 ~~--~ .. . Lawrence Haber, Ph.D. 23 Surrey Lane Mechanicsburg, PA 17050 July 26. 2000 f 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 15th 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. f 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 ~ "' B c__ I-I' ~~- " , . . Lawrence Haber, Ph.D. 23 Surrey Lane Mechanicsburg, PA 17050 -" I- . ~ September 4. 2000 Jim Flower, Jr. Attorney-at-Law 11 E. 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 enforce 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@bellatlantic.net EXHIBIT I D ~ ,.- r"'1 ~ ! - ~1-' ,~f",., KELLEY & MURPHY, ATTORNEYS-AT-LAW BY: PATRICK G. MURPHY, ESQUIRE ATTORNEY J.D. NO. 34815 UNION MEETING CORPORATE CENTER V SUITE 160, 925 HARVEST DRIVE BLUE BELL, P A 19422 (215) 643-6500 ATTORNEY FOR DEFENDANTS IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA LAWRENCE C. HABER v. 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 -';""""~"" II" ~ . ~~~~~lIlli'P~'~~-"!1'ifiSlfr'I'J~'~$"!'E,n1i1fif!!~II;""..~~;ml'f,l"'f'I!iHif'~ri"C"VNi!,_'",,"'_f"'''-- 'h~~__'!/i';~ '1'-,,' 'I~; () 0 0 c -o~ -n <..... ~:j ~-sg "'" z ~1 ~?J Zc N ~,~:1 f"n (f) _'~ t.n __::;C} -<Z ~O ~J(L ."0 -" ...J )> -T"'-,", ZO :ll:: ;~~ >0 S8 c ....., Z --I =< 01 Jo' <...> :u -< t{)~ 'P""h!!'c'j;jJ':~'."H"t1"'-fi'?l,'$1,j;1~;;,~~!ffi~~ , , ..,; " "It -, i KELLEY & MURPHY, ATTORNEYS-AT-LAW BY: PATRICK G. MURPHY, ESQUIRE ATTORNEY J.D. NO. 34815 UNION MEETING CORPORATE CENTER V SUITE 160, 925 HARVEST DRIVE BLUE BELL, P A 19422 (215) 643-6500 ATTORNEY FOR DEFENDANTS IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA LAWRENCE C. HABER v. CIVIL ACTION LAW THE STEVENS CENTER AND NORTHWESTERN HUMAN SERVICES 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: 1. ~_'F'''_ 1--1 - . , 1 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 BLUEBELL, PA 19422 (215) 643-6500 IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA LAWRENCE C. HABER v. CIVIL ACTION LAW THE STEVENS CENTER AND NORTHWESTERN HUMAN SERVICES 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: 1. 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. """''''''~t'''"""''''. 1'""1 . 'f' I'" , l' I .. 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 BLUEBELL,PA 19422 (215) 643-6500 ATTORNEY FOR DEFENDANTS IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA LAWRENCE C. HABER v. CIVIL ACTION LAW THE STEVENS CENTER AND NORTHWESTERN HUMAN SERVICES 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. 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. -'-YI-.;~ ~ ,,' "[-'I -"'1 ,. ~ " """~"~ , . ,/ 2. Plaintiff incorrectly avers that TSC became part ofNHS on or about , September 1, 2000. See Exhibit "N' '1116. 3. Plaintiff alleges that he has a claim against TSC for "wages" as defined in the Pennsylvania Wage Payment Collection Law. See Exhibit "N' '1124. 4. Plaintiff alleges that TSC orNHS is liable for said "wages". See Exhibit "N' '1125, 5. Plaintiff's claim for wages is alleged to be encompassed in a letter from counsel regarding a payment of"tennination" pay. See Exhibit "N' 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 Center'. 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 "N' -"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 ofPa. 1 Counsel for Plaintiff, was advised in a letter of September 19 and 21,2000 that NHS was not the successor corporation. 2 -, "-' - II . I ~ " i .; 12. Northwestern Human Services ofPa 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 plaintiff vested 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 plaintiff's 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 ofPennsvlvania Wage Payment and Collection Law 19. Defendants incorporate by reference paragraphs 1 through 18 as if same were fully set forth herein. 3 .;f'I'II,~~~_ i- ~..,.., - -~. ~"~ 1--'1 -'[ I' , ~- " '''-.........., , J . 20. Plaintiff's claim for "severance pay" does not arise from any employment contract. 21. Plaintiff's claim for "severance pay" does not arise from any specific employee benefit plan. 22. Plaintiff's claim, should one exist, arises solely upon the letter attached to his complaint as Exhibit "tV'. 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 ofliquidated 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, Y & MURPHY, Attorneys At Law 4 ., r-I ~I " ""'II'iIW~ , . CERTIFICATE OF SERVICE I, PATRICK G. MURPHY, ESQUIRE, hereby certifies that on the 24th day ofJanuary, 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, ATTORNEYS-AT-LA By: P "" n 1]'-- . ,-<'" -''',,-' -- ."'~ ,.,- ~ ~ ~. '^"""ltl'""~" '.'111' , " JJ.Nn~~V1~~fNN3d . 'l7ljJ8i1i(lO rs:[;" / ;~d C? ,,"',., I ~v Ilill 0 ^!:l'i/.'r,,, , ...:.../,\::/-/''-',: ' 3Di):(J=(){7grl j'G , I I '-'8il1'l''1!f'' ~~~1I'Iil':!li!'i!e,~W~~'i"!I_',""'%-tF~~*'~~!W1Im~Ij"'''",Hj'-,'','r<:;;c''~'c"'"F--"--'-- "'""_~J~C- ------1!"":i',~'T,'_+~;:r"'_'em.':~-.-*;\!'_li!c,"'l"\j'f+'i~1{*lJ!n&l1i~~~ .. , IN THE COUR.T OF COMMON PLEAS OF CUMBERLAND COUN'IY. PENNSYLVANIA LAWRENCE C. HABER, Plaintiff : v. CiYilAaiOD - LaW No.; THE STEVENS C€NTER and. NORTIlWESTERN HUMAN SERVICES. DcCmdllZlt8 : 0:1' ~ <if) I . - ! lti"vr : JURy TRIAL DEMANDED ; NonCE TO DEFEND You have be=15Ued in court. Ifyou..wUh to deJi:nd against the cWms set form in me following ~ YOll must take ac:ti0tl whbin twenty days ~ this complaint and noricei are set\'ed, hy entering a ....mrcn appeu2nc:e personally O,t' by atlotney and tiling in writing with me court yoUt' defense or objections to the cbitns r,et (Ol:lh against you. You-are wam<:d that if you fail to do so the case may ptOeeed widlout you lInd a. judgment may be , .. enURd against you by the coUttwithout furdlcr notice tor any mQIJey ~d in the compbint or for my ~ther eI2.im or relief :e'i\=1ed by me' plaintiff. You may Jose money orl property Or omcr right! impoiUnt ~ you. YOU SHOULD TAKE THIS PAPER TO YOURLA\VYER AT ONCE.. !F YOU DO NOT RAVE ALA.WYEROR. CANNOT AFFORD ONE, GO TO OR. TELE.'PHONE nm OffiCE SET FORTIiBELOWTO FIND OUT WHElm YOU CAN GET LEGAL-HELP. ., ~: Cumbctl2nc! County Bar Association 2 Liberty Avenue Olrlislc, PA 17013 (711) 249-?J166 . ",: ..~ . '- "- .'~ c'd S.!.E'ON HLno^ ~~3LS3MHL~O~ W1:;lC;VI:V\"t ....OO.?e. 'kYo-lf" ,. , , IN 'I1IE COURT OF COMMON PLEAS OF CUMBEIUAND COUlfiY,PENNSYLVANIA lAftENCE C. HABER, Plaintift' . . v. CiYil Aaion . La. No~: : THE S),e;YJ:!;NS CENTBRaDd NO&nI'WESTERN HUMAN : SEIlVlCBS, D~...d...... JURy TKW.DEMANDED COMPlAINT PARTm.C: ANn IURtSDICITON . 1. lhe Plaillliff is r.rmce c. ~. an adu1c individual residing at 23 Suttey Lane. Medlmicsburs CumbDnd County, PennsylTall.ia 17055. . .. "-.. 2. The S~ Center, !he Defendant. {hfteinaftcr "TSC'? 'is a business lllith iu priac:ipIe :, p_e of'business at 33 Stale Aven~ CadiSIe, Cumber:lmd County. Pennsy19'alUa17013 and a ~ lena lldcb:ss at 850 BicerllDlnial Drive, Carli!le, Peruuyl"WIia 17103. 3. Nonhwest Human Serriees, m.e DefendanT, Q:u:rcinafter "NHS'j, is a non-prolit eO'})Ol'abOl1 'lIridl a p1aee of business at 1320 Lingle5lOWrl Road, Harrisburg. PerI1l.aylv3nia 17110. 4,. This eoun has jurirdicaon o~ this ~ pursumt to Section .260.9a of me Pennsyl.V3Ilia Wage Paymen t lIIId Collec1:ion Law, 43 P.s.. Section 260 It 16fo , VRl'JUQ 5. Paagr:aphs 1-4 an incoEpOlllted herein by reference. 6. Vc:nue is proper in mi. court because me eause of aon lIrDSe in CumbD-.d County. ,~~,~ '~1 ~ . E'd SLE'ON ~ ~ , , ..~ - -.; p .-..... . HlnOA N~31S3MH1~ON , ' WI:J90 :01: 1:002'F; 'NHr, ,...,.., "~O " ., ',' 1-....". _ .; . ..( 'l":. :';';' , .' ", t. o. .,.1.' : ~' . ~ . ~ . '. :'~. ". , " '" . :".1...' ":': ~ > ~ . ~ , (.iA~ 7. PlIl'lIgnphs 1-6 are incoJPORa:d h=in byrefcrence. 8. Plairl1:iffbepl working forTSC on or about January 1991. 9. PlainrifFs employment was terminated Cor economic rusons on or about May 2000_ 10. At me Umeofdu~ temlination, PlIlinliffwas thep=identmd CEO ofTSC. His annl.llllizeci w.rwas $103,744.80. 11. In addi1ion fD .. salay, TSC had. paid for the leasing aad mainfen3l1c:e of Xl. automobile (or PJajatiff's use. . In March 2000, TSC svddeuly ~~. and Plaintiff made the following payments on behalf' ofTSC, 3/23/00 $417.26 4/16/00 $416.31 5/19/00 $816.59 12. Sometime prior fD Plaintiff's tmDinaticn. 1'1ain1iffhad 11. r;onveaauon -with TSt's Board President, ~ Kalinak. At thai: time. Ma. Kalinak aplained to Plaintiffthac die Board i ofDil.....~1 ~uld be teanin.g him, but 1bat be wtRIld. be plicl my unused 'tlClUon pay. as 9clI :as 60 days se'9Cnnc:e pay, in c:onsideration of:all his Jl!lIl'S of Fed \Vork.. 13. This ptomise_ con.fUmed in .mlirlgon fi/15/00by1'SC', lzeasurer"J~ O.FIowet-, Jr., whereirI be sD.ted dlat he was "authorized by me Pruident of the Bozd to confirm !he BoW'! dec:ision coneeming t:emlination pay." The ptomise to payout UIl\l!ed vacuion pay as well as 60 days Mmination pq_ Riber:artd. therein. A 1:tUe and CO=ct copy of !bat coaespondence ill 2tlaehed heme as Exhibit A- I.... By ~O'.""t'otIdalce of 6/27/00. PWnliH Kknowledp Attocney Plowec's coaupgndence, and offe=i to accept me seveanee pay in bi-monthly ins1a1kftents, lIS opposed to a one-time paymenr, because he was i.WUl! ofISe's linan.cia1 problems. At I --.-......--... -- S . ~," -. .. - . , ,-,' . .' '~,J~ . " '.'-1' ". '" Wir '. ,:II:" "'" , ..::~: ",~,~,' ~ . ;::::.:~ ,,' . - ~, " j'.. ,I. " . ';~~;"'{~'I-;X'; . ~.. v'd SLS'ON HlnOA N~31S3MH1~ON So' :::= ~, WtJ90:0'! 1:0101;;>, 'f:, . ,'Hr' ~- " " " I ......-~_. , . that ante he asked for eW.ific:aticQ 011 me method of paymenL A we and COlTea copy , of mat coa-espondence is attached hereto as Exhibit B. IS. TSC failed to reply to PlaintifPs inquiries. Plainciff followed widt additional written I reque5lS for the ptomised. SeveQIlce pay, among other- ma.tletS, by ccnrespondence dated! 7/26(00 and 9/4/00. A tme and comet copy of eacllletteris attached hereto as Exhibits C and D_ 16. Upon information and belief, TSCbec:am.e pan of Not1hwestem Human Services e~ 9/t/00. Then=~ that DefeDclan.t may have some or all responsibility for any ! " liability ofTSC aprding the subject mar=- of this suit. ~~". I 17. PIain1:iff made one last r~est in 'Writing for the unpaid amounts, 1fltoU&hleg;l counsel, : I " by letter dated 9{16/0Q. COUlofl" 1_ PP..NNSYLVANIA WAGRPAYMENT ANn COTTFt""l"rQN LAW . 21. Severance or, "separation" pay, comes wimin me de6niticln of "Frin~ benefits or wage supp1emcnlll" lIS defined by 43 P.S, Secrion 260.2a. 22. Plaintiff made a wzit:ten. demand for the S~ce 1>>-7 on 6/'-7/00, 7/2fJ/00, 9/4/00 met tbmugh ~ on 9/16/00. 23. Such paymen1S, to da~ n:main UIlpaid. ',:',----- - - .. ",. WHC1Ii1:0rt T.Ii\OI?'C. 'Ul-/r- ~ " S'd SLE'ON HlnOA N~31S3MH1~ J,,' ' , . ~. . \~ .~. '/ . : . , ~ " .if,,?, I ..: ^~ '. .~ ... . .." , a. /~':~~~~', :..~.~;.:'::~'~: " ' ~ .' , " ,. .' ';;i" .'.~': ' . ::.";. " r::. l' Y#'~',:," I . ~.' c" . t~' .. . -I- :::...;. <,- , . .. , 24. Therefore, Defendant TSC has \>iolared Ihe P A Wage Payment and Collection Law by ... ~ ~ , 'I ! withholding the promised wage s\'\pplemenlS. 25. Defendant TSC Of NHS is Ihete(ore liable to Plaintiff foC' such promised. but unpaid amour'll::!.. RRlI.fFn I'P ~ 26.. Pangraphs 1-25ll1'e inc:otpoClted herein by refermce. )." .~' ',< . " I 27. WHEREFORE, Plaintiff requestllmc Call:'[ to h71rd.lhc foIJo.win& m amo\lZl.~ expeacd to be in excess 0($25,000: , . . Y, :, :..~ \.~ ,:,,: : .. . .. a. Payment of me 60 d&y3 pay; b. Reimbursement for me automobilMe/ated elCpenses Plaintiff paid on behllli of Defendant TSC; c;.. S1:IILltory ia1terest on (I) and (b); d. I..iquiducd damages pursuant to 43 P.s. Section ~60.10; c. ~mey fees and COSls ot Iirjgation Punuanc 10 43 P.s. Section 260.9a(i). '., -..... ReapectfUUy sublnita!cI. Fred Hait& ~s Attoffley! for Plaintiffs r~ ': ': . ,~ ""~; '~~';;:~~':;~ .r, "I . "..,,'. ,'. .':~=:: .:" " ,;, , " ' ""."' .. ~ .....:., , , ',d' ,,' . 1. ':". t, ' . ~ :... ~'.6.~~~:: L'J .'.J. nwe OOf'i FROM REOOf~C' rnT..fJh1Ul'~"".enIlf.. HlI!;'.~_mr~ ~' ' .....!'fi..... ..;;~ ' _ '5 :.:..AI" 01 ~ .< ' , ': ~ '-- ,'. I ... ' ~,.., t..,. I .', ';:, ~ ,J, ",h "",_..,1, .;'. ':' . J ' .' ~"': . ' ~ ,\. " . , J L:::t-'..~~"';f~,?,, Wt:VVI:V1t "[I/ll/l~.c::. .l.iL~.\~ .~~~:~,.{: 9'd SLE'ON HlnOA N~31S3MH1~ON --wrr: rol ,_ _"""",,,'~m~. ~~. . :..-1;!l!'l"" , r 1l'etitY that any faets not of record set forth in the fo~ing Comp~t ace tr.l.le lII11 COaec:t to !he btst of my knowledge, infomwion and belief. r acknOwledge that my false " I Af'PmAVlT staterrJents herein are made subject to me pen21ries of 18 Pa.CS. SecliQn 4904 relating to unswom l3lsificalion to aulhotities, Date ,UI..7Hd C. LaWrence C. Haber ~ ~ ~-'-~ L'd SLE'ON H~nOA N~3~S3MH~~ON , , ~r"'1 ,e ~ '. '.~."'. ;.~. : " .." ~ ; - , j ~ ~~~~;: . ~.~~<~{\~::. , '~':-~'" ::f.,.;' ,:. ; r.",,' ':...,. .. . ". "'.r).: .' :",":'." ,,', , , '~\~}::;{':>:: , , . -, .'. ~, ~~..:'~~t: . ~>'::~? ~:::'\ ;':':" ._- '" ,', " ...~~;.:: ~;. ': . '-;' - .~: I: ;~_., .: 'J I };'~~::", ~~w..\ ,.~:~..] ::r ... '~"'" Ii ~,(""'.!4 . !:.~:,' ,;~:i:..~ . . '} '~''i1 "'.J .- .j-, ~ ..., '1f )..~~k;:t:~ ~:;:';~" , " . , i::;\' ;' ~~:,. .. ":. ":.;'-'., , " . I : ;,,:~,;,: ~,,~:': ., ~ 1~ , . .". :~\j.':'i:J.'.!;:~:. ." 1j; ;;)I..'J":.J~ ~'.-;'~' : ' ':)' ~ ' 1~~ IP~rt:' . :':I"':"/r"""~ ' t'.~ ~l .' },"': ....~ ,~:~.-~):. ~;\~-:\ ., WH)l?I:l?IT . TUlfA?"C 'LIU';':": , .... ~. ..I:.~ -:' , . LA1IrOPFIas FLOWER. FLOWER &: LINDSAY A 1'1l0'ESSIOl'lAL COlll'OllATTOl'I . . , 11 EAST HIGlf 5'IREET CAlUJ'SLE, PENNSYLVANIA 1701J.3016 1_0.'&.0-. l.u.c1!5 D. ft.OtrO. J~ CAll.OI.I. ~T nlOMAS t. FlOWD (711)ZCJ4SlJ 1'~(7I1)Z"06510 "I~.,ICMI June 15,2000 ,ft., ..~; ., . .'~~ . '.: ..,~ Or. Lawrence C. Haber 23 Surrey Lane Meehanicsburg, PA 17055 RE: '. The Stevens Center Dear Larry: ...,'. .. [ have been authorized by the President of the Boflrd to confirm the Board's decislon.:f .'. '~ . 'COnceming termination pay_ We understand that you have vacation pay w~ch i$ currently i; : ~ ~". .' in the proee~ of being paid out to you. and which will be paid in full. The Board a!so . ."..' wislies'l~fpay you 60 days temlination pay in deference U) the many: years of SeNiC6 which .';;: ' .> .": \, you gave to the stevens Center and to wish you well in whichever new endeavor you w~ to pursue. . , 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 6Q days severance pay ~ soon as it i$ financial feasible, which we hope will be in the near future. : Sevant! of the staff currenUy at the Center have complained that they felt a recent ,'islt b)' y~u to the Center W2S disl"Jpiive. Wltb tensions and emotions hIgh at tlte Cent~~.. we would ask you not to visit the Center. at this time. . . , ~ ;, .;, .,'\", ~ :_"~~'" , .~; ~;. ~ '~~ ~ i~ ,_ /': ~~ ~ ,~": :~~~: .~'::~:':;::'. ..,. ~" ' Very truly yours. FLOWER. FLOWER & LINDSAY, P.C. o t:::_. Jr " . . t" ~ , '- . ~, " '.' . ,. .,-::;f.:.'S -< :':,~ . ,,1_., ~ / . "~ " ~I~, ,:;.. '., ):1 '\i(.~:;t.~ _.r. . ,-t' .. . ",. -. " ~~:" '" . JOF)rltjb cc: Laurie Keli". Member or Boanl af DirllClCr>; , - I . -~ ~81T A . . . S'd SLE'ON H I n(u J...1).,f'::J I ~":IMU I )Jf'I~ I , 1 \W...... .......... ~ "~ ,,,. +- . :~~;,:- . .~: .;. . ~ ----. -'~~': j , ",............ ....~ '-:a~~.~. Ph..D. L8wrence ~ber, Ph.D. 23 Sumty Lane Mechanicsburg, PA 17050 June 27, 2000 . - , Lee Cavanaugh Administrative Director The Stevens Center 33 S~te Aven4e Carlisle. PA 17Q13 Re: Cobra and Se'lerance 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 deductecl from my vacation pay. I have : reque$tecf that under Cobra she and I be SWitched to individual coverage. I need to : know the amount 0.' premium we are to pay and when it is due. I believe I am near ltte end of my accrued vacation pay. I would like fa know When thff pay would be running out'. . . i I have been informed by the Board in a letter from Jim FlOWers. Jr.. that the Beald haal agreed to amty d/lya severance or termination pay_ I have indicated to him that : because of the Center's cash trow. I wou/c:l be wimnS to accept Chis severance on' 8 bi- , monthly balis rather than a lump aum, similar to the way I received my vacation pay. . WOuld like to know the Center's intentions as to which method will be utilized. Is : l5everance 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 malter. Lawrence Haber CC: Sheila FoJC Jim Flower. Jr. ~. ~_1 . ~ 6'd SLE'ON Ulnf"ll LI'-I-.I.-...,.....I 1"'....., , ':<.~""""'-" ~ ~ ~" '11' 1.. ,1:"- , . . v .~ .."" " , 'l.. . :~:~T:::. '..; ~~a .:,. ., '. . :.I~' ,~, . ~ , t:~~.,~-~~;~ '':~' ~~ ~.~>~~.,' .:-, . -, ":' " '".3 , .d.. ",,_' .~.~ . ';~. n',..."" _I"" , ,.." d,i '..' .\~:!' '''''S'' .. ". ~ "11".. . ~ ".' . \'..:-" '", '- .." ,"r:. .~r.I': ,;,,".i: " '. ~ .,1' :~: ,~~ -.:'f. .-,- .; .. '.' .' ,,: . . Lawren~ Haber, Ph.D. 23 SUn'eY Lane Mechanlcsbllrg, PA 17050 September 4, 2000 -' I- '.' 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 sevenlnce. The letter was written after a number of phone calls went unanaMred. J 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 ha\le:notre.ceived any . eommu.nicQon answering my questions. ' Today, rt'tf heJlth coverage wa$ refused at the pharmac;.y as no longer in effect and furthermore the cancellation was effective at the~inning of July. I halle . repeatedl, asked wtIatlhe Cobra premium is, when it is' due and to whom and where I should $end a check. While I realize things have been c:haotic 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 eartiest I would hate to have to engage legal counsel to protect and enforce 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 Fall: Ichaber@beUallantic.net EXHlSlT - 0l'd S.l.E'Oj.J LJ I 1""1..... I L ",..., I ,........,...., I I ~ ,....... , .,r ",: ::J^ :If.'.....~_' . ,.. , :'. /'.\~ -~ ,..' , ~. ~.~;, ~ .,' . . ,,: :. . '. i , ,t/f':\ f;~I'\':: '-. : ..'_' ...."."' ",' ..~ ~ .' ~ .""::' .': .'::'"' .: " .' . , .,~J*:~~'1;~~:.~ . '~:.,:~.; " ".t1~.~ . .'. .:. .: ". .~. ,\ . .: :::~: :;~ ] '," ',',' '. . : . ,..,~ .:.,1, ..;~ j I .",,,,'Ii,,,....:., .~., I )~..:.f,1" -, .. ff .,..,..~.!IH.J.:v:?1' " i .'*15;:# .. -- , , ~ . , ., " Micrc:iiilm Number Filed with the Department 01 State on Enft~ Number Secretory of the Commonwealth ART1CLES OF DIVISION-NONPROFIT CORPORATION OSCE:! 5-5754 {Rev 901 In compliance with the requirements of 15 Pa.C.S. g 5954 (relating to articles 01 divisicn) the undersigned business corporation, desiring to effect a division. hereby states that: STEVENS CENTER i. ihe nome 01 the dividing corporation is: 2. (Checl< and complete one 01 the following): The dividing corporation is a domestic nonpra!it corporation and the (a) address 01 its currem regisTerea oilice in this Commonwealth or (bj nome of its commercial registered office pravider and the ccunty 01 venue is (the Departmem is hereby authorized to correct the following inlormation to conform to the records 01 the Oepanmentl: . (01 33 STATE AVENUE Number and Street CARLISLE City PENNSYLVANIA Stare Zip 17013 CUMBERLAND CounTy (b) c/o: Nome 01 Commercial Registered Office Provider CounTY Fer c corporation represented by c commerc:Cl registered office provider. the c:Junr'l in (bJ shell ::e ceemed ~he county in whicn rhe corpofation is loc::::ted for venue and offide! pUblication purposes. _The dividing ccrpcrcticn is a quc!ified :oreign nonprofit corporation incorpcratec uncer the iaws of and the (oJ address oT its current registered office in this Commonweclth or (o) name of its commerc:aJ registered office provider and the county of venue is (the Depcrtment'is hereby cuthorized to carreCi the following information to canlarm to the reccrds 01 the Deportment): (01 Number and Street City State Zip Ccumy (b) c/o: Ncme at Commerciai Registered Office Provider County Fer a corporation represented by 0 commercial registered office provider, the county in (b) shall be deemed ir,e c:Junry in wi1ic~ [he corporation is located fcr'lenue and official publication purposes. _The dividing carparanon is a nonquaiified foreign nonprafit corporation incorporated under the laws of and the address 01 its principal office under the laws of such domiciliar; jurisdicnon is: Number and Street City State Zip 3. ihe\'s.totvte by or under which it wcs incorporated is: 4. ihe dole 01 its incorporcTicn is: Maroh 15, 1932 as Welfare Association of Carlisle Act of April 29, 1874 """ " .. +-1 --1'-'- '",''' ,-. - " AGREEMENT AND PLAN OF REORGANJZATION DIVIDING the STEVENS CENTER (A PENNSYL VANIA NONPROFIT CORPORATION) INTO the STEVENS CENTER (A PENNSYL VANIA NONPROFIT CORPORATION) AND the HSC RESIDUARY CORPORATION (A PENNSYL VANIA NONPROFIT CORPORATION) AND AGREEMENT OF ACQUISITION OF THE RESULTING, STEVENS CENTER #- BY NORTHWESTERN HUMAN SERVICES OF PENNSYL VANIA, INC. ,} If.g t"" ..{./ .1 This Agreement and Plan of Reorganization ("Agreement") is entered into this~ day ~ /Jo"E"~ of OdUU~l ,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 PENNSYL VANIA, 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 Pennsylvania, as amended. """","""""", ,. . , rWI , 1--' ;'_ "" ,~ 4 . _ '. C. NORTHWESTERN HUMAN SERVICES OF PA., hereinafter referred to as "NHS", 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 CTSC'), a new corporation, and the HSC RESIDUARY CORPORATION ("HSCRC"), the surviving corporation (the "Division") with the acquisition, immediately subsequent to such Division, ofTSC by NHS (the "Reorganization"). i 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 10, 2000, NHS has issued a non-binding Letter of Intent to acquire certain assets and certain permitted liabilities/encumbrances (the "Lor") 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 15, 2000 for the payroll period covering June 15,2000 to June 30, 2000. I. The L01 calls for closing on the transaction, then yet to be structured, on or before August 1.2000 since the next payroll ofTSC was July 31. 2000. However, on July 31; 2000, due to 2 '--r"''''''''--r'- "II- , ~ c" . , , <,- . 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 ofNHS, 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: 1) The Dividing Corporation will reorganize and divide into two (2) separate and distinct nonprofit corporations being (1) The Stevens Center ("TSC"), the new corporation, and (2) the HSC Residuary Corporation (the "HSCRC"), the surviving corporation; 2) 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 the sole assets and sole liabilities/encumbrances ofTSC on or at the Effective Time of this Division and Reorganization automatically without further need for instrument, act, transfer, conveyance. or assignment; 3 __l...,"""--, .- =- 1'1 " *''"'~-4 ,- -, ' 3) All other assets, liabilities and encumbrances of the Dividing Corporation which are, in part, set forth in Exhibit "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; 4) Subsequent to the Effective Time, on the Determination Date, TSC shall be vested without further need for instrument, act, transfer, conveyance or assigrunent, 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. 5) 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 4 ~ I'" I ,j" -, designated by NHS constituting the new Board of Trustees ofTSC 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 Lor 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 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 warranties herein contained and with the intention of being legally bound hereby, the Parties hereto agree as follows: ARTICLE I GENERAL 5 :~ r-~ ~r I .' ,~. '. ','Il, 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 shaU take the name of the Dividing Corporation and be thereafter known as the Stevens Center. 1.02 Further Assurances with Res1;lect 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, alI such conveyances, 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, tight, 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. 6 "-"'l'T-i~ II 01 ,. 1- - ~" .. 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 Approval. The Parties hereto shail 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 ofIncorooration. The Articles ofIncorporation ofTSC, 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 ',"~ ~, ',..'1- '[""'I 1- . " 2.02 TSC Bylaws. The Bylaws of the Diyiding Corporation as amended and in effect immediately prior to the Effective Time shall at the Effective Time be the Bylaws ofTSC 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 ofTSC. 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 ofTSC. 2.04 SHC Articles ofIncorooration. 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 Bv-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 manner 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 SHe. ARTICLE III - HSCRC 8 .',.......,.,'"'". ~~ , ~r I II ~ ~-~ ~=.....", " . 3.01 Articles ofIncoIl?oration. 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 ofIncorporation ofHSCRe. 3.02 Bylaws. The Bylaws of the Dividing Corporation as amen&:d 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'ferred 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 Bylaws. ARTICLE IV EFFECT OF DIVISION 4.01 Assets and Liabilities Generallv. 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 HSCRe. 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 free of all of the debts, liabilities, and obligations of any nature, kind. or type, whatsoever, contingent or otherwise. of the 9 ;;~-"~I "Q "-,. II ," "1" ~= Di'viding 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 detennined 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 9 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 hannless, 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 Detennination 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 ofTSC. At the Effective Time, TSC shall be a wholly owned subsidiary ofNHS without further act or deed, as hereinabove provided in Article II. 4.06 Notice to Office of Attomev General. IfNHS elects to discontinue all or substantially all the operations ofTSC 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 ofTSC and SHC in a manner consistent with the 10 '~""i"l' -, ," '1:1.' , I' ^W I I , i I ! i" ! I I' r I' ,; :'j Ii Ii ii I' " i-I "'1 !i I, " ,] Ii " t-! :.i !i " l: I:,: , I,: , I P i , ~" doctrine of"cy pres" currently codified at 20 Pa. e.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 50 1 (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 NtiS as follows: 5.01 Due IncoIlJoration, 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 NHS. The Dividing Corporation and SHC have requisite corporate powers to canyon 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 SHe prior to the Effective Time are listed on Schedule 5.02 not attached but incorporated by reference. 11 . 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. Such 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, in 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 Descriptions. The Dividing Corporaiton and SHC have furnished. or will fumish 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 SHe. (B) Liabilities Descriptions. The Dividing Corporation and SHC have furnished, or will fumish 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 SHe. 5.06 Litigation List. The Dividing Corporation and SHC have also furnished, or will fumish 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 -~" 'r 1-,1 L, ~ . 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 SHe, in such capacity as either Plaintiff or Defendant. 5.07 No Material Adverse Change. 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 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 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 ",~"''''- I- ~ ~. ~- I-I - , 11 - . .~- 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 govemmental regulation, or any provision of the Articles ofIncorporation 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 SHe are bound or by which the Dividing Corporation or SHC are bound. 14 '0'~'"'~~~r , I~ I ,,0 "1,1 , " "~ 5.12 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 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 true 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 Attomey 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 -'-,--,!~ , II ' -, "~, .'1' _.._.~ SHC are required in connection with the execution and delivery of this Agreement or the consummation of any transaction contemplated hereby. 5.15 Intellectual Prol'ertv. 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 Tse 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 SHe 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 connection 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 Compliance with Applicable Law. To the best knowledge of the Officers and Trustees of the Dividing Corporation and SHe, after inquiry as they determine to be appropriate, the 16 "1' - - " I-I > . I ~..,., n'ividing 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, penuits and other governmental authorizations necessary for the conduct of its business as a whole. 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 wiil contain any untrue statement of a material fact, or i 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 et seq., the Resource Conservation and Recovery Act, 42 U.S.e. ~ 6901 et ~., the Federal Water Pollution Control Act, 33 U.S.e. ~ 1251 ~ 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.e. ~~ 651 to 678. and any applicable state or local law relating to the 17 '<,..... ~, ~". .'" ~1"'11 " - - 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) ofCERCLA, 41 D.S.C. 9 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 Environmental 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 SHe'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 environmental contamination 18 ""~~""-, I ',", --" II , ,-" - 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 SHe 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 ofNHS hereunder are subject to the fulfillment (unless specifically waived in writing by NHS subsequent to the execution ofthis Agreement) of each ofthe 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 respects all obligations and agreements required of them and complied with all ,-, covenants applicable to theII]. 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 wbsistence (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 ^ ',-..",-~ - ._~ .,. ,- [-'I II ~-~- .......,. 6.04 Opinion of Counsel for the Dividing Corporation and SHC. NHS shall have been fumished 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 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; (2) The Dividing Corporation and SHC are non-stock, non-member. nonprofit corporations and SHC is a wholly owned subsidiary of TSC. (3) The execution, delivery and performance of this Agreement by the Dividing Corporation and SHe have been duly and validly authorized by its Board of Trustees in compliance with Pennsylvania Law and its Articles of Incorporation and By-laws, 20 ,,"~- r ,.~ rl -~"~ ,~"" - c_,_ 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, all consents or approvals (including authorizations or orders of any private person, entity or govemmental 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; (S) 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 21 1'-1 " - , "---" . roo", threatened, relating to the transactions contemplated by this Agreement; (7) 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 (8) 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 ,--" II '-I I ~~..l and liabilities ofHSCRC. 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 Parties 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 ';';Ilt 1, ,~"~ " P"'"I-I- H . ." . - ARTICLE VIII SURVIVAL OF WARRANTIES 8.01 Survival Except as otherwise provided in the Agreement, all representations, warranties and covenants of the Parties made herein or in connection herewith shall survive the Closing for a period of five (S) years. ARTICLE IX NOTICES AND PROVISIONS OF GENERAL APPLICA nON 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, P A 17013 With a copy to: Martson, Deardorff, Williams and Otto Ten East High Street Carlisle, P A 17013 STEVENS HOUSING CORPORATION 33 State Avenue Carlisle, P A 17013 With a copy to: Kelley & Murphy Suite 160,925 Harvest Drive Blue Bell, PA 19422 24 11,.'.." ~ -r < "."".;?C"i'..., II. u._ HSC RESIDUARY CORPORATION 33 State Street Carlisle, PA 17013 With 1I copy to: MlIrtson, Deardorff, Williams, & Otto Ten East High Street Carlisle,PA 17013 NORTHWESTERN HUMAN SERVICES OF PENNSYL VANIA 1320 Linglestown Road Second Floor Harrisburg, P A 17110 With 1I copy to: Joseph T. Kelley, Jr., Esquire Kelley & Murphy Suite 160, 925 Harvest Dri ve Blue Bell, PA 19422 9.02 Place of Closing, Closing Date. The Closing shall take place at the Carlisle, Pennsylvania offices of The Stevens Center on October 12,2000 at 11 :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 will 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 Departrnent of Sate of the Commonwealth of Pennsylvania, pursuant to Pennsylvania law, in order to consummate the Division, Reorganization and Acquisition. 25 !;~,,~,.- '1-' , ... - y., i" ,~ " I-I ,-I' .."..~ 9.03 Entire Understanding. 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 anyone 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 Counterparts. 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 Applicable 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. Attest: BY: " the STEVENS CENT~ . Juoo li, ~ CHAII2- - W DF [),etclbf-Sr /~A-<- ~tJ? Its: STEVENS HOUSING CORPORATION 26 ~';'. . ., \ \ ", -~~ "~~ "- Attest: ~~ Attest: ;;;rw- 1" ,-". '-~tJ <- ,-, 1-,'1,' "-1-.- '" BY: Its: " BY: I ,Jfe.(l Its: 27 , ' '. Ex...'lIBIT "A" ACQUIRED ASSETS - STEVENS CENTER I. All names, trade names, service and trademarks, patent copyrights and any and all other intellectual property; including without limitation, the "Stevens Center" and all of its preceding names, the "Stevens Housing Corporation" and Steven Affordable Housing and any and all other property set forth on Schedule 5.15, incorporated herein by reference. , 2. The Stevens Housing Corporation, and all of it assets and liabilities, including, without limitation, the following: a) Louther Place (L.P): which is Louther Place Limited Partnership 63-67 W. Louther'Street Carlisle, P A 17013 LP was renovated in 1996 and consists ofl7,530 sq ft; 17 Unit, 4 story apartment building - 10 one bedroom apartments - 7 two bedroom apartments. Such may be an historically certifiable building. It was an old church, burned down and was refurbished. 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 ft Third Floor 5,290 sq ft IA 1 Bedroom IB 2 Bedrooms lC 2 Bedrooms 2A 1 Bedroom 2B I Bedroom 2C 1 Bedroom 2D 1 Bedroom 2E 1 Bedroom 2F 2 Bedrooms 20 I Bedroom 3A 2 Bedrooms 3B 2 Bedrooms 3C 2 Bedrooms 3D 1 Bedroom 3E I Bedroom j. \ \ l_ 3F 30 2 Bedrooms 1 Bedroom Fourth Floor 1,690 sq ft No apartments Such has been valued as follows: 10 1 Bedroom @ $20,000.00 and 7 2 Bedroom @ $28,000.00 for the total sum of$396,000.00. .. b) Silver Surinf! CourtYards. L.P. and its real estate under development 3. All contracts with any and all local, county, state, federal, and/or-private sector person or entity wherein the Stevens Center provides services. 4. All Insurance Policies and contracts. 5, All Leases for Real Estate whether as a lessor and/or -lessee, including, without limitation, the following: Hanover Manor Storage Space Shippensburg Office Perry County Office - Drop In Center (100 High Street) 1 Lease I Lease. 1 Lease 1 Leas e 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 ofTSC and SHe and the provision of their services, including, without limitation the following: 9. All those certain parcels ofreal estate which are commonly ]mown 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 c $75/psfestimated to be$I,476.6300.00 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. reference. 12. All other assets set forth on Schedule 505A - the Asset List incorporated herein by' 13. All accounts receivable. Any of the aforementioned assets, including, without limitation, 33 State Street, Carlisle, P A, and the accounts receivable which ",re 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. ~y " --'~ '" 1- "II r'"o' 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 Schedule 505A 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 ''''-t EXHIBIT "E" ACQlJIRED LIABILITIES - STEVENS CENTER 1. Certain liabilitieslpayables as set forth on Schedule 5.05 (Bj incorporated herein by reference and as designated therein, either at the Effective Time or Determination-Date.. 2. The obligations of Keystone Bank 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 obligations of Harris 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 Residuar; Corporation, including those to be vested in the Stevens Center, the new corporation, at the Determination Date pending the occurrence of the Determination Date. " Th e S tev ens Center Liabilities List Creditor/Puroose 1J>> Keystone Bank, Mortgage 33 State Street p j) Keystone Bank, Second Mortgage 33 State Street p J) Keystone Bank, Line of Credit Dj) Keystone Bank, Line of Credit e'/ Harris Savings Bank e I Cumberland County, Human Services Grant Funds c'l Cavanaugh Michaies, Ltd., (Note) '* . c T Inter-Company Payable LPLP Rents c: r Xact Medicare Services >/:: ':l':: c: T Northwestern Human Services - Loan for Payroll c::/ Employee Accrued Vacation @ 6/30/00 c! Trade Creditors - See Detail Listing Below Total Liablilities / I Trade Creditors Anyware Computers Adams Hanover Counseling Buchamam Ingersoll ;I?: Companion Technologies - PA Capital Blue Cross Capital Blue Cross X Capital Telecommunications Carl D. Bert Cavanaugh Michaels, Ltd. *' Carlisle Chamber of Commerce Dauphin Oil Company DePaul Realty Company 'l<- Eastern Maintenance Systems Keystone Financial *' Fishers Lawn Service First Energy Fleet Fueling Ahold Financial Services GMAC Grace United Methodist Church Harris Business Banking ~ IMWRF Infinity Print Graphics James Wilson Safe Harbour fJ Amount $ 447,299.53 $ 593,705.26 $ 499,964.69 $ 74,966.66 $ 150,000.00 $ 4,007.60 $ 101,500.00 $ 78,715.00 $ 30,594.82 $ 70,000.00 $ 86,366.75 $ 326,431.84 $ 2,463,552.15 Amount $ 507.20 $ 2,109.25 $ 3,176.53 $ 1,200.00 $ 195.00 $ 5,427.38 $ 4,34!;.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..19 $ 38:.16 $ 560.(10 $ 495.83 $ 50.00 $ 556.50 $ 10,505.00 Schedule 5.05B, Page 1 of 3 t::/_ fl[) j _ /;,qc it/.:- EFFe'C ~~,; , r).-'! k{!.m,,vA 1-10.f.J ()/l. k- I -~ H' -. d -- .Lo.--< /- ~e '" .;,h/- -h <,-"<4Q/,,n ?-7~ v- '" S' fey / ^' T>: c... (-r4e: tlJe..v C412.f) 0 <'-' " ,. " w ,. . " -*' , TL::.. n4 H?.s r",6./"-=1':. r. . i.. ,';-, . Trade Creditors , Keller Brothers, Inc. Henry S. Lehr, Inc. .(:' Lowes Business Account Lindeman Moving Co, Inc. Lube 'N Go Martson Deardorff :1: Moorefield Communications Mobil Fleet MBNA America Minolta Leasing Services Paige A. Nelson Paychex Paychex, Inc. Patient Accounting Services, Inc. ":f PP&L PP&L PP&L Penn Community Providers PCPA Group Workers Comp Fund ". Perry Health Center l 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 iF David W. Shively AlItel Tuckey Mechanical Services Termlnex International Toshiba American Info Systems Corncast Cable Transkrit, Inc. Sprint Sprint Yell,ow Pages \sprint Sprint Sprint The Stevens Center Liabilities List Amount $ 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 :::,081.00 273.83 1,628.46 273.83 2,000.00 854.32 iOO.OO 2,659.14 2,310.16 1,8:!5.00 388.81 3,435.40 459.98 7,78:3.86 475.00 1,062.24 1,290.00 40.00 1,099.86 18.19 1,660.31 3,303.17 2,742.00 864.70 253.5'1 72.72 " " $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ Schedule 5.058, Page 2 of 3 ,-,- G:'I ',"'''''~ . Trade Creditor Sprint Steven Walters Waste Management of Central PA Xitech * Total Trade Creditors II The Stevens Center Liabilities List Amount $ 74.10 $ 70.00 $ 284.21 $ 1,998.00 $ 326,431.84 Schedule 5.058, Page 3 of 3 ~r' .. ~ ~~.,~~ --" , " . EXHIBIT "C" ASSETS AND LIABILITIES TO BE ASSIGNED TO Al'\(D VESTEDl'N 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( e~) and contents, if any. 2. All liabilities of the Dividing Corporation not included on Exhibit "B", including, wit..'\Out limitation, i) The claims of Lawrence Haber, including, without , limitation, those set forth by his counsel in her letter of September 19,2000, attached hereto. ii) Any possible wage and hour claim ofrelevant 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 Al Vitelli of August 3,2000. iii) Any possible partial hospitalization claim of the GIG of HHS, GIG of the Commonwealth of Pennsylvania, the Department of Justice of the United States of America, whether civil or criminal. iv) Any and all successor liability. , , L '. L 3, 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 Agreement of even date herewith and the assets encumbered, as a result thereof shall vest in H}CRC pending the occ;urrence of the Determination Date at which time such shall vest in the Stevens Center, the new corporation. , j Microfilm Number . . -, Filed with the Deportment of Srate on E'1tity Number , -'"--- Secretory of the Commonwealth ARTICLES OF INCORPORATION-DOMESTIC NONPROFIT CORPORATION DSCB:rs..s306 (Rev 90) In compliance with the requirements of 15 Pa,C,S, !l 5306 (relating to orticies of incorporation), the undersigned. desirina to incorporate a nonprofit corporation. hereby stoters) that: - 1. The nome of the corporotion is: Ste.vens Ce.nter ~ "-' 2. The [a) address of this corporation's initial registered office in this Commonwealth or fb} name of its commercial registered office provider and the county of venue is: . (a) 1320 Linglestown Road Number and Street Harrisburg City PA State 1.7110 Zip Daunhin County (b) c/o: ... -< " Nome of Commercial Registered Office Provider County For a corporation represented by a commercial registered office provider, the county in {bJ sholl be deemed the county in which the corporafion is located for venue and offielal publication purpos~es. 3, The corporation is incorporafed under the Nonprofit Corporation Law of 1988 for the following purpose or purposes: See exhibit A attachements and. incaruorated herain by reference 4. The corporation does not contemplate pecunicrl gCfn or profit. incidental or otherwise. 5. The corporation is organfzed upon a nons tack basis. 6. ~~~X!iCQlIDrn!ilrOtreXSX 7. ~~~~liImrororn~ iW"~J~ Ynx"Ot.."i.L'Z..,,{L,"{x.vXXvx..'Cxv~vvxx:vx..v_vvv_v_v_v_~uxxy.c.:"',..,.'{Y...e~'CY.:...v:"y=.XX.,~,-v_v_V"_V"....v_v...?::.X.v"y"y_v_v~J.....v..."?'_x ~~. ',' .' %~. "., ~ . 'XX 8. The name arid address. including street and number. if any, of each incorporator is: Name Address Michael J,. Breslin : < "1320 Lingle.stown Road, 'Harrisburg PA 17] 1.0 . --j;-- ~=:- ~- ~- 9. Thespedfiedeffectivedate,ifany,is: Not aDDlicab]e, - effe~tive on filing monfh day year hour, if any 10. Additional provisions of the oHicles, if any, oilach on 81/2 xii sheet. ['PJ-g,'1 D .. , ,.; "\ 1 "I. ;.; " , . ....... 3. The corporation is incorporated under the Nonprofit Corporation Law of the Commonwealth of Pennsylvania exc!usively 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. .1=ne 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. 11. The corporation is irrevocably dedicated to and operated 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. 12. The tenn for which the corporation is to exist is perpetuaL 13. The corporation is empowered to do all manner of things which a nonprofit corporation may do under Pennsylvania law. 14. 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. 15. (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 participate in or inteNene in (including the publishing or distributing of statements) any political campaign on behalf of (or 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 provisions of any subsequent Federal tax laws, or (ii) by a corporation, contributions to which are deductible for Federal income tax purposes.:o (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. . l..,-: -, \ " J ' . , 16. 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 1~~86, or corresponding provision of any subsequent Federal tax laws, which have been created and operated for nonprofit p'urposes similar to those of the corporation, other than ones created for religious purposes, 17. The corporation shall.be governed by a Board of Trustees, the number of . which shall be established in the Bylaws. 18. The officers of the corporation shall be elected by the Board of Trustees in the manner prescribed in the Bylaws. .."..~ . D~CB:J5-5306 (Rev 90)-2 " ''''''' : '\' . .,' . .:~ .. ':: .' .... ." '-', ""':.' "";'," "', , ",<':'fi-I~ ~ES~M00YWIjE~ in~"r~o;al~r;s) ha~Jho:vej,'~:g,;ed these Articles of In,corporation thiS~ f!j Jff-<H --, 'I,;.c;. . . _ _ . _ _ _'. _ A " -' - j "t".. - ,J .".' -. - - , " '..\-? '",.>.' ~ '~. - ~ : :,':;-,;..;',,'-.;-.:. " ,," .'::..' ,~.' r.... .~ _.;; , ..:! ' ',' " , . ....."~ :': :~J ~:'~':'::: ".',' . .:,:-j'>::':"8::-,;~:,'\;:~:'~;i:::~.:~~<.:" :,'~" ;J(.J ~'P#/liJtkS-,,, .'. ;".<:..: ".,-.',:,. -._,"t(. -:, ;":':".':,:'.,:~:~:;'-'-,"">';' :....' ,. ":t': ,..' ',' dot/df "",:' ".',," ,.;.....' "-, ",,:,.F..;;:l. ,.<,." '.","; ,",;..' ,',>,-: "':,.., ; "~~.\,,,. "," ",;,)':.,' f..', -"~' -, .' " , , ' >J.., '-,' -.', c.... "<" ,i-'.: ',' , :::"?ISil;lnOfIJ.re) , " ,~. :., ':." (., - .." ,", " , '. ..~~.. =~.,~~ - . ,--~ - ,., ,< -~-".. ~~ --<- " << <_'. c_,_ _.", ~,~",< ' _,,_, m ".-41',,""'""~',' "'.....N'- ." r) 0 0 ~. -q s.: '- ;:g f.i~ -,.;.... Z!I.; "',~ :n e- Zf';: N ii~~ ~z 0'] ~c: .." ~c-:: 3':; ;_:.!.):J:! ~-L) W b?r~ -....C z --"t :n p; ::;;! :':rJ (.:> -< ~ '?'~ _~~~~,,""."W~1 ," ~~~~~~,",""",,,~-,,~..,,:-:-, ;'-;r,T~'!Nl'lc"'-;"'-''if;;;-{'Y''''I~H':;;;;:r_'''''',''f,p?ll'''''';'':'i;,':Fi'!1'M_!~,,:',o\";;;""'l~I"'P"~W!"hl!1!>:~!l!~,,~rr! It SHERIFF'S RETURN - OUT OF COUNTY CASE NO: 2001-00090 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND HABER LAWRENCE C VS STEVENS CENTER THE ET AL R. Thomas Kline , Sheriff or Deputy Sheriff who being duly sworn according to law, says, that he made a diligent search and and inquiry for the within named DEFENDANT , to wit: NORTHWESTERN HUMAN SERVICES but was unable to locate Them in his bailiwick. He therefore deputized the sheriff of DAUPHIN County, Pennsylvania, to serve the within COMPLAINT & NOTICE On January 25th , 2001 , this office was in receipt of the attached return from DAUPHIN Sheriff's Costs: Docketing Out of County Surcharge Dep. Dauphin 18.00 9.00 10.00 30.50 .00 67.50 01/25/2001 NORA A. GIBSON . Thomas Kline' Sheriff of Cumberland County Sworn and subscribed to before me day ofJ..J",. "'; A.D. this /~ ~(}{) I C}r~ C hrupef . ~~ Prothonotar ?1:<;~""_~ n . , _WIl>O #, SHERIFF'S RETURN - REGULAR CASE NO: 2001-00090 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND HABER LAWRENCE C VS STEVENS CENTER THE ET AL CPL. MICHAEL BARRICK , Sheriff or Deputy Sheriff of Cumberland County,Pennsylvania, who being duly sworn according to law, says, the within COMPLAINT & NOTICE was served upon STEVENS CENTER (THE) the DEFENDANT , at 0014:31 HOURS, on the 8th day of January ,2001 at 850 BICENTENIAL DRIVE CARLISLE, PA 17013 by handing to LAURA RUSSEL (ADMIN. ASST) a true and attested copy of COMPLAINT & NOTICE together with and at the same time directing Her attention to the contents thereof. Sheriff's Costs: Docketing Service Affidavit Surcharge So Answers: 6.00 3.10 .00 10.00 .00 19.10 ~~~~t:~, R. Thomas Kline Sworn and Subscribed to before 01/25/2001 NORA A. .","SON ~ BY:~ lJepuc erlff me this /..~ day of j~. ~')" o2InJ I A.D. C+rJ:;th~oty:;;i,. ~ ~ "~,;]1J,'l - II " , @ffite of tq~ ~4~riff William T. Tully Solicitor Ralph G. McAllister Chief Deputy Mary Jane Snyder Real Estate Deputy Michael W. Rinehart Assistant Chief Deputy Dauphin County Harrisburg, Pennsylvania 171 0 1 ph: (717)255-2660 fax: (717)255-2889 Jack Lotwick Sheriff Commonwealth of Pennsylvania HABER LAWRENCE C vs County of Dauphin THE STEVENS CENTER & Sheriff's Return No. 0105-T - -2001 OTHER COUNTY NO. 01-90 AND NOW: January 19, 2001 at 10:25AM served the within CIVIL ACTION COMPLAINT upon THE STEVENS CENTER & NORTHWESTERN HUMAN SERVICES to SHELLEY KERSTETTER, RECEPTIONIST 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 C!.-. AaWw) So Answers, JfrJ$L Sworn and subscribed to before me this 22ND day of JANUARY, 200,1 Sheriff of Dauphin County, Pa. PROTHONOTARY By i/O--M Ylu'lhh _ Deputy Sheriff Sheriff's Costs: $30.50 PD 01/10/2001 RCPT NO 145144 NMILLER , :j.j-~, 1-'1- - , In The Court of Common Pleas of Cumberland County, Pennsylvania Lawrence C. Haber VS. The Stevens Center, et. aI. Serve: Northwestern Human Servic~o. 01-g0 P Now, 1/25/01 ,200 q;J , I, SHERIFF OF CUMBERLAND COUNTY, P A, do hereby deputize the Sheriff of Dauphin County to execute this Writ, this deputation being made at the request and risk of the Plaintiff. , " r~~~~~f Sheriff of Cumberland County, PA Affidavit of Service Now, ,20_, at o'clock M. served the within upon at by handing to copy of the original a and made lmown to the contents thereof So answers, Sheriff of County, P A Sworn. and subscribed before me this _ day of ,20_ COSTS SERVICE MILEAGE AFFIDAVIT $ $ 'c?"l1l', ,I ~^ . , '. , IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA LAWRENCE C. HABER, Plaintiff v. Civil Action - Law No.: 01-90 THE STEVENS CENTER and NORTHWESTERN HUMAN SERVICES, Defendants JURY TRIAL DEMANDED ORDER AND NOW, this day of . 2001, upon consideration of Defendants' Preliminary Objections, it is hereby ORDERED that said Preliminary Objections are DENIED. J. -i.1';T .,- r'I' IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA LAWRENCE C. HABER, Plaintiff v. Civil Action - Law No.: 01-90 THE STEVENS CENTER and NORTHWESTERN HUMAN SERVICES, Defendants JURY TRIAL DEMANDED PLAINTIFF'S ANSWER TO DEFENDANTS' PREUMINARY OBJECTIONS TO PLAINTIFF'S COMPLAINT Plaintiff, by and through his attorneys, Fred Hait & Associates, files his responses to Defendants' Preliminary Objections to Plaintiffs 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 Plaintiff has 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. 1. Admitted. 5. Admitted in part and denied in part. It is admitted that Exhibit A to Plaintiffs complaint evidences a promise to Plaintiff for severance pay. It is denied that Exhibit A is the sole basis for Plaintiffs 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. k._ -" "';'''_1' '-,> ,-~ -~', 1--'1 ?"" ~~ \ 7. Plaintiff incorporates by reference paragraphs 1 through 6 as if same were fully set forth herein. 8. Paragraph 8 is a conclusion oflaw 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 Plaintiff with 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. 10. 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 Plaintiff's Complaint, and is not appropriate for consideration at this jun cture. 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 oflaw to which no response is required. ",~~ 'I -" 1,,"1 \ , \ 13. 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 oflaw 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 paragraph 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. 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 that a conclusion oflaw 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. ,~, -1" . ,-",- -1,'1 I' i 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 forth herein. 20. P;tragraph 20 is a conclusion oflaw to which no response is required. 21. Paragraph 21 is a conclusion oflaw to which no response is required. 22. It is denied that Plaintiffs claim arises solely upon the letter attached to his Complaint as Eliliibit 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. P;tragraph 23 is a conclusion oflaw to which no response is required. 24. P;tragraph 24 is a conclusion oflaw to which no response is required. ';-'';!l:I'"<1''''-i , 1"1 Ii \ WHEREFORE, Plaintiff respectfully requests that this Honorable Court deny Defendants' Preliminary Objections to Plaintiff's Complaint. Respectfully submitted, FRED HAIT & ASSOCIATES Attorneys for Plaintiff By Date zltf-~/ I / Nora S. Gibson, P A ill #81918 The Wellington 17 E. High Stteet, Ste. 101 Carlisle, PA 17103 (717) 249-4500 '" " ,~,,' 1,- 1-" " l' ~,~ l .;If'i''''Il!!''1 '1' ~_. c, CERTFlCATE OF SERVICE I, Nora S. Gibson, hereby certify that on this {fit'- day of February, 2001, a true and correct copy of the foregoing Plaintiffs Reply to Defendants' Preliminary Objections to Plaintiffs Complaint was served upon the parties below by First Class Mail, postage pre- paid: Patrick G. Murphy, Esquire Kelley & Murphy, Attorneys at Law Union Meeting Corporate Center V Suite 160, 925 Harvest Drive Blue Bell, P A 19422 ~ ,. . r"1 ~ 1,,1 I . - '.'.- -~..---,- .. ,,~. ~=- ^~, ~ _~"'__'I.",;N'" ",^",_.,-", "",'-<~ C-""""~,,c ,^,C.' "" ~ -~" .' .~"-~~. -- "- ' "'~'-t ,< , i () .c=-') () C .. , <.>-- -"', ~ f;:; -~--' v '-r"i ~~ C:y , , , ~L ~(: I'r, 0] - ,"- (':::1 ~~:: C.! ~.~) j:";; C, ."~"-' ,", ~::: .". ,C;~) "',:.:.: C' c::: N c--''; j-r, z: ::::> ~~~ -j _:1] -<c , ') -< ~ !~~ ".IIllll~_~ ~ Jlf-~ ~~J~II!lIil;_~~~~~Fc"""-n<'-;"'''","''_--'l'Jl'';''''''i';I'~.--;O~';.><:~i'~f~!iffi-~~i'l1!I_1~'ll~~~.c."":",,",, q. i', i i I I , i , , I i I I I I i I I I 1\': ~_ 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, v. NO. 01-90 CIVIL ACTION LAW THE STEVENS CENTER AND NORTHWESTERN HUMAN SERVICES 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 BY: l1M4A Michael A. Riccio, Esquire e - '_'". ~ . -,. . _~ _ ",.-_,_ . 1~'1 - ". -" -- - .. <.- ~"- - 1 , , ,--, - <.. - ,., ,"--' ... _'".'.~H"""~," " , ",~" ." ~_. ;-",-'0 _.~- ,". '~"',. __~ '!7' <,'~' ,,~_"!'-' _' 0" , ,,'<' ,,~- ,---,~ tt~ < t,>>, ,. _ ...-t1'f'..,.,~, 8 ;;:: "0 co m.rT: ~-,.... ~C:-o C/) <:~-": -<,~, ~c 2-~ <b 5S:c ;z: :< :y ':::. r-v J 10';-' U~ o c.u :!: :boo .i 'lJ o -., ~~;g :~E 521 ;;;;:~ '_.J b! :0 -< ~ "., -~ ."" ,~< ---;_ r' ",_I';?: , iI 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) v. THE STEVENS CENTER AND NORTHWESTERN HUMAN SERVICES (Defendant) NO. 01-90 CIVIL ACTION LAW 1. State the matter to be argued (i.e., plaintiffs motion for new trial, defendant's demurrer to complaint, etc.): Defendant's Preliminary Objections to Plaintiffs Complaint 2. Identify counsel who will argue case: (a) Attorney for Plaintiff: Brian J. Puhala, Esquire FRED HAlT & ASSOCIATES The Wellington 17 East High Street, Suite 10 1 Carlisle, PA 17013 (b) Attorney for Defendant: Patrick G. Murphy, Esquire or Michael A. Riccio, Esquire KELLEY & MURPHY, Attorneys at Law Suite 160, 925 Harvest Drive Blue Bell, PA 19422 " ~: 0,'1"- '" "I / ,. -,:,_'\'J/l--,'''_'~' -- ""-^" 'I-I 1:.,- ~~ -" "'~ ...... - 3. I will notify all parties in writing within two (2) days that this case has been listed for argument. 4. Argument Court Date: July 23, 2003 KELLEY & MURPHY, Attorneys At Law Dated: 1;,/4/03 , BY: ?I1d4~ MICHAEL A. RICCIO, ESQUIRE Attorney for Defendants I" - - '~,-.,- ,,_~.~_o,,",,""_"\"" __"-i___ ~_ - ~, --- -rl :I ~" i.. ....' .....n.... ...... ....... ._~ ~ ................... ....,........ .... .....!!!.............. ..................... -,', ,~. -,~"'~I~--- . ~~ ,.n~_",,"_'A_~ o c ~ "- vcr.~ n')rr; -:7_,_, ."'--. -~-- 60~?:~ ~{:. ~l~~ ~;~~ :2: --j -, S1~ "rw" [III. , , ~ .. o w S: :';'; o "n ..., :'!~ :r: :_~:~; ~b 'j{S -"',-, o'-,t ~~~ ~ Po :J:J -< I I.D ."C' :2:' r.- ,'0 OJ ,~-_ . ~'"";,,.1,_~~ ,,]~; _J","", !lI!IlIII!'-"1!'l_ ..,..'!"f'l" > , ID JUL 1 0 2003jJ 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. CIVIL ACTION LAW THE STEVENS CENTER AND NORTHWESTERN HUMAN SERVICES 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 to 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 HSe 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 ("Wl'CL"). Defendants subsequently filed Preliminary Objections to Plaintiffs 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. I028(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) ..., ..., ..., (5) legal insufficiency of a pleading (demurrer); and lack of capacity to sue, nonjoinder of a necessary party or a misjoinder of a cause of action; and (6) '-'~""l". I~I . 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; (Hi) 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 Lel!allv Sufficient Claim Under the Wal!e Pavment and Collection Law Plaintiff's 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 Computer Corp., 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, NET! Technolol!ies, 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 . . . payor 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 payor 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 IS, 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 Finaucial 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-Kaplan Production, Inc. v. Zippi, 1988 WL 92871, 8 (E.D.Pa., 1988) citing, Community Sports, Inc. v. Denver Rinl!sbv 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 ,""'" "I .'. OJ') , 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 Dividin1! Corporation Plaintiff's complaint does not state a legally sufficient claim upon which relief can be granted because, in consideration of all 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, Inc., 2000 Pa. Super. 331, 763 A.2d 858 (2000). However, there are exceptions to the general rule: (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) The successor corporation is merely a continuation of the transferor corporation; (4) The transaction is frauduleutly entered into to escape liability to creditors; (5) The sale or transfer was not made for adequate consideration and protections were not implemented for the benefit ofthe transferor corporation's creditors; or (6) In strict (product) liability corporation undertakes the operation as the transferor. cases, same the successor manufacturing Id. 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 Plaintifrs 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 Plaintifrs 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. Plaintifrs theory of liability simply, and incorrectly, alleges that Dividing Corporation became "part or' 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 Plaintifrs 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 (Hi) additional facts supporting an argument that NHS andlor New Corporation fall into one of the six exceptions to the general rule regarding successor liability. Plaintiffs Complaint does not aver sufficient facts supporting Plaintiffs 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 Plaintiffs claims, which, prior to Dividing Corporation's division and reorganization, presumably rested with Dividing Corporation, was explicitly transferred and vested in HSC. Plaintiffs claim is legally insufficient and therefore subject to demurrer because pursuant to the Agreement, Plaintiffs 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 Partv Additionally, Plaintiff has failed to join a necessary party, namely HSC, the entity which, pursuant to the Agreement, specifically assumed liability for Plaintiffs 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 Tp. Water Authority v. Vernon Tp., -- Pa.Cmwlth. --, 734 A.2d 935 (Pa.Cmwlth.App. 1999); See also Polydyne Inc. v. City of Philadelphia, -- 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 ofthe 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 Plaintifrs claims from Dividing Corporation to HSC by virtue of the Agreement. Accordingly, Plaintifrs 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) Plaintifrs claim for severance pay does not arise from an employment contract or employee benefit plan; (Hi) Plaintifrs 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 Plaintifrs claims for statutory remedies of liquidated damages, attorneys fees, costs and statutory interest; (iv) Plaintiff has failed to join a - ~ ,- " ., "- "'1""'1 , - . necessary party, namely HSC; and (v) Plaintifrs 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 Plaintifrs complaint is dismissed with prejudice pursuant to Pa.R.C.P. 1028(a)(4) and (5). Respectfully submitted, KELLEY AND MURPHY, Attorneys At Law BY: ""..,. "" II I" ," EXHIBIT "A" AGREEMENT DATED NOVEMBER 16, 2000 i'il'~ I ~, ,-,.- ,,, . II ~ - 1 ..- ~ AGREEMENT Ai'i'D PLAN OF F..EORGA"HZATION DIVIDING the STEVENS CENTER (A PENNSYL VANIA NONPROFIT CORPORATION) INTO the STEVENS CENTER (A PENNSYL V Ai'UA NONPROFIT CORPORATION) AND the HSC RESIDUARY CORPORATION (A PENNSYL VANIA NONPROF1T CORPORATION) A.I\ID AGREEMENT OF ACQUISITION OF THE RESULTING, 8TEVENSCENTER ~ BY NORTHWESTE&."{ HUMAN SERVICES OF PENNSYL V AI'lIA, me. ,) I I&r- ti /' . I This Agreement and Plan of Reorganization ("Agreement") is entered into this ~ day ..y: /..hv'';- ;.,;:-=,-<- ' of C~.ULCI ,2000 among the STEVENS CENTER, a Pennsylvania nonprofit corporation ("the Dividing Corporation"), its subsidiary, the STEVENS HOUSING CORPOR4..TION, a Pennsylvania nonprofit corporation ("SHC"), and NORTHWESTERN HV]\1AN SERVICES OF PENNSYL VANIA, 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 "SHe", 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 Pennsylvania, as amended. C. NORTHWESTER'< HUMAN SERVICES OF PA., hereinafter referred to as "NHS", is a Pennsylvania nonprofit corporation organized and existing under the laws of the Commonwealth of PelU1sy1vania, 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 tbe HSe RESIDUARY CORPORATION ("HSCRC"), the surviving corporation (the "Division") with the acquisition, immediately subsequent to such Division, ofTSC by NHS (the "Reorganization") . E. The Dividing Corporation and its subsidiary SHe, as well as NHS, are non-stock, n.on-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 10,2000, NHS has issued a non-binding Letter of Intent to acquire certain assets and certain permitted liabilities/encumbrances (the "LOr'') which has been accepted and adopted by the Board of Trustees of the Dividing Corporation on or about July 20,2000. H. A.long with the LOI, NHS loaned to the Dividing Corporation that sum not to exceed Seventy Thousand ($70,000,00) Dollars which was eV,idenced 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 ]5, 2000 for the payroll period covering June 15,2000 to June 30, 2000. , ' 1. The LOr cal!s for closing on the transaction, then yet to be structured,on or before August 1, 2000 since the next payroll ofTSC was July 31, 2000, However, on July 31; 2000, due to 2 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 ofNES, Closing was postpoo.ed. J. As a result of the due diLigen.ce, the Parties became aware that certain debt of the Dividio.g Corporation that was to be vested in TSC was tax free debt and for such sta(us to be maintained unimpaired wouLd require that TSC be determined by the Internal Reveo.ue 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 fo1!ows: !) The Dividing Corporation will reorganize and divide into two (2) separate and distinct nonprofit corporations being (1) The Stevens Center ("TSC"), the new corporation, and (2) the HSC Residuary Corporation (the "HSCRC"), th,,(: surviving corporation; 2) 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 th~ 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 , ~ -- 3) All other assets, liabilities and encumbrances of the Dividing Corporation which are, in part, set forth in Exhibit "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; 4) Subsequent to the Effective Time, on the Determination pate, 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, 5) 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 Tmstees of the New Corporation, TSC, and the Board of Tmstees 4 . 1" ",-- ~ """'" ,. " designated by NHS constituting the new Board of Trustees ofTSC at the Effective Time, K The Boards of Trustees of the Dividing Corporation and NHS have determined that this Agreement achieves substaIltially the same result as the acquisition of certain assets and liabilities as anticipated in the Lor from a business point of view while achieving an avoidance of transfer tax and contract assigrunent insuring no break in the continuity of programmatic services an.d 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 N1-IS 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 Divisi on 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 Pa.C.S.A. S 5952(c), 5924 (b) and 5922 (b)(l) 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 5 , ~ 1 -F e,= - i*~'"",, I,O! 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 definedin Section 1.04 hereof) the Dividing Corporation shall be divided into two corporations: (i) the Stevens Center (TSC), a }'ennsylvania 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 9 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 ofthe Di vi ding Corporation and be thereafter known as the Stevens Center. 1.02 Further Assurances with Resoect to Assets. The Dividing Corporation shal1 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 con veyances, assignments, transfers, deeds, or other instruments, and shall take or cause to be taken such further or other action as eitherpf the Resulting Corporations, or the successors or assigns of either of time, may deem necessary or de,sirable in order to evidence the transfer, vesting or devolution of any property, tight, 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 cany out the intent and purposes thereof. 6 ~ , '" - 1.03 Further Assurances with ResDect 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 ADDfovai. The Parties hereto shaU submit the instant transaction to the Orphans' Court Di vision 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 ofIncomoration, The Articles ofIncorporation ofTSC, 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 ,? , r., . 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 ofTSC until changed in the manner therein provided (hereinafter referred to as the "TSe Bylaws"). 2.03 TSe Trustees and Officers, The Trustees and Officers of the Dividing Corporation shall, at the Effective Time cease being the Officers and Trustees ofTSe, 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 shan contemporaneously at the Effective Time become the Trustees and Officers ofTSC. 2.04 SHC Articles of Incornoration. 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 "SHe Articles"). 2,05 SHC Bv-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 SHe shan resign and withdraw at the Effective Time and the Trustees and Officers appointed by NHS as the Officers and Trustees ofTSe, the new corporation, shall contemporaneously at the Effective Time become the Trustees and Officers ofSHC. ARTICLE III - HSCRC 8 ._~ "~ -- -.- " 3.0 1 Articles oflncofPoration, 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 ofIncorporation ofHSCRC. 3.02 Bvlaws. 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 ofHSCRC until changed in the manner therein provided (hereinafter referred 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 iIi the manner provided in the HSCRC Bylaws, ARTICLE IV EFFECT OF DIVISION 4.01 Assets and Liabilities Generallv, 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 ~et 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 free of all of the debts, liabilities, and obligations of any nature, kind, or type, whatsoever, contingent or otherwise, of the 9 , . - Dividing Carporatian except far thase set forth in Exhibit "B" hereto as hereinabove pravided far in Sectian 4,02, In na event shall TSC be viewed or determined ta be a Sllccessor corparation to the Dividing Carp oration, nor be deemed liable far the successor liability of the Dividing Corporation. All liabilities, if any, of the Dividing Carporatian as a nanprofit corporatian and/ar corparatian under NCL S 5103 and BCL S 1572 (relating ta definitians) or otherwise, other than those set forth in Exhibit "B", shall withaut 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 fDr 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 nat vested in TSC pursuant heretD. 4,04 Effect .of Determination Date. On the DeterminatiDn 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 Acauisition ofTSC. At the Effective Time, TSC shall be a wholly owned subsidiary afNHS without further act or deed, as hereinabove provided in Article II. 4.06 Notice to Office .of Attornev General. IfNHS elects to discontinue all or substantially all the operations afTSC or SHC, within a reasanable time priGr ta the act .of disc.ontinuance, NHS shall prDvide written notice to the Cammonwealth of Pennsylvania, Office of Attorney General of such propDsed discontinuance and the Office of Attorney General shall have the right ta and approve the dispasition .of the assets .of TSC and SHC in a manner consistent with the 10 .~ , doctrine of"cy pres" currently codified at 20 Fa. c.s, 96110 pursuant to 15 Pa,C,S, 99 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 W ARRAt'lTIES OF THE DIVIDING CORPORATION. SHC AND THE OFFICERS AND TRUSTEES OF THE DIVIDING CORPORATION A.1'1D 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~1'lS as follows: 5,0 I Due Incoruoration. 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 NHS. The Dividing Corporation and SHC have requisite corporate powers to cany 011 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 Divid.ing Corporation and SHe. 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, 1] '~"1'\!1iIf1 - ~,- " r ., - - 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 ]'..iHS h,ave been certified by Smith, Elliot, Keanrs & Company, independent certified public accountants, Such 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, in 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 DescriDtions. The Dividing Corporaiton and SHC have furnished, or will fumish 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 DescriDtions. The Dividing Corporation and SHC have furnished, or will fumish at the time of the execution of this Agreement, to T\'HS, 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 SHe. 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 , '~"t . 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 detennine 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 Chan2:e, Since June 30, 1999, there has not been (1) 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 materially and adversely affected the Dividing Corporation or SHC or impaired the ability of the Dividing Corporation or SHe 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 SHe (oth~r 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 SHe have title to all of its properties, including, without limitation, aU 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 (norma! wear and tear and normal repair or maintenance excepted), Except as set forth in the Document List, the Dividing Corporation and SHC have the umestricted right to use its properties for its operations as presently conducted and/or to transfer said property as they shaIl 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 materia] 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 SHe. 5.11 This Ag:reement 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 SHe are bound or by which the Dividing Corporation or SHC are bound, 14 ~ " " - 5.12 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 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 true 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 ofthis 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 jimited by bankruptcy, insolvency, reorganization, or other'simiJar 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 tra.nsaction contemplated hereby, 5.15 Intellectual Prooertv, 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 thy 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 ofthe parties hereto in connection with any of the transactions contemplated herein, 5.] 7 ERISA. There are no Plans subject to the Employee Retirement Income Security Act of 1974 ("ERISA"). 5,]8 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 aT arranges with others to do so, 5,20 Compliance 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 ,",.~.- ~-" " ~- ,. -,'1-- , I' ~, . 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 ail material licenses, pennits and other governmental authorizations necessary for the conduct of its business as a whole, 5.21 Untrue Statements. No representation or warranty by the Dividing Corporation and SHe and/or its Officers or Trustees in this Agreement 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 written information, statement or certification furnished to NHS by the Dividing Corporation and SHe 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 warrantthat 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. 9 9601 et ~., the Resource Conservation and Recovery Act, 42 U.5,C. & 6901 etgg., the Federal Water Pollution Control Act, 33 U.S,c. 91251 et seq., the Clean Air Act, 41 U.S.C. 92601 et gg" as amended, the Federal Insecticide, Fungicide and Rodenticide Act, 7 u,s,c. 99 136 to 1364, the Occupational Safety and Health Act of 1970,29 u,s,c. 99 651 to 678, and any applicable state or local law 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 ]0](14) ofCERCLA, 41 U.S.C. & 9601(]4)), 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 Environmental Laws, pennits, iicenses 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 rea! 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 SHe's activities (y) any violation or alleged violation, or noncomp1iance or alleged noncompliance with, any of the EnviroIlIT1ental Laws, permits, licenses, or other authorizations; or (z) any environmental contamination 18 .' I~ , I', .' of: or the disposal of any hazardous substance, pollutant or contaminant at, in, into, onto, upon, by or from any real propeny owned, operated, possessed or used by the Dividing Corporation and SHe 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 ofNHS hereunder are subject to the fulfiIIment (unless specificaIIy waived in writing by f-,,'HS subsequent to the execution ofthis 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 shaII in all materia] 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..::~pects all obligations and agreements required of them and complied with all covenants applicable to ther:q 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 SHe in subsistence (i) in the state of its incorporation; and Oi) in every jurisdiction, in wbich the cbaracter and location of its assets or the nature of the business transacted by it requires that it be qualified to do business, 19 ""-"~' - I r , 6,04 Ouinion of Counsel for the Dividing Corporation and SHe. 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: (I) The Dividing Corporation and SHC are validly organized and 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 ,,J 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 SHe. The Dividing Corporation and SHC have all requisite corporate power under its statutes and articles to carry on its business as then being conducted; (2) The Dividing Corporation and SHC are non-stock, non-member, nonprofit corporations and SHC is a wholly owned subsidiary of TSC. (3) The execution, delivery and performance of this Agreement by the Dividing Corporation and SHe have been duly and validly authorized by its Board of Trustees in compliance with Pennsylvania Law and its Articles of Incorporation and By-laws, 20 ," and this Agreement constitutes the valid and binding obligation of the Dividing Corporation and SHe, 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, all consents or approvals (including authorizations or orders of any private person, entity or goverrunental body) required for the Dividing Corporation and SHC to enter into and perform this Agreement and the transacJions '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 ofTSC 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] -""",,~ 1-<1 , "~" ~ -~, threatened, relating to the transactions contemplated by this Agreement; (7) The execution, delivery and perfonnance of this Agreement by the Dividing Corporation and SHC will not materially violate or result ina 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 (8) 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 ofHSCRC. Furthermore, the Board of TlUstees and Officers of the Dividing Corporation and SHe 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 ofthe 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 ariy 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 7.0 1 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 Parties hereto and their respective successors and permitted assigns. 7,02 Assienment. The Dividing Corporation shall not be permitted to assign its interest in this Agreement. ?O -.) " ~ , ~ I , ARTICLE VIII SURVIVAL OF WARRANTIES 8.01 Survival Except as otherwise provided in the Agreement, all representations, waHanties 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 PRQVISIONS QF 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 STEVENS HOUSING CORPORATION 33 State Avenue Carlisle, P A 17013 With a copy to: Kelley & Murphy Suite 160, 925 Harvest Drive Blue Bell, PA 19422 24 , '''~''~ t I 1 "n - HSC RESIDUARY CORPORATlON 33 State Street Carlisle, PA 17013 With a copy to: Martson, Deardorff, Williams, & Otto Ten East High Street Carlisle, FA 17013 NORTHWESTERN HUMAN SERVICES OF PENNSYL V Al'<'IA 1320 Linglestowil Road Second Floor Harrisburg, P A 17110 With a copy to: Joseph T. Kelley, Jr., Esquire Kelley & Murphy Suite 160,925 Harvest Drive Blue Bell, PA 19422 9.02 Place ofClosin2. Closinf! Date. The Closing shall take place at the Carlisle, Pennsylvania offices of The Stevens Center on October 12,2000 at 11 :00 A.M., or at such other place, and at such time, as the Parties may mutuaUy agree, The date of the Closing is hereincaUed the "Closing Date"- At Closing, the Parties to this Agreement will exchange certificates, opinions and other documents in order to determine whether the tenus 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 Pennsylvania law, in order to consummate the Division, Reorganization and Acquisition, 25 ..~ , I --- 9.03 Entire Understandin!Z, This Agreement constitutes the entire agreement and supersedes all prior Agreements, both written and oral, among the Parties hereto wirh 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 anyone 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 Counterparts. 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 Aooljcable 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. Attest: BY: the STEVENS CENT~R ) , - iLlj~ tJe ~ CHAiR- - Auf DF Df!:cToey- /;{~ J--..-- ,". () 2._ Its: STEVENS HOUSING CORPORA.TION 26 - Altest: ~ iL<.-... Attest: "",","'l . I , ,,')h\ <- \0 II BY:~ ; , / ;?!.iJj~'l! U -/ ,S;;'; ,'[,U:) Its: BY: Its: 27 - - EXHIBIT "A" ACQUIRED ASSETS - STEVENS CENTER 1. All names, trade names, service and trademarks, patent copyrights and any and all other intellectual property, including without limitation, the "Stevens Center" and all of its preceding names, the "Stevens Housing Corporation" and Steven Affordable Housing and any and all other property set forth on Schedule 5.15, incorporated herein by reference. 2. The Stevens Housing Corporation, and all of it assets and liabilities, including, without limitation, the following: a) Louther Place (L.P): which is Louther Place Limited Partnership 63-67 W. Louther'Street Carlisle, FA 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 historically certifiable building. It was an old church, burned down and was refurbished. Fully modernized five apartments for CRR (mentally retarded clients) and remainder for low income HUDhousing. 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 lA 1 Bedroom 1B 2 Bedrooms lC 2 Bedrooms " Second Floor 5,260 sq ft 2A 1 Bedroom 2B 1 Bedroom 2C 1 Bedroom 2D 1 Bedroom 2E 1 Bedroom 2F 2 Bedrooms 2G 1 Bedroom Third Floor 5,290 sq ft 3A 2 Bedrooms 3B 2 Bedrooms 3C 2 Bedrooms 3D 1 Bedroom 3E I Bedroom ,. IIIiiIIIIIIIIi 3F 3G 2 Bedrooms I Bedroom Fourth Floor 1,690 sq ft No apartments Such has been valued as follows: ] 0 I Bedroom @ $20,000.00 and 7 2 Bedroom @ $28,000.00 for the total sum of $396,000.00. , , b) Silver $vrine CourtYards. L.P, and its real estate under development 3. All contracts with any and all local, county, state, federal, andJor private sector person or entity wherein the Stevens Center provides services. 4, All Insurance Policies and contracts. 5. All Leases for Real Estate whether as a lessor and/or lessee, including, without l''!''Yl;tCltl'on th~ F.ollo'tH~nIT' ................~-~ ...., .............. ...... 'fY...t 6" Hanover Manor Storage Space ShippensburgOffice Perry County Office - Drop In Center (100 High Street) I Lease I Lease I Lease 1 Lease 1 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, AIl licenses, permits, filings or authorizations, franchises, etc. with respect to the operation ofTSC and SHC and the provision of their services, including, without limitation the foIlowing: 9. All those certain parcels of real estate which are commonly klJ.own 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 sever~l wings consisting of 21,715 sq ft on 2+ acres which is valued @ $68 - $75/psf estimated to be 51,476.630,00 to 51,628,625.00; 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 HSe Residuary COrporation, reference. 12, All other assets set forth on Schedule S05A - the Asset List incorporated herein by 13. AIl 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 Detennination Date at which time such shall be vested in the Stevens Center, the new COrporation. '''-...., r II , I' ~ ",; THE STEVENS CENTER Asset List Description Casb/Equivalents Amount :5 55,409 6,972 440,890 74,675 119,873 168,430 24,736 Trusts and Investments Accounts Receivable - Third Party/Clients Accoun ts 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 1,253,865 27,150 Furniture and Equipment (Book Value) (See Furniture and Equipment Listing) 28,90:2 Otber Assets: Deferred Financing Fees Charter MemberShip, Community Behavioral Health Care Network of Pennsylvania 33,208 Start Up Costs 19,000 Total Assets 500 $2.253.610 Schedule 505A ~,~ ~ ~~'l ~,-<'^ n ,. =,,' EXHIBIT "B" ACQUIRED LIABILITIES - STEVENS CENTER 1. Certain liabilities/payables as set forth on Schedule 5.05 (B) incorporated herein by reference and as designated therein, either at the Effective Time or Determination Date.. 2. The obligations of Keystorre Bank 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 obligations of Harris 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 Residuar-j Corporation, including those to 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 j) j) Keystone Sank, Mortgage 33 State Street j) j) Keystone Sank, Second Mortgage 33 State Street iJ fJ Keystone Sank, line of Credit i)P Keystone Bank, line of Credit E I Harris Savings Sank eo: i Cumberland County, Human Services Grant Funds C I Cavanaugh Michales, Ltd., (Note) >/:' E I Inter-Company Payable lPlP Rents c T Xact Medicare Services )j:';f:: <0:( Northwestern Human Services - loan for Payroll c I Employee Accrued Vacation @ 6130100 cl Trade Creditors - See Detail listing Below Total Liablilities Trade Creditors Anyware Computers Adams Hanover Counseling Buchamam Ingersoll ;f; Companion Technologies - PA Capital Blue Cross Capital Blue Cross X Capital Telecommunications Carl D. Bert Cavanaugh Michaels, Ltd. * Carlisle Chamber of Commerce Dauphin Oil Company DePaul Realty Company ~ Eastern Maintenance Systems Keystone Financial '*' fFiShers Lawn SerVice . First Energy Fleet Fueling Ahold Financial Services ) GMAC Grace United Methodist Church Harris Business Banking #' i IMWRF Infinity Print Graphics i, James Wilson Safe Harbour I A.mount S 507.20 S 2,109.25 S 3,176.53 $ 1,200.00 $ 195.00 $ 5,427.38 S 4,345.60 $ 1,280.00 $ 109,080.90 $ 200.00 S 5,529.26 S 14,607.41 $ 10,255.25 $ 21,133.41 $ 210,00 $ 3,106.38 $ (27.48) $ 4,915.49 $ 38.16 S 560.00 S 495.83 S 50.00 $ 556.50 $ 10,505,00 Schedule 5.05B, Page 1 of 3 Amount S 447,299.53 .$ 593,705.26 .$ 499,964.69 .$ 74,966.66 .$ 150,000.00 S 4,007.60 .$ 101,500.00 S 73,715.00 S 30,594.82 .$ 70,QOO.00 $ 86,366.75 $ 326,431.84 $ 2,463,552.15 j) ! - vah=o /~ Tr;: c Ha )J~Cc.l!-f) Do"-' j / i".{'c f!1-=- EF,cc< (V~ U...>! ,Le,('/JJ,p'Alo ;0 VA ~, / ~_ j /,:) " " , . '-/ (' " / _ r J L ~ i-'i c ~._ /-, L -- __ ~ TYi ;-~y .) ~o;:v.J- :. " . , / Trade Cieditors (' Keller Brothers, Inc. Henry S. Lehr, Inc. ;>: Lowes Business Account Lindeman Movina Co, Inc. t Lube 'N Go - MaTtson Oeard orff *' Moorefield Communica"tions Mobil Fleet MBNA America Mino!ta Leasing Services Paige A. Nelson Paychex Paychex, Inc. Patient Accountin.g Services, Inc. y: PP&L PP&L PP&L Pen.. Community Providers PCPA Group Workers Comp Fund Perry Health Center Phoenix American Life Perry Health Center Philadelphia Child and Family Ser.ices Pitney - Bowes, Inc. Postmaster Purchase Power Print Image Richard L. Rovegno Staples Credit Plen The St. Paul The Sentinel Smith ~Jljott Kearns and ,Company;j:: Devid W. Shively Alltel Tuckey Mechanical Services Terminex lnternational Toshiba American Info Systems Comcast Cable Transkrit, Inc. Sprint Sprint Yell,ow Pages Sprint Sprint Sprint ..- The Stevens Center Liabilities List ~ ~ Amount $ 2,449.17 $ 10,324.00 $ 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 $ $ $ $ $ $ $ $ $ S S S S $ S S S S S S S .$ S $ s s s s s Schedule 5.058, Page 2 of 3 .-' Trade Creditor r,- (' Sprint r::: (t Steven Walters .Waste Management of Central PA Xitech :{( Total Trade Credito'rs The Stevens Center Liabilities List Amount $ 74.10 $ 70.00 $ 284.21 $ 1,998.00 S 325,431.84 Schedul e 5.058, 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 foilows: 1. All assets of the Dividing Corporation not included on Exhibit "A", including, without limitation, the safe deposit box(es) and contents, ifany'. 2, All liabilities of the Dividing Corporation not included on Ex.hibit "B", including, without limitation, i) The claims of Lawrence Haber, including, without limitation, those set forth by his counsel in her letter of September 19,2000, attached hereto. ii) Any possible wage and hour claim ofreJevant employeees or past employees and/or the government (federal, state, county, local) and/or any entity to which Stevens Center provided services, including, without limitati on, such as is set forth in the E-Mail of Al ViteHi of August 3,2000. iii) Any possible panial hospitalization claim of the GIG of HHS, OlG oftlle Comr:10nwealth of Pennsylvania, the Department of Justice of the United States of America, whether civil or criminal. iv) Any and all successor liability. 3, The Tax Free Debt and Relc.ted Assets pending the occurrence of the Determination Date, The Dividing Corporations Tax Free Debt with Keystone Bank as setJorth in aD Agreement of even date herewith and the assets encumbered as a result thereof shall vest in HSCRC pending the ocqurrence of the Deterrnin,ation Date at which time such shall vest in the Stevens Center, the new corporation: J ,Microfilm Number Filed ......lith the Deportment of State on E'lnty Number Secretary of the Commonwealth ARTICLES OF INCORPORATlON-DOMESTlC NONPROFJT CORPORATION OSC3;15.5306 (Rev 90J In compliance with the requirements or 15 Po.C.S. S 5306 (relating to articles of incorporation). the undersigned. desfri. to incorporatE;! a nonprofit corporation. hereby ~foters) that: J. The name of the corporation is: Stevens Center 2. The (0) address of this corporation's initial registered otfice in fhis Commonwealth or (b) name of its commerciaf registere office provider and the county of venue is: ' (a) 1320 Linglestown Road Number ond,Street HarrisDurz PA City Stoie 17110 Zip Daunnin County (b) c/o: Nome of Commercial Registered Office Provider County For a corporation represented by a commercfc;) registered office provider. the county in (bJ shoJI be deemed the county in which the corporation IS locoted fer venue ond ofrldol publication purposes. 3. The corporation is incorporated under the Nonprofit Corporation ~ow of 1938 for the following purpose or purposes: See exhibit A attachements and incorporated herein bv reference 4. The corporation does not contemplate pecunia~1 gain or profit. inddental or otherwise. 5. The corporation is o.rganized upon a nonstock basis. 6. ~;re;{c;jmwrr;:;;j:i~Qi.qC@JililX;~~X~:X[IQ)O:NWJ?Jti~i 7. ~.zsw~.M.X..~i1[~A:;Qlj!~~4)n31XJi'~~"~"'.<\!n.tt.~.1t~ 1<i!l!?.::x!~~ YvVXllyyYvX.x.v_VvVy_\XYVyv:.Vy->.Y-...=.,.v_":.....{y.:v_v_V"_vvv""::~v..yv:.....vv-::......v~:V"~~-"':-V"v:::~v...:-=C7"...c:rv.....::..vvv'V_V"':..V"X .,""<.,,,,,,,.,,,,,,,,,i;~,,,,'po~'P,,,"""""''''''''''''',c-iE ""w''''''"""~..,.,.Jr-'i",,.w;.I''''.6mC;..'''''''=-'_C' "VG);--Gr.G.G.-.i"J=u,v______ i\....~'l::.'r:R..&"S!.:U~~.6::2i.:./:i:.t'.&.~J.:...:\:..~~'L~~~i:.......-<;:'".iQi;..'Lli::U.L......."t.;.;:?i..E..:&..?i:..~~"u~.A..,f../l..ll.:i"..~.:..&Ax:3.A.X_X...X...x...x 8. The name and address~ incJ!Jding street and nU0'"",ber. If. any. of each incorporator is: Name Address Michael J. Breslin 1320 Lin<.2:1estor,m RO.:.-d. Barrisbur'2 PA 1711.0 I. rh€$p.;ci~iedeffecti\redcte,lfony,is; Not: 2'O'Dl"icab~e month - effective on f~lino dcy yocr hour. if any f:..cdirioncl provisions of the crllelas. if any, OTtoch en 8 )/2 Xl i'.sheeL [~:L.gl-r b 3. The corporation is incorporated under the Nonprofit Corporation Law ofthe Commonwealth of Pennsylvania exclusively for charitable, educational and scientific purposes within the meaning of Section 501 (0) (3) of the Internal Revenue Code of 1986. The corporation does not contemplate pecuniary gain or profit, incidental or otherwise. ,+:he 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. -'",- 11. The corporation is irrevocably dedicated to and operated exclusively for nonprofit purposes. No part of the income or assets of the ~orporation shall be distributed to, or inure to the benefit of, any individual. 12, The term for which the corporation is to exist is perpetual. 13. The corporation is empowered to do all manner of things which a nonprofit corporation may do under Pennsylvania law. 14. 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. 15. (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), an,d the corporation shall not participate in or intervene in (including the publishing or distributing of statements) any political campaign on behalf of (or 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 provisions of any subsequent Federal tax laws, or (ii) by a corporati.on, 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, 1M the event of the entire Of partial termination, dissollJtion or winding up of the corporation in any manner or for any reason whatsoever, the assets of the cOfporation which remain after payment, or making provision for payment of ail liabiliiiesof thecorporaiion, ,shall be distriputed to and only to one or more nonprofit organizations exempt from Federal income tax under Se.ction 501 @ (3) of the Internal Revenue Code of 1986, or corresponding provision of any subsequent Federaltax laws, whic:hhavebeen CI:eatedand operated for nonprofit purposes similar to those of the corpOratioM, other than ones created for religious purposes. 17. TlJe corporation shall ,be governed by a Board of Trustees, the number of which shail be established in the Bylaws. 18. The officers ,of the corporation shall be elected by the Board of Trustees in the manner prescribed in the Bylaws, '..",." _1~ -.~- ~ , , 1"""1 I I ,- qSCS:15:5306 (Rev 90).2 .;,.-';;.., .' c:~, ",l~ ;:"Nr;i\::i'+;<~!,/ · '" J,: )~';'I~i~~iM6~Y' Y:)pi ~t;, ltJe ;n~oJ;;ti,~~rj;ib'b~r~~,j~}:':iS&~d Jh'~'se'Articl~s Df Ins::orpo,oiion 1tJ1S~.d6i 0+ _, /)~~t;;r' ~:1~ :,.~~f,;.',,~' '-<.~L~'~~~~::>:;~{tf.~~}~~t~f\: ,:,./\., ,!~'/' 8c, ["~j.-:~t,,:t~:~~) ,<,;1-',," ;",0' ___>C' ~~;_{;-'11\,: -' ~b' i.?~"> "<f'i,.".'.~ ,(<" f<~,.., , ;, >"_ .. " _, ".' '. p"., ,;.. '.z,c ;':,';,F" "" .1',",:12;,7" ,;~'" -:':/~/~t,,'~~_.}:-. ,:.;':~<.; ';',< -0," . ';?~!::, ~~t;.j.r. ~~'.;,~ ~fi'<'"-''''''''''' ....' '-\. ",,"l:r~:;e,f:E$~""!t1 'f'. t:.. '~__#'"- ~".,.' l fi* . '';,'..: I< ".~'. - "~ -', .. ,.t",,,,, ,'" ...; ~..-~ ~. '. ~z ~ .;t ,..;~ .~, '. :'~~;. !.}, ,1. ;"~~. : ~ = ;': ,J'L' '; .':ti:;;/"~;.~.;~.:~,~,~~ s:rriJiJ'J . 0l'>,';v _'''{,~P''."fbJ;~'~;~;':~[: ,:' .',' ..~ ' ''''-:'_~ .;,", '''''1' ,',.' F',' ',- ", :',;.;., :,-'~_: ";.-~~,F';'~~.'" ~"i..i'14r:3Jllf:>. -Ai?-l'~r.i1i }. /7t/' ;::L",:" . :;:~,A\','.. > ..' . ,. ":~,l'-r;, ,...~,~.~-~~.j; .". ~F'." .~ t"~~~;~ '.~""~I(;#f1i,,:.:..:M)~S,i~?i"'" ,-:,';.d.~...;., '~" l'.'~ -t--':'"~ '-r," "~-": , "if ._: _') , " i,. ", "".. ~,4.!-"" "-.~). ,,:<;- -., ;.0$'" ....'~:N.'f,~~~W'~ ;"1<' ,;fi,ri" '~ . .., '". '._ ; . '~';'. ': .. ,.' "''''';~'~''''''''~'''''~''''''''''~ 'j<"~-""'''''''--''T':!;'''',1I\ '~-_.;..r .. ( ,. "', '0" "", <.. "!:,',," .~t' ".:.t, :':..~" ,F .. )" .>t4; '\ , ~ ~ ' ," ". .. .~: . -\>:,~r,;' ." I-~'.l: '<;>i:;;.::~1 J~" ':~' l-:~~"~;~)' !.~~.~' ". .~~:;, ~ ',' . ':."::::."!. .it .-';!". ,'- ~~'" . .;,-:; '."':' ~.!.. :,,", " ." \~ .j, 'l'; .Y':;: " ,i: .~~. " '.'1; .,:".0" ',::? "', :.'! ,.' . ...... ""', .., " ...,;#;(~:. EXHIBIT "B" SEPTEMBER 19, 20 AND 21, 2000 LETTERS EXCHANGED BETWEEN PLAINTIFF'S AND DEFENDANT'S ATTORNEYS '''''''''''''''': --'f ,,-,., rl' fILE COpy September 21,2000 FAX NO: 717-249-2411 VIA FAX AND FIRST CLASS MAIL Jennifer C. Deitchman, Esquire McGraw, Hait & Deitchman 4 Liberty A venue Carlisle, P A 17013 Re: Dr. Lawrence Haber/The Stevens Center Our File NO: 9110 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. JTKJRlmb 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/enc1osure, via FAX ,~ r 'w- ,"-' ~MI "I ,or McGRAW, HAlT & DEITCHMAN ATTORNEYS AT LAW q/l FRED H. HAIT* JENNIFER C. DEITCH MAN NORA S. GIBSON TRUDY H. McGRAW, Of Counsel AREAS OF PRACTICE: EMPLOYMENT DISCRIMINATION WORKERS' COMPENSATION PERSONAL INJURY CORRESPOND TO: 4 LIBERTY AVENUE CARLISLE, PA 17013-3308 PHONE: (717) 249.4500 FAX; (717) 249-2411 BRANCH OFFICE: FINANCIAL TRUST BLDG. 14 N. MAIN STREET, SUITE 307 CHAMBERSBURG, PA 17201 PHONE: (717) 263.7344 FAX: (717) 249-2411 September 20, 2000 Joseph T. Kelley, Jr., Esquire KELLEY & MURPHY Union Meeting Corporate Center V 925 Harvest Drive, Suite 160 Blue Bell, PA 19422 RE: NHS/TSC/DR. LAWRENCE HABER ~.Si~ fiig~f\~," ~~~RHP1R "'o'wi!;;;lJ SFp <,\, . . t!.': '';' (I" ~- f'- t>#f:1,,1,1->>; ~ ... '''''U'g.;/'If !(!!I..l"" "V -t':'Y &I ~h" 11Ji(Jf1~'1Y VIA FACSIMILE (2]5) 643-8356 AND MAIL Dear 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 Pennsylvania Wage Collection aDO 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 shall 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 * Board ofGovcmors, Pennsylvania Trial Lawyers Association Board of Directors, Central Pennsylvania Trial Lawyers Association _Y_f,I,4.. , ~"-, I-I 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 wages 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 payout 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, ~ ~~~ C {iY~~L Jennifer C. Deitchman Enclosure Cc: Benjamin T, Warner, Esq, (w/enc,) (via fax only: 243-1850) Lawrence Haber, Ph, D, (w/enc,) "--""1 " rO,t - 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, But 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 $1.1 miilion in overdue bills and crisis borrowing to cover payroll and other expenses. But those debts have been refinanced. (from 9/2/00 Sentinel) ,111 II fILE COpy September 19,2000 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: 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 ofTSC 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 ofNHS and TSC is that NHS is operating programs ofTSC 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 ofthe 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, I shall require (1) ',., ", "- =.^ '1"'"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 leaselcharitable deduction, and (3) the position ofTSC with respect to such. At such time I shall submit your claim to NHS for its management's response. Please review and advise. Very truly yours, JOSEPH T. KELLEY, JR. JTKJRlmb CC: M. Joseph Rocks, Chairman, President and Secretary, w/enclosure Thomas Donaghue, ChiefPinancial Officer, w/enclosure Karen Snider, Chief Operating Officer, w/enclosure Michael Breslin, Regional Vice-President, w/enclosure Benjamin T. Warner, Esquire, w/enclosure, via PAX Steven Fishman, Esquire, w/enclosure, via PAX ~ 1- ., " . II 0_. 09/18/2000 22:04 7172d92411 MCGRAWHAIT&DEITCHMAN PAGE 02 McGRAW, HAlT & DEITCHMAN AITORNEYSAT LAW FRED H. HAlT- JUNFU C. otrTCtfMAI,l NOftA 8. a__ TRUDY H. MdIlAW. IN_ ARE....S OF PRACTICE: ~OV'uiNT'DjiCAiMINATION WORKERS' COMPENSATION PI5R$QNAL IN..!UR Y ~~ ~! ;:J\'n.Je4.E. PA 11Q1.J..aaoe PHON!> i7! 71 :zG.4toll PAX, f7i71 '42411 Septernber19,2000 BIIANCH OFFICE: FINANCIAL TRUST BLDG, 14 N, MAIN STREET, SUITE 307 Cl-IAMAIiAGAURG, PA 17201 PHONE; (7171 263.7344 FAx: (1111 249-2"411 Joseph Kelly, Jr., Esquire Kelly &: Mrnphy 9:25 Harvest Drive, Suite 160 :Blue Bell, P A 19422 VIA F ACS!MILE ONt Y # (215) 643.8356 RE: DR. LAWRENCE HABER / THE STEVENS CENTER Dew Mr. Kelly: I have been directed to you by Ben Warner at the law offices of Manson, Deardorff, Williams &:. Otto llli the representative of the purchaser Dr successor 10 the Stevens Center in Carlisle. You are probably aware that Dr. Haber was the former Pn:sident tUld CEO of tlu: Centcr and that thc Board of Din:totors promiscd him 60 days severance pay upon his separation ,/tom employment at the Center, To date, he has not received his severance pllY. Under the Pennsylvania Wage Payment and CoIlectiotl Act, such payments constitute "fringe benefits or wage supplements" and are due atld payable to Dr. Haber. The Act indicatcs that when~ no ~uired time frame is specified for payments of fringe benefits or wage supplements, payment is to be made within 60 days of a proper claim filed by the employee. See 43 P.S. 9260.3. I count this to be from June 27. 2000 when Dr. Haber wrote a lett~ to Lee Cavlll1augh inquiring about his vacation pay, payments for health intmmnce, and indicating that he would accept the severance in bi-monthly payments rathcr than a lump sum. (Copy enclosed) As such, the severance pay is overdue and Dt. Haber would be entitled to make a claim for Ihese funds, as well as liquidated damages, attorney fees and costs of filing. I had been trying to contact you by phone to detexliline whether we could avoid filing such a daim. J undenrtand that resolution, of this claim is dependent upon the business relatkmship \,(:twecn Northwestern and the Stevens Center, and am culTently no! fully aware of the nuances of that relationship. Therefore, please caU or fax me at your earliest convenience to indicate whether your client will be accepting responsibility for payment of the severance and when Dr. Haber will be paid in full. At this point, h~ i, . BCOI1l,fo.-..n.""""""_T,,,'~_ auAl'Jf)fDQct<<l.Ce!lWPel:I~Tri:aI~~ "'''''''''''''' ,~ " -" II' -'I 09/18/2000 22:04 7172492411 MCGRAWHAIT&DEITCHMAN PAGE 03 demanding payment in a lump sum (with appropriate tax deductions made), as well as a nominal amount a.ssociated with his having to resort to legal representation to protect his Int~Slll. On a related note, he is also interested in coverage for any lapses in insurance coverage during the time frame when the Center did not infonn him of what was required to continue his insurance coverage_ Upon receipt of the COBRA notice, Dr, Haber switchcd his coverage from the family plM to individual plans for himself and his wife. It is my understanding that Thl: SleVCfll\ Center paid the premiums through July 2. 2000, but did not notifY him of the difference in premium payments required to continue: the individual plans following July 2nd. There is approximately one month of lapse of coverage which may have some out of pocket expenses associated with it and I wanted to make you aware that this may also be an issue that we need to resolve. F1na1ly, in light of the Centcr's nnancial difficultie., Dr. Haber paid his OW/J automobile lease payments for the last few months of the lease tenn. While hc i5 not looldnll to recover those amounts, it seems that he should be able to take a charitable dedUction for the portion of the vehicle use directly related to Center business. We may or lIIay not need to dioouss this issue with you as well. I am sorry that we were unable to connect by phone, but look forward to discussing this matter with you hopefully before the end of the week. S;,,~ly. - J I ~~ .-, .. \ . '- j;,/ Je ifer c. Deitchman I1nemwre Cc: Lawrence C. Haber. Ph.D. (wlo coo.) . 1 ~ ~ , f ,. ,'11 - 03/18/2000 22:04 7172492411 MCGRAWHAIT&DEITCHMAN PAGE 04 L_.....L. Hllber, Ph.D. 23 ........, Lane .......burv, PA 17050 June 27, 2000 Lee C.....lllUgh Admlmihlt.re DIrector The S...... center 33 stIIIIO Attnue Carlisle, PA 17013 Re:Cobnil Md Sevel1lrKill PIlIY Questions oearNk.~naugh: I want to". lWte that lfiere 10 no interruption of my health insurance. It is my undorHilnc:Nng that ttte Ccmterwas covering !tie cost of my insurance until July 2.2000 and tf1fIt my ""', CO'l/ItI'III. WU being deducted from my vacation pay. I have re<:11H18t8d fMt under CotmI she and I be switched to individual coverage. I need to knOW the amount of premium \lM .,. to P-V and wtten it is dUe. I boIlove 111m "... the end of my &tCCrued vacation pay. I would like to know when this pay would be running out. I h/live been Informed by lie BtMrd in a letter from Jim Flowers, Jr., that the Board has sgreed to tiJtty days 8eVltFIlnce or terminetion pay. I ha....e indicated to him tllat beeau.. of Itle Centers .... flow, I wcufd be \\'tiling to accept this severance on a bi- monthly beete rether than III lump sum, similar to the way I received my vacation pay_ I woUld ,. to know the Center's intentions as to which method will be utilized. Is severance pay considered salaty for IRS purposes? That is to say willI be receiving a payroll check or a payab/$ OM? Thank you for your liIU8ntlon to litis matter. LaWl'lllnco Haber cc: Shelltl Fox Jim F1owiIIr, Jr, '!"f"1'.d 1_ . " FI ~ I .,.. 69/18/2000 22:04 7172492411 MCGRAWHAIT&DEITC~MAN PAGE 05 . LA'I'omas FLOWE., FLOWER &: LINDSAY A ,..-.OI'&SIbONAL COIU'OM.nON 11 EAST HIGH STREEr CAlILISLE,PENNSl'LVANIA t701~3016 ]1JqI1l.1'1Oftk jAJdS Di-l'WftII,JL <:.WIt,. lD_W 'nIOIIM !.I"..oftr. (711ll'J.llll PAX, (m) 20..110 PP~Ltgm June 15, 2000 Dr. Lawrence C. Haber 23 SwTeV lane Mechanlcsburg, PA 11055 RE; The StevElns Center Dear Larry: I have been authorized by the Pl'&6ident of the Board to confirm the Board's decision concerning t$rmination pay. We understand that you have vacation pay which is currently in the proceS$ of being paid out to you, and which will be paJd In fulL The Board also wishes to pay'you 60 days tennination 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 pU!1Iue. 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 financial feasible. whIch we hope will be in the near future. Several of t~ staff currently at the Center have complained that they felt a recent visit by )IOU to the Center was disruptive. Wit!:! tensions and emotions high 3t the Cent'lf, we would ask you not to VIsit the Center, at this time, Very truly yours, FLOWER, FLOWER & LINDSAY, P.C. ~Iower, Jr. JDFJr/Vll cc: ~ KlI1nlIk M<IIiIbet iI BoIrd oll'.llrec1llB '!~l!l!I7"!I!!I'1 . ' .>'f7'I'or . , 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. CIVIL ACTION LAW THE STEVENS CENTER AND NORTHWESTERN HUMAN SERVICES NO. 01-90 CERTIFICATE OF SERVICE I, PATRICK G. MURPHY, ESQUIRE, hereby certifies that on the 8TH day of Jnly, , 2003 a true and correct copy of the foregoing Memorandnm of Law in Snpport 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 HAlT & ASSOCIATES The Wellington 17 East High Street, Suite 101 Carlisle, P A 17013 KELLEY & MURPHY, ATTO YS-AT-LAW -,-......... . 1'~ ~I r ,r ,. , ~1 t JUl 2 1 2003 IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA Defendants i i ! CIVIL ACTION - LAW ; i ! No. 01-90 ; ; ; i i ; ; ; i i i LAWRENCE C BABER, Plaintiff v. THE STEVENS CENTER and NORTHWESTERN HUMAN SERVICES, PLAINTIFF'S BRIEF IN OPPOSITION TO PRELIMINARY OBJECTIONS OF DEFENDANTS, THE STEVENS CENTER AND NORTHWESTERN 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 ofthe 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 Plaintiff in a letter dated June 27, I "'~"' ["'I - . 2000 addressed to Lee Cavanaugh, the Administrative Director of the Dividing Corporation. See, Complaint Exhibit B. This letter and three messages were ignored by Mr. Cavanaugh. Plaintiff wrote to him again on July 26, 2000. See, Complaint Exhibit C. Plaintiff stin received no reply and wrote to the treasurer on September 4, 2000. See, Complaint Exhibit D. In that letter, Plaintiff referenced 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 case, 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. Pennsvlvania 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 2 -_r.,~. . II "",f , 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 ofOllerating Engineers. Local No. 66 v. Linesville Construction Comoanv. 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 objections filed by Defendants. This is very similar to the situation found in Fabinvi. 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 to assert a cause of action as a matter oflaw. However, the Superior Court found that the trial court considered factual matters beyond the complaint in finding that the purported lack of any written suretyship agreement justified 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 ofthat document. As the document was not referenced in the Complaint, this court caunot 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, 3 .,,.,,. " - rl 11 . , Defendants' preliminary objections still must fail. The Articles of Division were executed on November 16,2000. Prior to that Plaintiff was told verbally by the president of the board ofthe 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. Haber a reasonable belief that he was going to receive the vacation pay and severance pay. Dr. Haber 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. SS260.1 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. s260.2a. Accrued and unpaid vacation time is considered wages under the Wage Payment Collection Law. Harding v. Duquesne LilJht 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. NET! 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 of a contractual promise on the part of the Dividing Corporation. Vacation pay does not need to be contractually designated. In their brief, Defendants refer to S260.3(b) of 4 -~ to,. " ~TI " . , 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 this 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 caunot 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 ofHSC Residuary Corporation. Furthermore, the Trustees and Officers of the Dividing Corporation became the Trustees and Officers ofHSC 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. SeW v. Vista Linen Rental Service. Inc., 2000 Pa.Super. 331,763 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 143 P.S. ~260.3(b) Fring~ benefits and wage supplements. Every employer who by agreement deducts union dues from employes' payor agrees to payor provide fringe benefits or wage supplements, must remit the deductions or payor provide the fringe benefits or wage supplements, as required, within 10 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 10 days after such payments are required to be made directly to the employe, or within 60 days of the date when proper claim was filed by the employe in situations where no required time for payment is specified. 5 ,i~_,. . rr I' . , CERTIFICATE OF SERVICE I certify that a true 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 Suite 160,925 Harvest Drive Blue Bell P A 19422 By: r Brian J Puhala Dated: July 20, 2003 7 ',"'.. i~~" II~ ~-- f"l:ii"<.;';~%'?-~'S; #17. LAWRENCE C. HABER : IN THE COURT OF COMMON PLEAS OF .: CUMBERLAND COUNTY, PENNSYLVANIA V. THE STEVENS CENTER AND NORTHWESTERN HUMAN SERVICES : NO. 2001-0090 CNIL : CNIL ACTION - LAW IN RE: DEFENDANTS' PRELIMINARY OBJECTIONS BEFORE BAYLEY, GUIDO, JJ. ORDER OF COURT AND NOW, this 6TIIday of AUGUST, 2003, the Defendants' Preliminary Objectitons are DENIED. Edward E. Guido, J. Brian J. Puhala, Esquire Patrick G. Murphy, Esquire Michael A. Riccio, Esquire .~ ~ f.II-03 :sld q.. ,~ r _' - i" _ ^ , . 11 -~ !;R~~0}i~~!;J'~~__ _ - I , I I \fIN\!!ilASNN:id I 'I.~II'('''''I n: ,."e"'\Ir':] 1\..:,1 \, li,),_.' " :,:.-'--;,~I,r~ I " II tYC'Tj ,.....-1''\ ES :8 H9 ~lil,'j 1:.U ^8'dlO:'~'~':' . ~o ~'.r'J;-! I:~-I~('!:::i---l:j ;.h.",l,-,J'~, ',J_I".j '. -",-,- ~ ~,~ F "~~- - -~ ',,,, ,~-, -'-"'1""'"' _ '_~'Y"~.n ",'- :'-'Nfht~r- 'F'!,:: 'j tlf~~:~1'k1i;;~~~j:\W{i-I'1-~~::::'~j~'it:' "-- m l"l'!~I!l!l-"jJl' m] ,lmj'!Ijl~1l'JW,l<ii!I~')'Y,~FYjll1"HWj~~1ll"'~~I"~IW"'~-1f1~'!I'!J)~m~ ~"l-'iI:' ~ KELLEY & MURPHY, ATTORNEYS-AT-LAW BY: PATRICK G. MURPHY, ESQUIRE ATTORNEY !.D. NO. 34815 BY: MICHAEL A. RICCIO ATTORNEY !.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. CNIL ACTION LAW THE STEVENS CENTER AND NORTHWESTERN HUMAN SERVICES NO. 01-90 ANSWER AND NEW MATTER TO PLAINTIFF'S COMPLAINT Defendants, Northwestern Human Services, Inc. and Stevens Center (hereinafter sometimes collectively referred to as "Defendants"), by and through undersigned counsel, respectfully submit this Answer and New Matter to Plaintiff's Complaint and in support thereof aver as follows: . I. Admitted in part; denied in part. It is admitted that Plaintiff is Lawrence C. Haber. As to the remaining allegations, after reasonable investigation, Defendants are without knowledge or information sufficient to form a belief as to the truth of the matter asserted. Strict proof thereof is demanded at the time of trial should same be deemed relevant. 2. Denied. Defendant, Stevens Center (hereinafter "New Corporation"), is a Peunsylvania non-profit corporation with an office at 33 State Avenue, Carlisle, Cumberland ~" ,,, J .-'- II I ~--- ~ County, Pennsylvania and a registered service address at 1320 Linglestown Road, Harrisburg, Peunsylvania 17110. By way of further response, Plaintiff has incorrectly brought this action against New Corporation, and should have brought this action against Stevens Center (hereinafter "Dividing Corporation"), a separate and distinct Pennsylvania nonprofit corporation which filed Articles of Division on November 16, 2000 and reorganized itself as HSC Residuary Corporation. 3. Denied as stated. Defendant, Northwestern Human Services, Inc. (hereinafter "NHS"), is an LR.C. S 501 (c)(3) Pennsylvania non-profit corporation which maintains an office at 1320 Linglestown Road, Harrisburg, P A 17110. 4. Denied. The allegation contained herein is a conclusion oflaw to which no responsive pleading is necessary. 5. Paragraphs 1-4 of this Answer and New Matter are incorporated as if fully set forth herein by reference. 6. Denied. The allegation contained herein is a conclusion oflaw to which no responsive pleading is necessary. 7. Paragraphs 1-6 of this Answer and New Matter are incorporated as if fully set forth herein by reference. 8. Denied. After reasonable investigation, Defendants are without knowledge or information sufficient to form a belief as to the truth of the matter asserted. Strict proof thereof is demanded at the time of trial should same be deemed relevant. By way of further response, it is specifically denied that Plaintiff began working for NHS or New Corporation on or about January 1991. ,~ 1"'111II r.'," -, ~, . - .',- II r-- , _3 !f - 9. Denied. After reasonable investigation, Defendants are without knowledge or infonTIation sufficient to form a belief as to the truth of the matter asserted. By way of further response at no time did Plaintiff ever work for Defendants. Strict proof thereof is demanded at the time of trial should same be deemed relevant. 10. Denied. After reasonable investigation, Defendants are without knowledge or infonTIation sufficient to form a belief as to the truth of the matter asserted. Strict proof thereof is demanded at the time of trial should same be deemed relevant. By way of further response, it is specifically denied that Plaintiff was at any time relevant hereto, the president and CEO of either New Corporation or NHS or that Plaintiff otherwise received salary or other employment benefits from New Corporation or NHS. Strict proof thereof is demanded at the time of trial should same be deemed relevant. II. Denied. After reasonable investigation, Defendants are without knowledge or information sufficient to form a belief as to the truth of the matter asserted. Strict proof thereof is demanded at the time of trial should same be deemed relevant By way of further response, it is specifically denied that Plaintiff was at any time relevant hereto, the president and CEO of either New Corporation or NHS or that Plaintiff otherwise received salary or other employment benefits from New Corporation or NHS, including, without limitation, payments for the leasing and maintenance of any automobile. It is also specifically denied that New Corporation or NHS ceased payments of any kind or that Plaintiff made any payments whatsoever on behalf of New Corporation or NHS. Strict proof thereof is demanded at the time of trial should same be deemed relevant. ~~,-. . "., TI I ,~ - 12. Denied. After reasonable investigation, Defendants are without knowledge or information sufficient to form a belief as to the truth of the matter asserted. Strict proof thereof is demanded at the time of trial should same be deemed relevant. By way of further response, it is specifically denied that Plaintiff had a conversation with any members of New Corporation or NHS' Board of Directors, including, without limitation, the alleged conversation set forth in paragraph 12 of Plaintiffs Complaint. Strict proof thereof is demanded at the time of trial should same be deemed relevant. 13. Admitted in part; denied in part. It is admitted that Plaintiff has attached to his Complaint correspondence as Exhibit A. Defendants deny all of the remaining allegations contained in this paragraph because after reasonable investigation, Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegations contained herein. Strict proof thereof is demanded ofthe line of trial should same be deemed relevant. By way of further response, it is specifically denied that Plaintiff received any letters from any member of New Corporation or NHS' Board of Directors or that Exhibit "A" was authored or authorized by Defendants. Strict proof thereof is demanded at the time of trial should same be deemed relevant. 14. Admitted in part; denied in part. It is admitted that Plaintiff has attached to his Complaint correspondence as Exhibit B. Defendants deny the remaining allegations contained in this paragraph because after reasonable investigation, Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegations contained herein. Moreover, by way of further response it is specifically denied that Mr. Flower was acting as the ~- ",~ h r rl' I representative or agent of Defendants. Strict proof thereof is demanded at the time of trial should same be deemed relevant. 15. Admitted in part; denied in part. It is admitted that Plaintiff has attached to his Complaint correspondence as Exhibits C and D. Defendants deny the remaining allegations contained in this paragraph because after reasonable investigation, Defendants are without knowledge or information sufficient to form a belief as to the truth ofthe allegations contained herein. Strict proof thereof is demanded at the time of trial should same be deemed relevant. By way of further response, it is specifically denied that New Corporation or NHS received or was otherwise obligated to reply to any of the alleged inquiries made by Plaintiff. Strict proof thereof is demanded at the time of trial should same be deemed relevant. 16. Denied. The allegation contained herein is a conclusion oflaw to which no responsive pleading is necessary. By way of further response should same not be deemed a conclusion oflaw, it is specifically denied that Dividing Corporation became "part of' either New Corporation or NHS effective September 1, 2000 or at any othertime. It is also specifically denied that either New Corporation or NHS may have some or all responsibility for any liability of Dividing Corporation or HSC Residuary Corporation regarding the subject matter of this suit. Strict proof thereof is demanded at the time of trial. 17. Denied. After reasonable investigation, Defendants are without knowledge or information sufficient to form a belief as to the truth of the matter asserted. Strict proof thereof is demanded at the time of trial should same be deemed relevant. 1lJ!~ ?f II COUNT I - PENNSYLVANIA WAGE PAYMENT AND COLLECTION LAW 18 Paragraphs 1-17 of this Answer and New Matter are incorporated as if fully set forth herein by reference. 19. Denied. The allegation contained herein is a conclusion oflaw to which no responsive pleading is necessary. By way of further response, it is specifically denied that New Corporation or NHS employed Plaintiff at any time relevant hereto. 20. Denied. After reasonable investigation, Defendants are without knowledge or information sufficient to form a belief as to the truth of the matter asserted. Strict proof thereof is demanded at the time of trial should same be deemed relevant. Defendants also deny the allegations contained herein to the extent they represent conclusions oflaw, to which no responsive pleading is necessary. It is also specifically denied that at any time material hereto, New Corporation NHS employed or promised Plaintiff anything or otherwise provided Plaintiff with a leased automobile or any other fringe benefits or wage supplement. 21. Denied. The allegation contained herein is a conclusion of law to which no responsive pleading is necessary. 22. Denied. After reasonable investigation, Defendants are without knowledge or information sufficient to form a belief as to the truth of the matter asserted. Strict proof thereof is demanded at the time of trial should same be deemed relevant. 23. Denied. It is denied with specificity that Defendants owe any sums of money to Plaintiff. Strict proof thereof is demanded at the time of trial should same be deemed relevant. 24. Denied. The allegation contained herein is a conclusion oflaw to which no responsive pleading is necessary. By way of further response should same not be deemed a , ,,' 1-"1 conclusion oflaw, it is specifically denied that New Corporation or NHS have violated any laws or are otherwise liable to Plaintiff on his cause of action. 25. Denied. The allegation contained herein is a conclusion of law to which no responsive pleading is necessary. By way of further response should same not be deemed a conclusion oflaw, it is specifically denied that New Corporation or NHS have violated any laws or are otherwise liable to Plaintiff on his cause of action. REMEDIES 26. Paragraphs 1-25 of this Answer and New Matter are incorporated as if fully set forth herein by reference. 27 (a)-(e). Denied. This paragraph contains neither allegations of fact nor conclusions of law and Defendants specifically deny that this Honorable Court should grant any of the relief sought in Plaintiff s Complaint. WHEREFORE, Defendant demand that judgment be entered on their behalf against Plaintiff. NEW MATTER 1. Pursuant to Pa.R.C.P. 1030 (a), Defendants raise the following affirmative defenses to the allegations of Plaintiffs Complaint: accord and satisfaction, arbitration and award, estoppel, failure of consideration, impossibility of performance, payment, release, laches, and statute of frauds and statute of limitations. 2. Plaintiff fails to state a claim upon which relief may be granted. '""''''''''..., '< , I'r- [~ - 3. Plaintiff alleges that in January of 1991, he began working for Stevens Center (Dividing Corporation), as New Corporation did not exist in 1991. See Paragraph 8 of Plain tiffs Complaint. 4. Plaintiff alleges that he was terminated in May of 2000 because of economic reasons. See Paragraph 9 of Plaintiffs Complaint. 5. Plaintiff alleges that at the time of his termination he was President and CEO of Dividing Corporation. See Paragraph 10 of Plaintiffs Complaint. 6. Plaintiff alleges that prior to his termination, he had a conversation with 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 days severance pay, in consideration of all his years of good work. See Paragraph 12 of Plaintiffs Complaint. 7. Plaintiff alleges the Board President's promise was confirmed in a June 15, 2000 letter to him from Dividing Corporation's Treasurer. See Paragraph 13 of Plaintiffs Complaint. 8. Plaintiff s claims are legally insufficient because at no time does Plaintiff allege that the Board President's alleged promise was legally enforceable. 9. Plaintiff s claims are legally insufficient because at no time does Plaintiff allege that the Board Treasurer's letter contained a legally enforceable promise to pay. 10. Defendants believe and therefore aver, that Plaintiff has received payment for any unused vacation time and was reimbursed for any and all automobile-related costs and expenses. II. On or about November 16, 2000, Dividing Corporation filed with the Commonwealth of Pennsylvania Department of State: (a) Articles of Division and (b) an Agreement and Plan of Division, Reorganization and Acquisition (hereinafter the "Agreement"). '--~, '" ., ~ , ,-" -,' I I .. T . , "7'"1 .' 12. Pursuant to the Articles of Division and Agreement, the following transactions took place: (a) the Dividing Corporation was divided into the Stevens Center (''New Corporation") and HSC Residuary Corporation (hereinafter "HSC" or "Surviving Corporation"); (b) the New Corporation was acquired by Northwestern Human Services of Peunsylvania, Inc., a Pennsylvania non-profit corporation; and (c) the Dividing Corporation reorganized itself as HSC. 13. Pursuant to the Agreement, certain assets and liabilities were vested in Defendant, New Corporation, whereas certain other assets and liabilities were vested in HSC. 14. Pursuant to the Agreement, 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 herletter of September 19, 2000. . . ." 15. Defendant, NHS is not a proper party to this action and should therefore be dismissed because it is not the successor to Dividing Corporation and it did not acquire any of New Corporation's assets or liabilities pursuant to the Agreement. 16. Defendant, New Corporation, is not a proper party to this action and should therefore be dismissed because it is not the successor to Dividing Corporation and, pursuant to the Agreement, the claims of Plaintiff were neither assigned to nor vested in New Corporation. 17. Plaintiff, in his Complaint, fails to allege legally sufficient claims upon which relief can be granted because Plaintiff fails to allege sufficient facts establishing the successor liability of New Corporation and/or NHS. "'" - ,~ t I I' 18. HSC is the successor to Dividing Corporation and is therefore solely liable on Plaintiff s cause of action. 19. The sixty-day severance pay, which Plaintiff seeks to recover, was not provided for in an employment contract or as part of an employee benefit plan. 20. Plaintiff fails to state a legally sufficient claim pursuant to Pennsylvania's Wage Payment and Collection Law (hereinafter "WPCL") because Plaintiff fails to allege that the sixty days severance pay which he seeks to recover was provided for in an employment contract or as part of an employee benefit plan. 21. Plaintiff s claim for "severance pay" is not a "fiinge benefit or wage supplement" as contemplated or defined by the WPCL. 22. Accordingly, the WPCL's remedies, including, without limitation, statutory interest, liquidated damages, attorney fees and costs of litigation are not available to the Plaintiff. 23. The alleged promises upon which Plaintiff s cause of action is premised are not legally enforceable for lack of adequate consideration. 24. The alleged promises upon which Plaintiff s cause of action is premised are not legally enforceable because the alleged promise to pay was conditioned upon such becoming financially feasible. 25. Neither NHS nor New Corporation made Plaintiff any promise, commitment or obligation to pay him any sums of money. 26. Due to the failure of adequate consideration between the Plaintiff and Defendants and lack of a firm promise, commitment or obligation to pay, no binding contract or agreement exists between Plaintiff and NHS and/or New Corporation, and Plaintiffs claims are thus barred. ""'*"'" " I".~ -II I'" I 27. Dividing Corporation Treasurer, James D. Flower, Jr. (hereinafter "Flower"), at all times material hereto, lacked the appropriate authorization and/or corporate and representative authority to act on behalf ofNHS and/or New Corporation. 28. At all times material hereto, Flower was acting on behalf of Dividing Corporation and/or HSC. 29. Flower's letter of June 15,2000 was not made on NHS' or New Corporation's letterhead. 30. Flower's letter of June 15,2000 was signed by Flower individually and not under seal or corporate name ofNHS and/or New Corporation. 31. Due to the lack of authority and the lack of corporate signature or seal, no binding contract or agreement exists between Plaintiff and NHS and/or New Corporation, and Plaintiffs claims are thus barred. WHEREFORE, based on the foregoing, Defendants, Northwestern Human Services, Inc. and Stevens Center respectfully request this Honorable Court enter judgment in their favor and dismiss Plaintiff s Complaint with prejudice. BY: ffLP'~ MICHAEL A. RICCIO, ESQUIRE ,.~" - , "",-- '. ,~ ,-~~ II" I 'I W__'_', ':" -" , VERIFICATION I, PATRICK G. MURPHY, ESQUIRE, hereby verifY that I am the attorney for the Defendants herein and that the facts and documents set forth in the foregoing are true and correct to the best of my knowledge, information and belief. I understand that statements made herein are made subject to the penalties of 18 Pa.C.S., Section 4904 relating to unsworn falsification to authorities. DATED: August 28, 2003 ,.."""- -" 't IP"- " ~'!~-- I,: . CERTIFICATE OF SERVICE I, PATRICK G. MURPHY, ESQUIRE, hereby certify that a true and correct copy of the foregoing ANSWER AND NEW MATTER TO PLAINTIFF'S COMPLAINT was served upon the following persons, via U.S. First Class Mail at the address set forth below: Brian J. Puhala, Esquire FRED HAlT & ASSOCIATES The Wellington 17 East High Street, Suite 101 Carlisle, P A 17013 KELLEY & MURPHY, ATTORNEYS-AT-LAW %!,~ . I"~ ,., 1'1 'I" , I I.: ( Ii t') Ii ~'! l! I, fj l! U r: f! F1 II II H rl I I' ~ :1 I: 1 Ii " II I (: ~ I 1" :-,.-1. ~"~ 0 ,..., c:. ':";~ ti:.' " >, n'~'; n') ,:.-1 ;;~ ;;-- ) "<" ; ~, c;:rl, (f.'l -J" , -'< ~~(~) ..,.:.,4.~~ t" ~T- ,-1. ~C~: \-!:---.-" ",;0 ",0 r:y Om C ;...:{ Z ".. ~ ~ '0 - ~" _. ->:-"1'''~.'1''''~_",,-r'!'''.~~" ....~.~~l1~~r~.!!!!I~ll'!W .~.~~- _J:,.;~",,-,,>~,, IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA LAWRENCE HABER, Plaintiff CIVIL ACTION LAW v. No. 01-90 THE STEVENS CENTER and NORTHWESTERN HUMAN SERVICES, JURY TRIAL DEMANDED Defendants PRAECIPE FOR DISCONTINUANCE TO THE PROTHONOTARY: Please mark the above captioned matter as discontinued with prejudice. Respectfully Submitted, f[ffi[!;1DJ IfI]lA\m ~ 1A\~~IOJIG~lA\liU, ~.IG. Attorneys for Plaintiff Dated: /,;;L/ ~tf B~~ Fred H. Hait, ID # 3~331 The Wellington 17 East High Street Suite 101 CarlislePA 17013-3047 (717) 249-4500 ''@lt~ '" . , iQi5~8t0ttC<6'-" " .. ""; ,,,. , , '" I ., . .- .' ~< ""-' .. !I " I :1 ~Lrt 0f?~~ ii II "J "'''' c:;:~ or- C.::f rT~ c") I ClO o -n :;:l Fh:D ,.-- -orn ;;Q~? 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