EXHIBIT 10.2

 

Execution Copy

 

ADMINISTRATIVE AND MANAGEMENT SERVICES AGREEMENT

 

THIS ADMINISTRATIVE AND MANAGEMENT SERVICES AGREEMENT (“Agreement”) is executed
this 30th day of December, 2016, to be effective as of the 31st day of December,
2016 (the “Commencement Date”), by and between AF-CH-HH, LLC (“AF-CH-HH”) f/k/a
Community Health United Home Care, LLC, a Delaware limited liability company,
and (ii) Almost Family, Inc. (“AFAM”), a Delaware corporation, and National
Health Industries, Inc. (“NHI”), a Kentucky corporation (AFAM and NHI are
referred to collectively, as the “Management Company”).  AF-CH-HH, AFAM and NHI
are sometimes collectively referred to in this Agreement each as a “Party” and
collectively as the “Parties.”

 

Recitals

 

A.                                    AF-CH-HH engages in the business of
providing Medicare certified home health services and hospice services directly
and through several direct and indirect subsidiaries (referred to collectively
as, the “AF-CH-HH Group”).

 

B.                                    The Management Company provides certain
administrative, managerial, billing, and collections services (collectively, the
“Management Services”) to its direct and indirect subsidiaries, including, more
particularly, the services that are (i) described in Section 4, and (ii) further
described in Attachment A, Section 1 attached hereto and incorporated herein by
reference;

 

C.                                    AF-CH-HH, on behalf of the AF-CH-HH Group,
desires to engage the Management Company to provide the Management Services, or
to cause the Management Services, to be provided to the AF-CH-HH Group, and the
Management Company desires to provide the Management Services, or to cause the
Management Services to be provided, to the AF-CH-HH Group, each on the terms and
conditions set forth herein.

 

THE PARTIES, INTENDING TO BE LEGALLY BOUND, AGREE AS FOLLOWS:

 

1.                                      Provision of Management Services.  The
AF-CH-HH Group and the Management Company hereby agree that the Management
Company shall provide the Management Services for the AF-CH-HH Group during the
Term, pursuant to the terms and conditions set forth in this Agreement.

 

2.                                      Term.  The initial term of this
Agreement shall begin on the Commencement Date and shall continue for a period
of five (5) years (“Initial Term”), unless otherwise terminated as set forth in
this Agreement.  Each year on the anniversary of the Commencement Date, this
Agreement shall automatically renew for a new five (5) year term (each a
“Renewal Term” and with the Initial Term, hereinafter referred to as the “Term”)
unless either Party provides written notice of its intent not to renew at least
sixty (60) days prior to the applicable anniversary of the Commencement Date. 
If a Party timely provides written notice of its intent not to renew, then the
given Initial Term or Renewal Term shall no longer renew on the anniversary of
the Commencement Date.

 

3.                                      Fees and Charges.

 

(a)                                 The Management Company’s fee for the
services provided under this Agreement shall be calculated and billed as set
forth below.

 

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(i)                                     As the Management Company’s fee for its
management services hereunder, the Company shall pay to the Management Company
an annual amount equal to five percent (5%) of the Company’s Net Revenues for
the preceding year (the “Management Fee”). “Net Revenues” shall mean the total
operating revenues of the AF-CH-HH Group net of an allowance for contractual
allowances, discounts, bad debt and other uncollectible amounts as determined
under the accrual method of accounting in accordance with GAAP as consistently
applied by the Management Group from time to time.  The Management Fee for each
month shall be paid in accordance with Section 3(b) hereof.

 

(ii)                                  In addition to the Management Fee, the
AF-CH-HH Group shall reimburse the Management Company on a monthly basis for all
direct charges incurred by the Management Company on behalf of AF-CH-HH Group of
the nature identified in Attachment A, Section 2 attached hereto and
incorporated herein by reference, but only to the extent that the Management
Company actually incurs such charges.  The Management Company and the AF-CH-HH
Group agree that the AF-CH-HH Group shall be responsible for all expenses for
executive employees exclusively dedicated to AF-CH-HH Group, sales and marketing
efforts, hospital specific programs, hospice related support and such other
items identified in Attachment A, Section 2, and in the event that the
Management Company incurs charges with respect to such items, then the AF-CH-HH
Group shall reimburse the Management Company.

 

(iii)                               In addition to the Management Fee and
expense reimbursement referred to above, the AF-CH-HH Group shall also pay and
reimburse the Management Company on a monthly basis (or as billed, if later),
for all actual costs paid or incurred by the Management Company related to
participation by the AF-CH-HH Group’s employees in the Management Company’s
benefit plans, if applicable, and/or the AF-CH-HH Group’s employee costs
incurred or paid by the Management Company, including without limitation, actual
costs paid or incurred relating to employee benefit plans.

 

(b)                                 All charges, including, without limitation,
the monthly Management Fee will be billed, to the extent reasonably possible, to
the AF-CH-HH Group on a monthly basis within seven business days after the end
of each month and are due and payable to the Management Company within 15
business days after receipt of the invoice, unless the AF-CH-HH Group notifies
the Management Company of a discrepancy in the monthly invoice within seven
business days of receipt of the invoice date.  The Management Company will
maintain and provide to the AF-CH-HH Group reasonable documentation of its
out-of-pocket expenses charged back to the AF-CH-HH Group pursuant to this
Agreement.  Notwithstanding the preceding, the failure of the Management Company
to seek reimbursement for an expense on a timely basis as described above shall
not affect the AF-CH-HH Group’s obligation to reimburse the Management Company
for such expense.

 

4.                                      Scope of Services and Obligations of the
Management Company.

 

(a)                                 Services Provided.  The Management Company
acknowledges that it shall have responsibility for ensuring that the Management
Services required by this Agreement, including any coding, billing, and invoice
or claims submissions activities, are performed in accordance with applicable
Federal and State law, generally accepted industry standards, as well as any
other third party payor rules or guidelines provided by the AF-CH-HH Group to
the Management Company.  The Management Services to be provided by the
Management Company under this Agreement are identified on Attachment A attached
and incorporated herein by reference, and shall otherwise be provided pursuant
to the terms set forth in this Agreement.

 

(b)                                 Performance Metrics.  The Management Company
shall perform its services under this Agreement for the AF-CH-HH Group with the
same level of quality and performance standards

 

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as the Management Company adheres to in the performance of services for the
direct and indirect subsidiaries of AFAM.

 

(c)                                  HIPAA Compliance.  The Management Company
and any subcontractor with which the Management Company subcontracts for the
provision of the Management Services shall comply with the applicable
requirements of Title II of the Health Insurance Portability and Accountability
Act of 1996, as amended (“HIPAA”) in the performance of its obligations under
this Agreement.  The Parties agree to execute a business associate agreement in
form mutually satisfactory to the Management Company and the AF-CH-HH Group.

 

(d)                                 Contracted Services Arrangement.  To assist
the Management Company in providing the Management Services to the AF-CH-HH
Group, the Management Company may, but is not required to, contract with the
AF-CH-HH Group for the services of one or more of the AF-CH-HH Group’s
employees.  The Parties intend that such services will be performed on behalf of
the Management Company, but under the primary direction and control of the
AF-CH-HH Group with input from the Management Company.  The AF-CH-HH Group shall
pay or provide to the contracted employees such salaries, bonuses, benefits,
including retirement contributions, in accordance with its applicable polices
and pay the federal, state and local income and employment tax withholdings
related to or associated with the employment of the contracted employees.  The
Management Company will reimburse the AF-CH-HH Group for the aforementioned
expenses, or portion thereof, as may be mutually agreed upon between the
Management Company and the AF-CH-HH Group.  Similarly, the AF-CH-HH Group may
contract with the Management Company for the services of one or more of the
Management Company’s employees.

 

(e)                                  Compliance Activities.  The Management
Company shall maintain, or cause to be maintained, a corporate compliance plan
for the Management Services contemplated by this Agreement, including the
implementation of effective internal controls to ensure compliance with
applicable Federal and State law. The Management Company shall take appropriate
steps to prevent, investigate, and act upon any inappropriate coding, billing or
business practices within the Management Company.  The Management Company shall
conduct regular internal audits and engage in other ongoing monitoring
activities relating to the business practices of the Management Company.  The
Management Company shall at all times be solely responsible for taking
appropriate disciplinary action and/or other corrective measures when
inappropriate, fraudulent, abusive or otherwise illegal business activity is
identified within the Management Company.  The Management Company shall further
ensure that any subcontractor with whom the Management Company contracts to
provide the Management Services under this Agreement agrees in writing to comply
with the requirements of this Section 4(e).

 

(f)                                   Audits.

 

(i)                                     Audits or Reviews.  In addition to the
independent audit contemplated by Section 4(i), below, upon not less than 10
days’ notice from the AF-CH-HH Group to the Management Company, and at the sole
cost and expense of the AF-CH-HH Group, the Management Company shall cooperate
and furnish the AF-CH-HH Group or its designees with any and all information
necessary to perform and complete any and all audits or review procedures deemed
necessary by the AF-CH-HH Group, in the AF-CH-HH Group’s reasonable discretion,
to determine the accuracy and correctness of the accounting and internal
controls performed and maintained by the Management Company; provided, however
that any such designee of the AF-CH-HH Group shall not be a direct or
substantial competitor of the Management Company or any member of the AF-CH-HH
Group.  Any such audit or review shall be conducted at such time and in such
manner so as to avoid undue disruption of the Management Company’s business
operations.

 

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(ii)                                  Software Changes.  The Management Company
shall provide, at AF-CH-HH Group’s sole cost and expense, any software changes
that the Management Company deems necessary, in its reasonable discretion, for
purposes of upholding the billing and coding specifications required by CMS, the
applicable state department of medical assistance or any applicable insurance
provider or third party payor.  Notwithstanding the preceding sentence, the
Management Company agrees to back up data collected and stored on the AF-CH-HH
Group’s behalf at regular intervals in order to preserve data and system
integrity and to regularly store appropriate backups offsite.

 

(g)                                  Insurance.  The Management Company agrees
to maintain an insurance policy in the amount of not less than $1,000,000 per
occurrence and $3,000,000 in the aggregate in order to cover any errors,
omissions, or other negligent acts of the Management Company or the Management
Company’s principals, employees, or agents during the performance of any duties
under this Agreement and to provide the AF-CH-HH Group with a copy of the
insurance certificate upon request by the AF-CH-HH Group.

 

(h)                                 Additional Services.  From time to time, the
AF-CH-HH Group may request that the Management Company provide additional
services that are not described in this Agreement.  Prior to providing any such
additional services, the Management Company shall notify the AF-CH-HH Group of
any additional fees and out-of-pocket expenses that the Management Company may
charge for such additional services and obtain the AF-CH-HH Group’s approval of
such additional fees. The AF-CH-HH Group shall be billed any such additional
fees on a monthly basis, unless otherwise agreed between the Parties in
writing.  If such additional services are requested by the AF-CH-HH Group and
are to be performed by the Management Company, then the Parties shall amend this
Agreement in order to specify the additional services to be provided by the
Management Company and any additional fees and out-of-pocket expenses that the
Management Company may charge for such additional services.

 

(i)                                     Independent Audit.  From time to time,
but not more frequently than once during any 12-month period, the Management
Company and the AF-CH-HH Group may mutually agree to engage an independent
auditor, directly or through an attorney, to perform an audit with respect to
the Management Company’s operations, and in particular its billing and coding
practices on behalf of AF-CH-HH Group, with the expenses associated with such
audit to be allocated to the AF-CH-HH Group.

 

5.                                      Obligations of the AF-CH-HH Group.

 

(a)                                 The AF-CH-HH Group shall not knowingly
provide or cause to be provided inaccurate or incomplete billing information
related to professional services rendered by the AF-CH-HH Group and shall not
cause any unreasonable delay in providing same.

 

(b)                                 The AF-CH-HH Group shall not knowingly
submit to the Management Company any information, documents and other records,
including, but not limited to, information, documents or records relating to any
member of the AF-CH-HH Group, the practices of the AF-CH-HH Group, the physician
providers of the AF-CH-HH Group, services rendered, charges, billings, accounts
receivable, patient information, and payor mix history, that is not accurate,
true, and correct in all material respects.  Upon becoming aware of any
inaccuracy, untruth or incorrect information or any material change to the
foregoing in connection with this subsection (b), the AF-CH-HH Group shall
promptly notify the Management Company thereof and use reasonable efforts to
provide the Management Company with updated documents and records, as
appropriate.

 

(c)                                  The AF-CH-HH Group shall provide to the
Management Company information with regard to participation agreements or
contracts for professional services that have been entered into between the
AF-CH-HH Group and third parties responsible for payment of claims relative to
any

 

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professional services provided by the AF-CH-HH Group, including, without
limitation, terms of the contract, requirements and guidelines related to
billing, and the specific agreed reimbursement rates for professional and/or
total component services.  Upon becoming aware of any material change in
connection with the foregoing in this Section 5(c), the AF-CH-HH Group shall
promptly notify the Management Company thereof and make reasonable efforts to
provide the Management Company with updated information, as appropriate.

 

(d)                                 The AF-CH-HH Group acknowledges and agrees
that under the terms of this Agreement, the business practices and methods,
software programs, business products, plans, or other trade secrets, business
records, or documents of the Management Company are the sole property of the
Management Company.

 

(e)                                  The AF-CH-HH Group acknowledges that the
AF-CH-HH Group shall have full legal responsibility for providing complete,
accurate and reliable information, data, and materials needed for Management
Services under this Agreement, including providing all charge-related
information to the Management Company.

 

6.                                      Default.  In the event of any default
under the terms of this Agreement (each, a “Default”), the Party asserting such
default shall provide written notice to the other Party (the “Defaulting Party”)
within 30 days of its discovery thereof, which Defaulting Party shall cure such
Default within 15 business days from its receipt of such notice.

 

7.                                      Indemnification.

 

(a)                                 By the AF-CH-HH Group.  Without limitation
as to the other rights of the Management Company, the AF-CH-HH Group shall
indemnify, defend, and hold harmless the Management Company and its members,
officers, managers, agents, affiliates, representatives, employees, and the
personal representatives, heirs, successors and/or assigns, as applicable, of
such persons, against and from all liability, demands, claims, actions or causes
of action, assessments, losses, penalties costs, damages or expenses sustained
or incurred by any of the foregoing persons as a result of or arising out of or
by virtue of any misrepresentation or breach of any representation, warranty,
covenant or agreement of the AF-CH-HH Group set forth herein.

 

(b)                                 By the Management Company.  Without
limitation as to the other rights of the AF-CH-HH Group, the Management Company
shall indemnify, defend, and hold harmless the AF-CH-HH Group and its
shareholders, directors, officers, partners, members, officers, managers,
agents, affiliates, representatives and employees, and the personal
representatives, heirs, successors and/or assigns, as applicable, of such
persons, against and from all liability, demands, claims, actions or causes of
action, assessments, losses, penalties costs, damages or expenses sustained or
incurred by any of the foregoing persons as a result of or arising out of or by
virtue of any misrepresentation or breach of any representation, warranty,
covenant or agreement of the Management Company set forth herein.

 

8.                                      Termination.

 

(a)                                 The Parties may terminate this Agreement at
any time by mutual written consent of the Management Company and the AF-CH-HH
Group.

 

(b)                                 Either Party may terminate this Agreement,
immediately, without prior notice to the other Party, if (i) the non-terminating
Party liquidates, dissolves or winds up; becomes insolvent or seeks protection,
voluntary or involuntary, under applicable bankruptcy law; makes an assignment
for the benefit of its creditors; (ii) there is a final determination by an
administrative agency or a court of

 

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competent jurisdiction that a violation of any law or regulation has occurred in
connection with the provision of the Management Services; (iii) the
non-terminating Party is excluded, suspended, or debarred from participating in
the Medicare of Medicaid programs; or (iv) if any principal of the
non-terminating Party is convicted by a court of competent jurisdiction of a
felony or any misdemeanor involving fraud or embezzlement, including, without
limitation, mail or insurance fraud.

 

(c)                                  In the event there is any uncured Default
under this Agreement, the non-Defaulting Party may terminate this Agreement by
30 days written notice to the Defaulting Party.

 

(d)                                 In the event the AF-CH-HH Group is more than
45 days delinquent in remitting payment to the Management Company for the
Management Services provided under this Agreement following delivery of a proper
and accurate invoice by the Management Company related to such payment, the
Management Company may terminate this Agreement immediately, by written notice
to the AF-CH-HH Group; provided, however, that the AF-CH-HH Group shall remain
liable to the Management Company for any unpaid amounts owed to the Management
Company under this Agreement.

 

(e)                                  Upon the termination of this Agreement for
any reason, immediately and without charge, the AF-CH-HH Group may access and
obtain copies of all of the AF-CH-HH Group’s reports and information, including
but not limited to information concerning the rendition of medical services by
the AF-CH-HH Group, the AF-CH-HH Group’s patient charge data, and the AF-CH-HH
Group’s billing and collection data.  Any and all amounts owed to the Management
Company under this Agreement shall become immediately due and payable, and
except as set forth above in this subparagraph and in Section 8(f), the
Management Company may cease performance of all Management Services under this
Agreement without any further obligation or liability to the AF-CH-HH Group
under this Agreement.

 

(f)                                   Following the expiration or termination of
this Agreement, the Management Company shall, if requested by the AF-CH-HH Group
in writing and so long as permitted by law, continue to provide Management
Services to the AF-CH-HH Group in accordance with the terms and conditions of
this Agreement for a reasonable period (not to exceed 90 days) (the “Run-Out
Period”) sufficient to enable the AF-CH-HH Group to make appropriate
arrangements for the ongoing management of the AF-CH-HH Group.  In exchange for
its provision of services provided during the Run-Out Period, the AF-CH-HH Group
shall pay to the Management Company on the same basis as applicable during the
Term.

 

9.                                      Books and Records.

 

(a)                                 Access.  The AF-CH-HH Group shall have the
right during normal business hours of the Management Company to examine the
books, records, and related materials maintained by the Management Company in
connection with the Management Services provided to any member of the AF-CH-HH
Group.

 

(b)                                 Retention of Documents.  Except as otherwise
required under the terms of the Parties’ Business Associate Agreement, the
Management Company shall not have any liability or obligation with respect to
the retention and storage of source documents, charge documents, and payment
documents beyond the time period of normal billing activity, and shall return
all such information to AF-CH-HH Group when no longer needed by the Management
Company.  In connection with any follow-up billing issues, the AF-CH-HH Group
shall make reasonable efforts to provide access to any such documents during
normal business hours of the AF-CH-HH Group, upon written request by the
Management Company.

 

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(c)                                  Reasonable Costs.  To the extent that
Section 1861(v)(1)(I) of the Social Security Act applies to this Agreement, the
Management Company agrees that until the expiration of four years after the
furnishing of the Management Services under this Agreement, the Management
Company shall retain and make available, upon written request of the Secretary
of Health and Human Services or the U.S. Comptroller General, or any of their
duly authorized representatives, this Agreement, and any books, documents and
records of the Management Company that are necessary to certify the nature and
extent of any costs incurred by the AF-CH-HH Group under this Agreement. 
Furthermore, the Management Company agrees to include a provision substantially
similar to this Section 9(c) in any subcontractor agreement in connection with
the Management Services.

 

(d)                                 Confidentiality.  Each Party acknowledge and
agree that during the Term each Party may be provided, and may otherwise come
into contact, with confidential and proprietary information of the other Party
and its affiliates and customers, including, but not limited to, customer lists,
business plans, know-how, trade secrets, development and experimental work,
other proprietary and confidential matters relating to the financial affairs,
personnel, products and services, sales, and business and other affairs of the
other Party and any division or affiliate of the other Party and their
respective assigns and successors, and with respect to the Management Company,
including Information regarding the Management Company (collectively, the
“Information”), and such Information is therefore deemed confidential,
proprietary information of the applicable Party (to the extent it relates to the
business of such Party), so long as it is neither generally known nor readily
ascertainable by the public (collectively, the “Confidential Information”). 
Confidential Information shall not include any information in intangible form
which is retained in memory by a Party’s representatives and is wholly
dissociated from the other Party in such representative’s memory.  Except
pursuant to express written consent of the other Party, neither Party shall at
any time during the duration of this Agreement or after the termination or
expiration of this Agreement, make use of (whether personal, commercial or
otherwise) nor disclose to any person or other third party (including an
employee, contractor, or agent of the Management Company), for any competitive
purpose whatsoever or any purpose which may be, directly or indirectly,
individually or in the aggregate, reasonably considered to have a competitive
effect, any Confidential Information, except in furtherance of performing the
Management Services as may be required pursuant to applicable law or to a
Party’s professional advisors and counselors, including, but not limited to,
attorneys and consultants.  Except to the extent required by law, each Party
shall return to the other Party any and all Confidential Information, and all
copies thereof, in its possession upon the termination of this Agreement, or in
the alternative, if then acceptable to the other Party, shall certify in writing
that such Confidential Information including without limitation all electronic
versions thereof have been destroyed.  Additional confidentiality and privacy
provisions required by HIPAA are set forth in the Parties’ Business Associate
Agreement.  This Section 9(d) shall in no way limit the Management Company’s
obligations with respect to Protected Health Information.  The Parties
acknowledge that monetary damages may not be an adequate remedy for a breach of
this Section 9(d); therefore, a Party may seek equitable relief, including
injunctive relief, without the need to post bond, and specific performance, in
the event of any breach or threatened breach of this Section 9(d) by the other
Party in addition to all other remedies available at law or in equity.  The
AF-CH-HH Group acknowledges that the restrictions set forth in this Agreement
shall not restrict the right of the Management Group to engage in the home
health and hospice business, and related healthcare business activities, subject
to the restrictions set forth in the Amended and Restated Limited Liability
Company Agreement for AF-CH-HH (the “LLC Agreement”) or to otherwise use or
disclose Confidential Information in the Management Group’s business, subject to
restrictions set forth in the LLC Agreement.

 

10.                               Independent Contractor.  In performance of the
work, duties, and obligations under this Agreement, the Parties acknowledge and
agree that the Management Company shall act as an independent contractor, and
that the AF-CH-HH Group shall neither have nor exercise any control or direction
over the methods by which the Management Company or its employees function in
providing

 

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the Management Services.  The Management Company acknowledges and agrees that it
shall be solely responsible for all payroll taxes, withholding taxes,
withholding tax obligations, and related duties connected with the personnel
employed by the Management Company to provide the Management Services.

 

11.                               Miscellaneous.

 

(a)                                 Amendments and Waivers.  This Agreement may
only be amended, modified, or supplemented in a writing signed by the Management
Company and the AF-CH-HH Group.  The failure of any Party hereto to enforce any
provision of this Agreement against the other Party shall not be deemed a waiver
or in any way affect the validity of this Agreement or any part hereof.  No
waiver of any breach of this Agreement shall be held to constitute a waiver of
any other or subsequent breach.

 

(b)                                 Appropriate Amendments.  Notwithstanding
anything in this Agreement to the contrary, upon any of the events listed in
paragraphs (i) or (ii) below, the Parties agree to immediately initiate
negotiations to resolve the matter through amendments to this Agreement.  If the
Parties are unable to resolve the matter within 45 days after initiating
negotiations, either Party may, at its option, terminate this Agreement upon
written notice to the other party.

 

(i)                                     If, in the opinion of a Party’s legal
counsel, there is a material risk of loss to: (A) the licensure of the Party;
(B) the participation of the Party in the Medicare or Medicaid programs; or
(C) the Party’s full accreditation by any State or nationally-recognized
accrediting organization; or

 

(ii)                                  If for any other reason performance under
this Agreement should be in violation of any statute, ordinance, or be otherwise
deemed illegal, or be deemed unethical by any recognized body, agency, or
association in the medical field.

 

(c)                                  Severability.  Whenever possible, each
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement
is held to be prohibited by or invalid under applicable law, such provision will
be ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provision of this
Agreement.

 

(d)                                 Complete Agreement.  This Agreement and the
documents referred to herein contain the complete agreement between the Parties
and supersede any prior understandings, agreements or representations by or
between the Parties, written or oral, which may have related to the subject
matter hereof in any way.

 

(e)                                  Assignability; Binding Effect. Neither this
Agreement nor any right or obligation under this Agreement may be assigned by
any of the Parties to this Agreement without the prior written consent of the
other Parties to this Agreement; provided, however, that the Management Company
shall have the right to assign this Agreement to an affiliate of the Management
Company upon written notice to the AF-CH-HH Group of same.  Any attempted
assignment in violation of the foregoing shall be void and of no effect.  The
rights and obligations of the Agreement shall extend to and be binding upon the
Parties and their respective heirs, executors, administrators, successors and
assigns, as applicable.

 

(f)                                   Construction.  This Agreement shall be
construed under, and in accordance with, the laws of the State of Delaware. In
the event any of the provisions of this Agreement are to be held invalid,
illegal or unenforceable in any respect, by a court of competent jurisdiction,
the remaining portion of this Agreement shall continue to be in full force and
effect.

 

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(g)                                  Notices.  All notices provided for in this
Agreement shall be delivered by registered or certified mail, or by FedEx or
other reputable overnight carrier, to the applicable party at the respective
address set forth below, or at such other addresses as the Parties shall
designate to each other in writing:

 

If to the Management Company:

 

c/o Almost Family, Inc.

9510 Ormsby Station Road, Suite 300

Louisville, Kentucky 40223

Attention:  President

 

with a copy to:

 

Frost Brown Todd LLC

400 West Market Street, 32nd Floor

Louisville, Kentucky 40202

Attention:  Scott W. Dolson

 

If to the AF-CH-HH Group:

 

c/o Almost Family, Inc.

9510 Ormsby Station Road, Suite 300

Louisville, Kentucky 40223

Attention:  President

 

with a copy to:

 

Frost Brown Todd LLC

400 West Market Street, 32nd Floor

Louisville, Kentucky 40202

Attention:  Scott Dolson

 

and

 

CHSPSC, LLC

4000 Meridian Boulevard

Franklin, Tennessee 37067-6325

Attention:  General Counsel

 

(h)                                 Arbitration.  Unless the Parties agree
otherwise, if any dispute arises between the Parties relating to this Agreement
or any claim arising out of this Agreement (or its breach), the Parties will
first utilize the procedures specified in this Section 11(h) prior to initiating
any court proceedings or other legal action.  First, any Party seeking to
resolve a dispute shall give written notice to the other Party, describing in
general terms the nature of the dispute and the initiating Party’s claim for
relief.  The Parties shall then make a good faith attempt for the 30-day period
which immediately follows delivery of such notice to meet (with legal and other
counsel if desired) to discuss the dispute and to attempt to achieve a
settlement thereof.  If the dispute is not resolved within such 30-day period,
then the Parties shall cease to negotiate directly and shall submit such dispute
to arbitration.  The Parties shall each appoint one person to hear and determine
the dispute, and such person appointed by each party shall have at least 10
years’

 

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experience in the health care industry.  If these two arbitrators cannot agree,
then the two arbitrators shall choose a third impartial arbitrator who shall
have at least 10 years’ experience in the health care industry, whose decision
shall be final.  The arbitration shall be conducted in accordance with and
subject to the American Health Lawyers Alternative Dispute Resolution Service
Rules of Procedure for Arbitration.  All costs and expenses of arbitration shall
be paid equally by the Parties to such arbitration, except that each Party to
such arbitration shall be solely responsible for its own attorney’s fees. The
meetings of the arbitrator shall be held in Louisville, Kentucky or at such
other place or places as may be determined by the Parties.

 

(i)                                     Singular and Plural; Gender.  The
singular shall include the plural and vice-versa, and the use of one gender
shall be deemed to include all other genders whenever appropriate.

 

(j)                                    Section Titles.  The headings herein are
inserted as a matter of convenience only, and do not define, limit, or describe
the scope of this Agreement.

 

(k)                                 Incorporation of Preliminary Statements. 
The Recitals are incorporated herein by this reference, are made a part of this
Agreement, and shall have the full force and effect of any other provision of
this Agreement.

 

(l)                                     No Referrals.  The Parties agree that
the benefits to the Parties under this Agreement do not require, are not payment
for and are not in any way contingent upon the referral of patients or business
or any other arrangement for the provision of medical services or products.

 

(m)                             Change in the Law.  It is the intent and good
faith belief of the Parties hereto that this Agreement complies with the Federal
Anti-Kickback Statute, 42 U.S.C. §1320a-7b and other applicable Federal and
State laws and regulations.  In the event there is a change in the law or in the
interpretation of the law, either by statute, regulation or written final
opinion which makes this Agreement or any part hereof illegal, then this
Agreement shall be reformed to comply with the law.  If it is not possible to
reform this Agreement to comply with the law or if to do so would materially
deprive either Party of the benefits contemplated when this Agreement was
signed, then this Agreement shall be terminated as provided under Section 8(b).

 

(n)                                 Fair Market Value.  The Parties hereby agree
that the aggregate compensation paid by the AF-CH-HH Group to the Management
Company for the Management Services performed by the Management Company under
this Agreement represents fair market value for the Management Services.

 

(o)                                 Disclosure and Waiver of Conflicts.  In
connection with the preparation of this Agreement, the Parties acknowledge and
agree that:  (i) the attorney that prepared this Agreement (“Attorney”) acted as
legal counsel to the Management Company; (ii) the Parties have been advised by
the Attorney that the interests of the Parties may be opposed to each other and,
accordingly, the Attorney’s representation of the Management Company may not be
in the best interests of the Parties; and (iii) each of the Parties has been
advised by the Attorney of their right to retain separate legal counsel. 
Notwithstanding the foregoing, the Parties (A) acknowledge that they have been
advised of their right to retain separate counsel and have either done so or
have waived their right to do so; and (B) jointly and severally forever waive
any claim that the Attorney’s representation of the Management Company
constitutes a conflict of interest.  AF-CH-HH acknowledges that it has retained
CHSPSC, LLC’s counsel to represent it in connection with the negotiation and
drafting of this Agreement.

 

10

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(p)                                 Counterparts; Facsimile.  This Agreement may
be executed in any number of counterparts, and delivered by facsimile or other
electronic means, each of which shall be deemed an original and when taken
together shall constitute one complete instrument.

 

(o)                                 Post-Closing Restructuring.  The Parties
hereto acknowledge that AF-CH-HH may undergo a restructuring after the date
hereof that would involve the spin out of some or all of the subsidiaries of
AF-CH-HH into separate joint ventures.  Each separate joint venture would be
owned 80% by AFAM (or one of its affiliates) and 20% by the Community Health
Services, Inc. subsidiary that owns and operates a hospital in the market of the
given separate joint venture (each a “CHS Hospital”).  AF-CH-HH, AFAM and NHI
hereby agree that each such separate joint venture would enter into a management
services agreement substantially similar to this Agreement with AFAM and NHI,
and such new management services agreement shall have a term consistent with the
term of this Agreement.  Each of the undersigned Parties has executed and
delivered this Services Agreement as of the date first set forth above.

 

 

 

 

The Management Company:

 

 

 

 

 

NATIONAL HEALTH INDUSTRIES, INC.

 

 

 

 

 

 

 

 

 

By:

/s/ P. Todd Lyles

 

 

 

P. Todd Lyles, Senior Vice President

 

 

 

 

 

 

 

 

ALMOST FAMILY, INC.

 

 

 

 

 

 

 

 

 

 

By:

/s/ P. Todd Lyles

 

 

 

P. Todd Lyles, Senior Vice President

 

 

 

 

 

 

 

 

The AF-CH-HH Group:

 

 

 

 

 

AF-CH-HH, LLC

 

 

f/k/a COMMUNITY HEALTH UNITED HOME CARE, LLC

 

 

 

 

By:

NATIONAL HEALTH INDUSTRIES, INC., as Manager

 

 

 

 

 

 

 

 

 

 

By

/s/ P. Todd Lyles

 

 

 

P. Todd Lyles, Senior Vice President

 

11

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ATTACHMENT A

TO

ADMINISTRATIVE AND MANAGEMENT SERVICES AGREEMENT

 

Section 1:  Shared Services Included in Management Fee:

 

1. Chairman/CEO Expense

2. Government Affairs

3. Internal Audit and Compliance

4. Finance, Tax and Accounting

5. Information Technology

6. Accounting

7. Accounts Receivable

8. General Operations

9. Human Resources

10. Legal

11. Administration

12. Clinical Affairs

 

Section 2:  Direct Costs and Expenses to be paid by AF-CH-HH:

 

1. Home Health Line Management

2. Senior Operations Management

3. PC/Hospice Line Management

4. Hospital Specific Programs

5. Sales and Marketing

 

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