Termination of tenured appointments: MCP Hahnemann School of Medicine (Pennsylvania)

As you know, the Allegheny University of the Health Sciences is undergoing many changes as the transition out of bankruptcy occurs. A new organizational structure is being developed and staffing requirements are being identified. While it is unfortunate that we cannot retain all of the current employees, this reorganization is crucial to the success of the new venture.

As a result of these organizational changes, it has been determined that your employment will be terminated by Allegheny University of the Health Sciences effective at the close of the transaction (anticipated to be November 10, 1998). In order to minimize disruption to your continuing research efforts and academic pursuits to the extent possible, I am pleased to offer you a transitional arrangement with the Philadelphia Health and Education Corporation, which is the legal entity name for MCP Hahnemann University (the University). This arrangement is outlined in the attached Faculty Transition Agreement. If you are currently eligible for benefits, you will also be eligible to participate in the benefit plans and programs described in the accompanying attachment and at the contribution rates shown in the rate schedule.

FACULTY TRANSITION AGREEMENT

1. License to Use Office and Laboratory Space. The University hereby grants Faculty Member a license to use the office and laboratory space used historically by Faculty Member as a member of the faculty of Allegheny University of the Health Sciences.

2. Transitional Stipend. Faculty Member shall receive a transitional stipend as set forth in Schedule A attached hereto and incorporated herein by reference. Compensation shall be payable as an employee in accordance with University policies and procedures.

4. Term. The term of this Agreement shall expire on June 30, 1999.

6. Faculty Status. Faculty Member acknowledges that Faculty Member does not hold a faculty appointment with the University and that Faculty Member shall not have the rights and privileges of a faculty member of the University.

10. Release. In consideration of the terms of this Agreement, Faculty Member hereby releases Allegheny University of the Health Sciences, a Pennsylvania nonprofit corporation ("AUHS") and Allegheny Health, Education, and Research Foundation, a Pennsylvania nonprofit corporation ("AHERF") from and against any and all liability it may have with respect to the termination of Faculty Member's employment agreement with AUHS (the "AUHS Agreement") or with respect to severance benefits (excluding COBRA benefits) to which Faculty Member might otherwise be entitled; provided, however, this release shall not affect any rights or claims Faculty Member may have, if any, for incentive compensation or deferred compensation payments under the AUHS Agreement. Such release shall inure to the benefit of AUHS and AHERF, which, notwithstanding anything to the contrary contained in this Agreement, are intended thirdparty beneficiaries of this Section.

Letters to faculty members who were to be retained, also signed by President Papadakis, were notable in their use of the phrase, "offer you employment," and in including an "employment agreement," also to be signed within twenty-four hours. In the PHEC-Drexel administration's view, faculty were being appointed de novo, not retained, and any rights under the nowabandoned AUHS bylaws had presumably been withdrawn.