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HomeMy WebLinkAbout00-00255 .' ,>~ r.~~ul'!lliL, '- WILLIAM WRA Y, JR, and KAY GRAY WRA Y, husband and wife,: Plaintiffs v. IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY , PENNSYLVANIA NO. .;/OC6- ..<S'S (l"Jc'{ '-r~ BETSY WRA Y DESTEFANO, an adult individual, and BETSY WRA Y DESTEFANO trading as DO WRA Y MI: PIANO RENTALS and WRA Y'S MUSIC HOUSE PARTNERSHIP, . Defendants NOTICE YOU HAVE BEEN SUED IN COURT. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) 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. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP. CUMBERLAND COUNTY BAR ASSOCIATION 2 LffiERTY AVENUE CARLISLE, PENNSYLVANIA 17013 TELEPHONE: (717)-249-3166 - ".J " WILLIAM WRA Y, JR. and KAY GRAY WRA Y, husband and wife,: Plaintiffs IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. A. rrov - :2 j/5 eu;;;; I ~ v. BETSY WRAY DESTEFANO, an adult individual, and BETSY WRA Y DESTEFANO trading as DO WRAY MI: PIANO RENTALS and WRA Y'S MUSIC HOUSE PARTNERSHIP, Defendants COMPLAINT AND NOW, this /~B day of J-. ~p.r!:, , 2000 come the plaintiffs, WILLIAM WRAY, JR. and KAY GRAY WRAY, by and through their attorney, R. Mark Thomas, Esquire, to file this Complaint and in support thereof respectfully represent: 1. Plaintiffs William Wray, Jr. and Kay Gray Wray, are husband and wife residing at 91 Skyline Drive, Mechanicsburg, Cumberland County, Pennsylvania. 2. Defendant Betsy Wray DeStefano is an adult individual who currently resides at 221 GIenside Lane, Camp Hill, Cumberland County, Pennsylvania. 3. Defendant Do Wray Mi Piano Rentals is a general partnership operating as a retail business with its principal place of business located at 400 Market Street, Lemoyne, Cumberland County, Pennsylvania. 4. Defendant Wray's Music House Partnership is a general partnership involved in buying, selling and leasing real estate with its principal place of business located at 400 Market Street, Lemoyne, Cumberland County, Pennsylvania. 5. Plaintiffs and defendant are partners in the partnership known as Do Wray Mi Piano Rentals. (Hereinafter referred to as "Business Partnership''). A copy of the Amended and .J Restated General Partnership Agreement dated January 10, 1989 is attached hereto and marked as Exhibit "A". 6. Plaintiff William Wray, Jr. and Betsy Wray DeStefano are partners in the real estate partnership known as Wray's Music House Partnership. (Hereinafter referred to as "Real Estate Partnership"). COUNT I William Wray,Jr; and Kay Gray Wray, Plaintiffs v. Betsy Wray DeStefano, Defendant 7. Paragraphs 1 through 6 are incorporated herein as if set forth at length. 8. On or about August 31, 1999, all parties entered into a "Withdrawal from Partnership Agreement" whereby William Wray, Jr. and Kay Gray Wray were to withdraw from the "Business Partnership" pursuant to terms of the Agreement. A copy of this Withdrawal From Partnership Agreement is attached hereto and incorporated herein as Exhibit "B". 9. Following the execution of the Withdrawal From Partnership Agreement by all parties the plaintiffs withdrew from the day to day operations of the ''Business Partnership" as per the Agreement. 10. Plaintiffs complied with the requirements of the Agreement that they would deliver to the defendant all books, records, correspondence, manuals, letters, notes, notebooks, reports and any other documents and tangible items belonging to the partnership. 11. Under the terms of the Agreement closing was to occur within sixty (60) days, but impliedly could be extended to a period of ninety (90) days from the date of the execution of the Agreement. . J ;fi c 12. Closing should have occurred on or before November 29,1999, but was extended by agreement to occur on or before December 6,1999. 13. The consideration to be paid to the plaintiffs as a result of the Withdrawal From Partnership Agreement is $144,881.06. 14. Despite requests by the plaintiffs to conduct closing on this Agreement the defendants have refused and continue to refuse to comply with the terms of the Agreement, particularly the payment to plaintiffs in the amount of $144,881.06. 15. Defendants have breached the terms of the Withdrawal From Partnership Agreement by their refusal to pay plaintiffs the agreed upon consideration for their withdrawal from the partnership. WHEREFORE, plaintiffs demand judgment against the defendants in the amount of $144,881.06, plus costs and interest as the law may allow. COUNT II Plaintiff William Wray, Jr. v. Defendant Betsy Wray DeStefano 16. Paragraphs 1 through 15 are incorporated herein as if set forth at length. 17. Plaintiff William Wray, Jr. was a partner with defendant Betsy Wray DeStefano in a Real Estate Partnership known as Wray's Music House Partnership. 18. On or about August 31, 1999, plaintiff and defendant entered into a Partnership Withdrawal Agreement. A copy of that Agreement is attached hereto and incorporated herein as if set forth in length and marked Exhibit ''B''. 19. Plaintiff William Wray, Jr. has complied with all terms and conditions set forth in the Agreement to be performed by him. ~ ~. - - ,.1._ ........,_ ( . 20. Plaintiff was to receive consideration in the amount of $152,092.19 as a result of his withdrawal from the Real Estate Partnership. 21. Closing was to occur within sixty (60) days from the date of execution of the Partnership Withdrawal Agreement, but impliedly could be extended to ninety (90) days. 22. Closing was to be held on or before November 29, 1999, but was extended by agreement to December 6,1999. 23. Plaintiff has requested and demanded that closing take place pursuant to the terms of the Partnership Withdrawal Agreement, but defendants refuse and continue to refuse to pay the consideration agreed upon for plaintiff's withdrawal from this partnership. 24. Defendants are in breach of the Partnership Withdrawal Agreement due to their refusal to pay the agreed upon consideration in the amount of $152,092.19. WHEREFORE, plaintiff William Wray, Jr. seeks damages against the defendant Betsy Wray DeStefano in the amount of $152,092.19, plus costs and interest as the law may allow. Respectfully submitted, ~- R. Mark Thomas, Esquire Attorney for Plaintiffs 101 South Market Street Mechanicsburg, P A 17055 (717)796-2100 ID# 41301 , . . ", , VERIFICATION We, Williarn Wray, Jr. and Kay Gray Wray verifY that the staternents rnade in the foregoing docurnent are true and correct. We understand that false staternents herein are rnade subject to the penalties of 18 Pa. C.S. ~4904, relating to unsworn falsification to authorities. D,re!-/~ ~~ Date: /hpo~c) I ~~~)t!c~ AMENDED AND RESTATED GENERAL PARTNERSHIP AGREEMENT DO WRAY MI PIANO RENTALS , I')'U . AGREEMENT made this C - day of 3,tll(;..(\V"~' 1989, by and between WILLIAM WRAY, JR. and KAY GRAY WRAY, his wife, as tenants by the entireties, ("Partner") and NANA E. WRAY DESTEFANO (together "Partners"), adult individuals. WITNESSETH: WHEREAS, by Partnership Agreement dated July 29, 1977 the Partners together with Frank J. DeStefano formed a Pennsylvania general partnership known as "Do Wray Mi Piano Rentals;" and WHEREAS, Frank J. DeStefano previously transferred and assigned his partnership interest to Nana Elizabeth WraYi and WHEREAS, the Partners desire to amend and restate the Partnership Agreement as hereinafter set forth. That in consideration of the mutual covenants -~~'-"-''''-'': i I I i I I. '''." contained herein, and intending to be legally bound, the parties hereto agree as follows: ARTICLE I Organization of Partnership c 1.1. Name. The Partners hereby declare themselves to be associates as a general partnership under the name and style of "Do Wray Hi Piano Rentals". . :1 . ~ I !i 1.2. Place of Business. The principal office and place of business of the Partnership shall be 370 Market Street, Lemoyne, Pennsylvania 17043, or at such other location as may hereafter be determined by the Partners. 1.3. Term. The term of the Partnership shall commence as of the date of execution of this Agreement and shall terminate twenty (20) years and one (1) day hence unless the Partnership is sooner terminated or dissolved in accordance with the provisions of this Agreement or by operation of law. 1.4. Other Business of Partners. Except as otherwise specifically provided herein, nothing in this Agreement shall - 2 - J.. ~'-. i .. be construed to prohibit the Partners, or any of them, from conducting or carrying on any other business or trade, whether alone, with each other, or with third persons, and whether or not similar to o~ in competition with the business of the Partnership, and neither the Partnership nor the Partners shall ,have any right by virtue of this Agreement in or to such independent ventures or to the income or profits derived therefrom. 1.5. Scope of Authority. Except as otherwise expressly provided herein, neither Partner shall have any authority to act for, or to assume any obligations or responsibilities on behalf of, the other Partner or the Partnership. .J 1.6. Partners. The terms "Partner" and "Partners" as used herein shall refer to the parties hereto and, to the extent permitted by this Agreement, to any successors in interest admitted as partners. ARTICLE II Purpose and Business 2.1. Purpose of the Partnershio. The Purpose of the - 3 - ~, , ~, .1 "."",:,: Partnership is to acquire, own, maintain, lease and rent piano and musical instruments and to perform such other actS as necessary to accomplish the purpose of the partnership all under the terms and conditions hereafter set forth and provided the same shall not be prohibited hereunder or under the laws of the Commonwealth of Pennsylvania. ARTICLE III Capital Contributions and Partnership Interests 3.1. Capital Contributions. The Partners shall make capital contributions at such times and in such amounts as the Partners unanimously shall agree. Such capital contributions shall be made equally by each Partner unless the Partners unanimously agree otherwise in writing. 3.2. Additional Partners and Capital Contributions. Except as hereinafter set forth, no additional person may be admitted as a Partner without the unanimous consent of all Partners. Any Partner may transfer, assign and conveyor give, devise and bequeath all or any portion of'such Partner's partnership interest by testamentary or inter vivos transfer to said Partner's spouse and/or issue, provided that the - 4 - - - " _. transferee(s) of such partnership interest shall execute an amendment to this Partnership Agreement agreeing to be bound by the terms hereof. 3.3. Return of Capital Contribution. Except as otherwise specifically provided in this Agreement, no Partner shall be entitled to demand or to receive the return of his Capital Contribution. 3.4. Capital Accounts. An individual capital account shall be maintained for each Partner. The capital, interest of each Partner shall consist of that Partner's original capital contribution increased by (i) that Partner's additional contributions to capital, and (ii) any credit balances transferred from that Partner's drawing account to that Partner's capital account, and decreased by (a) distributions to that Partner in reduction of that Partner's Partnership capital and (b) that Partner's share of Partnership losses if charged to the capital accounts of the Partners. Capital account balances shall ,not bear interest unless otherwise agreed in writing by the Partners. 3.5. Drawing Accounts. An individual drawing account shall be maintained for each Partner. All withdrawals by a Partner shall be charge~ 1;9 that Pa,rtner' s drawing account. - 5 - ~ Ju..: Withdrawals during the year shall be limited to such amounts as the Partners, by a majority vote, shall determine from time to time. Each Pa,rtner' s share of any Partnership net loss shall be charged to that Partner's drawing account, unless the Partners by a majority vote agree to charge the loss to the capital accounts of the Partners. Each Partner's share of Partnershij profits shall be credited to that Partner's drawing account. The Partners may determine by unanimous vote to transfer to Partnership capital all or any portion of the credit balances in the drawing accounts of the Partners. Any amounts transferred shall be in the proportions of the Partners' interests in profits or losses of the Partnership. 3.6. Balances in Drawing Accounts. A credit balance in a Partner's drawing account shall constitute a liability of the Partnership to that Partner; it shall not constitute a part of that Partner's interest in the capital of the Partnership. A debit balance in a Partner's drawing account, whether occasioned by drawings in excess of her/his share of Partnership profits or by charging that Partner for a share of Partnership loss, shall constitute an obligation of that Partner to the Partnership; it shall not reduce the Partner's interest in the capital of the Partnership. Such obligation of a Partner shall be treated as a loan by the Partnership to the - 6 - .~ .'-,. - Partner and shall bear interest at the of six (6%) percent per annum and shall be repaid to the Partnership on demand of any Partner. ARTICLE IV Profits and Losses 4.1. Allocations: Determination of Profits and Losse~. Each item of income, profit, gain, loss, deduction, credit and other items of tax significance shall be allocated to and shared by each Partner equally. Profits and losses for all purposes of this Agreement shall be determined in !! " I I I !i I, I 'I " i i II il I, " ii " " 'I I' i! " Ii I ! I !: I " accordance with the accounting method followed by the Partnership for Federal Income Tax purposes, except that any adjustments made pursuant to Section 743 of the Internal Revenue Code of 1986, as amended, shall not be taken into account. Every item of income, gain, loss, deduction, credit or tax preference entering into the computation of such profit or loss, or applicable to the period during which such profit or loss was realized, shall be considered allocated to each Partner in the same proportion as profit and loss are allocated to such Partner. - 7 - ~~ 4.2. Salaries and Distributions. Unless otherwise agreed upon, a Partner shall not receive from the Partnership any salary or other compensation for services rendered as a Partner to the Partnership. Profits from the Partnership may be distributed from time to time as agreed by the Partners. All such distributions shall be made to each Partner in , accordance with his share of profits or losses. ARTICLE V Management of the Partnership 5.1. ~anag~ment. The overall management and control of the business and affairs of the Partnership shall be in the Partners collectively. Except as otherwise specifically provided herein, no Partnership action shall be taken unless approved by the Partners having a majority in interest in the profits and losses of the Partnership. 5.2. Responsibilities of Partners. A11 of the Partners shall devote so much of their time to the business of the Partnership as shall be necessary for the efficient carrying on thereof and shall cooperate with each other in achieving Partnership goals. - 8 - 5.3 Unanimous Consent. Notwithstanding any other provision to the contrary, no Partner, without the consent of the other Partners, may: (i) Borrow money in the firm name for firm purposes or utilize collateral owned by the partnership as security for such loans; (Ii) Assign, transfer, pledge, compromise, or release any of the claims of, or debts due, the partnership, except upon payment in full, or arbitrate or consent to the arbitration of any disputes or controversies of the partnership; " !! Ii I . Ii " I, !I (iii) Make, execute, or deliver any assignment for the benefit of creditors, or any bond, confession of judgment, chattel mortgage, deed, guaranty, indemnity bond, surety bond, or contract to sell or .J contract of sale of all or substantially all of the property of the partnership; (iv) Lease or mortgage any partnership real estate or any interest therein or enter into any contract for any such purposei (v) Pledge, or hypothecate, or in any manner transfer, his interest in the partnership, except to the other parties to this Agreement; (vi) Become a surety, guarantor, or accommodation party to any obligation. - 9 - -~~ ARTICLE VI Transfer of Partnership Interests. 6.1 Death or Withdrawal. Except as provided in paragraph 3.2 hereof, upon the withdrawal or death of any Partner, the remaining Partner shall either purchase the entire interest in the ~~rtnership of the withdrawing or deceased Partner, or terminate and liquidate the Partnership business. For purposes of this Agreement, a withdrawal from the Partnership shall be deemed to have occurred when a Partner terminates his/her employment with or transfers or assigns his/her common stock in Wray's Music House, Inc. except an inter vivos or testamentary transfer of such stock to ~ous~ or issue. 6.2 Liquidation. If the remaining Partner does not elect to purchase all of the interest of the deceased or withdrawing Partner in the Partnership, the remaining Partner shall proceed with reasonable promptness to liquidate the business of the Partnership. The surviving Partner and the estate of the any deceased Partner shall share in the profit and losses of the business during the period of liquidation in the same proportion in which they shared such profits and losses prior to the death of the deceased Partner. A - 10 - , "'"" .' withdrawing Partner shall not share in any profits, but shall share in losses incurred during the period of liquidation. 6.3 Acquisition of Interest of a Deceased or Withdrawing Partner: Purchase Price. In the event the rema.ining Partner elects to acquire the interest of the --"-'_."'~'''''-''"i''''," ...,_ ,_.'" . ...' withdrawing or deceased Partner, the purchase price for a __".'''''~~~'''''''r''_.._,.____''''. Partner's Partnership interest hereunder shall be that ....--.,.....,. Partner's proportionate share of the fair market value of the -,.....-.,~..".~...,~ ,-~ - -,~."," --".. Partnership assets less all liabilities of the Partnership as __"' '_'~r'_" '''~'''__~,.. ". determined by the certified public accountants regularly _"~.,,''''~_...'''_~_,,.."..___.. e__' ,. retained by the Partnership. For this purpose, the fair market -~-~.,"....<.,_.,-,,,,-.,,- value of the Partnership Assets shall be determined by an appraisal by a qualified appraiser of pianos and musical instruments mutually agreeable to the withdrawing Partner or the personal representative of the estate of the deceased Partner and the remaining Partner, or if no agreement is reached, by a panel of three (3) such appraisers, one to be selected by the withdrawing Partner or the personal representative of the estate of the deceased Partner, one to be selected by the remaining Partner, and one to be selected by the two appraisers so selected. - 11 - ~ .-.; 6.4 Acquisition of Interest of Deceased or Withdrawing Partner: Method of Payment. The entire purchase price of the deceased or withdrawing Partner's interest in the ---.." ............ ,". . '. .'~""-' -.-.... ,- - - "~."-"~--~'-,-- Partnership shall be paid within thirty (30) days of}h.~ -----_...............'~--..~._..__. - - ," " determination of the value of the Partnership interest in -~--_.--,--,_.. - accordance with Section 6.3 hereof. -.,.....-......----....-. --::"-..... --_.- 6.5' Balance in Drawing Account. The balance in the drawing account of a deceased or withdrawing Partner is to be treated as an obligation of the Partnership to the Partner or an obligation of the Partner to the Partnership, as the case may be. Any amount owed. whether to the Partner or to the ~~'-_."-. .-... Partnership', as reflected in the drawing account,o..f a deceased .....~...._~,........_.-,......'"_._...-.. . "'~n"'" '''_ '.' or withdrawing Partner shall be paid within ninety (90) da~s ~~--"--"F_."'-"""---""'--'" "'"--....,.-,.-' after the death or withdrawal of such Partne~. ii ~ .ii ~ ___~.. -,..'-.._.._......~..._"..". .," _,." _0._ 6.6 Dissolution of Partnership. Notwithstanding the provisions of Items 6.4 and 6.5, in the event the Partnership is dissolved, the rights and obligations of each Partner, including the right to any distributions from the Partnership, shall be governed by the provisions of the Uniform Partnership Act, 59 Pa. C.S.A. ~301 et. seq. - 12 - . ARTICLE VII Distribution of Proceeds of Financing, Sale of Assets and Dissolution 7.1. The net proceeds of loans secured by the Partnership property in excess of that sum necessary to pay such creditors of the Partnership as may be necessary to create such financing, or free such property from encumbrance; the net proceeds at the time of a sale of all or substantially all of the assets of the Partnership, or upon dissolution~ shall be distributed as follows: a. First to creditors of the Partnership other than the Partners; b. Second, to repayment of debts owed to Partners; c. Third, in the event that the ratio of the capital account of any Partner or Partners to the capital accounts of all Partners shall exceed the ratio of such Partner or Partner1s interest in the profits and losses of the Partnership to the interest of all Partners in the profits and losses, to such Partners, until the capital accounts of all Partners are - 13 - ..~~ ~~ -., . , "' ~ - I """''''." " in proportion to their respective interests in profits and losses; d. Fourth, among the Partners in proportion to their then interests in the profits and losses of the Partnership. In any case of payment in classification a, b or c above, in the event the fund is insufficient to pay all items in such classification, payment shall be made proportionately. ARTICLE VIII Dissolution Mechanics 8.1. Liquidation. Upon the termination or dissolution of the Partnership, the liquidating Partners shall sell and collect the assets of the Partnership and wind up its affairs. Except as agreed by the liquidating Partners, no Partner shall have the right to act for or on behalf of the Partners after dissolution. 8.2. Liquidatin~_rtners. The liquidating Partners shall be both of the Partners or the personal representative or - 14 - ,- ~, legatee of a deceased Partner, except no Partner shall serve as liquidating Partner if: a. He is bankrupt, or b. The Partnership has been dissolved by reason of that Partner's breach of the Partnership Agreement. The liquidating Partners shall serve without compensation, but shall be reimbursed for all expenses (including attorneys' fees incurred in successfully defending their right to act as liquidating Partners) incurred in winding up the affairs of the Partnership. . .I ARTICLE IX Books, Records, Accounts 9.1. Fiscal Year. The fiscal year of the PartnerShip shall be the calendar year. 9.2. Books and Records. Complete records and bookS of account shall be kept and maintained in the office of the Partnership according to generally accepted accounting - 15 - I~' ~ .~ '" -"""''''-" practices. Each of the Partners shall be entitled at any reasonable time to examine such books and records in person or by agent and to make copies or excerpts therefrom. 9.3. Accounting. As soon as practicable after the close of each fiscal year, the Partnership shall obtain at Partnership expense a complete operating statement prepared by an independent certified public accountant which shall show all usual operating data for the Partnership for the preceding year in accordance with good accounting practice. Such operating statement need not be audited or certified except at the request and the expense of any Partner or Partners. Each Partner shall receive a copy of the Tax Return as soon as it shall be available. Each Partner shall, upon request, receive copies of all reports and communications recorded by the Partnership. ARTICLE X General Provisions 10.1. Indemnification. Each Partner shall be indemnified by the other Partner and held harmless against and from all claims, demands, actions and rights which shall or may - 16 - -J I,"",Jo, arise by virtue of anything done by that Partner outside the scope of, or in breach of the terms of this Agreement; Provided, that the Partner against which indemnity is sought shall be promptly notified of the existence of the claim, demand, right or action and shall be given reasonable opportunity to participate in the defense thereof, and further "., provided that f~ilure to give such notice shall not affect such Partner's obligations hereunder, except to the extent of any actual prejudice to him resulting therefrom. 10.2. Equitable Relief. Each Partner acknowledges and agrees that the remedy at law for any breach of any of the terms of this Agreement would be inadequate, and agrees and consents that temporary and permanent injunctive and other equitable relief may be granted in any proceeding which may be brought to enforce any provision hereof, including with such other equitable relief specific performance, without the necessity of proof of actual damage or inadequacy of any legal remedy. 10.3. Construction. Wherever the context so requires, the feminine gender shall be substituted for the masculine, the masculine for the feminine or the neuter for either; the singular shall be substituted for the plural and - 17 - "'....- ~, vice versa. Paragraph headings are for convenience only and do not constitute a part of this Agreement. 10.4 Notices. All notices or other communication pursuant hereto shall be in writing and, unless otherwise specifically stated herein, shall be deemed given when ~.. delivered or depOsited in the United States Mail, Certified or Registered Mail. return receipt requested. Rejection or other refusal to accept notice or the inability to deliver mailed notice because of a changed address which no notice was given shall be deemed to be receipt of notice. Until ch~nged by appropriate notice to the Partners, notice shall be addressed to the Partners at their addresses as recorded in this Agreement. 10.5. Binding Agreement. The covenants and agreements herein contained shall inure to the benefit of, and be binding upon, the parties hereto and, to the extent permitted by this Agreement, to their successors and assigns. 10.6. Entire Agreement. This Agreement contains the entire understanding among the parties. There are no representations, agreements" arrangements, or understandings, oral or written, between and among the parties hereto relating - 18 - ,- ~~. .J <_:. . to the subject matter of this Agreement which are not fully expressed herein. 10.7. Governing Law. The Partnership and this Agteement shall be governed by, and construed in accordance with, the laws of the Commonwealth of Pennsylvania. IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and seals the day and year first above written. --;)\"'-""'A Z:-,oJ~ Wfth~ss - \ / Wi! . I( ay, ~4A4 Wi ness >. eJAt,'J ) Jf~j Witne s 1c~~ - - ~."""~w MEMO: TO: Belsy FROM: Kay RE: Addendwn's DATE: May 31,19911 Betsy please sign lJoth copies of the three (3) partnership agreements addendum's and return 10 me as soon as possible so we can start with the payments, 1 will get them notarized and return a copy of each to you. T111lllks - , ADDENDUM TO DO WRA Y Ml PIANOS PARTNERSHIP AGREEMENT This is an addendum to paragraph 4.2 of the above mentioned partnership agreement. A guarnnteed monthly payment is due to the following partners beginning 6/1/98: Nana WillY DeStefano $IlOO.OO per month for services rendered at Do WillY Mi Pianos in the capacity of answering phones and helping with sales when necessary, Kay G, WillY $IlOO,OO per month for services rendered at Do Wray Mi Pianos in the capacity of bookkeeper and other sUch accounting activities when necessary, Any changes or additions to this agreement will be in an across the board percentage increase as follows: %INCREASE PER YEAR 2001 % INCREASE AMOUNT 5% 2004 5% 2007 5% ~}~fc' 5/31/98 INmALS ~(NWD) (KOW) ')U..u&- (NWD) ~ (KGW) ~~:~ Date CiJ/( /q 1 SWORN TO BEFORE ME ~~ 17'h drr of 0000 " 00.00, YGtu~ Nary Public Date Nola~al S.al Da~a C. Panner, NOlary PUbllo Lomoyna BoftJ, CIImIlnnd Co\mty My Commllllon IlIJlllI' Dill. II, IDOl M""'btr., Ptnn.ytvln. AlIIOIlI 01 otlI.. i'-'" " , ~- . ''C' PARTNERSHIP wrTHDRA W AL AGREEMENT THIS PARTNERSHIP WITHDRAWAL AGREEMENT (this "Agreement") is made as of the thirty-first day of August, 1999, by and arnong NANA E. WRAY DESTEFANO, an adult individual ("Betsy"), WILLIAM WRA Y, JR., an adult individual ("Bitr), KAY GRAY WRA Y, an adult individual ("Kay") (Bill and Kay being hereinafter sometimes collectively referred to as the "Withdrawing Partners"), DO WRAY MI PIANO RENTALS, a Pennsylvania general partnership (the "Business Partnership"), and WRAY'S MUSIC HOUSE PARTNERSHIP, a Pennsylvania general partnership (the "Real Estate Partnership") (the Business Partnership and the Real Estate Partnership being hereinafter sornetimes collectively referred to as the "Partnerships"), WITNESSETH: WHEREAS, Betsy, Bill, and Kay constitute all of the partners of the Business Partnership, pursuant to a certain Amended and Restated General Partnership Agreement dated January 10, 1989, (the "Business Partnership Agreement"); and WHEREAS, Betsy owns a fifty percent (50%) interest in the Business Partnership, Bill owns a twenty-five percent (25%) interest, and Kay owns a twenty-five percent (25%) interest therein; and WHEREAS, the Business Partnership is engaged in the business of owning and leasing pianos and other musical instruments; and WHEREAS, the Business Partnership entered into a certain Master Dealer Agreement, dated August I, 1996 (the "Dealership Agreement"), with Yamaha Corporation of America ("Yamaha"); and WHEREAS, Betsy and Bill constitute all of the partners ofthe Real Estate Partnership, pursuant to a certain General Partnership Agreement dated January 10, 1989, (the "Real Estate Partnership Agreement") (the Business Partnership Agreernent and the Real Estate Partnership Agreement being hereinafter sometimes collectively referred to as'the "Partnership Agreements"); and WHEREAS, Betsy owns a fifty percent (50%) interest in the Real Estate Partnership and Bill owns a fifty percent (50%) interest therein; and WHEREAS, the Real Estate Partnership owns certain improved real property located in Lemoyne Borough, Curnberland County, Cornrnonwealth of Pennsylvania, commonly known - - - """"'.- :.:i, and numbered as 370 Market Street, Lemoyne, and 400 Market Street, Lemoyne (the "Real Estate"); and WHEREAS, Bill and Kay desire to withdraw from the Partnerships, and Betsy is willing to permit Bill and Kay to do so, under and subject to the terms and conditions hereinafter provided, NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained and intending to be legally bound, the parties hereto agree as follows: 1. RECITALS. The foregoing recitals are incorporated herein and made a part of this Agreement. 2. WITHDRAWAL FROM THE PARTNERSHIPS, The terms and conditions of the withdrawal shall be as follows: (a) At Closing (as hereinafter defined), Bill and Kay shall withdraw from the Business Partnership, and Bill's and Kay's interest in the Business Partnership shall be completely liquidated, in exchange for the payment, in cash, of an amount determined by the Partnership's regular certified public accountant (the "Accountant") to equal Bill's and Kay's capital accounts in the Business Partnership, valued at cost (the "Business Liquidation Payments"). Bill and Kay each hereby waives any and all rights they might have to an ilPpraisal oftheir interests in the Business Partnership under applicable law or the Partnership Agreernent generally (or Article VI thereof specifically). It is the intention of the parties to treat the Business Liquidation Payments, to the extent possible, as payments in exchange for partnership property under Section 736(b) ofthe Internal Revenue Code of 1986, as arnended (the "Code). At the Closing, Bill and Kay shall each assign, setover, convey, sell and transfer to the Business Partnership all of their right, title, and interest in and to the Business Partnership (including, without lirnitation intended, any right, title, or interest in or to the partnership name, trade secrets, or proprietary information), by assignment document in substantially the form attached hereto as Exhibit "A" and made a part hereof, and shall execute and deliver to the Business Partnership and/or Betsy such other docurnent(s) as rnay be reasonably necessary or appropriate in order to evidence their withdrawal frorn the Business Partnership. (b) At Closing, Bill shall withdraw from the Real Estate Partnership, and Bill's interest in the Real Estate Partnership shall be cornpletely liquidated, in exchange for the payment, in cash, of an amount determined by the Accountant to be the surn of: (i) $114,500 (being one-half (l/2) of the appraised value of the Real Estate, pursuant to an appraisal dated December 6, 1996, plus five percent (5%)); (ii) one-half(l/2) of the Real - 2 - ~- "" Estate Partnership's prepaid expenses as of Closing; (iii) one-half (1/2) of the Real Estate Partnership's cash on hand as of Closing; and (iv) one-half (l/2) of the outstanding principal balance of a certain promissory note, dated July 10, 1990, delivered to the Real Estate Partnership by Wray's Music House, Inc. (the "Real Estate Liquidation Payment") (the Business Liquidation Payments and the Real Estate Liquidation Payment being sometimes hereinafter collectively referred to as the "Liquidation Payments"). Bill hereby waives any right he might have to an appraisal of his interest in the Real Estate Partnership under applicable law or the Partnership Agreernent generally (or Article VI thereof specifically), It is the intention of the parties to treat the Real Estate Liquidation Payment, to the extent possible, as a payment in exchange for partnership property under Section 736(b) of the Code, At the Closing, Bill shall assign, setover, convey, sell and transfer to the Real Estate Partnership all of his right, title, and interest in and to the Real Estate Partnership (including, without limitation intended, any right, title, or interest in or to the partnership name, trade secrets, or proprietary information), by assignment document in substantially the form attached hereto as Exhibit "A" and made a part hereof, and shall execute and deliver to the Real Estate Partnership and/or Betsy such other document(s) as may be reasonably necessary or appropriate in order to evidence his withdrawal from the Real Estate Partnership, (c) The parties acknowledge that the withdrawal of Bill and Kay from the Business Partnership will trigger Yamaha's option to repurchase certain Yamaha inventory owned by the Business Partnership (the" Yamaha Inventory"), pursuant to Paragraph 9.C ofthe Dealership Agreernent (the "Option"). (i) In the event that Yamaha exercises the Option and Closing does not occur within the first thirty (30) days of the Agreernent Date (as hereinafter' defined), Bill shall have the right to receive, upon written request therefor, advances on his Liquidation Payments frorn the proceeds, if any, of Yamaha's repurchase ofthe Yamaha Inventory; provided, however, that (i) such advances shall reduce, dollar-for-dollar, the amount ofthe Liquidation Payments; (ii) such requests may not be made more often than once in any calender week; and (iii) the aggregate amount of such advances shall not exceed $500 for any week. (ii) In the event that Yamaha does not exercise the Option, the Withdrawing Partners shall have the right to purchase the Yamaha Inventory from the Partnership at cost, subject, however, in all cases, to the WithdrawingÿPartners' entering into a dealership agreernent with Yamaha, - 3 - lMi.J.i:f! (d) Effective as of the Agreement Date: (i) The overall management and control of the business and affairs of the Partnerships shall be in Betsy individually, and the Withdrawing Partners each hereby waives any and all rights they might have with respect to the management of the Partnerships under applicable law or the Partnership Agreements generally (or Article V thereof specifically); (ii) Each of the Withdrawing Partners shall immediately deliver to Betsy all books, records, correspondence, manuals, letters, notes, notebooks, reports and any other documents and tangible items belonging to the Partnerships or constituting confidential information about the Partnerships in their possession or control, including all items relating to the Partnerships' financial and accounting matters (including, without limitation intended, all check books, ledgers, credit cards, and bank statements) in their possession or control, and shall cooperate with Betsy in transferring authority over all checking accounts of the Partnerships; and (iii) All guaranteed payments and customary partnership draws of the Withdrawing Partners will cease; provided, however, that if Closing does not occur within thirty (30) days following the Agreement Date, the Withdrawing Partners shall have the right to continue to receive their guaranteed payments and custornary partnership draws; provided further, however, that all such guaranteed payments and partnership draws received by the Withdrawing Partners following the Agreement Date shall reduce, dollar-far-dollar, the amount ofthe Liquidation Payments, Provided, however, that it is expressly understood and agreed that, in the event this Agreement is terminated pursuant to Paragraph 3 below, the provisions ofthis subparagraph 2( d) shall become null and void and of no further force or effect. (e) Upon the execution of this Agreernent by all of the parties, Betsy shall: (i) Take reasonable steps to inform those certain vendors and suppliers of the Partnerships identified on Exhibit "B" attached hereto and made a part hereof (collectively, the" Vendors") of the proposed withdrawal of Bill and Kay from the Partnerships, and shall undertake to obtain, where applicable and to the extent practicable, the Vendors' release of Bill and Kay frorn liabilities of the Partnerships to the Vendors, Betsy and/or the Partnerships, after Closing, shall indemnify the Withdrawing Partners for any liability, loss, damage or expense they rnay have or incur to any Vendor after the Agreement Date (so long as the - 4- -~ , ~~IloieI:IJ.-,* Withdrawing Partners cornply with the terms and conditions of this Agreement) and/or Closing, absent fraud or other willful misconduct on the part of the Withdrawing Partners; and (ii) Provide the Withdrawing Partners with a letter (or other document(s) reasonably requested by Yamaha) to Yamaha advising Yamaha that the parties have entered into an agreernent regarding the withdrawal of the Withdrawing Partners from the Partnerships. Such letter shall not be released to any person or entity other than Yamaha without.the prior consent of Betsy; provided, however, that the Withdrawing Partners shall have the right to provide a bank or other lending institution with a copy of the said letter in order to obtain financing for their future business enterprise, if any, with Yamaha, (f) Betsy shaH have the right, within ten (10) days of the Agreement Date, to identify, make a physical count of, and prepare an inventory list of the property and assets of the Partnerships, Betsy shall promptly provide Bill, Kay, and the Accountant with copies of any such inventory list, not more than three (3) days after its preparation. (g) Not less than five (5) days prior to Closing, the Accountant shaH provide Betsy, Bill, and Kay with an estimate of the amounts ofthe Liquidation Payments, and Betsy, Bill, and Kay shall each have the right to object to sarne. The objecting party shaH so notify the other parties within two (2) days of his receipt of the estimate (tirne being of the essence thereof) in writing which shall set forth the precise objection(s), Betsy, Bill, and Kay shall negotiate in good faith to resolve any objection(s) and agree on the amount ofthe Liquidation Payments. If at the end of thirty (30) days (following the giving of the objection) no such resolution is reached, such disagreement shall be resolved by submission of the issue(s) to a firm of independent accountants upon which Betsy, Bill, and Kay shall agree, The submission shall be in writing with each party having the opportunity to set forth his position on each issue, and the resulting determination of such firm shall be conclusive and binding on the parties hereto. If Betsy, Bill, and Kay are unable, within five (5) days after the expiration of such 30-d~y period, to agree upon such firm, Betsy, on one hand, and Bill and Kay, on the other hand, shall have the right to immediately select (and bear the fees and expenses of) one such firm each and the firms thus selected shaH prornptly agree upon an additional firm (the "Arbitrating Valuation Firm") to address the issue(s) submitted in accordance with the foregoing. The determination rnade by any Arbitrating Valuation Firm shall be conclusive and binding on the parties hereto. All costs, fees, and disbursements of the Accountant and the Arbitrating Valuation Firm, if any, hereunder shall be divided equally between Betsy, on one hand, and Bill and Kay, on the other hand. - 5 - ,-~..- " " ~ ."~~ " (h) It is expressly understood and agreed that Betsy shall have the right to admit, as of Closing, one or more adult individuals as a partner( s) in one or both of the Partnerships in order that the Partnerships shall continue for purposes of state law following the withdrawal of Bill and Kay from the Partnerships. (i) It is further expressly understood and agreed that, notwithstanding the withdrawal of Bill and Kay from the Partnerships, items of income and loss for the Partnerships for the period from January 1, 1999 through Closing shall be allocated to Bill and Kay based upon their ownership interests in the Partnerships during that period, and that Bill and Kay will receive IRS Form K-ls for that period and will be responsible for the payment of all income tax (Federal, state, and local) in connection therewith, (j) The obligations of Betsy under this Agreement are subject to the satisfaction, or the waiver thereof by Betsy, of the following express conditions precedent on or before the Closing Date: (i) Betsy's and/or the Partnerships' receipt of a loan commitment in an amount not less than $300,000 at prevailing interest rates and terms, Betsy and/or the Partnerships shall exercise reasonable best efforts to obtain such loan commitment, including the timely filing of applications, payment of application fees, and such other actions as are normally required to obtain a loan commitment; and (ii) [INTENTIONALLY OMITTED] (k) In order to induce Betsy and the Partnerships to consummate the transactions contemplated hereby, and with the knowledge that Betsy and the Partnerships are relying on the representations and warranties herein contained, each of the Withdrawing Partners hereby represents and warrants to and with Betsy and the Partnerships as follows: (i) At Closing, the Partnerships will acquire good and valid title to the interests, in the Partnerships being liquidated by the Withdrawing Partners, free and clear of any lien or encurnbrance; and (ii) To the best of their knowledge, there are no obligations, liabilities, damages, claims, costs, or expenses of the Partnerships other than those heretofore expressly disclosed to Betsy or to the Accountant by the Withdrawing Partners. (I) All ordinary accounting costs, fees, and disbursements incurred by the Partnerships with respect to 1999 year-end "close-out" shall be paid as follows: (i) - 6 - """'~ '. ~ ~'...~..'"'~' seventy-five percent (75%) by Betsy; and (ii) twenty-five percent (25%) by the Withdrawing Partners. The costs, fees, and/or disbursements of any other accounting of the Partnerships shall be borne solely by the party or parties seeking such an accounting. 3, CLOSING, (a) The consummation of the transactions referred to in this Agreement (the "Closing") shall occur on the date (the "Closing Date") which (provided all conditions precedent to Closing shall have been satisfied or waived on or before such date) shall be within sixty (60) days after this Agreement has been executed by all of the parties (the "Agreement Date"), If Closing has not occurred on or before ninety (90) days after the Agreement Date, then any party shall have the right to terminate this Agreement by providing notice to the others, whereupon this Agreement shall become null and void and of no further force or effect; provided, however, that such termination will be without prejudice to a party's rights and remedies as a result of any breach or default on the part of another party. Time is of the essence of each and every provision of this Agreement. (b) Closing shall occur at the offices of the Accountant, commencing at 10:00 a,m., local tirne, on the Closing Date, or at such other rnutually convenient place agreed to by the parties, ( c) The parties shall use reasonable best efforts to cause the transactions contemplated herein to be consummated within the aforernentioned time periods, 4. MUTUAL RELEASE. In exchange for the rnoney to be paid under this Agreernent, the transfers to be rnade under this Agreernent, and the other prornises and covenants contained herein, effective as of Closing, the parties shall and do hereby release, rernise and forever discharge and hold harmless each other of and from any and all obligations, liabilities, damages, claims, costs and expenses arising out of or resulting from the business, operations, assets, or activities of the Partnerships, the Partnership Agreernents, and/or the involvement or status of Betsy, Bill, and/r Kay as a general partner in the Partnerships; provided, however, that this release shall not apply to any claim to enforce the terms of this Agreernent or based upon fraud or other willful rnisconduct. This release shall be binding upon and shall inure to the benefit of the parties' partners (general, lirnited or otherwise), subsidiaries, affiliates, predecessors, successors (by merger or otherwise), assigns, insurers, subrogees, divisions, directors, officers, agents, servants, employees, attorneys, heirs, executors, administrators, personal representatives, assigns and agents, The obligations and liabilities released and discharged include all such obligations and liabilities now existing or hereafter arising, whether fixed or contingent, and whether liquidated or unliquidated, - 7 - e"""""","~-_~h - <}-< 5, NON-DISPARAGEMENT, None of the parties to this Agreement shall say, publish or cause to be published, or do anything that casts any other party hereto in an unfavorable light, or disparage or injure any other party's goodwill, business reputation or relationship with existing or potential suppliers, vendors, custorners, employees, contractors, or the good will or business reputation of such party. 6, CONFIDENTIALITY. Each ofthe parties to this Agreement agrees that the terms of this Agreement shall remain confidential, and that no term or condition hereof shall be disclosed to any individual or entity (except as required byregulatory authorities and/or independent outside auditing entities, or the parties' attorneys and accountants to the extent necessary to cornplete tax filings and to otherwise comply with law) or in any manner used by the parties without the express written consent of all of the parties. 7, EXPENSES. Except as otherwise provided herein, the parties shall each pay their own fees and expenses and those oftheir respective agents and advisors, 8. MISCELLANEOUS PROVISIONS. (a) This Agreement constitutes the entire understanding among the parties hereto concerning the subject matter hereof, and supersedes any and all prior written agreements and any and all prior or conternporaneous oral agreements or understandings relating to the subject rnatter hereof. (b)' This Agreernent may not be amended, rnodified, superseded, cancelled, renewed or extended, nor may any term or condition hereof be waived, except by a written instrument or document signed by all parties hereto or, in the case of a waiver, signed by the party sought to be charged therewith, No waiver by any party of the breach of any provision hereof shall be deemed to constitute a waiver of any continuing or subsequent breach of such provision or any other provision hereof. Except as otherwise provided herein, the rights and remedies expressly granted hereunder shall be cumulative with respect to, and shall not be deerned to exclude, any other rights and rernedies to which any party shall be entitled at law or in equity, (c) 'This Agreernent shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, successors, personal representatives and permitted assigns. (d) This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania, without regard to choice-of-law proVISIOns, - 8 - "~ "" ~~-- '.... '".~ . (e) Headings have been set forth for convenience of reference only, and shall not be used in construing this Agreement. References to persons or things shall be deerned to refer to such persons or things in the singular or plural and in the masculine, feminine or neuter gender as the context shall require, (f) This Agreement shall be deemed to be severable, so that if any provision hereof shall be determined by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions hereof shall continue to rernain valid and enforceable in accordance Witll their terms. (g) This Agreement may be executed in any nurnber of counterparts (and delivered by first-class or first-class express mail, or by fax with confirmation in writing mailed first-class), each of which shall be deemed to be an original as against any party whose signature appears thereon, and all of which shall together constitute one and the same insl11llllent. This Agreement shall be binding when one or rnore counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected on this Agreernent as the signatories, (h) Notwithstanding any presurnption to the contrary, all covenants, warranties, and representations contained in this Agreernent which by their nature, irnpliedly or expressly, involve performance, in any particular, after Closing or which cannot be ascertained to have been fully performed until after Closing, shall survive Closing. IN WITNESS WHEREOF and intending to be legally bound hereby, the parties hereto have executed this Agreement and have affixed their respective seals hereto, as ofthe date first set forth above, WITNESS: .~,..A;_ BETSY: WITNESS: ;Q;tJ~ (SEAL) [SIGNATURES CONTINUE ON FOLLOWING PAGE] - 9 - ..... ~~ ,. , ~ WITNESS: mJ~ WITNESS: b~ xMJff~~ ,Mt~ WITNESS: ~Jj~ ~J~ j~~", ~ '.. , . KAY: ~Jt~ y ay Wra ' (SEAL) DO WRA Y MI PIANO RENTALS, a Pennsylvania general partnership (SEAL) WRAY'S MUSIC HOUSE PARTNERSHIP, a Pennsylvania general partnership [Lb(SEAL) neral Partner (SEAL) neral Partner - 10- .J-;;"~--' r "~bliiM/j]~ . ' .^ "~ m-"OOl->!tIDM~_<ir;:!-~'~'"'-"" " . i ,~- . " IioMilillli -~.- " , (') <::> 9, c 0 t -cq <'~ '- ~ffi ..... ~Oir :::C:n ~ ~ in ::.c :21 n1-~ ~ 1- .Ii h ~b 'C;8 c., ~r"r- G;;: _""~~ ::.:::~ f C, 8 8 2: ;('5 ~:;:C) 0 ~." \-. "., "'r"'"f,i <C) :::r. (~-") ",r, ~(-, .0,,0 ~ "- I p" c:? c-~)m :::::. c r tJ 2: ~ ?& () --J:::: :;! l:J -<: "-l -;. ""0 p... ~ ,-~. " - WILLIAM WRA Y, JR, and KAY GRAY WRA Y, husband and wife, Plain tiffs v, BETSY WRA Y DESTEFANO, an adult individual, and BETSY WRAYDESTEFANO, t/aDO WRA Y MI PIANO RENTALS and WRA Y'S MUSIC HOUSE PARTNESHIP, Defendants TO THE PROTHONOTARY: .'." lif.'~ : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA NO, 2000 - 255 Civil Term PRAECIPE TO DISCONTINUE KINDLY DISCONTINUE THE ABOVE CAPTIONED ACTION WHICH WAS FILED ON JANUARY 13, 2000. Respectfully subrnitted, ~//I~ R, ark Thornas, Esquire Attorney for Plaintiffs 101 South Main Street Mechanicsburg, P A 17055 (717) 796-2100 ID# 41301 .~~~.lI'lliI!.iIiIllllllII~rMIUiiUjjifIIMi!&IIHli'~~'li.;;,wIf';";d "........iiiliiiWi..I!Ullhillf' ",.'-""'" ~ _Ii" --. .~ ~ '. "~~ ~~ ~ ~?p0 (..f) ~''''' ~( ~~~, ;2 --i -< ~ ""~ a c' "TJ :-q ;;;D ""bJ N i'..) -~-~ ~ '.,' i I I i I I I , , ~ (:~') ~ -<