HomeMy WebLinkAbout97-06903
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7. Thc "Rcstrictivc Sharc Agrccmcnt" providcs in sc\:tion 1.2 thatthc Plaintiff shall havc thc
option to scll his sharcs. und thc Dcfcndulll shall be obligutcd to pur\:hasc his sharcs, if
Plaillliff excrdscs this option ufter Novcmber I, 1997.
ll. Under section 2 ofthc "Restrictive Share Agreen~nt,"the price Defendunt is obligated to pay
for Plaintill"s shares if the option to sell is exerdsed is the hig,her of: (a) the fair market value
of the \:ompany as determined under Exhibit "A" to the "Restrictive Share Agreement" as
divided by the total number of shares outstanding, or (b) the original price per share plus
interest at the rate of prime plus five percent (5%) from the date of pur\:hase to the date the
option is exerdsed.
9. Defendant indka.ted in writing on O<.:tober 30, 1997 that the method of \:akulationthat yields
the higher value for its shares is the method explained in sc\:tion 2(a) of the "Reslrictive Share
Agreerrent." i,e.. the \:akulation based on the fair lnarket value of the. \:ompany, which reveals
that an inilial investment of five thousand dollars ($5,000,00) is \:urrently worth eleven
thousand one hundred dollars ($11,100). A letter written by John K. Rich as president of
Defendant indicating this determination is attached as "Exhibit B."
Ill, Relying on Defendant's vahlation under se\:tion 2(a) of the "Restrictive Share Agreerrent,"
Plaintilfs 1,600 shares pur\:hased for $40,000,00 are \:ufl'cntly worth eighty eight thousand
eight hundred dollars ($llll,llOO.OO),
11. Under se\:tion 1.2 of the "Restrictive Share Agreement," Defendant is obligated to pay
Plaintiff $llll,8IKI,OO ill ex\:hange for Plaintilfs 1 ,/ilK) shares if Plaintiff demands in wriling that
he wishes to exen:ise his option to sell.
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MICHAEL A. STONER,
Plainlill'
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYL VANIA
v,
.CIVIL ACTION. EQUITY
STREETGARD,INC"
Defendanl
NO,
i,
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I
VERWICAl'ION
I verify Ihal the slalcments made in the foregoing Complainl are lrue and correct.
understand Ihal false stalemenls herein are made subject to Ihe penalties of 18 Pa,C,S, !l 4904,
relating to unsworn falsification to aUlhorilies,
,.--,
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/~~~<--~~
Michael A. Stoner
Dated: December 9, 1997
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Exhibit A
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RESTRICTIVE SHARE AGREEMENT
,
This is an A'Jreement executed on Ne u 23
,
1992, among
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STREETGARD, lNC., a Pennsylvania business corporation (hereinafter
called "the Corporation") and the undersigned shareholders of the
Corporation (hereinafter sometimes referred to collectively as "the
shareholders"" and each singly as "a shareholder").
WITNESSETH:
WHEREAS, the shareholders own stock (hereinafter referred to
as .shnres") of the Corporation and they and the Corporation deaire
the stock to remain closely held in order to promote harmonious
anagement of the Corporation's affairs; and
WHEREAS, the parties desire to make arrangements fo+ the
resale of said stock to the Corporation on the terms and conditions
I
hereinafter set forth.
NOW THEREFORE, the shareholders and the Corporation agree as
follows:
1. Purchase and Sale Option.
1.1 Upon the death of a shareholder (or the death of both
shareholders in the event of jointly owned shares), the deceased
shareholder's personal
representative shall
sell
and
the
SAIDIS, GUIDO
'" MASLAND
26 W, Iliih Streer
C.,lillo, PA
orporation shall purchase all, but not less than all, of said
eceased shareholder' So shares upon the terms and oondi tions set
orth in paragraph two (2) and three (3) below.
1.2 Each shareholder shall have the option to sell, and the
orporation shall purchase, all, hut not less than all, of a
hareholder's shares upon the terms and conditions Bet forth in
aragraph two (2) and three (3) below. Provided, however, that
"
SAlOIS, GUIDO
& MASLAND
26 W. Ili,h Sir",
Carlisi.. PA
BIIid option to sell shall not be exercisable until at least
November 1, 1997. Said option shall be exercised by notifying the
Corporation in writing of the shareholder's intent to sell said
shares.
1.3 From the date hereof until December 31, 1997, the
Corporation shall maintain a key man life insurance policy on the
president, John K. Rich, in an amount of at least Five Hundred
Thousand ($500,000.00) Dollars, naming the Corporation as
beneficiary thereon,
1.4 The shareholders shall he prohibited from selling any of
their shares except to the Corporation under the terms of this
paragraph one (1) or to another party pursuant to the terma of
paragraph six (6) below.
2.
.
Purchase Price.
The purchase price per share may be agreed upon by the
Corporation and the selling shareholder or the personal
representative of a deceased shareholder. If an agreement cannot
be reached, the purchase price per share shall be the higher of the
following:
(a) The fair market value of the company as determined
pursuant to Exhibit "A" attached hereto and made a part hereof
di vided by the tO,tal number of shares outstanding.
(b) The original price per share paid to the Corporation
plus interest at the rate of prime plus five (5') percent from
the date the shares were purchased by shareholder to the date
of the Corporation's exercise of its option to repurchase said
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SAID IS, GUIDO
8< MASI.AND
26 w, IIlah Sir'"
Callis'e, PA
shares. ("Prime" shall be adjusted annually on February 20 of
each year and shall be the rate as reported in the Money Rates
section of the Wall Street Journal as the .prime Rate" on said
date, or the next date thereafter if said date be a legal
holiday or Sunday,)
3. Payment of Purchase Price.
The purchase price shall be paid in cash at the closing, or
may, at the Corporation's option, be paid as follows:
(a) Five Thousand ($5,000.00) Dollars in cash or in
certified check at the time of closing,
(b) The balance in sixty (60) monthly installments to be
det.ermined by amortizing t-he remaining principal over five (5)
years with interest on the outstanding principal at the
"applicable federal rate" as it exists on the date of closing.
4. Transfer or Pledge of Shares Prohibited,
Except as otherwise specifically agreed to 1n writing by the
Corporation, no shareholder shall transfer, encumber or use any of
his shares as security for any loan.
5, The Closing.
5.1 Unless otherwise agreed in writing, the closing shall be
held at the office of corporate counsel, Saidis, Guido & Masland,
26 Went High Street, Carlisle, Pennsylvania. Closing shall be held
within forty-five (45) days of the shareholder's death or delivery
of the written notice of his or her intent to exercise the option
to sell said shares. If the report of the appraiser required under
paragraph 2(a) above has not been completed in time for the
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,
SAlOIS, GUIDO
&: MASLAND ..
U w. Illah Slrc<l
Ca,II~.. PA
closing, the Corporation shall pay the purchass price as determined
pursuant to paragraph 2(b) above and the difference, if any, within
thirty (30) days of receipt of the appraiser's report pursuant to
paragraph 2(b). (If the Corporation has exercised its option to
pay i~ sixty (60) monthly installments, an amended promissory note
shall be executed to replace the original and the difference in
interest shall be paid within said thirty (30) days of receipt of
the said appraiser'S report.)
5.2 At closing, the selling and purchasing parties shall
execute and deliver to each other the various documents which shall
be required to carry out their undertakings thereunder, including
the payment of cash and the execution, delivery, and assignment of
share certificates, and/or a promissory note, if applicable, In
addition, the selling shareholder shall deliver to the Corpor~tion
his resignation and that of his nominees, if any, as officers and
directors of the Corporation and, if applicable, as a trustee or
administrator of th~ any retir.ement plan maintained by the
Corporation.
6, Sale of Substantially all of the Assets or Shares of the
Corporation,
If a majority of the original shareholders (original
shareholders being John Rich and Linda Rich) decide to ,sell all or
substantially all of their shares or the assets of the Corporation,
shareholders, upon written request by the majority of the original
shareholders, shall agree to such sale upon such terms and
conditions as the original shareholders have agreed to and, for the
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SAIDlS, GUIDO
'" MASLAND
U W. Ili,h S"CCl
Collldc, PA
purpose of implementing the foregoing agreement, shareholders
her.eby appoint the original shareholders as their attorneys-.tn-fact
to vote their shares in favor of such a sale (in the case ot a sale
of assets by the Corporation) or to execute and deliver a share
purch~se agreement in their names (in the case of a sale otall of
the shares of the Corporation). The original shareholders covenant
and agree that in the event of such II sale, the shareholder shall
be entitled to and receive their pro rata share of the
consideration paid by a purchaser on the same terms as the original
shareholders,
7. Legend on Certificates,
All shares now or hereafter owned by the sh~reholders shall be
subject to the provisions of this !\greement and the certificates
representing same shall bear the following legend:
The sale, transfer or encumbrance of this certificate is
subject to an agreement dated NovU'nbu;)3, 1992 among the
Corporation and the holder of these shares. A copy of the
agreement is on file in the office of the Secretary of the
Corpora ti.on. The agreement provides, among otheJ; thingo, for
certain obligations to sell and certain options to purchase
the shares of stock evidenced by this certificate, for a
designated purchase price. By accepting the shares of stock
evidenced by this certificat~ the holder agrees to be bound by
said agreement.
8. Termination.
8.1 This Agreement and all restrictions on share tranafer
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created hereby shall terminate on the occurrence of any of the
,
following eventsl
(8) The bankruptcy or dissolution of the Corporation.
(b) A single shareholder becoming the owner. of all of
the shares of the Corporation, which are then outstanding.
(c) 'l'he execution of a written instrument by the
Corporation and all of the shareholders who then own shares
subject to this Agreement which terminates the same.
8.2 The termination of this Agreement for any reaspn shall
not affect any right or remedy existing hereunder prior to the
ef.fective date of termination hereof,
9. General Provisions.
9.1 Governing Law.
This Agreement shall be construed
pursuant to the' laws of the Commonwealth of Pennsylvania~
9.2 Remedies for Breach, The shares are unique chattels and
each party to this Agreement shall have the remedies which 'are
available to him or it for the violation of any of the terms of
this Agreement, including, but not limited to, the equitable remedy
of specific performance, and the award of reasonable attorney fees
incurred to enforce the provisions hereof,
9.3 Notices.
All notices provided for by this Agreement
SAID IS, GUIDO
"MASLAND shall be made in wri :-ing (l) either by actual delivery of the
26 W, Hilh 5''''1
eIlU"., PA, notice into the hands of the parties thereunto entitled, or (2) by
the mailing of the notice in the u.s. mails to the last known
address of the party entitled thereto. The notice shall be deemed
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SAID IS, GUIDO
" MASLAND
26 W. Hl,h Sir'"
C.rlisle, PA
EXHIBIT "A"
Determination of Fair Market Value
The term "Fair Market Value" as used in paragraph 2(b) of the
foregoing Agreement shall be the value of the corporation as
determined by a qualified appraiser of closely-held buuiness sharcs
who shall appraise the Corporation on a going-concern basis, The
evaluation date to be used by said appraiser shall be the last day
of the month preceding the month in which the shareholder died or
in which he or she delivered his or her intention to exercise the
option to sell, The parties and/or personal representatives of a
deceased shareholder shall agree upon an independent qualified
appraiser, If the parties cannot agree, such an appraiser shall be
designated by the accounting firm of Boycr and Ritter, The
Corporation shall cooperate fully with such appraiser by making
available financial data and other pertinent information necessary
to prepare the appraisal, The cost of said appraisal shall be born
by the Corporation.
If such an appraisal has been obtained by the corporation in
connection with the purchase of any shares hereunder, and it is not
more than one (1) year old on the date of the Corporation's notice
of intention to exercise its option to purchase additional shares
hereunder, said appr.aisal shall be used in connection with the
purchase of said additional shares.
If all of the shares of the corporation or substantially all
of the assets of the Corporation are sold to a non-shareholder
within one (1) year of any sale or purchase of stock pursuant to
"
Exhibit B.
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October 30, 1997
PUB.~ .
Safety"
CiJ"t-S.O are
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Mr, Mike Stoner
P,O. B~ 878
BozCl1llll, MJ' 59771
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Dtw'Mr, Stoner:
[ apologize that it has taken me alltlle longlll' lhan anticipated in writing you this follow up
letter. We bave been extremely bUIY with several major projects and conlractll, addiJ'l.g
additional personnel, IIIId opening 11\ office in Atlanta, While all ofthese actions are
positive, u we begin a major growth spurt you are interested in the value of your
inveltmeOt in Strectgard Inc. In your agreement you have !he option to lell your stock
back to Strcelgard or reltin your lnvefltmwt and have II grow even more. Also in your
agreemflllt are two options as to the valuation of your stock,
. The first option is a 8\Iarll1teed interest ratc, The secoild is a COl1lorate valuation, Your
inveatment velue In Streetglrd will be the higher ofw two. After review ofbolh oflhe
options, !he higher ofllle two is the l;orporatc valuatiun, There arc many diifen:nt ways
10 look at eltimatill8 the value of a corporation. Wc have used !be most oonunon to come
up with the valuc. If your purchasc was a one percent share in Strcetllard for S 5000, it is
nowworthS 11,100.
A majority of you have dccid~ not to sell your !tock back, bill to keep your investment in
place and watch it grow. Some of you havc chosen to enrcise your right 10 sell your
dock back 10 Stn\etgard and we will be glad 10 discu!18 this with you. Strcetgard is in a
major growth spurt, 1 would ask that those of you !bat are inlere1ted in Streetgard buying
YOllr stock back to please consider this growth spurt and work together with this,
We have roade many Ilralcgic changes to the company in order to grow wilh . Bnn
foundation, Theile clw18es Include the addition ofkey per!lOnnel. We have lIlIdcd four
people to our staff, three of which have years o(experience in the 80ftware industry, The
I\CW ltaft'memben arc:
PO 80. S04' 1Io,IIn9 Sp"'gs. PA 1700/-0604
Phooe 717.25/1.3180' 80\)-786-3160' fat 711'256-4157
Campus.." 133532886 "Ole"1I1: Slgatl)1IIePI..ntl
(c) Stoncr lLlils to advisc thc Court that on Fcbruary IH, 19911,
counselli}r Sloncr was adviscd that Stoncr should cxccutc thc Assignmcnt
Agrccmcnt and, @ rcturn of thc c;.;ccutcd Assignmcnt, Strcctgurd would
providc him with lUl initial paymcnt 01'$5.000 by chcck and IInotc in
accord with thc Rcstrictive Sharc Agrccmcnt ti)r thc principal balancc of
$H3,HOO plus appropriatc intcrcst payablc undcr the tcrms of thc
Rcstrictive Share Agrccmcnl.
(d) Stoner lails to advise the Court that Stoner never relurned the
documcnts to Slreetgard or its counscl.
(c) Stoncr further lails to advisc thc Court that counsel for
Strcctgard callcd counselli}r Stoner in carly March 19lJH requcsting rcturn
ofthc documcnts so that an initial check 01'$5.000 and a notc could bc
issucd to Stoncr, and, dcspitc the lact that counsel for Stoner indicatcd that
hc would chcck with his clicnt and rcspond, Stoncr ncv(~r rcspondcd
c:xccpt to me thc instant Motion.
(I) Stoner lilils to advisc the Court that dcspitc Streetgard's cfforts
to comply with thc tcrms of this Restrictivc Share Agrccment, ncithcr
Stoncr nor his counsel cver rcspondcd uflirmatively to those eft(lrts,
(g) Streetgurd hus unilaterally providcd u check in Ihe amount of
$5,000 und a note in uccord with thc tcrms of thc Rcstrictive Shurc
Agrccmcnt to Stoner's counscl, fullllljng ull of the tcrms ofthc Rcstrictivc
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Sharc Agrccmcnt. Truc and correct copies of thc check ami note ore
attachcd hercto and made 0 pllrl hereof as Exhihits "A" aad "B"
(h) Stoner's instant Motion seeks entry of nn Order by this Court
giving a judgmcntto Stoner in lhe alllount of $88.800. pi as interest, at the
applicahle lederal rate, Stoner is not entitled to cntry of any judgment
against Strcetgard inasmuch as the only payments due to Stoner arc the
initial $5,000 payment due under the Restrictive Shure Agreementnlready
paid to Stoncr, and future successive equal monthly installment payments
due ovcr a 60-month period, which payments arc not ycl due. Streetgard
has delivcrcd to Stoner's counsel a promissory note for such paymcnts in
accord with the Rcstrictivc Share Agrecment.
(3) Dcnicd, Stoncr secks ajudgment for a monetary SIUll 01'$88,800 plus
intercst to which Stoncr has no entitlcment undcr thc terms of the Restrictive
Share Agreemcnt. as a matter of fact or as a matter of law inasmuch as all
paymcnts due to him have been made to date,
(4) Admittcd, By way of further averment, howevcr, Stoner
misrepresents thc nature of the Countcrclaim and the relief requested thereunder
which seeks to compcl Stoner to deliver his stock ce~titicate to Strectgard in
exchange for an initial payment 01'$5.000 (which has alrcady been made) and lor
a promissory notc for future payments on an equalmonlhly basis for a period of
60 months (which has alrcady been delivered), Stoner has no entillement
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S83,000
Harrisburg, P A
April, ~ 1998
FOR VALUE RECEIVED, the undersigned, STREETGARD, INC. ("Maker"), a
Pennsylvania corporation with offices at r.o, Box 604, Doiling Spring,5, PA 17007 promises to
pay to the order of Michael A. Stoner ("Holder"), an individual whose address is P.O, Dox 878
Dozeman, MT 59771, in immcdiately availablc funds at Holder's address set forth hcrein, or at
such other location as the Holder may designate from time to time, the principal sum of Eighty-
Three Thousand Dollars ($83,000) plus interest at 5.7%, the Applicable Federal Rate for mid.
tcrm debt compounded annually for April 1998, This Note is being issued to Holder in
connection with the assignment to Maker of 1,600 shares of stock in Maker previously owned by
Holder pursuant to the Assignment Agreement to which this Note is Exhibit D, Maker may
prepay this Note in whole or part without penalty at any time or from time to time, provided
however, that such prepayment shall first be applied to all sums owed to Holder hereunder other
lhan principal and interest, next to interest, and then to principal.
The principal and interest payments shall be made in Sixty (60) equal consecutive
monthly installments of One Thousand Six Hundred and One Dollars and Ninety Two Cents
($1,601.92) on or before the twentieth day of each month beginning in the first fullmonlh after
the date hereof, If any payment of principal 01' interest on this Note shall become due on a
Saturday, Sunday or on any holiday, sllch payment shall be made on the next succeeding
business day, All payments made hereunder shall be applied first to all sums owed to Holder
hereunder for interest, and then to principai, or in such other order or proportion as the Holder, in
its sole discretion, may elect from time to time,
Maker shall be in default under this Note upon the happening of any of the following
events of default ("Event of Default"):
(a) default in the payment when due of the principal of or interest on this Note, which
default continues unremedied for a period of thirty (30) days after wrillen notice from Holder;
(b) any default in the performance by Maker of any other condition or covenant
contained in this Note, which default continues unremedied for a period of thirty (30) days after
wrillen notice from Holder;
(c) all or substanlially all of the assets of Maker are sold to a third party who is
unaffiliated with Maker or any shareholder of Maker;
(d) lhe dissolution of Maker or the winding up of its uffairs; and
(e) lhe insolvency of, the appointment of a receiver of any part of the properly of, the
assignment for the benefit of creditors by, or the commencement of proceedings under any
bankruptcy or insolvency laws by or against Maker.
F:'fll.li!i'I},\ r ^Hllf\OtNj)OI~II\MlW)'J,Il.~r, I' I...
('rall.'ll: l))tlI1'J6111:2J:1I2AM
Rnl.t\i: 1/J111!IIAII:IIIII'AM
"Mij-I
MICHAEL A, STONER,
Plaintiff
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
v,
CIVIL ACTION - EQUITY
STREETGARD, INC.,
Defendant
NO, 97-6903 - Equity Term
PLAINTIFF'S REi'LY TO NEW MATTER AND
COUNTERCLAIM OF DEFENDANT
AND NOW, comes Plaintiff, Michael A, Stoner, by and through his attorneys, Martson,
Deardorff, Williams & Otto, and asserts the following Reply to New Matter and Counterclaim of
Dcfendant, Streetgard, Inc,
NEW MATTER
16-20, Admitted,
21. Denied,
22, It is admitted that Plaintiff Stoner, through his counsel, caused the communication
dated December 2, 1997 to be made to John K, Rich, President of' Streetgard, By way of further
answer, such option was exercised by letter datcd February 25, 1997 and I'c-sent under cover letter
of September 29, 1997 to the said John K, Rich, (Copies of these letters are attached as Exhibits "A"
and "S" hereto,)
23, It is adl11illed that Section 5.1 of the Restrictive Share Agreement provides for a 45
day time period, It is denied that such period commenced running as of December 2, 1997, To the
contrary, the latest such period commenced running was on November I, 1997,
24, It is admitted that Plaintiff Stoner t1Ied suit on or about December 15, 1997, It is
denied that such suit was filed "only 13 days after exercising his option."
25, Admitted.
26, It is admitted that Plaintiff Stoner has sued for a judgment for the full amount of
$88,800. It is denied that such amount was not due to him at the time of the filing of the Complaint
or that such amount is not due to him now, To the contrary, no attempt to exercise the option to pay
over time was excl'cised by Defendant prior to the tiling of the Complaint notwithstanding repeated
communications with Defendant.
i
27, The averments of paragraph 27 constitute impropcr attcmpts to charactcrize certain
provisions of Section 5,1 of thc Restrictivc Share Agrcement which is in writing and speaks for
itsell~ and Ilrc dcnicd for that reason, By way of further answer, Delendant Streetgard's
communication to counsel for Plaintill'Stoner spcaks for itself, No attempt to exercise any "option"
to make payments ovcr timc or to resolve this matter wcre engagcd in by Delendant Streetgard until
aftcr the t1Iing of Plaintiffs lawsuit.
28, Plaintiff Stoner's communicAtion attached liS Exhibit "B" to Oelendant's Answer,
New Maller and Counterclaim speaks for itself. Any implication that Plaintiff Stoner is not entitlcd
to judgment as rcquested is denied,
29, Admitted that Plaintiff Stoner seeks judgment for $88,800, It is denied that such
amount is not due to the Plaintiff,
30-35, Denied,
COUNTERCl.A1M
COUNT I - SPECIFIC PERFORMANCE
36. No answer required,
37, Admitted that the Defendant should have perlarmcd and both parties are "entitled to"
specific performance,
!:OUNT 11- ATTORNEVS' FEES
38, Admitted.
39, Denied, To the contrary, despite repeated demands, Delendant never made any
payment to Plaintiff and Defendant, as the breaching party, should not be entitled to attorneys' fees,
WHEREFORE, Plaintiff demands judgment in his favor and dismissal of the Defendant's
counterclaim with prejudicc.
MARTSON, DEARDORFF, WILLIAMS & OTTO
BY~~~~~
Ivo V, Otto 1II, Esquire -
1.0. No, 27763
Ten East High Street
Carlisle, PA 17013-301})
(717) 243-3341
Attorneys for Plaintiff
Date: 0); ~ /9!
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I!IIhlbltA
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Exhibit B
~..-nJ q;~ 1f/~ &- e7tto
A PW'IJSIONAL CORrOMnON
WIWNol R MAIn'SON
DAI<III. K. DIAaDO~'
THOMAS J. WlulAMs.
lvo V. OtTo, 1lI
SnrHUl L BLOOM
GIOI.GI B. P.uua.J.,.
MICHAII. J, HANfT
W. DoWIN I'owIu
THOMAS G. CoWNS
Cow. C. RISCH
A1TORNEYS AND CoUNSw.oRS AT LAw
TEN EAsr HICH STllUT
CAtwSLI!, PENNS'/l.VANIA 17013
TWlHONI
om 243-".1
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FACIl/olILl
om 243-18'0
September 29, 1997
INTUNIT
md...,.mdwo,a>m
'_ CUn'lID Ovu. T..... Srta.wrr
John K. Rich, President
Streetgard, Ine,
P,O. BQl( 604
Boiling Springs, P A 17007-0604
RE: Streetgard, Inc,
Our File No, 8669, I
Dear Mr, Rich:
We are foUowing up on our letter of Febrwuy 25, 1997 with respect to Mr, Stoner's llJ(ercise of
his option to seU.
Enclosed is our earlier letter for your easy reference,
We would appreciate a response to this inquiry with re.,pect to how you and the company intend
to proceed.
Mr. Stoner ha, given his proxy to me so that I might attend any shareholder meeting and vole his
shares, Accordingly, we would appreciate being notified of any such meeting.
~
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Very tndy yours,
~SON' DEARDORFF, WILLIAMS & O'ITO
lvo V, Otto ill
IVO/dln
Enclosure
cc: Mr. Michael A. Stoner
(via facsimile (406) 763-4216)
Edward E, Guido, Esquire
',IIU.~rAnLI'4lN"ntNUtlll.l
EXHIBIT "e"
INFORMATION' AOVICl! · AOVOCACY'"
:sE;-. r BY :\10110
:11:'.8t\
1'0: ul
\I[)\\,~O'
.11)676:\j21 ~ : ~:1~1 ~'6
YJ::RIFK.(\'T10J'l
Thl: toregoinll Reply of I'lallltiff 10 New Moller und COlll1tcrdnim of Defendant is based
Up(ln infol1l1atiol1 wllid, lidS bCCII gather!;'d hy my (''''Insd III the prl'paralion Ill' thl' lawsuit Tlw
l~nl!u;ll!e 01 the duo;umcnlls lhat of ,'ounsel unll nl)lmy OWI1, I hav~ read tll,: doeulllent and t,) the
extent that it is based upon infonnation whkh I have givcnlo my counsel. it is true and correct 10
the best (If my kn\'wledgc, information and hdid, '1\) the exlent thaI the contcnt of thc doclllllcnt
I~ that of counsel. I have relied upon counsel in making this vcril1calion,
This slJllemcnt And verifiCAtion arc made subject to thc penalties of 18 Pa, (:,S, Section 4904
relating to lInSWOI1l falsification 10 authorities, which provides that if I make knowingly false
avcnncnts, Imuy be subject to criminal penalties
.7
a' /' 7 ,r'J-
~~~"--~<~,-L~~~
Michael A. SloneI'
MICHAEL A. STONER,
PlaintilJ'
IN TilE ('OURT OF COMMON PLEAS
: CUMIIEI~I.ANI)('OUNTY,I'I~NNSYI,VANIA
vs,
STREETGARD,INc'
Dclcndunt
NO, <)7.6<)03 . hlulty Tcrll1
NOTICE
VOU HAVE BEEN SUED IN COURT, If you wish 10 dclcnd ugulllstllll' c1uhllN sct
forth in thc 1l)lIowing pugcs, YOUll1ust tukc uction withill twcnty (20) duys uncr Ihls Ncw MUllcr
and Countcrclail11l1rc scrved, by cntcring a wrlllclI uppcuruncc pcrsollully or hy ullorncy ulld
filing in writing with thc Court your dcfcnscs or objcetions IOlhc c1I1II11S sctlllrlh ugulllst you,
Vou arc wamcd that if yo II thillO do sothc casc ll1uy procecd without you ull(l ujudglllCnlll1uy
bc entcrcd against you by thc Court without thrthcr nOlicc Illr uny ll10ncy c1uill1cd inthc
Complaint or for any uthcr e1uill1 or rclicf rcqucslcd by thc I'luinli f1s. V Ollll1UY losc Il1UIICY or
property or othcr rights important to you,
VOU SHOULD TAKE THIS PAPER TO YOUR LA WYER AT ONn:, IF VOU DO
NOT HA VE A LA WVER OR CANNOT AFFORD ONE, 00 TO OR T1~U~1'1I0NE TIII~
OFFICE SET FORTH BELOW TO FIND OUT WIIERE YOU ('AN (iET L1'JiAI. 11I':1 ,I',
Court Administrutur
4th Floor, CUlllbcrlund Coullly Courthousc
Curlislc, I' A 170 I.l
717-240-6200
NO'J'ICI"
LE HAN DEMANDADO A USTED EN LA ('ORTE, Si lIslcd Iluicrc dctclldcrsc dc
eslas dcmandas expucslus cn Ius puginus siguiclltcs, uslcd Ilcne ViClllc aU) dlus dc pluzu III purtir
de lu fccha dc la dcmandu y la notit1cueion. Ustcd dcbc prcsclllur IIllU upuricnciil cseritu u CII
pcrsona 0 por abogndo y arehivur cn III eortc cn fornm cserilu sus defcllsus 0 sus objccloncs u Ius
dcmandas en contru dc su pcrsona, Seu nvisado !Juc si usled no Sl~ dct1clldc, lu ef,lrlc lomarn
medidas y pucde cntmr IIllU ordcn contru ustcd sin prcvio uviso ollolilieueiulI y pur eUIII!JlIicl'
queja 0 alivio quc cs pcdido en la pClidon dc dCll1l1ndll, lIsted plwdc pcrdcr dillcrll 0 sus
propiedadcs 0 otros dercchos importanlcs pam ustcd.
LLEVE ESTA DEMANDA A UN AIIODA(jO INMEDIATAMENTE, SI NO TIENE
ABOGADO 0 SI NO TIENE EL DINEIW SIJF/ClI':NTE I>E I'A(JAR TAL SI':RVICIO,
VA VA EN PERSONA 0 I.I.AME I'OR TELI':FONO ^ LA OFIClNA ('UV A DIHECCION SE
ENClJENTRA ESCRITA AIIAJO PARA AVERI(ilIAR I>()NDE SE 1'1 limE C'ONSEGlIIR
ASISTENCIA LEGAL
CUMBERLAND COUNTY liAR Ml90CI AT [ON
2 LIBERTY AVENUE
CARtI9LE PA 17013
(717) 249 3166
Scetiun 5.1 ufthc Rcstrictivc Sharc Agrccmcnt, Dcfenuant Strcctgard had 45 days lllicr receipt of
writtcn notiec to makc thc initial puymcntlllr ucquisitiul1 uf Plaintiff Stoncl"s stock, Only
thirtccn d(\ys ancr issuing thc Icllcr of Dcecmbcr 2, 1997 cxcrcising thc option, Plaintiff Stoncr,
acting through his cOllnscl on or about Dcecmber 15, 1997, tilcd the instant sllit which secks a
full judgmcnt inthc principalamounl of$88,800 against Defendant Strcetgard, a form ofrclicfto
which Plaintiff Stoncr has no cntitlcmcnt undcr thc Rcstrictivc Sharc Agreemcnt. In addition, on
January 5, J 998, wdl within thc 45 days pcrmittcd lIndcr Scction 5, I for e1osing, Dclendant
Strectgurd, through its Presidcnt, John K. Rich, notificd counscllor Plaintiff Stoner that it would
purchasc PlaintiffStoncr's stock pursuant to the tcrms of the Agreemcnt. A copy ofMr, Rich's
January 5. 1998 leller in this rcgard is attaehcd hcrcto and madc a part hereof as Exhibit "A",
Counsellor Plaintiff Stoncr respondcd to thc offer of c1using by rcqucsting exccution of a
judgmcnt note for thc full $88,800, a request which is wholly lInauthorized and not rcquired by
any tcrm of thc Restrictivc Share Agrcemcnt. A copy of' a Icttcr of January 12, 1998 from
cOllnsellor Plllintiff Stoner making such rcqucsts is attachcd hercto and made a part hcrcof liS
Exhibit "8", Dcfcndant Strcctgard has been and remains flllly prcparcd to purchase thc stock of
Plaintiff Stoner in accord with thc terms of the Rcstrictivc Sharc Agrcement.
15, Dcnied. Defendant Strcctgard has not brcachcd the Restrictivc Share Agrcementlor
the reasons sct forth in paragraph 14 hcreinabovc and in thc avcrmcnts of Ncw Mattcr
hereinafter, all of whh;h arc incorporatcd hcrcin by relercncc thcrcto as though fully set forth.
N F: W MIlTI!ili
16, Paragraph 1.2 of the Rcstrictivc Sharc Agreemcnt providcs as follows:
5
21. Pursuuntto thc aforcsuid quotcd provisions of Section 1,2 of thc Rcstrictivc Shurc
Agreement, Plaintifl" Stoncr's right 10 cxcrcisc his option to scll his sharcs to Strcctgard did not
accruc until Novembcr I, 1997,
22, Plaintiff Stoncr cxcrciscd his option to scll his shurcs by Icttcr dutcd Dcecmbcr 2,
1997 from his allorncy to John K, Rich. Prcsidcnt of Strcctgard, A copy of the aforesuid Ictter is
attached hercto and madc a purt hcreofas Exhibit "C",
23, Pursuant to Scction 5,1 ofthc Restrictive Share Agrecmcnt, Defcndant Strcetgard
had 45 days to close on thc purchasc of Plaintiff Stoncr's sharcs,
24, Despite the 45 day provision ofScetion 5, I ofthc Restrictive Share Agrcement,
Plaintiff Stoner filed suit on or about Dcccmbcr 15, 1997, only I.l days aftcr exercising his
option.
25. Pursuant to Scction 3 of the Rcstrictive Share Agrecment, Strectgard has the option
to pllrchase PlaintiffStoncr's shares by paying him $5,000 in cash or by certificd check at
e1osing, with the balance due in 60 monthly installments, bearing interest at the "applicable
federal rate".
26, Despite the clear option of Streetgard to purchase Plaintiff Stoner's stock for $5,000
at closing, with the balance duc in 60 monthly installmcnts, Plaintiff Stoner has sucd for a
judgment for the full amollnt of $88,800, an amount which was not due to him at the time of
filing of his Complaint and which is not due to him now.
8
27, Withinthc 45 duy p.:riod lor closing sct by Scetion 5, I ofthc Rcstrictive Shurc
Agrccmcnt, Dclcndunt Strcctgurd adviscd cOllnscl ti.lr Pluintiff Stoncr that Dcfcndunt Strcctgnrd
intended to fultill its obligations undcr thc Rcstrictivc Shurc Agrccmcnt und rcqucstcd thut
PlaintitTStoncr withdrnw his Compluintand cull to sct u closing t<lr ueqllisition of Plaintiff
Stoncr's stock, A copy of Dclcndnnt Strcctgllrd's commllnicution to counsel ti.lr PlnintilT Stoncr
in this rcgurd is nttuched hcrcto and madc a purt hcrcof us Exhibit "A".
28, Dcspitc Dcfcndant Streclgard's offcr to c10sc on PlaintiffStoncr's stock, Pluintiff
Stoner did not agree to a settlcmcnt dutc bllt ruther dcmandcd cxecution of a judgmcnt notc und
entry ofajudgmcnt tor thc full $88,800, an amount which is not yct duc to PlaintiffStoncr Irom
'Strectgard, A copy of Plaintiff Stoner's impropcr dcmand is attachcd hereto and mudc u part
hereof as Exhibit "B",
29. Plaintiff Stoner seeks, throllgh thc instant suit, to obtain a judgmcnt for the full
amount of $88,800 against Defendant Strectgard, cvcn though thc $88,800 is not dlle to PlaintifT
Stoner under thc clear terms of the Restrictive Share Agrecmcnt.
30, PlaintiffStoncr has tailcd to state a causc of action on which relief can bc granted by
thc Court,
31. Plaintiff Stoner has assertcd his claim in cqllity despitc the fact that, to the extent he
alleges a breach of contract, he has a full, complete and adeqllatc rcmcdy at law.
32, By failing to accept Dcfcndant Strcetgard's offer of closing, Plaintiff Stoncr has
waived any causc of action.
9
IIchMllt A
Exhlblt B
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CERTIFICATE OF SERVICE
I, Denise L, Nye, an authorized agent of Martson Deardorff Williams & Otto, hereby certifY
that a copy of the foregoing Praecipe was served this date by depositing same in the Post Office at
Carlisle, P A. tlrst class mail. postage prepaid, addressed as follows:
Jack M. Stover, Esquire
BUCHANAN INGERSOLL
30 North 3rd Street - 8th Floor
Harrisburg, P A 1710 I
Attorney for Defendant
MARTS ON. DEARDORFF. WILLIAMS & OTTO
By ~,of,~
D"nise L. Nye
Ten East High Street
Carlisle. PA 17013
(717) 243-3341
Dated: July 23, 1998