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HomeMy WebLinkAbout03-3126COMPUTER SUPPORT, INC., Plaintiff V. JANNA KNAPP, Defendant 1N THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - EQUITY JURY TRIAL DEMANDED NOTICE TO DEFEND 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. LAWYER REFERRAL SERVICE Cumberland County Bar Association 2 Liberty Avenue Carlisle, PA 17013 (717) 249-3166 RHOADS & SINON LLP By: Todd J. Shill Attorney I.D. No. 69225 Heather Z. Kelly Attorney I.D. No. 86291 One South Market Square P. O. Box 1146 Harrisburg, PA 17108-1146 ATTORNEYS FOR PLAINTIFF 478099.1 AVISO USTED HA SIDE DEMANDADO/A EN CORTE. Si usted desea defenderse de las demandas que se presentan mas adelante en las siguientes paginas, debe tomar accion dentro de los proximos veinte (20) dias despues de la notificacion de esta Demanda y Aviso radicando personalmente o por medio de un abogado una comparecencia escrita y radicando en la Corte por escrito sus defensas de, y objecciones a, las demandas presentadas aqui en contra suya. Se le advierte de que si usted falla de tomar accion como se describe anteriormente, el caso puede proceder sin usted y tm fallo por cualquier suma de dinero reclamada en la demanda o cualquier otra reclamacion o remedio solicitado por el demandante puede ser dictado en contra suya pot la Corte sin mas aviso adicional. Usted puede perder dinero o propiedad u otros derechos importantes para usted. USTED DEBE LLEVAR ESTE DOCUMENTO A SU ABOGADO INMEDIATAMENTE. SI USTED NO TIENE UN ABOGADO O NO PUEDE PAGARLE A UNO, LLAME O VAYA A LA SIGUIENTE OFIC1NA PARA AVERIGUAR DONDE PUEDE ENCONTRAR ASISTENCIA LEGAL. LAWYER REFERRAL SERVICE Cumberland County Bar Association 2 Liberty Avenue Carlisle, PA 17013 (717) 249-3166 2 Todd J. Shill Attorney ID No. 69225 Heather Z. Kelly Attorney ID No. 86291 RI-lOADS & S1NON LLP One South Market Square, 12th Floor P.O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Plaintiff COMPUTER SUPPORT, INC., Plaintiff JANNA KNAPP, Defendant 1N THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - EQUITY JURY TRIAL DEMANDED COMPLAINT NOW COMES the Plaintiff, COMPUTER SUPPORT, INC. ("CSI"), by its attomeys Rhoads & Sinon LLP, and files the within Complaint stating as follows: I. PARTIES 1. CSI is a Pennsylvania corporation with its principal place of business at 54 West Main Street Mechanicsburg, Pennsylvania 17055 and designs, develops, programs, sells and provides technical support for software for use in the trucking, shipping, and logistics industries. 2. Defendant Janna Knapp is an adult individual with an address of 422 Hogestown Road Mechanicsburg, PA 17050. II. JURISDICTION AND VENUE 3. This action arises under the laws of the Commonwealth of Pennsylvania and is within the subject matter of this Court. This Court has personal jurisdiction over Defendant pursuant to 42 Pa.C.S.A. §5301(a). Venue is proper pursuant to Pa.R.Civ.P. 1006. III. FACTUAL ALLEGATIONS 4. On or about June 28, 1999, CSI hired Defendant to work as a customer service representative in CSI's customer service group providing technical support to CSI's customers. 5. While employed by CSI, Defendant had access to CSI's trade secrets, proprietary information and confidential information relating to technology, programming, procedures, formulas, business strategies, trade secrets, client and customer lists, and other confidential information that belongs to CSI. 6. CSI's computer source code as well as the methodology that it uses for data flow is confidential and proprietary and constitutes trade secrets. 7. While employed by CSI, Defendant was trained thoroughly on CSI's software, including the confidential and proprietary information and trade secrets necessary to provide technical support to users of CSI's software. 8. CSI uses the confidential and proprietary information and trade secrets described above in furtherance of its business, and the proprietary information and trade secrets give CSI an advantage over its competitors because CSI's software provides faster results and is easier to implement and utilize than competing software. 9. CSI's confidential and proprietary information and trade secrets are not made known to others outside of CSI, and are generally known only to certain CSI employees. CSI has employed, and continues to employ, measures to preserve the secrecy of the information and 4 trade secrets, for example only two individuals have access to CSI's source code. Furthermore, employees and customers of CSI are required to execute confidentiality agreements to protect the secrecy of CSI's software. Employees are given passwords to access CSI's computers in order to ensure the secrecy of the trade secrets and confidential and proprietary information. 10. CSI's trade secrets and confidential and proprietary information have independent economic value from not being generally known to, and not being readily ascertainable through proper means by, other persons who would gain economic value from their disclosure or use, and are not easily acquired by others because the information is not commonly known to competitors. 1 I. It would be difficult or impossible for others to legally acquire and/or duplicate CSI's trade secrets and confidential and proprietary information. 12. In consideration of her employment, and as a condition thereof, Defendant entered into a Non-Competition Agreement with CSI. A true and correct copy of the Non- Competition Agreement is attached hereto as Exhibit "A'. 13. The Non-Competition Agreement provides, in relevant part, as follows: That [Defendant] will not within one year after leaving the employ of CSI for any reason whatsoever, engage in or enter into employment by, or into self-employment or gainful occupation as, a Competing Business, or act directly or indirectly as an advisor, consultant, agent or representative for a Competing Business regardless of compensation structure, if any. "Competing Business" means a business which is engaged in the creation, sale, or other disposition of a product or service or has under development a product or service that is in direct or closely indirect competition with a product, process, or service whether existing or under development, of CSI, and is sold within the United States. (Exhibit A at ¶ 4). 5 14. Also in consideration of her employment, and as a condition thereof, Defendant entered into a Confidentiality Agreement with CSI. A true and correct copy of the Confidentiality Agreement is attached hereto as Exhibit "B". 15. The Confidentiality Agreement provides, in relevant part: [Defendant agrees] [t]o keep secret and confidential, at all times, during and subsequent to the period of [her employment with CSI], and to not use, adopt or adapt, sell, abuse, trade, bargain for or with, or disclose in any manner to any third party any CSI trade secret pertaining to its products, processes, or business operations. (Exhibit B at ¶ (2)(a)). 16. On or about March 13, 2002, Defendant voluntarily terminated her employment with CSI, indicating that she had learned a lot while working at CSI but that she had accepted a position with another company. A true and correct copy of Defendant's resignation letter is attached hereto as Exhibit "C". 17. Following Defendant's separation from her employment at CSI, CSI leamed that Defendant has provided technical support regarding CSI software products to at least one of CSI's clients, Reliable Carriers, Inc. ("Reliable"). 18. CSI has an existing License and Support Agreement with Reliable. A true and correct copy of the License and Support Agreement is attached hereto as Exhibit "D". 19. Pursuant to the License and Support Agreement, Reliable pays an annual support fee for CSI to "provide complete and continuing information, research, design and technical support and advice as may be requested from time to time by [Reliable] concerning the design, refinement and application of [CSI's sof~ware] .... "(Exhibit D at ¶ 1.3). 20. Reliable has indicated its intent to discontinue paying the annual service fee in the future. 6 21. Defendant was providing technical support to Reliable as early as June 2002, indicating that Defendant began soliciting business from Reliable while still in CSI's employ. 22. Defendant has provided Reliable technical support services that are within the scope of the Licensing and Support Agreement. 23. It is impossible to provide technical support regarding CSI's software without using and/or disclosing CSI's trade secrets and confidential and proprietary information. 24. Additionally, certain software is needed to provide technical support regarding CSI's software, and it is likely that Defendant copied or unlawfully removed such software from CSI's computers. 25. Technical support of its software generates approximately one-third of CSI's annual revenues. 26. Prior to working for CSI, Defendant had no experience with CSI's software, and all of Defendant's knowledge and experience relevant to CSI's software was obtained while she was employed by CSI, and, in fact, Defendant could not have gained experience and knowledge of CSI's software outside of CSI because such knowledge is a trade secret and confidential and proprietary information. IV. CLAIMS Count I: Breach of Contract - Non-Competition A~reement 27. The above Paragraphs are incorporated herein by reference. 28. Defendant has violated the terms of the Non-Competition Agreement by acting "directly or indirectly as an advisor, consultant, agent or representative for a Competing Business" in serving as a consuitant by providing technical support regarding CSI software to at least one client of CSI beginning at least as early as June 2002, and continuing to the present. 7 29. Technical support is one of the services that CSI offers to its customers, and by selling such support to Reliable and possibly other CSI clients, Defendant is acting as a "consultant, agent or representative for a Competing Business." 30. As a result of Defendant's violation of the Non-Competition Agreement, CSI has suffered, and will continue to suffer economic and non-economic damages. 3 l. Such damages include, but are not limited to, loss of revenue, loss of business opportunities, loss of competitive advantages, and disclosure of trade secrets and confidential and proprietary information. WHEREFORE, Plaintiff respectfully requests this Court to enter judgment in its favor and against Defendant in an amount in excess of $25,000.00, the compulsory arbitration amount, plus interest, reasonable attorneys fees and costs, punitive damages, injunctive relief as set forth below, and for such other relief as the Court may deem appropriate. Count 1I: Breach of Contract - Confidentiality A~reement 32. The above Paragraphs are incorporated herein by reference. 33. Defendant has violated the terms of thc Confidentiality Agreement by using, adopting or adapting, selling, abusing, trading, bargaining for or with, or disclosing to a third party or third parties CSI trade secrets pertaining to its software products, processes, or business operations. 34. Specifically, by providing technical support to Reliable, and possibly other CSI clients, as described in the above Paragraphs, it is necessary that Defendant use and/or disclose to third parties CSI trade secrets pertaining to CSI's software, processes, or business operations. 35. As a result of Defendant's violation of the Confidentiality Agreement, CSI has suffered, and will continue to suffer economic and non-economic damages. 36. Such damages include, but are not limited to, loss of revenue, loss of business opportunities, loss of competitive advantages, and disclosure of trade secrets and confidential and proprietary information. WHEREFORE, Plaintiff Computer Support, Inc. respectfully requests this Court to enter judgment in its favor and against Defendant in an amount in excess of $25,000.00, the compulsory arbitration amount, plus interest, reasonable attorneys fees and costs, punitive damages, injunctive relief as set forth below and for such other relief as the Court may deem appropriate. Count III: Misaoorooriation of Trade Secrets and Proorietarv Information 37. The above Paragraphs are incorporated herein by reference. 38. The actions of Defendant constitute common law conversion and misappropriation of CSI's trade secrets and confidential and proprietary information. 39. As a result of Defendant's conduct, CSI has suffered, and will continue to suffer economic and non-economic damages. 40. Such damages include, but are not limited to, loss of revenue, loss of business opportunities, loss of competitive advantages, and disclosure of trade secrets and confidential and proprietary information. WHEREFORE, Plaintiff respectfully requests this Court to enter judgment in its favor and against Defendant in an amount in excess of $25,000.00, the compulsory arbitration amount, plus interest, reasonable attorneys fees and costs, punitive damages, injunctive relief as set forth below, and for such other relief as the Court may deem appropriate. Count IV: Breach of Duty of Loyalty/Fiduciary Duty 41. Thc above Paragraphs are incorporated herein by reference. 9 42. The aforesaid actions of Defendant constitute a breach of the common law duties of loyalty and fiduciary duties that Defendant owed, and owes, to CSI. 43. Defendant's actions are willful, intentional and unprivileged, and CSI has suffered, and will continue to suffer economic and non-economic damages. 44. Such damages include, but are not limited to, loss of revenue, loss of business opportunities, loss of competitive advantages, and disclosure of trade secrets and confidential and proprietary information. WHEREFORE, Plaintiff respectfully requests this Court to enter judgment in its favor and against Defendant in an amount in excess of $25,000.00, the compulsory arbitration amount, plus interest, reasonable attorneys fees and costs, punitive damages, injunctive relief as set forth below, and for such other relief as the Court may deem appropriate. Count V: Tortious Interference with Contractual/Business Relationshins 45. The above Paragraphs are incorporated herein by reference. 46. The aforesaid actions by Defendant constitute tortious interference with CSI's existing and prospective contractual and business relationships. Defendant took these actions with the intent to interfere with such contracts and business relationships, and Defendant's actions were not privileged or justified. 47. As a result of Defendant's conduct, CS! has suffered, and will continue to suffer economic and non-economic damages. 48. Such damages include, but are not limited to, loss of revenue, loss of business opportunities, loss of competitive advantages, and disclosure of trade secrets and confidential and proprietary information. 10 WHEREFORE, Plaintiff respectfully requests this Court to enter judgment in its favor and against Defendant in an amount in excess of $25,000.00, the compulsory arbitration amount, plus interest, reasonable attorneys fees and costs, punitive damages, injunctive relief as set forth below, and for such other relief as the Court may deem appropriate. Count VI: Accountim, 49. The above Paragraphs are incorporated herein by reference. 50. As a result of the aforesaid actions by Defendant, and pursuant to Pennsylvania Rule of Civil Procedure 1530, CSI is entitled to an accounting of all income and/or other financial benefits derived by Defendant through her use of CSI's trade secrets and confidential and proprietary information as well as her violations of the Non-Competition Agreement. Defendant's actions are willful, intentional and unprivileged and have caused, and are causing, irreparable harm as well as monetary damages to CSI. The information required for the accounting is solely in the possession of the Defendant, there is a fiduciary relationship between the parties, the accounts are complicated, and CSI has no adequate remedy at law. WHEREFORE, Plaintiff respectfully requests that this Court enter an Order requiring Defendant to provide an accounting of all income and/or other financial benefits derived by Defendant through her use and/or disclosure of CSI's trade secrets and proprietary and confidential information as well as through her violation of the Non-Competition Agreement. V. INJUNCTIVE RELIEF 5 I. The above Paragraphs are incorporated herein by reference. 52. In view of the actions of Defendant referred to herein, CSI is entitled to injunctive relief as follows: 11 a. Prohibiting Defendant from making any use of CSI's trade secrets and confidential and proprietary information in any way; b. Prohibiting Defendant from the disclosure in any form of CSI's trade secrets and confidential and proprietary information; c. Requiring Defendant to return any document, computer file or program, database or other information that originated from CSI or that contains, refers to or relates to CSI's trade secrets and confidential and proprietary information; d. Prohibiting Defendant from interfering with CSI's current and prospective contractual relations by acting as a consultant or advisor or in any other capacity regarding CSI software for any ctm'ent or prospective customers of CSI; e. Requiring Defendants to account for all profits and/or other financial benefits derived by Defendant through her use of the CSI trade secrets and confidential and proprietary information, and in violation of her Non-Competition and Confidentiality Agreements. WHEREFORE, Plaintiff respectfully requests that this Court enter an injunction as provided for above. DATED: July 2, 2003 Respectfully Submitted, RHOADS & SINON LLP Todd J. Shill Heather Z. Kelly One South Market Square P. O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Plaintiff 12 VERIFICATION Fred Nichols, President of Computer Support, Inc., deposes and says, subject to the penalties of 18 Pa. C.S. § 4904 relating to unswom falsification to authorities, that the facts set forth in the foregoing document are true and correct to the best of his knowledge, information and belief. COMPUTER SUPPORT, 1NC. DATED: Exhibit A Computer Support, Inc. NON-COMPETITION AGREEMENT Exhibit I This Non-Competition Agreement ("Agreement") is made between Janna Mueller and Computer Support, Inc. CCSI"), a corporation with a principal place of business of 54 West Main Street, Mechanicsburg, PA 17055. WHEREAS, CSI conceptualizes, develops, programs, sells, applies, and supports computer software for use in the trucking, shipping, and logistics industries in the United States and worldwide, and has accumulated valuable and confidential information including ideas, concepts, formats, trade secrets and know-how relating to technology, programming, procedures, formulas, business strategies, and other business records in connection therewith and othenNise; WHEREAS both CSI and Employee recognize and acknowledge that such information and Trade secrets must be kept confidential; WHEREAS, such valuable and confidential information is likely to be beneficial and desirable Both to CSI's competitors and to CSI even after Employee's employment has ended; WHEREAS, availability and use of this information by CSI competitors could irreparably harm CSI and unjustly cause CSl to be deprived of the benefits derived from its investment of time, effort, knowledge, and expertise required to develop such proprietary information; and WHEREAS, Employee as a necessary incident to employment with CSI will acquire as is expected to develop in a fiduciary relationship with CSl and on CSI's account much of said Information, in confidence, from CSI and, from its officers, agents, employees, materials, work-in-process, or records, and Employee will be in a position to disclose said proprietary Information to CSI's competitors or others to the detriment of CSI either by divulging it to employees or agents of a competitor for whom Employee becomes employed or by indirectly revealing it in the performance of duties and responsibilities of employment or through negotiations with a competitor; NOW THERFORE, acknowledging that the agreements and covenants contained in this Agreement are an important prerequisite to employment, and in consideration of employment with CSI, Employee agrees as follows: That effective as of the day hereof, to sign and be bound by the obligations of CSl's Confidentiality Agreement which accompanies this Agreement and which obligations shall survive termination or expiration of this Agreement. The terms of this Agreement supplement rather than supersede the terms and conditions of the aforesaid Confidentiality Agreement. 2. That Employee shall give CSI thirty (30) days' written advance notice of termination of employment with CSI. 3. That Employee shall cooperatively participate in an Exit Interview conducted by CSI at at the time of or prior to any termination of employment with CSI. Computer Support, Inc. Exhibit I ~ NON-COMPETITION AGREEMENT (continued) That employee will not within one year after leaving the employ of CSI for any reason whatsoever, engage in or enter into employment by, or into self-employment or gainful occupation as, a Competing Business, or act directly or indirectly as an advisor, consultant, agent or representative for a Competing Business regardless of compensation structure, if any. "Competing Business" means a business, which iS engaged in the creation, sale, or oth~osition of a product c~vi~e or has under development a pro--ct or s~'~rvice that is in direct or closely indirec-~c~petition with a product, process, or service whether existing or under development, of CSI, and is sold within the United States. That the obligations of Paragraphs 3 and 4 shall apply whether said termination of Employment with CSI is voluntary or involuntary, regardless of the reason for any said termination of employment. 6. That only CSI may waive or elect in writing not to enforce the provisions of Paragraphs 3 and 4. THIS AGREEMENT SHALL BE GOVERNED BY THE LAW OF THE COMMONWEALTH OF PENNSYLVANUA WITHOUT REGARD TO ITS CONFLICTS OF LAW. EMPLOYEE AGREES TO SUBMIT TO THE JURISDICTION OF, AND WAIVES OBJECTION TO THE LAYING OF VENUE IN, THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA, REGARDLESS OF EMPLOYEES RESIDENCE AT THE TIME ANY ENFORCEMENT OF THE PROVISIONS OF THIS AGREEMENT ARE SOUGHT TO BE ENFORCED BY CSl. In the event any one or more of the provisions, or portions thereof, contained or referenced in this Agreement shall for any reason be determined by a court of competent jurisdiction to be invalid, illegal or unenforceable, such finding shall not affect any other provision hereof and this Agreement shall continue in full force and effect and be construed as if such provision, to the extent that it is invalid, illegal or unenforceable, had never been contained herein. The obligations of this Agreement shall not be construed as any limitation upon the remedies CSI might also, otherwise, or in the absence of this Agreement, have at law or in equity including, without limitation, any remedies for breach of this Agreement; for actual, consequential, and punitive damages; and for injunctive relief. INTENDING to be legally bound hereby, CSI and Employee execute this Agreement on the Date (s) indicated below. /"I Date ~ -~ ~ -~ ~ Signed ,~.-r~- ,/~?/~ (SEAL) / (Employee Signature) ~ (~lo~e~ame T~d or P~ted~ --,/ (cs ) Computer Support, Inc. P.O. Box 2429 Meclmnk~h~xrg, PA 1705~2429 Phone ('~17) 691~/07 Fax (717) 691-7503 CONFIDENTIALITY AGREEMENT Exhibit II It is recognized by the undersigned that the day-to-day performance of his or her duties while in the employment of Computer Support, Inc, ("CSI") is likely to give or require access to confidential CSI records and sources of information, and to bring the undersigned into routine contact with others engaged in confidential work for CSI. In consideration of, and as a condition precedent to, employment by CSI, tile undersigned hereby acknowledges the sufficiency of said consideration and agrees to cany on his or her employment under the following continuing obligations: (1) (a) During the period of said employment: To keep secret and treat confidentially and as a fiduciary, all CSI confidential information pertaining to CSI customers and prospective customers, customer requirements, customer financial information, and other such confidential information compiled or maintained by CSl concerning its customers and prospective customers; ii) To keep secret and treat confidentially and as a fiduciary, at all times, all CSI confidential information pertaining to CSI sources of supply, costs, marketing plans and contemplated activities, drawings, writings, formats, customer inquiries and suggestions concerning CSI products or developments, financial matters, strategic plans, initiatives, research and development, programming, product design, distribution, personnel matters, terms and conditions of any agreements involving CSI, and other such confidential information compiled or maintained by CSI concerning its business operations and activities; iii) To conduct him or herself at all times as a fiduciary for the benefit of CSI and never take any action inconsistent with CSI'S best interests and to refrain from any and all violations of CSI's Non- Competition Agreement, executed herewith. (b) Upon termination of said period of employment, to promptly return to CSI any and all documents, programs, notes, and work-product of any description, including all copies in identical or differing formats, made or obtained by the undersigned in the course of his or her employment pertaining to or containing any of the confidential information referred to in Paragraph (1)(a) above, (2) (a) To keep secret and confidential, at all times, during and subsequent to the period of said employment, and to not use, adopt or adapt, sell, abuse, trade, bargain for or with, or disclose in any manner to any third party any CSI trade secret pertaining to its products, processes, or business operations. (b) To promptly return to CSI upon termination of employment and all documents, programs, notes, and work-product of any description, including all copies in identical or differing formats, made or obtained by the undersigned in the course of, or in relation to, his or her employment pertaining to or containing any trade secret information referred to in Paragraph (2) (a) above. Computer Support, Inc. CONFIDENTIALITY AGREEMENT (continued) Exhibit II (3) The undersigned acknowledges that this agreement provides notice that CSI regards It to be vital to its interests that its confidential information and trade secrets be safeguarded, at all times, by its employees and longer employees. The undersigned understands and agrees that this agreement establishes, as a basis of his or her employment, a confidential relationship between the undersigned and CSI, and that the undersigned has a further duty under the law not to breach the confidential relationship by using or disclosing CSI confidential information and trade secrets adverse to CSI's interests. The undersigned further understands that CSI relies upon the undersigned honoring such duty of confidence when CSI entrusts the undersigned with CSI confidential information and trade secrets. (4) All of the covenants and provisions herein contained are severable: In the event that any of said covenants or provisions shall be held by any court of competent jurisdiction to be invalid or unenforceable, this agreement shall be construed as if any such invalid or unenforceable covenant or provision were not herein contained. (5) THIS AGREEMNT SHALL BE GOVERENED BY THE LAW OF THE COMMONWEALTH OF PENNSYLVANIA WITHOUT REGARD TO ITS CONFILICTS OF LAWS. THE UNDERSIGNED AGREES TO SUBMIT TO THE JURISDICTION OF, AND WAIVES OBJECTIONS TO THE LAYING OF VENUE tN , THE COURT OF COMMON PLEAS, CUMBERLAND COUNTY, PENNSYLVANIA, REGARDLESS OF THE UNDERSIGNED'S RESIDENCE AT THE TIME ANY ENFORCEMENT OF THE PROVISIONS OF THIS AGREEMNTARE SOUGHT TO BE ENFORCED BY CSI. Intending to be legally bound, the undersigned has executed this Agreement on the date indicated below, Signed! z~ Name, printed .J(i,l,q,:~ L. j'g/~o~, // dJ Date ~ ',;] ~,~ ~) Witne~Ss~~// Exhibit C Fred Nichols 54 West Main Street Mechanicsburg, PA 17050 Fred, Please let this letter serve as my resignation from CSI. I spoke with you on Wednesday February 27, 2002 to let you know in person that I had accepted a position with another company. I have learned a lot in my time with CSl, but felt that our paths are going in different d~rections. The decision was made upon receiving an offer with a company that can provide me with the opportunities I am seeking. I will be working through March 13, 2002. I will try and wrap up as many items as possible with the clients that I am working with prior to my departure. I am glad that I was able to give you this notice and part ways amicably. Sincerely, Janna L. Knapp Exhibit LICENSE AND SUPPORT AGREEMENT This AGREEMENT (this "Agreement") made and effective as of the day of , 1998, (hereinafter referred to as the "Effective Date") is by and between the RELIABLE CARRIERS, INC. , having a principal place of business at 41555 KOPPERNICK RD., CANTON, MI./ .48!87.' ~ ("LICENSEE"), and C.S.I., Computer Support, Inc.,- a Pennsylvania Corporation, ("C.S.I."), having a place of business at 54 West Main Street, Mechanicsburg, Pennsylvania 17055 U.S.A. RECITlkLS WHEREAS, C.S.I. is the developer and o~zner of certain design, engineering, fabricating, trade secret, trademark, tradename, applications processing and related intellectual property rights necessary and useful in the design, production, and applications of a full range of software packages and related material ("IP" rights) used and useful in managing all aspects of the trucking, shipping and related industries, including its Motor Carriers software applications designated "CSI.Road" (also referred to herein as the "Licensed Program Materials"); WHEREJkS, C.S.I. possesses the further engineering and design capability to provide to LICENSEE, on a regular and ongoing basis, all necessary specialty design and technical support to enable and assist LICENSEE to install, utilize, customize and manage the Licensed Program Materials, as well as to develop additional, related systems, and derivatives of existing programs as may be suitable for deployment in the trucking and common carrier by road industry from time to time; WHEREAS, LICENSEE is engaged in the ~siness of trucking, hauling and shipping by road in USA and J~i~hin specific areas as serviced on the date hereof through THREE~ruck terminals located in CANTON,MI CHANDLER, AZ; ORLANDO, FL, each connected to LICENSEE'S server located in (the "Territory"); WHERE2kS, LICENSEE maintains, or is capable of developing with the continuing assistance of C.S.I., appropriate use of C.S.I.'s Licensed Program Materials in managing Licensee' s business sufficient to satisfy its anticipated market demands and schedules; Page 6 of 19 WHEREAS, C.S.I. desires to provide its full, regular, and systematic support to, and to vest in, LICENSEE the non-exclusive right to utilize, customize and deploy such software products for use throughout the Territory; and WHEREAS, LICENSEE desires (a) to acquire from C.S.I. a license to use the Licensed Program Materials under the terms and conditions set forth in this license and support agreement (the ~License Agreement") and (b) to be supported by the continuing services of C.S.I. in connection with Licensed Program Materials, including the application of know-how, engineering, design and technical support from and through the C.S.I. staff and facilities; NOW THEREFORE, the parties to this Agreement, intending to be legally bound, and for good and valuable consideration, the sufficiency and receipt of which is hereby acknowledged, hereby agree as follows: ARTICLE I LICENSE AND SUPPORT SERVICES 1.1. C.S.I. will furnish certain program materials and documentation to Licensee, and hereby grants to Licensee, and Licensee accepts, a nontransferable and nonexclusive license to use the Licensed Program Materials within the Territory; provided, however, that such license shall not be deemed to apply to custom applications as may be specified in Annex A hereto and shall not include release of source codes to LICENSEE, provided further, that such licensed rights may be transferable or assignable, in whole or in part, by LICENSEE to such affiliates of LICENSEE, including other subsidiaries or divisions of its parent, Reliable Carriers,Inc. (however described), designated by LICENSEE (such persons hereinafter referred to as "Sub licensees"), subject to the terms and conditions set forth in Article III below, and that any such Sub licensees may be entitled to use Licensed Program Materials within a specified territory as may be requested by LICENSEE and consented to by C.S.I., provided further that each such Sub licensee shall execute, and LICENSEE shall provide C.S.I. with a copy of, a Subscription and Assumption Agreement within 60 days of its appointment by LICENSEE as a Sub licensee (generally in the form appended hereto as Annex B). C.S.I. shall not be prohibited from granting other licenses in respect of the Licensed Program Materials, or entering into service agreements in respect thereof within the Territory or otherwise. Page 7 of 19 1.2 LICENSEE agrees with respect to the Licensed Program materials to accept the responsibility for (a) their selection to achieve LICENSEE'S intended results, (b) their installation, (c) their use, and (d) the results obtained therefrom. 1.3 C.S.I. shall, in consideration of the servicing fees provided for in article III below, provide complete and continuing information, research, design and technical support and advice as may be requested from time to time by LICENSEE concerning the design, refinement and application of Licensed Program Materials, including the development of C.S.I. standard and special procedures, for application with Licensed Designs, which procedures shall be developed by C.S.I. in reasonable response to requests for same by LICENSEE. If LICENSEE subscribes to CSI's Continuing Support Program CSI will provide to LICENSEE all technical upgrades and improvements as CSI may make upon the Licensed Program Materials from time to time for no additional license fees 1.4 The applications licensed to Licensee are: Applications as referenced in this License Agreement dated the effective date hereunder covering Order Entry/Dispatching, Freight Billing, Driver Settlement, Fuel and Mileage, Safety and Accident Reporting, and usually including: Accounts Receivable/Payable, General Ledger, and Fixed Assets as contained in the software system known as CSI.Road. 1.5 C.S.I. expressly reserves the right to determine, in its sole discretion, whether any location transfer of applications of the Licensed Program Materials or additional computer access is (a) in support of LICENSEE'S business within the Territory, (b) is otherwise a new site, (c) is beyond or outside the Territory, (d) is made to an entity (whether an affiliate of LICENSEE, a third party, or otherwise) and which, in the cases of (b), (c) or (d), use is therefore not covered by this Licensing Agreement without applying the sub licensee procedures set forth in krticle III. 1.6 Specialized services may be provided from time to time by C.S.I. upon request for such services by LICENSEE or any of its approved Sub licensees. The parameters of any such requested service shall be clearly set forth by LICENSEE, and may include joint research and development of custom or specific applications as may be agreed to by C.S.I. pursuant to such request. By way of example, and not by way of limitation, specialized services may include computer-related consulting services including data conversion, application modifications and integration of programs with other related or unrelated business applications. Page 8 of 19 ARTICLE II CHARGE S 2.1.A The one-time licensing charge for the licensed use by the LICENSEE of the above-described licensed program materials shall be $90,500, including any down or pre-payment previously made. 2.1.B LICENSEE may also license additional applications listed on page 18,at LICENSEE's discretion. The respective fees listed are valid for one year from date of executed contract. 2.2 Consulting services fees shall be paid and payable to C.S.I. for support services at the hourly rate of $95 provided, that LICENSEE may opt to purchase C.S.I.'s Continued Support Program for service commencing on the 90=n day after CSI.Road becomes operational for LICENSEE, at LICENSEE'S option and upon such service and payment terms as are in effect under the Continued Support Program from time to time. Travel and living expenses are also charged as may be required by C.S.I. in order to provide services in the appropriate circumstances, including for set-up and training work to be performed at LICENSEE'S premises in Orlando, FL., and shall be promptly reimbursed by LICENSEE upon notice by C.S.I. at the rate incurred, it being further provided that personnel of C.S.I. deployed to service the account and systems of LICENSEE shall be selected at the reasonable discretion of C.S.I. and that neither LICENSEE nor any affiliate of LICENSEE shall cause or allow such C.S.I. personnel to quit employment with C.S.I. and become employed by LICENSEE or any of its affiliates for a period of two years after the termination of this License Agreement unless a finder's fee of no less than 50% of the first 12 months' compensation package for such personnel shall also be paid to C.S.I. upon such hiring. 2.3 Ail payments to be made by LICENSEE to C.S.I. under this Agreement shall be made to C.S.I. at its offices as indicated in the Notices section of this License Agreement or at such other location as C.S.I. may notify LICENSEE. 2.4 Ail references to "dollars" or "$" shall be to lawful currency of the United States. APPLICABLE TAXES 2.5 In addition to the charges specified under this Agreement, the LICENSEE agrees to pay amounts equal to any taxes resulting from this License Agreement, or any activities hereunder, exclusive of property taxes and taxes based on net income. Page 9 of 19 ARTICLE III SUBLICENSES AND FEES 3.1 During the term of this Agreement and in consideration for the license and the suppor~ services to be provided by C.S.I. pursuant to Article I hereof, LICENSEE agrees to pay C.S.I. a royalty, calculated to include in all instances a royalty fee for any extension of the license granted pursuant to Article I, and shall cause execution of a Subscription and Assumption Agreement in the form of Annex B, for the addition of use by affiliates of LICENSEE ("Sublicensees") to the Licensed Program Materials and any related continuing support services pursuant to Paragraph 1.6 above in accordance with the following: SUBLICENSEE Truck Terminal Shop EXTENSION OF TERRITORY Terminal 4 or more Shop ~ or more ROYALTY (or other payment structure) $5,000 each $3,950 each 3.2 LICENSEE agrees to keep complete records of all data necessary for the determination and computation of royalties subject to accrual under this Article, and further agrees to permit such records to be examined from time to time, after reasonable notice received from C.S.I. during LICENSEE'S normal business hours, to the extent necessary to verify the validity of said written reports, such examination to be made at the expense of C.S.I. by accountants designated by C.S.I. and acceptable to LICENSEE. Page 10 of 19 ARTICLE IV A. CONFIDENTIALITY; PROPRIETARY RIGHTS INDEMNIFICATION 4.1 C.S.I. represents and warrants to LICENSEE: (a) That it owns the entire right, title and interest in and to the Licensed Program Materials, including, without limitation, the IP rights, and all proprietary rights therein, free and clear of all liens, known claims, security interests or other encumbrances; (b) That neither the Licensed Program Materials, including, without limitation, the IP rights, nor any of the intended uses thereof, will infringe any patents, copyrights, trade secrets, or other proprietary rights of any third parties (including, without limitation, any present or former employees, consultants or shareholders of C.S.I.); and C.S.I. has no reason to believe that any such infringement claims could be made; and (c) That C.S.I. and the Licensed Program Materials are Year 2000 compliant in all material respects. 4.2 LICENSEE and C.S.I. shall each take reasonable and continuing steps to protect the secrecy and confidentiality of information received (and designated as such by the party with proprietary interests in such information) under this License Agreement, using the same degree of care to protect the information that it takes with its own confidential information, and each will only intentionally disclose the information to such of its employees or any sub licensee as required to use the information or the Licensed Program Materials and only then under an obligation of secrecy binding upon such employees coextensive with the parties' obligation of secrecy. Sub licensees chosen to use Licensed Program Materials, or parts thereof for, or through, LICENSEE will be required to sign a non-disclosure agreement before LICENSEE may disclose confidential information to sub licensee. The obligation of secrecy and confidentiality shall not apply to any information which: (1) is already known to the party receiving such confidential information; (2) is or becomes generally known to the public through no wrongful act of the party charged with protecting such confidentiality; (3) is received by a party without restriction from a third party; (4) has been or is furnished by the party owning such proprietary interests to a third party without imposing restrictions against use and disclosure similar to those imposed on the party receiving such disclosure herein; or (5) must be publicly disclosed by such party pursuant to the requirements of law, judicial process or governmental regulation. This covenant shall continue for a period of two (2) years after the date of termination of this Agreement. Page 11 of 19 4.3 Upon the reasonable request of C.S.I., LICENSEE shall assist C.S.I. in a reasonable way and at C.S.I.'s cost and expense, in executing such filings, docllments, licenses and actions as may be required to protect the intellectual property and other rights of C.S.I. in the Licensed Program Materials within the Territory, and LICENSEE shall take or permit no action as may compromise or infringe upon such rights of C.S.I. within the Territory or otherwise. 4.4 LICENSEE shall not duplicate, distribute, demonstrate to any third party, nor lend the Licensed Program Materials without the prior, written consent of C.S.I., which consent, in the case of affiliates of LICENSEE, shall not be unreasonably withheld. 4.5 The parties recognize and acknowledge that LICENSEE may, in the ordinary course of LICENSEE'S business, provide its own data or information from time to time to its customers, and in doing so, may utilize the Licensed Program Materials as a means of researching or delivering such data or information; provided, however, that nothing in this Section 4.5 shall in any way amend, abridge, relieve, excuse or obviate LICENSEE'S obligation with respect to use, restrictions, treatment and control of the Licensed Program Materials as set forth generally in this Article IV, and provided further that nothing contained in this Section 4.5 or elsewhere in this License and Support Agreement, notwithstanding any provision to the contrary, shall create or be deemed to create, any rights, claims, benefits, privity, reliances or expectations in any person who is not a party to this License and Support Agreement either as a third party or incidental beneficiary, or otherwise. In the event that any third party, without regard to whether such party has been previously identified to CSI, who shall receive information or data from LICENSEE utilizing the Licensed Program Materials shall bring any legal action, assert a claim or make a threat or demand of any nature whatsoever upon C.S.I. as a direct or indirect result of LICENSEE's use of or reliance upon, the Licensed Program Materials, including as contemplated in this Secion 4.5, LICENSEE shall indentnify C.S.I., hold C.S.I. harmless and, at the option of C.S.I. assurae the defense of C.S.I. in any such action or proceeding, or with respect to any such threat or demand. B. LIMITED WAi~TY 4.6 The Licensed Program Materials will perform generally as demonstrated, provided that it is (a) operated in accordance with the instructions provided LICENSEE by C.S.I. and (b) used on a designed, standard, satisfactorily functioning computer in accordance with specifications provided to LICENSEE by C.S.I. 4.7 C.S.I. makes no representation or warranty, special or general, that the functions contained in the Licensed Program Materials will meet the LICENSEE'S requirements or will operate in the combinations which may be selected for use by the LICENSEE, or that the operation will continue without interruption or error, or Page 12 of 19 t~at all program defects will be corrected. THE FOREGOING WAi~RANTIES A3UE IN LIEU OF ALL OTHER WA~RRANTIES, EXPRESSED OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE IMPLIED WD/IRANT IE S OF MERCHANTABILITY A/~D FITNESS FOR A PB-RT I CULAR PURPOSE · C. LIMITATION OF P~DIES 4.8 C.S.I.'s entire liability and the LICENSEE'S exclusive remedy shall be limited as follows: In all situations involving performance or non-performance of Licensed Program Materials furnished under this License Agreement, LICENSEE'S remedy is (a) the correction by C.S.I. of program defects, or (b) if after repeated efforts made in good faith, C.S.I. is unable to cause the program to operate as warranted, LICENSEE shall be entitled to recover only actual damages to the extent set forth in the following paragraph and shall in no event include consequential, special or punitive damages. C.S.I.'s liability for damages to the LICENSEE for any cause whatsoever, and regardless of the form of action, whether in contract or in tort, including without limitation, an action sounding in negligence, shall be limited to a refund of the one- time licensing fee actually paid for non-functioning portion of licensed application and shall not include any refund of fees for services actually paid or invoiced in connection with such non- fllnctioning portion, provided however that such entitlement to refund shall be exclusive of fees and payments made for services rendered or hardware. ARTICLE V TEPa4 OF AGREEMENT; TERMINATION 5.1 Unless earlier terminated as provided hereinafter, this Agreement shall continue to be in effect for a period of one year commencing on the Effective Date, provided that such term shall be automatically renewed for an additional one year period ("Automatic First Renewal Period") absent mutual written agreement of the parties to otherwise terminate prior to the first year anniversary of the Effective Date. It is further understood and agreed that no later than three months prior to the expiration of any anniversary date of the Effective Date after the first anniversary, either party may notify the other party in writing of its intention to terminate, which termination shall become effective, in the case of the Automatic First Renewal Period or any subsequent Renewal Period (as defined below), at the end of such Renewal Period. In the event that no such notice of a party's intent to terminate is given at such time, the Agreement shall be automatically renewed and extended for successive one year periods (each a "Renewal Period"), commencing with the next anniversary date of the Effective Date. 5.2 If at any time either party shall become insolvent, or if any party shall be in material default of any of its obligations under this Agreement, or any of such party's representations or warranties set forth herein shall be determined to be materially Page 13 of 19 f'alse or incorrect or if formal proceedings shall be commenced to administer either party's affairs or to liquidate its assets, or, if the ownership of either party as presently constituted should change in such a way as to materially and adversely affect such party's ability to perform its obligations under this Agreement, the other party may, at it option, and upon or after the expiration of thirty (30) days advance notice in writing given to the first party of its intention to do so (and, in the case the notice is given for default, if the default is not meanwhile cured), declare this Agreement terminated by a second written notice to the other party, and thereupon all licenses, rights and privileges of LICENSEE or Sub licensees or of C.S.I., as the case may be, hereunder shall cease, except (a) that the licenses, rights and privileges granted under Article I hereof shall continue as to all Licensed Program Materials delivered prior to said termination of this Agreement, (b) that LICENSEE and Sub licensees shall have the right to continued use of such Licensed Program Materials without the benefit of continued service or subsequent improvements not existing as of the time of such termination and (c) that C.S.I., or its successors and assigns shall, to the extent permitted by applicable law, transfer and assign all source codes relevant to CSI.Road to an independent bank, trust company or law firm of its selection which shall retain such source codes for the benefit of all C.S.I. licensees. 5.3 No ~rmination of this Agreement by expiration or o~erwim shill release LICENSEE ~r Sub i~ensee) from any of i~ obligations ~cmed hereunder (including ~ obligations under Article III ~ ~mish statemenm and m pay compensation wi~ m~t m Sub licensees or remind or g~e ds m any fighm m mm~d anything done or any paymem made or o~er consideration gNen m eider party hereunder prior m ~e time ach mrmination becomes eff~tive. Page 14 of 19 ARTICLE VI NOTICES 6.1 Notices of every nature to be given pursuant to this Agreement shall be given in writing and addressed to the other party at the address stated below or at any other address notice of which is given by one party to the other in accordance with this Article VI: If to LICENSEE: RELIABLE CAiRRIERS, INC. 41'555 KOPPERNICK RD. CANTON, MI '48187' Telephone: ~-453-6677 Fax: 734-453-8608 If to C.S.I.: COMPUTER SUPPORT, INC. 54 West Main Street Mechanicsburg, PA 17055 Telephone (717) 691-6707 Fax: (717) 691-7303 Any notice shall be deemed to have been duly given if and when regularly sent by telex, electronic mail, or fax (if confirmed by letter mailed within two (2) days thereafter) or if and when delivered by any other method furnishing receipt of delivery, including by recognized delivery service or by hand. ARTICLE VII MISCE?J,AlqEOUS 7.1 This License Agreement will inure to the benefit of and be binding upon the parties. This License Agreement is personal to the parties and may not be assigned or otherwise transferred by either of them without the prior, written consent of the other. 7.2 This Agreement contains all of the terms and conditions agreed upon by the parties hereto, and supersedes all prior agreements (including any and all exchanges by correspondence, telephone, mail, or memorandums of agreement), promises, covenants, arrangements, communications, whether representations or warranties, whether oral or written by any officer, employee or representative of any party, and no other agreement, oral or otherwise, regarding the subject matter of this License Agreement shall be deemed to exist or bind any of the parties hereto. C.S.I. hereby acknowledges and agrees that no further amounts are due to be paid to C.S.I. under the previous Memoranduin of Agreement or any interim Agreement between the parties, which agreements are superseded hereby. Page 15 of 19 7'.3 LICENSEE IRREVOCABLY AGREES, AND FULLY UNDERSTANDS, THAT ALL LAWSUITS ARISING DIRECTLY OR INDIRECTLY OUT OF THIS LICENSE AGREEMENT, INCLUDING THOSE RELATING TO MATTERS OF PERFORMANCE OR RESULTING FROM THIRD PARTY CLAIMS AGAINST ~2qY PAIITY SHALL BE BROUGHT EXCLUSIVELY IN EITHER THE COMMON PLF_JkS COURT FOR THE COUNTY OF DAUPHIN, PENNSYLVANIA, OR IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLIGtNIA. EACH PARTY TO THIS LICENSE AGREEMENT AGREES TO IRREVOCABLY SIIBMIT TO THE PERSONAL JURISDICTION OF SUCH COURTS AND HEREBY WAIXrES ANY OBJECTION TO PROPER VENUE RESTING THEREIN AND FURTHER WAIVES ANY RIGHT TO TRIAL BY J73RY IN ANY SUCH LAWSUIT. 7.4 It is the intent of the parties that the validity, interpretation, and performance of this Agreement shall be governed by the internal laws of the Commonwealth of Pennsylvania, USA, without regard to its conflicts of laws. 7.5 This Agreement may be amended, modified or supplemented only by written agreement of the parties, duly authorized officers authorized, at any such amendment, modification or supplement until such time as both parties shall have and until such time, the provisions of this in full force and effect. or by their respective time, provided that no shall become effective executed such writing, Agreement shall remain 7.6 This Agreement, and any amendment hereto, may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 7.7 Neither Licensee nor C.S.I. shall have any responsibility to perform services for or to assume contractual obligations which are the obligation of the other party under this Agreement; nothing herein shall constitute LICENSEE or C.S.I. as a joint venturer, partner, agent, representative or employee of the other party. 7.8 In the event any provision or any part of a provision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, provided it does not materially alter the substance of the agreement between the parties, such holding shall not invalidate or render unenforceable any other provision or part of this License Agreement. 7.9 The captions contained herein are included for convenience only and shall not be considered a part hereof or affect in any manner the construction or interpretation hereof. 7.10 ~_ny controversy over the construction of this Agreement shall be decided neutrally according to its terms and without regard to events of authorship or negotiation. Page 16 of 19 7.11 This Agreement is not assignable; neither the licenses granted hereunder nor any of the licensed program material or copies thereof may be sublicensed, assigned or transferred by the Licensee without the prior written consent of C.S.I. Any attempt to sublicense, assign or transfer any of the rights, duties or obligations under this License Agreement other than as provided for and under the terms of Article III is void. C.S.I. is not responsible for failure to fulfill its obligations under this License Agreement due to causes beyond its control. 7.12 No action, regardless of form, arising out of this Agreement may be brought by either party more than two years after cause of action has arisen, or, in the area of non-payment, more than two years from the date of the last payment. IN WITNESS WHEREOF, the parties have executed this Agreement and caused their Corporate seals to be hereunto affixed as of the day and year fiist above written. COMPUTER SUPPORT, INC. Title: (13~2~3~ Date: ~ ~i '6 ~ ! ~ ~ RELIABLE CARRIERS, INC. Title: VICE PRESIDENT Date: 12/29/98 Page 17 of 19 Annex A [Ai~PLICATIONS NOT INCLUDED LICENSE] Application Description Brokerage Tank Wash Keep Fill OS&D (over short & damaged) Pallet Tracking License Fee Sll,000 11,000 22,500 3,500 3,500 Hours referenced in response to ~software requirements" Dated December 8,1998. Page 18 of 19 Annex B SUBSCRIPTION AND ASSUMPTION AGREEMENT [Terms will require that Sub licensee pays for the service and adopts and assumes all obligations, including confidentiality, that apply to LICENSEE] IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year written below. ~ttest: RELIABLE CARRIERS, INC. By ~ Title: VICE PRESIDENT Date: 12/29/98 Attest: SUBLICENSEE: By: Title: Date: Page 19 of 19 Todd J. Shill Attorney ID No. 69225 Heather Z. Kelly Attorney ID No. 86291 RHOADS & SINON LLP One South Market Square, 12th Floor P.O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Plaintiff COMPUTER SUPPORT, INC., JANNA KNAPP, Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - EQUITY JURY TRIAL DEMANDED Defendant MOTION FOR EXPARTE PRELIMINARY OR SPECIAL INJUNCTION NOW COMES the Plaintiff, COMPUTER SUPPORT, INC. ("CSI'), by its attorneys, Rhoads & Sinon LLP, and files the within Motion for Ex Parte Preliminary or Special Injunction pursuant to Pennsylvania Rule of Civil Procedure 1531 as follows: 1. CSI is a Pennsylvania corporation with its principal place of business at 54 West Main Street Mechanicsburg, Pennsylvania 17055 and designs, develops, programs, sells and provides technical support for software for use in the tracking, shipping, and logistics industries. 2. Defendant Knapp is an adult individual with an address of 422 Hogestown Road Mechanicsburg, PA 17050. 3. CSI has instituted a Complaint in Equity against Defendant arising from actions taken by Defendant during her employment with CSI and thereafter. 407156.1 4. In addition, CSI has filed a Motion for Preliminary Injunction and Brief in Support of Motion for Preliminary Injunction. In the interest of brevity, said Motion and Brief are incorporated herein by reference. 5. CSI's Complaint alleges breaches of Defendant's Non-Competition Agreement and Confidentiality Agreement with CSI, as well as common law claims for Misappropriation of Trade Secrets, Breach of Fiduciary Duty, and Intentional Interference with Contract, through Defendant's use of CSI's trade secrets and confidential and proprietary information in working as a consultant providing technical support regarding CSI's computer software to at least one of CSI's customers. 6. In its Motion for Preliminary Injunction, CSI seeks, among other things, an Order prohibiting Defendant from using CSI's trade secrets and confidential and proprietary information, and an Order requiring Defendant to return any docament, computer file or program, database or other information that originated from CSI or that contains, refers to, or relates to CSI's trade secrets and confidential and proprietary information. 7. In the instant Motion for Ex £arte Preliminary or Special Injunction, CSI seeks only an Order requiring Defendant to allow copying of information from any computer(s) or computer system(s) owned by or under the control of Defendant that has been used to violate the Non-Competition and Confidentiality Agreements or to otherwise act unlawfully with respect to CSI, and requiring Defendant not to alter any such computer systems until such time as such copies are made. 8. The requested injunction will not, in any way, alter or affect Defendant's business or, in any way, impact Defendant's ability to do business; such requests are only part of the Complaint and Motion for Preliminary Injunction. 9. The information sought in this matter will, undoubtedly, be discoverable, based on the allegations set forth in CSI's Complaint. 10. In essence, the requested Motion for Ex Parte Preliminary or Special Injunction is akin to granting the right to expedited discovery, but without prior notice to Defendant. 11. In order to alleviate any confidentiality concerns raised by Defendant regarding the content of her computer(s) or computer system(s) under her control, CSI will certify to the Court that CSI's expert will download and copy the information, with necessary assistance from CSI's employees, but that no representative of CS1 will review the information retrieved and that such information will be deposited with the Court until such time as a determination is made that CSI is entitled to such information. When the Court makes such determination, only relevant and discoverable information will be used by CSI in the prosecution of this litigation. 12. Pursuant to Pennsylvania Rule of Civil Procedure 1531 this Court may enter an Ex Parte Preliminary or Speciai Injunction prior to notice and prior to a hearing if "it appears to the satisfaction of the court that immediate and irreparable harm will be sustained before notice can be given or a heating held." Pa. R. Civ. P. 1531(a). 13. Because of the unusual circumstances presented hem, it is necessary, to avoid the possibility of irreparable hmm, to issue an Ex Parte Preliminary or Special Injunction against Defendant, obligating Defendant to permit access and copying of the contents of Defendant's computer(s) and computer systems under Defendant's control that have been used to violate the 3 Non-Competition Agreement and Confidentiality Agreement through the servicing and support of CSI's current and prospective customers. 14. Such information must be copied in order to prevent Defendant from altering her computer(s), in any way, until such time as a hearing is held and a final determination is made with respect to the allegations contained in CSI's Complaint. 15. If Defandant is provided notice of the request to reproduce such information, it is possible that that Defendant will alter the computer(s) or computer system(s) in an effort to prevent CSI from obtaining the information thereon evidencing the truth of the allegations in CSI's Complaint as well as information of other violations of the Non-Competition and Confidentiality Agreements. 16. CSI does not seek to have an Ex Parte Injunction issued to halt any business of Defendant, to interfere with the business of Defendant in any way, to interfere with Defendant's ownership or control over her computer(s) or computer system(s), or to harass Defendant; to the contrary, the Ex Parte injunction would simply enable CSI to memorialize the content of the computer(s) at issue before Defendant has an opportunity to take action that would make it difficult or impossible to establish the facts of this case. 17. CSI is likely to succeed on the merits of its underlying claims against Defendant for the reasons set forth in the Complaint and in the Motion for Preliminary Injunction and Brief in Support. 18. Pursuant to Pennsylvania Rule of Civil Procedure 1531 (b), CSI must post a bond in support of a motion for injunctive relief. 4 19. Because the proposed Ex Parte Injunction will have no effect on Defendant's business operations or control over her computer system(s), CSI avers that a bond in the amount of $500.00 is sufficient. WHEREFORE, Plaintiff Computer Support, Inc. respectfully requests: (1) An immediate ex parte order (a) obligating Defendant to pemfit entry onto any property where Defendant maintains computer(s) or computer system(s), and to permit copying and identification of all information that may include, refer or relate to CSI's trade secrets and confidential and proprietary information, as well as evidence of Defendant's breach of the Non-Competition and Confidentiality Agreements; (b) obligating Defendant to provide CSI with copies of any and all full system data back-ups, or to deposit such information directly with the Court; (c) directing CSI to immediately deposit with the Court all copied information and all full server system data back-ups provided by Defendant; and (d) prohibiting Defendant t~om altering any computer(s) or computer system(s) under her control that include or in any way relates to CSI's trade secrets and confidential and proprietary information, or any of the allegations contained in CSI's Complaint prior to CSI or its representative's ability to copy such information; and (2) That CSI be Ordered to post a bond in accordance with Pennsylvania Rule of Civil Procedure 1531 (b) in the amount of $500.00; (3) That the Sheriff of Cumberland County accompany CSI or its representatives when the copying of information outlined above takes place; and, (4) The Court grant such other relief as the Court deems proper. Respectfully Submitted, RHOADS & SINON LLP DATED: July 2, 2003 Todd J. Shill Heather Z. Kelly One South Market Square P. O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Plaintiff 6 VERIFICATION Fred Nichols, President of Computer Support, Inc., deposes and says, subject to the penalties of 18 Pa. C.S. § 4904 relating to unswom falsification to authorities, that the facts set forth in the foregoing document are tree and correct to the best of his knowledge, information and belief. Date: COMPUTER SUPPORT, INC. bY: ~&a~cry a~sd~ COMPUTER SUPPORT, INC., Plaintiff V. JANNA KNAPP, Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - EQUITY JURY TRIAL DE~'4~DED ORDER.~NTING. EX PARTE INJUNCTION AND NOW, this day of 2003, upon consideration of Plaintiff Computer Support, Inc.'s Motion for Ex Parte Preliminary or Special Injunction, it is hereby ORDERED as follows: (1) Defendant is prohibited from altering, changing, or in any way modifying her computer(s) or computer system(s) or the data maintained thereon until Plaintiff has obtained copies of such data; (2) Defendant shall allow access to Plaintiff, Plaintiff's expert and Plaintiff's representatives for the purpose of copying the above information and shall provide Plaintiff's representatives with any necessary assistance, including, but not limited to, passwords, servers, and hardware; (3)Plaintiff's expert shall copy the information and deposit it directly with the Court; (4) Defendant shall provide Plaintiff or its representatives a copy of any and all of Defendant's full system data back-ups for deposit with the Court, or Defendant shall deposit such information directly with the Court (5)No representative of Plaintiff, other than Plaintiff's expert, as necessary, shall review the content of the information copied until further Order of this Court_i., (6) Plaintiff shall post a bond in the amount of iJ/0/ (7) The Sheriff of Cumberland County shall accompany Plaintiff or its representatives when the above information is copied.L. ~,~7 (0 ~t~O~~ to what extent Plaintiff shall be permitted to access and inspect the information deposited with the Court. BY THE COURT: COMPUTER SUPPORT, 1NC., Plaintiff V. JANNA KNAPP, Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - EQUITY JURY TRIAL DEMANDED ORDER GRANTING PRELIMINARY INJUNCTION AND NOW, this __ day of Plaintiff Computer Support, Inc.'s Complaint and expedited discovery and an evidentiary hearing, 1. Defendant is prohibited from us confidential information in any way; , 2003, upon consideration of 'after and 2. Defendant is prohibited from disck confidential and proprietary information; id 3. Defendant is prohibited from inter .... contractual relations by acting as a consultant or ad~ _. ,,~ in any other capacity regarding CSI software for any current or prospective clients or customers of CSI; 4. Defendant is required to return any document, computer program, database or other information that originated from Plaintiff or that contains, refers to, or relates to Plaintiff's trade secrets and confidential and proprietary information; 5. Defendant is required to account for all income and/or other financial benefits she derived through her use of Plaintiff's trade secrets and proprietary and confidential information. 6. Plaintiff is required to post a bond in the mount of $500.00. BY THE COURT: Todd J. Shill Attorney ID No. 69225 Heather Z. Kelly Attorney ID No. 86291 RI-lOADS & SINON LLP One South Market Square, 12th Floor P.O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Plaintiff COMPUTER SUPPORT, INC., Plaintiff V. JANNA KNAPP, Defendant 1N THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - EQUITY JURY TRIAL DEMANDED MOTION FOR PRELIMINARY INJUNCTION NOW COMES the Plaintiff, Computer Support, Inc. ("CSI"), by its attorneys, Rhoads & Sinon LLP, and files the within Motion for Preliminary Injunction pursuant to Pennsylvania Rule of Civil Procedure 1531 as follows: 1. CSI is a Pennsylvania corporation with its principal place of business at 54 West Main Street Mechanicsburg, Pennsylvania 17055 and designs, develops, programs, sells and provides technical support for computer software for use in the tracking, shipping, and logistics industries. 2. Defendant Knapp is an adult individual with an address of 422 Hogestown Road Mechanicsburg, PA 17050. 3. On or about June 28, 1999, CSI hired Defendant to work as a customer service representative in CSI's customer service group providing technical support to CSI's customers. 478100.1 4. While employed by CSI, Defendant had access to CSI's trade secrets, proprietary information and confidential information relating to technology, programming, procedures, formulas, business strategies, trade secrets, client and customer lists, and other confidential information that belongs to CSI. 5. CSI's computer source code as well as the methodology that it uses for data flow is confidential and proprietary and constitutes trade secrets. 6. While employed by CSI, Defendant was trained thoroughly on CSI's software, including the confidential and proprietary information and trade secrets necessary to provide technical support to users of CSI's software. 7. CSI uses the confidential and proprietary information and trade secrets described above in furtherance of its business, and the proprietary information and trade secrets give CSI an advantage over its competitors because CSI's software provides faster results and is easier to implement and utilize than competing software. 8. As a general matter, CSI's confidential and proprietary information and trade secrets are not made known to others outside of CSI, and is generally known only to certain CSI employees. CSI has employed, and continues to employ, measures to preserve the secrecy of the information and trade secrets, for example, only two individuals have access to CSI's source doe. Furthermore, employees and customers of CSI are required to execute confidentiality agreements to protect the secrecy of CSI's software. Employees are given passwords to access CSI's computers in order to ensure the secrecy of the trade secrets and confidential and proprietary information. 2 9. CSI's trade secrets and confidential and proprietary information have independent economic value from not being generally known to, and not being readily ascertainable through proper means by, other persons who would gain economic value from their disclosure or use, and are not easily acquired by others because the information is not commonly known to competitors. 10. It would be difficult or impossible for others to legally acquire and/or duplicate CSI's trade secrets and confidential and proprietary information. 11. In consideration of her employment, and as a condition thereof, Defendant entered into a Non-Competition Agreement with CSI. A true and correct copy of the Non- Competition Agreement is attached to the Complaint as Exhibit "A". 12. The Non-Competition Agreement provides, in relevant part, as follows: That [Defendant] will not within one year after leaving the employ of CSI for any reason whatsoever, engage in or enter into employment by, or into self-employment or gainful occupation as, a Competing Business, or act directly or indirectly as an advisor, consultant, agent or representative for a Competing Business regardless of compensation structure, if any. "Competing Business" means a business which is engaged in the creation, sale, or other disposition of a product or service or has under development a product or service that is in direct or closely indirect competition with a product, process, or service whether existing or under development, of CSI, and is sold within the United States. (Non-Competition Agreement, attached to Complaint as Exhibit "A" at ¶ 4). 13. Also in consideration of her employment, and as a condition thereof, Defendant entered into a Confidentiality Agreement with CSI. A true and correct copy of the Confidentiality Agreement is attached to the Complaint as Exhibit "B". 14. The Confidentiality Agreement provides, in relevant part: 3 [Defendant agrees] [t]o keep secret and confidential, at all times, during and subsequent to the period of [her employment with CSI], and to not use, adopt or adapt, sell, abuse, trade, bargain for or with, or disclose in any manner to any third party any CSI trade secret pertaining to its products, processes, or business operations. (Confidentiality Agreement, attached to Complaint as Exhibit "B" at ~I (2)(a)). 15. On or about March 13, 2002, Defendant voluntarily terminated her employment with CSI, indicating that she had learned a lot while working at CSI and that she had accepted a position with another company. A true and correct copy of Defendant's resignation letter is attached to the Complaint as Exhibit "C". 16. Following Defendant's separation from her employment at CSI, CSI learned that Defendant has provided technical support for CSI products to at least one of CSI's clients, Reliable Carriers, Inc. ("Reliable"). 17. CSI has an existing License and Support Agreement with Reliable. A true and correct copy of the License and Support Agreement is attached to the Complaint as Exhibit "D". 18. Pursuant to the License and Support Agreement, Reliable pays an annual support fee for CSI to "provide complete and continuing information, research, design and technical support and advice as may be requested from time to time by [Reliable] concerning the design, refinement and application of [CSI's software] .... "(License and Support Agreement, attached to Complaint as Exhibit "D" at ¶ 1.3). 19. Reliable has indicated its intent to discontinue paying the annual service fee in the future. 4 20. Defendant was providing technical support to Reliable at least as early as June 2002 indicating that Defendant began soliciting business from Reliable while still in CSI's employ. 21. Defendant has provided Reliable technical support services that are within the scope of the Licensing and Support Agreement. 22. It is impossible to provide technical support regarding CSI's software without using and/or disclosing CSI's trade secrets and confidential and proprietary information. 23. Technical support of its software generates approximately one-third of CSI's annual revenues. 24. Defendant has improperly and without the approval of CSI used CSI's trade secrets and confidential and proprietary information to improperly and unfairly compete against CSI in violation of both the Non-Competition Agreement and the Confidentiality Agreement. 25. Defendant's conduct has and will continue to interfere with CSI's existing and prospective contractual relationships. 26. Unless Defendant is immediately enjoined from using and disclosing CSI's trade secrets and confidential and proprietary information, Defendant will continue to cause immediate and irreparable harm to CSI. 27. Unless Defendant's unlawful and tortious conduct is halted immediately, CSI will incur additional immediate and irreparable harm not compensable by damages. 28. The requested injunction is necessary to prevent greater harm than would occur if the injunction is granted. 29. CSI is likely to succeed on the merits of its claims and its right to relief is clear. 5 30. The proposed injunction will restore the parties to the status quo that existed prior to the wrongful conduct of Defendant. 31. CSI is willing to post a reasonable bond in an amount to be determined by the Court. WHEREFORE, Plaimiff COMPUTER SUPPORT, INC., respectfully requests that, after expedited discovery and an evidentiary hearing, this Honorable Court enter an Order: (1) Prohibiting Defendant from using any of CSI's trade secrets and confidential and proprietary information in any way; (2) Prohibiting Defendant from disclosing in any form, CSI's trade secrets and confidential and proprietary information; (3) Prohibiting Defendant from interfering with CSI's current and prospective contractual relations by acting as a consultant or advisor or in any other capacity regarding CSI software for any current or prospective clients or customers of CSI; (4) Requiring Defendant to return any document, computer program, database or other information that originated from CSI or that contains, refers to, or relates to CSI's trade secrets and confidential and proprietary information; 6 (5) Requiring Defendant to account for all income and/or other financial benefits she derived through the unlawful conduct set forth in CSI's Complaint. Respectfully Submitted, RHOADS & SINON LLP DATED: July 2, 2003 Heather Z. Kelly One South Market Square P. O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Plaintiff 7 VERIFICATION Fred Nichols, President of Computer Support, Inc., deposes and says, subject to the penalties of 18 Pa. C.S. § 4904 relating to unsworn falsification to authorities, that the facts set forth in the foregoing document are true and correct to the best of his knowledge, information and belief. COMPUTER SUPPORT, INC. 12 SHERIFF'S CASE NO: 2003-03126 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CI/MBERLAND COMPUTER SUPPORT INC VS KNAPP JANNA RETURN - REGULAR RICHARD SMITH , Cu~lberland County, Pennsylvania, says, the within ORDER GRANTING EX PARTE KNAPP JDJqNA RESPONDD~NT , at 0009:46 HOURS, at 422 HOGESTOWN ROAD MECHANICSBURG, PA 17055 by handing to JAAINA KNAPP a true and attested copy of ORDER GR3tNTING EX PARTE INJUNCTION, NOTICE & COMPLAINT, ORDER GRANTING PRELIMINARY INJUNCTION, MOTION and at the same time directing Her attention to the Sheriff or Deputy Sheriff of who being duly sworn according to law, was served upon on the 3rd day of July the , 2003 together with contents thereof. Sheriff's Costs: Docketing 18.00 Service 6.90 Affidavit .00 Surcharge 10.00 .00 34.90 Sworn and Subscribed to before me this ifc day of ~/~.~ ~:~J A.D. 'P[othonotary So Answers: R. Thomas Kline 07/03/2003 RHOADS & SINON ,~ iff COMPUTER SUPPORT, 1NC., : Plaintiff : . V. ~ JANNA KNAPP, : : Defendant : 1N THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - EQUITY ORDER OF COURT GRANTING PERMANENT INJUNCTION AND NOW, this 7th day of July, 2003, upon learning of an agreement reached between the parties, it is hereby ORDERED as follows: 1. Defendant is prohibited from using Plaintiff s trade secrets and proprietary and confidential information obtained by Defendant during the course of her employment with CSI; 2. Defendant is prohibited from disclosing, in any form, Plaintiff's trade secrets and confidential and proprietary information obta/ned by D~fendant during the course of her employment with CSI; 3. Defendant is required to return any document, computer program, database or other information, or certify that she does not have any such materials that originated from Plaintiff or that contains, refers to, or relates to Plaintiff's trade secrets and confidential and proprietary information; 4. Defendant is required to account for all income and/or other financial benefits derived through her use of Plaintiff's trade secrets and proprietary and confidential information, including providing the identity of any CSI client or clients for which Defendant has performed services. Defendant shall provide said accounting on or before July 17, 2003. 5. For one year after the date of this Injunction, Defendant shall comply with the Non-Competition Agreement between Defendant and CSI entered into on June 28, 1999. 6. Following Defendant's compliance with Paragraphs 3 and 4 of this Injunction, CSI shall: (a) withdraw the underlying case (Civ. No. 03-3126) with prejudice; and (b) delete all computer flies copied from Defendant's computer on July 3, 2003 pursuant to the Court's Order Granting Ex Parte Injunction dated July 2, 2003. Upon the deletion of said files, the bond in the amount of $10,000 posted by Fred Nichols, on behalf of CSI on July 2, 2003 shall be released. Distribution: Rhoades & Sinon Attorneys for the Plaintiff Aborn & Kutulakis Attorneys for the Defendant BY THE COURT: Todd J. Shill Attorney ID No. 69225 Heather Z. Kelly Attorney ID No. 86291 RHOADS & SINON LLP One South Market Square, 12th Floor P.O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Plaintiff COMPUTER SUPPORT, 1NC., JANNA KNAPP, Plaimiff Defendant 1N THE COURT OF COMMON PLEAS OF CUMBERLAND C. OUNTY, PENNSYLVANIA CIVIL ACTION --EQUITY JURY TRIAL DEMANDED PRAECIPE TO DISCONTINUE Kindly mark the docket in this matter discontinued and ended with prejudice. Respectful][y submitted, RHOADS & SINON LLP Todd J. shill, Esquire Heather Z. Kelly, Esquire One South Market Square P. O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-.5731 Dated: July 24, 2003 Attorneys for Plaintiff CERTIFICATE OF SERVICE I hereby certify that on this 24th day of July, 2003, a c. opy of the foregoing "Praecipe to Discontinue" was served by first class mail, postage prepaid, upon the following: John A. Abom Abom& Kutulakis 106 Walnut Street Harrisburg, PA 17101 Teresa L. Paulhamus AUG U 1 2083 Todd J. Shill Attorney ID No. 69225 Heather Z. Kelly Attorney ID No. 86291 RHOADS & SINON LLP One South Market Square, 12th Floor P.O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Plaintiff COMPUTER SUPPORT, INC., Plaintiff JANNA KNAPP, Defendant 1N THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION -- EQUITY JURY TRIAL DEMANDED ORDER AND NOW, this ~d~ o~ 201)3, the above-captioned matter is hereby discontinued with prejudice d the docl~t shall be ,, o marked. 453034.1 ~Ik¥/'~XSNKr:.'-Jd O~ :~ H~ h- titl~ &O Todd J. Shill Attorney ID No. 69225 Heather Z. Kelly Attorney ID No. 86291 RHOADS & SINON LLP One South Market Square, 12th Floor P.O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Plaintiff COMPUTER SUPPORT, INC., JANNA KNAPP, Plaintiff Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - EQUITY JURY TRIAL DEMANDED PRAECIPE TO DISCONTINUE Kindly mark the docket in this matter discontinued and ended with prejudice. Respectfully submitted, RHOADS & SINON LLP By: Todd J. Shill, Esqmre Heather Z. Kelly, Esquire One South Market Square P. O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Dated: July 24, 2003 Attomeys for Plaintiff CERTIFICATE OF SERVICE, I hereby certify that on this 24th day of July, 2003, a copy of the foregoing "Pmecipe to Discontinue" was served by first class mail, postage prepaid, upon the following: John A. Abom Abom& Kutulakis 106 Walnut Street Harrisburg, PA 17101 ,-'~'x Teresa L. Paulhamus