Loading...
HomeMy WebLinkAbout03-4967RONALD BORZA, as managing partner of NEW ENGLAND FINANCIAL, Plaintiff DAVID KUHN, an adult individual, Defendant COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA NOTICE YOU HAVE BEEN SUED IN COURT. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this Complaint and Notice are served, by entering a written appearance personally or by attorney and filing in writing with the Court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so the case may proceed without you and a judgment may be entered against you by the Court without further notice for any money claimed in the Complaint or for any other claim or relief requested by the Plaintiffs. 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. PENNSYLVANIA LAWYER REFERRAL SERVICE Pennsylvania Bar Association P.O. Box 186 Harrisburg, PA 17108 1-800-692-7375 RONALD BORZA, as managing partner of NEW ENGLAND FINANCIAL, Plaintiff DAVID KUHN, an adult individual, Defendant COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA NOTICIA LE HAN DEMANDADO A USTED EN LA CORTE. Si usted quiere defenderse de estas demandas expuestas en las paginas siguientes, usted tiene viente (20) dias de plazo al partir de la fecha de la demanda y la notificacion. Usted debe presentar una apariencia escrita o en persona o por abogado y archivar en la corte en forma escrita sus defensas o sus objeciones a las demandas en contra de su persona. Sea avisado que si usted no se defiende, la corte tomara medidas y puede entrar una orden contra usted sin previo aviso o notificacion y por cualquier queja o alivio que es pedido en la peticion de demanda. Usted puede perder dinero o sus propiedades o otros derechos importantes para usted. LLEVE ESTA DEMANDA A UN ABOGADO INMEDIATAMENTE. SI NO TIENE ABOGADO O SI NO TIENE EL DINERO SUFICIENTE DE PAGAR TAL SERVICIO, YAYA EN PERSONA O LLAME POR TELEFONO A LA OFICINA CUYA DIRECCION SE ENCUENTRA ESCRITA ABAJO PARA AVERIGUAR DONDE SE PUEDE CONSEGUIR ASISTENCIA LEGAL. PENNSYLVANIA LAWYER REFERRAL SERVICE Pennsylvania Bar Association P.O. Box 186 Harrisburg, PA 17108 1-800-692-7375 :335390 _1 RONALD BORZA, as managing partner of NEW ENGLAND FINANCIAL, Plaintiff DAVID KUHN, an adult individual, Defendant COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA COMPLAINT IN ARBITHATION 1. Plaintiff is Ronald Borza, managing partner of New England Financial ("NEF"), located at 214 Senate Avenue, Suite 702, Camp Hill, Cumberland County, Pennsylvania 17011. 2. Defendant is David Kuhn, an adult individual with a last known address of 340 Greenbriar Drive, Lancaster, Pennsylvania 17601. 3. On or about May 3, 1999, Defendant became employed as an insurance agent with Gregory L. Baker, then the general agent for the New England Life Insurance Company whose local agency is NEF. 4. In conjunction with his employment, Defendant executed a Jump Start Training Allowance Program Agreement" ("Jump Start Agreement") as part of his employment. A copy of that agreement is attached as Exhibit "1." 5. Plaintiff became the general agent at NEF, succeeding Gregory Baker on or about March 1, 2000, and later came to be known as managing partner of NEF. 6. Defendant did not complete the requirements contained in the Jump Start Agreement within the specified time period. 7. At his request and to permit him the opportunity to successfully complete his training under the Jump Start Agreement and become eligible for payments under that program, on or about April 30, 2002, Plaintiff and Defendant entered into a letter of agreement to "ensure the successful completion of [defendant's] jump start contract." A copy of the letter of agreement is attached as Exhibit "2." 8. Under the letter of agreement, Defendant was advanced $2,000 per month beginning in April 2002 through September 2002 by Plaintiff. See Exhibit "2", paragraph 2. 9. Under the letter of agreement, Defendant agreed to repay the advances upon completion of his training under the Jump Start Agreement (as extended). See Exhibit "2", paragraph 3. 10. Defendant also agreed to repay the advances, his accounts receivable and field advances if separated from employment from New England Financial for any reason. See Exhibit "2", paragraph 5. 11. Defendant completed his training under the Jump Start Agreement on December 27, 2002. See Exhibit "3". 12. Upon completion of the training under the Jump Start Agreement, as extended, Defendant had a balance of $22,944.50 in his reserve account. 13. Under the Jump Start Agreement, this reserve account balance was to be paid out to Defendant over twelve (12) months commencing within thirty (30) days of the termination of the Jump Start Agreement, for as long as Defendant remained a full-time agent of New England Life. 14. After completing his training, Defendant requested that Plaintiff seek from New England Life the largest advance that could be obtained from Defendant's reserve account, in addition to the amounts that would be coming to him in January 2003 as a monthly reserve account payment. 15. Plaintiff requested the advance desired by Defendant and, on or about January 17, 2003, Defendant received a payment of $7,615.20 from New England Life which represented an advance payment of $7,000 ("advance") and two weekly payments of $307.60 from his jump start reserve account balance. 16. Defendant applied the proceeds of the advance and payment to his health benefits, taxes, errors and omissions coverage, accounts receivable, special withholding, and educational accounts. 17. In a letter dated January 24, 2003, Defendant resigned as an agent from NEF, effective immediately. See Exhibit "4." 18. Upon receipt of notice of his resignation, New England Life charged Plaintiff, as the general agent, for the advances to Defendant. 19. As a result, Defendants obligations under the letter of agreement were not significantly reduced. -3- 20. Defendant's existing obligation under the letter of agreement as of this date is $11,647.71, which includes an educational advance ($500.21) and the amounts unpaid under the letter of agreement ($11,147.50). 21. A demand for payment has been made but no payment has been received from Defendant. 22. All conditions precedent have been met. COUNT I BREACH OF CONTRACT 23. The averments contained in paragraphs i through 22 are incorporated by reference. 24. Defendant contracted to repay Plaintiffs for sums advanced to him between April 2002 and September 2002, and for his accounts receivable and field advances for this period. 25. No repayment has been received. 26. The current balance owed on the obligations undertaken by Defendant in the letter of agreement is currently $11,647.71. 27. Defendant has breached his contract with Plaintiff. 28. Defendant is liable to Plaintiff for $11,647.71. WHEREFORE, Plaintiff respectfully requests this Honorable Court to enter judgment in the amount of the outstanding balance due to Plaintiff, plus interest, and for the costs of this suit. -4- COUNT II UNJUST ENRICHMENT 29. The averments contained in paragraphs I through 28 are incorporated by reference. 20. Plaintiff conferred benefits on Defendant in the form of advances against future earnings in the net amount of $11,647.71. 31. Defendant received and retained these monies. 32. Defendant has not returned these monies despite his obligation to do so under his letter agreement. 33. It is inequitable for Defendant to retain these monies. WHEREFORE, Plaintiff respectfully requests this Honorable Court to enter judgment in the amount of the outstanding balance due to Plaintiff, plus interest and the cost of this suit. Respectfully submitted, METTE, ~VANS & WOODSIDE 3401 North Front Street P. O. Box 5950 Harrisburg, PA 17110-0950 (717) 232-5000 -5- VERIFICATION I, Ronald Borza, make this verification that I have read the foregoing document and to the extent that it contains facts supplied by me, they are true and correct to the best of my personal knowledge, information and belier however, to the extent that the foregoing document and/or its language is that of counsel, I have relied upon counsel in making this verification. I make this Verification subject to the penalties of 18 Pa.C.S. §4904 relating to unsworn falsification to authorities. Date: New England Life Insurance Company Jump Start Training Allowance Program Agreement Tiffs Agreement is n. ~, and entered into by and among the General Agent, the Agent, and New England Life I. nsman~ Company of Boston, Massachusetts Company"). Th~ General Agent for purposes of the Contract shall be tim person indicated on the Gen~ml Agent Appointment Page appointed by the Company as the Gcnertal Agent for the tcn-itory. AGENT ... David L. Kuhn Nm~ 636 Candiewvck Road Lancaster. PI. 1760] Add~ 183-68-7190 ~ Se~mty Numl~r The provisions s~t fo~'th h~mim and th~ Exlxibits her~in incorporated, am h~reby made part of this Agreement This Agreement shall supersede all previous tr'~'~ing allowance agreements, oral or wrktem, and slmll amend all prior and conmmporaneous agre~nents between thc General Agent and the Agent, with respect to policies or coverages, cmdit~l to the Agent, whos~ Hom~ Office Receipt Dates am on or after the Effective Dat~ of this Agreeanent. Th/s Agr~ment shall be effective on the Effective Dam approved by tim Company. Subsequent Agr~ment years shall begin with the annivetsm'y of this ~-fccfive Da~. Th?~ Agreement shall tak~ effect on the 3rd dayoft~ay .19 99 ("the Effective Date% The Basic Amount which is defined in Section E is tiff! .54 ~- per week. A-468-96 New England Life Insurance ~ompany General Agent Appointment Page Jump Start Training Allowance Program Agreement TMs Agreement is n, ~ and entered into by and among the General Agent, the Agent, and New England L'ffe ~xtrance Company of Boston, Massachusetts ("the Company"). GE3~JERAL AGENT Gregory L. Baker, CLU~ ChFC Central PA Financ±al Services Camp Ef~, PA 17011 Addt~= Effective Dam of General Agent Appointment by the Company: November 1, 1995 The Company Ires appointed the General Agent as the General Agent for the m'dtory as of the Effective Date above. The appointmant of the General Agent supersedes any prior appointment of any other general agent for the same territory. All terms and conditions of this General Agent Appointment Page are b.e~by ma~de a part of and ~ be // /~y~/By' Sigaed) A-4-68-96 New England Life Insurance Company Agent Contract This Agent Contract ~s made and ent~'ed into by and among the Gonexal Agent, fl~ Agent, and New England Lifo Insurance Company of Boston, Massachusetts ("'the Company"). The C, ene~'al Ag~t for purposes of ~ Conuact shall be the p~rson indicated on th~ General Agent Appoinunent Pag~ appointed by thc Company as the General Agent for the territory. AGENT David L. Kuhn Name 636 Candlewyck Road Lancaster, PA 17601 183-68-7190 Social Securi~Num~r The provision set forth herein, ~ho Schedule of Agent Comptmsafion and any amendments auached her~w ar~ hereby made part of the Agent Contract ("thc Contract"). The Conu'act shall supersede all previous agreements between the General Agent. the Agent, and the Compm~y with ~t to peUcic~ or corm'ages, credited to the Agent, whose Home Office Receipt Dat~ are on or after tho Effective Daw of the Contract. The tmni~ to tho Conwact agree that thc law of tho Commonwealth of ~huse~s shall govern the Cenwact in all respects. The Contract shall ~ effect on the 3rd dayof May ,19 99 ("theEffective Dam"). (Dm sign~O AG-&31-96 New England Life Insurance Company General Agent Appointment Page Agent Contract This Agent Contract C°l'he ContracO is made and ~nte~ed into by and among the General Agent, the Agent, and New England Life Insurance Company of Boston, Massa~husems ("the Company'S. G~qERALAGENT Gregory L. Baker, CLU, ChFC Central PA Financial Services Camp Hill, PA 17011 Addm~ The Company has appointed the General Agent as tho Gene~I Agent for ~ territory as of the Effecrlve Date above. The appointment of the Genea'al Agent supersedes any prior appointment of any other general ag~t for the same tenitory. All terms and conditions of this General Agent Appointment Page are ~reby made a part of and shall be incorporated/~toO~eg~ontract. Effective Date of General Agem Appointment by the Company: November 1, 1995 AG~831-96 NEW ENGLAND LIFE INSURANCE COMPANY CONTRACT AMENDMENT FOR INTERN AGENTS Agent: David L. Kuhn #48908 Contract Effective Date (AG-831): 05/03/1999 Managing Partner: Gregory L. Baker Agency: 027 In consideration of mutual promises, the Agent's Contract is hereby amended to pro- vide the following, which is subject to all the terms and conditions of the contract: (1) Part II of the Schedule of Compensation, "First Year Commissions" is amended as follows: -"The New England shall pay to the agent all first year commissions earned (i) prior to the expiration of the period of 90 days from the effective date of this Contract and (ii) after the expiration of such period, provided that the agent shall continue to solicit and procure applications under this Contract or any other full-time agent's contract. Payment for all ftrst year commissions earned prior to the expiration of such period shall be deferred until after the expiration &such period." (2) Part II of the Schedule of Compensation, "Renewal Commissions and Service Fees" is amended as follows: - "When Renewal Commissions are Earned. The Renewal Commissions on all new policies paid for in any calendar year shall be earned (i) if the agent shall have qualified in that calendar year under PART II Paragraph A and (ii) if the agent has continued to solicit and procure applications under this Contract or any other full-time agent's contracts. During the first and last year of this Contract, the new insurance requirements for any fractional part of a year shall be reduced proportionately." -"When Service Fees are Earned. The Services Fees on any policy paid for under this Contract shall be earned in any calendar year (i) if the agent shall have qualified under PART II Paragraph A in each preceding calendar year of the policy and (ii) if the agent has continued to solicit and procure applications under this Contract or any other full-time agent's contracts, During the first year of this Contract the new insurance requirements for any fractional part ora year shall be reduced proportionately." New England Life Insurance Company Contract Amendment for Financing Agreement Agent: David L. Kuhn g48908 Agency 027 : Contract Effective Date: 05/03/1999 General Agent: Gregory L. Baker In consideration of mutual promises, the parties hereby amend the Financing Agreement as follows, subject to all the terms and conditions thereof: "All policies submitted under the Intern Contract with an Effective date of 05/03/1999 With the New England Life Insurance Company prior to the effective date of th/s Agreement shall hereafter be subject to the terms of this Agreement to the same extent as if said policies had been placed after the effective date of this Agreement." RETROACTIVE (90 days only) x CURRENT [] Agent IMPORTANT: THIS AMENDMENT MUST BE SIGNED WHETHER OR NOT BUSINESS WAS WRITTEN PRIOR TO THE FINANCING START DATE. New England Life Insurance Company Jump Start Training Allowance Program Agreement In consideration of the mutual promises and upon the terms and conditions contained in fffis Jump Start Training Allowance Program Agreement, (the "Agreement"), the Managing Parmar, Agnm and New England Life Insurance Company (the "Company") hereby act and agree as follows: A. DEFINITIONS Any reference to thc "NEF Contract" shall mean the Agent Conmiet made by and among thc Managing Partner, Agent and the Company. Any refarence to the "N'ES Cantracf' shaft mean the Registered Representative and New England Securities Corporation. Unless otherwise indicated, any reference to "Eligible Commissions" shall mean all first year and renewal comnfissians and service fees on all products for which a commission would have been payable under the NEF Contract or NES ConWaet, if tbis Agreement were not in effect except ~ose products listed in the attached Ex. bit A. Any reference to ~EligiMe First Year Commissions" shall meen the first year commissions on all products for which a commission would have been payable under the NEF Contract, if this Agrecmem were not in effect, except those products listed in the ananhed Exhibits A and B. A/I of the attached Exhibits may be revised flora time to time by thc Company and shall remain in effect ~ superseded by the publication of new ExPloits by the Company. Any n:fcrence to Eligible Commissions having been "credited" shall mean the Eligible Commissions which the Company or New England Securities Corporation ('NES) have credited to the Agent, except as otherwise indicated in this Agreement As reference to lives having been "credited" shall mean the lives which the Company have credited to the Agent, except as otherwise indicated in this Agreement. Any reference to "Home Office Receipt Date" shall mean, depending on which companies' products, are involved, the date the Home Office of New England Life Insurance Company has received an application for any of its policies or coverage or the date NES or Duma and Bradstreat Plan Services, lie. on behalf of New England Life lisuranee Company has credited Eligible Commissions. Any reference to the "Contracts" shall mean the NEF Contract and NES Contract. A468~9 AMENDMENT TO AGENT CONTRACT In consideration of mutual promises, the Agent's Contract is hereby amended to provide thc following, which is subject to all thc terms and conditions of thc Contract: Part II of the Schedule of Compansafion, "First Year and Renewal Commissions and Service Fees" is amended as follows: "The Company shall defer payment to thc agent of all first year commissions earned by thc agent (i) during the period allowed for Pre-Financlig Business commencing on the effective date of this Contract and (ii) after the expiration of such period, provided that the agent shall sign a financing agreement with the Company. Payment of ali compensation earned on Pre-Financing shall be paid according to the provisions of the applicable Company financing agroement signed by the agent. If the agent does not sign a ~nuncing agreement with tho Company, fwst year commissions will no longer be deferred and shall be paid in accordance with the Contract terms." C. PRE-FINANCING BUSINESS All policies submitted under the Agent Contrm:t as Pre- Firumdng Business, whether ns an intern or f~ll-timc agent, with the Company prior to the effective date oftMs Agreement shall hereafter be subject to the terms oft. his Agreement to thc same extent as if said policies had been placed after the effective date of this Agreement. D. JUMP START TRAINING ALLOWANCE PROGRAM Duzing the terra of this Agreement, the Agent will participate in the lump Start Training Allowance Progra~ (the '~Progxam"), which provides the Agent with subsidized compensation while the Agent builds his/her sales production. The program is divided imo twelve (12) Validation Periods of thlneen (13) weeks eack During each Period of the Program, all Eligible First Year Commissions will be multiplied by a given factor and credited towards a Reserve Account as described in this Agreement. F. NO ELIGIBLE COMMISSIONS PAYABLE While this Agreemem is in effect it shall act as an amendment to the Contracts and the Agent shall be paid only the amounts described in this Agreement. The Agent shall not be paid any oftbe Eligible Commissions or expunse allowances prey/dad for in the Contracts for any individual policies or individual coverages with a Home Office Receipt Date occurring during the term of this Agreement, except for those products listed in Exhibit A. COMPENSATION Incentive ,4mount During the Program the weekly income payable to the Agent shall be referred to as the Incentive Amount. Thc Incentive Amount shall equal the Initial Incenrivc Amount shown on thc first page of this Agreement unless modified as described below. The Incentive Amount is calculated and payable on a weekly basis; however if the Managing Partner's regular pay per/od is biweekly or monthly, the Managing Parmer may hold such weekly amounts and make payments to the Agent on the Managing Parmer's regular pay period basis. Increases. The Incentive Anaount may be increased at the beginning ora Validation Period at the discretion of the Managing Parmer but only if the Eligible Commissions credited during the preceding Validation Period would have met that preceding Period's Validation Requirement for the increased amount. If at the end cfa Validation Per/od the Agent has been credited with Eligible Commissions during the Period sufficient to have met such Period's Validation Requirement for an increased Incentive Amount, the Managing Partner may in hisser discretion pay to tbe Agent in a lump sum an increased Incentive Amount for such Period. Decreases~Reductions. At the beginning of any Validation Period, the Managing Partner may in his/her discretion decrease the Incentive Amount. If during the preceding Period the Agent did not meet the Validation Requirement for the Incentive Amount, payments will be suspended. If the Agent fails to meet thc Validation Requirement for the Incentive Amount for two consecutive Validation Periods, this Agreement shall be terminated as of the end of that second Validation Period as stated in Section K. Payment of the Incentive Amount The Incentive Amount shall be payable for a particular week provided: (a) Forthatweekthebalanceinthe~4gent's Reserve Account before payment of the Incentive Amount is at least equal to the Incentive Amount. If the Reserve Account balance is tess than the Incentive Amount, the Agent may be paid only an amount equal to the balance in the Reserve Account, Thc Reserve Account is defined in Sectiun L The Subsidy, after payment of that week's Incentive Amount, would not exceed the Maximum Allowable Subsidy. Subsidy and Maximum Allowable Subsidy are defined below in Subsection 3. If the Subsidy would exceed the Maximum Allowable Subsidy, then the Agent shall be paid a reduced amount so that, after payment of that reduced amount, Re Subsidy does not exceed the Maximum Allowable Subsidy. The Agent has met the Validation Requirement for Commissions and Lives for the preceding Validaaon Period. lfthe Agent failed to meet the Validation Requirement for Commissions or the Validation Requirement for Lives in the preceding Period, payment of the Incentive Amount shall be suspended until the agent is credited with sufficient Eligible Commissions and Lives in the current Validation period and preceding Validation Period combined: (i) to meet the preceding Period's Validation Requirements and (ii) to meet the pro--mm Validation Requirements in the current period. Pro-ram Validation Requirement is defined in Section FL Any Eligible Commissions earned in the current Validation Period but used to meet the Validation Requirement for the preceding Validation Requirement for the preceding Validation Period shall be considered credited in the preceding Validation Period for validation purposes only. Eligible Commissions earned in one Period may be credited in another Period only when expressly provided in this Agreement. A468-99 2 tf the Agent does not satisfy Subsection (c)(i) and (¢Xii) above, this Agreement shall bo automatically terminated at the end of the current Validation Period as stated in Section K. (d) This Agreement has not been terminated. Subsidy. At any time during the term of this Agreement, the Subsidy is equal to: (i) The total of all payments made to the Agent under this Agreement; LESS (ii) The total of nil Eligible Commissions credited to the Agent under this Agleemant. The Maximum Allowable Subsidy is (a) $25,000 in the fa-st yeas of this Ag?cement; (b) $16,000 in the secood years of this Ag~ement, or aa accumdiated two-year maximum of $44,000 and (c) $10,000 in the third yeer of this Agreement, oran accumulated flu~e-yeer maximum of $54,000. H. VALIDATION REQUHLEMENTS 1. Validation Requirement for Commissions. To meet the Validation Requirement for Commissions for a Validation Period, the Agent must be credited during the Validation Period with Eligible Commissions according to the attached Validation Table, Exhibit D. To calcolate the amount of Elig/ble Commissions required, multiply the percentage from the Validation Table for the Agent's Incentive Amount, by 13 timea the Incentive Amount. Pro-rata Validation Requirement To calculate the amount of Eligible Commissions for the pro-mm Validation Requirement at the end of any week during which compensation bas been suspended, multiply the percentage fi.om the Validation Table for the Agent's Incentive Amount by the following: the Incentive Amount multiplied by the number of weeks which have already passed during th~ Validation Period. 2. Validation Requirement for Lives. To meet the Validation Requirement for Lives for a Validation Period, the Agent must be credited during the Validation Period, with nine (9) insured lives. Pro-rata Validalion Requirement To calculate the amount of Lives for the pro-ram Validation Requirement at the end of any week during which eompansafion has been suspended, divide the number of weeks which have already pasa~ during the Validation Period by 13 and multiply by 9. L RESERVE ACCOUNT The Reserve Account is established at thc commencement of the Program. The balance in the Reserve Account at any particular time is e4ual to: 1. Validation Requirement for Commissions, (a) The Eligible First Year Commissions credited to the Agent during the program multiplied by the appropriate Factor, as set forth in ge Factor Table Exhibit C attached, for the Validation Period in which the Eligible Fire:. Year Commissions were credited; (b) less any ehargebaek of such Elig~le First Year . Commissions multiplied by the Factor for the Validation Period in which the chargeback occurred. PLUS The Unfactored Portion. The Elig/ble Commissions credited to the Agent during the program which are not Eligible Fimt Year Commissions, less any chargeback of such Elig/ble Commissions. MINUS 3. The Amounts Paid Portion. The total amount paid to the Agent during the program to date. THE AGENT WILL NOT BE PAIl3 ANY AMOUNT FROM THE RESERVE ACCOUNT UNLESS SPECWICALLY REQUIRED BY TIlE TERMS OF THIS AGREEMENT. A-468-99 J. EXCLUSIVITY The Agent agrees to exclusively market the Inm~mee Products of the Company and not to market, whether directly or indirectly, without the express written permission of the Company, products of other companies which in the jndgrucnt of the Company compete with such Insurance Products or to accept compensatinn relating to the sale of such other products. The Agent agrees to t~minate within 30 days any agreement the Agent may have in effect on the Effective Date with any person or company for which the Agent mankets products which in the judgment of the Company compete with such Insurance Products. "Insurance Products" alufll mean all individual life inauranee products, (including universal life and variable life), annuity con~aacts, disability insurance conWacts, long term care products, group pension products, group life and health products and such other financial products as may be designated from time to time by the Company. The Agent shall not affiliate with any registered investment advisor or beeon~e a registered representative of a broker/dealer not affiliated with the Company. TERMINATION This Agreement shall terminate upon the earlier of the following: (1) termination oftha NEF Contract; (2) mailing of written notice of termination by either party to the other at that partes mailing address; (3) the Agent havi~g failed to meet the Validation Requiroment for Commissions for two consecutive Validation Periods; (4) the Agent having failed to meet the Validation Requirement for Lives for two consecutive Validation Periods; (5) the Subsidy equaling $54,000; or in any event, (6) the end of the 156t~ week of the Program. L. PAYMENT UPON TERMINATION If this Agleement is terminated under Section K (I), (2), (3) or (4), the Agent shall forfeit all Eligible Commissions which would have been payable after termination of the Agreement on all policies and coverages having a Home Office Receipt Date occurring during the term of this Agreement THE ONLY AMOUNT WHICH SHALL BE PAID TO TH~ AGENT UPON SUCH TERMINATION SHALL BE THE TERMINATION AMOUNT WHICH SHALL BE EQUAL TO: (i) The total of all Eligible Commissions et'edited during the term of this Agreement on policies and coverages whose Home Office Receipt Date occurred during the term of this Agreement; LESS (ii) The total amount paid to the Agent during the term of this Agreement. This Termination Amount shall be paid in a lmnp sum within thirty days of termiunfion. NO OTHER AMOUNT SHALL BE PAID TO T/vIE AGENT INCLUDING ANY BALANCE IN TME KESERVE ACCOUNT. However, if the Agreement terminates under Section K (1) because of the Agent*s death or total disability (as determined by the Company) and iftha Agent met the Validation Requirement for Commissions and Lives for the Validation Period preceding termiuation~ in addition to the Termination Amount, the Agent, his/her executors or administmto~ shall be paid the following amounts: (iii) Renewal Comxnissious which become payable under thc Contracts at%r this Aglenment terminates on poliales and coverages with a Home Office Receipt Date which oc/;mrrod during the term of this Agreement; and (iv) Eligible First Year Commissions which are credited under the Contracts after this Agreement terminates on policies and coverages with a Home Office Receipt Date which occurred during the term of this Agret~ment; and (v) The lesser off (a) The balance in the Reserve Account; and (b) The amount by which the Maximum Allowable Subsidy as of the date of t~rminafion excaeds the Subsidy as &the date of termination. Any amounts paid under this Subsection (v) shall be paid in twelve monthly iastallraents commencing within thirty days of termination. If the Agreement terminates under Section K (5), the Manag~lg Parmer shall pay to the Agent the amounts deseribod in Subsection (iv) above; and as long as the Agent continues to be a full-rime agent of the Company, the amounts described in Subsection (iii) above. If the Agreement terminates under Section K (6) and if at the time of termiuation the Agent met the Validation Requirement for Commission and Lives for the Validation Period prior to the date of termiuafion, the Managing Partner shall pay to the Agent the Termination Amount and the amounts described in Subsection (iv) above; and as long as the Agent continues to be a full-time agent of the Company, the amounts described in Subsections (iii) and (v) above. M. EFFECT OF AMENDMENT Except as altered, modified or amended by this Agreement, the terms and conditions &the Contracts shall continue in full fome and effect. A468-99 4 Exhibit A Eligible Commissions shall not include commissions on the following products (thee products will not pay through this program): 1. Large ~roup insurance 2. Group pension products 3. Products for which the agent is the insured 4. NELPA 5. VIA~NEF 6. Provident and Paul Revere Group LTD 7. Celtic 8, NES Contract products: Cash Management Trust service fees, NES bonu~s, discount brokerage comt~'nsation and 12(b)(1) fees Exhibit B Eligible FLrm Year Commissions shall not include commissions on the following products (~ese products will not be factored): I. Universal Life for which First Commissions are paid at a three p~'t~ont rate 2. Paid-Up Additions !~ider 3. Omega Lump Sum 4. Single Premium Variable Life 5. Prefeieuce Annuity First Year Pusehase Payments credited under Company Rules as Single Payments 6. All other single v,,~ium policies or coverages not specified above 7. NES products, not including Cash Manageraont Trust Service lees, NE$ Corporation bonuses, discount brokerage compensation, and 12(bX1) fees 8. Provident and Paul Revere Individual D/sahility [n¢onlc 9. MetLife Disability Income, Small Business Center, Long Term Care, Voluntary Benefits 10. Small Group Life & Health, Blue Cross/Blue Shield Small Group, Ameritus Dental I L MedAmerica/Finger Lakes Long Tenn Care Exhibit C FACTOR TABLE Period Weelc$ Factor 1 1-13 3.30 2 14-26 2.85 3 27-39 Z25 4 40-.92 ZOO 5 53-6.5 1.75 6 66-78 ].50 7 79-91 1.35 8 92-104 1.20 9 105-117 1.15 10 118-130 LIO I1 131-143 1.05 12 144-156 1.04 A468-99 Exhibit D VAL1DA TION T.d~BLE Incentive Amount Monthly or Weekly Income Band BAND 1 2 3 4 $ 6 7 Monthly Income Sl,000.00 $1,~00.00 $2,000.00 $2,500.00 $3,000.00 $3,500.00 S4,000.00 to to to to to to + $1~499.99 Sl,999.99 $2,499.99 $3,999.99 $3,499.99 $3,999.99 Over Weeklylncome S 230.77 $ $46.15 $ 461.54 $ 576.92 S 692.31 $ 807.69 $ 923.08 to to to to to to + $ 346.14 $ 461.53 $ 576.91 $ 69230 $ 807.68 $ 923.07 Over Pe~od Weeks % % % % % % % YEAR1 I 1~13 52 40 34 34 37 41 46 2 14-26 62 47 39 38 ~0 4~ 49 3 2%39 72 53 44 42 43 47 51 4 48-52 82 60 49 46 47 50 54 YEAR2 5 53..65 93 69 57 51 54 56 62 '6 66-78 103 78 65 59 6l 64 69 7 79-91 113 88 75 7I 70 73 77 8 92-10d 123 99 87 85 82 82 85 Y~AR 3 9 I05-I17 135 107 93 88 84 84 86 10 118-130 145 113 98 89 86 85 87 11 131-143 155 120 103 91 87 86 88 12 144°156 165 127 108 92 88 87 89 A468-99 NEW ENGLAND FINANCIALY April 22, 2002 Mr. David Kuhn New England Financial 800 New Holland Avenue Lancaster, PA 17602 Ronaid W. Borza MANAGING PARTNER Dear Dave, The attached Letter of Agreement outlines our proposed plan for your successful completion of your Financed Agent program by the end of this September 2002. We've tried to tailor this plan in order to give you an advance over the next six months allowing you to concentrate upon completing the Jump Start FYC requirements by the end of September. As we discussed previously, by successfully completing the program, you are ensuring the start of your renewal stream of your continued efforts during the program over the past three years. Sincerely, Ronald W. Borza Managing Partner, New England Financial Agency 027 rb20020422a LETTER OF AGREElvlENT The following agreemem is between David Kuhn (Agent), and Ronald Borza (Managing Partner). The signing of this agreement by both parties constitutes its understanding and promise to keep the following terms: The purpose of this Agreement is to ensure the successful completion of the Agent's Jump-Start Contract from present through the termination of the Financed periods until the completion of the reserve payout, (estimated at this time by Home Office as $24,000.00), twelve months following the successful completion of the Jump-Start Financed program. 2. The Managing Partner will advance a monthly sum of $2,000.00 to the Agent beginning April 2002 through and including September 2002 providing the following conditions are met: a. The Agent will produce on a monthly Basis in order to achieve the validation of the Jump-Start program by September 27~ with $15,000 FYC in YTD earnings at that time. b. The first checkpoint as to this successful completion of this agreement will be on May 24~ when the Agent is expected to have $5,400 FYC paid as calculated on the Agent's liEF MIS reports. c. The monthly advances will continue to be made from that point on so long as the Agent has the pro- rata amount of paid business in order to successfully complete the Jump-Start program by September 27t~, 2002. d. Within one week of the monthly payment, the Agent will reimburse the Agency via personal check all monthly Account Receivables, Field Benefit charges, and appropriate monthly E&O payments. 3. The Agent will repay the above total advance in equal installments during the 12-month "payout portion" of his successful completion of the Jump-Start program. Should the Agent fail to complete the Jump Start program at any time from now until October 25t~, the outstanding Advance Balance, as well as all A/R, and benefit balances will be due immediately from the Agent. Should the Agent be separated from employment with NEF by any reason from the below date, all remaining balances including advances, APR, and field benefit balances will be due immediately. If the Agent successfully completes the program before September 2002, the Agent will begin the payout period immediately thereafter with the advance being paid out over the following twelve months. 7. The monthly advance payment will be made on or around the 20~ of each of the six months. David L. Kuhn: ~ Date: Ronald W. Borza ~-,,~ Date: Managing Partner ~ rb20020422a ~pm 17 03 03:21p Nem England Financial 717-441-2091 NEW ENGLAND FINANCIAIZ January 17, 2003 Mr. Ronald W. Borza Managing Partner Central Pennsylvania Agency #027 Our congratulations to David Kuhn, #48908 for successfully completing the Incentive Training Allowance program as of December 27, 2002. Under the provisions of the Plan, David is now entitled to receive the remaining first year and renewal commissions on business paid for while receiving allowances under the Plan as well as any excess reserve account monies as of the point of successful completion. Any excess reserve account monies will be paid in 52 equal weekly installments as lung as the agent remains tinder a full-time contract and the financing subsidy does not exceed $54,000. For agents retaining full-time agent status with New England Financial, we recommend a contract change from the agent contract to the incentive career contract upon leaving the training allowance program. If you wish to make Ibis change, please submit three face pages of the ICC contract with a current date in order to process the change. Should David terminate fi.om the Company, commissions on ITAP business will ravert to the Company. Commissions received after the effective date of termination are m be held in the agency until instructions are received. Agent Contracts and Records is to be notified of any contract termination. Agent Compensation will make an audit of the finance account and contact you concerning payment of excess monies along with the instructions on closing out the account. If there are any questions on the finsnce account, please contact Pauline Gillon (ext. 4761). Best regards. Sincerely, Second Vice President Agency Operations H. O. Extension 2707 /pak~ cc: David Kuhn, #48908 David L. Kuhn 340 Greenbriar Drive Lancaster, PA 17601 January24,2003 Ron Borza Managing Partner New England Financial 214 Senate Avenue Suite 702 Camp Hill, PA 17011 Re: Resignation Letter Dear Mr. Borza, After careful thought and deliberation I have concluded that I must leave New England Financial to pursue other avenues. Please accept this letter as notification of my resignation effective immediately. Thank you for the help and support you, the staff of New England Financial Agency 027, and the other financial representatives have given me over the past years. I am taking with me a wonderful experience from which I have a deep respect for New England Financial and its various products~ Please send immediately my U-5 to my home address as indicated above. Sincerely, David L. Kuhn, Jr. Cc. Paul Richards SHERIFF'S RETURN - OUT OF COUNTY ~ASE NO: 2003-04967 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERL~UND BORZA RONALD ET AL VS KUHN DAVID R. Thomas Kline duly sworn according to law, and inquiry for the within named DEFENDANT , KUHN DAVID but was unable to locate Him in his bailiwick. deputized the sheriff of IJtNCASTER County, serve the within COMPLAINT & NOTICE , Sheriff or Deputy Sheriff who being says, that he made a diligent search and to wit: He therefore Pennsylvania, to On October 13th 2003 , attached return from LANCASTER Sheriff's Costs: Docketing 18.00 Out of County 9.00 Surcharge 10.00 Dep Lancaster Co 38.30 .00 75.30 10/13/2003 MET?E EVANS WOODSIDE Sworn and subscribed to before me this /~ day of ~c~c.~ ~0Dj A.D. ~ Frot~onOtary' ! / this office was in receipt of the So answ/e.~ ./ ~ / Sheriff of Cumberland County SHI RIFF'S OFFIC 50 NORTH DUKE STREET, P.O. BOX 83480, LANCASTER, PENNSYLVAN)A 17608-3480 · (717) 299-8200 SHERIFF SERVICE PROCESS RECEIPT, and AFFIDAVIT OF RETURN 1 PLAINTIFF/S/ Ronald Borza, et. al. 3 DEFENDANT/S/ David Kuhn SERVE 4' 5 NAME OF INDIVIDUAL, COMPANY, CORPORATION, ETC., TO BE SERVED David Kuhn 6. ADDRESS (Street or RFB, Apartment NO, City, Boro. Twp, State and ZIP Code) AT 340 Greenbriar Drive, Lancaster, PA 17601 7 INDICATE UNUSUAL SERVICE: ~i~ DEPUTIZE [] OTHER ~t.lmb~r~_and Now, 0/1 9/03 20 . , I, SHERIFF OF COUNTY, PA., do he.,Leb,.~eputize the .Sh. eri~i~of Lancaster County to execute this Wr..iL~_ ~ etur_n_thsreo.,J,~..j~:~iin~ to law. This deputation being mede at the request and risk of the plaintiff. 8. SPECIAL INSTRUCTIONS OR OTHER INFORMATION THAT WILL ASSIST IN EXPEDITING SERVICE: C~nberland PLEASE TYPE DO NOT DETACH ANY COPIES. 2 COURT NUMBER 2003-4967 Civll 4 TYPE OF WRIT OR COMPLAINT Notice & Complaint NOTE ONLY APPLICABLE ON WRIT OF EXECDTION: N.B. WAIVER OF WATCHMAN - Any deputy sheriff levying upon or attaching any property under within writ may leave same without a watchman, in custody of whomever is found in possession, after notifying person of levy or attachment, without liability on the part of such deputy or the sheriff to any plaintiff herein for any loss, destruction or removal of any such property before sheriff's sale thereof. 9. SIGNATURE of ATTORNEY or other ORIGINATOR Jf 0. TELEPHONE NUMBER 1 I DATE Kathryn Simpson, Mette, Evans & Woodsid~ 232-5000 9/~/03 12. SEND NOTICE OF SERVICE COPY TO NAME AND ADDRESS BELOW: (This area must be completed if notice is to be mailed). CUMBERLAND CO SHERIFF'S OFFICE SPACE BELOW FOR USE OF SHERIFF ONLY -- DO NOT WRITE BELOW THIS LINE f, la.now.dgereceipto.hewr t or complaint as indicated above,} NAME of Authohzed LCSO Deputy or Clerk 14 Date Received 15. Expiration/ earing date ANNETTE WALTON (717) 295-3609 9/23/03 16. I hereby CERTIFY and RETURN that I ~ave personally served [3 have legal evidence o service as shown n "Remarks", O have executed as shown in "Remarks" thewritorcomp an descr bed )n he ndvduaLcompany corporation etc. a headdressshewnaboveoron heind vdual,company cor- poration, etc. at the addres~ inserted below by handing a TRUE and ATTESTED COPY thereof. 17 E]I hereby certify and return a NOT ROUND because I am unable to locate the individual, company, corporation, etc, named above (See remarks below) 18 Name and title of individual served (if not shown above) (Relationship to Defendant) 19 20 Add ress of where served complete only if different than shown above) (S rea or RFD, Apartment No, City, Boro Twp State and Zip Code) 23. ATTEMPTS Date Miles ~1;. Dap. Int. 24H Advance~.~.~c~ ~:>/~C°sts 100.00 25. Ser~ice36.50Costs 26~ Notary Cart 30. REMARKS 10-07-O,3 3:qO M,,Te ; B,fN.F. Costs. CO.. OU, MY COMMISSION EXPIRES WHITE - Issuing Authority 2. P~NK - Attorney 3. CANARY - Sheriff's Office; 4 BLU~-~eI~I% O ~...- ...... .aJp '~-~..~-~ , RONALD BORZA, as managing partner of NEW ENGLAND FiNANCIAL, Plaintiff DAVID KUHN, an adult individual, Defendant COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA PRAECIPE TO DISCONTINUE To the Prothonotary: Please mark this case discontinued with prejudice. Respectfully submitted, METTE, EVANS & WOODSIDE ~A~'HRY~.~giMP~ 6N, E S ~I/~RE PA I.D. ~2~q~0 3401 North Front Street P. O. Box 5950 Harrisburg, PA 17110-0950 (717) 232-5000 CERTIFICATE OF SERVICE I certify that I am this day serving a copy of the foregoing document upon the person(s) and in the manner indicated below, which service satisfies the requirements of the Pennsylvania Rules of Civil Procedure, by depositing a copy of same in the United States Mail at Harrisburg, Pennsylvania, with first-class postage, prepaid, as follows: DATE: February 12, 2004 Kevin M. French, Esquire Hartman Underhill & Brubaker LLP 221 East Chestnut Street Lancaster, PA 17602-2782  VANS & WO~iDE~, ~,._' _ By: ~ , 3401 N. Front Street P. O. Box 5950 Harrisburg, PA 17110-0950 (717) 232-5000 Attorneys for Plaintiffs 390317vl