Loading...
HomeMy WebLinkAbout04-1104 Johnson, Duffie, Stewart & Weidner By: Mark C. Duffie LD. No. 75906 301 Market Street P. O. Box 109 Lemoyne, Pennsylvania 17043-0109 (717) 761-4540 Attorneys for Plaintiffs REIGLE, L.L.C., 15 N. 5th Street Lemoyne, PA 17043 IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff No.04 - /ICij Cit> cl JE/2.J'Y' CIVIL ACTION - EQUITY v. MANDY A. STONEROAD, 226 Lafayette Street Harrisburg, PA 17109 Defendant NOTICE TO DEFEND To the Defendant: 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 selVed, 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, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW THIS OFFICE CAN PROVIDE YOU WITH INFORMATION ABOUT HIRING A LAWYER. IF YOU CANNOT AFFORD TO HIRE A LAWYER, THIS OFFICE MAY BE ABLE TO PROVIDE YOU WITH INFORMATION ABOUT AGENCIES THAT MAY OFFER LEGAL SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE OR NO FEE. Cumberland County Bar Association 2 Liberty Avenue Carlisle, Pennsylvania 17013 Telephone: (717) 249-3166 SOLOMON Z. KREVSKY, ATTORNEY AT LAW LLC By: Solomon Z. Krevsky, I.D. No. 72719 4409 North Front Street Harrisburg, P A 17110 (717) 221-8338 Attorneys for Defendant 1N THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYL V ANlA REIGLE, L.L.C. No. 04-1104 Civil Term Plaintiff Civil Action - Equity vs MANDY A. STONEROAD Defendant NOTICE TO PLEAD To: Reigle, L.L.C. c/o Robert E. Kelly, Jr., Esquire Kelly, Hoffman & Goduto LLP Commerce Towers - 10th Floor 300 North Second Street P. O. Box 62003 Harrisburg, P A 17106-2003 You are hereby notified to file a written response to the enclosed New Matter and Counterclaim within twenty (20) days from service hereof or a judgment may be entered against you. Respectfully submitted, SOLOMON Z. KREVSKY, ATTORNEY AT LAW LLC By: Solomo vsky, Esquire Attorn fi Plaintiff Supreme 1. I.D. #72719 4409 North Front Street Harrisburg, PA 17110 (717) 221-8338 (717) 221-0800 fax e-mail: solomonlal.krevskvlaw.com SOLOMON Z. KREVSKY, ATTORNEY AT LAW LLC By: Solomon Z. Krevsky, I.D. No. 72719 4409 North Front Street Harrisburg, P A 17110 (717) 221-8338 Attorneys for Defendant 1N THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYL V ANlA REIGLE, L.L.C. No. 04-1104 Civil Term Plaintiff Civil Action - Equity vs MANDY A. STONEROAD Defendant DEFENDANT'S ANSWER TO COMPLAlNT WITH NEW MATTER AND COUNTERCLAIM Defendant, Mandy A. Stoneroad, by and through her attorneys, Solomon Z. Krevsky, Esquire, and Solomon Z. Krevsky, Attorney at Law LLC, files the following Answer with New Matter and Counterclaim to Plaintiffs Complaint. 1. Upon information and belief, admitted. 2. Admitted. 3. It is admitted only that the Personal (sic) Training Agreement (hereinafter "Employment Agreement") was executed in Cumberland COurlty. All remaining factual allegations are denied as pleaded. The Employment Agreement attached as Exhibit A to Plaintiffs Complaint is a written instrument which speaks for itself. Moreover, any implication that the Employment Agreement attached as Exhibit A is enforceable or that Defendant in any way breached said agreement is specifically denied. 4. Admitted in part; denied in part. Defendant admits she signed the Employment Agreement on July 14, 1999. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the remaining averments and strict proof is demanded. In addition, this averment contains legal conclusions to which no responsive pleading is required. To the extent a response is deemed required, the avennent is denied. 5. Denied. The agreement attached as Exhibit B to JPlaintiffs Complaint is a written instrument which speaks for itself. In addition, the averment contains legal conclusions to which no responsive pleading is required. To the extent a response is deemed required, the averment is denied. 6. Denied. The agreement attached as Exhibit C to Plaintiffs Complaint is a written instrument which speaks for itself. In addition, the averment contains legal conclusions to which no responsive pleading is required. To the extent a response is deemed required, the averment is denied. 7. Denied. The averment contains legal conclusions to which no responsive pleading is required. To the extent a response is deemed required, the aVlerment is denied. By way of further answer, it is specifically denied that Van Reigle, L.L.C. validly assigned any right to Plaintiff to enforce the Employment Agreement at issue. Upon information and belief, no prior written consent of all parties to assign any right or interest pursuant to the assignment agreement attached as Exhibit C to Plaintiffs Complaint was obtained as required by paragraph 12 of said agreement. As a result, Van Reigle, L.L.C. possessed no right to assign its interest to enforce the Employment Agreement to Plaintiff, and Plaintiff cannot therefore enforce same. 8. Denied. Paragraph 20 of the Employment Agreement is contained in a written instrument which speaks for itself. In addition, the averment contains legal conclusions to which no responsive pleading is required. To the extent a response is deemed required, the averment is denied. It is specifically denied that Jeffrey S. Van Boskirk, Vd/b/a J. S. Van Enterprises is a predecessor in interest of Plaintiff, or that Plaintiff has any right to enforce said Employment Agreement. 9. Denied. The averment contains legal conclusions to which no responsive pleading is required. To the extent a response is deemed required, the avennent is denied. It is specifically denied that Van Reigle, L.L.C. validly assigned any right to Plaintiff to enforce the Employment Agreement at issue. Upon information and belief, no prior writttm consent of all parties to assign any right or interest pursuant to the assignment agreement attached as Exhibit C to Plaintiff s Complaint was obtained as required by paragraph 12 of said agrt:ement. As a result, Van Reigle, L.L.C. possessed no right to assign its interest to enforce the Employment Agreement to Plaintiff, and Plaintiff cannot therefore enforce same. It is specifically denied that Jeffrey S. Van Boskirk, Vd/b/a J. S. Van Enterprises is a predecessor in interest of Plaintiff, or that Plaintiff has any right to enforce said Employment Agreement. 10-13. Denied. The averment contains legal conclusions to which no responsive pleading is required. To the extent a response is deemed required, the averment is denied. Paragraphs 9, 9 A, 9B and 11 are contained in a written instrument which Spt:aks for itself. It is specifically denied that Plaintiff has standing as a successor in interest or assignee to enforce the Employment Agreement. It is specifically denied that Defendant violated the Employment Agreement including without limitation Paragraphs 9, 9A, 9B, or 11. 14. Denied as pleaded. It is admitted only that Defendant last performed services as an employee for Plaintiff on November 6, 2002. 15. Denied as pleaded. Defendant admits that she "fi:aternized" (although she does not understand the precise meaning of that term in this context), but denies that she violated the Employment Agreement, that Plaintiff has standing as a successor in interest or assignee to enforce the Employment Agreement or that paragraph 11 of the Employment Agreement is enforceable as a matter of public policy. 16. Denied. After reasonable investigation, Defendomt is without knowledge or information sufficient to form a belief as to what Plaintiff "discovered" or when. In addition, the averment contains legal conclusions to which no responsive pleading is required. To the extent a response is deemed required, the averment is denied. It is specifically denied that Defendant "utilized Protected Information as defined in paragraph 9 of the Employment Agreement" or otherwise violated the "covenant not to compete provided in paragraphs 9A and 9B ofthe Employment Agreement". To the contrary, paragraphs 9A and 9B of the Employment Agreement do not contain any such covenant not to compete. 17. Denied as pleaded. It is admitted that Defendant taught dance classes at Pa Dance Sport, that Pa Dance Sport is located at the corner of East Main Street and Hershey Park Drive in Hummelstown, Dauphin County, Pennsylvania, and that Defendant taught said dance classes within two years of her termination of employment with Plaintiff. Any implication that Defendant violated the terms of the Employment Agreement is specifically denied and strict proof is hereby demanded. 18. Denied as pleaded. It is admitted that Defendant taught dance classes at Camelot Dance Studio located in Steelton, Dauphin County, Pennsylvania and that Defendant taught said dance classes within two years of her termination of employment with Plaintiff. Any implication that Defendant violated the terms of the Employment Agreement is specifically denied and strict proof is hereby demanded. COUNT I - BREACH OF CONTRACT NON-COMPETE EMPLOYMENT AGREEMENT 19. Defendant incorporates by reference her response and averments in Paragraphs 1 through 18 above. 20-21. Denied. Paragraphs 20 and 21 plead legal conclusion to which no response is required. Defendant generally denies that she violated any enforceable provision of the Employment Agreement and that her conduct in any way caused harm to Plaintiff. 22. Denied. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the averment, and strict proof is demanded. Defendant generally denies any violation of any enforceable provision of the Employment Agreement and that the Employment Agreement contains any "noncompete provisions". 23. Denied. The averment contains legal conclusions to which no responsive pleading is required. To the extent a response is deemed required, the aVlerment is denied. Defendant generally denies that she violated any enforceable provision of the Employment Agreement and specifically denies any improper utilization of the "protected information" defined in the Employment Agreement. 24-25. Denied. Paragraph 15 ofthe Employment Agreement is contained in a written instrument which speaks for itself. Any implication that Plaintiff is entitled to equitable or legal remedies which in any way arise from Defendant's action is spl:cifically denied and proof is hereby demanded. 26-27. Denied. Paragraph 16 of the Employment Agrt:ement is contained in a written instrument which speaks for itself. Any implication that Plaintiff is entitled to equitable or legal remedies which in any way arise from Defendant's action is speciJically denied and proof is hereby demanded. 28. Denied. The averment contains legal conclusions to which no responsive pleading is required. To the extent a response is deemed required, the averment is denied. Defendant generally denies that she violated any enforceable provision of the Employment Agreement and that her conduct in any caused harm to Plaintiff. Accordingly, Defendant denies that Plaintiff is entitled to any damages which in any way arise from Defendant's action lmd proof is hereby demanded. 29-30. Denied. The averment contains legal conclusions to which no responsive pleading is required. To the extent a response is deemed required, the averment is denied. It is specifically denied that Plaintiff is entitled to injunctive relief. On May 28, 2004, Plaintiff filed a Motion for Special Injunction docketed in the Court of Common Pleas, Cumberland County, Pennsylvania at No. 04-1104 Civil Term (equity). The facts pleaded allegedly in support of Plaintiff s Motion for Special Injunction are the same or substantially equivalent to those which form the basis of Plaintiff s request for equitable relief in the instant matter. On June 16, 2004, Plaintiff filed her Withdrawal of Motion for Special Injunction (a true and correct copy attached hereto as Exhibit A) Said Withdrawal of Motion for Special Injunction constitutes a release of any obligation Defendant had toward Plaintiff which in any way gives rise to Plaintiffs request for equitable relief. WHEREFORE, Defendant demands judgment against Plaintiff, with appropriate costs assessed to Plaintiff. COUNT II - TORTIOUS lNTERFERENCE WITH CONTRACTUAL RELATIONS 28 (sic )Defendant incorporates by reference her response and averments in Paragraphs 1 through 30 above. 29-31 (sic) Denied. The averment contains legal conclusions to which no responsive pleading is required. To the extent a response is deemed required, the averment is denied. It is generally denied that Defendant violated any enforceable provision of the Employment Agreement, that Plaintiff has standing as a successor in interest or assignee to enforce the Employment Agreement, that Defendant has tortiously interfered with Plaintiff's contractual relations, and that Defendant's conduct in any way caused harm to Plaintiff. WHEREFORE, Defendant demands judgment against Plaintiff and in favor of Defendant with appropriate costs assessed to Plaintiff. NEW MATTER 32. The averments in Paragraphs 1 through 30 and 28 (sic) through 31 (sic) of the foregoing Answer and Paragraphs 53 through 81 of the following counterclaim are incorporated herein by reference. 33. All of Plaintiffs claims against Defendant are barred by the doctrine of unclean hands. 34. All of Plaintiffs claims against Defendant are barred by the doctrine oflaches, estoppel and/or waiver. 35. At all relevant times hereto, Defendant was privileged and justified to engage in all the actions she took to protect her ability to earn a living and her actions in this regard were proper in all respects. 36. Plaintiff, Reigle, L.L.C., is not a proper party to the instant action in that she does not have standing as a successor in interest or assignee to enfon:e the Employment Agreement at issue. 37. Plaintiffs withdrawal of her Motion for Special Injunction filed on or about June 16, 2004 constitutes a release of any obligation allegedly owe:d by Defendant to Plaintiff which would in any way give rise to Plaintiffs request for equitable relief. 38. Plaintiffs claims for injunctive relief failed to statt: a cause of action in that Plaintiff has an adequate remedy at law for its alleged claims and damages. 39. Plaintiffs Complaint and demand for equitable relief is also defective and not sustainable as a matter oflaw because of the unreasonable and over-reaching breadth of the relief sought. 40. Plaintiff cannot enforce against Defendant any restrictive covenant contained in the Employment Agreement in that Defendant was terminated from t:mployment with Plaintiff without cause. See Insulation Corporation of America v. Brobston, 667 A.2d 729, 735, nt 6 (Pa. Super. 1995) 41. Paragraph 5 of the Employment Agreement sets forth as follows: Studio will assign students to applicant, as and when they are available for instruction, who the studio deems applicant qualified to instruct. During the term of employment, applicant agrees to render services hereunder on an hourly and/or lesson appointment basis at such time and day and on such days as studio may direct. 42. Paragraph 6 of the Employment Agreement sets forth as follows: Studio shall pay applicant for applicant's services as an l:mployee and applicant shall accept in full payment for all employee services the hourly or ksson taught rates and commission rates as advised by the studio and as set forth in the written pamphlet issued by studio, entitled "payroll", which has been made available to applicant by studio and will remain available at all future times for inspection by applicant. Notwithstanding any provision therein contained to the contrary, the total compensation paid to the applicant shall be not less than the minimum fixed by any federal, state or local minimum wage law applicable to such employee. It is expressly understood and agreed that in no event shall any compensation of any form be paid to applicant for training activities prior to the time when applicant is qualified and directed by studio to work, instruct, or direct. 43. During the course of her employment with Plaintiff, Defendant was assigned students to instruct and did so. For her services, as described hl:rein, Defendant was paid on an hourly and/or lesson appointment basis. 44. In addition to instructing students as assigned by Plaintiff, Defendant was assigned and instructed to complete tasks including, without limitation, clerical, custodial, and administrative. 45. The clerical, custodial and/or administrative duties assigned to Defendant by Plaintiff were unpaid. 46. The clerical, custodial and/or administrative duties assigned to Defendant by Plaintiff exceeded the scope of Defendant's work as described by the Employment Agreement. 47. During the course of her employment with Plaintiff, Defendant regularly worked hours in a work week such that the total compensation paid to Ddendant was less than the minimum fixed by federal, state and/or local minimum wage laws. 48. At all relevant times hereto, Plaintiff was an employer as that term is defined by the Fair Labor Standards Act (FLSA), the Pennsylvania Minimum Wage Act, and/or Pennsylvania's Wage Payment and Collection Law. 49. During the course of her employment with Plaintiff, Defendant regularly worked hours in excess of 40 in a workweek. 50. During the course of her employment with Plaintiff, Defendant was not compensated at a rate of one and one-half times her regular rates of pay for all hours worked in excess of 40 hours per week. 51. Upon information and belief, Defendant's employment with Plaintiff was terminated for reasons unrelated to Defendant's substandard and/or deficient performance. 52. Plaintiffterminated Defendant's employment on November 6, 2002, without cause. COUNTERCLAIM COUNT 1- PENNSYL V ANlA WAGE PAYMENT AND COLLECTION LAW MANDY A. STONEROAD, DEFENDANT AND COUNTER CLAIMANT v. REIGLE, L.L.C., PLAlNTIFF AND COUNTERCLAIM DEFENDANT 53. The averments in Paragraphs I through 52 in the fc)regoing Answer and New Matter are incorporated into this Counterclaim by reference. 54. At all relevant times hereto, Defendant resided in Harrisburg, Dauphin County, Pennsylvania, and Plaintiff Reigle, L.L.C. withheld Pennsylvania Income Tax from Defendant's paycheck. 55. Plaintiff Reigle, L.L.C. has failed to pay Defendant compensation due and owing in accordance with the Employment Agreement and other hours worked by Defendant, as more fully described above, including, without limitation, the clerical, custodial and/or administrative duties identified above. 56. The employment and work records for Defendant are in the exclusive possession, custody and control of Plaintiff and Defendant is unable to state precisely at this time the exact amount owing to her. 57. Payment and/or compensation has not been made to Defendant and was not made to Defendant within the time requirements authorized pursuant to 43 P .S. g260.3 and 43 P .S. g260.5 of Pennsylvania's Wage Payment and Collection Law and clairll is made therefore. 58. Plaintiff Reigle L.L.C. has no good faith reason for failing to pay Defendant the compensation and other pay to which she is entitled. 59. As a result thereof, Defendant is further entitled to liquidated damages and attorney fees pursuant to 43 P.S. g260.10 and 43 P.S. g260.9A(f) ofPelIDsy1vania's Wage Payment and Collection Law. 60. The amount in controversy exceeds the applicable arbitration limits and a jury trial is hereby demanded. COUNT II - FAIR LABOR STANDARDS ACT MANDY A. STONEROAD, DEFENDANT AND COUNTER CLAIMANT v. REIGLE, L.L.C., PLAlNTIFF AND COUNTERCLAIM DEFENDANT 61. The averments in Paragraphs 1 through 52 of the foregoing Answer with New Matter, and Count I of Defendant's Counterclaim are incorporated into this Counterclaim by reference. 62. Defendant was an employee of Plaintiff who at an relevant times was employed in an enterprise engaged in commerce or in the production of goods for commerce, as defined by Section 3(s) ofthe Fair Labor Standards Act (hereinafter "the Act"), 29 U.S.C. g203(s). 63. At all relevant times herein, Defendant was entitled to the rights, protections and benefits provided under the FLSA. 64. Plaintiff Reigle, L.L.C. is an employer as defined by Section 3(d) of the Act, 29 U.S.C. g203(d). 65. Plaintiff Reigle, L.L.C. is an enterprise as defined by Section 3(r) of the Act, 29 U.S.C. g203(r). 66. Defendant is entitled to overtime compensation at the rate of one and one-halftimes her regular base pay for all hours worked in excess of 40 hours per week, except as otherwise provided in Section 7 of the Act, 29 U.S.C. g207. Section 7(a)(I) of the Act, 29 U.S.C. g207(a)(1) provides: Except as otherwise provided in this Section, no employer shall employ any of his employees who in any workweek is engaged in commf:rce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, for a workweek longer than 40 hours unless such an employee receives compensation for his employment in excess of the hours above specified at a rate not less than 1-112 times the regular rate at which he is employed. 67. Defendant, during the applicable statutory maximum time periods, worked in excess of the statutory maximum number of hours provided for in Section 7(a)(l) of the Act, 29 U.S.c. g207(a)(I) without receiving compensation for such excess hours at a rate of one and one-halftimes the regular rate at which the Defendant was employed. 68. In addition, Defendant, during the applicable statutory maximum time periods, worked regular hours during her employment with Plaintiff but was not paid her regular rate of pay as required pursuant to the FLSA. 69. The failure by Plaintiff to compensate Defendant at her regular rate of pay and at one and one-half times her regular rate of pay for hours worked in excess of 40 in a workweek, is a violation of Section 7 of the Act, 29 U.S.c. g207. Such violation is redressable by Defendant as an affected employee under Section 16(b) of the Act, 29 U.S.C. g216(b). 70. On information and belief, the failure by Plaintiff to properly pay compensation owed to Defendant is a knowing, willful and/or reckless violation of29 U.S.C. g207 within the meaning of29 U.S.C. g255(a). 71. Plaintiff is liable to Defendant herein in the amOlmt of Defendant's unpaid regular rate of pay and/or unpaid overtime compensation and an additional equal amount as liquidated damages, and for reasonable attorney fees, together with the costs and disbursements of this action. 72. At all relevant times within the period of three y,ears prior to the filing of this counterclaim, Plaintiff has been aware of the provisions of the FLSA, as amended, 29 U.S.c. g20l, et seQ., requiring payment for regular hours worked and for overtime compensation to Defendant. Upon information and belief, Plaintiff willfully failed to pay such compensation to Defendant. 73. Therefore, Defendant is entitled to the regular compensation and/or overtime compensation and liquidated damages owed on this claim for the three-year period immediately preceding the commencement of the instant counterclaim. 74. The employment and work records for Defendant are in the exclusive possession, custody and control of Plaintiff and Defendant is unable to state precisely at this time the exact amount owing to her. The Plaintiff is under a duty imposed by 29 U.S.C. g211(c) and the regulations of the United States Department of Labor to maintain ;and preserve payroll and other employment records with respect to Defendant from which some ofthe amounts of Plaintiffs liability can be ascertained. 75. The amount in controversy exceeds the applicable arbitration limits and a jury trial is hereby demanded. COUNT IIl- PENNSYL V ANlA MlNIMUM WAGE ACT MANDY A. STONEROAD, DEFENDANT AND COUNTER CLAIMANT v. REIGLE, L.L.C., PLAINTIFF AND COUNTERCLAIM DEFENDANT 76. The averments in Paragraphs 1 through 52 of the foregoing Answer and New Matter, and Counts I and II are incorporated into this Counterclaim by reference. 77. The acts and/or omissions identified above and incorporated herein by reference violate the Pennsylvania Minimum Wage Act, 43 P.S. g333.l01 et seQ. 78. As a direct and proximate result thereof, Defenrumt has sustained damages as more fully described above and incorporated herein by reference. 79. The employment and work records for Defendant are in the exclusive possession, custody and/or control of Plaintiff and Defendant is unable to state precisely at this time the exact amounts owing to them. 80. For the reasons identified above and incorporatf:d herein by reference, Defendant is entitled to damages in an amount to be proven at tria\. 81. The amount in controversy exceeds the applicable arbitration limits and a jury trial is hereby demanded. WHEREFORE, Defendant/Counter Claimant Stoneroad prays: (I) for compensatory damages in an amount to be proven at trial, (2) for liquidated c\;maages in an amount to be proven at trial, (3) for reasonable attorney fees and costs incurred herein, (4) for prejudgment interest; and (5) for any other relief that this Court deems just and equitable. Respectfully submitted, SOLOMON Z. KREVSKY, ATTORNEY AT LAW LLC ~ Z. Atto ey r P intiff Supreme Ct. I.D. #72719 4409 North Front Street Harrisburg, PA 17110 (717) 221-8338 (717) 221-0800 fax e-mail: solomonlal.krcvskylaw.com VERIFICATION I, Mandy A. Stoneroad, the Defendant in the foregoing action do hereby affirm that the statements made in the foregoing are true and correct to the best of my knowledge, information and belief. I understand that this Verification is made subject to the penalties of 18 Pa. S.C.A., Section 4904, relating to unsworn falsification to authorities. 1\&~ oneroad Dated: Cd, IS 20(}/7 I ' CERTIFICATE OF SERVICE AND NOW, TO WIT, this 15~f July, 2004, I, Solomon Z. Krevsky, Esquire, hereby certify that I have this date served a copy of the foregoing by depositing a copy of same in the United States Mail, postage prepaid at York, Pennsylvania, addressed to counsel of record as follows: Robert E. Kelly, Jr., Esquire Kelly, Hoffman & Goduto LLP th Commerce Towers - 10 Floor 300 North Second Street P. O. Box 62003 Harrisburg, PA 17106-2003 Respectfully submitted, SOLOMON Z. KREVSKY, ATTORNEY AT LAW LLC By: Solo vsky, Esquire Atto r Defendant Supreme Ct. I.D. #72719 4409 North Front Street Harrisburg, PA 17110 (717) 221-8338 (717) 221-0800 fax e-mail: solomon(ciJ.krevskylaw.com (j 1"') v~) ", c'"' :~ o .1 '--l ~i=! --:)1'11 ~{~i i~S ~-] ~ 1'~ ?,'o,: :-n ,~,.- ~~ C'\ """:::1 1:'_- '. Johnson, Duffie, Stewart & Weidner By: Mark C. Duffie I.D. No. 75906 301 Market Street P. O. Box 109 Lemoyne, Pennsylvania 17043-0 I 09 (717) 761-4540 Attorneys for Plaintiffs REIGLE, L.L.C., 15 N. 5th Street Lemoyne, PA 17043 IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. Plaintiff CIVIL ACTION - EQUITY v. MANDY A. STONEROAD, 226 Lafayette Street Harrisburg, PA 17109 Defendant AVISO USTED HA SIDO DEMANDADO/A EN CORTE. Si usted desea defenderse de las demandas que se presentan mas adelante en las siguientes paginas, debe tomar acci6n dentro de los pr6ximos veinte (20) dias despues de la notificaci6n de esta Demanda y Aviso radicando personal mente 0 por medio de un abogado una comparecencia escrita y radicando en la Corte par escrito sus defensas de, y objecciones a, las demandas presentadas aqui en contra suya. Se Ie advierte de que si usted falla de tomar acci6n como se describe anteriormente, el caso puede proceder sin usted y un fallo por cualquier suma de dinero reclamada en la demanda 0 cualquier otra reclamaci6n 0 remedio solicitado por el demandante puede ser dictado en contra suya par la Corte sin mas aviso adicional. Usted puede perder dinero 0 propiedad u otros derechos importantes para usted. USTED DEBE LLEVAR ESTE DOCUMENTO A SU ABOGADO INMEDIATAMENTE. SI USTED NO TIENE UN ABOGADO, LLAME 0 VAYA A LA SIGUIENTE OFICINA. ESTA OFICINA PUEDE PROVEERLE INFORMACION A CERCA DE COMO CONSEGUIR UN ABOGADO. SI USTED NO PUEDE PAGAR POR LOS SERVICIOS DE UN ABOGADO, ES POSIBLE QUE ESTA OFICINA LE PUEDA PROVEER INFORMACION SOBRE AGENCIAS QUE OFREZCAN SERVICIOS LEGALES SIN CARGO 0 BAJO COSTO A PERSONAS QUE CUALlFICAN. Cumberland County Bar Association 2 Liberty Avenue Carlisle, Pennsylvania 17013 Telephone: (717) 249-3166 '. .' Johnson, Duffie, Stewart & Weidner By: Mark C. Duffie J.D. No. 75906 301 Market Street P. O. Box 109 Lemoyne, Pennsylvania 17043-0109 (717) 761-4540 Attorneys for Plaintiffs REIGLE, L.L.C., 15 N. 5th Street Lemoyne, PA 17043 Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 04 - 1/0'-1 Cud. '- I~ CIVIL ACTION - EQUITY ( v. MANDY A. STONEROAD, 226 Lafayette Street Harrisburg, PA 17109 Defendant COMPLAINT AND NOW, this g'l\-. day of March, 2004, comes Plaintiff, REIGLE, L.L.C., by and through its undersigned attorneys, Johnson, Duffie, Stewart & Weidner, and files this complaint and in support thereof avers as follows: PARTIES 1. Plaintiff, Reigle, L.L.C., is a Limited Liability Company organized under the laws of the Commonwealth of Pennsylvania with its principal place of business located at 15 N. 5th Street, Lemoyne, Cumberland County, Pennsylvania 17043. 2. Defendant, Mandy A. Stoneroad, is an adult individual who resides at 226 Lafayette Street, Harrisburg, Dauphin County, Pennsylvania 17109. .' VENUE 3. Venue is proper in Cumberland County, as the Personal Training Agreement ("Employment Agreement") through which Piaintiff's rights and remedies arise was executed here in Cumberland County, and further, in executing the Employment Agreement, Plaintiff and Defendant agreed in Paragraph 17 thereof that the jurisdiction is proper in the County and State that the Studio is located in and that the parties therein consented to personal jurisdiction and venue in such forum. A true and correct copy of the Empioyment Agreement is attached hereto and incorporated herein as Exhibited "A". FACTS 4. On July 14, 1999, the Defendant entered into the Employment Agreement attached as Exhibit "A" with J.S. Van Boskirk, trading and doing business as J.S. Van Enterprises, Plaintiff's predecessor in interest. Jeffrey S. Van Boskirk was formerly an Arthur Murray International, Inc. ("AMI") franchisee who operated two (2) AMI Studios in Lemoyne and York, Pennsylvania. 5. By the Assignment Agreement dated January 1 2001, Jeffrey S. Van Boskirk, trading and doing business as J.S. Van Enterprises, assigned any and all AMI franchise assets, rights, duties and interests to Van Reigle, L.L.C., a Limited Liability Company formed under the Laws of Commonwealth of Pennsylvania comprised of two (2) members, Lynn A. Reigle and Jeffrey S. Van Boskirk. A true and correct copy of Assignment Agreement is attached hereto and incorporated as Exhibit "B". 6. By an Assignment Agreement dated September 5, 2002, Jeffrey S. Van Boskirk assigned all of his membership interest in Van Reigle, L.L.C. to Lynn A. Reigle, the sole member of Van Reigle, L.L.C., a true and correct copy of said Assignment of Membership Interest is attached hereto and incorporated in as Exhibit "C". 7. As sole member of Van Reigle, L.L.C., Lynn A. Reigle, formed two (2) limited liability companies pursuant to the laws of the Commonweaith of Pennsylvania and transferred all AMI franchise assets, rights, duties and interests to Reigle, L.L.C. and Reigle York, L.L.C. to operate the Lemoyne and York Studios respectively. 8. The Employment Agreement signed by Lynn A. Reigle, as manager for Jeffrey S. Van 80skirk t/d/b/a J.S. Van Enterprises, a predecessor in interest of Reigle, L.L.C., contains, in Paragraph 20: The Agreement shall inure to the benefit of the heirs, representatives, successors and assigns of applicant, the heirs, representatives, successors and assigns of [Jeffrey S. Van 80skirk t/d/b/a J.S. Van Enterprises] and to Arthur Murray International, Inc. and its successors or assigns. 9. Plaintiff, Reigle, L.L.C., is an assignee and/or successor interest of J.S. Van 80skirk tld/b/a J.S. Van Enterprises to the rights, duties and obligations set forth in the Employment Agreement. 10. Under Paragraph 98 of the Employment Agreement, Defendant agreed to be bound by, inter alia, a covenant not to compete against Plaintiff. The covenant in Paragraph 98 of the Employment Agreement is set forth in its entirety as follows: [Defendant] agrees that both during the term of and after the termination of [Defendant's] employment and for a period of two (2) years thereafter, [Defendant] shall not directly or indirectly, individually or as a member of any business or organization, use any Protected Information in the city in which Studio is located and/or within a radius of twenty-five (25) miles from Studio, whichever is greater. 11. The Employment Agreement in Paragraph 9 defines "Protected Information" as follows: "methods as to dances, steps, teaching, instructional techniques, marketing techniques and operational procedures, names, addresses, phone numbers, preferences and abilities of students, customer lists, pricing information, and other matters, which [Plaintiff] has been permitted by franchisor to acquire and use, constitute proprietary information, confidential information and/or trade secrets." 12. Paragraph 9A of the Employment Agreement sets forth as follows: "[Defendant] agrees that both during the term of and after the termination [Defendant's] employment, (a) [Defendant] shall not reveal any of the Protected Information to any other person, firm or entity except in the ordinary course of the business of [Plaintiff] and/or franchisor in the case of dances or steps and instruction only or to other employees of [Plaintiff] who require such information for the operation of the Studio, and (b) [Defendant] shall not use any of the Protected Information in connection with any business or venture other than in connection with the rendering of [Defendant's] services as provided herein." 13. Paragraph 11 of the Employment Agreement provides as follows: "[Defendant] promises and contracts not to fraternize with students or prospective students of [Plaintiff] and not to accept monies, loans, guarantees, or things of value for [Defendant's] account during the term hereof and for a period of two (2) years after the term of this contract. 14. Defendant's employment with Plaintiff was terminated on or about November 8, 2002. 15. Defendant has, since her termination with Plaintiff, fraternized with students and prospective students of Plaintiff within their two (2) year window set forth in Paragraph 11 of the Employment Agreement. 16. Some time during the late summer of 2003, Plaintiff discovered that Defendant was teaching current students of Plaintiff utilizing Protected Information a defined in Paragraph 9 of the Employment Agreement in violation of the covenant not to compete provided in Paragraphs 9A and 98 of the Employment Agreement. 17. Defendant has taught and is believed to continue teaching group dance classes involving students of Plaintiff at Pa Dance Sport located at the corner of East Main Street in Hershey Park Drive in Hummelstown, Dauphin County, Pennsylvania within twenty-five (25) miles of Plaintiff's studio in Lemoyne, Pennsylvania and within two (2) years of Defendant's termination of employment with Plaintiff. 18. The Defendant was and is believed to be currently teaching at Camelot Dance Studio located in Steelton, Dauphin County, Pennsylvania within twenty-five (25) miles of Plaintiff's studio in Lemoyne, Pennsylvania and within two (2) years of Defendant's termination of employment with Plaintiff. COUNT I - BREACH OF CONTRACT NON-COMPETE EMPLOYMENT AGREEMENT 19. The foregoing numbered Paragraphs are incorporated herein by reference. 20. Defendant's actions constitute intentional violation of the covenants not to compete contained in the Employment which are ongoing and causing immediate and irreparable harm to Plaintiff. 21. As a direct and proximate result of Defendant's violation of the non-compete provisions of the Employment Agreement as set forth herein, which are ongoing, Plaintiff is suffering immediate and irreparable harm. 22. Defendant, by correspondence dated November 6, 2003, requested that Defendant cease from any further violation of the non-compete provisions of the Employment Agreement, but such violations continue. 23. It is believed, and therefore averred, that since her separation from employment with Plaintiff, Defendant has solicited and continues to solicit students of Plaintiff within the geographic area and has taught and continues to teach students of Plaintiff utilizing "Protected Information" as defined in the Employment Agreement. 24. Paragraph 15 of the Employment Agreement sets forth as follows: "The parties hereto recognize that a irreparable injury will result to [Plaintiff] and/or franchisor in the event of a breach of this Agreement by [Defendant] and agree that in such event [Plaintiff] and/or franchisor shall be entitled, in addition to all other remedies and damages and without further proof of monetary or immediate damage, to an immediate injunction to restrain the violation hereof by [Defendant] and all persons acting for or with him. [Defendant] shall pay all costs and reasonable attorney's fees and other expenses paid or incurred by [Plaintiff] and/or franchisor and enforcing this Agreement or any of the terms thereof. Further, [Defendant] agrees to post a fidelity or performance bond in such reasonable amount as [Plaintiff] may at any time require. 25. Paragraph 15 of the Employment Agreement expressly entitles Plaintiff to immediate equitable relief, enjoining Defendant from any further violation of the Employment Agreement and any of the non-compete terms contained therein. 26. Paragraph 16 of the Employment Agreement sets forth as follows: "It is agreed by the Parties hereto that the value of training material and the instruction and supervision made available to [Defendant] far exceeds the sum of Two Thousand Five Hundred ($2,500.00) Dollars, and [Defendant] hereby agrees to pay to [Plaintiff] such amount as is equivalent to [Plaintiff's] actual damages or the sum of $2,500.00, whichever is greater, to partially compensate [Plaintiff] for the cost of such training materials and instruction and [Defendant] has herewith delivered to [Plaintiff] a demand note of even date in the sum of $2,500.00 to evidence the minimum of such indebtedness. However, if [Defendant] shall perform and comply fully with all the terms of this agreement, and the two (2) year covenant thereafter, then upon such full performance and compliance [Plaintiff] agrees to cancel and discharge the note. On the other hand, such note shall be due and payable upon demand following any default under or breach or non-performance of any of the terms and conditions of this Agreement by [Defendant]." 27. The Note signed by Defendant and referenced in Paragraph 16 is attached to and part of the Employment Agreement and reads as follows: "FOR VALUE RECEIVED, on demand, I promise to pay Two Thousand Five Hundred Dollars ($2,500.00) to J. S. Van Boskirk d/b/a J. S. Van Enterprises an ARTHUR MURRAY FRANCHISED DANCE STUDIO OF Lemoyne, PA, at its principle place in the above city, without interest. In case suit shall be brought for the collection hereof, or the same has to be collected upon demand of an attorney, to pay reasonable attorney's fees and interest thereupon for making such collection. This Note shall be negotiable pursuant to paragraph 16 of this Personnel Training Agreement, and interest shall be payable at the maximum lawful rate of interest permitted by applicable usury laws, now or hereafter enacted, when demand shall be made for payment." The Note attached to the Employment Agreement was executed by the Defendant on July 14, 1999. 28. By this Complaint, Plaintiff is making demand of Defendant for payment under the Note as a result of Defendant's breach of the Agreement in such amount equivalent to Plaintiff's actual damages or the sum of Two Thousand Five Hundred ($2,500.00) Dollars, which ever is greater, as well as reasonable attorney's fees and interest as set forth in the Note. 29. Plaintiff will continue to suffer immediate and irreparable harm if the actions of Defendant are not enjoined, including, but not limited to the loss of clients, profits, business reputation, market share and confidential information. 30. Accordingly, Plaintiff has no adequate remedy at law. WHEREFORE, Plaintiff demands judgment against Defendant, inciuding an Order: A. Preliminary and thereafter permanently enjoining Defendant from further breach of the Employment Agreement with Plaintiff; B. Preliminarily and thereafter permanently enjoining Defendant from soliciting, teaching and/or fraternizing with any students or prospective students of Plaintiff; C. Awarding Plaintiff monetary damages for its loss in an amount not in excess of a minimum amount for compulsorary arbitration; D. Awarding Plaintiff costs and reasonable attorney's fees, interest, and other expenses incurred by Plaintiff and enforcing the Agreement and the non-compete terms thereof; and E. Any other relief this Court deems just. COUNT II - TORTIOUS INTERFERENCE WITH CONTRACTUAL RELATIONS 28. The foregoing numbered Paragraphs are incorporated herein by reference. 29. By soliciting and teaching Plaintiff's students, Defendant has tortiously interfered, and continues to tortiously interfere with Plaintiff's contractual relations with said students. 30. Defendant's actions have deprived Plaintiff of its rights under the Employment Agreement to Plaintiff's detriment, financially and otherwise. 31. As the direct and proximate result of the tortious interference of Defendant with Plaintiff's contractual relations with said students, Defendant has been unfairly and unjustly enriched to the extent of all revenues heretofore and hereafter derived from or in connect with said tortious interference with Plaintiff's contractual relations. WHEREFORE, Plaintiff demands judgment against Defendant, including an Order: A. Preliminarily and thereafter permanently enjoining Defendant's continued tortious interference with Plaintiff's contractual relations with said students; B. Awarding Plaintiff compensatory damages; C. Awarding Plaintiff punitive damages; D. Awarding Plaintiff attorney's fees and costs; and E. Any other relief this Court deems just. Respectfully submitted, :< , :l-2Hl>>( & WEIDNER Date: BY:/: ~ '" ~ ~uffie Attorney 1.0. NO.7 301 Market Street P.O. Box 109 Lemoyne, PA 17043-0109 Telephone (717) 761-4540 Attorneys for Plaintiff jlb:223682 VERIFICA T/ON I, Reigle, L.L.C., verify that the statements made in this Complaint are true and correct to the best of my knowledge, information and belief. I understand that false statements made herein are made subject to the penalties of 18 Pa. C.S.A 94904, relating to unsworn falsification to authorities. D"le~ 7)01 REIGLE, L.L.Cy' s, ;t141~d~ ~~ Reigle, Member 7 ~ EXHIBIT "A" 'A .' v:i;~ Personnel Training Agreement :::."-:fi;:"'::::" AGREEMENT.m.d"h,,'h' 1l{-r~'YOf .,-J,ll ~ .J9~bY'Odb"W"O ). s. VaY\. 6a.$ (L.,' rz-k _) . S I \.J6lV\. f'r.J1-e.....fn is C doing business as the Arthur Murray" Franl;hised Dance Swdio of Le-~J~. I fA- - CumBevlet~ Clv.-.....'t::; ,tIcreinafterreferredtoas"Studio" and ((klnd/ A. j!fonl.j.rvRt..(;1 ,herclnafterreferredtoas"Apphcant". WH EREAS~lldIO as an Independenl business person orentllY. conducts an Arthur Murray Franchised Dance Studio Ilndera franchise or sub.franchlse from Arthur Murray Inlernational. Inc.. hereinafter referred (0 as "Franchisor", which Studio IS associated with other Arthur Murray Franchised Dance Studios in various other places; and WH EREAS. Franchisor has expended and continues to expend large sums of money to develop a.nd impart to its franchisees methods of teaching dancing and procuring patronage and prestige for Ihe Arthur MLlHay methods and studios and has developed and established methods of instruction known as the Arthur Murray Methods of Instruction in Dancing. which are not ulili7.ed bycompelitors, and as a consequence has attained a nationwide reputation for conducting and supervising dance studios of the highest character; and WHEREAS. those who !lre not familiar with the distinctive and unique Arthur Murray Methods of Instruction in Dancing, operational procedures, and darlcesteps, hereinafter referred to as "Arthur Murray Methods", need extensive training in the Arthur Murray Methods before they can enter the employ of the Studio asa dance instructor or in other capacities: and WHEREAS. those who are familiar with the unique and distinctive Arthur Murray Methods need continuing training in the Arthur Murray Methods and instruction in the latest dilnce steps so that they can continue to be employed by the Studio; and WHEREAS, training in the Arthur Murray Methods will necessitate the Studio to expend significant amounts of time, money, and energy; and W H ER EAS, Studio is willing to train and instruct Applicant and provide continuing training and instruction or refresher and further training, as appropriate, to the Applicunt as stated above provided Applicant honors all provisions, conditions, and restrictions of this agreement and fully complies with same as hereinaflerprovided; <lnd WHEREAS. Applicant is under no legal impediment to enter into this Agreement and is not presently employed by Franchisor or any other Arthur Murray Franchised Dance Studio NOW. THEREFORE, Studio and Applicant agree as follows: I. That all of the foregoing recitals and representations are true and are made a part of this Agreement. 2. Applicant's employment by Studio shall begin a. As to an Applicant (or Employment and continued or further training, as of the date of this agreement. b. As to an Applicant (or Training, as soon as the Applicant finishes his initial training, which he agrees to undertake and complete within three (]) months from the date hereof, and is deemed qualified to work by Studio. J. Studio agrees to provide Applicant training and instruction in the Arthur Murray Metbodsso Applicant will be qualified to be employed by the Studio as a dance instructor, speci:llist, interviewer. counselor, supervisor. manager or in such other capacity or capacities asStudiodesires. Applicant agrees to accept and undergo such training and instruction and de\'ClIe A pplicant's best efforts thereto. Prior to the time that Applicant for TnJninl is qualified to work, training may be terminated either orally or in writing atany time without prior notice at Studio's ortian. Regardles!! of Applicant's previous training, Studio will provide Applicant with training and continuing training by furnishing supervision, written materials. and additillnlll or refresher courses of instruction, as the Studio may deem necessary, in accordance with the Arthur Murray Methods. 4. When quaJitied to work by the Studio, Applicant's work shall be in a capacity as a dance instructor, specialist, interviewer, counselor, supervisor, manager or otherwise, as Studio may from time to time determine. Applicant Cor Employment agrees to remain in the studio's employ and to work for Studio for a period of one year from the date Applicant's employment commences: Applicant for Tralnin, agrees to remain in Studio's employ fora period of nine months from tbedate on which it is determined by the Studio that Applicant ha~ ~atisfactlldly completed trelining and is qualified to work. Applicant agrees to serve in any such capacities exclusively for Studio and devote his time and best efforts to such employment. Applicant agrees that from the date hereof and throughout the term of this Agreement and the term of Applicant's relationship and employment with Studio, Applicant will not directly or indirectly engage in business as a dance instructor or teacher, accept employment in any capacity whatsoever in any dance school or studio, dance for hire or compensation in any manner. give e)thibitions, instructions or lectures in dancing in any form whatsoever, solicit business for Applicant or anyone else in any manner relating to dancing or dance lessons. dance services or dance instructions from anyone, or have any commercial dealings, contract or relationship in respect to dancing with any person, firm or corporation except for, un bchlllf of, or at the direction of Studio. Applicant acknowledges that applicant has read or been advised of the Arthur Murray Franchised Schools of Dancing "Studio Policy Manual" for employees. and will comply fully with same. 5. Studio will assign students to Applicant, as and when they are available for instruction, who the Studio deems ApplicantquaJificd to instrucL During the term ofemployment, Applicant agrees to render services hereunder on an hourly andlor lesson appointment basis at such time of day and on such days as Studio may direct. 6. Studio shall pay Applicant for Applicam's services as an employee and Applicant shall accept in full payment for all employee services the hourly or lesson taught rates and commission rates a~ advised by the Studio and as set forth in thewrinen pamphlet issued by StL!dio,entitled "PayroH", which has been made available to AppJicant by Studio and will rcmilin aVlIilahle ill all future times for inspection by Applicant. Notwithstandingany provision therein contained to the contrary, the total compensation paid to the Applicant shall bl" nntlcs.~ thlln thl' minimum fixed by Clny federal, stale or local minimum wage law applicable to such employee. It is expressly understood and agreed that in no event shall any compensation of any form be paid to Applicant (or Training for training activities prior to the time when Applicant is qualified and directed by Studio to work, instruct, or direct. 7. Termination of Applicant's Employment: During the period of Applicant'semployment and at all times hereafter, Studio may discharge Applicant and/orterminateStudio's relationship with Applicant wbere Applicarlt's performance Is not to the satisfaction of Studio, and Applicant agrees that such decision shall be final and binding. At the expiration of Applicllnt's initial term of employment, this Agreement shall be automatically extended and continued for bi.weekly periods unless or until terminated by two(2) weeks wrinen notice from either rarty to the other party by registered or certified mail or in person, and this Agreement shall govern the relationship between Studio and Applicant. Notification of immediate resignation shall be deemed given by Applicant to Studio should Applicant fail to report to work as scheduled on any three consecutive days. Should Applicant's relationsbip or employment with the Studio be interrupted/terminated from time to time by actions of either the Applicant or the Studio and Applicant subsequently renews his relationship or employment with the Studio this Agreement shall activate to full force and effect and shall govern the relationship between Studio and Applicant. Any reference herein to the "termination of Applicant's employment" shall include the expiration of the term of Applicant's relationship andl oremployment with Studio as well as an earlier termination of such relationship and/or employment, whether the termination is caused by Applicant or by Studio. 8. U ron the termination of Applicant's employment, Applicant shall surrender to Studio all names or lists, including duplicate lists, of names, addresses and phone numbers of students. and former students and all notes concerning existing, prospective or Cormer students, of the Studio in possession or under the control of Applicant, together with all forms and records of Studio in Applicant's possession or under Applicant's control and shall not use the same, or any of the same, for Applicant's own benefit or to the detriment or probable detriment of Studio. Prior to, upon and after termination of Applicant's employment, except in connection with the rendering of Applicant's services as provided herein, Applicant shall nol use any information enumerated in this Paragraph for any purpose, including, but nOI limited to, thesolicitatlon ofcuatomers or students of Studio or Franchis!?r, or sending announcements to such customers or students regarding Applicant's subsequent employment, if any. Violation of the covenant herein shall cause considerable, and irreparable, ditnwge to the Studio and franchisor and it is agreed that this considerable dama8e, oflln undetermined amount, will accrue in loss oftrade secrets, security, trademark damage, reputation. and prestige of the Arthur Murray methods and procedures locally, nationally and internationally to the detriment of the Studio and Franchisor. 9. Applicant acknowledges that Franchisor and Studio own proprietary rights in and to much ofthematerilll and information now or hereafter revealed to Applicant under this Agreemenl. In particular, and withoutlimitin& the type of information which is proprietary, confidential and or trade secret in nature. Applicant acknowledges that the unique and dislinctive Arthur Murray methods as to dances, steps, teaching, instuctionaltechniques, marketing techniquel and operational procedures, namel, addresses, phont numbers, preferences and abilities of students, customer lists, pricing information, and other matters, which Studio has been permitted by FranchiJor to acquire and use, comtitute proprietary information, confidential information andlor tr.de secrets lthe "!,rotc:~ted Information;. Applicant rurther acknOWled,ea that such Protected InCormation will be revealed to Aprlicant in confidence during his training and employment hereunder, solely lor the purpose of enabling Applicant to provide services hereunder and in reliance upon Applicanl '05 undertakings in this Agreement. 9A. Applicant agrees that both during the term of and after the termination of Applicant's employment, (a) Applicant shall not reveal any of the Protected Information to any other rerson. firm or entity except (x) in the ordinary course ofthe business of Studio andl or Franchisor in the case of dances onteps and instruction only or(y) to olher employees of Studio who require such information for the operation of the Studio, and (b) Applicant shall not use any of the Protected Information in connection with any buaineu or venture, other than in connection with the rendering of Applicant's services. as provided herein. HT-AM 17 -91 printed in U,S.A d v,l{n, ./Jrl'..'r~Jl(..r....' . FR"NCHISEO VANCESTUVIO 9B. Applicant agrees lhal both durinllh~ term of and after the Icrmipllion of Applicant'll employment and for a period of 111'0 (2) yem @ Iltcreafler, Applicant shall nOI directlyo. indirectly. individually orilll a membtrof.ny bUlincllorlllUlization, ulcany PrOICl;\cd Infonnalion in the city in which Sludio is localed and/or within a radius of lwcnly-Ove (25) l)'lilcl from Sllldio, whichever it ,re.ler. 9C. It is furl her agreed. as a separate covenanl hereunder, that upon lhe Icrlllin.tion arlhi. Agreement and any elllcnlionl thereof and of Applicant's relatiollJhip with Studio, and for a period of two (2) years lltcre_fler, Appllcanlshall not compete &II lei rQrth in p.r.,r'ph 9A or98 above with Ihe bUllnen of any Olher Arthur Murray FrallChiSl:d Dance Studio under operalion by Studio or affiliated with Studio in the Chy, County, or Metropolitan area in which Arthur Murray Frallchilled Studios a~ located or within a r.dius of Twenty_fi,'e (25) miles from said Studio, whichever are/isllteatn. As u$Cd herein, astudio "affiliated with Sludio:'shan include any Arthur Muuay Franchised Dance Studio which :'itudiooranyparlnerorstoekholderinStudio(5uehstockholderholdin. al leut a one-ei.hth stock intern' in Ihe ease ofaeorporal ion operatinlllheStudiolhuan intereltas an ;ndividualproprietor.parlnerorSlockholderlhereof(suehstockholderholdinllatleutaone-eilhthstoelr.hlterntintheeueoraeorporationoperatinllsUcha51udio)orua Franchisee or Sub_Franchisee under an Arthur MUrray franchise orfub-franehiseforsuchafflliatedstudio. 90. In Ihe eveDlthalany court shall find any provision in paragraphs 9A, 98, or 9C 10 be unreuonable u to time or area, the covenant shan remain enforceable and th.court ~halldet.rminewhatisr.asonablcandenforcesuchprovisioninare\lSonablefuhionUloduration,scope,area,andotherwile. 10. Applican\ ..hall never, at any lime afler the termination of Applicant'. employment, hold Applicant out or advertise for business purpose. u having been formerly connecled wilh Studio, Franchisor, any Arthur Murray Franchi.ed Dance Sludio or School or any variation thereof, hold Applicant outa. havinlllaullhl in the Arthur Murray method or as leaching in the Anhur Murray style, or in any other way capitalile on the name of Studio and/or Franchisor or Applicant" connection with nremployment in the Arthur Murray system. II. Applicant promises llnd contracts not to fraternile with students orprospectivesludentsoftheStudi"andnottoac~ptnlonies,loans,lluarantees,orthinlls of value for Applicllllt's acrount during the term hereoF and For.s period of two (2) years after the term of this contract. II A, This Agreemenl shall be deemed automalically .mended to incorporate all such Studio ruin and regulation' herein by virtue of Applicant's continued employment hereunder, with or witholll continuous employment but in case of employment From time to time lIS appropri.te, with the lime force and effect u if tbey wcre contained herein. 12_ Studio Or its desillnce m.sy photollraph, film and record Applicant, and Studio and/or Franchisor may forever lIlIe Appllcallt" nlme, photograph, film. .slid recordings in conneclion with Arthur Murray adverti.ingand publicity by Studio and/or Franchisor, or il$.ub.idiarin and amliatel, whether it bedirectlyorindirectly,and whetheril be forthe sale of d.nce lessons, dance scrvice~, producl$ or otherwise, 13. Applicant hcreby acknowledges that Franchisor owns cerl.sin trademark' and service marks whiCh arc licen.ed to Studio for use in conllectionwith its oper.tioll. Applicant fUlher acknowledges Ihatlhe trademarks, service m.srks and goodwill lISsociated therewith are the CJlclu.ivt property of Franchisor. Applicant shall not, durill,the term of Applicant'semployment, utilile any of the trademarks orsetvice mark, or any and aU namesconfusinllly similar thereto,CKcc:pt in acconlancewith Studio'linstructions. Upon Ind after termination of Applicalll's employment, Applicant allttes (I) to discontinue immediately.sll utilization of the trademarks and $Crvice marks and (bl thaI he shalf not ule any other tradcmark or service mark Ihat millht imply 10 any peuon or entity that Applicant i, .tillemployed by (lr connectro in .sny way with Studio or Franchisor. 14, Applicant acknowledges thaI fa) Franchis(>rowns coPyrillhts ill: all traininllaids, manuals,syllahuscs, books Ind otherwrittell materials; films, photogr.sphs, logos, and line drawings: audio andlor audio-visual materials; and trophic. used in the operation of Studio (the "CoPyrillhlcd Materials;, (b) Studio is authorised by Frallchisor to use Ihe Copyrightcd Materials in conjunction Wilh its opemtions and (c) such Copyrighted Materi.ls are provided to Applicant in traillinll and to enable him to render scrvicn hereunder. Applicant shall not have lhe right,eitherdurinllthe term of hi I employmenl orlhercafter, toeopy,film, tape, or reproduce Of reassemble in Iny manner,eilherin part or whole, anyof the Copyrighted Material. Or to use the Copyrighted Materials 10 create .sny work that is substanti.lIy similar to such Copyrighted M.sterials. Upon termination of Applicant's employment. Applicant shaltsurrenderlo Studio all such CoPyrillhtcd Materials, video, film, reprodudions, Or reanembled materials in pos5C$.ion orunderthecontrol of Applieanl and shall not use lhe Same. All CoPyrillhted Materials and copies or reproductions ther.or .hall remain at all times the e~clusivc property of Franchisor, 15. Tho Partie. hereto recognize Ihal irrc.parable injury will resullto Studio and/or Franchisor;n theevent ofa breaCh of this agreement by Applicant and agree thai in such event Studio and.'or Franoh;surshall be entilled, in addition to all other remedies and d.mages and without further proof of monetary or imlllcdiatedam.sae,to an immediate injunction to restrainttlel'iolalionherenfbyApplicantandallperson..sctinllfororwithhim. Applieantltlall payallcosts,reasonable.sllDrneysfw andotherellpenlcspaidorincurredbyStudio and! or Franchisor inenfnrdng lhis Agreement or .ny of the lermsthereor. Further, Applicaut agrees to pOllI alideJityor p<!rform.snce bOlld in such reasonableamoulll asStudio may at any till1e require. lb. 11 is agreed t>y the Partie. hereto thatlhe value oftraininll material and Ihe inltruction and supervisionmadeavailabletoApplicantfarexeccds the sum of Two Thouland Five Hundred (12,500.00) Dollars, and Applic.nt hcreby .sllrees to pay to Studio'such amount alii equivalent toStudio'lldualdamaaes or thesumofS2,jOO.00, whicheverisllreater, to partiaUycompensate Studio For the cost of such training materials and instruction and Applicant hili herewith dellvered toStudio a demand note of even d.tc: in the sum of52,5oo.00 to cvidence Ihe minimum of suoh indebtedness. However, if Applicant ,hall p<!rform and COlli ply fully with aU Ihe lerm. ofthillJlTCClIlenl, and the two (2) year covenant thereafter, Ihen upon such full performance and compliance Studio allrCCI to cancel and di.charle the note. On the other hand,such note shall hedue and payable upon demand following any default under or breach or non-perFormance of any of the terms alld conditions of thill Agreement by Applicant. 17. In theeventjudidal act;{]n is necessary forlhe interpretation or enforcement of the provisionsorcovenantlcontained hereill, said judicial aClionshall bemaintlincd in the cnurtsofthcC"unlyandlheSlatcthattheSludioislocatedin,the same stipulated a! theplllceorperformance,alld the parties h erebycon~ntlope"'onaljurisdietionandvenuein 'uchfnrum. Ill. All pronouns used in any gender shall include all genders, and all words in the sinllUlar number .hall include the plural and vice versa, whenever the Allreemcnt so permits. 19. The provisions of this Allreement arc severable. If any judgement orcourt orderShalldeclare any provisionorprovilionsofthilAllreement inv.slid orunenforctable, the other provisions.hallnntheaffectcdtherebyandshallremaininfullforcc and effect. 20. Thi. Agreement shall inure to the benefit of the heirs, reprcsentative s,SlIccessorsalldassignsofApplicant,theheirs,represcntatives,succcSlorsandassillnlofStudiolndlo Arlhut Murray lnternaliunal, Inc. and iu suta:ssors or assillns. 21. THIS AGREEMENT IS MADE BY ,4,ND SOLELY BETWEEN THE HEREIN NAMED OWNER OF STUDIO AND APPLICANT, AND APPLlC,4,NT UNDERSTANDS AND AGIlUS THAT APPLICANT SHALL HAVE NO RIGHTS AND SHALL NOT ASSERT ANY CLAIMS OF ANY NATURE WHATSOEVER AGAINST ARTHUR MURIlAY INTERNATIONAL, INC., HEREIN REFERRED TO AS ~FaANCHISOR", OalTS OFFICERS, DIRECTORS OR EMPLOYEES UNDER OR BY VIRTUE OF THIS AGREEMENT OR OTHERWISE, APPLICANT FURTHER AGREJ$ THAT THE PROVISIONS, RESTRICTIONS, PROMISES AND COVENANTS THEREIN MADE BY APPLICANT TO STUDIO ARE MADJ; BY SAID APPLTCAN'f FOR THI: BiNEFIT OF ARTHUR MURRAY INTERNA T10NA L, INe. AS A THIRD PARTY BENEFICIARY AS WELL,AND ARTHUR MURRAY INTERNATIONAL,INC,SHALLHA VI: THE RIGHT TO BRING ANY APPROPRIATE LEGAL ACTION DIRECTLY AGAINST SAID APPLICANT IN ORDER TO ENJOIN ANY VIOLATION OR THREATENED VIOLATION OF ANY OF THE PROVISIONS, RESTRICTIONS, PROMISES AND COVENANTS OF THE SAID APPLiCANT AS STATED HEREIN, 22. nus AGREEMENT MAYBE CANCELLED BY MAILING OR DELIVERING WRITTEI'l NOTTFlCA TTON TO CANCEL THE AGREEMENTTO THE STUDIO MANAGfR WITHtN THREE 8USINESS DAYS FROM THE DATE OF THIS AGREEMENT, IN WITNESS WHEREOF, the parties hereto have hereunder .ettheir hands and scali. STUDIO: }/ :"">r4f4;l /~~ B, 1.~:~:~~~~~~~'. "" '<_"~ FOR VALUE RECEIVED,on demand,I promise to pay Two Thousand Five Hundred Dollars o.J_:;-' ...............1"'!tosk-.i'J.L.\. ' ($2,500,00) to .), ~ . Lku., Co..!-r-ev-rf'\-(.tes d/b/a an ARTHUR MURRAyf) FRANCHISED DANCE STUDIO OF L.e'J.v...Cf1 k.<.. l PA ' ,at its principle place in the above city, without interest. In case suit shaH be brought for the collection hereof, or the same has to be collected upon demand of an attorney, to pay reasonable attorney's fees and interest thereupon for making such collection. This Note shall be negotiable pursuant to paragraph 16 of this Personnel Training Agreement, and interest shall be payable at th~ maximum lawful rate of interest permitted by applicable usury laws, now or her~after enacted, when demand shall be made for payment. ,I D'" (}d"/ I~ ,,!2iL /:X:)fIJIldiA , ,Aint.L/ZL-hd (Sea]) -,--~~--~._~.- -. EXHIBIT "B" _-._--~-,-~.,~.._,.".,-_.. PRE-ORGANIZA TlONAL AND AS~GNMENTAGREEMENT This Pre-Organizational Agreement made this 1st day of January, 2001, by and between JEFFREY S. VAN BOSKIRK, an adult individual residing at 1013 S. Humer Street, Enola, Cumberland County, Pennsylvania 17025, (hereinafter "Van Boskirk") and LYNN A. REIGLE, an adult individual residing at 211 Church Road, Shermans Dale, Pennsylvania 17090, (hereinafter "Reigle"). B A C KG R 0 UNO: WHEREAS, Van Boskirk entered into a franchise agreement (hereinafter "AMI Lemoyne Agreement") with ARTHUR MURRAY, INTERNATIONAL, INC. (hereinafter "AMI") dated January 13, 1990 to operate an AMI franchise dance studio (hereinafter "AMI Lemoyne") at 15 N. Fifth Street, Lemoyne, Pennsylvania 17043-1632; and WHEREAS, Van Boskirk entered into a franchise agreement with AMI dated February 14, 1994 (hereinafter "AMI York Agreemenf') for the purpose of operating an AMI franchise dance studio (hereafter "AMI York") in the Kingston Square Shopping Center, 2566 Eastern Boulevard, York, York County, Pennsylvania 17402-2914; and WHEREAS, Van Boskirk entered into a iease with Winston E. Spangler, the owner, to operate AMI Lemoyne at the premises located at 15 N. Fifth Street, Lemoyne, Cumberland County, Pennsylvania (hereinafter "Lemoyne Lease"); and WHEREAS, York Dance Studio, Inc. entered into a lease with Kingston Square Associates, a Pennsylvania limited partnership, on April 6, 1993 to lease the premises located at 2566 Eastern Boulevard, York, York County, Pennsylvania 17402-2914 (hereinafter "York Lease"); and WHEREAS, York Dance Studio, Inc. was the prior franchisee to Van Boskirk for AMI at the premises located at 2566 Eastern Boulevard, York, York County, Pennsylvania 17402-2914; and WHEREAS, York Dance Studio, Inc. sold and assigned all rights to Van Boskirk under the AMI York Agreement with AMI and under the York Lease; al')d WHEREAS, Kingston Square Associates, a Pennsylvania limited partnership, assigned all of its rights, duties, and interest under the York Lease to Kingston Fixed Income Fund, L.P., the current owner of the premises located at 2566 Eastern Boulevard, York, York County, Pennsylvania 17402-2914; and WHEREAS, the premises located at 2566 Eastem Boulevard, York, York County, Pennsylvania 17402-2914, owned by Kingston Fixed Income Fund, L.P. is managed by the Friedman Realty Group of Cherry Hill, New Jersey; and WHEREAS, Van Boskirk organized the Pennsylvania for profit corporation of J.S. Van Management, Inc. on December 29, 1999 with an effective date of January 1, 2000; and WHEREAS, Van Boskirk organized a Pennsylvania for profit Subchapter S corporation, J.S. Van York, Inc. by Articles of Incorporation dated January 6, 1997 and filed with the Department of State of the Commonwealth of Pennsylvania on January 14,1997 with an effective date of January 1,1997; and WHEREAS, Van Boskirk organized a Pennsylvania for profit corporation, J.S. Van Lemoyne, Inc., by Articles of Incorporation dated January 6, 1997 and filed with the Commonwealth of Pennsylvania Department of State on January 14,1997 and effective January 1,1997; and WHEREAS, Van Boskirk submitted an Application for Registration of Fictitious name dated August 20, 1990 for the registration of "J.S. Van Enterprises" in the Commonwealth of Pennsylvania, Department of State on September 4, 1990; and WHEREAS, Van Boskirk submitted an Application for Registration of Fictitious name dated August 18, 1992, for the registration of "Ball Room Dance Shoes of Central Pennsylvania" to the Commonwealth of Pennsylvania, Department of State on August 20, 1992; and WHEREAS, Reigle has been an employee of Management for approximately _ years and wishes to obtain an interest in both AMI York and AMI Lemoyne as an individual franchisee and as a member to a limited liability company; and 2 WHEREAS, both parties hereto wish to file a Certificate of Organization and execute an Operating Agreement for a limited liability company utilizing the name Van Reigle, L.L.C.; and WHEREAS, Van Boskirk, J. S. Van Management, Inc., J. S. Van York, Inc. and J. S. Van Lemoyne, Inc. will transfer all assets relating to the operation of AMI Lemoyne and AMI York to Van Reigle, L.L.C.; and WHEREAS, J. S. Van Management, Inc., J. S. Van York, Inc. and J. S. Van Lemoyne, Inc. and Van Boskirk individually will indemnify Reigle and Van Reigle, L.L.C. from any and all debts, liabilities, and obligations incurred in the past or in the future for J. S. Van Management, Inc., J. S. Van York, Inc., J. S. Van Lemoyne, Inc. or Van Boskirk, individually, unless Reigle and Van Reigle, L.L.C. expressly agree otherwise; and NOW THEREFORE, in consideration of mutual covenants and agreements hereinafter set forth, the parties hereto, intending to be legally bound, hereby agree as follows: 1. Background. The paragraphs set forth above shall be incorporated herein as set forth fully. 2. Purpose. It is the intent of the parties hereto that the assets, rights, duties and interests pertaining to the operation of the AMI franchises pursuant to the AMI York Agreement and the AMI Lemoyne Agreement be assigned to Van Reigle, L.L.C. to simplify the operation of the same. It is further the intent of the parties that Reigle purchase for sums set forth herein fifty-one percent (51%) of the member interest in Van Reigle, L.L.C. This assignment is subject to Van Boskirk's and Regie's individual obligations to AMI under the franchise agreements. 3. AMI York Agreement. Van Boskirk entered into a franchise agreement with AMI dated February 14,1994 whereby Van Boskirk began operating an AMI dance studio at Kingston Square Shopping Center, 2566 Eastern Boulevard, York, York County, Pennsylvania 17402-2914. Reigle and Van Boskirk shall enter into a new franchise agreement with AMI. A. Assignment. Reigle and Van Boskirk hereby assign to Van Reigle, L.L.C. all of their rights, title, interests and obligations under the new AMI York Agreement dated March 30, 2001, by and between Reigle, Van Boskirk and AMI, pertaining to the operation of AMI York to be operated in the Kingston Shopping Center, at 2566 Eastern Boulevard, York, York County, Pennsylvania 3 17402-2914. Van Reigle, L.L.C., hereby accepts the assignment of rights, title, interests and obligations of Reigle and Van Boskirk under the AMI York Agreement. B. Assignment Contingency. This entire Pre-Organizational Agreement is contingent upon the prior written consent of AMI, the franchisor as provided by paragraph 17 of the AMI York Agreement. Reigle and Von Boskirk will seek prior written consent of AMI, franchisor by written request concurrently with the signing of this Agreement. C. Royalty Fees. In order to effect an assignment under the AMI York Agreement, and Van Boskirk's required, pursuant to Paragraph 17(b)(1) to pay in full royalty fees and other amounts owed to franchisor [AMi] due and paid at the time of assignment. Any unpaid royalty fees due and owing AMI at the time of assignment shall be paid by Van Boskirk unless Reigle by expressed written agreement, consents to the payment of the same by Van Reigle, L.L.C. D. Time for Consent. Reigle and Van Boskirk shall, upon execution of this Pre- Organizational Agreement, forward a copy of this Agreement and the proposed Operating Agreement of Van Reigle, L.L.C. to AMI as required by Paragraph 17(f) for approval by AMI, franchisor to the AMI York Agreement. Van Eioskirk and Reigle hereby agree to strictly abide by the balance and terms contained in Paragraph 17 pertaining to the assignment of the franchise from Reigle and Van Boskirk to Van Reigle, L.L.C. Van Boskirk and Van Reigle, L.L.C. hereby certify that there will be no interruption in the operation of AMI York. 4. AMI Lemoyne Agreement. Van Boskirk entered into a franchise agreement with AMI dated January 13, 1990 whereby Van Boskirk began operating an AMI dance studio at 15 N. Fifth Street, Lemoyne, Cumberland County, Pennsylvania 17043-1632. A. Assignment. Reigle and Van Boskirk hereby assign to Van Reigle, L.L.C. all of their rights, titie, interests and obligations under the new AMI Lemoyne Agreement dated March 3D, 2001, by and between Reigle, Van Boskirk and AMI. pertaining to the operation of AMI Lemoyne to be operated at 15 N. Fifth Street, Lemoyne, Cumberland County, Pennsylvania, 17043. Van Reigle, L.L. C., hereby accepts the assignment of right, title, interests and obligations of Reigle and Van Boskirk under the AMI Agreement. 4 B. Assignment Contingency. This entire Pre-Organizational Agreement is i contingent upon the prior written consent of AMI, the franchisor as provided by paragraph 17 of the AMI York Agreement. Reigle and Boskirk will seek prior written consent of AMI. franchisor by written request concurrently with the signing of this Agreement.- C. Royalty Fees. In order to effect an assignment under the AMI York Agreement, and Van Boskirk's required, pursuant to Paragraph 17(b}(1} to pay in full royalty fees and other amounts owed to franchisor [AMI] due and paid at the time of assignment. Any unpaid royalty fees due and owing AMI at the time of assignment shall be paid by Van Boskirk unless Reigle by expressed written agreement. consents to the payment of the same by Van Reigle, L.L.C. D. Time for Consent. Reigle and Van Boskirk shall, upon execution of this Pre- Organizational Agreement, and the proposed Operating Agreement of Van Reigie. L.L.C. to AMI as required by Paragraph 17(f} for approval by AMI, franchisor to the AMI York Agreement. Van Boskirk and Reigle hereby agree to strictly abide by the balance and terms contained in Paragraph 17 pertaining to the assignment of the franchise from Reigle and Van Boskirk to Van Reigle, L.L.C. Van Boskirk and Van Reigle, L.L.C. hereby certify that there will be no interruption in the operation of AMI Lemoyne. 5. Indemnification. Van Boskirk, J. S. Van Management, Inc., J. S. Van York, Inc. and J. S. Van Lemoyne, Inc. hereby indemnify and hold harmless Reigle and Van Reigle, L.L.C. from any debts and obligations incurred prior to the execution of this Agreement as they pertain to the operation of AMI Lemoyne and AMI York. Van Boskirk, J. S. Van Management, Inc., J. S. Van York. Inc. and J. S. Van Lemoyne, Inc. further agree to incur no further debt following the execution of this Agreement pertaining to the operation of AMI Lemoyne and AMI York. Should any of the parties incur any of said debt pertaining to the operation of AMI Lemoyne or AMI York, those parties shall be responsible for those debts and shall indemnify Reigle and Van Reigle, L.L.C. from the same. Van Reigle, L.L.C., agrees to assume the following debts which would have otherwise been excluded herein: 1. Outstanding Royalty Fees to AMI as set forth Paragraphs 25(p} of the new AMI York Agreement and new AMI Lemoyne Agreement. 5 2. 3. 4. Farmers First loan - approximate balance $7,000.00. f' Line of credit at BELCO - approximate balance $9,000.00 Edge Solutions Studio Credit Cards - approximate balance $27,000.00 r-; , ., (,'1. ~" Van Boskirk, J. S. Van Management, Inc., J. S. Van York, Inc. and J. S. Van Lemoyne, Inc. hereby indemnify and hold harmless Van Reigle and Van Reigle, L.L.C. from any and all tax obligations incurred prior to the date of this Agreement as it pertains to the operation of AM I Lemoyne and AMI York and thereafter. Those shall specifically include any back payroll taxes as well as Pennsylvania taxes and any other personal tax or other tax due and owing. Should the federal government or the Commonwealth of Pennsylvania or any taxing authority institute any proceeding against Van Boskirk, J. S. Van Management, Inc., J. S. Van York, Inc., and J. S. Van Lemoyne, Inc., those parties shall immediately notify Reigle and Van Reigle, L.L.C. in writing the nature of the claim. Those obligations (all approximate balances) which Van Boskirk shall remain personally liable and indemnify Reigle and Van Reigle, L.L.C. are as follows: 1. Providian Bank Credit- $1,000.00 2. Allfirst Credit - $4,500.00 3. Any and all personal taxes 4. Sears - $2,600.00 5. Allen J. Ceperich, CPA - $3,500.00 6. Lowe's - $1,000.00 7. Home Depot - $2,000.00 6 IN WITNESS WHEREOF, the parties hereby have hereunto set their hands and seals the date and year first above written. WITNESS: /</' 7--:;./;;i(1/ / -f... "'/1" /. WITNESS: ./ VAN BOSKI / By: ,/ ~'f/i REIGLE:"', / ? A By: ~~kil~ J. S. Van Managemyt~y / By: 0~/ President J. S. Van L e)'TjJ/ ;/ By: ~J WITNESS: WITNESS: President WITNESS: President WITNESS: .L.C. By: .~~ . ember q#4/ / Member :141931 7 EXHIBIT tiC" . ., ASSIGNMENT OF MEMBERSHIP INTERESTS VAN REIGLE, L.L.C. lliIS ASSIGNMENT OF MEMBERSHIP INTEREST ("Assignment"), is made and entered into this 9\..day of September 2002, by and among LYNN A. REIGLE (hereinafter "Reigle") and JEFFREY S. VAN BOSKIRK (hereinafter "Van Boskirk"). BACKGROUND 1. Reigle and Van Boskirk have previously entered into an Operating Agreement of Van Reigle, LLC, dated January 1, 200 I, by which they formed a limited liability company, registered on December , 2000, as a limited liability company under Chapter 89, Title 15, Pennsylvania Consolidated Statutes, known as "VAN REIGLE, LLC." 2. The purpose of the limited liability company was to acquire and manage two (2) Arthur Murray franchises and their assets, formerly owned by Van Boskirk or a corporation owned solely by Van Boskirk. 3. Pursuant to the above-described Operating Agreement, Reigle has a fifty-one percent (51%) membership interest and Van Boskirk has a forty-nine percent (49%) membership interest in the limited liability company. 4. Reigle desires to acquire and Van Boskirk desires to sell his respective membership interest in Van Reigle, LLC, under the terms and conditions hereinafter provided. 5. Reigle and Van Boskirk desire to confirm their understanding in writing. NOW, THEREFORE, the parties hereto, each intending to be legally bound, agree as follows: J. Back1.1:round. The background set forth above is incorporated herein by reference. 2. Operatinl! Al!reement. The Operating Agreement of Van Reigle, LLC, dated January 1, 2001, is incorporated herein by reference, and is hereinafter called "Agreement." Van Reigle, LLC, is hereinafter called "LLC." 3. Ae:reement for Transfer of Partnership Interest. Van Boskirk does hereby assign, setover, and transfer his forty-nine percent (49%) membership interest in the LLC to Reigle, and Reigle hereby consents to and accepts said assignment and transfer. Said assignment gives Reigle one hundred percent (100%) membership interest in the LLC. 4. Assumption of Oblie:ations. In consideration for the assignment of Van Boskirk's membership interest, Reigle agrees to assume Van Boskirk's proportionate share of any liabilities incurred by the LLC, except as otherwise set forth herein. a. Belco Community Credit Union credit card and line of credit. The Belco Community Credit Union credit card!line of credit in Van Boskirk's individual name, with a balance of $6,763.52 as of June 28, 2002 and any additional balance accrued to date, will be the sole and separate responsibility of Van Boskirk, individually. Van Boskirk will indemnifY and hold harmless Reigle and LLC from said obligation. b. Edge Solutions Credit Card/line of credit. The Edge Solutions, Inc., credit card/line of credit with an approximate balance of $20,000.00 in Van Boskirk's name individually shall become the sole and separate obligation of Van Boskirk, individually. Van Boskirk will indemnify and hold harmless Reigle and LLC from said obligation. c. Arthur Murray royalty fees prior to 200 I. Van Boskirk agrees to individually assume all royalty fees accrued prior to January I, 200land one-half (1/2) of the royalty fees for 2001 due and owing to the franchisor, Arthur Murray International, Inc., which amount to $60,697.79. This amount was paid directly to franchisor, Arthur Murray International, Inc., by Reigle, and therefore the same will be reduced from the consideration due and payable under this Assignment. LLC will be responsible for any other royalty fees accrued after January I, 200lexcluding Van Boskirk's one-half (1/2) as set forth herein due under the Franchise Agreement of March 30, 2001, by and between LLC and Arthur Murray International, lnc or prior franchise agreements between Van Boskirk and the franchisor, Arthur Murray International, Inc. d. Taxes. i. Corporate Taxes. By execution of this Assignment, Van Boskirk, being all of the officers and lone shareholder of J.S. Van Management, Inc., J.S. Van York, Inc., and J.S. Van Lemoyne, Inc., hereby certifies and represents that all of the corporate taxes have been paid since those companies have filed their Articles of Incorporation and have come into existence through their dissolution effective December 31, 2000. Should any taxes of any nature be due for any of these entities, Van Boskirk, as all of the officers and loan shareholder, and the corporations set forth herein hereby indemnifies and holds harmless Reigle and LLC from any said obligation. 11. Individual Taxes. By execution of this Agreement, Van Boskirk hereby warrants and represents that all of his individual taxes to the Federal Government, the Commonwealth of Pennsylvania, and all local municipalities are paid in full or are currently being paid under an accepted and approved offer in compromise with the Internal Revenue Service. Under the approved offer in compromise, Van Boskirk agrees to make all payments in a timely fashion and to complete the accepted tenns of the offer in compromise. Should any individual taxes of any nature be due for any past tax year, Van Boskirk hereby indemnifies and holds harmless Reigle and LLC from any said obligation. 5. Consideration. In consideration for Van Boskirk's assigning, setting over, and transferring his forty- nine percent (49%) membership interest in LLC to Reigle, Reigle agrees, in consideration of the covenants, conditions, and promises set forth in this Assignment, to pay to Van Boskirk ONE HUNDRED TIllRTY THOUSAND THREE HUNDRED AND FORTY-EIGHT AND 901100 DOLLARS ($130,000.00), payable as follows: a. Reigle has paid outstanding royalty fees in the amount of $60,697.79, which amount shall be credited in full against the stated consideration set forth herein. b. Upon execution of this Agreement, Reigle shall pay to Van Boskirk $45,000.00. c. Reigle shall pay to Van Boskirk the amount oW4,651.ll, payable in twenty-four (24) equal monthly installments of$I,OOO.OO, beginning t>UOMI'" I ,2002. These payments shall be made free of interest and Reigle reserves the right to make prepayment at any time, which shall be a credit toward the last payment first. The twenty-fifth installment of $651.11 will be payable on OU"Nr I ~ 2004. 6. Non-Compete Covenant of Van Boskirk. In consideration of the purchase and sale herein contemplated, Van Boskirk hereby agrees that for a period of four (4) years after the date of execution of this Assignment, Van Boskirk shall not for any reason whatsoever, directly or indirectly, as a stockholder of any corporation; as a partner in any partnership; as a member of any limited liability company; as an owner, investor, principal, or agent; open, establish, purchase, manage, or become employed or contract independently with aily danl studio or school of dance or other similar entity within the air radius restrictions stated below; or in any other manne engage or assist any other party in any business which competes with the business conducted by Reigle or LLC within. seventy-five (75) mile air raaius of each of the franchise locations (I5 N. Fifth Street, Lemoyne, Pennsylvania 17043 and 2566 Eastern Boulevard, York, Pennsylvania). Van Boskirk also agrees that, for the SafIle period, Van Boskirk shall not, directly or indirectly, call upon, solicit, write, direct, divert, or accept business from any client or student of Reigle or LLC. Van Boskirk, for that same period, shall not call upon, solicit, write, direct, divert or attempt to engage any employee of LLC for the purpose of working elsewhere. The parties hereby recognize, acknowledge, and agree that the territorial and time limitations contained in this paragraph are reasonable and properly required for the adequate protection of the business to be conducted by Reigle and LLC. In the event of a breach or a threatened breach by Van Boskirk of any provision(s) of this paragraph, Van Boskirk agrees that Reigle or LLC shall suffer irreparable injury, and that Reigle or LLC shall be entitled to injunctions, both preliminary and final, without bond or security, enjoining and restraining such breach or threatened breach, and such remedies shall be in addition to all other remedies which may be available to Reigle or LLC either at law or in equity. Van Boskirk further agrees to be bound by these same covenants with respect specifically to opening and or operating an Arthur Murray International, Inc. franchise within the following counties: York, Lancaster, Adams, Cumberland and Dauphin for a period of eight (8) years. The parties recognize that any violation of this Covenant is one that will result in significant damages. Due to the nature of this business, solictation of a client or student could result in a loss of $15,000.00 annual income and the loss of an instructor I employee could result in an annual loss of$150,000.00 of income. The parties agree that the geographical area and time period referred to in this paragraph are divisible and severable, and that, if the restrictions are held by any Court to be unenforceable with respect to the geographic area and time interval, the restrictions remain applicable to that portion of any reduced geographical area and time interval designated by the Court. The parties recognize that, in the event of a breach by Van Boskirk of any of the provisions of this paragraph, the remedy at law alone would be inadequate and, accordingly, Reigle or LLC, in addition to damages, shall be entitled to an injunction restraining Van Boskirk from violating the covenants herein contained. This Covenant Not to Compete will be considered null and void if Reigle and LLC no longer operate the franchises described herein. 7. Partnership Assets. Upon execution hereof, all assets of the LLC shall be and remain the sole and separate property of the LLC, free and clear of any claim, demand, action or cause of action by Van Boskirk. Those .. assets include, but are not limited to, those set forth in the Asset Purchase Agreement by and between LLC and Van Boskirk, dated January I, 2001. 8. Partners' Representations. Van Boskirk makes the following representations to Reigle and LLC, which shall be effective as of the date of this Assignment: a. Authoritv. Van Boskirk has the authority, without the joinder of any person or entity, to sign this Assignment and to assign his membership interest in the LLC as provided herein. b. Litigation. Van Boskirk is not aware of any legal actions, suits, arbitrations, or other administrative or governmental proceedings pending or threatened against Van Boskirk, his property, assets, or business, that would impair or affect the right of Van Boskirk to sell his membership interest in the LLC as herein provided. c. Assignment or Pledge of Membership Interest. Van Boskirk has not assigned or pledged his membership interest to any creditor or otherwise, which would impair or affect the ability of Van Boskirk to assign his membership interest, as provided in this Assignment. 9. Contine:encv Upon Franchisor Approval. This Assignment is contingent upon the franchisor's, Arthur Murray International, Inc., approval of same. Should the franchisor fail to approve the Assignment, the same shall be null and void in total. All consideration paid herein shall be returned to Reigle immediately. Both parties hereto agree to execute any and all documents necessary to give effect to the provisions herein as well as in the Agreement. 10. Effective Date. This Assignment of Membership Interest, for all purposes, including tax purposes, shall be effeCtive immediately. II. Bindine: Effect. This Assignment shall be binding and shall inure to the benefit of Van Boskirk and Reigle, their respective heirs and/or representatives. 12. Assie:nment. This Assignment may not be assigned by Van Boskirk or Reigle without prior written consent of all parties to this Assignment. . I 13. Governinl! Law. This Assignment shaH be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania. Both parties hereby consent to any actions litigated hereunder to the jurisdiction of the Commonwealth of Pennsylvania. 14. Entire Al!reement. This Assignment contains the entire understanding by and between Van Boskirk and Reigle. 15. Modification. This Assignment shaH not be amended, altered, or changed, except in writing and signed by Van Boskirk and Reigle. 16. Partial Invalidity. If any portion of this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining provisions shall, nevertheless, continue in full force and effect without being impaired or invalidated in any way. IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have caused this Assignment to be signed and delivered as of the date and year first written above. WITNESS: : I 62329 COMMONWEALTH OF PENNSYLVANIA 55: COUNTYOF c..u.~\a."a On this, the S't~ day of ~ '" ~n-'N:'" :r 2002, before me, the undersigned officer, personally appeared LYNN A. REIGLE, known to me (or satisfactorily proven) to be the person whose name is subscribed to the within instrument, and acknowledged that she executed the same for the purposes therein contained. IN WITNESS WHEREOF, 1 hereunto set my hand and official seal. .... m,.n.~~. ~. 'Q-nn"&'> Notary Public NOTARIAL SEAL MICHELLE M. BROSS, Notary Public lemoyne Borough Cumberland Co. My Commission Expires Sept. 23, 2002 COMMONWEALTH OF PENNSYLVANIA COUNTY OF (J..I.~\o.N:i 55: On this, the S'"~ day of S-.t"' '" ~ rZ002, before me, the undersigned officer, personally appeared JEFFREY S. VAN BOSKIRK, known to me (or satisfactorily proven) to be the person whose name is subscribed to the within instrument, and acknowledged that he executed the same for the purposes therein contained. IN WITNESS WHEREOF, I hereunto set my hand and official seal. ~,~". \. ~" ~ N\ {ohiUl'h" Notary Public NOTARIAL SEAL MICHElLE M. BROSS, Notary Public lemoyne Borough Cumberland Co My Commission Expires Sept. 23, 2002 Aj(J-IO. tt 'i ~ ::t D; Crt "Q ~ ~ ~ --.() ~ J- :~:- ~. , c) ~~ (.., :~? -1'1 ..... ::.1 0- ..,.; Ch-!;: en (. " J , -~ 8 1N THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYL V ANlA REIGLE, L.L.C. No. 04-1104 Civil Term Plaintiff Civil Action - Equity vs MANDY A. STONEROAD Defendant ENTRY OF APPEARANCE TO: PROTHONOTARY Kindly enter my appearance as counsel for Defendant in the above-captioned matter. Papers may be served at the address set forth below: Respectfully submitted, SOLOMON Z. KREVSKY, ATTORNEY AT LAW LLC By: Solom vsky, Esquire Attorn y fc Plaintiff Supre e C . I.D. #72719 4409 North Front Street Harrisburg, PA 17110 (717) 221-8338 (717) 221-0800 fax e-mail: solomonlal.krevskvlaw.com CERTIFICATE OF SERVICE AND NOW, TO WIT, this t"j1t of April, 2004, I, Solomon Z. Krevsky, Esquire, hereby certify that I have this date served a copy of the foregoing by depositing a copy of same in the United States Mail, postage prepaid at York, Pennsylvania, addressed to counsel of record as follows: Mark c. Duffie, Esquire Johnson, Duffie, Stewart & Weidner 301 Market Street P. O. Box 109 Lemoyne, P A 17043-0109 Respectfully submitted, SOLOMON Z. KREVSKY, ATTORNEY AT LAW LLC r\... ~ \/'-K vsky, Esquire Atto ey r Plaintiff Supre 1. I.D. #72719 4409 North Front Street Harrisburg, PA 17110 (717) 221-8338 (717) 221-0800 fax e-mail: solomonlal.krevskvlaw.com 0 "-> 0 C'::::) f; = -" ....- --I ". ::r -", nlfI] :';';W -nrn I s~~6 --.J -~- " rJ - - -...-.., ::1':: Ci (~5 , ?':'f'fJ >- ~;. 1'0 ,~.> S! -j C> -~ -, SHERIFF'S RETURN - OUT OF COUNTY CASE NO: 2004-01104 P f?kd( COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND REIGLE L L C VS STONEROAD MANDY A R. Thomas Kline , Sheriff or Deputy Sheriff who being duly sworn according to law, says, that he made a diligent search and and inquiry for the within named DEFENDANT , to wit: STONEROAD MANDY A but was unable to locate Her in his bailiwick. He therefore deputized the sheriff of DAUPHIN County, Pennsylvania, to serve the within COMPLAINT - EQUITY On April 2nd , 2004 , this office was in receipt of the attached return from DAUPHIN Sheriff's Costs: Docketing Out of County Surcharge Dep Dauphin County 18.00 9.00 10.00 30.50 .00 67.50 04/02/2004 JOHNSON DUFFIE So a~~;~f~:.;=.<' / .' ...<c> . /..~:d' ~'.""..'? ....~,. 'r:'-- . ..~ "- ,.. "_,,<"'./ -='7 -~ ,.'- --- ~ ~ ,-- R. (Thomas Kline - Sheriff of Cumberland County .::3.....,.... STEWART WEIDNER Sworn and subscribed to before me this J;l!!:' day of ~ ;2'()'{)"1 A . D . ( Lu.- 0. ~. ~; /'rf Prothonotary' In The Court of Common Pleas of Cumberland County, Pennsylvania Reigle LLC VS. Mandy A. Stoneroad SERVE: same No. 04-1104 civil Now, March 16, 2004 , I, SHERlFF OF CUMBERLAND COUNTY, P A, do hereby deputize the Sheriff of Dauphin County to execute this Writ, this deputation being made at the request and risk of the Plaintiff. '/7/' 2;- ~~~..~~-f" Sheriff of Cumberland County, PA Affidavit of Service Now, ,20 , at 0' clock M. served the within upon at by handing to a copy of the original and made known to the contents thereof. So anSwers, Sheriff of County, PA Sworn and subscribed before me this _ day of ,20_ COSTS SERVICE MILEAGE AFFIDAVIT $ $ @iiite of t1r~ ~4~riff Mary Jane Snyder Real Estate Deputy Michael W. Rillehart Assistant Chief Deputy J. Daniel Basile Chief Deputy William T. Tully Solicitor Dauphin County Harrisburg, Pennsylvania 17101 ph: (717) 255-2660 fax: (717) 255-2889 Jack Lotwick Sheriff Commonwealth of Pennsylvania REIGLE LLC vs County of Dauphin STONEROAD MANDY A Sheriff's Return No. 2548-T - -2004 OTHER COUNTY NO. 04-1104-CIVIL AND NOW:March 26, 2004 at 1: 30PM served the within NOTICE & COMPLAINT IN EQUITY upon STONEROAD MANDY A by personally handing to DEFT 1 true attested copy (ies) of the original NOTICE & COMPLAINT IN EQUITY and making known to him/her the contents thereof at 226 LAFAYETTE ST HBG, PA 17109-0000 Sworn and subscribed to jR;#L ::_ ~'~': ':H dar:i~'" .JlifJfUVTU c;... l +) I PROTHONOTARY By Sheriff's Costs: $30.50 PD 03/25/2004 RCPT NO 191018 GM Johlison, Duffie, Stewart & Weidner By: Mark C. Duffie, Wade D. Manley J.D. No. 75906, 87244 301 Market Street P. O. Box 109 Lemoyne, Pennsylvania 17043-0 I 09 (717) 761-4540 Attorneys fur Plaintiff REIGLE, l.L.C., 15 N. 5th Street lemoyne, PA 17043 IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 04-1104Civi1Term Plaintiff CIVil ACTION - EQUITY v. MANDY A. STONEROAD, 226 Lafayette Street Harrisburg, PA 17109 Defendant PLAINTIFF'S MOTION FOR SPECIAt INJUNCTION AND NOW. this ~!f day of ft:I. 2004, comes the Plaintiff, Reigle. L.L.C., by and through its undersigned attorneys, Johnson, Duffie, Stewart & Weidner, moving this Honorable Court for special injunction pursuant to Pa.R.C.P. 1531, and in support thereof avers the following: 1. Plaintiff's Complaint filed in this action is attached hereto as Exhibit "A" and is incorporated herein by reference. 2. Plaintiff will suffer immediate and irreparable halrm for the loss of income and business opportunities if Defendant, Mandy A. Stoneroad, is not enjoined from continuing to breach the Covenant Not to Compete contained in her Employment Agreement with Plaintiff. 3. Plaintiff will suffer immediate and irreparable harm for the loss of income and business opportunities if Defendant, Mandy A. Stoneroad, is not enjoinlsd from revealing and utilizing Protected Information in violation of her Employment Agreement with Plaintiff. . 4. Plaintiff will suffer immediate and irreparable harm for the loss of income and business opportunities if Defendant, Mandy A. Stoneroad, is permitted to fraternize and/or teach current students or prospective students of studio in violation of her Employment Agreement with Plaintiff. 5. Plaintiff will suffer immediate and irreparable harm for the loss of income and business opportunities if Defendant, Mandy A. Stoneroad, is not enjoined from interfering with the contractual relationship between Plaintiff and its clients in violation of her Employment Agreement with Plaintiff. 6. The grant of a special injunction will maintain the status quo by allowing Plaintiff to continue to enjoy its rights under its relationships with its clients as it did prior to Defendant's, Mandy A. Stoneroad, wrongful conduct. 7. Plaintiff's right to relief is clear in that the counts of breach of contract and tortious interference with contractual relations that have been alleged against Defendant, Mandy A. Stoneroad, represent manifest wrongs. 8. The harm which may result to Defendant, Mandy A Stoneroad, from the entry of a special injunction will be substantially less than the harm which is being done to Plaintiff if such relief is not granted. 9. Plaintiff's right to a special injunction is clear. 10. By reason of the foregoing, Plaintiff will suffer iimmediate and irreparable harm and is therefore, without adequate remedy at law. 11. In Paragraph 15 of the Employment Agreement, as attached hereto and incorporated herein, 15. The parties hereto recognize that irreparable injury will result to [Plaintiff] and/or Franchisor in the event of a breach of this agreement by [Defendant] and agree that in such event [Plaintiff] and/or Franchisor shall be entitled, in addition to all other remedies and damages and without further proof of monetary or immediate damage, to an immediate injunction to restrain the violation hereof by [Defendant] and all persons acting for or with him. [Defendant] shall pay all costs, reasonable attorneys fees and other expenses paid or incurred by [Plaintiff] and/or Franchisor in enforcing this Agreement or any of the terms thereof. Furtlner, [Defendant] agrees to post a fidelity or performance bond in such reasonable amount as [Plaintiff] may at any time require. WHEREFORE, Plaintiff respectfully requests that this Honorable Court issue an injunction preliminarily until a final hearing and permanently thereafter: A. Enjoining and restraining Defendant, Mandy A. Stoneroad, from breaching the Employment Agreement with Plaintiff by continuing to breach the Covenant Not to Compete contained in her Employment Agreement with Plaintiff; B. Enjoining and restraining Defendant, Mandy A. Stone road , from utilizing Protected Information in violation of her Employment Agreement with Plaintiff; C. Enjoining and restraining Defendant, Mandy A. Stoneroad, from teaching and/or fraternizing with students or prospective students of Plaintiff in violation of her Employment Agreement with Plaintiff; D. Enjoining and restraining Defendant, Mandy A. Stoneroad, from interfering with contractual relationships between Plaintiff and its clients in violation of her Employment Agreement with Plaintiff; E. Scheduling this for a hearing on the merits; and F. Granting such other relief as this Honorable Court just and proper. Respectfully submitted, Date: 5/:1-5/0'-( ark C. Duffie Attorney I.D. No. 5906 Wade D. Manley Attorney I.D. No. 87244 Attorneys for Plaintiff :224888 12256.4 Johnson, Duffie, Stewart & Weidner By: Mark C. Duffie LD. No. 75906 301 Market Street P. O. Box 109 Lemoyne, Pennsylvania 17043-0 I 09 (717) 761-4540 Attorneys for Plaintiffs ----~ /~~~'- :--:-==-~, _ ',- \ r ~.!. '\'Ll"~)\\// '(:d L~ L( Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. QI.{ ~ /lDt{ (2L"uJ'-rE CIVil ACTION - EQUITY REIGLE, L.l.C., 15 N. 5th Street Lemoyne, PA 17043 v. MANDY A. STONEROAD, 226 Lafayette Street Harrisburg, PA 17109 Defendant NOTICE TO DEFEND To the Defendant: 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 fiiing 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, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW. THIS OFFICE CAN PROVIDE YOU WITH INFORMATION ABOUT HIRING A LAWYER. IF YOU CANNOT AFFORD TO HIRE A LAWYER, THIS OFFICE MAY BE ABLE~ ~vriaE YOU WITH INFORMATION ABOUT AGENCIES THAT MAY OFFER LEGAL SERVICES T~C.1GIBtf P~SONS AT A REDUCED FEE OR NO FEE. ".".. ~; c,,?J ~ ; rTl CJ Cumberland County Bar Association 2 Liberty Avenue Carlisle, Pennsylvania 17013 Telephone: (717) 249-3166 r.~: ;'; (.]'1 "',:,:. 'J C) ~'~: ~'- ::~: l-) rfl .,." ~--; (,) -.J Johnson, Duffie, Stewart & Weidner By: Mark C. Duffie I.D. No. 75906 30 I Market Street P. O. Box 109 Lemoyne, Pennsylvania 17043-0 I 09 (717) 761-4540 Attorneys for Plaintiffs REIGLE, L.L.C., 15 N. 5th Street Lemoyne, PA 17043 IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. Plaintiff CIVIL ACTION - EQUITY v. MANDY A. STONEROAD, 226 Lafayette Street Harrisburg, PA 17109 Defendant AVISO USTED HA SIDO DEMANDADO/A EN CORTE. Si usted desea defenderse de las demand as que se presentan mas adelante en las siguientes paginas, debe tomar acc:i6n dentro de los pr6ximos veinte (20) dias despues de la notificaci6n de esta Demanda y Aviso radicando personal mente 0 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 Ie advierte de que si usted falla de tomar acci6n como se describe anteriormente, el caso puede proceder sin usted y un falllo por cualquier suma de dinero reclamada en la demanda 0 cualquier otra reclamaci6n 0 remedio solicitado por el demandante puede ser dictado en contra suya par la Corte sin mas aviso adicional. Usted puede perder dinero 0 propiedad u otros derechos importantes para usted. USTED DEBE LLEVAR ESTE DOCUMENTO A SU ABOGADO INMEDIATAMENTE. SI USTED NO TIENE UN ABOGADO, LLAME 0 VAYA A LA SIGUIENTE OFICINA. ESTA OFICINA PUEDE PROVEERLE INFORMACION A CERCA DE COMO CONSEGUIR UN ABOGADO. SI USTED NO PUEDE PAGAR POR LOS SERVICIOS DE UN ABOGADO, ES POSIBLE QUE ESTA OFICINA LE PUEDA PROVEER INFORMACION SOBRE AGENCIAS QUE OFREZCAN SERVICIOS LEGALES SIN CARGO 0 BAJO COSTO A PERSONAS QUE CUALlFICAN. Cumberland County Bar Association 2 Liberty Avenue Carlisle, Pennsylvania 17013 Telephone: (717) 249-31136 Johnson, Duffie, Stewart & Weidner By: Mark C. Duffie I.D. No. 75906 301 Market Street P. O. Box 109 Lemoyne, Pennsylvania 17043-0109 (717) 761-4540 Attorneys for Plaintiffs REIGLE, L.L.C., 15 N. 5th Street Lemoyne, PA 17043 IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. Plaintiff CIVIL ACTION - EQUITY v. MANDY A. STONEROAD, 226 Lafayette Street Harrisburg, PA 17109 Defendant COMPLAINT AND NOW, this 6"\-. day of March, 2004, comes Plaintiff, REIGLE, L.L.C., by and through its undersigned attorneys, Johnson, Duffie, Stewart & Weidner, and files this complaint and in support thereof avers as follows: PARTIES 1. Plaintiff, Reigle, L.L.C., is a Limited Liability Company organized under the laws of the Commonwealth of Pennsylvania with its principal place of business located at 15 N. 5th Street, Lemoyne, Cumberland County, Pennsylvania 17043. 2. Defendant, Mandy A. Stoneroad, is an adult individual who resides at 226 Lafayette Street, Harrisburg, Dauphin County, Pennsylvania 17109. VENUE 3. Venue is proper in Cumberland County, as the Personal Training Agreement ("Employment Agreement") through which Plaintiff's rights and remedies arise was executed here in Cumberland County, and further, in executing the Employment Agreement, Plaintiff and Defendant agreed in Paragraph 17 thereof that the jurisdiction is proper in the County and State that the Studio is iocated in and that the parties therein consented to personal jurisdiction and venue in such forum. A true and correct copy of the Employment Agreement is attached hereto and incorporated herein as Exhibited "A". FACTS 4. On July 14,1999, the Defendant entered into the Employment Agreement attached as Exhibit "A" with J.S. Van Boskirk, trading and doing business as J.S. Van Enterprises, Plaintiff's predecessor in interest. Jeffrey S. Van Boskirk was formerly an Arthur Murray International, Inc. ("AMI") franchisee who operated two (2) AMI Studios in Lemoyne and York, Pennsylvania. 5. By the Assignment Agreement dated January 1 :2001, Jeffrey S. Van Boskirk, trading and doing business as J.S. Van Enterprises, assigned any and all AMI franchise assets, rights, duties and interests to Van Reigle, L.L.C., a Limited Liability Company formed under the Laws of Commonwealth of Pennsylvania comprised of two (2) members, Lynn A. Reigle and Jeffrey S. Van Boskirk. A true and correct copy of Assignment Agreement is attached hereto and incorporatE~d as Exhibit "B". 6. By an Assignment Agreement dated September 5, 2002, Jeffrey S. Van Boskirk assigned all of his membership interest in Van Reigle, L.L.C. to Lynn A. Reigle, the sole member of Van Reigle, L.L.C., a true and correct copy of said Assignment of Membership Interest is attached hereto and incorporated in as Exhibit "C". 7. As sole member of Van Reigle, L.L.C., Lynn A. Reigle, formed two (2) limited liability companies pursuant to the laws of the Commonwealth of Pennsylvania and transferred all AMI franchise assets, rights, duties and interests to Reigle, L.L.C. and Reigie York, L.L.C. to operate the Lemoyne and York Studios respectively. 8. The Employment Agreement signed by Lynn A. Reigle, as manager for Jeffrey S. Van Boskirk tld/b/a J.S. Van Enterprises, a predecessor in interest of Reigle, L.L.C., contains, in Paragraph 20: The Agreement shall inure to the benefit of the heirs, representatives, successors and assigns of applicant, the heirs, representatives, successors and assigns of [Jeffrey S. Van Boskirk t/d/b/a J.S. Van Enterprises] and to Arthur Murray International, Inc. and its successors or assigns. 9. Plaintiff, Reigle, L.L.C., is an assignee and/or successor interest of J.S. Van Boskirk tld/b/a J.S. Van Enterprises to the rights, duties and obligations set forth in the Employment Agreement. 10. Under Paragraph 9B of the Employment Agreement, Defendant agreed to be bound by, inter alia, a covenant not to compete against Plaintiff. The covenant in Paragraph 9B of the Employment Agreement is set forth in its entirety as follows: [Defendant] agrees that both during the term of and after the termination of [Defendant's] employment and for a period of two (2) years thereafter, [Defendant] shall not directly or indirectly, individually or as a member of any business or organization, use any Protected Information in the city in which Studio is located and/or within a radius of twenty-five (25) miles from Studio, whichever is greater. 11. The Employment Agreement in Paragraph 9 defines "Protected Information" as follows: "methods as to dances, steps, teaching, instructional techniques, marketing techniques and operational procedures, names, addresses, phone numbers, preferences and abilities of students, customer lists, pricing information, and other matters, which [Plaintiff] has been permitted by franchisor to acquire and use, constitute proprietary information, confidential information and/or trade secrets." 12. Paragraph 9A of the Employment Agreement sets forth as follows: "[Defendant] agrees that both during the term of and after the termination [Defendant's] employment, (a) [Defendant] shall not reveal any of the Protected Information to any other person, firm or entity except in the ordinary course of the business of [Plaintiff] and/or franchisor in the case of dances or steps and instruction only or to other employees of [Plaintiff] who require such information for the operation of the Studio, and (b) [Defendant] shall not use any of the Protected Information in connection with any business or venture other than in connection with the rendering of [Defendant's] services as provided herein." 13. Paragraph 11 of the Employment Agreement provides as follows: "[Defendant] promises and contracts not to fraternize with students or prospective students of [Plaintiff] and not to accept monies, loans, guarantees, or things of value for [Defendant's] account during the term hereof and for a period of two (2) years after the term of this contract. 14. Defendant's employment with Plaintiff was terminated on or about November 8,2002. 15. Defendant has, since her termination with Piaintiff, fraternized with students and prospective students of Plaintiff within their two (2) year window set forth in Paragraph 11 of the Employment Agreement. 16. Some time during the late summer of 2003, Plaintiff discovered that Defendant was teaching current students of Plaintiff utilizing Protected Information a defined in Paragraph 9 of the Employment Agreement in violation of the covenant not to compete provided in Paragraphs 9A and 9B of the Employment Agreement. 17. Defendant has taught and is believed to continuoS teaching group dance ciasses involving students of Plaintiff at Pa Dance Sport located at the corner of East Main Street in Hershey Park Drive in Hummelstown, Dauphin County, Pennsylvania within twenty-five (25) miles of Plaintiff's studio in Lemoyne, Pennsylvania and within two (2) years of Defendant's termination of employment with Plaintiff. 18. The Defendant was and is believed to be currently teaching at Camelot Dance Studio located in Steelton, Dauphin County, Pennsylvania within twenty-five (25) miles of Plaintiff's studio in Lemoyne, Pennsylvania and within two (2) years of Defendant's termination of employment with Plaintiff. COUNT I - BREACH OF COIIITRACT NON-COMPETE EMPLOYMENT AGREEMENT 19. The foregoing numbered Paragraphs are incorporated herein by reference. 20. Defendant's actions constitute intentional violation of the covenants not to compete contained in the Employment which are ongoing and causing immediate and irreparable harm to Plaintiff. 21. As a direct and proximate result of Defendant's violation of the non-compete provisions of the Employment Agreement as set forth herein, which are ongoing, Plaintiff is suffering immediate and irreparable harm. 22. Defendant, by correspondence dated November 13, 2003, requested that Defendant cease from any further violation of the non-compete provisions of the Employment Agreement, but such violations continue. 23. It is believed, and therefore averred, that since her separation from employment with Plaintiff, Defendant has solicited and continues to solicit students of Plaintiff within the geographic area and has taught and continues to teach students of Plaintiff utilizing "Protected Information" as defined in the Employment Agreement. 24. Paragraph 15 of the Employment Agreement sets forth as follows: "The parties hereto recognize that a irreparabie injury will result to [Plaintiff] and/or franchisor in the event of a breach of this Agreement by [Defendant] and agree that in such event [Plaintiff] and/or franchisor shall be entitled, in addition to all other remedies and damages and without further proof of monetary or immediate damage, to an immediate injunction to restrain the violation hereof by [Defendant] and all persons acting for or with him. [Defendant] shall pay all costs and reasonable attorney's fees and other expenses paid or incurred by [Plaintiff] and/or franchisor and enforcing this Agreement or any of the terms thereof. Further, [Defendant] agrees to post a fidelity or performance bond in such reasonable amount as [Plaintiff] may at any time require. 25. Paragraph 15 of the Employment Agreement expressly entitles Plaintiff to immediate equitable relief, enjoining Defendant from any further violation of the Employment Agreement and any of the non-compete terms contained therein. 26. Paragraph 16 of the Employment Agreement sets forth as follows: "It is agreed by the Parties hereto that the value of training material and the instruction and supervision made available to [Defendant] far exceeds the sum of Two Thousand Five Hundred ($2,500.00) Dollars, and [Defendant] hereby agrees to pay to [Plaintiff] such amount as is equivalent to [Plaintiff's] actual damages or the sum of $2,500.00, whichever is greater, to partially compensate [Plaintiff] for the cost of such training materials and instruction and [Defendant] has herewith delivered to [Plaintiff] a demand note of even date in the sum of $2,500.00 to evidence the minimum of such indebtedness. However, if [Defendant] shall perform and comply fully with all the terms of this ~lgreement, and the two (2) year covenant thereafter, then upon such full performance and compliance [Plaintiff] agrees to cancel and discharge the note. On the other hand, such note shall be due and payable upon demand following any default under or breach or non-performance of any of the terms and conditions of this Agreement by [Defendant]." 27. The Note signed by Defendant and referenced in Paragraph 16 is attached to and part of the Employment Agreement and reads as follows: "FOR VALUE RECEIVED, on demand, I promise to pay Two Thousand Five Hundred Dollars ($2,500.00) to J. S. Van Boskirk d/b/a J. S. Van Enterprises an ARTHUR MURRAY FRANCHISED DANCE STUDIO OF Lemoyne, PA, at its principle place in the above city, without interest. In case suit shall be brought for the collection hereof, or the same has to be collected upon demand of an attorney, to pay reasonable attorney's fees and interest thereupon for making such collection. This Note shall be negotiable pursuant to paragraph 16 of this Personnel Training Agreement, and interest shall be payable at the maximum lawful rate of interest permitted by applicable usury laws, now or hereafter enacted, when demand shall be made for payment." The Note attached to the Employment Agreement was executed by the Defendant on July 14, 1999. 28. By this Complaint, Plaintiff is making demand of Defendant for payment under the Note as a result of Defendant's breach of the Agreement in such amount equivalent to Plaintiff's actual damages or the sum of Two Thousand Five Hundred ($2,500.00) Dollars, which ever is greater, as well as reasonable attorney's fees and interest as set forth in the Note. 29. Plaintiff will continue to suffer immediate and irreparable harm if the actions of Defendant are not enjoined, including, but not limited to the loss of clients, profits, business reputation, market share and confidential information. 30. Accordingly, Plaintiff has no adequate remedy at law. WHEREFORE, Plaintiff demands judgment against Defendant, including an Order: A. Preliminary and thereafter permanently enjoining Defendant from further breach of the Employment Agreement with Plaintiff; B. Preliminarily and thereafter permanently enjoining Defendant from soliciting, teaching and/or fraternizing with any students or prospective students of Plaintiff; C. Awarding Plaintiff monetary damages for its loss in an amount not in excess of a minimum amount for compulsorary arbitration; D. Awarding Plaintiff costs and reasonable attorney's fees, interest, and other expenses incurred by Plaintiff and enforcing the Agreement and the non-compete terms thereof; and E. Any other relief this Court deems just. COUNT II - TORTIOUS INTERFER.ENCE WITH CONTRACTUAL RELATIONS 28. The foregoing numbered Paragraphs are incorporated herein by reference. 29. By soliciting and teaching Plaintiff's students, Defendant has tortiously interfered, and continues to tortiously interfere with Plaintiff's contractual relations. with said students. 30. Defendant's actions have deprived Plaintiff of its [lIghts under the Employment Agreement to Plaintiff's detriment, financially and otherwise. 31. As the direct and proximate result of the tortious interference of Defendant with Plaintiff's contractual relations with said students. Defendant has been unfairly and unjustly enriched to the extent of all revenues heretofore and hereafter derived from or in connect with said tortious interference with Plaintiff's contractual reiations. WHEREFORE, Plaintiff demands judgment against Defendant, including an Order: A. Preliminarily and thereafter permanently enjoining Defendant's continued tortious interference with Plaintiff's contractual relations with said students; B. Awarding Plaintiff compensatory damages; C. Awarding Plaintiff punitive damages; D. Awarding Plaintiff attorney's fees and costs; and E. Any other relief this Court deems just. Respectfully submitted, Date: :z I :Ll'llil'( & WEIDNER rk C. Duffie Attorney I.D. NO.7 301 Market Street P.O. Box 109 Lemoyne, PA 17043-0109 Telephone (717) 761-4540 Attorneys for Piaintiff jlb:223682 VERIFICA TION I, Reigle, L.L.C., verify that the statements made in this Complaint are true and correct to the best of my knowledge, information and belief. I understand that false statements made herein are made subject to the penalties of 18 Pa. C.S.A 94904, relating to unsworn falsification to authorities. REIGLE, L.L.C/' / Date: jJeJ ~/ CJ 1 / By: V EXHIBIT "A 11 . V<r\, 1.~::~f;~7" Personnel Training Agreement I t.f -rn", of 07).J .) . S I \j'tVt E'",+e: rft"t tS ~ . doing busine~s as the Arthur Murrayo!l Franchised Dance Studio C..lv\1.Be.vlft--.A. C,~ -t:::. I . 19~. by and betwcen . hereinafter referred to as "Studio" or and I hereinafter referred to as "Applicant". WHEREAS ludia as an independent business person or entity, conducts an Arth.ur Murray Franchised Dance Studio under a franchise or sub-francbisc from Arthur Murray International. IDe.. hereinafter referred to as "Franchisor", which Studio is associated with other Arthur Murray Franchised Dance Studios in various other places; and WH EREAS. Franchisor has expended and continues to expend large sums of money to develop B.nd impart to its franchisees metlleds of Icaching dancing and procuring patronage and prestige for the Arthur Murray methods and studios and has developed and established methods clf instruction known as the Arthur Murray Methods of instruction in Dancing. which are not utili7.ed by competitors, and as a consequence has attained a nationwide reputation for conducting and supervising dance studios of the highest character; and WHEREAS. those who are not familiar with the distinctive and unique Arthur Murray Methods of Instruction in Dancing, operational procedures, and dance steps, hereinafter referred to as "Arthur Murray Methods", need extensive training in the Arthur Murray Methods before they can enter the employ of the Studio as a dance instructor or in other capacities: and WH EREAS, those who are familiar with the unique and distinctive Arthur Murray Methods need continuing training in the Arthur Murray Methods and instruction in the latest dance steps so that they can continue to be employed by the Studio; and WHEREAS, training in the Arthur Murray Methods will necessitate the Studio to expend signiflcant amounts of time, money, and energy; and WH EREAS, Sludio is willing ta train and instruct Applicant and pravidecantinuingtraining and instruction or refresher and further training, as appropriate, to the Applicant as stated above provided Applicant honors all provisions, canditions, and restrictions of this agreement and fully complies with same as hereinafterprovided: and WHEREAS. Applicant is under no legal impediment to enter into this Agreement and is not presently employed by Franchisor or any other Arthur Murray Franchised Dance Studio NOW, THEREFORE, Studio and Applicant agree as follows: 1. That all of the foregoing recitals and representations are true and are made a part of this Agreement. 2. Applicant's employment by Studio shall begin a. As to an Applicant for Employment and continued or further training, as of the date of this agreement. b. As to an Applic8nt for Trainina. as soon as the Applicant finishes his initial training, which he agrl:es to undertake and complete within three (3) months from the date hereoL and is deemed qualified to work by Studio. ). Studio agrees to provide Applicant training and instruction in the Arthur Murray Methodsso Applicant will be qualified to be employed by the Studio 85 adance instructor, speci:llist. interviewer, counselor, supervisor. manager or in such other capacity or capacities as Studio desires, Applicant agrees to accept and undergo such training and instruction and devote Applicant's hest efforts thereto. Prior to the time that Applicant for Tnininc is qualified to work, tn.ining may be terminated either orally or in writing atany time without prior notice 111 Studio's option, Regardless of Applicant's previous training. Studio win provide Applicant with training and continuing training by furnishing supervision, written materials. and ndditi{lnlll or refresher counes of instruction, as the Studio may deem necessary, in accordaO(:e with the Arthur Murray Methods. 4. When qualified to work by the Studio, Applicant's work shall be in a capacity as a dance instructor. specialist, interviewer, counselor, supervisor, manager or otherwise, as Studio may from time to time determine, Applicant for Employment agrees to remain in the studio's employ and to work for Studio fora period of one year from the date Applicant's employment commences: Applicant for Traininl agrees to remain in Studio's employ for a period of nine months from the date on which it is determined by the Studio that Applicant has satisfachlrily completed training and is qualilied to work. Applicant agrees to serve in any such capacitil~s exclusively for Studio and devote his time and best efforts to such employment. Applicant agrees that from the date hereof and throughout the term of this Agreement and the term of Applicant's relationship and employment with Studio. Applicant will not directly or indirectly engage in business as a dance instructor or teacher, accept employment in any capacity whatsoever in any dance school or studio, dance for hire or compensation in any manner, give exhibitions, instructions or lectures in dancing in any form whatsoever, sloUcit business for Applicant or anyone else in any manner relating to dancing or dance lessons, dance services or dance instructions from anyone, or have any commercial dealings, contract or relationship in respect to dancing with any person, fum or corporation excepl for. on behalf of. or at the direction of Studio, Applicant acknowledges that applicant h:u read or been advised of the Arthur Murray Franchised Schools of Dancing "Studio Policy Manual" for employees. and will comply fully with same. 5. Studio will assign studenls to Applicant, as and when they are available for instruction, who the Studio deems Applicant qualifled to instruct. During the term of employment, Applicant agrees to render services hereunder on an hourly and/or lesson appointment basis at such time of day and on such days as Studio may,direct. 6. Studio shall pay Applicant for Applicant's services as an employee and Applicant shall accept in full payment for all employee services the hourly or lesson taught rates and cnmmission rates ;\s advised by the Studio and as set forth in the written pamphlet issued byStudio,entitled "Payroll", which has been made available to Applicant by StiJdioand will remain ;mlilahle 1l1l\1l future times for inspection by Applicant. Notwithstandingany provision therein contained to the contrary, lhetotal compensation paid tothe Applicant shall ne nllt1ess tll:1O till' minimum filled hy lIny federal. state or local minimum wage law applicable to such employee. It is expressly undentood and agreed that in no event shall any compensation of any form be paid to Applicant for Training for training activities prior to the time when Applicant is qualified and directed by Studio to work, instruct, or direct. 7. Termination of Applicant's Employment: During the period of Applicant'semployment and at all times hereafter, Studio may discharge Applicant andl or terminate Studio's relationship with Applicant where Applicant's performance is not to the satisfaction of Studio, and Applicant allrees that such decision shall be fmal and binding, At the expiration of Applicant's initialtcrm of employment. this Agreement shall be automatically extended and continued for bi-weekly periods unless or until terminated by two(2) weeks written notice from either party to the other party by registered or certilied mail or in person, and this Agreement shall govern the relationship between Studio and Applicant. Notification of immediate resignation shall be deemed given by Applicant to Studio should Applicant fail to report to .....ork as scheduled on any three consecutive days. Should Applicant's relationship or employment with the Studio be interrupted/terminated from time to time by actions of eithl:r the Applicant or the Studio and Applicant subsequenlly renews his relationship or employment with the Studio this Agreement shall activate to full force and effect and shall govern the relationship between Studio and Applicant. Any reference herein to the "termination of Applicant's employment" shall include the expiration of the term of Applicant's relationship and I or employment with Studio as well as an earlier termination of such relationship and/or employment, whether the termination is caused by Applicant or by Studio, 8. Upon the termination of Applicant's employment, Applicant shall surrender to Studio all names or lists, including duplicate lists, of names, addresses and pnone numbers of students. and former students and all notes concerning eltisting, prospective or former students. of the Studio in possession or under the control of Applicant, together with all forms and records llrStudio in Applicant's possession or under Applicant's control and shall not use the same, or any of the same, for Applicant's own benefit or to the detriment or probable detriment of Studio. Prior to. upon and after termination of Applicant's employment, except in connection with the rendering of Applicant's services as provided herein, Applicant shall not use ,IOY information enumerated in this Paragraph for any purpose, including, but not limited to, thellOlicitationofcustomersorstudents of Studio or Franchisor, or sending announcements \0 such customers or students regarding Applicant's subsequent employment, if any. Violation of the covenant herein shall cause considerable, and irreparable, <.I.lInage tn lht.' Studio :Iod Franchisor and it is agreed that this considerable damage, of an undetermined amount, will accrue in loss of trade secrets, security, trademark damage, reputation. and prestige of the Arthur Murray methods and procedures locally, nationally and internationally to the detriment of the Studio and Franchisor. 9. Applicant acknowledges that Franchisor and Studio own proprietary rights in and to much oflhe material and information now or hereafter revealed to Applicant under this Agreement. In particular, and without limiting the type of information which is proprietary, confidential and or trade secret in nature, Applicant acknowledges thai the unique and distinctive Arthur Murray methods as to dances, stcps, teaching, instuctional techniques, marketing techn.iques and operational procedures, names, addresses, phone numbers, preferences and abilities of students, customer lists, pricing information, and other matten, which Studio hu been permitted by Franchisor to acquire and use, constitute proprietary information. confidcntial information andlor trade secrets (the "Protected Information,. Applicant further acknowledges that such Protected Information will be revealed to Applicanlin confidence during his training and employment hereunder, solely lor lnc purpose of enahling Applicant to provide services hereunder and in reliance upon Applicant's undert:lkings in this Agreement. 9A. Applicant agrees that both during the term of and after the termination of Applicant's employment, (a) Applicant shall not reveal any of the Protected Information to any other person, firm or entity except (x) in the ordinary course of the business of Studio andl or Franchisor in the case of dances outeps and instruction only or(y) to otner employees of Studio who require such information for the operation of the Studio, and (b) Applicant shall not use any oCthe Protected information in connection with any business or venture, olher than in conneclion with the rendering of Applicant's services as provided herein. Printed in U.S,A HT_AM \7 - G1 A;"_~;V_' fRANCHISED DANCUTUDIO 99. Applicant IsretS Ihal both durinlllhe term of and after tht termination of Applicant" employment and for I period of two (2) ye&n @l thcreaftcr,ApplicanlshallnOldirt:etlyorindirectly,indi\lidulllyoruamem.beroflnybuaiI'ICIsorlaniution,L1'CllnyprOICl:Icdlnformationinlhe city in which Studio is located and/or within I radius of lwenty-flve (2S) l1Ii1es {rom Studio, whichever is ,realcr. 9C. It is further agreea.... .separate covenint hereunder, that upon the tennillllinn orlhi_ Alrecllltnt lod any tlltmion. thereof and of A.pplicant) rtlationshipwith Studio. alldlor II period 01 twO (2) YClrllhcreafttr. Applicant ahan nol earnpClt U HI forth in paraaraph 9A or 98 Ibovewith the bUII_ of any ather Arthur Murray Franchised Dance Studio under operation hy Studio or affilialed with Studio in lhe City, County, or Melropolitan area in which Arthur Murray Franchised Studiol, are localed or within a radius of Twenl)'.fi~e (25) mile~ from Slid St...dio, whiche~erare/islreater. Alused herein, Iltudio~affiliated withSludio;'shall include any Arthur Murra~ Franchised DanceStudiowhi1:h SI...dio or any p.rlner orstockhold.erinSuKlio(SuchllOckholderho Idinlat lUll I oneot:ilhlhItotkinterUlinthecaaeofacorporllionoper.tinl:theSllIdio)hlllnintere:sta,an individual proprielo,. plrtne, Dr lIockholder thereof (s...ch Itotlr. holder holding at leut a oneot:ighth stoclr. interest in thccue of Icorporat ionopl:Tltingsuchalludio)OTUa Franchise< orSub_Ftanchise<...nderan Arth...r M...rrayfranehiseorlub. frlnchilc for such affiliated Itudio. 90. In the event thaI any eourtshlll find any provision in plragTaphs 9A, 9B, or9C to be unreasonable u to time or afila, the covenant ,h.n ",mlin enforceable and thc eourl ~hall detcnnine what i5 reuonable and enforce such provision in a reasonlble fuhion u to duration, ICOpe, afila, .nd otherwiae. 10. Applicanl ~hllll neV<'r. al any lime anerthc terminal ion or Applicant'semployment. hold. Applicanlout or advertiscfor bUliness purposes a! having been formerlyconncctcd wilh Studio, Franchisor. any Anhur M...rray Frllnchised Danee Studio or School or any variation thereof. hotd Applie.nt out al havinglaught in tM Arthur Murray method or as leaching in the Arthur MurrlY style. or in Iny other way capllalile on the name or Studio and/or Franchisor or Appliclnt's connection with or employment in the Arthur Murray system II. Applic.nt promises.ndcontrlCts not to fr.ternizewith students or prospective ItudenlJ of the Studio and not to accept monies,loanl,lu arantees.orthingsofv.lucfor Applicant's llct'ounl during the tcrm hereof and for a period of two (2) yc.Tlafter the tenn of thil contract. IIA. This Agreement shall be deemed automatically amended to incorporate all slleh Studio rules and relulllionl herein by virtue or AI,plicant'$ continued employment he~under. with or witho...t continuous employment but in case of employment from time to time II approprilte, with the same force and effllCtll if they _re contained herein. 12. Studio or ill deliRnee may photolraph, Illm and record Applicant, .nd Studio IIKI/or Franchisor may forever\IIC Applicant's name, photoaraph, Illms and rctlOrdinp in connection wilh Arthur Murrayadvenilinsand publicitybyStudioand/ orFranchilor,oritllubaidiaricslndaffiliates,llIhetherltbedircctlyorindircctly,andwhctheritbeforthe laic of dance lesson',d.nce serviccs, prnducu Or othel'llliae. 13. Appllc.nt hereby acknowledgel that Fr.nchilor ownsc:enlin tradematklandservice marks which Ireliccnsed to Studioforuseinconl\Cl:tionwith iuoperllion. Appllcanl ruther acknowled@e~ tltat the trademarks, service m.rks .nd goodwillllsociated therewith Ire the eaclusive propeny of Franchisor. Applic.nt shall not, durinl the term of Applicanl'semployment, utiliteany of the tradem.rhorsetvice marks oranyand all naTltCl confusinSlysimilarthereto,CIlccpt in aecordancewithStudio'sinatruc:tions. Upon .nd after ttrminalirm of Applicant's employment. Applic.nt asrees (a) to diseontinue immedi.tely all utiliution of the trademarks Ind service mar~1 and (b) Ihat he lhan not use lny OIher trademark llr service msrk that milht imply tll any penon or eotity that Applicant il Jlill employed by or eonneeted in any way with Studio or Fr.nebisor. 14. Applicanl Kcknowledaeslhal fa) Frallchi~or own~copyrightl in:.U trlininl aids, m.nu.b,lyllahuscs, Itookllnd otherwrilten materials; I1Iml. photosraphl, 10101. and line drawings; ....di" .ndlllr atldio-vi~ual mlterillls; and trophies ...sed in the operltion of Studio (the MCopyrilhted Materials"), (b) Studio is aUlhoriled by Franchisor to Uat the Cupyrighted Mllterials in cllnjunetion with itl operMlion~ IInd (c)luch Copyrighted M.terilll are provided to Applic.nt in traininl and loenabl" him to render lervices hereunder. Applicant shall not havetheriSht,eitherduring the lerm orhil employment or thereafter, tooopy, Iilm,tape,or reproduceorreusemble in any muner,eitherin partorlllhole,any of lhe Copyrighted Materials or to use the Copyrighted Materiall to create any work Ihat is substantially similar to such CoPyrilhted Mlterials. Upon termination of Applicant's employment. Applic.ntshallsurrenderto Sludio III such Copyrilhted Materials, video, Iilm, filproductions, or reassembled m.teri.l, in poslICIsionorunderthecontrolof Applicant and shall not use Ihe same. An Copyrighted Materiall and eopiel nr reproductions thereof sh.1I rem.in It alltimCl the exclusive property of franchisor. 15. The Parlin hereto reeognite th.t irrqlarable injury win resulttn Studio Ind I or Franchilor in the eYent of. breach of this .greement by Applicant and Ig:reethlt in such eV<'nt Sludio Ind!M Franchisorlhall beentilled. in addition to all other remedies.nd d.mlJCllnd without further proof ofmonetaryorimmediltedlrnagt:,to an immediate;njunctinnto rcmain Iheviuluti<ln hereof by Apl'licanland all ('CrJonsaclinlfor o.with him. Applicantlhall pay allcostl, rellOn.b1eatlorne)'$feel.nd other':KpenllCs paid or incurred by Studio and/or Franchisor inen(orcinlthis Alreement or any orthe termsthereoL Further, Applicanl elr"lln pMt lfidelilyorperformancc: bond in lucl~ rellonable ImountalStudio may at any lime require. tb. It is.gll:ed by the Parties herelolhat the~alueoftraininllmateri.land the instroctionand supervision madeavaillble to Applicant farexo,edltbeSumofTwoThouslnd Five Hundred 1$2.500.00) Dollars. .nd Applicant hereby agreelto pay to Studin'luchamount lIis equivalenttoStudio'slclUlldlmlporthesumors2"OO.OO, whicheV<'risgrelter. tn partially compensate Studio rorthecost nfsuch traininlmaterialsand instruction and Applicant has herewith deliye~ to Studio a demand note of even dateinthelum ofS2,SOO.OO to evidence Ihe minimum of luch indebtednCls. However, if Applicanlshall perform and comply fully with all the terml Oflbil agreement, Ind t'~e two(2)year covcnlnttMreafter. Ihenuponsuchfullperformanceandcompli.nceStudioagreestocancel.ndditchlrgelhenote.ontheotherhand,luchnolelhallbedueandplyabIe upnndemandfollowiitllny default under or breach or lIOn_performance of any of the terms .nd conditionl of this Agreement by Applicant. 17. In the event judicial actillD is neceuary for the inlcrprelation orenrortCment of the provision. or .:ovenanu contained herein, said judicial action Ihall be maintained in the Celuru orthc (""UnlY und Ihe Slllle that the Studio i.luCllted in, the sameslipullled utM place of performance. .nd the parties herebyconseDttD person.ljurisdietion .nd venucin ,...chf",,,m. 1&, All pnlnoun5 ullCd in any gender shall include all genders, and all words in the singular numbershall include the ploral.nd vice verno whenever the ASfilcmentlO permits. 19. The provisions of Ihi! Agreement are severable. If Iny judgement OT court order shan declare Iny provilion or provisionl of thil Agreeme~t invalid or unenforceable, the other pro~ilionslhallnot beaITectedthereby.ndshanfilmaininfullforceandeffecl. 20. This Agreement shall inure 10 the benefit of the heirs, repfilsentllliVCli, SUCCCllOn .nd assisns of Applicant, the heiTl, repreaentatives, IUl:ceSlors and assignl of Studio Ind to Arthur Murray Intematiun.l.lnc..ndiulucceJIOTloraslilns. 11. THIS AGREEMENT IS MADE BV AND SOLELY BETWEEN THE HEREIN NAMED OWNER OF STUDIO AND ....PPLlCANT, AND ....PPLlCANT UNDERSTANDS AND AGREES THAT APPLICANT SHALL HAVE NO RIGHTS AND SHALL NOT ASSERT ANY CLAIMS O~' ANY NATURE WHATSOEVER AGAINST ARTHUR MURRAY INTERNATIONAL, INC., HEREIN REFERRED TO AS "FRANCHISORR. OR ITS OFFICERS, DIRECTORS OR EMPLOYEES UNDER OR BY VIRTUE OF THIS AGREEMENT OR OTHERWISE, APPLICANT FURTHER ACREES THAT THE PROVISIONS, RESTRICTIONS, PROMISES AND COVENANTS THEREIN MADE BV APPLICANT TO STUDIO ARE MAD~ BY SAID APPUCANT FOR THE JlNEFIT OF ARTHUR MURRAY INTERNATIONAL, INC. AS A THIRD PARTVBf.NEFlCIARV AS WELL,AND ARTIlUR MURRAY INTERNATlONAL,INC.SHA1~LHA VETHERICHTTOBRINC ANV APPROPRIATE LEGAL ACTION DIRECTLY ACAINST SAID APPLICANT IN ORDER TO ENJOIN ANY VIOLATION OR TIlREATENED VIOLATION OF ANY OF THE PROVISIONS, RESTRICflONS, PROMISES AND COVENANTS OF mE SAID APPLICANT AS STATED HEREII~. 11. THIS AGREEMENT MAYBE CANCELLED BY MAILING OR DELlVERINC WRITBN NOTIFICATION TO CANCEL Tm: AGREEMENTTO THESTUDlO MANAGER WITHIN THREE BUSINESS DAYS FROM THE DATE OF THIS AGREEMENT. IN WITNESS WHEREOF, Ihe parties hereto have hereunder let their hands and Icals. STUDIO: ~. <;. u""" 80" k... ~k 2\ S' v"''''- (S..,.+-e....rw:.'J By: d/b/a.n Anhur Momaye FnnchiKd Din.. Sludio .!>-t"6f- ^P4....~ ;/-3 r :~..c.... pta'lfIIat;ve (4IJd/ (A plicanl's Futl Leplliipllur>'j A ------------------------------------ ------------------ ~~~~.. . ,,~ "^ FOR VALUE RECEIVED, on demand,l promise to pay Two Thousand Five Hundred Dollars ..,. ;>',"''''....'('!.oslc::.-.hJ..l.. < ($2,500.00) to J, r;..Lku... Co...tr-t.\'"rt\.l.~er" d/b/a an ARTHUR MURRAyfIJ FRANCHISED DANCE STUDIO OF l-"IA.A1)Gf)1..o!.. " pp. ,at its principle place in the above city, without interest. In case suit shall be brought for the collection hereof, or the same has to be collected upon demand of an attorney, to pay reasonable attorney's fees and interest thereupon for making such collection. This Note shall be negotiable pursuant to paragraph 16 of this Personnel Training Agreement, and interest shall be payable at th~ maximum lawful rate of interest permitted by applicable usury laws, noW or her~after en~cted, when demand shall be m~de for payment. j 0"" 0'/''; I~ 19.!JiL ~ IIfIii1llJA of ' _ . / ( j; , Atl1'1/ltj",.d (S..I) EXHIBIT "B" PRE-ORGANIZA TION)~L AND ASSIGNMENT AGREf:MENT This Pre-Organizational Agreement made this 1.t day of January, 2001, by and between JEFFREY S. VAN BOSKIRK, an adult individual residing at 1013 S. Humer Street, Enola, Cumberland County, Pennsylvania 17025, (hereinafter "Van Boskirk") and l YNN A. REIGLE, an adult individual residing at 211 Church Road, Sherrnans Dale, Pennsylvania 17090, (hereinafter "Reigle"). B A C KG R 0 UNO: WHEREAS, Van Boskirk entered into a franchise agreement (hereinafter "AMI lemoyne Agreement") with ARTHUR MURRAY, INTERNATIONAL, INC. (l1ereinafter "AMI") dated January 13, 1990 to operate an AMI franchise dance studio (hereinafter "AMI le~moyne.) at 15 N. Fifth Street, lemoyne, Pennsylvania 17043-1632; and WHEREAS, Van Boskirk entered into a franchise agreElment with AMI dated February 14, 1994 (hereinafter "AMI York Agreemenf') for the purpose of operating an AMI franchise dance studio (hereafter "AMI York") in the Kingston Square Shopping Center, 2566 Eastern Boulevard, York, York County, Pennsylvania 17402-2914; and WHEREAS, Van Boskirk entered into a iease with Winston E. Spangler, the owner, to operate AMI lemoyne at the premises iocated at 15 N. Fifth Street, lernoyne, Cumberland County, Pennsylvania (hereinafter "lemoyne lease"); and WHEREAS, York Dance Studio, Inc. entered into a IElase with Kingston Square Associates, a Pennsylvania limited partnership, on April 6, 1993 to lease the premises located at 2566 Eastern Boulevard, York, York County, Pennsylvania 17402-2914 (hereinafter "York Lease"); and WHEREAS, York Dance Studio, Inc. was the prior franchisee to Van Boskirk for AMI at the premises located at 2566 Eastern Boulevard, York, York County, Pennsylvania 17402-2914; and WHEREAS, York Dance Studio, Inc. sold and assigned all rights to Van Boskirk under the AMI York Agreement with AMI and under the York Lease; al')d WHEREAS, Kingston Square Associates, a Pennsylvani;3 limited partnership, assigned all of its rights, duties, and interest under the York Lease to Kingston Fixed Income Fund, L.P., the current owner of the premises located at 2566 Eastern Boulevard, York, York Coun1y, Pennsylvania 17402-2914; and WHEREAS, the premises located at 2566 Eastem Boulevard, York, York County, Pennsylvania 17402-2914, owned by Kingston Fixed Income Fund, L.P. is managed by the Friedman Realty Group of Cherry Hill, New Jersey; and WHEREAS, Van Boskirk organized the Pennsylvania for profit corporation of J.S. Van Management, Inc. on December 29, 1999 with an effective date of January 1, 2000; and WHEREAS, Van Boskirk organized a Pennsylvania for profit Subchapter S corporation, J.S. Van York, Inc. by Articles of Incorporation dated January 6, 1997 and filed with the Department of State of the Commonwealth of Pennsylvania on January 14, 1997 with an effective date of January 1, 1997; and WHEREAS, Van Boskirk organized a Pennsylvania for pmfit corporation, J.S. Van Lemoyne, Inc., by Articles of Incorporation dated January 6, 1997 and filed with the Commonwealth of Pennsylvania Department of State on January 14,1997 and effective January 1,1997; and WHEREAS, Van Boskirk submitted an Application for Re!gistration of Fictitious name dated August 20, 1990 for the registration of "J.S. Van Enterprises" in the Commonwealth of Pennsylvania, Department of State on September 4,1990; and WHEREAS, Van Boskirk submitted an Application for Rogistration of Fictitious name dated August 18, 1992, for the registration of "Ball Room Dance Shoes of Central Pennsylvania" to the Commonwealth of Pennsylvania, Department of State on August 20, 1992; and WHEREAS, Reigie has been an employee of Mana~lement for approximately _ years and wishes to obtain an interest in both AMI York and AMI Lemoyne as an individual franchisee and as a member to a limited liability company; and 2 WHEREAS, both parties hereto wish to file a Certificate of Organization and execute an Operating Agreement for a limited liability company utilizing the name Van RI~igle, L.L.C.; and WHEREAS, Van Boskirk, J. S. Van Management, Inc., J. S. Van York, Inc. and J. S. Van Lemoyne, Inc. will transfer all assets relating to the operation of AMI Lemoyne and AMI York to Van Reigle, L.L.C.; and WHEREAS, J. S. Van Management, Inc., J. S. Van York, Inc. and J. S. Van Lemoyne, Inc. and Van Boskirk individually will indemnify Reigle and Van Reigle, L.L.G. from any and all debts, liabilities, and obligations incurred in the past or in the future for J. S. Van Management, Inc., J. S. Van York, Inc., J. S. Van Lemoyne, Inc. or Van Boskirk, individually, unless Reigle and Van Reigle, L.L.C. expressly agree otherwise; and NOW THEREFORE, in consideration of mutual covenants and agreements hereinafter set forth, the parties hereto, intending to be legally bound, hereby agree as follows: 1. Background. The paragraphs set forth above shall be incorporated herein as set forth fully. 2. Purpose. It is the intent of the parties hereto that the assets, rights, duties and interests pertaining to the operation of the AMI franchises pursuant to the AMI York Agreement and the AMI Lemoyne Agreement be assigned to Van Reigle, L.L.C. to simplify' the operation of the same. It is further the intent of the parties that Reigle purchase for sums set forth herE~in fifty-one percent (51%) of the member interest in Van Reigle, L.L.C. This assignment is subject to Van Boskirk's and Regie's individual obligations to AM I under the franchise agreements. 3. AMI York AQreement. Van Boskirk entered into a franchise agreement with AMI dated February 14, 1994 whereby Van Boskirk began operating an AMI dance studio at Kingston Square Shopping Center, 2566 Eastern Boulevard, York, York County, Pennsylvania 17402-2914. Reigle and Van Boskirk shall enter into a new franchise agreement with AMI. A. Assi9nment. Reigle and Van Boskirk hereby assign to Van Reigle, L.L.C. all of their rights, title, interests and obligations under the new AMI York Agreement dated March 30, 2001, by and between Reigle, Van Boskirk and AMI, pertaining to the operation of AMI York to be operated in the Kingston Shopping Center, at 2566 Eastern Boulevard, York, York County, Pennsylvania 3 17402-2914. Van Reigle, L.L.C., hereby accepts the assignment of rights, title, interests and obligations of Reigle and Van Boskirk under the AMI York Agreement. B. Assi!;lnment ContinQencv. This entire Pre-Organizational Agreement is contingent upon the prior written consent of AMI, the franchisor as provided by paragraph 17 of the AMI York Agreement. Reigle and Von Boskirk will seek prior written consent of AMI, franchisor by written request concurrently with the signing of this Agreement. C. Royalty Fees. In order to effec!1 an assignment under the AMI York Agreement, and Van Boskirk's required, pursuant to Paragraph 17(b)(1) to pay in full royalty fees and other amounts owed to franchisor [AMI] due and paid at the time of assignment. Any unpaid royalty fees due and owing AMI at the time of assignment shall be paid by Van Boskirk unless Reigie by expressed written agreement, consents to the payment of tl1e same by Van Reigle, L.L.C. D. Time for Consent. Reigle and Van Boskirk shall, upon execution of this Pre- Organizational Agreement, forward a copy of this Agreement and the proposed Operating Agreement of Van Reigle, L.L.C. to AMI as required by Paragraph H(f) for approval by AMI, franchisor to the AMI York Agreement. Van Boskirk and Reigle hereby a'gree to strictly abide by the balance and terms contained in Paragraph 17 pertaining to the assignment of the franchise from Reigle and Van Boskirk to Van Reigie, L.L.C. Van Boskirk and Van Reigle, L.L.C. hereby certify that there will be no interruption in the operation of AMI York. 4. AMI Lemoyne Agreement. Van Boskirk entered into a franchise agreement with AMI dated January 13, 1990 whereby Van Boskirk began operating an AMI dance studio at 15 N. Fifth Street, Lemoyne, Cumberland County, Pennsylvania 17043-1632. A. AssiQnment. Reigle and Van Boskirk hereby assign to Van Reigle, L.L.C. all of their rights, title, interests and obligations under the new AMI Lemoyne Agreement dated March 30, 2001, by and between Reigle, Van Boskirk and AMI, pertaining to the operation of AMI Lemoyne to be operated at 15 N. Fifth Street, Lemoyne, Cumberland County, Pennsylvania, 17043. Van Reigle, L.L.C., hereby accepts the assignment of. right, tille, interests and obligations of Reigle and Van Boskirk under the AMI Agreement. 4 B. Assignment Contingency. This entire Pre-Organizational Agreement is contingent upon the prior written consent of AMI, the franchisor as provided by paragraph 17 of the AMI York Agreement. Reigle and Boskirk will seek prior written consent of AMI, franchisor by written request concurrently with the signing of this Agreement.- C. Royalty Fees. In order to effect an assignment under the AMI York Agreement, and Van Boskirk's required, pursuant to Paragraph 17(b}(1} to pay in full royalty fees and other amounts owed to franchisor [AMI] due and paid at the time of assignment. Any unpaid royalty fees due and owing AMI at the time of assignment shall be paid by Van Boskirk unless Reigle by expressed written agreement, consents to the payment of the same by Van Reigle, L.L.C. D. Time for Consent. Reigle and Van Boskirk shall, upon execution of this Pre- Organizational Agreement, and the proposed Operating Agreement of Van Reigle, L.L.C. to AMI as required by Paragraph 17(f) for approval by AMI, franchisor to the AMI York Agreement. Van Boskirk and Reigle hereby agree to strictly abide by the balance and terms contained in Paragraph 17 pertaining to the assignment of the franchise from Reigle and Van Boskirk to Van Reigle, L.L.C. Van Boskirk and Van Reigle, L.L.C. hereby certify that there will be no interruption in the operation of AMI Lemoyne. 5. Indemnification. Van Boskirk, J. S. Van Managememt, Inc., J. S. Van York, Inc. and J. S. Van Lemoyne, Inc. hereby indemnify and hoid harmless Reigle and Van Reigle, L.L.C. from any debts and obligations incurred prior to the execution of this Agreement as they pertain to the operation of AMI Lemoyne and AMI York. Van Boskirk, J. S. Van Management, Inc., J. S. Van York, Inc. and J. S. Van Lemoyne, Inc. further agree to incur no further debt following the execution of this Agreement pertaining to the operation of AMI Lemoyne and AMI York. Should any of the parties incur any of said debt pertaining to the operation of AMI Lemoyne or AMI York, those parties shall be responsible for those debts and shall indemnify Reigle and Van Reigle, L.L.C. from the same. Van Reigle, L.L.C., agrees to assume the foliowin~l debts which would have otherwise been excluded herein: 1. Outstanding Royalty Fees to AMI as set forth Paragraphs 25(p} of the new AMI York Agreement and new AMI Lemoyne Agreement. 5 2. 3. 4. "' Farmers First ioan - approximate balance ~,7,000.00. \ t Line of credit at BELCO - approximate balance $9,000.00 Edge Solutions Studio Credit Cards - approximate balance $27,000.00 ., ". 1 '" Van Boskirk, J. S. Van Management, Inc., J. S. Van York, Inc. and J. S. Van Lemoyne, Inc. hereby indemnify and hold harmless Van Reigle and Van Reigle, L.L.C. from any and all tax obligations incurred prior to the date of this Agreement as it pertains to the operation of AMI Lemoyne and AMI York and thereafter. Those shall spE,cifically include any back payroll taxes as well as Pennsylvania taxes and any other personal tax or other tax due and owing. Should the federal government or the Commonwealth of Pennsylvania or any taxing authority institute any proceeding against Van Boskirk, J. S. Van Management, Inc., J. S. Van York, Inc., and J. S. Van Lemoyne, Inc., those parties shall immediately notify RE,igle and Van Reigle, L.L.C. in writing the nature of the claim. Those obligations (all approximate balances) which Van Boskirk shall remain personally liable and indemnify Reigle and Van Reigle, L.L.C. are as follows: 1. Providian Bank Credit - $1,000.00 2. Allfirst Credit - $4,500.00 3. Any and all personal taxes 4. Sears - $2,600.00 5. Allen J. Ceperich, CPA - $3,500.00 6. Lowe's - $1,000.00 7. Home Depot - $2,000.00 6 --I IN WITNESS WHEREOF, the parties hereby have hereunto set their hands and seais the date and year first above written. WITNESS: ./-:;'/ 4" ~:</fI- '?--,/";:.--e.. / /7 " / .' / ...-/ VAN BOSKI ,,/" By: -.4/ President / WITNESS: By: WITNESS: WITNESS: President WITNESS: By: /?- President WITNESS: Member :141931 7 EXHIBIT "C" ASSIGNMENT OF MEMBERSHIP INTERESTS VAN REIGLE, L.L.c. THIS ASSIGNMENT OF MEMBERSHIP INTEREST ("Assignment"), is made and entered into this 5t1..day of September 2002, by and among LYNN A. REIGLE (hereinafter "Reigle") and JEFFREY S. VAN BOSKIRK (hereinafter "Van Boskirk"). BACKGROUND 1. Reigle and Van Boskirk have previously entered into an Operating Agreement of Van Reigle, LLC, dated January 1,2001, by which they formed a limited liability company, registered on December , 2000, as a limited liability company under Chapter 89, Title 15, Pennsylvania Consolidated Statutes, known as "V AN REIGLE, LLC." 2. The purpose of the limited liability company was to acquire and manage two (2) Arthur Murray franchises and their assets, formerly owned by Van Boskirk or a corporation owned solely by Van Boskirk. 3. Pursuant to the above-described Operating Agreeffil:nt, Reigle has a fifty-one percent (51%) membership interest and Van Boskirk has a forty-nine percent (49%) membership interest in the limited liability company. 4. Reigle desires to acquire and Van Boskirk desires to sl:ll his respective membership interest in Van Reigle, LLC, under the terms and conditions hereinafter provided. 5. Reigle and Van Boskirk desire to confirm their understanding in writing. NOW, THEREFORE, the parties hereto, each intending to be legally bound, agree as follows: I. BackJ!round. The background set forth above is incorporated herein by reference. 2. Oneratinl! Al!reement. The Operating Agreement of Van Reigle, LLC, dated January 1, 2001, is incorporated herein by reference, and is hereinafter called "Agreement." Van Reigle, LLC, is hereinafter called "LLC." 3. A1!reement for Transfer of Partnershiv Interest. Van Boskirk does hereby assign, selover, and transfer his forty-nine percent (49%) membership interest in the LLC to Reigle, and Reigle hereby consents to and accepts said assignment and transfer. Said assignment gives Reigle one hundred percent (100%) membership interest in the LLC. 4. Assnmvtion of Oblil!ations. In consideration for the assignment of Van Boskirk's membership interest, Reigle agrees to assume Van Boskirk's proportionate share of any liabilities incurred by the LLC, except as otherwise set forth herein. a. Belco Community Credit Union credit card and line of credit. The Belco Community Credit Union credit card/line of credit in Van Boskirk's individual name, with a: balance of $6,763.52 as of June 28, 2002 and any additional balance accrued to date, will be the sole and separate responsibility of Van Boskirk, individually. Van Boskirk will indemnify and hold hannless Reigle and LLC from said obligation. b. Edl!e Solutions Credit Cardlline of credit. The Edge Solutions, Inc., credit cardlline of credit with an approximate balance of $20,000.00 in Van Boskirk's name individually shall become the sole and separate obligation of Van Boskirk, individually. Van Boskirk will indemnify and hold hannless Reigle and LLC from said obligation. c. Arthur Murrav rovalty fees prior to 2001. Van Boskirk agrees to individually assume all royalty fees accrued prior to January I, 200land one-half (1/2) of the royalty fees for 2001 due and owing to the franchisor, Arthur Murray International, Inc., which amount to $60,697.79. This amount was paid directly to franchisor, Arthur Murray International, Inc., by Reigle, and therefore the same will be reduced from the consideration due and payable under this Assignment. LLC will be responsible for any other royalty fees accrued after January I, 200lexcluding Van Boskirk's one-half (1/2) as set forth herein due under the Franchise Agreement of March 30, 2001, by and between LLC and Arthur Murray International, Inc or prior franchise agreements between Van Boskirk and the franchisor, Arthur Murray International, Inc. d. Taxes. i. Corporate Taxes. By execution of tllis Assignment, Van Boskirk, being all of the officers and lone shareholder of J.S. Van Management, Inc., J.S. Van York, Inc., and J.S. Van Lemoyne, Inc., hereby certifies and represents that all of1he corporate taxes have been paid since those companies have filed their Articles of Incorporation and have come into existence through their dissolution effective December 31, 2000. Should any taxes of any nature be due for any of these entities, Van Boskirk, as all of the officers and loan shllleholder, and the corporations set forth herein hereby indemnifies and holds harmless Reigle and LLC fi'om any said obligation. 11. Individual Taxes. By execution of this Agreement, Van Boskirk hereby warrants and represents that all of his individual taxes to the Ft:deral Government, the Commonwealth of Pennsylvania, and all local municipalities are paid in full or are currently being paid under an accepted and approved offer in compromise with the Internal Revenue Service. Under the approved offer in compromise, Van Boskirk agrees to make all payments in a timely fashion and to complete the accepted terms of the offer in compromise. Should any individual taxes of any nature be due for any past tax year, Van Boskirk hereby indemnifies and holds harmless Reigle and LLC from any said obligation. 5. Consideration. In consideration for Van Boskirk's assigning, setting over, and transferring his forty- nine percent (49%) membership interest in LLC to Reigle, Reigle agrees, in consideration of the covenants, conditions, and promises set forth in this Assignment, to pay to Van Boskirk ONE HUNDRED TIllRTY THOUSAND THREE HUNDRED AND FORTY-EIGHT AND 901100 DOLLARS ($130,000.00), payable as follows: a. Reigle has paid outstanding royalty fees in the amount of $60,697.79, which amount shall be credited in full against the stated consideration set forth herein. b. Upon execution of this Agreement, Reigle shall pay to Van Boskirk $45,000.00. c. Reigle shall pay to Van Boskirk the amount of $24,651.11, payable in twenty-four (24) equal -p:' monthly installments of$l,OOO.OO, beginning Ouo!xr I ,2002. These payments shall be made free of interest and Reigle reserves the right to make prepayment at any time, which shall be a credit towllld the last payment first. The twenty-fifth installment of$651.11 will be payable on ObldW I ~2004. 6. Non-Comnete Covenant of Van Boskirk. In consideration of the purchase and sale herein contemplated, Van Boskirk hereby agrees that for a period of four (4) years after the date of execution of this Assignment, Van Boskirk shall not for. any reason whatsoever, dire,ctly or indirectly, as a stockholder of any corporation; as a partner in any partnership; as a member of any limited liability company; as an owner, investor, principal, or agent; open, establish, purchase, manage, or become employed or contract independently with any dance studio or school of dance or other similar entity within the air radius restrictions stated below; or in any other manner, engage or assist any other party in any business which competes with the business conducted by Reigle or LLC within a seventy-five (75) mile air raaius of each of the franchise locations (15 N. Fifth Street, Lemoyne, Pennsylvania 17043, and 2566 Eastern Boulevard, York, Pennsylvania). Van Boskirk also agrees that, for the same period, Van Boskirk shall not, directly or indirectly, call upon, solicit, write, direct, divert, or accept business from any client or student of Reigle or LLC. Van Boskirk, for that same period, shall not call Upon, solicit, write, direct, divert or attempt to engage any employee of LLC for the purpose of working elsewhere. The parties hereby recognize, acknowledge, and agree that the tenitorial and time limitations contained in this paragraph are reasonable and properly required for the adequate protection of the business to be conducted by Reigle and LLC. In the event of a breach or a threatened breach by Van Boskirk of any provision(s) of this paragraph, Van Boskirk agrees that Reigle or LLC shall suffer irreparable injury, and that Reigle or LLC shall be entitled to iljjunctions, both preliminaJry and final, without bond or security, enjoining and restraining such breach or threatened breach, and such remedies shall be in addition to all other remedies which may be available to Reigle or LLC either at law or in equity. Van Boskirk further agrees to be bound by these same covenants with respect specifically to opening and or operating an Arthur Murray International, Inc. franchise within the following counties: York, Lancaster, Adams, Cumberland and Dauphin for a period of eight (8) years. The parties recognize that any violation of this Covenant is one that will result in significant damages. Due to the nature of this business, solictation ofa client or student could result in a loss of $1 5,000.00 annual income and the loss ofan instructor / employee could result in an annual loss of$150,000.00 of income. The parties agree that the geographical area and time period n:ferred to in this paragraph are divisible and severable, and that, if the restrictions are held by any Court to be unenfon:eable with respect to the geographic area and time interval, the restrictions remain applicable to that portion of any reduced geographical area and time interval designated by the Court. The parties recognize that, in the event of a breac:h by Van Boskirk of any of the provisions of this paragraph, the remedy at law alone would be inadequate and, accordingly, Reigle or LLC, in addition to damages, shall be entitled to an iljjunction restraining Van Boskirk from violating the Covenants herein contained. This Covenant Not to Compete will be considered null and void if Reigle and LLC no longer operate the franchises described herein. 7. PlIrtnershiD Assets. Upon execution hereof, all assets of the LLC shall be and remain the sole and separate property of the LLC, free and clear of any claim, demand, action or cause of action by Van Boskirk. Those assets include, but are not limited to, those set forth in the Asset Purchase Agreement by and between LLC and Van Boskirk, dated January I, 2001. 8. Partners' Renresentations. Van Boskirk makes tht: following representations to Reigle and LLC, which shall be effective as of the date of this Assignment: a. Authoritv. Van Boskirk has the authority, without the joinder of any person or entity, to sign this Assignment and to assign his membership interest in the LLC as provided herein. b. Litigation. Van Boskirk is not aware of 'my legal actions, suits, arbitrations, or other administrative or governmental proceedings pending or threatened against Van Boskirk, his property, assets, or business, that would impair or affect the right of Van Boskirk to sell his membership interest in the LLC as herein provided. c. Assignment or Pledge of Membershio Interest. Van Boskirk has not assigned or pledged his membership interest to any creditor or otherwise, which would impair or affect the ability of Van Boskirk to assign his membership interest, as provided in this Assignment. 9. Continl!encv Upon Franchisor Aoproval. This Assignment is contingent upon the franchisor's, Arthur Murray International, Inc., approval of same. Should the franchisor fail to approve the Assignment, the same shall be null and void in total. All consideration paid herein shall be returned to Reigle immediately. Both parties hereto agree to execute any and all documents necessary to give effe.ct to the provisions herein as well as in the Agreement. 10. Effective Date. This Assignment of Membership Interest, for all purposes, including tax purposes, shall be effective immediately. J 1. Bindinl! Effect. This Assignment shall be binding and shall inure to the benefit of Van Boskirk and Reigle, their respective heirs and/or representatives. 12. Assil!nment. This Assignment may not be assigned by Van Boskirk or Reigle without prior written consent of all parties to this Assignment. 13. Goveminl! Law. This Assignment shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania. Both parties hereby consent to any actions litigated hereunder to the jurisdiction of the Commonwealth of Pennsylvania. 14. Entire Al!reement. This Assignment contains the entire understanding by and between Van Boskirk and Reigle. 15. Modification. This Assignment shall not be amended, altered, or changed, except in writing and signed by Van Boskirk and Reigle. 16. Partial Invaliditv. If any portion of this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining provisions shall, neverthelless, continue in full force and effect without being impaired or invalidated in any way. IN WITNESS WHEREOF, the parties hereto, intending to be lc:gally bound, have caused this Assignment to be signed and delivered as ofthe date and year first written above. WITNESS: :162329 '44~ ,:;.I/~ COMMONWEALTH OF PENNSYLVANIA COUNTY OF c.u.~ \0. "d ss: On this, the '::>~ day of ~ \" <,,='r<'" r 2002, before me, the undersigned officer, personally appeared LYNN A. REIGLE, known to me (or satisfactorily proven) to be the person whose name is subscribed to the within instrument, and acknowledged that she executed the same for the purposes therein contained. IN WITNESS WHEREOF, I hereunto set my hand and official seal. \ m,. ~. ~ \l' \.~ -P.-n ""',, Notary Public NOTARIAL SEAL MICHElLE M. BROSS, Notary Public lemoyne Borough Cumberland Co. Mj Commission Expires Sepl. 23. 2002 COMMONWEALTH OF PENNSYLVANIA COUNTY OF ~~\o.c-d. ss: On this, the S'"~ day of s,,,, ~ c !:"tt-f>{2002, before me, the undersigned officer, personally appeared JEFFREY S. VAN BOSKlRK, known to me (or satisfactorily proven) to be the person whose name is subscribed to the within instrument, and acknowledged that he executed the same for the purposes therein contained. IN WITNESS WHEREOF, I hereunto set my hand and official seal. ~':n." Q" ~ ~ ~nf'\""'..., Notary Public NOTARIAL SEAL MIGHElLE M. BROSS. Notary Public lemoyne Borough Cumberland Co My Gommission Expires SePl. 23. 2002 . , . CERTlFICA TE OF SER'VICE AND NOW, this ~e-vh day of May, 2004, the undersignl3d does hereby certify that she did this date serve a copy of the foregoing document upon the other parties of I"ecord by causing same to be deposited in the United States Mail, first dass postage prepaid, at Lemoyne, Pennsylvania, addressed as follows: Solomon Z. Krevsky, Esquiire 4409 North Front Street Harrisburg, PA 17110 JOHNSON, DUFFIE, STEWART & WEIDNER By: c~ac&iYWL Lori Richard, Legal Assistant Q :';; . "" C-J (;':::l ",- C) " --j :L:o n1r:- -,Jf-:J :qC;,~' (:"J() :.,~,~,t~ '01 -'.'t - "~.... :...." N m -0 (11 <: -J . ~ JObnson, Duffie, Stewart & Weidner By: Mark C. Duffie J.D. No. 75906 30 I Market Street P. O. Box 109 Lemoyne, Pennsylvania 17043-0]09 (717) 761-4540 ~ Attorneys for Plaintiff JUN 0 7 2004 ~ REIGLE, L.L.C., 15 N. 5th Street Lemoyne, PA 17043 Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA v. NO. 04-1104 Civil Term MANDY A. STONEROAD, 226 Lafayette Street Harrisburg, PA 17109 CIVIL ACTION - EQUITY Defendant ORDER OF COURT AND NOW, this 1t/.. day of ~ .2004, it is ordered that a hearing on Po'o,", M"",, "'" S",." '0;00"" ,h "be 000'""", '0 Co," Ro= No. ~ Combe',", Cooo" Courthouse, Carlisle, Pennsylvania, on c.'?/.4LP. =<1 ,2004 at /.' 3:;i )::, .m. / . J. c: Mark C. Duffie. Esquire. Johnson. Duffie. Stewart & Weidner. 301 Market Street. P.O. Box 109. Le~. PA 17043-0109 Soiomon Z. Krevsky. Esquire. 4409 N. Front Street. HarriSburg. PA 17110 ~~ f...{)f.(J'f C}-. )- N 1-: ~~ -.:.... (-) CJ ~;5 i.J.J...o;;:,_ I::,~) Qi~\ F.q; U::r ~8 0." I wo... .:::r:,: -1 llj u: :.::,:; ~ ., -::,.1 ->" :5 lL c-"' <:> = (j '" SOLOMON Z. KREVSKY, ATTORNEY AT LAW LLC By: Solomon Z. Krevsky, I.D. No. 72719 4409 North Front Street Harrisburg, P A 17110 (717) 221-8338 Attorneys for Defendant REIGLE, L.L.c. IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYL V ANlA Plaintiff No. 04-1104 Civil Tenm vs Civil Action - Equity MANDy A. STONEROAD Defendant ORDER OF COURT AND NOW, this ---.lL day of June, 2004, it is ordered that~ on Plaintiffs Motion for a Special Injunction shall be conducted in Court Room No. J.L- , Cumberland County Courthouse, Carlisle, Pennsylvania, on June 18, 200~~: I :3(~rn. BY THE COURT: / \ Edgar B. Bayley, J. -- C: Mark C. Duffie, Esquire, Jolmson, Duffie, Stewart & Weidner, 301 Market Street, P.O. Box 109, Lemoyne, PA 17043-0109 Solomon Z. Krevsky, Esquire, 4409 North Front Street, Harrisburg, P A 171 I 0 ~ ~ " _I 'I-Of c;L. >- U'> ~ : ~ C'~ t.f') ~ 0 g :::J~ , lU:;:?" <..."l: _~ :ll: O~ ! j !to ':.J .J.,.:l: - (:J:>' gl- .3 ,..i>:! ~ 3"9 % ri:~ :::> UJl ....., co a.. ""5 ~ -"'" :'5 <=> = (.) c-.I REIGLE, L.L.C., Plaintiff 1N THE COURT OF COMMON PLEAS CUMBERL.hND COUNTY, PENNSYLVANIA v. No. 04-1104 Civil Term MANDY A. STONEROAD, Defendant CIVIL ACTION - EQUITY PRAECIPE FOR ENTRY OF APPEARANCE TO THE PROTHONOTARY: Kindly enter our appearance on behalf of Plaintiff Reigle, L.L.C. We are authorized to accept service of all documents in this matter. Respectfully submitted: 2~ Attorney N. 1925 KELLY, HOFFMAN & GODUTO LLP Commerce Towers - 10th Floor 300 North Second Street Post Officf: Box 62003 Harrisburg, P A 17101 (717 -920-81 00) rkellvlal,khgllp.com Dated: June 16,2004 Counsel for Plaintiff Reigle, L.L.C. CERTIFICATE OF SERVICE On this 16th day of June 2004, I, Pamela 1.. Russell, a legal secretary in the law firm of Kelly, Hoffman & Goduto, LLP, hereby certify that I have, this day, served a true and correct copy of the foregoing PRAECIPE FOR ENTRY OF APPEARANCE upon the person(s) and at the address( es) below named by United States First Class Mail, postage prepaid, in Harrisburg, PA: Solomon Z. Krevsky, Esquire Solomon Z. Krevsky, Attorney at Law LLC 4409 North Front Street Harrisburg, PA 17110 Counsel for Plaintiff Mark C. Duffie, Esquire Johnson, Duffie, Stewart & Weidner, P.C. 301 Market Street Post Office Box 109 Lemoyne, PA 17043-0109 .s;? r-':'f' ..,:-:~ \, ~!:;:~ {..~ ~1;1 -J -, CJ c: ;~P(}: 'f-":: N "-> "'" = ""- ~ c::: ;;~:: () ..., 5:... nl-l r- ."",..,., _i"10 (,),.L :t Sr: ~lF? ~) rTi );! ~:c .< "-' " :Jj: ~) - Johnson, Duffie, Stewart & Weidner By: Mark C. Duffie 1.0. No. 75906 301 Market Street P. O. Box 109 Lemoyne, Pennsylvania 17043-0109 (717) 761-4540 Attorneys for Plaintiff REIGLE, L.L.C., Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 04-1104 Civil Term v. MANDY A. STONEROAD, CIVIL ACTION - EQUITY Defendant PRAECIPE TO WITHDRAW APP!:ARANCE AND NOW, this 15th day of June 2004, kindly withdraw the appearance of the undersigned on behalf of the Plaintiff. JOHNSON, DUFFIE, STEWART & PRAECIPE TO ENTER APPEAIMNCE AND NOW, this Plaintiff. day of June 2004, enter the appearance of the undersigned on behalf of the By: Attorney I.D. No. :230678 CERTIFICATE OF SERVIC]~ On this 16th day of June 2004, I, Pamela 1.. Russell, a legal secretary in the law firm of Kelly, Hoffman & Goduto, LLP, hereby certify that I have, this day, served a true and correct copy of the foregoing PRAECIPE TO WITHDRAW APPEARANCE upon the person(s) and at the address( es) below named by United States First Class Mail, postage prepaid, in Harrisburg, PA: Solomon Z. Krevsky, Esquire Solomon Z. Krevsky, Attorney at Law LLC 4409 North Front Street Harrisburg, P A 1711 0 Counsel for Plaintiff Mark C. Duffie, Esquire Johnson, Duffie, Stewart & Weidner, P.C. 30 I Market Street Post Office Box 109 Lemoyne, PA 17043-0109 P '-<:"c:' j(\;'-' 0/0, ~:( :~ ~~i~ ::2. o ~. r--' ...'" c-:} .J:" c.- s;; .- -l -0 ~ t:"-: 9n :1.,., nlp:: rT1 :;',c;:.> ~:J,~l :.:;: -r~ (.:~(") 5'" ..\ 'l~ :;':J. -'- - N REIGLE, L.L.C., Plaintiff IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYL VANIA v. MANDy A. STONEROAD, Defendant No. 04-1104 Civil Term PRAECIPE FOR WITHDRAWAL OF MOTION FOR SPECIAL INJUNCTION CNIL ACTION - EQUITY TO THE PROTHONOTARY: Kindly withdraw Plaintiff Reigle, L.L.C.'s Motion for Special Injunction filed on May 28, 2004, and scheduled for hearing on June I I, 2004, at 1 :30 p.m., before The Honorable Edgar B. Bayley. Respectfully submitted, Dated: June 16, 2004 ~ RD~~ --- Attorney Nc 25 KELLY, HOFFMAN & GODDTO LLP Commerce Towers - lOth Floor 300 North Second Street Post Office Box 62003 Harrisburg, PA 17 I 0 I (717-920-8100) rkellvCal.khgllp.com Counsel for P'IaintiffReigle, L.L.C. (") ..., = 0 c::; c""' -,., ...:: ..,.. .T_~ rp L.. -I ~. <= ffi:n ~, z ~ r- ~ ""Drn ~! -.J :oy "") r-: C 2::{(~ j..; ~ _.,-.... , ."'. r~ ," .,.--'" 0 L. c) :is:: ;~~orn ~;. r:y ...::/ L.. 'J';~, =< .::.:::; <..., -< On this 16th day of June 2004, I, Pamela 1. Russell, a legal secretary in the law firm of CERTIFICATE OF SERVlCE - Kelly, Hoffman & Goduto, LLP, hereby certify that I have, this day, served a true and correct copy of the foregoing PRAECIPE FOR WITHDRAWAL OF MOTION FOR SPECIAL INJUNCTION upon the person(s) and at the addressees) below named by United States First Class Mail, postage prepaid, in Harrisburg, P A: Solomon Z. Krevsky, Esquire Solomon Z. Krevsky, Attorney at Law LLC 4409 North Front Street Harrisburg, PA l71I0 Counsel for Plaintiff (") c:: ;;?'" tfjF~ ce' ~r~_ 1:; i'~" ~~c~ .1>(-' :Z =2 "" = = .r- L.. c:: -'C. .~ o ., --l :r: nl;:.2 -urn :0,9 06 c,,-L-' T ., /-,,-,. ~~; _.~ -< -.J -0 :1: r:? w Plaintiff IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA REIGLE, L.L.c., v. No. 04-1104 Civil Term MANDY A. STONEROAD, Defendant CNIL ACTION - EQUITY PRAECIPE TO SETTLE. DISCONTINUE. AND END TO THE PROTHONOTARY: Kindly mark the above-captioned matter settled, discontinued, and ended with prejudice. S om Z. 'vsky, Esquire ttorney D. No. 72719 N Z. KREVSKY. ATTORNEY AT LAW LLC 4409 North Front Street Harrisburg, PA 17110 717-221-8338 solomon@krevskvlaw.com Dated: ~ \ l'1 lof Robert . Kell ,J . Attorney LD. .21925 Begene A. Bahl Attorney 1.0. No. 87803 KELLY, HOFFMAN & GODUTO LLP 300 North Second Street, 10th Floor Post Office Box 62003 Harrisburg, PA 17106-2003 717-920-8100 rkclly(Q',khgl1p.com Dated: Y /n/o.S' Counsel for Defendant and Counterclaimant Mandy A. Stoneroad Counsel for Plaintiff Reigle, L.L.e. CERTIFICATE OF SERVICE AND NOW, TO WIT, this 19th of August, 2005, I, Solomon Z. Krevsky, Esquire, hereby certify that I have this date served a copy of the foregoing by depositing a copy of same in the United States Mail, postage prepaid at York, Pennsylvania, addressed to counsel of record as follows: Robert E. Ke1\y, Jr., Esquire Kelly, Hoffinan & Goduto LLP Commerce Towers - 10th Floor 300 North Second Street P. O. Box 62003 Harrisburg, P A 17106-2003 Respectfu1\y submitted, SOLOMON Z. KREVSKY, ATTORNEY AT LAW LLC B ~'v' .V~ y: _1\ Solom n evsky, Esquire Attorn y for efendant Supreme t. J.D. #72719 4409 North Front Street Harrisburg, P A 1711 0 (717) 221-8338 (717) 221-0800 fax e-mail: solomon(QJkrcvskvlaw.com (') c ~ ~ ;po C G> 1') '" -0 -. -" 0_". ~-=l ~c so? ~ -.... :J;;-n n'-r: -011"' __,t:) t->b .:-'~ ~. -:.\: .,..;, ';,,:0 tsrTI ".\ 55 :.<< .r:- N