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The information collected on this form is used solely for court administration purposes. This form does not
supplement or replace the filing and service ofpleadings or otherpapers as required by law or rules of court.
k� Commencement of Action:
® Complaint ❑ Writ of Summons ❑ Petition
❑ Transfer from Another Jurisdiction ❑ Declaration of Taking
Lead Plaintiff's Name: Lead Defendant's Name
i•*�_ Aldo A. Morelli EMC Fitness Corp.
�. Dollar Amount Requested: ❑ within arbitration limits
Are money damages requested`' ® Y es [3 No (check on M outside arbitration limits
Is this a Class Action Suit? E3 Yes 19 No Is this an MDJAppeal? ® Yes [a No
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Name of Plaintiff /Appellant's Attorney: Raymcind C Hedger_ Jr
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TORT (do not include Mass Tort) CON'T'RACT (do not include Judgments) CIVIL APPEALS
❑ Intentional ❑ Buyer Plaintiff Administrative Agencies
❑Malicious Prosecution ❑Debt Collection: Credit Card ❑Board of Assessment
❑ Motor Vehicle ❑ Debt Collection: Other ❑ Board of Elections
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11 Nuisance ❑ Dept. of Transportation
= ❑ Premises Liability ❑ Statutory Appeal: Other
❑ Product Liability (does not include
mass tort) ❑ Employment Dispute:
❑ Slandcr/Libel/ Defamation ❑ Employment Dispute: Other ❑ Zoning Board
❑ Other:
[3 Other:
- - - - v-g. -- CR Other. MASS TORT Sharehal c3Pr huV_
❑ Asbestos ill agreement
=' ❑ Tobacco
❑ Toxic Tort - DES _ —
❑ Toxic Tort -Implant REAL PROPERTY MISCELLANEOUS
❑ Toxic Waste ❑Ejectment ❑ Common Law /Statutory Arbitration
❑ Other ❑ Eminent Domain /Condemnation ❑ Declaratory Judgment
� ❑Ground Rent ❑ Mandamus
❑ Landlord/Tenant Dispute ❑ Non - Domestic Relations
❑Mortgage Foreclosure: Residential Restraining, Order
- ;t, PROFESSIONAL LIABLITY ❑ Mortgage Foreclosure: Commercial ❑Quo Warranto
❑Dental ❑ Partition ❑ Replevin
^;tf ❑ Legal ❑Quiet Title El Other-
❑Medical ❑ Other:
❑ Other Professional:
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Updated 1/1/2011
ALDO A. MORELLI :IN THE COURT OF COMMON PLEAS
:CUMBERLAND COUNTY, PENNSYLVANIA
Plaintiff
:NO. 2013 CIVIL TERM
VS.
r ,.
:JURY TRIAL DEMANDED «=
EMC FITNESS CORP.`"''
Defendant :CIVIL ACTION - LAW fi' CD
:CIO j . ' D
CD ?
NOTICE TO DEFEND
YOU HAVE BEEN SUED IN COURT. IF YOU WISH TO DEFEND AGAINST
THE CLAIMS SET FORTH IN THE FOLLOWING PAGES, YOU MUST TAKE
ACTION WITHIN TWENTY (20) DAYS AFTER THIS COMPLAINT AND NOTICE
ARE SERVED, BY ENTERING A WRITTEN APPEARANCE PERSONALLY OR BY
ATTORNEY AND FILING IN WRITING WITH THE COURT YOUR DEFENSES OR
OBJECTIONS TO THE CLAIMS SET FORTH AGAINST YOU. YOU ARE WARNED
THAT IF YOU FAIL TO DO SO THE CASE MAY PROCEED WITHOUT YOU AND A
JUDGMENT MAY BE ENTERED AGAINST YOU BY THE COURT WITHOUT FURTHER
NOTICE FOR ANY MONEY CLAIMED IN THE COMPLAINT OR FOR ANY OTHER
CLAIM OR RELIEF REQUESTED BY THE PLAINTIFF. YOU MAY LOSE MONEY
OR PROPERTY OR OTHER RIGHTS IMPORTANT TO YOU.
YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU
DO NOT HAVE A LAWYER GO TO OR TELEPHONE THE OFFICE SET FORTH
BELOW. THIS OFFICE CAN PROVIDE YOU WITH HIRING A LAWYER.
IF YOU CANNOT AFFORD TO HIRE A LAWYER, THIS OFFICE MAY GE
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
33 SOUTH BEDFORD STREET
CARLISLE, PA 17013
(717) 249 -3166
aM
cel 3�
aqq gq I
Raymond C. Hedger, Jr.
Counsel for Plaintiff
Attorney ID #16274
Hedger & Hedger
2 Fox Chase Drive
P.O. Box 915
Hershey, PA 17033
(717) 534 -9993
rayhedger @hedgerandhedger.com
ALDO A. MORELLI, :IN THE COURT OF COMMON PLEAS
:CUMBERLAND COUNTY, PENNSYLVANIA
Plaintiff
:NO. 2013 CIVIL TERM
VS.
:JURY TRIAL DEMANDED
EMC FITNESS CORP.
Defendant :CIVIL ACTION - LAW
COMPLAINT
COMES NOW, Aldo A. Morelli, Plaintiff herein, by and through
his attorneys, Hedger.& Hedger, by Raymond C. Hedger, Jr., and
makes the following Complaint:
1. Plaintiff, Aldo A. Morelli, is an adult individual, is
domiciled in the Commonwealth of Pennsylvania and resides at 2315
Bellevue Road, Harrisburg, Pennsylvania 17104.
2. Defendant, EMC Fitness Corp., is a corporation organized
and existing under the laws of the Commonwealth of Pennsylvania and
has its principal place of business at 836 Market Street, Lemoyne,
Pennsylvania 17043.
3. The shareholders of Defendant, together with their common
stock owned and percentages of ownership, are as follows:
Shares of Percentage of
Shareholder Common Stock Owned Common Stock Owned
Daniel Dutcavich 1,100 55%
Paul Erwin 100 5%
Aldo A. Morelli 800 40%
The foregoing shareholders of Defendant are sometimes referred
to herein individually as "Shareholder" and collectively as
"Shareholders ". The shares of common stock of Defendant owned by a
given Shareholder are sometimes referred to herein as "Shares ".
4. On or about August 24, 2010 Defendant, by its
incorporator, Paul M. Erwin, adopted corporate bylaws (the
"Bylaws ") including therein Section 6.06 entitled "Restriction on
Transfer of Shares ". A true and correct copy of Section 6.06 of
the Bylaws is attached hereto as Exhibit 1.
5. On or about January 1, 2013, the Shareholders entered
into an agreement (the "Shareholders' Agreement ") providing for
the disposition of Shares upon a given Shareholder's death,
termination of employment, resignation as a director or upon the
contemplated inter vivos transfer of Shares. A true and correct
copy of the Shareholders' Agreement is attached hereto as
Exhibit 2.
2
6. On or about January 1, 2013, and subsequent to their
execution of the Shareholders' Agreement, the Shareholders, by
Unanimous Written Consent thereof in lieu of an Annual Meeting
of Shareholders of Defendant, deleted Section 6.06(e) entitled
"Price of Shares" of the Bylaws and, by necessary implication,
deleted Section 2.03 entitled "Determination of Value of Shares"
of the Shareholders' Agreement, and replaced these sections with
the following language:
(e) Price of Shares. The price at which shares
shall be offered to the corporation and the terms
of Subsection (a), (b) or (c) [references to the
Bylaws] shall be the fair market value of the
shares determined by the certified public
accountant employed by the Company by the
corporation [sic] for such purpose.
A true and correct copy of the aforereferenced Unanimous
Written Consent is attached hereto as Exhibit 3. The
Shareholders' Agreement, as amended by the Unanimous Written
Consent, is referred to herein as the "Amended Shareholders'
Agreement ".
7. The employment of Plaintiff with Defendant was
terminated by resolution of the board of directors of Defendant
on July 9, 2013.
8. Pursuant to Sections 6.06(b) and 6.06(e) of the Bylaws
and Sections 2.03 and 3.04 of the Amended Shareholders'
Agreement, the termination of the employment of Plaintiff with
3
Defendant operated as an offer (the "Offer ") by Plaintiff to
sell his Shares to Defendant for the fair market value thereof.
9. Defendant has affirmatively accepted the Offer and,
further, has accepted the Offer by virtue of its failure to
reject same in accordance with Section 6.06(d) of the Bylaws.
10. Upon information and belief, the fair market value of
the Shares of Plaintiff is One Hundred Thirty Thousand Dollars
($130,000.00).
11. Plaintiff has undertaken to tender his Shares to
Defendant upon payment therefor in the amount of One Hundred
Thirty Thousand Dollars ($130,000.00)
12. By virtue of the foregoing, Defendant is indebted to
Plaintiff in the amount of One Hundred Thirty Thousand Dollars
($130,000.00).
13. Although duly demanded, Defendant has not paid to
Plaintiff the aforesaid indebtedness or any portion thereof.
4
WHEREFORE, Plaintiff requests that the Court grant judgment
in his favor and against Defendant in the amount of One Hundred
Thirty Thousand Dollars ($130,000.00), together with the costs
and disbursements of this action and such other relief as to the
Court may appear just and proper.
Respectfully submitted,
C
Raymond edger, Jr.
Counsel for Plaintiff
Attorney ID #16274
Hedger & Hedger
2 Fox Chase Drive
P.O. Box 915
Hershey, PA 17033
(717) 534 -9993
Date: December 27, 2013
5
VERIFICATION
I verify that the statements made in this Complaint are true
and correct of my own knowledge with the exception of statements
made "upon information and belief" and, in such cases, I believe the
subject statements to be true. I understand that false statements
herein are made subject to the penalties of 18 Pa. C.S. §4904
relating to unsworn falsification to authorities.
Aldo A. Morelli
Date: December 27, 2013
III
Section 6.06. RESTRICTION ON TRANSFER OF SHARES.
(a) General rule. A shareholder shall not sell, transfer or
otherwise dispose of the shareholder's shares to anyone other than
a person who is already a registered shareholder in the
corporation without first offering them to the corporation by
notice in writing to the secretary of the corporation.
(b) Offer upon termination of employment. In the event that
any shareholder retires from the employ of the corporation or
leaves the employ of the corporation for any reason whatsoever,
such retirement or cessation of employment shall constitute an
offer on the part of the shareholder to the corporation to sell
the shareholder's shares to the corporation.
(c) Offer upon death of a shareholder. Upon the death of
any shareholder, the executor or administrator of the deceased
shareholder, as soon as possible thereafter, shall offer the
decedent's shares to the corporation by notice in writing to the
secretary of the corporation.
(d) Procedure for acceptance of offer. The corporation
shall have a period of 60 days after receipt of the offer
specified in subsection (a), (b) or (c) in which to accept the
offer at the price set forth in subsection (e). If the corporation
determines to reject the offer, the secretary of the corporation
shall furnish to the shareholder or the executor or administrator
of the deceased shareholder a written statement setting forth the
rejection and permitting the unrestricted sale of the shares
within a period of 60 days after the date of the written
statement.
(e) Price of shares. The price at which shares shall be
offered to the corporation under the terms of subsection (a), (b)
or (c) shall be the book value of the shares determined from the
records of the corporation as of the last day of the calendar
quarter immediately preceding the date of the offer. For the
purposes of this subsection, the book value of each share, if the
corporation has but one class of shares, or if the shares of the
corporation differ only with respect to voting rights, shall be
computed by deducting total liabilities from total assets, and
dividing the remainder by the total number of outstanding shares,
and in any other case shall be computed in accordance with
generally accepted accounting principles, on a consistent basis.
(f) Certificate legend. All certificates for shares of
EXI3IBIT 1
this corporation shall have the following legend printed or
stamped thereon:
"The shares represented by this certificate may not
be sold, assigned, transferred, pledged or otherwise
disposed of, except in accordance with the terms and
conditions of the bylaws of the corporation."
ARTICLE VII
INDEMNIFICATION OF DIRECTORS,OFFICERS AND
OTHER AUTHORIZED REPRESENTATIVES
Section 7.01. SCOPE OF INDEMNIFICATION.
(a) General rule. The corporation shall indemnify an
indemnified representative against any liability incurred in
connection with any proceeding in which the indemnified
representative may be involved as a party or otherwise by reason
of the fact that such person is or was serving in an indemnified
capacity, including, without limitation, liabilities resulting
from any actual or alleged breach or neglect of duty, error,
misstatement or misleading statement, negligence, gross negligence
or act giving rise to strict or products liability, except:
(1) where such indemnification is expressly
prohibited by applicable law;
(2) where the conduct of the indemnified
representative has been finally determined pursuant to
Section 7.06 or otherwise:
(i) to constitute willful misconduct or
reckless -ness within the meaning of 15 Pa.C.S. §
513(b), 518(b) and 1746(b) or any superseding
provision of law sufficient in the circumstances to
bar indemnification against liabilities arising from
the conduct; or
(ii) to be based upon or attributable to the
receipt by the indemnified representative from the
corporation of a personal benefit to which the
indemnified representative is not legally entitled;
or
7 Y
SHAREIIOLDE RS' AGREEMENT
This Agreement is made on January 1, 2013, among Paul Erwin, Aldo Morelli and
Daniel Dutcavich (Shareholders) and between the Shareholders and EMC Fitness Corp.
(Corporation), a corporation under the Pennsylvania Business Corporation Law of 1988.
RECITALS
The authorized capital stock of the Corporation consists of one hundred thousand
(100,000) shares
Paul Erwin, Aldo Morelli and Daniel Dutcavich own a total of two thousand (2,000)
shares of the Corporation's as follows:
Five percent (5 %) to Paul Erwin (100 shares - Certificate No. 5)
Fifty - five percent (55 %) to Daniel Dutcavich (1,100 shares - Certificate No. 6)
Forty percent (40 %) to Aldo Morelli (800 shares - Certificate No. 7)
The parties believe that it is in the best interest of the Corporation and the Shareholders to
make provision for the future disposition of the shares of the Corporation.
The purpose of this Agreement is to provide for continuity in the management and
policies of the Corporation by providing for the purchase of any deceased Shareholder's shares by
the Corporation and by giving the Corporation and the Shareholders the first option to purchase
any shares attempted to be sold by a Shareholder during his or her lifetime;
It is agreed as follows:
ARTICLE ONE
RESTRICTIONS AND NOTICE
Restriction on. "transfer
1.01. Except as expressly provided in this Agreement, no Shareholder may assign,
transfer, or in any manner dispose of, or permit a levy or attachment on, any part of� his or her
shares without the written consent of: (a) the Board of Directors of the Corporation; and (b) the
other Shareholders.
EXHIBIT 2
Agreement Available for Inspection
1.02. An original copy of this Agreement shall be delivered to the Secretary of the
Corporation and maintained at the principal executive office of the Corporation available far
inspection by any person requesting to see it.
ARTICLE TWO
OBLIGATION ON SHAREIIOLDER'S DEATH
Purchase and Sale of Shares of Deceased Shareholder
2.01. On the death of any Shareholder, the Corporation shall purchase from the
decedent's personal representatives and the decedent's personal representatives shall sell to the
Corporation, all of the shares of the Corporation owned by the decedent at the time of death,
according to this Agreement.
Determination of Purchase Price
2.02. On the death of a Shareholder the purchase price shall be the greater of the
following two amounts: (a) the value of his or her stock as established in accordance with
Paragraph 2.03; or (b) an amount equal to the total proceeds of the policies on his or her life that
are subject to this Agreement_ The term "proceeds" includes the face value of the policy and airy
additions, dividends, or accumulations paid with the claim, less any loans and unpaid interest
outstanding against the policy.
Determination of Value of Shares
2.03. The value of the shares of each Shareholder to be sold pursuant to this Agreement
shall be the-greater of any value agreed upon in writing by the Shareholders or the book value of'
the shares as determined on the last day of the month immediately preceding the date of death.
"fhe book value shall be determined by first adding as of the valuation date the capital, surplus,
and undivided profits, after having deducted any reserves previously established. The sum of
these items shall be divided by the number of shares outstanding as of that date, and the quotient
shall represent the book value of each share.
Purpose and Provis of Insurance
2.04. "fo assure that all or a substantial part of the purchase price for the shares of
deceased Shareholder will be available immediately in cash on his or her death, the Corporation
has, procured and made subject to this Agreement insurance on the lives of the Shareholders as
follows:
-2-
Maintenance of Policies
2.05. So long as this Agreement is in effect, the Corporation agrees that it shat( maintain
the insurance provided in Paragraph 2.04, or additional or similar insurance under Paragraph
2.06, in full force and effect and shall pay all premiums due on all policies issued to it subject to
this Agreement. The Corporation shall be the beneficiary and sole owner of all policies issued to
and maintained by it subject to this Agreement.
Additional or Substituted Insurance
2.06. The Corporation may procure additional policies on the lives of the Shareholders to
maintain parity between the value of the life insurance policies owned by the Corporation. under
this Agreement and the value of the shares subject to this Agreement. Any additional policies for
this purpose shalt be owned by the Corporation and made payable to it. Other policies may be
substituted for any policies made subject to this Agreement and any policies may be withdrawn.
Any addition, substitution, or withdrawal of policies shall be endorsed and signed by the
Corporation and Shareholders and attached to this Agreement.
Collection and Payment of Insurance Proceeds
2.07. On the death of a Shareholder, the Corporation agrees to collect the proceeds of the
policy or policies payable to it by reason of the Shareholder's death and to pay the proceeds to
the estate of the deceased Shareholder as is necessary to purchase the shares of the deceased
Shareholder at the price determined in this Agreement.
Purchase Price in Excess of Insurance Proceeds
2.08. If the amount of insurance proceeds accruing to the Corporation under Paragraph
2.07 is less than the total purchase price to be paid for the shares of the deceased Shareholder,
the balance of the purchase price shall be paid in twenty -four (24) consecutive monthly
payments beginning three (3) months after the date of the decedent's death. The unpaid balance
of the purchase price shall be evidenced by a series of negotiable promissory notes made by the
Corporation to the order of the estate of the deceased with interest at the prime rate as set forth in
the Wall Street Journal on the date of the deceased Shareholder's death with full privilege of'
prepayment of all or any part of the principal at any time without penalty or bonus. Each note
shall provide that in the event of default in payment of the principal, all notes subsequently due
shall become due and payable immediately.
Payment of Purchase Price
2.09. The purchase price payable to the estate of the deceased Shareholder shall be paid
in cash, or in cash and notes, to the estate of the deceased Shareholder on:
a. The estate of the deceased Shareholder becoming capable of transferring to the
Corporation .full legal and equitable tax -free title to the shares of the deceased Shareholder; and
b. Delivery to the Secretary of the Corporation of the certificate representing the shares
of the deceased Shareholder properly endorsed in the manner required to transfer full legal and
equitable tax -free title of those shares to the Corporation.
Costs of Performance
2.10. The estate of the deceased Shareholder shall bear, and shall hold the Corporation
harmless from, all costs and expenses required for securing any court orders, court decrees, court
approvals, inheritance tax clearances, and estate tax clearances required to enable the estate of
the deceased Shareholder to transfer to the Corporation full legal and equitable tax -free title to
the shares of the deceased Shareholder in the Corporation.
1?state of Deceased Shareholder Defined
2.11. The term "estate of the deceased Shareholder" as used in this Agreement, shall
include as those terms are understood under the laws of the State of 1
a. The personal representative of the estate of the deceased Shareholder.
b. The surviving joint tenant of the deceased Shareholder when shares of the Corporation
are owned by the deceased Shareholder and a person who is not active in the business of the
Corporation as joint tenants.
c. Any other person who may, because of the community property or other law of any
jurisdiction, acquire without formal probate proceedings any right, title, or interest in or to the
shares of the deceased Shareholder in the Corporation because of the death of the Shareholder.
Closin6
2.12. The closing of the purchase and the sale shall take place at the office of the
Corporation at a date designated by the Corporation, which shall not be more than 300 days
following the date of the qualification of the personal representatives, and not less than ten (10)
days following that date. However, the closing shall take place, regardless of the date of'
qualification of the personal representatives, within twelve (12) months of the date of the death
of the decedent.
Inability or Unwillingness to Purchase
2.13. If the Corporation has insufficient earned surplus to permit the lawful purchase of
the shares, or if the Corporation is otherwise unable or refuses to purchase all of the decedent's
shares, the obligation of the Corporation with respect to the shares shall be deemed assumed
proportionately by the surviving Shareholders.
-4-
ARTICLE THREE
TRANSFER OF SHARES DURING SHAREHOLDER'S LIFE
First Purchase Option
3.01. If anv Shareholder desires to dispose of any shares in the Corporation during his or
her lifetime, the Shareholder shall first offer to sell the shares to the Corporation and the other
Shareholders by giving them written notice to that effect. The notice must specify the number of
shares offered for sale and must be given in the manner prescribed by Paragraph 6.06. The
Corporation shall have the option for thirty (30) days after receipt of the notice to purchase any
or all of the offered shares at the price established in accordance with Paragraph 2.02,
determined as of the date of the notice.
Second Purchase Option
3.02. At the end of its option period, the Corporation shall notify the Shareholders of any
number of shares it has elected not to purchase, and the Shareholders shall have the option for
thirty (30) days after that notification to purchase all of the shares offered for sale not purchased
by the Corporation. Each Shareholder shall have the right to purchase the portion of the shares
offered for sale as the number of shares owned by hint or her at that time shall bear to the total
number of shares owned by all the other Shareholders excluding the selling Shareholder.
I lowever, if any Shareholder does not purchase his or her full proportionate allotment of" the
shares, the unaccepted shares may be purchased by the other Shareholders. If all of the offered
shares are not purchased by either the Corporation or the Shareholders, or both, before the
expiration of the second option period, the selling Shareholder shall be under no obligation to
sell any of the offered shares to the Corporation or other Shareholders but may dispose of the
shares in any lawful manner.
Payment of Purchase Price
3.03. The purchase price for any shares being sold voluntarily by the Shareholder under
this Article shall be satisfied by a cash payment to the Shareholder at the time of closing in the
amount of twenty -five percent (25 %) of the purchase price and the execution of a promissory
note by the Corporation, as maker, to the Shareholder, as payee, in the amount of the remaining
balance. The promissory note shall be payable at the Corporation's option, either in sixty (60)
equal monthly installments or in Live (5) equal annual installments, plus interest at a rate not to
exceed the prime rate in the Wall Street Journal at time of Closing. The promissory note shall
provide that the maker shall have the privilege of prepaying all or any part of the note at any
time with interest to the date of prepayment, that a default in any payment when due shall cause
the remaining unpaid balance to become immediately due and payable, and that the maker shall
pay' all costs and expenses of collection, including reasonable attorneys' fees.
-5-
Purchase Price on Termination of Emplo ment
3.04. On the termination of employment of Shareholder by the Corporation (except for
Paul Erwin), or on resignation of a Shareholder acting as a director or officer of the Corporation,
all shares owned by the Shareholder shall be sold and purchased as provided in Article Two of'
this Agreement, except that the shares shall be valued as of the last day of the month
immediately preceding the date of termination.
ARTICLE FOUR
OBLIGATION OF SHAREHOLDERS
Purchase by Shareholder
4.01. If any Shareholder purchases shares under this Agreement, except when the entire
purchase price is paid in cash, the purchaser shall, after delivery of the purchased shares, endorse
the share certificates issued to the purchaser and deliver them to the seller as collateral security
for the payment of the unpaid price. The shares shall be held as collateral until the entire
purchase price has been paid. While the shares are held as collateral security and so long as the
purchaser is not in default, the purchaser shall be entitled to all voting rights with respect to the
shares.
ARTICLE FIVE
UNNECESSARY INSURANCE POLICIES
Disposition
5.01. If either the Corporation or one or more Shareholders, or both, acquire a] I of a
Shareholder's shares during the selling Shareholder's lifetime pursuant to this Agreement, any
life insurance policies on the life of the selling Shareholder shall be held by the Corporation until
the price for the shares is fully paid, and the Corporation shall continue to pay the premiums.
When the price is fully-paid, and for thirty (30) days after that time, the selling Shareholder shall
have the right to purchase all of the contracts of insurance on his or her life. Further, upon
termination of this Agreement for any reason, each Shareholder shall have the right to purchase,
within thirty (30) days, all contracts of insurance on his or her life pertaining to this Agreement.
Purchase Price for Policies
5.02. The purchase price for the insurance contracts shall be the sum of (a) any unearned
premiums; plus (b) any total cash value of the policy, including the cash value of all dividends
standing to the credit of the policy; less (c) any indebtedness. The respective parties shall
execute and deliver all papers necessary to transfer ownership of the policies to the insured. if
the right to purchase any policy is not exercised, the Corporation shall have tyre privilege o1'
-6-
i
holding or disposing of the policy at its discretion.
ARTICLE Six
ADMINISTRATION, TERMINATION, AND CONSTRUCTION
Liability of Insurers
6.01. No insurance company that has issued or shall issue a policy or policies subject to
this .Agreement shall be under any obligation with respect to the performance of the terms and
conditions of this Agreement. The company shall be bound only by the terms of the policy or
policies that it has issued or will issue and shall have no liability except as set forth in its
policies.
Successors and Assigns
6.02. This Agreement shall be binding on and inure to the benefit of the parties and their
respective heirs, legal representatives, successors, and assigns.
Common Disaster Provision
6.03. In the event of the simultaneous deaths of all of the Shareholders, or in the event of
the deaths of all of the Shareholders within ninety (90) days after the death of the (:first
Shareholder to die, the estate of each Shareholder shall own its respective shares of the
Corporation and the proceeds of insurance on the life of each Shareholder free of the terms of
this Agreement.
Termination
6.04. "Phis Agreement shall terminate on occurrence of any of the following events:
a. bankruptcy, receivership, or dissolution of the Corporation.
b. Purchase by the Corporation of all of the shares of any Shareholders on their death,
disability, termination of employment, resignation from employment or pursuant to Paragraph
3.01. of this Agreement and full payment of the purchase price.
c. Voluntary agreement of all Shareholders.
On termination of this Agreement, the Secretary of the Corporation shall, on tender of the
share certificates, delete the notation referring to this Agreement.
Amendment of Agreement
6.05. This Agreement contains the entire agreement of the parties. No modification,
-7-
amendment, or discharge of any term or provision of this Agreement shall be valid or binding
unless made in writing and signed by all of the parties. No waiver of any of the terms of this
Agreement shall be valid unless signed by the party against whom the waiver is asserted.
Notices
6.06. Any notice, demand, offer, or other communications required or permitted by this
Agreement or by law to be served on, or delivered to, any party to this Agreement shall be in
writing, signed by the party giving or delivering it, and sent by certified mail to all parties
simultaneously at their respective addresses as follows:
Mr. Paul Erwin Mr. Aldo Morelli
Mr. Daniel Dutcavich
and the Corporation at:
EMC Fitness Corp.
836 Market Street - Rear
Lemoyne, PA 17043
with a copy to:
Bruce J. Warshawsky, Esquire
Cunningham & Chernicoff, P.C.
i
2320 North Second Street
i Harrisburg, PA 17110
Any notice, demand, offer, or other written instrument required to be given or sent to the
estate of any deceased Shareholder shall be signed and sent addressed to the personal
representative of the decedent or to the estate of the decedent at the Shareholder's address in that
exhibit. Any party shall have the right to change the place to which any notice, offer, demand, or
writing shall be sent by similar notice sent to all parties to this Agreement. The date of mailing
of any offer, demand, notice, or instrument shall be deemed to be the mailing date and shall be
effective from that date.
Governing Law
6.07. This Agreement shall be construed and governed by the laws of the Commonwealth
of Pennsylvania.
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Sp ecific Performance
6.08. The parties agree that the damages that will accrue to a party, or to the personal
representatives of a decedent, by reason of failure to perforni any of the obligations under this
Agreement will be difficult to measure in money. Consequently, if any party or personal
representative of a decedent shall institute any action or proceeding to enforce any provision of
this Agreement, any party against whom the action is brought agrees that this Agreement may be
specifically enforced by a court of competent jurisdiction.
Severabilitv
6.09. The invalidity or unenforceability of any provision of this Agreement shall not
affect any other provisions. The Agreement shall be construed in all respects as if the invalid or
unenforceable provisions were omitted.
Prior Agreements
6.10. This Agreement constitutes the only agreement of the parties respecting the sate
and purchase of their shares in the Corporation and correctly sets forth the rights, duties, and
obligations of each to the other as of the date of this Agreement. Any prior agreements made
between the Shareholders and the Corporation affecting the shares of the Corporation are
terminated by this Agreement.
i
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Y
Executed at Ilarrisburg, Pennsylvania, on
A"I FES" CORPORATION
EMC FITNESS C I'.
A do el i cc .etary-� ----,
By:
Daniel Dutcavich, President
WPM, SHAREHIOL ;RS B
13 rshawsky Ado or- li
d am4 By Bru J. sky Daniel Dutcavich
- - -- - By: "'_1 rt _.__...._...._... -- ......... ..._....__ ..................... ..
Bru J. Warsha . Paul F. rwin
l�f.Homc'•.F3.tW\pQCSlEM( FI "fivr_SSCC)Rf Sh »rcholdersAgreement.WPD
f
- 10-
t
a R
WRITII'EN CONSENT OF SHAREHOLDERS
AND BOARD OF DIREC'T'ORS
OF EMC FITNESS CORP.
IN LIEU OF AN ANNUAL MEETING
January 1, 201 3
The undersigned, being the shareholders and directors of EMC Fitness Corp.
( "Company "), a Pennsylvania corporation, in accordance with the applicable provision ofthe
Pennsylvania Business Corporation Law of 1988, as amended, do hereby consent to, approve and
adopt the following in lieu of an annual meeting:
RESOLVED, that the following are hereby elected directors of the corporation, to serve
for, one year:
,9
Paul Erwin
Aldo Morelli
Daniel Dutcavich
Each director shall serve until such director's successor has been elected and qualified.
PURTI-11 "IZ RT:ESOLVED, that the following are hereby elected officers of the corporation,
to serve for one year:
Daniel Dutcavich, President
Aldo Morelli, Vice President /Treasurer /Secretary
Each officer shall serve until such officer's successor has been elected and qualified.
FURTHER RESOLVED, that the Board of Directors approve the 2012 financial
statement as presented.
FURT1 RESOLVED, to change the registered address to:
836 Market Street - Rear
Lemoyne, PA 17043
FURTHER. REESOLVED, to retire the outstanding shares of stock of the Company
(Certificates 1, 3 and 4 to be surrendered by Paul Erwin, Aldo Morelli and Daniel Dutcavich,
respectively) and to reissue shares of stock as follows:
Five percent (5 %) to Paul Erwin (100 shares - Certificate No. 5)
Fifty -five percent (55 %) to Daniel Dutcavich (1, 100 shares - Certificate No. 6)
Forty percent (40 %) to Aldo Morelli (800 shares - Certificate No. 7)
EXHIBIT 3
for no additional consideration, but based upon the operation of the Company and the work
performed through December 31, 2012;
FUR'I'I IER RESOLVED, to pay down all debts outstanding on the date hereof by
December 31, 2013;
FURTHER RESOLVED, that the shareholders execute a Shareholders Agreement in the
form attached hereto;
FURTHER RESOLVED, to delete Section 6.06(e) of the Company's Bylaws and replace
said Section with the following:
(e) Price nf'Shares. The price at which shares shall be offered to the corporation and the
terms gfSubsection (a), (b) or (c) shall be the market value of the shares determined
by the certified public accountant employed by the Company by the corporation for such
purpose.:
FUR'lIHER RESOLVED, that Section 6.07 of the Bylaws be added as follows:
SECT ION b. 07 ADDITIONAL SHARES. No additional shares of stock of the corporation
.shall be issued without action by a majority of the Board of Directors.;
FURTHER RESOLVED, that. Section 8.08 of the Bylaws, AMENDMENT OF
BYLAWS, shalt be deleted and the following be inserted:
Section 8.08 Atb11sNDMT;NT OF BYLAW,' . These Bylaws maybe amended or r•epeuled..
or new Bylaws may be adopted either (I) by a two- thirds vote of the shareholders at anv
duly organized annual or special meeting of the .shareholders, or (II) by a vote of the.
majority gfthe Board of Directors of the corporation in office at any regular or special
rneetirlg of directors. Any change in these Bylaws should take effect when adopted unless
other vise provided and resolution effecting the change. See. Section 2.03(h)(IZelutirrn to
notice of action by shareholders and Bylaws).
i f
ALDO A. MORELLI : IN THE COURT OF COMMON PLEAS
:CUMBERLAND COUNTY, PENNSYLVANIA
Plaintiff .
:NO. 2013 G 3 3 CIVIL TERM
VS .
: JURY TRIAL DEMANDED
EMC FITNESS CORP.
Defendant :CIVIL ACTION - LAW
ACCEPTANCE OF SERVICE
The undersigned, Bruce J. Warshawsky, Esq. , of the firm of
Cunningham & Chernicoff, P.C. , counsel for Defendant EMC Fitness
Corp. , having been thereunto duly authorized, hereby accepts
service of an attested copy of the Complaint in this ac "on.
cep Warsh ws , Esq.
unningham & nicoff, P.C.
2320 North Front Street
Harrisburg PA 17110
4 Co
TZ
ALDO A. MORELLI :IN THE COURT OF COMMON PLEAS
:CUMBERLAND COUNTY, PENNSYLVANIA
Plaintiff
:NO. 2013 - 7633 CIVIL TERM
c.-.) ,. ,
vs. --- .......
:JURY TRIAL DEMANDED
EMC FITNESS CORP.
—s
Defendant :CIVIL ACTION - LAW
PRAECIPE TO DISCONTINUE WITH PREJUDICE
TO THE PROTHONOTARY:
Kindly mark the within action settled, discontinued and
ended with prejudice.
Respectfully submitted,
Raymond C. Hedger, Jr.
Counsel for Plaintiff
Attorney ID #16274
Hedger & Hedger
2 Fox Chase Drive
P.O. Box 915
Hershey, PA 17033
(717) 534-9993
Date: April 4, 2014