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HomeMy WebLinkAbout14-4416S E C T I 0 N A S E C T I 0 N B Supreme Court of Pennsylvania Court4rof.Conimon Pleas • loverrSheet Cumibeerlland- County For Prothonotary Use Only: 1; ,f,‘ .SI I•P Docket No: / 4/ -Ng/ 6 The information collected on this form is used solely for court administration purposes. This form does not supplement or replace the filing and service of pleadings or other papers as required by law or rules of court. Commencement of Action: Petition Declaration of Taking Ill Complaint IIIA Writ of Summons • IN Transfer from Another Jurisdiction ® Lead Plaintiff's Name: Hearing Instruments, Inc. Lead Defendant's Name: Clyde Vadasz Dollar Amount Requested: II within arbitration limits Are money damages requested? ® Yes X No (check one) El outside arbitration limits Is this a Class Action Suit? M Yes ® No Is this an MDJAppeal? 0 Yes ® No Name of Plaintiff/Appellant's Attorney: Stephen Moniak, Esquire a Self -Represented IPro Sel Litigant) VIII Check here if you have no attorney (are Nature of the Case: Place an "X" to the left of the ONE case category that most accurately describes your PRIMARY CASE. If you are making more than one type of claim, check the one that you consider most important. TORT (do not include Mass Tort) D Intentional ▪ Malicious Prosecution O Motor Vehicle O Nuisance O Premises Liability O Product Liability (does not include mass tort) O Slander/Libel/ Defamation O Other: MASS TORT O Asbestos O Tobacco O Toxic Tort - DES O Toxic Tort - Implant O Toxic Waste O Other: PROFESSIONAL LIABLITY O Dental Legal O Medical O Other Professional: CONTRACT (do not include Judgments) 0 Buyer Plaintiff 0 Debt Collection: Credit Card 0 Debt Collection: Other ▪ Employment Dispute: Discrimination Employment Dispute: Other Breach of Contract O Other: REAL PROPERTY • Ejectment O Eminent Domain/Condemnation O Ground Rent O Landlord/Tenant Dispute O Mortgage Foreclosure: Residential O Mortgage Foreclosure: Commercial O Partition O Quiet Title O Other: CIVIL APPEALS Administrative Agencies O Board of Assessment O Board of Elections O Dept. of Transportation 0 Statutory Appeal: Other O Zoning Board O Other: MISCELLANEOUS O Common Law/Statutory Arbitration O Declaratory Judgment O Mandamus Non -Domestic Relations Restraining Order El Quo Warranto 0 Replevin 0 Other: Updated 1/1/2011 Todd J. Shill, Esquire Attorney ID No. 69225 Stephen Moniak, Esquire Attorney ID No. 80035 RHOADS & SINON LLP One South Market Square, 12th Floor PO Box 1146 Harrisburg, PA 17108-1146 Telephone: (717) 233-5731 Facsimile: (717) 238-8622 Email: tshill@rhoads-sinon.com smoniak@rhoads-sinon.com Attorneys for Plaintiff Hearing Instruments, Inc. HEARING INSTRUMENTS, INC., Plaintiff v. CLYDE VADASZ, Defendant F1LED-OFFICE OF THE PROTHONOTARY 1011i JUL 28 Pti 3: 26 CUMBERLAND COUNTY PENNSYLVANIA IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA LAW AND EQUITY NO. 11/,o6 NOTICE You have been sued in court. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this complaint and notice are served, by entering a written appearance personally or by attorney and filing in writing with the court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so the case may proceed without you and a judgment may be entered against you by the court without further notice for any money claimed in the complaint or for any other claim or relief requested by the 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 32 South Bedford Street Carlisle, PA 17013 Telephone: (717) 249-3166 Fil3 7 5- (27.0 ot Todd J. Shill, Esquire Attorney ID No. 69225 Stephen Moniak, Esquire Attorney ID No. 80035 RHOADS & SINON LLP One South Market Square, 12th Floor PO Box 1146 Harrisburg, PA 17108-1146 Telephone: (717) 233-5731 Facsimile: (717) 238-8622 Email: tshill@rhoads-sinon.com smoniak@rhoads-sinon.com Attorneys for Plaintiff Hearing Instruments, Inc. HEARING INSTRUMENTS, INC., ) ) Plaintiff ) ) v. ) ) CLYDE VADASZ, ) ) Defendant ) IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA LAW AND EQUITY NO. COMPLAINT Plaintiff Hearing Instruments, Inc. ("Hearing Instruments"), by and through its counsel, Rhoads & Sinon LLP, brings this action in law and equity against Defendant Clyde Vadasz (hereinafter "Defendant" or "Vadasz"). INTRODUCTION Hearing Instruments brings this action to stop the wrongful conduct of the Defendant who is currently employed by Hearing Lab Technology, LLC or Liberty Hearing Aids (collectively "Liberty"), a direct competitor of Hearing Instruments' hearing aid and hearing aid accessory business. Vadasz is a former employee of Hearing Instruments, and he is subject to restrictive covenants contained in his Employment Agreement with Hearing Instruments. Those restrictive covenants prohibit Vadasz from employment with Liberty within the proscribed 959164.1 geographic area, soliciting Hearing Instruments' customers and/or employees, and/or disclosing Hearing Instruments' confidential and proprietary information. PARTIES 1. Hearing Instruments is a Pennsylvania corporation with a principal place of business at 3425 Simpson Ferry Road, Suite 202, Camp Hill, Cumberland County, Pennsylvania. Hearing Instruments is a franchisee of Miracle-Ear, a manufacturer and distributor of hearing aids and hearing aid accessories. Hearing Instruments owns and operates numerous Miracle-Ear locations across the Commonwealth of Pennsylvania. 2. Defendant Clyde Vadasz is an adult individual who, upon information and belief, resides at 8577 Old Turnpike Road, Mifflinburg, PA 17844. 3. Vadasz is a former employee of Hearing Instruments, and upon information and belief, is a current employee of Liberty. JURISDICTION AND VENUE 4. This action arises under the laws of this Commonwealth and is within the subject matter jurisdiction of this court. 5. This Court has personal jurisdiction over Defendant pursuant to 42 Pa. C.S. § 5301(a)(1). 6. Venue in this Court is proper pursuant to Pa. R.C.P. 1006(a)(1) because Defendant accepted and signed his Employment Agreement with Hearing Instruments at its headquarters in Cumberland County. 2 FACTUAL BACKGROUND 7. Vadasz initially worked for Hearing Instruments from October 26, 2009 through October 7, 2010, and more recently was employed by Hearing Instruments from January 13, 2011 until he was terminated on or about April 17, 2014. 8. In connection with and in consideration of his most recent employment with Hearing Instruments, Vadasz signed an Employment Agreement that contained certain employment restrictive covenants. A true and correct copy of Vadasz's Employment Agreement with Hearing Instruments is attached hereto as Exhibit A. 9. Vadasz signed the Employment Agreement at Hearing Instruments' corporate headquarters in Camp Hill, Cumberland County, PA and also completed all corporate training at Hearing Instruments' Camp Hill location. 10. As part of the Employment Agreement, Vadasz acknowledged that he would have access to Hearing Instruments' confidential and proprietary information, including, inter alia, its customer lists, and agreed that he would not, at any time, use or otherwise disclose such information for any purpose other than for the purpose and benefit of Hearing Instruments. (See Employment Agreement (Ex. A), 75,8; see also Sycle Confident Agreement (Ex. A) ¶l.) 11. It was clear that this confidential and proprietary information was only to be used within the scope of his employment with Hearing Instruments. (See Employment Agreement (Ex. A) ¶8.) 12. Moreover, the Employment Agreement signed by Vadasz contains the following restrictive covenant: During my employment with the Company and for a period of two (2) years after my employment is terminated for any reason, with or without cause, I will not directly or indirectly recruit or hire any 3 employee of the Company, or otherwise induce such employee to leave the employment of the Company, to become an employee of or otherwise be associated with me or any company or business with which I am or may become associated, nor will I directly or indirectly solicit present or former clients or customers of the Company. I further agree not to induce, promote or facilitate the discontinuation of any existing or prospective customer relationship, whether or not such relationship with the Company was obtained through my efforts. I further agree that I shall not, for a continuous uninterrupted period commencing upon the expiration or termination of my employment by the Company, regardless of the cause for termination, and continuing for two (2) years thereafter, either directly or indirectly for myself or through or on behalf of or in conjunction with any person, entity or corporation; own, maintain, engage in, be employed by, advise, assist, invest in, make loans to, or have any interest whatsoever in any business which is the same as or substantially similar to the Company's business, or that of any Company affiliate or parent, and which is located within the non-exclusive area served by Employee or within a radius of 20 miles thereof I recognize that from time to time my employment may be at different locations and that this paragraph 15 applies to each and every location of my employment with the Company. The initial area to be served by Employee is Williamsport, Pennsylvania and may be amended from time to time by instruction of the Company. (Employment Agreement (Ex. A), ¶15. (emphasis added).) 13. As set forth in the Employment Agreement, therefore, Vadasz agreed not to work, inter alia, for any business which is the same as or substantially similar to Hearing Instruments' business, within a 20 mile radius of "each and every location of [his] employment with the Company." (Employment Agreement (Ex. A), ¶15.) 14. During his most recent employment with Hearing Instruments, Vadasz was assigned to and worked as a sales consultant at the following locations: Williamsport, Shamokin Dam and Bloomsburg, Pennsylvania. His primary locations were the Williamsport and Shamokin Dam offices. 4 15. Vadasz's last day of employment with Hearing Instruments was April 17, 2014, at which time he was terminated for excessive absenteeism and violation of company policies. 16. At the time of his termination, Vadasz returned certain company property to the Shamokin Dam office. 17. On July 21, 2014, Hearing Instruments' President and CEO, Julia Beall - McKelvey received an email from one of her employees who heard from two Hearing Instruments' patients that Vadasz was working at the Sam's Club in Muncy selling hearing aids on behalf of Liberty. 18. Hearing Lab Technology, LLC owns and/or operates a hearing aid store located inside the Sam's Club at 611 Lycoming Mall Road, Muncy, PA 17756 ("Liberty's Muncy Hearing Aid Store"). 19. Upon information and belief, Vadasz is currently employed at Liberty's Muncy Hearing Aid Store for Hearing Lab Technology, LLC/Liberty Hearing Aids, and is the primary, if the not sole, hearing aid sales consultant at that store. 20. Hearing Lab Technology, LLC/Liberty Hearing Aids is a direct competitor of Hearing Instruments, and its business is the same or substantially similar to Hearing Instruments' business. 21. Liberty's Muncy Hearing Aid Store at 611 Lycoming Mall Road, Muncy, PA 17756 is just 8.9 miles from Hearing Instruments' Williamsport office where Vadasz worked and is well within the 20 mile radius prohibited by his Employment Agreement. 22. Further, during the course of his employment with Hearing Instruments, Vadasz became familiar with confidential and proprietary information concerning, inter alia, sales 5 methods and techniques, marketing and sales information and data, equipment costs and expenses and customer lists for both current and prospective customers. 23. Indeed, Hearing Instruments invested substantial time, money and resources in training and educating Vadasz with regard to its unique sales methods and techniques. 24. It is believed, and therefore averred that Vadasz is now making use of such confidential and proprietary information to further the business interests of Liberty in clear violation of the terms of his Employment Agreement with Hearing Instruments. 25. Upon information and belief, Vadasz is working for Hearing Lab Technology, LLC/Liberty Hearing Aids and, unless enjoined by this Court, will continue to violate the terms of his Employment Agreement. IRREPARABLE HARM 26. Vadasz agreed that the provisions of his Employment Agreement are reasonably designed to protect Hearing Instruments from irreparable harm. [See Employment Agreements (Ex. A) ¶16(c).] During his employment, he became intimately familiar with Hearing Instruments' confidential and proprietary information concerning, inter alia, sales methods and techniques, marketing and sales information and data, equipment costs and expenses, and customer lists (both current and prospective). 27. Vadasz's possession of that knowledge while working for a competitor of Hearing Instruments within the restricted geographic region will result in irreparable harm to Hearing Instruments, which the Employment Agreement was designed to protect against. 28. Hearing Instruments has a legitimate belief and concern that Defendant will interfere with Hearing Instruments' business relationships with its customers. He is likely to continue such action unless restrained. 6 29. Unless restrained, and because of the proprietary and confidential information that Vadasz gained through his employment with Hearing Instruments, his current employment with Liberty poses an immediate threat and would very likely cause irreparable harm to Hearing Instruments' current business relationships, business opportunities, goodwill, and business reputation. 30. Unless Defendant is restrained, Hearing Instruments will likely suffer the loss of customers, employees, goodwill, revenues, and profit. COUNT I Breach of Contract 31. Hearing Instruments incorporates paragraphs 1 through 30 as though fully set forth herein. 32. The Employment Agreement previously identified herein was entered into by Vadasz in connection with the commencement of his employment with Hearing Instruments, and, as such, is supported by adequate consideration. 33. Vadasz is subject to the terms and conditions of his Employment Agreement with Hearing Instruments, whereby he is prohibited from soliciting Hearing Instruments' employees or customers for a period of two (2) years, and he is prohibited from competing against Hearing Instruments, directly or indirectly, for a period of two (2) years and within a radius of twenty (20) miles of each location where he worked as an employee of Hearing Instruments. 34. Vadasz's continued employment with Liberty is in direct violation of his Employment Agreement in that he is competing with Hearing Instruments inside the twenty (20) mile restricted area. 7 35. During his employment with Hearing Instruments, Vadasz learned trade secrets and obtained confidential information regarding Hearing Instruments' customer lists, marketing strategies, pricing, costs, and sales of hearing aids and hearing aid accessories. 36. Vadasz, whether consciously or unconsciously, will subject such information to disclosure while competing directly with Hearing Instruments as an employee of Liberty. 37. As a result of the foregoing, Hearing Instruments has been harmed and will continue to be harmed, and, therefore, is entitled to all relief previously agreed to by the parties pursuant to Vadasz's Employment Agreement, namely, injunctive relief (both preliminarily and permanently), the receipt of compensatory and/or liquidated damages, and such other legal or equitable relief that this Court deems just and proper. COUNT II Breach of Fiduciary Duty 38. Hearing Instruments incorporates paragraphs 1 through 37 as though fully set forth herein. 39. The actions taken by Vadasz, as set forth above, constitute a breach of his fiduciary duty and obligation to Hearing Instruments arising from his confidential relationship with Hearing Instruments. 40. As a result of the aforementioned breach of fiduciary duty, Hearing Instruments will be injured in that it will suffer in its business relationships and lose customers, business, reputation, and/or goodwill. Hearing Instruments lacks an adequate remedy at law and, unless enjoined by this Court, Vadasz will continue to cause irreparable injury and damage to Hearing Instruments as a result of the wrongful acts complained of herein. 8 COUNT HI Violation of Pennsylvania Uniform Trade Secrets Act 41. Hearing Instruments incorporates paragraphs 1 through 40 as though fully set forth herein. 42. As set forth above, Vadasz is in possession of valuable proprietary information and trade secrets concerning Hearing Instruments' business, and such information and trade secrets are protected by the Pennsylvania Uniform Trade Secrets Act, 12 Pa. C.S. §§5301 et seq. ("PUTSA"). 43. Defendant knows that that the aforementioned proprietary information and trade secretes were acquired under circumstances giving rise to a duty to maintain their secrecy and limit their use. 44. Defendant has used, or will inevitably use, the aforementioned proprietary information and trade secrets to the advantage of Liberty and to the detriment of Hearing Instruments. 45. Unless Defendant is enjoined from the use and disclosure of Hearing Instruments' proprietary information and trade secrets, Hearing Instruments will suffer irreparable harm and unascertainable monetary damages. 46. As a result of the foregoing, Hearing Instruments is entitled to injunctive relief prohibiting Defendant from disclosing Hearing Instruments' proprietary information and trade secrets pursuant to 12 Pa. C.S. §5303, compensatory damages in an amount yet to be determined pursuant to 12 Pa. C.S. §5304(a), costs, and such other legal or equitable relief that this Court deems just and proper. 9 COUNT IV Tortious Interference with Current and Prospective Business Relationships 47. Hearing Instruments incorporates paragraphs 1 through 46 as though fully set forth herein. 48. The actions taken by Defendant, as set forth above, were, and are, intended to harm Hearing Instruments by interfering with Hearing Instruments' current and prospective business relationships. 49. Defendant is aware that his actions violate the aforementioned Employment Agreement. 50. In addition, Defendant is in possession of confidential information and trade secrets owned and developed by Hearing Instruments, and he has used or intends to use, whether consciously or unconsciously, such information which will impact Hearing Instruments' ability to perform business and cause current and prospective customers to do business with Liberty instead of with Hearing Instruments. 51. Defendant lacks privilege or justification for such interference. 52. As a result of Defendant's conduct, he has or will impact Hearing Instruments' current and prospective business relationships and has caused, and/or will cause Hearing Instruments to sustain harm. 53. As a result of the foregoing, Hearing Instruments is entitled to injunctive relief prohibiting Defendant from solicitation of Hearing Instruments' employees, customers, and prospective customers, and is further entitled to compensatory and punitive damages in an amount yet to be determined and such other legal or equitable relief that this Court deems proper. 10 COUNT V Unfair Competition 54. Hearing Instruments incorporates paragraphs forth herein. 55. 1 through 53 as though fully set By engaging in the aforementioned conduct, Defendant has engaged in unfair competition with Hearing Instruments. 56. The actions of Defendant have been willful, intentional, and unprivileged, and have caused, and are continuing to cause, irreparable harm as well as imminent monetary damages to Hearing Instruments in an amount yet to be determined. PRAYER FOR RELIEF WHEREFORE, Plaintiff Hearing Instruments, Inc. respectfully requests: (1) After a hearing, that a preliminary injunction issue against Defendant Clyde Vadasz from competing with Plaintiff for a period of two (2) years from the date of termination of his employment with Hearing Instruments within a twenty (20) mile radius of any Hearing Instruments' location where he worked; from soliciting or doing business with Hearing Instruments' customers, both current and prospective, and from disclosing Hearing Instruments' trade secrets or confidential information to anyone; (2) A permanent injunction against Defendant from competing with Hearing Instruments (upon the same durational conditions as the preliminary injunction), from soliciting or doing business with Hearing Instruments' customers, both current and prospective, and from disclosing Hearing Instruments' trade secrets or confidential information to anyone; and 11 (3) A judgment in favor of Hearing Instruments and against Defendant for all direct, consequential, compensatory, incidental, liquidated, and special damages arising out of his aforementioned wrongful conduct, in an amount believed to exceed the jurisdictional threshold for compulsory arbitration, including costs and such other legal or equitable relief that this Court deems proper. RHOADS & SINON LLP Todd J. Shill Stephen Moniak One South Market Square, 12th Floor PO Box 1146 Harrisburg, PA 17108-1146 Telephone: (717) 233-5731 Attorneys for Plaintiff Hearing Instruments, Inc. 12 VERIFICATION Julia C. Beall -McKelvey, deposes and says, subject to the penalties of 18 Pa. C.S. §4904 relating to unsworn falsification to authorities, that she is the President of Hearing Instruments, Inc., that she makes this verification by its authority and that the facts set forth inthe foregoing Complaint are true and correct to the best of her knowledge, information and belief. ZS , 20 rc C. Date Julia C. Beall -McKelvey EXHIBIT A 6221 13.1 EMPLOYMENT AGREEMENT HEARING INSTRUMENTS, INC. In consideration of my employment or continued employment by HEARING INSTRUMENTS, INC., a corporation duly organized and existing in the State of Pennsylvania, with a principal business address at 1501 Market Street, Camp Hill, Pennsylvania (referred to as the "Company") and the compensation paid to me by the Company from time to time, Clyde Vadasz("Employee") does hereby represent, warrant and agree as follows: WHEREAS, Company desires to employ the services of Employee as a Sales Consultant for the sale and service of hearing aids and hearing aid accessories; and WHEREAS, Employee desires to be employed by the Company in the capacity of Sales Consultant to sell and service hearing aids and hearing aid accessories. 1. I agree that during my employment with the Company, I will devote my full business time and efforts to the Company and will not, without the Company's express prior written consent, engage in any employment or business other than for the Company: I acknowledge that this Agreement does not create any obligation on my part to work for the Company, or on the part of the Company to employ me, for any fixed period of time, and my employment is at will and may be terminated at any time with or without cause. The Company is not obligated by this Agreement to continue my employment for any particular period, or under any specific terms or conditions. 2, Company agrees to train Employee in the sale and servicing of hearing aids and accessories. 3. Company agrees to pay Employee a compensation based upon sales made by Consultant during the term of this Agreement. The rate of compensation will be determined in advance by the Company and provided in writing to Employee, a copy of which is attached hereto as Exhibit "A". Compensation will be paid based on monies received by Company on Employee's sales and accounts less cancellations. Payment shall be made within twenty (20) days of receipt of satisfactory delivery of products paid in full. Employee understands that compensation rates will change from time to time as conditions, prices, expenses, etc. change, determined by Company. 4, I acknowledge and agree that all Confidential Information is the property of the Company and that I have or will have access to knowledge of Confidential Information (hereinafter defined), any part of which may be valuable to the Company, as a consequence of my employment by the Company, including, but not limited to, information that I have conceived, originated, devised, discovered, invented, or developed, either alone or with others, 5. (a) I acknowledge that, in and as a result of the provision by me of services to the company, I shall or may be making use of, acquiring, observing, examining and adding to the Company's information of a special and unique nature and value relating to such matters as the Company's trade secrets, systems, concepts, processes, testing processes, techniques, devices, procedures, confidential reports and communications and records and lists of customers and clients and/or prospective customers and clients (hereinafter referred to as "Confidential Information"). As a material inducement to the Company to engage my services (or to continue to so engage my services) and to pay to me compensation for such services to be rendered to the Company by me (it being understood and agreed by me that such compensation shall also be paid and received in consideration hereof), I covenant and agree that I shall not, for any purpose, other than the purposes of the Company, at any time during or following the terms of my provision of services to the Company, directly or indirectly, disclose, divulge, reveal, report, publish, transfer, copy, duplicate, communicate, make available or use to any person or entity, directly or indirectly, for any purpose whatsoever or in any manner, any such 1 Confidential Information which has been obtained by or disclosed to me as a result of the Company's engagement of my services. (b) I agree I may not copy or otherwise duplicate any such Confidential Information in whole or in part, without the prior written approval of the Company, except in connection with and in accordance with the terms hereof. I agree I shall use all reasonable means to safeguard any Confidential Information to which I have access and retain it in a safe and secure place. (c) I shall use every reasonable and prudent precaution to ensure that any individual to whom such Confidential Information is or has been disclosed (in connection with the provision by the of services hereunder and in accordance with the terms hereof) does not disclose to any third parties or otherwise use such Confidential Information except pursuant to the terms of this Agreement during, and subsequent to the termination of the relationship between me and such individual. 6. I agree to abide by all state and federal laws governing the sale and service of hearing aids and to uphold all Company policies. 7. (a) Upon termination of this Agreement Company agrees to pay employee all Base Pay earned to date of termination at the first company payday following employment termination. One Hundred and twenty days after employment termination, Company agrees to pay employee one half of the total commission earned on the sale if not already paid. In the event employee leaves employment, any bonus earned will be paid provided that after deductions and other adjustments, employee shall qualify for a bonus. In the event that termination of employment is for cause, including violation of company policy or rules, or any state and federal law governing sale and service of hearing aids, no unpaid commissions or bonus will be paid or shall be considered due to an employee. (b) Employee agrees to report to Company each business day all sales and services performed and all monies collected by employee. Employee also agrees to submit within 48 hours of collection all monies collected from sales and customer accounts. (c) Failure of Employee to submit reports or monies in subparagraph (b) will void the obligations of Company under subparagraph (a). (d) Employee has no authority to deduct commissions from monies received. All monies, checks or drafts received will be delivered to Company, endorsed, if necessary, by Employee to Company. 8. Any Confidential Information to which I have access shall be used by me solely in connection with my employment by the Company. It shall not be used either internally or externally by me for any use outside the purpose and scope of my employment by the Company. I shall not make the Confidential Information available for use by, or for the benefit of, any other party, whether or not for consideration. 9. I agree that I will not take with me any Confidential Information that is in written, machine readable, model, or other form, including sound or video recordings, computer CDs, demo hearing aids, training materials, disks or diskettes, capable of physical delivery, upon or after the termination of my employment with the Company, for any reason whatsoever, without the prior written consent of the Company. I also agree that upon termination of my employment with the Company, for any reason whatsoever, to promptly deliver all such materials in my possession or under my control to the Company. I further agree that upon termination of my employment with the Company for any reason whatsoever, I will return to the Company any property of the Company within my possession or control. 2 10. Neither this Agreement, nor any of the rights and obligations under this Agreement of the parties hereto, may be assigned, transferred or otherwise disposed of by me without the Company's written consent, 11, I agree not to engage in any business directly or indirectly competitive with any business of the Company without the Company's prior written consent during the period of my employment with the Company, alone or as a partner officer, agent, joint venture, director or stockholder, or as a consultant, advisor or employee, or otherwise, of any other entity or individual. 12, (a) I agree to devote my best efforts to the work assigned to me by the Company. If I have any other employment, I will advise the Company at the time of hire. If there is any substantial change in the degree of time or effort required of such other work, I will also advise the company of such change. (b) I will not initiate, continue, or expand such outside employment without the express written permission of the Company. 13. (a) I represent that my performance of all the terms of this Agreement and as an employee of the Company does not and will not breach any agreement to keep in confidence proprietary information acquired by me in confidence prior to my employment by the Company. I have not entered into, and I agree I will not enter into, any agreement either written or oral in conflict with this Agreement. (b) I agree to advise the Company of the identity of any successor employer for whom I am scheduled to work, prior to the time I terminate employment with the Company. I further agree to disclose to any future employer the existence of this Agreement and my obligations hereunder. 14. If and when I leave the employ of the Company for any reason whatsoever, I agree not to take any action to assist my successor employer or any other individual or entity in recruiting any other employee who had worked for the Company during any time period when I worked for the Company. I expressly understand and acknowledge that the provisions of Sections 5, 14 and 15 hereof shall survive termination of this Agreement, for any reason whatsoever. 15. During my employment with the Company and for a period of two (2) years after my employment is terminated for any reason, with or without cause, I will not directly or indirectly recruit or hire any employee of the Company, or otherwise induce such employee to leave the employment of the Company, to become an employee of or otherwise be associated with me or any company or business with which I am or may become associated, nor will I directly or indirectly solicit present or former clients or customers of the Company. I further agree not to induce, promote or facilitate the discontinuation of any existing or prospective customer relationship, whether or not such relationship with the Company was obtained through my efforts. I further agree that I shall not, for a continuous uninterrupted period commencing upon the expiration or termination of my employment by the Company, regardless of the cause for termination, and continuing for two (2) years thereafter, either directly or indirectly, for myself or through or on behalf of or in conjunction with any person, entity or corporation, own, maintain, engage in, be employed by, advise, assist, invest in, make loans to, or have any interest whatsoever in any business which is the same as or substantially similar to the Company's business, or that of any Company affiliate or parent, and which is located within the non-exclusive area served by Employee or within a radius of 20 miles thereof, I recognize that from time to time my employment may be at different locations and that this paragraph 15 applies to each and every location of my employment with the Company. The initial area to be served by Employee is Williamsport, Pennsylvania and may be amended from time to time by instruction of the Company. 3 16. (a) If any provision of this Agreement shall be determined to be invalid or otherwise unenforceable by any court of competent jurisdiction, the validity and enforceability of the other provisions of this Agreement shall not be affected thereby and the provision found invalid or otherwise unenforceable may be appropriately amended by that court so as to be valid and enforceable. (b) This Agreement constitutes the entire agreement and understanding between the Company and me concerning the subject matter thereof. No modification, amendment, termination or waiver of this Agreement shall be binding unless in writing and signed by a duly authorized officer of the Company. Failure of the Company to insist upon strict compliance with any of the terms, covenants or conditions hereof shall not be deemed a waiver of such terms, covenants and conditions. (c) I acknowledge that money damages alone will not adequately compensate the Company for breach of any of my covenants and agreements herein and, therefore, agree that in the event of the breach or threatened breach of any such covenants or agreements, in addition to all other remedies available to the Company, the Company shall be entitled to injunctive relief compelling specific performance of, or other compliance with the terms hereof. I agree that in the event of a breach of either Paragraph 11 or Paragraph 15 of this Agreement by me, I will be liable to Company as liquidated damages in an amount of money equal to the total sum of any sales by me as Employee on my own behalf or on behalf of others contrary to the best interests of Company. In addition, Company will retain as liquidated damages any commissions due and owing by Company to me at the time of the breach of this Agreement by me. I acknowledge that I have previously made my living in other fields and that the restrictive provisions of this Agreement in no way prevent me from earning a living in the event I should breach these provisions. (d) This Agreement shall be binding upon me irrespective of the duration of my employment with the Company or the amount of my salary, wages or commissions. For purposes of this Agreement, the period of my employment shall include any time during which I am retained as a consultant by the Company. My obligations under this Agreement shall survive the termination of my employment by the Company irrespective of the reason for such termination and shall not in any way be modified, altered or otherwise affected by such termination.. (e) I understand, acknowledge and agree that any violation by me of any of the terms of this Agreement shall result in my immediate termination. (fl willingly. I warrant and represent that I have the legal right to enter into this Agreement and that I do so (g) This Agreement may not be amended or modified, nor may any of the rights or obligations of any party hereto be waived, except by a superseding written agreement signed by myself and by the Company. (h) The captions to the paragraphs of this Agreement are for the convenience of the parties only and shall not affect the application or construction of the provisions of this Agreement. (i) This Agreement shall be construed, interpreted and applied in accordance with the laws of the Commonwealth of Pennsylvania, applying to contracts fully executed and performed in the State of Pennsylvania. (j) This Agreement contains the entire agreement between the parties. Any and all prior and collateral representations, promises and conditions in connection with the subject matter are merged into this Agreement. Any representation, promise or condition not incorporated herein shall not be binding upon either party. This Agreement supersedes and is in lieu of all existing agreements or arrangements between the parties. 4 4:55:2317!_l4V /F4(.0 RAGE. 02 e" ll 17. Employee agrees to work the minimum office buurs which are 9:00 am t') 5:00 pm in free standing MJracie-Hes Cettters and from store opening + 8 hours in Seal's stores Monday ttu'ough Friday. In Addition, employee is required to be available to work three evenings per week by appointment and two Saturday's per month by appybibmrn►l, The. IUlIliniultL oft ceiworking (tutus may be amended :From ti mo to tk o by Om company with; consent from the employee, 18, Employee ondetvands that as a part of trailing, and for t iture eva[uati.ons, the Company will, from tlni ; to time he monitoring sessions with clients or customers. 3 hereby consent to the use of remota monitoring equipment, including both visual and sound, for Such purses, 19. receipt of Copy 9 Avitg -1ct t. 1 hereby nolo owlpt :tea duplioate copy of this A$rce►nent. I ACKNOWLEDGE THAT BEFORE SIGNING BELOW 1 HAVE READ ALL OF THE PROVISIONS OF THIS AGR Fk;M1?I'IT AND FULLY UNDERSTAND THE. SAME. Dated: f ACCEPTED AND AGREED FOR: Near ills 0tts. If1c, (Company) Signature: W'I'NES Date: Date: 5 EXHIBIT "A" Effective January 17, 2011 Compensation for Clyde Vadasz will be as follows: $300/week draw against commissions with 15% commission paid on all product lines. PA State Hearing Aid Fitters Exam: • After employee has successfully passed the PA State Hearing Aid Fitters Exam, the compensation plan will be a $300/week draw against commissions with 17% commission paid on all product lines. Bonus structure: • A 3% bonus will be paid on net sales of $130,000 or more sold in a calendar quarter. The bonus will be considered to be earned 60 days after the end of the quarter on all products satisfactorily delivered. • If any quarterly bonus level is not earned but net sales of $500,000 in a calendar year is achieved, the 3% bonus will still be paid. • An additional 2% bonus will be paid on net sales of $700,000 in a calendar year. • All sales made from any office will count toward bonus. Health Insurance Contributions: • After 90 days, employee will receive $200.00 per month as a contribution to their own Health Insurance Plan. Commissions on Batteries/Accessories: • Employee will receive 17% commission on all batteries and accessories sold Vacation: • After 1 year of employment, employee will receive 2 weeks vacation and 5 personal days. 401K Plan: • Employee will qualify, after 6 months, for participation in the company retirement plan. Employee is responsible for contacting the corporate accountant at our corporate office within 6 months of employment to become enrolled in the company retirement plan. From time to time the company will promote special events and deeply discounted sales. The commission amount will vary with each situation. Compensation arrangements in the firture will change as circumstances change. 6 Sycle Confident Agreement Form of Confidentiality Agreement for employees, agents, representatives, third party suppliers, and all other Individuals or entities who utilize or may have access to Confidential Information THIS AGREEMENT is made as of this day, January 17, 2011 by and between Hearing Instruments, Inc. ("Franchisee") and Clyde Vadasz ("Confidant"). RECITALS A. Miracle -Ear, Inc. ("Miracle -Ear") and Franchisee executed that certain franchise agreement dated as of February 28 2004 and that certain sublicense to access and use agreement (Collectively, the "Franchisee Agreements"). 13. Franchisee has received and will periodically receive Confidential Information of Miracle -Ear. "Confidential Information" includes the whole or any portion of know-how, knowledge, methods, manuals, specifications, processes, procedures and/or improvements regarding the business that is valuable and secret in the sense that it is not generally known to Miracle -Ear competitors and any proprietary information contained in any Miracle -Ear documents that Miracle - Ear provides to Franchisee and in which Miracle -Ear describes the Miracle -Earl System or any operational policies, manuals, standards, requirements or practices, whether communicated to Franchisee in writing, verbally or through the internet or other online or computer communications, and any other knowledge or know-how concerning the methods of operation of the Miracle -Ear® centers. C. Pursuant to the Franchisee Agreements, alt of Franchisee's employees, agents, representatives, third party suppliers, and all other individuals or entities who utilize or may have access to Confidential Information, may not, at any time, disclose, copy, reproduce, sell or use in any other business or in any manner not specifically authorized or approved in advance in writing by Miracle -Ear any Confidential Information. D. Pursuant to the Franchisee Agreements, Franchisee must obtain Confidentiality Agreements from all of its employees or agents, or any other individual or entity to whom Franchisee has disclosed the Confidential Information. E. Confidant wants to become or currently is an employee of Franchisee and, therefore, it has had and/or will have access to Confidential Information. NOW, THEREFORE, in consideration of foregoing, the payment of $1.00 that at the time of execution of this Agreement Franchisee is paying to Confidant, and the mutual covenants and reliance of the parties, the parties agree as follows: 1. Confidant agrees that (a) it will treat as confidential and will not disclose the Confidential Information which may be made or become available to Confidant; (b) it will maintain in a secure place any Confidential Information delivered to it; and (c) it will not use any Confidential Information for any purpose other than in furtherance of its relationship with Franchisee or for any purpose which may be detrimental to Miracle -Ear or Miracle -Ear's present or potential business or shareholders. 2. Confidant represents and warrants that as of this date, Confidant has never disclosed Confidential Information to any third party, with the exception of third parties with whom Confidant has subcontracted for the performance of some or all of Confidant's obligations to Franchisee ("Confidant's Subcontractors"). Confidant represents and warrants that as of this date, Confidant has required Confidant's Subcontractors to maintain the confidentiality of such Confidential Information consistent with the provisions of Paragraph I hereof. 3. Nothing stated herein shall preclude the disclosure of Confidential Information in response to a valid order of a court, governmental agency or other governmental body or any political subdivision thereof or as otherwise required by law, provided, however, that if Confidant is requested pursuant to, or required by, applicable law, regulation or legal process to disclose any Confidential Inforrnation, Confidant will notify Miracle -Ear and Franchisee promptly so that Miracle -Ear and Franchisee may seek a protective order or other appropriate remedy or, in.Miracle-Ear's sole discretion, waive compliance with the terms of this Agreement. Confidant agrees to use reasonable efforts to cooperate with Miracle - Ear and Franchisee in connection with Miracle -Ear's and Franchisee's efforts to prevent disclosure or seek confidential treatment or any other remedy respecting such requested or required disclosure. 4. The parties agree that Miracle -Ear and Franchisee would not have an adequate remedy at law for any breach or nonperformance of the terms of this Agreement by Confidant, Irn the event of a breach or threatened breach of any of the terms of this Agreement by Confidant, Miracle -Ear and Franchisee will forthwith be entitled to an injunction restraining 7 *1i'12/2w.I O4:5 . 5 t152' 2'4S KEVCG FGA 01/02 such brr at lr ur to s decree of spsoit te'perforrttattcc, tivitltout showing of proving any notual (image and .rirhr,:re :tit)' obligation to post bund or grant tiny other type of guaranty, together with recovery Of re ,9uuable phut m y;' ice. and ether cost; ince-red in obtaining said equitable relict, until such time as a final mid bntd'ing determination is made. Tho toredoing rgniteble. teinedir,.s aro in addition to, and nut in lieu of: nil other remedies or rights that Miracle -Bin might otherwise have by virtue of airy breach of this Ag?eement by Confident, inoltrditig the right to ecnsequentinl damages. 5. No modification or waiver cif any of the provisions hereof, or any representation, promise or addition hereto, o• waiver orally broach hereof, ►trill be binding upon n party unless made hi writing and signed !,y the party to bs charged thereby and by Mirecle•Ear. Vo waiver ofany particular breach wlli be deemed to apply to any other breach, whether pr iur IC' 1 rinircr, This Agreoinent may not bo asnignod by confidant without the express prior written oousa:.t of Mitaetts-Eur. S. The prevailing party u, any action • r proeexding arising rnidcr, out of, hi connection with: or in relation i:o this ASte Ciaent •rviil be eutittsd to recover its reasonable nttomeya' fees and costs. 1, Thia /lgreentent shn(i ba oonetrued and eutorced in accordance with rho laws of the. State of Minnesota, .nithout regard to any conflict of laws principles. Any cause of action, claim, suit or demand nllegertly prising front or related to the terms of -this Agreement must be brought (i) by Confidant, in the federal District Court for the District of Minnesota or in the State courts located In (.Hennepin County, Minnesota, (ii) by Minicle•13ar or by Franchisee, (n the Federal f)letrict Cont for the District of Minnesota, in thw State courts located in Hennepin County, Minnesota, or iu the competent cont; located in the Stole where Confidant has lts domicile at the time the action is brought. 'rite parties ir'evocably submit theimctves to, nuts coli ri t to, the exclusive jurisdiction of mild courts, All parties hereby waive any and all riv,htS Ick a trh,1 by fury in connection with the enforcement or interpretation by judicial process of any provision of this Arccrmnt, or any icpal nurio.t initiated for ilia recovery of damages for b, ascii of this Ag eminent Franchisee and Cottfidnut expressly wee that Miracle -Ear is a thrid party benefic!aty of this ,tib ecment and as melt Miroelr..pae 9hnll hove, the. right to mirnree any and all remedies available upon the+ violation of any of the provisions under this Agreement, tu addition, Miracle -Ear may require Franchisee to bring any action that lvfiracle-f;ar considers appropriate hi tilt event of any breach by Confidant hereunder. In the event that Miracle -Bar or Franohisee make a claim that Confidant has violated Confidant's ubtig,ittons under this Agreement, Confidnrt will have the burden ofprvviny that such violation did not occGr, 9. C:onnfinnt con ill ns 1. ' oudorstnnd rind win comply will; all ;linos end Federal Icgialntion roI ting to thn rare fold dandling of'electronic records, and tiiilhetntore understands that failure to comply with such Ie€;lsla(ion may result in civil ani or criminal actions. Confidant also affirms their future compliance With erten regulations including that they shall; t, access the sytatetn only from Miracle -rear offices, and no other location apices ttattchisty provides specific written authorization of an additional location for access; 2) use only the unique Useruamo assigned to confident when accessing the &yctent, and s11911 'mutest their Usertutme, and vhnll notify finnahisco if confidant suspects any breach of their logo) ercdcntinls; 3) shall enter tiara and accurate inforrnatlon into the system, and understand that entry of such information consdtntes their affirmation of such information by rattans of a legal eleotronie signature, tN WITNESS WHEREOF, the parties have caused this Agreement to be executed in the tnnntter appropriate to each. FRANCHISEE CONFIDANT Hearing Instruments, Inc. (Employee Signature) 6�1',1r („._,I rrp Ely; Y.ulta C. Maf✓*alvoy By;'Xi:-.._<..` .4 , its: President. and C15O (Print Name) 8 Todd J. Shill, Esquire Attorney ID No. 69225 Stephen Moniak, Esquire Attorney ID No. 80035 RHOADS & SINON LLP One South Market Square, 12th Floor PO Box 1146 Harrisburg, PA 17108-1146 Telephone: (717) 233-5731 Facsimile: (717) 238-8622 Email: tshill@rhoads-sinon.com smoniak@rhoads-sinon.com Attorneys for Plaintiff, Hearing Instruments, Inc. HEARING INSTRUMENTS, INC., Plaintiff v. CLYDE VADASZ, Defendant HLED-OFFICL: 01: THE RROTHONQTA, 201411 28 Ptd 3:26 CUMBERLAND COUNTY PENNSYLVANIA IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA LAW AND EQUITY NO. /41— VV/‘. MOTION FOR PRELIMINARY INJUNCTION Plaintiff Hearing Instruments, Inc. ("Hearing Instruments"), by and through its counsel, Rhoads & Sinon LLP, hereby moves this Court pursuant to Pa. R.C.P. 1531 for an Order granting a Preliminary Injunction in its favor, and in support thereof, avers the following: 1. The Complaint, filed by Hearing Instruments contemporaneously herewith, is attached as Exhibit 1 and is incorporated by reference as though set forth in full. 2. Hearing Instruments moves for a Preliminary Injunction pursuant to Pa. R.C.P. No. 1531. 3. Defendant Clyde Vadasz ("Vadasz" or "Defendant") has irreparably harmed Hearing Instruments and will continue to irreparably harm Hearing Instruments unless this Court intervenes. Vadasz, a former employee of Hearing Instruments, has breached the express non- compete covenant in his Employment Agreement by accepting employment with Hearing Lab Technology, LLC or Liberty Hearing Aids (collectively "Liberty"), a direct competitor of 959185.1 Hearing Instruments. Further, Hearing Instruments' proprietary and confidential information is, upon information and belief, at substantial risk of being unlawfully transferred by Vadasz to Liberty. 4. As noted in the Complaint, Vadasz has breached, or will likely breach, his contractual and/or common law duties owed to Hearing Instruments, including: a. Vadasz's agreement to not be employed by or assist a business which is the same or substantially similar to Hearing Instruments' business for a period of two (2) years and within a twenty (20) mile radius of each Hearing Instruments location where he worked following termination of his employment; b. Vadasz's agreement to not solicit Hearing Instruments' clients or customers for a period of two (2) years after termination of his employment; c. Vadasz's agreement to not disclose Hearing Instruments' confidential and proprietary information; e. Vadasz's common law duty not to interfere with Hearing Instruments' contractual and prospective contractual relations with its customers and prospective customers; f. Vadasz's statutory and/or common law duty not to misappropriate or disclose Hearing Instruments' confidential information or trade secrets; and g. Vadasz's common law duty not to unfairly compete with Hearing Instruments. 2 5. For the reasons stated in the Complaint and accompanying Memorandum of Law, unless and until Vadasz is enjoined from breaching his contractual and/or common law duties to Hearing Instruments, Hearing Instruments is and will continue to be irreparably harmed in the nature of: a. loss of and/or damage to relationships with clients and customers, both current and prospective; b. loss of business reputation; and c. loss and disclosure of Hearing Instruments' confidential and proprietary information. 6. Relief is necessary to prevent immediate and irreparable harm that cannot be adequately compensated by money damages. 7. Greater injury will occur from refusing to grant the injunction than from granting the injunction. 8. The injunction will restore the parties to their status quo as it existed before the alleged wrongful conduct. 9. Hearing Instruments is likely to prevail on the merits. 10. The injunction is reasonably suited to abate the offending activity. 11. The public interest will not be harmed if the injunction is granted. 3 WHEREFORE, Plaintiff Hearing Instruments, Inc. respectfully requests that a preliminary injunction in the form attached hereto be issued which enjoins Clyde Vadasz from engaging in the wrongful conduct described above. Respectfully submitted, RHOADS & SINON LLP Todd J. Shill Stephen Moniak One South Market Square P. O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Plaintiff, Hearing Instruments, Inc. 4 EXHIBIT 1 5925g65.1 S E C T .I 0 N A S E C T I 0 N Supreme Court of .Pennsylvania CourtffCommoi Pleas C1 'i1 CoV,er Sheet Cumberland} County For Prothonotary Use Only: Docket No: The information collected on this form is used solely for court administration purposes. This form does not supplement or replace the filing and service of pleadings or other papers as required by law or rules of court. Commencement of Action: Petition Declaration of Taking 1 Complaint 1 Writ of Summons ■ IN Transfer from Another Jurisdiction 1 Lead Plaintiff's Name: Hearing Instruments, Inc. Lead Defendant's Name: Clyde Vadasz Dollar Amount Requested: 1 within arbitration limits Are money damages requested? :x Yes 1 No (check one) ®outside arbitration limits Is this a Class Action Suit? I• Yes El No Is this an MDJAppeal? 0 Yes El No Name of Plaintiff/Appellant's Attorney: Stephen Moniak, Esquire a Self -Represented Pro SeJ Litigant) 1 Check here if you have no attorney (are Nature of the Case: Place an "X" to the left of the ONE case category that most accurately describes your PRIMARY CASE. If you are making more than one type of claim, check the one that you consider most important. TORT (do not include Mass Tort) O Intentional O Malicious Prosecution O Motor Vehicle O Nuisance O Premises Liability O Product Liability (does not include mass tort) O Slander/Libel/ Defamation O Other: MASS TORT O Asbestos Tobacco O Toxic Tort - DES O Toxic Tort - Implant • Toxic Waste O Other: PROFESSIONAL LIABLITY O Dental O Legal O Medical O Other Professional: CONTRACT (do not include Judgments) O Buyer Plaintiff 0 Debt Collection: Credit Card 0 Debt Collection: Other O Employment Dispute: Discrimination El Employment Dispute: Other Breach of Contract D Other: REAL PROPERTY O Ejectment 0 Eminent Domain/Condemnation 0 Ground Rent 0 Landlord/Tenant Dispute O Mortgage Foreclosure: Residential O Mortgage Foreclosure: Commercial O Partition 0 Quiet Title El Other: CIVIL APPEALS Administrative Agencies O Board of Assessment O Board of Elections O Dept. of Transportation O Statutory Appeal: Other O Zoning Board O Other: MISCELLANEOUS O Common Law/Statutory Arbitration 0 Declaratory Judgment O Mandamus 0 Non -Domestic Relations Restraining Order 0 Quo Warranto 0 Replevin 0 Other: Updated 1/1/2011 Todd J. Shill, Esquire Attorney ID No. 69225 Stephen Moniak, Esquire Attorney ID No. 80035 RHOADS & SINON LLP One South Market Square, 12th Floor PO Box 1146 Harrisburg, PA 17108-1146 Telephone: (717) 233-5731 Facsimile: (717) 238-8622 Email: tshill@rhoads-sinon.com smoniak@rhoads-sinon.com Attorneys for Plaintiff, Hearing Instruments, Inc. HEARING INSTRUMENTS, INC., Plaintiff v. CLYDE VADASZ, Defendant ) IN THE COURT OF COMMON PLEAS ) CUMBERLAND COUNTY, ) PENNSYLVANIA ) LAW AND EQUITY ) NO. NOTICE You have been sued in court. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this complaint and notice are served, by entering a written appearance personally or by attorney and filing in writing with the court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so the case may proceed without you and a judgment may be entered against you by the court without further notice for any money claimed in the complaint or for any other claim or relief requested by the 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 32 South Bedford Street Carlisle, PA 17013 Telephone: (717) 249-3166 Todd J. Shill, Esquire Attorney ID No. 69225 Stephen Moniak, Esquire Attorney ID No. 80035 RHOADS & SINON LLP One South Market Square, 12th Floor PO Box 1146 Harrisburg, PA 17108-1146 Telephone: (717) 233-5731 Facsimile: (717) 238-8622 Email: tshill@rhoads-sinon.com smoniak@rhoads-sinon.com Attorneys for Plaintiff, Hearing Instruments, Inc. HEARING INSTRUMENTS, INC., ) IN THE COURT OF COMMON PLEAS ) CUMBERLAND COUNTY, Plaintiff ) PENNSYLVANIA v. ) LAW AND EQUITY CLYDE VADASZ, ) NO. Defendant ) COMPLAINT Plaintiff Hearing Instruments, Inc. ("Hearing Instruments"), by and through its counsel, Rhoads & Sinon LLP, brings this action in law and equity against Defendant Clyde Vadasz (hereinafter "Defendant" or "Vadasz"). INTRODUCTION Hearing Instruments brings this action to stop the wrongful conduct of the Defendant who is currently employed by Hearing Lab Technology, LLC or Liberty Hearing Aids (collectively "Liberty"), a direct competitor of Hearing Instruments' hearing aid and hearing aid accessory business. Vadasz is a former employee of Hearing Instruments, and he is subject to restrictive covenants contained in his Employment Agreement with Hearing Instruments. Those restrictive covenants prohibit Vadasz from employment with Liberty within the proscribed 959164.1 FACTUAL BACKGROUND 7. Vadasz initially worked for Hearing Instruments from October 26, 2009 through October 7, 2010, and more recently was employed by Hearing Instruments from January 13, 2011 until he was terminated on or about April 17, 2014. 8. In connection with and in consideration of his most recent employment with Hearing Instruments, Vadasz signed an Employment Agreement that contained certain employment restrictive covenants. A true and correct copy of Vadasz's Employment Agreement with Hearing Instruments is attached hereto as Exhibit A. 9. Vadasz signed the Employment Agreement at Hearing Instruments' corporate headquarters in Camp Hill, Cumberland County, PA and also completed all corporate training at Hearing Instruments' Camp Hill location. 10. As part of the Employment Agreement, Vadasz acknowledged that he would have access to Hearing Instruments' confidential and proprietary information, including, inter alia, its customer lists, and agreed that he would not, at any time, use or otherwise disclose such information for any purpose other than for the purpose and benefit of Hearing Instruments. (See Employment Agreement (Ex. A), ¶¶5,8; see also Sycle Confident Agreement (Ex. A) ¶1.) 11. It was clear that this confidential and proprietary information was only to be used within the scope of his employment with Hearing Instruments. (See Employment Agreement (Ex. A) ¶8.) 12. Moreover, the Employment Agreement signed by Vadasz contains the following restrictive covenant: During my employment with the Company and for a period of two (2) years after my employment is terminated for any reason, with or without cause, I will not directly or indirectly recruit or hire any 3 employee of the Company, or otherwise induce such employee to leave the employment of the Company, to become an employee of or otherwise be associated with me or any company or business with which I am or may become associated, nor will I directly or indirectly solicit present or former clients or customers of the Company. I further agree not to induce, promote or facilitate the discontinuation of any existing or prospective customer relationship, whether or not such relationship with the Company was obtained through my efforts. I further agree that I shall not, for a continuous uninterrupted period commencing upon the expiration or termination of my employment by the Company, regardless of the cause for termination, and continuing for two (2) years thereafter, either directly or indirectly for myself or through or on behalf of or in conjunction with any person, entity or corporation,' own, maintain, engage in, be employed by, advise, assist, invest in, make loans to, or have any interest whatsoever in any business which is the same as or substantially similar to the Company's business, or that of any Company affiliate or parent, and which is located within the non-exclusive area served by Employee or within a radius of 20 miles thereof. I recognize that from time to time my employment may be at different locations and that this paragraph 15 applies to each and every location of my employment with the Company. The initial area to be served by Employee is Williamsport, Pennsylvania and may be amended from time to time by instruction of the Company. (Employment Agreement (Ex. A), ¶15. (emphasis added).) 13. As set forth in the Employment Agreement, therefore, Vadasz agreed not to work, inter alio, for any business which is the same as or substantially similar to Hearing Instruments' business, within a 20 mile radius of "each and every location of [his] employment with the Company." (Employment Agreement (Ex. A), ¶15.) 14. During his most recent employment with Hearing Instruments, Vadasz was assigned to and worked as a sales consultant at the following locations: Williamsport, Shamokin Dam and Bloomsburg, Pennsylvania. His primary locations were the Williamsport and Shamokin Dam offices. 4 15. Vadasz's last day of employment with Hearing Instruments was April 17, 2014, at which time he was terminated for excessive absenteeism and violation of company policies. 16. At the time of his termination, Vadasz returned certain company property to the Shamokin Dam office. 17. On July 21, 2014, Hearing Instruments' President and CEO, Julia Beall - McKelvey received an email from one of her employees who heard from two Hearing Instruments' patients that Vadasz was working at the Sam's Club in Muncy selling hearing aids on behalf of Liberty. 18. Hearing Lab Technology, LLC owns and/or operates a hearing aid store located inside the Sam's Club at 611 Lycoming Mall Road, Muncy, PA 17756 ("Liberty's Muncy Hearing Aid Store"). 19. Upon information and belief, Vadasz is currently employed at Liberty's Muncy Hearing Aid Store for Hearing Lab Technology, LLC/Liberty Hearing Aids, and is the primary, if the not sole, hearing aid sales consultant at that store. 20. Hearing Lab Technology, LLC/Liberty Hearing Aids is a direct competitor of Hearing Instruments, and its business is the same or substantially similar to Hearing Instruments' business. 21. Liberty's Muncy Hearing Aid Store at 611 Lycoming Mall Road, Muncy, PA 17756 is just 8.9 miles from Hearing Instruments' Williamsport office where Vadasz worked and is well within the 20 mile radius prohibited by his Employment Agreement. 22. Further, during the course of his employment with Hearing Instruments, Vadasz became familiar with confidential and proprietary information concerning, inter alia, sales 5 methods and techniques, marketing and sales information and data, equipment costs and expenses and customer lists for both current and prospective customers. 23. Indeed, Hearing Instruments invested substantial time, money and resources in training and educating Vadasz with regard to its unique sales methods and techniques. 24. It is believed, and therefore averred that Vadasz is now making use of such confidential and proprietary information to further the business interests of Liberty in clear violation of the terms of his Employment Agreement with Hearing Instruments. 25. Upon information and belief, Vadasz is working for Hearing Lab Technology, LLC/Liberty Hearing Aids and, unless enjoined by this Court, will continue to violate the terms of his Employment Agreement. IRREPARABLE HARM 26. Vadasz agreed that the provisions of his Employment Agreement are reasonably designed to protect Hearing Instruments from irreparable harm. [See Employment Agreements (Ex. A) ¶16(c).] During his employment, he became intimately familiar with Hearing Instruments' confidential and proprietary information concerning, inter alia, sales methods and techniques, marketing and sales information and data, equipment costs and expenses, and customer lists (both current and prospective). 27. Vadasz's possession of that knowledge while working for a competitor of Hearing Instruments within the restricted geographic region will result in irreparable harm to Hearing Instruments, which the Employment Agreement was designed to protect against. 28. Hearing Instruments has a legitimate belief and concern that Defendant will interfere with Hearing Instruments' business relationships with its customers. He is likely to continue such action unless restrained. 6 29. Unless restrained, and because of the proprietary and confidential information that Vadasz gained through his employment with Hearing Instruments, his current employment with Liberty poses an immediate threat and would very likely cause irreparable harm to Hearing Instruments' current business relationships, business opportunities, goodwill, and business reputation. 30. Unless Defendant is restrained, Hearing Instruments will likely suffer the loss of customers, employees, goodwill, revenues, and profit. COUNT I Breach of Contract 31. Hearing Instruments incorporates paragraphs 1 through 30 as though fully set forth herein. 32. The Employment Agreement previously identified herein was entered into by Vadasz in connection with the commencement of his employment with Hearing Instruments, and, as such, is supported by adequate consideration. 33. Vadasz is subject to the terms and conditions of his Employment Agreement with Hearing Instruments, whereby he is prohibited from soliciting Hearing Instruments' employees or customers for a period of two (2) years, and he is prohibited from competing against Hearing Instruments, directly or indirectly, for a period of two (2) years and within a radius of twenty (20) miles of each location where he worked as an employee of Hearing Instruments. 34. Vadasz's continued employment with Liberty is in direct violation of his Employment Agreement in that he is competing with Hearing Instruments inside the twenty (20) mile restricted area. 7 35. During his employment with Hearing Instruments, Vadasz learned trade secrets and obtained confidential information regarding Hearing Instruments' customer lists, marketing strategies, pricing, costs, and sales of hearing aids and hearing aid accessories. 36. Vadasz, whether consciously or unconsciously, will subject such information to disclosure while competing directly with Hearing Instruments as an employee of Liberty. 37. As a result of the foregoing, Hearing Instruments has been harmed and will continue to be harmed, and, therefore, is entitled to all relief previously agreed to by the parties pursuant to Vadasz's Employment Agreement, namely, injunctive relief (both preliminarily and permanently), the receipt of compensatory and/or liquidated damages, and such other legal or equitable relief that this Court deems just and proper. COUNT II Breach of Fiduciary Duty 38. Hearing Instruments incorporates paragraphs 1 through 37 as though fully set forth herein. 39. The actions taken by Vadasz, as set forth above, constitute a breach of his fiduciary duty and obligation to Hearing Instruments arising from his confidential relationship with Hearing Instruments. 40. As a result of the aforementioned breach of fiduciary duty, Hearing Instruments will be injured in that it will suffer in its business relationships and lose customers, business, reputation, and/or goodwill. Hearing Instruments lacks an adequate remedy at law and, unless enjoined by this Court, Vadasz will continue to cause irreparable injury and damage to Hearing Instruments as a result of the wrongful acts complained of herein. 8 COUNT III Violation of Pennsylvania Uniform Trade Secrets Act 41. Hearing Instruments incorporates paragraphs 1 through 40 as though fully set forth herein. 42. As set forth above, Vadasz is in possession of valuable proprietary information and trade secrets concerning Hearing Instruments' business, and such information and trade secrets are protected by the Pennsylvania Uniform Trade Secrets Act, 12 Pa. C.S. §§5301 et seq. ("PUTSA"). 43. Defendant knows that that the aforementioned proprietary information and trade secretes were acquired under circumstances giving rise to a duty to maintain their secrecy and limit their use. 44. Defendant has used, or will inevitably use, the aforementioned proprietary information and trade secrets to the advantage of Liberty and to the detriment of Hearing Instruments. 45. Unless Defendant is enjoined from the use and disclosure of Hearing Instruments' proprietary information and trade secrets, Hearing Instruments will suffer irreparable harm and unascertainable monetary damages. 46. As a result of the foregoing, Hearing Instruments is entitled to injunctive relief prohibiting Defendant from disclosing Hearing Instruments' proprietary information and trade secrets pursuant to 12 Pa. C.S. §5303, compensatory damages in an amount yet to be determined pursuant to 12 Pa. C.S. §5304(a), costs, and such other legal or equitable relief that this Court deems just and proper. 9 COUNT V Unfair Competition 54. Hearing Instruments incorporates paragraphs 1 through 53 as though fully set forth herein. 55. By engaging in the aforementioned conduct, Defendant has engaged in unfair competition with Hearing Instruments. 56. The actions of Defendant have been willful, intentional, and unprivileged, and have caused, and are continuing to cause, irreparable harm as well as imminent monetary damages to Hearing Instruments in an amount yet to be determined. PRAYER FOR RELIEF WHEREFORE, Plaintiff Hearing Instruments, Inc. respectfully requests: (1) After a hearing, that a preliminary injunction issue against Defendant Clyde Vadasz from competing with Plaintiff for a period of two (2) years from the date of termination of his employment with Hearing Instruments within a twenty (20) mile radius of any Hearing Instruments' location where he worked; from soliciting or doing business with Hearing Instruments' customers, both current and prospective, and from disclosing Hearing Instruments' trade secrets or confidential information to anyone; (2) A permanent injunction against Defendant from competing with Hearing Instruments (upon the same durational conditions as the preliminary injunction), from soliciting or doing business with Hearing Instruments' customers, both current and prospective, and from disclosing Hearing Instruments' trade secrets or confidential information to anyone; and 11 (3) A judgment in favor of Hearing Instruments and against Defendant for all direct, consequential, compensatory, incidental, liquidated, and special damages arising out of his aforementioned wrongful conduct, in an amount believed to exceed the jurisdictional threshold for compulsory arbitration, including costs and such other legal or equitable relief that this Court deems proper. RHOADS & SINON LLP Todd J. Shill Stephen Moniak One South Market Square, 12th Floor PO Box 1146 Harrisburg, PA 17108-1146 Telephone: (717) 233-5731 Attorneys for Plaintiff Hearing Instruments, Inc. 12 VERIFICATION Julia C. Beall -McKelvey, deposes and says, subject to the penalties of 18 Pa. C.S. §4904 relating to unsworn falsification to authorities, that she is the President of Hearing Instruments, Inc., that she makes this verification by its authority and that the facts set forth in the foregoing Complaint are true and correct to the best of her knowledge, information and belief. s �..�. C. DateJulia C. Beall -McKelvey EXHIBIT A 621}413.1 EMPLOYMENT AGREEMENT HEARING INSTRUMENTS, INC. In consideration of my employment or continued employment by HEARING INSTRUMENTS, INC., a corporation duly organized and existing in the State of Pennsylvania, with a principal business address at 1501 Market Street, Camp Hill, Pennsylvania (referred to as the "Company") and the compensation paid to me by the Company from time to time, Clyde Vadasz("Employee") does hereby represent, warrant and agree as follows: WHEREAS, Company desires to employ the services of Employee as a Sales Consultant for the sale and service of hearing aids and hearing aid accessories; and WHEREAS, Employee desires to be employed by the Company in the capacity of Sales Consultant to sell and service hearing aids and hearing aid accessories. I. I agree that during my employment with the Company, I will devote my full business time and efforts to the Company and will not, without the Company's express prior written consent, engage in any employment or business other than for the Company: I acknowledge that this Agreement does not create any obligation on my part to work for the Company, or on the part of the Company to employ me, for any fixed period of time, and my employment is at will and may be terminated at any time with or without cause. The Company is not obligated by this Agreement to continue my employment for any particular period, or under any specific terms or conditions. 2. Company agrees to train Employee in the sale and servicing of hearing aids and accessories. 3. Company agrees to pay Employee a compensation based upon sales made by Consultant during the term of this Agreement. The rate of compensation will be determined in advance by the Company and provided in writing to Employee, a copy of which is attached hereto as Exhibit "A". Compensation will be paid based on monies received by Company on Employee's sales and accounts less cancellations. Payment shall be made within twenty (20) days of receipt of satisfactory delivery of products paid in full. Employee understands that compensation rates will change from time to time as conditions, prices, expenses, etc. change, determined by Company. 4. I acknowledge and agree that all Confidential Information is the property of the Company and that I have or will have access to knowledge of Confidential Information (hereinafter defined), any part of which may be valuable to the Company, as a consequence of my employment by the Company, including, but not limited to, information that I have conceived, originated, devised, discovered, invented, or developed, either alone or with others. 5. (a) I acknowledge that, in and as a result of the provision by me of services to the company, I shall or may be making use of, acquiring, observing, examining and adding to the Company's information of a special and unique nature and value relating to such matters as the Company's trade secrets, systems, concepts, processes, testing processes, techniques, devices, procedures, confidential reports and communications and records and lists of customers and clients and/or prospective customers and clients (hereinafter referred to as "Confidential Information"). As a material inducement to the Company to engage my services (or to continue to so engage my services) and to pay to me compensation for such services to be rendered to the Company by me (it being understood and agreed by me that such compensation shall also be paid and received in consideration hereof), I covenant and agree that I shall not, for any purpose, other than the purposes of the Company, at any time during or following the terms of my provision of services to the Company, directly or indirectly, disclose, divulge, reveal, report, publish, transfer, copy, duplicate, communicate, make available or use to any person or entity, directly or indirectly, for any purpose whatsoever or in any manner, any such Confidential Information which has been obtained by or disclosed to me as a result of the Company's engagement of my services. (b) 1 agree I may not copy or otherwise duplicate any such Confidential Information in whole or in part, without the prior written approval of the Company, except in connection with and in accordance with the terms hereof. I agree I shall use all reasonable means to safeguard any Confidential Information to which I have access and retain it in a safe and secure place. (c) I shall use every reasonable and prudent precaution to ensure that any individual to whom such Confidential Information is or has been disclosed (in connection with the provision by me of services hereunder and in accordance with the terms hereof) does not disclose to any third parties or otherwise use such Confidential Information except pursuant to the terms of this Agreement during, and subsequent to the termination of the relationship between me and such individual. 6. I agree to abide by all state and federal laws governing the sale and service of hearing aids and to uphold all Company policies. 7. (a) Upon termination of this Agreement Company agrees to pay employee all Base Pay earned to date of termination at the first company payday following employment termination. One Hundred and twenty days after employment termination, Company agrees to pay employee one half of the total commission earned on the sale if not already paid. In the event employee leaves employment, any bonus earned will be paid provided that after deductions and other adjustments, employee shall qualify for a bonus. In the event that termination of employment is for cause, including violation of company policy or rules, or any state and federal law governing sale and service of hearing aids, no unpaid commissions or bonus will be paid or shall be considered due to an employee. (b) Employee agrees to report to Company each business day all sales and services performed and all monies collected by employee. Employee also agrees to submit within 48 hours of collection all monies collected from sales and customer accounts. (c) Failure of Employee to submit reports or monies in subparagraph (b) will void the obligations of Company under subparagraph (a). (d) Employee has no authority to deduct commissions from monies received. All monies, checks or drafts received will be delivered to Company, endorsed, if necessary, by Employee to Company. 8. Any Confidential Information to which I have access shall be used by nie solely in connection with my employment by the Company. It shall not be used either internally or externally by me for any use outside the purpose and scope of my employment by the Company. I shall not make the Confidential Information available for use by, or for the benefit of, any other party, whether or not for consideration. 9. I agree that I will not take with me any Confidential Information that is in written, machine readable, model, or other form, including sound or video recordings, computer CDs, demo hearing aids, training materials, disks or diskettes, capable of physical delivery, upon or after the termination of my employment with the Company, for any reason whatsoever, without the prior written consent of the Company. I also agree that upon termination of my employment with the Company, for any reason whatsoever, to promptly deliver all such materials in my possession or under my control to the Company. I further agree that upon termination of my employment with the Company for any reason whatsoever, I will return to the Company any property of the Company within my possession or control. 2 10. Neither this Agreement, nor any of the rights and obligations under this Agreement of the parties hereto, may be assigned, transferred or otherwise disposed of by me without the Company's written consent. 11. I agree not to engage in any business directly or indirectly competitive with any business of the Company without the Company's prior written consent during the period of my employment with the Company, alone or as a partner officer, agent, joint venture, director or stockholder, or as a consultant, advisor or employee, or otherwise, of any other entity or individual. 12, (a) I agree to devote my best efforts to the work assigned to me by the Company. If I have any other employment, I will advise the Company at the time of hire. If there is any substantial change in the degree of time or effort required of such other work, I will also advise the company of such change. (b) I will not initiate, continue, or expand such outside employment without the express written permission of the Company. 13. (a) I represent that my performance of all the terms of this Agreement and as an employee of the Company does not and will not breach any agreement to keep in confidence proprietary information acquired by me in confidence prior to my employment by the Company. I have not entered into, and I agree I will not enter into, any agreement either written or oral in conflict with this Agreement. (b) I agree to advise the Company of the identity of any successor employer for whom I am scheduled to work, prior to the time I terminate employment with the Company. I further agree to disclose to any future employer the existence of this Agreement and my obligations hereunder. 14. Hand when I leave the employ of the Company for any reason whatsoever, I agree not to take any action to assist my successor employer or any other individual or entity in recruiting any other employee who had worked for the Company during any time period when I worked for the Company. I expressly understand and acknowledge that the provisions of Sections 5, 14 and 15 hereof shall survive termination of this Agreement, for any reason whatsoever. 15. During my employment with the Company and for a period of two (2) years after my employment is terminated for any reason, with or without cause, I will not directly or indirectly recruit or hire any employee of the Company, or otherwise induce such employee to leave the employment of the Company, to become an employee of or otherwise be associated with me or any company or business with which I am or may become associated, nor will I directly or indirectly solicit present or former clients or customers of the Company. I further agree not to induce, promote or facilitate the discontinuation of any existing or prospective customer relationship, whether or not such relationship with the Company was obtained through my efforts. I further agree that I shall not, for a continuous uninterrupted period commencing upon the expiration or termination of my employment by the Company, regardless of the cause for termination, and continuing for two (2) years thereafter, either directly or indirectly, for myself or through or on behalf of or in conjunction with any person, entity or corporation, own, maintain, engage in, be employed by, advise, assist, invest in, make loans to, or have any interest whatsoever in any business which is the same as or substantially similar to the Company's business, or that of any Company affiliate or parent, and which is located within the non-exclusive area served by Employee or within a radius of 20 miles thereof. I recognize that from time to time my employment may be at different locations and that this paragraph 15 applies to each and every location of my employment with the Company. The initial area to be served by Employee is Williamsport, Pennsylvania and may be amended from time to time by instruction of the Company. 3 16. (a) If any provision of this Agreement shall be determined to be invalid or otherwise unenforceable by any court of competent jurisdiction, the validity and enforceability of the other provisions of this Agreement shall not be affected thereby and the provision found invalid or otherwise unenforceable may be appropriately amended by that court so as to be valid and enforceable. (b) This Agreement constitutes the entire agreement and understanding between the Company and me concerning the subject matter thereof. No modification, amendment, termination or waiver of this Agreement shall be binding unless in writing and signed by a duly authorized officer of the Company. Failure of the Company to insist upon strict compliance with any of the terms, covenants or conditions hereof shall not be deemed a waiver of such terms, covenants and conditions. (c) I acknowledge that money damages alone will not adequately compensate the Company for breach of any of my covenants and agreements herein and, therefore, agree that in the event of the breach or threatened breach of any such covenants or agreements, in addition to all other remedies available to the Company, the Company shall be entitled to injunctive relief compelling specific performance of, or other compliance with the terms hereof. I agree that in the event of a breach of either Paragraph 11 or Paragraph 15 of this Agreement by me, I will be liable to Company as liquidated damages in an amount of money equal to the total sum of any sales by me as Employee on my own behalf or on behalf of others contrary to the best interests of Company. In addition, Company will retain as liquidated damages any commissions due and owing by Company to me at the time of the breach of this Agreement by me. I acknowledge that I have previously made my living in other fields and that the restrictive provisions of this Agreement in no way prevent me from earning a living in the event I should breach these provisions. (d) This Agreement shall be binding upon me irrespective of the duration of my employment with the Company or the amount of my salary, wages or commissions. For purposes of this Agreement, the period of my employment shall include any time during which I am retained as a consultant by the Company. My obligations under this Agreement shall survive the termination of my employment by the Company irrespective of the reason for such termination and shall not in any way be modified, altered or otherwise affected by such termination.. (e) I understand, acknowledge and agree that any violation by me of any of the terms of this Agreement shall result in my immediate termination. (0 willingly. I warrant and represent that I have the legal right to enter into this Agreement and that I do so (g) This Agreement may not be amended or modified, nor may any of the rights or obligations of any party hereto be waived, except by a superseding written agreement signed by myself and by the Company. (h) The captions to the paragraphs of this Agreement are for the convenience of the parties only and shall not affect the application or construction of the provisions of this Agreement. (i) This Agreement shall be construed, interpreted and applied in accordance with the laws of the Commonwealth of Pennsylvania, applying to contracts fully executed and performed in the State of Pennsylvania. (j) This Agreement contains the entire agreement between the parties. Any and all prior and collateral representations, promises and conditions in connection with the subject matter are merged into this Agreement. Any representation, promise or condition not incorporated herein shall not be binding upon either party. This Agreement supersedes and is in lieu of all existing agreements or arrangements between the parties. 4 11.!.112 11 IN: 51'. 5;G;i5'774`"hi ,<EvCO PAGE. 0102 17. Employee agree -9 to work the minimum office hours which are 9:00 am to 5:00 pm in 1.ee standing 'Miracle -Ear Centers and (am store opening f 8 hour's in Seers stores Monday through Friday. Itt addition, employee k required to be available to work three evenings per week by e.ppoint niexit aad two Saturday's per month by appointumtt, Tats minimum ofttce/working hours may be amcnde.d .from time to thr o by the company with consent from he employee, 18, Employee understands hat as a part of training; and for future evaluations, the Company willfrom time to flint:, hs monitoring sessions with clients or customers. 1 hereby consent to the use of remote monitoring equipment, Including both visual and sound, for such piurposes, 19. Receipt of Copy of A 'cc Zcnt. thereby aolulowledge vec.eipt at'a dupt;oate. copy of this .4ereernent. 1 ACK tOWf DGE THAT 138,FORE SIGNING BELOW I HAVE READ ALL OF TE-ILE i'1}OVISJONS UIi THIS AGRBk,1`A't?NT AND FULLY UNDERSTAND TRU, SAME. Dr,ted;•��-/3-,'�% ACCEPTED AND AGREED FOR: Nearing I+tstt•urtteltts, Inc (Company) .�� . WITNESS: Signature: Date: (Employe Date: 5 EXHIBIT "A" Effective January 17, 2011 Compensation for Clyde Vadasz will be as follows: $300/week draw against commissions with 15% commission paid on all product lines. PA State Hearing Aid Fitters Exam: After employee has successfully passed the PA State Hearing Aid Fitters Exam, the compensation plan will be a $300/week draw against commissions with 17% commission paid on all product lines. Bonus structure: • A 3% bonus will be paid on net sales of $130,000 or more sold in a calendar quarter. The bonus will be considered to be earned 60 days after the end of the quarter on all products satisfactorily delivered. • If any quarterly bonus level is not earned but net sales of $500,000 in a calendar year is achieved, the 3% bonus will still be paid. • An additional 2% bonus will be paid on net sales of $700,000 in a calendar year. • All sales made from any office will count toward bonus. Health Insurance Contributions: • After 90 days, employee will receive $200.00 per month as a contribution to their own Health Insurance Plan. Commissions on Batteries/Accessories: • Employee will receive 17% commission on all batteries and accessories sold Vacation: • After 1 year of employment, employee will receive 2 weeks vacation and 5 personal days. 401K Plan: • Employee will qualify, after 6 months, for participation in the company retirement plan. Employee is responsible for contacting the corporate accountant at our corporate office within 6 months of employment to become enrolled in the company retirement plan. From time to time the company will promote special events and deeply discounted sales. The commission amount will vary with each situation. Compensation arrangements in the future will change as circumstances change. 6 Sycle Confident Agreement Form of Confidentiality Agreement for employees, agents, representatives, third party suppliers, and all other Individuals or entities who utilize or may have access to Confidential Information THIS AGREEMENT is made as of this day, January 17, 2011 by and between Hearing Instruments, Inc. ("Franchisee") and Clyde Vadasz ("Confidant"). RECITALS A. Miracle -Ear, Inc. ("Miracle -Ear") and Franchisee executed that certain franchise agreement dated as of February 28 2004 and that certain sublicense to access and use agreement (Collectively, the "Franchisee Agreements"). B. Franchisee has received and will periodically receive Confidential Information of Miracle -Ear. "Confidential Information" includes the whole or any portion of know-how, knowledge, methods, manuals, specifications, processes, procedures and/or improvements regarding the business that is valuable and secret in the sense that it is not generally known to Miracle -Ear competitors and any proprietary -information contained in any Miracle -Ear documents that Miracle - Ear provides to Franchisee and in which Miracle -Ear describes the Miracle -Ear® System or any operational policies, manuals, standards, requirements or practices, whether communicated to Franchisee in wilting, verbally or through the internet or other online or computer communications, and any other knowledge or know-how concerning the methods of operation of the Miracle -Ear® centers. C. Pursuant to the Franchisee Agreements, all of Franchisee's employees, agents, representatives, third party suppliers, and all other individuals or entities who utilize or may have access to Confidential Information, may not, at any time, disclose, copy, reproduce, sell or use in any other business or in any manner not specifically authorized or approved in advance in writing by Miracle -Ear any Confidential Information. D. Pursuant to the Franchisee Agreements, Franchisee must obtain Confidentiality Agreements from all of its employees or agents, or any other individual or entity to whom Franchisee has disclosed the Confidential Information. E. Confidant wants to become or currently is an employee of Franchisee and, therefore, it has had and/or will have access to Confidential Information. NOW, THEREFORE, in consideration of foregoing, the payment of $I.00 that at the time of execution of this Agreement Franchisee is paying to Confidant, and the mutual covenants and reliance of the parties, the parties agree as follows: 1. Confidant agrees that (a) it will treat as confidential and will not disclose the Confidential information which niay be made or become available to Confidant; (b) it will maintain in a secure place any Confidential Information delivered to it; and (c) it will not use any Confidential Information for any purpose other than in furtherance of its relationship with Franchisee or for any purpose which may be detrimental to Miracle -Ear or Miracle -Ear's present or potential business or shareholders. 2. Confidant represents and warrants that as of this date, Confidant has never disclosed Confidential Information to any third party, with the exception of third parties with whom Confidant has subcontracted for the performance of some or all of Confidant's obligations to Franchisee ("Confidant's Subcontractors"). Confidant represents and warrants that as of this date, Confidant has required Confidant's Subcontractors to maintain the confidentiality of such Confidential Information consistent with the provisions of Paragraph I hereof. 3. Nothing stated herein shall preclude the disclosure of Confidential Information in response to a valid order of a court, governmental agency or other governmental body or any political subdivision thereof or as otherwise required by law, provided, however, that if Confidant is requested pursuant to, or required by, applicable law, regulation or legal process to disclose any Confidential Information, Confidant will notify Miracle -Ear and Franchisee promptly so that Miracle -Ear and Franchisee may seek a protective order or other appropriate remedy or, in Miracle -Ear's sole discretion, waive compliance with the terms of this Agreement. Confidant agrees to use reasonable efforts to cooperate with Miracle - Ear and Franchisee in connection with Miracle -Ear's and Franchisee's efforts to prevent disclosure or seek confidential treatment or any other remedy respecting such requested or required disclosure. 4. The parties agree that Miracle -Ear and Franchisee would not have an adequate remedy at law for any breach or nonperformance of the terms of this Agreement by Confidant, In the event of a breach or threatened breach of any of the terms of this Agreement by Confidant, Miracle -Ear and Franchisee will forthwith be entitled to an injunction restraining 7 !".11.""J.2/ 2ot I 1i4l: 57052$24_ KEVCD • PACT Rich t.reach ur to a Jere. of spscinc.'pet-formancc;, without showin; or proving any damage and without:any obligation to post bond or grunt y Ober type of guaranty, together with recovety of rer,sonoble Attu:to:y:0 and other os incurred in obtaining said equitable reliof, until such time as final and binding determination is made. Tho threoriine,4!coliable:Letnedi?..s ero in addition to, and not in lieu of; all other remedies or rights that might otbenvlso have by virtue of any Wench of this A- veement by Cant-16ml, including the right to eensequentinl darna,gen. 5. No inodiction or waiver or au.' of lite- provisions hereof; or any representation, promise Of AdditiOS hereto, or waiveofnny broach hereof, v.0 bo binding upon n party unless male to writing and signed 1,y the party to be charged tuerlby alij by Miracle -Ear. No waiver of any particular breach willh deomed to apply to any other bre,aelt, whether kir (.3ui.itlc'k.11Y71/YCI, This .4g-roe:tient may not be assigned by ccolridant without the express prior tveirtait ("ousel( Of Mireolt".Enr. 6. The ptevallhig partyb.any ttetion proceeding arising ukr, out or, 10 comearfilll with: of in 1.01kti,,,i, io this Agi cement will be antiniad lc VCCOVCr remanabie, attorneys' fe!.. sad casts. This A gre-emciit Arai be construed nrid ithfereed in accordance with the laws of tile,: State oeMInnesota, without regard to any conflict of lam principles. Any cause ofaction, claim, suit or demand nllegedly arising from or related to the terms of ibis Agreement must be brought (i) by Confidant, in the Federal District Court for the District of Minnesota or In the State courts located lollennepin County, Minnesota, (ii) by ls,Li."-,$ele-Ear or by Franehlaco, in the Federal District Court for the District of Minnesota, in tho State Coo* located iu Hennepin County, Minnesota, or in the competent cows located in the State where Confidant tins It do:nit:11e at the time the netiun is brought. 'Vito parties irrevocably submit tin:cm:elves to, and contient to, the exclusive jurisdiction of said courts, Alt parties hereby valve tiny and A ti rights to o trisl by.itay in connection with the enforcement ur interpretation byjudicial processofany prbvision of this AgrocraNt, or any lead action initiated for the onovcfy of chunky's for b1411011 of this Aveement. ?. Franchisee and Confidnut expressly agree that Miracle -Ear is a thiid party benefary or tills Agreement end as melt Mirpetc.Tia:. shell !wivethe right In tuirnrce illy and all remedies available npon tiro violation of any of the provisions tinder this Agreement. to addition, Miracle -Ear may require Franchisee. to bring any action that tvflracle-Ear considers appropriate itt the event of any breach by Confidant hereunder. itt the cvent thnt Miracle -Ear or Franchisee make a claim that Confidant has violated Con ficlant's obligations 'tinder this Agreentent, Conn.:1nm will Inv© the burden orptvving that such violation did not occur, 9. (onn:Jam cuant ms they understand and will vomply diI, all Otnte" raid Federal leglaintien relatikt8 to the owe. ta-pri. handling of electronic records, and fintherinore underttands that failure to comply with such leEistation may result in civil an or oriminal actions, Confidant also affnms their future compliance with bud regulations inoluding that they shall 1) access the system only front Miracle -Ear offices, and no other location unless tiaileit isle provides specific written atithorintion of an additional location for access; 2) use only the unique Usentitthe assigned to confidant when aocesaing the nyctetn,, and Flinil pioteet their Usertteme, talc' shnli notify franchisee if confidant suspects any breach of their logon ercdentittis; 3) shall enter tiw nnd accurate information into the system, and understand that cult), of such information constitutes their affirmation of such informntion by nitons of a legal eleettonio aignature, LN WITIgt!,SS \VHERBOF, the parties have caused this Agreement to be executed in t110 IntIntler appropriate to oaa. FRANCHISEE Hearing htstruments, hie. Wi,41.144,4;x4. Dy; IDlifs C. IvicKtdvoy Its: President. and CVO CONFIDANT (Employee Signature) 54,, By: (Print Haute) 8 CERTIFICATE OF SERVICE I hereby certify that on this o?f''‘ day of July, 2014, a true and correct copy of the foregoing Motion for Preliminary Injunction was served by means of United States mail, first class, postage prepaid, upon the following: Clyde Vadasz 8577 Old Turnpike Rd. Mifflinburg, PA 17844 Teresa H. Laughead r 'LE- OF :( Todd J. Shill, Esquire 1 ;i'' DR Q Tli Q N Q e� Attorney ID No. 69225 Stephen Moniak,Esquire 2014 JUL 31 NI 3: ,17 Attorney ID No. 80035 RHOADS & SINON LLP CUMBERLAND COUNTY One South Market Square, 12th Floor PENNSYLVANIA PO Box 1146 Harrisburg, PA 17108-1146 Telephone: (717)233-5731 Facsimile: (717)238-8622 Email: tshill@rhoads-sinon.com smoniak@rhoads-sinon.com Attorneys for Plaintiff, Hearing Instruments, Inc. HEARING INSTRUMENTS, INC., ) IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff ) ) LAW AND EQUITY v. ) ) NO.: 14-4416 CLYDE VADASZ, ) Defendant ) PLAINTIFF'S MOTION FOR CONTINUANCE AND FOR EXPEDITED DISCOVERY IN ADVANCE OF PRELIMINARY INJUNCTION HEARING Plaintiff Hearing Instruments, Inc., by its attorneys, Rhoads & Sinon LLP, and files the within Motion for Continuance and for Expedited Discovery, stating as follows: 1. On July 28, 2014, Plaintiff Hearing Instruments, Inc. (hereinafter "Hearing Instruments") filed a verified Complaint and Motion for Preliminary Injunction to enjoin Defendant Clyde Vadasz from engaging in competitive activity with Hearing Instruments for a period of two (2) years and within a twenty (20) mile radius of each Hearing Instruments location where he worked following the termination of his employment. Hearing Instruments also seeks an injunction against Defendant from disclosing Hearing Instruments' trade secrets and confidential information in breach of his Employment Agreement with Hearing Instruments. 959928.1 2. The Honorable Edward E. Guido issued an Order dated July 30, 2014 setting a hearing date of August 4, 2014 at 1:00 p.m. for Hearing Instruments' Motion for Preliminary Injunction. 3. The undersigned counsel for Hearing Instruments is currently attached to a hearing on a motion for preliminary injunction before the Honorable Thomas A. Placey at 9 a.m. on August 4, 2014 in the matter of Hearing Instruments, Inc. v. Kellie Tankersley, No. 2014- 1871. 4. There is a possibility that hearing may continue in the afternoon of August 4, presenting an unavoidable conflict with the present matter. 5. Further, Hearing Instruments seeks an order expediting discovery in order to prepare for the Preliminary Injunction hearing. 6. Specifically, Hearing Instruments seeks to take the deposition of Defendant in order to obtain testimony and documents which are critical to the proper presentation of Hearing Instruments' case, but which are outside of Hearing Instruments' control. 7. To complete this limited discovery prior the Preliminary Injunction hearing, the time periods for taking depositions and producing documents provided for in the Pennsylvania Rules of Civil Procedure must be shortened and expedited. 8. A Preliminary Injunction hearing can be rescheduled after the conclusion of Defendant's deposition and document production. 2 WHEREFORE, Plaintiff Hearing Instruments, Inc. respectfully requests this Honorable Court to (1) grant a continuance of the August 4, 2014 Hearing on its Motion for Preliminary Injunction, (2) order expedited discovery in the nature of Defendant's deposition and document production upon two (2) weeks notice; and (3) reschedule the Hearing on Plaintiff's Motion for Preliminary Injunction after the conclusion of Defendant's deposition and document production. Respectfully submitted, RHOADS & SINON LLP V; By: /<</ "ltf' odd J. Shill Stephen Moniak One South Market Square P. O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Plaintiff Hearing Instruments, Inc. 3 CERTIFICATE OF SERVICE I hereby certify that on this 3/f day of ' cutud, , 2014, a true and correct copy of the foregoing Motion for Continuance was served by means of United States mail, first class, postage prepaid, upon the following: Clyde Vadasz 8577 Old Turnpike Road Mifflinburg, PA 17844 Teresa H. Laughead 4 HEARING INSTRUMENTS, INC., : IN THE COURT OF COMMON PLEAS OF Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA vs. CLYDE VADASZ, Defendant : LAW AND EQUITY : NO. 14-4416 IN RE: PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION ORDER AND NOW, this v� -day of July, 2014, a hearing on Plaintiff's Motion for Preliminary Injunction is scheduled for August 4, 2014, at 1:00 p.m., in Courtroom Number 3 of the Cumberland County Courthouse, Carlisle, PA. Edward E. Guido, J. Todd J. Shill, Esquire For the Plaintiff Clyde Vadasz, Pro Se Defendant :rim Qerr jeS ir2SIAIG-CL rn co 7/2 0 (I = -'v cnr- -_./17 r- = CO Z G7 >-4 HEARING INSTRUMENTS, INC., ) IN THE COURT OF COMMON PLEAS ) CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff ) ) LAW AND EQUITY v. ) ) NO.: 14-4416 CLYDE VADASZ, ) Defendant ) IN RE: MOTION FOR CONTINUANCE AND FOR EXPEDITED DISCOVERY IN ADVANCE OF PRELIMINARY INJUNCTION HEARING ORDER OF COURT , 2014, upon consideration of Plaintiff's Motion 01— AND NOW, this 1 day of for Continuance, it is hereby ORDERED that the Motion is GRANTED. The Hearing on Plaintiff's Motion for Preliminary Injunction scheduled for August 4, 2014 is CONTINUED. r, ?'V i 4Slot 3: oop.A. <... Dpi tribution List: t./rd J. Shill, Esq. and Stephen Moniak, Esq. lyde Vadasz eopiks S //iy BY THE CO for Edward E. Guido, J. r 0 CO) --j SHERIFF'S OFFICE OF CUMBERLAND COUNTY Ronny R Anderson FiLEO-C,IF F 1C . Sheriff OF THE PROTHONO TAS Jody S Smith Chief Deputy Richard W Stewart Solicitor :CE OF Tf< Ef+ERIFF 2014 AUG -8 AMU: 02 CUMBERLAND COUNTY PENNSYLVANIA Hearing Instruments Inc. vs. Case Number Clyde Vadasz 2014-4416 SHERIFF'S RETURN OF SERVICE 07/29/2014 Sheriff Ronny R Anderson, being duly sworn according to law, states he made diligent search and inquiry for the within named Defendant to wit: Clyde Vadasz, but was unable to locate the Defendant in the Sheriffs bailiwick. The Sheriff therefore deputizes the Sheriff of Union, Pennsylvania to serve the within Complaint and Notice, Motion for Preliminary Injunction and Brief in Support of Motion for Preliminary Injunction according to law. 07/31/2014 07:40 PM - The requested Complaint & Notice served by the Sheriff of Union County upon Clyde Vadasz, personally, at 8577 Old Turnpike Road, Mifflinburg, PA 17844. Ernest R. Ritter, III, Sheriff, Return of Service attached to and made part of the within record. SHERIFF COST: $37.49 SO ANSWERS, August 05, 2014 (c) CoounVSui e Sheriff, Teleosoft h1c. l v• RONNYR ANDERSON, SHERIFF OUT CO BK. #26 PAGE #45 IN THE COURT OF COMMON PLEAS 17TH JUDICIAL DISTRICT UNION COUNTY, PENNSYLVANIA HEARING INSTUMENTS INC. NO: 14-4416 VS SERVE: COMPLAINT AND NOTICE CLYDE VADASZ UNION COUNTY SHERIFF'S RETURN And now this 31ST day of JULY 2014 I hereby certify and return that I DEPUTY JEFFERY TICE served a copy of thb above described COMPLAINT AND NOTICE Upon CLYDE VADASZ, named defendant, by personally handing to CLYDE VADASZ at 8577 OLD TURNPIKE ROAD, MIFFLINBURG, Union County Pennsylvania, on July 31, 2014 at 7:40 PM a true and correct copy of the above described COMPLAINT AND NOTICE, and made known to HIM the contents of the same. SO ANSWERS ERNEST R RITTER III, SHERIFF UNION COUNTY, PA. By: /,.t,.r D PUTY JEFFERY TICE PLAINTIFF'S ATTORNEY: RHOADS & SINON LLP SHERIFF'S FEES. DOCKET $ 9.00 SURCHARGE EXTRA SERVICE AFFIDAVIT 4.50 SERVICE 9.00 CO MILEAGE 10.00 NOT FOUND DEPUTATION DEPUTIES OVERTIME MISC. TOTAL $ 32.50 DEPOSIT REFUND $50.00 RECEIPT # 059647 $17.50 CHECK # Commonwealth of Pennsylvania: County of Union Sworn and subscribed before mLL this f day ofMaiL 20 / My `�` fll ELLER f ` -0mmi & Cleric of Courts Lowlsburt Union County, PA My Carte Expires 1st Mon Jan 2018 HEARING INSTRUMENTS, INC., Plaintiff, VS. IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY PENNSYLVANIA LAW AND EQUITY CLYDE VADASZ, Defendant. NO. 14-4416 TO THE PROTHONOTARY: 77. GD I do hereby enter my appearance for the Defendant, Clyde Vadasz, in the above entitled action and request that copies of all papers in this action be served on me at my office. Respectfully submitted, t E E T : UTTORFF, ESQUIRE ATTORNEY FOR DEFENDANT I. D. No. 205943 354 Chestnut St., Ste. A Mifflinburg, PA 17844 T: (570) 966-3115 F: (570) 966-3116 STEVE T. BUTTORFF, ESQUIRE I.D. No. 205943 354 CHESTNUT STREET, STE. A MIFFLINBURG, PA 17844 T: (570) 966-3115 F: (570) 966-3116 Attorney for Defendant E.C)- Fir NO TAR ; 201.4 4110 20 Ati 1: 14 OUNBERL AND COUNTY PENNS LVANIA HEARING INSTRUMENTS, INC., Plaintiff, VS. CLYDE VADASZ, Defendant. IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY PENNSYLVANIA LAW AND EQUITY NO. 14-4416 MOTION FOR CONTINUANCE NOW COMES, the Defendant, by and through his attorney, Steve T. Buttorff, Esquire, and moves for a continuance as follows: 1. The above captioned matter is scheduled for a hearing on the Plaintiff's Motion for Preliminary Injunction on August 21, 2014 at 3:00 p.m. A copy of the Order scheduling this proceeding is attached hereto as Exhibit "A." 2. The proceeding was continued by Order of Court dated August 1, 2014 and signed by the Honorable Edward E. Guido at the request of Plaintiff. A copy of the Order is attached hereto as Exhibit "A." 3. A continuance is requested for the following reasons: a. Undersigned counsel had a consultation with the Defendant on August 18, 2014 at which time it was learned that a proceeding was scheduled for August 21, 2014 as specified above. b. Undersigned counsel is currently scheduled for a court proceeding in Union County, Pennsylvania at 3:00 p.m. on August 21, 2014 in the matter of Commonwealth v. Matthew Erb and will be unable to attend the above scheduled hearing. c. Defendant was involved in an automobile accident on August 14, 2014 in which he sustained physical injuries. d. Defendant currently suffers from severe and persistent headaches in addition to nausea and physical pain in his neck. e. Defendant had a doctor's appointment on August 18, 2014 with Dr. John H. Persing in Lewisburg, Pennsylvania. f. Defendant was instructed by Dr. Persing not to travel long distances and that Defendant needed to undergo a CT scan on Friday, August 22, 2014 for possible bleeding in the brain. g. Defendant is currently employed in State College, Pennsylvania which is outside of the 20 mile radius referenced in Plaintiff's Motion for Preliminary Injunction which alleviates the negative impact Plaintiff may be suffering as alleged. 4. Undersigned counsel attempted to contact Stephen Moniak, Esquire and Todd Shill, Esquire, attorneys for Plaintiff, regarding their position in this request but was unsuccessful. 5. I hereby certify that if a continuance is granted, I will serve a copy of the Order granting the continuance on all parties forthwith and that I will notify all witnesses who would be appearing at my request. WHEREFORE, Defendant respectfully requests this Honorable Court continue the hearing scheduled for August 21, 2014 at 3:00 p.m. to the next available court date and/or any other relief the Court deems appropriate. Respectfully submitted, E ` UTTORFF, ESQUIRE I.D. No. 205943 ATTORNEY FOR DEFENDANT 354 Chestnut St., Ste. A Mifflinburg, PA 17844 (570) 966-3115 VERIFICATION I verify that the statements made in the foregoing document are true and correct. I understand that false statements herein are made subject to the penalties of 18 Pa.C.S. Section 4904, relating to unsworn falsification to authorities. Dated: teve`T.: r orff, Esquire HEARING INSTRUMENTS, INC., Plaintiff, VS. IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY PENNSYLVANIA LAW AND EQUITY CLYDE VADASZ, Defendant. NO. 14-4416 CERTIFICATE OF SERVICE Steve T. Buttorff, Esquire, being duly sworn according to law, deposes and says that he mailed a copy of the attached Motion for Continuance in this matter by regular, first class mail to: Stephen Moniak, Esquire Rhoads & Sinon LLP One South Market Square, 12th Floor P.O. Box 1146 Harrisburg, PA 17108 Attorney for Plaintiff EVE f BUTTORFF, ESQUIRE Attorney .D. No. 205943 Attorney for Plaintiff 354 Chestnut St., Ste. A Mifflinburg, PA 17844 Tel: (570) 966-3115 HEARING INSTRUMENTS, INC., ) IN THE COURT OF COMMON PLEAS ) CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff ) ) LAW AND EQUITY v. ) ) NO.: 14-4416 CLYDE VADASZ, ) ) Defendant ) IN RE: MOTION FOR CONTINUANCE AND FOR EXPEDITED DISCOVERY IN ADVANCE OF PRELIMINARY INJUNCTION HEARING ORDER OF COURT , 2014, upon consideration of Plaintiff's Motion AND NOW, this I day o for Continuance, it is hereby ORDERED that the Motion is GRANTED. The Hearing on Plaintiff's Motion for Preliminary Injunction scheduled for August 4, 2014 is CONTINUED. A eu—te x;a s mAr &TA-a- ts falie.144athaaqUr4ixacJigzi. Distribution List: Todd J. Shill, Esq. and Stephen Moniak, Esq. Clyde Vadasz for Edward E. Guido, A HEARING INSTRUMENTS, INC., Plaintiff, VS. IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY PENNSYLVANIA LAW AND EQUITY CLYDE VADASZ, Defendant. NO. 14-4416 ORDER AND NOW, this .24 day of /9r,Lca 20 upon consideration of the attached Motion of the Plaintiff, requesting a continuance: the Motion is denied. the Motion is granted and the matter scheduled for August 21, 2014 at 3:00 P.M. in Courtroom No. 3 is hereby continued until 1 P.) ?tI1/at 1.'0 0 P M. in the Cumberland County courthouse in Courtroom No. The moving party shall promptly notify all interested parties of this Order pd -II a m rn cn > --- c--) (73 shall serve a copy of this Order upon them. Distribution List: Stephen Moniak, Esq. and Todd J. Shill, Esq. — attorneys for Plaintiff / Steve Buttorff, Esq. — attorney for Defendant 60p; es /Ka --Id /...)40/V fil4 .7".• G-3 --r, HEARING INSTRUMENTS, INC., IN THE COURT OF COMMON PLEAS Plaintiff, CUMBERLAND COUNTY 2 PENNSYLVANIA -off res c) VS. r ; -0 r -r, LAW AND EQUITY zr" + cid` CLYDE VADASZ, �. Defendant. NO. 14-4416 �� -o c) `A�) 3� c'� c� 2© car C — '1 -1 TO: Stephen Moniak, Esquire c/o Hearing Instruments Inc. One South Market Square, 12th Floor P.O. Box 1146 Harrisburg, PA 17108 NOTICE TO PLEAD You are hereby notified to file a written response to the enclosed New Matter within twenty (20) days from service hereof or a judgment may be entered against you. V. BUf TORNEY F O R DEFENDANT I. D. No. 205943 354 Chestnut St., Ste. A Mifflinburg, PA 17844 T: (570) 966-3115 F: (570) 966-3116 ORFF, ESQUIRE HEARING INSTRUMENTS, INC., IN THE COURT OF COMMON PLEAS Plaintiff, CUMBERLAND COUNTY PENNSYLVANIA VS. LAW AND EQUITY CLYDE VADASZ, ri c rn Defendant. NO. 14-4416 { -o cn r cp .py .. DEFEDANT'S ANSWER. TO PLAINTIFF'S COMPLAINT AND NFV MATTER NOW COMES, Defendant, Clyde Vadasz, by and through his attorney, Steve T. Buttorff, Esquire, and hereby answers Plaintiff's Complaint and avers as follows: ANSWER 1. Admitted. 2. Admitted. 3. Admitted. 4. Admitted in part; denied in part. Count III of plaintiff's complaint is to be construed under the laws of the state of Minnesota pursuant to attachment "A" of plaintiff's complaint. Defendant demands strict proof at trial. 5. Admitted. 6. Admitted. 7. Admitted. 8. Admitted. 9. Admitted. 10. Admitted. 11. Admitted. 12. Admitted. 13. Admitted. 14. Admitted. 15. Admitted in part; denied in part. It is admitted that defendant's last day of employment was April 17, 2014. Defendant denies being terminated for violation of company policies and/or excessive absenteeism. Defendant demands strict proof at trial. 16. Admitted. 17. After reasonable investigation, defendant is without knowledge or information sufficient to form a belief as to the truth of the averment. To the extent an answer is required, it is denied. Defendant demands strict proof at trial. 18. Admitted. 19. Denied. Defendant is currently employed by Liberty Hearing Aids (Liberty) in State College, Pennsylvania. Defendant demands strict proof at trial. 20. Denied. Defendant does not know how plaintiff defines direct competitor or substantially similar. Defendant demands strict proof at trial. 21. Admitted in part; denied in part. It is admitted that Liberty's store in Muncy is within 20 miles from plaintiff's Williamport office. The implication that defendant works at the Muncy store is denied. Defendant demands strict proof at trial. 22. Admitted. 23. Denied. Defendant does not know how plaintiff defines substantial. Defendant demands strict proof at trial. 24. Denied. Defendant denies using confidential and proprietary information in violation of an employment agreement. Defendant demands strict proof at trial. 25. Admitted in part; denied in part. It is admitted that defendant works for Liberty. Defendant denies the averment that he has or will continue to violate the terms of an employment agreement. Defendant demands strict proof at trial. 26. Admitted. 27. Denied. Plaintiff has not suffered or will not suffer any harm against which the employment agreement is designed to protect. Defendant demands strict proof at trial. 28. Denied. Plaintiff's belief is illegitimate, speculative, and not based in knowledge, law or fact. Defendant demands strict proof at trial. 29. Denied. Defendant's current employment possesses no threat to plaintiff. Defendant demands strict proof at trial. 30. Denied. Plaintiff will not suffer any loss of customers, employees, goodwill, revenues, and/or profit. Defendant demands strict proof at trial. Count I — Breach of Contract 31. Defendant incorporates paragraphs 1 through 30 as fully set forth herein. 32. Denied. Defendant never received consideration required under the Sycle Confident Agreement attached to plaintiff's complaint. Defendant demands strict proof at trial. 33. Admitted. 34. The allegations contained herein are a conclusion of law to which no response is required. In the event a response is required, it is specifically denied that defendant's continued employment with Liberty is in direct violation of the employment agreement. Defendant demands strict proof at trial. 35. Admitted. 36. Denied. Defendant never consciously disclosed any information and the notion that he unconsciously disclosed any information is speculative. Defendant demands strict proof at trial. 37. Denied. Plaintiff has not and/or will not suffer any harm and is not entitled to relief. Defendant demands strict proof at trial. Count II — Breach of Fiduciary Duty 38. Defendant incorporates paragraphs 1 through 37 as fully set forth herein. 39. The allegations contained herein are a conclusion of law to which no response is required 40. Denied. Defendant has not breached any fiduciary duty. Plaintiff has not and will not suffer in any way and no remedy is required. Defendant demands strict proof at trial. Count III — Violation of Pennsylvania Uniform Trade Secrets Act 41. Defendant incorporates paragraphs 1 through 37 as fully set forth herein. 42. Denied. Count III of plaintiff's complaint is to be construed under the laws of the state of Minnesota pursuant to attachment "A" of plaintiff's complaint. Furthermore, the allegations contained herein are a conclusion of law to which no response is required. Defendant demands strict proof at trial. 43. The allegations contained herein are a conclusion of law to which no response is required. 44. Denied. Defendant has not used and will not use proprietary information or trade secrets, in any manner, to the detriment of plaintiff and notion of inevitable use is speculative, illegitimate, and without basis in knowledge, law or fact. Defendant demands strict proof at trial. 45. The allegations contained herein are a conclusion of law to which no response is required. 46. The allegations contained herein are a conclusion of law to which no response is required. Count IV Tortious Interference with Current and Prospective Business Relationships 47. Defendant incorporates paragraphs 1 through 46 as fully set forth herein. 48. Denied. Defendant has not and will not interfere with plaintiff's current and prospective business relationships. Defendant demands strict proof at trial. 49. Denied. Defendant has not interfered with plaintiffs current and prospective business relationships and is not in violation of the Employment Agreement in this respect. Defendant demands strict proof at trial. 50. Denied. Defendant denies that he has used or intends to use such information to impact plaintiff's ability to perform business and/or to cause current or prospective customers to not do business with plaintiff. 51. The allegations contained herein are a conclusion of law to which no response is required. 52. Denied. Defendant denies interfering with current or prospective customers of plaintiff as well as causing any harm to plaintiff. Defendant demands strict proof at trial. 53. The allegations contained herein are a conclusion of law to which no response is required. Count V — Unfair Competition 54. Defendant incorporates paragraphs 1 through 53 as fully set forth herein. 55. The allegations contained herein are a conclusion of law to which no response is required. 56. Denied. Plaintiff mischaracterizes defendant's actions and defendant has not caused plaintiff irreparable harm or imminent monetary damages. Defendant demands strict proof at trial. WHEREFORE, Defendant respectfully requests this Honorable Court grant judgment in his favor and any other relief the Court deems appropriate. NEW MATTER 57. Defendant incorporates paragraphs 1 through 56 as fully set forth herein. 58. Inasmuch as the Pennsylvania Rules of Civil Procedure, specifically Rule 1032, provide that a party waives all defenses not presented by way of answer, Defendants, upon advice of counsel, hereby asserts all affirmative defenses as set forth in the Pennsylvania Rules of Civil Procedure 1030, those defenses to include those mentioned above, assumption of the risk, consent, contributory negligence, discharge in bankruptcy, estoppels, failure of consideration, illegality, immunity from suit, impossibility of performance, justification, laches, license payment, privilege, release, statute of frauds, statute of limitations, truth and waiver, with these said affirmative defenses being subject to demonstration during the discovery process and proof, as relevant, at the time of trial. WHEREFORE, Defendants respectfully request dismissal of Plaintiffs' Complaint and any other such relief as may be deemed necessary. Respectfully submitted, TTORFF, ESQUIRE TTORNE` FOR DEFENDANT I. D. No. 205943 354 Chestnut St., Ste. A Mifflinburg, PA 17844 T: (570) 966-3115 F: (570) 966-3116 HEARING INSTRUMENTS, INC., IN THE COURT OF COMMON PLEAS Plaintiff, VS. CLYDE VADASZ, Defendant. CUMBERLAND COUNTY PENNSYLVANIA LAW AND EQUITY NO. 14-4416 CERTIFICATE OF SERVICE Steve T. Buttorff, Esquire, being duly sworn according to law, deposes and says that he mailed a copy of the attached Answer in this matter by regular, first class mail to: Stephen Moniak, Esquire Rhoads & Sinon LLP One South Market Square, 12th Floor P.O. Box 1146 Harrisburg, PA 17108 Attorney for Plaintiff Date: 7- BUTTORFF, ESQUIRE ttorney I.D. No. 205943 Attorney for Plaintiff 354 Chestnut St., Ste. A Mifflinburg, PA 17844 Tel: (570) 966-3115 VERIFICATION I verify that the statements made in the foregoing document are true and correct. I understand that false statements herein are made subject to the penalties of 18 Pa.C.S. Section 4904, relating to unsworn falsification to authorities. �YDE VAD Dated: Todd J. Shill, Esquire Attorney ID No. 69225 Stephen Moniak, Esquire Attorney ID No. 80035 RHOADS & SINON LLP One South Market Square, 12th Floor PO Box 1146 Harrisburg, PA 17108-1146 Telephone: (717) 233-5731 Facsimile: (717) 238-8622 Email; tshill@rhoads-sinon.com smoniak@rhoads-sinon.com Attorneys for Plaintiff Hearing Instruments, inc. HEARING INSTRUMENTS, INC., Plaintiff v. CLYDE VADASZ, Defendant r !LEO- CFri C THE PROTHONOTAR)' Wit SEP 10 PM 2: 33 CUMBERLAND COUNTY PENNSYLVANIA IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA LAW AND EQUITY NO.: 14-4416 PETITION TO CANCEL SEPTEMBER 12, 2014 RULE RETURNABLE AS MOOT Plaintiff Hearing Instruments, Inc., by its attorneys, Rhoads & Sinon LLP, with the concurrence of counsel for Defendant, Clyde Vadasz, petitions the Court to cancel the September 12, 2014 Rule returnable as moot, and in support thereof avers as follows: 1. Currently scheduled this Friday, September 12, 2014 at 1:00 p.m. in Courtroom No. 3 is a Rule returnable for Defendant to show cause why expedited discovery should not be granted. 2. By Your Honor's Order dated August 1, 2014, the Court continued the hearing on Plaintiffs Motion for Preliminary Injunction generally at Plaintiffs request. 3. The reason was Plaintiff had sought expedited discovery from Defendant prior to the injunction hearing. 4. While leave of court to take Defendant's deposition would have been required as of August 21, 2014, the date for the prior Rule returnable, it is no longer required. 963972.1 5. Specifically, leave of Court is required if a deposition is sought prior to the expiration of thirty (30) days after service of original process. Pa. R.Civ.P. 4007.2(b). 6. Defendant was served with original process on July 31, 2014. 7. As of August 30, 2014, Plaintiff was free to notice Defendant's deposition without leave of Court, and counsel for the parties have agreed to Defendant's deposition on October 8, 2014. 8. In light of the above, it is respectfully submitted that the Rule returnable regarding expedited discovery is now moot. 9. As a result, both parties respectfully request that the September 12, 2014 Rule returnable hearing is no longer required. 10. Counsel for Defendant concurs in this request. WHEREFORE, Plaintiff Hearing Instruments, Inc. respectfully requests that this Honorable Court cancel the September 12, 2014 Rule returnable on Plaintiff's request for expedited discovery as moot. Respectfully submitted, RHOADS & SINON LLP 2 d J. Shill Stephen Moniak One South Market Square P. O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Plaintiff, Hearing Instruments, Inc. CERTIFICATE OF SERVICE I hereby certify that on this /D day of , 2014, a true and correct copy of the foregoing Petition to Cancel September 12, 2014 Rule Returnable as Moot was served by means of e-mail and United States mail, first class, postage prepaid, upon the following: Steve T. Buttorff, Esquire 354 Chestnut Street, Suite A Mifflinburg, PA 17844 J_JA Lao— Teresa H. Laughead HEARING INSTRUMENTS, INC., ) IN THE COURT OF COMMON PLEAS ) CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff ) ) LAW AND EQUITY v. ) CLYDE VADASZ, ) NO.: 14-4416 ni cr) (--t) m r -r-, -- i:- ) x) -o " Defendant ) -<1"al r -:-.t: .,-- -1- — ORDER —4 r..) ... AND NOW, this day of September, 2014, upon consideration of Plaintiff Hearing Instruments, Inc.'s Petition to cancel September 12, 2014 Rule returnable as moot, the Petition is GRANTED. The Rule returnable previously scheduled for September 12, 2014 at 1:00 p.m. in Courtroom No. 3 is MOOT. Edward E. Guido, J. Djst. ribution List: Moniak, Rhoads & Sinon LLP, One S. Market Square, PO Box 1146, Harrisburg, PA 17108-1146 ../St.eve T. Buttorff, Esquire, 354 Chestnut Street, Suite A, Mifflinburg, PA 17844 cop Todd J. Shill, Esquire Attorney ID No. 69225 Stephen Moniak, Esquire Attorney ID No. 80035 RHOADS & SINON LLP One South Market Square, 12th Floor PO Box 1146 Harrisburg, PA 17108-1146 Telephone: (717) 233-5731 Facsimile: (717) 238-8622 Email: tshill@rhoads-sinon.com srnoniak@rhoads-sinon.com Attorneys for Plaintiff Hearing Instruments, Inc. HEARING INSTRUMENTS, INC., Plaintiff v. CLYDE VADASZ, Defendant THE PROTHONOTA 23114 SEP 10 AN 11 58 CUMBERLAND COUNTY PENNSYLVANIA IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA LAW AND EQUITY NO.: 14-4416 PLAINTIFF'S REPLY TO NEW MATTER Plaintiff Hearing Instruments, Inc. (" Hearing Instruments"), by its attorneys, Rhoads & Sinon LLP, and files its Reply to New Matter, as follows: 57. Plaintiff incorporates Paragraphs 1 through 56 of its Complaint as if fully set forth herein. 58. Denied. It is specifically denied that any of the aforestated affirmative defenses apply to this case. By way of further answer, it is improper to assert all affirmative defenses set forth in Rule 1030 of the Pennsylvania Rules of Civil Procedure without alleging any facts supporting said defenses. 964214.1 WHEREFORE, Plaintiff Hearing Instruments, Inc. respectfully requests that the New Matter be stricken, and all the relief asserted in Plaintiffs Complaint be granted. Respectfully submitted, By: 2 RHOADS ON LLP od J. Shil Stephen Moniak One South Market Square P. O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Plaintiff Hearing Instruments, Inc. CERTIFICATE OF SERVICE I hereby certify that on this /7771 day of a/ , 2014, a true and correct copy of the foregoing Plaintiff's Reply to New Matter was served by means of United States mail, first class, postage prepaid, upon the following: Steve T. Buttorff, Esquire 354 Chestnut Street, Suite A Mifflinburg, PA 17844 Lij. hue ad Teresa H. Laughead STEVE T. BUTTORFF, ESQUIRE LD. No. 205943 354 CHESTNUT STREET, STE. A MIFFLINBURG, PA 17844 T: (570) 966-3115 F: (570) 966-3116 Attorney for Defendant --F. LED --OFFICE OF THE PROTHONOTARY 2011i OCT 11 PM 2:2k CUMBERLAND COUNTY PENNSYLVANIA HEARING INSTRUMENTS, INC., Plaintiff, VS. : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY : PENNSYLVANIA : LAW AND EQUITY CLYDE VADASZ, Defendant. : NO. 14-4416 MOTION TO WITHDRAWAL AS COUNSEL TO THE HONORABLE, THE JUDGE OF THE SAID COURT: Counsel, Steve T. Buttorff, Esquire, hereby moves to withdrawal as counsel, and represents that: 1. Counsel entered his appearance for defendant on August 20, 2014. 2. Undersigned counsel requests leave to withdrawal as counsel for Defendant as Defendant is unable to pay undersigned counsel for services provided in the above captioned case. 3. Defendant signed a document indicating his desire to discharge undersigned counsel as his counsel in the above captioned matter. A document entitled "Agreement to Discharge Counsel" is attached hereto as Exhibit "A." 4. Undersigned counsel contacted plaintiff's attorney, Stephen Moniak, Esquire, regarding the relief requested in this motion, and he has no objection. WHEREFORE, the undersigned respectfully requests that his withdrawal from this case be formally recognized by the Court and that the Court grant any other such relief as it might deem appropriate. Respectfully submitted, EVE'T. BJflORFF, ESQUIRE I. D. No. 20 943 ATTORNEY FOR DEFENDANT 354 Chestnut St., Ste A. Mifflinburg, PA 17844 Tel: (570) 966-3115 Fax: (570) 966-3116 VERIFICATION I verify that the statements made in the foregoing document are true and correct to the best of my knowledge, information and belief. I understand that false statements made herein are subject to the penalties of 18 Pa.C.S. Section 4904 relating to unsworn falsification to authorities. Date: rff, Esquire HEARING INSTRUMENTS, INC., Plaintiff, VS. CLYDE VADASZ, Defendant. : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY PENNSYLVANIA : LAW AND EQUITY NO. 14-4416 CERTIFICATE OF SERVICE I hereby certify that a copy of the foregoing document was served this /C 4 day of October, 2014, upon the following persons by U.S. first class mail, postage prepaid: Clyde Vadasz Defendant 8577 Old Turnpike Road Mifflinburg, PA 17844 Stephen Moniak, Esq. Plaintiff's Attorney One South Market Square, 12t" floor P.O. Box 1146 Harrisburg, PA 17108 L/ UTTORFF, ESQUIRE HEARING INSTRUMENTS, INC., Plaintiff, VS. IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY PENNSYLVANIA LAW AND EQUITY CLYDE VADASZ, Defendant. NO. 14-4416 AGREEMENT TO DISCHARGE COUNSEL 1, Clyde Vadasz, do hereby discharge Steve T. Buttorff, Esquire as counsel in the above captioned matter. Date: 10 8 Clyde Vadasz HEARING INSTRUMENTS, INC., : IN THE COURT OF COMMON PLEAS Plaintiff, : CUMBERLAND COUNTY C7 ,—w : PENNSYLVANIA c d *' -aa. ---t rim © =r : LAW AND EQUITY zJ � - r-- rn cn r— PO 4,, rte; CLYDE VADASZ, ...<> C..) Defendant. NO. 14-4416 { -< ui VS. ORDER And now, this day of 0 , 201I, upon consideration of the attached Motion to Withdrawal as Counsel it is hereby Ordered that Steve T. Buttorff, Esquire, Counsel for Defendant in this matter, is granted leave to withdraw his appearance for Defendant, Clyde Vadasz. BY THE COURT: J. Distribution List: Stephen Moniak, Esquire,One S. Market Square, P.O. Box 1146, Harrisburg, PA 17108 Steve Buttorff, Esquire, 354 Chestnut Street, Ste. A, Mifflinburg, PA 17844 Clyde Vadasz, 8577 Old Turnpike Road, Mifflinburg, PA 17844 roz3pIf HEARING INSTRUMENTS, INC., ) IN THE COURT OF COMMON PLEAS ) CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff ) c) �, LAW AND EQUITY -. . , v. ) CD = _., rn ri NO.: 14-4416 2 r-) CLYDE VADASZ, ) . -< > - o Defendant ) > c STIPULATION AND ORDER OF COURT 2 r\' ---% cn Plaintiff, Hearing Instruments, Inc. and Defendant, Clyde,Vadasz (collectively, the "Parties"), hereby agree and stipulate as follows: 1. The Parties agree that the Employment Agreement entered into between Hearing Instruments, Inc. and Clyde Vadasz dated January 13, 2011 (the "Employment Agreement") is valid and enforceable. A true and correct copy of the Employment Agreement is attached hereto as Exhibit "A" and incorporated by reference as if expressly set forth herein. 2. Vadasz shall abide by and not violate any of the terms of the Employment Agreement, including, but not limited to, the following: a. Vadasz shall not directly or indirectly recruit or hire any employee of Hearing Instruments, Inc. or otherwise induce such employee to leave the employment of Hearing Instruments, Inc. to become an employee of or otherwise be associated with Vadasz or any company or business with which Vadasz is or may be associated from April 17, 2014 to April 17, 2016. b. Vadasz shall not directly or indirectly solicit present or former clients or customers of Hearing Instruments, Inc. from April 17, 2014 to April 17, 2016. 970203.1 c. Vadasz shall not induce, promote or facilitate the discontinuation of any existing or prospective customer relationship of Hearing Instruments, Inc., whether or not such relationship with Hearing Instruments, Inc. was obtained through his efforts, from April 17, 2014.to April 17, 2016. d. Vadasz shall not directly or indirectly, for himself or through or on behalf of or in conjunction with any person, entity or corporation, own, maintain, engage in, be employed by, advise, assist, invest in, make loans to, or have any interest whatsoever in any business which is the same as or substantially similar to the Hearing Instruments, Inc.'s business, including, but not limited to, Hearing Lab Technology, LLC, or that of any Hearing Instruments, Inc. affiliate or parent, and which is located within a radius of twenty (20) miles of any of the following locations: (a) 1758 E. 3rd St, Williamsport, PA 17701; (2) 2668 N. Susquehanna Trail, Shamokin Dam, PA 17876; or (3) 18 Sherwood Dr., Bloomsburg, PA 17815, from April 17, 2014 to April 17, 2016. e. Vadasz shall not take any action to assist his employer subsequent to his employment with Hearing Instruments, Inc., including Hearing Lab Technology, LLC, in recruiting any other employee who had worked for Hearing Instruments, Inc. during any time Vadasz worked for Hearing Instruments, Inc.. f. Vadasz shall not use or disclose to any person or entity Hearing Instruments, Inc.'s proprietary and confidential information, including its trade secrets, systems, concepts, processes, testing processes, techniques, devices, procedures, confidential reports and communications and records and lists of customers and clients and/or prospective customers and clients. 3. The Parties acknowledge and represent that they have read this Stipulation, that they understand the terms of this Stipulation, and they have had an opportunity to review this Stipulation with an attorney, concerning the terms, contents and consequences of this Stipulation, that they are freely executing and delivering this Stipulation voluntarily. 4. The Parties jointly agree that this Stipulation will be entered as an Order of Court, to be enforced in accordance with the laws of the Commonwealth of Pennsylvania. IN WITNESS WHEREOF, AND INTENDING TO BE LEGALLY BOUND HEREBY, Decernb ex' the Parties have executed this Stipulation as of this 5 day of Nevefftber, 2014. Stephen Momak, Esquire Rhoads & Sinon LLP One S. Market Square, 12th Floor P.O. Box 1146 Harrisburg, PA 1.7108-1146 Attorneys for Plaintiff Hearing Instruments, Inc. Date: 47/%6 4/ C de Vadasz 8577 Old Turnpike R Mifflinburg, PA 17844 APPROVED AND ENTERED AS AN Edward E. Guido, J. 3