HomeMy WebLinkAbout05-5368DAVID L. LIBERATOR,
Individually and on behalf of
Starner Technologies, Inc.,
Plaintiff,
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
NO. 2005- 500 CIVIL TERM
V.
STARNET TECHNOLOGIES, INC.,:
STARNET TECHNOLOGIES, INC. :
d/b/a Walk on Flooring,
STARNET ENTERPRISES, INC.,
STARNET GROUP, LP, STARNET :
PROPERTIES, LLC, STARNET
MECHANICAL GROUP, INC.,
STARNET ELECTRICAL
GROUP, INC.,
DOUGLAS L. MORROW and
RONALD BLYSTONE,
Defendants.
CIVIL ACTION-EQUITY
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 an attorney and filing in writing with
the court, your defenses or objections to the claims set forth against you. You are warned that if
you fail to do so, the case may proceed without you and a judgment may be entered against you
by the court without further notice for any money claimed in the complaint or for any other claim
or relief requested by the plaintiff. You may lose money or property or other rights important to
you.
YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO
NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE
OFFICE SET FORTH BELOW. 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, Pennsylvania 17013
(717) 249-3166
DAVID L. LIBERATOR,
Individually and on behalf of
Stamet Technologies, Inc.,
Plaintiff,
V.
STARNET TECHNOLOGIES, INC.,:
STARNET TECHNOLOGIES, INC. :
d/b/a Walk on Flooring,
STARNET ENTERPRISES, INC.,
STARNET GROUP, LP, STARNET :
PROPERTIES, LLC, STARNET
MECHANICAL GROUP, INC.,
STARNET ELECTRICAL
GROUP, INC.,
DOUGLAS L. MORROW and
RONALD BLYSTONE,
Defendants.
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
NO. 2005- ?36CIVIL TERM
CIVIL ACTION-EQUITY
COMPLAINT
NOW, comes Plaintiff, David L. Liberator ("Liberator"), by and through his attorneys,
O'BRIEN, BARIC & SCHERER, and files the within Complaint and, in support thereof, sets
forth the following:
1. Plaintiff, David L. Liberator, is an adult individual with a residence address of 271
Springview Road, Carlisle, Cumberland County, Pennsylvania and is a shareholder of Stamet
Technologies, Inc.
2. Defendant, Starnet Technologies, Inc. is a Pennsylvania corporation with its
principal place of business located at 1845 Market Street, Camp Hill, Cumberland County,
Pennsylvania 17011.
Defendant, Stamet Enterprises, Inc. is a Pennsylvania corporation with its
principal place of business located at 1845 Market Street, Camp Hill, Cumberland County,
Pennsylvania 17011.
4. Defendant, Starnet Group, LP is a Pennsylvania limited partnership with its
principal place of business located at 1845 Market Street, Camp Hill, Cumberland County,
Pennsylvania 17011. The general partner of Starnet Group, LP is Stamet Properties, LLC.
5. Defendant, Stamet Properties, LLC is a Pennsylvania limited liability corporation
with its principal place of business located at 1845 Market Street, Camp Hill, Cumberland
County, Pennsylvania 17011.
6. Defendants, Stamet Mechanical Group, Inc. and Stamet Electrical Group, Inc. are
Pennsylvania corporations with their principal place of business located at 1845 Market Street,
Camp Hill, Cumberland County, Pennsylvania 17011.
Defendant, Douglas L. Morrow ("Morrow"), is an adult individual with a
residence address of 336 North 28th Street, Camp Hill, Pennsylvania 17011.
8. Defendant, Ronald D. Blystone, ("Blystone"), is an adult individual with a
business address of 1845 Market Street, Camp Hill, Pennsylvania 17011.
9. On or about August 20, 2002, Liberator became the record owner of 75,000 shares
of "Series A" preferred stock of Stamet Technologies, Inc. True and correct copies of share
certificates reflecting these shares are attached hereto as Exhibit "A" and are incorporated by
reference.
2
10. On or about August 20, 2002, Blystone, Morrow, Cory Dailey and David Aeillo
each became record owners of 100,000 shares of common stock of Starnet Technologies, Inc.
True and correct copies of share certificates reflecting these shares are attached hereto as Exhibit
"B" and are incorporated by reference.
11. Contemporaneously with the issuance of the Series A preferred stock to Liberator,
Starnet Technologies, Inc. adopted Restated Articles of Incorporation of Starnet Technologies,
Inc. A true and correct copy of the Restated Articles of Incorporation of Starnet Technologies,
Inc. is attached hereto as Exhibit "C" and is incorporated by reference.
12. Liberator paid to Starnet Technologies, Inc. the sum of $144,000.00 in
consideration for the Series A preferred stock.
13. Subsequent to August 20, 2002, Cory Dailey and David Aeillo terminated their
stock ownership of Starnet Technologies, Inc. and Morrow and Blystone became the sole record
owners of the common stock of Starnet Technologies, Inc.
14. In August, 2002, Starnet Group LP and Starnet Properties LLC were formed with
Liberator obtaining the ownership interests as identified below:
Starnet Group LP 34% interest as a limited partner
Starnet Properties LLC 25% member interest
15. To the date of this Complaint, Liberator has received no compensation or
remuneration from any of the entities or individuals named as Defendants in this matter.
16. Liberator loaned to Starnet Technologies, Inc. the sum of $21,500.00.
17. On or about March 2, 2005, Liberator was provided with a check from Caledonia
Construction, a fictitious name of Starner Technologies, Inc., in the amount of $21,500.00. A
true and correct copy of this check is attached hereto as Exhibit "D" and is incorporated by
reference.
18. The check which is Exhibit "D" was returned for insufficient funds.
19. Liberator has made demand upon the Defendants to make good on the check
attached as Exhibit "C" and the Defendants have failed and refused to do so.
20. Pursuant to the Restated Articles of Incorporation, holders of preferred stock of
Starner Technologies, Inc. are entitled to a preference as it relates to dividends paid by Stamet
Technologies, Inc.
21. Pursuant to the Restated Articles of Incorporation, holders of preferred stock are
entitled to a preference as it relates to any liquidation, dissolution or winding up of the
corporation.
22. On or about June 27, 2005, the Defendants executed an Indenture of Mortgage
naming Liberator as mortgagee. A true and correct copy of this Indenture of Mortgage
("Mortgage") is attached hereto as Exhibit "E" and is incorporated by reference.
23. Pursuant to the Mortgage, the Defendants agreed to pay to Liberator $21,500.00.
24. Pursuant to the Mortgage, the Defendants agreed to continue making payments
against an outstanding credit line with PNC which was in the name of Liberator.
25. To the date of this Complaint, the Defendants have failed and refused to pay
Liberator the $21,500.00 and have failed to make the payments against the outstanding credit line
with PNC, Upon information and belief, the PNC credit line has an outstanding balance of
approximately $55,000.00.
26. Liberator and Starnet Technologies, Inc. entered into an Indemnification
Agreement on or about August 20, 2002. A true and correct copy of the Indemnification
Agreement is attached hereto as Exhibit "F" and is incorporated by reference.
27. Pursuant to the Indemnification Agreement, Liberator is entitled to be indemnified
by Starnet Technologies, Inc. for any claim in which he and Starnet Technologies, Inc. may be
jointly liable.
28. Pursuant to the Indemnification Agreement, Starnet Technologies, Inc. is required
to pay, "in the first instance, the entire amount of any judgment or settlement of such action,
suit..."
29. On or about August 3, 2005, Liberator was named as a Defendant in an action
filed in the Court of Common Pleas of Cumberland County docketed to No. 05-2459 by The
Strober-Haddonfield Group, Inc. The complaint filed by Strober-Haddonfield Group, Inc. is
incorporated herein by reference thereto as a public record.
30. Starnet Technologies, Inc was also named as a defendant in the Strober-
Haddonfield Group, Inc. matter.
31. Starnet Technologies, Inc. has failed and refused to pay the claim of Strober-
Haddonfield Group, Inc. which claim relates to materials provided by Strober-Haddonfield
Group, Inc. to Starnet Technologies, Inc. for which payment has not been made.
32. In December of 2002, Stamet Electrical Group entered into several lease
agreements with Graybar Electric. True and correct copies of these Lease Agreements are
attached hereto as Exhibit "G" and are incorporated by reference.
33. To induce Graybar Electric to enter into the Lease Agreements and at the request
of Stamet Electrical Group, Liberator executed a Personal Guaranty for the obligations of Stamet
Electrical Group under the Lease Agreements. A true and correct copy of the Personal Guaranty
is attached hereto as Exhibit "H" and is incorporated by reference.
34. Plaintiff has sought action by the entity Defendants to fulfill the obligations and
duties owed to Plaintiff by discussing the obligations and duties with Morrow and Blystone and
requesting that they have the entity Defendants fulfill the obligations.
COUNT I-BREACH OF CONTRACT
DAVID L. LIBERATOR v. ALL DEFENDANTS
35. Plaintiff incorporates by reference paragraphs one through thirty-four as though
set forth at length.
36. Defendants have breached the Mortgage by failing and refusing to pay to
Liberator the sum of $21,500.00 and by failing and refusing to make the required payments
against the PNC credit line.
37. Starnet Technologies, Inc. has breached the Indemnity Agreement by failing and
refusing to pay the claim of Strober-Haddonfield Group, Inc.
6
38. As a direct and proximate result of the breaches of the Defendants, Liberator has
incurred the following damages:
a) the loss of $21,500.00 loaned by Liberator to Starnet Technologies, Inc.;
b) $55,000.00 owed on the PNC credit line which account is in the name of
Liberator;
C) the sum of $4,779.53 paid by Liberator to settle the Strober-Haddonfield
Group, Inc. claim;
d) attorney fees incurred by Liberator to defend the Strober-Haddonfield
Group, Inc. claim; and,
e) any and all amounts due under the Lease Agreements with Graybar
Electric.
WHEREFORE, Plaintiff requests that judgment be entered in his favor and against the
Defendants as follows:
a) the sum of $81,279.53;
b) attorney fees incurred by Plaintiff to defend the Strober-Haddonfield
matter;
C) any and all amounts due under the Lease Agreements with Graybar
Electric; and,
d) such further relief as this Court may deem just and proper together with
interest and costs.
COUNT II-BREACH OF FIDUCIARY DUTIES
DAVID L. LIBERATOR v. DOUGLAS L. MORROW and RONALD BLYSTONE
39. Plaintiff incorporates by reference paragraphs one through thirty-eight as though
set forth at length.
7
40. As persons controlling fifty percent (50%) of the common stock of Starnet
Technologies, Inc. and as officers and directors of Starnet Technologies, Inc., Morrow and
Blystone owe fiduciary duties to the corporation as well as the remaining shareholders.
Accordingly, Morrow and Blystone have a duty not to engage in corporate waste,
mismanagement and/or misappropriation of the corporations' assets and not to oppress their
fellow shareholders.
41. Morrow and Blystone, as the holders of a majority interest in Starnet
Technologies, Inc. and as the officers and directors of Starnet Technologies, Inc. have breached
their fiduciary duties owed to Liberator as a holder of preferred shares of Starnet Technologies,
Inc. in ways that include, but are not limited to, the following:
a) failing to declare a dividend ever in their capacities as the directors of
Starnet Technologies, Inc.;
b) failing to notify all stockholders of the date, time and place of the annual
stockholder's meeting and board of directors meeting;
C) failing to reveal information to the stockholders when requested to do so;
d) paying themselves excessive compensation and collecting excessive
corporate benefits in connection with the services they provided to Starnet
Technologies, Inc.;
e) in misappropriating corporate assets;
f) in failing to ensure annual financial reports of Starnet Technologies, Inc
were distributed to shareholders;
g) failing to permit Liberator to vote as was his right under the Restated
Articles of Incorporation of Starnet Technologies, Inc.; and,
h) breaching the Voting Trust Agreement attached hereto as Exhibit "I" and
incorporated by reference.
42. Morrow and Blystone have acted intentionally, recklessly and/or in a wanton
manner and in careless disregard for the rights of others in breaching their fiduciary duties to
Liberator.
WHEREFORE, Plaintiff, David L. Liberator, respectfully request that judgment be
entered in his favor and against Douglas L. Morrow and Ronald D. Blystone for an amount in
excess of $35,000.00 plus punitive damages, costs, expenses and interest.
COUNT III-APPOINTMENT OF RECEIVER
DAVID L. LIBERATOR v. ALL DEFENDANTS
43. Plaintiff incorporates by reference paragraphs one through forty-two as though set
forth at length.
44. Morrow and Blystone, as officers and directors of Starnet Technologies, Inc., have
and continue to pay themselves excessive salaries, compensation and other benefits.
45. Morrow and Blystone have and are continuing to collect receivables owed to
Starnet Technologies, Inc. and are failing to apply these amounts to pay the debts of Starnet
Technologies, Inc.
46. The acts of Morrow and Blystone are in direct contravention of the dissolution
and winding up provisions of the Restated Articles of Incorporation which require preferential
treatment of holders of preferred shares of Starnet Technologies, Inc.
47. The appointment of a receiver for Starnet Technologies, Inc. and the related and
affiliated companies named as Defendants herein is necessary to preserve the assets of the
entities and to protect Liberator from suffering further losses as more fully set forth hereinabove.
WHEREFORE, Plaintiff, David L. Liberator, respectfully requests this Court enter
judgment in his favor and against Defendants and appoint a receiver at Starnet Technologies, Inc.
and the affiliated companies named as Defendants herein for the purpose of winding up the
affairs of the businesses.
COUNT IV-NEGLIGENCE
DAVID L. LIBERATOR v. STARNET TECHNOLOGIES, INC.
48. Plaintiff incorporates by reference paragraphs one through forty-eight as though
set forth at length.
49. Plaintiff leased to Starnet Technologies, Inc. a vehicle titled in the name of
Plaintiff. The vehicle was a 1998 Dodge Durango, VIN IB4HS282XWF161096.
50. At the time Plaintiff delivered the Durango to Starnet Technologies, Inc., the
vehicle was in excellent shape and had no body damage.
51. Starnet Technologies, Inc. recently returned the vehicle to Plaintiff.
52. When Starnet Technologies, Inc. returned the vehicle to Plaintiff the vehicle had
substantial damage to its body. Estimates indicate the repair of the body damage to the vehicle
will be $4,232.26.
53. Starnet Technologies, Inc. had a duty to return the vehicle to Plaintiff in
substantially the same shape and repair as when Plaintiff provided the vehicle to Starnet
Technologies, Inc..
54. Starnet Technologies, Inc. breached the duty of care it had to Plaintiff by
damaging the vehicle.
10
55. The damage to the vehicle was the direct and proximate result of the acts and
omissions of Stamet Technologies, Inc., its agents, representatives and employees.
WHEREFORE, Plaintiff requests judgment in his favor and against Starner Technologies,
Inc. for the sum of $4,232.26 plus costs, interest and expenses.
COUNT V-ACTION FOR ACCOUNTING AND TO
INSPECT BOOKS AND RECORDS
DAVID L. LIBERATOR v. ALL DEFENDANTS
56. Plaintiff incorporates by reference paragraphs one through fifty-five as though set
forth at length.
57. Due to the Defendants' conduct described herein, including wrongfully excluding
Liberator from participating in the conduct and management of the business affairs of the entity
Defendants, wrongfully refusing to allow Liberator to access the books and records of the entity
defendant and, upon information and belief, the misappropriation and conversion of the assets of
Stamet Technologies, Inc., Plaintiff is entitled to an accounting of:
a) all transactions and dealings of the entity Defendants from December 2002
to date;
b) all profits and losses of each entity Defendant from December 2002 to
date; and
c) a listing of all of the assets and liabilities of the entity Defendants as of
December, 2002 and as of this date.
58. Additionally, Morrow and Blystone should account for all corporate funds spent
for their personal use and should be required to pay back such misapplied funds to the entity
Defendants.
11
59. As a shareholder of Starnet Technologies, a member of Starnet Properties, LLC
and a limited partner in Starnet Group LP, Liberator is entitled to a full and complete inspection
of the corporate books and records of Stamet Technologies, Inc., Starner Properties, LLC and
Starnet Group LP.
WHEREFORE, Plaintiff requests judgment in his favor and against Defendants for an
Order directing Defendants to produce all corporate books and records for inspection pursuant to
15 Pa.C.S.A. §1508, account for all of the transactions, dealings, assets and liabilities of Starnet
Technologies, Inc, Starnet Properties, LLC and Starner Group LP and such other and further
relief as this Court deems just and proper.
Respectfully submitted,
O'BRIEN, BARIC & SCHERER
David A. Baric, Esquire
I.D. # 44853
19 West South Street
Carlisle, Pennsylvania 17013
(717) 249-6873
Attorney for Plaintiff,
David L. Liberator
d a b.d it/litigation/liberator/com plaint. pld
VERIFICATION
The statements in the foregoing Complaint are based upon information which has been
assembled by my attorney in this litigation. The language of the statements is not my own. I
have read the statements; and to the extent that they are based upon information which I have
given to my counsel, they are true and correct to the best of my knowledge, information and
belief. I understand that false statements herein are made subject to the penalties of 18 Pa.C.S. §
4904 relating to unsworn falsifications to authorities.
DATE: /D l2 ??
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CORPORATION BUREAU
Articles of Amendment-Domestic Corporation
Entity Number (15 Pa.C.S.)
x Business Corporation (§ 1915)
Nonprofit Corporation (§ 5915)
Name
Robert C. May, Esquire
Ame
3438 Trindle Road; Suite 201
ON State ZID Code
Camp Hill PA 17011
Document will be returned to the
name and address you enter to
the left.
e=
Fee: $52
------------------
Secretary of the Commonwealth
Filed in the Department of State
In compliance with the requirements of the applicable provisions (relating to articles of amendment), the undersigned,
desiring to amend its articles, hereby states that:
1. The name of the comnration is:
StarNet Technologies, Inc.
2. The (a) address of this corporation's current registered office in this Commonwealth or (b) name of its
commercial registered office provider and the county of venue is (the Department is hereby authorized to
correct the following information to conform to the records of the Department):
(a) Number and Street City State Zio County
1845 Market Street Camp Hill PA 17011 Cumberland
(b) Name of Commercial Registered Office Provider County
c/o NIA
3. The statute by or under which it was incorporated: Business Corporation Law of 1988.
1 a. The date of its incorporation: February 8, 2002
5. Check, and if appropriate complete, one of the following.
k The amendment shall be effective upon filing these Articles of Amendment in the Department of State.
The at?rertt ]..It be?effecU, C1 Date at Hour
6#:01.141 0Z SnV IG&Z
EXHIBIT "C"
DSCB:15-1915/5915-2
6. Check one of the following:
X The amendment was adopted by the shareholders or members pursuant to 15 Pa.C.S. § 1914(a) and (b) or §
5914(a).
The amendment was adopted by the board of directors pursuant to 15 Pa. C.S. § 1914(c) or § 5914(b).
7. Check, and if appropriate, complete one of the following:
_ The amendment adopted by the corporation, set forth in full, is as follows
X The amendment adopted by the corporation is set forth in full in Exhibit A attached hereto and made a part
hereof.
8. Check if the amendment restates the Articles:
X The restated Articles of Incorporation supersede the original articles and all amendments thereto.
IN TESTIMONY WHEREOF, the undersigned
corporation has caused these Articles of Amendment to be
signed by a duly authorized officer thereof this
19th day of August
2002
StarNet Technologies, Inc.
ame, f or ration
Y
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EXHIBIT "D"
ECG 11 Aft 10 32
INDENTURE OF MORTGAGE
THIS INDENTURE made the anE' day of Vu ^'f , 2005, between
Stamet, Technologies, Inc., Stamet Enterprises, Inc. Stamet Group, LP, Stamet Properties, LLC,
Stamet Mechanical Group, Inc., Walk On Flooring, and Stamet Electrical Group, Inc., each a
Pennsylvania business entity of 1845 Market Street, Camp Hill, Pennsylvania, and Douglas L.
Morrow and Ronald D. Blystone, each an adult individual, and any and all affiliates of such
entities and/or individuals, such entities and individuals being together referred to as "Starnet
Parties" and each individually referred to as "Starnet Party", of , Pennsylvania, hereinafter called
("Mortgagors") and David L. Liberator of 271 Springview Road, Carlisle, Pennsylvania,
hereinafter called ("Mortgagee").
WHEREAS, Mortgagors, in and by a certain obligation or writing obligatory,
under their hands and seals, duly executed and bearing even date herewith, stands bound unto
Mortgagee in the sum of Twenty One Thousand Five Hundred and 00/100 Dollars ($21,500.00)
conditioned for the payment of the just and full sum of Twenty One Thousand Five Hundred
Dollars ($21,500.00), together with the premiums of insurance, taxes, ground rents, water rents,
municipal assessments and charges from time to time assessed against or upon the hereinafter
described mortgaged premises, without any fraud or further delay, as in and by the said recited
obligation and the condition thereof relation to the same being had, may more fully and at large
appear, and in case of default in payment, as aforesaid, shall also pay all cost, fees and expenses
of collecting the same including an attorney's commission of five (5%) percent.
AND WHEREAS, the Mortgagors agree and shall continue to make payments
against an outstanding credit line with PNC which is in the name of the Mortgagee and has a
current balance of approximately $57,000.00. Further, no additional credit shall be taken on this
line and the Mortgagors agree they will indemnify Mortgagee from and against any claim or
demand for payment by PNC regarding this line of credit.
NOW, THIS INDENTURE WITNESSETH, that Mortgagors, as well for and in
consideration of the aforesaid debt or sum of Twenty One Thousand Five Hundred and 00/100
Dollars ($21,500.00) and the other obligations referenced above, and for the better securing the
payment thereof unto Mortgagee, his heirs, executors, administrators and assigns, in discharge of
the said obligation above recited, as for and in consideration of the further sum of one dollar in
specie, well and truly paid to Mortgagors, by Mortgagee, at and before the ensealing and delivery
hereof, the receipt of which one dollar is hereby acknowledged, has granted, bargained, sold,
released and confirmed, and by these presents does grant, bargain, sell, release and confirm unto
Mortgagee, his heirs, executors, administrators and assigns, more fully bound and described on
Exhibit "A", attached hereto and incorporated herein by reference.
EXHIBIT "E"
BK 19 1 8PG2 158
TOGETHER with all and singular the buildings, improvements, woods, ways,
rights, liberties, privileges, hereditaments, and appurtenances to the same belonging, or in any
wise appertaining, and the reversion and reversions, remainder and remainders, rents, issues and
profits thereof. To have and to hold the said hereditaments and premises above granted, or
intended so to be, with the appurtenances, unto Mortgagee, his heirs, executors, administrators
and assigns, forever.
AND it is further understood and agreed that Mortgagors, his heirs, executors,
administrators and assigns, will pay all taxes, municipal assessments and charges from time to
time assessed against or upon said mortgaged premises forthwith when the same become due and
payable, and will keep the buildings erected upon the said premises insured in some good and
reliable fire insurance company or companies licensed to transact business in the Commonwealth
of Pennsylvania, in the amount of at least Twenty One Thousand Five Hundred and 00/100
Dollars, and shall take no insurance upon said buildings not marked for the benefit of the
Mortgagee, and the policy or shall be delivered to and held by Mortgagee, his heirs, executors,
administrators or assigns, as collateral security for the payment of moneys secured hereby, and in
case said party of the first part, their heirs, executors, administrators or assigns, shall neglect to
procure such insurance, or shall neglect to pay said taxes, municipal assessments and charges
forthwith when the same become due and payable, Mortgagee, his heirs, executors,
administrators or assigns, may take out such policy or policies in their own names, and may pay
such taxes, municipal assessments and charges, and the premium or premiums paid therefor, and
the sum or sums paid for such taxes, municipal assessments and charges as aforesaid, shall bear
interest from time of payment, and be added to collected as part of the said principal sum and in
the same manner.
AND is further agreed and understood, that in case default be made at any time in
the payment of the principal debt or any installment of principal debt or interest, or any part
thereof, or of any taxes, municipal assessments, charges or premiums of insurance aforesaid, for
thirty (30) days after the same falls due as aforesaid, the whole of the said debt and interest and
additions thereto as aforesaid shall, at the option of Mortgagee, his heirs, executors,
administrators or assigns, become due and payable forthwith; and hereupon an action or
mortgage foreclosure as now provided by Pennsylvania Procedural Rules 1141 to 1148, both
inclusive, or other appropriate proceedings, now or hereafter prescribed by law, may forthwith be
commenced and prosecuted to judgment, execution and sale, for the collection of the whole
amount of the said debt and interest remaining unpaid, together with all premiums of insurance,
and all taxes, municipal assessments and charges, and all fees, costs and expenses of such
proceedings, including attorney's commission of five percent of the principal sum. And all errors
in said proceedings, together with all stay of or exemption from execution, or extension of time
of payment which may be given by any Act or Acts of Assembly now in force, or which may be
enacted hereafter, are hereby forever waived and released.
8K 1918PG2 159
PROVIDED, HOWEVER, NEVERTHELESS, that if Mortgagors, their heirs,
executors, administrators or assigns, does and shall well and truly pay, or causes to be paid unto
Mortgagee, his heirs, executors, administrators or assigns, the aforesaid debt or sum of Twenty
One Thousand Five Hundred and 00/100 Dollars ($21,500.00) on the day hereinbefore
mentioned and appointed for the payment thereof, together with lawful interest for the same, and
premiums of insurance aforesaid, taxes, municipal assessments and charges, in like money, in the
way and manner hereinbefore specified therefor, without any fraud or further delay and without
any deduction, defalcation or abatement to be made, for or in respect of any taxes, charges or
assessments whatsoever, that then, and from thenceforth, as well this present Indenture, and the
estate hereby granted, and perform all other obligations as set forth herein as the said obligation
above recited, shall cease, determine and become absolutely null and void to all intents and
purposes, anything hereinbefore contained to the contrary thereof in any wise notwithstanding.
Mortgagors agrees not to transfer title, legal or equitable, unless Mortgagee
consents in writing to such transfer. This provision is for preventing Agreements of Sale for
purposes other than passing legal title within 180 days of signing said Agreement of Sale.
IN WITNESS WHEREOF, Mortgagors have hereunto set their hands and seals,
the day and year first above written.
Signed, Sealed and Delivered
in the Presence of
Stamet Technologies, Inc.
,* A I ?
By: Rjvq" rltxsToNs
Starner Enterprises, Inc.
i?w C? ?/` b 14 (SEAL)
By:
Starnet Group, LP
By:
BK 19 18PG2 160
Stamet Properties, LLC
I "m t rv (SEAL)
By:
Starnet Mechanical Group, Inc.
'Z?,,A? 6 A (SEAL)
14 By:
Walk On Flooring
0A
By:
rV` ' JI) ?_
Ronald D. Bl stone
OK1918PG2161
Stamet Electrical Group, Inc.
COMMONWEALTH OF PENNSYLVANIA }
) SS:
COUNTY OF CUMBERLAND )
1M
On this, the day of J nf- 2005, before me, the undersigned
officer, personally appeared ? CI cl_ 0. SiSion? who
acknowledged himself/herself to be the of Starnet
Technologies, Inc., a corporation, and that he/she as such OTC _r
being authorized to do so, executed the foregoing instrument for the purposes therein contained
by signing the name of the corporation by himself/herself as cm t v
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
Yiv C
Nok* sw ugrn'?
TINany S. MeftnonPubNe t4nl?m
cwnpHiMeoro,ctanbsAertdCounb
11,4) N
tart' ublic
Pr
MY Commission ExWrosAug• 20,
Member, Pennsylvania Association of Noted"
COMMONWEALTH OF PENNSYLVANIA )
) SS:
COUNTY OF CUMBERLAND )
On this, the8= day of
officer, personally appeared RYQQ
acknowledged himself/herself to be the
2005, before me, the undersigned
who
of Stamet
Enterprises, Inc., a corporation, and that he/she as such c L re r ,
being authorized to do so, executed the foregoing instrument for the purposes therein contained
by signing the name of the corporation by himself/herself as Cr r-
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
COMMONWEALTH OF PENNSYLVANIA
Nolaflal Seal
Tiffany S. McKinnon, Notary Public
Camp HIM Boro, CumbeAanA Count1yy
C
rW
Notary ublic
--- -) L'1' 5'ril') My Commission F?Ifes Aug. 20, 2W16
Member, Pennsylvanla Association of Nolen"
8K 19 18PG2 162
COMMONWEALTH OF PENNSYLVANIA )
) SS:
COUNTY OF CUMBERLAND )
On this, the &?C day of -?- , 2005, before me, the undersigned officer,
personally appeared mal nl EkCTO G
who acknowledged themselves to be (general) partners in Stamet Group, LP, a Pennsylvania
partnership, and that as such (general) partners, being authorized to do so, executed the foregoing
for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
Nw Notww ?SYLV C! LhrNu -
Tmk S. Mdannon, PubBc
CaCWa A? C Notary p lic
ilb
Member, Parmevlvarua Aswiation of NoWba
COMMONWEALTH OF PENNSYLVANIA
COUNTY OF CUMBERLAND
On this, the(" day of
)
SS:
2005, before me, the undersigned
officer, personally appeared :4m-al OL 1 ?. lSt) f4ma G
who acknowledged himself/herself to be 4"i - Y of Stamet
Properties, LLC, a Limited Liability Company and in that capacity, being authorized to do so,
executed the foregoing instrument for the purposes therein contained by signing the name of the
Limited Liability Company by himself/herself as iCCr-
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
CQMMONwEALTH OF PENNSYLY
NatafialSeal
Ti fa S. MdQnnon, 1o(ary PuWk
CampHX8om,Cumbe?nd
My Commission Evkes Aug. 20, &
Member, P&TwOvanlo Aasodation of Notaries
f tv
env"`
No ary Public
BK 19 18PG2 163
COMMONWEALTH OF PENNSYLVANIA )
) SS:
COUNTY OF CUMBERLAND )
On this, the2 r day of , 2005, before me, the undersigned
officer, personally appeared ?r OLJo( r) h i hn-a who
acknowledged himself/herself otof be the of?p Crr of Walk On
Flooring, a corporation, and that he/she as such dfr, being
authorized to do so, executed the foregoing instrument for the pu?oses therein contained by
signing the name of the corporation by himself/herself as OtX,'C r
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
COMMONWEALTH OF PENNSYLY.
Notarial
Tilferry S. M it, C , Ndary Putdic 0 ) Llc
Borou
DampF1111
My ErrplrosreA Aug. . Courrb ' , Notary Publi
Cornrnbebn 20,
Member, PermsyNark Assoda0w of Notaries
COMMONWEALTH OF PENNSYLVANIA )
) SS:
COUNTY OF CUMBERLAND )
On this, the c5,/? day of
2005, before me, the undersigned
officer, personally appeared who
acknowledged himself/herself to be the 40A rr- r- of Stamet
Electrical Group, Inc., a corporation, and that he/she as such 0r rr r
being authorized to do so, executed the foregoing instrument for the purposes therein contained
by signing the name of the corporation by himself/herself as 6PA?t° I-
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
COMMON TH OF P NNSYLVANIA
Notarialsefill
Tiffany S. MdOwron, Notary PubNo
MYComm sbn'CumDer"C ur4V
E?Nea Aug. Yo, 2ft
Member, Permsylvarda Association of Notaries
of y Public
OK 1918PG2164
COMMONWEALTH OF PENNSYLVANIA )
) SS:
COUNTY OF CUMBERLAND )
On this, the c?j day of J ne , 2005, before me, the undersigned
officer, personally appeared Douglas L. Morrow, known to me (or satisfactorily proven) to be
the person whose name is subscribed to the within instrument, and acknowledged that he
executed the same for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
Notorisl s"
Twany S. Mdamon, Notaryry Public
Camp HIN Boro, Cumbeftntl Cpu
My Commission Expires Aug. 20 2p?g
Member, PenroYNenis Association of Not Mee
COMMONWEALTH OF PENNSYLVANIA )
) SS:
COUNTY OF CUMBERLAND )
jW ? r
Notary Public ^J
On this, the :Pj day of -Mn f, , 2005, before me, the undersigned
officer, personally appeared Ronald D. Blystone, known to me (or satisfactorily proven) to be the
person whose name is subscribed to the within instrument, and acknowledged that he executed
the same for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
COMM
jQ
HillBoro Cumberlend NWE rH F YENNSY VAMA NoferiaiSesly S. McKinnon, NWary ot uliC
mission ?Ezpires Aug. ennsyNenk AesocieHon of Notaries
X3-{ 19q Q(? ZI(04 - Pr
I do hereby certify that the precise residence and complete post office address of
the within Mortgagee is 271 Springview Road, Carlisle, Pennsylvania 17013,
'SvZoos. 6ve;' /' a
Attorney for Mortgagee
BK 1918PG2 165
ALL those certain tracts or lots of land situate in the Borough of Camp Hill, Cumberland County,
Pennsylvania, more particularly bounded and described as follows, to wit:
TRACT NO. 1: BEGINNING at a point on the Southeast corner of Market Street and South 19 Street;
thence in a due easterly direction along the southern line of Market Street, a distance of 100 feet to a
point at line of Tract No. 2 hereinafter described; thence along said Tract No. 2 in a due southerly
direction a distance of 141.5 feet to a point on the northeasterly line of South 19th Street; and thence
along the northeasterly line of South 19th Street in a northwesterly direction, a distance of 173.27 feet to
a point at the Southeast corner of Market and South 19th Streets, the place of BEGINNING.
HAVING thereon erected a one story commercial building known and numbered as 1849 Market Street,
Camp Hill, Pennsylvania.
TRACT NO. 2: BEGINNING at a point in the southerly line of Market Street, which point is referenced
100 feet measured along the southern line of Market Street in an easterly direction from the Southeast
comer of Market Street and South 19th Street, which point of beginning is also at the eastern line of
Tract No. 1 hereinabove described; thence along the southern line of Market Street in a due easterly
direction, a distance of 18.4 feet to a point at line of other lands of the Grantor, hereinafter described as
Tract No. 3; thence along said last mentioned lands, South 02 degrees 19 minutes West, a distance of
167.5 feet to a point on the northeastern line of South 19th Street; thence along the northeastern line of
South 19th Street in a northwesterly direction, a distance of 33 feet, more or less, to a point at the eastern
line of Tract No. 1 hereinabove described; and thence along said last mentioned lands in a northerly
direction, a distance of 141.5 feet to a point on the southern line of Market Street, the point and place of
BEGINNING.
HAVING thereon erected a two and one-half story commercial building in part, the remaining part being
erected on Tract No. 1 aforesaid, known and numbered as 1847 Market Street, Camp Hill, Pennsylvania.
TRACT NO. 3: BEGINNING at a point on the southern line of Market Street at the eastern line of Tract
No. 2 hereinabove described; thence along the southern line of Market Street, South 89 degrees 15
minutes East, a distance of 75 feet to a point at line of lands now or formerly of Handy Markets, Inc.;
thence along said last mentioned lands, South 00 degrees 45 minutes West, a distance of 100 feet to a
point at line of other lands of the Grantor herein known as Tract No. 4 hereinafter described; thence
along said last mentioned lands, South 48 degrees 07 minutes West, a distance of90.2 feet to a point on
the northeastern line of South 19th Street; and thence along the eastern line of Tract No. 2 hereinabove
described, North 02 degrees 19 minutes East, a distance of 167.5 feet to a point on the southern line of
Market Street, the place of BEGINNING.
HAVING thereon erected a two story commercial building known and numbered as 1845 Market Street,
Camp Hill, Pennsylvania.
TRACT NO. 4: BEGINNING at a point on the northeastern line of South 19th Street at the southwestern
apex comer of Tract No. 3 hereinabove described; thence along said Tract No. 3, North 48 degrees 07
minutes East, a distance of 90.2 feet to a point at line of lands now or formerly of Handy Markets, Inc.;
thence along said last mentioned lands, South 89 degrees 15 minutes East, a distance of 52.84 feet to a
point on the northeastern line of a 20 feet wide alley; thence along said line of alley, South 40 degrees 07
minutes East, a distance of 97.91 feet to a point at line of lands now or formerly of Omorff Construction
Co.; thence along said last mentioned lands, South 49 degrees 23 minutes West, a distance of 136.05 feet
to a point on the northeastern line of South 19th Street; and thence along the northeastern lien of South
19th Street, North 37 degrees 31 minutes West, a distance of 131 feet to a point at the place of
BEGINNING.
BK 1918PG2166
INDEMNIFICATION AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into as of August 20, 2002
between StarNet Technologies, Inc., a Pennsylvania corporation ("the Company"), and
("Indemnitee").
WITNESSETH THAT:
WHEREAS, Indemnitee performs a valuable service for the Company; and
WHEREAS, the Board of Directors of the Company has adopted Bylaws (the "Bylaws")
providing for the indemnification of the officers and directors of the Company; and
WHEREAS, the Bylaws and applicable Pennsylvania law, by their nonexclusive nature,
permit contracts between the Company and the officers or directors of the Company with respect to
indemnification of such officers or directors; and
WHEREAS, in accordance with the authorization as provided by applicable Pennsylvania
law, the Company may purchase and maintain a policy or policies of directors' and officers' liability
insurance ("D & O Insurance"), covering certain liabilities which may be incurred by its officers or
directors in the performance of their obligations to the Company; and
WHEREAS, in order to induce Indemnitee to enter into the Proprietary Information,
Inventions and Noncompete Agreement set forth as Exhibit A hereto, the Company has determined
and agreed to enter into this contract with Indemnitee;
NOW, THEREFORE, in consideration of Indemnitee's execution and delivery of the
Proprietary Information, Inventions, and Noncompete Agreement set forth as Exhibit A hereto, the
parties hereto agree as follows:
I. Indemnity of Indemnitee. The Company hereby agrees to hold harmless and indemnify
Indemnitee to the full extent authorized or permitted by the provisions of Pennsylvania law, as such
may be amended from time to time, and the Bylaws, as such may be amended. In furtherance of the
foregoing indemnification, and without limiting the generality thereof:
(a) Other Than Proceedings by or in the Right of the Proceedings Company. Indemnitee
shall be entitled to the rights of indemnification provided in this Section 1(a) if, by reason of his
Corporate Status (as hereinafter defined), he is, or is threatened to be made, a party to or participant
in any Proceeding (as hereinafter defined) other than a Proceeding by or in the right of the Company.
Pursuant to this Section 1(a), Indemnitee shall be indemnified against all Expenses (as hereinafter
defined), judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred
by him or on his behalf in connection with such Proceeding or any claim, issue or matter therein, if
he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best
EXHIBIT "F"
interests of the Company and, with respect to any criminal Proceeding, had no reasonable cause to
believe his conduct was unlawful.
(b) Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights
of indemnification provided in this Section 1(b) if, by reason of his Corporate Status, he is, or is
threatened to be made, a party to or participant in any Proceeding brought by or in the right of the
Company. Pursuant to this Section I (b), Indemnitee shall be indemnified against all Expenses
actually and reasonably incurred by him or on his behalf in connection with such Proceeding if he
acted in good faith and in a manner he reasonably believed to be in or not opposed to the best
interests ofthe Company; provided, however, that, if applicable law so provides, no indemnification
against such Expenses shall be made in respect of any claim, issue or matter in such Proceeding as
to which Indemnitee shall have been adjudged to be liable to the Company unless and to the extent
that a court shall determine that such indemnification may be made.
(c) Indemnification for Expenses of a Party Who Is Wholly or Partly Successful-
Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason
of his Corporate Status, a party to and is successful, on the merits or otherwise, in any Proceeding,
he shall be indemnified to the maximum extent permitted by law against all Expenses actually and
reasonably incurred by him or on his behalf in connection therewith. If Indemnitee is not wholly
successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less
than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee
against all Expenses actually and reasonably incurred by him or on his behalf in connection with
each successfully resolved claim, issue or matter. For purposes of this Section and without
limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or
without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.
2. Additional Indemnity. In addition to, and without regard to any limitations on, the
indemnification provided for in Section 1, the Company shall and hereby does indemnify and hold
harmless Indemnitee against all Expenses, judgments, penalties, fines and amounts paid in settlement
actually and reasonably incurred by him or on his behalf if, by reason of his Corporate Status, he is,
or is threatened to be made, a party to or participant in any Proceeding (including a Proceeding by
or in the right of the Company), including, without limitation, all liability arising out of the
negligence or active or passive wrongdoing of Indemnitee. The only limitation that shall exist upon
the Company's obligations pursuant to this Agreement shall be that the Company shall not be
obligated to make any payment to Indemnitee that is finally determined (under the procedures, and
subject to the presumptions, set forth in Sections 6 and 7 hereof) to be unlawful under Pennsylvania
law.
3. Contribution in the Event of Joint Liability.
(a) Whether or not the indemnification provided in Sections 1 and 2 hereof is available, in
respect of any threatened, pending or completed action, suit or proceeding in which Company is
jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), company
shall pay, in the first instance, the entire amount of any judgment or settlement of such action, suit
or proceeding without requiring Indemnitee to contribute to such payment and Company hereby
waives and relinquishes any right of contribution it may have against Indemnitee. Company shall
not enter into any settlement of any action, suit or proceeding in which Company is jointly liable
with Indemnitee (or would be if joined in such action, suit or proceeding) unless such settlement
provides for a full and final release of all claims asserted against Indemnitee.
(b) Without diminishing or impairing the obligations of the Company set forth in the preceding
subparagraph, if, for any reason, Indemnitee shall elect or be required to pay all or any portion of any
judgment or settlement in any threatened, pending or completed action, suit or proceeding in which
Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding),
Company shall contribute to the amount of expenses (including attomeys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred and paid or payable by Indemnitee in
proportion to the relative benefits received by the Company and all officers, directors or employees
of the Company other than Indemnitee who are jointly liable with Indemnitee (or would be if joined
in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, from the
transaction from which such action, suit or proceeding arose; provided, however, that the proportion
determined on the basis of relative benefit may, to the extent necessary to conform to law, be further
adjusted by reference to the relative fault of Company and all officers, directors or employees of the
Company other than Indemnitee who are jointly liable with Indemnitee (or would be if joined in such
action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, in connection with
the events that resulted in such expenses, judgments, fines or settlement amounts, as well as any
other equitable considerations which the law may require to be considered. The relative fault of
Company and all officers, directors or employees of the Company other than Indemnitee who are
jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one
hand, and Indemnitee, on the other hand, shall be determined by reference to, among other things,
the degree to which their actions were motivated by intent to gain personal profit or advantage, the
degree to which their liability is primary or secondary, and the degree to which their conduct is
active or passive.
(c) Company hereby agrees to fully indemnify and hold Indemnitee harmless from any claims
of contribution which may be brought by officers, directors or employees of the Company other than
Indemnitee who may be jointly liable with Indemnitee.
4. Indemnification for Expenses of a Witness. Notwithstanding any other provision of this
Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a witness in any
Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses actually
and reasonably incurred by him or on his behalf in connection therewith.
5. Advancement of Expenses. Notwithstanding any other provision of this Agreement, the
Company shall advance all Expenses incurred by or on behalf of Indemnitee in connection with any
Proceeding by reason of Indemnitee's Corporate Status within ten (10) days after the receipt by the
Company of a statement or statements from Indemnitee requesting such advance or advances from
time to time, whether prior to or after final disposition of such Proceeding. Such statement or
statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be
preceded or accompanied by an undertaking by or on behalf of Indemnitee to repay any Expenses
advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against
such Expenses. Any advances and undertakings to repay pursuant to this Section 5 shall be
unsecured and interest free. Notwithstanding the foregoing, the obligation of the Company to
advance Expenses pursuant to this Section 5 shall be subject to the condition that, if, when and to
the extent that the Company determines that Indemnitee would not be permitted to be indemnified
under applicable law, the Company shall be entitled to be reimbursed, within thirty (30) days of such
determination, by Indemnitee (who hereby agrees to reimburse the Company) for all such amounts
theretofore paid; provided, however, that if Indemnitee has commenced or thereafter commences
legal proceedings in a court of competent jurisdiction to secure a determination that Indemnitee
should be indemnified under applicable law, any determination made by the Company that
Indemnitee would not be permitted to be indemnified under applicable law shall not be binding and
Indemnitee shall not be required to reimburse the Company for any advance of Expenses until a final
judicial determination is made with respect thereto (as to which all rights of appeal therefrom have
been exhausted or lapsed).
6. Procedures and Presumptions for Determination of Entitlement to Indemnification. It
is the intent of this Agreement to secure for Indemnitee rights of indemnity that are as favorable as
may be permitted under the law and public policy of the Commonwealth of Pennsylvania.
Accordingly, the parties agree that the following procedures and presumptions shall apply in the
event of any question as to whether Indemnitee is entitled to indemnification under this Agreement:
(a) To obtain indemnification (including, but not limited to, the advancement of Expenses and
contribution by the Company) under this Agreement, Indemnitee shall submit to the Company a
written request, including therein or therewith such documentation and information as is reasonably
available to Indemnitee and is reasonably necessary to determine whether and to what extent
Indemnitee is entitled to indemnification. The Secretary of the Company shall, promptly upon
receipt of such a request for indemnification, advise the Board of Directors in writing that
Indemnitee has requested indemnification.
(b) Upon written request by Indemnitee for indemnification pursuant to the first sentence of
Section 6(a) hereof, a determination, if required by applicable law, with respect to Indemnitee's
entitlement thereto shall be made in the specific case by one of the following three methods, which
shall be at the election of Indemnitee: (1) by a majority vote of the disinterested directors, even
though less than a quorum, or (2) by independent legal counsel in a written opinion, or (3) by the
stockholders.
(c) If the determination of entitlement to indemnification is to be made by Independent Counsel
.pursuant to Section 6(b) hereof, the Independent Counsel shall be selected as provided in this Section
6(c). The Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall request that
such selection be made by the Board of Directors). Indemnitee or the Company, as the case may be,
may, within 10 days after such written notice of selection shall have been given, deliver to the
Company or to Indemnitee, as the case may be, a written objection to such selection; provided,
however, that such objection may be asserted only on the ground that the Independent Counsel so
selected does not meet the requirements of "Independent Counsel" as defined in Section 13 of this
Agreement, and the objection shall set forth with particularity the factual basis of such assertion.
Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If a
written objection is made and substantiated, the Independent Counsel selected may not serve as
independent Counsel unless and until such objection is withdrawn or a court has determined that
such objection is without merit. If, within 20 days after submission by Indemnitee of a written
request for indemnification pursuant to Section 6(a) hereof, no Independent Counsel shall have been
selected and not objected to, either the Company or Indemnitee may petition any court of competent
jurisdiction for resolution of any objection which shall have been made by the Company or
Indemnitee to the other's selection of Independent Counsel and/or for the appointment as
independent Counsel of a person selected by the court or by such other person as the court shall
designate, and the person with respect to whom all objections are so resolved or the person so
appointed shall act as Independent Counsel under Section 6(b) hereof. The Company shall pay any
and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel
in connection with acting pursuant to Section 6(b) hereof, and the Company shall pay all reasonable
fees and expenses incident to the procedures of this Section 6(c), regardless of the manner in which
such Independent Counsel was selected or appointed.
(d) In making a determination with respect to entitlement to indemnification hereunder, the
person or persons or entity making such determination shall presume that Indemnitee is entitled to
indemnification under this Agreement if Indemnitee has submitted a request for indemnification in
accordance with Section 6(a) of this Agreement. Anyone seeking to overcome this presumption shall
have the burden of proof and the burden of persuasion, by clear and convincing evidence.
(e) Indemnitee shall be deemed to have acted in good faith if Indemnitee's action is based on the
records or books of account of the Enterprise, including financial statements, or on information
supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice
of legal counsel for the Enterprise or on information or records given or reports made to the
Enterprise by an independent certified public accountant or by an appraiser or other expert selected
with reasonable care by the Enterprise. In addition, the knowledge and/or actions, or failure to act,
of any director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for
purposes of determining the right to indemnification under this Agreement. Whether or not the
foregoing provisions of this Section 6(e) are satisfied, it shall in any event be presumed that
Indemnitee has at all times acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the Company. Anyone seeking to overcome this presumption
shall have the burden of proof and the burden of persuasion, by clear and convincing evidence.
(0 If the person, persons or entity empowered or selected under Section 6 to determine whether
Indemnitee is entitled to indemnification shall not have made a determination within thirty (30) days
after receipt by the Company of the request therefor, the requisite determination of entitlement to
indemnification shall be deemed to have been made and Indemnitee shall be entitled to such
indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a
material fact necessary to make Indemnitee's statement not materially misleading, in connection with
the request for indemnification, or (ii) a prohibition of such indemnification under applicable law;
provided, however, that such 30 day period may be extended for a reasonable time, not to exceed
an additional fifteen (15) days, if the person, persons or entity making the determination with respect
to entitlement to indemnification in good faith requires such additional time for the obtaining or
evaluating documentation and/or information relating thereto; and provided, further, that the
foregoing provisions of this Section 6(g) shall not apply if the determination of entitlement to
indemnification is to be made by the stockholders pursuant to Section 6(b) of this Agreement and
if (A) within fifteen (15) days after receipt by the Company of the request for such determination the
Board of Directors or the Disinterested Directors, if appropriate, resolve to submit such
determination to the stockholders for their consideration at an annual meeting thereof to be held
within seventy-five (75) days after such receipt and such determination is made thereat, or (B) a
special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose
of-making such determination, such meeting is held for such purpose within sixty (60) days after
having been so called and such determination is made thereat.
(g) Indemnitee shall cooperate with the person, persons or entity making such determination with
respect to Indemnitee's entitlement to indemnification, including providing to such person, persons
or entity upon reasonable advance request any documentation or information which is not privileged
or otherwise protected from disclosure and which is reasonably available to Indemnitee and
reasonably necessary to such determination. Any Independent Counsel, member of the Board of
Directors, or stockholder of the Company shall act reasonably and in good faith in making a
determination under the Agreement of the Indemnitee's entitlement to indemnification. Any costs
or expenses (including attorneys' fees and disbursements) incurred by Indemnitee in so cooperating
with the person, persons or entity making such determination shall be home by the Company
(irrespective of the determination as to Indemnitee's entitlement to indemnification) and the
Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.
(h) The Company acknowledges that a settlement or other disposition short of final judgment
may be successful if it permits a party to avoid expense, delay, distraction, disruption and
uncertainty. In the event that any action, claim or proceeding to which Indemnitee is a party is
resolved in any manner other than by adverse judgment against Indemnitee (including, without
limitation, settlement of such action, claim or proceeding with or without payment of money or other
consideration) it shall be presumed that Indemnitee has been successful on the merits or otherwise
in such action, suit or proceeding. Anyone seeking to overcome this presumption shall have the
burden of proof and the burden of persuasion, by clear and convincing evidence.
7. Remedies of Indemnitee.
(a) In the event that (i) a determination is made pursuant to Section 6 of this Agreement that
Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses
is not timely made pursuant to Section 5 of this Agreement, (iii) no determination of entitlement to
indemnification shall have been made pursuant to Section 6(b) of this Agreement within 90 days
after receipt by the Company of the request for indemnification, (iv) payment of indemnification is
not made pursuant to this Agreement within ten (10) days after receipt by the Company of a written
request therefor, or (v) payment of indemnification is not made within ten (10) days after a
determination has been made that Indemnitee is entitled to indemnification or such determination
is deemed to have been made pursuant to Section 6 of this Agreement, Indemnitee shall be entitled
to an adjudication in an appropriate court of the Commonwealth of Pennsylvania, or in any other
court of competent jurisdiction, of his entitlement to such indemnification. Indemnitee shall
commence such proceeding seeking an adjudication within 180 days following the date on which
Indemnitee first has the right to commence such proceeding pursuant to this Section 7(a). The
Company shall not oppose Indemnitee's right to seek any such adjudication.
(b) In the event that a determination shall have been made pursuant to Section 6(b) of this
Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding commenced
pursuant to this Section 7 shall be conducted in all respects as a de novo trial, on the merits and
Indemnitee shall not be prejudiced by reason of that adverse determination under Section 6(b).
(c) If a determination shall have been made pursuant to Section 6(b) of this Agreement that
Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any
judicial proceeding commenced pursuant to this Section 7, absent a prohibition of such
indemnification under applicable law.
(d) In the event that Indemnitee, pursuant to this Section 7, seeks a judicial adjudication of his
rights under, or to recover damages for breach of, this Agreement, or to recover under any directors'
and officers' liability insurance policies maintained by the Company the Company shall pay on his
behalf, in advance, any and all expenses (of the types described in the definition of Expenses in
Section 13 of this Agreement) actually and reasonably incurred by him in such judicial adjudication,
regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification,
advancement of expenses or insurance recovery.
(e) The Company shall be precluded from asserting in any judicial proceeding commenced
pursuant to this Section 7 that the procedures and presumptions of this Agreement are not valid,
binding and enforceable and shall stipulate in any such court that the Company is bound by all the
provisions of this Agreement.
8. Non-Exclusivity; Survival of Rights; Insurance; Subrogation.
(a) The rights of indemnification as provided by this Agreement shall not be deemed exclusive
of any other rights to which Indemnitee may at any time be entitled under applicable law, the
certificate of incorporation of the Company, the Bylaws, any agreement, a vote of stockholders or
a resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of
any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect
of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment,
alteration or repeal. To the extent that a change in the Law, whether by statute or judicial decision,
permits greater indemnification than would be afforded currently under the Bylaws and this
Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the
greater benefits so afforded by such change. No right or remedy herein conferred is intended to be
exclusive of any other right or remedy, and every other right and remedy shall be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter existing at law or
in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other right or remedy.
(b) To the extent that the Company maintains an insurance policy or policies providing liability
insurance for directors, officers, employees, or agents or fiduciaries of the Company or of any other
corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such
person serves at the request of the Company, Indemnitee shall be covered by such policy or policies
in accordance with its or their terms to the maximum extent of the coverage available for any such
director, officer, employee or agent under such policy or policies.
(c) In the event of any payment under this Agreement, the Company shall be subrogated to the
extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers
required and take all action necessary to secure such rights, including execution of such documents
as are necessary to enable the Company to bring suit to enforce such rights.
(d) The Company shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually
received such payment under any insurance policy, contract, agreement or otherwise.
9. Exception to Right of Indemnification. Notwithstanding any other provision of this
Agreement, Indemnitee shall not be entitled to indemnification under this Agreement with respect
to any Proceeding brought by Indemnitee, or any claim therein, unless (a) the bringing of such
Proceeding or making of such claim shall have been approved by the Board of Directors of the
Company or (b) such Proceeding is being brought by the Indemnitee to assert, interpret or enforce
his rights under this Agreement.
10. Duration of Agreement. All agreements and obligations of the Company contained herein
shall continue during the period Indemnitee is an officer or director of the Company (or is or was
serving at the request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise) and shall continue thereafter so long
as Indemnitee shall be subject to any Proceeding (or any proceeding commenced under Section 7
hereof) by reason ofhis Corporate Status, whether or not he is acting or serving in any such capacity
at the time any liability or expense is incurred for which indemnification can be provided under this
Agreement. This Agreement shall be binding upon and inure to the benefit of and be enforceable by
the parties hereto and their respective successors (including any direct or indirect successor by
purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of
the Company), assigns, spouses, heirs, executors and personal and legal representatives. This
Agreement shall continue in effect regardless of whetherlndemnitee continues to serve as an officer
or director of the Company or any other Enterprise at the Company's request.
11. Security. To the extent requested by the Indemnitee and approved by the Board of Directors
of the Company, the Company may at any time and from time to time provide security to the
Indemnitee for the Company's obligations hereunder through an irrevocable bank line of credit,
funded trust or other collateral. Any such security, once provided to the Indemnitee, may not be
revoked or released without the prior written consent of the Indemnitee.
12 Enforcement.
(a) The Company expressly confirms and agrees that it has entered into this Agreement and
assumed the obligations imposed on it hereby in order to induce Indemnitee to enter into the
Proprietary Information, Inventions and Noncompete Agreement set forth as Exhbit A, and the
Company acknowledges that Indemnitee is relying upon this Agreement in executing and delivering
said agreement to the Company.
(b) This Agreement constitutes the entire agreement between the parties hereto with respect to
the subject matter hereof and supersedes all prior agreements and understandings, oral, written and
implied, between the parties hereto with respect to the subject matter hereof.
13. Definitions. For purposes of this Agreement:
(a) "Corporate Status" describes the status of a person who is or was a director, officer,
employee or agent or fiduciary of the Company or of any other corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise which such person is or was serving at the
express written request of the Company.
(b) "Disinterested Director" means a director of the Company who is not and was not a party
to the Proceeding in respect of which indemnification is sought by Indemnitee.
(c) "Enterprise" shall mean the Company and any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise of which Indemnitee is or was serving at the express
written request of the Company as a director, officer, employee, agent or fiduciary.
(d) "Expenses" shall include all reasonable attorneys' fees, retainers, court costs, transcript
costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs,
telephone charges, postage, delivery service fees, and all other disbursements or expenses of the
types customarily incurred in connection with prosecuting, defending, preparing to prosecute or
defend, investigating, participating, or being or preparing to be a witness in a Proceeding.
(e) "Independent Counsel" means a law firm, or a member of a law firm, that is experienced
in matters of corporation law and neither presently is, nor in the past five years has been, retained
to represent: (i) the Company or Indemnitee in any matter material to either such party (other than
with respect to matters concerning the Indemnitee under this Agreement, or of other indemnitees
under similar indemnification agreements), or (ii) any other parry to the Proceeding giving rise to
a claim for indemnification hereunder. Notwithstanding the foregoing, the term "Independent
Counsel" shall not include any person who, under the applicable standards of professional conduct
then prevailing, would have a conflict of interest in representing either the Company or Indemnitee
in an action to determine Indemnitee's rights under this Agreement. The Company agrees to pay the
reasonable fees of the Independent Counsel referred to above and to fully indemnify such counsel
against any and all Expenses, claims, liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto.
(f) "Proceeding" includes any threatened, pending or completed action, suit, arbitration,
alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other
actual, threatened or completed proceeding, whether brought by or in the right of the Company or
otherwise and whether civil, criminal, administrative or investigative, in which Indemnitee was, is
or will be involved as a party or otherwise, by reason of the fact that Indemnitee is or was a director
of the Company, by reason of any action taken by him or of any inaction on his part while acting as
an officer or director of the Company, or by reason of the fact that he is or was serving at the request
of the Company as a director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other Enterprise; in each case whether or not he is acting or serving in any such
capacity at the time any liability or expense is incurred for which indemnification can be provided
under this Agreement; including one pending on or before the date of this Agreement; and excluding
one initiated by an Indemnitee pursuant to Section 7 of this Agreement to enforce his rights under
this Agreement.
14. Severability. If any provision or provisions of this Agreement shall be held by a court of
competent jurisdiction to be invalid, void, illegal or otherwise unenforceable for any reason
whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this
Agreement (including without limitation, each portion of any section of this Agreement containing
any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or
unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable
to the fullest extent permitted by law; and (b) to the fullest extent possible, the provisions of this
Agreement (including, without limitation each portion of any section of this Agreement containing
any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or
unenforceable) shall be construed so as to give effect to the intent manifested thereby.
15. Modification and Waiver. No supplement, modification, termination or amendment of this
Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of
any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other
provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.
16. Notice by Indemnitee. Indemnitee agrees promptly to notify the Company in writing upon
being served with any summons, citation, subpoena, complaint, indictment, information or other
document relating to any Proceeding or matter which may be subject to indemnification covered
hereunder. The failure to so notify the Company shall not relieve the Company of any obligation
which it may have to the Indemnitee under this Agreement or otherwise unless and only to the extent
that such failure or delay materially prejudices the Company.
17. Notices. All notices, requests, demands and other communications hereunder shall be in
writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the
party to whom said notice or other communication shall have been directed, or (ii) mailed by
certified or registered mail with postage prepaid, on the third business day after the date on which
it is so mailed:
If to Indemnitee, to the address set forth below Indemnitee signature hereto;
If to the Company, to its main office as in effect from time to time to the attention of the Board of
Directors;
or to such other address as may have been furnished to Indemnitee by the Company or to the
Company by Indemnitee, as the case may be.
18. Identical Counterparts. This Agreement maybe executed in one ormore counterparts, each
of which shall for all purposes be deemed to be an original but all of which together shall constitute
one and the same Agreement. Only one such counterpart signed by the party against whom
enforceability is sought needs to be produced to evidence the existence of this Agreement.
19. Headings. The headings of the paragraphs of this Agreement are inserted for convenience
only and shall not be deemed to constitute part of this Agreement or to affect the construction
thereof.
20. Governing Law. The parties agree that this Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the Commonwealth of Pennsylvania without
application of the conflict of laws principles thereof.
21. Gender. Use of the masculine pronoun shall be deemed to include usage of the feminine
pronoun where appropriate.
Indemnitee Name, Address and Signature:
St et Technologies, Inc.
(Name/Title)
EXHIBIT A
PROPRIETARY INFORMATION, INVENTIONS AND NONCOMPETE AGREEMENT
STARNET TECHNOLOGIES, INC.
PROPRIETARY INFORMATION, INVENTIONS AND NONCO pM?PETTE AGREEMENT
The following confirms an agreement between me ( o?y st b,,,16., e
and StarNet Technologies, Inc., a corporation (the "Company"), lhich is a materiel part of the
consideration for my employment (or service as a director of the Company, or service as an
independent consultant of the Company, as the case may be) by the Company. Employees only:
I understand that the Company shall not offer employment to me prior to my execution and delivery
of this Agreement to the Company, but that this Agreement shall only become binding upon my
acceptance of employment with the Company (the foregoing sentence shall not apply to independent
contractors or directors of the Company):
1. 1 have not entered into, and I agree I will not enter into, any agreement either written or
oral in conflict with this Agreement or my employment (or service) with Company. I will not violate
any agreement with or rights of any third party or, except as expressly authorized by Company in
writing hereafter, use or disclose my own or any third party's confidential information or intellectual
property when acting within the scope of my employment or otherwise on behalf of Company.
Further, I have not retained anything containing any confidential information of a prior employer
or other third parry, whether or not created by me.
2. Company shall own all right, title and interest (including patent rights, copyrights, trade
secret rights, mask work rights, and all other intellectual and industrial property rights of any sort
throughout the world relating to any and all inventions (whether or not patentable), works of
authorship, mask works, designs, know-how, ideas and information made or conceived or reduced
to practice, in whole or in part, by me during the term of my employment (or service) with Company
to and only to the fullest extent allowed by law (collectively "Inventions") and I will promptly
disclose all Inventions to Company. I hereby make all assignments necessary to accomplish the
foregoing. I shall further assist Company, at Company's expense, to further evidence, record and
perfect such assignments, and to perfect, obtain, maintain, enforce, and defend any rights specified
to be so owned or assigned. I hereby irrevocably designate and appoint Company as its agents and
attorneys-in-fact to act for and in my behalf to execute and file any document and to do all other
lawfully permitted acts to further the purposes of the foregoing with the same legal force and effect
as if executed by me. If I wish to clarify that something created by me prior to my employment (or
service) that relates to Company's actual or proposed business is not within the scope of this
Agreement, I have listed it on Appendix A.
3. To the extent allowed by law, paragraph 2 includes all rights of paternity, integrity,
disclosure and withdrawal and any other rights that maybe known as or referred to as "moral rights,"
"artist's rights," "droit moral," or the like (collectively "Moral Rights"). To the extent I retain any
such Moral Rights under applicable law, I hereby ratify and consent to any action that may be taken
with respect to such Moral Rights by or authorized by Company and agree not to assert any Moral
Rights with respect thereto. I will confirm any such ratifications, consents and agreements from time
to time as requested by Company.
4. I agree that all Inventions and all other business, technical and financial information
(including, without limitation, the identity of an information relating to customers or employees) I
develop, learn or obtain during the term of my employment that relate to Company or the business
or demonstrably anticipated business of Company or that are received by or for Company in
confidence, constitute "Proprietary Information." I will hold in confidence and not disclose or,
except within the scope ofmy employment (or service), use any Proprietary Information. However,
I shall not be obligated under this paragraph with respect to information I can document is or
becomes readily publicly available without restriction through no fault of mine. Upon termination
of my employment (or service), I will promptly return to Company all items containing or
embodying Proprietary Information (including all copies), except that I may keep my personal copies
of (i) my compensation records, (ii) materials distributed to shareholders generally and (iii) this
Agreement. I also recognize and agree that I have no expectation of privacy with respect to
Company's telecommunication, networking or information processing systems (including, without
limitation, stored computer files, e-mail messages and voice messages) and that my activity and any
files or messages on or using any of those systems may be monitored at any time without notice.
5. Until one year after the term of my employment (or service), I will not encourage or
solicit any employee or consultant of Company to leave Company for any reason (except for the
bona fide firing of Company personnel within the scope of my employment or service), and I will
not encourage or solicit any customer or vendor of Company to sever or lessen its relationship with
Company for any reason.
6. I agree that during the term of my employment (or service) with Company (whether or
not during business hours), I will not engage in any activity that is in any way competitive with the
business or demonstrably anticipated business of Company, and I will not assist any other person
or organization in competing or in preparing to compete with any business or demonstrably
anticipated business of Company. In addition, for a period of one year after the term of my
employment (or service), I will not, directly or indirectly as a shareholder, officer, director,
employee, partner, joint venturer, employee, or through any other contractual relationship, for myself
or for any other person or entity other than Company, engage in any activity that is in any way
competitive with the business or demonstrably anticipated business of Company, and I will not assist
any other person or organization in competing or in preparing to compete with any business or
demonstrably anticipated business of Company. I acknowledge that the provisions of this paragraph
6 are reasonable and will not prevent me from earning a living. I further understand and agree that
a breach of any of the covenants contained in this paragraph 6 will result in material and irreparable
harm to Company, that an action at law for damages for such breach is inadequate, and, accordingly,
that in the case of a breach or threatened breach, Company also shall be entitled to temporary and
permanent injunctive rights and remedies as Company may be entitled without necessity of proving
actual damage or irreparable harm. Further, in the event that the Company determines to seek such
injunctive or other relief as a result of a breach by me, I hereby consent to the passage of a decree
requiring, without limitation, the enforcement of the foregoing provisions of this paragraph, with any
and all legal and other reasonable expenses incurred by Company as a result to be paid by me. If any
provision of this paragraph 6 is ever deemed by a court of competent jurisdiction to be illegal,
unlawful or unenforceable, it is the agreement, intention and direction of the parties hereto that the
restrictions contained herein be reduced as necessary to make the same legal, lawful and enforceable.
7. I agree that this Agreement is not an employment (or service) contract for any particular
term and that I have the right to resign and Company has the right to terminate my employment (or
service) at will, at any time, for any or no reason, with or without cause. In addition, this Agreement
does not purport to set forth all of the terms and conditions of my employment (or service), and, as
an employee (or consultant or director, as the case may be) of Company, I have obligations to
Company which are not set forth in this Agreement. However, the terms of this Agreement govem
over any inconsistent terms and can only be changed by a subsequent written agreement signed by
the CEO of Company.
8. I agree that my obligation under paragraphs 2, 3, 4, 5 and 6 of this Agreement shall
continue in effect after termination of my employment (or service), regardless of the reason or
reasons for termination, and whether such termination is voluntary or involuntary on my part, and
that Company is entitled to communicate my obligations under this Agreement to any future
employer or potential employer of mine. My obligation under paragraphs 2, 3, and 4 also shall be
binding upon my heirs, executors, assigns, and administrators and shall inure to the benefit of
Company, its subsidiaries, successors and assigns.
9. Any dispute in the meaning, effect or validity of this Agreement shall be resolved in
accordance with the laws of the Commonwealth of Pennsylvania without regard to the conflict of
laws provisions thereof. I further agree that if one or more provisions of this Agreement are held to
be illegal or unenforceable under applicable Pennsylvania law, such illegal or unenforceable
portion(s) shall be limited or excluded from this Agreement to the minimum extent so that this
Agreement shall otherwise remain in full force and effect and enforceable in accordance with its
terms. I also understand that any breach of this Agreement will cause irreparable harm to Company
for which damages would not be a adequate remedy, and, therefore, Company will be entitled to
injunctive relief with respect thereto in addition to any other remedies.
[Signature Page Follows]
I HAVE READ THIS AGREEMENT CAREFULLY AND I UNDERSTAND AND ACCEPT
THE OBLIGATIONS WHICH IT IMPOSES ON ME WITHOUT RESERVATION. NO
PROMISES OR REPRESENTATIONS REGARDING MY EMPLOYMENT WITH THE
COMPANY HAVE BEEN MADE TO ME TO INDUCE ME TO SIGN THIS AGREEMENT.
I SIGN THIS AGREEMENT VOLUNTARILY AND FREELY, IN DUPLICATE, WITH THE
UNDERSTANDING THAT ONE COUNTERPART WILL BE RETAINED BY THE
COMPANY AND ONE COUNTERPART WILL BE RETAINED BY ME.
Date:
Employee (or Consultant or Director) Name: co--y
11
Employee (or Consultant or Directors) Signature:
Accepted and Agreed To:
StarNet Technologies, Inc.
B?
a 4)4
Title. e cp
? g `? --a--
APPENDIX A
PRIOR MATTER
NONE. (If any, cross out and describe below).
RUG-15-2005 10:19 LEASING SERVICES 1 800 572 8764
Ireurv ?. ,??
I)L(;. 4.20OZ 2;1SPM GRRYBAR FINAWIPL N0.449 P.2?
LEASE AGREEMENT
YOU gums to pay at Me cm you sign tnls L 60
A) Total Advance Lem PoM M (2 mwY, r $WAS PLUS
APPM,
0) One-file Comerxhltadwt POW4100.911' ABLE
W Tats of A ? 0 . S40TAG TAXES
rl mere than one Lasso Payment is mcptimd in advance 0l) additional
annoe t? I1Nn I I'WS
Illi "vovr APPu
C.
ABLE
we TOW= W Mmon WR WPlman aa.aanw ,rrwv, w rw cywl,,,.aw r,w w x.v r•v rv we
r, related b bldg oats w aro 'euisrlten6 (See sseaone 4 1110 a an 01e eamne peas d gels naps.) Y you we
1. LEASE: 091.111M AM ACOPAYANCE. You morel) to
(calloWny "Equipment") on the bans and ondltlons a
ant" Into any pumWe of guppy co(ItfaOt ('Supply Cm
CompaA but noel) of your Obflae0ens lamer than ate ON
and you timely deliver to us such dOMMOnts and 6=9W
augaxt a µy to tatter Imo a 8uppy Conaact on your behr
resolve tare Equipment, you agree to Inspmuitb dotsrmim
Equipment is deiNered to you end tile Equipment will be d
us of a signed pe)fvery and Acceptance CaBflcata (g to
previously you heve not given written notice to us of your
the Equipment 11 delivered to you. The remaining Lease A
Gee period specified an the fume pope of this Loose) desg
et such address as we may apeimyr in wrW%. You sudbl
Total Cash Price (whkb is all amounts we he" Pald In e
induding any bads-up and buyout aepums) ti fem from it
DOCUMENTATNON FEZ OF LIP TO $100,00 WIT" SUCH
seas the equipment dosonsed an tine fast Pepe of pea we" aprcement
cmh *on pages one through four of " rl)eee ('Lena"?, If you have
raft") with any Vendor, you assign to us your rights odor sum &qw
OEM to pay for Me Equipment if Y is soapled by you ra stated below
as as We request), If you have not entered into a Supply Conbact, you
F. You will arrange for the dollvary of the Equlpmeld to you. When you
if it Is in good WsrWM order. This Lasso win boOn on the data when Me
emsd irrmwItly accepted by you upon the earlier of a) the doWery to
uesied by us); or. b) 10 dWA after delivery of the Equpmem Is you s
iorhacooptmrfae. The first Lome Payment Is due an or before the data
ymsnts will be due on the day of each subsequent month for such miller
wed by us. You wig make all ps0mremi required under alt lease to us
to us to asst ft Lease Paynamt by not more thin 15% It Cho actual
nnection w(bh cite purchaw delivery and I ten of the EqA m@K
esUUgl?adted total Cash Price, *YOU AGM TO PAY US A ONE-TM
OrTt W VNTAMN PEE TO at OUE UPON YOUR Rf GEIPT OF OUR
and
GB FS LLC-IA • Wag
Patio 1014
P. 03/10
EXHIBIT "G,I
nrfgenrim IMA6LAN 1ECK CABLE CERTIFIER
TERMS AND CONDITIONS
NAMWACTURE THE EQUI VMW, WE 00 NOT REPRF,.6FNT THE MANUFACTURER OR THE VENUOR, AND YOU HAVE
SMJC1'ED THE 80UPNENT AND VENDOR BASED UPON YOUR OWN JUP MENT, ME MAIM NO WARRAN7IM
EXPRESS OR WKW% VICUMING WARRANTIM OF MERCHANTARUdiY OR FITTW U FOR A PARIIC" PUNK"
OR OTItERIMS6 YOU AGREE THAT MU MLESB OF CHUM WE ARE NOT RESPONSIBLE FOR AND YOU WILL NOY
MAKE ANY CLAIM AGAINST IS FOR ANY Mlllll EtT, WHETIM O011i6QI?'ENTtAt., MM", SPECIAL, OR INO.rRQCT,
YOU AGREE THAT NEITHER VVIDM NOR ANY'SALESPEMM EWLOYEE OR AOM OF VENDOR IS OUR AMff the
HAS ANY AUTHORITY TO SftM FOR US OR TO BIND US IN ANY WAY, We varsfar to You for the term of this Lease any
werri ntes missile by the manufacturer or Voider coder a Supply Contract
A EQWPMENT LOCATWIK; U36 AND REPAIR; RETURN. You will keep and use the equipment only at the egalpmeM London
showtr_ on the final page of this Leese. You may not move the Equipment without our prior written consent At your war cwt and
expense, you wig keep the Equipment eggwe for any menufacwrer's canwtadon, In compliance With at applicable We and hi
good aondrbon, except for ordinary wear and tear. You WIN not make any a0eradons, additions or rogaoaments is do equipment
Without our prior Weldon consent All al erations, additions and repI000manao Will beeonA part Of the Egdpment and air property at
no coat or expenea a era, We may Inspect the Equipment at any reasonable brine. unless you purahase on I3gtripmed In
accordance wash this Leese, within 10 days of the omirolivn or earlier 9amdnadon of this Lens you WAN "modlmay, dativer the
Equipment to us In good condition and repair, except for ordinary weer and tear, to any place In the United States that we M you,
and upon our request, you will provide us with a aerWltation from she manufxWrer or Pis authorized representlodve as to tie
EqulpmaM`s candhion, You VIII pay ea expenses M doMMI0ng, craarhg and shippkhg, std ysu WIN insure the Equlptnent for Its IN
repfaoenletn value during shipping. .
e. TAXES AND FEES. You WIN pay when due, el directly or to ua upon our domend, as tomcat ones and penalties Me§ng to
this tease or the Equipment drat are now or in the fulurs assessed or levied by any able, load or other government sAhody. We
or our harhNate will Ills sN "Mari N property, use or other tax retums (urNess we no" you otherwise in wrft) and you agree to pay
us or our of katd a fee for macro such filings, We do nol have to contest any taxes, fines or penalties. You will pity eat hated
property Was with each Lease Payment or annually, es Invoiced.
S. LOSS Olt DAMAOE, As between you and us, you are responsible for any loss,.theR or destruction of, or damage to the
Equipmant (coltaCtvey"lass"} from any cause at 80, whether or not insured, unw R Is dopvomd to us at the and or to Lease. You
are reclulted to make aft Lease Payments oven d share is R Loss, You must notify ua in willing immediately of any Loss. Thera, at
ow R, you wet ellheir (a) repair ire Mwi{pg merd me tlet It Is In goad condition and working order. eligible for any menufacWre0a
ce den, or (b) pay us the amounts spWried in tiecdbn 9(b) below.
S. MSURANCE. You Wrdl provide and maintain at your expense (a) property (insistence anoint the Was, theft or destruction of, or
damage to. the Equipment for its tug replacement "his, naming us as lees payee, and (b) puW Wily and third party 'property
thsurortce, nemhhg us as en addkronel bhaura 1. You Will On us deriNieaW or Other evidence of Such insurance when requested,
Such Insurance Wag be in a form, amount and with comparriss acce dabre to «s, and war provide that we Wfa be Oven S days
advance tarn of any nnee0e(kin or material change of such insurance. If you do net give w evldsnce of Insurance acceptable to
us, we have the fight, tit eat ft Obligation, to obtain insurance covadng our interest in the Egrdpment for the term of No Lease.
including any enewal or extensions, from an insurer of our choke, including an insurer that is our afillata. We may add the costs
of ac*ftV and malAa;ning such yhaurario% and our or our amllete's fees for our or our aftkwe't services in placing and
maintaining Siam Insurance (collectively, "Insurance Chomal to the amounts due from you udder this Law, You wfil pay the
Insurance Cthdrge in equal iNtallmentc allocated tG the remaining Lease Payments. If we purchase Visurencos, you WIN cooperate
Wbh our insurance agent with respect to ire placement of Insurance and the processing of claims. Nothing in thle Lease wo create
an insuance relationship Of sty type between us and any other person. You acknowledge that we are not rcquired to secure or
maintain any insumnco, and we was net be liable to you if we terminate any insurance coverage that we amouns, d via replace or
renew any InaurofCa coverage, we are not obligated to provide replecememt or renewal comregs undar the same terms, costs,
limas. or condNJons as the previous coverage.
7, TITLE; RECORDING. We aim the owner of and will hold ate to fie Equipment, YOU W111 Neap the E"Mont froa of all Ilene am
encvmbranoes, Unless the Purchase Option price shown an tiro first page of this Lease is SIM, you agree that dos tranaecion Is
a true )aaae. NoWeve, If eta trsnsecton Is deemed to be a leaxe IManded for aftudhy, you gram us a Purchase money Security
Interest In the Equipment (Including any reptaoemonts, subatitutions, scatters, attachments and proceeds), You will deliver to us
signed financing ttatariehds or other documents we request to protect our Interest In the Equipntert, YOU AUTHORM US TO
r" A COPY OF THIS LE"X A$ A FINANCING STATEMENTAND APPOINT UG OR OUR M918 MA8 YOUR ATTQRNEY-
IN-FACT TO EXECUTE AND FILE, ON YOUR BtiNIALF, FINANCING STATEeENYS COVERMG THE EQUIPMENT.
a. DEPAULT. Each of the following is a "oa(aulC under this Cosset (a) you fail to pay any hose Payrnam or any other payment
W t hku 10 days of its due date, (b) you do not paricrm any of your other obligations under tld8 tease or in any other agreement Win
us or WWI any of our apNates MOO INS fallufo 1=111tres for 10 days after we have notified you of k (a) you become Insolvent, you
dissolve or are dissolved, or you salon your assets for the benefit of your cradiors, or enter (voluntamy or Mvoluntaft) any
Lease dies, does not perform is obligations under me guaranty,
bankruptcy Subject to reorganization the eWnffi;(rdag in g:ause to above
or beco
AUG-15-2005 10:20
DEC. 4.22E 2;19PM
LEASING SERVICES
1 800 572 8764 P.04i10
GRRYBRR EINRNCIRL M.449
a1LjjZMMM
1.6 'ea"acaosse
INITIIA41NVOICS TO YOU. If any Lease Payment pr other Amount payola to us it not pall within 10 days of Re due dtte, you Wig
exceed 7% of loch Irta Payment (or such lessor rate se Is the maximum rate allowable under
us a Opposable ?)ehege not to
P. NO WARRANTIES. We are Waft lute ScIAMant to you OAS-Ir. YOU ACXNOWLEDGE THAT 1M13 DO NOT
RUG-15-2005 10:21 LEASING SERUICES 1 800 572 8764 P.05i10
DEC, 4.2002 2:i9PM GRAYBW FINFlNCIPL NO,449?EP.4
A RIMCDIRS, N a Data* ocdre, VA may do ores or more of Me f0OVft: (a) we may canal or temlim as aria Lem or any or a%
ether egfeaments that we have witted Oft with you: (b) we may MCA** you to imtnal%aby pay us, as comper raft ter loss of
our bMgain and not as a penalty. a aum a" 10 m the present value of ail im"M Lease Pw netfa for the remainder of the own
pia to presentvatde of Our antWpaead residual Interest in Oil Equipment each discouraee at 6% par year, compouraw. Mamlhly,
plat (il ap corer amourds due or that become due under this Lease: (a) we may raquke you to ddWer the Equipment to us as set
forth in Section 9: (d) we or our egad may "W Arlon repossess it* EgWprtent will t court order ant you vet not WAS NJ
Moms against us for damages or "spew or Any otter rMbM and (e) va may alrclse any cow rlght or Mmeow Smm" at law
or in squib. You ifs to PW all of our eesb of diming our Aside against you, Inalvol reasonable aftonayra' lra. a we
take possession or the Equipment, we may e00 or otherwise dispose of It with or vAOhout roam, at a W& Or pMvsfe sale, and
apply the net Me$$* (after we have deducted cep ms" minted to the sale or deposition of the SOPMOM) to lie amounts 70
you owe ue. You earn Olaf N notice of a" is required by law to be Swan, 10 Owoe notice shall aonetltuta reasonable notice. You
wilt remain respOmble for any amounts that are hire age we have app8ed such net pmoseds.
10. FINANCE LEASE STATUS. You agres that if Article 2A•Lea6es of the Uniform Commercial Code applies to this Lease. agile
Lease elg be considered a °IMfarce lease" as that term Is defined In Article 2A. By sgrtng this lease, you agree lost ember (a) you
haw reviewaa, approved, and Meehred, a COPY of the Supph' Contract or (b) tat we have informed you of the Identity of the,
simpler. that you may have fights under the Supply Contract, and that you may coked the supplier for a description of Oros
rights. You and wa acknowledge that ft Vendor named an the first page of fits Lease le the "supplier for purposes of clause (b)
above. TO THE EXTMNT PMtWr= BY APPLICABLE LAW, YOU WAIVE ANY AND ALL RIGHTS AND NO EOIES
CONFERRED UPON A LESSEE BY ARTLC7. Ik
11. ASSIGNMENT. YOU MAY NOT ASSIGN, MILL, TRANSFER OR SUELEASE THE EQUIPMONT OR YOUR INTEREST IN
THIS LEASE we may, without retying you, NO, assign, or transfer this Lease and our rights hh the Equipment You agree and
the raw owner YA have the same A" and benefits that we have now under an Lease but rat our cbigatior i. The rob of ire
now ow w will rat be subject td any otsim, defense or setoff that you may have against us.
12 PURCHASE OPTION; AUTOMATIC RENBWAI-. If no Default exists under this Lem. you wR nave the option at to and of the
ft" or any renewal term to purchase sat (but rat Mae then alp of the Equipment at to Purchase Option price shown on ft fast
page of this Lease, plus any Applicable, taxes. UnIm to purchase Option price is $1.00, you must give us at least erg days written
nonce before the end of the initial lease tine drat you wit pumnase the Equipment or that you well return the pQ t 10 a. if
you d0 roof gale us such written note0 or t you de not purchase or dears the Fqulpmed in accordance, with terms and
Condtbns of this Leese, this Lease wig automatically renew for an additional 112 month term and thereafter renew for successive
one month taros until you deriver the Equipment to us. During suet renewal(s) the Lease Payment wfi remain the same. We may
ameel an Mitomatle.renewal (arm by sendna you written notice 10 days prior to such renewal tame. It the Fair Market Vain
Purchase Option has ban selected. we will tae our reasonable Judgment to determine the Equipments In use and in place fair
market value. H you do not agree % ft our determinadon of Om Equipmentt fair market value, the fair market V" On use and In
place) win be determined at your wpamie by an Independent appmlaa selected by us. Upon payment of the Purdieee Option
prim, we ahall transfer our lritav;f In the Equipment to you "AS IS, WHERE IS' wttlnout any representation or warranty whatsoever
Amt his Lem vat t8nnhnate,
1a. MEN NNIWATtON. You are rapomble for any losses, damages. Wrinkles, clalms, wets and actions (oaoedivoly "Chino"),
w other Daeed Mn a theory of strict bb ft or Otherwise caused by or related to (a) to manufacture. Nrota9aion, ownership. use,
tease, possession, or ddNay Of the Equipment or (p) any defects in the C-quipmek. You agree to reimburse us for and I vX
request to defend a against, arty Claims.
1rlti CREpiT wonstATION. YOU AVMORIM US OR ANY OF OUR AFF%.)ATE9 To OBTAIN CREDIT BUREAU REPORTS,
AND MAKE OTHER CREW INQUIRIES TRAY WE OETERMU ARE NECESSARY, ON YOUR WRITTEN Rl QUEBT, WE
WILL INFORM YOU WHETHER WE' NAVE REQDESTED A CONSUMER CREW REPORT AND THE NAME AND ADDRESS
OF ANY CONSUMER CREDrr REPORTING AGENCY THAT FURNISHED A REPORT. YOU ACKNOWLEDGE THAT WITHOUT
FURTHER NOTICE WE MAY USE OR REQUEST ADDITIONAL CREDIT BUREAU REPORTS TO UPDATE OUR INFORMATION
SO LONG AS YOUR OBLIGATIONS TO USA 1111 OUTSTANDINIL
16. MISCELLANEOUS. You agree that the terms and conditions contained in this Lem make up the emus agreement basaeen
you and ua reaaMma ft Jesse of fie Equipment This Leone is not binding on we unil we aim IL Any change N any of Via farms
and conditions of this Lease must be in witting and signed by us. You agree, howmr. Ow we airs authorized, WHIM 4 noBce, to
you, to supply missing Infomf action or aerraat abvious arrbra in this Lassa. If we daisy or fat to enforce any Of our Aghds
under the Lease, we wile still he enOaad to entorae those riaW at a later Orhe. All notices shat be ow In wiling by the party
sending the notice and shall be affective when deposited in the U,S. Mail, addressed to the pft receiving the norm at Na addrea
shown On the flat page of Oft Lease (or to oily other sddrm tpeaTIO by tied parts el Wn1kg) with postage prapald. All of our
fig?" aid Indemnities wag sundve me termination of file Lease. It Is the express b" Of an parties not to Vaiste any appfimhle
usury laws or to exceed the madmum amount of Nine price differential or Interest as applleehle. permitted to be cheigod of
eonaead by applicable law, are any such excess payment will be applied to Lease Payments In inverse order of maturhy. and any
remaining ex sis will Do refunded to you, if you ea not perform any of your obigatons under this Lease. we have its right, Out not
the obligatlen. to take any action or pay any smouMB that we believe are necessary to protect our irtt r6sMT You agree to
retmbur6a us immediately upon our demand for any such amount that we Pay. If more than one Lessee has signed this Lase.
each of you .Bras that your Nobility Is joint and several.
01 FSLLC-LA.4190 ,a.r77--- Pageaaa
AUG-15-2005 10:18
rugtlA V. "
DEC. 4.2902 a'20PN
NOTICEi IF YOU ARE TRP
TO LEASE AS RBCFMD
NO FAXOROTfERVw"
IF YOU HAVE SOW
WE MAY IN OUR SOLE On
WE
SIDNATURE. YOU AGREE
HEARIN6, TRIAL OR 1
WNICH VERIKON OF T
UNIFORM CpINIIEROU
AND POSBOBW N OF
YOU AGREE THAT 0)
PROVISION OP THIS
ADDENDUM OR EGIS
DOCLWWM ARE CP
ARE MISSING OR ILL!
LEASE IS COMPLETE
AGREE TO BE BOUND
LEASE. YOU HEREBY
ACCEPTO LEASE.
LEASING SERVICES 1 800 572 8764
P.01i10
GRRYBRtt rIwiciAL NO.449_.P."..
1111ITTIM THIS LEASE TO US. BY FACSIMILE TRAtB MSWK THE FACSINILF COPY OF
US S)NiLL BE BktM ON YOU A$ IF IT WORK MANUALLY SOM BY YOU, 10ft ER.
OF THIS LEASE SHALL BECOME QIIIDW AGAINST US UNTIL MANUALLY SOM BY US
B7 TkWUWM THIS LEASE 70 US BY FACB M0.E TRANSMI6MK YOU AM TRAY
W MR RBOUIRE YOU TO OELUVER TO US A COPY (29 THIS !EASE WITH YOUR OMMIAL
12
A SNFFM.' 1'44T Q"WIPJKM 7V RP.AO ARP RWSW TUB TWINS OF EACH
HAVE RECEIVED EACH OF THE FOUR PAGES OF THIS LEASE ObLUS ANY
IF APPLICABLE, THE GUARAWY. M6 THAT ALL OF SUCH PAGES AND OTHER
E; AND 00) TIES LEASE 15 COMPLETE AND THAT NONE OF THE PROVISIONS
KNOWLEM THAT WE ARE RELYING ON YOUR REPRESENTATRIN THAT THIS
TO THE ERTENT THAT ANY PROVISIOW ARE MISSNG OR ILLEGIBLE. YOU
P OUR STANDARD FORM LEASE IN USE AT THE TIME YOU ENTERED INTO THIS
IF OUR ACCEPTANCE OF THIS LEASE AND WANE RECWT OF A COPY OF THE
NO
YOU CERTIFY THAT YOU "AVE REC$NED AND REMINED THIS LEASE AND THAT EACH OF THE PROVISIONS SET
FORTH IN THIS LEASE IS CLEAR AND LEGIBLE.
T nc?C1 Q ICI (1C STAiRN GT ICAL 6
AutWOUN
VPIATTORNEY IN FACT ?` t? thDllzl SI n / v`K C/v Print Name & US q tB Print Name & TN1e i ? Ako
Dag-
17--d 'O'Z-
k\?p
e haw nesWW and ravYw0lMS P*pa and I Wft t Mt taoh of the piwhtohf ae! tmpi st e is dear ehd NOW
(LN & I t "
CB FS LLC _ LA • 4/99 Pape 444
RUG-15-2005 10:22 LEASING SERVICES 1 800 572 8764 P.06i10
DEC. 4.20W 2:ZIPM C-IWWR FIhT"CIAL N0.449 P.7/7
I
DELIVERY & ACCEPTANCE
CERTIFICATE
By signing this Certificate, you, the Customer
identified below, agree:
A) That all equipment described in the lease or rental agreement
identified below ("Equipment") has been delivered, Inspected,
installed and Is unconditionally and irrevocably accepted by you
as satisfactory for all purposes of the lease or rental agreement;
and
B) That we, Graybar Financial Services I-M are authorized to
purchase the Equipment and start billing you under the lease or
rental agreement.
Lem ar Rental Agreement Number customer Number
176818
Cual"or Name
STARNET ELECTRICAL GROUP
31871
X
T\ C
6ti M35Aoo July IBM
AUG-15-2005 10:23 LEASING SERVICES 1 800 572 8764 P.08i10
o. 388
P."
DEC.30.2002 11.14FM GRAYBAR FINANCIAL 1'v"
Dec 18t02?0 9p.? 5tG Fe2wcTPLegies, Inc (717) 7a3 P,2,#? No.ms r•2
pA)Tpa?mlpAm UMM Vlw P"MO mm.Y-+Ia00 PM
oS TdndA*!• 00.0e 7
APPLI
r1?A? b ¦I?
TERMS AND CONMONS
AUG-15-2005 10:23 LERSING SERVICES 1 800 572 8764 P.09i10
DEC.30.2002 11:15AM GRRYHRR FINANCIAL N0. 38B P.4/8
Bee to 02 (34,138p StarlNeL Teohnolo6tes, Inc (7171 781^(3tau r.8
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afay u;O? ?dlalgn 001 to mood 7% sf seoh 1a0e pWm t or gm* 109tr tae ss k VW rtpdmnn tots tlNiV" WfpN
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mm w dny 41su19npa Comm we am nut atlllgated in proytdo mplsasnAtt or "em; eeueraeo Maur to tango ulna, coM
Wk aopml gate as rlle Pravloaa Poverve.
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rgaf*rttan m GIat (gWb*j* "LAa uelwsan fla11/ srN you glogeedw at tww t0. , %,lla4ta or rag lnmu fir umll gy, It Iaa11 r§ rlpn ar dfo desln+a us a 0* IM WO >!r of as Lmssmmaw 4 You
IIIInkeJkob aL or tarfiMetsinMllA tlLo o
•ra on)Mqu?sn,y yaw WO P'y x to repair ft Mihr it Is In aid WrAlM13 otkt aAw1 a gE* AN any any 4
aof6AFaso14 At (b) pWyue Cla 411o7HiteapN1 SiCY0719(b? aalpW.
A.IN6URANCE, Ya4 rdUAaogAas mid malnldn olYAUrmpmmise ftl IaosmtY Nlal0s0oa rlBldOet ate bss. tpsA r deeNara(on of, r
L DEFAULT, bob of to 101106" It a "110(4411' under INS Loons: (4) you fag era Pay ata Low Payaemt or sat Dater POAW
wNNln 40 daya of Its due dale, 04 you do from pmlolnl dlryof yaw ogler d0 OWN Inr wft Lame or in W 6 ter sm4anm0 WO
Ya or vrM orgy or e4r 101olos and 94 Wora oon far 10 dfpa Ou We We nPOW you M 1; (e) you 54oams hnohml6 Yon
(Ono" or in d1a0N0d, or you asman ya4f ptla for the oaoaf0 Of yoar aedlors, or oiler (41410" of MrOWMX M any
war14 raged (d.) qrn C7wie (m pF We Low doe, dam not por(odn Na abnp * ranter the sum2W.
or se?ro?m01?s NOom n sh n ptma&
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AUG-15-2005 10:24 LEASING SERVICES 1 300 572 8764 P.10i10
lrgF? ?i ,?
DEC.30.2ooZ 11:15AM 6R4qYBAR FINANCIAL fOOOM P.5/8
Deo 1e OP 04tlOPp SaarMet Technolcglcss Inc (717] 731mMW Pf/T M•?
Ltb•aa.euuL ib'+kTN.1N 6aArBfR fINWVGIPL
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TOTAL P.10
kYilyC? W ,) RUG-15-2005 10:22 LEASING SERVICES 1 800 572 8764 P.07i10
DF-C.80.2902 11 1pp6PM GRAYEAR FII POKIAL Ja•'8 P."
Dec 19D?0132 0ZZ n1H?®fifTl SC GRRYPPSR FIN a6fes, Ino L717) 701-0.0118
NO P.W?IY?IR
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VPIA IN!!l -! 3alo? / ur C' ?S cip
Arms Name & d e P"nl Name A TMR
alFa"o-IA-40 77-,1' PION•r,
YOU GEMW IMT YOU NAYS RECW= AND PCYIki M TM WME AND TK%T FAM OF WW PROYIS W =T
FOMINTINSMAN4MARAND + M
AUG-15-2005 10:19
DEC. 4. MW 2!28PM
LEASING SERVICES
C,RAYBW FINRN71FL
1 800 572 8764
N0.449 P.6i7
FINANCIAL, SI»RVICRS 4LC PERSONAL GUARANTY
LEASE NO. 176619
LESSM STARNET Et.ECTT21tSAL GROUP
TBIS PERSONAL GUARANTY CREATP.S SPECIFIC LEGAL OBLIGATIONS. When we we the words yar ad
year in thts Personal One arty, we mean the Perweal Gnararmr(a) indicated below. when we we tbs words we, as and
am in tbie Personal Guaranty, we mean Graybor Financial Services LLC.
in consideration of acr entering info tbo lew alrc went weabiled above (°Leaee'y, you uncoseftioually and itsevooably
Duane to m, cur successor; end assigns *a prampt PaymM and perfbasseaw of all obligations of the Lessee ideeilled
she" ("Leaser) tmder dm Low, You agree tbet this is a g4ataary of payment and sot of wllection, and lbat wo eanpaoeoed
directly spiced you without that proceeding against the Leese; or agoinet the equipment severed by the Lease. Yen waive all
defewas and aesicm, including time of picket preearrmtwt and demand. You agree tout we cm ranow, extend or otberwlse
modify the terns of the law ad you will be bound by such changes. If the Lemse defauha honer the law, you will
born diatety parkim al obligations of the Lacers antler the Lees, iWila , but not limikd to, paying all an counts due amder
the Lease. You will pay to as all expenses (incbtdiug attorneys' fees) incurred by us in eldoreiag am rigbk spinet you or the
Lessee. This is a coadmteg parmaty which will agar be diaeharged err affacmd by your death and will bind yaw heirs sad
personal representatives. You waive any rights to seek repayment from ft Lasses in the event you must pay na. If more than
one personal gwraaror bee signed this Personal t3uarauty, each of you agree that your liability u ,joist and seemtL You
xibodae us or any of our affilierss to obtain coedit bureau reports rcauftg your personal credit. and mob other credit
iiiqulrus that we de ennine are s weeeary.
TMS PERSONAL GUARANTY IS GOVERNED BY THE LAWS OF THE COMMONWEALTH OF
MAsSACAUSE7'I'S. YOU CONSENT TO TBE JURISDICTION OF ANY LOCAL, STATE, OR FJMZRAL COURT
LOCATED Wpm; MAssACHUSETT9. YOU 2XPRESSLY WAIVE ANY XMIT TO A TRIAL; BY JURY.
AGREE THAT (A) THE FACSEIHLE COPY OF TMS PERSONAL GUARANTY AS REC)MM BY US SHALL BE
BINDDB4G ON YOU AS IF IT WERE MANUALLY SIGNED BY YOU AND. (B) NOTVM%nANMG ANY RULE
OF EVIDENCE TO TBE CONTRARY, IN ANY BEARING, TRIAL OR PROCEEDING OP ANY RJND WTM
RESPECT TO TM5 PERSONAL GUARANTY, WE MAY PRODUCE A FACSIMILE COPY OF THIS PERSONAL
GUARANTY RATHER TW TIDI COPS! WIT'II YOUR ORIGINAL SIGNATURE AND THAT SUCH
FACSIMILE COPY SHALL BE DEEMED TO BE THE ORIGINAL OF SUCH PERSONAL GUARANTY. YOU
AGREE THAT (i) YOU HAYS HAD A SUFFICIENT OPPORTUNITY TO BRAD AND REVIEW TIM TZRW OF
EACH PROVISION 00 THIS PERSONAL GUARANTY AND REVIEW TIM SAME WITH YOUR COUNSEL IF
YOU DEEM sUCB REVIEW NBCESSSARY,(tq YOU UNDERSTAND THE TERMS OF THE PERSONAL
GUARANTY, (Ill) THE PERSONAL GUARANTY IS COMPLETE AND THAT NONE OF THE PROVISI01o8 ARE
MISSING 0A 11,LECIBLE. YOU ACXNOWLM)Ct THAT WE ARE RELYING ON YOUR REPRESENTATION
TRAT THE PERSONAL GUARANTY IS COMPLETE AND LEGIBLE. TO THE ERTRNT THAT ANY
PROVISIONS ARE MISSING OR ILLEGIBLE, YOU AGRFE TO BE SOUND BY TYPE TERMS OF OUR
STANDARD FORM PERSONAL GUARANTY IN USE AT THE TIME YOU EXECUTED TMS PERSONAL
REMWBD THIS ?MMNAS. OVARANTY AND THAT BACH OF TM
paved L'haramr
TyparPdnt Name now
Moms Street AddreoaPgtytstite/Llp
Sale aee^ Romper Ppom Nn.
i now reaelvad and reviewed tfds Pape, and 1 GOttify 1hilt Mob of the ptovtelanb sot for% Is G*w sold 1001sks.
Customer'* Intuala:
GBFa Paanuer-uao peps t or r
EXHIBIT "H"
P.02i10
VOTING TRUST AGREEMENT
THIS VOTING TRUST AGREEMENT (the "Agreement"), dated as of August 20, 2002,
by and among StarNet Technologies, Inc., a Pennsylvania corporation (the "Company"), the
President of the Company (the "Trustee"), err
and the holders of Common
Stock of the Company (the "Founders") Ronald Blystone, and Cory Daley. The
Company, the Founders and the Investor are individually each referred to h 'n as a "Party" and are
collectively referred to herein as the "Parties." The Company's Board of D ectors is referred to
hereto as the "Board."
RECITALS
WHEREAS, the Company and the Investor have entered into that certain Series A Preferred
Stock Purchase Agreement of even date herewith (the "Purchase Agreement") which provides for,
among other things, the purchase by the Investor of shares of the Company's Series A Preferred
Stock (the "Series A Stock");
WHEREAS, the Company's Articles of Incorporation provides that (a) holders of shares of
Common Stock, voting together as a class, shall elect four (4) members of the Board (the "Common
Directors"), (b) holders of shares of Series A Preferred Stock ("Series A Stock"), voting together as
a class, shall elect one (1) member of the Board (the "Series A Director"),
WHEREAS, to induce certain Founders to approve, and Investor to enter into the Purchase
Agreement and sell and purchase shares of Series A Stock thereunder, the Company, the holders of
Series A Stock and the Founders desire to enter into this Agreement with such Investor; and
WHEREAS, Section 1768 of the Pennsylvania Business Corporation Law of 1988, as
amended, authorizes the establishment of Voting Trusts;
NOW, THEREFORE, in consideration of the foregoing premises and certain other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties
agree as follows:
Voting Trust Certificates.
(a) Upon execution ofthis Agreement, each Party (other than the Company) shall deliver
to the Trustee all certificates held by the Party representing the Shares (as defined herein), and the
Trustee shall issue and deliver to each Party, a voting trust certificate in substantially the form
attached hereto as Schedule I (a "Voting Trust Certificate"), for the number of Shares owned by such
Party and transferred to the Trustee. The Company shall cause such Shares to be transferred to the
Trustee on the Company's books. Any Shares acquired by a Party after the date hereof shall be issued
to the Trustee, who shall, within five (5) business days (as defined in the Securities Purchase
Agreement), issue and deliver to the Party, a Voting Trust Certificate for the number of additional
Shares so acquired by the Party.
EXHIBIT "I"
(b) The Trustee shall hold the Shares in trust subject to the terms of this Agreement. The
Trustee shall distribute all dividends and other distributions to the Parties (other than dividends or
other distributions payable in Shares which shall not be distributed but shall remain subject to the
terms of this Agreement) in proportion to theirrespective interests as represented by the Voting Trust
Certificates.
(c) All Voting Trust Certificates will be registered in a register book which will be
maintained by the Trustee for that purpose (the "Trust Register"). The Trustee may treat the
registered holder of each Voting Trust Certificate as the absolute owner and holder of the Shares
evidenced thereby and of all of the other rights and interests represented thereby. All transfers of
Shares will be recorded by the Trustee in the Trust Register.
(d) If a Voting Trust Certificate is lost, stolen, mutilated or destroyed, the Trustee will
issue a duplicate Voting Trust Certificate upon receipt by the Trustee of evidence satisfactory to the
Company of the loss, theft, mutilation or destruction, and upon receipt of a bond, undertaking or
other indemnity reasonably satisfactory to the Company (if appropriate). The Trustee will also keep
correct books of account of all business transactions with respect to the Voting Trust, which books,
including the Trust Register, may be inspected by any Party, such Party's agents or personal
representatives at any time during normal business hours.
2. Trustee's Powers and Duties. During the term of this Agreement, the Trustee shall have the
exclusive right to vote all Shares Beneficially Owned (as defined herein) by the Parties on all matters
as to which such Parties are entitled to vote at a meeting of the shareholders of the Company, or
otherwise, or to which they are entitled to express consent or dissent to corporate action in writing
without a meeting. The Trustee shall give the Parties not less than five (5) business days prior written
notice of any such vote or right to express consent or dissent. The Trustee shall exercise such voting
rights as follows:
(a) The Trustee shall vote at a regular or special meeting of stockholders (or by written
consent) the Shares to ensure that the size of the Board shall be set and remain at five (5) directors;
provided, however, that such Board size may be subsequently increased or decreased pursuant to an
amendment of this Agreement in accordance with Section 11 hereof.
(b) For any vote, consent or dissent by or of holders of Shares, voting for the election of
Common Directors to the Board or for the removal of Common Directors, the Trustee shall vote the
Shares to elect three (3) directors who are founders of the Company. Notwithstanding the foregoing,
in the event that a founder of the Company is either (i) dead, (ii) mentally disabled so as to be unable
to function as a Director in the reasonable discretion of the Trustee, (iii) terminated "For Cause" as
defined in the Founder's Stock Purchase Agreement, (iv) or the Founder has voluntarily terminated
his Service as defined in the Founder's Stock Purchase Agreement for any reason, then the Trustee
shall not vote for that Founder of the Company, but rather, shall vote for a replacement candidate
for that Founder (or Founders as the case may be) as directed in writing by a plurality vote of the
Beneficial Owners of the Common Shares, with any ties being decided in the discretion of the
Beneficial Owners of a plurality of the Series A Stock, with any ties on that vote being decided by
a coin toss or lots by the Trustee to be held in view of all of the candidates for the directorship(s) at
issue.
(c) For all other votes, consents or dissents by holders of Shares, the Trustee shall vote
the Shares as follows:
(i) as directed in writing by the Beneficial Owner of such Shares;
(ii) if not so directed in writing, proportionately in accordance with the votes cast
by such Beneficial owner with respect to other shares of the Company's
stock owned by such Beneficial Owner; or
(iii) if not so directed in writing and if such Beneficial Owner does not own or
vote any other shares of the Company's stock on such matter, the Trustee
shall not vote such shares and such shares shall not be counted for the
purpose of determining whether a quorum is present or any percentage of
shares of the Company's capital stock is achieved.
The Trustee shall have no authority to sell, encumber or otherwise dispose of any Shares. The
Trustee shall have no voting or other rights with respect to any shares of capital stock Beneficially
Owned as of the date hereof by any Party other than Shares.
3. Effective Transfer. Any transferee of Shares must become a party to this Agreement and
any purported transfer of Shares to a person or entity that has not become a Party hereto shall be null
and void. Any transferee of any Shares shall have all the rights and shall be subject to all limitations
of the transferor under the Voting Trust Certificate and this Agreement.
4. No Withdrawal. No Party may withdraw from this Agreement prior to termination of this
Agreement pursuant to Section 7 hereof.
5. Replacement or Removal of Trustee. In the event of the Trustee's dissolution, resignation,
removal or inability to act, the Parties, by vote of a majority of the Shares then outstanding, shall
elect a successor Trustee. Any Trustee may be removed by the affirmative vote of a majority of the
Shares then outstanding. Notwithstanding any change in the Trustee, the certificates for Shares
standing in the name of the Trustee may be endorsed and transferred to any successor Trustee
without the further action of any Party or predecessor Trustee with the same effect as if endorsed and
transferred by the Trustee who has ceased to act.
6. Trustee's Liability and Indemnity. TheTrusteeshall notbeliable foranyerror ofjudgment
or mistake of fact or law, or for any act or omission undertaken in good faith in connection with the
Trustee's powers and duties under this Agreement, except for the Trustee's own willful misconduct
or gross negligence. The Trustee is authorized and empowered to construe this Agreement and its
reasonable construction made in good faith shall be conclusive and binding upon the Parties. The
Trustee shall not be liable for acting on any legal advice or on any notice, request or instruction or
other document believed by the Trustee to be genuine and to have been signed by the proper Party
or Parties. The Company shall indemnify the Trustee for, and hold the Trustee harmless against, any
expenses, claims, losses, damages or liabilities, including without limitation attomeys' fees, incurred
by the Trustee and arising out of or in connection with the administration of this trust and its rights
and duties hereunder, except to the extent that a court of competent jurisdiction determines that the
Trustee is not entitled to such indemnification because the action giving rise to such indemnification
was the result of willful misconduct or gross negligence by the Trustee.
7. Term. This Agreement shall terminate and be of no further force or effect on the earlier of
(a) the consummation of the Company's sale of its Common Stock or other securities pursuant to a
registration statement under the Securities Act of 1933, as amended (other than a registration
statement relating either to sale of securities to employees of the Company pursuant to its stock
option, stock purchase or similar plan or a SEC Rule 145 transaction), (b) the acquisition of the
Company by another entity by means of any transaction or series of related transactions (including,
without limitation, any reorganization, merger or consolidation) that results in the transfer of fifty
percent (50%) or more of the outstanding voting power of the Company or a sale of all or
substantially all of the assets of the Company, or (c) January 1, 2006. At any time within two (2)
years prior to the time of expiration of this Agreement pursuant to Section 7(d), the Parties may, by
written agreement and with the written consent of the Trustee, extend the duration ofthis Agreement
for an additional period not exceeding two (2) years from the expiration date of the trust as originally
fixed or as last extended as provided in this paragraph. As soon as practicable after the termination
of this Agreement, the Trustee shall deliver to each Party share certificates or securities representing
the number of Shares or other securities in respect of which Voting Trust Certificates registered in
the name of such Party are then outstanding, upon the surrender of such Voting Trust Certificates
properly endorsed and upon payment by the persons entitled to receive such share certificates or
other securities of a sum sufficient to cover any tax or governmental charge in respect of the transfer
or delivery of such certificates. If any Party cannot be located or fails or refuses to surrender Voting
Trust Certificates in exchange for Shares or other securities as aforesaid, the Trustee shall deliver
said Shares or other securities to the Company or to any bank or trust company in Pennsylvania for
the benefit of the Person or Persons entitled thereto. Upon any such delivery, the Trustee shall be
fully acquitted and discharged with respect to said Shares or other securities.
8. Covenants of the Company. The Company agrees to use its best efforts to ensure that the
rights granted hereunder are effective and that the Parties hereto enjoy the benefits thereof. Such
actions include, without limitation, the use of the Company's best efforts to cause the nomination
and election of the directors as provided above. The Company will not, by any voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be performed hereunder
by the Company, but will at all times in good faith assist in the carrying out of all of the provisions
of this Agreement and in the taking of all such actions as may be necessary, appropriate or
reasonably requested by the holders of a majority of the outstanding voting securities held by the
Parties hereto assuming conversion of all outstanding securities in order to protect the rights of the
Parties hereunder against impairment.
9. Defined Terms. As used in this Agreement, the following terms have the respective
meanings set forth below:
Affiliate: shall mean a Person (other than a subsidiary) which directly or indirectly through one or
more intermediaries controls, or is controlled by, or is under common control with, a Person. The
term "control" means the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.
Beneficial Owner: shall have the meaning set forth in Rule 13d-3(a) and (b) of the Rules and
Regulations to the Securities Exchange Act of 1934, as amended; and Beneficially Owned shall have
a correlative meaning.
Person; shall mean an individual, partnership, corporation, trust or unincorporated organization, and
a government or agency or political subdivision thereof.
Shares: shall include: (1) all shares of Series A Stock issued to the Investor pursuant to the Purchase
Agreement or hereafter obtained by a Party, (2) all shares of Common Stock issued to the Parties or
over which the Parties exercise voting power (including Common Stock issued upon conversion of
the Series A Stock), and (3) any other voting securities of the Company (a) issued by the Company
in the future and the ownership of which is required by the Board to be made subject to this
Agreement or (b) distributed with respect to any security then subject to this Agreement.
10. Remedies. The Parties agree and acknowledge that money damages may not be an adequate
remedy for breach of the provisions of this Agreement and that any party hereto shall be entitled, in
its sole discretion, to apply to any court of competent jurisdiction for specific performance,
injunctive relief or such other equitable remedy or remedies as the court may in its discretion order
to enforce or prevent any violations of the provisions of this Agreement, in addition to its remedies
at law. In respect of any such equitable remedy so sought, the Parties hereby waive the requirement
of the posting of any bond or the necessity to show irreparable injury on the part of the Party seeking
such relief.
11. Notices. Any notice required or permitted by this Agreement shall be in writing and shall be
sent prepaid registered or certified mail, return receipt requested, addressed to the other Party at the
address shown below or at such other address for which such Party gives notice hereunder. Such
notice shall be deemed to have been given three (3) days after deposit in the mail.
12. Modification, Amendment, Waiver. Any term hereof may be amended and the observance
of any term hereofmay be waived (either generally or in a particular instance and either retroactively
or prospectively) only with the written consent of the holders of a majority of the then outstanding
voting Shares Beneficially Owned by the Party or Parties for whose benefit such term has been
included. Any amendment or waiver so effected shall be binding upon the Parties hereto. The failure
of any Party at any time to enforce any of the provisions of this Agreement shall in no way be
construed as a waiver of such provisions and shall not affect the rights of the Party thereafter to
enforce the provisions of this Agreement in accordance with its terms.
13. Complete Agreement. This document, the Voting Trust Certificates, the Purchase
Agreement and the Restated Articles of Incorporation embody the complete agreement and
understanding between and among the Parties hereto with respect to the subject matter hereof, and
supersede and preempt any prior understandings, agreements or representations by or among the
parties hereto, written or oral, which may have related to the subject matter hereof.
14. Successors and Assigns. This Agreement will bind and inure to the benefit of and be
enforceable by the Parties and their respective permitted transferees, successors and assigns.
15. Legends. Each certificate evidencing Shares shall bear a legend in substantially the following
form:
N THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON VOTING AND TRANSFER AS SET FORTH IN THE VOTING
TRUST AGREEMENT, A COPY OF WHICH IS AVAILABLE FROM THE COMPANY
AND ANY SUCCESSOR THERETO.
16. Counterparts. This Agreement may be executed in separate counterparts, each of which will
be an original and all of which taken together will constitute one and the same Agreement.
I 17. Applicable Law. All questions concerning this Agreement will be governed by and
interpreted in accordance with the internal laws of the Commonwealth of Pennsylvania, without
regard to internal law concerting choice or conflict of law. Any disputes arising hereunder shall be
resolved before the appropriate state or federal courts of the Commonwealth of Pennsylvania, and
the Parties hereto hereby consent to the personal jurisdiction of such courts in respect of such
disputes.
1 18. Severability. If any one or more of the provisions of this Agreement, as applied to any Parry
or any circumstance, shall, for any reason, be held to be invalid, illegal or unenforceable in any
' respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this
Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein. If any one or more of the provisions of this Agreement
l shall, for any reason, be held to be unenforceable as to duration, scope, activity or subject, such
provisions shall be construed by limiting and reducing it so as to make such provision enforceable
to the extent compatible with the then existing applicable law.
19. Trustee's Expenses. The Trustee shall be reimbursed by the Company for all reasonable
out-of-pocket expenses incurred pursuant to this Agreement.
20. Nature of Relationship. The Trust created by this Agreement is not intended to be, shall not
be deemed to be and shall not be treated as a general partnership, limited partnership, joint venture,
corporation joint stock company or association. The relationship of the Parties to the Trustee shall
be solely that ofbeneficiaries of the Trust created by this Agreement, and their rights and obligations
shall be limited to those set forth in this Agreement.
21. Investment Representations. In acquiring Voting Trust Certificates hereunder, each Party
acknowledges and represents that such Parry has had an opportunity to discuss the business of the
Company with the officers and directors of the Company and has received satisfactory answers in
response to such inquiries. Such Party further acknowledges that the Voting Trust Certificates are
highly speculative and involve a high degree of risk and that the Voting Trust Certificates have not
been registered under the Securities Act of 1933, as amended (the "Act") and may not be sold or
otherwise disposed of except pursuant to an exemption from the Act. Such Party represents and
warrants to the Trustee and the Company that such Party is acquiring the Voting Trust Certificate
for such Party's own account for investment and not with a view to or for sale in connection with any
distribution of said Voting Trust Certificates or with any present intention of distributing or selling
said Voting Trust Certificates, and such Party does not presently have reason to anticipate any
change in circumstances or any particular occasion or event that would cause it to sell said Voting
Trust Certificate.
22. Inspection. A duplicate of this Agreement and any extension hereof shall be filed with the
Trustee and shall be open to inspection by any shareholder of the Company, any holder of a Voting
Trust Certificate or the agent of either, upon the same terms as the record of shareholders of the
Company is open to inspection.
[Signature Page Follows]
I
E
?J
I
I
L
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first
above written.
StarNet Technologies, Inc.
By AAA,
onald D. Blyston EO
1
. L' er r
President (Trustee)
By: 1)MK/
Title: President, StarNef Technologies, Inc.
Co aley
SCHEDULEI
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT
BE SOLD, TRANSFERRED OR ASSIGNED, PLEDGED OR HYPOTHECATED ABSENT
AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR COMPLIANCE
WITH RULE 144 PROMULGATED UNDER SUCH ACT, OR UNLESS THE COMPANY
HAS RECEIVED AN OPINION OF COUNSEL TO THE HOLDER HEREOF (WHICH
COUNSEL SHALL BE REASONABLY SATISFACTORY TO THE COMPANY) THAT
SUCH REGISTRATION IS NOT REQUIRED.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON VOTING AND TRANSFER AS SET FORTH IN THE VOTING
TRUST AGREEMENT, A COPY OF WHICH IS AVAILABLE FROM THE COMPANY
AND ANY SUCCESSOR THERETO.
This certifies that (&o" a7s - has deposited or has caused to be deposited
o J ,sue shares of the C,? Stock of StarNet Technologies, Inc., a Pennsylvania
corporation (the "Company"), under a Voting Trust Agreement (the "Voting Trust Agreement"),
among the Company, the President of the Company (the "Trustee"), and the shareholders of the
Company named in the Voting Trust Agreement. The Trustee shall possess and be entitled to the
exclusive right to vote such shares upon the terms and subject to the conditions stated in the Voting
Trust Agreement.
This Voting Trust Certificate shall be transferable only on the records of the Trustee upon surrender
hereof by the registered holder in person or by attorney duly authorized and, until so transferred, the
Trustee may treat the registered holder as the owner of this Voting Trust Certificate for all purposes
whatsoever, unaffected by any notice to the contrary. As a condition precedent to the making of any
transfer of this Voting Trust Certificate, the Trustee may require the payment of a sum sufficient to
cover the amount of any taxes or other governmental charges incident thereto.
This Voting Trust Certificate is issued pursuant to, and the rights of the holder hereof are subject to
and limited by the terms and conditions of, the Voting Trust Agreement. The holder of this Voting
Trust Certificate, by the acceptance hereof, assents to and agrees to be bound by all the terms and
conditions of the Voting Trust Agreement. Copies of the Voting Trust Agreement are on file at the
principal office of the Company and at the office of the Trustee.
Certificates for the number of shares in respect of which this Voting Trust Certificate was issued,
or the net proceeds in cash or property of said number of shares at the time of surrender hereof, all
as provided in the Voting Trust Agreement, shall be deliverable hereunder upon the termination of
the Voting Trust Agreement.
SCHEDULEI
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT
BE SOLD, TRANSFERRED OR ASSIGNED, PLEDGED OR HYPOTHECATED ABSENT
AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR COMPLIANCE
WITH RULE 144 PROMULGATED UNDER SUCH ACT, OR UNLESS THE COMPANY
HAS RECEIVED AN OPINION OF COUNSEL TO THE HOLDER HEREOF (WHICH
COUNSEL SHALL BE REASONABLY SATISFACTORY TO THE COMPANY) THAT
SUCH REGISTRATION IS NOT REQUIRED.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON VOTING AND TRANSFER AS SET FORTH IN THE VOTING
TRUST AGREEMENT, A COPY OF WHICH IS AVAILABLE FROM THE COMPANY
AND ANY SUCCESSOR THERETO.
This certifies that has deposited or has caused to be deposited
? oo, shares of uic Stock of StarNet Technologies, Inc., a Pennsylvania
corporation (the "Company"), under a Voting Trust Agreement (the "Voting Trust Agreement"),
among the Company, the President of the Company (the "Trustee"), and the shareholders of the
Company named in the Voting Trust Agreement. The Trustee shall possess and be entitled to the
exclusive right to vote such shares upon the terms and subject to the conditions stated in the Voting
Trust Agreement.
This Voting Trust Certificate shall be transferable only on the records of the Trustee upon surrender
hereof by the registered holder in person or by attorney duly authorized and, until so transferred, the
Trustee may treat the registered holder as the owner of this Voting Trust Certificate for all purposes
whatsoever, unaffected by any notice to the contrary. As a condition precedent to the making of any
transfer of this Voting Trust Certificate, the Trustee may require the payment of a sum sufficient to
cover the amount of any taxes or other governmental charges incident thereto.
This Voting Trust Certificate is issued pursuant to, and the rights of the holder hereof are subject to
and limited by the terms and conditions of, the Voting Trust Agreement. The holder of this Voting
Trust Certificate, by the acceptance hereof, assents to and agrees to be bound by all the terms and
conditions of the Voting Trust Agreement. Copies of the Voting Trust Agreement are on file at the
principal office of the Company and at the office of the Trustee.
Certificates for the number of shares in respect of which this Voting Trust Certificate was issued,
or the net proceeds in cash or property of said number of shares at the time of surrender hereof, all
as provided in the Voting Trust Agreement, shall be deliverable hereunder upon the termination of
the Voting Trust Agreement.
4
SCHEDULEI
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT
BE SOLD, TRANSFERRED OR ASSIGNED, PLEDGED OR HYPOTHECATED ABSENT
AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR COMPLIANCE
WITH RULE 144 PROMULGATED UNDER SUCH ACT, OR UNLESS THE COMPANY
HAS RECEIVED AN OPINION OF COUNSEL TO THE HOLDER HEREOF (WHICH
COUNSEL SHALL BE REASONABLY SATISFACTORY TO THE COMPANY) THAT
SUCH REGISTRATION IS NOT REQUIRED.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON VOTING AND TRANSFER AS SET FORTH IN THE VOTING
TRUST AGREEMENT, A COPY OF WHICH IS AVAILABLE FROM THE COMPANY
AND ANY SUCCESSOR THERETO.
This certifies that Cv bow has deposited or has caused to be deposited
100/--100 shares of the (r?,?.. r Stock of StarNet Technologies, Inc., a Pennsylvania
corporation (the "Company"), under a Voting Trust Agreement (the "Voting Trust Agreement'),
among the Company, the President of the Company (the "Trustee"), and the shareholders of the
Company named in the Voting Trust Agreement. The Trustee shall possess and be entitled to the
exclusive right to vote such shares upon the terms and subject to the conditions stated in the Voting
Trust Agreement.
This Voting Trust Certificate shall be transferable only on the records of the Trustee upon surrender
hereof by the registered holder in person or by attorney duly authorized and, until so transferred, the
Trustee may treat the registered holder as the owner of this Voting Trust Certificate for all purposes
whatsoever, unaffected by any notice to the contrary. As a condition precedent to the making of any
transfer of this Voting Trust Certificate, the Trustee may require the payment of a sum sufficient to
cover the amount of any taxes or other governmental charges incident thereto.
This Voting Trust Certificate is issued pursuant to, and the rights of the holder hereof are subject to
and limited by the terms and conditions of, the Voting Trust Agreement. The holder of this Voting
Trust Certificate, by the acceptance hereof, assents to and agrees to be bound by all the terms and
conditions of the Voting Trust Agreement. Copies of the Voting Trust Agreement are on file at the
principal office of the Company and at the office of the Trustee.
Certificates for the number of shares in respect of which this Voting Trust Certificate was issued,
or the net proceeds in cash or property of said number of shares at the time of surrender hereof, all
as provided in the Voting Trust Agreement, shall be deliverable hereunder upon the termination of
the Voting Trust Agreement.
co)
'1J
W
n
S.J
P?
SHERIFF'S RETURN - NOT FOUND
CASE NO: 2005-05368 P
COMMONTWEALTH OF PENNSYLVANIA
COUNTY OF CUMBERLAND
ERATOR DAVID L ET AL
VS
STARNET TECHNOLOGIES INC ET AL
R. Thomas Kline
,Sheriff or Deputy Sheriff, who being
duly sworn according to law, says, that he made a diligent search and
inquiry for the within named DEFENDANT
C TTDMWL m7UNMT.nr-TF'c TNTr
but was
unable to locate Them in his bailiwick. He therefore returns the
COMPLAINT - EQUITY ,
the within named DEFENDANT
1845 MARKET STREET
NOT FOUND , as to
, STARNET TECHNOLOGIES
CAMP HILL, PA 17011
DEFENDANT IS NO LONGER IN BUSINESS.
Sheriff's Costs: So answers
Docketing 18.00
/
Service 14.40
Not Found 5.00 R. Thomas Kline
Surcharge 10.00 Sheriff of Cumberland County
.00
47.40 OBRIEN BARIC SCHERER
11/15/2005
Sworn and subscribed to before me
this ;SAS day of IJOX ,6?-
n?OCJ? A.D.
Pro onotar
SHERIFF'S RETURN - NOT FOUND
CASE NO: 2005-05368 P
COMMONTWEALTH OF PENNSYLVANIA
COUNTY OF CUMBERLAND
LIBERATOR DAVID L ET AL
VS
STARNET TECHNOLOGIES INC ET AL
R. Thomas Kline
,Sheriff or Deputy Sheriff, who being
duly sworn according to law, says, that he made a diligent search and
inquiry for the within named DEFENDANT
STARNET ENTERPRISES INC
unable to locate Them in his bailiwick
COMPLAINT - EQUITY
but was
He therefore returns the
the within named DEFENDANT
1845 MARKET STREET
NOT FOUND , as to
, STARNET ENTERPRISES INC
CAMP HILL, PA 17011
DEFENDANT IS NO LONGER IN BUSINESS.
Sheriff's Costs: So answers:
Docketing 6. 00
Service 00
c
Not Found 5. 00 R. Thomas Kline
Surcharge 10. 00 Sheriff of Cumberland County
. 00
21. 00 OBRIEN BARIC SCHERER
11/15/2005
Sworn and subscribed to before me
this f F?k day of l/?vem.Oo,,-s'
A.D.
P of ono
SHERIFF'S RETURN - NOT FOUND
CASE NO: 2005-05368 P
COMMONTWEALTH OF PENNSYLVANIA
COUNTY OF CUMBERLAND
LIBERATOR DAVID L ET
VS
STARNET TECHNOLOGIES INC ET AL
R. Thomas Kline
,Sheriff or Deputy Sheriff, who being
duly sworn according to law, says, that he made a diligent search and
inquiry for the within named DEFENDANT
STARNET GROUP LP
unable to locate Them in his bailiwick
COMPLAINT - EQUITY
but was
He therefore returns the
the within named DEFENDANT
1845 MARKET
ILL. PA 17011
NOT FOUND , as to
, STARNET GROUP LP
DEFENDANT IS NO LONGER IN BUSINESS.
Sheriff's Costs: So answers: .'
Docketing 6 .00 - ,
Service .00
Not Found 5 .00 R. Thomas Kline
Surcharge 10 .00 Sheriff of Cumberland County
.00
21 .00 OBRIEN BARIC SCHERER
11/15/2005
Sworn and subscribed to before me
this I ? r? day of iO?p-nnLQr
CTS A.D.
Pro onotar
SHERIFF'S RETURN - NOT FOUND
CASE NO: 2005-05368 P
COMMONTWEALTH OF PENNSYLVANIA
COUNTY OF CUMBERLAND
LIBERATOR DAVID
VS
STARNET TECHNOLOGIES INC ET AL
R. Thomas Kline Sheriff or Deputy Sheriff, who being
duly sworn according to law, says, that he made a diligent search and
inquiry for the within named DEFENDANT
STARNET PROPERTIES LLC
unable to locate Them in his bailiwick
COMPLAINT - EQUITY
but was
He therefore returns the
NOT FOUND , as to
the within named DEFENDANT , STARNET PROPERTIES LLC
1845 MARKET STREET
CAMP HILL, PA 17011
DEFENDANT IS NO LONGER IN BUSINESS.
Sheriff's Costs: So answers:
Docketing 6.00
Service .00
Not Found 5.00 R. Thomas K ine
Surcharge 10.00 Sheriff of Cumberland County
.00
21.00 OBRIEN BARIC SCHERER
11/15/2005
Sworn and subscribed to before me
this day of 1GI?ery,L-0"
A. D.
Pr thonot
SHERIFF'S RETURN - NOT FOUND
CASE NO: 2005-05368 P
COMMONTWEALTH OF PENNSYLVANIA
COUNTY OF CUMBERLAND
LIBERATOR DAVID L ET
VS
STARNET TECHNOLOGIES INC ET AL
R. Thomas K1
,Sheriff or Deputy Sheriff, who being
duly sworn according to law, says, that he made a diligent search and
inquiry for the within named DEFENDANT
STARNET MECHANICAL GROUP
unable to locate Them in his bailiwick
COMPLAINT - EQUITY ,
but was
He therefore returns the
NOT FOUND , as to
the within named DEFENDANT
, STARNET MECHANICAL GROUP INC
1845 MARKET S
CAMP HILL, PA 17011
IS NO LONGER IN BUSINESS.
Sheriff's Costs: So answers
Docketing 6.00
Service .00
Not Found 5.00 R. Thomas Kline
Surcharge 10.00 Sheriff of Cumberland County
.00
21.00 OBRIEN BARIC SCHERER
11/15/2005
Sworn and subscribed to before me
this day of V67\Jeo
,2(V5- A.D.
Pro ono
SHERIFF'S RETURN - NOT FOUND
CASE NO: 2005-05368 P
COMMONTWEALTH OF PENNSYLVANIA
COUNTY OF CUMBERLAND
LIBERATOR DAVID L ET AL
VS
STARNET TECHNOLOGIES INC ET AL
R. Thomas Kline Sheriff or Deputy Sheriff, who being
duly sworn according to law, says, that he made a diligent search and
inquiry for the within named DEFENDANT
STARNET ELECTRICAL GROUP INC but was
unable to locate Them in his bailiwick
COMPLAINT - EQUITY
He therefore returns the
NOT FOUND , as to
the within named DEFENDANT , STARNET ELECTRICAL GROUP INC
1845 MARKET STREET
CAMP HILL, PA 17011
DEFENDANT IS NO LONGER IN BUSINESS.
Sheriff's Costs: So answers:
Docketing 6 .00
??
?
'r l
?
Service .00 ,
?
-„
Not Found 5 .00 R. Thomas Kline
Surcharge 10 .00 Sheriff of Cumberland County
.00
21 .00 OBRIEN BARIC SCHERER
11/15/2005
Sworn and subscribed to before me
this ? day of r?•i?Mk? r
?US A. D.
Pro ono
SHERIFF'S RETURN - NOT FOUND
CASE NO: 2005-05368 P
COMMONTWEALTH OF PENNSYLVANIA
COUNTY OF CUMBERLAND
LIBERATOR DAVID L ET
VS
STARNET TECHNOLOGIES INC ET AL
R. Thomas Kline Sheriff or Deputy Sheriff, who being
duly sworn according to law, says, that he made a diligent search and
inquiry for the within named DEFENDANT
BLYSTONE RONALD D but was
unable to locate Him in his bailiwick. He therefore returns the
COMPLAINT - EQUITY
NOT FOUND , as to
the within named DEFENDANT , BLYSTONE RONALD D
1845 MARKET STREET
CAMP HILL, PA 17011
DEFENDANT IS NOT LOCATED AT GIVEN ADDRESS.
Sheriff's Costs: So answers:.
Docketing 6. 00
?
'
Service 00 -
Not Found 5. 00 R-Thomas Kline
Surcharge 10. 00 Sheriff of Cumberland County
.00
21. 00 OBRIEN BARIC SCHERER
11/15/2005
Sworn and subscribed to before me
this day of /VOVe^ C??
?/1C)JS D.
Pr honotar -
SHERIFF'S RETURN - NOT SERVED
CASE NO: 2005-05368 P
COMMONWEALTH OF PENNSYLVANIA
COUNTY OF CUMBERLAND
LIBERATOR DAVID L ET AL
VS
STARNET TECHNOLOGIES INC ET AL
R. Thomas Kline
, Sheriff , who being duly sworn
according to law, says, that he made a diligent search and inquiry for
the within named DEFENDANT to wit:
MORROW DOUGLAS L but was
unable to locate Him in his bailiwick. He therefore returns the
COMPLAINT - EQUITY
the within named DEFENDANT
336 NORTH 28TH S
PA 17011
NOT SERVED
as to
, MORROW DOUGLAS L
DEFENDANT IS IN CHAPTER 7 BANKRUPTCY. 05-8365
DEFENDANT IS NO LONGER AFFILIATED WITH BUSINESS.
Sheriff's Costs: So answers,
Docketing 6.00
Service 14.40
Affidavit .00 R. Thomas line
Surcharge 10.00 Sheriff of Cumberland County
.00
30.40 OBRIEN BARIC SCHERER
11/15/2005
Sworn and subscribed to before me
this day of ?I?D?PMbr
A. D.
Prothonotary
SHERIFF'S RETURN - NOT FOUND
CASE NO: 2005-05368 P
COMMONTWEALTH OF PENNSYLVANIA
COUNTY OF CUMBERLAND
LIBERATOR DAVID L ET AL
VS
STARNET TECHNOLOGIES INC ET AL
R. Thoma
,Sheriff or Deputy Sheriff, who being
duly sworn according to law, says, that he made a diligent search and
inquiry for the within named DEFENDANT
STARNET TECHNOLOGIES INC D/B/A WALK ON FLOORING but was
unable to locate Them in his bailiwick. He therefore returns the
COMPLAINT - EQUITY
the within named DEFENDANT
WALK ON FLOORING
1845 MARKET STREET
HILL. PA 17011
NOT FOUND , as to
, STARNET TECHNOLOGIES INC D/B/A
DEFENDANT IS NO LONGER IN BUSINESS.
Sheriff's Costs:
Docketing 6.00
Service .00
Not Found 5.00
Surcharge 10.00
.00
21.00
So answers,,
R. Thomas Kline
Sheriff of Cumberland County
OBRIEN BARIC SCHERER
11/15/2005
Sworn and subscribed to before me
this ,u4? day of .?Xm4??r'
Q?c D. ? 9-?,
Pr honot
DAVID L. LIBERATOR,
Individually and on behalf of
Starnet Technologies, Inc.,
Plaintiff,
V.
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
NO. 2005-5368 CIVIL TERM
STARNET TECHNOLOGIES, INC.,:
STARNET TECHNOLOGIES, INC. :
d/b/a Walk on Flooring,
STARNET ENTERPRISES, INC.,
STARNET GROUP, LP, STARNET :
PROPERTIES, LLC, STARNET
MECHANICAL GROUP, INC.,
STARNET ELECTRICAL
GROUP, INC.,
DOUGLAS L. MORROW and
RONALD BLYSTONE,
Defendants.
CIVIL ACTION-EQUITY
PRAECIPE TO DISCONTINUE
TO THE PROTHONOTARY:
Kindly mark the above-captioned action as having been settled and discontinued without
prejudice.
Date: October 1, 2008
Respectfully submitted,
O' V CHE
David A: Baric, Esquire
I.D. # 44853
19 West South Street
Carlisle, PA 17013
(717) 249-6873
Attorney for Plaintiff
CERTIFICATE OF SERVICE
I hereby certify that on October 1, 2008, I, David A. Baric, Esquire of O'Brien, Baric &
Scherer, did serve a copy of the Praecipe To Discontinue, by first class U.S. mail, postage prepaid,
to the parties listed below, as follows:
Starnet Technologies, Inc.
1845 Market Street
Camp Hill, Pennsylvania 17011
Starnet Enterprises, Inc.
1845 Market Street
Camp Hill, Pennsylvania 17011
Starnet Group, LP
1845 Market Street
Camp Hill, Pennsylvania 17011
Starnet Mechanical Group, Inc.
1845 Market Street
Camp Hill, Pennsylvania 17011
Douglas L. Morrow
336 North 28th Street
Camp Hill, Pennsylvania 17011
Starnet Properties, LLC
1845 Market Street
Camp Hill, Pennsylvania 17011
Starnet Electrical Group, Inc.
1845 Market Street
Camp Hill, Pennsylvania 17011
Ronald D. Blystone
1845 Market Street
vania 17011
David A. Baric, Esquire
S-? ? ?x
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