HomeMy WebLinkAbout06-4952
Goldberg Katzman, p.e.
Steven E. Grubb, Esquire, I.D.# 75897
Attorney for Plaintiff
320 Market Street, Strawberry Square
P. O. Box 1268
Harrisburg, PA 17108-1268
(717) 234-4161 ·
JOHN M. CADDELL.
Plaintiff
IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY, PENNSYL VANIA
v.
NO. bl,.~q5a
ELECTRONICS AND UNIT RECORD :
DATACENTER, INC., d/b/a EUR
SYSTEMS; INTEC, USA, INC.;
INTEC BILLING SERVICES, INC.;
SARA TOGA P ARlNERS,
and WHITBY, SANT ARLASCI &
COMPANY
JURY TRIAL DEMANDED
CIVIL ACTION - LAW
Defendants.
COMPLAINT
Plaintiff, John M. Caddell (Caddell), by and through his counsel, Goldberg Katzman,
P.C., alleges the following in support of this Complaint.
THE PARTIES
1. Plaintiff is John M. Caddell, an adult individual with an address of 340 North 25th
Street, Camp Hill, Pennsylvania 17011.
2. Defendant Electronics and Unit Record Datacenter, Inc., t/d/b/a EUR Systems is a
Pennsylvania business corporation with a registered address of 5040 Ritter Road,
Mechanicsburg, Cumberland County, PA 17055.
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3. Defendant, Intec USA, Inc., appears to be a corporation with a registered address
at 73-16 Drexel Brook Drive, Drexel Hill, Delaware County, PA 19026 and a mailing address of
301 Perimeter Center North, Suite 200, Atlanta, GA 30346.
4. Defendant, Intec Billing Services, Inc., appears to be a corporation with a
registered address at 73-16 Drexel Brook Drive, Drexel Hill, Delaware County, PA 19026 and a
mailing address of 301 Perimeter Center North, Suite 200, Atlanta, GA 30346.
5. Saratoga Partners (Saratoga) is a private investment firm, with its principal place
of business located at 535 Madison Avenue, New York, NY 10022. Saratoga is in the business
of making equity investments in a variety of businesses, and manages a fund called Saratoga IV,
which is the major investor (approximately 85%) in EUR.
6. Whitby, Santarlasci & Company (WSC) is a consulting firm, with a principal
place of business located at 2210 Wyoming Avenue NW, Washington, D.C. 20008
A. MR. CADDELL'S EMPLOYMENT AT EUR
7. Mr. Caddell began him employment at EUR on October 16, 2000 as Vice
President of Marketing and Business Development ofEUR Datacenter, Inc. pursuant to a three
year letter contract dated September 22, 2000, attached hereto as Exhibit A.
8. Pursuant to this offer of employment, Mr. Caddell re-Iocated his family from
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Atlanta, Georgia to his preseft location.
9. The letter conract provided for an annual evergreen renewal of its three-year
term.
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10. On, or about, July I, 2002, after almost two years of employment at EUR, Mr.
Caddell entered into an "Executive Severance Agreement" ("Agreement") which is attached
hereto as Exhibit B.
11. The Agreemel1t featured a severance package in the event EUR, or EUR' s
successor, terminated Mr. C~ddell without cause, as follows:
3. Oblie:ation of the ComDanv UDon termination Under Section 1.
If the Executive's employment shall have been termmated by the
Company under Section 1 (other than for Cause) or by the Executive for
Good Reason.
(a) the Company shall make a lump sum cash payment to the
Executive witPin 30 days after the Date of Termination of the accrued
Amounts earned but unused Paid Time Off and any money that is
normally paidi during this time period, except to the extent under the terms
of a Plan they are to be paid at a later date;
(b) th~ Company shall pay to the Executive in equal installments,
made at least lnonthly, an aggregate amount equal to two times the
Executive's ~ual Base Salary in effect on the Date of Termination over
the twenty-fo1\rr months following the Date of Termination and;
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(c) it the earlier of eighteen months following the Date of
Termination r the date the Executive becomes entitled to comparable
benefits from other employer, the Executive shall be entitled to receive
medical cove ge and life insurance as provided under the Company's
Plans from ti e to time and the Executive's cost therefor shall not exceed
the cost paid y the other executives of the Company for comparable
coverage.
12. As part of the Agreement, Mr. Caddell also agreed to restrictive covenants
(section 7 of Ex. A).
13. Mr. Caddell p rformed his services for EUR under the above terms in an
exemplary fashion, receiving excellent performance reviews.
B. EUR SELLS ITS ~SETS TO INfEC USA AND INTEC BILLING SYSTEMS
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14. Prior to March of2006~ Mr. Caddell first became aware that EUR was
considering a sale of its asse.s to a third party.
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15. Negotiations t' rogressed to the point that Intec USA~ Inc. and Intec Billing
Services~ Inc. (collectively~' ntec") became the likely purchaser of the assets.
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16. Of high relevfce to Mr. Caddell~s situation at this point was Section 8(c) of his
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Agreement which reads:
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The Compan~ [EUR1 will require any successor (whether direct or
indirect~ by p~chase~ merger~ consolidation or otherwise) to all or
substantially 411 of the business and/or assets of the Company prior
to or concurr t with any such event of succession to assume
ex ressl and a ee to erform this A reement in the same manner
and to the s e extent that the Com an would be re uired to
erform it if such succession had taken lace and to rovide the
executive wi written evidence of such assum tion and a eement
(which may i elude documents sufficient to evidence a transaction
whereby such assumption and agreement is by operation of law).
As used in thi Agreement~ "Company" shall mean the company as
hereinbefore efined and any successor to its business and/or
assets as aforqsaid that assumes and agrees to perform this
agreement by loperation of law ~ or otherwise. (Emphasis added.)
17. Thus~ EUR w~s required to assign Mr. Caddell~s Agreement to the purchaser of
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EUR~s assets as part of any ttansaction.
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18. As negotiatio*s between EUR and Intec progressed~ it became apparent that EUR
had no intention of assigning, Mr. Caddell~s Agreement to its successor~ Intec.
19. EUR's couns~l communicated as much as early as May 9~ 2006.
20. On July 17, 2q06~ EUR entered into an Asset Purchase Agreement (AP A) with
Intec whereby Intec agreed to assume all or substantially all ofEUR's assets. Intec~ however~
did not assume EUR~s liabilities unless such liabilities were expressly stated in the APA. (The
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AP A is attached hereto as Exhibit C. It is a voluminous document. Relevant excerpts are
attached hereto, but the entire document is available).
21. The APA conlfirms at Section 5.10 that Mr. Caddell's Agreement would not be
assumed by Intec. (See Also Disclosure Schedule 2.2(d), item 15, attached as part of Exhibit C).
22. Furthermore, Intec did not assume any liability for severance payments to Mr.
Caddell pursuant to his Agreement, leaving this liability to EUR.
23. EUR will not have the resources after the closing on the AP A from which to make
the payments due Mr. Cadden under his Agreement as it will be transferring all of its assets.
24. AU proceeds from the asset sale will be distributed to EUR's creditors, including
investment banks. It is believed that Saratoga and WSC will also benefit financially from the
sale.
25. Throughout tJ1e negotiations, WSC pushed for agreement and closing in order to
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be able to recover a "successl fee" which is believed to be $325,000, payable at closing of the
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26. WSC has negttiated and encouraged EUR to close on this transaction and
disregard its contractual obli ations to Mr. Caddell.
27. Upon infOrm+ion and belief, WSC is motivated by its own interest to ensure that
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it receives substantially all of its "success fee" from EUR, while Mr. Caddell is denied the
amount due him. I
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Similarly, Sarrtoga, as majority shareholder in EUR, has not been operating with
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EUR's interests in mind. Up~>n information and belief, Saratoga has a long-standing relationship
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with the banks from which EbR obtained loans. Saratoga seeks to continue its preferred
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Intec/EUR transaction.
28.
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positions of standing with these banks by ensuring that the banks receive payment on EUR's
loans.
29. In that regardJ Saratoga's paramount concern is the banks' economic interests, not
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EUR's.
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30. Saratoga is futther motivated to maintain its reputation so that it will be able to
finance future transactions "*th the assistance of these banks.
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31. Saratoga is mbtivated by an attempt to improve its standing with the banks and
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recovery as a creditor of EU*, by reducing the amount of funds available to pay Mr. Caddell and
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other similarly situated emplpyees with as much money as possible going to the banks.
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Saratoga's actions show no fncern about preserving EUR's financial wellbeing, including its
ability to comply with its co tracts with executives.
32. Upon inform ion and belief, Saratoga and WSC have caused EUR to delay
action in resolving Mr. Cadd ll's severance issues with the bad-faith intent of pressuring the
employees to accept less mo ey for their claims - leaving more money available to Saratoga and
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WSC.
33. Upon infonn+on and belief, the intent ofWSC, Saratoga, and EUR was to place
Mr. Caddell in the position 0 using the pendency of the Intec transaction to coerce Mr. Caddell
into surrendering most or all f his rights under his Agreement.
34. WSC, Sarato a, and EUR have engaged in tactics of delay with the hope of
allowing the EURllntec tr action to occur, dissipating the payments made to EUR as a result
of the sale, to themselves an to the investment banks with which, in particular, Saratoga, is
affiliated, leaving Mr. Cadde 1, and other similarly situated executives, with rights only against
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EUR, which, after closing, Will be but a shell corporation with no financial ability to handle the
relevant claims.
35. This motivati n is further obviated in EUR's litigation tactics, as is described
below in paragraphs 37 thro gh 49.
C. MR. CADDE L ASSERTS HIS RIGHTS UNDER HIS AGREEMENT
36. EUR's unaba hed and blatant disregard for Mr. Caddell's contractual rights in the
AP A, and the belief that a cl sing was going to occur as early as July 27, 2006 (See AP A at
~2.3), left Mr. Caddell no ch ice but to initiate legal proceedings against EUR and Intec to
enforce the terms of his Agr ement, particularly the requirement of an assignment, as stated in
Section 8( c) of his Agreeme~t.
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37. Mr. Caddell i$itiated this action on July 18,2006, through the filing ofa
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Complaint and Motion for P~eliminary Injunction which sought to stay the closing of the EUR-
Intec transaction pending de$rmination of Mr. Caddell's assignment rights, and which would
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also compel assignment of ~e Agreement.
38. A Preliminary Injunction hearing was scheduled for July 27,2006 before the
Honorable Edward Guido.
39. Counsel for EUR alerted counsel for Mr. Caddell that the closing would occur no
earlier than August 21, 2006~ but no later than August 31, 2006, and suggested that the
Preliminary Injunction hearing be postponed so the parties would have time to discuss and,
potentially, settle Mr. Caddell's dispute.
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40. Relying upon this representation, Mr. Caddell requested, and was granted, a
postponement of the July 27 hearing until August 21,2006.
41. Rather than engage in any settlement discussions, EUR used this delay to
terminate Mr. Caddell on AUgust 15,2006 for what it termed "cause."
42. The termination letter was signed by Charles Phillips, a principal at Saratoga.
43. No basis for the termination for "cause" was given in the termination letter,
attached hereto as Exhibit D, and no reason which would permit a termination for cause exists as
Mr. Caddell performed his job responsibilities in an exemplary fashion for EUR up to the date of
his termination, even in the face ofEUR's complete disregard for his contractual rights, and even
while EUR refused to engag~ him in settlement discussions, contrary to the representations that
caused Mr. Caddell to delay the July 27,2006 preliminary injunction hearing.
44. It is believed that Mr. Caddell's termination was nothing more than a tactical
move taken by EUR, with the full support and encouragement of Saratoga and WSC, to
eliminate the possibility that ;a court would enjoin the closing of the EUR - Intec transaction, or
force EUR into assigning Mr. Caddell's Agreement as part of the asset sale, as requested in Mr.
Caddell's Motion for Preliminary Injunction.
45. Such a tactic was done in bad faith and in perpetuation ofEUR, WSC and
Saratoga's own financial interests, at the expense ofEUR's contractual undertaking to Mr.
Caddell.
46. This tactic was in no way related to Mr. Caddell's performance or for "cause" as
defined in Section 1 of the Agreement.
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47. EUR, with the knowledge, support and endorsement of Saratoga and WSC, next
sought to delay the preliminary injunction hearing of August 21, 2006 by removing this case to
federal court on August 16, 2006, a day after it fired Mr. Caddell, thereby depriving the state
court of jurisdiction to hold the August 21 hearing.
48. Despite Mr. Caddell's filing of an Emergency Motion to Remand the case back to
state court the next day, its granting only occurred after the passing of the August 21 date.
49. These two tactics were taken in bad faith, without basis and with the sole purpose
of enriching EUR, WSC and Saratoga, by permitting the EUR-Intec transaction to occur and
leaving Mr. Caddell, and similarly situated executives, to assert claims against a shell
corporation which is believed to have no assets and no ability to pay the claims the executives
may have against EUR.
COUNT I
BREACH OF CONTRACT (WRONGFUL TERMINATION) V. EUR
50. The allegations of paragraphs 1-48, above, are incorporated by reference as if set
out in full.
51. EUR's termination of Mr. Caddell on August 15,2006 was done without "cause"
as defined in section l.(a)(i) of Mr. Caddell's Agreement (Ex. B, hereto).
52. EUR's termination of Mr. Caddell was nothing more than a litigation tactic to
assure that the Intec - EUR transaction occurred, and to position Mr. Caddell, and similarly
situated executives, so their claims for severance payments, upon termination, would be against
an assetless company with no ability to pay.
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53. EUR had no basis or cause for its termination of Mr. Caddell, entitling him to
benefits described in section 3 of the Agreement, including payment of salary for two years at
Mr. Caddell's rate of pay as of his termination, continuation of benefits, and payment of all
amounts of accrued, but unused, Paid Time Off.
WHEREFORE, Mr. Caddell requests that judgment be entered in his favor in an amount
in excess of $35,000, the arbitration limit in Cumberland County, together with all costs of court,
reasonable attorneys fees, and whatever other remedy this court deems just and proper.
COUNT II
EQillTABLE IMPOSITION OF CONSTRUCTIVE TRUST THROUGH
GRANT OF PRELIMINARY AND PERMANENT INJUNCTION V. EUR,
INTEC USA, INC. AND INTEC BILLING SYSTEMS, INC.
54. The allegations of paragraphs 1-52, above, are incorporated by reference, as if set
out in full.
55. EUR has in its possession and control funds that must, under contract and in
equity, be paid to Mr. Caddell under the terms of the Agreement.
56. Under the facts as set forth above, including the execution of the AP A and the
subsequent transfer of substantially all ofEUR's assets to Intec, EUR will soon lack the financial
resources to satisfy its obligations to Mr. Caddell.
57. Equity demands that a constructive trust be imposed so that EUR cannot dissipate
funds to the benefit of its creditors, including WSC and Saratoga, leaving EUR's executives and
employees, including Mr. Caddell, without an appropriate remedy to satisfy their clear
contractual rights.
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58. Alternatively~ the court should order Intec to hold the $600~000 of the funds it will
pay EUR~ pursuant to the AP A~ in constructive trust.
59. Relief in the nature of a preliminary ~ and then permanent~ injunction which
imposes a constructive trust is necessary.
60. Mr. Caddell has no adequate remedy at law.
61. Mr. Caddell will experience immediate and irreparable harm in that a direct
contractual obligation he has with EUR is being violated~ and will continue to be violated~ with
no remedy to Mr. Caddell where EUR will soon be a shell corporation~ having dissipated and
wasted its assets and all proceeds from the EUR - Intec transaction.
62. Mr. Caddell is entitled to the immediate imposition of a constructive trust on such
sums as are and will become due to him under the terms of Section 3~ together with his costs and
attorneys fees to which Mr. Caddell is entitled~ which sum is estimated at approximately
$600,000.00.
WHEREFORE~ the following relief is requested:
a. The court enter an injunction against EUR and/or Intec in the form of a
constructive trust in the amount of $600~000, which is necessary to protect
Mr. Caddell from the wrongful dissipation and waste of a sum of money
currently held or to be received by EUR from Intec;
b. That the money held in constructive trust be paid over the Mr. Caddell,
together with interest at the maximum legal rate~ and costs and attorneys
fees allowed by the law; and
c. Whatever other remedies this court deems just and proper.
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COUNT III
CLAIM UNDER PENNSYLANIA'S WAGE PAYMENT AND COLLECTION LAW V.
EUR
63. The averments of paragraphs 1 through 60 above are incorporated by reference as
if set out in full.
64. EUR's wrongful termination of Mr. Caddell, allegedly for cause, has deprived
Mr. Caddell of severance benefits under his Agreement, as stated at Section 3 of the Agreement.
65. Severance benefits of this nature are defined as wages under Pennsylvania's
Wage Payment and Collection Law. 43 P.S. ~260.1.
66. EUR has not paid, nor indicated it will pay, any of the promised benefits to Mr.
Caddell.
WHEREFORE, Mr. Caddell requests that judgment be entered in his favor in an amount
in excess of $35,000, the arbitration limit in Cumberland County, together with all costs of court,
including attorneys fees, and liquidated damages under Pennsylvania's Wage Payment and
Collection Law, 43 P .S. ~260.1 et seq., and whatever other remedies this court deems just and
proper.
COUNT IV
TORTIOUS INTERFERENCE WITH CONTRACT V. WSC AND SARATOGA
67. The averments of paragraphs 1 through 64 above are incorporated by reference as
if set out in full.
68. Defendants Saratoga and WSC are aware of the terms of the Agreement, and
specifically of the promises, assurances, and protections made and granted to Mr. Caddell under
Section 8.
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69. During the negotiation of the APA, Saratoga and WSC have deliberately and
maliciously induced and caused EUR to renege on its promises to Mr. Caddell under the
Agreement by not only failing to require Intec to assume EUR's duties to Mr. Caddell under the
Agreement, but also by leaving any claims to be made by Mr. Caddell against only a shell
company - EUR.
70. WSC and Saratoga also recommended, encouraged and conspired to terminate
Mr. Caddell, for no reason other than as a litigation tactic to assure the EUR/Intec transaction
would be consummated, which would result in their financial enrichment, leaving Mr. Caddell
with only a claim against a shell company.
71. The intentional acts of Saratoga and WSC were significant factors inducing EUR
to breach its Agreement with Mr. Caddell.
72. This interference was wrongful, vexatious, unjustified and unprivileged.
WHEREFORE, Mr. Caddell demands judgment in his favor and against Defendants
Saratoga and WSC, jointly, severally and in the alternative, in an amount in excess of $35,000,
the arbitration limit in Cumberland County, together with all costs, interest, punitive damages
and such other relief as the Court deems just.
COUNT V
BREACH OF IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING V. EUR
73. The averments of paragraphs 1 through 70 above are incorporated by reference as
if set out in full.
74. EUR owes a duty to Mr. Caddell to perform its obligations under the Agreement
and otherwise conduct itself in accordance with the implied duty of good faith and fair dealing.
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75. Mr. Caddell is entitled to expect that EUR would not breach the Agreement.
76. EUR breached its duty of good faith and fair dealing to Mr. Caddell by, among
other things, entering into negotiations with Intec for the sale ofEUR's assets through an Asset
Purchase Agreement that was knowingly designed to deny Mr. Caddell his bargained-for rights
under the Agreement, under precisely those circumstances anticipated by the protective clause at
Section 8.
77. EUR's breach deprives Mr. Caddell of the fruits of his bargain with EUR by
failing to require Intec to perform EUR's obligations under the Agreement, and by setting in
place a chain of events that resulted in Mr. Caddell's termination without cause, yet deny him
any of the compensation of benefits that he is entitled to receive in such circumstances.
78. By consciously engaging in the intentional and malicious conduct described
above, EUR breached the implied covenant of good faith and fair dealing contained in the
Agreement by depriving Mr. Caddell of the benefit of the contract, and has thereby breached the
Agreement.
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WHEREFORE~ Mr. Caddell requests that judgment be entered in his favor in an amount
in excess of $35~000~ the arbitration limit in Cumberland County~ together with all costs of court~
reasonable attorneys fees~ and whatever other remedy this court deems just and proper.
Respectfully Submitted~
Date: August;S~ 2006
By:
Steven E. Grub ~ squire (J.D. #75897)
320 Market Street
P. O. Box 1268
Harrisburg~ PA 17108-1268
(717) 234-4161
Attorney for Plaintiff
138502.1
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VERIFICATION
I, Steven E. Grubb, Esquire, am the attorney representing John M. Caddell in the within
matter. I have gone over the foregoing Amended Complaint with Mr. Caddell, and he has
verified to me that the facts stated therein are true and correct to the best of his knowledge,
information, and belief. Mr. Caddell was unavailable to sign the verification, but will submit a
substitute verification upon his availability.
I understand that any false statements herein are made subject to penalties of 18 Pa. C.S.
~4904, relating to unsworn falsification to authorities.
Date:
~f1j/O~
By:
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Exhibi+ A
I F-189
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"i:ua
5040 R.~"r RDcd
. P. o. Boz 380
M~ha7Uabu7'g. Pet. 17056
'....
Datacenter, Inc.
TlllllphoM: 717.697.6800
September 22, 2000
John M. Caddell
1115 University Drive
Atlanta. GA 30306
Dear John:
I am pleased to formally extend this offer of employment to you for the position of
Vice President of Marketing and Business Development of EUR Datacenter, Inc.
This offer provides for a term of three years with an annual -AVAmfeen renewal."
~mplate that you would commence employment by no later than October
~~bject to the terms and conditions set forth below. This offer is contingent
upon the satisfactory completion of any and all reference checks.
Base Salary
Your base salary will be at the annual rate of $200,000, payable semi-monthly.
less appropriate federal, state, and local statutory deductions. This base salary
will be reviewed annually.
Performance Incentive Plan
Upon commencing employment, you win be eligible to participate in the
company's Performance Incentive Plan. For the remainder of the year 2000. we
will guarantee you a minimum $50.000 bonus although you may be able to
exceed this amount based on performance. Half of this amount, $25,000, wnl be
paid shortly after your start date as a slgn-on incentive.
For 2001 and thereafter, your incentive will be based on company performance,
consistent with other members of senior management Your target bonus will be
50% of your base salary achieved if EUR meets Its EBITDA objective. No bonus
win be paid if EUR does not achieve at least 75% of its objective. 40% of the
bonus will be paid at 75% of objective. 100% of bonus will be paid at 100% of
objective. 200% of bOnus will be paid at 125% of objectiVe. Bonus is prorated
between these points.
Eauitv Position
As the Vice President of Marketing and Business Development, you have the
opportunity to earn equity representing 0.75% of the Company. equivalent to the
s~
. .'_." _,wI'" linin tin..... _ .
September 22, 2000
Page 2 014
appreciation on a $350,000 equity investment. This incentive equity wUl receive
value after repayment of cash equity and 9% accretion invested in the
Transaction analogous to stock options but with capital gains treatment.
50% of the incentive stock will time vest over a 5-year period in equal annual
installments. The other 50% of the Incentive~ stock will performance vest based
on achieving salss and EBITDA targets:
Ta et $5 in Millions
Trail n9 4 Quarters at venues of
$45.0
Trailing 4 Quarters' Net Revenues of
$52.0 or EBITDA of $24.0
Trailing 4 Quarters' Net Revenues of
$60.0 or EBITDA of $28.0
1/3 0 Perfonnance Portion
Full vesting of Performance Portion
Additional Eauitv Investment
In concert with the entrepreneurial spirit and culture of EUR, you are invited to
purchase up to $200.000 of the company's common stock on the same basis as
Saratoga Partners and other members of EUR's management team. If desired, a
loan will be provided to assist you with said purchase up to the amount of your
equity investment. This loan will bear interest at the same rate as EUR's senior
debt, and be repaid annually with the lesser of $25,000 or 50% of the after-tax
proceeds of your fiscal year-end performance incentive compensation payments.
Relocation
It Is the Intent of EUR to proVide you with assistance for your temporary living
expenses in Mechanlcsburg, and for your major relocation costs once you
relocate your family later this year, as follows:
· Temporary living expenses for up to one hundred twenty (120) days, if
needed, to include meals and lodging.
· Two house hunting trips of up to a total of six days for you and your family.
· Airfare for one retum trip home every two (2) weeks of temporary living.
· Reimbursement of sales commission on former home.
· Packing and shipment of household goods (including one auto) and
unpacking to a new location In the Mechanicsburg. PA area.
· Up to two thousand dollars ($2.000) of additional closing costs on sale of
fonner home and/or pUrchase of new home.
· Gross up of applicable expenses per IRS standards.
In the event that you voluntarily leave the company within two years from the
effective date of your employment. you will be required to reimburse EUR for the
total amount paid to you for these relocation expenses.
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04-j
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SepbHnber22,2000
Page 3 of4
Ottler
You will be required to enter into a non-competeagreement with EUR. For a two
year period following the tennfnation of your employment you'll be restricted from
wor1dng for an organization involved with outsourced services and systems for
billing and customer care to telecom service providers.
You will be entitled to the full range of EUR's employee benefits that include:
Medical coverage Bille Cross/Blue ShIeld Custom Blue
PPO, effective the lb. afthe moratl. n-
foIlQT.'Jiftg sa (fays e"',&SYfR8At /t.bv ~ 2-
Dental Effective January 1 fallowing 1 year of
employment
Life insurance $10,000 effeCtiVe the lfrst of the month
following employment date
2% x salary up to $175,000 effective
January 1 follOWing 1 year of
employment
Holidays 7 paid
Personal Days 2 paid
Sick Leave 10 days per calendar year accrued 1
per month
Vacation 2 weeks per calendar year
3 weeks after 10 years
4 weeks after 20 years
Long Tenn Disability Effective January 1 following 1 year of
employment
Profit Sharing Plan January 1 folloWing date of
employment
(IKt~
V~
A summary of the benefit plans for which you would be eligible will be forwarded
to YOIJ prior to your commencing employment.
v~
04-21-06
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September 22, 2000
Page 4 of4
John, I would apP/l!Clate your signifying that you Unders1and and accept the
terms of this offer of employmern by acknawfedglng beJow and relllming this
Original letter to me. We look forward to your joining the EUR team, and are
convinced that you will help us build a very successful company.
Sincerely,
~,tCa
Creedin S. Paulus
President and Chief Executive Officer
CSP/mg
Enclosures
Agreed this 14
day of September 2000.
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V' ,-e-
E.xhi bit 5
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Executive Severance Agreement
EUR Systems
Confidential Information
EXECUTIVE SEVERANCE AGREEMENT
~I TIllS EXECUTIVE SEVERANCE AGREEMENT is made effective the first day of
, 2002, by and between EUR Systems, with principal offices located at 5040 Ritter
Road, P.O. Box 380, Mechanicsburg, Pennsylvania 17055 (hereinafter referred to as the
"Company"), and John M. Caddell, a resident of Camp Hill, Cumberland County, Pennsylvania
(hereinafter referred to as the "Executive").
WITNESSETH:
WHEREAS, the Executive is now employed by the Company, and the Executive and the
Company desire to enter into an agreement relating to severance:
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein
set forth, it is agreed as follows:
1. Termination. The Company may terminate the Executive's employment with or
without Cause and Executive may terminate his employment with or without Good Reason.
(a) Def"mitions. For the purposes of this Section 1.
(i) Termination with cause is a result of
(i) any material breach of a material provision of the Agreement by the Executive, (ii) a violation
of company policy by the Executive, (iii) the Executive not performing the duties and
responsibilities of the position or the duties assigned, or (iv) engagement by the Executive in any
criminal activity. ; (v) engagement in any activity which could be detrimental to the business of
the company.
(ii) Termination with good reason means the occurrence of any of the
following events provided that the executive delivers a Notice of Termination to the Company
within 60 days of the occurrence of such event and the Company shall not have cured the
circumstances giving rise to such event within 30 days of its receipt of such Notice of
Termination: (i) any material breach of a material provision of the Agreement by the Company,
(ii) the assignment to the Executive by the Company of duties and responsibilities that are
significantly different from the duties and responsibilities of an executive of the Company or (iii)
the relocation by the Company of the Executive's principal business location to a site that is not
within 50 miles of Mechanicsburg, Pennsylvania.
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Executive Severance Agreement
BUR Systems
Confidential Information
2. Notice of Termination. Any termination of the Executive's employment with
the Company (other than due to death) shall be effected by written notice delivered to the other
party and, if by the Company for Cause or by the Executive for Good Reason, shall be
communicated by a Notice of Termination to the Executive or the Company, as applicable, given
in accordance with this Agreement. The failure by the Company to set forth in the Notice of
Termination any fact or circumstance that contributes to a showing of Cause shall not waive any
right of the Company hereunder or preclude the Company from asserting such fact or
circumstance in enforcing the Company's rights hereunder. The failure by the Executive to set
forth in the Notice of Termination any fact or circumstance that contributes to a showing of Good
Reason shall not waive any right of the Executive hereunder or preclude the Executive from
asserting such fact or circumstance in enforcing the Executive's rights hereunder.
3. Oblie:ation of the Company Upon Termination Under Section 1. If the
Executive's employment shall have been terminated by the Company under Section I (other than
for Cause) or by the Executive for Good Reason:
(a) the Company shall make a lump sum cash payment to the Executive within 30
days after the Date of Termination of the accrued Amounts, earned but unused Paid Time Off
and any money that is normally paid during this time period, except to the extent under the terms
of a Plan they are to be paid at a later date;
(b) the Company shall pay to the Executive in equal installments, made at least
monthly, an aggregate amount equal to two times the Executive's Annual Base Salary in effect
on the Date of Termination over the twenty-four months following the Date of Termination and;
(c) until the earlier of eighteen months following the Date of Termination or the
date the Executive becomes entitled to comparable benefits from another employer, the
Executive shall be entitled to receive medical coverage and life insurance as provided under the
Company's Plans from time to time and the Executive's cost therefor shall not exceed the cost
paid by the other executives of the Company for comparable coverage.
4. Voluntarv or For Cause Termination. If the Executive's employment shall
be terminated for Cause or the Executive voluntarily terminates employment (other than for
Good Reason) excluding death, Disability or Retirement, such termination shall be without
further obligations to the Executive other than Accrued Amounts.
5. Release Ae:reement. The benefits pursuant to Section I lp"e contingent upon the
Revised on 7/03/02 Page 2 of7
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Executive Severance Agreement
EUR Systems
Confidential Information
Executive (I) executing a Separation and Release Agreement (the "Release Agreement") upon or
after any Date of Termination, a copy of which is attached as Exhibit A to this Agreement, and
(II) not revoking or challenging the enforceability of the Release Agreement.
6. No Miti2ation. etc. The amounts payable hereunder shall not be subject to
obligations to mitigate for offset by any amounts earned from any future employers. The
Company shall have the right to setoff the amounts required to be paid to the Executive under
this Agreement against any amounts owed by the Executive to the Company or its affiliates and
nothing in this Agreement shall prevent the Company from pursuing any other available remedies
against the Executive.
7. Restrictions and Obli2ations of the Executive.
!!l Considerations for Restrictions and Covenants. The parties hereto
acknowledge and agree that a principal consideration for the agreement to make the payments
provided in Section 3 hereof from the Company to the Executive and the grant to the Executive
of the equity-based compensation as set forth in Section 3 hereof is the Executive's compliance
with the undertakings set forth in this Section 6. Specifically, the Executive agrees to comply
with the provisions of this Section 6 irrespective of whether the Executive is entitled to receive
any payments under Section 1 of this Agreement.
all Confidentiality. The confidential and proprietary information and trade
secrets of the Company and its affiliates are among their most valuable assets, including but not
limited to, their customer and vendor lists, database, computer programs, frameworks, models,
their marketing programs, their sales, financial, marketing, training, and technical information,
and any other information, whether communicated orally, electronically, in writing or in other
tangible forms concerning how the Company and its affiliates create, develop, acquire or
maintain their products, services and marketing plans, target their potential customers and
operates their businesses. The Company and its affiliates have invested, and continue to invest,
considerable amounts of time and money in obtaining and developing the goodwill of their
customers, their other external relationships, their data systems and data bases, and all the
information described above (hereinafter collectively referred to as "Confidential Information"),
and any misappropriation or unauthorized disclosure of Confidential Information in any form
would irreparably harm the Company and its affiliates. The Executive shall hold in a fiduciary
capacity for the benefit of the Company and its affiliates and their businesses, which shall have
Revised on 7/03/02
Page 3 of7
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,Executive Severance Agreement
EUR Systems
been obtained by the Executive during the Executive's employment by the Company which shall
not be or become public knowledge (other than by acts by the Executive or representatives of the
Executive in violation of this Agreement). After termination of the Executive's employment
with the Company, the Executive shall not, without the prior written consent of the Company or
as may otherwise be required by law or legal process, communicate, divulge or use any such
information, knowledge or data to anyone other than the Company and those designated by it.
~ Non-Solicitation or Hire. During the Employment Period and for a two-year
period following the Date of Termination of the Executive's employment for any reason, the
Executive shall not, directly or indirectly, for himself or on the behalf of on in conjunction with
any person, partnership, corporation or other entity, (i) employ or seek to employ any person who
is at the Date of Termination (unless terminated by the Company), an employee of the Company
or any of its affiliates or otherwise solicit, encourage, cause or induce any such employee of the
Company or such affiliates to terminate such employee's employment with the Company or such
affiliate for the employment of another company (m,cluding for this purpose the contracting with
any person who was an independent contractor (excluding management consultants of the
Company or an affiliate during such period) or (ii) knowingly take any action (and will cease all
such actions immediately upon obtaining knowledge thereof) that would interfere with the
relationship of the Company or its affiliates with their suppliers or customers, or otherwise solicit
the Company's or its affiliates' customers, with respect to a Restricted Business, without, in
either case, the prior written consent of the Company's Board, or knowingly engage in any other
action or business (and will cease all such engagements immediately upon obtaining knowledge
thereof) that would have an adverse effect on the Company or its affiliates.
@ Non-Competition. During the Employment Period and for a two-year period
following the Date of Termination of the Executive's employment for any reason, the Executive
shall not, directly or indirectly:
(i) engage in any managerial, administrative, advisory, consulting,
operational or sales activities in a Restricted Business anywhere in the Restricted Area,
including, without limitation, as a director, officer or partner of a business engaging in such
Restricted Business, or
Confidential Information
(ii)
organize, establish, operate, own, manage, control or have a direct or
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~xecutive Severance Agreement
EUR Systems
Confidential Information
indirect investment or ownership interest in a Restricted Business or in any corporation,
partnership (limited or general), limited liability company enterprise or other business entity that
engages in a Restricted Business anywhere in the Restricted Area. Nothing contained in this
Section 7( d) shall prohibit or otherwise restrict the Executive from acquiring or owning, directly
or indirectly, for passive investment purposes not intended to circumvent this Agreement,
securities of any entity engaged, directly or indirectly, in a Restricted Business if (i) such entity is
a public entity and the Executive (A) is not a controlling person of, or a member of a group that
controls, such entity and (8) owns, directly or indirectly, no more than 3% of any class of equity
securities of such entity; (ii) such entity is not a public entity and the Executive (A) is not a
controlling person of, or a member of a group that controls, such entity and (8) does not own,
directly or indirectly, more than 1 % of any class of equity securities of such entity or (iii) such
investment is through a mutual fund, private equity fund or other pooled account ("Pooled
Equity") and Executive satisfies the requirements of (i) (A) and (i) (8) with regard to such
Pooled Entity.
!!tl Definitions. For purposes of this Section 7:
(i) "Restricted Business" means (i) any business which provides software,
systems, professional services, or outsourced services for billing and customer management to
telecommunications service providers, or (ii) such other business, to be mutually agreed on by
the parties, as may be conducted by the Company after the date hereof during the employment
period. In the case of multi-divisional enterprises in which one division may provide such
services, divisions which do not provide these services are not Restricted Businesses.
(ii) "Restricted Area" means the United States and Canada and any
country where the Company directly provides outsourced billing, billing software, professional
services, and customer management system services for its customers.
.m. Relief. The parties hereto hereby acknowledge that the provisions of this
Section 7 are reasonable and necessary for the protection of the Company and its affiliates. The
parties further acknowledge and agree that the Company's business is worldwide and the
definition of ''Restricted Business" in Section 7(e) is reasonable and necessary for the protection
of the Company and its affiliates in light of such worldwide business. In addition, the Executive
further acknowledges that the Company and its_affiliates may be irrevocably damaged if such
covenants are not specifically enforced. Accordingly, the Executive agrees that, in addition to
Revised on 7/03/02
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pxecutive Severance Agreement
EUR Systems
Confidential Information
any other relief to which the Company may be entitled, the Company will be entitled to seek and
obtain (without the requirement of any bond) injunctive relief for the purposes of restraining the
Executive roam any actual or threatened breach of such covenants or such other relief as may be
required to specifically enforce any of such covenants from a court or competent jurisdiction.
The Executive hereby agrees and consents that such injunctive or other relief may be sough ex
parte in any state of federal court of record in the State of Pennsylvania. The Executive agrees to
and hereby does submit to in personam jurisdiction in the State of Pennsylvania. In addition,
without limiting the Company's remedies for any breach of any restriction on the Executive set
forth in this Section 7, except as required by law, the Executive shall not be entitled to any
payments set forth in Section 1 hereof if the Executive breaches any of the covenants applicable
to the Executive contained in this Section 7, the Executive will immediately return to the
Company any such payments previously received upon such a breach, and, if the event of such
breach, the Company will have no obligation to pay any of the amounts that remain payable by
the Company under Section 1.
00 Exceptions. Any exceptions to Section 7 must be approved by the Chief
Executive Officer and must be documented as an Addendum to this agreement.
(i) If the Executive terminates employment voluntarily without Good
Reason and will not be receiving any type of severance from the company, then it is expected
that the Executive would still abide by the expectations that are covered in Section 7 except for
paragraph 7 (d) "Non-Competition."
8. Successors: Assimment.
!!} Bv the Executive. Neither this agreement nor any right, duty, obligation or
interest hereunder shall be assignable or delegable by the Executive without prior written consent
of the Company; provided, however, that nothing in this Section 8(a) shall preclude the
Executive from designating any of his beneficiaries to receive any amount payable hereunder
upon his death, or preclude his executors, administrators, or other personal representatives, from
assigning any such right or interest to the person or persons entitled thereto.
i!!l Bv the Comoany. Neither this agreement nor any right, duty, obligation or
interest hereunder shall be assigned or delegable by the Company without prior written consent
of the Executive, other than any assignment to any entity that succeeds to substantially all the
business operations and/or assets of the Company.
Revised on 7/03/02 Page 6 of 7
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~ecutive Severance Agreement
EUR Systems
Confidential Information
~ The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company prior to or concurrent with any such event of succession to assume
expressly and agree to perform this Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such succession had taken place_ and to
provide the_Executive with written evidence of such assumption and agreement (which may
include documents sufficient to evidence a transaction whereby such assumption and agreement
. is by operation of law). As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as aforesaid that assumes and
agrees to perform this Agreement by operation of law, or otherwise.
9. Miscellaneous.
!!} Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Pennsylvania, without reference to principles of conflict
of laws.
@ Captions. The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect.
~ Amendment. This Agreement may not be amended or modified otherwise
than by a written agreement executed by the parties hereto or their respective successors and
legal representatives.
The parties to this Agreement have executed this Agreement as of the day and
year first written above.
cutive _. J
~~.
ame~" A . (J;l~dt / !
Title: Vf.f"-..t:rl.tf,(j ti (f__s/-W".f f:)eVI
=~~
~ ,;;.--:::
Name: J CX:f./J
Title: d.€.iJ
Revised on 7/03/02
Page 7 of7
~paration and Release Agreement
EUR Systems
Confidential Information
EXHIBIT A
SEPARATION AND RELEASE AGREEMENT
This Separation and Release Agreement ("Agreement") is entered into as of this
day of , between and any successors thereto (collectively, the
"Company) and (the "Executive').
The Executive and the Company agree as follows:
1. The employment relationship between the Executive and Company
terminated on (the "Termination Date').
2. In accordance with Section 1 of the Executive's Severance Agreement, the
Company has agreed to pay the Executive the payments and to make the benefits
available after the Tennination Date, each as required by such Section 3.
3. In consideration of the above, the sufficiency of which the Executive
hereby acknowledges, the Executive, on behalf of the Executive and the Executive's
heirs, executors and assigns, hereby releases and forever discharges the Company and its
members, parents, affiliates, subsidiaries, divisions, any and all current and former
directors, officers, employees, agents, and contractors and their heirs and assigns, and any
and all employee pension benefit or welfare benefit plans of the Company, including
current and former trustees and administrators of such employee pension benefit and
welfare benefit plans, from all claims, charges, or demands, in law or in equity, whether
known or unknown, which may have existed or which may now exist from the beginning
of time to the date of this letter agreement, including, without limitation, any claims the
Executive may have arising from or relating to the Executive's employment or
termination from employment with the Company, including a release of any rights or
claims the Executive may have under Title vn of the Civil Rights Act of 1964, as
amended, and the Civil Rights Act of 1991 (which prohibit discrimination in employment
based upon race, color, sex, religion and national origin);the Americans with Disabilities
Act of 1990, as amended, and the Rehabilitation Act of 1973 (which prohibit
discrimination based upon disability); the Family and Medical Leave Act of 1993 (which
prohibits discrimination based on requesting or taking a family or medical leave ); Section
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.Separation and Release Agreement
BUR Systems
Confidential Information
1981 of the Civil Rights Act of 1866 (which prohibits discrimination based upon race);
Section 1985(3) of the Civil Rights Act of 1871 (which prohibits conspiracies to
discriminate); the Employee Retirement Income Security Act of 1974, as amended
(which prohibits discrimination with regard to benefits); any other federal, state or local
laws against discrimination; or any other federal, state or local statue, or common law
relating to employment, wages, hours, or any other terms and conditions of employment.
This includes a release by the Executive of any claims for wrongful discharge, breach of
contract, torts or any other claims in any way related to the Executive's employment with
or resignation or termination from the Company, including any claim under the
Employment Agreement. This release also includes a release of any claim for age
discrimination under the Age Discrimination in Employment Act, as amended
("ADEA"). The ADEA requires that the Executive be advised to consult with an
attorney before the Executive waives any claim under ADEA. In addition, the ADEA
provides the Executive with at least 21 days to decide whether to waive claims under the
ADEA and seven days after the Executive signs the Agreement to revoke that waiver.
This release does not release the Company from any obligations due to the Executive
under the Severance Agreement or under this Agreement. Nothing herein to the contrary
shall effect any rights the Executive may have under the Shareholders' Agreement, dated
May 3, 2000, by and among the Company, the Executive and the other shareholders from
time to time party thereto. This release shall not apply to any rights of the Executive with
respect to indemnification, directors', and officers' insurance.
Additionally, the Company (on its behalf and that of its affiliates) agrees
to discharge and release the Executive and the Executive's heirs from any claims,
demands, and/or causes of action whatsoever, presently known or unknown, that are
based upon facts occurring prior to the date of this Agreement, including, but not limited
to, any claim, matter or action related to the Executive's employment and/or affiliation
with, or termination and separation from the Company; provided that such release shall
not release the Executive from any loan or advance by the Company or any of its
subsidiaries, any act that would constitute "Cause" under the Executive's Severance
Agreement or a breach under Section 7 of the Executive's Severance Agreement;
provided, however, that nothing herein to the contrary shall affect any rights the
Company may have under the Shareholders' Agreement, dated as of May 3,2000, by and
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Page 2 of 4
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~eparation and Release Agreement
EUR Systems
Confidential Information
among the Company, the Executive and the other shareholders from time to time party
hereto.
4. This Agreement is not an admission by either the Executive or the
Company of any wrongdoing or liability.
5. The Executive waives any right to reinstatement or future employment
with the Company following the Executive's separation from the Company on the
Termination Date.
6. The Executive agrees not to engage in any act after execution of the
Separation and Release Agreement that is intended, or may reasonably be expected to
harm the reputation, business, prospects or operations of the Company, its officers,
directors, stockholders or employees. The Company further agrees that it will engage in
no act which is intended, or may reasonably be expected to harm the reputation, business
or prospects of the Executive.
7. The Executive shall continue to be bound by Section 7 of the Executive's
Severance Agreement.
8. The Executive shall promptly return all the Company property in the
Executive's possession, including, but not limited to, the Company keys, credit cards,
cellular phones, computer equipment, software and peripherals and originals or copies of
books, records, or other information pertaining to the Company business.
9. This Agreement shall be governed by and construed in accordance with
the laws of the State of Pennsylvania, without reference to the principles of conflicts of
laws.
10. This Agreement represents the complete agreement between the Executive
and the Company concerning the subject matter in this Agreement and supersedes all
prior agreements or understandings, written or oral. This agreement may not be amended
or modified otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.
11. Each of the sections contained in this Agreement shall be enforceable
independently of every other section in this Agreement, and the invalidity or
nonenforceability of any section shall not invalidate or render unenforceable any other
section contained in this Agreement.
Created on 4/512002 I :03 PM
Page 3 of4
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~eparation and Release Agreement
EUR Systems
Confidential Information
12. It is further understood that for a period of7 days following the execution
of this Agreement in duplicate originals, the Executive may revoke this Agreement, and
this Agreement shall not become effective or enforceable until the revocation period has
expired. No revocation of this Agreement by the Executive shall be effective unless the
Company has received within the 7-day revocation period, written notice of any
revocation, all monies received by the Executive under this Agreement and all originals
and copies of this Agreement.
13. This Agreement has been entered into voluntarily and not as a result of
coercion, duress, or undue influence. The Executive acknowledges that the Executive
has read and fully understands the terms of this agreement and has been advised to
consult with an attorney before executing this Agreement. Additionally, the Executive
acknowledges that the Executive has been afforded the opportunity of at least 21 days to
consider this Agreement. To the extent that the Executive executes this Agreement prior
to the expiration of such 21-day period, he does so knowingly and voluntarily and
without coercion.
The parties to this Agreement have executed this Agreement as of the day and
year first written above.
Th~u.~e ~ ~ ~ A
By: l~,
ame:
Title:
:~com2f~
Name:
Title:
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Case 3~C DdOOOIlIIIEtI5$3 Fled O8I21f.lOO6 Page 1 of 49
Execution Version
ASSET PURCHASE AGREEMENT
by and among
ELECTRONIC AND UNIT RECORD DATACENTER, INC.
d/b/a EUR SYSTEMS
and
APTlS, INC.
(collectively, the "Sellers")
and
INTEC USA, INC.
and
INTEC BILLING SERVICES, INC.
(collectively, the "Purchasers")
Dated as of July 17, 2006
-OocN 667319 12-
.,
t
Case J~C DdOODIlII!JE6I5$-3 Fled 0Br2112OO6 Page 22 of 49
(e) All claims for refund of Taxes and other governmental charges arising prior to the
Closing Date.
(f) Except as otherwise provided herein, all rights in connection with and assets of
the Employee Plans.
(g) All rights of the Sellers under this Agreement, the Bill of Sale, the Trademark
Assignment, the Domain Name Assignment, the Assignment and Assumption Agreement and
the Escrow Agreement.
(h) All employee notes and obligations due to the Sellers.
(i) The assets listed in Section 2.2(i) of the Disclosure Schedules.
2.3 Closin~. The Closing shall take place at the offices of Nelson Mullins Riley &
Scarborough LLP, 999 Peachtree Street, Atlanta. Georgia 30309, at 10:00 A.M. on or about July
27, 2006 or on such other date as is mutually agreed to by the Sellers and the Purchasers. The
date on which the Closing occurs in accordance with the preceding sentence and relevant terms,
provisions and conditions of this Agreement is referred to in this Agreement as the "Closing
Date."
2.4 Purchase Price. At the Closing, as consideration for the transfer, delivery and
assignment of the Acquired Assets. the Purchasers shall pay to the Sellers via wire transfer to a
bank account established and maintained on behalf of the Lenders (the "Lenders' Account"). a
cash amount equal to Thirteen Million Four Hundred Sixty-Five Thousand Dollars
($13,465,000) (the "Purchase Price"), less any Reduction Amount, and provided that Two
-11-
-Doc. 667389 12-
!
QlseJ~C DdimOO8lle~$4 Fied08l2112OO6 Page6m44
Affiliates from and against any claims arising out of or due to the failure to comply with any
bulk sales law.
5.10 Employment of Emolovees: Emolovees Benefits Matters. (a) The Purchasers shall
make offers of employment to the employees of each of the Sellers listed in Section 5.10 of the
Disclosure Schedules, as of the Closing Date, except with respect to Charles Achuff, Sheila
Bond, John Caddell and Raymond Wenger, such offers shall be at the same pay scale and for a
reasonably comparable position to the one currently held by such employees. Such employment
shall be on an "at will" basis and upon such other terms and conditions as such applicable
Purchaser deems reasonably appropriate, in its sole discretion provided, however, except with
respect to Charles Achuff, Sheila Bond, John Caddell and Raymond Wenger, that such terms and
conditions are reasonably comparable to those of employee's prior arrangement.. Such
employees hired by either Purchaser as of the Closing Date, as part of the Transactions
contemplated by this Agreement, are referred to as ''Transferred EmpIQvees."
(b) The Transferred Employees shall receive credit under the applicable Purchaser's
paid time off arrangement for earned but unused paid time off under the Sellers' paid time off
arrangement as of the Closing Date; provided, however, such credit under such applicable
Purchaser's paid time off arrangement shall be subject to the terms, conditions, qualifications
and limitations of the applicable Purchaser's paid time off arrangement. Transferred Employees
shall be given credit by the applicable Purchaser for earned but unused leave under the Family
and Medical Leave Act of 1993 or similar state law, as of the Closing Date, which was earned as
.
a result of their employment by Sellers; provided, however, such credit to be recognized by the
applicable Purchaser shall not duplicate Family and Medical Leave Act of 1993 or similar state
law benefits which the applicable Purchaser is required to provide to the Transferred Employees,
~DocN 667389 12-
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Case 3~C DdaaDDllllEB63-5 Fled 08I'21Q006 Page 40 of 50
Final Version
Section 2.2( d)
EXCLUDED CONTRACTS
I. Amended and Restated Credit Agreement dated as of January 18, 2002 among Electronic
and Unit Record Datacenter, Inc., as Borrower, and Bank of Montreal, Chicago Branch,
as Administrative Agent, et ai, as Lenders.
2. Security Agreement dated as of May 3, 2002 among Electronic and Unit Record
Datacenter, Inc. as "Grantor" and Bank of Montreal, Chicago Branch, individually and as
Administrative Agent, OE Capital and Citizens Bank as Secured Party.
3. Piedge and Security Agreement dated as of January 18, 2002 among Aptis Holdings
LLC, BC Holding II Corporation and Aptis, Inc., collectively as Grantors, and Bank of
Montreal, Chicago Branch, individually and as Administrative Agent, GE Capital and
Citizens Bank as Secured Party,.
4. Letter Agreement by and between EUR and Whitby, Santar/asci & Company, dated May
31,2005, as amended (providing for the services of Joseph H. Santarlasci. Jr.).
5. Engagement Letter by and between EUR and Troutman Sanders LLP, dated June 9, 2005
(providing for legal services to the Sellers).
6. Letter Agreement by and between EUR and Evercore Partners, dated November 28, 2004
(providing for financial and strategic advisory services in connection with a merger, sale
or acquisition).
7. Letter Agreement by and between EUR and Edelweiss Capital Limited. dated November
1,2004 (providing for mergers and acquisitions alliances strategy services).
8. Lease Agreement by and between Aptis and Prentiss Properties Acquisition Partners, LP
dated November 11. 1999 (for the premises located at Two Barton Skyway, 1601 South
MoPac Expressway, Austin, Texas 78746).
9. Service Bureau License Agreement, as amended, by and between EUR and Daleen
Technologies. Inc.., dated March 20, 2000 (covering license to run the BilIPlex software
in the service bureau environment).
10. Letter of Intent by and between EUR and InnoSource Business Solutions, Inc., dated
August 1,2005 (covering a comprehensive, on-site study of Sellers' print. mail and data
center operations to validate the processes, current costs and potential cost savings
outlined in a preliminary study).
11. Employment Agreement by and between EUR and John Boyd dated February 28, 200 I,
NEWYORKOI II J927Sv9 034866-000001
NEWYORKOI 111927Svll 034866.0??oo1
NEWYORKOI I I I 927Svl4 034866-0??oo1
6
,
Case J~c Ddaa~B6$-5 Filed 081'21/2006 Page 41 of 50
Final Version
12. Employment Agreement by and between EUR and Charles Achuff dated May 3, 2000.
] 3. Employment Agreement by and between EUR and Raymond L. Wenger dated September
1,2005.
14. Employment Agreement by and between EUR and Sheila A. Bond dated July], 2005.
IS, Executive Severance Agreement by and between EUR and John M Caddell dated July I,
2002 and Offer of Employment Letter dated September 22, 2000 with Mr. Caddell.
16. Motor Vehicle Lease Agreement by and between EUR and BMW of Manhattan Inc.,
dated April 19, 2001 (covering leasing ofautomobile for use by John Boyd).
17. Marketing and Referral Agreement by and between EUR and CTI Billing Solutions, Inc.
dated November 13,2002 (covering mutual referrals of software products-SmartBiIl for
CTI and Advantacs for EUR).
18. Teaming Agreement by and between EUR and Openet Telecom, Inc. dated December 30,
2005 (covering joint business opportunities; Openet develops and licenses real-time
mediation, rating and charging software).
]9. Master Consulting Agreement by and between EUR and Mark Ponton dated August 31,
2005 (covering sales training services).
20. Mobile Virtual Network Enabler Teaming Agreement by and between EUR and Qpass
Inc. dated October ]9, 2005 (covering an alliance for coordinated exploration of new
market opportunities).
21. Consulting Agreement by and between EUR and Vichara Technologies, Inc. dated July
16,2003 (covering offshore software development services for the Aptis software).
22. Administrative Services Agreement by and between EUR and Flex Corp. dated April I,
2004 (covering administrative services for flexible spending plan benefit to the Sellers'
employees)..
23. Application for Membership and Services Contract by and between EUR and CBY
Systems, Inc. dated April] 9, 2004 (covering provision of credit reports on employees
and potential employees).
24.. Client Agreement by and between EUR and CD Studio, Inc., dba The Clockwork Group,
dated April 15, 2004 (covering webcare for Aptis software).
25. Gallagher Benefits Services (health insurance broker).
NEWYORKOI II J927Sv9034866.000001
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Final Version
26. Consultant Agreement by and between EUR and Global Advertising Strategies, Inc.
dated October 4,2005 (covering marketing services to prospective MYNOs to facilitate
brand creation and sales generation).
27. Consulting Services Agreement by and between EUR and JB Knowledge Technologies,
Inc. dated April 13,2004 (covering webcare for Aptis software).
28. Website Design Contract by and between EUR and Leo Web Design (Matthew C. Leo)
dated September 19,2005 (covering development and/or improvement of three Websites
for EUR's web space).
29. Finders Agreement by and between EUR and LERA Partners, LLC (Linda Seigelman)
dated February 15,2004 (providing for payment ofa finder's fee for customer referrals).
30. Engagement Letter by and between EUR and McKonly & Asbury LLP (covering annual
reporting obligations under ERISA for 401 (k) Employee Retirement Savings Plan for
year ended December 31, 2004).
31. Consultant Agreement by and between EUR and MCR Partners dated August 18, 2005
(covering consulting services for the wireless industry).
32. Employee Assistance & WorklLife Services Program Agreement by and between EUR
and NEAS, Inc. dated August 1,2005 (covering Sellers' Employee Assistance Program).
33. Ordering and Billing Forum - Annual participation in billing conference.
34. Consultant Agreement by and between EUR and Clifton P. Orzolek dated March 3, 2006
(covering system design and programming services regarding Unisys billing platforms).
35. Consultant Agreement by and between EUR and Robert J. Potter (covering OSP/ISP
product evaluations and presentations, Web site development and other services in
connection with CPqD products).
36. Legal Service Contract by and between EUR and Pre-paid Legal Services, Inc. and Pre-
paid Legal Casualty, Inc. (covering Sellers' Voluntary Legal Plan).
37. Proposal for Creative Development by and between EUR and Dean Stevenson, dba
Allegro Designs (covering Website development).
38. Engagement Letter by and between EUR and Troutman Sanders LLP dated 6117/05
(covering legal services in connection with efforts to restructure/recapitalize the Sellers).
39. Agreement for Yankee On-linelWB Delivery by and between EUR and The Yankee
Group dated October 31, 2001 (covering consulting services re telecom billing and
wireless industry analysis and information).
NEWYORKOI 1I1927Sv9 034866.0??oo1
NEWYORKOI II I 927Sv I I 034866-0??oo1
NEWYORKOI 1I1927Svl4 034866.000001
8
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Final Version
40. Master Lease Agreement No. 206240, as amended, by and between ElJR and CitiCapital
Technology Finance, Inc. dated June 22,2004 (covering leasing of MVL Office Pro).
41. Master Lease Agreement No. 206261 by and between Aptis and CitiCapital Technology
Finance, Inc. dated June 23, 2004 (covering leasing ofMVL Office Pro).
42. Master Agreement, Reference No. 3709B, by and between EUR and AT&T Corp.. dated
May B, 2002 (covering remote dial-up Internet access for EUR staff).
43. Microsoft Select Agreement, as amended, by and between EUR and Microsoft Licensing,
GP, dated June 1,2004 (covering licensing and purchase of various products for servers
and desktop PCs).
44. Master Services Contract by and between EUR and Postini, Inc. (covering spam filter _
Perimeter Manager-Enterprise Edition).
45. Symantec Software License Agreement, as amended, by and between EUR and Symantec
Corporation (covering licensing and maintenance of Symantec Ghost Solution Suite
License Value B, which is used for creating backup images of PC hard drives for archival
and restoration needs).
46. Consultant Agreement by and between EUR and Dale R. Hoover dated June 27, 2006
(covering tax software support services).
47. Consultant Agreement by and between EUR and Karyl Tetzlaff dated June 20, 2006
(covering project management services for assigned MVNGO implementation projects).
4B. Severance Agreement and Release by and between EUR and Ronald R. Schauer effective
October B, 2004, which provides for continued salary through August 4, 2006 and
medical and dental insurance through August 31, 2006. Gross amount payable to Mr.
Schauer as of June I, 2006 is $10,6B6.39 (9 weeks and 2 days). Total benefit cost is
$1,016.10 for three months of medical and dental coverage.
49. Severance Agreement and Release by and between EUR and Stacy Ryder effective
June 8, 2006, which provides for three weeks' continued salary (final paycheck due July
26, 2006).
50. Severance Agreement and Release by and between EUR and Suzanne Shartzer effective
June 8, 2006, which provides for continued group insurance benefits through June 30,
2006 and seven weeks' continued salary (final paycheck due August 9, 2006).
51. David Conahan's employment with EUR was tenninated effective June 8, 2006, and he
was provided with a Severance Agreement and Release, which will entitle him to two
weeks' continued salary ifhe accepts the terms of the Agreement by July 3 1,2006.
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August 15,2006
V1A OVERNIGHT MAIL AND HAND DEliVERY
Mr. John M. Cacidell
clo Electronic and Unit Record Datacenter, Inc, d/b/a EUR Systems
5040 Ritter :Road
Mcc:hanicsburg, Pennsylvania 17055
Re: EUR Spt~ms
near Mr _ Caddell:
The pUJ))O&e of this letter is to advise you that, effective immediately, your employment with Electronic
and Unit Record DataCCDter, Inc. d/b/a BUR Systems ("BUR'') is hereby terminated with cause. The decision to
tennina.te you ftom your positiOTl for Gause is beina taken for 1'C8S()I')S, including, but not limited to. your bl"each of
your fiduciary duties owed to EUR, your failure to perform the duties and responsibilities of your position with EUR
and your engagement in activity whidt, has been and continues to be detrimental to the business ofEUR.
Sinoercly,
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a . ar es J 1J)S, an aut on=<.! SIgnatory
Title: ~'ft(.tll.
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Goldberg Katzman, P.C.
Steven E. Grubb, Esquire, 1.0.# 75897
Attorneys for Plaintiff
320 Market Street, Strawberry Square
P. O. Box 1268
Harrisburg, PA 17108-1268
(717) 234-4161
JOHN M. CADDELL.
Plaintiff
v.
IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY, PENNSYLVANIA
NO. Dlo- ~q.5~ Ci'4il lerrn
ELECTRONICS AND UNIT RECORD :
DATACENTER, INC., d/b/aEUR
SYSTEMS; INTEC, USA, INC.;
INTEC BILLING SERVICES, INC.;
SARATOGA PARTNERS,
and WHITBY, SANT ARLASCI &
COMPANY
JURY TRIAL DEMANDED
CIVIL ACTION - LAW
Defendants.
MOTION FOR PRELIMINARY INJUNCTION
REOUESTING THE IMPOSITION OF A CONSTRUCTIVE TRUST
Plaintiff John M. Caddell, by and through his counsel, Goldberg Katzman, P.C., hereby
moves the Court, pursuant to Pa. R.C.P. 1531, for a preliminary injunction, as set forth in the
attached proposed order.
1. Plaintiff is John M. Caddell, an adult individual with an address of 340 North 25th
Street, Camp Hill, Pennsylvania 17011.
2. Defendant Electronics and Unit Record Datacenter, Inc., tJd/b/a EUR Systems is a
Pennsylvania business corporation with a registered address of 5040 Ritter Road,
Mechanicsburg, Cumberland County, PA 17055.
1
.. ..
3. Defendant~ Intec USA~ Inc.~ appears to be a corporation with a registered address
at 73-16 Drexel Brook Drive~ Drexel Hill~ Delaware County~ PA 19026 and a mailing address of
301 Perimeter Center North~ Suite 200~ At1anta~ GA 30346.
4. Defendant~ Intec Billing Services~ Inc.~ appears to be a corporation with a
registered address at 73-16 Drexel Brook Drive~ Drexel Hill~ Delaware County~ PA 19026 and a
mailing address of 301 Perimeter Center North~ Suite 200~ At1anta~ GA 30346.
5. Saratoga Partners (Saratoga) is a private investment firm~ with its principal place
of business located at 535 Madison Avenue~ New York~ NY 10022. Saratoga is in the business
of making equity investments in a variety of businesses~ and manages a fund called Saratoga IV ~
which is the major investor (approximately 85%) in EUR.
6. Whitby~ Santarlasci & Company (WSC) is a consulting firm~ with a principal
place of business located at 2210 Wyoming Avenue~ Northwest~ Washington~ DC 20008.
7. Simultaneously with the filing of this Motion for Preliminary Injunction~ Plaintiff
has filed a Complaint requesting preliminary and permanent injunctive relief. The Amended
Complaint is attached hereto as Exhibit A~ and incorporated by reference as if set out in full.
8. Also filed with this Motion is a Brief in Support of Plaintiff' s Motion for
Preliminary Injunction~ which is attached hereto as Exhibit B.
9. For the reasons explained in the complaint and in the brief in support of this
motion~ a preliminary injunction imposing a constructive trust over $600~000 ofEUR~s Assets~
or payment to be made by Intec~ pursuant to the AP A is warranted in this case.
10. Preliminary injunctions are mandated where six essential prerequisites are proven:
(1) a strong likelihood of success on the merits; (2) a showing ofitnmediate and irreparable harm
2
.
that cannot be compensated by money damages; (3) a showing that greater injury will result if
preliminary injunctive relief is denied then if such injunctive relief is granted; (4) a showing that
a preliminary injunction would restore the status quo; (5) the injunction Mr. Caddell seeks is
reasonably suited to abate the offending activity; and (6) there is no adverse affect on the public
interest. Kessler v. Broder, 851 A.2d 944, 947 (Fa. Super. 2004) appeal denied, 582 A.2d 676,
868 A.2d 1201 (2005); Alleghenv Anesthesiology Assocs. v. Allegheny Gen. Hosp., 826 A.2d
886, 891 (Fa. Super. 2003), appeal denied 577 Pa. 684,644 A.2d 550 (2004).
11. In this situation, all requirements are met.
12. First, Mr. Caddell has a strong likelihood of success on the merits since EUR has
clearly violated the language of the contract by terminating him, without any justification
whatsoever, allegedly "for cause." Mr. Caddell's termination does not fit the definition of
"cause" contained in Mr. Caddell's Executive Severance Agreement (the "Agreement"), giving
Mr. Caddell severance rights pursuant to Section 3 of his Agreement, and rights under
Pennsylvania's Wage Payment and Collection Law (WPCL).
13. Second, without an injunction creating a constructive trust, Mr. Caddell's
contractual rights, as a whole, are virtually destroyed, particularly where, after the asset sale,
EUR will cease to operate as a business. Thus, there is no possibility that Mr. Caddell can be
compensated by monetary damages and will suffer irreparable harm.
14. Third, greater injury will result if injunctive relief is denied, than if such
injunctive relief is granted, in that denial of a preliminary injunction will permit the closing to go
forward, with EUR dissipating all of its assets to the complete destruction of Mr. Caddell's
3
. ."
contractual rights, whereas granting the injunction only forces the parties to maintain the status
quo pending a determination of the contractual issues, and is less injurious than the alternative.
15. Fourth, a preliminary injunction will maintain the status quo pending a
determination of Mr. Caddell's legal rights, and will prevent complete dissipation ofEUR's
assets in the meantime.
16. Fifth, the requested injunction is reasonably suited to abate the offending activity.
Mr. Caddell asks only that portion ofEUR's funds, or Intec's payments at closing that would
cover his contractual claims be placed in a constructive trust, with the remaining amounts
distributed to EUR, per the terms of the Asset Purchase Agreement. These funds are only held
pending this legal action and then distributed to the rightful parties at the close of the proceeding.
17. Finally, the public interest in assuring compliance with contracts, and not
permitting an intentional dissipation of funds to avoid the claims of creditors is upheld by the
entry of an injunction of this nature.
WHEREFORE, it is respectfully requested that the court enter a preliminary injunction in
the nature of a constructive trust which commands that EUR and/or Intec set aside $600,000,
pending a final hearing on the merits of Mr. Caddell's claims.
Respectfully Submitted,
Date: August~ 2006
en E. Grubb, squire I.D. #75897)
320 Market Street, P. O. Box 1268
Harrisburg, P A 17108-1268
(717) 234-4161
Attorneys for Plaintiff
By:
4
.
.
CERTIFICATE OF SERVICE
And now, this .L25 day of August, 2006, I hereby certify that the foregoing document
was served on the following individuals via first class mail.
Jeffrey T. McGuire, Esquire
Caldwell & Kearns, P.C.
3631 North Front Street
Harrisburg, PA 17110-1533
Robert A. Graci, Esquire
Eckert Seamsns Cherin & Mellott, LLC
213 Market Street
Harrisburg, PA 17101
Saratoga Partners
535 Madison Avenue
New York, NY 10022
Whitby, Santarlasci & Company
2201 Wyoming Avenue Northwest
Washington, DC 20008
GO~d?
---st; . rubti .
. .
P<hLbit A
. ,.
Goldberg Katzman, P.C.
Steven E. Grubb, Esquire, I.D.# 75897
Attorney for Plaintiff
320 Market Street, Strawberry Square
P. O. Box 1268
Harrisburg, PA 17108-1268
(717) 234-4161
JOHN M. CADDELL.
Plaintiff
IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY, PENNSYLVANIA
v.
NO.
ELECTRONICS AND UNIT RECORD :
DATACENTER, INC., d/b/a EUR
SYSTEMS; INTEC, USA, INC.;
INTEC BILLING SERVICES, INC.;
SARATOGA PARTNERS,
and WHITBY, SANTARLASCI &
COMPANY
JURY TRIAL DEMANDED
CIVIL ACTION - LAW
Defendants.
NOTICE TO PLEAD
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 is
served, by entering a written appearance personally or by attorney and filing in writing with the
Court your defenses or objections to the claims set forth against you. You are warned that if you
fail to do so the case may proceed without you and a judgment may be entered against you by the
Court without further notice for any money claimed in the Complaint or for any other claim or
relief requested by the Plaintiff. You may lose money or property or other rights important to
you.
YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO
NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE
OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP.
CUMBERLAND COUNTY LAWYER REFERRAL SERVICE
32 S. Bedford Street
Carlisle, Pennsylvania 17013
(717) 249-3166
.
NOT/CIA
Le han demandado a usted en la corte. Si usted qui ere defenderse de estas demandas
expuestas en las paginas siguientes, usted tiene viente (20) dias de plazo al partir de la fecha de
la demanda y la notificacion. Usted debe presentar una apariencia escrita 0 en persona 0 por
abogado y archivar en la corte en forma escrita sus defensas 0 sus objectiones alas demandas en
contra de su persona. Sea adisado que si usted no se defiende, la sin previo aviso 0 notificacion
y por cualquier quja 0 puede perder dinero 0 sus propiedades 0 otros derechos importantes para
usted.
LLEVE ESTA DEMANDA A UN ABOGADO IMMEDIA TAMENTE. SI NO TIENE
ABOGADO 0 SI NO TIENE EL DINERO SUFICIENTE DE P AGAR TAL SERVICIO,
VA Y A EN PERSONA 0 LLAME POR TELEFONO A LA OFICINA CUY A DIRECCION SE
ENCUENTRA ESCRIT A ABAJO PARA A VERIGUAR DONDE SE PUEDE CONSEGUIR
ASISTENCIA LEGAL.
CUMBERLAND COUNTY LAWYER REFERRAL SERVICE
32 S. Bedford Street
Carlisle, Pennsylvania 17013R(717) 249-3166
.
Goldberg Katzman, P.C.
Steven E. Grubb, Esquire, I.D.# 75897
Attorney for Plaintiff
320 Market Street, Strawberry Square
P. O. Box 1268
Harrisburg, PA 17108-1268
(717) 234-4161 ·
IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY, PENNSYLVANIA
JOHN M. CADDELL.
Plaintiff
v.
NO.
ELECTRONICS AND UNIT RECORD :
DATACENTER, INC., d/b/a EUR
SYSTEMS; INTEC, USA, INC.;
INTEC BILLING SERVICES, INC.;
SARATOGA PARTNERS,
and WHITBY, SANTARLASCI &
COMPANY
JURY TRIAL DEMANDED
CIVIL ACTION - LAW
Defendants.
COMPLAINT
Plaintiff, John M. Caddell (Caddell), by and through his counsel, Goldberg Katzman,
P.C., alleges the following in support of this Complaint.
THE PARTIES
1. Plaintiff is John M. Caddell, an adult individual with an address of340 North 25th
Street, Camp Hill, Pennsylvania 17011.
2. Defendant Electronics and Unit Record Datacenter, Inc., t/d/b/a EUR Systems is a
Pennsylvania business corporation with a registered address of 5040 Ritter Road,
Mechanicsburg, Cumberland County, P A 17055.
1
.
3. Defendant, Intec USA, Inc., appears to be a corporation with a registered address
at 73-16 Drexel Brook Drive, Drexel Hill, Delaware County, P A 19026 and a mailing address of
301 Perimeter Center North, Suite 200, Atlanta, GA 30346"
4. Defendant, Intec Billing Services, Inc., appears to be a corporation with a
registered address at 73-16 Drexel Brook Drive, Drexel Hill, Delaware County, P A 19026 and a
mailing address of 301 Perimeter Center North, Suite 200, Atlanta, GA 30346.
5. Saratoga Partners (Saratoga) is a private investment firm, with its principal place
of business located at 535 Madison Avenue, New York, NY 10022. Saratoga is in the business
of making equity investments in a variety of businesses, and manages a fund called Saratoga IV,
which is the major investor (approximately 85%) in EUR.
6. Whitby, Santarlasci & Company (WSC) is a consulting firm, with a principal
place of business located at 2210 Wyoming Avenue NW, Washington, D.C. 20008
A. MR. CADDELL'S EMPLOYMENT AT EUR
7. Mr. Caddell began him employment at EUR on October 16, 2000 as Vice
President of Marketing and Business Development ofEUR Datacenter, Inc. pursuant to a three
year letter contract dated September 22, 2000, attached hereto as Exhibit A.
8. Pursuant to this offer of employment, Mr. Caddell re-Iocated his family from
Atlanta, Georgia to his present location.
9. The letter contract provided for an annual evergreen renewal of its three-year
term.
2
.
10. On, or about, July 1, 2002, after almost two years of employment at EUR, Mr.
Caddell entered into an "Executive Severance Agreement" ("Agreement") which is attached
hereto as Exhibit B.
11. The Agreement featured a severance package in the event EUR, or EUR's
successor, terminated Mr. Caddell without cause, as follows:
3. Obli2ation of the Comuanv Uuon termination Under Section 1.
If the Executive's employment shall have been terminated by the
Company under Section 1 (other than for Cause) or by the Executive for
Good Reason.
(a) the Company shall make a lump sum cash payment to the
Executive within 30 days after the Date of Termination of the accrued
Amounts earned but unused Paid Time Off and any money that is
normally paid during this time period, except to the extent under the terms
of a Plan they are to be paid at a later date;
(b) the Company shall pay to the Executive in equal installments,
made at least monthly, an aggregate amount equal to two times the
Executive's Annual Base Salary in effect on the Date of Termination over
the twenty-four months following the Date of Termination and;
(c) until the earlier of eighteen months following the Date of
Termination or the date the Executive becomes entitled to comparable
benefits from another employer, the Executive shall be entitled to receive
medical coverage and life insurance as provided under the Company's
Plans from time to time and the Executive's cost therefor shall not exceed
the cost paid by the other executives of the Company for comparable
coverage.
12. As part of the Agreement, Mr. Caddell also agreed to restrictive covenants
(section 7 of Ex. A).
13. Mr. Caddell performed his services for EUR under the above terms in an
exemplary fashion, receiving excellent performance reviews.
B. EUR SELLS ITS ASSETS TO INTEC USA AND INTEC BILLING SYSTEMS
3
.
14. Prior to March of 2006, Mr. Caddell first became aware that EUR was
considering a sale of its assets to a third party.
15. Negotiations progressed to the point that Intec USA, Inc. and Intec Billing
Services, Inc. (collectively, "Intec") became the likely purchaser of the assets.
16. Of high relevance to Mr. Caddell's situation at this point was Section 8(c) of his
Agreement which reads:
The Company rEURl will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company prior
to or concurrent with any such event of succession to assume
expressly and agree to oerform this Agreement in the same manner
and to the same extent that the Company would be required to
perform it if no such succession had taken place and to provide the
executive with written evidence of such assumotion and agreement
(which may include documents sufficient to evidence a transaction
whereby such assumption and agreement is by operation of law).
As used in this Agreement, "Company" shall mean the company as
hereinbefore defmed and any successor to its business and/or
assets as aforesaid that assumes and agrees to perform this
agreement by operation of law, or otherwise. (Emphasis added.)
17. Thus, EUR was required to assign Mr. Caddell's Agreement to the purchaser of
EUR's assets as part of any transaction.
18. As negotiations between EUR and Intec progressed, it became apparent that EUR
had no intention of assigning Mr. Caddell's Agreement to its successor, Intec.
19. EUR's counsel communicated as much as early as May 9, 2006.
20. On July 17,2006, EUR entered into an Asset Purchase Agreement (APA) with
Intec whereby Intec agreed to assume all or substantially all ofEUR's assets. Intec, however,
did not assume EUR's liabilities unless such liabilities were expressly stated in the APA. (The
4
.
AP A is attached hereto as Exhibit C. It is a voluminous document. Relevant excerpts are
attached hereto, but the entire document is available).
21. The APA confirms at Section 5.10 that Mr. Caddell's Agreement would not be
assumed by Intec. (See Also Disclosure Schedule 2.2(d), item 15, attached as part of Exhibit C).
22. Furthermore, Intec did not assume any liability for severance payments to Mr.
Caddell pursuant to his Agreement, leaving this liability to EUR.
23. EUR will not have the resources after the closing on the APA from which to make
the payments due Mr. Caddell under his Agreement as it will be transferring all of its assets.
24. AU proceeds from the asset sale will be distributed to EUR's creditors, including
investment banks. It is believed that Saratoga and WSC will also benefit financially from the
sale.
25. Throughout the negotiations, WSC pushed for agreement and closing in order to
be able to recover a "success fee" which is believed to be $325,000, payable at closing of the
Intec/EUR transaction.
26. WSC has negotiated and encouraged EUR to close on this transaction and
disregard its contractual obligations to Mr. Caddell.
27. Upon information and belief, WSC is motivated by its own interest to ensure that
it receives substantially all of its "success fee" from EUR, while Mr. Caddell is denied the
amount due him.
28. Similarly, Saratoga, as majority shareholder in EUR, has not been operating with
EUR's interests in mind. Upon information and belief, Saratoga has a long-standing relationship
with the banks from which EUR obtained loans. Saratoga seeks to continue its preferred
5
positions of standing with these banks by ensuring that the banks receive payment on EUR's
loans.
29. In that regard, Saratoga's paramount concern is the banks' economic interests, not
EUR's.
30. Saratoga is further motivated to maintain its reputation so that it will be able to
finance future transactions with the assistance of these banks.
31. Saratoga is motivated by an attempt to improve its standing with the banks and
recovery as a creditor ofEUR by reducing the amount of funds avail~ble to pay Mr. Caddell and
other similarly situated employees with as much money as possible going to the banks.
Saratoga's actions show no concern about preserving EUR's financial wellbeing, including its
ability to comply with its contracts with executives.
32. Upon information and belief, Saratoga and WSC have caused EUR to delay
action in resolving Mr. Caddell's severance issues with the bad-faith intent of pressuring the
employees to accept less money for their claims - leaving more money available to Saratoga and
WSC.
33. Upon information and belief, the intent ofWSC, Saratoga, and EUR was to place
Mr. Caddell in the position of using the pendency of the Intec transaction to coerce Mr. Caddell
into surrendering most or all of his rights under his Agreement.
34. WSC, Saratoga, and EUR have engaged in tactics of delay with the hope of
allowing the EURlIntec transaction to occur, dissipating the payments made to EUR as a result
of the sale, to themselves and to the investment banks with which, in particular, Saratoga, IS
affiliated, leaving Mr. Caddell, and other similarly situated executives, with rights only against
6
EUR, which, after closing, will be but a shell corporation with no financial ability to handle the
relevant claims.
35. This motivation is further obviated in EUR's litigation tactics, as is described
below in paragraphs 37 through 49.
C. MR. CADDELL ASSERTS HIS RIGHTS UNDER HIS AGREEMENT
36. EUR's unabashed and blatant disregard for Mr. Caddell's contractual rights in the
APA, and the belief that a closing was going to occur as early as July 27, 2006 (See APA at
~2.3), left Mr. Caddell no choice but to initiate legal proceedings against EUR and Intec to
enforce the terms of his Agreement, particularly the requirement of an assignment, as stated in
Section 8( c) of his Agreement.
37. Mr. Caddell initiated this action on July 18, 2006, through the filing of a
Complaint and Motion for Preliminary Injunction which sought to stay the closing of the EUR-
Intec transaction pending determination of Mr. Caddell's assignment rights, and which would
also compel assignment of the Agreement.
38. A Preliminary Injunction hearing was scheduled for July 27, 2006 before the
Honorable Edward Guido.
39. Counsel for EUR alerted counsel for Mr. Caddell that the closing would occur no
earlier than August 21, 2006, but no later than August 31, 2006, and suggested that the
Preliminary Injunction hearing be postponed so the parties would have time to discuss and,
potentially, settle Mr. Caddell's dispute.
7
40. Relying upon this representation, Mr. Caddell requested, and was granted, a
postponement of the July 27 hearing until August 21, 2006.
41. Rather than engage in any settlement discussions, EUR used this delay to
terminate Mr. Caddell on August 15,2006 for what it termed "cause."
42. The termination letter was signed by Charles Phillips, a principal at Saratoga.
43. No basis for the termination for "cause" was given in the termination letter,
attached hereto as Exhibit D, and no reason which would permit a termination for cause exists as
Mr. Caddell performed his job responsibilities in an exemplary fashion for EUR up to the date of
his termination, even in the face ofEUR's complete disregard for his contractual rights, and even
while EUR refused to engage him in settlement discussions, contrary to the representations that
caused Mr. Caddell to delay the July 27, 2006 preliminary injunction hearing.
44. It is believed that Mr. Caddell's termination was nothing more than a tactical
move taken by EUR, with the full support and encouragement of Saratoga and WSC, to
eliminate the possibility that a court would enjoin the closing of the EUR-Intec transaction, or
force EUR into assigning Mr. Caddell's Agreement as part of the asset sale, as requested in Mr.
Caddell's Motion for Preliminary Injunction.
45. Such a tactic was done in bad faith and in perpetuation ofEUR, WSC and
Saratoga's own financial interests, at the expense ofEUR's contractual undertaking to Mr.
Caddell.
46. This tactic was in no way related to Mr. Caddell's performance or for "cause" as
defined in Section 1 of the Agreement.
8
47. EUR, with the knowledge, support and endorsement of Saratoga and WSC, next
sought to delay the preliminary injunction hearing of August 21,2006 by removing this case to
federal court on August 16, 2006, a day after it fired Mr. Caddell, thereby depriving the state
court of jurisdiction to hold the August 21 hearing.
48. Despite Mr. Caddell's filing of an Emergency Motion to Remand the case back to
state court the next day, its granting only occurred after the passing of the August 21 date.
49. These two tactics were taken in bad faith, without basis and with the sole purpose
of enriching EUR, WSC and Saratoga, by permitting the EUR-Intec transaction to occur and
leaving Mr. Caddell, and similarly situated executives, to assert claims against a shell
corporation which is believed to have no assets and no ability to pay the claims the executives
may have against EUR.
COUNT I
BREACH OF CONTRACT (WRONGFUL TERMINATION) V. EUR
50. The allegations of paragraphs 1-48, above, are incorporated by reference as if set
out in full.
51. EUR's termination of Mr. Caddell on August 15,2006 was done without "cause"
as defined in section 1.(a)(i) of Mr. Caddell's Agreement (Ex. B, hereto).
52. EUR's termination of Mr. Caddell was nothing more than a litigation tactic to
assure that the Intec - EUR transaction occurred, and to position Mr. Caddell, and similarly
situated executives, so their claims for severance payments, upon termination, would be against
an assetless company with no ability to pay.
9
53. EUR had no basis or cause for its termination of Mr. Caddell, entitling him to
benefits described in section 3 of the Agreement, including payment of salary for two years at
Mr. Caddell's rate of pay as of his termination, continuation of benefits, and payment of all
amounts of accrued, but unused, Paid Time Off.
WHEREFORE, Mr. Caddell requests that judgment be entered in his favor in an amount
in excess of$35,000, the arbitration limit in Cumberland County, together with all costs of court,
reasonable attorneys fees, and whatever other remedy this court deems just and proper.
COUNT II
EQUITABLE IMPOSITION OF CONSTRUCTIVE TRUST THROUGH
GRANT OF PRELIMINARY AND PERMANENT INJUNCTION V. EUR,
INTEC USA, INC. AND INTEC BILLING SYSTEMS, INC.
54. The allegations of paragraphs 1-52, above, are incorporated by reference, as if set
out in full.
55. EUR has in its possession and control funds that must, under contract and in
equity, be paid to Mr. Caddell under the terms of the Agreement.
56. Under the facts as set forth above, including the execution of the APA and the
subsequent transfer of substantially all ofEUR's assets to Intec, EUR will soon lack the financial
resources to satisfy its obligations to Mr. Caddell.
57. Equity demands that a constructive trust be imposed so that EUR cannot dissipate
funds to the benefit of its creditors, including WSC and Saratoga, leaving EUR's executives and
employees, including Mr. Caddell, without an appropriate remedy to satisfy their clear
contractual rights.
10
58. Alternatively, the court should order Intec to hold the $600,000 of the funds it will
pay EUR, pursuant to the AP A, in constructive trust.
59. Relief in the nature of a preliminary, and then permanent, injunction which
imposes a constructive trust is necessary.
60. Mr. Caddell has no adequate remedy at law.
61. Mr. Caddell will experience immediate and irreparable harm in that a direct
contractual obligation he has with EUR is being violated, and will continue to be violated, with
no remedy to Mr. Caddell where EUR will soon be a shell corporation, having dissipated and
wasted its assets and all proceeds from the EUR - Intec transaction.
62. Mr. Caddell is entitled to the immediate imposition of a constructive trust on such
sums as are and will become due to him under the terms of Section 3, together with his costs and
attorneys fees to which Mr. Caddell is entitled, which sum is estimated at approximately
$600,000.00.
WHEREFORE, the following relief is requested:
a. The court enter an injunction against EUR and/or Intec in the form of a
constructive trust in the amount of $600,000, which is necessary to protect
Mr. Caddell from the wrongful dissipation and waste of a sum of money
currently held or to be received by EUR from Intec;
b. That the money held in constructive trust be paid over the Mr. Caddell,
together with interest at the maximum legal rate, and costs and attorneys
fees allowed by the law; and
c. Whatever other remedies this court deems just and proper.
11
COUNT III
CLAIM UNDER PENNSYLANIA'S WAGE PAYMENT AND COLLECTION LAW V.
EUR
63. The averments of paragraphs 1 through 60 above are incorporated by reference as
if set out in full.
64. EUR's wrongful termination of Mr. Caddell, allegedly for cause, has deprived
Mr. Caddell of severance benefits under his Agreement, as stated at Section 3 of the Agreement.
65. Severance benefits of this nature are defined as wages under Pennsylvania's
Wage Payment and Collection Law. 43 P.S. ~260.1.
66. EUR has not paid, nor indicated it will pay, any of the promised benefits to Mr.
Caddell.
WHEREFORE, Mr. Caddell requests that judgment be entered in his favor in an amount
in excess of $35,000, the arbitration limit in Cumberland County, together with all costs of court,
including attorneys fees, and liquidated damages under Pennsylvania's Wage Payment and
Collection Law, 43 P .S. ~260.1 et seq., and whatever other remedies this court deems just and
proper.
COUNT IV
TORTIOUS INTERFERENCE WITH CONTRACT V. WSC AND SARA TOGA
67. The averments of paragraphs 1 through 64 above are incorporated by reference as
if set out in full.
68. Defendants Saratoga and WSC are aware of the terms of the Agreement, and
specifically of the promises, assurances, and protections made and granted to Mr. Caddell under
Section 8.
12
69. During the negotiation of the APA, Saratoga and WSC have deliberately and
maliciously induced and caused EUR to renege on its promises to Mr. Caddell under the
Agreement by not only failing to require Intec to assume EUR's duties to Mr. Caddell under the
Agreement, but also by leaving any claims to be made by Mr. Caddell against only a shell
company - EUR.
70. WSC and Saratoga also recommended, encouraged and conspired to terminate
Mr. Caddell, for no reason other than as a litigation tactic to assure the EUR/Intec transaction
would be consummated, which would result in their financial enrichment, leaving Mr. Caddell
with only a claim against a shell company.
71. The intentional acts of Saratoga and WSC were significant factors inducing EUR
to breach its Agreement with Mr. Caddell.
72. This interference was wrongful, vexatious, unjustified and unprivileged.
WHEREFORE, Mr. Caddell demands judgment in his favor and against Defendants
Saratoga and WSC, jointly, severally and in the alternative, in an amount in excess of $35,000,
the arbitration limit in Cumberland County, together with all costs, interest, punitive damages
and such other relief as the Court deems just.
COUNT V
BREACH OF IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING V. EUR
73. The averments of paragraphs 1 through 70 above are incorporated by reference as
if set out in full.
74. EUR owes a duty to Mr. Caddell to perform its obligations under the Agreement
and otherwise conduct itself in accordance with the implied duty of good faith and fair dealing.
13
75. Mr. Caddell is entitled to expect that EUR would not breach the Agreement.
76. EUR breached its duty of good faith and fair dealing to Mr. Caddell by, among
other things, entering into negotiations with Intec for the sale ofEUR's assets through an Asset
Purchase Agreement that was knowingly designed to deny Mr. Caddell his bargained-for rights
under the Agreement, under precisely those circumstances anticipated by the protective clause at
Section 8.
77. EUR's breach deprives Mr. Caddell of the fruits of his bargain with EUR by
failing to require Intec to perform EUR's obligations under the Agreement, and by setting in
place a chain of events that resulted in Mr. Caddell's termination without cause, yet deny him
any of the compensation of benefits that he is entitled to receive in such circumstances.
78. By consciously engaging in the intentional and malicious conduct described
above, EUR breached the implied covenant of good faith and fair dealing contained in the
Agreement by depriving Mr. Caddell of the benefit of the contract, and has thereby breached the
Agreement.
14
WHEREFORE, Mr. Caddell requests that judgment be entered in his favor in an amount
in excess of $35,000, the arbitration limit in Cumberland County, together with all costs of court,
reasonable attorneys fees, and whatever other remedy this court deems just and proper.
Respectfully Submitted,
138502.1
.G~&1
By. . ... I
~-Steven E. Grubb;1!Squire (J.D. #75897)
320 Market Street
P. O. Box 1268
Harrisburg, PA 17108-1268
(717) 234-4161
Attorney for Plaintiff
Date: August 25, 2006
15
VERIFICATION
I, Steven E. Grubb, Esquire, am the attorney representing John M. Caddell in the within
matter. I have gone over the foregoing Amended Complaint with Mr. Caddell, and he has
verified to me that the facts stated therein are true and correct to the best of his knowledge,
information, and belief. Mr. Caddell was unavailable to sign the verification, but will submit a
substitute verification upon his availability.
I understand that any false statements herein are made subject to penalties of 18 Pa. C.S.
~4904, relating to unsworn falsification to authorities.
Date:
~iJj/O~
By:
fI
. .
Exhibit A
.~
04"
- .
. . ...... _,... t " , .... . . .. -. .-- - - ... - - - -. - -. . -...
I H89
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BUR
5040 R.ner !lDcd
. P. o. Boz 380
M~hameBbu7'g. Pet. 17056
Datacenter, Inc.
September 22, 2000
TlllllphoM: 717.697.6800
John M. Caddell
1115 University Drive
Atlanta. GA 30306
Dear John:
I am pleased to formally extend this offer of employment to you for the position of
Vice President of Marketing and Business Development of EUR Datacenter, Inc.
This offer provides for a term of three years with an annllal-~vAmraen renewal."
~plate that you would commence employment by no later than October
~~bject to the terms and conditions set forth below. This offer is contingent
upon the satisfactory completion of any and all reference checks.
Base Salary
Your base salary will be at the annual rate of $200,000, payable semi-monthly.
less appropriate federal, state, and local statutory dedudions. This base salary
will be reviewed annually.
Performance Incentive Plan
Upon commencing employment, you will be eligible to participate in the
company's Performance Incentive Plan. For the remainder of the year 2000, we
will guarantee you a minimum $50,000 bonus although you may be able to
exceed this amount based on performance. Half of this amount. $25,000. will be
paid shortly after your start date as a sign-on incentive.
For 2001 and thereafter. your incentive will be based on company performance,
consistent with other members of senior management Your target bonus will be
50% of your base salary achieved if EUR meets its EBITDA Objective. No bonus
will be paid if EUR does not achieve at least 75% of its objective. 400/0 of the
bonus will be paid at 75% of objective. 100% of bonus will be paid at 100% of
objective. 200% of bonus will be paid at 125% of objectiVe. Bonus is prorated
between these points.
Eauitv Position
As the Vice President of Marketing and Business Development. you have the
opportunity to eam equity representing 0.75% of the Company. equivalent to the
s~
. ....._. .'.)''\' .,nln "n.... _ .
~
September 22, 2000
Page 2 of 4
. .
. appreciation on a $350,000 equity Investment. This incentive equity wUl receive
value after repayment of cash equity and 9% accretion invested in the
Transaction analogous to stock options but with capital gains treatment.
50% of the incentive stock will time vest over a 5-year period in equal annual
installments. The other 50% of the Incentive stock wm performance vest based
on achieving sales and EBITDA targets:
Target ($5 in Millions)
Trailing 4 Quarters' Net Revenues of
$45.0
TraUing 4 Quarters' Net Revenues of
$52.0 or EBITDA of $24.0
Trailing 4 Quarters' Net Revenues of
$60.0 or EBITDA of $28.0
Incremental Amount Vesting
1/3 of Perfonnance Portion
1/3 of Performance Portion
Full vesting of Performance Portion
Additional Eauitv Investment
In concert with the entrepreneurial spirit and culture of EUR, you are invited to
purchase up to $200,000 of the companys common stock on the same basis as
Saratoga Partners and other members of EUR's management team. If desired, a
loan will be provided to assist you with said purchase up to the amount of your
equity investment. This loan will bear interest at the same rate as EUR's senior
debt, and be repaid annually with the lesser of $25,000 or 50% of the after-tax
proceeds of your fiscal year-end perfonnance Incentive compensation payments.
Relocation
It is the intent of EUR to provide you with assistance for your temporary living
expenses in Mechanicsburg, and for your major relocation costs once you
relocate your family later this year, as follows:
· Temporary living expenses for up to one hundred twenty (120) days, if
needed, to include meals and lodging.
· Two house hunting trips of up to a total of six days for you and your family.
· Airfare for one retum trip home every two (2) weeks of temporary living.
· Reimbursement of sales commission on tonner home.
· Packing and Shipment of household goods (including one auto) and
unpacking to a new location in the Mechanicsburg. PA area.
· Up to two thousand dollars ($2.000) of additional clOsing costs on sale of
former home and/or pUrchase of new home.
· Gross up of applicable expenses per IRS standards.
In the event that you voluntarily leave the company within two years from theneffective date of your employment, you will be required to reimburse EUR for the
total amount paid to YOLl for these relocation expenses.
;J~
04-;
"
......
,
September 22, 2000
Page 3 of4
. Other
You will be required to enter into a non-compete agreement with EUR. For a two
year period following the termination of your employment you'll be restricted from
wOrking for an organization involved with oU1sourced services and systems for
billing and customer care to telecom service providers.
You wUl be entitled to tile full range of EUR's employee benefits that include;
Medical coverage Blue CrossIBlue Shlekr Custom Blue
PPO, effective the fl. "fila moMh ~1
fgIlQ~:Ji"g sa ft~ efftJ:llsYfR8~ j\bt/ J) Z.
Dental EffectiVe January 1 following 1 year of
employment
Life Insurance $10,000 effective the first of the month
following employment date
2% x salary up to $175,000 effective
January 1 following 1 year of
employment
Holidays 7 paid
Personal Days 2 paid
Sick Leave 10 days per calendar year accrued 1
per month
Vacation 2 weeks per calendar year
3 weeks after 10 years
4 weeks after 20 years
Long Tenn Disability Effective January 1 following 1 year of
employment
Profit Sharing Plan January 1 following date of
employment
A summary of the benefit plans for which you would be eligible will be forwarded
to YOIJ prior to your commencing employment
q~
v~
04-21-06
..
September 22, 2000
Page 4 of4
John, I would appreciate your signifying that you understand and accept the
. tenns of this offer of employment by acknowledging below and retuming this
original letter to me. We look forward to your joining the EUR team, and are
convinced that you will help us build a very successful company.
Sincerely,
~~
Creedin S. Paulus
President and Chief Executive Officer
CSP/mg
Enclosures
Agreed this 14
day of September 2000.
([r-t-
. .
Exhibit B
Executive Severance Agreement
EUR Systems
Confidential Information
EXECUTIVE SEVERANCE AGREEMENT
TIllS EXECUTIVE SEVERANCE AGREEMENT is made effective the first day of
2002, by and between EUR Systems, with principal offices located at 5040 Ritter
P.O. Box 380, Mechanicsburg, Pennsylvania 17055 (hereinafter referred to as the
"Company"), and John M. Caddell, a resident of Camp Hill, Cumberland County, Pennsylvania
(hereinafter referred to as the "Executive").
WIT N E SSE T H:
WHEREAS, the Executive is now employed by the Company, and the Executive and the
Company desire to enter into an agreement relating to severance:
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein
set forth, it is agreed as follows:
1. Termination. The Company may terminate the Executive's employment with or
without Cause and Executive may terminate his employment with or without Good Reason.
(a) Dermitions. For the purposes of this Section 1.
(i) Termination with cause is a result of
(i) any material breach of a material provision of the Agreement by the Executive, (ii) a violation
of company policy by the Executive, (iii) the Executive not performing the duties and
responsibilities of the position or the duties assigned, or (iv) engagement by the Executive in any
criminal activity. ; (v) engagement in any activity which could be detrimental to the business of
the company.
(ii) Termination with good reason means the occurrence of any of the
following events provided that the executive delivers a Notice of Termination to the Company'
within 60 days of the occurrence of such event and the Company shall not have cured the
circumstances giving rise to such event within 30 days of its receipt of such Notice of
Termination: (i) any material breach of a material provision of the Agreement by the Company,
(ii) the assignment to the Executive by the Company of duties and responsibilities that are
significantly different from the duties and responsibilities of an executive of the Company or (iii)
the relocation by the Company of the Executive's principal business location to a site that is not
within 50 miles of Mechanics burg, Pennsylvania.
Revised on 7/03/02
Page 1 of7
/~
,.
Executive Severance Agreement
EUR Systems
Confidential Information
2. Notice of Termination. Any termination of the Executive's employment with
the Company (other than due to death) shall be effected by written notice delivered to the other
party and, if by the Company for Cause or by the Executive for Good Reason, shall be
communicated by a Notice of Termination to the Executive or the Company, as applicable, given
in accordance with this Agreement. The failure by the Company to set forth in the Notice of
Termination any fact or circumstance that contributes to a showing of Cause shall not waive any
right of the Company hereunder or preclude the Company from asserting such fact or
circumstance in enforcing the Company's rights hereunder. The failure by the Executive to set
forth in the Notice of Termination any fact or circumstance that contributes to a showing of Good
Reason shall not waive any right of the Executive hereunder or preclude the Executive from
asserting such fact or circumstance in enforcing the Executive's rights hereunder.
3. Obli2ation of the Company Upon Termination Under Section 1. If the
Executive's employment shall have been terminated by the Company under Section 1 (other than
for Cause) or by the Executive for Good Reason:
(a) the Company shall make a lump sum cash payment to the Executive within 30
days after the Date of Termination of the accrued Amounts, earned but unused Paid Time Off
and any money that is normally paid during this time period, except to the extent under the terms
of a Plan they are to be paid at a later date;
(b) the Company shall pay to the Executive in equal installments, made at least
monthly, an aggregate amount equal to two times the Executive's Annual Base Salary in effect
on the Date of Termination over the twenty-four months following the Date of Termination and;
(c) until the earlier of eighteen months following the Date of Termination or the
date the Executive becomes entitled to comparable benefits from another employer, the
Executive shall be entitled to receive medical coverage and life insurance as provided under the
Company's Plans from time to time and the Executive's cost therefor shall not exceed the cost
paid by the other executives of the Company for comparable coverage.
4. Voluntary or For Cause Termination. If the Executive's employment shall
be terminated for Cause or the Executive voluntarily terminates employment. (other than for
Good Reason) excluding death, Disability or Retirement, such termination shall be without
further obligations to the Executive other than Accrued Amounts.
5. Release A2reement. The benefits pursuant to Section 1 are contingent upon the
Revised on 7/03/02 Page 2 of 7
0f</
Executive Severance Agreement
EUR Systems
Confidential Information
Ex~utive (I) executing a Separation and Release Agreement (the "Release Agreement") upon or
after any Date of Termination, a copy of which is attached as Exhibit A to this Agreement, and
(II) not revoking or challenging the enforceability of the Release Agreement.
6. No Miti2ation. etc. The amounts payable hereunder shall not be subject to
obligations to mitigate for offset by any amounts earned from any future employers. The
Company shall have the right to setoff the amounts required to be paid to the Executive under
this Agreement against any amounts owed by the Executive to the Company or its affiliates and
nothing in this Agreement shall prevent the Company from pursuing any other available remedies
against the Executive.
7. Restrictions and Obli2ations of the Executive.
!!l Considerations for Restrictions and Covenants. The parties hereto
acknowledge and agree that a principal consideration for the agreement to make the payments
provided in Section 3 hereof from the Company to the Executive and the grant to the Executive
of the equity-based compensation as set forth in Section 3 hereof is the Executive's compliance
with the undertakings set forth in this Section 6. Specifically, the Executive agrees to comply
with the provisions of this Section 6 irrespective of whether the Executive is entitled to receive
any payments under Section 1 of this Agreement.
{]ll Confidentiality. The confidential and proprietary information and trade
secrets of the Company and its affiliates are among their most valuable assets, including but not
limited to, their customer and vendor lists, database, computer programs, frameworks, models,
their marketing programs, their sales, financial, marketing, training, and technical information,
and any other information, whether communicated orally, electronically, in writing or in other
tangible forms concerning how the Company and its affiliates create, develop, acquire or
maintain their products, services and marketing plans, target their potential customers and
operates their businesses. The Company and its affiliates have invested, and continue to invest,
considerable amounts of time and money in obtaining and developing the goodwill of their
customers, their other external relationships, their data systems and data bases, and all the
information described above (hereinafter collectively referred to as "Confidential Information"),
and any misappropriation or unauthorized disclosure of Confidential Information in any form
would irreparably harm the Company and its affiliates. The Executive shall hold in a fiduciary
capacity for the benefit of the Company and its affiliates and their businesses, which shall have
Revised on 7/03/02
Page 3 of7
<fti/
Executive Severance Agreement
EUR Systems
Confidential Information
b~n obtained by the Executive during the Executive's employment by the Company which shall
not be or become public knowledge (other than by acts by the Executive or representatives of the
Executive in violation of this Agreement). After termination of the Executive's employment
with the Company, the Executive shall not, without the prior written consent of the Company or
as may otherwise be required by law or legal process, communicate, divulge or use any such
information, knowledge or data to anyone other than the Company and those designated by it.
~ Non-Solicitation or Hire. During the Employment Period and for a two-year
period following the Date of Termination of the Executive's employment for any reason, the
Executive shall not, directly or indirectly, for himself or on the behalf of on in conjunction with
any person, partnership, corporation or other entity, (i) employ or seek to employ any person who
is at the Date of Termination (unless terminated by the Company), an employee of the Company
or any of its affiliates or otherwise solicit, encourage, cause or induce any such employee of the
Company or such affiliates to terminate such employee's employment with the Company or such
affiliate for the employment of another company (including for this purpose the contracting with
any person who was an independent contractor (excluding management consultants of the
Company or an affiliate during such period) or (ii) knowingly take any action (and will cease all
such actions immediately upon obtaining knowledge thereof) that would interfere with the
relationship of the Company or its affiliates with their suppliers or customers, or otherwise solicit
the Company's or its affiliates' customers, with respect to a Restricted Business, without, in
either case, the prior written consent of the Company's Board, or knowingly engage in any other
action or business (and will cease all such engagements immediately upon obtaining knowledge
thereof) that would have an adverse effect on the Company or its affiliates.
@ Non-Competition. During the Employment Period and for a two-year period
following the Date of Termination of the Executive's employment for any reason, the Executive
shall not, directly or indirectly:
(i) engage in any managerial, administrative, advisory, consulting,
operational or sales activities in a Restricted Business anywhere in the Restricted Area,
including, without limitation, as a director, officer or partner of a business engaging in such
Restricted Business, or
(ii)
organize, establish, operate, own, manage, control or have a direct or
Revised on 7/03/02
Page 4 of7
~~.
Executive Severance Agreement
EUR Systems
Confidential Information
inqirect investment or ownership interest in a Restricted Business or in any corporation,
partnership (limited or general), limited liability company enterprise or other business entity that
engages in a Restricted Business anywhere in the Restricted Area. Nothing contained in this
Section 7( d) shall prohibit or otherwise restrict the Executive from acquiring or owning, directly
or indirectly, for passive investment purposes not intended to circumvent this Agreement,
securities of any entity engaged, directly or indirectly, in a Restricted Business if (i) such entity is
a public entity and the Executive (A) is not a controlling person of, or a member of a group that
controls, such entity and (B) owns, directly or indirectly, no more than 3% of any class of equity
securities of such entity; (ii) such entity is not a public entity and the Executive (A) is not a
controlling person of, or a member of a group that controls, such entity and (B) does not own,
directly or indirectly, more than I % of any class of equity securities of such entity or (iii) such
investment is through a mutual fund, private equity fund or other pooled account ("Pooled
Equity") and Executive satisfies the requirements of (i) (A) and (i) (B) with regard to such
Pooled Entity.
~ Definitions. For purposes of this Section 7:
(i) "Restricted Business" means (i) any business which provides software,
systems, professional services, or outsourced services for billing and customer management to
telecommunications service providers, or (ii) such other business, to be mutually agreed on by
the parties, as may be conducted by the Company after the date hereof during the employment
period. In the case of multi-divisional enterprises in which one division may provide such
services, divisions which do not provide these services are not Restricted Businesses.
(ii) "Restricted Area" means the United States and Canada and any
country where the Company directly provides outsourced billing, billing software, professional
services, and customer management system services for its customers.
ill Relief. The parties hereto hereby acknowledge that the provisions of this
Section 7 are reasonable and necessary for the protection of the Company and its affiliates. The
parties further acknowledge and agree that the Company's business is worldwide and the
definition of "Restricted Business" in Section 7(e) is reasonable and necessary for the protection
of the Company and its affiliates in light of such worldwide business. In addition, the Executive
further acknowledges that the Company and its_affiliates may be irrevocably damaged if such
covenants are not specifically enforced. Accordingly, the Executive agrees that, in addition to
Revised on 7/03/02
Page 5 of7
~r-'
Executive Severance Agreement
EUR Systems
Confidential Information
any other relief to which the Company may be entitled, the Company will be entitled to seek and
obtain (without the requirement of any bond) injunctive relief for the purposes of restraining the
Executive roam any actual or threatened breach of such covenants or such other relief as may be
required to specifically enforce any of such covenants from a court or competent jurisdiction.
The Executive hereby agrees and consents that such injunctive or other relief may be sough ex
parte in any state of federal court of record in the State of Pennsylvania. The Executive agrees to
and hereby does submit to in personam jurisdiction in the State of Pennsylvania. In addition,
without limiting the Company's remedies for any breach of any restriction on the Executive set
forth in this Section 7, except as required by law, the Executive shall not be entitled to any
payments set forth in Section 1 hereof if the Executive breaches any of the covenants applicable
to the Executive contained in this Section 7, the Executive will immediately return to the
Company any such payments previously received upon such a breach, and, if the event of such
breach, the Company will have no obligation to pay any of the amounts that remain payable by
the Company under Section 1.
{g} Exceptions. Any exceptions to Section 7 must be approved by the Chief
Executive Officer and must be documented as an Addendum to this agreement.
(i) If the Executive terminates employment voluntarily without Good
Reason and will not be receiving any type of severance from the company, then it is expected
that the Executive would still abide by the expectations that are covered in Section 7 except for
paragraph 7 (d) "Non-Competition."
8. Successors: Assimment.
{!l Bv the Executive. Neither this agreement nor any right, duty, obligation or
interest hereunder shall be assignable or delegable by the Executive without prior written consent
of the Company; provided, however, that nothing in this Section 8(a) shall preclude the
Executive from designating any of his beneficiaries to receive any amount payable hereunder
upon his death, or preclude his executors, administrators, or other personal representatives, from
assigning any such right or interest to the person or persons entitled thereto.
!I!l By the Company. Neither this agreement nor any right, duty, obligation or
interest hereunder shall be assigned or delegable by the Company without prior written consent
of the Executive, other than any assignment to any entity that succeeds to substantially all the
business operations and/or assets of the Company.
Revised on 7/03/02 Page 6 of 7
-4~
Executive Severance Agreement
EUR Systems
Confidential Information
~ The Company will require any successor (whether direct or indirect, by
pmchase, merger, consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company prior to or concurrent with any such event of succession to assume
expressly and agree to perform this Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such succession had taken place_ and to
provide the_Executive with written evidence of such assumption and agreement (which may
include documents sufficient to evidence a transaction whereby such assumption and agreement
is by operation of law). As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as aforesaid that assumes and
agrees to perform this Agreement by operation of law, or otherwise.
9. Miscellaneous.
!!} Goveminl! Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Pennsylvania, without reference to principles of conflict
oflaws.
.all Captions. The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect.
~ Amendment. This Agreement may not be amended or modified otherwise
than by a written agreement executed by the parties hereto or their respective successors and
legal representatives.
The parties to this Agreement have executed this Agreement as of the day and
year first written above.
CUti~~M
amev&;", A . ~~dt I !
Title: Vf.A..rbf,(J d fj._SI--Jf f)eVI
=/7fe~
Name: J Ocf./J
Title: d.€.iJ
Revised on 7/03/02
Page 7 of7
Separation and Release Agreement
EUR Systems
Confidential Information
EXHIBIT A
SEPARATION AND RELEASE AGREEMENT
This Separation and Release Agreement ("Agreement") is entered into as of this
day of , between and any successors thereto (collectively, the
"Company) and (the "Executive').
The Executive and the Company agree as follows:
1. The employment relationship between the Executive and Company
terminated on (the "Termination Date').
2. In accordance with Section 1 of the Executive's Severance Agreement, the
Company has agreed to pay the Executive the payments and to make the benefits
available after the Termination Date, each as required by such Section 3.
3. In consideration of the above, the sufficiency of which the Executive
hereby acknowledges, the Executive, on behalf of the Executive and the Executive's
heirs, executors and assigns, hereby releases and forever discharges the Company and its
members, parents, affiliates, subsidiaries, divisions, any and all current and former
directors, officers, employees, agents, and contractors and their heirs and assigns, and any
and all employee pension benefit or welfare benefit plans of the Company, including
current and former trustees and administrators of such employee pension benefit and
welfare benefit plans, from all claims, charges, or demands, in law or in equity, whether
known or unknown, which may have existed or which may now exist from the beginning
of time to the date of this letter agreement, including, without limitation, any claims the
Executive may have arising from or relating to the Executive's employment or
termination from employment with the Company, including a release of any rights or
claims the Executive may have under Title VII of the Civil Rights Act of 1964, as
amended, and the Civil Rights Act of 1991 (which prohibit discrimination in employment
based upon race, color, sex, religion and national origin);the Americans with Disabilities
Act of 1990, as amended, and the Rehabilitation Act of 1973 (which prohibit
discrimination based upon disability); the Family and Medical Leave Act of 1993 (which
prohibits discrimination based on requesting or taking a family or medical leave ); Section
Created on 4/5120021:03 PM
Page 1 of4
,.{~
\J
Separation and Release Agreement
EUR Systems
Confidential Information
.
1981 of the Civil Rights Act of 1866 (which prohibits discrimination based upon race);
Section 1985(3) of the Civil Rights Act of 1871 (which prohibits conspiracies to
discriminate); the Employee Retirement Income Security Act of 1974, as amended
(which prohibits discrimination with regard to benefits); any other federal, state or local
laws against discrimination; or any other federal, state or local statue, or common law
relating to employment, wages, hours, or any other terms and conditions of employment.
This includes a release by the Executive of any claims for wrongful discharge, breach of
contract, torts or any other claims in any way related to the Executive's employment with
or resignation or termination from the Company, including any claim under the
Employment Agreement. This release also includes a release of any claim for age
discrimination under the Age Discrimination in Employment Act, as amended
("ADEA"). The ADEA requires that the Executive be advised to consult with an
attorney before the Executive waives any claim under ADEA. In addition, the ADEA
provides the Executive with at least 21 days to decide whether to waive claims under the
ADEA and seven days after the Executive signs the Agreement to revoke that waiver.
This release does not release the Company from any obligations due to the Executive
under the Severance Agreement or under this Agreement. Nothing herein to the contrary
shall effect any rights the Executive may have under the Shareholders' Agreement, dated
May 3, 2000, by and among the Company, the Executive and the other shareholders from
time to time party thereto. This release shall not apply to any rights of the Executive with
respect to indemnification, directors', and officers' insurance.
Additionally, the Company (on its behalf and that of its affiliates) agrees
to discharge and release the Executive and the Executive's heirs from any claims,
demands, and/or causes of action whatsoever, presently known or unknown, that are
based upon facts occurring prior to the date of this Agreement, including, but not limited
to, any claim, matter or action related to the Executive's employment and/or affiliation
with, or termination and separation from the Company; provided that such release shall
not release the Executive from any loan or advance by the Company or any of its
subsidiaries, any act that would constitute "Cause" under the Executive's Severance
Agreement or a breach under Section 7 of the Executive's Severance Agreement;
provided, however, that nothing herein to the contrary shall affect any rights the
Company may have under the Shareholders' Agreement, dated as of May 3, 2000, by and
Created on 4/512002 1 :03 PM
Page 2 of 4
0t^-'
Separation and Release Agreement
EUR Systems
Confidential Information
among the Company, the Executive and the other shareholders from time to time party
hereto.
4. This Agreement is not an admission by either the Executive or the
Company of any wrongdoing or liability.
5. The Executive waives any right to reinstatement or future employment
with the Company following the Executive's separation from the Company. on the
Termination Date.
6. The Executive agrees not to engage in any act after execution of the
Separation and Release Agreement that is intended, or may reasonably be expected to
harm the reputation, business, prospects or operations of the Company, its officers,
directors, stockholders or employees. The Company further agrees that it will engage in
no act which is intended, or may reasonably be expected to harm the reputation, business
or prospects of the Executive.
7. The Executive shall continue to be bound by Section 7 of the Executive's
Severance Agreement.
8. The Executive shall promptly return all the Company property in the
Executive's possession, including, but not limited to, the Company keys, credit cards,
cellular phones, computer equipment, software and peripherals and originals or copies of
books, records, or other information pertaining to the Company business.
9. This Agreement shall be governed by and construed in accordance with
the laws of the State of Pennsylvania, without reference to the principles of conflicts of
laws.
10. This Agreement represents the complete agreement between the Executive
and the Company concerning the subject matter in this Agreement and supersedes all
prior agreements or understandings, written or oral. This agreement may not be amended
or modified otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.
11. Each of the sections contained in this Agreement shall be enforceable
independently of every other section in this Agreement, and the invalidity or
nonenforceability of any section shall not invalidate or render unenforceable any other
section contained in this Agreement.
Created on 4/5/2002 1 :03 PM
Page 3 of4
\J~
Separation and Release Agreement
BUR Systems
Confidential Information
12. It is further understood that for a period of7 days following the execution
.
of this Agreement in duplicate originals, the Executive may revoke this Agreement, and
this Agreement shall not become effective or enforceable until the revocation period has
expired. No revocation of this Agreement by the Executive shall be effective unless the
Company has received within the 7-day revocation period, written notice of any
revocation, all monies received by the Executive under this Agreement and all originals
and copies of this Agreement.
13. This Agreement has been entered into voluntarily and not as a result of
coercion, duress, or undue influence. The Executive acknowledges that the Executive
has read and fully understands the terms of this agreement and has been advised to
consult with an attorney before executing this Agreement. Additionally, the Executive
acknowledges that the Executive has been afforded the opportunity of at least 21 days to
consider this Agreement. To the extent that the Executive executes this Agreement prior
to the expiration of such 21-day period, he does so knowingly and voluntarily and
without coercion.
The parties to this Agreement have executed this Agreement as of the day and
year first written above.
?:;e " ,,1
By: ,~{
ame:
Title:
:~Com2f~
Name:
Title:
Created on 4/512002 I :03 PM
Page 4 of 4
SfL/
. .
Exhibit C
1
Case J~C DdaaOllllllE!:I5S-3 Red O8I'21FlOO6 Page 1 of 49
Execution Version
ASSET PURCHASE AGREEMENT
by and among
ELECTRONIC AND UNIT RECORD DATACENTER, INC.
d/b/a EUR SYSTEMS
and
APTIS, INC.
(collectively, the "Sellers")
and
INTEC USA, INC.
and
INTEC BILLING SERVICES, INC.
(collectively, the "Purchasers")
Dated as of July 17,2006
-0001166131912-
,
CaseJ~C DdOO~tI5!-3 filed08f21/2006 Page22d49
.
(e) All claims for refund of Taxes and other governmental charges arising prior to the
Closing Date.
(f) Except as otherwise provided herein, all rights in connection with and assets of
the Employee Plans.
(g) All rights of the Sellers under this Agreement. the Bill of Sale, the Trademark
Assignment, the Domain Name Assignment, the Assignment and Assumption Agreement and
the Escrow Agreement.
(h) All employee notes and obligations due to the Sellers.
(i) The assets listed in Section 2.2(i) of the Disclosure Schedules.
2.3 Closin~. The Closing shall take place at the offices of Nelson Mullins Riley &
Scarborough LLP, 999 Peachtree Street, Atlanta, Georgia 30309, at 10:00 A.M. on or about July
27, 2006 or on such other date as is mutually agreed to by the Sellers and the Purchasers. The
date on which the Closing occurs in accordance with the preceding sentence and relevant tenns,
provisions and conditions of this Agreement is referred to in this Agreement as the "Closing
Date:'
2.4 Purchase Price. At the Closing, as consideration for the transfer, delivery and
assignment of the Acquired Assets, the Purchasers shall pay to the Sellers via wire transfer to a
bank account established and maintained on behalf of the Lenders (the "Lenders' Account"), a
cash amount equal to Thirteen Million Four Hundred Sixty-Five Thousand Dollars
($13,465,000) (the "Purchase Price"), less any Reduction Amount, and provided that Two
-21-
-Doc' 66D89 12-
,
Case J~C DdimOlllR1eBl5$4 Fled O8I'21flOO6 Page 6 m 44
Affiliates from and against any claims arising out of or due to the failure to comply with any
bulk sales law..
5.10 Emoloyment of Emolovees: Emolovees Benefits Matters. (a) The Purchasers shall
make offers of employment to the employees of each of the Sellers listed in Section 5..1 0 of the
Disclosure Schedules, as of the Closing Date, except with respect to Charles Achuff, Sheila
Bond, John Caddell and Raymond Wenger, such offers shall be at the same pay scale and for a
reasonably comparable position to the one currently held by such employees. Such employment
shall be on an "at will" basis and upon such other terms and conditions as such applicable
Purchaser deems reasonably appropriate, in its sole discretion provided, however, except with
respect to Charles Achuff, Sheila Bond, John Caddell and Raymond Wenger, that such terms and
conditions are reasonably comparable to those of employee's prior arrangement.. Such
employees hired by either Purchaser as of the Closing Date, as part of the Transactions
contemplated by this Agreement, are referred to as "Transferred Emplovees."
(b) The Transferred Employees shall receive credit under the applicable Purchaser's
paid time off arrangement for earned but unused paid time off under the Sellers' paid time off
arrangement as of the Closing Date; provided, however, such credit under such applicable
Purchaser's paid time off arrangement shall be subject to the terms, conditions, qualifications
and limitations of the applicable Purchaser's paid time off arrangement. Transferred Employees
shall be given credit by the applicable Purchaser for earned but unused leave under the Family
and Medical Leave Act of 1993 or similar state law, as of the Closing Date, which was earned as
.
a result of their employment by Sellers; provided, however, such credit to be recognized by the
applicable Purchaser shall not duplicate Family and Medical Leave Act of 1993 or similar state
law benefits which the applicable Purchaser is required to provide to the Transferred Employees,
~DocM 667389 12-
-54-
,
Case J~c DdaootlllllEB6~ Red 08f2112OO6 Page 40 0150
Final Version
Section 2.2( d)
EXCLUDED CONTRACTS
1. Amended and Restated Credit Agreement dated as of January 18, 2002 among Electronic
and Unit Record Datacenter, Inc" as Borrower, and Bank of Montreal, Chicago Branch,
as Administrative Agent, et aI, as Lenders.
2. Security Agreement dated as of May 3, 2002 among Electronic and Unit Record
Datacenter, Inc. as "Grantor" and Bank of Montreal, Chicago Branch, individually and as
Administrative Agent, GE Capital and Citizens Bank as Secured Party.
3. Pledge and Security Agreement dated as of January 18, 2002 among Aptis Holdings
LLC, BC Holding II Corporation and Aptis, Inc., collectively as Grantors, and Bank of
Montreal, Chicago Branch, individually and as Administrative Agent, GE Capital and
Citizens Bank as Secured Party,.
4. Letter Agreement by and between EUR and Whitby, Santarlasci & Company, dated May
31,2005, as amended (providing for the services of Joseph H. Santarlasci. Jr.).
5. Engagement Letter by and between EUR and Troutman Sanders LLP, dated June 9,2005
(providing for legal services to the Sellers).
6. Letter Agreement by and between EUR and Evercore Partners. dated November 28, 2004
(providing for financial and strategic advisory services in connection with a merger, sale
or acquisition).
7. Letter Agreement by and between EUR and Edelweiss Capital Limited, dated November
1, 2004 (providing for mergers and acquisitions alliances strategy services).
8. Lease Agreement by and between Aptis and Prentiss Properties Acquisition Partners, LP
dated November 11, 1999 (for the premises located at Two Barton Skyway, 1601 South
MoPac Expressway, Austin, Texas 78746).
9. Service Bureau License Agreement, as amended, by and between EUR and Daleen
Technologies, Inc., dated March 20, 2000 (covering license to run the BiIlPlex software
in the service bureau environment).
10. Letter of Intent by and between EUR and InnoSource Business Solutions, Inc., dated
August I, 2005 (covering a comprehensive, on-site study of Sellers' print, mail and data
center operations to validate the processes. current costs and potential cost savings
outlined in a preliminary study).
11. Employment Agreement by and between EUR and John Boyd dated February 28, 200} ,
NEWYORKO\ 1 I 1 927Sv9 034866-000001
NEWYORKOI 1 /I927Sv/l 034866-000001
NEWYOIlKOI 111927Sv)4 034866.000001
6
,
Case J~c DdOOotI8lIE66S-5 Filed 0812112006 Page 41 C"A 50
.
Final Version
12. Employment Agreement by and between EUR and Charles Achuff dated May 3, 2000.
13. Employment Agreement by and between EUR and Raymond L. Wenger dated September
1,2005.
14. Employment Agreement by and between EUR and Sheila A. Bond dated July 1,2005.
IS. Executive Severance Agreement by and between EUR and John M Caddell dated July I,
2002 and Offer of Employment Letter dated September 22, 2000 with Mr. Caddell.
16. Motor Vehicle Lease Agreement by and between EUR and BMW of Manhattan Inc.,
dated April 19,200 I (covering leasing of automobile for use by John Boyd).
17. Marketing and Referral Agreement by and between EUR and CTI Billing Solutions, Inc.
dated November 13,2002 (covering mutual referrals of software products--SmartBiIl for
CTI and Advantacs for EUR).
18. Teaming Agreement by and between EUR and Openet Telecom, Inc. dated December 30,
2005 (covering joint business opportunities; Openet develops and licenses real-time
mediation, rating and charging software).
19. Master Consulting Agreement by and between BUR and Mark. Ponton dated August 31,
2005 (covering sales training services).
20. Mobile Virtual Network Enabler Teaming Agreement by and between EUR and Qpass
Inc. dated October 19, 2005 (covering an alliance for coordinated exploration of new
market opportunities).
21. Consulting Agreement by and between EUR and Vichara Technologies, Inc. dated July
16,2003 (covering offshore software development services for the Aptis software).
22. Administrative Services Agreement by and between EUR and Flex Corp. dated April I,
2004 (covering administrative services for flexible spending plan benefit to the Sellers'
employees)..
23. Application for Membership and Services Contract by and between EUR and CBY
Systems, Inc. dated April 19, 2004 (covering provision of credit reports on employees
and potential employees).
24. Client Agreement by and between EUR and CD Studio, Inc., dba The Clockwork. Group,
dated April 15, 2004 (covering webcare for Aptis software).
25. Gallagher Benefits Services (health insurance broker).
NEWYORKOJ 11/927Sv9034866.oooool
NEWYORKOI 1I1927Svll 034866.000001
NEWYORKO/ 1I1927Svl4 034866-000001
7
,
Case3~C DdOOooeneB6!-5 Fied08l21fL006 Page42d50
Final Version
26. Consultant Agreement by and between EUR and Global Advertising Strategies, Inc..
dated October 4,2005 (covering marketing services to prospective MYNOs to facilitate
brand creation and sales generation).
27. Consulting Services Agreement by and between EUR and JB Knowledge Technologies,
Inc. dated April 13, 2004 (covering webcare for Aptis software).
28. Website Design Contract by and between EUR and Leo Web Design (Matthew C. Leo)
dated September 19,2005 (covering development and/or improvement of three Websites
for EUR's web space).
29. Finders Agreement by and between EUR and LERA Partners, LLC (Linda Seigelman)
dated February 15,2004 (providing for payment ofa tinder's fee for customer referrals).
30. Engagement Letter by and between EUR and McKonly & Asbury LLP (covering annual
reporting obligations under ERISA for 40 I (k) Employee Retirement Savings Plan for
year ended December 31, 2004).
3] . Consultant Agreement by and between EUR and MCR Partners dated August ] 8, 2005
(covering consulting services for the wireless industry).
32. Employee Assistance & Work/Life Services Program Agreement by and between EUR
and NEAS, Inc. dated August 1,2005 (covering Sellers' Employee Assistance Program).
33. Ordering and Billing Forum - Annual participation in billing conference.
34_ Consultant Agreement by and between EUR and Clifton P. Orzolek dated March 3, 2006
(covering system design and programming services regarding Unisys billing platforms).
35. Consultant Agreement by and between EUR and Robert J. Potter (covering OSPIlSP
product evaluations and presentations, Web site development and other services in
connection with CPqD products).
36. Legal Service Contract by and between EUR and Pre-paid Legal Services, Inc. and Pre-
paid Legal Casualty, Inc. (covering Sellers' Voluntary Legal Plan).
37. Proposal for Creative Development by and between EUR and Dean Stevenson, dba
Allegro Designs (covering Website development).
38. Engagement Letter by and between EUR and Troutman Sanders LLP dated 6/17/05
(covering legal services in connection with efforts to restructure/recapitalize the Sellers).
39. Agreement for Yankee On-linelWB Delivery by and between EUR and The Yankee
Group dated October 31, 200] (covering consulting services re telecom billing and
wireless industry analysis and information).
NEWYORKOI 111927Sv9034866-000ooJ
NEWYORKOI I J 1927Svll 034866.000001
NEWYORKOI 111927Svl" 034866-000001
8
,
Case J~C DdaoOllll!l'EB6$5 FEd 081'2112006 Page 43 d 50
Final Version
40. Master Lease Agreement No. 206240, as amended, by and between EUR and CitiCapital
Technology Finance, Inc. dated June 22,2004 (covering leasing of MVL Office Pro).
41. Master Lease Agreement No. 20626 I by and between Aptis and CitiCapital Technology
Finance, Inc. dated June 23, 2004 (covering leasing ofMVL Office Pro).
42. Master Agreement, Reference No. 37098, by and between EUR and AT&T Corp. dated
May 8, 2002 (covering remote dial-up Internet access for EUR staff).
43. Microsoft Select Agreement, as amended, by and between EUR and Microsoft Licensing,
GP, dated June 1,2004 (covering licensing and purchase of various products for servers
and desktop PCs).
44. Master Services Contract by and between EUR and Postini, Inc. (covering spam filter _
Perimeter Manager-Enterprise Edition).
45. Symantec Software License Agreement, as amended, by and between EUR and Symantec
Corporation (covering licensing and maintenance of Symantec Ghost Solution Suite
License Value B, which is used for creating backup images of PC hard drives for archival
and restoration needs).
46. Consultant Agreement by and between EUR and Dale R. Hoover dated June 27, 2006
(covering tax software support services).
47. Consultant Agreement by and between EUR and Karyl Tetzlaff dated June 20, 2006
(covering project management services for assigned MVNGO implementation projects).
48. Severance Agreement and Release by and between EUR and Ronald R. Schauer effective
October 8, 2004, which provides for continued salary through August 4, 2006 and
medical and dental insurance through August 31, 2006. Gross amount payable to Mr.
Schauer as of June I, 2006 is $]0.686.39 (9 weeks and 2 days). Total benefit cost is
$ 1.0 I 6. I 0 for three months of medical and dental coverage.
49. Severance Agreement and Release by and between EUR and Stacy Ryder effective
June 8, 2006, which provides for three weeks' continued salary (final paycheck due July
26, 2006).
50. Severance Agreement and Release by and between EUR and Suzanne Shartzer effective
June 8, 2006. which provides for continued group insurance benefits through June 30,
2006 and seven weeks' continued salary (final paycheck due August 9,2006).
51. David Conahan's employment with EUR was tenninated effective June 8. 2006. and he
was provided with a Severance Agreement and Release, which will entitle him to two
weeks' continued salary ifhe accepts the terms of the Agreement by July 31, 2006.
NEWYORKOI 11 I 9275v9 034866-0??oo1
NEWYORKOJ 1119275vll 034866-000001
NEWYORK011119275v14034866-000001
9
. .
Exhibit D
08/15/2006 15:09
17177613286
PAGE 02
1. 1:
1.-.....
__.............,_IW....H..~'...... __,,,.... .._.............
August 15, 2006
rIA OYERNIGHT MAIL AND HAND DELiVERY
Mr. john M. Caddell
eto Electronic and Unit Record Datacenter, Inc. d/b/a EUR Systems
5040 Ritter Road
Mcc:banicsburg, Pennsylvania 17055
R6: EUR Sy$IOl'lS
Dear Mr. CilddeJ1:
The purpose of this letter is to advise you that, effective immediately, your employment with Electronic
and Unit Record Datacenter, Inc. d/b/a BUR Systems ("EUR") is hereby terminated with cause. The decision to
terminate you from your positi()'l'l for ClaUse is being taken for reasons, including. but not limited to, your breach of
your fiduciary duties owed to BUR. your failure to perform the duties and RlSponsibillties of your position with EUR
and your engagement in activity whieb, has been al'ld continues to be detrimemal to the business ofEUR.
Sinoerely,
EUR Systems, Inc.
NBY: Ch. I' Ph'Il' ~h ._z~ .
a . ar es J 1))S, an aut onJ!NI.I Signatory
Title: '),.,.fCtll v
5040 Rine, Road Metllanicsburg. PA 17tJ55 WWVf.8'ul$ystems.cDm
V01t:E 111.691,6IJ(JtJ ElHil il1ftJ"'uBystems.ctlm
E-m,bi+ .B
. Goldberg Katzman, P.C.
Steven E. Grubb, Esquire, I.D.# 75897
Attorneys for Plaintiff
320 Market Street, Strawberry Square
P. O. Box 1268
Harrisburg, PA 17108-1268
(717) 234-4161
v.
IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY, PENNSYLVANIA
NO.
JOHN M. CADDELL.
Plaintiff
ELECTRONICS AND UNIT RECORD :
DATACENTER, INC., d/b/a EUR
SYSTEMS; INTEC, USA, INC.;
INTEC BILLING SERVICES, INC.;
SARATOGA PAR1NERS,
and WHITBY, SANTARLASCI &
COMPANY
JURY TRIAL DEMANDED
CIVIL ACTION - LA W
Defendants.
PLAINTIFF'S BRIEF IN SUPPORT OF
MOTION FOR PRELIMINARY INJUNCTION
I. INTRODUCTION
Before the court is Plaintiff John M. Caddell's Motion for Preliminary Injunction. EUR,
Saratoga Partners and WSC have engaged in a concerted scheme to render Mr. Caddell's clear
and substantial contractual rights worthless. Where a preliminary injunction is designed to
maintain the status quo pending resolution of legal issues, Mr. Caddell asks this court to enter an
injunction which immediately interposes a constructive trust upon enough ofEUR's or Intec's
assets such that if Mr. Caddell prevails under the legal theories contained in his Complaint, he
will have a remedy.
. II. . FACTUAL BACKGROUND
The factual background of this case is described in the complaint Mr. Caddell has filed,
but is briefly summarized herein.
Mr. Caddell began him employment at EUR as an Executive Vice President on October
16, 2000. On, or about, July 1, 2002, Mr. Caddell entered into an "Executive Severance
Agreement" (attached to the Complaint as Exhibit B). The Agreement featured a severance
package in the event EUR, or EUR's successor, terminated Mr. Caddell without cause, as
follows:
3. Oblieation of the Comoanv Uoon termination Under Section 1.
If the Executive's employment shall have been terminated by the
Company under Section 1 (other than for Cause) or by the Executive for
Good Reason.
(a) the Company shall make a lwnp swn cash payment to the
Executive within 30 days after the Date of Termination of the accrued
Amounts earned but unused Paid Time Off and any money that is
normally paid during this time period, except to the extent under the terms
of a Plan they are to be paid at a later date;
(b) the Company shall pay to the Executive in equal installments,
made at least monthly, an aggregate amount equal to two times the
Executive's Annual Base Salary in effect on the Date of Termination over
the twenty-four months following the Date of Termination and;
(c) until the earlier of eighteen months following the Date of
Termination or the date the Executive becomes entitled to comparable
benefits from another employer, the Executive shall be entitled to receive
medical coverage and life insurance as provided under the Company's
Plans from time to time and the Executive's cost therefor shall not exceed
the cost paid by the other executives of the Company for comparable
coverage.
Mr. Caddell performed his services for EUR under the above terms in an exemplary
fashion, receiving excellent performance reviews.
2
.. · In early 2006, EUR began considering a sale of its assets to Intec USA, Inc. and Intec
Billing Services, Inc. (hereinafter, collectively "Intec"). Of high relevance to Mr. Caddell's
situation, at that point, was Section 8(c) of his Agreement which reads:
The Company fEURl will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company prior
to or concurrent with any such event of succession to assume
expressly and agree to perform this Agreement in the same manner
and to the same extent that the Company would be required to
perform it if no such succession had taken place and to provide the
executive with written evidence of such assumption and agreement
(which may include documents sufficient to evidence a transaction
whereby such assumption and agreement is by operation of law).
As used in this Agreement, "Company" shall mean the company as
hereinbefore defined and any successor to its business and/or
assets as aforesaid that assumes and agrees to perform this
agreement by operation of law, or otherwise. (Emphasis added.)
Thus, EUR was required to assign Mr. Caddell's Agreement to the purchaser ofEUR's
assets as part of any transaction.
On July 17,2006, EUR entered into an Asset Purchase Agreement (APA) with Intec
whereby Intec agreed to assume all or substantially all ofEUR's assets. Intec, however, did not
assume Mr. Caddell's Agreement. Furthermore, Intec did not assume any liability for severance
payments to Mr. Caddell, leaving this liability to EUR. According to the APA, closing was to
have occurred on July 27, 2006. It is understood that closing has been postponed until August
31,2006.
EUR's blatant disregard for Mr. Caddell's contractual rights, and the belief that a closing
was going to occur as early as July 27,2006 (See APA at ~2.3), left Mr. Caddell no choice but to
initiate legal proceedings against EUR and Intec to enforce the terms of his Agreement,
particularly the requirement of an assignment, as stated in Section 8( c) of his Agreement. Mr.
Caddell initiated the action on July 18, 2006, through the filing of a Complaint and Motion for
3
.. Preliminary Injunction which sought to stay the closing of the EUR - Intec transaction pending
determination of Mr. Caddell's assignment rights.
A Preliminary Injunction hearing was scheduled for July 27, 2006 before the Honorable
Edward Guido. Counsel for EUR alerted counsel for Mr. Caddell that the closing would occur
no earlier than August 21, 2006, but no later than August 31, 2006, and suggested that the
Preliminary Injunction hearing be postponed so the parties would have time to discuss and,
potentially, settle Mr. Caddell's dispute. Pursuant to, and relying upon this representation, Mr.
Caddell requested, and was granted, a postponement of the July 27 hearing until August 21,
2006.
Rather than engage in any settlement discussions, EUR used this delay to terminate Mr.
Caddell on August 15,2006 for what it termed "cause." No basis for the termination for "cause"
was given in the termination letter and no reason which would permit a termination for cause
exists as Mr. Caddell performed his job responsibilities in exemplary fashion for EUR up to the
date of his termination. Mr. Caddell performed even in the face ofEUR's complete disregard for
his contractual rights, and even while EUR refused to engage him in settlement discussions,
contrary to its representations that caused the delay to the July 27, 2006 preliminary injunction
hearing.
Mr. Caddell's termination was nothing more than a tactical move taken by EUR, with the
full support and encouragement of Co-Defendants Saratoga and WSC, to eliminate the
possibility that a court would enjoin the closing of the EUR-Intec transaction, or force EUR into
assigning Mr. Caddell's Agreement as part of the asset sale, as Mr. Caddell had requested in his
Motion for Preliminary Injunction. Such a tactic was done in bad faith and in perpetuation of
EUR, WSC and Saratoga's own financial interests, at the expense ofEUR's contractual
4
9, undeftaking to Mr. Caddell. This tactic was in no way related to Mr. Caddell's performance or
for "cause" as defined in Section 1 of the Agreement.
EUR next sought to delay the preliminary injunction hearing of August 21,2006 by
removing this case to federal court on August 16, 2006, thereby depriving the state court of
jurisdiction to hold the August 21 hearing. Despite Mr. Caddell's filing of an Emergency
Motion to Remand the case back to state court on August 24, 2006, the federal court only
granted the remand after the passing of the August 21 date.
Again, this tactic was taken in bad faith. EUR was fully aware of the August 21 hearing
date as of July 25,2006, yet waited until two business days before the August 21 hearing date to
remove the case to federal court which further delayed the hearing.
There is no intrigue behind what EUR is doing. Its tactical maneuverings were designed
to rid itself of the possibility that a court might enjoin the Intec-EUR sale, while leaving Mr.
Caddell's claims to a shell of a corporation which will soon have no ability to pay. All proceeds
from the asset sale will be distributed to EUR's creditors, including investment banks, Saratoga
and WSC.
Saratoga and WSC have supported and encouraged not only EUR's breach of its
contractual assignment obligations to Mr. Caddell, but have also been compliant with the
obvious delay tactics employed by EUR (a principal with Saratoga signed Mr. Caddell's
termination letter), with the only goal being the closure of the Intec - EUR transaction where
WSC will benefit from a "success fee" in the amount of $325,000, and Saratoga will bring a
benefit to investment banks with which it is affiliated which will be paid the majority of the
transaction price that goes to EUR.
5
. Mr. Caddell originally demanded assignment of his contract to Intec, but since EUR
terminated him, assignment of his employment contract is no longer feasible. Mr. Caddell now
seeks rights under his Severance Agreement, particularly Section 3, as well as rights under
Pennsylvania's Wage Payment and Collection Law, and prosecution of claims against Saratoga
and WSC for interference with his contractual relations, and EUR for failing to negotiate in good
faith. Preservation of the status quo is of utmost importance pending resolution of these claims.
EUR, today, stands in a position to pay severance benefits, but as of August 31, it will cease to
be a viable company and Mr. Caddell's remedy of severance benefits will be extinguished.
EUR's delay tactics have clearly been motivated by its desire to cast off these claims to a shell
company that will be unable to pay. A constructive trust which sets aside $600,000, the
approximate amount of Mr. Caddell's claims, is necessary to prohibit dissipation ofEUR's assets
which will essentially destroy Mr. Caddell's legal claims.
III. LEGAL DISCUSSION
A. PREREQUISITES TO ISSUANCE OF A PRELIMINARY INJUNCTION.
In Pennsylvania, six essential prerequisites are needed in order for a party to be entitled to
a preliminary injunction: (1) a strong likelihood of success on the merits; (2) a showing of
immediate and irreparable harm that cannot be compensated by money damages; (3) a showing
that greater injury will result if preliminary injunctive relief is denied then if such injunctive
relief is granted; (4) a showing that a preliminary injunction would restore the status quo; (5) the
injunction Mr. Caddell seeks is reasonably suited to abate the offending activity; and (6) there is
no adverse affect on the public interest. Kessler v. Broder, 851 A.2d 944,947 (pa. Super. 2004)
appeal denied, 582 A.2d 676,868 A.2d 1201 (2005); Allegheny Anesthesiology Assocs. v.
6
.. Alle~heny Gen. Hoso.. 826 A.2d 886,891 (pa. Super. 2003), aopeal denied 577 Pa. 684, 644
A.2d 550 (2004).
Mr. Caddell will be able to meet all six prerequisites.
B. MR. CADDELL WILL SUSTAIN IRREPARABLE INJURY IF AN
INJUNCTION IS NOT ENTERED.
Of utmost concern in this proceeding is the dissipation ofEUR's assets once the closing
occurs on August 31,2006. There is no dispute that Mr. Caddell's claims under his Agreement
have not been assigned or assumed by Intec and he will be left with claims against the shell of
what once was EUR.
"Unsatisfiability of a money judgment can constitute irreparable injury." Hoxworth v.
Blinder. Robinson & Co.. Inc., 903 F.2d 186,206 (3d Cir. 1990). Hoxworth held that a party's
transfer of assets, which might leave injured plaintiffs without a remedy, constituted irreparable
harm. Id. at 205. In doing so, at 903 F.2d 205-06, the court cited several cases in support of this
proposition, including United States Supreme Court authority - Deckert v. Inde-pendent Shares
Corp., 311 U.S. 282, 290 (1940) ("There were allegations that [the defendant] was insolvent and
its assets in danger of dissipation or depletion. This being so, the legal remedy against [the
defendant], without recourse to the fund in the hands of a [third party], would be inadequate.").
This situation is on point. EUR's assets are about to be dissipated after August 31, 2006,
leaving Mr. Caddell with no remedy. This constitutes irreparable harm.
C. THE STATUS QUO MUST BE MAINTAINED
PENDING RESOLUTION OF ALL LEGAL ISSUES.
A preliminary injunction's purpose is to preserve the status quo and prevent imminent
and irreparable harm that might occur before the merits of the case can be heard and determined.
7
.. Walfer v. Stacy, 837 A.2d 1205, 1209 (pa. Super. 2003). Mr. Caddell need not surely prove the
merits of the underlying claim, but need only show that substantial legal questions must be
resolved to determine the rights of the respective parties and the status quo must be maintained in
the meantime. Id.
A court has within its equitable powers the ability to prohibit a party from dissipating
funds in order to prohibit a fraud as to creditors and maintain the status quo. Citizens Bank of Pa.
v. Mvers, 872 A.2d 827, 836 (pa. Super. 2005). See also Walter (Holding that a preliminary
injunction preventing the dissipation of funds was proper, the failure of the court to post the bond,
however, resulted in a vacation of the lower court's order, with instructions to set an amount for
the bond.)
Citizens Bank is instructive. In that case, a court froze stolen assets in an account
pending litigation by the bank to recover the stolen funds. The court reasoned that without an
injunction freezing the assets, those assets would disappear and the defendant would have no
way of paying a judgment.
The same was true in Walter where the court found an injunction properly issued where a
husband, a party in a civil action, attempted to transfer the entirety of his assets to his wife. The
court entered an injunction prohibiting the transfer pending the outcome of the case.
The vehicle to prevent the dissipation ofEUR's assets is a constructive trust. A
constructive trust arises when a person holding title to property is subject to an equitable duty to
convey it to another on the ground he would be unjustly enriched if he were permitted to retain it.
Santoro v. Morse, 781 A.2d 1220, 1231 (pa. Super. 2001). Santoro involved a situation such as
here where a court ordered a constructive trust, commanding a corporate defendant to hold assets
pending trial, where the evidence suggested that the corporate defendant would divert assets to
8
· an iIYdividual defendant. The court used its broad equitable power to impose a constructive trust
over assets to preserve the assets of the corporate defendant pending trial. Id.
In this case, there are several legal issues, described above and in the Complaint, and an
obvious procedural offensive undertaken by EUR to delay Mr. Caddell's efforts at vindicating
his contractual rights until after the August 31 closing. But after August 31, there will be no
assets left with EUR, thus rendering Mr. Caddell's legal claim virtually worthless. There is no
better use of a constructive trust to maintain the status quo so that these claims can be fully
litigated against EUR with assets as they exist today. To that end, a constructive trust should be
placed over $600,000 ofEUR's current assets, or the money that Intec will pay EUR for its
assets.
D. MR. CADDELL HAS MET ALL OTHER
REQUIREMENTS NECESSARY FOR THE
ISSUANCE OF A PRELIMINARY INJUNCTION.
1. Likelihood of Success on the Merits
First, Mr. Caddell has a strong likelihood of success on the merits as described above and
in the Complaint. There is really no serious defense on the part ofEUR to Mr. Caddell's
contractual claims. As described above, EUR's termination "for cause" has no basis other than
as a litigation tactic to get around an injunction that may have resulted in a delay of the Intec-
EUR closing, or, worse yet, forced EUR to assign Mr. Caddell's contract to Intec. Equally clear
is EUR's breach of the contract by not immediately paying Mr. Caddell his severance benefits.
9
..
... Similarly, Saratoga's and WSC's involvement in forcing EUR's breach of contract with
Mr. Caddell, to enhance their own fmancial prospects, is equally clear and likely to succeed at a
fmal hearing on the merits.
But as held in Walter, in situations which seek to maintain the status quo and prevent a
dissipation of assets, such as this one, Mr. Caddell does not need to prove his case. In fact, the
court need not even hold an evidentiary hearing. The court may enter an injunction on the basis
of the Complaint, arguments of counsel and affidavits, alone. Id. at 1210. In this case, Mr.
Caddell requests a hearing, but the time constraints and the need to maintain the status quo is
obvious. An injunction entering a constructive trust is needed and appropriate.
2. There will be Greater Iniury if a Preliminary Injunction is Denied
than if Granted.
Denial of a preliminary injunction will permit the closing to go forward, in contravention
of Mr. Caddell's contractual rights, and will allow EUR to drain its assets, foreclosing any hope
on the part of Mr. Caddell to have a real remedy against EUR. If a constructive trust is
interposed, the Intec-EUR closing will occur with all but a relatively small portion of the closing
funds freely distributed according to the AP A and arrangements EUR has made with its other
creditors. These closing funds will be held in constructive trust pending a final hearing on the
merits in which case they will either be distributed to Mr. Caddell, per his contractual rights, or
released to EUR for distribution. EUR is not prejudiced by an injunction interposing a
constructive trust whereas Mr. Caddell's rights could be essentially extinguished without an
injunction.
10
.' .
3.
The Iniunction Mr. Caddell Seeks is Reasonablv Suited to Abate
the Offending Activity.
The requested injunction is reasonably suited to abate the offending activity in that it
preserves and compels enforcement of Mr. Caddell's contractual rights, and only places a
constructive trust over those assets sufficient to cover Mr. Caddell's contractual rights with all
other assets being distributed to EUR and by EUR in accordance with pre-arranged distribution.
Mr. Caddell does not now seek to enjoin the entire transaction, but only set aside that portion that
will address his contractual issues.
4. There is no Adverse Affect on the Public Interest.
An injunction is also in the public's interest in that contractual rights will be preserved
and EUR's underhanded strategy of using procedural delay to defeat substantive rights will be
thwarted.
All prerequisites to a preliminary injunction will be met by Mr. Caddell.
11
....._ -l' _.
III. CONCLUSION
The court must uphold the status quo and prevent the dissipation of assets which would
render Mr. Caddell's legal claim under his Agreement meaningless. The court should grant Mr.
Caddell's Motion for Preliminary Injunction and order the imposition of a constructive trust over
$600,000 ofEUR's or Intec's assets, pending trial in this matter.
Respectfully Submitted,
Date: ~/2;;/Ob
GO~.
~ E. Grubb, Esquire (J.D. 75897)
320 Market Street, P.O. Box 1268
Harrisburg, PA 17108-1268
(717) 234-4161
Attorneys for Plaintiff
/382941
12
-.,~ ... ill ...
CERTIFICATE OF SERVICE
And now, this ~S day of August, 2006, I hereby certify that the foregoing document
was served on the following individuals via first class mail.
Jeffrey T. McGuire, Esquire
Caldwell & Kearns, P.C.
3631 North Front Street
Harrisburg, P A 17110-1533
Robert A. Graci, Esquire
Eckert Seamsns Cherin & Mellott, LLC
213 Market Street
Harrisburg, P A 1710 1
Saratoga Partners
535 Madison Avenue
New York, NY 10022
Whitby, Santarlasci & Company
2201 Wyoming Avenue Northwest
Washington, DC 20008
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JOHN M. CADDELL
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
V.
NO. 06-4952 CIVIL
ELECTRONICS AND UNIT
RECORD DATACENTER,
INC., d/b/a EUR SYSTEMS
SARATOGA
PARTNERS, AND WHITBY
SANTARLASCI & CO. CIVIL ACTION - LAW
ORDER OF COURT
AND NOW, this 30th day of August, 2006, upon consideration of the Plaintiff's
Motion for Preliminary Injunction requesting the creation of a constructive trust, the
Defendant's answer thereto, the briefs filed by the parties, and after hearing; IT IS
HEREBY ORDERED AND DIRECTED that Plaintiff's motion is DENIED.
By the Court,
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M. L. Ebert, Jr"
~ven E. Grubb, Esquire
Attomey for Plaintiff
~y T. McGuire, Esquire
Attorney for Defendant EUR System
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JOHN M. CADDELL,
Plaintiff
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
V.
ELECTRONICS AND UNIT
RECORD DATACENTER, INC.,
d/b/a EUR SYSTEMS; INTEC
USA, INC.; INTEC BILLING
SERVICES, INC.; SARATOGA
PARTNERS, and WHITBY,
SANTARLASCI & COMPANY,
Defendants
CIVIL ACTION - IN EQUITY
NO. 06-4952 CIVIL TERM
ORDER OF COURT
AND NOW, this 29th day of August, 2006, the parties
having indicated that the action against INTEC USA, Inc., and
INTEC Billing Services, Inc., is no longer warranted, it is
hereby ordered and directed that INTEC USA, Inc., and INTEC
Billing Services, Inc., are dismissed as parties to the
action docketed to 06-4952 of the civil docket.
By the Court,
vSteven E. Grubb, Esquire
For the Plaintiff
vieffrey T. McGuire, Esquire
For Def~ndant EUR Systems
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~obert ~. Graci, Esquire
For Defendant INTEC
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Goldberg Katzman, P.C.
Steven E. Grubb, Esquire, I.D.# 75897
Attorneys for Plaintiff
320 Market Street, Strawberry Square
P. O. Box 1268
Harrisburg, P A 17108-1268
(717) 234-4161
JOHN M. CADDELL.
Plaintiff
IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY, PENNSYLVANIA
v.
CIVIL ACTION - LAW
ELECTRONICS AND UNIT RECORD:
DATACENTER, INC., d/b/aEUR
SYSTEMS; INTEC, USA, INC.;
INTEC BILLING SERVICES, INC.;
SARA TOGA PARTNERS,
and WHITBY, SANT ARLASCI &
COMPANY
NO: 06-4952
JURY TRIAL DEMANDED
Defendants.
PRAECIPE TO SETTLE. DISCONTINUE AND END WITH PREJUDICE
TO THE PROTHONOTARY:
Please mark the above-captioned case SETTLED, DISCONTINUED, and ENDED with
prejudice, terminating the above-captioned matter in its entirety.
By.:.-...
even E. Grubb, squire (I. D. No. 75897)
320 Market Street
P.O. Box 1268
Harrisburg, P A 17108-1268
Telephone: (717) 234-4161
Attorneys for Plaintiff
Dated: October 18, 2006
140495.1
..
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that I have served a true and correct copy of the foregoing Praecipe
to Discontinue on the person or persons listed below by U.S. Mail, as follows:
Jeffrey T. McGuire, Esquire
Caldwell & Kearns, P. C.
3631 North Front Street
Harrisburg, P A 17110-1533
Counsel for All Defendants
GOLDBERG KATZMAN, P.c.
DATE: October 18, 2006
By:
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