HomeMy WebLinkAbout06-01-04 (4)
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INRE:
ESTATE OF LOY T. HEMPT
IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY, P A
ORPHAN'S COURT DIVISION
NO. 21-77-231
KALBACH OBJECTORS' BRIEF
IN OPPOSITION TO MOTION TO PERMANENTLY SEAL
THE RECORD
I. STATEMENTOFFACTS
The background facts relating to this case have been well-developed in other pleadings
and will not be repeated herein. However, some clarification is appropriate regarding a
Confidentiality Agreement entered into by the parties during the discovery stage of this
litigation. A copy of this Confidentiality Agreement is attached hereto as Exhibit "A".
As is clear from its face, the Confidentiality Agreement is between Robert Hempt
Kalbach, Sr. and Hempt Brothers, Inc. (identified as "HBI" in the agreement). The background
and limited effect of the Confidentiality Agreement are set forth in the following recitals:
WHEREAS, Kalbach has requested that HBI provide him
with certain confidential and proprietary information in order to
enable Kalbach to evaluate the possibility of entering into a
settlement regarding various issues that have arisen regarding the
Estate ofLoy T. Hempt and the Residuary Trust Under Will of
Loy T. Hempt, deceased, and division thereof (collectively
"Trust") (the "Settlement"); and
WHEREAS, Kalbach has requested that HBI provide him
with certain confidential and proprietary information as part of the
discovery process regarding the Objections filed by Kalbach in the
Estate ofLoy T. Hempt and the Residuary Trust Under Will of
Loy T. Hempt, deceased (the "Litigation"); and
WHEREAS, the parties wish to set forth the terms and
conditions upon which HBI may provide confidential and
proprietary information to Kalbach [.]
Any attempt by Accountant, explicit or implicit, to bootstrap the Confidentiality
Agreement into a basis to seal the record in these proceedings is grossly misplaced. The
Confidentiality Agreement did not concern Valley Land Company, C.A. Hempt Estate, Inc., Jean
Doris Hempt or any other individual party. Its tightly limited scope must be acknowledged and
its complete irrelevance to the pending Motion must be respected.
2
II. ARGUMENT
A. The Motion To Permanently Seal The Record is an extraordinary request
given the constitutional and common law principle or openness.
It is critical at the outset to understand the extraordinary nature of the Motion To
Permanently Seal The Record. In a recent case, In Re M.B., 819 A.2d 59 (Pa. Super. 2003), the
Superior Court summarized the presumption of openness as follows:
Our courts have recognized a constitutional right of public access
to judicial proceedings based on Article I, Section 11 of the
Pennsylvania Constitution, which provides that '[a]ll Courts shall
be open.' Pa. Const. Art. 1, ~11; see Storms fv. O'MalleY, 779
A.2d 548 (pa. Super. 2001)] at 569 ("In Pennsylvania, the common
law, the fIrst amendment to the United States Constitution and the
Pennsylvania Constitution, all support the principle of openness.")
. .. This constitutional provision has been referred to as a
"mandate" for open and public trials, . . . and has been applied to
both civil and criminal cases . . .
Id. at 61 (citations omitted); see also, Hutchinson by Hutchinson v. Luddy, 417 Pa. Super. 93,
611 A.2d 1280 (1992); Katz v. Katz, 356 Pa. Super. 461, 514 A.2d 1374 (1986), apj)eal den., 515
Pa. 581, 527 A.2d 542 (1987).
The Accountant correctly cites R.W. v. Hampe, 626 A.2d 1218 (pa. Super. 1993) for the
proposition that closure of judicial records requires "good cause," and that closure is required in
order to prevent "a clearly defIned and serious injury to the party seeking it." Id. at 1221. R. W.
is instructive in many respects. In that case, a psychiatrist's patient brought a psychiatric
3
malpractice case and requested that she be identified by her initials alone in the caption and in
the record. The Superior Court observed:
In her request to use initials, appellee essentially has requested
closure of certain aspects of this judicial proceeding. There are few
instances in this Commonwealth where closure will be permitted
over the objection of other parties.
Id. at 1222 (emphasis added). Appellee argued in RW. that there was "no need" for her identity
to be open to the public. The Superior Court aptly observed that this argument misstated the law.
"It is not the public that must show why a proceeding should remain open but rather she who
must establish that her interest in avoiding embarrassment outweighs the presumption of
openness." Id. at 1223, fn. 4.
R W. contains a particularly instructive and compelling review of the applicable law, and
because of its immediate relevance and persuasiveness in the instant matter, is quoted herein at
length:
In order to justify closure or sealing the record, a party
must overcome the common law presumption of openness.
Hutchinson fv. Luddv, 398 Pa. Super. 505, 581 A.2d 578 (1990),
rev'd on other grounds, 527 Pa. 525, 594 A.2d 307 (1991) (per
curiam)]; Katz fv. Katz], 356 Pa. Super. 461, 514 A.2d 1374
(1986)]. The existence of a common law right of access to judicial
proceedings and inspection of judicial record is beyond dispute.
Publicker Industries. Inc. v. Cohen, 733 F.2d 1059 (3d Cir. 1983),
citing United States v. Criden, 648 F.2d 814,81 (3d Cir. 1981).
The Third Circuit Court of Appeals analyzed the origins of this
presumption:
4
[Sir Matthew] Hale [, M. Hale, Historv of The Common
Law of England. 163 (C. Grayed. 1971),] served as
authority for Williams Blackstone when he explained
why trials generally were conducted in public:
This open examination of witnesses viva
voce, in the presence of all mankind, is much
more conducive to the clearing up of truth,
than the private and secret examination taken
down in writing before an officer, or his clerk
8 W. Blackstone, Commentaries 373.
The explanation for and the importance of this public right
of access to civil trials is that it is inherent in the nature of our
democratic form of government. Thus, Justice Oliver Wendell
Holmes, when he served as a justice on the Massachusetts
Supreme Court, declared that public access to civil judicial
proceedings was of 'vast importance' because of 'the security
which publicity gives for the proper administration of justice.' 'It
is desirable that the trial of [civil] causes should take place under
the public eye,' Holmes continued,
Not because the controversies of one citizen with
another are of public concern, but because it is of the
highest moment that those who administer justice
should always act under the sense of public
responsibility, and that every citizen should be able to
satisfy himself with his own eyes as to the mode in
which a public duty is performed.
Wigmore on Evidence reaffirms the beneficial effects of
public access to civil judicial proceedings identified centuries ago
by Hale and Blackstone. Wigmore observes that public access
'plays an important part as a security for testimonial
trustworthiness . . .' Public proceedings are the means by which
this testimonial of trustworthiness is achieved. Wigmore identifies
other beneficial effects of public access to civil as well as criminal
trials. It enhances the quality of justice dispensed by officers of
the court and thus contributes to a fairer administration of justice:
(a) Subjectively, a wholesome effect is produced,
analogous to that secured for witnesses, upon all the
5
officers of the court, in particular, upon judge, jury,
and counsel. In acting under the public gaze, they are
more strongly moved to a strict conscientiousness in
the performance of duty. In all experience, secret
tribunals have exhibited abuses which have been
wanting in courts whose procedure was public.
Public access to civil trials also provides information
leading to a better understanding of the operation of government
as well as confidence in and respect for our judicial system.
(c) The educative effect of public attendance is a
material advantage. Not only is respect for the law
increased and intelligent acquaintance acquired with
the methods of government, but a strong confidence in
judicial remedies is secured which could never be
inspired by a system of secrecy.
Publicker, SUDra at 1068-1070 (citations omitted).
Id. at 1220-1221 (footnote omitted).
It is not often that Blackstone and Oliver Wendall Holmes can be cited at the same time
for the same proposition. Openness of judicial proceedings is a cherished cornerstone of
American jurisprudence. It is against this background that Accountants' Motion to Permanently
Seal the Record must be evaluated.
B. The Accountant utterly fails to identify good cause to seal the record in these
proceedings.
The Accountant identifies three (3) categories of information that purport to justify
sealing the record: (1) "confidential information" related to the operation of private, closely-held
corporations (Hempt Brothers, Inc., Valley Land Company, C.A. Hempt Estate, Inc.); (2) private
6
and personal financial information; and (3) alleged attomey-client communications.
Remarkably, other than applying labels to the categories, Accountant fails to identify any
compelling reason why the identified information must be sealed. There is no discussion of
harm, no discussion of prejudice, no rationale offered to support the request. He fails to identify
any "clearly defined and serious injury," R.W., supra, that may be suffered by failing to seal the
record.
(1) Disclosure of the alleged confidential corporate information will not cause
any clearly defined serious injury.
Without citing any reason, Accountant claims that the "operations, plans, assets, and
valuation" of these corporations should not be available to competitors or to the general public.
However, Accountant fails to identify any clearly defined and serious injury. In fact, there really
are no corporate plans or operations identified in the record. There is no reason proffered why
assets or valuations must be kept confidential. In Littleiohn v. HIC Corporation, 851 F.2d 673
(3rd Cir. 1988) the Third Circuit distinguished between trade secrets and confidential
information, stating that "documents do not contain trade secrets merely because they are
confidential." Id. at 685. (Citing Restatement of Torts ~757, Comment b (1939)). "Further,
non-trade secret but confidential business information is not entitled to the same level of
protection from disclosure as trade secret information. A private interest in secrecy has not been
weighed heavily once the information has been used at trial, particularly where, as here, the
commercial interest stems primarily from a desire to preserve corporate reputation." Littleiohn,
851 F .2d at 685 (citations omitted).
7
It must further be recognized that Accountant himself fIrst placed on the record what is
now claimed to be confIdential business information. In the Accounting itself, the Accountant
set forth in the public record the specifIc number of shares ofHempt Brothers, Inc., C.A. Hempt
Estate, Inc., and Valley Land Company which he allocated to the separate Mark Trust and to the
separate Hempt Trust. (See pp. 44(a) and 44(b) of the Accounting). This public record not only
reveals the number of shares of each corporation, it also discloses the "fair market value" used
by Mr. Hempt in his calculations. Thus, it is a simple arithmetic calculation that can be
performed by anyone over third grade to divide the "fair market value" by the identifIed number
of shares to determine the alleged fair market value per share of these corporations. These are
already matters of public record, disclosed by the Accountant himself when the Accounting was
fIled in July, 2002. There was no effort to seal the record at that time on the basis of any alleged
confIdentiality concern.
The Accountant himself further voluntarily placed even more and even more detailed
alleged confIdential information in the public record when he fIled his Reply to Objections in
December, 2002. Exhibit F to his Reply is the C.A. Hempt Estate, Inc. independent auditor's
report dated December 31, 2000. Exhibit H to his Reply is the Limited Summary Appraisal
Report for the Valley Land Company tract dated January 1,2002. This supposed confIdential
company information was voluntarily placed in the public record and served on counsel by the
Accountant. It has been public for well over a year. Accountant can hardly claim now that this
and similar company information is so sensitive and so critical that its disclosure would cause
clearly defIned and serious injury.
8
Accountant identifies absolutely no reasons why the information presented at the hearing
in this case would be harmful to the corporations, would bestow some unfair competitive
advantage on competitors, or must be shielded from the general public. In this regard,
Accountant turns the analysis on its head in the manner rejected by R.W., suVra ("It is not the
public that must show why a proceeding should remain open but rather she who must establish
that her interest in avoiding embarrassment outweighs the presumption of openness.")
Accountant argues that there is no reason why the information should be in the public record,
rather than establishing, as he must in order to prevail, how sealing the record would prevent
clearly defined and serious injury. This falls far short of his burden.
(2) Disclosure of alleged private, personal financial information would not
cause any clearly defined or serious injury.
Accountant again turns the proper and required legal analysis on its head, suggesting that
personal financial information should be protected from "needless public disclosure." "Needless
public disclosure" is not the test. What clearly defined and serious injury will result if it is not
sealed? There is none. In fact, the only private or personal financial information identified by
Accountant is the value of assets owned by Jean Doris Hempt and the share ownership of the
corporations by various individuals. How, by any stretch of the imagination, would the failure to
seal the record in these regards constitute a clearly-defined and serious injury? Accountant has
not established with any specificity or credibility how any of the supposed private and personal
information presented at the hearing would create injury if not sealed.
9
Moreover, it was the Accountant who first disclosed on the record information regarding
Jean Doris Hempt's expenses and income, information which now purports to be "private and
persona1." The chart summarizing Jean Doris Hempt's expenses and income (which was also
admitted at trial as Kalbach Exhibit 6) was first flIed of record as Exhibit D to the Accountants'
Reply to Objections on or about December 2, 2002. Accountant made no effort to seal the
record at the time the Reply to Objections was flIed in a public docket and has made no effort
until the instant motion to seek any form of protection for this information. How can Accountant
first place this matter in the public record himself, and then attempt to seal the information over a
year later? Similarly, Accountant, wearing the hat of Guardian of the Jean Doris Hempt Estate,
voluntarily disclosed significant personal financial information regarding Jean Doris Hempt
when he flIed the Petition for Permission to Make Gifts (Kalbach Exhibit 4). Is it perfectly
acceptable for Mr. Hempt to reveal Jean Doris Hempt's financial information when it suits his
purpose in asking the Court to approve cash distributions to him, but shield this information from
the public eye when it would be used by Robert H. Kalbach, Sr. to contest his Trustee decision to
distribute funds from the Loy T. Hempt Residuary Trust to the Jean Doris Hempt Estate? This
two-facedness cannot be countenanced and is an additional reason why the Motion To
Permanently Seal The Record must be denied. 1
I In addition, Accountant chose to attach several years worth of Jean Doris Hempt's personal income tax returns as
Exhibit E to the Reply. Where was the concern for confidentiality when this information was filed in a public
record?
10
(3) Reliance on alleged attorney-client communication cannot serve as a basis
to seal the record.
Gerald L. Hempt seeks to seal the letters from Robert Freedman, Esquire and Mr.
Freedman's testimony regarding his correspondence and discussions with Gerald L. Hempt on
the alleged basis that these are attorney-client communications subject to the attorney-client
privilege. This argument fails on several fronts.
First, Accountant misapprehends the nature of the privilege. In Follansbee v. Gerlach. 22
Fid. Rpt. 2d 319 (Allegheny Co. 2002), Judge Stanton Wettick, one of the most influential and
well-respected jurists in Pennsylvania on discovery matters, specifically ruled that a trustee may
not invoke the attorney-client privilege to withhold from beneficiaries opinions of counsel
procured by the trustee to guide the trustee in the administration of the trust. He found that, as
to the beneficiaries, the attorney-client privilege never applies to communications between the
trustee and an attorney consulted in the fiduciary capacity on the subject of trust administration.
Because the law provides that the trustee has a duty to produce all such information, the privilege
never adhered to this communication in the first place. Id. at 321.2
It might also be instructive and aid analysis if the Accountant would attempt to identify
who the "client" is in the Freedman correspondence, and who is claiming the confidence of the
attorney-client communication. The attorney-client privilege cannot apply to Kalbach Exhibit 8,
2 It is clear from the letters themselves that Mr. Freedman was providing legal advice to Mr. Hempt, personally, in
order to assist him in his self-dealing with respect to the Trust assets. Nevertheless, Mr. Hempt asserts that the
advice was given to him in his capacity as Trustee and was paid for by the Trust.
11
which was a letter directed to both Gerald L. Hempt and George Hempt. 3 It cannot apply to
Kalbach Exhibit 10 since, at a minimum, that letter was written to both Gerald L. Hempt as
Trustee and Gerald L. Hempt, personally, since it contemplated his personal purchase of Trust
assets. It cannot attach to Kalbach Exhibit 11, since that letter was also written to both Gerald L.
Hempt as Trustee and Gerald L. Hempt, individually, since it addressed his personal purchase of
Trust assets. It cannot attach to Kalbach Exhibit 12, since that was written to both Gerald L.
Hempt and George Hempt. It cannot attach to Kalbach Exhibit 13, since that letter was sent to
not only the Hempt brothers, but to the Mark brothers and to Robert H. Kalbach, Sr. It cannot
attach to Kalbach Exhibit 14, since that letter was sent to Gerald L. Hempt as Trustee and to
Gerald L. Hempt, personally, since it contemplated his individual purchase of Trust assets. It
can hardly apply to Kalbach Exhibits 15 and 16, since those documents actually affect the Trust
division and are not attorney-client communications. The whole issue of whom Mr. Freedman
was representing, and when, makes application of the attorney-client privilege to any of these
communications misplaced. At its fundamental core, these were letters that Gerald L. Hempt
attempted to rely upon in his role as Trustee when they were clearly letters written to further his
personal and individual interests as a beneficiary of the Trust. There is no privilege.
Moreover, it is extremely significant that Mr. Hempt attempts to justify his actions in
dividing the Trust on the basis of his reliance on the "advice of counsel." (See, e.g.,
Accountants' Brief, p. 7. Accountants' Motion for Directed Verdict regarding division of Trust,
3 A communication is not privileged if disclosed to a third party. See, In Re Beise:en's Estate, 387 Pa. 425, 128 A.2d
52 (1956).
12
paragraph 3, Motion for Non-Suit regarding removal of Trustee, paragraph 3, Accountants'
Proposed Findings of Fact, paragraph 54). Mr. Hempt cannot simultaneously rely upon
justifying his actions on the basis of receiving advice of counsel while maintaining that the
advice he allegedly relied upon is subject to the attorney-client privilege and should not be
disclosed.
C. There exist compelling reasons why the record should not be sealed in this
case.
As set forth hereinabove, the Kalbach Objectors do not carry any burden to establish why
the record should not be sealed. The burden rests entirely on the Accountant to establish that
definite and specific injury will occur absent sealing. However, it is important for the Master's
consideration to appreciate the significance of certain issues in this case.
First, this case concerns serious issues of a Trustee's duty to beneficiaries. Public access
to the facts and ultimate decision in this case would further the law on clarifying the extent of a
Trustee's duties and how that duty can be violated in circumstances such as this, where the
Trustee is also a beneficiary, is also an officer/director of corporations comprising of substantial
portions of Trust assets, and where the Trustee wears multiple hats with respect to the Trust's
primary beneficiary. It is an important case with important issues, and should not be hidden in
some dark comer of jurisprudence.
13
Further, this case presents serious questions regarding the use and application of 20 Pa.
C.S.A. ~7191 for the division of Trust assets. This section of the Probate Code seldom appears
in reported cases, and the instant issues appear to be matters of first impression within
Pennsylvania. There appear to be no cases interpreting the most recent version of Section 7191,
nor cases addressing when a Trustee may divide a Trust and allocate assets among the Trust in
the absence of court approval or consent of all beneficiaries. The Kalbach Objectors have
challenged whether that section is constitutionally and lawfully applied to a pre-existing Trust.
The Kalbach Objectors have challenged whether that section can be utilized to divide a trust
when there are serious disputes about the value of the allocated assets. The Kalbach Objectors
have challenged whether that section can be utilized by a Trustee to divide a Trust and allocate to
himself as beneficiary those specific Trust assets he wishes to receive. These are impo~t and
critical issues in Pennsylvania law and all aspects of this record should be open.
14
III. CONCLUSION
Accountant has failed to establish any basis to seal this record. He may want to hide
from public view any record of his shameful actions, and hide any record of any challenges to his
Trustee decisions, but there is no identification of any definite and serious injury that would
occur by not sealing this record. This entire proceeding, including its unique facts and the
important legal issues involved, should remain in the light of day. For the reasons and
authorities set forth herein, Kalbach Objectors respectfully request that the Motion To
Permanently Seal The Record be denied in its entirety and that this record, in its entirety, remain
open.
Respectfully submitted,
METTE, EVANS & WOODSIDE
By:
~i-~
Howell C. Mette, Esquire
Sup. Ct. J.D. No. 7217
Daniel L. Sullivan, Esquire
Sup. Ct. I.D. No. 34548
Vicky Ann Trimmer, Esquire
Sup. Ct. I.D. No. 49679
3401 North Front Street
P. O. Box 5950
Harrisburg, PA 17110-0950
(717) 232-5000 - Phone
(717) 236-1816 - Fax
DATED: r; Ilo/D '1
Attorneys for Kalbach Objectors
EXHIBIT A
"
HEMPT BROS., INC.
CONFIDENTIALITY AGREEMENT
~
AGREEMENT dated as of the 11'" day of June, 2003 (the "Effective Date") by
and between ROBERT HEMPT KALBACH, SR., for himself, his heirs, personal
representatives, successors and assigns ("Kalbach") and HEMPT BROS., INC., a
Pennsylvania Corporation ("HBI").
WHEREAS, Kalbach has requested that HBI provide him with certain
confidential and proprietary information in order to enable Kalbach to evaluate the
possibility of entering into a settlement regarding various issues that have arisen
regarding the Estate of Loy T. Hempt and the Residuary Trust Under Will of Loy T.
Hempt, deceased, and division thereof (collectively "Trust") (the "Settlement"); and
WHEREAS, Kalbach has requested the HBI provide him with certain confidential
and proprietary information as part of the discovery process regarding the Objections
filed by Kalbach in the Estate of Loy T. Hempt and the Residuary Trust Under Will of
Loy T. Hempt, deceased (the "Litigation"); and
WHEREAS, the parties wish to set forth the terms and conditions upon which
HBI may provide confidential and proprietary information to Kalbach;
NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties agree
as follows:
1. HBI shall provide to Kalbach certain Confidential Information (as defined
in paragraph 2 below) under and subject to the provisions hereof solely for the purpose
of providing Kalbach the opportunity to evaluate a possible Settlement and for the
Litigation related to the Objections filed by Kalbach in regard to the First and Final
Account filed by the Estate of Loy T. Hempt and the Residuary Trust Under Will of Loy
T. Hempt, deceased in the Court of Common Pleas, Orphans' Court Division,
Cumberland County and for no other purpose whatsoever (the "Authorized Purpose").
2. For purposes of this Agreement, "Confidential Information" means any
and al information which HBI deems confidential or proprietary, whether in written, oral
or other form, which is provided to Kalbach by HBI. Information deemed "Confidential
Information" includes, without limitation: agreements, financials; reports, projections,
records; analyses; compilations; studies; financial statistical, technological or other
business information or processes, to include those prepared by or for Kalbach
containing such Confidential Information.
3. For purposes of this Agreement, Confidential Information shall not include
any information that Kalbach can prove by written evidence: (i) was known to one or
more of them prior to disclosure by HBI and without violation of this Agreement; (ii) is,
as of the time of its disclosure, or thereafter becomes, part of the public domain through
no fault of Kalbach; (iii) was made known to Kalbach by a third person who Kalbach
reasonably believes had the right to disclose the information to Kalbach; or (iv) is
required to be disclosed pursuant to governmental authority, law, regulation, duly
authorized subpoena or court order. Notwithstanding the foregoing, except as
expressly permitted in Section 4 below, prior to any disclosure to any third party of any
Confidential Information under subpart (iv) above or other information deemed to be
Confidential Information pursuant to this Section 3, Kalbach shall provide prompt written
notice to HBI of its intent to make such disclosure in order to permit HBI with an
opportunity to pursue a judicial protection order if it so chooses.
4. Kalbach agrees:
(i) to take all steps necessary (A) to ensure that
the Confidential Information or any part
thereof, in any form, is not disclosed to, or
discussed with, any third party except his legal
and/or business valuation advisors in
accordance with Paragraph 4(iii) below, and
(B) to treat and keep any and all of the
Confidential Information as confidential;
(ii) to use the Confidential Information solely for
the Authorized Purpose;
(iii) to disclose the Confidential Information only to
his legal and/or business valuation advisors,
provided that (A) such advisors (1) have each
been informed of the confidential, proprietary
and secret nature of the Confidential
Information, (2) have a demonstrable need to
review such Confidential Information for the
Authorized Purpose, and (3) have agreed, in
writing, to be bound by the terms and
conditions set forth in this Agreement, and (B)
Kalbach shall be responsible and liable for any
breach by such advisors of any and all of the
terms and conditions of this Agreement.
(iv) that HBI is and shall remain the exclusive
owner of its Confidential Information, and no
license or conveyance of any rights in or to the
Confidential Information is granted to Kalbach,
or implied under the terms of this Agreement;
and
(v) not to use any Confidential Information to
compete directly or indirectly with HBI or for
any purpose other than the Authorized
Purpose.
5. Upon the request of HBI, Kalbach shall return to HBI or, at HBl's direction,
to destroy any and all of the Confidential Information and all documents, data, materials
or writings containing any, and all, other manifestations of the Confidential Information,
along with any copies and photocopies thereof, in which event Kalbach shall certify to
HBI that such destruction has occurred, provided however, such request shall not be
made prior to the final Settlement or completion of the Litigation, including all appeals.
6. This Agreement shall commence on the Effective Date and expire four (4)
years from the Effective Date.
7. If Kalbach determines not to pursue a Settlement, Kalbach shall promptly
notify HBI of such determination, whereupon HBI shall not be requested to, nor be
under any obligation to, provide any additional Confidential Information hereunder,
except as may be required pursuant to discovery in the Lititgation.
8. Kalbach understands and acknowledges that neither HBI nor any of its
officers, directors, employees, representatives or agents is making any representation
or warranty, express or implied, as to the accuracy or completeness of the Confidential
Information and neither HBI nor any of its officers, directors, employees,
representatives or agents will have any liability to Kalbach or any other person resulting
from his use of the Confidential Information. The foregoing to the contrary
notwithstanding, to the best of its knowledge and without independent investigation, HBI
believes that the Confidential Information provided hereunder is accurate in all material
respects.
9. All requests for, and the delivery of, Information shall take place in
accordance with the procedures described on Exhibit "An attached hereto and made a
part hereof.
10. The parties hereto understand and acknowledge that any breach or
threatened breach by Kalbach or an advisor shall result in irreparable injury and
damage to HBI which shall not be adequately compensated in money damages, that
HBI shall have no adequate remedy at law for any such breach, and that, in addition to
any other legal remedies which may be available to HBI, HBI shall be entitled to such
. .
equitable relief as may be necessary to protect it against any such breach or threatened
breach, including, without limitation, injunctive relief. In addition, HBI may recover any
damages (including without limitation all court costs and reasonable attorneys' fees) it
may incur as a result of such breach or threatened breach.
11. This Agreement constitutes the complete understanding of the parties
hereto on the subject matter hereof and may not be modified, amended or altered
unless in a writing signed by duly authorized representatives of the parties hereto. The
rights of Kalbach hereunder are personal to him and may not be assigned. This
Agreement shall be binding upon and insure to the benefit of the parties hereto and
their respective heirs, personal representatives, successors and permitted assigns.
12. The failure or delay by either party hereto in exercising any right, power or
privilege hereunder shall not operate as a waiver thereof, and any single or partial
exercise thereof shall not preclude any other or further exercise thereof or the exercise
of any right, power or privilege under this Agreement.
13. This Agreement shall be governed by, and construed in accordance with,
the laws of the Commonwealth of Pennsylvania without regard to the conflict of laws
principles of Pennsylvania. The parties hereto agree that jurisdiction and venue for
resolution of any disputes hereunder, and all actions to enforce this Agreement, shall
be only in the Court of Common Pleas for Cumberland County or in the United States
District Court for the Middle District of Pennsylvania.
14. Kalbach shall be permitted to discuss and share Confidential Information
with other persons who are parties to the Litigation who have signed a similar
Confidentiality Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed
by their respective duly authorized representatives effective as of the Effective Date.
HEMPT BROS, INC.
a Pennsylvania Corporation
~'.?-/M
By: / GERALD L. ,
Title: Secretary I Treasurer
~
Robert Hempt Kalbach, Sr.
(SEAL)
r
. . .
EXHIBIT "An
REQUESTS FOR INFORMATION
1. All requests for information must be directed to the attention of Richard
W. Stevenson, Esquire, McNees, Wallace & Nurick LLC, 100 Pine Street, P.O. Box
1166, Harrisburg, Pennsylvania 17108-1166, telephone: 717-237-5208; FAX: 717-237-
5300; E-mail: rstevens@mwn.com. Notwithstanding the foregoing, discovery requests
in the Litigation may be directed to counsel of record in the Litigation.
2. So long as the Trust and Kalbach are actively pursuing and/or negotiating
a Settlement or the request is made pursuant to a discovery in the Litigation, HBI
agrees to provide Kalbach with Information in the possession or control of HBI
reasonably necessary in order for Kalbach to evaluate a Settlement; provided, however,
that (i) providing such Information does not unreasonably interfere with the operation of
HBl's business; (ii) HBI shall not incur any cost or expense in providing such
Information, and (iii) HBI shall have the right at any time, in its sole discretion, to elect
not to provide Information.
:326410 _1
.. '" .
CERTIFICATE OF SERVICE
I certify that I am this day serving a copy of the foregoing document upon the person(s)
and in the manner indicated below, which service satisfies the requirements of the Pennsylvania
Rules of Civil Procedure, by depositing a copy of same in the United States Mail at Harrisburg,
Pennsylvania, with first-class postage, prepaid, as follows:
Ivo V. Otto III Esquire
MARTS ON, DEARDORF,
WILLIAMS & OTTO
10 East High Street
Carlisle, P A 17013
Donald Kaufman, Esquire
McNEES, WALLACE & NURlCK
100 Pine Street
P.O. Box 1166
Harrisburg, P A 17108-1166
Joel Zullinger Esquire
ZULLINGER & DAVIS
14 North Main Street
Suite 200
Chambersburg, P A 17201
Respectfully submitted,
METTE, EVANS & WOODSIDE
By:
~-1-~
Howell C. Mette, Esquire
Sup. Ct. LD. No. 7217
Daniel L. Sullivan, Esquire
Sup. Ct. I.D. No. 34548
Vicky Ann Trimmer, Esquire
Sup. Ct. I.D. No. 49679
3401 North Front Street
P. O. Box 5950
Harrisburg, PA 17110-0950
(717) 232-5000 - Phone
(717) 236-1816 - Fax
DATED: S-/t "'/r}'-/
Attorneys for Kalbach Objectors
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