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HomeMy WebLinkAbout94-05000 " , , " ,r 1'1 .' "II I . ,1.1 ',I i' I: . I , , ~ " I, ,~ , , ~ J .1 ) / / / r , ' " " i I I , , ,I II" " " I . J ~ , , , , v. IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNA, NO. 94.5000 EQUITY TERM CIVIL ACTION-EQUITY PLATANOS, INC., Plaintiff A THANASIOS VELLlOS, Defendant RESPONSE TO PETITION TRUE COPY FROM RECORD In T. . lllilY ....,., I '*' lIIlIO III q hMd and .. ~ flUId ColII1It ~. "It "r,0~:~ r~l1;~~~~ Ir{ 1'nIUlGnaIII't " Admitted. 2. Admitted. 3. Denied as a conclusion of law. 4. Admitted, except that Bill Katsifis was the sole purchaser of such shares. 5. Denied. Said term of the Installment Sales Agreement speaks for itself. 6. Denied. Said term of the Installment Sales Agreement speaks for itself. 7. It is denied that Defendant is actively involved, either directly or indirectly, with the Flamingo Restaurant and Coffee Shop, Inc. or with the activities being undertaken, Including all activities and services characterized in subparagraphs A through E. It is denied that the site is within seven and seven tenths (7,7) miles from the Windsor Family Restaurant, and proof thereof is demanded. 8. Denied. Defendant does not intend to act as chef or cook at the Flamingo as is evidenced by communication of counsel dated August 3', , 994 and received by Katsifis or his agents on September', , 994, fully five (5) days before Katsifis caused the Instant action to be filed. (See true and correct copy of letter, receipt and return receipt attached hereto as Exhibit A.) 9. Admitted, except that It is denied that Defendant is integrally connected with said business, either as an owner thereof or otherwise. On the contrary, Defendant has no intention of becoming so connected during the term of the agreement. , O. Denied. Defendant has not solicited business from plaintiff's customers and has no intention of doing so. , ,. Denied. After reasonable investigation, the Defendant is without knowledge or information sufficient to form a belief as to the truth of the averments of paragraph 11 and proof thereof Is demanded. 12. Denied as a conclusion of law, WHEREFORE, Defendant respectfully requests your Honorable Court to dismiss Plaintiff's petition and all of the relief requested therein. NEW MA TIER 13. By way of further answer and defense, Defendant avers the following new matter: 14. Plaintiff is not a proper party to this proceeding. Said Intstallment Sales Agreement Is between Defendant and Bill Katslfls with respect to all matters alleged by Plaintiff, 15, Because Defendant's continued interest in Plaintiff by reason of Plaintiff's shares being held In escrow pursuant to said Installment Sales Agreement, permitting Plaintiff to pursue this cause of action Is an improper use and depletion of corporate assets and funds, exposing Defendant to real and potential loss. 16. Plaintiff (or Bill Katsifls) has breached said Installment Sales Agreement by failure to pay Defendant the monthly installments in a timely fashion as required thereunder, has failed to provide Defendant with copies of the bank receipts evidencing monthly rental payments to "eia Markets as required thereunder, and has denied making available to Defendant the monthly statement of Income and expenses of Plaintiff since June 1, 1994, all of which amounts to "unclean hands" and is the basis for denying Plaintiff's various claims for relief. 17. Plaintiff has stated no basis upon which preliminary injunctive relief is proper or can be granted in this case. 18. Plaintiff has no clear right to relief. 19. Plaintiff has a clear and :!dequate remedy in damages at law if in fact its legal pOSition Is correct and any damage accrues to it. 20. Any preliminary injunction granted by this court should be conditioned upon the posting of a bond in an amount sufficient to reimburse Defendant all damages sustained by reason of granting the injunction, including ali legally taxable costs and fees as hereinafter alleged. In no event, should any funds of Platanos, Inc. be used for such bond or any other purposes connected therewith. WHEREFORE, Defendant respectfully prays this Honorable Court to dismiss the Petition for Preliminary Injunction, or, alternatively, to issue its '1\, .. ,!, /l~' /" August 31, 1994 Mr. Bill Kalslfls Windsor Family Restauranl 5144 Simpson Ferry Road Mechanlcsburg, Pennsylvania 17055 In Re: Tom Velllos . Flamingo Restaurant Dear Bill: Please be advised Ihal as of 10:30 A.M. Ihls morning I was advised by Rob Frey that he Is In the process or terminating his represenlation of you. Therefore, I am writing to you directly, I have had several conversations wllh Effie Velllos Ihls morning concerning the Flamingo (formerly Chalet) Restaurant. She has assured me In Ihe mosl definite terms of the following: 1 .) Tom Velllos Is not and will not be Involved In the Flamingo. He Is not an owner of any Interest. Only Effie. her uncle and her cousin are holders of any Interesl. 2.) Tom will not be Ihe chef or cook or be employed In any other capaclly nor will he work for free In any manner al Ihe Flamingo. 3.) Effie's uncle, Jim Zahos. Is 56 years old and has plenty or experience in the reslaurant business and Is a good chef. Her cousin, Gus, has plenty 01 experience as a cook and short order cook. They have managed 10 survive on their own so lar wllhoul Tom Velllos and Inlend 10 conllnue to do so in Ihe fUlure, 4. ) There is no dale sel yel for opening the business. Therefore II Is obvious anylhlng you are hearing Is only speculalion. In view of thai, the assurances from Effie which. I am communicaling to you at her dlrecllon and under her authority, should serve \0 put an end 10 this mailer unless you discover Ihat Tom Is, In facl, working atlhe Flamingo, an event, In view of Ihe assurances given, which I would regard as highly unlikely. 5. ) I have also been Inslructed to notify you Ihal your payment Is late, I hope this will be paid promptly and Is nOI a prelude to an effort to cause my client's aggravation cw . "" Cl'l\le"T '1 , I , , ~ ~ ' J e. 'I 8 ~. m ~ ~ . . ~! Iii ~~ L ~ . i~ ~ ! . , . . 'f ~ ~ ~ il :! ~r ~ . ~ ~ ~ ~ I 'P ~ ~ ~ ~ ;;,: .. , , L STATEMENT OF THE CASE A. PROCEDURAL HISTORY OF THE C~ This Bellon was commenced by Plelnllff's filing of a Complaint on or about September 6, 1994. Plaintiff flied a Petition for Preliminary Injunction coneurrenlly with the filing of the Complaint and prayed for the decree and entry of such an InJunellon wllhoulthe holding of a hearing. Your Honorable Courl, by Order dated September 8, 1994, refused to grant said prayer and scheduled a hearing on the prayed for Preliminary Injuncllon for September 15, 1994 al 9:30 o'clock A,M. An answer to the Petition for Preliminary Injuncllon with New Maller has been flied by Defendant prior to the hearing. This BRIEF-MEMORANDUM Is submitted In opposition 10 Plalntlff's prayer for a Preliminary Injunction. B, PROPOSED FINDING OF FACTS OF CASE 1. DEFENDANT ATHANASIOS VELLIOS entered Into an INSTALLMENT SALES AGREEMENT FOR 250 SHARES OF STOCK IN PLATANOS, INC. on Apr1l2B, 1993 with BILL KATSIFIS. TONY KOUKOUNAS joined In the AGREEMENT to evidence his assent to Ihe warranties and guaranties made by him therein. Defendant has admitted thai the copy of the AGREEMENT (without Its exhibits), as now augmented and corrected with the addition of page 2, (which was originally missing from the copy attached to the Petlllon) Is now a true and complete copy. 2. Page 3 of the AGREEMENT contains the following paragraph: Covenant not to compele, Velllos agrees that he will not, either as an Individual or In any other business form, dlreclly or Indirectly, enter Into compelltlon with Platanos, Inc. or engage In the same or similar type of baseness (sic) as the Windsor Family Restaurant whether as a principal, agent, employee, or straw party within a ten (10) mile radius of the Windsor Family Restaurant, located at the corner of Trlndle and Windsor Road (sic) for a period of three years from the date of this contract. 3, The Windsor Family Restaurant Is actually located near the Intersection of Simpson Ferry Road and Wesley Drive and has a Mechanlcsburg mailing address of 5144 Simpson Ferry Road. (See Testimony of Tony Koukounas, hereinafter cited as T,K,; Petition, parag. 1.; and ResDOnse, !d.), 4. Defendant was the owner of 250 shares of Platanos, Inc. at the lime the AGREEMENT with BILL KATSIFIS was made. TONY KOUKOUNAS was then and stili Is the owner of the other 250 shares of a total Issue of 500 shares. (T.K.) I " l: I' r i , , . 1 , 5, Defendant was formerly employed as a chef at the Windsor Family Restaurant and was In charge of Ihe kitchen and also ordered food from time to time, He was In charge of .speclals," and along wllh others, took a hand In public relations, and hiring and firing the kitchen help. (T.K.) 6, Defendant's wife. "EFFIE" VELLlOS, also worked at the Wlndllor Family Restaurant as a cashier, hostess, floor manager, public relations person, and from time to time had some hand In hiring and firing floor personnel. She also had a hand In bookkeeping and banking activities. (T.K.) 7, TONY KOUKOUNAS also took part In managing and operating the Windsor Family Restaurant, Including doing soma cooking In the kitchen, some hiring and firing of kitchen help and floor personnel and some buying of food, (T,K.) 8, The Flamingo Restaurant and Coffee Shop, Inc, Is leasing the former Chalet Restaurant on U. S, Route 15, near Dlllsburg In York County, The distance from the Windsor Family Restaurant to the Flamingo, as measured by the most direct route over highways, that being Wesley Drive to Route 15 and then directly south, varied from point of departure and entrance and odometer to between 9,3 to 10.7 miles, It Is evident, however, that "as the crow flies" the distance Is less than ten (10) miles. (See Testimony of T.K" Bill Katslfls, hereinafter cited as B.K.; Charles E. Shields, III, hereinafter cited as C,S.; Athanaslos Velllos, hereinafter clled as A.V.; map) 9. The owners of the Flamingo Restaurant and Coffee Shop, Inc. are "EFFIE" VELLlOS, CONSTANTINOS (GUS) GEORGEAKOPOULOS. (married to "EFFIE'S" first cousin); and DEMETRIOS (JIM) ZAHOS ("EFFIE'S" uncle), (T,K,; Petition, parag. 9, and Response, parag, 9) 10, Defendant has no ownership or other Interest In the Flamingo and has not loaned or advanced any money or funds to his wife for the purpose of obtaining an Interest In the business. (A.V,) 11 . No evidence whatsoever was Introduced to Indicate that Defendant's wife Is engaged In any subterfuge concerning her Interest In the Flamingo nor has any evidence whatsoever been introduced to Indicate that sl'e Is In any way engaging In any fraud on the covenant or covenantee. 12. Defendant, his wife. and her shareowner relatives were aware of the covenant not to compete and took honest good faith efforts as lay people to measure the distance from the Windsor Family Restaurant to the Flamingo. (C,S.; A.V.) 1 3. The use of Defend9nt as a chef to help at the Flamingo for a few hours per day I'l I ! ,I i II ~ Ii I, i I ,,' 2 was Inlllally considered but Defendant never considered being an owner or otherwise taking any Interest In the business because of numerous bad experiences in the past with partners or business associates, whether merely friends or relallves. (C.S.; A.V.) 1 4, The owners are qulle capable of owning and running the Flamingo wllhout Defendant as Is evidenced by their past experience In the restaurant business, This Is parllcularly true of DEMETRIOS (JIM) ZAHOS who has close to thirty (30) years experience In the business as an owner and a chef and who has plenty of experience cooking everything from hot dogs to more sophlsllcated fare such as beef cakes, pork chops and the like, Also. the owners have recenlly discussed the employment of an addlllonal chef to be brought In from out of state. (Tesllmony of Chris Coy, hereinafter C.C,; C,S.; A.V.) 15. When Plalnllff's wllness, Chris Coy, at the order of BILL KATSIFIS, vlslled the Flamingo on several occasions, she only saw Defendant once. At that lime, Defendant gave her business cards and a menu to take to "the boys" . a reference to BILL KATSIFIS and TONY KOUKOUNAS . clear evidence of Defendant's good fallh and lack of guile or any Intenllon to engage In decell or subterfuge. The business cards did not mention Defendant's name. (C.C.) 16. When Plalnllff's wllness, Chris Coy, engaged Defendant In conversallon In late August or early September concerning his part In the Flamingo, ShE was told the business was not Defendal'lt's and that a chef would likely be brought In from out of state. (C,C.) 17. Plalnllff's witness, Gregory Carrera, a restaurant supplies salesman, vlslled the Flamingo on six (6) occasions. Only on one vlsll, earlv In August. did Defendant take any acllve part In any discussion concerning restaurant equipment and that concerned trying to help the witness determine which model of steam tray was wanted by the Flamingo's owner. Defendant suggested wllness obtain the model number from the lIem at the Windsor Restaurant. There was no statement by the witness nor even an Inllmallon that this was to be done surreplltiously . further evidence of Defendant's good faith and lack of guile in the maner. (Tesllmony of Gregory Carrera, hereinafter G.C.) 18. Plalnllff's witness. Richard Norrie, a kitchen equipment Installer, tesllfled that he saw Defendant at the Flamingo on several occasions and that the only time he saw Defendant doing anything, Defendant was washing some pots and pans. He also stated that this was cause for joking between the two of them, (Tesllmony of Richard Norrie, hereinafter R.N,) 19. Plalnllff's witness, Richard Norrie, further testified that Defendant had no 3 part In the Inslallatlon or service contracl nor did Defendant have any Input as 10 Ihe choice 01 equipment. (R.N.) 20. PlalntlN's wllness, Steve Kouros, Indloated that he had been told by one 01 the owners 01 the Flamingo I\pproxlmalely three 131 months aQo, Ihat Delendant m.iQh1 work several hours per day. (Testimony 01 Steve Kouros, herelnaller S.K.) 2 1 . Defendant gave complelely credible testimony thaI he had clocked the distance Irom the Windsor Family Restaurant's 'ront door to the Iront door 01 the Flamingo and lound lito be 10.0 miles and that when using the turn lane on Roule 15 to obtain entrance to the Flamingo, Ihe distance was 10.7. (A.V.) 22, Delendant has not parllclpeted In the management 01 the Flamingo, has never had any ownership Interest In the Flamingo, has not cooked any meals at the Flamlnoo . which Is not even open yel, has never received a salary or any other remunorallon Irom the Flamingo, has laken no part In any remOdeling or similar activities, except to oller assistance to salesman Carrera and one 01 the owners regarding the appropriate model 01 a steam tray, has not hired or IIred anyone, and has nol solicited any customers, 23. In mid 10 late August, when Delendantllurd rumors that TONY KOUKOUNAS and BILL KATSIFIS were angry at him and were saying ha was breaking the covenant and were threatening 10 sue him, he contacled his Attorney, Charles E. Shields, III, 01 Mechanlcsburg, Cumberland County and arranged a consullatlon, (C.S., A.V,) 24, Delendantllslened to an explanallon concerning possible meanings ollhe word "radius" In the t:Ovenant and 10 options 10 take to avoid trouble wllh BILL KATSIFIS and TONY KOUKOUNAS and Inlormed counsel to communlcale 10 Mr, ROBERT G. FREY, then counsellor BILL KATSIFIS, thaI Delendant would not acl as a chel or In any other capacity at the Flamingo. (C.S., A.V,) 25, Mr, Shields, by letter 01 August 31, 1994, sent by IIrst class mall and by certllled mall wllh relurn receipt, signed lor by BILL KATSIFIS or his agenls on September 1, 1994, unequivocally assured BILL KATSIFIS that Delendant would nol be Involved wllh the Flamingo. (C.S., copy olleller attached to Response) 26. There 15 absolutely no evidence 01 any communication to Mr. Shields Irom either BILL KATSIFIS, TONY KOLJKOUNAS or their present counsel at any time belore the IIl1ng 01 the Instant action nor Is there any evidence 01 any communication Irom either BILL KATSIFIS or TONY KOUKOUNAS 10 Defendant before the said IIl1ng. (C,S., B.K., T,K., A.V.) 27. Despite Ihe clear and unequivocal Assurances made by Delendantthrough his coullsel. and desplle the virtually negligible nalure 01 Delendant's previous acllvltles at the 4 Flamingo I Plaintiff's counsel proceedlld, primarily and predominantly slIer August 31, 1994, and slIer September 1, 1994, to proceed to Incur the e~penses and costs or preparing and going forward wllh an unnecessary law suit. (See Plaintiff's e~hlblt concerning legal fees and e~penses and the entries as to dates and work performed Ihereln,) 28, Defendant has stated unequivocally that he does not Intend to work at the Flamingo during Ihe term of Ihe covenant not to compete, II. ARGUMENT A, PLAINTIFF HAS NO RIGHT TO PRELIMINARY INJUNCTIVE RELIEF IN THIS CASE. 1 , PLAINTIFF CANNOT HAVE DEFENDANT'S WIFE ENJOINED FROM TAKING PART IN THE FLAMINGO RESTAURANT AND COFFEE SHOP, INC, Although Plaintiff has not asked for an Injunction to prohibit Defendant's wife from laking part In the business of the Flamingo. your Honorable Court made a passing reference to this Issue In a remark from the Bench, Therefore, Defendant shall provide some case law and argument upon this Issue, Defendant's wile was not an owner of any shares of Platanos, Inc.; was not a signatory nor a party to the AGREEMENT; and was not a covenantor regarding the covenant not to compete. The general rule on this Issue Is that: A person who has not executed or signed the contract or covenant Is not bound by the stipulation against engaging In business, and she may not be enjoined from competing with the covenantee. She may, however, be restrained from engaging in the business In partnership with, or as an employee of the covenantor or seller. In other words, II she engages In subterfuge, fraud, and the like. in order to aid the covenantor In violating his covenant or receiving any benefit from such violation, her activities may be enJoined. See, In this regard. Russell v, Mullis, 479 So, 2d 727 (Ala., 1985); WelckQenaut v. Eccles, 173 Mich. 695, 140 N, W. 513 (1913) (business put In wife's name solely to help husband evade the covenant); Harris v Theus, 149 Ala, 133. 43 So, 131 (1907) (wife was not attempting In good faith to engage In business on her own, but was Involved In a SUbterfuge); Up River Ice Co, v, Denier, 114 Mich. 296, 72 N, W. 157 (1897) (Competing business was actually started and built up by husband.) Plaintiff Introduced no evidence that Defendant's wife has acted In anything but good faith. All evidence entered makes It abundantly clear that Defendant Is not using his wife as a front for him, Is not paying her a salary, nor 15 he engaged with her In a subterfuge. Also, 5 he did not tend her his money to engage In this bualness. (FF, 9. 10) It Is thus abundantly clear that Plaintiff Is not entitled 10 enjoin Defendant's wile from laking part In the ownership and/or operation of the Flamingo. 2. PLAINTIFF CANNOT ESTABLISH THE PREREQUISITES ESSENTIAL TO THE ISSUANCE OF A PRELIMINARY INJUNCTION IN PENNSYLVANIA, A. BRIEF REVIEW OF GENERAL PRINCIPLES OF PENNSYLVANIA LAW REGARDING I~UNCTIONS, 'An Injunction Is an extraordinary remlldy which should be granted only with great caution." School District of City of Pittsburgh v, Zebra, 16 Pa. Commonwealth Ct. 203. 208,326 A, 2d 330, 333 (1974). au: Rick v, Cramp, 357 Pa. 83, 91, 63 A. 2d 84, 88-89 (1947): Commonwealth v. National G9tt~Bbura Battlefield Tawer. Inc., 8 Pa. Commonwealth Ct, 23', 248, 302 A. 2d 886, 894, 1I.1fi1. 464 Pa. 193, 311 A, 2d 688 ( 1973), A court of equity will grant an Injunction only where the rights and equity of the Plaintiff are clear and freG from doubt and the harm sought to be remedied Is great and Irreparable. Sell: Robinson v, Phlladelpple, 400 Pa. 80, 89, 161 A. 2d 1, 6 (1960); McDonaldv. NOQa, 393 Pa. 309, 312,313, 141 A. 2d 842. 844 (1968); Williams v. Brl.d.Y.,391 Pa. 1,7,136 A. 2d 832. 836 (1957); Rick v, Cramp, 5J.Ullil, 357 Pa, at 91, 53 A, 2d at 88-89; Wlndber BorouQh v, Spadafora, 356 Pa. 130, 134, 51 A, 2d 726, 728 (1947). Pennsylvania courts have long and consistently regarded the preliminary Injunction as a particularly harsh and extraordinary remedy to be utilized only In exceptional circumstances. SJul".e......g., Rush v. AI(Dort Commercial Properties. Ine., 28 Pa. Commonwealth Ct. 51, 367 A, 2d 370 (1976). The courts have carefully circumscribed the use uf this form of relief by requiring that certain criteria be "fully and completely established" by the proponent of the Injunction before It will be granted. Commlllee of Seventy v. Albert. 33 Pa. Commonwealth CI. 43, 49, 381 A. 2d 188, 190 (1977). In the Commlllee of Seventy case, at the pages above cited, the Commonwealth Court reiterated the established authority delineating the requirements which IJ1Ia1 be established before a preliminary Injunction can be Issued: Three criteria have been established for the granting or a preliminary Injunction, which, as a harsh and extraordinary remedy, Is to be granted only when and If Ul:h criteria has been fully and compl6tely established. Qad!t Alliance Corp. Iv Philadelphia Mlnlt,Man Car Wash CorP" 450 Pa, 367, 301 A. 2d 816 (1973)); Gillette Co, v, Master, 408 Pa. 202, 182 A. 2d 734 (1962). They are (1) the preliminary Injunction must be necessary to 6 prevent Immedlete and Irreparable harm which could not be compensated lor by damages: (2) greater Injury would result from the denial 01 the preliminary Injuncllon than from the granting 01 It: and (3) It would operate to restore the parties to the status quo as It existed prior to the alleged wronglul conduct, In addition to meeting all three crlterla, the court must be convinced that Ihe plaintiff's right to a preliminary Injunction Is clear '" and general equity jurisdiction must be warranted. lemphasls original: bracketed language added,) B. MORE PARTICULAR BURDENS UPON PLAINTIFF WHICH MUST BE MET TO JUSTIFY THE ISSUANCE OF A PRELIMINARY INJUNCTION AND ANALYSES THEREOF, 1 , Plalntlfl In the Instant case must demonstrate at Ihe outset a clear case lor judicial redress, New Caslle Orthopedic Associates v. BurlJa, 481 Pa. 460, _, 392 A, 2d 1383, 1385 (1978): Jostan Aluminum Products V. MI. Carmel District Industrial Ewld., 256 Pa, Superior Ct. 353, 389 A. 2d 1160 (1978): and Board of Directors of the School District of the City of Scranton v, Roberts, 13 Pa. Commonwealth Ct. 464, 468, 320 A. 2d 141 (1974), wherein the court noled: Furthermore, In a case In which a parly requests a preliminary InJunction, he must also establish a clear right to the relief, and the lallure to receive same musl result In Immodlate and Irreparable Injury. (citations omIUed.) (emphasis added,) 2, Plaintiff has the burden of proving, bv clear and convlnclnq evidence, as a lact, all conditions which would warrant Ihe decree for an Injunction. 1\ Is not enouQh to show that a result m10ht take place In the future, or to rest the application only on Inferences and theories: there must be actual proof by positive tesllmony. Where, as here, Defendant's acts are prima facie legal. the burden Is on the Plaintiff to also show Inlury resulllno therefrom. Wahl v, Methodist EplscQpal Cemeter.y Ass'n, 197 Pa. 197,46 A. 913 (1900): Kelly v, Phlladelohla, 382 Pa, 459, 115 A, 2d 238 (1955): Shryock v, Association of United Fr~ternal Buyers, Inc" 135 Pa, Superior Ct. 428, 5 A. 2d 581 (1939): Brown v, Lehman, 141 Pa. Superior Ct. 467, 15 A, 2d 513 (1940): Pusey v, WrlQht,31 Pa, 387 (1858): Scranton v, People'S Coal Co, 256 Pa, 332, 100 A. 818 (1917): Halo Corp. v, Thomas S, Gassner Co" 163 Pa, Superior Ct. 611, 63 A. 2d 433 (1949) and as to burden 01 proof generally In equity acllons, see Standard Pennsylvania Practice 2d, ch. 79, 3, More parllcular burdens applicable to the Inslant case Include: a.) An Injuncllon will nOI be granted except upon clear and convlnclno evidence of an Intended or threatened Injury, which must be actually threatened and not merely 7 anll<;lpaled, and must be pracllcally certain and nol merely probabla. Shryock Y. Association of United Fraternal Buyers, Inc., 136 Pa. Superior Ct, 428, 5 A. 2d 681 (1939); Halo Corp. y, Thomes S. Gassner Co., 163 Pa. Superior CL 611, 63 A. 2d 433 (1949); Clinton y, Carma!. Inc" 288 Pa, Superior Ct. 433, 432 A, 2d 238 (1981); 1S.i.U~ y, Phlladelohla, 382 Pa. 469, 116 A. 2d 238 (1966); Erie y, Gulf 011 CorP" 396 Pa, 383, 160 A. 2d 361 (1969). The best evidence Plaintiff's own witnesses could produce, at least one of whom was clearly sent to the Flamingo to spy on the Defendant, was exceptionally ltiWlK as to both 1lmi ~ and conten!, As to time frame, It appears each activity of even the most negligible and contenllous purported merit as a basis to IIle this acllon was undertaken before Defendant was aware that his Dosslble working as a chef for a few hours per day was objected to by Plaintiff or that It was going to be considered a violation by Plaintiff of the covanant not to compete. E.g., Chris Coy received business cards and a menu early on to take to "the Boys" . meaning MESSRS, KATSIFIS and KOUKOUNAS, (F.F. 16, 16.) This does not violate the covenant either directly or Indlreclly unless MESSRS. KATSIFIS and KOUKOUNAS wish to be so foolhardy as to argue Defendant was trying to compete with them by luring them out of their own kitchen and establishment with his apparenlly superior COOking and the Flamingo'S proposed new menu. Gregory Carrera could only state one episode where Defendant took any part In ordering anything and that was only In relation to trying to help determine which model of a steam tray was wanted by the Flamingo's owners, His suggestion was to go to the Windsor Family Reslaurantto get the model number from the steam tray located there. There was llil tesllmony nor so much as hint that Defendant suggested this simple act be done clandestinely. This occurred In early Alll;IUS!. (F.F. 17) Richard Norrie, Plaintiff's witness, never took any orders or the like from Defendant and the only time he ever saw Defendant doing anything, he was washing pots and pans, a cause for some laughter between them. (F.F. 18, 19.) Plaintiff's witness, Steve Kouros. could only state that he had been told by one of the owners of the Flamingo that Defendant mJ.Q.b.l. work there several hours per day. That statement took place approximately three 131 months ago! (F.F. 20) In summary, Plalntiff's own testimony deals with what were, some lime ago, lD.a!a conslderallons concerning the possibility of Defendant's cooking at the Flamingo. These considerations have long since been put to rest. Not only Is no Injury threatened or Intended. there had been clear assurances given In writing days before this action was lIIed fl ur even worked on to any degree, that Delendant was no longer considering doing any work at the Flamingo. (F,F. 25, 26, 27,) Thus there was clearly no jusllflcatlon for the current aollon, let alone the Issuance of a preliminary Injunction because there Is absolutely no evidence that Defendant then or now Intended or threatened any Injury. It Is even more abundantly clear that no Injury has occurred In view of the fact the Flamingo Is not even open yeti The rule~ make It clear that mere anllclpallon will not be sufficient to justIfy an Injuncllon nor will a mere probability suffice. Addlllonally, Plalnllffs have not been able to show any Injury because there Is no Injury to show. In the Instant case there Is not even a probability the covenant will be violated. To the contrary, there are clear and unequivocal assurances that the covonant will not be violated, In view of the above, Plalnllffs are without any Jusllflcatlon for even bringing this acllon, let alone praying for an Injunction. b,) It might be wise to address the earlier and negligible acllvllles undertaken by Defendant as to whether they can even be considered violations of the covenant. The general rule concerning the rendering of assistance, other than financial, under covenants not to compete, Is lis lollows: A covenant not to compete Is not breached by the covenantor by his rendering a6slstance to covenantee's competitor unless covenantor has some Interest In the business owned and operated by the persons receiving his assistance, It should also be kept in mind that the term 01 this covenant: "engage" has been specifically held to not Include occasional services voluntarlty and gratuitously rendered lor those persons' convenience or accommodation In good faith. SU, a.g., Simmons v, Johnson, 11 So. 2d 710 (La. App.. 1942) (Covenantor, who had agreed not compete, buill a restaurant building and sold It to coven an tees' compelltor, provided training In operallng a restaurant and even loaned trained employees to the compelllor to get him started In the business. The court adapted Webster's deflnlllon of "compellllon" as the act of seeking or endeavoring to gain what another was endeavoring to gain at the same time, or as common strife for the same object, or lor superiority,): Nelson v, Johnson, 38 Minn. 255, 36 N, W. 868 (1888) (covenant not to compete "dlreclly or Indlreclly," Since the covenant used the term "engage" In business, It was held not to extend to Isolated acts or to occasional services voluntarily rendered lor the convenience or accommodation 01 another In good faith.) Thus It should be apparent that Defendant's negligible and iii. minimis acllons, undertaken some time ago In complete good lalth, did not violate the covenant. It should also be pointed out that, even II they had violated the covenant, they caused no harm whatsoever, ') leI alono any Irreparable harm. Mosl Importantly, Delendant has given clear and unequivocal assurances that he will not compete with the covenantee, There Is clearly no basis to consider Ihe proved acts as a legltlmale reason to even IlIe the Instant action lei alone pray for an Injunction, c.) An Injunction will only be Issued to prevent an Immedlete or Imminent Inlury. Alabama Binder & Chemical Corp. v. Pennsylvania Industrial Chemical Corp., 410 Pa. 214, 189 A, 2d 180 (1963); Albee HomeE, Inc. v. Caddie Homes. Inc'l 417 Pa, 177, 207 A. 2d 766 (1965); Berman v. Philadelphia, 425 Pa, 13, 228 A, 2d 189 (1967); John G. BQlent Co, v, SlIno Testlno & Rapalr. Inc" 471 Pa. I, 369 A, 2d 1164 (1977). Our analysis above Is clearly applicable here as well. We merely re.emphaslze that the Flamingo Is not even open yet, there Is no evidence of any actions undertaken thus lar thaI would even be considered breaches of the covenant, even II those actions undertaken by Delendant could be considered breaches, they were done long belore the Instant action was IlIed. More Importantly, clear and unequivocal assurances have been made to and received by Plalntlfl (BILL KATSIFIS). Clearly there Is neither Immediate nor Imminent Injury 01 any sort present. d.) If the injury Is doubtful. eventual. or contlnoBnt. eQultv will not arant Inlunctlve rellel, Also, the lact that a thing may possibly work Inlur~ to somebody Is llQ ground lor an Injunction. Rhodes v. Dunbar, 57 Pa. 274 (1868); Huckenstlne's Appeal, 70 Pa. 102 (1872); Pennsylvania Co, lor Insurance on Lives v. Sun Co" 290 Pa. 404, 138 A. 909 (1927), Our analysis and above made statement Is clearly applicable here as well. e.) An Injunction will WU Issue to allav lears and aoorehenslon as to luture damages. Thus, a mere threat to do harm, without an overt act, Is not a sufficient ground to grant an Injunction, and mere lear. without reasonable orobablllty of InluQl Is Insulllclent. Eckels v, Welbley, 232 Pa. 547, 81 A, 645 (1911); POllsvllle Union Traction Co. v, St. .QJ.a.ir, 261 Pa, 293, 104 A. 602 (1918); Edmunds v, Dull, 280 Pa, 355, 124 A. 489 (1924), This principle Is clearly applicable to Plaintlff's III.advlsed ellort to obtain an Injunction in the Instant case. I. ) With regard to the principle of substantiality: There must be both Inlury and damaQe to justlly an Injunction. A court may Issue an Injunction only when It IInds that substantial special Inlury Is being caused, or will result lithe Injunction Is denied, and that the delendantls responsible lor such Injury. Unless the wronQ Is manllesl, a preliminary 10 Injuncllon generally will not be awarded, Rhodes v. Dunbar, 57 Pa. 274 (1868); M1IU Really Co. v, Wanamaw, 231 Pa. 277, 79 A. 514 (1911); Rlek v. Cramp, 357 Pa, 83,53 A, 2d 84 (1947); Food Fair Slores, Inc. v. Kllno, 396 Pa, 397, 162 A, 2d 661 (1969); John G. Bryanl Co, v, Sling Tesllno & Rapalr.Jng., 471 Pa, t, 369 A, 2d 1164 (1977); Valloy Forn9 Historical Soclol" v. WaAhlnalon Momorlal ChaDol, 493 Pa, 491. 426 A. 2d 1123 (1961), The Flamingo Is nol yet open. Dlltendonl'ft acllons Ihus tar do not even violate the covenant. Plalnllft (BILL KATSIFIS) has already be on given clear and unequivocal assurances thai Delendant will not, In the luture, breach Ihe covenanl. Plalnll" can clearly II.Q.1 meel Ihe substanllallly lest. g,) With regard to the oanoral orlnelolo 01 Irraoarablllly: An Injuncllon will be granted ~ to pravenl Irreparable Inlury, and Ills necessary lor the plain 11ft 10 show that Irreparable harm will result IIlhe Injuncllon Is not granted. Oberly v, H. C, Frick Coke Co" 262 Pa, 83, 104 A, 864 (1918); Sluqrl v. Gimbel Bros.. Ine,. 286 Pa. 102, 131 A, 728 (1926); Keystone Guild, Ine, v, Pllppes, 399 Pa, 46, 169 A, 2d 681 (1960); Albee Homes, Ine, v, Caddie Holmes, lne" 417 Pll. 177, 207 A, 2d 768 (1966); Samerle Corp, 01 Markel St v, Goaa, 448 Pa. 497, 295 A. 2d 277 (1972). PlelntlH clearly lalls to meel this standard, h.) Assuming, for the purpose ot argument, Ihal Defendant's negligible and lil minimis actions did conslllute a breach 01 the coven ani not to compete. a point we do not concede except tor the limited purpQse 01 argument on this parllcular sub-polnl - then another rule becomes eppllcable, to wit: It Is II.Q.1the Inlllal breach 01 a covenant not 10 compele which necessarily eslabllshes the exislence ollrraparable harm, bul rei her Ihe Ihreal ot unbridled eonllnuallon 01 Ihe viola lion by Ihe covenanlor and Ihe resultanl Incaleulabla darnal}e to the covenanlee's business that conslltutes Ihe Justlflcallon for Ihe Issuance 01 an Inluncllon, John G, Bryanl Co v, Sling Tesllng & Repair, Ine,. 471 Pa, I, 369 A. 2d 1164 (1917). Here, even If there was a past breach 01 Ihe covenant, II occurred quite some lime ago, was negligible and llIl minimis and clear eSBurances have been made Ihat defend ani will nol breach Ihe covenant. I. ) Wllh regard 10 the proleellon 01 Ihe good will 01 a business. II Is Irue an Inluncllon may Issue. But belore It will Issue, there musl be unconlradlcted lesllmony Ihal: Plalnti"'s business is within the restricted terrllory; thaI lhal business has lallan dramalleally since Delendant began working lor Ihe competition; and that an Inlunction Is It nscssllary to prevent Irraparabl9 harm to PlalntlWs customer relationships. Sldco P~per , ,. :\ i ,. i! I ,i Co. v. Aaron, 466 Pa. 686,361 A. 2d 260 (1976), Plaintiff has presented no evidence whatsoever to meet the second and third prongs of the above requirement. In point of lact, Plaintiff cannot present any such evidence because none exists. The Flamingo Is not even open for business, Defendant has not and will not WOOl as a chef at the Flamingo. There Is thus no evidence to support an Injunction or to justify Plaintiff's aotlon. B. PLAINTIFF HAS A FULL COMPLETE AND ADEQUATE REMEDY AT LAW RENDERING EQUITABLE RELIEF INAPPROPRIATE IN THE CURRENT CIRCUMSTANCES. Pennsylvania law Is olear that where a Plaintiff has a full and adequate remedy at law, Issuanoe of Injunctive relief, Including preliminary Injunctive relief, Is Inappropriate. [A Plaintiff Is] only entitled to a preliminary Injunction If the loss that would be Incurred pending final adjudication would not be compensable by an award of money damages. SllL In re Arthur Treacher's Frenchlse 1Il1oatlon, 689 F. 2d 1137 (3d Clr., 1982) (preliminary Injunction vacated where loss can be fully compensated by monetary damages awarded at final judgment.) Only when thero Is proof that the threatened monetary loss Is so great as to threaten the existence of the business Is a preliminary Injunction properly granted, Three Co, Services v. Philadelphia Inquirer, 337 Pa, Superior Ct. 241, 486 A. 2d 997, 1001 (1985), In the Instant case, Plaintiff, when and II Its business ever falls off as a result of a breach of the Instant covenant, an event which It Is assured will not happen, would then have a full and adequate remedy at law In damages. C, A SUBSTANTiAl CASH BOND IS NEC~~c::ARY TO PROTECT DEFENDANT, IN THE EVENT ANY PRELIMINARY INJUNCTIVE RELIEF IS GRANTED. Pursuant to the provisions of Pennsylvania Rule of Civil Procedure 1631, Defendant Is entitled to the posting of a substantial cash bond In the event this Court considers the Issuance of any form of preliminary Injunctive relief In this matter. It must be remembered that a preliminary Injunction Is a most extraordinary form of relief which Is to be granted only In the most compelling cases, . . . The requirement of a bond exists for the specific purpose of protecting a defendant by supplying a fund to pay damages II this relief Is granted erroneously. . , \ ~' , I' 1'1 Goodies Olde Fashion FudQe v. Kulros, 408 Pa. Superior Ct. 495, 697 A, 2d 141, I: I! !, 12 144 (1991), In the Instant case, Defendant, desplto Ihe negligible and di minimis nature of his actions undertaken quite Rome time ago, and despite his clear assurances that he will nol violate the covenant, has been forced 10 expond substantial sums of money to defend himself. In the event this Injunction Issues he will bo forced to expend greater sums unnecessarily. His damages will no doubt be substantial. ThlHolore, Defendant requests thaI a bond 01 at least TWENTY. FIVE THOUSAND ($25,000,00) DOLLARS be required belore any Injuncllon Issues, Defendant further requests thaI the bond not be paid lor by the funds of Platanos" Inc, Defendant Is holding shares or Ihe corporation In escrow as security for performance of the buy.out agreement. To allow the corporation to fund the bond will expose Defendant to unnecessary depreciation of the value of his securlly, D, PLAINTIFFS HAVE ACTED IN lilAD FAITH AND VEXATIOUSLY IN THE BRINGING OF THE INSTANT ACTION AND SHOULD NOT BE PERMITTED TO HAVE ATTORNEY'S FEES AWARDEO TO THEM. The AGREEMENT, In pertlnont part, provides the covenant not to compete, as above- quoted, and also conlalns al pago 5, tho following: Incidents 01 Default, Default shall be dellned as a breach of any of the terms of this Agreement, InCluding: g.) Breach of the covenant not to compete by Velllos. Breach. In Ihe event of delault undar the terms of this Agreement, the party breaching this contract shall be responsible for payment of legal fees and COsls Incurred by the other In enforcing their rights under this Agreement. . .. (emphasis added), To prevail upon this Issue, Plaintiff must prove, by clear and convincing evidence, two roundatlonallacts: 1.) Delendant, In fact, undertook and com milled acllons which are real breaches 01 the covenant not 10 compete; and 2.) Plalnllff was justified In; acted In good fallh In; and was necessar::y compelled to bring the Instant action to enforce lis rights, As to the first Item, as has been shown above, the acllons undertaken by Defendant were, In fact, not violations of the covenant. See, In this regard, the proposed Findings of Fact, as Willi as the above analysis, and the cases cited therein, concerning the rendering of non,f1nanclal assistance. However, even In the event these acllons could be construed as 13 vlolatlons, an event highly unlikely In view 01 the strict construollon applied to these clauses, those actions were negligible, dll minimis, and In good faith. In point of time they had ceased quite &ome time before the Instant action was brought. There were, to put It quite simply, no breaches at the time this action was brought nor was there any Indication any breaches would occur again, Rather. there were clear and unequivocal assurances that no breaches would occur. As to the second Item, all contracts are deemed to Integrate the general common law and established equitable principles Into their terms without the necessity of specific reference thereto. Both of those provide that there must be a clear and manliest reason to enforce rights before allorney's fees can be awarded by virtue of the contractual clause concerning allorney's fees, Let us review the facts Involved herein and their time sequence: Defendant undertook several negligible and dll minimis actions which did not even rlGe to the level of a breach of the covenant. There was no need to enforce any rights. In the event Defendant's actions can even be considered breaches, they were negligible and dll minimis and, under the well-known doctrine of de minimis non curat lex, did not justlly filing an action In equity for an Injunction. It has been clearly shown above that the Defendant's mere consideration or posslblllly of working as a chef has not yet occurred and the cases cited show clearly that this consideration did not, under the circumstances herein, even approach a Justification for requesllng an Injuncllon. But even If alt of the above points could somehow be found to be In favor of Plaintiff's action. the most Important and most telling facts are that Defendant acted throughout In good faith, without guile and without engaging In any subterfuge or other Improper behavior. Also, most Importantly, Defendant, alter the legal meaning of "radius" was explained to him. continued to actin coml"lete good faith and his counsel proceeded to communicate clear and unequivocal assurances to Plalntllfthrough Its then counsel, Mr. Robert G. Frey. Mr. Fyey Informed Defendant's counsel that he had terminated his relationship with Plaintiff (BILL KATSIFIS). Defendant's counsel therefore Immediately proceeded to send assurances to BILL KATSIFIS by leller of August 31, 1994 which was received by BILL KATSIFIS or his agents the next day, September 1, 1994, The nature of the assurances and the tone of the leller speak for themselves. Nevertheless, as Is evidenced by Plalnllff's own exhibits, Plaintiff, almost contemporaneously with wrlllen receipt of the assurances, began to prepare the Instant suit. II Is also most Interesting to consider that the vast majority of the lime and expense Incurred by Plaintiff In this action which, even without the assurances, would have been unjustified and unsustainable ' In fact occurred a1liL Defendant's clear and unequivocal 14 assurances were received I Law and equity clearly do not countenance a PlalntlH's reckless disregard lor another Individual or his rlghls nor do they permit someone 10 take an unlalr advantage 01 a situation In a malicious, vindictive, Irresponsible or unnecessary lashlon, This Is clear at both law and equity concerning both tOyts and contracts Issues, Sill, JL"Q., clean hands doctrine I last clear ohance doctrine, discovered peril doctrine, and the like, Plaintiffs cannot seize upon a contract clause, misconstrue It and the rules and principles 01 law and equity Incorporated Into It, and launch an unjustified, premature, III,advlsed, malicious, and punitive action against Delendant, lorce him to spend large amounts 01 money to delend such an action and then eKpect the court to make Delendant pay Plalntllf's legal lees and costs lor an unnecessary and Inappropriate law suit. Clearly, Plalntlfl should nol be rewarded lor or encouraged In such conduct. Plalntlfl should not receive any award 01 allorney's lees or other costs Irom Delendant. Plaintiffs should bear the costs and burdens 01 their own unnecessary and III-advised actions as an object lesson to themselves and to others who may be prone to lIIe such actions and hope to make others, who are already the victims 01 such actions, lurther victims by lorclng them to pay lor their Initial victimization. CONClll<;K'lN Plalntlfl has brought a totally unnecessary and unwarranted suit. They do not deserVI~ to have an Injunction decreed and they most definitely do not deserve to receive an award 01 allorney's tees lor their III-advised actions. Respectfully submllled, __~k__h_~_&-- Charles E. Shlelds,lII, Esquire Mellon Bank Building 2 West Main Street Mechanlcsburg, Pennsylvania 17055 . (717) 766-0209 Allorney lor Delendant Athanaslos Velllos 15 ...r, % '... ., ~ !l ~:;,: <,.. ~ u ,~ ~ ;: 1.4;:; ., 0.; p:~- <= 0:: b . 'M ~ . r: :;.o:~S: 0: .,. ~~~E ~ ~ 8 w.: j'" ~~ ~ff!~f=; Po "" ~ ~ ~ '" .. ~ ~..f=;S . 0 o .. ~ '- III ~ U III .. ~ ~~S@' YJ"f, ~ "w,8z H c..:;~ '" 0 .. . ..l :;.0: ci:l "~/l. o @', . ..l ~"" ~ z ~. ~8 ~ u ~ PO ~~O"/l.O :;.0: :.-: 0" .. 00 H ;.. HVl . -c: 1tI Q... ~ 8~gE . ~ ""6 Q III ~Lr. ' ~ H p~ el Iii s;!,...r, ;!l ~8 III .. :.-: ~ ~ ~~:;;~ ~ ~ I;Q ,;; ~ s ~8 zt30tJ .::J ~ H Z P. \ ~ . ..Ill ",..' 'O"I~" "."H"I'''I.' Oft....I)1 O.}.'....n! 1''1''11'11 '" , PLATANOS, INC., I IN THE COURT OF COMMON PLEAS Plaintiff I CUMBERLAND COUNTY, PENNSYLVANIA I v. I NO. 94-5000 EQUITY TERM I ATHANASIOS VELLIOS, I CIVIL ACTION - EQUITY Defendant I ORDER AND NOW this day of , 1994, upon consideration after a hearing for Preliminary Injunction, it is hereby ordered and Decreed as follow: A. A Preliminary Injunction is issued requiring the Defendant, Athanasios Vellios, to immediately cease and desist any and all activity, either direct or indirect, whether personally or as a principal, agent, employee or straw party, relating to the planning, institution and operation of the restaurant which is being prepared for operation by the Flamingo Restaurant and Coffee Shop, Inc. B. A Preliminary Injunction is issued prohibiting the Defendant from being physically present at the site of the aforementioned restaurant which is being prepared by Flamingo Restaurant and Coffee Shop, Inc. for oparation on Route 15 in Dillsburg. C. A Preliminary Injunction is issued prohibiting the Defendant from sOliciting customers of the Windsor Family Restaurant on behalf of Flamingo Restaurant and Coffee Shop, Inc., and their operation at the Route 15, Dillsburg, facility. PLATANOS, INC. , I IN THE COURT OF COMMON PLEAS Plaintiff I CUMBERLAND COUNTY, PENNSVLVANIA I v. I NO. 94-5000 EQUITV TERM I ATHANASIOS VELLIOS, I CIVIL ACTION - EQUITV Defendant I EBOPOSED FINDINGS or FACT AND CONCLUSIONS OF LAW PROPOSED FINDINGS OF FACT 1. The Petitioner in this matter is Platanos, Inc., co-owned by Bill Katsifis (50% owner of Platanos, Inc.) (hereinafter "Katsifis") and Tony Koukounas (50% owner of Platanos, Inc.) (hereinafter "Koukounas"). 2. The Respondent is Athanasios Vellios (hereinafter "Vellios") . 3. A document was executed on April 28, 1993 entitled Installment Sales Agreement for 250 shares of stock in Platanos, Inc., by which Vellios sold his one-half (1/2) interest in Platanos, Inc. to Katsifis. 4. By way of the Installment Sales Agreement, executed on April 28, 1993, Platanos, Inc. is now co-owned by Katsifis and Koukounas, 50% to each party. 5. Platanos, Inc. is a Pennsylvania corporation, t/d/b/a Windsor Family Restaurant located at the intersection of Simpson Ferry Road and Wesley Drive. Prior to the execution of the Installment Sales Agreement, Vellios had been one-half (1/2) owner of Platanos, Inc., t/d/b/a Windsor Family Restaurant. 6. Vellios was the chef and 50\ owner of the Windsor Family Restaurant and coordinated all kitchen activity therein. 7. The Installment Sales Agreement contains a covenant not to compete, which states, "Vellios agrees that he will not, either as an individual or in any other business form, directly or indirectly, enter into competition with Platanos, Inc. or engage in the same or similar type of baseness (sic) as the Windsor Family Restaurant whether as a principal, agent, employee, or straw party within a ten (10) mile radius of the Windsor Family Restaurant...for a period of three years from the date of this contract." 8. There is a new restaurant being prepared for opening on Route 15 in Dillsburg with the name Flamingo Rest,aurant and Coffee Shop (hereinaftjE!r "Flamingo Restaurant"). 9. The owners of record of the Flamingo Restaurant and Coffee Shop are Efrosini Vellios (wife of Respondent Vellios), Konstantinos Georgakopoulos, and Demetrios Zahos. 10. The Flamingo Restaurant is within a ten (10) mile distance of the Windsor Family Restaurant. 11. Prior to the formation of the Flamingo Restaurant, neither Efrosini Vellios, nor Konstantinos Georgakopoulos, had ever owned a restaurant. 12. Prior to the formation of the Flamingo Restaurant, Demetrios Zahos had owned a smaller diner with seating for less than one hundred (100). 13. Since the beginning of the setup of the Flamingo Restaurant, Vellios had spent every day at the Flamingo Restaurant site, until service of the instant Petition. 14. Vellios is not currently employed outside of his activities of the Flamingo Restaurant. 15. Vellios has participated in cleaning and washing necessary for the preparation of the opening of the Flamingo Restaurant. 16. Vellios has planned to cook at the Flamingo Restaurant. 17. Vellios has acted as a mentor to Konstantinos Georgakopoulos in the preparation for the opening of the Flamingo Restaurant. 18. Vellios has participated in the ordering of equipment for the Flamingo Restaurant. 19. Vellios has handed out the menu and bUBiness cards for the Flamingo Restaurant. 20. Vellios has expressed an ongoing willingness and desire to help in the setup and operation of the Flamingo Restaurant. 21. The Installment Sales Agreement executed on April 28, 1993, defines an incident of default as "...a breach of any of the terms of this Agreement, including:... (g) breach of the covenant not to compete by Vellios." 22. The Installment Sales Agreement executed on April 28, 1993, states, "In the event of default under the terms of this Agreement, the party breaching this contract shall be responsible for payment of legal fees and costs incurred by the other in enforcing their rights under this Agreement." 23. Platanos, Inc., co-owned by Katsifis and Koukounas, and being the entity which Vellios covenanted not to compete against, entered into a fee agreement with Friedman and Friedman, P.C. for services to be rendered in enforcing its rights under the Installment Sales Agl'eement executed on April 28, 1993. 24. The fee agreement entered into by Platanos, Inc. requires payment at a rate of $175.00 per hour for the services of Richard S. Friedman, Esquire, $125.00 per hour for the services of John F. King, Esquire, and $35.00 per hour for a paralegal and legal assistant's work, plus costs. 25. The fee billowed by Platanos, Inc. at time of trial, which included 3.5 hours for travel and attendance at hearing, is $3,009.90, 26. At heari~g, the parties were directed to prepare Proposed Findings of Fact and Conc1us~ons of Law for submittal to the Court. , ' CONCLUSIONS OF LAW 1. An Agreement tor the sale ot 50' of stook in Platanos, Ino. by Vellios to Katsifis and Koukounas (Koukounas being the other 50' owner ot Platanos, Ino.) was entered into by Vellios and is a legally binding document. 2. Vellios did covenant not to compete with Platanos, Inc., either directly or indirectly, and Vellios did covenant not to engage in the same or similar type business as the Windsor Family Restaurant, whether as a principal, agent, employee or straw party, within a ten (10) mile radius of the Windsor Family Restaurant. 3. The covenant not to compete entered into by Vellios was supported by adequate consideration, was properly limited in both time and territory, and was ancillary to a contract for the sale of a business. 4. The covenant not to compete entered into by Vellios was necessary to protect the legitimate interests of Platanos, Inc. and of Katsifis, the purchaser of Vellios' 50% share of the business of Platanos, Inc., and of Koukounas, the other 50% owner of Platanos, Inc., who was a party to the Installment Sales Agreement which contained the covenant not to compete entered into by Vellios. 5. The covenant not to compete contained in the Installment Sales Agreement signed by Vellios on April 28, 1993 is a legally binding covenant. . . 6. Platanos, Inc. is a proper party to this action, since Vellios covenanted not to compete with Platanos, Inc., and since Platanos, Inc. is owned by the two parties with whom Vellios executed the Agreement, Katsifis and Koukounas. 7. Vellios has breached his covenant not to compete with Platanos, Inc. by both directly and indirectly participating in the planning, institution, and operation of the Flamingo Restaurant, which is within ten (10) miles of the Windsor Family Restaurant. 8. Sufficient evidence and testimony has been given at hearing, including direct testimony and cross examination ot Vellios and through his attorney, Charles E. Shields, III, Esquire, to allow for an Order enjoining Vellios from any further activities, either as an individual or in any other business form, directly or indirectly, from entering into competition with Platanos, Inc., or from engaging in the same or similar type of business as the Windsor Family Restaurant, whether as a principal, agent, employee, or straw party within a ten (10) mile radius of the windsor Family Restaurant. 9. Platanos, Inc. has incurred legal fees and costs in its efforts to enforce the covenant not to compete given by Vellios. 10. Vellios is responsible for the payment of the legal fees and costs incurred by Platanos, Inc. in the enforcement ot the covenant not to compete. 11. The oosts incurred, including attorney's fees, by the Petitioner for the preparation of Proposed Findings of Faot and conolusions of Law are recoverable under the terms of the Installment Sales Agreement. WHEREFORE, the Petitioner prays that this Honorable Court find in favor of the Petitioner and against the Respondent as followSI A. A Preliminary Injunction be issued requiring the Defendant, Athanasios Vellios, to immediately cease and desist any and all activity, oither direct or indirect, whether personally or as a principal, agent, employee or straw party, relating to the planning, institution and operation of the restaurant which is being prepared for operation by the Flamingo Restaurant and Coffee ShOp, Inc. B. A Preliminary Injunction be issued prohibiting the Defendant from being physically present at the site of the aforementioned restaurant which i~ being prepared by Flamingo Restaurant and Coffee Shop, Inc. for operation on Route 15 in Dillsburg. C. A Preliminary Injunction be issued prohibiting the Defendant from sOliciting customers of the Windsor Family Restaurant on behalf of Flamingo Restaurant and Coffee Shop, Inc., and their operation at the Route 15, Dillsburg, facility. ~ /\ ./ - ._-~ IH/:l8 '. 8.k. ENTERF.D INTO, This ~h day of April, 1993 BETWEEN ATHANASIOS VELLlOS ,of 1750 Ashland Drive, York, Pennsylvunla 17404 hereinafter known as Velllos, AND BILL KATSIFlS, of Silver Spring Township, Cumberland County, PennsylvllOla, hereinafter known os Katsifis, AND TONY KOUKOUNAS. of Mechonicsburg, Cumberland County, Pennsylvania, hereinafter known os Koukounas. Koukounas joins in the within agreement to evidence his IlSsent to the wlllTllnties and guaranties made by him herein; WITNESSETH: That the said Vellios, in consideration of the tenns and conditions hereinafter memioned and comained, agrees to tronsfer and deliver unto the said Katsifis, his heirs IlOd IIssigns, Two Hundred Fifty (250) shares of common stock in Platonos, Inc., which said shares of stock represent the entire remaining interest of Vellios in PlalaJ1OS, Inc., and which said shares constitute a one-half (1/2) interest in PlalaJ1os, Inc. Vellios agrees to execute all necessary documenlS contempor.ll1cously with the signing of this document to effect the immediate tronsfer of said shares 10 Katsifis. IN CONSIDERATION WHEREOF, the parties herelo agree as follows: Purchase orlce. KalSifis agrees 10 pay to Vellios therefor, Ihe sum of $150,000.00 Dollars, as follows: (I) $55,000.00 dollars upon the execution of this Agreement of Sale, the receipl whereof is hereby acknowledged by Vellios, and which said $55,000.00 is more specifically paid as follows: 0. $10,000.00 which is held in escrow by Charles E. Shields, III, Esquire, allomey for Vellios and which is agreed by the parties hereto to be released to Vellios contemporaneously with the signing of this Agreement. b. $40,050.00 to be paid by cenified or cashiers check made payable to the order of Platanos, Inc. as a loan 10 the corporation. It is the understonding of the panies hereto that contemporaneously with this agreement PlatllOos, Inc. will make paymenlto Vellios of $40,050.00, which figure. represents full payment of Ihe debt owed by Platanos, Inc. to Vellios. c. $4,950.00 to be paid by cenified or cashiers check made payable to the order of Athanasios Vellios. AlJfllENTICATED BY Vellios: AUTIIENTICATED BY Katsifis: AUUIENTICA TED BY Koukounas: ~v Ole. 1f- I') ') J. ;(.~ ((3./..(, A V' ',' /.~f)_..'f".,~ 'g"<JCl_6J6cl.J~~J ..7)/1 --,.\":5 ~ "\.-...N.'-f..J. ~ (2) Ihe balwlce of $95,0<XI,lXI dollars if momllly Twenty-eight monthly InSlIlllment5, Including u balloon payment of $IC),(XXI.<XI, whl I balloon pu ment shull be surplemenllll and In oddltionto the regulllr monthly ptlymcnt of due " IInd IIlso II lina balloon pllyment of $IO,1l35.1l7 due In the twenty-eighth month as more fully set forth on the ulluched amorti7.ntlon schcdule which is incorporatcd herein by referenced, said monthly hlsullhnents to be applied first to interest at the rute of eight (1l.(XI%) pcrcentl~~~(.\\~I.!.1 on the unpllid balance of principal, said l' monthly InstalImeUlto be paid onllt ~fore the. 'ay of each month, beginning Ma~(" 19')3. '~Y\ ~ I and thereafter on or before the ~l Day of ellch succceding month until principal WId interest have . LJ' J been fully paid, except that, if not ~lXlIlcr paid, Ihe ~ald principal and interest ~hal1 be paid in full /1 . f--- by the twenty-eighth month as uforesaid, anything herein contained to the contmry I.J 1<. notwithstllnding. J>r~t1avmenl. KatsiOs shal1 hllve Ihe privilege ofJllIying liS much more thun the l'C(!uired monthly insllllhnelll of principal and interest us he esires, IInd nothing contlllned in this Agrcement shllll be construed to limit the reduction of principal to said IImoUlll. Interest shal1 be computed on the unpaid principal baluncc. Provided, however, thlltllny prepllyment made shall be limited to one or more increments of prlnclplIl us shown on the amortization or a payment of IIn amount c'lualto the full payment of the outsltlllding obligation on the dllte of payment. Place of Davmenl. All payments slmli be mude to Vellios at whatever address is designated in writing, and until funhcr notice at 1750 Ashland Drive, York, Pennsylvllnia 17404. Secllrllv. As security for perfomlance by KalSilis of the terms and conditions contained herein, Katsilis agrecs to execute contemporaneously with the within Agrcemelll a Stock Pledge Agreement pledging the aforesaid 250 shares of Platanos, Inc. as security to be held by Charles E. Shields, III, Esquire, 2 West Main Street, Mechanicsburg, Pennsylvllnia 17055, as attorney for Vellios until full performance under the tenns of this Agreernelll. As further security for perfonnance by Katsifis of the terms and conditions contained herein, Tony Koukounas, docs hereby agree to personally guarantee the perfonnllOce of KalSiOs of the temls and conditions of this Agreement. To secure said guarllOtec, Koukounas does hereby agree to execute contemporaneously with the within Agreement a Stock Pledge Agreement pledging 250 shares of Platanos, Inc., representing his entire ownership interest in Platanos, Inc. Said shares shall be held by Robert G. Frey, Esquire, 5 South HllOover Street, Carlisle, PennsylvllOia 17013, as attorney for 10hn KalSifis. Provided, however, that all parties hereto acknowledge that the Stock Pledge Agreemelll given by Koukounll.~ to Vellios is subordinate IlOd inferior to a Stock Pledge Agreement given by Koukounas to 10hn Katsifis. Tony Koukounas and Bill KalSifis each agrees to execute a demand note, co-signed by each party's respective wife, in the wnount of $95,000.00 as further security and as surety and guarllOtee of the said perfonnances by Katsifis. Incidents of OwnershiD. It is also agreed between the panies hereto that without regard to any of the provisions to the contrary regarding the holding or pledging of stock certificates, KlIlsilis shall be entitled to all the incidents of ownership in the said shares of stock in Plaulnos, Inc. and shall be entitled to receive rents, issues, and profits from the date of this agreement. Provided, however, that KnlSifis and Koukounas agree that as owners, officers, and directors of Platanos, Inc., they will not without the express wrillen conselll of Vellios and 10hn Katsifis, issue additional shares of common or preferred stock, or restructure or recapitalize the stock structure of Platanos, Inc. Kntsifis and Koukounas agree that neither of them shall Il.~sign, sell, lronsfer or otherwise further encumber any shares of Platanos, Inc., until such time as Vellios and 10hn KlllsiOs are paid in full. The restrictions and agreemenlS with respect to the shares of Plata nos shall continue and be in full force and effect only until Vellios and 10hn Katsilis are paid in full under the temlS of this Agreement. ,.f1/ AUTHENTICATED BY Vellios: /1v AUTIlENTICATED BY Katsilis: AU111ENTICATED BY Koukounas: a3 K. -1 r. 2 Dellverv .If shnreN. Upon compliance with the foregoing tcnns nnd conditions and Iltlyment of the said purehase price In full by KutsUls, VelHos shllll pnlmptly delIver to Kn15ll1s the 250 shares of stock In Platanos, Inc. which is pil'dged us security for pcrfontlUnce by KlIlslfis ,!f the tcnns unl! conditions of this Agreement, and VelHos slmll prmnptly sign II general relcase III fuvor of Katsll1s und Koukounas. Defnull. In the evcntthe sllid KUlSifis shull fail to make any monthly payment for u period of thirty (30) days uftcr the stune shall hllve become due and payable by the temls hereof, or If u breuch of any of Ihe foregoing conditions be nlUde by Kalsil1s, lhen und In such clIse this Agreemem shall, at the option of VelHos, becomc null und void and the sllld KUlSifis shall forfcltall monies then paid II.~ Iiquidlllcd damuges. In the altcmlllive, Vellios may elect to have the entire principal sum remulning unpaid become due and paYllble at once and mllY be collect the samc by suit or otherwise. Provided, however, Ihlltthat no sueh default shall occur unless Velllos has given KlllSifis and any other shareholders of Platanos, Inc. allcastthil1y (30) dllYs wrI11en notice of such violution of the tenns hereof. Katslfis, or 11IIY other shareholdcr of Plnlanos, Inc. shall have the right to correct such default during said thirty-day period, provided, however, that said curing pm1Y give ut Icastlifteen (15) days wrI11en notice of inlentto cure said dcfault. If a shllreholder elects to cure the default of KlIlsil1s, said shareholder shall a. Completely curc the default of Katsilis b. Execute IlO agreement assuming all of the temtS of this Agreement. c. Execute a stock pledge agreement in same form as the Stock Pledge Agreement executed by KalSifis parsuantto this Agreement. If said shareholder elects to remedr the default and assume the obligations of Katsifis, Vellios and KalSifis will fully cooperate In the assignment of Katsifis's shares of Plalllnos Inc., subject 10 the Stock Pledge agreement, to the assuming shareholder. NonwaIver of rlehls. Acceptance by Vellios of any of the aforesaid monthly paymenlS after the same shall have become past due and in default, or llOy failure to enforee llOy of the rights herein reserved to the parties of the first pllrt, or any of the penalties, forfeitures, damages or conditions herein contained, shall not in any wise be considered a waiver of the right to enforce the same at any time and IIny allempt to collect the amount due by one proceeding shall not be considered a waiver of the right to institute any of the other proceedings herein provided, but all of the righlS of Vellios, and all forfeitures, penalties, dalllllges and conditions IIlIIY be enforced together or successively at the option of Vellios. Covenanl nol 10 comoele. Vellios agrees that he will not, either as IlO individual or in any other business form, directly or indirectly, enter into competition with Platanos, Inc. or engage in the same or similar type of baseness as the Windsor Family Restaurant whether as a principal, agclll, employee, or straw party within a ten (10) mile radius of the Windsor Family Restaurant, located atlhc comer of Trindlc IlOd Windsor Road for a period of three years from the date of this Contract. Wnrrontieos and indemnificotiQns: Warrantv relmrdlnl! laxl!S. Vellios hcreby WlllTllnts that all taxes owed by Platanos, Inc., including real estate, income. and corpomte taxes and unemployment compensmion contribution for prior years have been paid, excepting those set forth on Exhibit "A", atl:lched hereto and incorpomted herein. Vellios agrees to indemnify and defend Kal~ifis for his share of any tax deficicncies owed or alleged to be owed by AUTHENTICA1ED BY Vellios: ';'1/ AUTIIENTICA11:D BY Katsifis: 13./L., AUTHENTICATED BY Koukounas: 3 --rr: PllIlanos, Inc. for 1992 and plior ycars. Velllos warrants thut nil suld IlIxes nnd ussessments due in CO'lIIC'4~tlon with the openltion of Plutllnos, Ine. and the Windsor Family Re:JUlunlntto an)' city, county, state, or federal govenllnentnlllgeneles, shall be paid In full up to the date of selllemcnt and thnt ull due relums, fonns, and taxes re'lulred to be filed with sllld ngencies have been properly filed und pnid us of the sculemem dute, or will be so filed nnd ptlid in due course thereafter. Warranty r~.,nrdlnv DSflii~ls Dnd lIoblUtl~s of Coruornllnn. Vcllins hereby warrants that the assels und liabilities are as set forth on ExMhlt "A" uuached hereto und Incorporated herein by reference. Vellios shull indemnify Kutsilis for Kutsif1s's slHlre of the corponlle obligation for any debts not disclosed to Kmsif1s on Exhibit "AU, Worran." of confnrnlllv with (~()vernment revulntlnns. Vcllios wammls thllt he Is not aware of any governmental notices conceming IIny violations of uny FederuJ, SUIte or locllllaw, rule or regullltion, nor of any work required to be perfonned or any assessment for any thing whnlSOCver, Including, but not limited to, sidewnlk, Slrcet, water and sewer, and other such improvements. Vellios wamllllS thnt the existing utilities are sufficient to servicc the premises and Its cun-cnt operations. Velllos wurrants thnt the existing use of the premises is a permilled use ur.der all applicable 7.Oning ordinllOccs, or that n celtificllle of non-conformance from the approprillle lOning officials shall be providlld on or before settlement. Worranty of romDllonce with Lease obllqotlolls. Vellios wamults that the Lease Agreement ntlllched hereto as Exhibit "B" Is the current agreement between Platanos, Inc. and Weis Markets and that there have been no modifications, wriuen or oral, of the terms thereof. Vellios further warrants that he is unaware of any uncured violations of any of the tenus of said lease IlOd that he has received no notice of default in the terms of the lease. Katslfis acknowledges that said Lease conUlins a personal guarantee by Vellios and Nicholas Barokos, a fonner shareholder. Kal~Ifis and Koukounas each covenanlS that he will make all reasonable efforts to remove Vellios's gullrllOtee from future lease ajlTCCmenlS. Until such time as Vellios is no longer a gUllrllOtor of the lease obligallon with Wels Markets, Katsifis and Koukounas will indemnify, defend and hold Vellios harmless from any liubility arising from said personal guarllOtee. Further, for as long this Agreement is in effect, Katsifis and Koukounas agree that they will cause Platanos, Inc. to deliver by bank-to-bank wire tronsfer, the monthly rental payments to Weis MarkelS IlOd will provide Vellios with copies of the bank receipt evidencing said transfer. Warranty or insurance. Katsifis and Koukounas both warrlll1t that they have made application for and the corporation will pay for business interruption insurance, the tenns of which are as set forth on Exhibit "D", allached hereto and incorporated herein by reference. KalSifis and Koukounas wonnntthat they will cause PlatRllos, Inc. to keep said insurance in full force and effect IlOd shall forwllrd copies of the renewal declarations to Vellios for the life of this Agreement and Guaralllee. AlITHENTICATED BY Vellios: AlITHENTICATED BY Katsifis: AUTI-lENTICATED BY Koukounas: IIV 6./<, 4 ~.r- Malerlolllv of Worronlll'S. 11lis Agreement is expressly contlngenl upon the wurrunties of Vellios being tnte und com'l::t III the sclllement dllle. Any express contingency in this Agreementmuy be wuived in writing by the party to be benefited by the contingency III the time of seulement. In the event thllt wlY such collllngency fails this Agreement shall be null und void und ull deposit monies shal1 be returned to KUlslfis without dcduction und without funher liabHity hereunder on the pUl1 of either party herel'l. All wlllTllntles In this Agreement, not expressly waived shlll1 IIlso be considered covenants of this Agreement und uny faHure of uny wurmnty shal1 be considered a default in the tenlls of the IIgreement by the breal1hing pany and shull entitle the nonbreaching parties to (III the rights and responsibilities on default as set forth in this Agreement. Provided, however. that the breaching purty shall be entitled to cure the failure of any wllITlInty within thiny (30) days from the dute he receives wrillen notice of the failure of uny wlllTllnty given by him. Coroorale necords. Koukounas and Katsifis agree that, as officers, directors and shareholders of Plutallos, Inc., they shall authorize the person or persons responsible for the keeping of the books, accounts, lmd records to make available to Vellios on a monthly basis n statement of the income and expenses of Plntanos, Inc. in a form substantially the SUllie as the monthly reports now prepared for Platnnos, Inc. by Gift Sniegocki & Assoeiutes, the most recelll mOlllhly report being auached hereto as Exhibit "C". Ineldenls of Defuull. Default shall be defined as u breach of any of the tenn~ of this Agreement, including: a. Failure of Kntsifis to mllke any payment as aforesaid. b. Breach of any of the above-stated warranties. c. Entry into bankruptcy under any chapter of the BllOkntptcy Code. d. Breach of the tenns of the lease by PlatllOos, Inc. e. A permanent cessation of business known as the Windsor Family Restaurant. f. Failure of Platanos, Inc. 10 pay all taxes when due, unless there is a good faith dispute concerning said taxes. g. Breach of the covenant not to compete by Vellios. Breach. In the event of default under the tenus of this Agreemel\t, the party breaching this contract shall be responsible for paymem of legal fees and costs incurred by the other in enforcing their rights under thiS Agreement. Should KnlSifis breach the tenus of this AgreementllOd should said breach not be cured as provided in this Agreement, Vellios shall hllve the right to declare this Agreement null and void and to retain all payments received as liquidated damages. Vellios shall further have the option to re-enter and operate the Windsor Family Reslllutant as owner pursuant to the Stock Pledge Agreemellls, or, in lhe alternative, he shal1 have the option to acce1erute as due and immediately payable, the entire unpaid principal amount as evidenced by the Demand Notes executed by Katsifis and Koukounas and to col1ect thereon. Nothing herein contained shal1 restrict any rights he may have to go against Tony Koukounas er la., upon any guarantee or surety or other agreement. AUTHENTICATED BY Vel1ios: AUTIIENTICATED BY Kat5ifis: ~.I~. AUTIIENTICATED BY Koukounas: I'tv 5 -r r- Modincnllon. No modlficlltlon of this Agreement shall be binding upon the parties, unless the same shall be in writing and duly approvcd by both of the parties hereto. Nonnssh!llobllity. The Interest of KlIlsifis in this AgreemeJll shall not be assignable, in whole or in pan, without the prior wrlllen consent and approval of Vellios, and If such assignment Is allempted, nil rights and remedies of Vellios set forth herein or which Vellios may otherwise have, shall immediately accrue to Vellios. Transfer of title by Will, survivorship, descent or by election of a shareholder to cure the default of Katslfis shall not be regarded as an assignment requiring the consentllOd approval of Vellios. Survival of Al!reement. 111is Agreement is to extend to and be binding upon the heirs, successors, executors, administmtors, and assigns of the panies hereto. Document Compliance. The undersigned panles for and in considemtion of the temls of this Agreement, if requested by llOy other party or the attorney of any other pliny , to fully cooperate and adjust for clerical errors, or omissions, in any or all of the closin~ documenllltion if deemed necessary or desirable in the reasonable discretion of any pany or their attorney, to fully consummate said Agreement. The undersigned panies do hereby so agree and covenant In order to assure that this documenUltion executed this date will confoml and be acccptable and complete to the standard practices and requirements. INTENDING TO BE LEG ALL Y BOUND, WITNESS OUR HANDS AND SEALS, on this page 6 of 6 pages, the day and year first above wrillen. WITNESS: ,//J A, ~M~g~7lL a~.e'J ~.~)--nr ~~h~ E /LM/JiL ,I1-('1a"1.a.-! I~ 1/ ~ett(SEAL) Athunasios VeIHos 13~ k~ r./ (SEAL) Bill Kntsifis ' /~ -q d~ t_ j~ - .. (SEAL) Tony~~ AUTHENTICATED BY Vellios: AUlliENTICATED BY Klltsifis: uJf<, AUlliENTICATED BY Koukounas: Av -r r- 6 ..~ ~c.~" "'''4- II. 4.(.,.1\...,...,...... DEFENDAN1'$ EXHmll August 31, 1994 Mr. Bill Katslfls Windsor Family Resteuranl 5144 Simpson Ferry Road Mechanlcsburg, Pennsylvania 17055 In Re: Tom Velllos . Flamingo Restaurant Dear Bill: Please be advised Ihal as of 10:30 A.M. Ihls morning I was advised by Rob Frey Ihal he Is In the process of terminating his representation of you. Therefore, I am writing to you directly. I have had several conversations wllh Effie Velllos this morning concerning the Flamingo (formerly Chalel) Restaurant. She has assured me In the most definite terms of the following: 1 .) Tom Velllos Is nol and will not be Involved In the Flamingo. He Is not an owner of any Interesl. Only Effie, her uncle and her cousin are holders of any Inlerest. 2.) Tom will not be Ihe chef or cook or be employed In any other capacity nor will he work for free In any manner at Ihe Flamingo, 3.) Effle's uncle, Jim Zahos, Is 66 years old and has plenty of experience In the restaurant business and Is a good chef. Her cousin, Gus, has plenly of experience as a cook and short order cook. They have managed to survive on Ihelr own so far without Tom Velllos and Intend to continue 10 do 50 In the fulure. 4. ) There Is no date set yet for opening the business. Therefore Ills obvious anything you are hearing 15 only speculation. In view of that, the assur~nces from Effie which I am communicating to you at her direction and under her aUlhorlty, should serve to pUI an end to this mailer unless you discover that Torn 15, In facl, working allhe Flamingo, an event, In view of Ihe assurances given, which I would regard as highly unlikely. 5.) I have also been Inslructed 10 nollfy you Ihat your payment Is lale. I hope Ihls will be paid promptly and Is nol a prelude to an effort 10 cause my client's aggravation &-l~It'>IT ' A" I ( "'1/:l8 . l1.k. ENTERED INTO, Thls~h day of April, 1993 BETWEEN ATHANASIOS VELLlOS ,of 1750 Ashland Drive, York, PennsylvllOia 17404 hereinl1fter known os Vellios, AND BIlL KATSIFlS, of Silver Spring Township, CumberlllOd County, Pennsylvania, hereinaflCr known as Katsifis, AND TONY KOUKOUNAS, of Mechanicsburg, CumberlllOd County, PennsylvllOia, hereinafter known as Koukounas. Koukounas joins in the within agreement to evidence his assent to the wlUTllllties IlOd gUlll'Wlties made by him herein; WITNESSETH: That the said Vellios, in consideration of the tenns and conditions hereinafter mentioned and cOlllwned. agrees to tronsfer and deliver unto the said KolSifis, his heirs IlOd assigns, Two Hundred Fifty (250) shares of common stock in PlalaJ1Os, Inc., which said shares of stock represent the entire remaining interest of Vellios in PlalaJ1os, Inc., and which said shares constitute a one-half (1/2) interest in PlalllnOS, Inc. Vellios agrees to execute all necessary documents tontemporaneously with the signing of this document to effect the immediate transfer of said shares to Katsifis. IN CONSIDERATION WHEREOF, the parties hereto agree as follows: Purchase nrlce. Kotsifis agrees to pay to Vellios therefor, the sum of $150,000.00 Dollars, as follows: (1) $55,000.00 dollars upon the execution of this Agreement of Sale, the receipt whereof is hereby acknowledged by Vellios, and which said $55,000.00 is more specificaily paid as follows: a. $10,000.00 which is held in escrow by Charles E. Shields, m, Esquire, attorney for Vellios and which is agreed by the parties hereto to be released to Vellios contemporaneously with the signing of this Agreement. b. $40,050.00 to be paid by certified or cashiers check made payable to the order of Platanos, Inc. as a 101lO to the corporation. It is the underslaJ1ding of the parties hereto that contemporaneously with this agreement Plalllnos, Inc. will make payment to Vellios of $40,050.00, which figure represents full payment of the debt owed by PlalaJ10S, Inc. to Vellios. c. $4,950.00 to be paid by certified or cashiers check made payable to the order of Athanasios Vellios. AlITHENTlCATED BY Vellios: ~V AUlllENTICATED BY KalSifis: AUlHENTlCA TED BY Koukounas: Ole. 1F- PLAINTIFF'. EXHIBIT / I I ( Delivery of shures. Upon compliance with the foregoing tenns and conditions IUld payment of the said purehase price In full by Katsifis, Vellios shall promptly deliver to KUlJiif1s the 250 shares of stock In Plalllnos, Inc. which Is pledged as security for perfonnnnce by Kalsif1s of the tenus and conditions of this Agreement, and VelHos shall promptly sign a general relcuse In favor of KalSlfis and Koukounlls. 1ll:f'w.U.. In the event the said Katsll1s shall full. to 1II11k~ any monthly payment for u peril'ld of thirty (30) days after the sanle shall have become due and payable by the tenns hereof, or if II breach of llOy of the foregoing conditions be nuule by Katsilis, then IlOd In such case this Agreement shall, at the option of Vellios, become null and void IlOd the said Katsif1s shall forfeit 1111 monies then paid as liquidated damages. In the alternative, Vellios may elect to haye the enllre prlnelpal sum remaining unpaid become due and payable at once and may be collect the SlIme by suit or otherwise. Proylded, however, that that no such default shall occur unless Velllos has given KalSlfis IlOd llOy other shareholders of PlatllOos, Inc. at least thirty (30) days wrillen notice of such violation of the tenus hereof. Katsifis, or any other shareholder of PlalaJ1os, Inc. shall have the right to correct such default during said thirty-dny period, provided, however, that said curing party give at least fifteen (15) days wrillen nollce of Intent to cure said default. If a shareholder elects to cure the default of Katsifis, said shareholder shall a. Completely cure the default of KalSlfis b. Execute an agreement assuming all of the tenus of this Agreement. c. Execute a stock pledge agreement In same fonn as the Stock Pledge Agreement executed by KalSlfis purSUllOtto this Agreement If said shareholder elects to remedy the default and assume the obligallons of Katsifis, VelUos and KalSifis will fully cooperate in the assignment of KalSlfis's shares of PlalaJ10s Inc., subject to the Stock Pledge agreement, to the assuming shareholder. Nonwaiver or rll!hts. AcceplaJ1ce by Vellios of any of the aforesaid monthly paymenlS afler the same shall have become past due and In default, or any failure to enforce llOy of the rights herein reserved to the parties of the fIrSt pan, or any of the penalties, forfeitures, darrlllges or conditions herein conlll1lled, shall not In any wise be considered a waiver of the right to enforee the same at any time and any attempt to collect the amount due by one proceeding shall not be considered a waiver of the right to Institute any of the other proceedings herein provided, but all of the rights of Vellios, and all forfeitures, penalties, damages and conditions may be enforced together or successively at the option of Vellios. Coyenant not to cornDete. Vellios agrees that he will not, either as an individual or in any other business form. directlr or indirectly, enter into competition with Platanos, Inc. or engage in the same or similar type 0 baseness as the Windsor Family Restaurant whether as a principal, agent, employee, or straw party within a ten (10) mile radius of the Windsor Family Restaurant, located at the comer of TrlndJe IlOd Windsor Road for a period of three years from the date of this Controcl. WArranties and Indemnifications: Warranty re~ardin~ tnxes. Vellios h~reby warrants that all taxes owed by Plalllnos, Inc., including real estate, income, and corporate taxes and unemployment compensation contribution for prior years have been paid, excepting those set forth on Exhibit "A", allached hereto and incorporated herein. Vellios agrees to indemnify and defend KalSifis for his share of any till( deficiencies owed or alleged to be owed by AUTHENTICATED BY Vellios: I'fv AUTHENTICATED BY KalSifis: a3.1t.(, 3 AUlHENTICATED BY Koukounas: --r.r- (' ( Platanos, Inc. for 1992 and prior years. Velllos wllITlInts that wi said taxes and assessments due 1'1 connection with the operation of Plaulllos, Inc. and the Windsor Family RestalllUllI to any city, county, Slllte, or federal govemmenllllagencles, shall be paid lit full up to the date of settlementllOd that 011 due returns, fonns, and taxes required to be flied with said agencies have been properly filed IlOd paid as of the settlement date, or will be so flied IlOd paid in due course thereafter. Wllrrnntv revordinll assets and Ilahllltles or COfnorotlon... Vellios herehy wWTllnts thaI the assets and liabilities are as set forth on Exhibit" A" attached hereto and incorporuted herein by reference. Vellios shall indemnify Katsifis for Katsifis's share of the corporate obligation for any deblS not disclosed to Katslfis on Exhibit "AU. Worrllnlv of conformltv with Government reaulatlons.. Vellios womUltS that he is not aware of any govemmentw notices concerning any violations of any Federal, Slllte or locwlaw, rule or regulation, nor of any work required to be perfonned or any assessment for llOy thing whatsoever, Including, bUI not limited 10, sidewalk, street, water and sewer, and other such improvemenlS. Velllos warrants that the existing utilities are sufficienlto servlee the premises and Its current Qperotions. Vellios warrants that the existing use of the premises is a pennllted use under all applicable zoning ordinances, or thaI a certificate of non-eonfonnance from the approprlale zoning officials shall be provided on or before settlement. Warranty 01 comnllonce with Lease obllvatlons. Vellios warrants that the Lease Agreement altached hereto as Exhibit "B" is the currenl agreement between PlalaJ1os, Inc. and Weis MarkelS and th~ there have been no modifications, written or oral, of the lerms thereof. Vellios further warrants thaI he is unaware of any uncured violadons of any of the tenns of said lease and that he has received no notice of default In the terms of the lease. Katslfis acknowledges that said Lease contains a personal guarantee by Vellios and Nicholas Barakos, a former shareholder. Katsifis and Koukounas each covenants that he will make 011 reasonable efforlS 10 remove Vellios's guarantee from future lease aFments. Until such time as Vellios Is no longer a p1arantor of the lease obllgauon with Weis MarkelS, Katsifis and Koukounas will Indemnify, defend and hold Vellios hann1ess from any liability arising from said personal guarantee. Further, for as long this Agreement is In effect, Katsifis and Koukounos agree that they will cause Platanos, Inc. to deliver by bank-to-bank wire transfer, the monthly rental payments to Weis Markets and will provide Vellios with copies of the bank receipt evidencing said transfer. Warranty of Insurance. Katsifis and Koukounas both WlUTIIIlt that they have made application for and the corporation will pay for business IntelTUption Insurance, the tenns of which are as set forth on Exhibit "0", attached hereto and incorporated herein by reference. KalSifis and Koukounas warrant thaI they will cause Platanos, Inc. to keep said Insurance in full force and effect and shall forward copies of the renewal declarations to Vellios for the life of this Agreemenl and Guarantee. AUTHENTICATED BY Vellios: AU1HENTICATEO BY Katsifis: AU1HENTICA TED BY Koukounas: /111' (jJ:, 4 r[.r- ( Mnll!rlnlUv IIrWnrrnnlll!!l. '11lis Agrccment is expressly contingent upon the warrnnties of Vellios bang trUe and correct at Ihe settlement dtlle. Any express contingency In this Agreeme/lllllay be waived in writing by the party to be benefited by the contingency 01 the time of senlement.' In the event that llOy such contingency falls this Agreement shall be null and void and 011 deposit monies sholl be returned to KatslOs without deduction and without further liability hereunder on the part of either pany hereto. All warmnlies in this Agreement, nol expressly waived shall also be considered covenllllts of this Agreement nnd any fllllure of uny warranty shull be considered II defauit in the temls of the agreement by the brcllchlng purty nnd shull entitle the nonbreaching parties to 011 the rights IlOd responsibilities on default as set forth In this Agreement. Provided, however, that the breaching pany shllll be entitled to cure the failure of llOy wllITlInty wlthlnthiny (30) days from the date he receives wrlllen notice of the failure of IIIIY warronty given by him. Cornorole Records. Koukounas IlOd KalSlOs agree that, as officers, directors and shareholders of PlatllOos, Inc., they shall authorize the person or persons responsible for the keeping of the books, accounts, and records to make available to Vellios on a monthly basis a statement of the income and expenses of PlalaJ1os, Inc. in a fonn subslllntilllly the sllllle as the monthly repons now prepared for PlalWlos, Inc. by Oift Sniegocld & Associates, the most recent monthly repon being allached hereto lIS Exhibh "C". Incldenls or nernull. Default shall be defined as a breach of any of the tenns of this Agreement, including: a. Failure of KntsiOs to make llOy pnyment as aforesaid. b. Breach of any of the above-slllted warranties. c, Entry into bankruptcy under any chapter of the Bankruptcy Code. d. Breach of the tenns of the lease by Plalllnos, Inc. CI, A pennanent cessation of business known as the Windsor Family Restaumnt. f. Failure of PlalllnOs, Inc. to pay all taxes when due, unless there is a good faith dispute concerning said lOXes. g. Breach of the covenant not to compete by Vellios. Breach. In the event of default under the tenus of this Agreement, the party breaching this contract shall be responsible for payment of legal fees and COSlS Incurred by the other in enforcing their rights under this Agreement. Should Katsifis breach the tenns of this Agreement and should said breach not be cured lIS provided in this Agreement, Vellios sholl have the right to declare this Agreement null and void and to retain all payments received as liquidated damages. Vellios shall funher have the option to re-enter and operate the Windsor Family Restaurant as owner pursuant to the Stock Pledge Agreements, or, in :he alternative, he shall have the option to accelerate as due and immediately payable, the entire unpaid principal amount as evidenced by the Demand Notes executed by Katsifis and Koukounas and to collect thereon. Nothing herein contained shall restrict any righlS he may have to go against Tony Koukounas et UK., upon Bny guarantee or surety or other agreement. AUTHENTICATED BY Vellios: !tV AUTIlENTICA TED BY Kalsifis: V3 .tot:.. AU1HENTICA TED BY Koukounas: -rr- 5 ( ( Modlncollon. No modification of this Agreement shall be binding uJlollthe pmies, unless the slime shllll be in writing and duly opproved by both of the panles hereto. /,,/onosslllnoblllty. The interest of KlIlSifls in this Agreement shllll not be assignable, in whole or In plll1, without the prior written consentllnd npprovlll of Vellios, IInd if such assignment is lI11empted, oll rights IInd remedies of Vellios set forth herein or which Vellios may otherwise have, sholl immediately IIccrue to Vellios. Transfer of title by WiU, survivorship, descent or by election of a shareholder to cure the defauh of Katslfis shnll not be regarded liS IIn IlSsignrr.ent requiring the consentllnu IIpproval of Vellios. Survlvol or Avreement. This Agreement is to extend to IlOd be binding upon the heirs, successors, executors, IIdminislrotors, IlOd assigns of the panies hereto. Document Comollonl'e. The undersigned pnnles for and in considerotion of the tenns of this Agreement, if requested by lInY other pllrly or the attorney of lInY other party , 10 fully cooperate lInd IIdjust for clerical errors, or omissions, in llOy or 1Il1l)f the closing documentation if deemed necessary or deslroble In the reasonable discretion of any pany or their attorney, 10 fully consummate sold Agreement. The undersigned panies do hereby 50 agree and covennntln order to IlSsure thllt this documentation executed this date will conform lInd be acceptable and complete to the standlU'll practices and requirements. INTENDING TO BE LEGALLY BOUND, WrrNESS OUR HANDS AND SEALS, on this page 6 of 6 pages, the day and year flI'St nbove written. (C;~g~:or ~~8..~~ ~jh~ E ./LaJ'JjL 1!:t':!a."1,aA I~ I/~etl-<SEAL) Athanasios VeUios ~~s I<~~ (SEAL) d~...~-, t_ 1...- -- ~, (SEAL) TOny~ AUTHENTICATED BY Vellios: AUTHENTICATED BY KalSifis: (3.1<, AuntENTICATED BY Koukounas: /Iv -(. r- . 6 ( ( FRIEDMAN & FRIEDMAN, p.c. ^TTOIINI~YI> AT LAW ClOO N. SI!r.ONIl ST. I'Y.NTIII)llSI! SUlTY. pO, JIox 11I1.~ llAIIHlsIIUlIll, I'I!NNSYLVANIA 111011 1717IUUO.Ol}l)U 1a!.UXUJ'1J1lt1 Nu. (117) Ill)tHIOnO RICHAHIl S. I'HI.IlNAI'I JOHI'II'. KII'IO EIl"'''"1l I'..I.I>NAI'I RITI...I> September 1, 1994 Tony Koukounas and Bill Katsifis Platanos, Inc. Dear Tony and Bill: We are pleased that you have asked our firm to represent Platanos, Inc. in its enforcement of the covenant not to compete entered into with Mr. Vellios. This letter is the written fee contract which Pennsylvania law requires attorneys to have with their clients. We, Friedman and Friedman, p.e., will provide legal services to you on the terms set forth below. 1. This agreement will not take effect, and we will have no obligation to provide legal services; until you return a signed copy of this agreement. This agreement will take effect when you have performed the conditions stated in Paragraphs 1 and 2, but its effective date will be retroactive to the date we first performed services. The date at the beginning of this agreement is for reference only. Even if this agreement does not take effect, you will be obligated to pay us the reasonable value of any services we may have performed for you. 2. we have reserve Although it is customary for us to receive a retainer fee, waived a retainer in your particular case. However, we the right to require a deposit (retainer) in the future. 3. We feel that the most equitable basis for our fee is to determine how much time is spent on your matter. It is impossible to determine in advance the amount of time that will be needed to complete your case or the amount of fees and costs which you may incur. In the case of litigation or domestic cases, this frequently depends on the nature of the controversies and the willingness of the parties to resolve their differences out of court. Our billing is based on an hourly rate of $175.00 per hour for Richard Friedman, Esquire, $125.00 per hour for John F. King, Esquire, and $35.00 for any paralegal or legal assistant's work. The hourly rates will be subject to increase subject to 30 days notice to you. We will bill you monthly on a time-expended basis. Although we do not send itemized bills as a matter of course, we do PLAINTIFF'S I EX~BIT ~ ( Tony Koukounas and Bill Katsifis September 1, 1994 Page 2 provide a general explanation of the nature of the services provided and the actual hours expended during each billing period. We also maintain in our office recorda of time used for conferences, telephone calls, drafting documents, research, court time and, if necessary, travel time. These records will be available to you upon request. Fraotions of hours are oomputed in periods of not less than two-tenths '(2/10) of an hour for phone calls and written communications. The interruption of other work or phone calls is taken into consideration. In some instances we find it more expedient to bill predetermined set fees for certain services to be performed; i.e., uncontested divorce, incorporation of business, etc. Charges for preparation of documents are calculated on a time plus value basis. You will not be billed for clerical or secretarial time. As is the case with most attorneys, based on the complexity of the issues involved and based on the results obtained, the final bill may be raised accordingly. 4. We expect you to keep current with our billings. We reserve the right to terminate our attorney-client relationship for non-payment of fees or costs. We expect our invoices to be paid in full within the month in which they are received. You should review your invoice promptly. If you fail to object to the charges in the month within which the bill is sent, I will assume that the bill is satisfactory, 5. We reserve the right to add a carrying charge of one and one half percent (1 1/2%) per month (18% APR) for bills which are not paid in full during the calendar month in which they are received. 6. We will charge you for the time we spend on telephone calls relating to your matter, including but not limited to calls with you, with court personnel, with opposing counsel, with experts or other witnesses, and with other individuals involved in or material to your matter. The legal personnel assigned to your matter will confer among themselves about the matter, as required. When they do confer, usually only one will charge for the time expended. However, if more than one of our legal personnel attends a meeting, court hearing or other proceeding, each will charge for the time spent. We will charge for waiting time in court and elsewhere and for travel time, both local and out of town. 7. You are hiring us as your attorneys, to represent Platanos, Inc. in its enforcement of the covenant not to compete entered into with Mr. Vellios. We will provide those legal services reasonably required to represent you. We will take reasonable steps to keep you informed of progress and to respond to ( I' Tony ~oukounas and Bill ~ataifis September 1, 1994 Page J your inquiries, and will return your calls as promptlr as possible. Unless we are out of town, most phone calls will be ether taken at the time you call us, or returned the same day. B. Unless we make a different agreement in writing, this agreement will govern all future services we may perform for you. 9. You agree to be truthful with us, to cooperate, to keep us informed of developments, to abide by this agreement, to pay our bills on time, and to keep us advised of your address, telephone number and whereabouts. Frequently, courts or other governmental agencies will send documents directly to you, as a party to litigation or as a principal in a business, and they will not send copies to us, as your attorney of record. For this reason it is very important that you forward to us any documents, papers, or correspondence which have been sent directly to you from the court or from any other source which may have any bearing on this matter. 10. We may incur various costs and expenses in performing legal services under this agreement.. You agree to pay for those costs and expenses in addition to the hourly fees. Upon request, you agree to pay these costs in advance. The costs and expenses commonly include process servers' fees, fees fixed by law or assessed by courts and other agencies (so-called "filing fees"), court reporters' fees, messenger, overnight delivery and other delivery fees, sheriff's fees, parking and other local travel expenses, photocopying charges if they become excessive and must be performed out of the office, computer research, and other similar items. For out of town travel, you agree to pay transportation, meals, lodging and all other costs of any necessary out-of-town travel by personnel. You will also be charged the hourly rates for the time legal personnel spend travelling. To aid in the preparation or presentation of your case, it may become necesAary to hire doctors or other expert witnesses. We will not hire such personnel unless you agree to pay their fees and charges. We will select any expert witnesses to be hired. 11. As previously stated, all fees must be paid on a current basis. Should there be outstanding fees ~t the conclusion of your matter, they must be paid when the case is concluded. Additionally, I may require that you execute a judgment note or lien upon property or the proceeds of equitable distribution in my favor to secure payment of fees and costs. I also reserve the ( ( Tony Roukounas and Bill Ratsitis september 1, 1994 Page 4 right to retain all funds which I receive on your behalf, trom any source, to guarantee payment of tees and costs. 12. You may discharge us at any time. We may withdraw with your consent or for good cause. Good cause includes your breach of this agreement, your refusal to cooperate with us or to tollow our advice on a material matter, or any fact or circumstance that would render our continuing representation unlawful or unethical. When our services conclude, all unpaid charges will immediately become due and payable. After our services conclude, we will, upon your request, deliver your file to you or your representative, along with any funds or property of yours in our possession. 13. Nothing in this agreement and nothing in our statements to you will be construed as a promise or guarantee about the outcome of your matter. We make no such promises or guarantees. Our comments about the outcome of yo~r matter are expressions of opinion only. 14. our office manager and secretaries are usually conversant with the status of your file but are not permitted nor are they qualified to give any opinions or to advise clients on any legal matters, 15. Please countersign this Agreement and return it to us in the enclosed envelope, so that we will have a mutual memorandum of our understanding. RSF/bp:Fees\Platanos.fee I yours Enclosures . 9/2/94 - Telephone call from client, revisions of Petition, filing of Petition, 1.0 9/5/94 - Two telephone calls to Judge Bayley's secretary, meeting with Richard Friedman, dictation of Complaint, revision of Petition, telephone call to client. 2.0 9/12/94 - Telephone call to Prothonotary reI subpoenas, memo to file. .4 9/12/94 - Meeting with client, preparation of subpoenas, initial preparation for Hearing. 1.5 9/13/94 - Preparation of third subpoena, review and revision of preparation notes for Hearing, .6 9/14/94 - Telephone call to client, revision of notes in preparation for Hearing reI 4th Subpoena, general preparation for hearing. 2.0 9/15/94 - Attendance at Hearing. 3.5 15.5 hours @ $125,00 per hour $1,875.00 SERVICES RENDERED BY MEREDITH A. MCNICHOL, PARALEGAL 9/5/94 - Trip to Windsor Family Restaurant reI signing of verifications, filing of Petition in Cumberland County. 3.0 hours @ $35.00 per hour 105.00 Costs Advanced I Cumberland County Prothonotary (Platanos v. Vellios) Cumberland County Sheriff (Platanos v, Vellios) priority One Attorney's Messenger Service, (Service of Subpoenas, Complaint, and Hearing Order) Witness Fee - Stavros Kouras 45.50 100,00 Witness Fee - Greg Carrera 310.00 10.60 5.70 1,_/1...,.", I.. ''''It"""." -:-r~--'r ."oll '0 " . y~..' .' c "' ". \1\,111" ;, " I)~". ~ (,~) ,.." :. I''f ~. r.J~ \~ :1: '. r' ,," - 1"1 .-t1" !j ~~, ., .! If 11: - I " .'''' ", ) ~ n \! ~ I l II ...: ~ i5 ll. ,1:'1 !:! II o:! I . E ~ ~ ~)~.. B\~ {\. I ! \ . ~ '" ,; ~ d 11)1- ;,~ "" : ~ '- 1111" . c,:. ~ II) C') 8\ ~! : ~ [ n~; J A. ii ~" ( : ' ! d~ .:;~r I i 11l-1 · i"~.:' yJ "::", o i' .;: I B":~' \ ~ ~ t ;;~ .--' / "\'h, LU:J \~ *~ %'\!; ~t1 ~ ~\a z :.I CI) \~ 'u j ~ " ~ Ol "- fl, ......', t,@ \. .... ;Hi' . .' ~I ;:~ :';: "I 7':: I" r .i! ~>. i" . ., 'oJl .. -~J .-r-' I q ," n , .:i ~ ' ~ H ~ I i- .~.;, r "'J ~ " -,_..:.- ;", f .: i ~ I.I! I..;' i:: , .,: , " Set.' Pil~" ,I ror "T.. bl.. or . I. 1o",J.< ~' ';')' , ,.', oJ'~ <;.) ~ ~ i I ,~ ~) ~ \ -:J"' t ~ <"n " . '-.::t () Iv) .. .. () ...;) ~. '-n 0 \1"\ l:l- ~ 1.1'1 \ "Y) 0 \,"' Q- ", "- 'I', .::r- i ,':;]-- \- 'I-~ \ -+ n. .~ ,., I ...... I Jj c:y. --J. \- o<"--.l ..; !;: U'l~ id.~ ~...: ~~ S!!5:: i:: a," ~ ~~ ~u 6 8~ 6 ~~ : ;.>:..:;o~ l-d'J z b ..... '.... ,~ oJ " ,~ <': ~ '" d ~ H . ~ ~ ~ t;: . ~ '" ..1ll.s.....nlll....'.""L.".n... l}tol'llflJl 0".",(\1 '.1i1" JI'I'.". " ." - ~ ~ r.: .<:J .... "8 ~ H >-i fil. ,... ~ .< S!,l ? ~ "'f, 1l ;: ~ :.? ....I Q, 8 u ~ . . ~ ) ,.; l! ~ :II j VI ~ of ~ ~~~Vl~~ III Ia ~ ~ .. ~ ~p!VI~S,j oil ~ .' ~ ,p., o Z !': 0 . Z~~o~g;" < 0 p., ~ ." "' ~ II> el ~ III !l ~ < ~ ; 4. As a term of the aforementioned Installment Sales AgreeMent executed by the Defendant on April 28, 1993, the Defendant did promise and covenant not to enter into competition with Platanos, Inc., or engage in the same or similar type of business as the Windsor Family Restaurant, either as an individual or in any other businesG form, directly or indireotly, whether as a principal, agent, employee or straw party, within a ten (10) mile radius of the Windsor Family Restaurant for a period of three (3) years from the date of the contract, which was April 28, 1993. A copy of this promise and covenant, executed by the Defendant, is attached in the aforementioned Exhibit "A". 5, The Installment Sales Agreement executed by the Defendant defines incidents of default to include, "Breach of the covenant not to compete by Vellios", and said agreement requires, in the event of default, that the party breaching the contract shall be responsible for payment of legal fees and costs incurred in enforcing rights under the agreement. The sections entitled "-., Incidents of Default and Breach are included in the Installment Sales Agreement attached hereto as Exhibit "A". 6, It is believed, and therefore averred, that Defendant Vellios, contrary to the abbve-referenced promise and covenant, not to compete, is actively involved, both directly and indirectly, with the Flamingo Restaurant and Coffee Shop, Inc., and is actively involved, both directly and indirectly, with activities being undertaken by the Flamingo Restaurant and Coffee Shop, Inc. to open a restaurant on Route 15 in Dillsburg, York County, Pennsylvania, said site being approximately seven and seven tenths (7.7) miles from the aforementioned Windsor Family Restaurant, and is performing services for the Flamingo Restaurant and Coffee Shop, Inc. as follows! A. Remodeling, furnishing, and setting up the kitchen facility; B. Remodeling, furnishing, and setting up the dining room facility; C. Hiring of kitchen staff; ~ D. Solicitation o~ customers; and E. Generally assisting in the organization and institution of a competing business, that being the restaurant being prepared to be open by the Flamingo Restaurant and Coffee Shop, Inc. 7. It is also believed, an? therefore averred, that the Defendant has indicated that he will be acting as a chef/cook at the restaurant which is being planned to be opened by the Flamingo Restaurant and Coffee Shop, Inc. 8. It is believed, and therefore averred, that the Defendant's wife and his wife's family members are the principals in Flamingo Restaurant and Coffee Shop, Inc., and that Defendant Vellios in integrally connected with the ongoing concerns of the Flamingo Restaurant and Coffee Shop, Inc. 9. It is believed, and therefore averred, that the Defendant will continue to solicit business from customers of the Plaintiff to the detriment of the Plaintiff, and will continue to act both directly and indirectly in competition with the Plaintiff, contrary to the Defendant's promise and covenant not to compete. 10. The Plaintiff faces immediate and irreparable injury due to the Defendant's actions and competition with the Plaintiff, said actions being contrary to, and in violation of, the promise and covenant not to compete executed by the Defendant. 11. The Plaintiff has no adequate remedy at law. WHEREFORE, the Plaintiff respectfully requests that this Honorable Court: A. Order the Defendant, Athanasios Vellios, to immediately cease and desist any and all activity, either direct or indirect, relating to the planning, institution and operation of the restaurant which is being prepared for operation by the Flamingo Restaurant and Coffee Shop, Inc.. B. Order the Defendant, Athanasios Vellios, to cease acting either directly or indirectly as a principal, agent, employee or straw party of the aforementioned Flamingo Restaurant and Coffee Shop, Inc., as those actions might relate to the opening of a restaurant within a ten (10) mile radius of the Windsor Family Restaurant. C. Order the Defendant, Athanasios Vellios, to cease being physically present at the site of the aforementioned restaurant which is being prepared by Flamingo Restaurant and Coffee Shop, Inc. for operation on Route 15 in Dillsburg, .for any I ) ...,........;1.... ~t/:28. . /1,/<, ENTERED INTO, Thls-26th day of AprlI,l993 BETWEEN ATHANASIOS VELLlOS ,ofl750 AshlllOd Drive, York, Pennsylvania 17404 here1nllfter known as VeUlos, ~ND BUL KATSIFIS, of SUver Spring Township, CumberlMd County, Pennsylvania, herelnaf'ter known as Katslfis, AND , TONY KOUKOUNAS, of Mcclullllcsburg, Cumberland County, Pennsylvania, herelnaf'ter known as Koulrounas. Koukounas joins In the within agreement to evidence his assent to the warranties and guaranties lIl3de by him herein; WITNESSETII: That the Sllid Vellios, In consideration of the tenns and conditions hereinaf'ter mentioned and conlllined, agrees to tronSfer and deliver unto the Sllid Katsifis, his heirs and assigns, Two Hundred Fifty (250) shares of common stock In Pllltanos, Inc" which said shares of Slock represent the entire remaining Intr.rest of Vellios In Pllltanos, Inc., and which said shares constitute a one-half (112) intereSt in Pllltanos, Inc, Vellios agrees to execute ail necessary documents contemporaneously with the signing of this document to effect the Immediate transfer of Sllid shares to KBtsifis. IN CONSmERA TION WllEREOF, the parties hereto agree as follows: Purchase once. Katsifis agrees to pay to Vellios therefor, the sum of$1SO,OOO.OO Dollars, as follows: (1) $55,000,00 dollars upon the execution of this Agreement of Sale, the receipt whereof is hereby acknowledged by Vellios, and which Sllid $55,000.00 is more SDCclfLCl!IlY p,ald as follows: L $10,000.00 which is held In escrow by OIarles Eo Shlelds, m. Bsquire. attorney for Velllos and which is agreed by the parties hereto to be released to Vellios contemporaneously with the signing of this Agreement. b. $40,050.00 to be paid by certified or cashiers check made payable to the order of PllllaJ1os, Inc. as a loan to the corporation. It Is the understanding of the parties hereto that contemporaneously with this agreement Pllltanos, Inc. will make payment to Vellios of $40,050.00, which figure represents full payment of the debt owed by PllllaJ1os, Inc. to Vellios. c. $4,950.00 to be paid by certified or cashiers check made payable to the order of . Athanaslos Vellios. AUTHENTICATED BY Vellios: ,-1 V AUTHENTICATED BY Katslfis: fJ./e , AUTHENTICATED BY Koukounas: I 1F- pellverv or shores. Upon complianee with the foregoing tenns and conditions 8Ild payment of the 5lI1d purchase price in full by Ka15lflS, VeUlos shllll promptly deliver to KalSlfis the 2.50 shares of stock In PlalJUlos, Inc, whlch Is pledged as security for performance by KalSlfis of the terms and conditions of this Agreement, and VeUll)s shall promptly sign 0. genero1 release in favor of KalSlfls and Koukounas, perolllt. In the event the said Katslfis shall fal1.to make llOy monthly payment for a period of thirty (30) days after the same shllll have become due: and parable by the tenns hereof, or If a breach of any of the foregoing conditions be made by Kntslfis, then IlOd In such case this Agreement shall, lit the option of Vellios, become nullllOd void and the said KalSlfis shall forfeltllll monies then pald as liquidated damages. In the alternative, Vellios may elect to have the entire prlnclpa1sUIn mnaInlng_ unpaid become due ond payable at once ond may be collect the same by suit or otherwise, ProvIded, however, that that no such default shall oocur unless Vellios has given KalSlfis and ony other shareholders of Plat.o.nos, Inc, at least thirty (30) days written notice of such violation of the tenn.~ hereof, Katslfi~t ~ ony other shareholder of Platanos, Inc. shllll have the right \Q correct such default dwing said uuny-day period, provided, however, that said curing party give at least flftocn (15) days written notice of Intent to cure said default. If a shareholder elects to cure the default of Katslfis, said shareholder shall 0.. Completely cure the default ofKalSlfls b. Execute on agreement assuming Illl of the terms of this Agreement. c. Execute a stock pledge agreement In same fonn as the Stock Pledge Agreement executed by KalSlflS pursuontto this Agreement. If said shareholder elects to remedy the default and assume the obligations of Katslfis, Vellios and Katslfis will fully cooperate In the assignment of Katslfis's shares of PlalaJ10s Inc., subject to the Stock Pledge agreement, to the assuming shareholder. NonWDlv~r or rll'hl~. Acceptance by VeIlIos of any of the aforesaid monthly payments after the same shall have become past due ond In default, or any fallure to enforce any of the rights herein reserved to the panies of the first part, or any of the penalties, forfeitures, damages or conditions herein conlalJled, shall not in any wise be considered a waiver of the right to enforce the same D1 any time and any attempt to collect the amoun:,=-~~ one proceeding shall not be considered a wiUver of the right to Institute ony of the other gs herein provided, but all of the rights of Vellios, and all forfeitures, penalties, damages and conditions may be enforced together or successively at the option of VeIlIos. Covenont not to comocle. Vellios agrees that he will not, either as an individual or in any other business form, directll or indirectly, enter into competition with P1atanos, Ine. or en,:age in the same or s\mllar type 0 baseness as the Windsor Family Restaurant whether as I pnnclpal, agent, employoc, or straw party within a ten (10) mile radius of the Windsor Family Restaurant, located at the comer of Trlndie and Wl/Idsor Road for a period of three years from the date of this Contract. }VArrnnrles And Indemntncatlons: Worrnntv relmrdinl.' t~xes. Vellios hereby warrants that all taxes owed by PlalaJ1os, Inc., including real estate, income, IlOd corporate taxes and unemployment compensation contribution for prior years have been paid, excepting those set forth on Exhibit "A", attached hereto and incorporated herein. Vellios agrees to indemnify and defend KalSifis for his share of any tax deficiencies owed or alleged to be owed by AtmlENTICATEDDY AU1lffiNTICATEDBY AUTIlENTICATEDBY Vellios: KalSifis: Koukounas: If V ~.IL:, 1'. ~ 3 .. Platanos, Inc. for 1992 and prior years. VeUlos warrants that all said taxes IlOd assessments due In connectlon with the operation of Plalllnos, Ine, and the Windsor FlII11ily Restaurant to any clty, county, slllte, or federal govcnunental agencles, shBl1 be paid In full up to the date of senlementllOd that all due returns, fOnDS, and taxes required to be filed with said agencles have been properly filed BIId paid as of the settlement date, or will be 50 filed and paid In due course thereafter. Warrant\! re!1ardlnl! assets and liabilities or Corooratlon. Velllos hereby wo.rronts that the assets and llabWtles are lIS set forth on Exhibit "An attached hereto and Incorporated herein by reference, Vel1los shBl1lndemnlCy KalSifis for KalSifis's share of the corporate obligation for any debts not disclosed to Katsifis on Exhibit "An. ,Warranty or conformity with GoY(!rnm~nt r~m.I'ntlons. VeUios warrants lhat he [S Dot aware of any governmental notices concerning any violatloDS of any Federal, SIale or loco1law, rule or regu1atlon, nor of any work required to be performed or any asSCSSJDellt for any thing whlllSOCver, including, but Dot Umlted to, sidewalk, street, water and sewC'l', and other such Improvements. Vellios warrants lhat lhe existing utilltles are suflicieDt to servioc lhe ~ and its current operations. Vellios warrants that the existing use of the premises is a pennlttcd use uDder all applicable :r.oning ordinances, or that a certificate of non-c:onformanee from the approprl.atc zoning officials sholl be provided OD or before settlement :Warrant\! of comollance with Lease obllfatlons. Vellios warrants that lhe Lease Agreement attaChed hereto as Exhibit "B" is the current agreement between Plalllnos, Ine. and Web Madcets and that there have been no modifications, written or oral, of the tc:m1S lhereof. Vellios further warrants that he is unaware of any uncured vlOlatlODS of any of the leI1llS of said lease and that he has received no notice of default In the tc:nnS of lhe lease. Katslfis acknowledges lhat $aid Lease c:onlalns a personal gumntee by Vellios and Nicholas Barakos, a former shareholder. Katsitis and Koukounas each covenants that he will make oIl reasonable cfforlS to remove Velllos's guarantee from future lease agreements. Undl such time as Velllos is DO longer a guarantor of the lease obligation with Weis Marlcets, Katslfis and Koukounas will Indemnify, defend and hold VeUios harmless from any liability arising from said personal guarantee. FUrther, for as long this Agreement is In effect, Katslfis and Koukounas agree that lhey wUl cause Platanos, Inc. to deliver by bank-to-bank wire ttaDSfer, the monthly rental payments to Weis Markets and wUl provide VeUios with eoplcs of the bank receipt evidencing said tranSfer. }Varrnntv of Insurance. Katsifis and KouIcounas bolh warrant that they have made application for and the corporation wUl pay for business 1ntcmlption Insurance, the tenDS of which an: IS set fonh on ExhIbit "0", auached hereto and Incorporated herein by reference. Katslfis and Koukounas warrant that they will cause Platanos, Inc. to keep $aid Insurance In Cull foree and effect and shall forWam copies of the renewal declarations to VeUios for the UCe of this Agreement and Guarantee. AUlHEN11CATED BY Velllos: AU1HENTlCA TED BY Katslfis: AUlHENTICATEO BY Koukounas: 111/ G.~, ~.r:: 4 .. JVlntcrlnlllv or Wnrrnntl~. TIlis Agreement is expressly contingent upon thc WlllTl1llties of Vellios being trUC and corroct at thc scttlement date. Any express coatingcncy In this Agreement ulllY be wn\Ved in writing by the party to be benefited by thc contingency at the time of settlcmenL In thc event thatllOY such contingency fails this Agreement shall be null IlOd void and nIl deposit monies shall be returned to Ko15lflS without deduction and without further UabUity hereunder on the pan of cither party hereto. All warranties In this Agreement, not expressly wnived shall n1so be considered covenants of this Agreement IlOd any failure of any warranty shnIl be considered a default In thc telll1$ of the agreement by the breaching party and shnIl entitle the nonbl\\llChlng parties to nIl the rights IlOd respollSibUitie$ on default as sct fonh In this AgreemenL Provided. however, that thc breaching party shall be entitled to cure the fallure of any WlllTI1lIty within thirty (30) days from thc date he receives written notice of the failure of any warranty given by him. Coroomte Rt'Cords. Koukounas and Kolliifis agree that, as omeen, directon and slweholders of PlatanOS, Inc., they shnll authorize thc person or penons responsible for the keeping of the books, accounts, and records to II1Ilke avnllablc to Vellios on a monthly basis a sllltement of the income and expenses of PlatanOS, Inc. In a fonn substantially the same as the monthly reports now prepared for PlatanOS, mc, by Gift Sniegocki & AssociateS, the most recent monthly report being attached hereto as Exhibit "C". - - Incidents or Dernult. Default shall be deCmed as a breach of any of the terms of this Agreement, including: a. Pallure of Kotslfis to make any payment as aforesnid. b. Breach of any ofthc above-stated warranties. c, Entry Into bonlauptcy under any chapter of thc Bankruptcy Code. d. Breach of the terms of the lease hy Platanos, Inc. e, A permanent cesaation of business known as the Wmdsor Family RestauranL f. Pallure of PlalaJ1os. Inc. to pay all taXes when due, unless there is a good falth dispute concerning said taXes. g, Breach of the covenant not to compete by Vellios. Jlrcach. In the event of default under the terms of this AFlUCnt, the party breaching this contract shall be re,sponslble for payment of legal fees and costs mcurred by the other in enfoiclng , their rights under this AgreemenL Should Kotsifis breach the terms of this Agreement and should said breach not be cured as provided In this Agreement, Vellios shall have the right to declare this Agreement null and void and to retain nIl payments received as liquidated damages. Vellios shall further have the option to re-enter and opctate the Windsor Family Restaurant as owner pursuant to the Stock Pledgc Agreements, or, in thc alternative, he shill have thc option 10 accelerate IS due and Immediately payable, the entire unpaid principal amount as evidenced by the Demand Notes executed by Katsifis and Koukounas and to collect thereon. Nothing herein contained shall restrict any rights he may have to go agalllSt Tony Koukounas et /lX., upon any guarantee or surety or other agrocmenL ' AUTHENTICATED BY Vellios: !tV AUTIIENTICA TED BY Katsifis: f!> .{.c.. AUlHENTICA lED BY Koukounas: -rf:- 5 Modln~ollon. No modification of this Agreement shall be binding upon the parties, unlC3S the SIl1DC shall be In wriling and duly approved by both of the parties hereto. ~, NmtosslKnobllllv. The IntcmSt of Katslfis In this Agreement shall not be DSslgnable, In whole orIn .Part, without the prior written consent and approvlll of Vellios, and U'such BSslgnment Is attempted, all rights and remedies of Vellios set forth herein or which Vellios may otherwise have' sliAlllmmcdfstely lCICIlIe to Ve\llos. Transfer of title by W1II, survivorship, descent or by eIectlon of a shardtolder to cure the default of KBlSIfis shall not be regarded as an BSslgnment requiring the consent and approval of Vellios, SUl,"Ylvol or Aareement. 'IbIs Agreement Is to extend to and be binding upon the heirs, suc:c:cssora, cxec:uton, admIniSlr8tors, and assigns of the partles hereto. Document Comnlllln~. ''lbc undersigned partles for and In consideration of the tenns of thli Agreement, U' requested by any Oth~:n>' or the auomey of any other party , to fully cooperate and adjust for c:1erlca1 errors, or slons, In any or all of the Closing dOcumentation If deeined Dec:e5Slll}' or deslrablc In the reasonable d\s(:redOD of any party or their attorney, to fully consummate said A~nt. The undersigned partles do hereby 10 agree and covenant in order to assure that this documentation executed ihIs date will conConn and be acceptable and complelC to the standard practices iDd requirements. ' INTENDING TO BE LEGALLY BOUND, WITNESS OUR HANDS AND SEALS, on this page 6 of 6 pages, the day and year first above written. , I I' ~:~ wE. -:or ~4'/8..~~ ~~h.L E JLaJ'JjL ., lh''1a.l4oaA /~ l/~at(SEAL) Athanaslos Vellios 13 ~ ~~ (SEAL) BUlKa 15' . (SEAL) To yKo ' AtrrHEN'J1CATED BY Vellios: Av AU1HBN11CATED BY KalSlfis: (3 .I,., 6 AtrIHEN'I1CATED BY Koukounas: -( ~. "\ v. : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA : NO. (Ill- !JON) ClU,;'I 7iOr1 : : CIVIL ACTION - EQUITY : PLATANOS, INC., Plaintiff ATHANASIOS VELLIOS, Defendant ORDER AND NOW, this day of September, 1994, upon consideration of the within Petition for Preliminary Injunction Without Hearing and for Hearing for Permanent Injunction, it is hereby ORDERED AND DECREED as follows: A. The Preliminary Injunction is issued, without Hearing, requiring the Defendant, Athanasios Vellios, to immediately cease and desist any and all activity, either direct or indirect, relating to the planning, institution and operation of the restaurant which is being prepared for operation by the Flamingo Restaurant and Coffee Shop, Inc. B'. The Preliminary Injunction is issued, without Hearing, prohibiting the Defendant from acting either directly or indirectly as a principal, agent, employee or straw party of the aforementioned Flamingo Restaurant and Coffee Shop, Inc., as those actions might relate to the opening of a restaurant within a ten (10) mile radius of the Windsor Family Restaurant. C. The Preliminary Injunction is issued, without Hearing, prohibiting the Defendant trom being physically present at the site of the aforementioned restaurant which is being prepared by PLATANOS, INC., Plaintiff v. IN THE COURT OF COMMON PLEAS I CUMBERLAND COUNTY, PENNSYLVANIA I NO. I I CIVIL ACTION - EQUITY ATHANASIOS VELLIOS, Defendant PBTITION FOR PRELIMINARY INJUNCTION WITHOUT HEARING AND FOR HEARING FOR PERMANBNT INJUNCTION AND NOW comes the Plaintiff, Platanos, Inc., by and through its attorneys, Friedman and Friedman, P.C., and respectfully moves this court, pursuant to Pa. R.C.P. 1531, for a Preliminary Injunction without a hearing against the Defendant, Athanasios Vellios, and also for a hearing thereon to permanently enjoin said Defendant from any and all actions in competition with the Plaintiff, Platanos, Inc., and in support thereof avers as follows: 1, The Plaintiff is Platanos, Inc., a duly registered corporation in the Commonwealth of Pennsylvania, and is the owner and operator of the Windsor Family Restaurant, located at 5144 Simpson Ferry Rd., Mechanicsburg, Cumberland County, Pennsylvania 17055. 2. The Defendant, Athanasios Vellios, hereinafter "Vellios", is an adult individual with an address of 1750 Ashland Drive, York, York County, Pennsylvania 17404. 3. This Honorable Court has authority to issue a Preliminary Injunction without a hearing in this matter, pursuant to Pa. R.C.P. 1531(a). 4. On April 28, 1993, tho Defendant Vellios, who at that time was the owner of fifty (50') percent of the issued and outstanding shares of Platanos, Inc., entered into an Installment Sales Agreement for the sale thereof to Bill Katsifis and Tony Koukounas, as a result of which Katsifis and Koukounas are present sole owners of Platanos, Inc. A copy of said Inst3l1ment Sales Agreement is attached hereto, marked Exhibit "A", and incorporated herein by reference. 5. As a term of the aforementioned Installment Sales Agreement executed by the Defendant on April 28, 1993, the Defendant did promise and covenant not to enter into competition with Platanos, Inc" or engage in the same or similar type of business as the Windsor Family Restaurant, either as an individual or in any other business form, directly or indirectly, whether as a principal, agent, employee or straw party, within a ten (10) mile radius of the Windsor Family Restaurant for a period of three (3) years from the date of the contract, which was April 28, 1993. A copy of this promise and covenant, executed by the Defendant, is attached in the aforementioned Exhibit "A". 6. The Installment Sales Agreement executed by the Defendant defines incidents of default to include, "Breach of the covenant not to compete by Vellios", and said agreement requires, in the event of default, that the party breaching the contract shall be responsible for payment of legal fees and costs incurred in enforcing rights under the agreement. The sections entitled Incidents of Default and Breach are ircluded in the Installment Sales Agreement attached hereto as Exhibit "A". 7. It is believed, and therefore averred, that Defendant Vellios, contrary to the above-referenced promise and covenant not to compete, is actively involved, both directly and . indirectly, with the Flamingo Restaurant and Coffee Shop, Inc., and is actively involved, both directly and indirectly, with activities being undertaken by the Flamingo Restaurant and Coffee Shop, Inc. to open a restaurant on Route 15 in Dillsburg, York County, Pennsylvania, said site being approximately seven and seven tenths (7.7) miles from the aforementioned Windsor Family Restaurant, and is performing services for the Flamingo Restaurant and Coffee Shop, Inc. as follows: B. Remodeling, furnishing, and setting up the kitchen facility; Remodeling, furnishing, and setting up the dining room facility; Hiring of kitchen staff; Solicitation of customers; and A. C. D. E. Generally assisting in the organization and institution of a competing business, that being the restaurant being prepared to be open by the Flamingo Restaurant and Coffee Shop, Inc. a. It is also believed, and therefore averred, that the Defendant has indicated that he will be acting as a chef/cook at the restaurant which is being planned to be opened by the Flamingo Restaurant and Coffee Shop, Inc. 9. It is believed, and therefore averred, that the Defendant's wife and his wife's family members are the principals in Flamingo Restaurant and Coffee Shop, Inc., and that Defendant Vellios in integrally connected with the ongoing concerns of the Flamingo Restaurant and Coffee Shop, Inc. 10. It is believed, and therefore averred, that the Defendant will continue to solicit business from customers of the Plaintiff to the detriment of the Plaintiff, and will continue to act both directly and indirectly in competition with the Plaintiff, contrary to the Defendant's promise and covenant not to compete. 11. The Plaintiff faces immediate and irreparable injury due to the Defendant's actions and competition with the plaintiff, said actions being contrary to, and in violation of, the promise and covenant not to compete executed by the Defendant. 12. The Plaintiff has no adequate remedy at law. WHEREFORE, the Plaintiff respectfully requests that this Honorable Court: A. Issue a Preliminary Injunction without Hearing requiring the Defendant, Athanasios Vellios, to immediately cease and desist any and all activity, either direct or indirect, relating to the planning, institution and operation of the restaurant which is being prepared for operation by the Flamingo Restaurant and Coffee Shop, Inc., and, after hearing, issue a Permanent Injunction to said effect until the natural termination ot the promise and covenant not to compete, said date being April 28, 1996. B. Issue a Preliminary Injunction without Hearing prohibiting the Defendant from acting either directly or indirectly as a principal, agent, employee or straw party of the aforementioned Flamingo Restaurant and Coffee Shop, Inc., as those actions might relate to the opening of a restaurant within a ten (10) mile radius of the Windsor. Family Restaurant, and, after hearing, issue a Permanent Injunction to said effect until the natural termination of the promise and covenant not to compete, said date being April 28, 1996. C. Issue a Preliminary Injunction without Hearing prohibiting the Defendant from being physically present at the site of the aforementioned restaurant which is being prepared by Flamingo Restaurant and Coffee Shop, Inc. for operation on Route 15 in Dillsburg, for any of the purposes or activities for which he has otherwise been enjoined from undertaking, and, after hearing, issue a Permanent Injunction to said effect until the natural termination of the promise and covenant not to compete, said date being April 28, 1996. D. Issue a Preliminary Injunction without Hearing prohibiting the Defendant from soliciting customers of the Windsor Family Restaurant on behalf of Flamingo Restaurant and Coffee Shop, Inc., and their operation at the Route 15, Dillsburg, facility, and, after hearing, issue a Permanent Injunction to said effect until the natural termination of the , promise and covenant not to compete, said date beinq April 28, 1996. E, Upon hearing for Permanent Injunction in this matter, qrant the Plaintiff such other relief as this Court may deem appropriate, including, but not limited to, attorney's fees, as allowed for in the Installment Sales Agreement executed by the Defendant and the principals of Platanos, Inc., and costs. Respectfully submitted, Datel~JYt\.l~^ L. t"l cl'-f. I P.C. 17108 kIp ~ Pleadings\Platanos.Inj . , ,................... ~lI':l8 . l1.k ENTERED INTO, Thl.s~h day of April, 1993 BETWEEN ATHANASIOS VELLlOS ,of 1750 AshlllOd Drive, York, Pennsy1vllOia 17404 hereln.llfter known as VeUios, ~ND BIlL KATSIFIS, of SUver Spring Townshlp, CumberlllOd County, Pennsylvania, hereinafter known as KotsUis, AND , TONY KOUKOUNAS, of Mechnnicsburg, Cumberland County, Pennsylvania, hereinafter known as Koukounas. Koukounas joins in the within agreement to evidence his assent to the warranties and guaranties made by him hen:ln: WITNESSETH: That the said Velllos, in consideration of the tcm1S and conditions hereinafter mentioned IIDd contained, agrees to u-ansfer IlOd deliver unto the said Kotsifi." his heirs and assigns, Two Hundred fUty (250) shares of common stock In PlatanoS, Inc., which said shares of stock represent the entire remaining Interest of Velllos in PlatanoS, Inc., and which said shares constitute a one-half (112) intereSt ill Platanos, Inc. Vellos agrees to execute all necessary documents contemporaneously with the signing of this document to effect the immediate transfer of said shares to Katsifis. IN CONSIDERATION WHEREOF, the panies hereto agree as follows: Purchase once. KotsUis agrteS to pay to Velllos therefor, the sum of $150,000.00 Dollars, as follows: (1) $55,000.00 dollars upon the execution of this Agreement of Sale, the receipt whereof is hereby acknowledged byVelllos, and which said $55,000.00 is more 51ICCif'lCalJy p,aid as follows: L $10,000.00 which is held in escrow by OIarles E. Shields, Ill, Esquire, attorney for Velllos and which is agreed by the parties hereto to be released to Velllos contemporaneously with the signing of this Agreement. b. $40,050.00 to be paid by certified or cashlers check made payable to the order of Platanos, Inc. as a loan to the corporation. It is the understanding of the parties hereto that contemporaneously with this agreement PlatanoS, Inc. will make payment to Velllos of $40,050.00, whlch figure represents full payment of the debt owed by PlatanOS, Inc. to Velllos. c. $4,950.00 to be paid by certified or cashlers check made payable to the order of . Athanasios Velllos. AUTHENTICATED BY Velllos: ~V AUlHENTICA TED BY Katsifis: AU11IENTICATED BY Koukounas: 1 1f-- Ole. pellverv of shores. Upon compUance with the foregoing terms IlOd conditions IlOd payment of the S4ld purchase price In full by Katslfis, VeUlos shall promptly deUver to KalSitis the 250 shares of stock In PlalaRos, Inc, which Is pledged 115 security for penOIDlllOee by KlItsitis of the terms and conditions of this Agreement, IlOd VeUlos shll11 promptly sign a general release In favor of Katslfis IlOd Koukounas. Default. In the event the said KlIlSlfls shall fall.to make any monthly payment for a period of thlny (30) days after the 5IlIDe shall huve becorae due IlOd payable by the tenns hereof, or If' a breach of any of the foregoing conditions be made by KalSlfis, then and In such case this Agreement shall, at the ~S:~~f Velllos, become nullllOd vold and the said Katslfis shall fonelt all monies then paid as Uq damages. In the alternative, VeUlos may elect to have the entire principal sum remalnlng unpald become due and payable at onee and may be collect the same by suit or otherwise. ProvIded, however, that that no such default shall occur unless VeIlios has given Katslfis and any other shareholders of PlalllnOS, Ine, at least thlny (30) days written notiee of such violation of the terms hereof. Kalslfis, or any other shareholder of PlalaJ105, Inc. shall have the right to correct such default during said thlny-day period, provided. however, that said curing party give at least fifteen (IS) days written notlee of Intent to CUIe said default. If a shareholder elects to cure the default of Katslfis, said shareholder shall , a. Completely cure the default of KlIlSitis b. Execute an agreement assuming all of the terms of this Agreement. c. Execute a stock pledge agreement In same fonn as the Stock Pledge Agreement executed by Katslfts p\D'Suant to this Agreement. If said shareholder elects to remedy the default and assume the obligations of Katslfis, Vellios and KalSlfis will fully cooperate In the assignment of Katslfis's shares of Plalllnos Inc., subject to the Stock Pledge agreement, to the assuming shareholder. Nonwaiver of rl~hls. Aceeplllnee by VeUlos of any of the aforesaid monthly paymenlS after the same shll11 have become past due and In default, or any failure to enforce any of the rights herein reserved to the parties of the first part, or any of the penalties, forfeilUICS, damages or conditions herein contained. shall not In any wise be considered a waiver of the right to enforce the same at any time and any attempt to collect the amoun:,~~ one ~g shall not be considered a waiver of the rlghs to Institute any of the other gs herein provided, but all of the rights of Vellio5, and all forfeitures, penalties, damages and conditions may be enforced together or successively at the option ofVe1llos. Covenant not to comoete. Vellios agrees that he will not, either as an individual or In any other business form, directly or Indirectly, enter Into competition with Platanos, Inc. or en~age in the same or similar type of baseness as the Windsor Pai:nlly Restaurant whether as a principal, agent, employee, or straw party within a ten (10) mile radius of the Windsor Pamlly Restaurant, located at the corner of Trindle and Wmdsor Road for a period of three years from the date of this Contract. WRrrnntt~ Rnd Indemntncations: }Varrnntv re~ardin~ lax~. Vellios hereby warrants that all taxes owed by Plalllnos, Inc., Including real estate, Income, IlOd corporate taxes and unemployment comp,c:nsation connibution for prior years have been paid, exeepting those set fonh on Exhibit "A", attached hereto and incorporated herein. Vellios agrees to Indemnify and defend KalSifis for his share of any tax deficiencies owed or alleged to be owed by AlT1'HENTICATEDBY AU1HENTICATEDBY AU1llENTICATEDBY Vellios: KlIlSifis: Koukounas:o (j3 1.(, Ifv ~~ 3 PIlllllnos. Inc. for 1992 and prior years, Vell10s WllITlUltS that 011 said taxes and assessments due in connection with the openlllon of PIIllaJ10s, Inc. IlOd the Windsor FamUy Reslllurant to any city. county, SllllC, or federnl govemmentnl agencies, sholl be pald lit full up to the date of settlementllOd that all due returns, fonus, IlOd lOXes required to be filed with said agencies have been properly filed IlOd pDld as of the settlement dote, or will be 50 filed and pald in due course thereafter. Warrnntv rellArdlnq Assets nnd liAbilities or CorDoratloll. Vell10s hereby warrants that the assets DJ\d llabUities are as set forth on Exhibit" A" atlllched hereto and incorporated herein by reference, VelUos shall indemnify Katsl.fis for Katsl.fis's share of the corporate obligation for any debts nol disclosed 10 Katslfis on Exhibit uAu. J WArranty of conformIty with Government remJlAtlons. Velllos warrants that he (S not aware of any govemmentnl notices concerning any violations of any FcdemI. State or locallDw. rule or regulDtion, nor of any work required to be pcdormcd or any assessment for any thing whDlSOCver, Including, but not Umlted 10, sidewa1k, 5\1'tJC1, water and l5CWer, and other such Improvements, Ve1llos wamnts that the existing utllities are sufficient to service the pl'"ml...s and its cun'Cl1t ope:otions. Ve1llos wamnts that the existing use of the premISes is a pennlttcd use ui1der oll applicable :ronlng ordinances, or that a cenificate of noo-confonnanee from the appropriDte :ronlng officI.aIs sholl be provided on or before seulemenL Warranty of comDllnnce with Lease ob1iIlDtlons. Velllos wamnts that the Lease Agreement atIllched hereto as Exhibit "Bn is the current agreement between PlalaJ1os, Ine. and We1s Markets and that there have been no modifications, written or omI, of the tams themlf. Ve1llos further wamnts that he is unaware of any uncured violations of any of the termS of said lease and that he has recclvcd no notiee of default In the terms of the lease. Katsl.fis acknowledges that said Lease contains a per5Oao1 guarantee by Ve1llos and Nicholas Barakos, a former shareholder. Katsl.fis and Koukounas each covenants that he will make all reasonable efforts to ~'emove VelUos's guarantee from future lease apeements. Until such time as Vellios is no longer a guarantor of the lease obligalion with Weis Markets, KatsifIS and Koukounas will Indemnify, defend and hold Vellios harmless from any liabUity arising from said personal guarantee. Further, for as long this Agreement is in effect, Katsifis and Koukounas agree that they will cause Platanos, Inc. to deliver by bank.to-bank wire transfer. the monthly rental payments to Weis Markets and will provide Vellios with copies of the bank receipt evidencing said transfer. lY.llrrantv of Insurance. Katsl.fis tII1<I Koukounas both warrant that they havc made application for and the corporation will pay for business Intcmlption insurance, the terms of which are as set forth on Exhibit "0", attDChed hereto and Incorporated herein by reference. Katsifis and Koukounas warrant that they will cause P1atanos, Inc. to keep said insurance in full force and effect and shall forward copies of the renewo1 doclarations to Vellios for the life ofthls Agreement and Guarantee. AUTHENTICATED BY Vellios: ,41/ AU1lIENTICATED BY KalSifis: AU1HENTICA TED BY Koukounas: (j.~, ~.~ 4 lt1n!C!rlplltv or Wnrrnnlll!5. nlls Agrecment 15 expressly contingent upon the womnties of Vellios being true and correct at the 5ettlement date. Any express contingency In tlus Agrwnent may be wajved In writing by the pllrty to be benefited by the contingency lit the time of settlement. In the event that llOy such contingency falls this Agreement shall be null IlOd void IlOd all deposit monies shall be returned to Katslfls wltllout deductionllOd without further liability hereunder on the pllrl of either party hereto, All warranties In this Agreement, not expressly waived shall n1so be considered covenllOts of this Agreement IlOd any failure of llOy warranty shall be considered 11 default In the terms of the agreement by the breach1ng party IlOd shall entitle the nonbreach1ng parties to all the rights and responsibilities on default lIS sct forth In this Agreement. Provided. however, that the breach1ng party shall be entitled to cure the fallure of any warranty within thirty (30) days from the date he receives written notice of the failure of any warranty given by him. Corooro!/! R~ords. KoukounllS and KalSlfis agree that, as officers, directors and shareholders of PlatanOS, InC" they shall authoriz.e the person or persons responsible for the keeping of the books, accounts, and records to IUIIkc aV1illable to VellIos on a monthly basis a statement of the income and expenses of PlalOnos, Inc. In a form substantl.al1y the same lIS the monthly reports now prepare4 for Plall1nOS, InC, by Gift Snlegocld & AssociateS, the most recent monthly report being attached hereto as Exhibit "C". - - Inelden!s or DC!rault. Default shall be dermed as a breach of llOy of the terms of this Agreement, including: a. Failure of KalSlfis to make any payment as aforesaid. b. Breach of any of the above-slllted warranties. c. Entry Into bankruptcy under any chapter of the Bankruptcy Code. d. Breach of the terms of the lease by Platanos, Inc. e. A permanent cessation of business known lIS the Wmdsor Family Restaurant. f. Fallure of PlatanoS, Inc. to pay all taxes when due, unless there Is a good faith dispute coneeming said taxes. g. Breach of the eovenant not to compete by Vellios. preach. In the event of default under the termS of this Agreement, the party breaching this contract shall be responsible for payment of legal fees and costs inc:urred by the other in enfolclng , their rights under this Agreement. Should Katsifis breach the terms of this Agyeement and should said breach not be cured as provided in this Agreement, Vellios shall have the right to declare this Agreement null and void and to retain all payments received as liquidated damages. Vellios shall further have the option to re-enter and operate the Windsor Family Restaurant as owner pursuant to the Stock Pledge Agreements, or, In the alternative, he shall have the option to accelerate lIS due and immediately payable, the entire unpaid principal amount as evidenced by the Demand Notes executed by Katsifis and Koukounas and to collect thereon. Nothing herein contained shall restrict any rights he may have to go against Tony Koukounas et !lX., upon any guarantee or surety or other agreement. AU1llENTICATED BY Vellios: ItV AUTIIENTICA TED BY KalSifis: f!J}c., AU1HENTICA'reD BY Koukounas: -(~ 5 Modlncatlon. No modificalion of this Agreement shall be binding upon the parties, unless the Sllllle shall be in writing and duly approved by both of the parties hereto, .' ~onasslenabllltv. The Interest of Katslfis in this Agreement shall not be assignable, In whole or In J'1Irt, without the prior written consent and approval of Vellios, and if such assignment is attempted, all rights and remedies of Vellios set forth herein or which Vellios may otherwise have shall immediitcly oocrue to Vellios. Transfer of title by Will, survivorship, descent or by elecdon of a shareholder to cure the default of Kntslfis shall not be regarded as an assignment requiring the consent IlOd approval of Vellios. Survival of Agreement. 11Us Agreement is to extend to and be binding upon the heirs, successon, executon, adminlstmton, and assigns of the ponies hereto. . Document ComDllance. The undersigned parties for and In consldemtlon of the terms of thIS Agreement, if requested by any oth:,,~~ or the attorney of any other pony , to fully cooperate and adjust for clerical errors, or sions, in any ar all of the closing documenllllion if ckemcd necessary or desirable in the reasonable discredOD of any pony or their attorney, to fully consummate said Agreement. The undersigned parties do hereby so agICC and covenant In order to assure that this docul1lellllltioa executed this date will conform and be acceptable and complete to the standard practices and requirements. ' INTENDING TO BE LEGALLY BOUND, WITNESS OUR HANDS AND SEALS, on this page 6 of 6 pages, the day and year first above written. ~~: , /~ 'A. CI1I~f~':lIf:... ~# 8.,~~.J~ t%h.L E /Larlll . lH''Ja.'''1~/~ 1/~a!...(SEAL) Athanasios Vellios fjJ ~ ~~ (SEAL) Bill KlilsiflS ' (SEAL) Thy~ . AU'IHENTICATED BY Vellios: .'Iv AU'IHEN11CA1ED BY Kotsifis: (3.1<, AU'lHENnCATEDBY Koukounas: '" -(. ~ . 6 PLATANOS, INC" Plaintiff IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNA, NO, 94-5000 EQUITY TERM CIVIL ACTION-EQUITY v, ATHANASIOS VELLIOS, Defendant RESPONSE TO PETITION 1. Admitted. 2. Admitted. 3. Denied as a conclusion of law. 4. Admitted, except that Bill Katslfls was the sole purchaser of such shares. 5. Denied. Said term of the Installment Sales Agreement speaks for itself. 6. Denied. Said term of the Installment Sales Agreement speaks for itself. 7. It is denied that Defendant is actively Involved, either directly or indirectly, with the Flamingo Restaurant and Coffee Shop, Inc. or with the activities being undertaken, including all activities and services characterized in subparagraphs A through E. It is denied that the site is within seven and seven tenths (7.7) miles from the Windsor Family Restaurant, and proof thereof is demanded. 8. Denied. Defendant does not Intend to act as chef or cook at the Flamingo as is evidenced by communication of counsel dated August 31, 1994 and received by Katsifis or his agents on September 1, 1994, fully five (5) days before Katslfis caused the instant action to be filed. (See true and correct copy of letter, receipt and return receipt attached hereto as Exhibit A.) 9. Admitted, except that it is denied that Defendant is integrally connected with said business, either as an owner thereof or otherwise. On the contrary, Defendant has no intention of becoming so connected during the term of the agreement. 10. Denied. Defendant has not solicited business from plaintiff's customers and has no intention of doing so. 11. Denied. After reasonable investigation, the Defendant is without knowledge or information sufficient to form a belief as to the truth of the averments of paragraph 11 and proof thereof Is demanded, 12. Denied as a conclusion of law, WHEREFORE, Defendant respectfully requests your Honorable Court to dismiss Plaintiff's petition and all of the relief requested therein. NEW MA ITER 13, By way of further answer and defense, Defendant avers the following new matter: 14, Plaintiff Is not a proper party to this proceeding. Said Intstallment Sales Agreement Is between Defendant and Bill Katslfis with respect to all matters alleged by Plaintiff. 1 S. Becauso Defendant's continued Interest In Plaintiff by reason of Plaintiff's shares being held In escrow pursuant to said Installment Sales Agreement, permitting Plaintiff to pursue this cause of action Is an Improper use and depletion of corporate assets and funds, exposing Defendant to real and potential loss. 16. Plaintiff (or Bill Katslfls) has breached said Installment Sales Agreement by failure to pay Defendant the monthly Installments In a timely fashion as required thereunder, has failed to provide Defendant with copies of the bank receipts evidencing monthly rental payments to Weis Markets as required thereunder, and has denied making available to Defendant the monthly statement of Income and expenses of Plaintiff since June 1, 1994, all of which amounts to "unclean hands" and Is the basis for denying Plaintiff's various claims for relief. 17. Plaintiff has stated no basis upon which preliminary Injunctive relief Is proper or can be granted In this case. 18. Plaintiff has no clear right to relief. 19. Plaintiff has a clear and adequate remedy in damages at law If In fact its legal position is correct and any damage accrues to It. 20. Any preliminary Injunction granted by this court should be conditioned upon the posting of a bond In an amount sufficient to reimburse Defendant all damages sustained by reason of granting the Injunction, Including all legally taxable costs and fees as hereinafter alleged. In no event, should any funds of Plata nos, Inc. be used for such bond or any other purposes connected therewith. WHEREFORE, Defendant respectfully prays this Honorable Court to dismiss the Petition for Preliminary Injunction, or, alternatively, to issue its .'..~ /'.,. 'II . ~"I, ..~q \". ,........- August 31, 1994 Mr. Bill Katsllls Windsor Family Restaurant 5144 Simpson Ferry Road Mechanlcsburg, Pennsylvania 17055 In Re: Tom Velllos . Flamingo Restaurant Dear Bill: Please be advised that as of 10:30 A.M. Ihls morning I was advised by Rob Frey thai he Is In Ihe process of terminating his representation of you. Therefore, I am writing to you directly. I have had several conversations wilh Ellie Velllos this morning concerning the Flamingo (formerly Chalet) Restaurant. She has assured me In the mosl deflnile terms of the following: 1 .) Tom Velllos Is not and will not be Involved In the Flamingo. He Is nol an owner of any Interest. Only Effie, her uncle and her cousin are holders of any Interest. 2.) Tom will not be the chef or cook or be employed In any other capacily nor will he work for free In any manner at the Flamingo. 3.) Effle's uncle. Jim Zahos. Is 56 years old and has plenty of experience In the restaurant business and Is a good chef. Her cousin, Gus, has plenty of experience as a cook and shorl order cook. ThllY have managed to survive on their own so far wilhout Tom Velllos and Intend to continue 10 do so In the luture. 4. ) There Is no date set yet for opening the business. Therefore Ills obvious anything you are hearing Is only speculation. In view of that, the assurances from Effie which I am communicating to you at her direction and under her authority, should serve to put an end to this mailer unless you discover that Tom Is. In fact, working atlhe Flamingo, an event, In view of the assurances given, which I would regard as highly unlikely. 5.) I have also been Instructed to notify you that your payment Is late. I hope this will be paid promptiy and Is not a prelude to an effort to cause my client's aggravation ~l\le\1 . n" CERTIFICATE OF SERVICE I hereby certify that a copy of Defendant's Response was served on September 15, 1994, upon the person and In the manner Indicated below: Service in person as follows: John F. King, Esq. Cumberland County Courthouse Carlisle, PA 17013. Dated: September 15, 1994. ~E~$ Charles E. Shields, III Mellon Bank Bldg. 2 West Main Street Mechanicsburg, PA 17055 (717) 766-0209 Atty. I,D. No. 38513 " " , ~ v. IN THE COURT OF CCltIMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA NO. 94-5000 EQUITY TERM CIVIL ACTION - EQUITY PLATANOS,INC" Plaintiff ATHANASIOS VELUOS, Defendant, ORDER OF COURT AND NOW, ,1994, Preliminary Objections of the Defendant In the above captioned case are held valid and this case Is dismissed. By the Court, P.J, Charles E. Shields, III, Esquire John B. Fowler. III, Esquire Allorneys lor Delendant John F. Kino. Esquire Allorney lor Plalntlfl '. v. IN THE COURT OF CXWMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA NO. 94-5000 EaUITY TERM CIVIL. ACTION. EaUITY PLATANOS, INC., Plalntlll ATHANASIOS VELUOS, Defendant eREUMINARV OBJECTIONS OF DEFENDANT TO PLAINTIFF'S COMPLAINT Defendant makes the following preliminary objections to Plalntlff's complaint. DEMURRER 1 . Plalntlll's complaint falls to state a cause of action In that all alleged actions are either not a breach of the oovenant not to compete or are of such a d.e. minimis nature as to be trilling and beyond any reasonable need to require prevention. 2. The oomplalnt also falls to state a cause of action In that Plaintiff Is not a party to the underlying oontract for which remedy Is sought. MOTION TO STRIKE 3. Plain till's complaint falls to join an Indispensable party, vlz. BILL KATSIFIS who Is the other named party to the contract with the Defendant which contains the covenant not to oompete. WHEREFORE, Defendant prays that the complaint be dismissed. Respectfully submitted, Date: q ,...)j~qr __~~f~~~~ Charles E. Shields, III Mellon Bank Building 2 West Main Street Mechanlcsburg, Pennsylvania 17055 (717) 766-0209 Any. 1.0.' 38513 , .. .',. . " ",."... .. ... ~.".... .,..' . . '" '...'.'''' ....,........,.....,........,.. 'Il. ...,.....,. SHERIFF'S RETURN COMMONWgALTH OF PENNSYLVANIA COUNTY OF CUMBERLAND In the Court of Common Pleas of Cumberland County, Pennsylvnaia No. 94-5000 Equity Term Complaint in Equity and Notice Plantanos, Inc. VS Athanasios Vellios R. THOMAS KLINE, Sheriff, who being duly sworn according to law, says, that he made diligent search and inquiry for the within named , defendant, to witl AthBnasios Vellios but was unable to locate him in his bailiwick. He therefore depu~ized the sheriff of York County, Pennsylvania, to serve the within Complaint in Equity and Notice On September 12, 1994 , this office was in receipt of the attached return from York _ County, Pennsylvania. Sheriff's Costs, Docketing Out of County Surcharge York County 14.00 5.00 2.00 16.00 $ 37.00 pd. by and subscribed to before me So answers, Sworn t.~:~M'~: 'KL:~~ :<'Sherif f atty 9-13-94 this ~ ,1 day of (j) d4",-, 19 <;IJ , A.D. ~;;,,-,, C. )H,Jl__ tL~lLf .. I , 'J Prothonotary I' l)4.~(KKI EQUITY TERM 4. Dckmlant wa~ thc owncr of 2~O ~harc~ of Plalano~. Inc. at the time the Agrecmcnt with Bill Kat~ifls wa~ made. Tony Koukouna~ wa~ then and ~tilll~ thc owner of the othcr 2~O sharc~ of a 10Iall~~ue of ~OO shares. ~. ()ef,'ndant "as formcrly employcd a~ a ehef at the Windmr Family Rcslaurant and was in chargc of the kllch,'n and alsoordercd "lod from time to limc. lie was in chargc of "~peclal~." and along with othl'rs, look a hand in puhlic rclations, and hiring and firing thc kltchcn help. 6. Dcfcndant's wlfc, Effie Velllos. also worked attlw Windsor Family Restaurnntas a cashier, hostess, l100r manager, puhlic rclations pcrson, and from limc to tlmc had some hand in hiring and firing 1100r personnel. She also had a hand in hookkeeplllg and hanking activltics. 7. Tony Koukollnas also look part in managing and operating thc Windsor Family Restuurunt, including doing somc cooking in Ihe kitchen. S,Hlle hiring and firing of kitchcn help and l100r pcrsonncl and som,' huying of food. 8. Thc Flamingo Rcstaurant and Coffce Shop. Inc. Is leasing lhe former Chalet Rcstuuranton U.S. Routc 15, ncar Dillshurg in York County. The distanec from the Windsor Family Rcstaurantto the Flamingo, as measured hy the most direct routc ovcr highways, that hcing Wcsley Drive to Route 15 and then directly south, varicd from point of departure and entrancc and odometer to hetwcen 9.3 to 10.7 milcs. It is evilknt. howcvcr. that "as thc crow tlies" the distance Is less than ten (10) miles. 'I. The owners of the Flamingo Restaurant and Coffee Shop, Inc. arc Effic Velllos, Constantinos (Gus) Georgcakopoulos (married to Effie's first cousin) and Dcmetrios (Jim) Zahos (Effie's uncle). 10. Defendant has no ownership or othcr Interest in the Flamingo and has not loaned or 2 . 94.5(KIO EQUITY TERM udvunced uny money or funds to his wife for lhc purpose of ohllllnlng un lntercst In the husiness. 11. Defendunt, his wifc, und her shurcowncr rclutlves wcre nwnrc of thc covennnt not to eompcle und took honcsl good fnlth efforts ns Iny peoplc to mellsure the distnnee from the Windsor Fumlly Resluuruntto lhc Flumlngo. Bnsed on these IIICllsurcmcnls, Ihe usc of the defendllntlls u chef to help at the Flumingo wns inltlnlly considcred hUlthc dcfenduntncver contempllltcd heing un owner or otherwisc luking IIny interest In the husincss hccuuse of hud cxperienccs in thc pust with husincss partners or IIssodlltes. 12. Defcndunt, prior 10 the filing of this luwsult, madc no allcmptto conecul his involvcment in thc Flamingo Rcstaurant, satisfied that thc restllurant was outside of the len-Ollie limil set forlh inlhe covcnant not to compctc. Sincc Icarning that hc is in error with regnrd to the distance, thc defcndant has ugrccd nollo participate In thc husincss and apparcntly has ceused his involvement. Prcvious to this, thc defendant had suggcsted to one of thc owners of thc Flamingo thaI hc contacl the Windsor Rcstaurant to ohtain thc model numher for II stcam tmy. Hc also gave to Chris Coy. a woman whom he kncw to he employcd at the Windsor, a copy of his wifc's husiness cards and menu to takc to "the hoys" (a refell~ncc to Bill Katslfls and Tony Koukounas). Thcse aClions indicated a dcar lack of knowledge that he was potentilllly in violation of the covenant not to compete. 13. Prior to thc Institution of this lawsuit, defendant. through counsel, assured Bill Katsifls that he, Vclliios. would not he Involved In the Flamingo and "will not hc the chef or cook or he cmployed in any other capacity nor will he work for free in any manner at the Flamingo." 14. The Flaming" Restaurant is not yctopen for husiness and is. thcreforc, not in competition with the Windsor Family Restaurant. 3 lJ4.S(X)O EQUITY Tf.RM DISCUSSlilli In Schuul Dlstrlctuf City uf Plllshurl/h v. Zchru, IS Pu.Culllmw. 203, 20ll, 325 A.2d 330, 333 (llJ74), the CUllllllunwculth Cuurt reitcruted scvcrul prlnclplcs hnving tu du with the lssunncc of Injunetiuns: It must he rcmelllhcred ... thutthc Issunncc uf injunction is un cxlrnurdinnry rClllcdy. CUlllmunwclllth v. Nntion(11 GCllvshurll Tower. Inc., H Pn. Commonwcnlth Ct.. 231, 302 A.2d HH6 (1973). Thc puwcr uf the euurts tu issuc injunctions shuuld he cxercised with greut cnution allllunly wherc the rensun und nceessity thercfor have hcen dcurly estuhlishcd. Rick v. Crump. 3S7 Pa. 1{3, 53 A.2d H4 (1947). And, uf cuurse, one seeking an injunctiun must estnhlish n dear Icgal right, nut douhtful or uneertnin. McDonald v. NUlla, 393 Pa. 309, 141 A.2d H42 (1951{). The power of the triul euurt tu issuc a preliminary injunetiun has heen furthl~r delimited as noted in Commillee uf ScvenlV v. Alhert, 33 Pa.Commw. 44, 49. 3HI A.2d 1HH, 190 (1977): Thn:e criteria have heen cstahlishcd fur the granting uf a preliminary injunctiun. which, as a harsh and extraordinary rcmedy, is tu he granted only when and if each eritcria has hecn fully and completcly estahlished. Crcdit Alliunee Curp. Iv. Philadelphia Minit-Man Car Wash Corp., 4S0 Pa. 367,301 A.2d HI6 (1973)1; Gillclle Cu. v. Master, 40H Pa. 202, IIl2 A.2d 7:l4 (1962). They arc (I) the preliminary injunctiun must he necessary tu prevent immediate and irreparahle harm which cuuld nut he compensated for hy damagcs; (2) grcatcr injury wuuld result from the denialuf the preliminary injunetiun than frum the granting uf it; and (3) it wuuld uperate to restore thc parties to thc status quu as it existcd priur tu thc allcged wrongful conduct. In addition to mccting allthrcc criteria, the court must hc convinced that the plaintiffs right tu a preliminary injunetiun is clear ... and general cquity jurisdietion must he warranted. (cmphasis in uriginal; hraekcted languagc addcd.) 4 . . 94.5000 EQUITY TERM Thus fur in this cuse, it hus not hccn cstnhllshed th(lt nn Injunction Is necessary to prevent immedintc und irrcpnruhle hnrm which eunnot he Cllmpensnted for hy money dumnges. There Is no indication thntthc defendnnt hns un ownership interest in, is nn cmployce of, or Is otherwise purticipnting in the huslness known us thc Flnmingo Restnurant. Whilc the defendnnt admits that hc has had some involvemcntln prepnring the premises for opcning nnd in giving ndvicc, hc has made wrillen aeknowlcdge, prior tothc filing of this complaint, thnt furthcr pnrticipntlon nt the Flamingo would violatc his covenant not to compctc. The Flnmingo Resltlurnnt is not yet open nnd Is not, therefore, in competition with the plaintiff. The plaintiff, of course, nced not wait until actual harm hns heen cnused prior to seeking the relief of a preliminary injunction. Sce Alnhama Binder and Chemical CorP. v. Pcnnsylvania Industrial Chemical C'm, 410 Pa. 214, IHlJ A,2d IHO (1963). Noncthcless, thcrc is not yct competition. The defendant hns no ownership intcrcst in thc Flamingo nor docs he intcnd to he employcd hy them, and has assured the plaintiff in writing. prior to the institution of thc lawsuit, that he would ahide hy the terms of the covenant not to compete. These factors militnte against the issuance of a prcliminary injunction at this timc. CONCLUSIONS OF LAW 1. The parties hereto have entered into a covenant not to competc which is valid and cnforceahle. 2. The participation of Athanasios Vellios in the operation of the Flamingo Restaurant in a management capacity of any kind or as owner or employee would eonstitutc a violation of the eovenant n',lt to compete. 3. In light of the defendant's assuranccs that hc will ahide hy thc covenant not to compete and given the fact that the Flamingo is not in husiness and in competition with the 5 PLATANOS/ INC., BILL KATSIFIS, t IN THE COURT OF COMMON PLEAS and TONY KOUKOUNAS, t CUMBERLAND COUNTY/ PENNSYLVANIA Plaintiffs t t V. t NO. 94-5000 EQUITY TERM t ATHANASIOS VELLIOS, = CIVIL ACTION - EQUITY Defendant t NOTICE TO DEFENDANT NAMED HEREIN: 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 Amended Complaint and Notice are served, by entering a written appearance personally or by attorney and filing in writing with the Court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so, the case may proceed without you, and a judgment may be entered against you' by the Court without further notice for any money claimed in the Amended Complaint or for any other claim or relief requested by the Plaintiffs. 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. COURT ADMINISTRATOR Cumberland County Court House 1 Courthouse Square, 4th Flr. Carlisle, PA 17013-3387 (717) 240-6200 Le han demandado a usted enla corte. si usted quiere defenderse de estas demandas expuestas en las paginas siguientes, usted tiene viente (20) dias de plazo al partie 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 objeciones alas demandas en contra de su persona. Sea avisado que si usted no se defiende, la corte tomara medidas y puede entrar una orden contra usted sin previa aviso 0 notificacion y por cualquier queja 0 alivio que es pedido en la peticion de demanda. Usted puede perder dinero 0 sus propiedades 0 otros derechos importantes para usted. PLATANOS, INC., BILL KATSIFIS,I and TONY KOUKOUNAS, I Plaintiffs I I IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA v. NO. 94-5000 EQUITY TERM CIVIL ACTION - EQUITY ATHANASIOS VELLIOS, Defendant AMENDED COKP~~INT AND NOW corne the Plaintiffs, by and through their attorneys, Friedman and Friedman, P.C., and respectfully aver as follows: 1. The Plaintiff, Platanos, Inc., is a duly registered corporation in the Commonwealth of Pennsylvania, and is the owner and operator of the Windsor Family Restaurant, located at 5144 Simpson Ferry Rd., Mechanicsburg, Cumberland County, Pennsylvania 17055. 2. The Plaintiff, Bill Katsifis, is an adult individual residing at 25 Valley View Dr., Mechanicsburg, Cumberland County, Pennsylvania 17055. 3. The Plaintiff, Tony Koukounas, is an adult individual residing at 5312 Oxford circle, Apt. 5, Mechanicsburq, Cumberland County, Pennsylvania 17055. 4. The Defendant, Athanasios Vellios, hereinafter "Vellios", is an adult individual with an address of 1750 Ashland Drive, York, York County, Pennsylvania 17404. 5. On April 28, 1993, the Defendant Vellios, who at that time was the owner of fifty (50%) percent of the issued and outstanding shares of Platanos, Inc., entered into an Installment sales Agreement for the sale thereof to Bill Katsifis and Tony Koukounas, as a result of which Katsifis and Koukounas are present sole owners of Platanos, Inc. A copy of said Installment Sales Agreement is attached hereto, marked Exhibit "A", and incorporated herein by reference. 6. As a term of the aforementioned Installment Sales Agreement executed by the Defendant on April 28, 1993, the Defendant did promise and covenant not to enter into competition with Platanos, Inc., or engage in the. same or similar type of business as the Windsor Family Restaurant, either as an individual or in any other business form, directly or indirectly, whether as a principal, agent, employee or straw party, within a ten (10) mile radius of the Windsor Family Restaurant for a period of three (3) years from the date of the contract, which was April 28, 1993. A copy of this promise and covenant, executed by the Defendant, is attached in the aforementioned Exhibit "A". 7. The Installment Sales Agreement executed by the Defendant defines incidents of default to include, "Breach of the covenant not to compete by Vellios", and said agreement requires, in the event of default, that the party breaching the contract shall be responsible for payment of legal fees and costs incurred in enforcing rights under the agreement. The sections entitled Incidents of Default and Breach are included in the Installment Sales Agreement attached hereto as Exhibit "A". 8. It is believed, and therefore averred, that Defendant Vellios, contrary to the above-referenced promise and covenant not to compete, is actively involved, both directly and indirectly, with the Flamingo Restaurant and Coffee Shop, Inc., and is actively involved, both directly and indirectly, with activities being undertaken by the Flamingo Restaurant and Coffee Shop, Inc. to open a restaurant on Route 15 in Dillsburg, York county, Pennsylvania, said site being approximately seven and seven tenths (7.7) miles from the aforementioned Windsor Family Restaurant, and is performing services for the Flamingo Restaurant and Coffee Shop, Inc. as follows: B. Remodeling, furnishing, and setting up the kitchen facility; Remodeling, furnishing, and setting up the dining room facillty; Hiring of kitchen staff; Solicitation of customers; and A. C. D. . E. Generally assisting in the organization and institution of a competing business, that being the restaurant being prepared to be open by the Flamingo Restaurant and Coffee Shop, Inc. 9. It is also believed, and therefore averred, that the Defendant has indicated that he will be acting as a chef/cook at the restaurant which is being planned to be opened by the Flamingo Restaurant and Coffee Shop, Inc. 10. It is believed, and therefore averred, that the Defendant's wife and his wife's family members are the principals in Flamingo Restaurant and Coffee Shop, Inc., and that Defendant Vellios in integrally connected with the ongoing concerns of the Flamingo Restaurant and Coffee Shop, Inc. 11. It is believed, and therefore averred, that the Defendant will continue to solicit business from customers of the Plaintiffs to the detriment of the PlaintiffS, and will continue to act both directly and indirectly ip competition with the Plaintiffs, contrary to the Defendant's promisa and covenant not to compete. 12. The Plaintiffs face immediate and irreparable injury due to the Defendant's actions and competition with the Plaintiffs, said actions being contrary to, and in violation of, the promise and covenant not to compete executed by the Defendant. 13. The Plaintiffs have no adequate remedy at law. WHEREFORE, the Plaintiffs respectfully request that this Honorable Court: A. Order the Defendant, At?anasios Vellios, to immediately cease and desist any and all activity, either direct or indirect, relating to the planning, institution and operation of the restaurant which is being prepared for operation by the Flamingo Restaurant and Coffee Shop, Inc.. B. Order the Defendant, Athanasios Vellios, to cease acting either directly or indirectly as a principal, agent, employee or straw party of the aforementioned Flamingo Restaurant and Coffee Shop, Inc., as those actions might relate to the opening of a restaurant within a ten (10) mile radius of the Windsor Family Restaurant. C. Order the Defendant, Athanasios Vellios, to cease being physically present at the site of the aforementioned restaurant which is being prepared by Flamingo Restaurant and Coffee Shop, Inc. for operation on Route 15 in Dillsburg, for any of the purposes or activities for which he has otherwise beell enjoined from undertaking. D. Order the Defendant, Athanasios Vellios, to cease soliciting customers of the Windsor Family Restaurant on behalf of Flamingo Restaurant and Coffee Shop, Inc., and their operation at the Route 15, Dillsburg, facility. E. Grant the Plaintiffs such oth~r relief as this Court may deem appropriate, including, but not limited to, attorney's fees, as allowed for in the Installment Sales Agreement executed by the Defendant and the principals of Platanos, Inc., and costs. Respectfully submitted, FRIEDMAN AND FRIEDMAN, . / P.c. /-, I Date:OC,Q ~lW-~(,(f n . K nq, e N. Second Stre thouse suite P. O. Box 984 HarriSburg, PA 17108 (717) 236-8000 kip - Pleadings\Platanos.Amd IH/:l8 . 8,k. ENTERED INTO, This ~h day of April, 1993 BETWEEN ATHANASIOS VELLlOS ,of 1750 Ashland Drive, York, Pennsylvania 17404 hereinafter known as Vellios, AND BILL KATSIHS, of Silver Spring Township, CumberlllOd County, Pennsylvania, hereinafter known as Katsifis, AND TONY KOUKOUNAS, of Mechllllicsburg, CumberlllOd County, PeMsylvllOia, hereinafter known as Koukounas. Koukounas joins in the within agreement to evidence his IlSsent to the warranties llIId gull1'l1llues made by him herein; WITNESSETH: That the said Vellios, In consideration of ~l'; terms llIId conditions hereinafter mentioned and contained, agrees to transfer llIId deliver unto the said Katsifis, his heirs IlOd assigns, Two Hundred Fifty (250) shares of common stock in PlalaJ1os, Inc., which said shares of stock represent the entire remaining interest of Vellios In PlalaJ1OS, Inc., llIId which said shares constitute a one-half (1/2) interest in PlalaJ1os, Inc. Vellios agrees to execute all necessary documents contemporaneously with the signing of this document to effect the immediate transfer of said shares to Katsifis. IN CONSIDERATION WHEREOF, the parties hereto agree as follows: Purchase orlce. Katsifis agrees to pay to Vellios therefor, the sum of $150,000.00 Dollars, IlS follows: (1) $55,000.00 dollars upon the execution of this Agreement of Sale, the rcceipt whereof is hereby acknowledged by Vellios,llIId which said $55,000.00 is more specifically paid as follows: 0. $10,000.00 which is held in escrow by Charles E. Shields, m, Esquire, attorney for Vellios and which is agreed by the parties hereto to be released 10 Vellios contemporaneously with the signing of this Agreement. b. $40,050.00 to be paid by certified or cllShiers check made payable to the order of Plalllnos, Inc. as a 101lO to the corporation. It is the underslaJ1dlng of the parties hereto that contemporaneously with this agreement PlalaJ1OS, Inc. will make payment to Vellios of $40,050.00, which figure represents full payment of the debt owed by PlolllnOs, Inc. to Vellios. c. $4,950.00 to be paid by certified or cashiers check made payable to the order of Athanasios Vellios. AlITHENTICA TED BY Vellios: ~V AUTHENTICATED BY KalSifis: AU1HENTICATED BY Koukounas: Ole. 1 1f- 1')'7 Y ;(.~ Q).l< IIV' J" I MJ_.. '1~ .r '1/::<'0<:)..,;) ocl.,t"J" ,~<;; ~,.,"S ~/~,.....,. I ,/ (2) the balanee of $95,<XlO.OO dollars i monthly Twenty-eight monthly installments, including a balloon payment of $10,000.00, whi I balloon pa ment shall be supplemenllllllOd m addition to the regulw' monthly payment of due , and also a final balloon payment of $10,83.5.87 due in the twenty-eighth mOlllh a.~ more fully set forth on the Iltlllched l1IIlortizatlon schedule which is incorporuted herein by referenced. said monthly inslllllments to be applied first to interest at the rate of eight (8.00%) percent per l1Q.!l1.!m on the unpaid balance of ~:~6\~~ monthly Installment to be paid on l}t ~fore the.~ nay of C<lch month, beginning , ""'~ 1 ~, , ll/ld thereafter on or before the ~ (lay of each succeeding lIlonth until principal WId 11Ilerest have . V' J been fully Pllid, except that, if not sooncr paid, the said prlnclpai [\lid interest shall be paid in full . f- by the twenty-eighth month (IS aforesaid, anything herein conlllmed to the conlrnry (J Ie. notwithSlaJ1ding. A- t/ fI:l:wIyment. KalSifis shall have the privilege of paying as much more than the required montlilylnslllllment of principal IlOd interest as he desires, and nothing contained in this Agreement shall be consuued to limit the reduction of principal to said lImounl. Interest shall be computed on the unpaid principal balllOce. Provided, however, that any prepa.yment nlllde shall be limited to one or more incremenlS of principal as shown on the amortization or a payment of an wnount equal to the full payment of the outstanding obligation on the date of payment. Place of oavment. All paymenlS shall be made to Vellios at whatever address is designated in writing, and until funhernol1ce at 1750 Ashland Drive, York, Pennsylvania 17404. Securltv. As security for performance by KalSifis of the tenns and conditions conlllined herem, Katsifis aFs to execute contemporaneously with the within Agreement a Stock Pledge Agreement pledgmg the aforesaid 250 shares of PlalaJ1os, Inc. as security to be held by Charles E. Shields, ill, Esquire, 2 West Main Street, Mechanicsburg, Pennsylvania 17055, as attomey for Vellios until full perfonnanee under the tenns of this Agreement. As further security for perfonnllOce by Katsifis of the tenus and conditions contained herein, Tony Koukounas, does hereby agree to personally gUllrllOtee the perfonnance of KalSifis of the terms and conditions of Ibis Agreement. To secure said gullrllOtee, Koukounas does hereby agree to execute contemporaneously with the within Agreement a Stock Pledge Agreement pledging 250 shares of PlalaJ1os, Inc., representing his entire ownership interest in Platanos, Inc. Said shares shall be held by Robert G. Frey, Esquire,S South HllOover Street, Carlisle, Pennsylvania 17013, as attorney for 10hn KaISifis. Provided, however, that all parties hereto acknowledge that the Stock Pledge Agreement given by Koukounas to Vellios is subordinate and inferior to 11 Stock Pledge Agreement given by Koukounas to 10hn KatsiflS. Tony Koukounas and Bill Kotsifis each agrees to execute a demand note, co-signed by each party's respective wife, m the amount of $9.5,000.00 as further security and os surety and gullrllOtee of the said performances by Katsifis. Incidents or Ownershlo. It is also agreed between the panies hereto that without regard to llOy of the provisions to the controry regarding the holding or pledging of stock eertificates, KolSifis shall be entitled to all the mcidents of ownership in the said shares of stock in Platonos, Inc. and shall be entitled to receive rents, issues, and profits from the date of this agreement. Provided, however, thai KalSifis and Koukounas agree that as owners, officers, and directors of PlatllOos, Inc., they willoot without the express written consent of Vellios and 10hn Katsifis, issue additional shares of common or preferred stock, or restructure or recapilllliz.e the stock structure of Platan~s, Inc. KalSiflS and Koukounas agree that neither of them shall assign, sell, transfer or otherwISe funher encumber any shares of Platanos, Inc., until such time as Vellios and John Katsifis are paid in fun. The restrictions and agreemenlS with respect to the shares of Plalllnos shall continue and be in full force and effect only until Vellios and John Katsifis are paid in full under the terms of this Agreement. AlITHENTICATED BY Vellios: !tV AUTIIENTICATED BY Koukounas: AUTIIENTICATED BY KalSifis: ~ K.. -(Ie 2 ( pellverv of shAres. Upon compHwlce with thc foregoing tCIll15 and conditions and payment of the said purchase poce In full by Katslfis, Vcllios ~hnll promptly deliver to KalSifis the 250 shares of stock In Platnnos, Inc. which Is pledgcd ns security for perfonnance by Kntslfls of the terms and conditions of this Agreement, and Vellios shAll promptly sign a general release In favor of Katslfis and KoukounAs. Default. Inthc cvcnllhc saill Katsilis shall tail tll nlake any monthly paymenl for a period of thirty (30) days aftcr thc samc shall haw be<:omc duc and pa~ablc by the tcnns hcrcof, or if II breach of any of the foregoing conditions be madc by Katslfis, thcn and in such case this Agreement shill, at the option of Vellios, become null and void and the said Kntslfis shall forfdt all monies then paid as liquidated danlllges. In the altemative, Vcllios Ollly elect to have the entire principal sum remaining unpaid become due tmd payable at once and may be collect the swne by suit or otherwise. Provided, however. that that no such default shall occur unless Vellios has given Katslfis and any other shareholders of Platnnos. Inc. lit least thirty (30) days written notice of such violation of the tenus hereof. Katslfis, or any other shareholder of PlatWlos. Inc. shill have the right to correct such default during said thirty-day period. provided, however. that said curing patty give at least fifteen (15) days written notice of Intent to cure said default. If a shareholder eleclS to cure the default of KalSlfis, said shareholder shall a. Completely cure the default of Katsifis b. Execute an agrecment assumirtg all of the terms of this Agreement. c. Execute a stock pledge agreement In same form as the Stock Pledge Agreement executed by Katslfis pursuWlt to this Agreement. If said shareholder elects to remedy the default and assume the obligations of KatsUis, Vellios and Katslfis will fully cooperate m the asslsnment of KatsUis's shares of Platnnos Inc.. subject to the Stock Pledge agreement, to the assuming shareholder. /,,!onwalver of rh!hls. Acceptnnce by Vellios of any of the aforesaid monthly payments after the swne shill have become past due and in default, or any failure to enforce any of the rights herein reserved to the parties of the fU"St pan, or any of the penalties. forfeitures, damages or conditions herein conla1/led, shall not in any wise be considered a waiver of the right to enforce the same at any time and any attempt to collect the amount due by one proceeding shall not be considered a waiver of the right to institute any of the other proceedings herein providod. but ill of the rights of Vellios, and all forfeitures, penalties, damages and conditions Ollly be enforced together or successively at the option of Vellios. Covenant nollo comoele. Vellios agrees that he will not, either as an individual or In any other business form, directly or indirectly, enter into competition with Platanos, Inc. or engage in the same or similar type of baseness as the Windsor Family Restaurant whether as a principal, agent, employ<.:e, or straw patty within a ten (10) mile radius of the Windsor Family Restaurant, located at the comer of Trindle and Windsor Road for a period of three years from the date of this Contract. Warranlles nnd Indemnlncallons: Warranlv n~~ardinl! taxes. Vellios hereby Wa.7Wlts that all taxes owed by Platnnos, Inc., including real estate, income, WId corporate taxes and unemployment compensation contribution for prior year.; have been paid, excepting those set fonh on Exhibit "A", attached hereto and incorporated hcrein. Vellios agrees to Indemnify and defend Katsilis for his share of any tax deficiencies owed or alleged to be owed by 1/1,/ AU111ENTICATED I3Y Katsifis: U31L:., AUTHENTICATED I3Y Koukounas: AUlllENTICATED I3Y Vellios: 1.~ 3 ( ( Platanos, Inc. for 1992 and prior years. Vellios warrants that nil said taxes and assessments due In conncction with the operation of Platanos, Inc. and the Windsor Pamily Restaurant to any city, oounty, state, or federal govenunental agencies. shill be paid lit full up to the date of scttlement and that nil due returns, fOlll1s, and taxes required to be filed with snld agencies have been properly filed and paid as of the settlement date, or wHl be so filed and paid in due course thereafter. Wnrrnnlv rCl1nrdlnv nssels nnd IInbililles of CoroorallQJl. Vellios hcreby warrants that thc assets und liabilities arc us sct fonh on Exhibit uA" anached hereto and IncolpOrated herein by reference. Vellios shall indemnify KalSlfis for Katsifis's share of the colpOrate obligation for any debts not disclosed to Katslfis on Exhibit uA". Warrontv of c;onformlly w1lh Government re\PIlallons. Vellios warrants that he fS not aware of any governmental notices concerning any violations of any Federal, State or local law, rule or regulation. nor of any work required to be performed or any assessment for any thing whatsoever, including. but not limited to, sidewalk. street, water and sewer. and other such Improvements. Vellio$ warrants that the existing utilities are sufficient to service the premises and Its current operations. Vellios warrants that the existing use of the premises is a permitted use under all applicable zoning ordinances, or that a certificate of non-conforOlllllce from the appropriate zoning officials shall be provided on or before settlcment Warranlv of comollancc wllh Lease oblleallons. Vellios warrants that the Lease Agreement attached hereto as Exhibit uB" is the current agreement between Platanos, Inc. and Weis Markets and that there have been no modifications, written or oral, of the terms thereof. Vellios further warrants that he is unaware of any uncured violations of any of the tenDS of said lease and that he has received no notice of default In the terms of the lease. Katsifis acknowledges that said Lease contains a personal guarantee by Vellios and Nicholas Barakos. a former shareholder. Katslfis and Koukounas each oovenants that he will make all reasonable efforts to remove VeUios's guarantee from future lease ap'tCments. Until such time as Vellios is no longer a guarantor of the lease obliganon with Weis Markets, Katsifts and Koukounas will indemnify, defend and hold Vellios harmless from any liability arising from said personal guarantee. Further, for as long this Agreement is In effect, Katslfis and Koukounas agree that they will cause Platanos, Inc. to dr.liver by bank-to-bank wire transfer, the monthly rental payments to Weis Markets and will provide Vellios with copies of the bank receipt evidencing said transfer. yvarrantv of Insurance. Katslfis and Koukounas both warrant that they have made application for and the corporation will pay for business interrUption insurance, the terms of which are as set forth on Exhibit "0", attached hereto and incorporated herein by reference. KatsiflS and Koukounas warrant that they will cause P1atanos, Inc. to keep said insurance in full force and effect and shall forward copies of the renewal declarations to Vellios for the life of this Agreement and Guarantee. AU1HENTICA TED BY Vellios: AUTI-lEN'nCATEO BY Katsifis: AU1HENTICA TED BY Koukounas: All fJ,fc, ~.r 4 ( Mnlerlnlllv of Wllrrunlll'S. 111is Agrccmcnt is cxpressly contingent upon the wnmmtics of Vellios being true nnd correct at the settlement dllte. Any express contingency in this Agreement lllay be wn!ved In writing by the pany to be benefited by the contingency III the time of settlement. In tlle event that any such contingency fails this Agreement shall be null and void and nll deposit monies shall be relUmed to Kntslfis withoUI deduction and without furtller liability hereunder on the pan of either pnrty hereto. All warranties In this Agreement, not expressly waived shnll also be considered covenants of this Agreemcnt llnd IIllY fllllure of IIny wllmmty shall be consldcred n default in thc tcnns of the agrecmcnt by thc brcaching party and slmll entitle the nonbreachlng pllJ1ies to all the rights and responsibilities 011 defnult as set fonh in this Agreement. Provided, however, that the breaching party shnll be entitled to cure the failure of any warranty within thirty (30) days from the date he receives writtcn notice of the fnUure of any warranty given by him. Cornorate Records. Koukounas and Katsifis ngree tllllt. as officers, directors Md shareholders of Platanos, Inc., they shill nuthorize the person or persons responsible for the keeping of the books, accounts, and recaJds to mnke nvai\nble to Vellios on a monthly basis n statenlent of the Income and expenses of Platanos, Inc. in a form substantially the swne as the monthly reports now prepared for PlalanOS, Inc. by Gift Sniegocki & Associates, the most recent monthly report being attached hereto as Exhibit Ole". Incldenls or Defnull. Ocfault shall be defined as a breach of any of the terms of this Agreement, Including : n. Failure of Kntslfis to make any payment as aforesaid. b. Breach of any of the above-stated warranties. e. Entry into bWlkruptcy under any chnpter of the BWlkruptcy Code. d. Breach of the tenus of the lease by Platnnos, Inc. e. A permanent cessation of business known as the Windsor Family Restaurant. f. Failure of Platnnos, Inc. to pay ail taXes when due, unless there ls a good faith dispute concerning said taxes. g. Breach of the covenant not to compete by Vellios. BreRch. In the event of default under the tenus of this Agreement, the party tRachlng thls contract shall be responsible for payment of legal fees and costs Incurred by the other in enforcing their rights under this Agreement. Should Kats\fis breach the tenus of this Agreement and should said breach not be cured as provided In this Agreement, Vellios shall have the right to declare this Agreement null and void and to retain all payments received as liquidated damages. Vellios shall further have the option to re-enter and operate the Windsor Family Restaurant as owner pursuant to the Stock Pledge Agreements. or, In the nltemative, he shall have the option to accderate as due and inunediately payable, the entire unpaid principal amount as evidenced by the Demand Notes executed by Katslfis and Koukounas and to collect thereon. Nothing herein contained shall restrict an)' rights he Ollly have to go against Tony Koukounas el ux., upon any guarantee or surety or other agreement. AUTHENTICATED BY Ve\lios: ItV AUTIIENTICATED BY Katsilis: ~.l~. AlrnffiNTICA TED BY Koukounas: -rr:- 5 ( ( Modlncollon. No modification of this Agreement shall be binding upon the parties, unless the same shllll be in writing and duly opproved by both of the parties hereto. Nonosslt:nobllltv. The Interest of Katslfis in this Agreement shall not be assignable, in wholo or in part, without the prior written consent and approval of Vellios, and If such assignment is attempted, all rights and remedies of Vellios set forth herein or which VeWos may otherwise have shilll.mmediately accrue to Vellios. Transfer of title by Will, survivorship, descent or by election of a shareholder to cure the default of Katsllis shall not be regarded as an assignment requiring the consent and approval of Vellios. Survlvol of Aqreement. This Agreement is to extend to and be binding upon the heirs, sUCCC$sors, executors. administrators, and assigns of the parties hereto. Document Comnllonce. The undersigned parties for and In consideration of the tenns of this Agreement, if requested by any other party or the attomey of any other party , to fully cooperate and adjust for clerical errors, or omissions, in any or all of the closing docW1lentation if deemed necessary or desirable In the reasonable discretion of any party or their attorney, to fully consummate said AgreemenL The undersigned parties do hereby so agree and covenant in order to assure that this documentation executed this date will conform and be acceptable and complete to the standard practices and requirements. INTENDING TO BE LEGALLY BOUND, WITNESS OUR HANDS AND SEALS, on this page 6 of 6 pages, the day and year first above written. ~:~ wE 7Jr. ~# 8..~~)~ (%h-L E ~MfJiL . l17'1at.tf&l/A I~ 1/ ~aJ.....(SEAL) Athanasios Vellios fj.~ ~ k~L# (SEAL) Bill KatsiftS ' (SEAL) To yKo n AunmNTICATED BY Vellios: AUTHENTICATED BY Katsifis: f3.k AtrrnENTICATED BY Koukounas: /Iv -(. r- . 6 (' Liabilities 1, Real eslllte taxes billed annually by Wels Markets, bill expecll'..d in September 1993 for 1993 real eSlllte taxes. 2. Current sales tax. 3. Current payroll and witholdlng Wes. 4. Current bills from suppUers, none of which are more than 30 days past due. AUTImNTICATED BY Vellios: AuntENTICATEDDY KalSlfls: (J j<., Exhibit "A" AU1lIENTICATED BY Koukounas: ,Av -rt- PLATANOS, INC., Plalnllll IN THE COURT OF COM'.OII PlEAS CUMBERLAND COUNTY, PENNSYlVANIA NO. 94-5000 EQUITY TERM CIVIL ACTION, EQUITY v. ATHANASIOS VEWOS, Defendant CERTIFICATE OF SERVICE I, Charlea E. Shlelda, III Eaqulre of Mellon Bank Building, 2 Wesl Main Street, Meohanlcaburg, Pennsylvania 17055, do hereby certify thaI on this 181h day of Oelober 1994, I aerved the wllhln Preliminary Objections of Defendanl to PlalnllH's Cemplalnl, by placing Ihe same In Ihe Unlled Stales First Class Mall, Poslage prepaid 10: John F. King, Esquire FRIEDMAN AND FRIEDMAN, P.C. 600 N. Second Street P.O. Box 984 , Harrisburg, Pennsylvania 17108 (717) 236-8000 CI:ub;: /~~ ----------------------------- Charlea E. Shields, III, Esquire I. , ~ r:n " . , ="': I.i,~ .:1' 1'-' ("~ , " ,- e> C) -< r? 1I1~ .1':.~ ~~ c. In _. Z~~ ~g:~1: t3."1:; S ~e.S8' 0;:J8" ~8e~ Fie.- ~~b S1'~ ~~d;...1 ~C3~~ '- '+- '0-< ... <= .~ '" ~ c. " u :0-; .~ " ~ ;,' ~ :::i c. 1-1""1." '0".0" '.u"..~. 1110' 014""1)1 <1)"""(111"11"'1',.,,, ~ ... ~ <= ~~ 8 " ~ >- ...1 ..J ~ ~ >- ~ :2. ~ ~ ~ ~ t=: ~ '" ~ if, _ >- ""'if, ~~ g~ ~~ !l ;: u A: ~ ~j~E ~ e dlll ~ g ~~~U~ ~~i~o6: ~~O?;~O i!<~6: ~ ~ ~ e! Iii III ~ 10. = . PLATANOS, INC" Plaintiff v. IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA NO. 94-5000 EQUITY TERM CIVIL ACTION - EQUITY ATHANASIOS VELLIOS, Defendant PETITIONBR'S EXCEPTIONS TO DECR!! NISI The Petitioner, Platanos, Inc., now files the following Exceptions to the Honorable Judge Hess's opinion and Decree Nisi, pursuant to Order of the Court dated October 5, 1994, and, in particular, asks the Court to vacate its adjudication of October 5, 1994, and asks that the Court now evaluate the various factors it has omitted from its consideration, and that it then modify or change its October 5, 1994 opinion and Decree Nisi by entering judgment for Platanos, Inc. and against Athanasios Vollios notwithstanding the Court's October 5, 1994 Decree Nisi, and notwithstanding its resolution of the other requests for relief set forth in these Exceptions. The reasons advanced in support of this relief are: 1. This Honorable Court found that the parties hereto have entered into a Covenant Not to compete, which is valid and enforceable. Opinion and Decree Nisi, Conclusions of Law, paragraph 1. 2. This Honorable Court found that lias the crow flies" the distance between the Flamingo Restaurant and Coffee Shop and the Windsor Family Restaurant is less than ten (10) miles. Opinion and Decree Nisi, Factual Findings, paragraph 8. 3. This Honorable Court fpund that the participation of Athanasios Vellios in the operation of the Flamingo Restaurant in a management capacity of any kind, or as owner or employee, would constitute a violation of the Covenant Not to Compete, Opinion and Decree Nisi, Conclusions of Law, paragraph 2. 4. This Honorable Court erred in not finding that Vellios did covenant not to compete with Platanos, Inc., either directly or indirectly, and Vellios did covenant not to engage in the same or similar type business as the Windsor Family Restaurant, whether as a principal, agent, employee, or straw party, within a ten (10) mile radius of the Windsor Family Restaurant. Petitioner's Proposed Corclusions of Law, paragraph 2. 5. This Honorable Court found that Vellios made no attempt to conceal his involvement in the Flamingo Restaurant, and had suggested to one of the owners of the Flamingo Restaurant that he contact the Windsor Family Restaurant to obtain the model number for a steam tray. This Honorable Court also found that Vellios gave to Chris Coy, a woman whom he knew to be employed at the Windsor Family Restaurant, a copy of his wife's business cards and menu to take to "the boys" (a reference to Bill Katsifis and Tony Koukounas). Opinion and Decree Nisi, Factual Findings, paragraph 12. 2 6, This Honorable Court erred in not finding that Vellios has participated in cleaning and washing necessary for the preparation of the opening of the Flamingo Restaurant, Petitioner's Proposed Findings of Fact, paragraph 15. 7. This Honorable Court erred in not finding that Vellios has acted as a mentor to Konstantinos Georgakopoulos in the preparation for the opening of the Flamingo Restaurant. Petitioner's proposed Findings of Fact, paragraph 17. 8. This Honorable Court erred in not finding that Vellios has expressed an ongoing willingness and desire to help in the setup and operation of the Flamingo Restaurant. Petitioner's Proposed Findings of Fact, paragraph 20. 9. This Honorable Court found that Page 3 of the Agreement contained the following paragraph: "Covenant not to comDete. Vellios agrees that he will not, either as an individual or in any other business form,' directly or indirectly, enter into competition with Platanos, Inc. or engage in the same or similar type of baseness [sic] as the Windsor Family Restaurant whether as a principal, agent, employee, or straw party within a ten (10) mile radius of the Windsor Family Restaurant, located at the corner of Trindle and Windsor Road [sic] for a period of three years from the date of this contract." opinion and Decree Nisi, Factual Findings, paragraph 2. 3 10, This Honorable Court found that Vellios, his wife, and her shareowner relatives were aware of the covenant not to compete. opinion and Decree Nisi, Factual Findings, paragraph 11, 11. This Honorable Court erred in considoring issue6 of honest good faith efforts as lay people (referring to VelliQs, his wife, and her shareowner relatives) to measure the distance from the Windsor Family Restaurant to. the Flamingo Restaurant, said issues not being applicable to the covenant not to compete at issue. Opinion and Decree Nisi, Factual Findings, paragraph 11. 12. This Honorable Court erred in considering issues relating to a clear lack of knowledge that he (Vellios) was potentially in violation of the covenant not to compete, said issues not boing applicable to the covenant not to compete at issue. Opinion and Decree Nisi, Factual Findings, paragraph 12. 13. This Honorable Court erred in considering issues relating to the Defendant's (Vellios) assurances that he will abide by the covenant not to compete,. said issues not being applicable to the covenant not to compete at issue. Opinion and Decree Nisi, Findings ot Fact, paragraph 13; and Opinion and Decree Nisi, Conclusions ot Law, paragraph 3. 14. This Honorable Court erred in considering issues relating to the Flamingo Restaurant not yet being opened for business, said issues not being applicable to the covenant not to 4 compete at issue. opinion and Decree Nisi, Factual Findings, paragraph 14; and opinion and Decree Nisi, conclusions ot Law, paragraph 3. 15. This Honorable Court erred in not finding that the Installment Sales Agreement executed on April 28, 1993, defines an incident of default as ".,.a breach of any of the terms of this A~reement, including:..,(g) breach of the covenant not to compete by Vellios." Peti tioner' s Proposed Findings ot Fact, paragraph 21. 16. This Honorable Court erred in not finding that the Installment Sales Agreement executed on April 28, 1993, states, "In the event of default under the terms of this Agreement, the party breaching this contract shall be responsible for payment of legal fees and costs incurred by the other in enforcing their rights under this Agreement." Petitioner's Proposed Findings ot Fact, paragraph 22. 17. This Honorable Court erred in not finding that Platanos, In~., co-owned by Katsifis and Koukounas, and being the entity which Vellios covenanted not to compete against, entered into a fee agreement with Friedman and Friedman, P.C. for services to be rendered in enforcing its rights under the Installment Sales Agreement executed on April 28, 1993. Petitioner's Proposed Findings of Fact, paragraph 23. 18. This Honorable Court erred in not finding that the fee agreement entered into by Platanos, Inc. requires payment at 5 a rate of $175.00 per hour for the services of Richard S. Friedman, Esquire, $125.00 per hour for the services of John F. King. Esquire, and $35.00 per hour for a paralegal and legal assistant's work, plus costs. Petitioner's Proposed Findings ot Fact, paragraph 24. 19. This Honorable Court erred in not finding that the fee billowed by Platanos, Inc. at time of trial, which included 3.5 hours for travel and attendance at hearing, is $3,009.90. Petitioner's Proposed Findings ot Fact, paragraph 25. 20. This Honorable Court erred in not finding that, at hearing, the parties were directed to prepare Proposed Findings of Fact and Conclusions of Law for submittal to the Court. Petitioner's Proposed Findings ot Fact, paragraph 26. 21. This Honorable Court erred in not finding that Vellios has breached his covenant not. to compete with Platanos, Inc. by both directly and indirectly participating in the planning, institution, and operation of the Flamingo Restaurant, which is within ten (10) miles of the Windsor Family Restaurant. Petitioner's Proposed Conclusions ot Law, paragraph 7. 22. This Honorable Court erred in not finding that sufficient evidence and testimony has been given at hearing, including direct testimony and cross examination of Vellios and through his attorney, Charles E. Shields, III, Esquire, to allow for an Order enjoining Vellios from any further activities, either as an individual or in any other business form, directly 6 or indirectly, from entering into competition with Platanos, Inc" or from engaging in the same or similar type of business as the Windsor Family Restaurant, whether as a principal, agent, employee, or straw party within a ten (10) mile radius of the Windsor Family Restaurant. Petitioner's proposed Conclusions ot Law, paragraph B. 23. This Honorable Court erred in not finding that Platanos, Inc. has incurred legal fees and costs in its efforts to enforce the covenant not to compete given by Vellios. Petitioner's Proposed Conclusions ot Law, paragraph 9. 24. This Honorable Court erred in not finding that Vellios is responsible for the payment of the legal fees and costs incurred by Platanos, Inc. in the enforcement of the covenant not to compete. Petitioner's Proposed Conclusions ot Law, paragraph 10. 25. This Honorable Court erred in not finding that the costs incurred, including attorney's fees, by the Petitioner for the preparation of proposed Findings of Fact and Conclusions of Law are recoverable under the terms of th~ Installment Sales Agreement. Petitioner's Proposed Conclusions ot Law, paragraph 11. 26. This Honorable Court's Opinion is against the weight of the evidence. 7 WHEREFORE, Petitioner, Platanos, Inc., respectfully requests this Honorable Court tot 1, Alter and modify the adjudication of october 5, 1994 in form and in substance to reflect the matters and points set forth above; 2. Issue a Preliminary Injunction requiring the Defendant, Athanasios Vellios, to immediately cease and desist any and all activity, either direct or indirect, relating to the planning, institution and operation of the restaurant which is being prepared for operation by the Flamingo Restaurant and Coffee Shop, Inc.; 3. Issue a Preliminary Injunction prohibiting the Defendant from acting either directly or indirectly as a principal, agent, employee or straw party of the aforementioned Flamingo Restaurant and Coffee Shop, Inc., as those actions might relate to the opening of a restaurant within a ten (10) mile radius of the Windsor Family Restaurant; 4. Issue a Preliminary Injunction prohibiting the Defendant from being physically present at the site of the aforementioned restaurant which is being prepared by Flamingo Restaurant and Coffee Shop, Inc. for operation on Route 15 in Dillsburg, for any of the purposes or. activities for which he has otherwise been enjoined from undertaking; 5. Issue a Preliminary Injunction prohibiting the Defendant from soliciting customers of the Windsor Family 8 PLATANOS, INC'I , IN THE COURT OF COMMON PLEAS Plaintiff , CUMBERLAND COUNTY, PENNSYLVANIA , v. , NO, 94-5000 EQUITY TERM , ATHANASIOS VELLIOS, , CIVIL ACTION - EQUITY Defendant CERTIfICATE OF SERVICE I, John F. King, Esquire, hereby certify that on october 13, 1994, I served a copy of the within Petitioner'. Exceptions to Dacrae Nisi, by depositing same in the United States Mail, first class, postage prepaid, addressed as follows, Charles E, Shield8, III, Esquire Mellon Bank Building 2 West Main st. Mechanicsburg, PA 17055 John B. Fowler, III, Isquire Fowler, Addams, Shughart & Rundle 28 South pitt st. carlisle, PA 17013 IEDMAN, P,C. 60 N. Second ~ Penthouse suite P. O. Box 984 Harrisburg, PA 17108 (717) 236-8000