HomeMy WebLinkAbout96-00883
~
D
~
.
-7
--fJ
<-r
e I
u
,
0- j
0 .
-;r. <) "
~ j
\.. I
~ J
1
>...... 0 J
:-t'-.. I
, 'l
~ I -
\:'; '- j
Wi \~ J
,
') --l{
I
I ,
j
rf) 1 r'() r<)
00 j 60 0-
J 00 i [)O ~ 00
j i
, 3 J
,
. , ...,
-. <:1
, J ..j <)-
j
I "
-9 I 0-
.~~
0'
<::
t t
>- 0 1L 1 "R.
~'!: - --
" .
tuC': "J . 0 \i1
/~0 (_"1 ~-. ;,1'": 8 [J !$ l1)
f,.:'- (,:. ;:,~ I.{J ....
IV) i...~ ~1
( 'I . ._J . ~
~, '- 0 I.f) rt'}
c.') ? >..""1 €d i.C) -
Lc...;; '. "< ?" -::t -
, "" ,.
C' ( "
l.j , J '" $ 'tc::
L.. "'l u
'- '~j ....1
. , C.)
Q
j ~
rLI ~i€a
fil ~~~~~
u .... '" f-o z"
~ -.a X IIlz"
o o~6~~
::. Q .- .~
... ..o:t~11l
~ ;l , 'Ill Z
..J "l>.~:JO
",..::1:
....~l>.
U
rii
..
Q
..
<
rLI
. . . .
, \ ..
I'
'i
I
,I'
il
I
~
...
DAVID HOPCRAFT,
Plaintiff
It< THE COURT OF COMl10N PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
v.
ACORDIA OF PENNSYLVANIA,
INC.,
Defendant
NO. 96- <(5'63 CIVIL TERM
CIVIL ACTION - LAW
DECLARATORY JUDGMENT
NOTICE
YOU HAVE BBEN SUED IN COURT. If you wish to defend against
the claims set forth in the following pages, you must take action
within twenty (20) days after this Complaint and Notice are
served, by entering a written appearance personally or by
attorney and filing in writing with the court your defenses or
objections to the claims set forth against you. You are warned
that if you fail to do so, the case may proceed without you and
a judgment may be entered against you by the court without
further notice for any other claim or relief requested by the
Plaintiff. You may lose money or property or other rights
important to you
YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCB. IF YOU
00 NOT HAVE A LAWYBR OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THB
OFFICB SET FORTH BELOW TO FINO OUT WHERE YOU CAN GET LEGAL HELP.
Cumberland County Court Administrator
One Courthouse Square /"
Carlisle, Pennsylvania l7013,~:
(717) 240-6200 -1
Date: d IIle>Jq~
SAIDIS, GUIDO, F & MASLAND
BY'~
Edward E. Guido, Esquire
supreme Ct. 1.0. . 21206
26 West High Street
Carlisle, PA 17013
(717) 243-6222
Attorney for Plaintiff
SAIDIS, GUIDO,
snUFF &
MAS LAND
26 W High Slrtd
Carlisle. Pr\
I
SAID IS. GUIDO, I
SHUFF &. I
MASLAND I
i
::!6 W Hlllh Street I
('.J.rlt~l~, .,,, j
II
i
I
-
.I
,.
I
I
,I
..
04
."
President and CEO, Richard Moore (hereinafter "Moore") negotiated
to purchase the Plaintiff's lnsurance business.
6. When Defendant acquired Robinson-Conner, Moore became,
and at all relevant times hereto remained, President and CEO of
Defendant.
7. On or about July l, 1992 Plaintiff and Defendant's
predecessor in interest executed a Purchase Agreement, a true and
correct copy of which is attached hereto as Exhibit "A".
8. On or about July l, 1992 and pursuant to paragraph 4.l
of the aforesaid Purchase Agreement, the parties signed an
Employment Agreement, a true and correct, copy of which is
attached hereto as Exhibit "B".
9. Both agreements contain provisions which prohibit
Plaintiff from competition with Defendant.
10. During the negotiations leading up to the execution of
those agreements, Plaintiff, who was only 43 years old at the
time, expressed grave concerns as to what he would do if the
contemplated "merger" did not work.
11. Plaintiff has never worked at any job other than as an
insurance broker. Except for his college years, Plaintiff has
never resided anywhere other than Central Pennsylvania.
12. Robinson-Conner assured him that he could purchase back
his business on the same terms as contained in the Purchase
Agreement at a price to be computed using the same formula used
to determine the price paid by Robinson-Conner (Le. 1.4 x
previous year's commission).
,
11
ii
li
H
,
,
I
i
SAIDIS, GUIDO,
SnUFF &
MASLAND
26 w. lIiKh Streel
C.ulidc:.PA
~ 4
13. In April of 1992 Plaintiff received draft agreements
which, except for the dates, were virtually identlcal to those
attached hereto as Exhibits "A" and "B".
14. After reviewing said agreements, Plaintiff advised
Moore that his only major concern was what Plaintiff would do for
a living if the merger did not work. Moore indicated that the
Agreements were "form" or "boilerplate" agreements, and that
Plaintiff was "guaranteed" to be able to buy back his business,
notwithstanding the fact that the agreements contained no such
provision,
15. Based upon the aforesaid assurances, Plaintiff executed
both Agreements.
16. Plaintiff worked diligently for Robinson-Conner and
Defendant for approximately three years. He developed many new
accounts resulting in commissions to Defendant of several hundred
thousand dollars.
17. During his period of employment with Defendant,
Plaintiff was assured by Moore on numerous occasions that he
could always buy his business back.
After the purchase by
Defendant of the local agency referred to in 18 below, it was
inferred that the "buy-back" could be exercised within 90 days of
his termination of employment.
18. At one point, Plaintiff was with Moore as he was
negotiating to purchase another local insurance agency for
Defendant. When the owner expressed concerns as to what would
happen if things did not work out, Moore assured him that he
3
,
I
I
I
I
I
I
I
I
SAlOIS. GUIDO, i
SHUFF & I
MASLAND I'
26 W High Sired
C.lflish:. PA
II
il
iI
:1
I
1
i
:\
'4
4
.
i
I
',I
would have the same option as Plaintiff, i.e. to buy the business
back within 90 days of termination.
19. Plaintiff was requested by Defendant to leave his local
base of business to other employees of Defendant, and to transfer
to a~other office so that he might concentrate his efforts on
developing new clientele.
Plaintiff agreed to accommodate
Defendant's request and was successful in developing new
business.
20. Plaintiff eventually became concerned with Defendant's
operation of his local business. Key employees and accounts were
being lost. Plaintiff was worried that there Ivould be nothing
left to buy back.
21, In early May of 1995 Plaintiff expressed these concerns
to Moore, and made initial inquiries about buying back his
business.
22. In late May of 1995 it was agreed between the parties
that the Employment Contract attached as Exhibit "B"would be
allowed to expire.
23. Plaintiff, Moore and Plaintiff's counsel had numerous
discussions, negotiations and correspondence since that time
regarding the repurchase of Plaintiff's business. Defendant had
given Moore full authority to negotiate the "buy-back" with
Plaintiff.
24. Moore had asked Plaintiff if he was interested in
purchasing the entire Carlisle operation rather than just his
previous business.
Plaintiff had indicated that he was
4
,
I .
I
i
I
.
.
.
interested, and the parties executed a Confidentiality Agreement,
a true and correct copy of which is attached hereto as Exhibit
"CO, along with the cover letter from Moore,
25. Negotiations were proceeding when Defendant advised
Plaintiff that Moore's position with the company had changed and
that Defendant was no longer interested in selling to Plaintiff.
26. Defendant further advised Plaintiff that it would
enforce its rights under the non-competition clauses of the
Employment Agreement attached hereto as Exhibit "B".
27. The non-competition clause contained in Exhibit "A"
expired on July 1, 1995. By its term, the non-competition clause
contained in the Employment Agreement would expire on May 31,
1998.
28. The non-competition clauses are inconsistent as
written. The non-competition clause contained in the Employment
Agreement must be interpreted to apply only to those customers of
Defendant that were not customers of Plaintiff in July 1992.
29, This action is brought to avoid the necessity for
litigation and to obtain an adjudication of the rights of the
parties.
I WHEREFORE, Plaintiff respectfully requests this Honorable
1
I Court to take jurisdiction of this controversy and that after
SAlOIS, GUIDO'I
SHUFF & hearing and adjudication it enter an Order of Declaratory
MASLAND I
2bW Ih~hSIl'" Judgment as follows:
Cllli~lc. PA
(a) Declaring that Plaintiff has the right to
repurchase his business from Defendant on the same
5
.
..
,
terms and conditions contained in the original Purchase
Agreement; and/or
(b) Declaring that Defendant is estopped from
enforcing the non-competition provisions in the
Employment Agreement; and/or
(C) Declaring that the non-competition provisions
in the Employment Agreement apply only to those
customers who were not customers of Plaintiff on July
1, 1992; and/or
(d) Ordering such other relief as this Honorable
Court deems appropriate.
! .
Date: ,) Ill.; fer 1,0
Respectfully submitted,
"'OIS, ~. MASLAND
By: -~
Edward E. Guido, Esquire
Supreme Ct. I.D. . 21206
26 West High Street
Carlisle, PA 17013
(717) 243-6222
Attorney for Plaintiff
I
1
J
I
SAID IS. GUIDO,
SHUFF &
MAS LAND
,.:,J,;
26 w. Hi.h Stccet
Culidc. PA
(;
.
..
,
.
VERIFICATION
I verify that the statements made in the foregoing Complaint
are true and correct. I understand that false statements herein
are made subject to the penalties of 18 Pa. C,S. S 4904, relating
to unsworn falsification to authorities,
DATED:
41",h~
7
'/
I
I
I
"
..A
.
A
~
.-
II
(
\
",
"
,'.\
d
t
}
,
f
.
f.
'r
:t
.
"
;i,
:.;
J
it
r.
.'
...
.;.,
.
.
COpy
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT is made and entered into as of the 1st d~y
of July, 1992, by and among ROBINSON-CONNER OF PENNSYLVANIA, INC., a
pennsylvania corporation (hereinafter called the "purchaser"), HOPCRAP'T
INSURANCE AGENCY, INC., a Pennsylvania corporation (hereinafter called the
"Seller"), end DAVID HOPCRAFT, an individual (hereinafter called the
"Shareholder") .
WHEREAS, the Seller is engaged in the operation and conduct of a
general insurance agency and brokerage business in all Unes of insurllnce allLI
the Shareholder constitutes the beneficial and record owner of 1111 of the
issued and outstanding capital stock of the Seller; and
WHEREAS, the Purchaser desires to purchase the business and
certain specified assets of the Seller and the Seller and the Shareholder are
agreeable to the sale of said business and certain of its assets, all in
reliance upon the warranties and representations set forth hereinafter and
upon the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and intending to be legally bound hereby, the parties agree to the
following:
1. Purchase and Sale of Assets
1.1 Purchase and Sale. sut.ject to the terms and conditions set
forth hereinafter, the Seller agrees to sell, assign, transfer and convey, at
the Closing, absolutely to the Purchaser, free and clear of all security
interests, liens and encumbrances, its entire business and certain of ita
properties and assets (hereinafter collectively called the "Anets"), and
inCluding the following:
(a) All rights of the Seller regarding 311 insurance which
has been solicited, placed or sold through the Seller or by any of its agents
or employees on its behalf, including all work in progress, and all other
information possessed by the Seller identifying its pIIst, present and
potential clients describing their insurance needs and coverages and setting
forth the expirations of their current insurance policies and contracts.
Attached hereto as Schedule 1 is a list of all customers' policies in force liS
of the effective date of this Agreement.
(b) All of the Seller's other files, records and
information concerning present, past and potential clients.
(C) All of the Seller's rights to renewal premiums, direct
bill commissions, contingent commissions and all other entitlements and rights
of absolutely every nature whatsoever of Seller to receive money or ?8yments
of any kind except as specifically excluded in Sections 1.2 and 1.3 hereof.
.
(d) All rights to the name Hopcraft Insurance Agency and
to all other trade names and trademarks owned or used by the Seller, ~nd any
registrations or applications for registration thereof, and all of the
Seller's goodwill.
(e) All governmental licenses, permits, approvals and
authorizations possessed by the Seller to the extent assignable or
transferable.
(f) All restrictive covenants now owned by the Seller.
(g) All prepayments received by the Seller for insurance
written on policies for coverage to be effective from and after July 1, 1992.
All invoices and credit memos with respect to insurance policies to be
processed or billed on or after July 1, 1992 regardless at the effective date.
1.2 Excluded Assets. The Seller shall retain and does not by
this Agreement sell to the Purchaser and there is excluded from the assets to
be conveyed by the Seller to the Purchaser enumerated above (i) the Seller's
corporate minute book, stock transfer records and corporate seal, (ii) all of
the Seller's cash, outstanding accounts receivable, prepaid expenses, loans or
notes receivable, automobiles, cash value of life insurance policies, and real
estate, if any, and (iii) the rights and benefits accruing to the Seller undpr
the terms of this Agreement.
1.3 Collection of Accounts Receivable. The Seller shall retain
and does not by this Agreement sell to the Purchaser and there is exclu....ed
from the assets to be conveyed by the Seller to the Purchaser any and all
accounts receivable of the Seller based on invoices and credit memos with
respect to lnsurance policies processed and billed by the Seller prior to the
close of business on June 30, 1992, except prepayments invoiced by the Seller
for insurance coverage to be effective from and after July 1, 1992 (such
excluded accounts receivable hereinafter called the "Seller's Receivables").
The Purchaser shall collect and pay over tc the Seller or its assigns on a
monthly basis any and all amounts collected by the Purchaser from customers in
connection with the Seller's Receivables. If the customer identifies the
invoice paid, the Purchaser will apply the funds in accordance with the
customer's instructions. If the customer fails to identify the invoice paid
all funds received until September 31, 1992 will be first applied to the
Seller's Receivables, and any excess will be retained by the Purchaser to be
applied against its accounts receivable. Beginning October I, 1992, all funds
received will be applied to invoices covering insurance written and billed for
the period beginning July 1, 1992 to the extent any amount is owed to the
Purchaser b~ the customer at the time of payment, and any excess will be
applied to the extent necessary to the Seller's Receivables. The accounting
books and records of the Seller shall remain the property of the Seller, but
the Purchas~r shall have access to such records. The Purchaser and the Seller
shall do all acts necessary to accomplish the above. The Seller agrees to
give the Purchaser a copy of its aged accounts receivable trial balance report
-2-
...
..
)
I
1
I
I
I
I
! .
~
I
,-
t
.
,
,
I
L
t'~
.
,0;
.',-
.
as of June 30, 1992. After September 30, 1992, the Purchaser shall be
relieved of further responsibility to collect the Seller's Receivable., and
the Seller may commence to collect the same on its own behalf.
2. Aqreement and Covenant Not to Compete
2.1 Shareholder's Covenant Not to Compete
(6) The Shareholder will not, individually or jointly,
directly or indirectly, (ot~r than in the capacity as an employee of the
Purchaser) solicit, sellar accept business of the type then beinq performed
by the Purchaser (whether or not for that particular client or custo..r) from
any person, partnership, corporation or other entity who is a client or
customer at the ~urchaser or the Seller at the time of the execution of this
Agreement, or during the twelve (12) months preceding this Agree..nt, or at
any time during the term set forth in section 2.3 below.
(b) The Shareholder will not, individually or jointly:
(i) directly or indirectly enter into the employ of
or render any service to or act in concert with any perlon,
partnership, corporation or other entity engaged in any
business, or in rendering any service, ~iflq cundUl.:ted U1
rendered by the Purchaser or the Seller upon the date of
this Agreement or during the term set forth in Section 2.3
below; or
(ii) directly or indirectly engage in any such
competitive business or render any such servicel on their
own account; or
(iii) become interested in any such competitive
business or service, directly or indirectly, as an
individual, partner, shareholder, director, officer,
principal, agent, employee, consultant or in any other
relationship or capacity.
(C) The Shareholder will not, individually or jointly,
directly or indirectly, entice or induce any employee of the Purchaser to
leave the employ of the Purchaser and to work with the Shareholder or with any
person or entity with whom the Shareholder is or becomes associatect.
2.2 Prohibition on Disclosure of Intor..tion, !tc. At no time
during or after the term as set forth in Section 2.3 below shall the
Shareholder divulge, furnish or make aceeBsible to anyone any knowledge or
information with respect to confidential information or data of the Purchaser
or the Seller or with respect to any confidential or secret Intonation or
data at any at the Seller's or the ~Irchaser's clients or customer. or with
- J-
".
4
!
I
,
:J
respect to any other confidential or secret aspect of the business or services
of the Purchaser or the Seller.
~.3 Term and Geoqraphic Area. The term of the covenants set
forth in this Article 2 shall extend for three (3) years from the date hereof.
The obligations of the Shareholder hereunder shall extend to the entire
geographic area of the State of Pennsylvania.
2.4 Injunctive Relief for Breach. In addition to all other
rights and remedies which the Purchaser may have at law, as an additional and
cumulative remedy, the covenants contained in Sections 2.1 and 2.3 shall he
enforceable by specific performance and injunctive relief and shall be
construed as separate covenants governing competition in the geographical
territory applicable and if any court shall finally determine that the
restraints provided for herein are too broad as to the area, activity or time
covered, said area, activity or time covered may be reduced to whatever extent
the court deems reasonable and the covenants may be enforced 3S to such
reduced area and time.
2.5 Reservation of Riqhts. The Purchaser reserves all rights,
set forth in this Agreement for breaches of this Article 2, which rigM"
include (but are not limited tOI offset rights against amounts otheruisli'
payable pursuant to Article 3 below.
3. Closing, Purchase Price and Transfer Date
3.1 Closing. The parties shall hold and conduct a closineJ
(hereinafter called the "Closing") at the offices of the Seller in Carlisle,
Pennsylvania. The Closing shall be effective as of the opening of business on
July 1, 1992. At the Closing, the Seller shall execute and deliver to the
Purchaser such bills of sale, assignments and other instruments as the
Purchaser deems necessary to effect the sale and transfer of the Seller's
business and the Assets to the Purchaser as contemplated hereunder. At the
Closing, the Shareholder shall also execute and enter into the Agreement and
Covenant Not to Compete with the Purchaser as provided in Section 2 hereof.
3.2 Purchase Price and Payment of the purchase Price. In
exchange for the transfer and conveyance of the Seller's business and the
Assets and for the warranties and covenants of the Seller and Shareholder
herein, the Purchaser shall pay to the Seller and Shareholder a purchase price
(hereinafter called the "Purchase Price") which shall be allocated in
accordance with section 3.5 of this Agreement. The Purchase Price shall be
the sum of the following:
1'1'
-4-
(a) The Purchaser shall pay the sum of $100,000.00 in cash
at or before the Closing.
(b) As additional consideration the Purchaser agrees to
pay within ninety (90) days following the first (1st) and second (2nd)
~~
,,,
...
anniversaries of this Agreement, an amount, if any (the "Annual paymemt" , , if
greater than zero (0) determined by the following formula:
(i) The net personal lines, group and
commercial/casualty commiss ion income ("net commission
income") billed and received by the Purchaser and produced
from eligible accounts for the twelve (12) months ended June
30th of each anniversary year shall be calculated. For the
purposes of this Agreement, "eligible accounts" shall
inclode only the existing clients of the Seller on the date
of this Agreement. The term "net commission income" shall
not include contingent and profit sharing commissions.
Further, all broker's commissions owed to third parties
incurred by the PurChaser in connection with the eligible
accounts shall be deducted from the commissions applicable
theret.:> in calculating "net commission income."
(ii) The net commission income for the anniversary
year shall be multiplied by 1.4.
(iii) From the product there shall be su~tracted
SlOO,OOO.Oo. This figure, i.e., SIOO,OOO.OO, replesollt'3 tlte
amount paid by purchaser upon execut ion of tltis Aljleement.
(iv) The resulting difference shall be divided by 2
and the resulting quotient shall be the amount of t.he Annual
Payment for that anniversary year.
Schedule No. 2 attached hereto and made a part hereof demonstrates the
toregoing computations. The Seller and Shareholder shall have the right
tollowing reasonable notice to inspect the Purchaser's records regarding the
net commission income earned by the Purchaser and produced trom eligible
accounts during each anniversary year at this Agreement.
(C) The obligation ot the Purchaser to make such payments
to that part thereof allocated to the Agreement and Covenant Not to Compete
shall survive the death or disability at the Shareholder.
(d) The Seller and Shareholder acknowledge that the Annual
Payments to be made pursuant to this Section 2 are contingent payments and
that the amount of an Annual Payment, it any, shall depend upon the
computation as set forth in 3.2 (b) above. Further, the Seller and
Shareholder acknowledge that continuation of an account relationship with any
eligible account shall require that the client conform with all unitorm
policies of the Purchaser including, but not limited to, billing and account.s
receivable poliCies.
3.3 No Assumption ot Liabilities. Except as expressly provided
herein, the Purchaser will not assume and will not discharge or be liable for
-5-
any debts, liabilities, or obligations ot the Seller, including, without
limitation, any (i) liabilities or obligations of the Seller to its creditors;
(ii) liabilities or obligations of the Seller with respect to any transactions
occurring atter the Closing; (iii) sales or income tax or other liabilitie~ or
obligations of the Seller incurred in connection with the sale of the Assets
or its business pursuant to this Agreement; (iv) any contingent liabilities or
obligations of the Seller; or (V) any commission owed by the Seller in
connection with this Agreement. The Seller or the Shareholder, as the case
may be, agrees to timely pay to the insurance carriers, when due and payabie,
all amounts owed in connection with invoices and credit memos with respect to
insurance policies processed and billed by the Seller on or prior to June 30,
1992, except for insurance coverage to be effective from and after July 1,
1992.
3.4 Expenses of Transaction. The purchaser, on the one hand,
and the Seller, on the other hand, shall each bear their own costs and
expenses, including legal and accounting fees, incurred in negotiating the
agreement evidenced hereby, in preparing this Agreement and the other
documentation referred to herein and in consummating the transactions
contemplated hereunder.
3,5 Allocation. The Purchase Price shall be allocated among the
various assets being sold and transferred by the Seller to the Purchaser ar~
the Shareholder's Agreement and Covenant Not to Compete in the following
proportions:
(a)
(b)
(C)
Expirations (Seller)
Goodwill (Seller)
Agreement and Covenant Not
Not to Compete (Shareholder)
25\
60\
15\
Each payment made pursuant to this Agreement shall be allocated in the
proportions set forth above.
4. Conditions Precedent to Obliqations of Purchaser
The Purchaser shall not be obligated to pay any of the Purchase
Price or otherwise to perform its obligations hereunder unless all of the
following conditions have either been fulfilled or performed to the
Purchaser's satisfaction, on or before the Closing, or have been waived by the
Purchaser.
-..-:--:->-.--...--
4.1 P.mployment Contract. The Shareholder shall have executed
and entered into a written employment contract with the Purchaser (hereinafter
collectively called the "Employment Agreement") on terms and conditions
satisfactory to the Purchaser.
-6-
~
4,2 Possession. Simultaneously with the Closing, the Seller "lid
the Shareholder will take all steps that will be necessary to put the
Purchaser in actual possession, operation, and control of the Assets,
4.3 further Assurances. from time to time, after the Closing,
at the request of the Purchaser, the Seller and the Shareholder will execute
and deliver to the purchaser such other instruments of conveyance and trans!er
and take such other actions as the Purchaser may reasonably require more
effectively to convey, transfer to, and vest in the Purchaser, and to put the
purchaser in possession of, any and all of the Assets.
5. Representations and Warranties of the Seller and Shareholder
The Seller and the Shareholder, jointly and severally, warrant and
represent to the Purchaser as follows:
5.1 Leqal Status. The Seller is a corporation, validly existing
and in good standing under the laws of the State of pennsylvania. The Seller
has all necessary corporate power and authority to own and operate the Asset~
and to conduct its present business as and where presently conducted, and the
Seller possesses all necessary governmental licenses, permits and
authorizations to engage in its present business in pennsylvania.
5.2 Approva 1 of Transact ion. The execution and del bel j' <It th i!l
Agreement on the part of the Seller, and the performance by the Seller of all
of its covenants and obligations under this Agreement, have been duly and
proper 1 y author ized and approved by its Board of Directors and by all of the
shareholders of the Seller. The Seller possesses full and unrestr ictetl power,
authority and capacity to execute, deliver and enter into this Agreement and
to carry out and perform all of his covenants and obligations under this
Agreement in accordance with its terms. The execution and delivery of this
Agreement and the transactions contemplated under this Agreement do not and
will not violate or conflict with any provisions of the Articles of
Incorporation or Bylaws of the Seller. No governmental approval or
authorization is necessary for the Seller to execute and deliver this
Agreement or to perform its obligations under this Agreement. This Agreement
has been duly executed and delivered by and on behalf of the Seller and
Shareholder end constitutes a valid and legally binding obligation of the
Seller and Shareholder, enforceable in accordance with its terms.
5.3 Shareholder. The Shareholder constitutes the owner,
beneficially and of record, of all of the issued and outstanding common stock
of the Seller. Except for its common stock, the Seller has no class of stock
or any equity securities outstanding. Neither the execution and delivery of
this Agreement, nor the performance of all of the Obligations under Baid
instruments, by the Seller and the Shareholder violate or conflict with, or
will violate or conflict with, the terms of any loan document, indenture,
contract, lease, order or agreement to which the Shareholder is a party or is
bound or the Seller is a party or is bound.
-7-
l
,
,
I
!
5.4 Title to Assets. The Seller has good and marketable title
to all of the Assets, and all of the Assets are free and clear of security
interests, liens and other encumbrances of any nature.
5.5 Financial Statements. The statements of income and expenses
delivered to the Purchaser by the Seller are substantially true, complete and
correct and have been prepared in accordance with generally accepted
accounting principles consistently applied. These documents fairly present
the information contained therein and fairly represent the financial condition
of the Seller.
5.6 ~. The Seller has duly and timely prepared, executed
and filed all federal, state and local income, property, occupational premiullls
and other tax returns, reports, statPments and declarations which it is or was
legally required to file, and the Seller has paid in full all taxes,
assessments, impositions and other payments ds shown thereby to be due, or has
made provision for same.
5.7 Litigation. There are no (i) claims made, pending, or
threatened against or affecting the Seller, Iii) actions, suits, proceedings,
or investigations pending or threatened, against or affecting the Seller in
any court or before or by any federal. state or locai governmental arJ,!!II<':'{ tol
instrumentality, or (iii) actions, suits, or legal rroceedin'p pendin'l or
threatened against the Seller which might in any way affect its executi'Jn or
de livery of, or per formance at its obI iqat ions under this Agreem'?nt. H"lther
the Seller nor the Shareholder has any knowledge of any oc::cunellce c'r ~1lH .:,.f
circumstances which may result in any claim, suit, investigation 'Jr le'~ill
proceedings against the Seller.
5.a Client Relations. The Seller has not since December 31,
1990, lost the business of any client which represents 5% or more of the net
commissions of Seller during the fiscal year ended December 31, 1990. Ileitner
the Seller nor the Shareholder is aware of any fact or circumstance which
might indicate that any such client has ceased or intends to cease placing
business with the Seller or to materially reduce the amount of business it is
placing or will place with the Seller. Apart from ordinary contracts of
insurance, the Seller has no contracts or agreements with any of its clients.
5.9 Employee Benefit Plan Matters. If the Seller does have in
effect and contributes to, an "employee pension plan" as defined in Section
3(2) of ERISA, the Purchaser is not assuming anI' responsibility or obligation
with respect to any such retirement plan. The Purchaser is not assuming any
responsibility or Obligation with the respect to any welfare benefit plan.
5.10 validity of Article 2 Agreement and Covenant llot to
Compete. The Agreement and Covenant Not to Compete set faIth ill Article 2
constitutes a valid and binding agreement and undertaking enforceable in
accordance with its terms,
-0-
J,
,.11 Absence at Material Chanqes. There have been no material
adverse changes of any nature in the assets, business or financial condition
ot the Seller since December 31, 1990.
5.12 Completeness of statements, 110 representation or warranty
by the Seller or the Shareholder in this Agreement or in any Schedule hereto
or in any written statement furnished to the Purchaser pursuant hereto or in
connection herewith contains any untrue statement of a material fact cr omits
to state a material fact necessary to make any statement herein or therein not
misleading.
5.13 Insurance Accounts and Commissions. The insurance accounts
of the Seller represent genuine insurance placed througll the Seller for the
commissions set forth on the Seller's books and records. There are no oral or
written agreements, commitments or understandings with any account whereby any
(If the insurance commissions received by the Seller are being returned
directly or indirectly to any customer or any other person.
5.14 Claim Administration Aqreemellts. The Seller providen no
claim administration or adjustment services, and there are no contracts 01
agreements, oral or written, with any person or entity, pursuant to which th"!
Seller is obligated to provide any such services, other than draft i1uth,'r it,
for various insurance companies in var ious amounts tor certain tirst part\'
claims.
6. Warranties ot Purchaser
6.1 Status of Purchaser. The Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Pelmsylvania, and has full corporate power and authority to enter into thlS
Agreement, to perform its covenants and Obligations hereunder, and to
consummate the transactions contemplated thereby.
6.2 Authorization. The Purch~ser has taken all necessary and
proper corporate actions to authorize the execution and delivery of this
Agreement and the performance of it of all of its covenants and Obligations
under this Agreement.
6.) No Violations; Valid Aqreement. Neither the execution and
delivery of this Agreement, nor the consummation of the transactions described
herein, nor the performllnce of their respective obligations hereunder, will
violate any provision of the Articles of Incorporation or Bylaws of the
purchaser, nor violate the provisions of any loan document, indenture,
contract or other agreement to which the Purchaser is a party or is bound, nor
violate the provisions of any jUdicial or administrative order, judgment or
decree applicable to the Purchaser. No governmental approval or authorization
is necessary for the Purchaser to execute and deliver this Agreement or to
perform its obligations under this Agreement. This Agreement has been duly
executed and delivered by and on behalf ut the Purchaser and constitutes a
-9-
._. 41~
valid and legally binding obligation of the Purchaser, enforceable in
accordance with its terms. All consents, approvals, authorizations and orders
required of the purChaser for the execution and delivery of, for the
consummation of the transactions contemplated by, and for the fulfillment of
and compliance with the terms and conditions of, this Agreement have been
obtain~d. '
6.4 Completeness of Statements. No representation or warranty
by the Purchaser contains any untrue statement of a material fact or any
misstatement of a material fact necessary to make any statement herein or .
therein not misleading.
7. Indemnification and Remedies of the Purchaser
7.1 Indemnification. The Seller and the Shareholder, jointly
and severally, hereby promise and agree to indemnify and hold harmless the
Purchaser against any and all losses, damages, judgments, liabilities. costs
and expenses (including reasonable attorney's fees) suttered by the Purch,'lser
as a result of (i) any representation or warranty by the Seller or the
Shareholder in this Agreement, or in any Schedule hereto or in any instrument
or agreement delivered in connection herewith, proving to be false, incorrect
or inaccurate, and/or (ill any breach or violation by the Seller or till?
Shareholder of any of its covenants and obligations under this Agreemf'lIt (Jr
allY agreement or in3trument delivered in connection herewith.
7.2 Remedies. Upon the occurrence of any event referenced i"
the preceding Section 7.1 for which the Purchaser is entitled to
indemnification, the Purchaser shall have all of the rights and remedies
available to it at law, in equity, in bankruptcy or otherwise. In addition.
the Purchaser shall have the right to offset the amount for which it is
entitled to indemnification against any amount then outstanding under this
Agreement.
7.3 Indemnification of the Seller and the Shareholder. The
Purchaser hereby promises and agrees to indemnify and hold harmless the Seller
and the Shareholder against any and all losses, damages, judgments,
liabilities, costs and expenses (including reasonable attorneys' fees).
suffered or incurred by the Seller and the Shareholder as a result of (i) any
representation or warranty by the Purchaser in this Agreement, or in any
Schedule hereto or in an} instrument or agreement delivered in connection
herewith, proving to be faise, incorrect or inaccurate, ,and/or (il) any breach
or violation by the Purchaser of any of the covenants and obligations under
this Agreement or any agreement or instrument delivered in connection
herewith.
7.4 Remedie,!!.. Upon the occurrence of any event referenced in
the preceding Section 7. J for which the Seller and the Shareholder are
entitled to indemnification, the Seller and the Shareholder shall have all of
-10-
the rights ard remedies available to them at law, in equity, in bankruptcy o~
othelwise.
B. Miscellaneous
8.1 Successors and Assi ns. The terms and provisions of this
Agreement shall be b nd ng upon and nure to the benefit of the parties hereto
and their respective successors, permitted assigns, personal representatives,
legatees, devisees and heirs.
B.2 Notices. All notices, requests, demands and other
communications required or permitted to be given or made under this Agreement
shali be in writing and shall be delivered personally or sent by registered or
certified mail (return receipt requested), postage prepaid, as follows:
william B. C(lnner, Chairman
Robinson-Conner of pennsylvania, Inc.
3230 West Lay-e Road
Erie, pennsylvania 16505
Robert G. Dwyer, Esq.
120 West Tenth Street
Erie, pennsylvania 16501
David Hopcraft
Hopcraft Insurance Agency, Inc.
401 East Louther Street
Carlisle, pennsylvania 17013
Any party may change its or his address for the receipt of notices
hereunder by giving appropriate notice to the other parties in accordance with
this Section 8,2.
If to the Purchaser:
With copies to:
If to the Seller:
B.3 Governing Law. This Agreement shall be governed by and
interpreted in accordance with the law of the State of pennsylvania.
B.4 Captions, The captions in this Agreement are included for
convenience only and shall not be considered in the interpretation or
construction of this Agreement.
B.5 Survival of Warranties and Representations. The warranties
and representations of the Purchaser, the Shareholder and the Seller set forth
in this Agreement shall survive the Closing and the consummation of all of the
transactions herein contemplated, and shall continue and remain in full force
and effect thereafter.
B.6 Entire Agreement. This Agreement, together ~ith the
Schedules hereto and written instruments referenced herein, constitutes the
entire agreement by and among the parties hereto with respect to the subject
-11-
SCHEDULE NO. 2
Annual Payment Computation Example
Year 1993
1994
(1 ) section 3.2(b)(i) net
commission income billed
and received for 12
months ended June 30 $200,000,00
(li) Multiplied by 1.4 !...L..1
Product 280,000.00
( 111) Minus $100,000 -100,000.00
Difference 180,000.00
( 1v) Divided by 2 -- 2
Annual Payment $ 90,000.00
$175,000.00
U.:..1
245,000.00
-100,000.00
145,000.00
-- 2
$ 72,SOO,OO
23PA2033l2
a'
r-'
r, ~.!
.
"
I
.
I
~ .
l,
I
I,
II
EXHISIT "S"
copy
EMPl-QY;'1Ell'r AGREEf1EN'r
THIS EMPLOYMENT AGREEMENT is made and entered into as of the 1st
day of July, 1992, by and between ROBINSON-CONNER OF PENNSYLVANIA, INC., a
pennsylvania corporation, hereinafter called the "Company", and DAVID
HOPCRAFT, an individual, hereinafter colled the "Employee".
WHEREAS, the company is engaged in the conduct of a generai
insurance agency IInd brokerllge business in all lines of insurance; and
WHEREAS, in view of the Employment experiences and abilities of
the Employee, the CompllllY is desirous of employing the Employee IInd the
Employee is desirous of obtaining such employment.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein IInd intending to be legally bound hereby, the parties agree to the
following:
1. Employment and Term
(II) Subject to the terms and conditions of this Agreement,
the Company IIgrees to and does hereby empioy the Employee and the Eoployee
agrees to IInd does hereby accept employment with the Company for a period ot
three (3) years commencing on the date hereof (hereinafter called the "perio<1
of Employment"), unless such employment is termi:lated pursuant to this
Agreement prior to the expiration of such Period of Employment.
(b) The Period of Employment shall be automatically
renewed on a year-to-year basis following expiration of the initial period of
Employment, unless either party shall, on or before thirty (30) days prior to
the expiration of the Period of Employment or any applicable anniversary
thereof, notify the other party, in writing, of termination.
2. Duties
(a) The Employee's duties shall consist of performing and
carrying out such duties as are described on the Employee Job Description
attached hereto and marked as Exhibit A, as well as such other approprillte
duties as may be assigned to him from time to time by the Company. The
Company shall have the right, to supplement and/or delete specific duties
referred to in Exhibit A. The Employee shall perform the foregoing duties at
the company"s Mechanicsburg, pennsylvania office IInd such other plllces as the
company shall reasonably designate.
(b) During the Period of Employment, the Employee agrees
to give the company the full benefit of his business time, energy and ability,
to comply with the orders and conform to the instructions given to him from
time to time by the company in accordance with paragraph 2(a) hereof, and to
endeavor, in all cases and to the best of his ability, to promote the
company's best interests.
3, Remuneration
(a) until July 31, 1993, the Employee shall be paid annual
compensation at the rate of $65,000.00 per annum for the solicitation,
production, development, maintenance, surveying and servicing of accounts
assigned to him by the company as well as such other duties as may be assigned
to him pursuant to this Agreement, and the Employee shall be eligible to
participate in the company's new business bonus program, provided however,
that none of the accounts on Schedule 1 of the Purchase Agreement entered into
simultaneously between Hopcraft Insurance Agency, Inc., Employee, and the
company shall be taken into account for purposes of calculating the new
business bonus.
(b) Thereafter and commencing on August 1, 1993, the
Employee's compensation shall be based on the Company's producer compensation
policies in effect at that time or modified from time to time thereafter,
provided however that the annual compensation is at least $50,000.00 per
annum. Compensation for handling the insurance requirements of existing
clients of the Company shall be determined by reference to the "handled only"
formula for sharing of commissions. A copy of the Company's current producer
compensation policies is attached hereto as Exhibit B.
(C) The Employee shall also be eligible to participate ill
any Health, Accident or other insurance plans, Vacation, Sick Leave and Fringe
Benefit Programs (including bonus, pension and prOfit-sharing programs, if
any) presently existing or which may hereafter be established by the Company
during the Period of Employment, provided that he is otherwise qualified to
participate in such plans and programs. The Company shall be entitled to
modify its employee benefit programs from time to time in its sole discretion.
(d) Remuneration is payable on a semi-monthly basis.
Advances or loans on any type of remuneration are not permitted.
(e) Expense allowances and/or expense reimbursements for
travel, entertainment and other business expenses incurred by the Employee in
promoting, fostering, furthering, and perpetuating the business of the Company
will be determined by reference to such rules, regulations and policies as
shall be established by the Company from time to time. The Employee shall not
commit the company, financially or otherwise, unless prior approval is
granted.
4. Termination
(a) The Employp.e's employment hereunder shall
automatically terminate following expiration of the Period of Employment or
any applicable renewal anniversary thereof, provided that wri~ten notice of
termination is given by either party to the other on or before thirty (30)
days prior to said termination date. Furtner, the Company shall be entitled
to terminate the Employee's employment hereunder at any time (i) because of
the Employee's fraud, misappropriation, embezzlement, or the like, or (ii) if
the Employee willfully breaches or habitually neglects the duties which he is
-2-
required to perform pursuant to this ^greement lollowinq implementat ion of
normal personnel review policies, or I iii) il the Employee shall violate allY
provision of this Agreement, or (iv) if the Company shall permanentiy cease to
do business in its present or successor form or structure or commence its
voluntary dissolution or complete liquidation or be pleced in voluntary or
involuntary bankruptcy, or (V) if the Empioyee for any reaaon becomes unable
to perform hls duties hereunder or (vi) upon the disability or death of the
Employee, or (viii) upon the loss of the Empioyee's insurance license. The
Employee msy terminate his employment hereunder at any time followinq thirty
(30) days' written notice to the Company. In addition, during any renewal
term the Company shall have the right to terminate the Employee's employment
hereunder at any time following ninety (901 days written notice to the
Employee. Termination at the Employee's employment hereunder by either party
shall not be construed to nullify or terminate any covenant or obligation of
the Employee which is intended to survive the Period of Employment pursuant to
the terms of this Agreement.
i
i
i'
I
(b) In the event of termination of the Period of
Employment or any renewal term thereof, the Employee shall be entitled to
receive full remuneration up to and including the date of termination. The
Company shall have no further obligation to the Employee for remuneration for
any period thereafter.
,
5, Proprietary lIature of Bus iness
(a) The Employee acknowledges that the Company has a
valuable property interest in all aspects of its business relationships with
its clients, insurers, and all other persons who perform services tor said
cli~nts and said insurers. Further, the Employee acknowledges that in the
course of his employment with the Company, he will become aware ot and
familiar with secret or contidential information of '~e company relating to
its customers, its internal business operations and Ie sources with which
insurance is placed (including secret and confidential :nformation at the
Company's affiliates and subsidiaries), including but not limited to, lists of
agents, brokers, policy holders, expiration and renewal dates, inspection and
credit reports, other insurance data on various risks written by the Company
(or its affiliates and subsidiaries), the procedures, forms, techniques used
in servicing accounts, and other documents and information which is required
to be maintained in confidence tor the continued success of the Company and
its business, all of which secret or confidential information is acknowledged
by the Employee to be the sole and exclusive property of the Company, its
affiliates and subsidiaries. In view ot the foregoing, the Employee expressly
agrees and acknowledges that the covenants contained in this Paragraph 5 and
in paragraph 6 hereof a:e reasonable and necessary.
(b) All insurance business transacted through the ettorts
of the Employee shall be the sole property of the Company, and the E.ployee
shall have no right to share in any commission resulting from the conduct of
such business.
-3-
(C) premiums on all insurance business transacted through
the efforts of the Employee shall be invoiced to the assured or purchaser by
the company or any insurance company it represents. All checks or bank drafts
received by the Employee from any assured or purchaser shall be made payable
to the company or any insurance company it represents; and all premiums shall
be collected by the Employee in the name of and on behalf of the Company.
(d) The Employee agrees that he will not, without the
written consent of the company, during the term of this Agreement or
thereafter, disclose or make any use of such confidential information except
as may be required in the course of his employment hereunder.
(e) On termination of employment, the Employee shall
surrender to the ccmpany all records and all copies made of those records that
pertain to any aspect of the business of the Company, with its clients and
their respective insurers, including but not limited to clients' coverages,
active and prospective clients, expirations of coverages, premiums and
compilations of the same,
(f) The Employee agrees that he will not entice or induce,
directly or indirectly, any other employee of the company to leave the employ
of the Company.
6. Agreement tlot to Compete
(a) Upon termination or expiration of the Period of
Employment for any reason, the Employee agrees that for a period of thr~e (31
years following such termination or expiration, he will not, directly or
indirectly, solicit, sellar accept insurance business from any person,
partnership, corporation or other entity who is then a client of the company
or who was a client of the Company during the Period of Employment (including
any renewal tent). If, during the said three (3) year period, any commission
or any insurance business becomes payable to the Employee or to any person,
firm, or corporation by whom the Employee is then employed or affiliated, as a
result of the Employee's violation of the first sentence of thi~ paragraph,
the Employee agrees to pay promptly to the company an amount equal to 150~, of
such commission. This covenant shall extend to the entire geographic area of
the state of pennsylvania. If any court shall finally determine that the
covenants contained herein are too broad as to area, activity or time, said
covenants may be reduced to the extent that the court deems reasonable; and
such covenants may be enforced thereafter as to the reduced area, activity or
time.
(b) If, following termination or expiration of the period
of Employment, the Employee accepts other employment or enters into a business
relationship with any person, partnership, corporation or other entity doing
business of the kind then being performed by the Company, the Employee shall
obtain from said second employer and shall provide to the company a written
acknowledgment by the successor employer of its notification of the terms of
paragraphs 5 and 6 of this Agreement.
-4-
.......
(C) It is expressly agreed upon that money damages will.
not be an adequate remedy for any breach of the covenants of the Employee set
forth in paragraphs 5 or 6 hereof; and in the event of any such breach, or
threatened breach, the Company shall be entitled to secure an injunction
requiring the Employee to abide by his commitments under such provisions of
this Agreement.
1. Miscellaneous
(a) The Employee may not assign this Agreement or any of
his right~ or obligations hereunder to any person, firm or entity. The
Company shall be entitled to assign and transfer its rights pursuant to this
Agreement in connection with any merger, sale or other disposition of all or
any part of its insurance business; provided, however that the Company's
obligations hereunder are expressly assumed, in writing, by a solvent assignee
or successor.
(b) Any notice required or permitted to be given pursuant
to this Agreement, or in connection there~ith, shall in lieu of personal
services, be deemed to be duly given when transmitted by First Class United
States Certified Mail, to the Company and the Employee at the following
addresses, or at such other place as either of the parties may for themselves
designate in writing from time to time for the purpose of receiving notices
pursuant hereof:
(i) William B. Conner, Chairman
Robinson-Conner of Pennsylvania
3230 West Lake Road
Erie, pennsylvania 16505
(ii) David Hopcraft
Hopcraft Insurance Agency, Inc.
401 East Louther Street
Carlisle, pennsylvania 11013
\
}
J
\
(e) Neither party will be deemed to have waived any right,
power or privilege under this Agreement or any provision thereof unless such
waiver shsll have been duly executed in writing and acknowledged by the party
to be charged with such waiver. The failure of either party hereto at any
time to enforce any of the provisions of this Agreement will not be construed
to be a waiver of such provisions, nor in any way affect the validity of this
Agreement or any part thereof, or the right of any party to thereafter enforce
each and every such provision. No waiver or any breach of this Agreement will
be held to be a waiver of any other or subsequent breach. In the event that
anyone or more of the provisions contained in this Agreement shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, Illegality or unenforceability shall not affect any other
provision of this Agreement.
~,
.
i
j,
r
-5-
<-.;k
,I,
Contidcnlialil y Ag/ccmcnt
Decembcr 11, 1995
Page J
c, Thai was received from a third party having no obligations to Hopcraft to
hold .uch information in con.tidenco; or
d, That was known to Acordia prior to receiving the information from
Hopcraft.
6. Hopcraft shall require each of its agents, directors, consultants, and employees 10
maintain the confidentiality requirements of Paragraph 2 and 4 hereof
7, Acordia shall require each of its agents, directors, consultants, and employees to
maintain the confidentiality requi:'ements of Paragraph 4 and 5 hereof
8, The validity and illlerpretation oftbis Agreement shall be governed by the laws of
the Commonwealth of Pennsylvania,
WITNESS the due execUlion hereof on this 12th day ofDecewber 1995.
By:
Title:
By:
LAW OPFICES
JOHNSON, DUfflE, STEWART & WEIDNER
.. .
)01 M.d... s.....
P. 0. 80. 109
Lomoyne, P.......,lvonla 1104).0109
.- ~ .
T.1cphone (717) 761"'~
T .1oeopl.r (7\7) 761.JOU
DAVID HOPCRAFT,
IN THE COURT OF COMMON PLEAS OF
CUMBERLANO COUNTY, PENNSYLVANIA
NO. 96-883 CIVIL TERM
Plaintiff
v.
CIVIL ACTION - LAW
ACORDIA OF PENNSYLVANIA. INC..
DECLARATORY JUDGMENT
Defendant
NOTICE TO PLEAD
TO: David Hopcraft
clo Edward E. Guido. Esquire
Said is. Guido, Shuff & Masland
28 West High Street
Carlisle. PA 17013
AND NOW, this 1" day of April, 1996, you are hersby notified to plead responsively within twenty
(20) days of the date of ssrvice hereof, or judgment may be entered against you.
JOHNSON. DUFFIE. STEWART & WEIDNER
BY: J~r:JjJ;1w -
Attornsy 1.0. #39867
301 Market Street
P.O. Box 109
Lemoyne. PA 17043-0109
(717) 761-4540
Attornsys for Defendant
009961 ~IApnll. 1996iJAJIKllMl'I09'
OA VIO HOPCRAFT.
IN THE COURT OF COMMON PlEAS OF
CUMBERLAND COUNTY. PENNSYLVANIA
NO. 96-883 CIVIL TERM
Plaintiff
v.
CIVIL ACTION. LAW
ACORDIA OF PENNSYLVANIA. INC..
DECLARATORY JUDGMENT
Defendant
~R AND COUNTERCLAiM
ANSWER
AND NOW. comea Defendant, Acordia of Pennaylvania. Inc., by and through itllttarneYI. Jlmes
A. Johnson and Johnaon, Duffle, Stewart 1& Weidnsr, and IIts forth the following Answer in the mltter
above-captioned:
1. Adm'tted.
2. Admitted.
u
3. Admitted.
4. Admitted.
5. Admitted.
6. Admitted. By way of further answer, Moore has been and ,emalns Pruldent.nd CEO of
Defendant for Pennsylvania purposes.
7. Admitted.
8. Admitted.
009901 OOOOJIApnll, 1'l%iJAJiUMijl09j
9. Admltt.d.
10. D.nled IS stat.d. It is admitt.d that Plaintiffaxpr....d conc.rns, although not In term.
which could be d.scrib.d as "grav.."
11. D.nI.d as b.yond the knowledge of D.fendant aft.r reasona~. invettigation.
12. Admltt.d In part. D.nled In part. It is admitt.d that Robinson-Connotr Indicated that it may
be possible for the Plaintiff to purchas. back his busineu at a prlc. of 1.4 x the pravioua y.ar's
commission. It is denied that the Plaintiff was giv.n "assurances" and thet the prlc. wa. the same II
the price paid by Robinson-Conner.
13. Admltt.d.
14. D.nI.d IS stat.d. To the contr.ry, Moor. .xpr....d tha. he would work with the Plaintiff
to allow the Plaintiff to go back into his busin.ss. By way of further dani.I, the agreem.nt did contain
a damages provision by which the Plaintiff would pay 1.5 x the previous year's commillSions should he
violats the restrictive covenant.
15. Admitt.d In part. Denied In part. Execution is admitted. Motivations of the Plaintiff are
denied as beyond the knowledgs of Defendant after rsasonable investiQation.
16. Admitted. By way of further answer, Plaintiff was emply compensat.d for hi, work.
17. Denied as stated. To the contrary, Plaintiff was given no assur.nces or gueramee., but
rather that Moore would try to work something out with the Plaintiff.
18. Admitted.
II 19. Admlttad. By way of further answer, the changes in the Plaintiff', r. w.,. """..Wi
I agreed to by Plaintiff and the Defendant, and the Plaintiff realizsd finencial IUCc'" by the movu.
00996I-OOOOJIAprill.1996IIAlIKXMmQ9!
20. Admitted In pert. Denied In pert, It Is edmitted that e key employes and certain eccounts
wers lost. Plaintiff's concerns and worries are beyond the knowledge of Defendant after reuonabls
invsstigetion.
!
r~
21. Denl.d. Defendants believes and therefore avers that these concsrns and inquiries wsre
not raisad until later in 1995.
22. Admlttad.
23. Admltt.d.
24. Admltt.d.
25. Admltt.d.
26. Admitted.
27. Admlttad.
28. Denied as a conclusion of law. It Is averred nonatheless. that the non-competition clauaes
can be rsad consistently so that the non-competition clsuse contained In the smployment agraement is
enforceable by its terms.
29. No answer rsqulred.
WHEREFORE. Defendant respectfully requests that the relisf sought by the Plaintiff be danled.
009'l61 OOOOJ/Apnll. I<J<l6iJAJiKKMI51095
COUNTERCLAIM
30. The admillionaand anawers contained in paragrapha 1 through 29 ar. incorporated herein
as if set forth at length.
WHEREFORE, Dsfendant respectfully requests this Honorable Court take jurisdiction of the
controversy and that alter hearing and adjudication enter en Order of declaratory judgment IS follows: ! '
L
A. Declaring that the non-competition covenant contained in the employment
agreement is valid end snforceable by it. terms.
.t
B. Such other relief as the Court deems eppropriate.
fj
Respectfully submitted.
JOHNSON, DUFFIE. STEWART. WEIDNER
BY:
~
mss . John
ttorney I.D. 139867
301 Market Street
P.O. Box 109
Lemoyne, PA 17043-0109
(717) 761-4540
Attornsys fot Defendant
-
009961 OOOOJ/ApriJ 1. 19%1lAJIKItM/JI09J
VERIFICATION
'. Richard W. Moor., Pr.sid.nt of Acardia of P.nnsylvania,loe.. do verify that the .tat.ment. mad.
in the for.going Anawer ar. true and correct to the best of my knowledge, Information and belief. I
understand that fa'H .tat.ment. made herein ere .ubjsct to the penalties of 18 Pa.C.S. 14904 rellting
I to unsworn falsification to authorities. /
rlc
~, l,^----
,.,',.~ .'
Richard W. Moor.
Dated: April 1. 1996
00996I-OOOOJIAprill, 1996IIAJIKKM15I09'
CERTIFICATE OF SERVICE
AND NOW, this 1" day of April, 1996, tha undsrslgnad does hereby certify that he did this date
serve e copy of the foregoing Answer upon the other parties of record bV causing same to be deposited
in the United Statas Mail, first clasa postags prapaid, at Lemoyne, Pennsylvanle, addressed II follows:
Edward E. Guido. Esquire
Saidls, Guido. Shuff 1& Masland
26 West High Street
Carlisi." PA 17013
JOHNSON, DUFFIE, STEWART 1& WEIDNER
BY' f11~!..11l::--
....
r:
i.. ~"'l
'~,
j.
t..)
)
,
!
.:'1
.'J
,
,-,
l -I
1--)
;,n
I
I
-~
"T'
"
\...1
r-:.,
-...,
(.II
;J
"
1
\
,
i
j,.
"
Ii
I)
..
r
..,
"
, "
'-1 , <" -.:
,
, .
,
t . ~, .~ ,
i
r '"
L I
L. , "
/ '-1
l.'.
" ''-l.
. , ..
. . ..J
Q
:z
:s '"
r.I) o!j
< til"....
fil :l:s~~~
u "'~Z"
~ ~XlllZM
Ii:: 0 UJ ~
o g~~':E
~ ....O:J:~~
j ~o.::iS!.lO
l;,:l ",...l:J:
.. N '" Q.
r.I) <(
.... u
Q
....
<
r.I)
"
.'
,j
'-. If')
i
....
I
11'-- 'l -.r;
,
I ,
U .1
( .
L .
f~. , ;
,I
1 L 1..
I . - i
... l,J
I
:\.
'.'
;,
I,
I:
I
I':
\
,
;;!lEl'lFF
HET\JRH
hE'.JUL/\h
CASE HO: 190&-008SJ P
COMMONWEALTH OF PERNSYLVAHlA:
COUNT! UF UJi'lBEkLANC'
HIJi'l Ht\Fi. ['AVU!.
.-..~._.~--~...,~ -
V,.
;J.
ACnRD!A OF PENNSYLVANIA IHe
.~_. ..,......----.. . _.__...._.~~.-"---~.,-_...._"'--'--".--~..''''
?Tf:'lt~ _ wH I.',Tl,._~IL-. '
~--_. ~._,,~---'''''' ..-._-----~.__.,.........~_.._"....-.,
Sh&rlff or Deputy Sheriff of
CUMBERLAND County. Penn8ylvanlB. who bSlngduly sworn according
t.c' lIW.,'ly3. th'" within (~\I!'!.PJ,,~!N_L__n----'--'----'-------- was served
,
,
\
!,
1,1 "'_In
AcaRDIA Of PENNSYLVANIA IRe the
...,' ....._........ _ ...,___.._...._~..____..,~._~.-.-.- _...__.~.___.____~.w..~-___.__~____._._._._...-^-_._~-----
t_.'j': th;~'l wlth u.:TI!~!:: -,.----
)",) j' ',h.? "".." tl'"'" .11rect,inq IUs'. at.tenti')[1 t.o the contents thereof.
-_._--~ -~_._--<.~---~
(tc'fpnd-'~rll::, dt M_.._3J.J'.LI?l~ HOURS, 00 tht':' ;;'lp.-!-_ r;ay of February
'I' ,4., ~SLJ,,g:J.<!illQQ!L RO AL-, -.--,-..-.---
11 EtHAN r'::3_p,11J'<.Q,.J.b,.. !~~.\~?_~____...,-_..-------_...---- .--' CUl1.BERLAND
,_,:'.1[1',;'. Pc-nns'll'/ani>3. il,' handing to ~R~Fi....EQJ1I.t!..IIL_,_^DUL,I....Jl!, CHARGE
r(~r.~.." L1I~~fsr!~.~t:l:!I_-.----~-----_._-_.-'--'-'---"~-------'
~i +-,;:"q." ~-H'ld at.-t.lil-:.::;ted copy of th~ -,~_Qt1P.L^ltcr.__"
by
_~ " \~f' "'" "-----rr
~,U ~y ~lIer~.1..1.
f" 1.:,::' ;:". Cost::);
;"'-.:~',,?:, 1 nel
r".' 1 "'-'
,.:.., t t 1. j _'1 'J l t~
';:'.~ L ::1""1 "1; q..:>
18.00
r 1 r
';1. . ,~)
,:.)i.1
2.4")(..1
::,:(1 ~nClc'er": ~~/4_
~~~
~r~' -'''---' K-r"'- ...---~-iT
[\. IIQm;::l~l 1 e, :JnE."'r.1. f
't::-6:T'::, SAIDI;;:, GUlP,) ~:;HUFF & MASLAND
0::1 ~:.'~{/ 1 ": I ':'1 El
rI-'~) :,\.f :31ili;:;<:r:.bl::"j t,0 b,::.tlJt~" lb-
~ \ ).l~ ".1.~,Y .:\f ~1~..f,.~7
'ic" A. :
'-,
(-!L~If.,;r:"
C--. ~~i__, "-~) -
,. , '. I..
VERIFICATION
I verify that the statements made in the foregoing
Plaintiff's Answer to Defendant's Counterclaim are true and
'~orrect ,
I understand that false statements herein are made
subject to the penalties of 18 Pa. C.S. S 4904, relating to
unsworn falsification to authorities.
DATED:
--/,,/'lfJ
~~'f
David Hope t
SAlOIS, GUIDO,
SHUFF &
MASLAND
26 w, Hiah Streel
Carlisle, PA
-
CERTIrICATE or SIRVICI
On this
day of
, 1996, I,
Edward E. Guido, Esquire, hereby certify that I served a true and
correct copy of the foregoing Plaintiff's Answer to Defendant's
Counterclaim upon counsel for all parties of record via United
States Mail, postage prepaid, addressed as follows:
James A. Johnson, Esquire
JOHNSON, DUFFIE, STEWART & WEIDNER
301 Market Street
Lemoyne, PA 17043
DATED:
SAIDIS, GUIDO, SHUFF & MASLAND
By:
~44
Edward E. Guido, Esquire
26 West High Street
Carlisle, PA 17013
(717) 243-6222
Attorney for Plaintiff
SAlOIS, GUIDO,
SHUFF &
MAS LAND
26 w, Hiah 5t=1
Carlisle,PA
,-.j
..
11 , .. . "
'.
f
, I
. ~..~ ~
.. ,
r j
'-
,
'. <, 1
=
Z
~ ..,
(IJ t;jgtj
fil ~~~~~
U "","'I-oZ'"
- ~)(tI'lZM
f.t OO:C~;::-
o = III 0 Cl.;::
~ _O:c::j;;;
.<( ;J , . '" Z
..J r~ Cl.~-O
.... ....lX
. ~ 0( Cl.
(IJ .<(
_ U
=
-
4(
(IJ
"
"
" .
.
.. .
.
,
r,'~"
'" .. ..
.
.
.
Plaihtlff
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COU~TY, PENNSYLVANIA
'1"" _lllf ." <"lI.~t.\- ~hV>o"o'
NO. 96-883 CIVIL 'i'ERM
OAVID HO?CRAFT,
v.
ACORDIA OF PENNSYLVANIA,
INC, ,
Defendant
CIVIL ACTION - LAW
DECLARATORY JUDGMENT
AND NOW, this
ORDER
-z..~ day of
\
, 1996, upon
consideration of the unopposed petition to transfer the matter from
the civil action law docket to the equity docket, it is hereby
ORDERED and DIRECTED that the above-captioned case be transferred
from the civil acti()J ~~et t~qU~cket ~d be given
an eqUit~YUmb r. Iti!t-.e:t;:r-&f~D-'tlll!lt(\ k'.,,~~~a~..r~ ,
~'G (l lL OV" '/fii:ul(t'l' )u Jt..( 17, /9 Y& ~,
.'be- . !I echrt . / v
Ie ,j( CI /n
,
BY
I
J.
I
!
,
/
1
I
;
I
i
k
SAllIS, GUIDO,
SHIIFF &
MAS LAND
26 W Hiih Sll'<<1
Carlide.PA
.
.
DAVID HOPCRAFT,
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
Plaintiff
v.
NO. 96-883 CIVIL TERM
ACORD!A OF PENNSYLVANIA,
!NC. ,
CIVIL ACTION - LAW
DECLARATORY JUDGMENT
Defendant
PETITION TO TRANSFER MATTER
FROM THE LAW DOCKET TO THE EQUITY DOCKET
AND NOW, comes Plaintiff David Hopcraft, by and through his
attorneys, Saidia, Guido, Shuff & Masland and files this petition
and represents as follow:
1. On February 16, 1996, Plaintiff David Hopcraft filed a
declaratory judgment action against Acardia of Pennsylvania, Inc.
seeking declaratory judgment regarding terms of the Contract. A
copy of the Complaint is attached hereto as Exhibit "A".
2. On or about April l, 1996, Defendant Acordia of
Pennsylvania, Inc. filed an Answer and Counterclaim, a copy of
which is attached hereto as Exhibit "B".
3. On April 4, 1996, Plaintiff filed an Answer to
Defendant's Counterclaim, a copy of which is attached hereto as
Exhibit "C".
4. On April 4, 1996, Plaintiff filed a Praecipe listing
the case for trial.
5. When the case was originally filed, it was given a
civil action law number rather than an equity number.
6.
P:aillt.lff request!) the court to t.ranc:fer the action
from the civil action law docket to the equity docket.
7. In addition, Plaintiff requests the court to schedule
a pre-trial conference and/or trial as soon as possible.
SAlOIS, GUIDO,
SHUFF &
MAS LAND
26 w. Hllh Slrtcl
Carlisle:. PA
8. In the alternative, Plaintiff requests the Court to
specially set this matter for non-jury trial.
9. Plaintiff David Hopcraft requests that this case be set
as soon as possible as he is currently out of work because of the
non-compete clauses contained within the Agreement and would be
irreparably harmed by any delay.
10. Counsel for Petitioner/Plaintiff has contacted counsel
for Respondent/Defendant regarding these requests and Respondent/
i
I
II
~ requests this Honorable Court to transfer this action from the
I
!
I
I
I
1
I
I
I
Defendant is not opposed to either request.
WHEREFORE, Petitioner/Plaintiff David Hopcraft respectfully
civil action law docket to the equity docket and schedule a pre-
trial conference, or in the alternative, specially set the case
for trial on the civil law docket.
Date:
'r-17-tl.
Respectfully submitted,
SAIDIS, GUIDO, SHUFF Ii MASLAND
I
.
!
~i
By:
Scott D. Moore, Esquire
Supreme Ct. I.D. . 55694
26 West High Street
Carlisle, PA 17013
(717) 243-6222
Attorney for Plaintiff
,
"
~
I
.
,
II
"
I
I
i
II
!I
"
:1
1
I
f
f
!~
2
,
/ ;
~
,
.
.
,
I
I
I
I
,
i
I D,
II
II
II
II
On this
CBRTIFICATE OF SBRVICB
17-ri::.day of 4~r;1
...
, 1996, I, Scott
Moore, Esquire,
hereby certify that
I served a true and
correct copy of the foregoing Petition upon counsel
for all
parti~s of
record via United
States Mail,
postage prepaid,
addressed as follows:
James A. Johnson, Esquire
JOHNSON, DUFFIE, STEWART & WEIDNER
301 Market Street
Lemoyne, PA 17043
SAIDIS, GUIDO, SHUFF & MASLAND
By' 5L~:o '/- '---"
~ Scott D. Moore, Esquire
I
I
I
II
SAIDIS, GUIDO, 'I'
SHUFF" I
MASLAND II
26 W Hip SU'<CI II
Carlisle. PA II
II
!I
'I
!'
"
:i
Ii
;1
I
:1
A
r'
"
"
.
,
" "
i .
; I ;,
I,. ,
I ..
I",. . . ~.,. , .
I' '.'
i"
1 .~
. ,
i' i
n ,
.
I
"., r .
I . I
I
I . ~
" I !,
;
" I I
, ~ I
;
1 J
;
.' \ I
'....., . ! '
, ;r.. s
. ~ ~
\ fr
'I
i . . I !f
, ...
l , .1'
, ft
I \
~ ;' I
,t
~
, , wi,
,I
'i
,I
[I
i
'I
I
I
II
I ,
:
I
I I
I
I I
I
I
i
I I
I
I
i
:1
,
I
i
I
I
I
I
I
I ,I
I j!
I ,I
II
I'
I I
, I
,
: I
I
I
I
I
I
j
I
I
I
I
SAIDIS, GUIDO,
SHUFF &
MAS LAND
!f1 W. HiKh SIn:CI
Carlisll.!.PA
"
DA V I D HOPCRAF'T I
I N Till': COIJRT 0[" COMMON PLEAS 01"
CUMBERLAND COUNTY, PENNSYLVANIA
Plaintiff
v.
ACORDIA OF PENNSYLVANIA,
INC. ,
NO, 96- ('(?i~'3 CIVIL TERM
CIVIL ACTION - LAW
DECLARATORY JUDGMENT
Defendant
NOT I C.I
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 af ter this Complaint and Notice are
served, by entering a written appearance personally or by
attorney and filing in writing with the court your defenses or
objections to the claims set forth against you. You are warned
that if you fail to do so, the case may proceed without you and
a judgment, may be entered against you by the court without
further notice for any other claim or relief requested by the
Plaintiff. You may lose money or prcperty or other rights
important to you
YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU
DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE
OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP.
Cumberland County Court Administrator
One Courthouse Square ./"__
Carlisle, Pennsylvania 17013;~
(717) 240-6200 '-1'
Date: d 11&'lq~
"IOI~NASLAND
By: '-z
Edward E. Guido, Esquire
Supreme Ct. I.D. * 21206
26 West High Street
Carlisle, PA 17013
(717) 243-6222
Attorney for Plaintiff
SAIDIS, GUIDO,
SHUFF &
MASLAND
26 W. Hilh Slreef
CAllis Ie. PA
-.I.
DAVID HOPCRAFT,
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
Plaintiff
v.
CIVIL TERM
NO. 96-
ACORDIA OF PENNSYLVANIA,
INC. ,
CIVIL ACTION - LAW
DECLARATORY JUDGMENT
Defendant
COMPLAINT
I";
, ,
"I
<.~
, ,
,
Ii
jl
il
II
II
,I
:1
I
I
I
II
!
plaintiff brings this action pursuant to the Declaratory
Judgment Act (42 Pa. C.S.A. S 7531, et seq.) and Pa. R.C.P. l60l
and in support thereof avers as follows:
1. Plaintiff is David Hopcraft, an adult individual
residing at 3 Strayer Drive, Carlisle, Cumberland County,
pennsylvania.
Defendant is Acordia of Pennsylvania,
Inc., a
2.
Pennsylvania corporation have a principal place of business
located at 4750 Oelbrook Road, Mechanicsburg, Cumberland County,
Pennsylvania.
3. Defendant is successor iu interest to Robinson-Conner
of Pennsylvania, Inc.
4. Prior to July 1, 1992 Plaintiff owned and operated a
family insurance business in Carlisle, Cumberland County,
Pennsylvania. The agency, known as Hopcraft Insurance, had been
founded by his father in 1956.
5. Defendant's predecessor in interest, Robinson-Conner of
Pennsylvania, Inc. (hereinafter "Robinson-Conner"), through its
1
SAIDIS, GUIDO,
SnUFF &
MASLAND
26 W High Strc'el
Couli,le,llA
I
!
I
i
I
I
President and CEO, Richard Moore (hereinafter "Moore") negotiated I
to purchase the ?laintiff's insurance business,
6. When Defendant acquired Robinson-Conner, Moore became,
and at all relevant times hereto remained, President and CEO of
Defendant,
7. On or about July 1, 1992 plaintiff and Defendant's!
predecessor in interest executed a Purchase Agreement, a true and
correct copy of which is attached hereto as Exhibit "A".
8. On or about July 1, 1992 and pursuant to Paragraph 4.l
of the aforesaid Purchase Agreement, the parties signed an
Employment Agreement, a true and correct copy of which is I
attached hereto as Exhibit "B".
9. Both agreements contain provisions which prohibit
Plaintiff from competition with Defendant.
10. During the negotiations leading up to the execution of
those agreements, plaintiff, who was only 43 years old at the
time, expressed grave concerns as to what he would do if the
contemplated "merger" did not work.
ll. plaintiff has never worked at any job other than as an
insurance broker.
Except for his college years, plaintiff has
never resided anywhere other than Central Pennsylvania.
12. Robinson-Conner assured him that he could purchase back
his business on the same terms as contained in the purchase
Agreement at a price to be computed using the same formula used
to determine the price paid by Robinson-Conner (i. e. 1.4 x
previous year's commission).
...
f
?
~
.
.
,
t r~
,
i.
.'
SAIDIS, GUIDO,
SHUFF '"
MASLAND
26 W High SUecl
C.vhslc. PA
I
I
,
i
ill
I,
13. In April ot 1992 Pldintitf received draft agreements
which, except for the dates, were virtually identical to those
attached hereto as Exhibits "A" and "B".
14, After reviewing said agreemente, plaintiff advised
Moore that his only major concern was what Plaintiff would do for
a living if the merger did not work. Moore indicated that the
Agreements were "form" or "boilerplate" agreements, and that
"
,
,I
'I
plaintiff was "guaranteed" to be able to buy back his business,
notwithstanding the fact that the agreements contained no such
provision.
15. Based upon the aforesaid assurances, plaintiff executed
ii
I'
:i
;\
II
!I
I
both Agreements.
16. Plaintiff worked diligently for Robinson-Conner and
Defendant for approximately three years. He developed many new
accounts resulting in commissions tq Defendant of several hundred
thousand dollars.
l7. During his period of employment with Defendant,
plaintiff was assured by Moore on numerous occasions that he
could always buy his business back.
After the purchase by
Defendant of the local agency referred to in 18 below, it was
inferred that the "buy-back" could be exercised within 90 days of
his termination of employment.
18. At one point, Plaintiff was with Moore as he was
negotiating to purchase another local insurance agency for
Defendant. When the owner expressed concerns as to what would
happen if things did not work out, Moore assured him that he
3
--.---"'"
"....
would have the same option as plaintiff, i.e. to buy the business
back within 90 days of termination.
19. plaintiff was requested by Defendant to leave his local
base of business to other employees of Defendant, and to transfer
to another office so that he might concentrate his efforts on
developing new clientele.
plaintiff agreed to accommod,.Jte
Defendant's request and was successful in developing new
business.
20, plaintiff eventually became concerned with Defendant's
operation of his local business. Key employees and accounts were
being lost. plaintiff was worried that there would be nothing
left to buy back.
21. In early May of 1995 plaintiff expressed these concerns
to Moore, and made initial inquiries about buying back his
business.
22. In late May of 1995 it was agreed between the parties
'j
"
\
1 '
that the Employment contract attached as Exhibit "B" would be
allowed to expire.
23. plaintiff, Moore and plaintiff's counsel had numerous
discussions, negotiations and correspondence since that time
regarding the repurchase of plaintiff's business. Defendant had
given Moore full authority to negotiate the "buy-back" with
Plaintiff.
100,
i 1
t;
\:
I:
Ie.
SAlOIS, GUIDO,
SHUFF &
MAS LAND
26 w. Hiah Street
Culi!'ile, PA
24. Moore had asked plaintiff if he was interested in
..
ic:
purchasing the entire Carlisle operation t'ather than just his
previous business.
Plaintiff had indicated that he was
~
"\
4
interested, and the part ies executed a Conf ident ia 1 ity- Aqreement,
a true and correct copy of which is attached hereto as Exhibit
"CO, along with the cover letter from Moore.
25. Negotiations were proceeding when Defendant advised
Plaintiff that Moore's position with the company had changed and
that Defendant was no longer interested in selling to Plaintiff.
26. Defendant further advised Plaintiff that it would
enforce its rights under the non-competition clauses of the
Employment Agreement attached hereto as Exhibit 'B".
27. The non-competition clause contained in Exhibit "A"
expired on July 1, 1995. By its term, the non-competition clause
contained in the Employment Agreement would expire on May 31,
1998.
29. This action is brought to avoid the necessity for
litigation and to obtain an adjudication of the rights of the
,
r
I
L
,
1,
I
28. The non-competition clauses are inconsistent as
written. The non-competition clause contained in the Employment
Agreement must be interpreted to apply only to those customers of
Defendant that were not customers of Plaintiff in July 1992.
parties.
SAIDIS, GUIDO,
SHUFF '"
MASLAND
26 WHiSh Street
Cllli,le,PA
WHEREFORE, Plaintiff respectfully requests this Honorable
Court to take jurisdiction of this controversy and that after
hearing and adjudication it enter an Order of Declaratory
Judgment as follows:
(a) Declaring that Plaintiff has the right to
t-
i
, -.
i
,
i
I
tt
,';-,.-
repurchase his business from Defendant on the same
5
~'-
terms and condltions contained in the original Purchase
Agreement; and/or
(b) Declaring that Defendant is estopped from
enforcing the non-competition provisions in the
Employment Agreement; and/or
(C) Declaring that the non-competition provisions
in the Employment Agreement apply only to those
customers who were not customers of Plaintiff on July
1, 1992; and/or
(d) Ordering such other relief as this Honorable
Court deems appropriate.
Date: t:i I {l.' (,( 1,0
Respectfully submitted,
SAIDIS,
By:
Edward E. Guido, Esquire
Supreme Ct. I.D. . 21206
26 West High Street
Carlisle, PA 17013
(717) 243-6222
Attorney for Plaintiff
SAlOIS, GUIDO,
SHUFF &
MAS LAND
26 W. High Sleet'
Carlisle, PA
i!
6
VERIPICATION
I verify that the statements made in the foregoing Complaint
are true and correct. I understand that false statements herein
are made subject to the penalties of 18 Pa. C.S. S 4904, relating
to unsworn falsification to authorities.
DATED:
)1/'ltJ~
'12; $t>.-1
David Ho raft
,.;
7
i
11
I
,
,
f
~
;
[
I
i
i
,
BllHIBIT nA"
;f
COpy
PURCHASE AGREEMEN'f
THIS PURCHASE AGREEMENT is made and entered into as of the 1st day
of July, 1992, by and among ROBINSON-CONNER OF PENNSYLVANIA, INC., a
pennsylvania corporation (hereinafter called the "purchaser"), HOPCRAFT
lNSURANCE AGENCY, INC., a pennsylvanir. corporation (hereinafter called the
"Seller"), and DAVID HOPCRAFT, an individual (hereinafter called the
"Shareholder") .
WHEREAS, the Seller is engaged in the operation and conduct of a
general insurance agency and brokerage business in all lines of insurance and
the Shareholder constitutes the beneficial and record owner of all of the
issued and outstanding capital stock of the Seller; and
WHEREAS, the Purchaser desires to purchase the business and
certain specified assets of the Seller and the Seller and the Shareholder are
agreeable to the sale of said business and certain of its assets, all in
reliance upon the warranties and representations set forth hereinafter and
upon the terms and conditions of this Agreement,
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and intending to be legally bound hereby, the parties agree to the
following:
1, purchase and Saie of Assets
1.1 Purchase and Sale. Subject to the terms and conditions set
forth hereinafter, the Seller agrees to sell, assign, transfer and convey, at
the Closing, absolutely to the Purchaser, free and clear of all security
intel'ests, liens and encumbrances, its entire business and certain of its
properties and assets (hereinafter collectively called the "Assets"), and
including the following:
(a) All rights of the Seller regar~lng all insurance which
has Peen solicited, placed or sold through the Seller or by any of its agents
or employees on its behalf, including all work in progress, and all other
information possessed by the Seller identifying its past, present and
potential clients describing their insurance needs and coverages and setting
forth the expirations of their current insurance policies and contracts.
Attached hereto as Schedule 1 is a list of all customers' policies in force as
of the effective date of this Agreement.
(b) All of the Seller's other files, records and
information concerning present, past and potential clients.
(C) All of the Seller's rights to renewal pre.iums, direct
bill commissions, contingent commissions and all other entitlements and rights
of absolutely every nature whatsoever of Seller to receive money or payments
of any kind except as specifically excluded in Sections 1.2 and 1.3 hereof.
(d) All right!! to the name Ilopcraft Insurance Agency and
to all other trade names and tredemarks owned or used by the seller, and any
registrations or applications for reqistrat ion thereof, and all of the
Seller's goodwill.
(e) All governmental license!!, permits, approvals and
authorizations possessed by the Seller to the extent assignable or
transferable.
(t) All restrictive covenants now owned by the Seller.
(g) All prepayments received by the Seller for insurance
written on poliCies for coverage to be effective from and after July i, 1992.
All invoices and credit memos with respect to insurance policies to be
processed or billed on or after July 1, 1992 regardless of the effective date.
1. 2 Excluded Asset~. The Seller sha 11 retain and does not by
this Agreement sell to the Purchaser and there is excluded from the assets to
be conveyed by the Seller to the Purchaser enumerated above (i) the Selier's
corporate minute book, stock transfer records and corporate seal, (il) all of
the Seller's cash, outstanding accounts receivable, prepaid expenses, loans or
notes receivable, automobiles, cash value of life insurance policies, and leai
estate, if any. and (iii) the rights and benefits accruing to the Seller unupr
the terms of this Agreement.
1.3 Collection of Accounts Receivable. The Seller shall retain
and does not by this Agreement sell to the Purchaser and there is exclulled
from the assets to be conveyed by the Seller to the Purchaser any and all
accounts receivable of the Seller based on invoices and credit memos with
respect to insurance policies processed and billed by the Seller prior to the
close of business on June 30. 1992. except prepayments invoiced by the Seller
for insurance coverage to be effective from and after July 1, 1992 (such
excluded accounts receivable hereinafter called the "Seller's Receivables").
The Purchaser shall collect and pay over to the Seller or its assigns on a
monthly basis any and all amounts collected by the Purchaser from customers in
connection with the Seller's Receivables. If the customer identifies the
invoice paid, the Purchaser will apply the funds in accordance with the
customer's instructions. If the customer fails to identify the invoice paid
all funds received until September 31. 1992 will be first applied to the
Seller's Receivables, and any excess will be retained by the Purchaser to be
applied against its accounts receivable. Beginning October I, 1992. all funds
received will be applied to invoices covering insurance written and billed for
the period beginning July 1, 1992 to the extent any amount is owed to the
purchaser b~ the customer at the time of payment, and any excess will be
applied to the extent necessary to the Seller's Receivables. The accounting
books and records of the Seller shall remain the property of the Seller. but
the Purchaser shall have access to such records. The Purchaser and the Seller
shall do all acts necessary to accomplish the above. The Seller agrees to
give the Purchaser a copy of its aged accounts receivable trial balance report
-2-
-*'
as of June 30, 1992. After September lO, 1992, the Purchaser shall be
relieved of further responsibility to collect the Seller's Receivables, and
the Seller may commence to collect the same 0/1 its own behalf.
2. Aqreement and Covenant Not to Compete
2.1 Shareholder's Covenant Not to Compete
(a) The Shareholder will not, individually or jointly,
directly or indirectly, (other than in the capacity as an employee of the
Purchaser) solicit, sell or accept business of the type then being performed
by the Purchaser (whether or not for that particular client or customer) from
any person, partnership, corporation or other entity who is a cllent or
customer of the Purchaser or the Seller at the time of the execution of this
Agreement, or during the twelve (121 months preceding this Agreement, or at
any time during the term set forth in section 2.3 below.
':
~
f
;
~
I
,
I
(b) The Shareholder will not, individually or jointly:
(i) directly or indirectly enter into the employ of
or render any service to or act in concert vith any person,
partnership, corporation or other entity engaged in any
business, or in rendering any service, lJ"!ing conducted or
rendered by the Purchaser or the Seller upon the date of
this Agreement or during the term set forth in Section 2,l
below; or
(ii) directly or indirectly engage in any such
competitive business or render any such services on their
own account; or
(iii) become interested in any such competitive
business or service, directly or indirectly, as an
individual, partner, shareholder, director, officer,
principal, agent, employee, consultant or in any other
relationship or capacity.
(C) The Shareholder will not, individually or jointly,
directly or indirectly, entice or induce any employee of the Purchaser to
leave the employ of the Purchaser and to work with the Shareholder or with any
person or entity with whom the Shareholder is or becomes associat~d.
2.2 Prohibition on Disclosure of Information, Etc. At no tiMe
during or after the term as set forth in Section 2.3 below shall the
Shareholder divulge, furnish or make accessible to anyone any knowledge or
information with respect to confidential information or data of the Purchaser
or the Seller or with respect to any confidential or secret information or
data of any of the Seller's or the Purchaser's clients or customers or with
-3-
, J'
respect to any other confidential or secret aspect of the business or services
of the Purchaser or the Seller.
'\ .
l.l Ter. and Geoqraphic Area. The term of the covenants set
forth in this Article 2 shall extend for three (3) years from the date hereof.
The obligations of the Shareholder hereunder shall extend to the entire
geographic area of the State of Pennsylvania.
2.4 Injunctive Relief for Breach. In addition to all other
rights and remedies which the Purchaser may have at law, a3 an additional and
cumulative remedy, the covenants contained in Sections 2,1 and 2.3 shall be
enforceable by specific performance and injunctive relief and shall be
construed as separate covenants governing competition in the geographical
territory applicable and if any court shall finally determine that the
restraints provided for hurein are too broad as to the area, activity or time
covered, said area, activity or time covered may be reduced to whatever ext~Ht
the court deems reasonable and the covenants may be enforced 3S to such
reduced area and time.
I
i
~
!
,
!
2.5 Reservat ion of Riqhts. The Purchaser reserves all rights,
set forth in this Agreement for breaches of this Article 2, which rights
include (but are not limited to) ot!set rights aqainst amounts uthenl1."
payable pursuant to Article 1 below.
3. Closinq, Purchase Price and Transfer Date
3.1 Closinq. The parties shall hold and conduct a closing
(hereinafter called the "Closing") at the offices of the Seller in Carlisle,
Pennsylvania. The Closing shall be effective as of the opening of business on
July 1, 1992. At the Closing, the Seller shall execute and deliver to the
Purchaser such bills of sale, assignments and other instruments as the
Purchaser deems necessary to effect the sale and transfer of the Seller's
business and the Assets to the Purchaser as contemplated hereunder. At the
Closing, the Shareholder shall also execute and enter into the AgreemEnt and
Covenant Not to Compete with the Purchaser as provided in Section 2 hereof.
3.2 Purchase Price and Payment of the Purchase Price. In
exchange for the transfer and conveyance of the Seller's business and the
Assets and tor the warranties and covenants of the Seller and Shareholder
herein, the Purchaser shall pay to the Seller and Shareholder a purchase price
(hereinafter called the "Purchase pri::e") which shall be allocated in
accordance with section 3.5 of this Agreement. The Purchase Price shall be
the sum of the following:
i
l
I -4
j ,~
,\
i
i
lo,"<'
I
,
(a) The Purchaser shall pay the sum of $100,000.00 in cash
at or before the Closing.
,
..}
. .
f
(b) As additional consideration the Purchaser agrees to
pay within ninety (90) days following the first (1st) and second (2nd)
-4-
, ,
alllllyersaritos ot this Agreement. ill: amount. lf illlY (the "Annual Payment"). if
greater than zero (0) determined by the tollowin'l tormula:
Ii) The net personal lines, group and
cOllll'.lercial/casualty commission income I "net commission
income") billed and received by the Purchaser and produced
trom eligible accounts tor the twelve (12) months ended June
30th ot each anniversary year shall be calculated. For th~
purposes ot this Agreement, "eligible accounts" shell
include only the existing clients ot the Seller on the dilte
of this Agreement. The term "net commission income" shall
not include contingent and prot it sharing commiss iOlls.
Purther, all broker's commissions owed to third ~lrties
incurred by the Purchaser in connection with the flligible
accounts shall be deducted trom the commissions oppllcabl.'
thereto in calculating "net commission incomfl."
(ii) The net commission income tor the anni..er~ary
year shall be multiplied by 1.4.
liiil From the product there shall be subtracted
$100,000.011. This figure, Le., $100,000.00, H'l'lflSt,"t.) It,.'
amount paid by purchaser upon execution ot this AUlo;~m~nt,
(iv) The resulting difterence shall be divido;d by ~
and the resulting quotient shall be the amount of the Annual
Payment for that anniversary year.
Schedule No. 2 attached hereto and made a part hereot demonstrates the
foregoing computations. The Seller and Shareholder shall have the right
following reasonable notice to inspect the Purchaser's records regarding the
net commission income earned by the Purchaser and produced trom eligible
accounts during each anniversary year ot this Agreement.
(C) The obligation of the Purchaser to make such payments
to that part thereof allocated to the Agreement and Covenant Not to Compete
shall survive the death or disability ot the Shareholder.
(d) The Seller and Shareholder acknowledge that the Annual
Payments to be made pursuant to this Section 2 are contingent payments and
that the amount of an Annual Payment, it any, shall depend upon the
computation as set forth in 3.2 (b) above. Further, the Seller and
Shareholder acknowledge that continuation ot an account relationship with any
eligible account shall r(quire that the client conform with all unitorm
policies ot the Purchaser including, but not limited to, billing and accounts
receivable policies.
3.3 No Assumption ot Liabilities. Except as expressly provided
herein, the Purchaser will not assume and will not discharge or be liable for
-5-
...."",..
any debts, liabilities, or obligations of the seller, including, without
limitation, any (i) liabilities or obligations ot the Seller to its creditors;
(ii) liabilities or obligations of the Seller with respect to any transactions
occurring after the Closing; (iii) sales or income tax or other liabilitie8 or
obligations of the Seller Incurred in connection with the sale of the Assets
or its business pursuant to this Agreement; (iv) any contingent liabilities or
obligations at the Seller; or (V) any commission owed by the Seller in
connection with this Agreement. The Seller or the Shareholder, as the case
may be, agrees to timely pay to the insurance carriers, when due and payable,
all amounts owed in connection with invoices and credit memos with respect to
insurance policies processed and billed by the Seller on or prior to June 30,
1992, except for insurance coverage to be eftective trom and after July I,
1992.
3.4 Expenses of Transaction. The Purchaser, on the one hand.
and the Seller, on the other hand, shall each bear their cwn costs and
expenses, including legal and accounting tees, incurred in negotiating the
agreement evidenced hereby, in preparing this Agreement and the other
documentation referred to herein and in consummating the transactions
contemplated hereunder.
3.S Allocation. The Purchase Price shall be allo<::ated am<)n<j till"
various assets being sold and transferred by the Seller to the Purchaser allll
the Shareholder's Agreement and Covendnt Not to Compete in the followinq
proportions:
(a)
(b)
(C)
Expirations (Seller)
Goodwill (Seller)
Agreement and Covenant Not
Not to Compete (Shareholder)
60~
IS~
25~
Each payment made pursuant to this Agreement shall be allocated in the
proportions set forth above.
4. Conditions Precedent to Obligations of Purchaser
The Purchaser shall not be obligated to pay any of the Purchase
Price or otherwise to perform its obligations hereunder unless all of the
fOllowing conditions have either been fulfilled or performed to the
Purchaser's satisfaction, on or before the Closing, or have been waived by the
Purchaser.
,--------'- -,-~_.-'- .--
4.1 Employment Contract. The Shareholder shall have executed
and entered into a written employment contract with the Purchaser (hereinafter
collectively called the "Employment Agreement") on terms and conditions
satisfactory to the Purchaser.
-6-
4.2 Po..e..i~,,,' 3Imult<tnec)u.ly with the closinq, the ';e11<.'[ dud
the Shareholder will take all steps that will be necessary to put the
Purchaser in actual possession, operation, and control of the Assets,
4.3 Further Assurances. From time to time, atter the Closing,
at the request of the Purchaser, the Seller and the Shareholder wj,ll execute
and deliver to the Purchaser such other instruments of conveyance and transfer
end take such other actions as the Purchaser may reasonably require more
effectively to convey, transfer to, and vest in the Purchaser, and to put the
Purchaser in possession of, any and all of the Assets.
5. Representations and Warranties of the Seller and Shareholder
The Seller and the Shareholder, jointly and severally, warrant and
represent to the Purchaser dS follows:
5.1 Leqal Status. The Seller is a corporation, I.'alidli' el(lqt. In'!
and in good standing under the laws of the State of PeMsylvania. The S'!ller
has ell necessary corporate power and authority to own and operate the A"~et,
and to conduct its present business as and where presently conducted, and the
Seller possesses all necessary governmental licenses, permits and
authorizations to engage in its present business in peMsylvania.
5.2 Approval of Transaction. The execution and cteli':eri' "t tltl~
Aqreement on the part of the Seller, and the performance by the Seller of all
of its covenants and obligations under this Agreement, have been duly and
properly authorized and approved by its Board at Directors and by all of the
shareholders of the Seller. The Se ller possesses full and unrestr icted power.
authority and capacity to execute, deliver and enter into this Agreement aud
to carry out and perform all of his covenants and obligati~ns under this
Agreement in accordance with its terms. The execution and delivery of tlli!!
Agreement and the transactions contemplated under this Agreement do not and
will not violate or conflict with any provisions of the Articles of
Incorporation or Bylaws of the Seller. No governmental approval or
authorization is necessary tor the Seller to execute and deliver this
Agreement or to perform its obligations under this Agreement. This Agreement
has been duly executed and delivered by and on behalf of the Seller and
Shareholder and constitutes a valid and legally binding obligation of the
Seller and Shareholder, enforceable in accordance with its terms.
5.3 Shareholder. The Shareholder constitutes the owner,
beneficially and at record, of all of the issued and outstanding common stock
ot the Seller. Except for its common stack, the Seller has no class at stock
or any equity securities outstanding. Neither the execution and delivery of
this Agreement, nor the performance of all of the obligations under said
instruments, by the Seller and the Shareholder violate or conflict with, or
will violate or conflict with, the terms of any loan document, indenture,
contract, lease, order or agreement to which the Shareholder is a party or is
bound or the Seller is a party or is bound.
,
-7-
5.4 Title to Assets. The ~ieller has good and marketable title
to all of the Asset., and all of the Assets are free and clear of security
lnterests, liens and other encumbrances of any nature.
5.5 Pinanrl~l Statements. The
delivered to th~'~UIcha.er by the Seller are
correct and have been prepared in accordance
accounting principles consistently applied.
the information contained therein and fairly
ot the Seller.
statements of income and expenses
substantialiy true, complete and
with generally accepted
These documents fairly present
represent the financial condition
5.6 Taxes. The Seller has duly and timely prepared, executed
and tiled all federal, state and lo<:al income, [lroperty, occupational premiuills
and other tax returns, reports, st~tements and declarations which it is or was
legally required to file, and lhe Seller has paid in full all taxes,
assessments, impositions and other pdYlnenls dS shown thereby to be due, or Iii"
made provision for same.
5.7 Litigation. TheLe dre no \ il claims made, pending, or
threatened against or affecting the ~cller, I ii) actions, suits, proceedin'ls,
or investigations pending or threatened, against or affecting the Seller in
dny court or before or by any f~delill, sl"le c.t local governmental 1.1')""<:'( ".,
instrumentality, or (iii) actions. suits, or legal proceedings pO!'nd i 1111 '.Ir
threater.ed against the Seller which miyhl in any way affect its executl'JIl '~l
del ivery at, or per forlnance at its obi ig,lUcns under this A'lreem~nt. H"itllel
the Seller nor the Shareh'Jldel has anI' ~.nowledqe at any occurnmce c" ~~t ..t
circumstances which may result in any claim, suit, investigatiC'r1 '.>l. I("~ill
proceedings against the SelleL,
5.8 Client Relations. The Seller has not since December 31,
1990, lost the business of any client which represents 5\ or more of the net
commissions of Seller during the fiscal year ended December 31, 1990. Ileither
the Seller nor the Shareholder is aware of any fact or circumstance which
might indicate that any such client has ceased or intends to cease placing
business with the Seller or to materially reduce the amount of business it is
placing or will place with the Seller. Apart from ordinary contracts of
insurance, the Seller has no contracts or agreements with any of its clients.
5.9 Employee Benefit Plan Matters. It the Seller does have in
effect and contributes to, an "employee pension plan" as defined in Section
3(2) of ERISA, the Purchaser is not assuming any responsibility or obli.ation
with respect to any such retirement plan. The Purchaser is not assuming any
responsibility or obligation with the respect to any welfare benefit plan.
5.10 Validity at Article 2 Aqreement and Covenant Not to
Compete. The Agreement and Covenant Not to Compete set forth in Article 2
constitutes a valid and binding agreement and undertaking enforceable in
accordance with its terms.
-0-
5.11 Absence of Molter ~~ Chol~..'.I~~' There have been no molter ia 1
adverse changes of any nature in the assets, business or financial condition
of the Seller since December 31, 1990,
5.12 COlllpleteness of Statements, 110 representation or warranty
by the Seller or the Shareholder in this Agreement or in any Schedule hereto
or in any written statement furnished to the Purchaser pursuant hereto or in
connection herewith contains any untrue statement of a material fact or omits
to state a .aterial fact necessary to make any statement herein or therein not
misleading.
5.13 Insurance Accounts and Commiss ions. The insurance accounts
of the Seller represent genuine in!lurance placed through the Seller for the
commissions set forth on the Selle~'s books and records. There are no oral or
written agreements, commitments or understandings with any account whereby any
".f the insurance commiuions received LJy th~ Seller are being returned
directly or indirectly to any custo,ner or any other person.
5,14 Claim Aclrninistration Agreements. The Seller providen no
claim administration or adjustment services, and there are no contracts 01
agreements, oral or written, with any person or entity, pursuant to which the
Seller is obligated to provide any such services, other than draft ;'luth"rit'{
fur var ious insurance companies in various amounts for certain first pOll \'
claims,
6. Warlanties of Purchaser
6.1 Status of Purchaser. The Purchaser is a corporation dull'
organized, validly existing and in good standing under the laws of the State
of pennsylvania, and has full corporate power and authority to enter int,) this
Agreement, to perform its covenants and obligations hereunder, and to
consummate the transactions contemplated thereby.
6.2 Authorization. The Purchaser has taken all necessary and
proper corporate actions to authorize the execution and delivery of this
Agreement and the performance of it of all of its covenants and obligations
under this Agreement.
6.3 No Violations; Valid Aqreement. Neither the execution and
delivery of this Agreement, nor the consummation of the transactions described
herein, nor the performance ot their respective obligations hereunder ( will
violate any provision of the Articles of Incorporation or 8ylaws of the
Purchaser, nor violate the provisions of any loan document, indenture,
contract or other agreement to which the Purchaser is a party or is bound, nor
violate the provisions at any judicial or administrative order, jUdgment or
decree applicable to the Purchaser. No governmental approval or authorization
is necessary tor the Purchaser to execute and deliver this Agreement or to
perform its obligations under this Agreement. This Agreement has been duly
executed and delivered by and on bella I f uf the PUl'::haser and constitutes a
-9-
valid and le'lally bindin'l obli'lation of the Purchaser, enforceable in
accordance with its terms. All consents, approvals, authorizations and orders
required of the Purchaser for the execution and delivery of, for the
consummation of the transactions contemplated by, and for the fulfillment of
and compliance with the terms and conditions of, this Agreement have been
obtained.
6.4 Completeness of Statements. No representation or warranty
by the Purchaser contains any untrue statement of a material fact or any
misstatement of a material fact necessary to make any statement herein or
therein not misleading.
7. Indemnification and Remedies of the Purchaser
7.1 Indemnification. The Seller and the Shareholder, jointly
and severally, hereby promise and agree to indemnify and hold harmless the
Purchaser against any and all losses, damages, judgments, liabilities, "usts
and expenses (including reasonable attorney's fees) suffered by the PIJrch.lser
as a result of (i) any representation or warranty by the Seller or th~
Shareholder in this Agreement, or in any Schedule hereto or in any instrumeIJt
or a'lreement delivered in connection herewith, proving to be false, incorrect
or inaccurate, and/or (iil any breach or violation by the Seller or tit'!
Shareholder ot any of its covenants and obligations under this AgreemPllt (,[
any agreement or in3trument delivered in connection herewith.
7.2 Remedies. upon the occurrence of any event re!erellcp.rl '"
the preceding Section 7.1 for which the Purchaser is entitled to
indemnification, the Purchaser shall have all at the rights and remedies
available to it at law, in equity, in bankruptcy or otherwise. In addition,
the Purchaser shall have the right to offset the amount tor whiCh it is
entitled to indemnification against any amount then outstanding under this
Agreement.
7.3 Indemnification of the Seller and the Shareholder. The
Purchaser hereby promises and agrees to inde~lify and hold harmless the Seller
and the Shareholder against any and all losses, damages, judgments,
liabilities, costs and expenses (inCluding reasonable attorneys' fees),
suffered or incurred by the Seller and the Shareholder as a result of (i I any
representation or warranty by the Purchaser in this Agreement, or in any
Schedule hereto or in any instrument or agreement delivered in connection
herewith, proving to be false, incorrect or inaccurate, and/or (ii) any breach
or violation by the Purchaser at any of the covenants and obligations under
this Agreement or any agreement or instrument delivered in connection
herewith.
7.4 Remedies. Upon the occurrence of any event referenced in
the preceding Section 7.3 for which the Seller and the Shareholder are
entitled to indemnification, the Seller and the Shareholder shall have all of
-10-
the rights and rt!medies available to theIR at law, in equity, in I.Jankruptcy or
otherwise.
8. ~iscellaneous
8.1 Successors and Assigns. The terms and provisions of this
Agreenent shall be binding upon and inure to the benefit of the parties hereto
and their respective successors, permitted assigns, personal representatives,
legatees, devilees and heirs.
8.2 Hotices. All not ices, requests, demands and other
cOlMlunications required or permittec1 to be given or made under this Agreement
shall be in writing and shall be delivered personally or sent by registered or
certified mail (return receipt requested), postage prepaid, as follows:
If to the Purchaser:
Will iam B. Conner, Chairman
Robin10n-Conner of Pennsylvania, Inc.
32]0 West Laroe Road
Erie, pennsylvania 16505
With copies to:
Robert G. Dwyer, Esq.
l20 West Tenth Street
Erie, Pennsylvania 16501
If to the Seller:
David Hopcraft
Hopcraft Insurance Agency, Inc.
401 East Louther Street
Carlisle, pennsylvania 17013
Any party may change its or his address for the receipt of notices
hereunder by giving appropriate notice to the other parties in accordance with
this Section 8.2.
9.3 Governinq Law. This Agreement shall be governed by and
interpreted in accordance with the law of the State of pennsylvania.
9.4 Captions. The captions in this Agreement are included for
convenience only and shall not be considered in the interpretation or
construction of this Agreement.
;
to,
.
,
,
\
9.5 Survival of Warranties and Re~resentations. The warranties
and representations of the Purchaser, the Shareholder and the Seller set forth
in this Agreement shall survive the Closing and the consummation of all of the
transactions herein contemplated, and shall continue and remain in full force
and effect thereafter.
I:
,.
,I
t
;t
-11-
!
/
r,
,\
I~
I.
,\.
U
9.6 Entire Aqreement. This Agreement, together with the
Schedules hereto and written instruments referenced herein, constitutes the
entire agreement by and among the parties hereto with respect to the subject
II\4tter hereof, and this Al.jrttment supersedes all pr ior agreements,
cottespondence and understandings llnd all prior and contemporaneous oral
agreements and understandings, among the parties hereto with regard to the
subject matter hereof. This Agreement may be amended only by a written
instrument setting forth the amendment with specificity, which is executed by
all of the parties hereto.
B.1 Schedules. The Schedules attached hereto constitute a part
of this Agreement and are hereby incorporated herein by reference by their
entirety as if fully set forth in this Agreement at the point where first
mentioned herein.
B.B waiver of Breach. The waiver by the Purchaser of a Llt!ac.:h
of any provision of this Agreement by the Seller or the Shareholder shall not
operate or be construed as a waiver of any subsequent breach by the Seller or
Shareholder.
8.9 Error and Omission "Tail" Coveraqe. At th~ ClosinrJ, the
Seller shall provide and pay for an error and omission "tail" coveraqe ror
three (3) years from the date of Closing. The Seller shall deliver to Lhe
Purchaser at the Closing either the policy, the endorsement, or written
evidence thereof to the sat isfact ion of the Purchaser.
IN TESTIMONY WIIEREOf', the parties hereto have each dul y ex~c.:lIt ,>d
and deli'Jered this Agreement, as of the date first above written.
PENNSYLVANIA, WC.
lchard W.
(SEll.!.)
!l.'l'TE!lT:
,<ion/)1~ l~. h. Q (1.1.4 ~J
Secreta y
HOPCRAFT INSURANCE AGENCY, INC.
'" Sg,r:r..!:rJ-b
TlIE SHAREHOLDER
'9~ ,Jt'i" ~!;.h
WITNESS:
(6.llfl1 rY\l..L.{ ~ OJ).../ ~)
{1r.EALI
23PA203312
-12-
SCHEDULE NO, l
Annual Payment Computation Example
Year 1993
1994
-
( i) Section J.~(b)(i) net
co..i..ion income billed
and received ror 12
IlOnth. ended June 30 $200,000.00
( it) Multiplied by 1.4 " 1. 4
-
Product 280,000.00
(iii I Minus $100,000 -100,000.00
Difference 180,000.00
f iv) Divided by 2 -- 2
Annual Payment S 90,000.00
$175,000.00
X 1. 4
-
245,000.00
-100,000.00
145,000.00
-- 2
S 72,500,00
23PA203312
EXHIBIT "B"
copy
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into as of the 1st
day of July, 1992, by and between ROBINSON-CONNER Of PENNSYLVANIA, INC., a
pennsylvania corporation, hereinafter called the "company", and DAVID
HOPCRAFT, an individu41, hereinafter called the "Employee".
WHEREAS, the Company is engaged in the conduct of a general
insurance agency and brokerage business in all lines of insurance; and
WHEREAS, in view of the employment experiences and abilities of
the Employee, the company is desirous of employing the Employee and the
Employee is desirous of obtaining such employment.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and intending to be legally bound hereby, the parties agree to the
following:
1. Employment and Term
(a) Subject to the terms and conditions ot this Agreement,
the company agrees to and does hereby employ the Employee and the Employee
agrees to and does hereby ar.cept employment with the Company for a period of
three (3) years commendng on the date hereof (hereinafter called the "Period
of Employment"), unless such employment is terminated pursuant to this
Agreement prior to the expiration at such Period of Employment.
(b) The Period of Employment shall be automatically
renewed on a year-to-year basis following expiration at the initial Period of
Employment, unless either party shall, on or betore thirty (30) days prior to
the expiration ot the Period of Employment or any applicable anniversary
thereof, not\fy the other party, in writing, of termination.
2. Duties
(a) The Employee's duties shall consist of performing and
carrying out such duties as are described on the Employee Job Description
attached hereto and marked as Exhibit A, as well as such other appropriate
duties as may be assigned to him from time to time by the Company. The
Company shall have the right, to supplement and/or delete specific duties
referred to in Exhibit A. The Employee shall perform the foregoing duties at
the Company's Mechanicsburg, pennsylvania office and such other places a8 the
Company shall reasonably designate.
(b) ouring the Period of Employment, the Employee agrees
to give the Company the full benefit of his business time, energy and ability,
to comply with the orders and conform to the instructions given to him from
time to time by the Company in accordance with paragraph 2(al hereof, and to
endeavor, in all cases and to the best of his ability, to promote the
Company's best interests.
], Remuneration
(a) Until July 31, 199], the Employee shall be paid annual
compensation at the rate of $65,000.00 per annum tor the solicitation,
product ion, development, ma intenance, surveying and servicing of accounts
assigned to him by the company as well as such other duties as may be assigned
to him pursuant to this Agreement, and the Employee shall be ellgible to
participate in the company's new business bonus program, provided however,
that none of the accounts on Schedule 1 ot the Purchase Agreement entered into
simultaneously between Hopcratt Insurance Agency, Inc., Employee, and the
company shall be taken into account ror purposes of calculating the new
bus ines s bonus.
(b) Thereafter and commencing on August 1, 1993, the
Employee's compensation shall be based on the Company's producer compensation
policies in effect at that time or modified from time to time thereafter,
provided however that the annual compensation is at least $50,000,00 per
annum. Compensation for handling the insurance requirements of existing
clients of the Company shall be determined by reference to the "handled only"
formula for sharing of commissions. A copy of the Company's current producer
compensation policies is attached hereto as Exhibit B.
(C) The Employee shall also be eligible to participate in
any Health, Accident or other insurance plans, Vacation, sick Leave and Fr inge
Benefit Programs (inCluding bonus, pension and profit-sharing programs, if
any) presently existing or which may hereafter be established by the Company
during the Period of Employment, provided that he is otherwise qualified to
participate in such plans and programs. The Company shall be entitled to
modify its employee benefit programs from time to time in its sole discretion.
(d) Remuneration is payable on a semi-monthly basis.
Advances or loans on any type of remuneration are not permitted.
(e) Expense allowances and/or expense reimbursements for
travel, entertainment and other business expenses incurred by the Employee in
promoting, fostering, furthering, and perpetuating the business of the company
will be determined by reference to such rules, regulations and policies as
shall be established by the Company from time to time. The Employee shall not
commit the Company, financially or otherwise, unless prior approval is
granted.
4. Termination
(a) The Employee's employment hereunder shall
automatically terminate following expiration of the Period of Employment or
any applicable renewal anniversary thereof, provided that written notice of
termination is given by either party to the other on or before thirty (301
days prior to said termination date, Further, the Company shall be entitled
to terminate the Employee's employment hereunder at any time (i) because of
the Employee's fraud, misappropr iat ion, embezzlement, or the like, or (i i I if
the Employee willfully breaches or habitually neglects the duties which he is
-2-
requlct-.'d I" t,I'"rtnrm pUrSUtint to thl~; A(Jr(lt-~m('llt toLloWlfl'l l:!'t'l'Jmf'ntiltion flt
norl1kll lJel'"""wl ,eview policies, 0' (iii) If the Empluy.", ';tldll vlfJlate illlY
provisIon u! thIs Aqreement, or (iv) it the Company 511,111 I'ermanently cease to
do business Ln its present or successor form or structure ur commence its
voluntary dic,c;olution or complete liquidation or be pldr;ed LlI voluntary or
involuntary lJankruptcy, or (V) if the Employee for any re,j:lon becomes unable
to perform his duties hereunder or lvi) upon the disalJillty ')r death of the
Employee, or (viii) upon the loss of the Employee's inc,urilflce license. The
Employee may terminate his employment hereunder at any t line fOllowir,g thirty
(]O) days' wntten notice to the Company. [n addition, dunng any renewal
term the Company shall have the right to terminate the Employee's employment
hereunder at any time following ninety (90) dilYS written nutice to the
F.:mployee. Termination or the Employee's employment hereun,kr by either party
shall not be const.rued to nullify or terminate any coven,H" "r obligation of
the Employee which is intended to survive the Period of Emphyment pursuant to
the terms ot this Agreement.
(bl In the event of termination of th" ,.,riod of
Employment 01 ,iny renewal term thereof, the Employee Sh,lll t., ent itled to
receive full remuneration up to and including the date of "'Imlndtion. The
company sh,1ll have no further obligation to the ~;mployef' t',: If:muneration for
dny period tn~'eafter.
'), 9roprietary Nature of Business
(al The Employee acknowledges that th.>':"mpany has a
valuable property interest in all aspects of its business r-lationships with
its clients, insurers, and all other persons who perfo'm so>r'Jices for said
clients and said insurers. further, the Employee acknowleJqo>s that in the
course of hi'l employment with the Company, he will become aware of and
famll iar with secret or confidential information of the Company relating to
its custome,s, its internal business operations and the SOllfces with which
insurance is placed (including secret and confidential information of the
Company's affiliates and subsidiaries), including but not limited to, lists of
agents, ~rokers, policy holders, expiration and renewal dates, inspection and
credit reports, other insurance data on various risks written by the company
(or its affiliates and subsidiaries), the procedures, forms, techniques used
in servicing accounts, and other documents and information which is required
to be maintained in confidence for the continued success of the Company and
its business, all of which secret or confidential information is acknowledged
by the Employee to be the sole and exclusive property of the Company, its
affiliates and subsidiaries. In view of the foregoing, the Employee expressly
aqrees and acknowledges that the covenants contained in this Paragraph 5 and
in Paragraph 6 hereof are reasonable and necessary.
(b) All insurance business tran~acted through the efforts
ot the Empioyee shall be the sole property of the Company, and the Employee
shall have no right to share in any commission resuiting from the conduct of
such business.
-)-
(e) PtemlUms on dll insurdnce business transacted tht')Ij'Jh
the efforts of the Employee Sh.lll be invoiced to the assured or purchaser by
the Company or any insurance company it represents. All checks or bank drafts
received by the Employee from any assured or purchaser shall be made payable
to the company or any insurance company it represents; and all premiums shall
be collected by the E~ployee in the name of and on behalf of the Company.
(d) The Emp,\oyee agrees that he will not, without the
written consent of the Company, during the term of this Agreement or
thereafter, disclose or make any use of such confidential Information except
as may be required in the course of his employment hereunder.
(e) On termination of employment, the Employee shall
surrender to the company all records and all copies made of those records that
pertain to any aspect of the business of the Company, with its clients and
their respective insurers, including but not limited to clients' coverages,
active and prospective clients, expirations of coverages, premiums and
compilations of the same.
(f) The Employee agrees that he will not entice or induce,
directly or indirectly, any other employee of the Company to leave the employ
of the Company.
6. Agreement 1I0t to Compete
(a) upon termination or expiration of the Period of
Employment for any reason, the Employee agrees that for a period of tlH~e (3)
years following such termination or expiration, he will not, directly or
indirectly, solicit, sell or accept insurance business from any person,
partnership, corporation or other entity who is then a client of the Company
or who was a client of the Company during the Period of Employment I inCluding
any renewal term). If, during the said three (l) year period, any commission
or any insurance business becomes payable to the Employee or to any person,
firm, or c~rporation by whom the Employee is then employed or affiliated, as a
result of the Employee's violation of the first sentence of this paragraph,
the Employee agrees to pay promptly to the Company an amount equal to 150% of
such commission. This covenant shall extend to the entire geographic area of
the state of Pennsylvania. If any court shall finally determine that the
covenants contained herein are too broad as to area, activity or time, said
covenants may be reduced to the extent that the court deems reasonable; and
such covenants may be enforced thereafter as to the reduced area, activity or
time.
(b) If, following termination or expiration of the period
of Employment, the Employee accepts other employment or enters into a business
relationship with any person, partnership, corporation or other entity doing
business of the kind then being performed by the Company, the Employee shall
obtain from said second employer and shall provide to the Company a written
acknowledgment by the successor employer of its notification of the terms of
Paragraphs 5 and 6 of this Agreement.
-4-
(c) It is expressly agreed upon that money damages will
not be an adequate remedy for any breach of the covenants of the Employee set
forth in Paragraphs 5 or 6 hereof; and in the event of any such breach, or
threatened breach, the Company shall be entitled to secure an injunction
requiring the Employee to abide by his commitments under such provisions of
this Agreement.
7. Miscellaneous
(a) The Employee may not assign this Agreement or any of
his rights or obligations hereunder to any person, firm or entity. The
Company shall be entitled to assign and transfer its rights pursuant to this
Agreement in connection with any merger, sale or other disposition of all or
any part of its insurance business; provided, how9ver that the Company's
obligations hereunder are expressly assumed, in writing, by a solvent assignee
or sllccessor.
(b) Any notice required or permitted to be given pursuant
to this Agreement, or in connection therewith, shall in lieu of personal
services, be deemed to be duly given when transmitt~d by First Class United
States Certified Hail, to the Company and the Employee at the following
addresses, or at such other place as either of the parties may for themselves
designate in writing from time to time for the purpose of receiving notices
pursuant hereof:
(i) william B. Conner, Chairman
Robinson-Conner of pennsylvania
3230 West Lake Road
Erie, Pennsylvania 16505
(ii) David Hopcraft
Hopcraft Insurance Agency, Inc.
401 East Louther street
Carlisle, Pennsylvania 17013
, (e) Neither party will be deemed to have waived any right,
power or privilege under this Agreement or any provision thereof unless such
waiver shall have been duly executed in writing and aCknowledged by the party
to be charged with such waiver. The failure of either party hereto at any
time to enforce any of the provisions of this Agreement will not be construed
to be a waiver of such provisions, nor in any way affect the validity of this
Agreement or any part thereof, or the right of any party to thereafter enforce
each and every such provision. No waiver or any breach of this Agreement will
be held to be a waiver of any other or subsequent breach. In the event that
anyone or more of the provisions contained in this Agreement shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement.
-5-
..'
.
"
,
EXHIBIT
.......
v
I 3 1995
hurllilt !I( t :"l1lr'lllt"llIhyhani. ltirl14rtl W. \lulI'"
/'1' II,,, I.' 'II PIl'~I,11'l1l .~ ( I:' ,
11 III I 1..1111 ""L H.w"
't"j ".IIIIo""UI~, )"'1,.,,\/1 .1111,1 17U.''-1
.;"'1 :'d I'n'j
I HUll lh}.I'111
1"'.1' Iii:, ;,iI .l'lt:
QQf;~()rdi(1
December 12, 1995
Mr, Roben C, Saidis
Saidis, Guido, Shuff & MasJand
26 West High Slreel
P,O, Box 560
Carlisle, PA 17013
Dear Bob:
Enclosed you will find two copies of a signed Confidentiality Agreement. Please ask
David 10 sign bOlh copies and return one to my office for nur files, As per our meeling,
David is going 10 advise who the purchasers will be and develop a formula to be used at
lhe end of the first twelve months to calculate the actual purchase price,
As I stated, my only concern is that we obtain proper indemnity clauses as respects any
E&O suits and a reciprocal convenant arrangement. We would not pemut our producers
to work on any accounts that David purchases and at the same time David (or his
affiliates) would be stopped from soliciting accounts not included in the purcbase. I would
recommend a two year period to allow sufficient time for both parties to establish
relationships Wilh their respective clients,
I bave the feeling Ibat David bas sufficient information to complete an initial Letter of
Intent, however, do not hesitate to contact me if you require addilional data. It is our
intention 10 try to present David's proposal in January and shoot for a first quaner
settlement if we arc able to come to an agreemenJ.
I wish you a happy boliday season and I'm sure we will be in toucb with one another
shortly.
,~
'-
7
,--. - ~
Richard W. Moore
President and CEO
cc: David lIoJlcran
Formerly nul"II~IlIl-{:nnll~r.lnc.
".....1
CQNflll!:NIIAIJTY A(jRFFM!iliT
TillS C:ONFlDENTIALI1Y AGREEMENT is n~1de and entered into by and between
Acordia of Pennsylvania, Ioc,. a Pennsylvania corporation, for itself and its affiliates,
having a principal place nfbusiness at 4750 I>elbrook Road, Mechanicsburg. Pennsylvania
17055 (hereinafter referred to as "Acordia "), and David W, Hopcraft having a principal
place of business at 3 Strayer Drive, Carlisle, PA 17013 (hereinafter referred to as
"Hopcraft").
WHEREAS, Acordia possesses Conlidcnliallnfomlation (as hereinafter defined) relatillg
to its business operations (hereinafter referred to as the "Business"); and
WHEREAS, Hopcraft is considering the potential acquisition oCa ponion of the Business;
and
WHEREAS, Acordia will need 10 disclose 10 1I0pcraft the Confidential Information in
order to enable Hopcraft to evaluate its inlerest in acquiring a portion of the Business,
NOW, THEREFORE, in consideralion ufthe lllutual covenants contained herein and
intending to be legally bound hereby, Acordia and Hopcraft agree as follows:
\, For the purposes of the Agreement, the lerm "Confidential Information" shall
mean all commercial and business infomJ.1tion relating to the Business, including:
a, all financial and business recurds, including projections. if any;
b, information on the various services conducted within the Business;
c. outstanding leases, executury cuntracts, and similar obligations,
commitments, and rights regarding the Business;
d. customer information, including lists of primary customers,
e. records regarding employees and producers working in the Business;
f. carrier records, including list of primary carriers;
g. information regarding commissions earned in the Business, including
contingent and profit sharing arrangements; and
h. such other economic or busincss information as shall be necessary for
Hopcraft to makc a filII cvaluation of the Business,
Confidentiality Agrcement
Dccember 12. 1<)<) 5
Page 2
2, It is agreed upon tbat Hopcraft shall not use the Confidential Informal ion received
from Acordia except to enable Hopcraft to evaluate its interest in acquiring a
portion of the Business. Furtbermore, Hopcraft agrees to use its best efforts to
prevent a disclosure of the Confidential Information received from Acordia to
persons outside of Hop craft, except that 1I0pcraft shall not be liable for a
disclosure to others of information:
a. Tbat was generally available to the public prior to receipt of said
information from Acordia,
b, Tbat has been in tbe public domain or becomes generally available to the
public tbrough no act or failure 10 act un the part offlopcraft;
c, 'l11at was received from a third party having no obligations to Acordia to
hold said information in conlidence; or
d, Tbat was known to Hopcrall prior to receiving the in!iJrlnation Irom
Acordia,
3, No rights or obligations other than those expressly recited herein are to be implied
from this Agreement. This Agreement does not represent a conunitment from
Acordia to sell, nor from Hopcraft to buy, any part of the Business,
4. The existence of this Agreement, the nature of the discussions involved, and the
relationship created by this Agreement shall be kept confidential.
5. Hopcraft may disclose to Acordia information concerning Hopcraft's business
operations. To the extent that any such information is disclosed to Acordia, .
Acordia agrees, for itself and its affiliates, not to use such information for its own
benefit. Furthermore, Acardia agrees to use its best efforts to prevent a disclosure
of such information to persons outside own organization, except that Acardia shall
not be liable for a disclosure to others of infoffi\8tion:
a. That was generally available to the public prior to receipt of such
information from Hopcraft;
b, That has been in the public dOllL1in or becomes generally available to the
public through no act or failnre 10 act on the part of Acordia;
B
~
,
i
i;
#
.
~
,
,
I
I
:
I
rI
d
,'.
"
';
f1,.'i
I
'J.
I' , ~
;c\ :I~ < i
, .
~/ ". .
.. .. ~.'"
. t. "
"I I
I
,
. ,~ :
" f
I
, I
"'l,'" ".
.F..,. ~
00996I-OOOOJlApriJ I. 19961JAllKKMl'109'
Plaintiff
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY. PENNSYLVANIA
NO. 96-883 CIVIL TERM
CIVIL ACTION. LAW
DAVID HOPCRAFT.
v.
ACORDIA OF PENNSYLVANIA. INC..
DECLARATORY JUDGMENT
Dsfendant
NOTICE TO PLEAD
TO: David Hoperaft
c/o Edward E, Guido. Esquire
Saidls. Guido. Shuff & Masland
26 West High Street
Carlisle. PA 17013
ANO NOW, this 1" day of April. 1996. you are hereby notified to plead responsively within twenty
(20) days of the dats of service hereof, or Judgment may be entered against you.
JOHNSON. DUFFIE, STEWART & WEIDNER
BY: J~J1~ ~
Attorney 1.0. #39867
301 Market Strset
P,O. Box 109
Lemoyne. PA 17043-0109
17171761-4540
Attorneys for Dsfsndent
-
OOW61.000Q3/Aprill. 19961IAJiKKM/~I09~
DAVID HOPCRAFT,
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY. PENNSYLVANIA
NO. 96-883 CIVIL TERM
Plaintiff
v.
CIVIL ACTION. LAW
ACORDIA OF PENNSYLVANIA. INC..
DECLARATORY JUDGMENT
Defendant
ANSWfR AND COUNTERCLAIM
ANSWER
I
t
i
I
!
r
AND NOW. comes Defendant. Acordia of Pennsylvania. Inc.. by and through It. attorney.. James
A. Johnson and Johnson. Duffie. Stewart 8. Weidner. and sets forth the following Answer In ths matter
sbove-captioned:
1. Admitted.
2. Admitted.
3. Admitted.
4. Admitted,
.
5. Admitted.
6. Admitted. By way of further answer. Moore has been and remains President and CEO of
Defsndant for Pennsylvania purposes.
7. Admitted.
8. Admitted.
009'101 OOO~l/AV"11. l'l'lt>IJAJ/KKMIlIO'lI
9. Admltt.d.
10. Denl.d II It.t.d, It II .dmltted that Plaintiff exprssssd concsrns, although not In terms
which could b. dllcrlb.d II "grev.."
11. D.nI.d II beyond tha knowledge of Defendant after reasonable investigation.
1 2. Admltt.d In p.rt. Denied in part. It is admitted that Robinson-Conner indicated that it may
b, poulole for th. PI.lntiff to purchase back his business at a price of 1.4 x the prsvlous year's
commission. 1111 danlad that the Plaintiff was givsn "assurances" and that the prics was tha same as
tha price paid by Robinson-Conner.
13. Admitted.
14. D.nled IS Itated. To the contrary, Moors expressed that he would work with the Plaintiff
to allow the Plaintiff to go back into his business. By way of further denial, the sgresmsnt did contain
a damages provision by which the Plaintiff would pay 1.5 x the previous ysar's commissions should he
violate the restrictive covenant.
15. Admlttad in part. Danled In part. Exscution is admitted. Motivations of the Plaintiff are
denied as beyond the knowlsdge of Dsfendant after reasonable investigation.
16. Admlttad. By way of further answer, Plaintiff was amply compensated for his work.
17. Denied as stated. To ths contrary, Plaintiff was givsn no assurances or guarantees, but
rathor that Moore would try to work something out with the Plaintiff.
18. Admlttad.
19. Admitted. By way of further answer, the changes in ths Plaintiff's role were mutually
agroed to by Plaintiff and the Defendant, and the Plaintiff realized financial success by the moves.
OOY/61.ooo<!J/ApriJ 1. 1996/IAJIKXMI5l095
20. Admitted In part. Denied In part. It Is admitted that a key employee and certain accounts
were los~. Plaintiff's concerns and worries are beyond the knowledge of Defendant after reasonable
investigation.
21. Denied, Defendants believes and therefore avers that these concerns and inquiries were
not raised until later in 1995.
22. Admitted.
23. Admitted.
24. Admitted.
25. Admitted.
26. Admitted.
27. Admitted.
i
I
i
l
,
"
28. Denied as a conclusion of law. It is averred nonstheless, that the non-competition clauses
can bs rsad consistently so that the non-competition clause contained in the employment agreement is
enforceable by its terms.
r
\
I }
11
d
f
i
29. No anllwer required.
WHEREFORE. Defendant respectfully requests that the relief sought by the Plaintiff be denied.
00'i'l61 Q(lQ~JIAilrlll, 1'l'lt\1IAJIXXMIS109S
COUNTERCLAIM
JO. The edmissions end enswers contained in paragraphs 1 through 29 are incorporated herein
IS if .et forth at length.
WHEREFORE. Defendant respectfully requests this Honorable Court take jurisdiction of the
controversy end thlt aftar hearing and adjudicaticn enter an Order of declaratory judgmsnt as fol:ows:
A. Declaring that the non-competition covenant contained in the employment
agreement is valid and enforceable by its tarms.
B. Such other relief as the Court desms appropriate.
Respectfully submitted.
JOHNSON. DUFFIE. STEWART & WEIDNER
BY:
,~
mes . John
ttorney 1.0. 139867
301 Market Strest
P.O. Box 109
Lemoyne. PA 17043-0109
(717) 761-4540
Attorneys for Defsndant
~"
I
~
I
,
I
00\ 161 llOOOJ/April I, 19%1lA.1IKXMISI09'
CERTIFICATE OF SERVICE
AND NOW. this 1" day 0' April, 1998, the undersigned does hereby certify that he did this date
serve a copy 0' tha fOtegoing Answer upon the other parties 0' recOtd by causing lime to be deposited
in the United States Mail, first class postage prepaid, at Lemoyne, Penn.ylv.ni., .ddt....d .. follows:
Edward E. Guido, Esquire
Saidis, Guido, Shuff" Masland
28 West High Street
Carllsle. PA 17013
:i
JOHNSON. DUfFlE. STEWART" WEIDNER
By' f'~AU:::--
.
00'961 OOl'nJ/Aprill. 19961IAl/IC.KMISI09S
VERIFICATION
I. Richard W. Moore, President of Acordia of Pennsylvania. Inc., do verify that the'tatements made
in the foregoing Answer Ire true and correct to the best of my knowledge, Information and bslief. I
understand that fal,e atatements msde herein are aubject to the penalties of 18 Pa.C.S. 14904 relating
to unsworn fal,lflcltlon to authorities.
/){j~
"--- " /lJ
Richard W. Moore
Dated: April 1. 1998
:,
;,
It'
'J:1
c
, \. ~
, i!
y~
tj
i ... ~
n
{i;
!i
I,
t'
, t I
;1'
11
! ';-'jl
'.1
~
~~
.;:
DAVID HOPCRAFT,
plaintiff
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
v.
NO. 96-883 CIVIL TERM
ACORDIA OF PENNSYLVANIA,
INC., : CIVIL ACTION - LAW
Defendant DECLARATORY JUDGMENT
PLAIOxr.. '8 U8WER TO
DZ"BIDART'S COUITBRCLAIM
AND NOW, comes plaintiff David Hopcraft by and through his
attorneys, Saidis, Guido, Shuff & Masland and sets forth the
following answer to Defendant's Counterclaim:
30. Tne allegations set forth in paragraphs 1-29 of
plaintiff's Complaint are incorporated herein as if set forth at
length.
WHEREFORE, plaintiff respectfully requests this Honorable
Court to dismiss Defendant's Counterclaim.
Date:
41tf/crc,
Respectfully submitted,
:~DIS' ~ KASUND
Edward E. Guido, Esquire
Supreme Ct. 1.0. t 21206
26 West High Street
Carlisle, PA 17013
(717) 243-6222
Attorney for plaintiff
t..
~
f:
i
SAlOIS, GUIDO,
SHUFF "
MASLAND
l6W.lUih_
CarlWe. PA
'"' '.? 'J
c: o~ .."
,,-
-o'~_-i ~ ;:.-j
-71
Clt I ~.J ':1:.71
~---
N I -"I"n
J. . - :.J~
r::t
:::: ..,..,
~c ~ r-']
>~- r';? ;~
;:.' ;;:.
:.:! '.'1 1;
w -<
On this
CBR'l'IrlCATB or 8BRVICB
day of
, 1996, I,
Edward E. Guido, Esquire, hereby certify that I served a true and
correct copy of the foregoing Plaintiff's Answer to Defendant's
Counterclaim upon b~unsel for all parties of record via United
States Mail, postage prepaid, addressed as follows:
Jam~s A. Johnson, Esquire
JOHNSON, DUFFIE, STEWART & WEIDNER
301 Market Street
Lemoyne, PA 17043
.
By:
SAlOIS, GUIDO, SHUFF & HASLAND
~~
Edward E. Guido, Esquire
26 West High Street
Carlisle, PA 17013
(717) 243-6222
Attorney for Plaintiff
r:
l
,
. -
L
tj;'
r;;.,
p.
k .
p--;
c."
td
"-'~
:~
',,1
:;:';1
,- ,-~::j
i:~
'~~
,~
:~-~~
DATED:
SAIDIS, GUIDO,
SIWFF "
MASLAND
26 W.IU,h S_
c..u.lc, PA
DAVID HOPCRAFT,
PLAINTIFF
V.
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
ACORDIA OF PENNSYLVANIA,
INC.,
DEFENDANT
96-0883 EQUITY
DEC"t;~ NISI
AND NOW, this '1. b day of June, 1996, IT IS DECREED:
(1) Plaintiff shall be allowed to repurchase the book of lnauranc:. busln... he
sold under a Purchase Agreement dated July 1, 1992.
(2) The price for the repurchase shall be based on the same terms and
formula as were used to pay plaintiff for his book of insurance.
(3) The Employment Agreement dated July 1, 1992, Is amended to provide (8)
plaintiff will not, directly or indirectly solicit, sell or accept insuranc:e business for a
period of three years from the termination of employment on May 31, 1995. from any
person, partnership, corporation or any other entity who on the date of this decree
nisi is a client of defendant, and (b) plaintiff shall be entitled to do business with the
insureds who (;onstitute the book of business he Is purchasing. All other terms and .
provisions of tMe parties' Employment Agreement shall remain in full fo,e and effect.
,) .
By the Court,. /
1// '
.\ '-P(lWfl
Edgar B. Bayley, J.
;:1 --, .... '"
.
r
,
',;:J
!~ "I n .
.~ ..-.' <j
r 1
.' .~
';.,,\..., :.,
~U". ~~':L.'..'-i\';f\
Edward E. Guido, Esquire
For Plaintiff
_ C.rI'~L'" /'"......1.'..\ "/;,)'1/16.
Jl..f.
James A. Johnson, Esquire
For Defendant
iJ
:saa
, i
;
i
~
.
DAVID HOPCRAFT,
PLAINTIFF
IN THE COLJRT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
V.
ACORDIA OF PENNSYLVANIA,
INC.,
DEFENDANT
96-0883 EQUITY
ADJUDICATION AND DECREE NISI
BAYLEY, J., June 28, 19ge:-
CHRONOLOGICAL STATEMENT OF FACTS
This equity case was benched tried on June 17, 1996. Plaintiff, David Hopcraft,
was the sole owner of the Hopcraft Insurance Agency, Inc. in Carlisle. Pursuant to a
written Purchase Agreement dated July 1, 1992, plaintiff sold his Agency to Robinson-
Conner of Pennsylvania, Inc. On the seme date, plaintiff entered into a three year
written Employment Agreement with Robinson-Conner. Acordia of Pennsylvania, Inc.,
defendant herein, purchased Robinson-Conner of Pennsylvania, Inc., In March, 1992.
On July 1, 1992, Acordia was trading as Robinson-Conner.
Plaintiff testified that he sold his insurance agency to access more Insuranc:e
carriers with whom he could conduct business. Plaintiff responded to a Robinson-
Conner advertisement for purchesing insurance agencies. Negotiations with Richard
Moore, the prasident of Robinson-Conner, began in the winter of 1991. Plaintiff
testified that he told Moore that he wanted a buyback provision In his Purchase
Agreement so that if his employment with Robinson-Conner did not work out he could
repurchase his book of insurance. Plaintiff testifiecllhat Richard Moore told him that If
his employment did not work out plaintiff could repurchase his book of insurance for
<
98-0883 EQUITY
a price based on the same terms and formula as Robinson-Conner would pay plaintiff
for the book.
In April, 1992, Robinson-Conner sent plaintiff a proposed purchase agreement
along with a three yfl8r employment agreement that contained a three year covenant
not to compete following any termination. Plaintiff took these documents to his
atlomey for review. Because the agreement lacked a provision enabling plaintiff to
repurchase his book of insurance if his employment did not work out, plaintiff
contacted Moore and told him of the omission. Plaintiff testified that Moore's
rasponse was that the provision should have been included. Moore proceeded to
have new contracts drawn up in Acordia's legal department In Erie. The contracts
were forwarded to plaintiff with an effective date of July 1, 1992. Inexplicably, the new
purchase agreement still did not contain a buyback provision. Plaintiff testified that
he again Informed Moore of the omission and that Moore said: (1) it was Important to
get the agreements signed, (2) plaintiff had Moore's assurance that he could buy
back his book of business if things did not work out, and (3) the buyback provision
would be taken care of at a later date. Plaintiff testified that based on those
assurances he did not take the documents back to his lawyer, and that he signed the
Purchase Agreement and the Employment Agreement. Under the terms of the
Purchase Agreement, plaintiff was paid $100,000 at the signing. Based on a formula
set forth in the purchase agreement, plaintiff was later paid $246,063 for the
remainder of the purchase price.
-2-
"
,
Ii'
~j
,
.1
"
.'!',,'
-#
96-0883 EQUITY
Plaintiff started working for Robinson-Conner In July, 1992. He continued to
work out of his Carlisle office. In the fall of 1992, using the increased resources
available through his employer, plaintiff secured the business of the Pennsylvania
Restaurant Association. Plaintiff then moved to defendant's Mechanicsburg office to
work exclusively on a program to obtain business from various types of Associations
throughout the Commonwealth. By the fall of 1994, however, plaintiff became
dissatisfied with his work. On May 5, 1995, he sent Richard Moore a letter asking him
to '[r]un . . . the Carlisle office accounts and let me know what the cost would be to
purchase the entire book.' Plaintiff testified that In subsequent conversations with
Moore, plaintiff told him that he wanted to repurchase his book, and if It could be
negotiated, to purchase the entire Carlisle Agency.
After the purchase of the Hopcraft Agency, Acordla purchased two more
Carlisle agencies and consolidated them in the Carlisle office. Plaintiff testified that
one of those purchases was the Neiderer Agency. In the early fall of 1992, plaintiff
was present with Moore during negotiations with Neiderer for Acordia to purchase
that agency. In reference to the Neiderer purchase, plaintiff pleaded In paragraph 18
of his complaint:
At one point, Plaintiff was with Moore as he was negotiating to
purchase another local Insurance agency for Defendant. When the
owner expressed concems as to what would happen If things did not
work out, Moore assured him that he would have the .ame option ..
Plaintiff, I.e. to buy the business back within 90 days 01 termination.
(Emphasis added).
In Its answer to the complaint, Acordia of Pennsylvania, Inc. admitted the averments
-3-
"
-
96-0883 EQUITY
in paragraph 18. Acordia's written purchase agreement with Neiderer has such a
buyback provision.
On May 31, 1995, Acordia terminated plaintiff's employment under an
option In the parties' Employment Agreement. In the letter of termination, Acordla
reminded plaintiff:
The Employment Agreement also contains an Agreement Not to
Compete, specifically; (a) Upon termination or expiration of the Period of
Employment for any reason, the Employee agrees that for a period of
thr.. (3) yeara following such termination or expiration, he will not,
directly or indirectly, solicit, sell or accept Insurance business from any
person, partnership, corporation or other entity who la then a client of
the Company or who was a client of the Company during the Period
of Employment (Including any renewal term). If, during the said three
(3) year period, any commission or any insurance businass becomes
payable to the Employee or to any person, firm, or corporation by whom
the Employee is then employed or affiliated, as a result of the
Employee's violation of the first sentence of this paragraph, the
Employee agrees to pay promptly to the Company an amount equal to
150% of auch commission. This covenant shall extend to the entire
geographic area of the State of Pennsylvania. If any court shall finally
determine that the covenants contained herein are too broad as to area,
activity or time, said covenants may be reduced to the extent that the
court deems reasonable; and such covenants may be enforced
thereafter as to tile reduced area, activity or time. (Emphasis added).
.
~
Following his termination of employment, plaintiff met with Moore in early June,
1995, and asked him to provide documentation of the business In the Carlisle office
so that he could repurchase his book of insurance and negotiate to purchase the
r
1
~t
,.
entire business of the expanded Carlisle Agency. Negotiations did not move forward
because Moore was unable to meet with his Board of Directors to pursue the matter.
In a letter to Moore dated August 11, 1995, plaintiff's attomey stated:
-4-
96-0883 EaUITY
Mr. Hopcralt has indicated the purchase of Hopcralt Insurance Agency,
Inc. was negotiated by you on behalf of Robinson-Conner of
Pennsylvania, Inc. At that time, Mr. Hopcralt, along with other agents
whose book of business was purchased, received assurancas from you
that they had an option to buy back their agencies in the event their
employment was terminated. This option was to be exercised within
ninety (90) days of the termination and the purchase price would be
calculated by use of the same formula as Robinson-Connor [sic) of
Pennsylvania, Inc. used to purchase the agency. Needless to say,
because of the runoff of Hopcralt's book of business with Linda
Blackbum leaving Acordia and Mr. Hopcraft not servicing the clientele,
he Is very concerned as to what he would actually be buying.
Accordingly, we would request that you provide records concerning the
actual volume of the Hopcralt book of business for the period from July
1,1994 to July 1, 1995. We would anticipate thaI this would be the
commissions on which a purchase price would be established. Could
you kindly confirm that this Is your understanding and that the
Agreement continues to be in effect. Obviously, If Mr. Hoperaft must
make a decision on or before October 1, 1995, your prompt attention
to this l11atter would be most helpful. (Emphasis added).
The concern plaintiff's attorney expressed as to an October 1, 1995 deadline,
was In reference to the three month period alter July 1, 1995, wi;;ch was three years
from the execution date of the parties' three year employment agreement. Moore
responded to plaintiff's attorney on September 15, 1995 stating:
When David Hopcraft's company was purchased by Robinson-
Conner of PA Inc., we did have lome discussions a8 to what would
happen In the event of a dlsa'greement and how the covenant would
apply. Since that time, a new company has been formed called Acordla
of PA, Inc., which bought all the stock and assets of Robinson-Conner of
PA and is govemed by a new board of directors. It Is my plan to go the
board of directors and advise them of the discussions that took place
with David during the acquisition and explain to them why I believe It Is
important that David is provided with the opportunity to explore these
options. A board meeting is scheduled for September 27th. If I do not
have everything, I will extend that October date. (Emphasis added).
On December 12, 1995, Moore sent a letter to plaintiff's attomey with a
-5-
r,
i
l
J
~
,
I
f
I
!
!
!
I
96-0883 EQUITY
Confidentiality Agreement that plaintiff signed so that negotiations to purchase the
entire Carlisle Agency could proceed. Moore told plaintiff that he would be interested
in selling that entire Agency, not j~lst plaintiffs book of insurance. On January 18,
1996, Moore !lent plaintiff's attomey a semple letter of intent to provide the Dasic
framework for plaintiff to purchase Acordia's Carlisle assets. Plaintiff responded
through his attomey on January 25, When half a month went by with no response
i
i
!
r
!
from Moore, plaintiff instituted this suit on February 16, 1996. Plaintiff testified that
Moore then called him to apologize for not getting back to him. Moore stated that he
was surprised that a repurchase clause was not in plaintiffs contract as it was in all
other contracts for insurance agencies that Robinson-Conner purchased.
Richard Moore testified that during his negotiations with plaintiff to purchase
the Hopcraft Agency plaintiff was concemed with having the ability to buy back his
book of insurance bus:ness. Moore acknowledged that he had told plaintiff that he
would have the right to buy back the book. Moore testified that after plaintiffs
termination by Acordia, he had been willing to consider taking to Acordia's Board of
Directors an agreement to sell plaintiff the entire Carlisle agency. However, he was
never able to explore the buyback with Acordia's board which had been dissolved.
By the time a new board was in place, plaintiff had filed suit and the matter was not
discussed. Before the change in the board, Moore had been president of Acerdla of
Pennsylvania, Inc. He is now an executive vice president. Moore acknowledged that
the parties' Purchase Agreement and Employment Agreement that his company's
-6-
96-0883 EQUITY
legal department drew up were 'boiler plate documents.' With respect to plaintiffs
ability to buy back his book, Moore stated that he thought plaintiff had a remedy In
the Purchase Agreement.
ISSUE AND DISCUSSION. PAROL EVIDENCE RULE
Based on the parol evidence rule, defendant maintains that plalnUff cannot
prevail on his claim to buy back his book of insurance business. As set forth In
Nlcol.lla v. Palmer, 432 Pa. 502 (1968):
Where the alleged prior or contemporaneous oral representations
or agreements concem a subject which is specifically dealt with In the
written contract, and the written contract covers or purports to cover the
entire agreement of the parties, the law Is now clearly and well-settled
that In the absence of fraud, accident or mistake the alleged oral
reprasentations or agreements are merged in or superseded by the
subsequent written contract, and parol evidence to vary, modify or
supersede the written contract is inadmissible in evidence. (Citations
and footnote omitted).
The Purchase Agreement in the present case makes no reference to a right of plaintiff
to buy back his book of insurance. Paragraph 8.6 states:
Entire Aareement. This Agreement, together with the Schedules
hereto and written Instruments referenced herein, constitutes the entire
agreement by and among the parties hereto with respect to the subject
matter hereof, and this Agreement supersedes all prior agreements,
correspondence and understandings and all prior 8Ild contemporaneous
oral agreements and understandings, among the parties hereto with
regard to the subject matter hereof. This Agreement may be amended
only by a written instrument setting forth the amendment with specificity,
which is executed by all of the parties hereto.
In Gilt v. Myers, 273 Pa. Super. 310 (1979), the Superior Court stated:
-7-
,
96-0883 EQUITY
The parol evidence rule, however, doe. not blr the
Introduction of cle.r, precise, .nd convincing evidence to .how th.t
the party who .eek. to enforce the agreement a. written aCl:ordlng
to It. tenor .dmltted or acknowledged that the agreement I. written
did not .xpre.. what the partie. Intended and that wh.t the partl..
Int.nded was omitted from the agreement by accident or ml.t.k.....
Clearly, in order to vary, modify or otherwise change a written
Instrument by parol evidence, fraud, accident or mistake must be
alleged and proven by clear, precise and convincing evidence or the
one enforcing the written contract must have admitted or
.cknowledged that the oral agreement .sserted had In f.ct been
m.de and the written agreement did not express wh.t the partie.
Intended and what the parties Intended w.s omitted from the
.greement by .ccldent or mistake. (Emphasis added) (Citations
omitted) .
During the course of the negotiations between plaintiff and Richard Moore
leading to the execution of the Purchase Agreement and Employment Agreement on
July 1, 1992, Richard Moore clearly had authority to bind Robinson-Conner of
Pennsylvania, Inc., and thus Acordia of Pennsylvania, Inc. The parol evidence rule
does not bar plaintiff's claim because: (1) both Moore and plaintiff agreed that
plaintiff would have a right to buy back his book of business; (2) both Moore and
plaintiff expected a buyback provision to be In the Purchase Agreement that was
drawn up In the legal department of Acordia; (3) on July 1, 1992, both Moore and
plaintiff knew that the legal department had mistakenly failed to put the buyback
prollislon in the "boiler plate" purchase agreement; (4) Moore Induced plaintiff to sign
the documents on July 1, 1992, by assuring plaintiff that he could buy back his book
of business if things did not work out and that the buyback provision would be taken
care of later, (5) Moore acknowledged that agreement with plaintiff In the fall of 1992,
.e.
"J
..'-
.~~
',",
98-0883 EQUITY
in the presence of plaintiff and the owner of the Neiderer Agency, when Moore told
Nelderer that he would have the same option as plaintiff to buy back his book of
Insur&nce business within ninety days of any termination of employment, a provision
that was placed Into the purchase agreement with Neiderer and the owners of all
other agencies defendant purchased; (6) In his letter of September 15, 1995 to
plaintiff's attorney, Moore agreed to extend If necessary the October 1, 1995 deadline
for plaintiff to buy back his book; and (7) Moore admitted at trial that his agreement
with plaintiff on behalf of defendant was that plaintiff would have a right to buy back
his book of business. On these facts, plaintiff Is entitled to equitable relief allowing
him to buy back from defendant his book of insurance for a price based on the same
terms and formula as were used to pay him for the book.
ISSUE AND DISCUSSION. RESTRICTIVE COVENANT
Plaintiff maintains that the restrictive covenant In his Employment Agreement
should be amended with respect to his former insureds who have left defendant and
Insured with other companies. We agree. A restrictive covenant is enforceable only
to the extent that It is necessary to protect the legitimate business interest of the party
benefiting from the covenant. Worldwide Auditing Services, Inc. v. Richter, 402 Pa.
Super. 584 (1991). The purpose of the restrictive covenant In the parties'
Employment Agreement Is to protect defendant from plaintiff taking away defendant's
insureds for a period of three years following the termination of plaintiffs employment.
.9.
96-0883 EQUITY
As to those Insureds that defendant has already lost, they no longer represent a
legitimate Interest of defendant that Is now necessary to protect. Furthermore, the
restrictive covenant must be amended to allow plaintiff to do business with the
Insureds who constitute the book of business that he Is repurchasing.
Plaintiff also maintains that the three year term of the restrictive covenant
should be reduced to two years from his date of termination. We disagree. As In
Worldwide Auditing Servlces, Inc. v. Richter, supra, there is nothing In the record
to indicate that the three year term was not part of a completely arms-length bargain
between knowing and willing parties. The time period Is reasonable and plaintiff must
live with the bargain he struck.
DECREE NISI
AND NOW, this 'Z~ day of June, 1996, IT IS DECREED:
(1) Plaintiff shall be allowed to repurchase the book of Insurance business he
sold under a Purchase Agreement dated July 1, 1992.
(2) The price for the repurchase shall be based on the same terms and
formula as were used to pay plaintiff for his book of Insurance.
(3) The Employment Agreement dated July 1, 1992, Is amended to provide (a)
plaintiff will not, directly or indirectly solicit, sell or accept Insurance business for a
period of three years from the termination of employment on May 31,1995, from any
person, partnership, corporation or any other er,lity who on the date of this decree
nisi is a client of defendant, and (b) plaintiff shall be entitled to do business with the
-10-
_.'
96-0683 EQUITY
Insureds who constitute the book of business he Is purchasing. All other terms and
provisions of the parties' Employment Agreement shall remain In full force and effect.
By the Court, /
I
~ '
Edward E. Guido, Esquire
For Plaintiff
\
Edgar B. Bayley, J,
~
James A. Johnson, Esquire
For Defendant
:saa
-11-
. - -.,A.' ~
DAVID HOPCRAFT,
Plaintiff
v.
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
l
ACORDIA OF PENllSYLVANIA, INC.,l 96-0883 EQUITY
Defendant l
PRAI!:CIPl!1
TO THE PROTHONOTARY:
Pursuant to Pal R.C.p. 227.4, please enter the Decree Nisi
as the final decree in the above-captioned matter.
mitted,
~:- ~/
~~
Edward E. Guido, Esq.
Attorney for the Plaintiff
July 9, 1996, Final Decree Nisi, entered.
LAWRENCE E. WELKER
Prothonotary
~: ~~'i\' Q. ~..~. '..J / Lftct
SAIDIS. GUIDO,
snUFF &
I\IASLAND
26 w. Hiw:h Street
Carlidc. fA
lr
,\ 0 '0 n
( ,_:, -il
~ -rlt. '~ -J
[I ~!,. ..- :~
~':t' I .-
c~, \,C
~ i~~ " -, , -, I
. ''t')
. ~ . : ::0
~' !"{ r~} -.i'n
~. I
~., --J
III ",
r.~
~ ,
-.,
A,
COpy
PURCHASE AGREEMEnT
THIS PURCHASE AGREEMENT is maje and entered into as of the 1st day
of July, 199~, by and among ROBINSON-CONNER OF PENNSYLVANIA, InC., a
Pennsylvania corporation (hereinafter called the "Purchaser"), HOPCRAFT
INSURANCE AGENCY, INC., a pennsylvania corporation (hereinafter called the
"Seller"), and DAVID HOPCRAFT, an individual (herelnafter called the
"Shareholder") .
WHEREAS, the Seller is engaged in the operation snd conduct of s
general insurance agency and brokerage business in all lines of insurance and
the Shareholder constitutes the beneficial and record owner of all of the
issued and outstanding capital stock of the Seller; and
WHEREAS, the Purchaser desires to purchase the business snd
certain specified assets of the Seller and the Seller and the Shareholder are
agreeable to the sals of said business and certain of its assets, all in
reliance upon the warranties and representations set forth hereinafter and
upon the terms and conditlons of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and intending to be legally bound hereby, the parties agree to the
follow ing:
1. Purchase and Sale of Assets
1.1 Purchase and Sale. Subject to the terms and conditions set
forth hereinafter, the Seller agrees to sell, assign, transfer and convey, at
the Closing, abSOlutely to the Purchaser, free and clear of all security
interests, liens and encumbrances, its entire business and certain of its
properties and assets (hereinafter collectively called the "Assets"), and
including the following:
(a) All rights of the Seller regarding all insurance which
has been solicited, placed or sold through the Seller or by any of its agents
or employees on its behalf, including all work in progress, and all other
information possessed by the Seller identifying its past, present and
potential cllents describing their insurance needs and coverages and setting
forth the expirations of their current insurance policies and contracts.
Attached hereto as Schedule 1 is a list of all customers' policies in force as
of the effective date of this Agreement.
(b) All of the Seller's other files, records and
information concerning present, past and potential clients.
(C) All of the Seller's rights to renewal premiums, direct
bill commissions, contingent commissions and all other entitlements and rights
of absolutely every nature whatsoever of Seller to receive ftOney or payments
of any kind except as specifically excluded in Sections 1.2 and 1.3 hereof.
PlAINTIFFS
EXHIBIT
j.
.....
- .-...
(d) All rights to t~e name Hopcraft Insurance Agency and
to all other trade names and trademarks owned or used by the Seller, and any
registrations or applications for registration thereof, and all of the
Seller's goodwill.
(el Ail governmental licenses, permits, approvals snd
authorizations posssssed by the Seller to the extent assignable or
transferable.
(f) All restrictive covenants now owned by the Seller.
(gl All prepayments received by the Seller for insurance
written on policies for coverage to be effective from and after July 1, 1992.
All invoices and credit memos with respect to insurance poliCies to be
processed or billed on or after July 1, 1992 regardless of the effective date.
1.2 Excluded Assets. The Seller shall retain and does not by
this Agreement sell to the @urchaser and there is excluded from the assets to
be conveyed by the Seller to the Purchaser enumerated above (i) the Seller's
corporate minute book, stock transfer records and corporate seal, (ii) all of
the Seller's cash, outstandlng accounts receivable, prepaid expenses, loans or
notes receivable, automobiles, cash value ot lite insurance policies, and Leal
estate, if any, and (iii) the rights and benefits accruing to the SelLer under
the terms of this Agreement.
1.3 Collection of Accounts Receivable. The Seller shall retain
and does not by this Agreement sell to the Purchaser and there is exdutled
from the assets to be conveyed by the Seller to the Purchaser any and all
accounts receivable of the Seller based on invoices and credit memos with
respect to insurance policies processed and billed by the Seller prior to the
close of business on June 30, 1992, except prepayments invoiced by the Seller
tor insurance coverage to be effective from and after July 1, 1992 (such
excluded accounts receivable hereinafter called the "Seller's Receivables").
The Purchaser shall collect and pay over to the Seller or its assigns on a
monthly basis any and all amounts collected by the Purchaser from customers in
connection with the Seller's Receivables. If the customer identifies the
invoice paid, the Purchaser will apply the funds in accordance with the
customer's instructions. It the customer fails to identity the invoice paid
all funds received until September 31, 1992 will be first applied to the
Seller's Receivables, and any excess will be retained by the Purchaser to be
applied against its accounts receivable. Beginning October 1, 1992, all funds
received will be applied to invoices covering insurance written and billed tor
the period beginning July 1, 1992 to the extent any amount is owed to the
Purchaser by the customer at the time of payment, and any excess will be
applied to the extent necessary to the Seller's Receivables. The accounting
books and records ot the Seller shall remain the property of the Seller, but
the Purchaser shall have access to such records. The Purchaser and the Seller
shall do all acts necessary to accomplish the above. The Seller agrees to
give the Purchaser a copy of its aged accounts receivable trial balance report
-2-
._'.
-"'"\
as of June 3D, 1992. After September 30, 1992, the purchaser shall be
relieved of further responsibility to collect the Seller's Recelvables, and
the Seller may commence to collect the same on its own behalf.
2. Aqreement and Covenant Not to Compete
2.1 Shareholder's Covenant Not to Compete
(a) The Shareholder will not, individually or jointly,
directly or indirectly, (other than in the capacity as an employee of the
purchaser) solicit, sell or accept business of the type then being performed
by the Purchaser (whether or not for that particular client or customer) from
any person, partnerShip, corporation or other entity who is a client or
customer of the Purchaser or the Seller at the time of the execution of this
Agreement, or during the twelve (12) months preceding this Agreement, or at
any time during the term set forth in section 2.3 below.
(bl The Shareholder will not, individually or jointly:
(i) directly or indirectly enter lnto the employ of
or render any service to or act in concert with any person,
partnership, corporation or other entity engaged in sny
business, or in rendering any service, Lo3ing conducted or
rendered by the Purchaser or the Seller upon the date of
this Agreement or during the term set rorth in section 2.3
below; or
(ii) directly or indirectly engage in any such
competitive business or render any such services on their
own account; or
(iii) become interested in any such competitive
business or service, directly or indirectly, as an
individual, partner, shareholder, director, officer,
principal, agent, employee, consultant or in any other
relationship or capacity.
(C) The Shareholder will not, individually or jointly,
directly or indirectly, entice or induce any employee of the Purchaser to
leave the employ of the purchaser and to work with the Shareholder or with any
person or entity with whom the Shareholder is or becomes associated.
2.2 Prohibition on Disclosure of Information, Etc. At no time
during or after the term as set forth in Section 2.3 below shall the
Shareholder divulge, furnish or make accessible to anyone any knowledge or
information with respect to confidential information or data of the Purchaser
or the Seller or with respect to any confidential or secret information or
data of any of the Seller's or the purchaser's clients or customers or with
-3-
.
,.......
,...,
respect to any other confidential or secret aspect of the business or se(vices
ot the Purchaser or the Seller.
2.3 Term and Geoqraphic Area. The term of the covenants set
torth in this Article 2 shall extend for three (3) years from the date hereof.
The obligations of the Shareholder hereunder shall extend to the entire
geographic area of the State of Pennsylvania.
2.4 Iniunctive Relief for Breach. In addition to all other
rights and remedies which the Purchaser may have at law, as an additional and
cumulative remedy, the covenants contained in Sections 2.1 and 2.3 shall be
entorceable by speciflc performance and injunctive relief and shall be
construed as separate covenants governing competition in the geographical
territory applicable and if any court shall tinally determine that the
restraints provided for herein are too broad as to the area, activity or time
covered, said area, activity or time covered may be reduced to whatever extent
the court deems reasonable and the covenants may be enforced as to such
reduced area and time.
I
2.5 Reservation of Rights. The Purchaser reserves all rights,
set forth in this Agreement for breaches of this Article 2, which rights
include (but are not limited to) offset rights against amounts athen/ise
payable pursuant to Article 3 below.
3. Closinq, Purchase Price and Transter Date
3.1 Clos ing. The part les shall hold and conduct a clo9ing
(hereinafter called the "Closing") at the offices of the Seller in carlisle,
Pennsylvanis. The Closing shall be effective as ot the opening of business on
July 1, 1992. At the Closing, the Seller shall execute and deliver to the
Purchaser such bills of sale, asslgnments and other instruments as the
Purchaser deems necessary to effect the sale and transfer of the Seller's
business and the Assets to the Purchaser as contemplated hereunder. At the
Closing, the Shareholder shall also execute and enter into the Agreement and
Covenant Not to Compete with the Purchaser as provided in Section 2 hereof.
3.2 Purchase Price and Payment of the Purchase Price. In
exchange tor the transfer and conveyance ot the Seller's business and the
Assets and for the warranties and covenants ot the Seller and Shareholder
herein, the Purchaser shall pay to the Seller and Shareholder a purchase price
(hereinafter called the "Purchase price") which shall be allocated in
accordance with section 3.5 of this Agreement. The Purchase Price shall be
the sum of the following:
n
t
,~
.-
'I
1
'..,
-4-
,
:~
"
\ ~\
I..'
1,1
l~
I',
t,
~t
it.
"
.,
t.
(a) The Purchaser shall pay the sum of $100,000.00 in cash
at or before the closing.
(h) As additional consideration the Purchaser agrees to
pay within ninety (90) days following the first (1st) and second (2nd)
.
.
anniversaries of this Agreement, an amo;Jnt, it any (the "Annual Payment"), if
greater than zero (0) determined by the following formula:
(i) The net personal lines, group and
commercial/casualty commission income ("net commission
income") billed and received by the Purchas~r and produced
from eligible accout.ts for the twelve (12) months ended June
30th of each anniversary year shall be calculated. For the
purposes of this Agreement, "eliglble accounts" shall
include only the exist ing clients of the Se ller on the date
of this Agreement. The term "net commission income" shall
not includs contingent snd profit sharing commissions.
Further, all broker's commissions owed to third parties
incurred by the Purchaser in connection with the eligible
accounts shall be deducted from the commissions applicable
thereto in calculating "net commission income."
(ii) The net commisslon income for the anni'Jeraary
year shall be multiplied by 1.4.
liii) From the product there shall be su~tracted
$100.000.(10. This figure, Le., $100,000.00, reple9{'"t~ thp.
amount paid by purchaser upon execution of this ACjleemt'nt.
(iv) The resulting difference shall be divirl",d by 2
and the resulting quotient shall be the amount ot t.he Annual
Payment for that anniversary year.
Schedule No. 2 attached hereto and made a part hereof demonstrates the
foregoing computations. The Seller and Shareholder shall have the right
following reasonable notice to inspect the Purchaser's records regarding the
net commission income earned by the Purchaser and produced from eligible
accounts during each anniversary year of this Agreement.
(C) The Obligation of the Purchaser to make such payments
to that part thereof allocated to the Agreement and Covenant Not to Compete
shall survive the death or disability of the Shareholder.
(d) The Seller and Shareholder acknowledge that the Annual
Payments to be made pursuant to this Section 2 are contingent payments and
that the amount of an Annual Payment, it any, shall depend upon the
computation as set forth in 3.2 (b) above. Further, the Seller and
Shareholder acknowledge that continuation of an account relationship with any
eligible account shall require that the client conform with all uniform
policies of the Purchaser inclUding, but not limited to, billing and accounts
receivable policies.
3.3 No Assumption of Liabilities. Except as expressly provided
herein, the Purchaser will not assume and will not discharge or be liable for
-5-
.-"
-
any debts, liabilities, or obligations of the Seller, including, without
limitation, any (i) liabilities or obligations of the Seller to its creditors;
(ii) li8bilities or obligations of the Seller with respect to any trans8ction~
occurring after the Closing; (iii) sales or income tax or other 1iabilitie~ or
obligations of the Seller incurred in connection with the sale of the Assets
or its business pursuant to this Agreement; (iv) any contingent liabl1ities or
obligations of the Seller; or (V) any commission owed by the Seller in
connection with this Agreement. The Seller or the Shareholder, as the case
may be, 8grees to timely pey to the insurance carriers, when due and payable,
all amounts owed in connection with invoices and credit memos with respect to
insurance policies proces3ed and billed by the Seller on or prior to June 30,
1992, except for insurance coversge to be effective from and after July 1,
1992.
3.4 Expenses of Transaction. The Purchaser, on ths one hand,
and the Seller, on the other hand, shall each bear their own costs 8nd
expenses, including legal and accounting fees, incurred in negotiating the
agreement evidenced hereby, in preparing this Agreement and the other
documentation referred to herein and in consummating the transactions
contemplated hereunder.
3.5 Allocation. The Purchase price shall be allocated among the
various assets being sold and transferred by the Seller to the Purchaser and
the Shareholder's Agreement and Covenant Not to Compete in the following
proportions:
(s)
(b)
(C)
Expirations (Seller)
Goodwill (Seller)
Agreement and Covenant Not
Not to Compete (Shareholder)
60\
15\
25\
Each payment made pursu~nt to this Agreement shall be allocated in ths
proportions set forth above.
4. Conditions Precedent to Ob1iqations of Purchaser
The Purchaser shall not be obligated to pay any of the Purcha~e
Price or otherwise to perform its obligations hereunder unless all of the
following conditions have either been fulfilled or performed to the
Purchaser's satisfaction, on or before the Closing, or have been waived by the
Purchaser.
4.1 Employment Contract. The Shareholder shall ha'le executed
and entered into a written employment contract with the Purchaser (hereinafter
collectively called the "Employment Agreement") on terms and conditions
satisfactory to the Purchaser.
"
"
-6-
-
,-.....
4.2 Possession. SiJll\lltdneously with the Closing, the Seller and
the Shareholder will taks all steps that will be necessary to put the
Purchaser in actual possession, operation, and control of the Assets.
4.3 Purther Assurances. Prom time to time, after the Closing,
at the request of the Purchaser, the Seller and the Shareholder wili execute
and deliver to the Purchaser such other instruments of conveyance and transfer
and take such other actions as the Purchaser may reasonably require more
effectively to convey, transfer to, and vest in the Purchaser, and to put the
Purchaser in possession of, any and all of the Assets.
5. Representations and Warranties of the Seller and Shareholder
The Seller and ths Shareholder, jointly and severally, warrant end
represent to the purchaser as follows:
5.1 Leqal Status. The Seller is a corporation, validly existing
and in good standing under the laws of the State of pennsylvsnia. The Seller
has all necessary corporate power and authority to own and oper^te the Assets
and to conduct its present business as and where presently conducted, and the
Seller possesses all necessary governmental licenses, permits and
authorizations to sngage in its present buoiness in pennsylvania.
,
5.2 APproval of Transaction. The execution and cleU'.:eqr or thi~
Agreement on the part or the Seller, and the performance by the Seller of all
of its covenants and obligstions under thls Agreement, have been duly and
properly authorized and approved by its Board of Directors and by all of the
shareholders of the Seller. The Seller possesses full and unrestricted power,
authority and capacity to execute, deliver and enter into this Agreement and
to carry out and perform all of his covenants and obligations under this
Agreement in accordance with its terms. The execution and delivery of this
Agreement and the transactions contemplated under this Agreement do not and
will not violate or conflict with any provisions of the Articles of
Incorporation or Bylaws of the Seller. No g~vernmental approval or
authorization is necessary for the Seller to execute and deliver this
Agree~ent or to perform its obligations under this Agreement. This Agreement
has been duly executed and delivered by and on behalf of the Seller and
Shareholder and constitutes a valid and legally binding obligation of the
Seller and Shareholder, enforceable in accordance with its terms.
5.3 Shareholder. The Shareholder constitutes the owner,
beneficially and of record, of all of the issued and outstanding common stock
of the Seller. Except for its common stock, the Seller has no class of stock
or any equity securities outstanding. Neither the execution and delivery of
this Agreement, nor the performance of all of the obligations under said
instruments, by the Seller and the Shareholder violate or conflict with, or
will violate or r.onflict with, the terms of any loan document, indenture,
contract, lease, order or agreement to which the Shareholder is a party or is
bound or the Seller is a party or is bound.
-7-
~. 41\
-
,,-
5.4 Title to Assets. The Seller has good an~ marketable title
to all of the Asset., and all of the Assets are free and clear of security
inter"lsts, liens and other encumbrances of any nature.
,
~I
5.5 Financial statements. The statements of income and expenses
delivered to the Purchaser by the Seller are substantially true, complete and
correct and have been prepared in accordance with generally accepted
accounting principles consistently applied. These documents fairly present
the information contained therein and fairly represent the financial condition
of the Se ller .
5.6 Taxes. The Seller has duly and timely prepared, executed
and filed all federa~state and local income, property, occupational premiums
and other tax returns, reports, statements and declarations which it is or was
legally required to file, and the Seller has paid in full all taxes,
assessments, impositions and other payments as shown thereby to be due, or has
made provision for same.
5.7 Litiqation. There are no (i) claims made, pending, or
threatened against or affecting the Seller, Iii) actions, suits, pro~eedings,
or investigations pending or threatened, against or affecting the Seller in
any court or before or by any federal, state or local governmental 8gellC'f m
instrumentality, or (iii) actions, suits, or legal proceectill'~'l pendiwl 01'
threatened against the Seller which might in any way aUect its executiun or
delivery of, or per formance of its obligations under this Agreement. Ilnither
the Seller nor the SharehCJlder has anI' knowiedqe of any occurrellce cr ~et ,-,t
circumstances which may result in any claim, suit, investigatiNl ')r Je'~nl
proceedings against the Seller.
5.8 Client Relations. The Seller has not since December 31,
1990, lost the business of any client which represents 5\ or more of the net
commiss ions of Seller dur ing the tiscal year ended December 31, 1990. lie itne r
the Seller nor the Shareholder is aware of any fact or circumstance which
might indicate that any such client has ceased or intends to cease placing
business with the Seller or to materially reduce the amount of business it is
placing or will place with the Seller. Apart from ordinary contracts of
insurance, the Seller has no contracts or agreements with any of its clients.
5.9 Employee Benefit Plan Matters. If the Seller does have in
effect and contributes to, an "employee pension plan" as defined in Section
3(2) of ERISA, the Purchaser is not assuming any responsibility or obligation
with respect to any such retirement plan. The Purchaser is not assuming any
responsibility or obligation with the respect to any welfare benefit plan.
5.10 Validitvof Article 2 Aqreement and Covenant llot to
Compete. The Agreement and Covenant Hot to Compete set forth in ArtiCle 2
constitutes a valid and binding agreement and undertaking enforceable in
accordance with its terms.
-0-
..~.........
""-...
5.11 Absence of Material Changes. There have been no material
adverse changes of any nature in the assets, business or financial condition
of the Seller since December 31, 1990.
5.12 Completeness of Statements. 110 representation or warranty
by the Seller or the Shareholder in this Agreement or in any Schedule hereto
or in any written statement furnished to the Purchaser pursuant hereto or in
connection herewith contains any untrue statement of a material fact or omits
to state a material fact necessary to make any statement herein or thersin not
misleading.
5.13 Insurance Accounts and Commissions. The insurance accounts
of the Seller represent genuine insurance placed through ths Seller for the
commissions set forth on the Seller's books and records. There are no oral or
wrltten agreements, commitments or understandings wlth any account whereby any
of the insurance commissions received by the Seller are being returned
directly or indirectly to any customer or any other person.
5.14 Claim Administration Aqreements. The Seller provides no
claim administration or adjustment services, and there are no contracts 01
agreements, oral or written, with any person or entity, pursuant to which the
Seller is Obligated to provide any such services, other than draft .1uth(.r Hy
for various insurance companies in various amounts for certain first party
claims.
6. Warranties of Purchaser
6.1 Status of Purchaser. The Purchaser is a corporation duly
crgsnized, validly existing and in good standing under the laws of the State
of pennsylvania, and has full corporate power and authority to enter into this
Agreement, to perform its covenants and obligations hereunder, and to
consummate the transactions contemplated thereby,
6.2 Authorization. The Purchaser has taken all necessary and
proper corporate actions to authorize the execution and delivery of this
Agreement and the performance of it of all of its covenants and obligations
under this Agreement.
6.3 No Violations; valid Aqreement. Neither the execution and
delivery of this Agreement, nor the consummation of the transactions described
herein, nor the performsnce of their respective obligations hereunder, will
violate any provision of the Articles of Incorporation or Bylaws of the
Purchaser, nor violate the provisions of any loan document, indenture,
contract or other agreement to which the Purchaser is a party or is bound, nor
violate the provisions of any judicial or administrative order, judgment or
decree applicable to the Purchaser. 110 governmental approval or authorization
is necessary for the Purchaser to execute and deliver this Agreement or to
perform its obligations under this Agreement. This Agreement has been duly
executed and delivered by and on behalf uf the Purchaser and constitutes a
-9-
-.....
-.
valid and legally binding obligation of the Purchaser, enforceabls in
accordance with its terms. All consents, approvals, authorizations and orders
required of the iurchaser for the executlon and delivery of, for the
consummation of the transactions contemplated by, and for the fulfillment of
and compliance with the terms and conditions of, this Agreement have been
obtained.
.
6.4 completeness of Statements. No representation or warranty
by the Purchaser contains any untrue statement of a material fact or any
misstatement of a material fact necessary to make any statement herein or
therein not misleading.
7. Indemnification and Remedies of the Purchaser
7.1 Indemnification. The Seller and the Shareholder, jointly
and severally, hereby promise and agree to indemnify and hold harmless the
purchaser against any and all losses. damages, j'ldgments, liabilities, easts
and expenses (including reasonable attorney's fees) suffered by the Purch<i~er
as a result of (i) any representation or warranty by the Seller or th~
Shareholder in this Agreement, or in any Scheduls hereto or in any instrument
or agreement delivered in connection herewith, proving to be false, incorrect
or inaccurate, and/or (ii) any breach or violation by the Sellel' or the
Shareholder of any of its covenants and Obligations under this Aqreempnl e,r
any agIeement or inatrument delivered in connection herewith.
7.2 Remedies. upon the occunence of any event referenc~r.1 i"
the preceding Section 7.1 for which the purchaser is entitled to
indemnification, the Purchaser shall have all of the rights and remedies
available to it at law, in equity, in bankruptcy or otherwise. In additi0n,
the Purchaser shall have the right to offset the amount for which it is
entitled to indemnification against any amount then outstanding under this
Agreement.
7.3 Indemnification of the Seller and the Shareholder. The
Purchaser hereby promises and agrees to indeRUlify and hold harmless the SellE'r
and the Shareholder against any and all losses, damages, judgments,
liabilities, costs and expenses (including reasonable attorneys' fees),
suffered or incurred by the Seller and the Shareholder as a r""suit of (i I any
representation or warranty by the Purchaser in this Agreement, or in any
Schedule hereto or in any instrument or agreement delivered in connection
herewith, proving to be false, in~orrect or inaccurate, and/or (ii) any breach
or VIolation by the Purchaser of any of the covenants and obligations under
this Agreement or any agreement or instrument delivered in connection
herew ith.
7.4 Remedies. upon the occurrence of any event referenced in
the preceding Section 7.3 for which the Seller and the Shareholder are
entitled to indemnification, the Seller and the Shareholder shsll have all of
-10-
""""
,-..
8. Miscellaneous
I
I
the rights and remedies available to them at law, in equity, in bankruptcy or
otherwise.
8.1 Succsssors and AssiQns. The terms and provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors, permitted assigns, personal representatives,
legates., devisees and heirs.
i,
r
I
8.~ Notices. All notices, requests, demands and other
cOlMlunication. required or permitted to be given or made under this Agreement
shall be in writing and shall be delivered personally or sent by registered or
certified mail (return receipt requested), postage prepaid, a. follows:
If to the Purchaser:
william B. Conner, Chairman
Robinson-Conner of pennsylvania, Inc,
3230 West Lake Road
Erie, Pennsylvania 16505
Robert G. Dwyer, Esq.
120 West Tenth Street
Erie, pennsylvania 16501
Dav id Hoper aft
Hopcraft Insurance Agency, Inc.
401 East Louther street
Carlisle, pennsylvania 11013
With copies to:
If to the Seller:
Any party may change its or his address for the receipt of notices
hereunder by giving sppropriate notice to the other parties in accordance with
this Section 8.~.
"
8.3 GoverninQ Law. This Agreement shall be governed by and
interpreted in accordance with the law of the state of Pennsylvania.
8.4 Captions. The captlons in this Agreement are included for
convenience only and shall not be conside.ed in the interpretation or
construction of this Agreement.
8.5 Survival of Warranties and Representations. The warranties
and representations of the Purchaser, the Shareholder and the Seller set forth
in this Agreement shell survive the Closing and the consummation of all of the
transactions herein contemplated, and shall continue and remain in full force
and effect thereafter.
c
8.6 Entire Agreement. This Agreement, together with the
Scheduies hereto and written instruments referenced herein, constitutes the
entire agreement by and among the parties hereto with respect to the subject
-11-
~
_.
matter hereof, and this Agreement supersedes all prior agreements,
correspondence and understandings and all prior and contemporaneous oral
agreements and understandings, among the parties hereto with regard to the
subject matter hereof. This Agreement may be amended only by a written
instrument setting forth the smendment with specificity, which is executed by
all of the parties hereto.
8.7 Schedules. The Schedule~ attached hereto constitute a part
of this Agreement and are hereby incorporated herein by reference by their
entirety as if fully set forth in this Agreement at the point where first
mentioned herein.
B.8 Waiver of Breach. The waiver by the Purches~r of e breach
of any provision of this Agreement by the Seller or the Shareholder shall not
operate or be construed as a waiver of any subsequent breach by the Seller or
Shareholder.
8.9 Error and Omission "Tail" Coveraqe. At th~ Closinq, the
Seller shall provide and pay for an error and omission "tail" coverage for
three (3) years from the date of Closing. The Seller shall deliver to the
Purchaser at the Closing either the policy, the endorsement, or written
evidence thereof to the satisfaction of the Purchaser.
IN TESTIMONY WHEREOF, the parties hereto have each duly exp.~uled
and deU"Jered this Agreement, as of the date flrst above written.
lchard W. Hoore, President
~S~'..!,)
,"TIT:;,' :
'~ . Q'
-1J..!)Ylrlu I cl. J..-. (:1.1,4 ~)
Secreta y
HOPCRAFT INSURAlICE AGEIICY, INC.
", d!!.'!wl:(p- b
THE SHAREHOLDER
WITNESS:
RlNr1rrt'l ~ .{ ~rl1M~
rtJJ w ~.
David H raft
{(SEAL)
23PA203312
-12-
..#0
....
-.,
,
SCHEDULE NO. 2
Annual payment computation Example
Year 1993
(1 ) Section 3.2(b)( 1) net
commission income billed
and received for 12
months ended June 30 $200,000.00
( il) Multiplied by 1.4 !....L.!
Product 280,000.00
(111 ) Minus $100,000 -100,000.00
Difference 180,000.00
(iv) Divided by 2 -- 2
Annual Payment $ 90,000.00
23PA203312
d
!!2!
$175,000.00
!....L.!
245,000.00
-100,000,00
145,000.00
-- 2
S 12,500.00
I;'
.-
-
coPY
EMPLOYMEllT AGREEHElIT
THIS EMPLOYMENT AGREEMENT is made and entered into as of the 1st
day of July, 1992, by and between ROBINSON-CONNER OF PENNSYLVANIA, INC., a
pennsylvania corporation, hereinafter called the "Company", and DAVID
HOPCRAFT, an individual, herelnsfter called the "Employee".
WHEREAS, the company is engaged in the conduct of a general
insurance agency snd brokerage business in all lines of lnsurancei and
WHEREAS, in vlew of the employment experiences and abl11tles of
the Employee, the company is desirous of employing the Employee and the
Employee is deslrous of obtaining such employment.
NuW, THEREFORE, ln consideration of the mutual covenants contained
herein and intending to be legally bound hereby, the partles agree to the
follow ing:
l. Employment and Term
(a) Subject to the terms and conditions of this Agreement,
the Company agrees to and does hereby employ the Employee and the Employee
agrees to and does hereby accept employment with the Company for a period of
three \ 3) years commencing on the date hereof (hereinafter called the "perlod
of Employment"), unless Buch employment ls terminated pursuant to this
Agreement prlor to the expiration of such period of Employment.
(b) The period of Employment shall be sutomatically
renewed on a year-to-year basis following expiration of the initial Period of
Employment, unless either party shall, on or before thirty (30) days prior to
the explration of the Period of Employment or any applicable anniversary
thereof, notify the other party, in writing, of termination.
2. Dutles
(a) The Employee'S duties shall consist of performlng and
carrying out such duties as are described on the Employee Job Description
attached hereto and marked as Exhibit A, as well as such other approprlate
dutles as may be assigned to him from time to time by the Company. The
Company shall have the right to supplement and/or delete specific duties
referred to in Exhibit A. The Employee shall perform the foregoing dutles st
the Company's Mechanicsburg, pennsylvania office and such other places as the
Company shall reasonably designate.
(b) DUring the period of Employment, the Employee agrees
to give the company the full benefit of his business time, energy snd ability,
to comply with the orders and conform to the instructions given to him from
time to time by the Company in accordance with paragraph 2(a) hereof, and to
endeavor, in all cases and to the best of his ability, to promote the
Company's best interests.
PI.AINTIff'S
EXHIBIT
1
~
,.......
3. Remuneration
(a) Until July 31, 1993, the Employee shall be paid annual
compensation at the rats of $65,000.00 per annum for the solicitation,
product lon, development, maintenance, surveying and servicing of accounts
asslgned to him by the company as well as such other dutles as may be assigned
to him pursuant to thls Agreement, and the Employee shall be eligible to
participate in the Company's new business bonus program, provided however,
that none of the accounts on Schedule 1 of the Purchase Agreement entered into
simultaneously between Hopcraft Insurance Agency, Inc., employee, and the
company shall be taken into account for purposes of calculating the new
business bonus.
(b) Thereafter and co~nencing on August 1, 1993, the
Employee's compensation shall be based on the company's producer compensation
policies in effect at that time or modified from time to time thereafter,
provided however that the annual compensation is at least $50,000.00 per
annum. Compensatlon for handling the insurance requirements of existing
clients of the company shall be determined by reference to the "handled onl y"
formula for sharing of commissions. A copy of the Company's current producer
compensation policies is attached hereto as Exhibit B.
(C) The Employee shall also be ellgible to participate in
any Health, Accident or other insurance plans, Vacation, Sick Leave and Fringe
Benefit Programs (inCluding bonus, pension and prOfit-sharing programs, if
any) presently existing or which may hereafter be established by the Company
during the Period of Employment, provided that he is otherwise qualified to
participate in such plans and programs. The company shall be entitled to
modify its employee benefit programs from time to time in its sole discretion.
(d) Remuneration is payable on a semi-monthly basis.
Advances or loans on any type of remuneration are not permitted.
(e) Expense allowances and/or expense reimbursements for
travel, entertainment and other business expenses incurred by the Employee in
promoting, fostering, furthering, and perpetuating the business of the Company
will be determined by reference to such rules, regulations and policies as
shall be established by the Company from time to time. The Employee shall not
commit the Company, financially or otherwise, unless prior approval is
granted.
4. Termination
(a) The Employee's employment hereunder shall
automatically terminate following expiration of the Period of Employment or
any appllcable renewal anniversary thereof, provided that written notice of
termination is given by either party to the other on or before thirty (30)
days prior to said termination date. Further, the Company shall be entitled
to terminate the Employee's employment hereunder at any time (i) because of
the Employee's fraud, misappropriation, embezzlement, or the like, or (ii) if
the Employee willfully breaches or habitually neglects the duties which he is
-2-
J.
.-~
requlred to perform pursuant to this Agreement following implementation of
normal personnel review policies, or (iii) if the Employee shall violate any
pKovision of this Agreement, or (iv) if the Company shall permanently cease to
do business in its present or successor form or structure or commence its
voluntary dissolution or complete liquidation or be placed in votuntary or
involuntary bankruptcy, or (V) if the Employee for any reason becomes unable
to perform his duties hereunder or (vi) upon the disability or death of the
Employee, or (viii) upon the loss of the Employee's insurance license. The
Employee may terminate his employment hereunder at any time following thirty
(30) days' written notice to the company. In addition, during any renewal
term the company snall have the right to terminate the Employes's employment
hereunder at any time following ninety (90) days written notice to the
Employee. Termination of the Employee's employment hereunder by either party
shall not be construed to nullify or terminate any covenant or Obligation of
the Employee which is intended to survive the Period of Employment pursusnt to
the terms of this Agreement.
(b) In the event of termination of the Period of
Employment or any renewal term thereof, the Employee shall be entitled to
receive full remuneration up to and inCluding the date of termination. 1he
Company shall have no further obligation to the Employee for remuneration for
any period thereafter,
5. Proprietary Nature of Business
(a) The Employee acknowledges that the Company has a
valuable property interest in all aspects of its business relationships with
its clients, insurers, and all other persons who perform services for said
clients and said insurers. Further, the Employee acknowledges that in the
course of his employment with the Company, he will become aware of and
familiar with secret or confidentlal information of the Company relating to
its customers, its internal business operations and the sources with which
insurance is placed (including secret and confidential information of the
Company's affiliates and subsidiaries), including but not limited to, lists of
agents, brokers, policy holders, expiration and renewal dates, inspection and
credit reports, other lnsurance data on various risks written by the Company
(or its affiliates and subsidiaries), the procedures, forms, techniques used
in servicing accounts, and other documents and information which is required
to be maintained in confidence for the continued success of the Company and
its business, all of which secret or confidential information is acknowledged
by the Employee to be the sole and exclusive property of the Company, its
affiliates and subsidiaries. In view of the foregoing, the Employee expressly
agrees and acknowledges that the covenants contained in this Paragraph 5 and
in paragraph 6 hereof are reasonable and necessary.
(b) All insurance business transacted through the efforts
of the Employee shall be the sole property of the Company, and the Employee
shall have no right to share in any commission resulting from the conduct of
such business.
-3-
,...Jl
,-
.-,
(C) premiums on all insurance business transacted through
the efforts of the Employee shall be invoiced to the assured or purchaser by
the Company or any insurance company it represents. All checks or bank drafts
received by the Employee from any assured or purchaser shall be made parable
to the Company or any insurance company it represents; and sll premiums shall
be collected by the Employee in the name of and on behalf of the Company.
(d) The Employee agrees that he will not, without the
written consent of the Company, during the term of this Agreement or
thereafter, disclose or make any use of such confidential information except
as may be required in the course of his employment hereunder.
,
p.
i'
I
,
(e) On termination of employment, the Employee shall
surrender to the company all records and all copies made of those records that
pertain to any aspect of the business of the Company, with its cllents and
their respective insurers, including but not limited to clients' coverages,
active and prospective clients, expirations of coverages, premiums and
compllations of the same.
(f) The Employee agrees that he will not entice or induce,
directly or indirectly, any other employee of the Company to leave the employ
of the Company.
6. Aqreement Not to Compete
(a) Upon termination or expiration of the Period of
Employment for any reason, the Employee agrees that for a per iod of thr~e (31
years following such termination or expiration, he will not, directly or
indirectly, solicit, sell or accept insurance business from any person,
partnership, corporation or other entity who is then a client of the Company
or who was a client of the Company during the Period of Employment (including
any renewal term). It, during the said three (3) year period, any commission
or any insurance business becomes payable to the Employee or to any person,
firm, or corporation by whom the Employee is then employed or affiliated, as a
result of the Employee's violation of the first sentence of this paragraph,
the Employee agrees to pay promptly to the Company an amount equal to lSO~ of
such commission. This covenant shall extend to the entire geographic area of
the state of Pennsylvania. If any court shall finally determine that the
covenants contained herein are too broad as to area, activity or time, said
covenants may be reduced to the extent that the court deems reasonable; and
such covenants may be enforced thereafter as to the reduced area, activity or
time.
(b) If, following termination or expiration of the Period
of Employment, the Employee accepts other employment or enters into a business
relationship with any person, partnership, corporation or other entity doing
business of the kind then being performed by the Company, the Employee shall
obtaln from said second employer and shall provide to the Company a written
acknowledgment by the successor employer of its notification of the terms of
paragraphs 5 and 6 of this Agreement.
-4-
~
(C) It is expressly agreed upon that money damages will
not be an adequate remedy for any breach of the covenants of the Employee set
forth in paragraphs 5 or 6 hereof; and in the event of any such breach, or
threatened breach, the company shall be entitled to secure an injunction
requiring the Employee to abide by his commitments under such provisions of
thls Agreement.
7. Miscellaneous
(a) The Employee may not assign this Agreement or any of
his rights or obligations hereunder to any person, flrm or entity. The
Company shall be entitled to assign and transfer its rights pursuant to this
Agreement in connection with any merger, sale or other disposition of all or
any part of its insurancs business; provided, however that the Company's
obligations hereunder are expressly assumed, in writing, by a solvent assignee
or successor.
(b) Any notice requlred or permitted to be given pursuant
to this Agreement, or in connection therewith, shall in lieu of personal
services, be deemed to be duly given when transmitted by First Class united
states Certified Mail, to the Company and the Employee at the following
addressss, or at such other place as either of the parties may for themselves
designate in writing from time to time for the purpose of receiving notices
pursuant hereof:
(il William B. Conner, Chairman
Robinson-Conner of pennsylvania
3230 West Lake Road
Erie, pennsylvania 16505
(ii) David Hopcraft
Hopcraft Insurance Agency, Inc.
401 East Louther Street
Carlisle, Pennsylvania 17013
(C) Neither party will be deemed to have waived any right,
power or privilege under this Agreement or any provision thereof unless such
waiver shall have been duly executed in writing and acknowledged by the party
to be chsrged with such waiver. The failure of either party hereto at any
time to enforce any of the provisions of this Agreement will not be construed
to be a waiver of such provisions, nor in any way affect the validity of this
Agreement or any part thereof, or the right of any party to thereafter enforce
each and every such provision. No waiver or any breach of this Agreement vill
be held to be a waiver of any other or subsequent breach. In the event that
anyone or more of the provisions contained in this Ag~eement shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceabi1ity shall not affect any other
provision of this Agreement.
-5-
.
.
(d) This Agreement sets forth the entire Agreement and
understanding between the parties as to the subject matter of this Agreement
and merges and shall superaede all prior Agreements, commitments,
representations, writings and discussions between the parties with respect
thereto. This Agreement shall not be subject to change, alteration or
modification, other than by an instrument in writing duly executed by the
part ies hereto.
(e) This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
(f) This Agreement shall be construed, interpreted and
enforceable in accordsnce wIth the laws of the State of pennsylvania.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement the day and year first ~bove written.
ROBINSOll-CO PENllSYLVAlIIA,
Q',
QY: '1.<' ~ tC...~
- ichard W. 1100re, President
INC.
WITNESS:
THE EMPLOYEE:
() . 0
I d i1n1. f)'\ I Q cJ? ~ (} j J..{ .4.J
~ ~*
~ W.
David per!t
(SEAL)
2 )EA203312
-6-
Oi\VIIIW HlII'l'IlMI
.1 S'fR.\HR DRI\<
C,UIlISIf.. PF.N~\SYI.v.\NI,\ 17013
May 05. 1995
Mr Richard Moore, CEO
Acordia of Pennsylvania. Inc.'
4750 Delbrook Road
Mechanicsburg, PA 17055
Dear Dick:
I have tried to reach you several times to discuss this mailer face to face, but with your
schedule it is vinually impossible, There are many mailers that I would like to go over
with you but the most pressing is the Carlisle office,
Dick. I am fony-six years old and have three children. ages nine, thineen and nineteen that
depend upon me. it is imponantto me that I have job security or know that at least I have
some control over my own destiny. [would appreciate it if you could have a run of thl:
Carlisle office accounts and let me know what the cost would be to purchase the entire
book.
The initial dealings [ had with you, almost three years ago, were confidential and [ would
expect this request to be the same.
Based upon what [ see and hear about the Carlisle office, [ would like to be able to make a
decision in the very near future
Dick. thank you for your allention to this mailer
Regards.
David W. Hopcraft
PLAINrlFt"8
ElCHl8lT
3
\.'urlli" IIf t :I'lllr'll "I"III"~ ".1I11i1
I'll, 1111\ 1220
17",H Ih'lhr'H,k H,,,,,I
\In-h.HUnl'IU';:. l'I'I"I~\" ,1I11il 1711.",:,
,:"171:"'" 1"1"
I HtH), It,;! I'Jn
hu171717hl:N17
()J;Y;.()f'( 1 ia
HAND OELIVERED
May31,I995
David Hopcraft
3 Strayer Drive
Carlisle, PA 17013
Dear David:
This letter is to infonn you that Acardia of Pennsylvania, Inc. has ellosen to exercise its Employment and
Term Option Wlder your Employment Agreement dated the 1st day of July 1992. Specifically the options
states: I(a) "The Period of Employment shall be automatically renewed on a yeaNo-year basis following
expiration of the initial Period of Employment. W1Iess either party shall, on or before thirty (30) days prior
to rIle expiration of the Period of Employment or any applicable anniversary thereof, notify the other party.
in writing, of termination"
Subsequently, your last day of employment with Acordia of Pennsylvania, Inc. will be May 31, 1995. In
lieu of working the next 30 days, Acordia of Pemsylvania. Inc. will compensate you at your normal base
salary whiell shall be payable on JWle 9, 1995. Business expenses incurred up througll May 3 I, 1995 will
be reimbursed in accordance with Company policy.
. i'
! \.
! I' :.
r :
, .
! .
! '
The terms of the Employment Agreement dated the I st day of July, 1992, states that you shall surrender to
the Company all records and all copies made of those records that pertain to any aspect of the business of
the Company, with its clients and their respective insurers, including but not limited to clients' coverage's,
active and prospective clients, expirations of coverage's, premiums and compilations of the same.
Additionally, you agreed per the tenns of the agrccmcnt, that you will not entice or induce, directly or
indirectly, any other employee of the Company to leave the employ of the Company.
The Employment Agreement also contains an Agrccm",t Not to Compete, specifically; (a) Upon
terminatIon or expiration of rhe Period of Employmcnt for any reason, the Employee agrees that for a
period of lhre'C (3) years followmg such tennination or expiration, he will not. directly or indirectly, solicit,
sell or acce'!>t insurance business from any person, partllership, corporatIOn or other entity who is then a
client of the Company or who was a client of the Company during the Period of Employment (including
any rcncwaltenn). If, during the said three (3) year period, any commission or any insurance business
becomes payable to the Employee or to any person, firm, or corporation by whom the Employee is then
employed or affiliated, as a result of the Employee's violation of the first sentence of this paragraph, the
Employee agrees to pay promptly to the Company an amoWlt equal to 150% of such commission. 'This
covcnant shall extend to the entire geographic area of the State of Pennsylvania If any court shall finally
delemline Ulat the covenants contained herein are too broad as to area. acti vity or time, said covenants may
be reduced to U,e extent Ulat U,e court deems reasonable; and suell covenants may be enforced thereafter as
to the reduced area, activity or time.
fI,
;
!
,
I
i
,
I
i
I i
,. ~
t
H
t ;t "
, ~ t
PlAINTIFFS
EXHIBIT
Furlll",'I\ llul,ill_"I1I:H111l1'r, 1110
'I
\ . \
Da vld Hop~raft
Page Two
(b) It. following tennination or expiration of the Period of Employment, the Employee accepts other
employment or enters into a business relationship with any person, partnership, corporation or other entity
.ioing busineas of the kind then being performed by the Company, the Employee shall obtain from said
second employer and shall provide to the Company a written a~knowledgment by the successor employer of
Its notification of the terms of this Agreement.
(c) It is expressly aweed upon that money damages will not be an adequate remedy for any breach of the
covenants and in the evlllt of such breach, or threatened breach. the Company shall be lIltitled to secure an
injunction requiring the Employee to abide by his commitments under such provisions of this Agreement.
Should you require additional information, please let me know.
Sinc:erely.
{l/L41/ )$r'
Craig Fortna
Chief Operating Officer
pc: File
, .,
-.
I..lW Offi<es
SAIDIS, GUIDO, SHUFF & MASI.AND
Ii 'Rf)tt,SSUJNAl. CURPtll(ATUIN
John E. Silk.
Robert C. Saidl,"
Edward E. GuhJo
Geoffrey S. Shuff
Albert H. M..I""d
Jnhnn. J. Deily
TImolhy M. Anstine
Scan D. Moore
West Sbore Orne.:
1109 Market Su<<,
Camp Hill, PA 11011
Telepho..: (117) 131.)4<IS
Ptcsimile: (111) 13 1. )401
26 W." High Slreel . Post Office 80. 5110
Carlisle, Pennsylvania 170 I ]
Telephone: (717) 243-6222 . Facsimile: (717) 24),(>4116
August 11, 1995
Reply 10 Corll5le
Mr. Richard Moore,
ACORDIA OF CENTRAL
P.O. Box 1220
4150 Delbrook Road
Mechanicsburg, PA
CEO
PENNSYLVANIA INC.
17055
Re: David W. Hopcraft
3 Strayer Drive
Carlisle, PA 17013
Dear Mr. Moore:
David W. Hopcraft has consulted this office with regard to the
recent termination of his contract by Acordia of Central
Pennsylvania, Inc.. I have been provided with copies of an
Employment Agreement and Purchase Agreement.
Mr. Hopcraft has indicated the purchase of Hopcraft Insurance
Agency, Inc. was negotiated by you on behalf of Robinson-Conner of
Pennsylvania, Inc. At that time, Mr. Hopcraft, along with other
agents whose book of business was purchased, received assurances
from you that they had an option to buy back their agencies in the
event their employment was terminated. This option was to be
exercised within ninety (90) days of the termination and the
purchase price would be calculated by use of the same formula as
Robinson-Connor of Pennsylvania, Inc. used to purchase the agency.
Needless to say, because of the runoff of Hopcraft's book of
business with Linda Blackburn leaving Acordia and Mr. Hopcraft not
servicing the clientele, he is very concerned as to what he would
actually be buying. Accordingly, we would request that you provide
records concerning the actual volume of the Hopcraft book of
business for the period from July 1, 1994 to July 1, 1995. We
would anticipate that this would be the commissions on which a
purchase price would be established. Could you kindly confirm that
this is your understanding and that the Agreement continues to be
in effect. Obviously, if Mr. Hopcraft must make a decision on or
before October 1, 1995, your prompt attention to this matter would
be most helpful.
PlAlNTlFF'S
EXHIBIT
s-
.
Mr. Richard Moore, CEO
August 11, 199r)
Page Two
Secondly, Mr. Hopcraft attracted the Pennsylvania Restaurant
Association of 100 State Street, Harrisburg, Pennsylvania as a
client. B~sed on discussions with Mr. Craig Fortna, Mr. Hopcraft
was led to believe that Acordia is not interested in retaining the
Pennsylvania Restaurant Association as a client. Could you kindly
advise as to Acordia's position with regard to the Pennsylvania
Restaurant Association?
Finally, Mr. Hopcraft has indicated to me that the non-renewal of
his contract with Acordia of Pennsylvania, Inc. was on an amicable
basis. Mr. Hopcraft continues to approach this matter in an
amicable and non~dversarial fashion and, as you can recognize by
the content of this letter, anticipates that Acordia will free him
from any covenant not to compete so that he may pursue his
livelihood. I have no reason to think that your approach will be
other than as stated above and would request that in addition to
your positions on the option to purchase the Hopcraft book of
business and the release of the Pennsylvania Restaurant
Assoclation, you also address Acordia's position as to the covenant
not to compete.
As Mr. Hopcraft is compelled to make certain financial and business
arrangements, we would ask for your prompt attention to this
matter. Mr. Hopcraft.s exercise of the option to repurchase his
business on or before October 1, 1995 would appear to require
financial arrangements, office space, advertising and various other
arrangements which must be completed promptly. May I request a
response or at least a telephone call within the next ten (10) days
on this matter.
If you have any questions or need any additional information from
this office, please do not hesitate to contact me.
Very truly yours,
SAlOIS, GUIDO, SHUFF & MASLAND
Robert C. Saidis
RCS/kll
cc: Mr. David Hopcraft
._..
, .,
~~! A:')RL1A ~j~ ~A
~ .~, :;' :;,
! 2~! 7
y
.
Acordl. a( Lellltal P.l1I1l)l....nl. Rith..rd \l.', ~.noril!
PO. 80' i'l;'!O rruident & CEO
41:)0 O/!Ihr')'lk RQ..d
Mech.niclbur,. Pcnn.)'h..ni. 110,S.s
(717) 761.l'I19
1.800..6~..9.l
P.. (717) 7~1.1'l17
~ordia
September 1$, 199'
S.idU, Guido, Shufi' Ik. Masland
Ann: Roben C. Saldls
26 West High Street
p 0 BOle '60
Carll.sle, PA 17013
Re: David W. Hopcraft
Dear Bob:
I Wldetsland from the tone of your voice that it appears I have been avoiding this issue.
That is not the case. I have had two board meetings canceled due to the lack of a quonun
during the month ot August. I need to get a decision from my board of dlrectora II to
what my authority is regarding this maner.
When David Hopcraft's company was purchased by Robinson-Conner of PA Inc., we did
have some wscussions as to what would happen in the event of a disagreement and how
the covenant would apply, Since that time, a new company has been formed called
Acorwa ofPA, Ino., which bought aU the stock and assets of Robinson-Conner ofPA and
is governed by a new board of directors. It is my plan to go the board of directors and
advise them of the discussions lhat took place with David during the acqulsltion and
elC}1lain to them why r believe it i.~ important that David i~ provided with tho OPPOnwllly
to explore these options. A board meeting is scheduled for September 27th. If I do not
~verything, I will e~lllI:~ the~~~~ber date.
-_.~--
As you read in his contract, there Is rellef for David. However, it is not practical, in that
anything he takes, he will owe ISO% of the commissioato Acordia ofPA. That in hse1f;
gives him the right to take accounts. I am not going to restrict his right to work and as
Indicated In your letter it was an aroicaMe separation, but Acordia of PA must adhere to
our governance and get board approval to sell assets.
You should realize that we are only dealing \vith the Hopcraft book, as I havo been
informed that there have been negotiations \vith other agents In the area to merge and buy
our Carlisle office. r am not In the position to discuss the Carlisle office untu I have bad
various strategic discussions with my board of directors.
Pl.AINT1FF'$
ElCHI8lT
~
rnmu',h Rohln"<}(1 .CnnnrT. In("
_.
> ..,.--.
.:r '~,,_
" ~::- -
.
.,
,- . ,
- ; ~ . ,
AI$O, I want YOllto know that Mr. Fortna and I arc not in a position to otTer the sale of
the Restaurant Association book at this time, Our company has put up a $350,000
Irrevocable letter of credit &. wc intcnd to honor our col11lllitmcnts to the Association
unless they would elecl to appoint David as their agent. Howevcr it would be necessuy
to replacs this lettcr of credit. The value of thls book of business would require a full
evaluation. Mr. Micbael McGovern, the executive director of the Restaurant Association
and I have had scveral discussions regarding this issue. It is important for you 10 know
that he Is on our board of directors, thereforc we want 10 ensure thaI there arc 110 conflicts
ofinlerest.
Again, I know the frustration to everyone and I will move just as fast as I can to bring this
matter to the poinl where I can ncgotiate with you and David. Please be patient and I will
get tbe definition of my authority funher clarified. After the conclusion of my meeting on
Septembcr 27th. I will conlact your office as well as David so that we may proceed
accordingly.
I hope Ibis will satisfY )'ou as 10 our position al this limc. If you have any questions,
please do nol hesilatc 10 give me a call.
!i'~p>z
~~r~oore
Prcsidenl &. CEO
.
RWM:dm
Law Office'i
SA lUIS, GUIDO, SHUFF & MASLAND
A ,MOtESSIl)NAL ('OI<<J'tlM^'lllN
luhn E Silkc
Robert C S...illu
f.dw~(d F.. Guidu
G""rrrey S. Shurr
Alhert 1.1. M..land
Johnn. J. Deily
nmolhy M. Ansline
Scali O. Moore
26 Wesl High Slreel . PnS! Ofti<e Iln. 5flfJ
Carlisle, PenD5yhanla 1701.1
Telephnne: (717) 243-6222 . F.csimile: (717) 'l43-64H6
Wm Shun om":
2109 Mart,,:, _I
Camp H.II, PA 17011
Telephone: (717) 737-340S
f,,,imile: (717) 737.3407
November 30, 1995
Reply 1b CarIItIe
Richard W. Moore
President and CEO
ACCOROIA OF CENTRAL PENNSYLVANIA
P.O. Box 1220
4750 Oelbrook Road
Mechanicsburg, PA 17055
Re: David W. Hopcraft
Dear Mr. Moore:
We have had not contact concerning the above-captioned matter since
the middle of September, 1995. At that time, it was indicated to
me that you needed to have various strategic discussions with your
Board of Directors before responding to Mr. Hopcraft.
Once again, I would request that you provide us with your position
on Mr. Hopcraft's purchase of his Book of Business which includes
personal and commercial lines.
I would request a response to this letter within one (1)
Hopcraft has indicated to me that this is not a
calculation for you to perform. In addition, we
discussions concerning this since August of 1995.
I look forward to your prompt response. If you have any questions,
please do not hesitate to contact me.
week. Mr.
difficult
have had
Very truly yours,
SAlOIS, GUIDO, SHUFF & MASLANO
Robert C. Saidis
RCS/kll
cc: David Hopcraft
PlAINTIFPs
EXHIBIT
7
Kt.Cl::IVEn
- 6 1q9~
,
osil<~()rdia
\l'unlill "I' (:I'II.rlll I'l'llll~\ h .\lIi;1 Ilidlilrll \\ . "llUrI'
I'll U", I !~H Pn'~lol"1I1 \'\ CF.11
~;.-,lIlh,II.."u" Un.I.1
",.,11.1111I-111"':(. 1'1'1I11.,h.t111.1 I ;1I".i
171:l :'11.1")'.
l.nulI.lh.!.IIIU
F.I\. t :17, 7hl.!!"7
December 4, 1995
Mr. Robert C. Saidis
Saidis, Guido, Shuff & Masland
26 West High Street
P.O. Box 560
Carlisle, PA 17013
R[: David lIopcraft
Dear Bob:
Your letter dated November 30th was somewhat ofa surprise to me. If you recall, we had
set up a meeting for I :00 PM on Friday, October 6th at your Camp Hill office. At 9:04
AM on Wednesday, October 4th, your office called to say that our meeting had to be
canceled, but that you would call me early the following week to reschedule. If you
remember. I had offered to go ahead and meet with David Hopcraft, however, you stated
that you wanted to be present at all meetings. Since you had taken on the responsibility of
rescheduling. I have done nothing up to this time under the assumption that perhaps David
was reevaluating his thoughts of buying the company.
Bob, a lot of changes have taken place with Acordia over the last couple months. If you
wish to reschedule our meeting, I suggest that we do so as soon as possible. I'll be in
Philadelphia all day on Tuesday, December 5. My assistant Wendy Jewell, however, has
my schedule and can assist in establishing a mutually agreeable time for a meeting.
I'm sorry for the confusion in this maller. As instructed by your office on October 4th, I
have been waiting for you to contact me to reschedule our meeting.
SincerelY'1
' l~
.1:!~. ~:ore
l'resident and CEO
cc: David Hopcraft
F'lrnlC"fl~' Illll,ill..llll.t:llIlIwr. 1111',
PI.AlNT1f1"8
EXHIBIT
<2"
".. -:
ConJidentiaiity Agrccmcnt
Dccember 12, 1995
Page 2
2. It is agreed upon that /Iopcraft shilll not use the Confidential Information received
from Acordia except to enable Hopcraft to evaluate its intere&1 in acquiring a
portion of the Business. Furthermore, Hopcraft agrees to use its best efforts to
prevent a disclosure of the Confidential Information reccived from Acordia to
persons outside of Hopcrafl, cxcept that Hopcrafl shall not be liable for a
disclosure to others of information:
a. That was generally available to the public prior to receipt of said
information from Acordia,
b. That has been in the public domain or becomes generally available to the
public through no act or failure to act on the part of Hopcraft;
c. That was received from a third party having no obligations to Acordia to
hold said information in confidence; or
d. That was known to Hopcraft prior to receiving the information from
Acordia.
3. No rights or obligations other than those e"Jlressly recited herein are to be implied
from this Agreement. This Agreement does not represent a commitment from
Acordia to sel~ nor from Hopcraflt~ buy, any part of the Business.
4. The existence of this Agreement, tile nature of the discnssions involved, and the
relationship created by this Agreement shall be kept con1idential.
5. Hopcraft may disclose to Acordia information concerning Hopcraft's business
operations. To the extent that any such information is disclosed to Acordia. .
Acordia agrees, for itself and its affiliates, not to use such information for its own
benefit. Furthermore, Acordia agrees to use its best efforts to prevent a disclosure
of such information to persons outside OWlI organization, except that Acordia shall
not be liable for a disclosure to others of information:
a. That was generally available to the public prior to receipt of such
information from Hopcraft;
b. 111at has been in the public domain or becomes generally available to the
public through no act or failure to act on the part of Acordia;
Acordia of l'ennsylvania, Inc.
INTEROFFICE MEMO
TO:
Dick Moore
Craig Fortna
FROM:
DATE:
Gil Shaffner
June 5, 1995
Below is the estimated commission revenue for the most recent 12 months ending May 31,
1995.
\ COMMERCIAL ACCOUNTS
i Name # of Accounts Premium Commission
\
\ K. Snyder 193 611,574 68,040
D. Neiderer 131 326,080 39,073
\ J. Scott 368 951,304 121,600
I D. Hopcraft 16 15,336 4,490
\
,
I Total Commercial
I 708 1,904,294 233,203
\
PERSONAL ACCOUNTS
\
i
1 D. Neiderer 598 221,233 32,233
j J. Scott 498 904,384 125,535
D. Hopcraft 511 605,522 86,634
Total Personal 1,607 1,731,139 244.402
TOTAL CARLISLE 2,315 3,635,433 477,6Q5
RE.:
Carlisle Commission Revenues
These are the best numbers 1 can provide at this time. Kathy Snyder'S accounts need
reviewed as to accounts that she produced vrs accounts that were David Hopcraft's.
~.-
,
Below art the commission amounts ustd in the acquisition calculation of each agency.
David Hopcraft
Jeff Scott
Dick Neiderer
$247.188
232,491
148,181
Total
$627.860
As you can see there is a $1 SO.OOO difference. I suspect the difference is in the personal
lines commissions and David Hopcrafis commercial commission,. 1 have retained the hard
copy of all documentation in my file,
I have not provided any of this information to David,
Jf;
_Joo
.'
law omce.
SAIDIS, GUIDO, sum'" & MASLAND
John E SlIke
Robert C. Saidi.
f'Alwiltd E. Guido
Geoffrey S. Shurr
Albert H. M..land
Johnna J. Deily
TImothy M, An,.ine
Scott D. Moore
A 'IOfESSIONA1. CORPOIATION
26 We.. High Slreel . PoSI Office UO~ S60
Cullale, Peonayl.anla 170 I 3
Telephone: (717) 243.6222 . Facsimile: (717) 243-6486
WeoIShon 0fIIct:
1109 MtlUl SlrocI
Ctrnp Hili. PA 11011
TclqllIono: (117) 137.).40'
PtcIlmIle: (717) 737. J.407
December 15, 1995
1lopI,1II CarIloIt
VIA PACSIMILE
Mr. Richard W. Moore
President and CEO
ACCOROIA OF CENTRAL PENNSYLVANIA
P.O. Box 1220
Mechanicsburg, PA 17055
Re: Carlisle Office
Dear Dick:
Enclosed please find an original executed copy of the
Confidentiality Agreement dated December 12, 1995.
In an effort to formulate his Letter of Intent, Mr. Hopcraft
would request the following information:
(1) A complete client list for the Carlisle office;
(2) Total premiums for the Carlisle office;
(3) A list of the carriers and the loss ratios for
the Carlisle office;
(4) The expenses of the Carlisle office; and
.:i
--'0
~f:
(5) A separate Profit and Loss Statement, year-to-date
for the Carlisle office.
Supplemental information which will be necessary would include
the following:
(1) A copy of the Lease;
(2) Employment Contracts; and
(3) A list of the assets which will be sold.
It is my understanding that this will be structured as an asset
purchase of the Carlisle office only. We will formulate a Letter
of Intent based on the information you share with us. We will
hold the information you give us in strict accordance with the
Confidentiality Agreement.
~':~9t~
.J,.
~
Law OUices
SAlOIS, (;UIOO, SIIUF'Jo' & MASLAND
I
j
1
!
1
~
,
J
luhn E. Shke
Ruben C Solidi,
EdwOIld E. Ouido
Ocollrey S. Shuff
A/bcrcll. Muland
Johnn. J. Deily
'Jlmolhy M, An'lIne
SCUll D, Moore
A PIlOt'l!!I310,..,,1. nIMf>(JHATION
26 We'l High Slreel . PuSI Office Box '60
Carlisle, PeDl1Bylvanla 17013
Telephone: (717) 243-6222 . Facsimile: (717) 243-6486
Willi Shore (>Inee:
2109 Muke. Sou.
Ctmp Hill, PA /70//
ToIcpl1ono: (717) 737.340'
F...intllo: (117) 737.3407
January 11, 1996
Reply To CarUtl.
VIA J'ACSIMILB
Mr. Richard W. Moore
President and CEO
ACCOROIA OF CENTRAL PENNSYLVANIA
P.O. Box 1220
Mechanicsburg, PA 17055
Re: Carlisle Office
Dear Dick:
This will confirm your conversation with my client,
with regard to our earlier negotiations and
Agreement.
Oavicl Hopcraft,
Confidentiality
It is my understanding that you will immediately provide us with a
sample letter of intent which will enable us to formulate our
offer. We are still awaiting the information requested in my
letter of December 15 which we understand you are attempting to
secure. Could you kindly advise when we may anticipate the release
of the requested information.
Needless to say, based on our earlier conversations, I believe we
are all anxious to get this matter resolved as soon as possible.
Please give this matter your immediate attention.
Very truly yours,
"/~QUIr"" SHD1'P
L_ Robert C. Saidis
&. MASLAND
RCS/kll
cc: David Hopcraft
, ......"
-.
~ ,.' \".
,~ .....\ ."
ArorJl.l of Contfa!
~1ll1i}lv,1l\j.l, fnc.
~ I II) D<lh",,,k R,,,,J. POBox 1110, MtchamClburg. PA 1105\
FAX
Oat.: 1/18/')6
Nunlbor of page. including cover ,ho<1: 3
To:
ll'rolU:
i
;
I
f
E;
r
Robert C. Saldls
Richard W Moor.
Phone:
Phon.:
Pa>C phone.
(1I1}161-1919
(111}161.Z911
Pa.' phone:
RJ:MARKS:
o Ursent
o Por your roview 0 Reply ASAP
o PICMO commenl
Per our discussion - sample letter of Intent attached.
I'LAINTIFF'8
EXHIBIT
/3
S.\.~II'I.r. U:TUll or INTtN'r
D~.1r
Tho fonowing Idter win provide t'" basio fraawwork for the pwcbaso of the specified assets of
- -------.-----
I. Subject 10 the terms lUId conilltlons se' forth in the tinal agreement. seller agree. to sell
illld buyer agrees to buy the business of .' and certain of its 8S5lOlS and
properties. This would includo the purchase of goodvo.iJI, record9, customer lists and
c.>rrllspondence.61es. work in progress at the date of closing, all righu and interests in
.xistC1lce in the agency and brokerage contracts.
2. Buyer's pwcbase price will be based on tbolrevenueS gll1lolratold by the sccounts of
. A rolling tWollw (12) months, ending 30 days prior to the closinS. will
be utilized to dottennine the 6nal number. This Dumber will be made up of Personal Lines
revll1lues. Group revenues and Commercial/Casualty business. The pwchaso price wiU be
a multiple of _ times tbose rcvenues pwchased on a conlingent basis, Our intentions
arol to pay $ down at closing and the balance over _ years tied 10 the
retjJ1t!on of tho so ICcounU according to tho formula in the Purchase Agreement.
3 We would mutuaUy agree on hard assets to be purehaied. They would be pwchased at
their current net book value.
4. We do (do 110t) intend to assume auy leas.: or other executory eootract of the seUer.
~ Any accounting transaction that has an ellective dale prior to closing will bol the
responsibility of thol sellolr. All transactions \\;th an effective date after tbe closing will be
thol respousibility of the bUYolr.
6 All contingency/profit sharing conmrissions for the year ended _,.---J which will be
paid during the calendar year ...--J win be the sllle property of the seUer.
7. In connection with tbol consummation of the purchase, eacb party shall pay all ofits
respectivol expenses.
8. The statemenu ofincome and expenses provided to the buyer are warranted to be
substantially tNol, complete l\lId correct. and have been prepared In accordance with
general accepted accounting principles and consistently applied and fairly represent the
financial condition oftbe seller.
Q Sollkr agrees to indemnify and bold harmless the buyer frODlllDd against any and all claims.
actions, damages and liabilities and e,,<pens.:s arising from the operation of the insurancol
agency prior to the date of closing.
, ..-
,
SAMPLE IEHER OF INTENT
PAGE 2
10. The seU~r a&leu to provide and pay for uilcovo:raac for ~ yellls from 1M date of
closing.
II. The final IgIcemelltto purchase will be contingent on the execution of. fon:nalaa1ea
agreement acceptable to both pmies, and this sales agreement must be approvod by the
Board of OiJectors of respective panies.
12. Ex~ept II may be requind by applicable law, neither the buyer nor the sener shall engage
in, encourage or 5\Ipport any publicity or disclosure of any kind or fonn ill coone<:tion
with this letter olintent or lbe transaction contemplated hereby unIesl tho partiea shall
consult in advance on the form, timing and content of any publicity, annoUll<:etDeDt or
disclosure, whether to the financial community. governmlll1tal agoncies, public generally
or otherwiso. Also, unless this leller is expressly terminated by the buyer or seUer, the
buyer will not permit any of its offic~r8. representatives, agcuts, and employees to supply
confidential information directly or indirectly, concerning the insurance business of the
seller to any third party in connection with a possible acquisition, or lolicit or negotiat~,
directly or indirectly. with any third peISon to acquir~ the seller.
If the general ftamework described herein is consistcut with your expectations, we will pro<:eed
with our due diligence investigation 10 assure that the overall transaction is COllUlIIIt with our
r~quiremcnts and current contractual obligations. N~ither party will be legally obligated to
procecld unIclss and until the due diligenc~ investigations is satisfactorily complated.
Respectfully,
Signature
Title
Dale
;\
Accepted by:
Signalurll
Tille
-
Dahl
> ~
~
L..J. w Offices
SAIDIS, GUIDO, SHUn' & MASLAND
"rRofli,~SIONAL CC)Rf'(JMArU>N
lohn E. Shke
Roben C. Sal~i1
Edw;u~ I!. Gui~o
Geo((rey S. Shurr
Alben H. M..land
Johnnal. Deily
TImothy M. AOIlIne
SCOll D. Moore
26 West lIigh Slree' . POSl Office /loa S60
Carlisle, Pennsylvania 17013
Telephone: (717) 24]-6222' Facsimile: (717) 24]-6486
w.... Sbo.. ()file",
2109 M...ct SUCCI
Camp Ihll, PA 17011
Telephone: (717) 7J1.)4(lS
Focsimile: (111) 131.)401
January 25, 1996
Reply To Carlisle
PlAINTlFPS
EXHIBrT
VIA FACSIMILB
/L(
Mr. Richard W. Moore
President and CEO
ACORDIA OF CENTRAL PENNSYLVANIA
P.O. Box 1220
Mechanicsburg, PA 17055
RE: Carlisle Office
Dear Mr. Moore:
We received your note that there would be no movement on Mr.
Hopcraft's proposal until after a rescheduled meeting to be held
February 6 and 7, 1996.
This is contrary to what you had represented to Mr. Hopcraft and
me at our conference in my Camp Hill office. At that time, you
represented that you had authority, pursuant to an agreement with
Kevin Conboy, to negotiate on behalf of Acordia of Central
Pennsylvania. Your representations were that the Carlisle office
did not fit into Acordia's plans.
Based on these representations, we moved ahead promptly with the
understanding that we would execute a Confidentiality Agreement,
promptly receive a sample letter of intent and the financial
information which was requested in my letter of Oecember 15. It
was our conclusion that no board action would be necessary until
we submitted the letter of intent in sufficient detail based on
receipt of the financial information. Since you had the
authority to wrap up this deal, we are unable to understand the
continuing delay.
Back in September, you acknowledged David Hopcraft's right to
purchase his book-of-business back and even extended the "October
date" so we could receive additional information. Nothing is
happening. Mr. Hopcraft is without a job and we have substantial
delay on your part. Accordingly, we are providing a roughed out
sample letter of intent which we would ask you to respond to
within one (1) week. Hopefully, your response would be such that
we could formulate a more acceptable letter of intent which you
could then resolve with your Board on February 6 and 7, 1996.
.
Mr. Richard W. Moore
January 25, 1996
Page Two
If we do not have a reasonable response within one (l) week, Mr.
Hopcraft will have to pursue the remedies which are available to
him.
Thank you for your continuing cooperation in this matter.
Very truly yours,
, GUIDO, SHUFF &: MASLAND
C. Saidis
Rcs/kll
Enclosure
eel David Hoperaft
'.r
January 25, 1996
VIA I'ACSllaU
~
fJlfll8n
IS-
Mr. Richard W. Moore
Pre~ident and CEO
ACOROIA OF CENTRAL PENNS'VLVANIA
P.O. Box 1220
Mechanicsburg, PA 17055
Re: Acordia of Central Pennsylvania
Carlisle Office
[
,
Dear Mr. Moore:
The following letter will provide the basic framework for the
purchase of the specified assets of the Carlisle office of
Acordia of Central Pennsylvania. This letter of intent is based
on the June 5, 1995 Carlisle Commissions Revenues Interoffice
Memo showing total commissions of $477,605.00 (a copy of which is
attached). This letter is contingent upon receipt by February 1,
1996 of a complete client list for the Carlisle office; the total
premiums for the Carlisle office; a list of the carriers and loss
ratios for the Carlisle office; the expenses of the Carlisle
office; and a separate profit and loss statement, year to date,
for the Carlisle office as well as a total profit and loss
statement for 1995.
l
J
1.
Subject to the terms and conditions set forth in the final
agreement, seller agrees to sell and buyer agrees to buy the
business of Acordia of Central Pennsylvania - Carlisle
office and certain of its assets and properties. This
would include the purchase of goodwill, records, customer
lists and correspondence, files, work in progress at the
date of closing, all rights and interests in existence in
the agency and brokerage contracts.
+0.
.
.
.
2.
Buyer's purchase price will be based on the revenues
generated by the commercial accounts and personal accounts
of the Carlisle office. A rolling twelve (12) months,
ending 30 days prior to the closing, will be utilized to
determine the final number. This number will be made up of
Personal Lines revenue, Group r!venues and
Commercial/Casualty business. The purchase price will be a
multiple of 1.25 times those revenues purchased on a
r
!:
~
11 t
i'l~.
I,
, ,
i '.
.,
i~ .\
I .1-
I
Mr. Richard W. Moore
January 25, 1996
Page Two
contingent basis. Our intentions are to pay $500,000.00
down at closing and the balance over 1 year tied to the
retention of those accounts according to the formula in the
Purchase Agreement.
3. We would mutually agree on hard assets to be purchased.
They would be purchased at their current net book value.
4. We do intend to assume any lease or other executory
contracts of the seller.
Any accounting transaction t.hat has an effective date
to closing will be the responsibility of the seller.
transactions with an effective date after the closing
be the responsibility of the buyer.
6. All contingency/profit sharing commission for the year ended
1995, which will be paid during the calendar year 1996, will
be the sole property of the seller.
prior
All
will
5.
7. In connection with the consummation of the purchase, each
party shall pay all of its respective expenses. seller
agrees to pay for the preparation of the formal Sales
Agreement acceptable to both parties.
8. The statements of income and expenses provided to the buyer
are to be warranted to be substantially true, complete and
correct, and to have been prepared in accordance with
general accepted accounting principles and consistently
applied and fairly represent the financial condition of the
seller and will be provided to the ~uyer on or before
February 1, 1996.
9, Seller agrees to indemnify and hold harmless the buyer from
and against any and all claims, actions, damages and
liabilities and expenses arising from the operation of the
insurance agency prior to the date of closir.g.
10. The seller agrees to provide and pay for tail coverage for 2
years from the date of closing.
11. The final agreement to purchase will be contingent on the
execution of a formal sales agreement acceptable to both
parties, and this sales agreement must be approved by the
Board of Directors of the respective parties.
12. Except as may be required by applicable law, neither the
buyer nor the seller shall engage in, encourage or support
~
Mr. Richard W. Moore
January 25, 1996
Page Three
any publicity or disclosure of any kind or form in
connection with this letter of intent or the transaction
contemplated hereby unless the purties shall consult in
advance on the form, timing and content of any publicity,
announcement or disclosure, whether to the financial
community, governmental agencies, public generally or
otherwise. Also, unless this letter is expressly terminated
by the buyer or seller, the buyer will not permit any of its
officers, representatives, agents, and employees to supply
~onfidential information directly or indirectly, concerning
the insurance business of the seller to any third party in
connection with a posuible acquisition, or solicit or
negotiate, directly or indirectly, with any third person to
acquire the seller.
Respectfully,
HOPCRAFT INSURANCE AND
FINANCIAL SERVICES
1)~ uJ.
David W.
Date: January 25, 1996
Accepted by:
ACORDIA OF CENTRAL PENNSYLVANIA, INC.
Richard W. Moore, President & CEO
Datel
,.'
.
..
(
r
Acardia of Pennsylvania, Inc.
INTEROFFICE MEMO
.
TO:
Dick Moore
Craig Fortna
i
,
,
l
K
~
.
i
FROM:
Oil Shaffiter
DATE:
Iune 5, 1995
RE: Carlisle Commission Revenues
Below is the estimated commission revenue for the most recent 12 months ending May 31,
1995.
COMMERCIAL ACCOUNTS
Name # of Accounts Premium Commission
K. Snyder 193 611,574 68,040
D. Neiderer 131 326,080 39,073 I'Jue:,
1. Scott 368 951,304 121,600 11.. I,
D. Hopcraft 16 15,336 4,493
Total Commercial 708 1,904,294 233,203 I
\
PERSONAL ACCOUNTS
D. Neiderer 598 221,233 32,233
I. Scott 498 904,384 125,535
D.Hopcraft 511 605,522 86,634
Total Personal 1,607 1,731,139 244,402
TOTAL CARLISLE 2,315 3,635,433 477,605
These are the best numbers I can provide at this time. Kathy Snyder's accounts need
reviewed as to accounU that she produced vrs accounts that were David Hopcraft's.
.... ~ ....
...
Pl.AJNT/FF'S
EXHIBIT
Law Offices
SAIDlS, GUIDO, SHUIo'F & MASLAND
/ ~
John E. Slike
Robell C. Saidi.
Ed... i1td E. Guido
Geoffrey S. Shuff
Alben H. Mas/and
JohMa J. Deily
TImothy M. An.tine
SCOll D. Moore
A PROfUSIONAL COIU'ORATION
26 Well High Streel . PoS! Office Box 561l
Carlisle, PeolUylnaJa 17013
Telephone: (717) 243-6222 . Facsimile; (717) 243-6486
W..c Sbore Officc:
2100MltkctSIr<el
Camp Hill, PA 170 II
1''''''''''''' (711) n7.J40~
PI<IimiII: (717) 737-3401
February 5, 1996
~ 1b CarlIsle
VIA FACSIMILE
Mr. Craig Fortna
ACORDIA OF CENTRAL PENNSYLVANIA
P.O. Box 1220
Mechanicsburg, PA 17055
Re: Hopcraft Book of Business
Oear Mr. Fortna:
After our telephone conversation of February 2, 1996, and being
aware of your board meetings on February 6 and 7, 1996, I felt it
best to put in writing Mr. Hopcraft's position so that we could
move forward on this matter.
As previously noted in our correspondence of August 11, 1995 and
acknowledged by Dick Moore in his correspondence of September 15,
1995, David Hopcraft had an option to buy back the "Hopcraft Book
of Business" in the event his employment was terminated. This
option was to be exercised within ninety (90) days of termination.
Mr. Moore negotiated the transaction and has acknowledged this
option. The option was negotiated and discussed before, during and
after the execution of the July 1, 1992 Agreements between Hopcraft
and Robinson-Conner of Pennsylvania, Inc.. It is Mr. Hopcraft's
position that he has an enforceable right to purchase back the
Hopcraft Book of Business.
The agreement not to compete contained in the Employment Agreement
of July 1, 1992, which you have termed a "non-piracy" provision,
must therefore also be unenforceable. Mr. Hopcraft' s option to buy
back his Book of Business cannot be precluded by a prohibition that
he not solicit, sale or accept insurance business from any person
who is then a client of the Company or was a client of the CompAnY
during the period of employment.
We anticipate that Acordia of Pennsylvania will acknowledge Mr.
Hopcraft's option and his release from any agreement not to
compete. We wou1d expect that you would acknowledge this on or
before Friday, February 9, 1996.
Unless we can reach an amicable agreement by that date, it would
appear to me that Mr. Hopcraft will have no alternative but to
pursue his legal remedies.
."
Mr. Craig Fortna
February S, 1996
Page Two
If you would like to discuss this matter prior to your board
meeting, please do not hesitate to contact me.
Very truly yours,
SAlOIS, GUIDO, SHUPP" MASLAND
Robert C. Saidis
RCS/kll
cc: Mr. David Hopcraft
!l
RC
I{, ,hllhl'l1( "'l1l1cr
Date: September 15, 1993
To: Dave Hopcraft
From: Gil Shaffner
Re: Acquisition Calculation and Payment
Attached is a copy of the agency acquisition calculation and payment for
same. I have listed below how the distribution of funds have been
calculated.
CNTC Agency Purchase Expirations
Payment Due 123,031.00 123,031.00 123,031.00
Allocation 25% 15% 60%
Payment 30,757.75 16,454.65 73,816.60
Less Loan - 35,000.00 0.00 00.00
- 4,242.25 16,454.65 73,616.60
Our check, in the amount of $92,273.25 represents the agp.ncy purchase and
expiration made payable to Hopcraft Insurance Agency Inc.
The CNTC check would normally have been made payable to you,
David Hopcraft. However, because of the employee loan, no payment is due
you. In fact, I need a check from you in the amount of $4,242.25.
Dick and I met yesterday afternoon regarding the distribution of these
funds. It is important we all understand and are in agreement how future
distribution will be handled, as well as the effect on the 7/1/92 purchase
agreement you have with Robinson-Conner of Pennsylvania, Inc.
Distribution of these funds to you and Hopcraft Insurance Agency, Inc.,
represents an early distribution of funds. Although your original sales
agreement called for distribution 90 days after July 1, 1993, and 1994, your
sub-agreement with William B. Conner delayed distribution until the end of
the calendar year.
Kllhlll"llll ('lllllll'r Illl'l:IlIl,!I\i1IlI;I. In~
~ """Il I klhrlltl\.. Htl.ld
\kdJdl1h..~.,bur)!, P.-\ 1705.';
(-::-1''') ~hl-l'll'l
L\.\ 1717!,7hl1flh5
Odte: September' 15, 1993
To: Od~e Hopcraft
F '-0"': G i 1 Sha ffner
Re: Acquisition Calculdtion and Payment
Pdge fwo
Dick and [ agreed to this early distribution because you agreed to accept
the calculation of $247,188 In convnissions as a final calculation of
cOl1111lssion earned. No further adjustment wll1 be made to the calculation.
One final payment will be due you and Hopcraft Insurance Agency Inc., in the
tota 1 amount of $123,031. 0 Is tribut I on of these funds is subject to the
side agreement you have with William B. Conner.
Please sign below indicating agreement, and attach your check in the amount
of $4,242.25.
GLS/cr
Attachment
cc: R. W. Moore
/7/ \- ;;' I
j' /I~' rUv"'l-<.. ,~__..e.....-
R. W. MOORE
'~-l) ~_ /
_/ "AA~AVID(JOPCRA€)
~LZ'~
ImBER L. FFNER
I!
.
II
i CO 0 II
CO "
.. II
. II
... II
." ,
N ,
"
"
~
lol ... "
~ '" "
'" =
.
'"
N
~ ...
...
...
.
...
N
.I ...
H '"
~ 0
.
'"
N
~ ."
N
...
-
0 I
N
.........
= ." " w>tU'1u'Un N"''''
... N ~.."''''''' "'NN 000
CO N ............................ ......... .........
Ii! . N ~ir-r-r-- ......... .........
... N
III N N >4
~ n lol
N
,
n ~.
i ... ..~.,o., ......... ......CD
... , ~ "''''0 ......... .....CD
'" " p. . . .. .
- O""r-N ........ "'N'"
... ~"''''''' .,.,,- .......
... ~ \D~~ .. ..."'..
.-
...... ..
Ci .. CJ..o..,..... 0"'''' 0"''''
'" la~"'N" ....,... CO",,,,
~ '" .....,.., ......
. ~~
...
'" ~I
lol
g
.., Ci .. 2:ClJI"'1P"1M 000 "'''''''
'" ... Ha ..,..,.., .........
I ~ '"
tlI - !:l..
~ '"
... H
I .I
0 z
..,
~I o~io I -1- I-II 0:
0 0 0 00 ONIOM .., "~O"'.. 0"" 0",'"
I 010 10M lol '" Z OMUl 0.,... 0",'"
'1 010 10. III '" H~ . . . .. . .. .
... -I - , ., g - :z; ON~ 0"'''' 0"''''
, 010 1011 .., H OaJN 00... 0"''''
I 010 ''''' .. ~ 0...., 0."", 0",'"
8'" I "'1'" I-II , . . . - . .
~~ 1 -,- I , , [:! "'co... ",..", 0..,'"
I I , , , "'...., .."'- ",0'"
I I I , , "'-
..... . . ........~.......Il ,
~ I -I I , ,
"'0 .., "' '" CO I ",0 IMM 1""11 0: '" , fJ1t"]OM~ 00., 00'"
co., "' .. 0 ... I \0011.0 ..,,, rol '" " :>~O..,'" 00... 00'"
~ .. . 0 '" '" "' I 0010 O. ~ '" " o ... .. .
. .... . . . . I . .1 ., . " ... 0"''' 00'" 00'"
0 ..~ ... "' "' ... ... I \001..0 .." '" " ~3 "'N 0'" 0.,
Z ." ." CO '" 0 I "lI'OI'l:l' N' ... " ..,., "'''' 0'"
... ~~ '" .., '" ,.,....IN .. .. " . . . . -
I -I rol " co... '" .,CD
.. ;;:~ I I III " .. ., ..
0 I 1 "
Z . . . . . . . . . . . . . . . .. . .. . . . . . . "
rol I "
" III 00 0 0 0 0 01 .. 0 " ~OO'\O 0"0 0"'0
.e z 00 0 0 0 0 01 III ." " 0",0 0"0 0",0
cO o. 0 0 0 0 01 ::> '" " .. . " . .. .
tJ rol'" .... - . . . . " - h OOLtlO 0"'0 0"'0
"Ill 0 0 '" '" 0 0 :i! '" " ~O... 00 0..,
~ ~~ 0 0 '" ... "' 0 , 0'" 0'" 0",
.. .. ... . . . . .
~~ II "'"' "'.. 0...
"'co ..'" "'A
III . '"
Z ,
... .. .. .. I ...... ...... ......
'" '" '" 0 ~ 0, ~lnU'1L1'1 "''''''' 000
~ '" '" .. "' '" ZNNC'\I ...... "'"'"'
... .., rol
.. N . 0
... . .., en 0:
0 ... . III .. Z rol
.. n, 0 ..
g "0 ...
III "... ~
.. N"
Z rolr,:i
!ij ::> en ~ III
rol ::JIIP U ~ ~
z 0 .. g,O :;J
0 rol ..... III f-4~~ rol rol rol 0'
... tl ~ o:z :> u ~.. ~ ~.. ~'"
lol III "!ij .., Z" rol
.. III ... rol~ !ijr,.. Z ~rol" ~rol" ~rol" en
~ .e ... 0: 0 III .... 0 rol>oZ U~)OtZ U)W)4Z Z
Cl ~'" .. 0: Z ~O': :> >o,~ "... .. ... 0:>0 ... Z" ... rol
.l :> 0 c'" .e. ".. cz ::> ClZ 0 cz ..
Z lol 8~ rol .. .. ... ~:;J 0 ""1Il ~ ,,< ,-,f-4Zl-t l1tf-lZH ....f-4:<:H ><
~ ~ .. rol .0: "..0 ~:Q8~ eno~ ":Q8~ rol
.. :c1e:,~ .. ;:! 00: :;Jr,~ @ "... >00:0
0 Z 0 ~... ~~ .. ".. "Hrol:;l O"'rol ;:!"'rol[:! :;J
Z "'0 ~ z ... ..... ::>.... 0 :Q 0 .0: ~"'1Il Z"'1Il "''''1Il
lol 0: t:i51!5 rol .. Z... ZIIZ .. 0 " 0 rol '" "
~ :> 8 " >< ~;'; ~~~ 0 ... '" ";:! 8 " >< '"
.. l-4XIg,. .e '" "'.. :I: '" III " . .e '" ...
~
i~
,~
HI
':!
;~
u
:5 ~
;-t t.:;
"C: .-f
~! Hi
.J._ I_t
1ft ;'f
15 ;:;
:5 'T~
t;;t';
a!l!
~~ ~
~
,- ...
~~
'_I
~i! ~
~
u5
-u
t'l .~
oc.
'"
-0,;
d ~
~"
L~
r", .t
'.'
t:.'
r;; -.,.
rt 1'1
'"
'0.'
'-t:l
Iy 1.1.1 L~
~1 ~i V;
..... ~ (1)
!.)g:ii
"';I;~
:e (..J
I"
...
~~~
:<;~~
IT! u..
I
~
'i'
~t5
ti/m
.4 ...
-
~5
m
~ 0=. :i1,'
I S Cl
, f,fi'-'
...
~!i'
w'5
~~
I~
I
'>:I
~
'"
In
C
!:l!
.r
,,,-
':
,.
g~~~~~~~~~:~l~~g~~~~~~::~
, , ,
,::-,. (_ ~'" ,-, r)>.
-' ,.,-<)
~s
......
...
,
t~8~~~~~;J;~~
...
.~ ~ ,',
';1 -Q ,...
I'~, ...,. "!
,"'
I-
..
,
-
8~~!:;i!l8~~J;~~*
- -.... .......'"""'.....-....
~t ~ ~
...... ...
OOOOOOOOOOOOQCQOOQ~OOOOOOOO
(<I ..-t
,
hJ 0 .:> 0 0' ~ 0 'J 0 _:;. ~
... r~
".
r~
...
000000000000000000
u
~
,n
...
:s
IXl
~
U
"
'"-
-- :-- "- ~
WUU~UUWUUWU~WYUUUUUU(~UUUUWUU
~~~~~i
;!:~~~~:a.~~
C::l ti'i :.r :J: :f ::I:
p::: ..
,..
~.:.
.~ ~
'7: :>
;!~
Mtt)
.....
r- r-
,.,
-
...::: t.
U 0
~~
<5..f
\\
, '~'"
-
N
.,.
",
~,
...
~
~l
...
~~
::-;...
">->-->.-
:- ~... ;.-
:;... ;.- '.. r >* :- :>>- ;_ ;_ ~... >0 :_
~~ ~
1.1 I_I
;:> :>
..r. ..c
~~ ..=.
t:~...t;;l:l;:I;:t:-I.::t;;. ttl.:...t::t::
':1:1 :~..t:~Cl,;q;';'1:4?..r",r~
o. tJiJt..l(J5tjtSb~j~,..J
",_'~, ~ :.~ fil ~ :... '>; ~ ~ ~~ ~ f>; !!.
:c:.t: 1:_:t::f~::t:.J:"'~:J::.c
~ ..;:. .:.. .:. ~ ~ .:=1 ;.~ i~ .... ,~ ~ ,~ ~ ~
..... :-t ,... _ ,-I ,.... ,~ .--I t-... ..... ,~ H ,... _ ,...
:;._.-.:>-~~;;X~. .J:;'-::;''''-~'''
.r.;f'i:'t;"F"" ..r;.;~~:t'i;['i:
~~'""'..::.~.::, ~IAi-I~c......~...:o
'0
..,.
r-
.:.. .:.~ Q..=,
1-11-0_ ,......
;n:ot~~
Q "-:'A"'::'~
Ie" 1:- 1:- 1- t- .... t- t: t t;: r- ~
:t \1: ~ ~ ,i; ~ ~ '5 ~ '5 :" ,J!
5 ti f5 t1 fJ 5 iJ f5 b b t~ t5
~5 ~:s. ~ ~~. ..... ~ ~ ~~ ~ f~ ~ '-
:J:'i::.c~~:f:c:f:f ~:f
.:4':' ~.~
.- ,... - I~
!! i! :Hli
,..., M M ,..... M t"J I'rt to', 1-4) 1<'\ M 1-1 t"'..i M M
r"! ;!. (! ~ ;!. I~ ~t ;!. j"! ,~ ;! ;! r"!. ~ IT.
I..... ~ M '''l r-l') M l'-<"J M M t"'J
<T~~""'1'''''''''''''r.,
1- ,.... ,.... r- I-- po. t... r- r_ r....
:.!
~
"-'
'"
:5 t~ :~
;iw~
is:J: g
, '"
...
,"
~ j ~
., &
g' ~ "
"'" t- CJ> 1_ >-
~J:~3..:.a
.a
~11'~:J:r.:3'_
III Ul 'I' oF! ';;1
a....:: ~ ~ U'T,;l
~ OJ.. III ....
!- c; 3 III
." m .c: .t\.:. '1.1
LILJ':ni~UW:>
u
,0
- ~
"'
j:~! '...
='-,;:; ~
.:.. ..
...c :u . -J ; !,:!
~-i ~~~;
'1':11 -.:. in Q
~....iOClj!U
oG ~ r1l iJI _
- J;~.lJ1",'.--~~~
.- ~ ~ 0 '0 ~ ~
-0 Vi ." J'j. O. .I:; I-
":~J~:;-_,,~.:;lu,~
..::2:.............cu:uw.3u:w
'"
ul
~
lo';
~.Q
'.:' ...' c: ,.... _
l;
:::
'" c
" -
ll,I .-
"1:J .~_
~
~
:J:
"'"
~ - iii
'" "
.- ~
" 0
Nu..
"''''
- "
~
"
"
'"
.,
::' il,
t:' ....
'1'
,,:; W
,- J::.
,.,~
u
'0
J
d:-.;
'" :t
:;l ':"1
X:....
\ ....
. '^'
\.~ -..J...
':f-. ,).0 --
"!. ,) r<
". :r-
~., N
:r-
~) ;:
<.>
"" '0
~
,0
-
"
4''"'
....~
"
SI;'
,J
Sf;
...."
f'.
\.t.b
~ ~
...
10
a
"
",
-
\'':>
...
~
u:
u
S1
0=.
~
::;>
s:
~
~
t;;
1)1
'-ll.
....
':.0
""
f-.
:j
l)
...
:.
.-f;:l
"'\
'"
~