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IN THE SUPERIOR COURT OF THE STATE OF DELAWARE IN AND FOR NEW CASTLE COUNTY ) ) ) Plaintiff, ) ) v. ) ) THE JAED CORPORATION, INC. ) d/b/a STUDIOJAED, STUDIOJAED, LLC, JAMES A. HUTCHISON, III, ED ) ) LUPINEK, BEATRICE A. COOK, ) DAVID SPANGLER, PHILLIP ) CONTE, BRIAN ZIGMOND, and ) PAMELA BABUCA, ) ) Defendants. JAMES R. NELSON,

C.A. No. N12C-06-068 CLS

Date Submitted: October 4, 2012 Date Decided: January 23, 2013 On Defendants' Motion to Dismiss. GRANTED in part and DENIED in part. ORDER James F. Harker, Esq., Nemours Bldg., Suite 1130, 1007 North Orange Street, Wilmington, DE, 19801. Jonathan Landesman, Esq. (Pro hac vice), United Plaza, 19th Floor, 30 South 17th Street, Philadelphia, PA, 19103. Attorneys for Plaintiff. Charles A. McCauley, III, Esq., 1000 N. West Street, Suite 1200, Wilmington, DE 19801. Eric J. Phillips, Esq. (Pro hac vice) (Of Counsel), One Penn Center, 19th Floor, 1617 JFK Boulevard, Philadelphia, PA 19103. Attorneys for Defendants.

Scott, J.

Introduction Before the Court is Defendants' Motion to Dismiss. The Court has reviewed the parties' submissions. For the reasons that follow, Defendants' motion is GRANTED in part and DENIED in part. James R. Nelson ("Plaintiff") has been a registered architect in several Eastern states for almost fifty years. From 1966 through 2005, Plaintiff owned and operated his own practice, "The Architects Studio, LLC." The JAED Corporation, Inc. and STUDIOJAED, LLC (Collectively, "JAED") are Delaware entities. Defendants Ed Lupinek ("Lupinek"), Beatrice Cook ("Cook"), David Spangler, Phillip Conte, Brian Zigmond, and Pamela Babuca held positions on the Board of Directors and are shareholders. Lupinek also held the position of Vice-President of JAED and Cook was both Secretary and Treasurer at JAED. James A. Hutchison ("Hutchison") was Chief Executive Officer, the principal shareholder, and a director on the Board of Directors at JAED. 1 In the summer of 2005, Plaintiff met with Hutchison several times and the parties negotiated the terms of a new business relationship and merger of their respective practices and businesses. The parties memorialized their agreement in
Hutchison, Lupinek, Cook, Spangler, Conte, Zigmond, and Babuca are collectively referred to as "Individual Defendants." 2
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three related documents: 1) Asset and Purchase Agreement and Stock Sale and Purchase Agreement between The Architects Studio, Inc. and JAED ("Asset Purchase Agreement"); 2) Employment Agreement of James R. Nelson by The JAED Corporation ("Employment Agreement"); and 3) Amendment No. 3 to and Restatement of Stockholders' Agreement ("Amended Stockholders' Agreement"). In the Asset Purchase Agreement, Plaintiff sold to JAED certain assets of The Architects Studio, LLC, accounts receivable, contracts and/or contractual rights valued in excess of one-half million dollars. In consideration for the Asset Purchase Agreement, JAED paid Plaintiff the equivalent of $122,700 through the issuance of 100 shares in JAED with each share valued at $1,227. While negotiating the Employment Agreement, Hutchison represented to Plaintiff that Plaintiff could expect to receive an additional $20,000 to $30,000 in annual bonuses during his employment. The Employment Agreement was a fiveyear term of employment running from September 18, 2005 through September 18, 2010. After September 18, 2010, Plaintiff's employment would continue under the same terms and conditions set forth in the Employment Agreement; however, the employment would convert into an employment at-will relationship and would be "terminable at any time and for any reason by either Party". 2 The Employment Agreement also provided that Plaintiff would be employed full-time, as an
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Employment Agreement, at

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