Document:

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                                                                   EXHIBIT 10.52

                              EMPLOYMENT AGREEMENT

         THIS AGREEMENT is made and entered into as of June 1, 2002 by and
between MOBILE HOMEOWNERS INSURANCE AGENCIES, INC. a Florida corporation
("Employer"), and P. DANIEL ELDRIDGE ("Employee") for the purposes herein
stated.

                             Background of Agreement

         Employee desires to continue in the employ of the Employer, and desires
certain protections and benefits; and

         Employee and the Employer deem it to be in their respective best
interests to enter into an agreement providing for compensation and benefits for
Employee pursuant to the terms stated in this Agreement; and

         The Employer desires to place reasonable restraints upon Employee's
ability to compete with the Employer during a specified period immediately
following Employee's termination from employment;

         Accordingly, in consideration of the mutual promises and agreements
contained herein, the parties hereto agree to the following:

         1.       EMPLOYMENT. The Employer agrees to continue Employee in its
employ, and Employee agrees to remain in the employ of the Employer, for the
Term of this Agreement, subject to Section 6 and below.

         2.       DEFINITIONS. The following terms when used herein shall have
the meanings given below:

                  (a)      "AFFILIATE" means any party controlled by, under the
control of, or under common control with, Employer or PCHC.

                  (b)      "AGREEMENT AND GENERAL RELEASE" means a general
release of claims against the Employer in a form acceptable to the Employer.

                  (c)      "BASE COMPENSATION" means the annual base salary of
Employee, exclusive of any bonus, insurance, or other fringe benefits and
perquisites.

                  (d)      "BOARD" means the Board of Directors of PCHC.

                  (e)      "CAUSE" means commission of any of the following
listed conduct by Employee: a felony or any crime involving moral turpitude
(whether or not related to Employee's employment) or gross negligence, drug or
alcohol use which interferes with Employee's job performance, insubordination,
willful misconduct, violation of any express directive or regulation established
by the Employer from time to time prior to a Hostile Change in Control or
Non-Hostile Sale regarding the conduct of its business, misrepresentations by

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Employee related to this Agreement, any violation by Employee of the terms and
conditions of this Agreement not cured within ten days after written notice
thereof is given by the Employer to Employee, acceptance of employment with
another company (other than employment with a Successor or a purchaser of assets
from the Employer), and/or performing work for another company, as an employee,
consultant or in any other capacity, while still an employee of the Employer and
any other act, omission or circumstance which, under applicable law, would
result in a termination by the Employer of Employee's employment hereunder to be
deemed to be a termination for cause.

                  (f)      "COMPETITIVE BUSINESS" means any business or
commercial activity in the insurance industry that involves or pertains to a
business or commercial activity in which the Employer is engaged or with which
the Employer competes or, with respect to the period following Employee's
termination of employment, Employer was engaged or with which the Employer
competed at the time of or within one (1) year prior to Employee's termination,
including but not limited to property and casualty or personal lines insurance
business (hereafter collectively "Competitive Business") anywhere within the
United States of America (including the District of Columbia, the Commonwealth
of Puerto Rico and its possessions and territories), and Canada.

                  (g)      "EFFECTIVE DATE" means the date upon which this
Agreement becomes effective, as set forth in Section 4 below.

                  (h)      "GOOD REASON" means either of the following:

                           (i)      A change in Employee's position of authority
in a manner that materially reduces the responsibility of Employee's current
position, provided, however, the fact that there may be additional executives in
the reporting structure above Employee will not be deemed to materially reduce
the responsibility of Employee's position.

                           (ii)     A reduction in Employee's Base Compensation.

                  (i)      "HOSTILE CHANGE IN CONTROL" mean individuals who are
Continuing Directors cease to constitute a majority of the members of the Board
("Continuing Directors" for this purpose being the members of the Board on the
date of this Agreement, provided that any person becoming a member of the Board
subsequent to such date whose election or nomination for election was supported
by two-thirds of those directors who were Continuing Directors at that time of
the election or nomination shall be deemed to be Continuing Director).

                  (j)      "NON-HOSTILE SALE" means the closing of the sale of
50% or more of the shares of stock of Employer or 50% or more of its assets in a
transaction which does not constitute a Hostile Change in Control.

                  (k)      "PCHC" means Philadelphia Consolidated Holding Corp.,
a Pennsylvania corporation.

                  (l)      "SUCCESSORS" means any entity that acquires at least
fifty (50%) percent of the shares of outstanding stock, and/or fifty percent
(50%) of the assets, of the Employer or PCHC (whether direct or indirect, by
purchase, merger, consolidation or otherwise).

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                  (m)      "TERM" shall have the meaning set forth in Section 4
below.

         3.       POSITION AND RESPONSIBILITIES.

                  (a)      During the Term of this Agreement, (i) Employee
agrees to serve the Employer as President and Chief Executive Officer and (ii)
Employee shall report to the chief executive officer of PCHC. This in no way
inhibits him from being promoted to another position during the Term of this
Agreement, or assigned different duties, consistent with Employee's status and
responsibility, which changes are in the sole discretion of the Employer.

                  (b)      Throughout the Term of this Agreement, Employee shall
devote his entire working time, energy, attention, skill and best efforts to the
affairs of the Employer and its Affiliates and to the performance of his duties
hereunder in a manner which will faithfully and diligently further the business
and interests of the Employer.

         4.       TERM. This Agreement shall be effective on June 1, 2002 (the
"Effective Date") and shall expire in the absence of a Hostile Change in Control
on the fifth anniversary of such date, unless extended by agreement of Employee
and the Employer. In the event of a Hostile Change in Control, this Agreement
shall be automatically extended for a period of three years, commencing upon the
expiration date set forth in the immediately preceding sentence. Notwithstanding
the foregoing, Employee and the Employer agree that the provisions of Section 7
shall remain in effect and enforceable in accordance with its terms following
the expiration of this Agreement, except as otherwise provided in such Section
7. The applicable period referred to above is referred to herein as the "Term"
of this Agreement.

         5.       COMPENSATION AND BENEFITS. During the Term of this Agreement,
Employee shall be eligible for the following, in return for all services
rendered by Employee to the Employer during the period of employment, subject to
the provisions of Section 6, as applicable:

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                  (a)      BASE COMPENSATION. Upon the effective date of this
Agreement, Employee shall receive Base Compensation at the annual rate of One
Hundred Ninety Five Thousand Dollars ($195,000), subject to periodic reviews and
possible increases in the sole discretion of the Employer. Employee's Base
Compensation shall be payable in accordance with the Employer's regular payroll
practices in effect from time to time.

                  (b)      BENEFITS. Employee shall be entitled to all group
health, disability, life insurance and pension benefits as are made available to
employees of the Company generally as such benefit programs may be amended from
time to time. Benefits due under any Bonus Plan or Stock Option Plan will be
paid based upon the Agreements signed specific to those plans.

                  (c)      BUSINESS EXPENSES. Employee shall be reimbursed
reasonable and necessary expenses related to Employee's employment by the
Employer in accordance with, and subject to, the Employer's regular policies
from time to time in effect regarding reimbursement of expenses and the
documentation required.

         6.       TERMINATION OF EMPLOYMENT. The following provisions shall
govern in the event that Employee's employment is terminated by the Employer or
by Employee during the term of this Agreement, except as provided in Section 8,
if applicable:

                  (a)      Discharge Without Cause or Resignation for Good
Reason. Employee shall receive from the Employer, provided (unless waived by the
Employer) Employee executes (without subsequent revocation) a General Release
(except that Employee shall not be obligated to do so following a Hostile Change
in Control), in the event that Employee either: (A) is discharged without Cause
and for reasons unrelated to his disability or death; or (B) resigns from the
Employer for Good Reason within twelve (12) weeks of the occurrence of the event
upon which Employee relies for claiming that his resignation is for Good Reason:

                           His Base Compensation for the lesser of (A) 36 months
or (B) the remainder of the Terms of this Agreement, but in no event less than 6
months, paid in accordance with the Employer's regular payroll practices then in
effect.

                  (b)      Discharge With Cause, Resignation Without Good
Reason, Discharge in Connection With Disability or Death.

                           (i)      Employee shall not be eligible for any
                                    payments or benefits for the period
                                    subsequent to his separation in any of the
                                    following circumstances: (A) he is
                                    discharged with Cause; (B) he resigns
                                    without Good Reason, or more than twelve
                                    (12) weeks following the occurrence of the
                                    event upon which Employee relies for
                                    claiming that his resignation was for Good
                                    Reason; (C) he is discharged due to his
                                    inability or failure to perform
                                    satisfactorily the essential functions of
                                    his position for six (6) months due to
                                    disability; or (D) his death.

                           (ii)     Employee shall receive all Base Compensation
                                    for work performed and benefits applicable
                                    to the period prior to his separation from
                                    the Employer (including any earned and not
                                    paid bonus for the

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                                    prior year and any Base Compensation and/or
                                    benefits for which he is entitled in
                                    accordance with the Employer's compensation
                                    and disability policies, if applicable, then
                                    in effect). In the event of his disability
                                    or death, Employee shall be eligible, in
                                    addition, for any disability or life
                                    insurance payments to which he or his estate
                                    or beneficiaries may be entitled pursuant to
                                    the applicable insurance documents relating
                                    to any group disability or life insurance
                                    plans in which he participated prior to his
                                    separation.

                  (c)      Notice of Termination. Any termination by the
Employer or by Employee shall be communicated by written Notice of Termination
to the other party given in accordance with Section 16 below. Such Notice of
Termination shall indicate the specific termination provision(s) in this
Agreement relied upon and specify the effective date of the termination if other
than the date such Notice of Termination is given (which effective date shall be
not more than thirty (30) calendar days thereafter).

         7.       RESTRICTIVE COVENANTS AND CONFIDENTIALITY.

                  (a)      During Employee's employment with the Employer and
for two (2) years following Employee's separation from the Employer for any
reason (whether initiated by the Employer or Employee), Employee shall not
directly or indirectly either: (A) with respect to a Competitive Business
(defined above), solicit, divert or appropriate, or attempt to solicit, divert
or appropriate, any customer, distributor or supplier, or any potential
customer, or supplier of the Employer; or (B) solicit or entice, or attempt to
solicit or entice, any of the Employer's employees, consultants, directors or
officers to terminate her/his employment with the Employer, or join with any
individual who is or was within the prior six (6) months an employee,
consultant, director or officer of the Employer, in any direct or indirect
capacity, or to hire, or commit to hire, as an employee or consultant any
individual who is or was within the prior six (6) months an employee,
consultant, officer or director of the Employer.

                  (b)      During Employee's employment with the Employer and at
all times thereafter, Employee shall not use for his personal benefit, or
disclose, communicate or divulge to, or use for the direct or indirect benefit
of, any person, firm, association or company other than the Employer, any
confidential information of the Employer which Employee acquires in the course
of his employment, which is not otherwise lawfully known by and readily
available to the general public. This confidential information includes, but is
not limited to: business, development, marketing, legal and accounting methods,
policies, plans, procedures, strategies and techniques; research and development
projects and results; trade secrets or other knowledge or processes of or
developed by the Employer; names and addresses of employees, suppliers and
customers; and any data on or relating to past, present or prospective
customers, including customer lists. Employee agrees that such information is
confidential and constitutes the exclusive property of the Employer, and
Employee agrees that, immediately upon Employee's termination, whether by
Employee, or by the Employer, Employee will deliver to the Employer, all
correspondence, documents, books, records, lists and other writings relating to
the Employer's business, retaining no copies.

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                  (c)      The term "Employer", as used in this Section 7 and in
Section 11, shall include as well all Affiliates of Employer and PCHC.

                  (d)      Employee acknowledges and agrees that the provisions
of this Section 7 are reasonable with respect to their duration, scope and
geographical area. In particular, Employee acknowledges that the geographic
scope of the Employer's business makes reasonable the geographic restrictions of
this Agreement. Employee agrees that his general executive skills and abilities
are applicable outside of the Competitive Business and that he will therefore
not be unduly restricted by this Agreement. If, at the time of enforcement of
any of the provisions of this Section 7, a court holds that the restrictions
therein exceed those allowed by applicable law, then such court will be
requested by the Employer, Employee and all other relevant parties to enforce
the provisions in this Section 7 to the broadest extent possible under
applicable law and this Section 7 shall be deemed to have been so modified.

                  (e)      In the event of a breach or threatened breach of the
provisions of this Section 7, the Employer shall be entitled to an injunction
restraining such breach, but nothing herein shall be construed as prohibiting
the Employer from pursuing any other remedy available to them for such breach or
threatened breach, including, without limitation, an action at law for damages.

                  (f)      Notwithstanding anything to the contrary contained in
this Section 7 or any other provisions of the Agreement, Employee shall not be
bound by any of the provisions of Section 7(a) following a Hostile Change in
Control.

         8.       HOSTILE CHANGE IN CONTROL OR NON-HOSTILE SALE. In the event of
a Hostile Change in Control or Non-Hostile Sale:

         Section 6 shall apply, except as set forth in Section 8(b) below.

                  Enhanced Severance Package in the Event of Hostile Change in
Control or Non-Hostile Sale. In the event that Employee, at any time after a
Hostile Change in Control or Non-Hostile Sale, is discharged without Cause and
for reasons unrelated to his disability or death, or resigns for Good Reason
within twelve (12) weeks of the occurrence of the event upon which Employee
relies for claiming that his resignation is for Good Reason:

                  (a)      The period specified in Section 6(a)(i) above during
which Employee shall receive his Base Compensation shall be increased to 48
months from 36 months.

                  (b)      The maximum period during which Employee and his
eligible, previously enrolled dependents shall be eligible for Employer-paid
group medical and dental insurance shall be increased to 36 months from twelve
(12) months.

         9.       INELIGIBILITY FOR PARTICIPATION IN OTHER EMPLOYER SEVERANCE
PLANS. In the event that Employee becomes entitled to the severance benefits set
forth in Section 6 above, Employee shall be ineligible for (and deemed to have
waived his right to receive) payments under any other severance plan, program or
arrangement maintained by the Employer.

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         10.      ARBITRATION. Except as set forth in Section 10(f), all
disputes arising under this Agreement or relating to Employee's employment or
termination of employment, including but not limited to statutory claims for
violation of Title VII of the Civil Rights Act, the Age Discrimination in
Employment Act, the Americans with Disabilities Act, the Family Medical Leave
Act and ERISA as well as state laws governing discrimination shall be
exclusively resolved in arbitration in accordance with the following:

                  (a)      The Rules for the Resolution of Employment Disputes
("Rules"), then in effect, of the American Arbitration Association ("AAA") shall
govern, except that Employee and the Employer may mutually agree to utilize
another process for selection of the Arbitrator.

                  (b)      The Arbitrator, in cooperation with Employee and the
Employer, shall set the date, time and place of the hearing in Philadelphia,
Pennsylvania or in such other place as Employer shall determine.

                  (c)      The Arbitrator shall have all of the power of a court
of competent jurisdiction for hearing the particular claim, including the power
to order discovery, as set forth in the AAA's rules, and to grant such remedies
as a court would have authority to grant.

                  (d)      The decision of the Arbitrator shall be in writing
and shall set forth the findings and conclusions upon which the decision is
based. It shall be final and binding, and may be enforced under the terms of the
Federal Arbitration Act (9 U.S.C. Section 1 et seq), but may be set aside or
modified by a reviewing court in the event of a material error of law.

                  (e)      The Employer and Employee shall share the cost of the
Arbitrator's fees but each shall bear his or its, as applicable, attorneys'
fees, expenses and costs and its respective filing fees charged by the AAA;
provided, however, that the Arbitrator shall have the power to award such fees,
expenses and costs to the prevailing party in accordance with the law and to
require the Employer at the beginning of the proceedings to fully or partially
reimburse to employee the filing fee in the event Employee can demonstrate that
the amount of the fee is an unreasonable impediment to adjudication of his
claims in arbitration.

                  (f)      This Section 10 shall not apply to any action by the
Employer to enforce Section 7 of this Agreement.

         11.      EMPLOYER PROPERTY. All Employer information, including without
limitation, data processing reports, analyses, invoices, and/or any other
materials or data of any kind furnished to Employee by the Employer or developed
by Employee on behalf of the Employer, or at the Employer's direction or for the
Employer's use, or otherwise in connection with Employee's employment hereunder,
are and shall remain the sole and confidential property of the Employer, except
to the extent such information has been publicly disclosed voluntarily by the
Employer. If the Employer requests the return of such materials, Employee shall
immediately deliver them, retaining no copies.

         12.      INCOME TAX WITHHOLDING. The Employer may withhold from any
payments made under this Agreement all Federal, State, City or other taxes and
withholdings as shall be required pursuant to any law or governmental regulation
or ruling.

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         13.      NO RESTRICTIONS ON EMPLOYEE'S EMPLOYMENT BY EMPLOYER. Employee
represents to Employer that: (i) there are no restrictions, agreements or
understandings whatsoever to which Employee is a party and no laws or
regulations of which he is aware which would or may prevent or make unlawful his
employment by the Employer; (ii) his execution of this Agreement and his
employment hereunder shall not constitute a breach of any contract, agreement or
understanding, oral or written, to which he is a party or by which he is bound;
and (iii) he is free and able to execute this Agreement and to enter into
employment with the Employer.

         14.      ENTIRE UNDERSTANDING. This Agreement contains the entire
understanding between the Employer and Employee, superceding all others with
respect to the subject matter hereof, and there are no other agreements,
understandings, representations or warranties among the parties.

         15.      SEVERABILITY. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law of law or
public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the extent possible.

         16.      NOTICES. All notices hereunder shall be sufficient upon
receipt for all purposes hereunder if in writing and delivered personally, sent
by documented overnight delivery service or, to the extent receipt is confirmed,
telecopy, telefax or other documented transmission service to the appropriate
address or number as set forth below:

                  (a)      If to the Employee:

                           Mr. P. Daniel Eldridge
                           10106 Chiltern Gardens Drive
                           Orlando, FL 32827

or at such other address as Employee may designate by written notice to the
Employer as specified below.

                  (b)      If to the Employer:

                           c/o Philadelphia Consolidated Holding Corp.
                           One Bala Plaza
                           Bala Cynwyd, PA  19004
                           Attention: James J. Maguire, Jr.

or at such other address and to the attention of such other person as the
Employer may designate by written notice to Employee as specified above.

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         17.      SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of Employee, Employee's heirs and legal
representatives, and to the Employer, and its Successors and assigns. PCHC and
its Affiliates are third party beneficiaries of this Agreement.

         18.      NO ASSIGNMENT BY EMPLOYEE. This Agreement is personal to
Employee, and Employee may not assign or delegate any of Employee's rights or
obligations hereunder without first obtaining the express written consent of the
Employer.

         19.      COUNTERPARTS AND PREREQUISITES TO BINDING EFFECT OF AGREEMENT.
This Agreement may be executed in one or more counterparts, all of which shall
be considered one and the same agreement, and shall be effective when one or
more counterparts have been signed by each of the parties and delivered to the
other party.

         20.      AMENDMENTS AND WAIVERS. This Agreement may not be modified or
amended except by an instrument or instruments in writing signed by the party
against whom enforcement of any modification or amendment is sought. A party
hereto may, only by an instrument in writing, waive compliance by the other
party hereto with any term or provision of the Agreement on the part of such
other party hereto to be performed or complied with. The waiver by any party
hereto of a breach of any term or provision of the Agreement shall not be
construed as a waiver of any subsequent breach.

         21.      GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania
without reference to the choice of law principles thereof.

         22.      JURISDICTION AND VENUE. The courts of Montgomery County,
Pennsylvania and the United States District Court for the Eastern District of
Pennsylvania shall have exclusive jurisdiction and venue with respect to any
action to enforce this Agreement which is not subject to arbitration; provided,
however, that this shall not prevent Employer from bringing such action in any
other court.

         IN WITNESS WHEREOF, the parties hereto, intending to be legally bound,
have duly executed and delivered, in Pennsylvania, this Agreement.

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                                               MOBILE HOMEOWNERS INSURANCE
                                               AGENCIES, INC.

                                               By: /s/ James J. Maguire, Jr.
                                                   ----------------------------
                                                   Title: President and Chief
                                                          Operating Officer

                                               Date of Execution: June 1, 2002
                                                                  -------------

                                               I UNDERSTAND AND AGREE
                                               TO BE BOUND

                                               /s/ P. Daniel Eldridge
                                               --------------------------------
                                               P. Daniel Eldridge

                                               Date of Execution: June 1, 2002
                                                                  -------------

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                                                                    EXHIBIT 10.7

                           STOCK ACQUISITION AGREEMENT

         This Stock Acquisition Agreement (the "Agreement") is entered into as
of November 3, 1997, by and between D & E Communications, Inc., a Pennsylvania
corporation (the "Company"), and Southwestern Investments, Inc., a Nevada
corporation and a wholly-owned subsidiary of Citizens Utilities Company (the
"Purchaser").

         WHEREAS, the Company desires to sell and the Purchaser desires to
purchase up to 1,300,000 shares of the Company's common stock, par value $0.16
per share (the "Common Stock"), for the consideration and on the terms set forth
herein;

         NOW THEREFORE, in consideration of the representations, warranties,
covenants and conditions set forth in this Agreement, the parties to this
Agreement, intending to be legally bound hereby, mutually covenant and agree as
follows:

         1. Transaction.

            1.1. Sale and Issuance. At the Closing (as hereafter defined), the
Purchaser shall purchase from the Company and the Company shall issue and sell
to the Purchaser 1,300,000 shares of Common Stock in consideration of the
Purchase Price (as hereafter defined) per share, in cash; provided, that if the
Purchase Price is less than $25.00 per share then the Company may elect in its
discretion to reduce the number of shares of Common Stock it will sell and the
Purchaser will purchase, but to not less than 1,000,000 shares. The "Purchase
Price" shall be a per share price equal to the sum of (i) the average of the
closing prices of the Common Stock on the NASDAQ National Market System on each
of the thirty (30) trading days ending on the day prior to the Closing (the
"Average Price") plus (ii) 10% of the Average Price; provided, that if the
Purchase Price as so determined is less than $20.00 per share then the Purchase
Price shall be equal to $20.00 per share and if the Purchase Price as so
determined is greater than $25.00 per share then the Purchase Price shall be
equal to $25.00 per share. The Company and the Purchaser shall jointly determine
and confirm with each other in writing the Purchase Price after the close of
regular hours trading on the NASDAQ National Market on the day prior to the
Closing and the Company shall then advise the Purchaser in writing of the number
of shares of Common Stock that it intends to sell to the Purchaser at the
Closing. The amount equal to the number of shares to be sold by the Company at
the Closing multiplied by the Purchase Price shall be the "Aggregate Purchase
Price."

            1.2. Payment and Delivery. The Purchaser shall deliver the Aggregate
Purchase Price to the Company at the Closing by wire transfer of immediately
available funds pursuant to written instructions to be provided by the Company
at least two days prior to the Closing. Upon evidence of receipt of such funds,
the Company shall promptly deliver to the Purchaser a stock certificate
representing the number of shares of Common Stock purchased by Purchaser.

<PAGE>

            1.3. Closing. The consummation of the transfer and delivery of the
Common Stock to the Purchaser and the receipt of the Aggregate Purchase Price by
the Company will constitute the "Closing." Unless otherwise mutually agreed to
by the parties, the purchase and sale provided for in this Agreement shall take
place at the offices of the Company at 130 East Main Street, Ephrata,
Pennsylvania, at 10:00 a.m. (local time) on the later of (i) December 1, 1997,
or (ii) the date that is two business days following the termination of the
applicable waiting period under the Hart-Scott Rodino Antitrust Improvements Act
of 1976. Failure to consummate the purchase and sale provided for in this
Agreement on the date, time and at the place determined pursuant to this Section
1.3 will not result in the termination of this Agreement and will not relieve
any party of any obligation under this Agreement.

         2. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Purchaser as follows:

            2.1. Organization. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the Commonwealth of
Pennsylvania and has all requisite corporate power and authority to own and
lease its properties, to carry on its business as presently conducted and to
perform the transaction contemplated hereby.

            2.2. Authorization. All corporate action on the part of the Company
and its Board of Directors and shareholders necessary for the authorization,
execution, delivery and performance of the obligations of the Company under this
Agreement, including the authorization, issuance and sale of the Common Stock to
the Purchaser, has been taken. This Agreement constitutes the valid and legally
binding obligation of the Company enforceable against the Company in accordance
with its terms.

            2.3. Validity. The Common Stock, when issued, sold and delivered in
accordance with the terms of this Agreement, will be duly and validly issued,
fully paid and nonassessable.

            2.4. Capitalization. The authorized capital stock of the Company
consists of 30,000,000 shares of Common Stock, par value of $0.16 per share, and
20,000,000 shares of Preferred Stock, without par value. As of October 24, 1997,
there were 6,121,956 shares of Common Stock issued and outstanding. As of the
date hereof, other than this Agreement, there are no options, warrants, calls or
other commitments outstanding that obligate the Company to issue or sell any
shares of capital stock, other than pursuant to the Company's Dividend
Reinvestment Plan and Employee Stock Purchase Plan, and except that the Company
is obligated to issue certain warrants to purchase Common Stock to Boles Knop &
Company in consideration of their arranging certain equity and/or debt financing
for the Company.

            2.5. No Conflict. The execution, delivery and performance of this
Agreement will not result in a violation of or default under, or result in the
imposition of any lien pursuant to, (i) the Company's Articles of Incorporation
or By-laws as in effect prior to the transaction contemplated hereby, or (ii)
any material mortgage, indenture, agreement, instrument or contract to which the
Company is a party.

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<PAGE>

            2.6. Accuracy of Public Information. All documents filed by the
Company with the Securities and Exchange Commission were true and correct in all
material respects as of the date thereof and, as of the date thereof, did not
omit to state any material fact required to be stated therein or necessary in
order to make the statements made therein not misleading.

            2.7. No Material Adverse Change. Since December 31, 1996, there has
not been any material adverse change in the business, properties, financial
condition or results of operation of the Company and its consolidated
subsidiaries, taken as a whole.

         3. Representations and Warranties of the Purchaser. The Purchaser
hereby represents and warrants to the Company as follows:

            3.1. Organization and Standing. The Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of Delaware and
has all requisite corporate power and authority to perform the transaction
contemplated hereby. The Purchaser was not organized for the purpose of
purchasing the Common Stock.

            3.2. Authorization, Execution and Delivery. All corporate action on
the part of the Purchaser and its Board of Directors and shareholders necessary
for the authorization, execution, delivery and performance of the obligations of
the Purchaser under this Agreement, has been taken. The Agreement constitutes a
valid and legally binding obligation of the Purchaser enforceable against the
Purchaser in accordance with its terms.

            3.3. Enforceability. The execution, delivery and performance of this
Agreement will not result in a violation of or default under, or result in the
imposition of any lien pursuant to (i) the Purchaser's Certificate of
Incorporation or By-laws as in effect immediately prior to the Closing, or (ii)
any material mortgage, indenture, agreement, instrument or contract to which the
Purchaser is a party.

            3.4. Securities Matters.

                 3.4.1. The Purchaser understands that, upon issuance, the
Common Stock will not be registered under the Securities Act of 1933, as amended
(the "Securities Act"), or any applicable state securities laws in reliance on
exemptions from the registration requirements therein, and that the Company's
reliance on such exemptions is predicated on the Purchaser's representations set
forth herein and otherwise in connection with the offer and sale of the Common
Stock.

                 3.4.2. The Common Stock is being acquired by the Purchaser for
investment for its own account, not as a nominee or agent, and not with a view
to the sale or distribution of all or any part thereof, and the Purchaser has no
present intention of selling, granting participation in or otherwise
distributing the same in violation of applicable securities laws. The Purchaser
represents that it does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participation to such
person or to any third person, with respect to the Common Stock, in violation of
applicable securities laws.

                                      -3-
<PAGE>

                 3.4.3. The Purchaser (i) has been afforded, prior to the
execution of the Agreement, the opportunity to ask questions of, and to receive
answers from, the Company's executive officers, and to obtain any additional
information, to the extent the Company has such information or could have
acquired it without unreasonable effort or expense, necessary to make an
informed investment decision with respect to the purchase of the Common Stock,
(ii) has not relied upon any representation, warranty or statement, other than
those expressly set forth in this Agreement and the public documents filed by
the company with the Securities and Exchange Commission, (iii) has such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits, risks and suitability of its investment and can bear the
economic risks of this investment, and (iv) acknowledges and understands that
the Company has relied upon the representations made by the Purchaser in the
Agreement and otherwise in connection with the offer and sale of the Common
Stock, and (v) represents and warrants that Purchaser's representations herein
are true, complete and accurate as of the date of this Agreement.

                 3.4.4. The Purchaser understands that the Common Stock may not
be sold, transferred or otherwise disposed of without registration of such
Common Stock under the Securities Act and any applicable state securities laws,
or the availability of exemptions from the registration provisions thereunder,
and that in the absence of an effective registration statement covering the
Common Stock or available exemptions from registration, the Common Stock must be
held indefinitely.

                 3.4.5. The Purchaser is aware that the Common Stock to be
issued hereunder may not be sold pursuant to Rule 144 promulgated under the
Securities Act unless all the conditions of that Rule are satisfied.

            3.5. Conditions. The obligation of each party hereto to consummate
the transactions contemplated hereby shall be subject to the following
conditions: (i) the applicable waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 (the "HSR Act") shall have expired or been
terminated, (ii) no action, suit or proceeding relating to the transaction
contemplated hereby shall be pending or threatened, and (iii) the
representations and warranties herein of the other party hereto shall be true
and correct in all material respects as of the Closing Date. (The Company and
the Purchaser agree to cooperate in the preparation of the required
notifications under the HSR Act, to file such notifications as promptly as
reasonably practicable, and to use their reasonable best efforts to obtain
termination of the waiting period under the HSR Act.)

            3.6. Transfer; Legends. The Common Stock acquired by the Purchaser
pursuant to this Agreement may not be sold, transferred or otherwise disposed of
except pursuant to an effective registration statement under the Securities Act
and any applicable state securities laws or pursuant to an opinion of counsel
satisfactory to the Company that such registration is not required. All
certificates evidencing the Common Stock acquired by the Purchaser pursuant to
this Agreement shall bear the following legend:

            These securities have not been registered under the Securities Act
            of 1933, as amended, or any state securities laws (the "Acts") and
            may not be sold, offered for sale, transferred or otherwise disposed

                                      -4-
<PAGE>

            of except pursuant to an effective registration statement as to the
            securities under the Acts or pursuant to an opinion of counsel
            satisfactory to the Company that such registration is not required.

         4. Confidentiality. All information provided by the Company to the
Purchaser in connection with this Agreement shall be subject to the existing
Confidentiality Agreement between the parties hereto.

         5. Standstill Agreement. For a period of one year from the date of this
Agreement, the Purchaser and its representatives shall not, directly or
indirectly, nor shall the Purchaser cause any person or entity controlled by it
to: (i) acquire, agree to acquire or make any offer or proposal to acquire,
directly or indirectly, by purchase, tender or exchange offer or otherwise, any
securities of the Company except by way of stock dividends or other
distributions made on a pro rata basis to all shareholders of the Company; (ii)
solicit proxies or consents or become a "participant" in a "solicitation" (as
such terms are defined in Regulation 14A under the Securities Exchange Act of
1934, as amended (the "Exchange Act")) of proxies or consents with respect to
securities of the Company with regard to any matter; (iii) seek to advise,
encourage or influence any person with respect to the voting of any securities
of the Company, or induce, attempt to induce or in any manner assist any other
person in initiating any stockholder proposal or a tender or exchange offer for
securities of or any change of control of the Company, or for the purpose of
convening a stockholders' meeting of the Company; (iv) make any public
announcement or make any written or oral proposal or invitation to discuss any
possibility, intention, plan or arrangement, relating to a tender or exchange
offer for securities of the Company or a business combination (or other similar
transaction which would result in a change of control), sale of assets,
liquidation or other extraordinary corporate transaction between the Purchaser
or any of its affiliates and the Company or take any action which might require
the Purchaser to make a public announcement regarding any of the foregoing.

         6. Twenty Percent Ownership Limit. For accounting reasons, the
Purchaser currently desires that aggregate number of shares of Common Stock
beneficially owned by it be less than twenty percent (20%) of the aggregate
number of shares of Common Stock outstanding without its consent. If the Company
intends to repurchase shares of Common Stock and as a result of such repurchases
the Purchaser would beneficially own twenty percent (20%) or more of the shares
of Common Stock outstanding after such repurchases, then before effecting such
repurchases the Company shall first offer in writing to purchase shares of
Common Stock from the Purchaser at a price and on such other terms as the
Company intends to repurchase shares of Common Stock from third parties, such
that after all such repurchases from third parties, the aggregate number of
shares of Common Stock beneficially owned by the Purchaser is less than twenty
percent (20%) of the aggregate number of shares of Common Stock outstanding. If
the Purchaser does not accept such offer of the Company to purchase within ten
(10) business days after it is received by the Purchaser, then the Company shall
have the right to effect repurchases from third parties at the price and on such
other terms as were offered to the Purchaser.

                                      -5-
<PAGE>

         7. Right of First Refusal. If the Purchaser proposes to sell, transfer
or otherwise convey (a "transfer") all or part of the Common Stock held by it,
the Purchaser shall notify the Company in writing of its intention, including
the number of shares to be sold, the identity of the proposed purchaser, the
proposed purchase price and the other terms of the sale. The Company shall
thereupon have the right to purchase all or part of the shares proposed in the
notice to be sold at the price and on the same terms as set forth in said
notice. If the Company decides to exercise its right of first refusal, it shall
deliver a written notice to such effect to the Purchaser within ten (10)
business days after receiving notice from the Purchaser. The Company shall
consummate such purchase not later than thirty (30) days after giving its notice
to the Purchaser. If the Company declines to exercise its right to purchase the
shares of Common Stock proposed to be sold by the Purchaser, the Purchaser may,
for a period of ninety (90) days, transfer such shares to the person, at the
price and on the other terms set forth in its notice to the Company; provided,
however, that it shall be a condition of the Purchaser's right to transfer such
shares (other than a transfer in a registered public offering in which the
transferee acquires beneficial ownership of less than 200,000 shares) that the
purchaser thereof agree to be bound by Sections 5 and 7 of this Agreement. All
certificates evidencing the Common Stock acquired by the Purchaser pursuant to
this Agreement shall bear the following legend:

         The sale, transfer or other disposition of the shares of Common Stock
         represented by this certificate is subject to the terms and conditions
         of a Stock Acquisition Agreement dated as of October __, 1997, by and
         between ___________ and __________, a copy of which is on file at the
         Company's registered office.

         8. Registration Rights. The parties agree that they shall be bound by
the registration rights provision attached hereto as Exhibit A.

         9. No Pre-Closing Acquisitions. The Company covenants and agrees that
from the date of this Agreement through the Closing, it shall not purchase nor
shall it permit any of its subsidiaries or employee benefit plans to purchase
any shares of Common Stock, except that the Company's Dividend Reinvestment Plan
and Employee Stock Purchase Plan may continue to purchase newly issued shares
directly from the Company but not in the open market.

         10. Termination. If the Closing has not occurred by March 31, 1997,
this Agreement shall terminate and be of no further force or effect, and neither
party shall have any liability to the other except for any damages suffered by a
party as a result of a breach of this Agreement by the other party.

         11. Miscellaneous.

            11.1. Governing Law. The Agreement shall be governed by and
construed under the laws of the Commonwealth of Pennsylvania without regard to
any jurisdiction's conflicts of laws provisions.

                                      -6-
<PAGE>

            11.2. Entire Agreement. This Agreement constitutes the entire
agreement of the parties and no party shall be liable or bound to any other
party in any manner by any warranties, representations or covenants except as
specifically set forth herein. The terms of this Agreement shall inure to the
benefit of and be binding upon the respective successors and assigns of the
parties except to the extent assignability is limited herein.

            11.3. Assignability. Neither party shall assign, or otherwise
transfer any interest in this Agreement to any other person or entity without
the prior written consent of the other party.

            11.4. No Third-Party Beneficiaries. Nothing in the Agreement shall
be construed to give any person other than the parties hereto any legal or
equitable right, remedy or claim under this Agreement. The Agreement shall be
for the sole and exclusive benefit of the parties hereto.

            11.5. Counterparts; Facsimile. This Agreement may be executed in
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same agreement. Delivery of executed
signature pages by facsimile transmission will constitute effective and binding
execution and delivery.

            11.6. Titles and Subtitles. The titles and subtitles used in the
Agreement are used for convenience only and are not to be considered in
construing or interpreting the Agreement.

            11.7. No Presumption. There will be no presumption against any party
on the ground that such party was responsible for preparing this Agreement or
any part of it.

            11.8. Publicity. Except as otherwise required by law, neither the
Company nor the Purchaser shall issue a press release or make any other public
announcement regarding the transactions contemplated by this Agreement without
the consent of the other, which consent shall not be unreasonably withheld.

         12. Notices. Any notice required or permitted under this Agreement
shall be given in writing and shall be deemed effectively given upon (i)
personal delivery, (ii) facsimile transmission, with confirmed receipt, or (iii)
delivery by overnight courier, charges prepaid at the following addresses:

                                      -7-
<PAGE>

         If to the Company at:

                  D & E Communications, Inc.
                  130 East Main Street
                  Ephrata, PA  17522
                  Attention:  Chief Executive Officer
                  Telephone:  (717) 738-8430
                  Telecopy:  (717) 733-7461

         If to the Purchaser:

                  Southwestern Investments, Inc.
                  Administration Offices
                  High Ridge Park
                  Stamford, CT  06905
                  Attention:  Chief Executive Officer
                  Telephone:  (203) 329-4612
                  Telecopy:  (203) 614-4651

         IN WITNESS WHEREOF, the parties have executed the Agreement as of
November 3, 1997.

                                      D & E COMMUNICATIONS, INC.

                                      By: /s/ G. William  Ruhl
                                         --------------------------------------

                                      Title: Senior Vice President
                                            -----------------------------------

                                      SOUTHWESTERN INVESTMENTS, INC.

                                      By: /s/ Robert J. DeSantis
                                          -------------------------------------

                                      Title: Vice President, Treasurer & Chief
                                            -----------------------------------
                                             Financial Officer
                                            -----------------------------------

                                      -8-
<PAGE>

                                    EXHIBIT A

                               REGISTRATION RIGHTS

         1. In connection with your (for purposes of this Exhibit A, the terms
"you" and "your" shall refer to the Purchaser) purchase from D & E
Communications, Inc. ("D & E") of up to 1,300,000 shares of the Common Stock of
D & E (the "Registrable Securities"), D & E covenants and agrees to prepare and
file with the Securities and Exchange Commission (the "Securities Commission") a
registration statement covering all or such number of shares of the Registrable
Securities which you may designate, at a time within the consecutive ten-year
period commencing with the date hereof (the "Term") which, subject to the other
provisions hereof, is mutually agreeable to both of us, but in no event earlier
than 20 days or later than 60 days from the date of receipt by D & E of a
written demand from you requesting that a registration statement with respect to
all or a portion of the Registrable Securities (the "Offered Securities") be
filed with the Securities Commission under the Securities Act of 1933, as
amended (the "Securities Act"). D & E shall use its best efforts to cause such
registration statement to become effective to permit the sale of the Offered
Securities. You understand and agree that the Offered Securities may only be
registered at such time as you are prepared to sell such shares and that any
sale of the Offered Securities may only be effected through underwriters of
recognized standing.

         2. D & E shall furnish you such numbers of copies of a printed
prospectus, including a preliminary prospectus and any amendments or supplements
thereto, in conformity with the requirements of the Securities Act, and such
other documents as you may reasonably request in order to facilitate the sale of
the Offered Securities. D & E shall also register or qualify the Offered
Securities covered by such registration statement under such securities or blue
sky laws of such jurisdictions as you shall reasonably request. D & E shall keep
effective and maintain any such registration statement until you have sold or
disposed of all of the Offered Securities, but in no event for a period beyond
six months from the effective date of such registration statement, and from time
to time during such six-month period D & E shall amend or supplement the
prospectus used in connection therewith to the extent necessary in order to
comply with Securities Act, it being understood that on notice to you, D & E
shall have the right to suspend the sale of any offered Securities, with the
further understanding that in the event D & E so suspends such sale during said
six-month period, the period of such suspension shall be added onto the said
six-month period at the end thereof.

         3. D & E may include other shares of D & E's Common Stock or other of D
& E's securities in such registration statement filed pursuant to the
aforementioned demand. D & E shall be required to file only three registration
statements relating to the Registrable Securities.

         4. Nothing herein shall restrict D & E's ability to file any
registration statement or prospectus or prospectus supplement in respect of the
offering and sale of other shares of D & E's Common Stock or other of D & E's
other securities at any time or from time to time or to

<PAGE>

otherwise offer or sell any other shares of D & E's Common Stock or other of D &
E's other securities.

         5. Notwithstanding the foregoing, D & E shall have no obligation to
prepare and file such registration statement covering any of the Offered
Securities, if (a) at the time of the receipt of the demand, a registration
statement covering any of D & E's securities is (i) is expected to be filed by D
& E within 60 days, (ii) is then in effect or (iii) became effective within the
six-month period immediately preceding such demand, or it is prohibited from so
doing pursuant to agreements with underwriters, or (b) promptly after receipt of
such demand, D & E furnishes to you (i) an opinion of its counsel to the effect
that such registration would require the disclosure of an event or information
which the Company does not then desire to disclose, and (ii) a certificate
signed by the President of the Company stating that in the reasonable, good
faith judgment of the Board of Directors disclosure of such event or information
would have a material adverse effect on the Company (the Company will advise you
of the nature of such event or information upon receipt of a signed
confidentiality agreement reasonably satisfactory to the Company); provided,
that in such event, D & E's obligation to prepare and file a registration
statement shall be deferred for not more than three (3) months.

         6. Additionally, if D & E at any time during the Term proposes to
register any of its securities under the Securities Act for sale to the general
public, on any form upon which the Offered Securities may be registered, D & E
will at each such time during the Term give prompt notice to you of its
intention. Upon your written request given within 30 days after D & E has given
such notice, D & E will cause each of the Offered Securities which you have
requested be registered under the Securities Act, to be included in such
registration statement, all to the extent requisite to permit the sale by you of
the Offered Securities so to be registered. If the securities to be so
registered for sale by D & E are to be distributed by or through a firm of
underwriters of recognized standing, then the Offered Securities to be
registered shall be included in such underwriting on the same terms as other
securities of the same class which are included in such underwriting, provided
that if, in the written opinion of the managing underwriter or underwriters, the
total amount of such securities to be so registered, when added to such Offered
Securities, will exceed the maximum amount of D & E's securities which can be
marketed without otherwise materially and adversely affecting the entire
offering, then D & E shall exclude from such underwriting (a) first, all
securities, other than the Offered Securities, being sold for the account of
other than D & E, (b) next, the number of Offered Securities, as is necessary in
the opinion of the managing underwriter to reduce the size of the offering, and
(c) last, the number of securities for the account of D & E which in the opinion
of the managing underwriter can or should be excluded.

         7. You agree that you are acquiring the Common Stock shares for
investment only and without any intention on your part to sell or otherwise
distribute any of such shares, that no transfer of said shares will be made
without registration under the Securities Act or an opinion of Counsel for you
that such transfer is pursuant to an exemption under the Securities Act and that
the certificates representing said shares shall be endorsed with the following
legend:

                                      -2-
<PAGE>

            These securities have not been registered under the Securities Act
            of 1933, as amended, or any state securities laws (the "Acts") and
            may not be sold, offered for sale, transferred or otherwise disposed
            of except pursuant to an effective registration statement as to the
            securities under the Acts or pursuant to an opinion of counsel
            satisfactory to the Company that such registration is not required.

         8. The costs and expenses of the registration and qualification of
Offered Securities under the Securities Act and state securities acts and of all
other actions which D & E is required to take or effect pursuant to paragraph 1
of the Agreement, shall be paid by you (including, without limitation, all
registration and filing fees, printing expenses, auditing costs and expenses,
and the reasonable fees and disbursements of counsel for D & E and your
counsel). With respect to such of the Registrable Securities which you desire to
have registered pursuant to paragraph 6 of this Agreement, such fees, expenses
and disbursements (other than your share of registration and filing fees and
underwriters commissions based on the number of shares requested by you, and
disbursements of your counsel and any extraordinary expenses, such as but not
limited to, expense of securing approval of regulatory authorities, all of which
shall be paid by you in full) shall be paid by D & E.

         9. You shall have the right to assign and transfer the registration
rights set forth in paragraphs 1 and 6 hereof to one person (the "Assignee"),
but only in connection with a single sale of all of the Registrable Securities
(or such of such shares that you have not heretofore sold pursuant to
registrations under said paragraphs) to a purchaser or purchasers who
represent(s) to D & E that the purchaser or purchasers (is)(are) acquiring the
shares for investment only and not with a view to the sale or other distribution
thereof and an acknowledgment and agreement that (i) any sale or transfer of the
acquired shares may only be effected pursuant to a registration under the Act or
with an opinion of D & E's counsel that such transfer is being made pursuant to
an exemption under the Act, (ii) that any sale or other transfer may only be
made through underwriters of recognized standing, (iii) that the legend
referenced in paragraph 7 shall remain on the certificates for the shares
transferred by you to such person and (iv) that all of the restrictions and
limitations set forth in paragraphs 1 through 8 of this agreement shall apply
with full force and effect and be binding on the Assignee.

                                      -3-

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