HomeMy WebLinkAbout00-03264
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NORMAN A. BEARD and
SUSAN IE. BEARD,
Plaintiffs
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
v.
NO. 00-3264 CIVIL TERM
BESCO SYSTEMS, INC., and
ROBERT E. RHOADS, IT,
individually
Defendants
ANSWER
I. Admitted.
2. Admitted.
3. Admitted.
4. Denied. Defendant, Robert E. Rhoads, II, resides at 21 Meadow Drive, Carlisle,
Pennsylvania, 17013.
5. Admitted in part, Denied in remainder. It is admitted that Defendant Rhoads was
the principal stockholder and an officer and director of BESCO. It is denied that he controlled
the business activities and decisions of BESCO as if he was the sole proprietor.
COUNT I
Plaintiffs v. Defendant BESCO Systems. Inc.
6. Denied. No signature is found on Exhibit "A" and thus proof that a Promissory
Note was executed by Defendant BESCO cannot be determined after reasonable investigation.
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7. Denied. After reasonable investigation, Defendant BESCO lacks sufficient
information to determine the truth of said averment and strict proof thereof is demanded at trial.
8. Admitted. It is admitted that Plaintiffs' attorney sent Defendant BESCO a letter
alleging a default of a Promissory Note. The document speaks for itself.
9. Denied. Said averment states a conclusion of law to which no responsive pleading
is required.
10. Denied. Said averment states a conclusion of law to which no responsive pleading
is required.
II. Denied. After reasonable investigation, Defendant BESCO lacks sufficient
information to determine the truth of said averment and strict proof thereof is demanded at trial.
12. Denied. After reasonable investigation, Defendant BESCO lacks sufficient
information to determine the truth of said averment and strict proof thereof is demanded at trial.
13. Denied. No such language exists in the Promissory Note attached to the Complaint
as Exhibit "A".
14. Denied. No such language exists in the Promissory Note attached to the Complaint
as Exhibit "A".
15. Denied. After reasonable investigation, Defendant BESCO lacks sufficient
information to determine the truth of said averment and strict proof thereof is demanded at trial.
WHEREFORE, Defendant BESCO requests that Count I of the Complaint be dismissed
with prejudice.
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COUNT II
Plaintiff Norman A. Beard v. Defendant BESCO Svstems, Inc.
16. No responsive pleading is required.
17. Denied. Plaintiff Beard was employed as a salesman from November 1978 until
1986. From 1987 to 1991, Plaintiff Beard was the President and CEO ofBESCO. From 1992
until August 1999, Plaintiff Beard was again a salesman.
18. Denied. The Agreement between Plaintiff and Defendant BESCO provided that
Plaintiff would receive commissions in the amount of forty percent (40%) on the net profit
received by Defendant BESCO on sales attained by Plaintiffs actions.
19. Denied. Plaintiff forfeited any sales commissions earned because he voluntarily
terminated his position with Defendant BESCO prior to the receipt of the sale which is in
accordance with company policy.
20. Denied. Plaintiff forfeited any sales commissions when he quit his job.
21. Denied. Plaintiff forfeited any sales commissions when he quit his job.
WHEREFORE, Defendant BESCO respectfully requests dismissal of Count II of
Plaintiffs' Complaint.
COUNT III
Plaintiffs v. Defendant Robert E. Rhoads, II
22. Denied. No responsive pleading is required.
23. Admitted.
24. Admitted.
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25. Admitted.
26. Denied. Said averment contains conclusions of law to which no responsive
pleading is required.
27. Denied. Defendant Rhoads has stopped taking sales commissions earned from his
efforts which exceed the monthly payment he receives from the sale of the service department.
Accordingly, the net effect has a positive impact on Defendant BESCO. Furthermore, the Twenty
Thousand Dollar ($20,000.00) amount received from the sale was redeposited into BESCO's
corporate account.
28. Denied. Said averment contains conclusions of law to which no responsive
pleading is required.
29. Denied. Said averment contains conclusions of law to which no responsive
pleading is required.
30. Denied. Said averment contains conclusions of law to which no responsive
pleading is required.
31. Denied. Creditors and other shareholders of BESCO shall be paid in full the value
of their claims.
32. Denied. Said averment contains conclusions of law to which no responsive
pleading is required.
33. Denied. Said averment contains conclusions of law to which no responsive
pleading is required.
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34. Denied. Defendant Rhoads has not benefitted in any manner from this transfer.
In actuality, Defendant Rhoads has returned to the corporation the deposit money from the sale
and has taken less commissions than are actually due him to preserve the continued existence of
BESCO.
35.
Denied. Said averment contains conclusions of law to which no responsive
pleading is required.
WHEREFORE, Defendant Rhoads respectfully requests that Count III of the Complaint
be dismissed with prejudice.
COUNT IV
Plaintiff Norman A. Beard v. Defendant Robert E. Rhoads. II
36. Denied. No responsive pleading is required.
37. Admitted.
38. Admitted.
39. Denied. Defendant Rhoads did not receive $250,000.00 in cash as the sale
involved a Note for $230,000.00. Defendant Rhoads admits that Plaintiff owns an interest in the
note receivable.
WHEREFORE, Defendant Rhoads respectfully requests that Count IV of the Complaint
be dismissed.
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LAW OFFICES OF CRAIG A. DIEHL
By:
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Craig A. Diehl, Esquire
Attorney ID No. 52801
3464 Trindle Road
Camp Hill, PA l70ll
(717) 763-7613
Counsel for Defendants
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NORMAN A. BEARD and
SUSAN E. BEARD,
Plaintiffs
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
v.
NO. 00-3264 CIVIL TERM
BESCO SYSTEMS, INC., and
ROBERT E. RHOADS, II,
individually
Defendants
VERIFICATION
I, ROBERT E. RHOADS, II, individually and as President of BESCO Systems, Inc.,
VERIFY that the statements set forth in the foregoing ANSWER are true and correct to the best
of my knowledge, information and belief. I understand that false statements herein are made
subject to the penalties of 18 Pa. C.S. 4904 relating to unsworn falsification to authorities.
Dated: 'Y -?;-oz:::,
.
Robert E. Rhoads, II
BESCO SYSTEMS, INC.
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Robert E. Rhoads, II, President .
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NORMAN A. BEARD and
SUSAN E. BEARD,
Plaintiffs
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
v.
NO. 00-3264 CIVIL TERM
BESCO SYSTEMS, INC., and
ROBERT E. RHOADS, II,
individually
Defendants
CERTIFICATE OF SERVICE
AND NOW, this 5 *' day of July, 2000, the undersigned hereby certifies that a true
and correct copy of the foregoing ANSWER was served upon the parties listed below by way of
United States first class mail, postage prepaid, addressed as follows:
William E. Miller, Jr., Esquire
Anthony E. Marrone, Esquire
MILLER & ASSOCIATES, PC
1822 Market Street
Camp Hill, PA 17011
(Attorney for Plaintiffs)
LAW OFFICES OF CRAIG A. DIEHL
B~
Helen . Rasmussen, Legal Assistant
3464 Trindle Road
Camp Hill, P A 17011
(717) 763-7613
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NORMAN A. BEARD and
SUSAN E. BEARD,
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IN THE COURTOF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
Plaintiffs
v.
No. ()-() - 3.)..(, 'i Civil Term
BESCO SYSTEMS, INC., and
ROBERT E. RHOADS, II, individually
Defendants
NOTICE
YOU HAVE BEEN SUED IN COURT. If you wish to defend against the
claims set forth in the following pages, you must take action within twenty (20) days after
this Complaint and Notice are served, by entering a written appearance personally or by
attorney and filing in writing with the Court your defenses or objections to the claims set
forth against you. You are warned that if you fail to do so the case may proceed without
you and a judgment may be entered against you by the Court without further notice for
any money claimed in the Complaint or 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 ONCE. IF YOU DO
NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE
OFFICE SET FORTH BELOW TO FIND WHERE YOU CAN GET LEGAL HELP.
Cumberland County Bar Association
2 Liberty Avenue
Carlisle, Pennsylvania 17013
(717) 249-3166
(800) 990-9108
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NOTICIA
USTED HA SIDO DEMANDADAlA EN CORTE. Si usted desea defenderse de
las demand as que se presentan mas adelante en las siguientes paginas, debe tomar
accion dentro de los proximos veinte (20) dias despues de la notificacion de esta
Demanda y Aviso radicando personalmente 0 por medio de un abogado una
comparecencia escrita y radicando en la Corte por escrito sus defensas de, y
objecciones a, las demandas presentadas aqui en contra suya. Se Ie advierte de que si
usted falla de tomar accion como se describe anteriormente, el caso puede proceder sin
usted y un fallo por cualquier suma de dinero reclamada en la demanda 0 cualquier otra
reclamacion 0 remedio solicitado por el demandante puede ser dictado en contra suya
por la Corte sin mas aviso adicional. Usted puede perder dinero 0 propiedad u otros
derechos importantes para usted.
USTED DEBE LLEVAR ESTA DOCUMENTO A SU ABOGADO
IMMEDIATAMENTE. SI USTED NO TIENE UN ABOGADO 0 NO PUEDE PAGARLE A
UNO, LLAME 0 VAYA A LA SIGUIENTE OFICINA PARA AVERIGUAR DONDE
PUEDE ENCONTRAR ASISTENCIA LEGAL.
Cumberland County Bar Association
2 Liberty Avenue
Carlisle, Pennsylvania 17013
(717) 249-3166
(800) 990-9108
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NORMAN A. BEARD and
SUSAN E. BEARD,
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
Plaintiffs
v.
No. fJO. 3:t.(., Y Civil Term
BESCO SYSTEMS, INC., and
ROBERT E. RHOADS, II, individually
Defendants
COMPLAINT
1. Plaintiff NORMAN A. BEARD is a citizen of the Commonwealth of Pennsylvania,
residing at 51 Circle Drive, Camp Hill, Cumberland County, Pennsylvania.
2. Plaintiff SUSAN E. BEARD is a citizen of the Commonwealth of Pennsylvania,
residing at 51 Circle Drive, Camp Hill, Cumberland County, Pennsylvania. (Norman A.
Beard and Susan E. Beard, who are husband and wife, are hereinafter collectively
referred to as "Plaintiffs").
3. Defendant BESCO SYSTEMS, INC., is a Pennsylvania business corporation with its
principal place of business located 6 State Road, Suite 110, Mechanicsburg, Cumber-
land County, Pennsylvania (hereinafter referred to as "Defendant BESCO" or
"BESCO").
4. Defendant ROBERT E. RHOADS, II, is an adult individual formerly residing at
Crossroad School Road, Carlisle, Cumberland County, Pennsylvania and currently
residing at an unknown address in Cumberland County, Pennsylvania, but who
continues to maintain his principal business address of 6 State Road, Suite 110,
Mechanicsburg, Cumberland County, Pennsylvania (hereinafter referred to as "Defen-
dant Rhoads" or "Rhoads").
5. At all times mentioned herein, Defendant Robert E. Rhoads, II, was the principal
stockholder and an officer and director of BESCO, and dominated and controlled the
activities and business decisions of BESCO as if he was the sole proprietor thereof.
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COUNT I
Plaintiffs v. Defendant BESCO Systems, Inc.
6. On 22 October 1992, Defendant BESCO made and delivered to Plaintiffs a Promis-
sory Note due and payable in one hundred seventy-four (174) monthly payments due
on the 30th day of each month beginning 30 October 1992, together with interest at an
annual rate of Seven and Seventy-Five One Hundredth Percent (7.75%). A true and
correct copy of the Promissory Note is attached hereto, made a part hereof, and
marked as Exhibit "A."
7. Defendant BESCO made payments totaling Thirty-Eight Thousand Four Hundred
Fifty and 00/100 Dollars ($38,450.00), representing payments of Thirty-Four Thousand
Forty-Eight and 82/100 Dollars ($34,048.82) of principal through August of 1999 and
Four Thousand Four Hundred One and 18/100 Dollars ($4,401.18) of interest through
March 1993. The payments were made in accordance with the schedule attached
hereto, made a part hereof, and marked as Exhibit "B."
8. Plaintiffs payees duly presented the Note to Defendant BESCO through their
attorneys, MILLER & ASSOCIATES, PC., by letter, dated 20 August 1999, which letter
advised Defendant BESCO that it was considered to be in default under the terms of
the Promissory Note. A copy of the 20 August 1999 letter is attached hereto, made a
part hereof, and marked as Exhibit "C."
9. Defendant BESCO has failed to cure its default.
10. Defendant BESCO has failed and refused to pay the Note or any part thereof,
although demand has been made.
11. Plaintiffs have accelerated the amounts due under the Promissory Note.
12. There is currently remaining unpaid principal in the amount of Eighty-One Thou-
sand Eighty-Nine and 37/100 Dollars ($81,089.73).
13. Defendant BESCO agreed, as per the terms of the Promissory Note, that, if any
payment of principal and interest due thereunder was not paid, the amount of such
installment which has matured shall bear interest at the rate of eighteen percent (18%)
per annum from its maturity date.
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14. Defendant BESCO agreed, as per the terms of the Promissory Note, that, in the
event the Note was placed in the hands of an attorney for collection, it would pay
reasonable collection costs, including attorneys' fees.
15. The Plaintiffs have incurred attorneys' fees and costs in pursuit of this action.
WHEREFORE, Plaintiffs demand judgment against the Defendant BESCO in the
sum of Eighty-One Thousand Eighty-Nine and 37/100 Dollars ($81,089.37), with
interest from 30 April, 1993 at the annual rate of Eighteen Percent (18%) per annum,
and reasonable attorneys' fees and costs.
COU NT II
Plaintiff Norman A. Beard v. Defendant BESCO Systems, Inc.
16. Paragraphs 1 through 15 above are herein incorporated by reference and made a
part hereof.
17. Plaintiff Norman A. Beard (hereinafter "Plaintiff') was employed as a salesman by
Defendant BESCO for the period of 3 November 1978 through and including 6 August
1999.
18. The Agreement between Plaintiff and Defendant BESCO provided that Plaintiff
would receive commissions in the amount of Forty (40%) on the gross profit received by
Defendant BESCO on all of the sales secured by Plaintiffs actions for Defendant
BESCO.
19. Plaintiff secured sales of products to the American Automobile Association Central
Penn Automobile Club, Susquehanna View Apartments and the Apartments at Mulberry
Commons of Lancaster, a.k.a., Housing Development Corp of Lancaster.
20. The gross profit on sales secured by Plaintiff was in the amount of Five Thousand
Four Hundred Eighty-One and 08/100 Dollars ($5,481.28). Plaintiff was entitled to a
commission in the amount of Two Thousand One Hundred Ninety-Two and 51/100 Dol-
lars ($2,192.51).
21. Defendant BESCO has failed to pay the commissions due and owing to Plaintiff.
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WHEREFORE, Plaintiff, Norman A. Beard, demands judgment against Defen-
dant BESCO Systems, Inc., in the sum of Two Thousand One Hundred Ninety-Two and
51/100 Dollars ($2,192.51), plus interest, costs and reasonable attorneys' fees.
COUNT III
Plaintiffs v. Defendant Rhoads
22. Paragraphs 1 through 21 above are herein incorporated by reference and made a
part hereof.
23. Defendant Rhoads, as President and majority shareholder of Defendant BESCO,
transferred Defendant BESCO's service department to himself individually.
24. Defendant Rhoads subsequently sold the said service department to BESCO
Service Company, Inc., of R.D. #4, Box A 598, Newport, PA 17074 for the amount of
Two Hundred Fifty Thousand Dollars ($250,000), and is personally receiving the
proceeds from the sale of Defendant BESCO's service department through monthly
payments.
25. Defendant BESCO's service department was a valuable asset of BESCO.
26. Plaintiffs believe and aver that the transfer of Defendant BESCO's service
department to Defendant Rhoads individually and the subsequent sale thereof violated
the provisions of the Pennsylvania Business Corporation Law.
27. Plaintiffs further believe and aver that the transfer of BESCO's service department
to Defendant Rhoads and subsequent sale amounted to a liquidation of Defendant
BESCO in violation of the Pennsylvania Business Corporation Law leaving Defendant
BESCO without substantial assets.
28. Defendant Rhoads' actions were done with an intent to defraud the creditors and
shareholders of Defendant BESCO, two of whom are Plaintiffs.
29. By reason of Defendant Rhoads' domination and control of Defendant BESCO, he
was able to obtain possession of the majority of Defendant BESCO's assets, use them
for his own benefit, and keep unpaid creditors and other shareholders at bay.
30. Any alleged transfer of assets from Defendant BESCO to Defendant Rhoads was
made without sufficient consideration.
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31. Creditors and other shareholders of Defendant BESCO did not receive the
benefits of the proceeds from the sale of assets of Defendant BESCO.
32. The net effect of the alleged transfer of the service department and subsequent
sale was to hinder, delay, and defraud Plaintiffs and other creditors.
33. A further net effect of the alleged transfer and subsequent sale was a misappro-
priation of a corporate asset of Defendant BESCO by Defendant Rhoads.
34. While engaged in the series of acts described herein and engaged in the business
transactions involving both Defendant BESCO and himself, Defendant Rhoads acted in
such a fashion that what he did as a representative of Defendant BESCO and what he
did in a personal capacity were indistinguishable.
35. As a result of Defendant Rhoads treating Defendant BESCO as a sole proprietor-
ship, the corporate veil should be pierced and Defendant Rhoads is personally liable to
Plaintiffs for all monies claimed by them.
WHEREFORE, Plaintiffs demand judgment against Defendant Rhoads in the
sum of Eighty-One Thousand Eighty-Nine 37/100 Dollars ($81,089.37), with interest at
the annual rate of Eighteen Percent (18%) from 30 April 1993 and reasonable costs
and attorneys' fees on the Promissory Note and judgment against Defendant Rhoads is
the additional amount ofTwo Thousand One Hundred Ninety-two and 51/100 Dollars
($2,192.51), plus interest, reasonable costs and attorneys' fees for the amount due
Plaintiff Norman A. Beard representing commissions earned.
COUNT IV
Plaintiff Norman A. Beard v. Defendant Robert E. Rhoads, II
36. Paragraphs 1 through 36 above are herein incorporated by reference and made a
part hereof.
37. Plaintiff Norman A. Beard (hereinafter referred to as "Plaintiff Beard") owns five
percent (5%) of the outstanding shares of common stock of Defendant BESCO.
38. By transferring Defendant Besco's service department to himself, personally,
Defendant Rhoads transferred a corporate asset in which Plaintiff Beard owned a five
percent (5%) equity interest.
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39. As owner of five percent (5%) of the outstanding shares of common stock, Plaintiff
Beard is entitled to five percent (5%) of the purchase price of Two Hundred Fifty Thous-
and Dollars ($250,000) received by Defendant Rhoads resulting from the sale of the
service department to BESCO Service Company, Inc.
WHEREFORE, Plaintiff Norman A. Beard, demands judgment against Defendant
Rhoads in the sum ofTwelve Thousand Five Hundred Dollars ($12,500), plus interest,
costs and reasonable attorneys' fees.
Dated:
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William E. Miller, Jr., Esquire
Anthony E. Marrone, Es Ire
MILLER & ASSOCIATES, PC
1822 Market Street
Camp Hill, PA 17011
(717) 737-9211
(717) 737-9215
ID No. 07220 and 48182
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VERIFICATION
I, NORMAN A. BEARD, do hereby verify that the statements made in the
Foregoing Complaint are true and correct to the best of my knowledge, information and
belief.
I understand that false statements made herein are subject to the penalties of 18
Pa. C.S. S4904 relating to unsworned falsification to authorities.
Date: 12.1oQ
/1~tW7 of /5-/~--r/
/NORMAN A. BEARD
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VERIFICATION
I, SUSAN E. BEARD, do hereby verify that the statements made in the Forego-
ing Complaint are true and correct to the best of my knowledge, information and belief.
I understand that false statements made herein are subject to the penalties of 18
Pa. C.S. ~4904 relating to unsworned falsification to authorities.
Date: q;;2.~ eo
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SUSAN E. BEARD
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TIns FORM IS Naf USUALLY RIiCORDED
PROMISSORY NOTE
Effective Date:
County and State of Transaction:
Cumberland County PA
PAYEE (Name, Address and Zip Code)
October 22, 1992
MAKER (Name, Mailing Address and Zip Code):
BESCO Systems Ine
6 State Road Sui te 110
Meehaniesburg PA 17055
Norman A Beard & Susan E Beard
51 Ci rele Drive
Camp Hill PA 17011
Principal Amount:
$114,488.19
Numberof Payments: Amount of Each Payment:
$
Interest Rate:
% 5
7.7
Dates of Payment:
174
$1,100.00
30th of month
1. Consideration. For value received the Maker promises to pay to the order of the Payee the Principal Amount together
with interest according to the terms stated herein.
2. Payment. Principal and interest shall be payable in lawful money of the United States. Interest accrued to date shall be
fIrst deducted from the payments and the balance of each payment shall be applied to the Principal Amount. Payment'shall
be made at the address of the Payee on or before the due date.
3. Prepayment. Payment in advance may be made in any amounts, in which event interest shall be prorated accordingly.
4. Events of Default. Any of the following events shall, for purposes of this Note, constitute an event of default:
4a Misrepresentation. The making of any misrepresentation by the Maker to the Payee for the purpose of obtaining
credit or an extension of credit.
4b. Creditor's Meeting. The ca1Iing of a meeting of the Maker's creditors;
4c. Committee of Creditors. The appointment of a committee of the Maker's creditors;
4<1. Assignment for Benefit of Creditors. The making of an assignment for the benefIt of the Maker's creditors;
4e. Receivership. The filing of a voluntary or involuntary petition for or the appointment of a receiver of the Maker's
property;
4f. Bankruptcy. The filing of a voluntary petition by or an involuntary petition against the Maker under any provision of
the Federal Bankruptcy Act;
4g. Attachment. The issuance of a warrant of attachment or for distraint against any of the Maker's property;
4h. Tax Lien. The issuance of a notice of tax lien against the Maker or the Maker's property;
41. Judgments. The entry of a judgment against the Maker or the Maker's property;
4j. Nonpayment of Taxes. The Maker's failure to pay, withhold, collect or remit any tax or tax defIciency when assessed
or due;
4k. Death. The Maker's death;
41. Dissolution of Business. The dissolution of the Maker's business;
4m. Bulk Sale. The making of a bulk sale by the Maker or the giving of notice of intent to do so;
4n. Encumbering Accounts Receivable or Property. The mortgage, pledge or assignment of the Maker's accounts
receivable or other property;
40. Suspension or Liquidation of Business. The suspension or liquidation of the Maker's usual business;
4p. Failure to Furnish Financial Information. The Maker's failure, after demand by the Payee, to furnish financial
information to the Payee or permit the Payee to examine any of the Maker's books of account or records;
4q. Default in Performance of Other Obligations. The Maker's failure to pay on any other note or obligation held by
the Payee when due.
PROMISSORY NOTE - Page 1 or2
----EXH1B!'f-A-
r-1 {.) L.awFonns 10-71,10-85,5-87,8-91
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5. Ac.:eleration: The urlpaid prin<:ipal and ac~rued intcrcs~ shall become immediately due and payable at the.option '!f the
Payee or holder of this Note when:
5a. Any installment is not paid when due and Payee has given 10 days written notice by certified mail or delivery.
5b. The Maker [ails to perform any term of any collateral instrument or ancillary agreement which secures or is
executed contemporaneously with this Note [or more than 15 days.
5<:. Any event of default described herein remains unresolved or uncorrected for more than 15 days.
6. Non-Payment When due. If any payment of principal and interest due hereunder is not paid, tbe amount of sucb
installment which bas matured sball bear interest at tbe rate of 18% per annum from its maturity date until paid.
7. Remedies. In tbe event of default, the Payee sball bave all tbe rights, options, duties and remedies of a se.:ured party at
law, iIll equity or by statute, including sucb remedies as may be specified for secured parties generally under tbe existing laws.
In addition, Payee sball have tbe right to immediately retake possession of the Collateral Security for this Note.
8. Waivers and Applicable Law. The Maker, sureties, endorsers, and guarantors hereof severally waive demand for
payment, notice of non-payment, protest and notice of protest of this Note and consent to extensions of time for payment
wIthout notice. The construction, validity and effect bereof shall be governed by the laws of this state and tbe Maker consents
tbat suit or other collection proceedings to enforce this Note may be brought against him by tbe Payee or holder of this Note
in the courts of the county in which the above address of the Payee is located,
9. Collection Fees.- If this Note is placed in the hands of an attorney for collection, the Maker agrees to pay reasonable
collection costs including reasonable attorney's fees tberefore, whether or not suit is brought hereon. In tbe event of court
actiolll, the costs and fees sball be determined by the court. All costs and fees shall be added to the Prin<:ipal Amount and
bear interest at the same rate as on tbe Principal Amount.
10. Right of First Refusal. Should the Payee or Holder elect to sell, assign, or transfer this note to any third party, for a
discount or for any amount of money less tban tbe outstanding principal balance of this note at that time, then this sale,
assignment, or tra1Isfer shall be accomplished only with the mutual written consent of the parlies, and the PayeelHolder sball be
obligated to first make the same offer to tbe Maker under the same terms and conditions as to tbe tbird party and tbe Maker
sball have the right to purchase this note for tbe reduced amount within thirty (30) days of receipt of the notice from the
PayeelHolder.
11. /Usury Protection. Sbould any interest cbarge or otber provision of this note violate any present or future usury laws
applicable to this Promissory Note, tben the interest rate or otber terms shall automatically be reduced to tbe maximum
amount permitted by law. Tbe Maker sball bave tbe duty to bring such laws to the attention of Payee. Failing to do so before
payment shal1 be waiver by Maker of those restrictive limits.
12. Late Charge, A late charge of 10% of an overdue payment sball be charged as a penalty on any payment that is past due,
in addition to any interest due for non-payment as otberwise provided for herein.
13. Collateral Security. This Note is secured by:
14. Other Provisions:
1.,.................................,......,......
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l___ Signatures of Witnesses of Maker's Signature
PROMISSORY NOTE - Page:1 of2
Signatures of Maker and Co-Maker
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INTEREST PRINCIPAL TOTAL
OCT 92 739.40 360.60 1100.00
NOV 92 737.07 362.93 1100.00
DEC 92 734.73 365.27 1100.00
IAN 93 732.3 7 367.63 1100.00
FEB 93 730.00 370.00 1100.00
MAR 93 727.61 372.39 1100.00
MAY 97 4401.18 650.00 650.00
JUN 97 1300.00 1300.00
JUL 97 650.00 650.00
AUG 97 1300.00 1300.00
SEP 97 1300.00 1300.00
OCT 97 1300.00 1300.00
NOV 97 1300.00 1300.00
DEC 97 1300.00 1300.00
IAN 98 650.00 650.00
FEB 98 1300.00 1300.00
MAR 98 1300.00 1300.00
APR 98 650.00 650.00
MAY 98
JUN 98
JUL 98 1300.00 1300.00
AUG 98 1300.00 1300.00
SEP 98 2600.00 2600.00
OCT 98 2600.00 2600.00
NOV 98 650.00 650.00
DEC 98
IAN 99 1300.00 1300.00
FEB 99 1300.00 1300.00
MAR 99 1300.00 1300.00
APR 99 1300.00 1300.00
MAY 99 1300.00 1300.00
JUN 99 1300.00 1300.00
JUL 99 1300.00 1300.00
AUG 99 650.00 650.00
4,401.18 34,048.82 38,450.00
EXf-!IBIT B
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William E. Miller. Jr.
Anthony E. Marrone
LAW OFFICES OF
MILLER &: A;'SS<<?CIATES, PC
600 NORTH 12TH 'STREET" LEMOYNE. PA 17043
TEL: (717) 737-9210' FAX: (717) 737.9215
.'
Direct Dial Number:
(717) 737-9211
20 August 1999
Robert E. Rhoads, II, President
BESCO Systems, Inc.
6 State Road, Suite 110
Mechanicsburg, P A 17055
Re: Norman A. Beard
Dear Mr. Rhoads:
We represent Norman A. Beard of 51 Circle Drive, Camp Hill, Pennsylvania. Mr. Beard
was previously a sales consultant for BESCO Systems, Inc. ("BESCO") and resigned from his
position with BESCO as of 6 August 1999. There are several areas that need to be addressed
subsequent to Mr. Beard's resignation from BESCO.
Mr. Beard is the holder of a Promissory Note ("Note") executed by BESCO with an
effective date of 22 October 1992. The principal amount of the Note was one hundred fourteen
thousand four hundred eighty-eight and 19/100 dollars ($114,488.19). Payments were to be made
monthly. There is currently outstanding A balance under the Note of eighty-one thousand eighty-
nine and 37 dollars ($81,089.37) plus interest. Paragraph 4 of the Note sets forth several events
that constitute an event of default under the Note. They include dissolution of the BESCO's
business, a bulk sale by BESCO, encumbering accounts receivable or property, and suspension
or liquidation ofBESCO's business. Mr. Beard considers the transfer ofBESCO's service
department by you as President and majority shareholder ofBESCO to you individually and the
subsequent sale of the department by you, with you receiving the proceeds from the sale
personally, to be an event of default under the Note. This letter is Notice that the Note will be
accelerated and the uupaid priuc1pal and interest will immediately become due and
payable pursuant to paragraph 5 of the Note if the events of default as outlined in this
letter remain unresolved or uncorrected for fifteen (15) days from the date of this letter.
Mr. Beard owns five percent (5%) ofthe outstanding shares of common stock ofBESCO.
You transferred the BESCO service department to yourself personally and are solely receiving
the proceeds from its sale. As the owner of the shares of common stock, Mr. Beard is entitled to
receive five percent (5%) ofthe sale price received by you for the sale of the service department.
This amounts to twelvethousand five hundred dollars ($12,500) based on a sale price of two
hundred fifty thousand dollars ($250,000), which we are advised is the sales price.
EXHIBIT C
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Robert,E. Rhoads, II
Page 2
20 August 1999
Further, Mr. Beard is owed back pay for the pay periods ending 15 June, 30 June, 15 July,
31 July, and from I August through 6 August 1999, the date of his resignation. BESCO also
owes Mr. Beard commissions for the sales of BESCO products to AAA, Susquehanna View
Apartments, and Apartments at Mulberry Commons of Lancaster (Housing Development Corp.
of Lancaster). The first two sales commissions are due now, while the third one will be due when
the product will be installed in December, 1999. In addition to the back pay and commissions,
Mr. Beard must be paid for unused vacation and sick time. He has nine (9) days of unused
vacation. That amounts to seventy-two (72) hours to be paid at a rate of thirteen dollars ($13) per
hour for a total of nine hundred thirtycsix dollars ($936) due Mr. Beard.
Mr, Beard also owns ten thousand (10,000) shares ofBESCO preferred cumulative
redeemable convertible non-voting stock which he purchased for twenty thousand dollars
($20,000) in 1989. Besco must redeem the preferred stock from Mr. Beard. Mr. Beard hereby
demands that BESCO redeem the preferred stock for twenty thousand dollars ($20,000) plus any
accrued, but unpaid, dividends.
Please: respond to this letter within ten (10) days of the date of this letter in writing
addressing the issues outlined above.
Very truly yours,
Law Offices of
MILLER & ASSOCIATES, PC
By
William E. Miller, Jr.
cc: Norman A. Beard
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SHERIFF'S RETURN - REGULAR
CASE NO: 2000-03264 P
COMMONWEALTH OF PENNSYLVANIA:
COUNTY OF CUMBERLAND
BEARD SUSAN E
VS
BESCO SYTEMS INC ET AL
SAHWN HARRISON
, Sheriff or Deputy Sheriff of
Cumberland County, pensylvania, who being duly sworn according to law,
says, the within COMPLAINT & NOTICE
was served upon
BESCO SYSTEMS, INC
the
DEFENDANT
, at 0009:30 HOURS, on the 1st day of June
, 2000
at 6 STATE ROAD
STE 110
MECHANICSBURG, PA 17055
by handing to
ROBERT RHOADS, II
PRESIDENT
a true and attested copy of COMPLAINT & NOTICE
together with
and at the same time directing His attention to the contents thereof.
Sheriff's Costs:
Docketing
Service
Affidavit
Surcharge
18.00
5.58
.00
10.00
.00
33.58
So Answers:
~~A/~~?
R. Thomas Kline
Sworn and Subscribed to before
06/02/2000
MILLER & ASSOCIATES
By: QP^~ fhh. _ ~
.0;e~u';{j,~~~ '
me this 1~ day of
~J J ',1.0111> { A.D.
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rothonotary ,''---01
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SHERIFF'S RETURN - REGULAR
CASE NO: 2000-03264 P
COMMONWEALTH OF PENNSYLVANIA:
COUNTY OF CUMBERLAND
BEARD SUSAN E
VS
BESCO SYTEMS INC ET AL
SHAWN HARRISON
, Sheriff or Deputy Sheriff of
Cumberland County, pensylvania, who being duly sworn according to law,
says, the within COMPLAINT & NOTICE
was served upon
RHOADS ROBERT E II
the
DEFENDANT
, at 0009:30 HOURS, on the 1st day of June
2000
at 6 STATE ROAD
STE 110
MECHANICSBURG, PA 17055
by handing to
ROBERT RHOADS, II
a true and attested copy of COMPLAINT & NOTICE
together with
and at the same time directing His attention to the contents thereof.
Sheriff's Costs:
Docketing
Service
Affidavit
Surcharge
6.00
.00
.00
10.00
.00
16.00
So Answers: , //./l?
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R. Thomas Kline
06/02/2000
MILLER & ASSOC
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Sworn and Subscribed to before By:
me this 1 /6t day of
q.....L~ c2 ()1Ji) A . D .
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~/~lrthonotary .~
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NORMAN A. BEARD and
SUSAN E. BEARD,
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
Plaintiffs
v.
No. 00-3264
Civil Term
BESCO SYSTEMS, INC., and
ROBERT E. RHOADS II, individually,
Defendants
PRAECIPE TO ENTER JUDGMENT
PURSUANT TO CONSENT AGREEMENT
TO: THIE PROTHONOTARY OF CUMBERLAND COUNTY:
Please enter judgment in favor of plaintiffs and against defendant, BESCO
SYSTEMS, INC, by stipulation pursuant to the attached agreement on the record
between the parties, attached hereto as Exhibit "A".
Assess damages as in the amount of Ninety Thousand and 00/100 Dollars
($90,000.00) as per the attached agreement.
Dated: 18 April 2001
~ In (W\F-~
Anthony E Marrone, Esquire
MILLER & SSOCIATES, PC
1822 Market Street
Camp Hill, PA 17011-4824
(717) 737-9210
I.D. # 48182
ASSESSMENT OF DAMAGES
AND NOW ~" :-\ 1/ , 2001, Judgment is entered in favor of the
Plaintiffs and against t e Defendant, BESCO SYSTEMS, INC., by stipulation pursuant
to the attached consent agreement on the record between the parties and damages
assessed at the sum of Ninety Thousand Dollars and 00/100 ($90,000.00), as per the
above statement and the Agreement between the parties.
C",-:};;,.< ~4
Prothonotary
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IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY, PENNSYLVANIA
Civil Action
No. 00-3264
Law
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - --X
NORMAN A. BEARD and
SUSAN E. BEARD,
Plaintiffs,
- vs
BESCO SYSTEMS, INC., and
ROBERT E. RHOADS, II,
individually,
Defendant.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - --x
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STATEMENT ON THE RECORD
1822 Market Street
Camp Hill, PA
December 27, 2000
11:25 a.m.
IT IS HEREBY STIPULATED and agreed that the
sealing of the within transcript is waived;
IT IS FURTHER STIPULATED and agreed that all
objections except as to the form of the question
are reserved to the time of trial.
LEARY REPORTING
112 West Main Street, Ste.
Mechanicsburg, Pennsylvania
200
17055
(717) 233-2660
Fax (717) 691-7768
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APPEARANCES:
3
MILLER & ASSOCIATES
1822 Market Street
Camp Hill, PA 17011
BY: ANTHONY E. MARRONE, ESQ.
(717) 737-9212
4
5
6
For the Plaintiffs
7
8
CRAIG A. DIEHL, ESQ.
3464 Trindle Road
Camp Hill, PA 17011
(717) 763-7613
9
For the Defendants
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PRO C E E DIN G S
MR. MARRONE:
Okay.
I guess I'll
just then if you want to add anything.
Anthony Marrone, attorney for the
plaintiffs.
We've reached a settlement
in the matter of Norman A. Beard and
Susan E. Beard, plaintiffs, versus Besco
Systems, Inc., and Robert E. Rhoads as an
individual.
The terms of the settlement are
that defendant shall pay $30,000 which
shall be payable 45 days from the date of
today's deposition or scheduled
deposition which is 27, December of 2000.
Okay.
if payment is not
Payment
made, defendant Besco Systems Inc. is
stipulating for an entry of judgment
against it alone in the amount of
$90,000, which shall be entered no
earlier than the 46th day after today,
the date of settlement.
Also in consideration of the
settlement, Mr. Beard and Mrs. Beard
shall return and transfer the stock
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back to Besco Systems.
2
Do you have anything to add on that
3
regarding the settlement?
4
MR. DIEHL:
Just that the
5
individual suit would be left open
6
pending receipt of the settlement money
7
at which time the suit against Robert
8
Rhoads individually would be dismissed.
9
MR. MARRONE:
And Besco Systems.
MR. DIEHL:
And Besco Systems.
MR. MARRONE:
Okay.
And we'd like
just to go on the record, I may ask Mr.
Rhoads some questions or if you would
agree with my statement that this matter
is being settled today for $30,000 on the
basis of our discussions in which
Besco Systems has presented to us
information that in the event a
settlement was not reached, there's a
substantial likelihood that a Chapter 11
bankruptcy or a Chapter 7 bankruptcy
22
would be filed in this matter.
23
And you've provided us with balance
24
sheets and I believe an income and
25
expense statement to show that the
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corporation could not afford to 'pay' any
2
substantial sum other than what's being
3
agreed or any other monthly payment.
4
And, Mr. Rhoads, you agree with my
5
statement that I just made, that that was
6
the extent of our discussions today?
7
MR. RHOADS:
Yes.
Yes.
8
MR. MARRONE:
Okay.
Do you have
9
anything to add to that?
Do you have
anything you'd like
MR. DIEHL:
Nothing.
MR. MARRONE:
Okay.
Thank you.
I
guess we can close the record then.
(Deposition adjourned at 11:27
a.m. )
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.Q. E R T ~ ~ ~ CAT Ji
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I, Karen J. Bemiller, the officer before
4 whom the within statement was taken, do hereby
5 certify that the statement was duly taken by me
6 on said date and that the transcribed statement
7 is a true record of the statement given by said
8 parties;
9
That the proceeding is herein recorded
10 fully and accurately;
11
That I am neither attorney nor counsel
12 for, nor related to any of the parties to the
(
13
action in which this statement was taken, and
14 further that I am not a relative of any attorney
15 or counsel employed by the parties hereto, or
16 financially interested in this action.
17
21
Notary Public in and
for the Commonwealth of
Pennsylvania
18
~-~~)~cc=~
Karen J. Bem111er, Reporter
19
20
22
My commission expires
23 October 29, 2001
24
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NOTICE OF ENTRY
OF JUDGMENT, ORDER OR DECREE
NORMAN A. BEARD and
SUSAN E. BEARD,
: IN THE COURT OF COMMON PLEAS OF
: CUMBERLAND COUNTY, PENNSYLVANIA
Plaintiffs
v.
No. 00-3264
Civil Term
BESCO SYSTEMS, INC., and
ROBERT E. RHOADS II, individually,
Defendants
TO: BESCO SYSTEMS, INC.
PURSUANT TO THE REQUIREMENTS OF PENNSYLVANIA CIVIL
PROCEDURE RULE 236, NOTICE IS GIVEN THAT A JUDGMENT IN THE ABOVE
CAPTIONED MATTER HAS BEEN ENTERED AGAINST YOU, BESCO SYSTEMS,
INC., IN THIS OFFICE TODAY.
JUDGMENT OF $90,000.00 FOR PLAINTIFFS AND AGAINST DEFENDANT
BESCO SYSTEMS, INC.
Dated: {)j1"L1 ( I,;', ;.00 {
~viI..J~
PROTHONOTAR
If you have any questions concerning the above please contact:
MILLER & ASSOCIATES, PC
Attorneys for the Plaintiffs
1822 Market Street
Camp Hill, PA 17011-4824
(717) 737-9210
,-..;, ,~' ,-- ,,;;:v
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NORMAN A. BEARD and
SUSAN E. BEARD,
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
Plaintiffs
v.
No. 00-3264
Civil Term
Dated: 18 April 2001
R~'~~~q";'e
MILLER & ASSOCIATES, PC
1822 Market Street
Camp Hill, PA 17011-4824
(717) 737-9210
I.D. # 48182
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BESCO SYSTEMS, INC., and
ROBERT E. RHOADS II, individually,
Defendants
CERTIFICATION OF ADDRESSES
TO THE PROTHONOTARY:
I certify that the address of the Plaintiffs, judgment creditors, is 51 Circle Drive
Camp Hill, Pennsylvania 17011, and the last known address of the Defendant BESCO
SYSTEMS, INC., judgment debtor, is 6 State Road, Suite 110, Mechanicsburg,
Pennsylvania 17055.
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NORMAN A. BEARD and
SUSAN IE. BEARD,
: IN THE COURT OF COMMON PLEAS OF
: CUMBERLAND COUNTY, PENNSYLVANIA
Plaintiffs
v.
No. 00-3264
Civil Term
BESCO SYSTEMS, INC., and
ROBERT E. RHOADS II, individually,
Defendants
PRAECIPE TO SATISFY JUDGMENT
TO: THE PROTHONOTARY OF CUMBERLAND COUNTY:
Please mark the judgment in the action against defendant, BESCO SYSTEMS,
INC, satisfied upon payment of your cost only.
Dated: August 2, 2001
~ <t. VYlOlJV'\~
Anthony . Marrone, Esquire
MILLER & ASSOCIATES, PC
1822 Market Street
Camp Hill, PA 17011-4824
(717) 737-9210
I.D.#48182
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NORMAN A. BEARD and
SUSAN E. BEARD,
: IN THE COURT OF COMMON PLEAS OF
: CUMBERLAND COUNTY, PENNSYLVANIA
Plaintiffs
v.
No. 00-3264
Civil Term
BESCO SYSTEMS, INC., and
ROBERT E. RHOADS II, individually,
Defendants
PRAECIPE TO DISCONTINUE ACTION
TO: THE PROTHONOTARY OF CUMBERLAND COUNTY:
Please mark the above-captioned matter as discontinued, settled and
withdrawn.
Dated: August 2,2001
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Anthony . Marrone, EsqUire
MILLER & ASSOCIATES, PC
1822 Market Street
Camp Hill, PA 17011-4824
(717) 737-9210
I.D. # 48182
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NORMAN A. BEARD and
SUSAN E. BEARD,
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
Plaintiffs
v.
No. 00-3264
Civil Term
BESCO SYSTEMS, INC., and
ROBERT E. RHOADS II, individually,
Defendants
CERTIFICATE OF SERVICE
I, Anthony E. Marrone, Esquire, Plaintiffs herein, hereby certify that I have
caused a true and correct copy of the foregoing Plaintiff's Praecipe to Discontinue
Action and Praecipe to Satisfy Judgement to be served by first class mail, postage prepaid,
on the date set forth below, upon the following entity/individual, attorney for Defendants:
Craig A. Diehl, Esquire, C.PA
Law Offices of Craig A. Diehl
3464 Trindle Road
Camp Hill, PA 17011
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Dated: 2 August 2001
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