HomeMy WebLinkAbout03-0369
THOMAS A. FULMER, and
DIANE S. FULMER,
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
Plaintiffs
v.
DOCKET NO. 03 - 3b'i
C,'oL'( ~~
PNC BANK, NA and FRANK
DeSTEFANO,
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 Plaintiffs.
You may lose money or property or other rights important to you.
YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF
YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE
THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL
HELP.
CUMBERLAND COUNTY BAR ASSOCIATION
2 LIBERTY AVENUE
CARLISLE, PA 17013
(717) 249-3166
THOMAS A. FULMER, and
DIANE S. FULMER,
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
Plaintiffs
v.
DOCKET NO. CJ3 - .3109
C;u~LY~
PNC BANK, NA and FRANK
DeSTEFANO,
Defendants
COMPLAINT
AND NOW come the Plaintiffs, by and through their attorneys, the Offices of
Fenstermacher and Associates, P.C., and files this Complaint, as follows:
1. Plaintiffs Thomas A. Fulmer and Diane S. Fulmer are adult individuals with
a residence located at 333 Ertel Road, Williamsport, Lycoming County, Pennsylvania.
2. Defendant PNC Bank, National Association ("PNC") is a Pennsylvania
banking corporation with an address for conducting business at 4242 Carlisle Pike,
Camp Hill, Cumberland County, Pennsylvania.
3. Defendant Frank DeStefano is assistant vice president for PNC bank with
an address for conducting business at 201 Penn Avenue, Scranton, Pennsylvania.
4. At all times relevant to this Complaint, Thomas A. Fulmer and Diane S.
Fulmer (collectively, "the Fulmers") were owners of Fulmer's Personal Care Home
located in Lock Haven, Pennsylvania.
5. On January 8, 1999 the Fulmers received a commitment letter, signed by
Business Banking Officer Peter Bower, for financing from PNC.
6. On January 21, 1999 the Fulmers executed a $558,000 promissory note
numbered 601071257 to PNC that included mortgages of the Fulmers' real property
located at 201 Woodward Avenue, Clinton County, Pennsylvania and RR2, Box 146,
333 Ertel Road, Williamsport , Lycoming County, Pennsylvania, attached hereto and
incorporated herein as Exhibit "A".
7. On October 25,2000 the Fulmers executed a $25,000 promissory note
numbered 601074355 to PNC, attached hereto and incorporated herein as Exhibit "B".
8. On or about December 8, 2000 the Fulmers executed a $358,204
promissory note numbered 601604522 to PNC that included mortgages of the Fulmers'
real property located at 201 Woodward Avenue, Clinton County, Pennsylvania and
RR2, Box 146, 333 Ertel Road, Williamsport , Lycoming County, Pennsylvania, and
collateral of Certificates of Title to various automobiles, attached hereto and
incorporated herein as Exhibit "C".
9. The Fulmers had never been late on a payment to PNC.
10. On December 17, 2001 PNC knowingly and arbitrarily increased the
interest rates by 5% on the two loans without giving the Fulmers any notification.
11. PNC raised the rates on these loans because it no longer desired to have
any participation in the managed health care industry. This is signified by PNC's
2
statement through loan officer Frank DeStefano that "they [PNC] want you [the Fulmers]
out".
12. On or about January 14, 2002, PNC informed the Fulmers of the rate
increase through a Letter of Default signed by Frank DeStefano which did not contain
any cure provisions, attached hereto and incorporated herein as Exhibit "D".
13. The apparent reason for the Fulmers' default according to the January 14
letter was a failure to properly forward financial statements for the years 2000 and 2001
for their trucking and personal home care businesses in addition to maintaining a "Debt
Service Coverage" of greater than 1.25x.
14. After receiving the January 14 letter the Fulmers had their accountant
prepare the desired compilation reports which were sent to PNC well within the required
time period for the 2001 fiscal year.
15. Prior to this the Fulmers were informed by PNC officers Lee Ann Martin
and Peter Bower that financial compilation statements going forward were not
necessary and simply forwarding their tax return documents would suffice to meet their
obligations under the loan contracts.
16. The Fulmers received no other notice of default aside from the letter.
17. No loan officer from PNC engaged the Fulmers to further explain the letter
or properly asses the merits of PNC's actions.
3
18. PNC attempted to remedy the situation by having the Fulmers sign a
Forbearance, Modification, and Repayment Agreement which they refused to do based
on the significant fees and costs that would further complicate the viability of
refinancing.
19. On February 5, 2002 the Fulmers retained a financial advisor to assist in
locating a replacement permanent lender.
20. The Fulmers repaid the $7,156.56 outstanding balance on loan number
601074355 on March 18, 2002.
21. On May 22, 2002 the Fulmers obtained a commitment to lend from Vine
Street Financial, Inc. located in Atlanta, Georgia.
22. On June 3, 2002 the Fulmers received an appraisal from Wellspring
Partners, Chicago, Illinois for their Lock Haven facility valued at $2.4 million.
23. The Fulmers were forced to sell their trucking business to comply with the
requirement of "stand alone" financing by Vine Street Financial on June 14, 2002.
24. The Fulmers fully repaid their PNC loans numbered 60107127 and
601604522 on July 3, 2002.
25. Payoff for said loans included no retroactive adjustment for penalty
interest and furthermore required a non-negotiable $5,000 payment to PNC as a "legal
charge."
4
26. Due to the unwarranted actions of PNC in claiming a default of the three
loans, the Fulmers have suffered substantial damages in expending $102,715.28 to
refinance their PNC debt as well as excess and/or penalty fees imposed by PNC.
27. The actions of the Bank were outrageous, and performed with a reckless
indifference to the rights of others.
COUNT I
Thomas A. Fulmer and Diane S. Fulmer v. PNC Bank, N.A. and Frank DeStefano
NEGLIGENCE
28. Paragraphs 1 through 27 are incorporated fully herein by reference.
29. The Defendants had a duty to the Fulmers to manage and maintain their
accounts in a reasonable and professional manner.
30. The Defendants breached such duty by failing to properly manage and
maintain the Fulmers' account and furthermore classifying the loan as being in default
when in fact the Fulmers had fully complied with their payment and reporting obligations
as defined in the contract and interpreted by the loan officers.
31. Due to such breach, the Fulmers have expended substantial money in
obtaining refinancing for the PNC loans.
WHEREFORE, Plaintiffs demand judgment against Defendants in an amount in
excess of the compulsory arbitration limitations, together with costs, interest and any
other relief the Court deems appropriate.
5
COUNT II
Thomas A. Fulmer and Diane S. Fulmer v. PNC Bank, N.A. and Frank DeStefano
BREACH OF FIDUCIARY DUTY
32. Paragraphs 1 through 31 are incorporated fully herein by reference.
33. PNC and Frank DeStefano owed a fiduciary duty to the Fulmers to
maintain and manage their funds and properly accept the Fulmers' payments per the
terms of the loans.
34. The defendants breached such duty by improperly treating the Fulmers'
account in default to the Fulmers' ultimate financial detriment.
35. The defendants breached such duty by improperly seeking to have the
Fulmers sign a Forbearance agreement placing them in a worse financial situation than
their previous loan agreements.
36. PNC and Frank DeStefano owed a fiduciary duty to the Fulmers to fairly
deal with them in all financial dealings.
37. PNC and Frank DeStefano breached this duty by, in an effort to leave the
managed health care industry, declaring the Fulmers' in default.
38. PNC and Frank DeStefano breached this duty by improperly declaring
default even though the Fulmers had fully complied with their legal obligations.
6
39. PNC breached this duty by previously informing Plaintiffs that their tax
return documents would suffice to meet the requirements under the agreement when in
fact their financial compilation information was needed.
WHEREFORE, Plaintiffs demand judgment against Defendants in an amount in
excess of the compulsory arbitration limitations, together with costs, interest and any
other relief the Court deems appropriate.
COUNT III
Thomas A. Fulmer and Diane S. Fulmer v. PNC Bank, N.A. and Frank DeStefano
Breach of Contract
40. Paragraphs 1 through 39 are incorporated herein by reference.
41. Defendants failed to perform services they were obligated to do under the
loan contracts cited herein.
42. In particular, under the terms of the contract, the Fulmers were not to be
considered in default if they made timely payments and handed over the requisite
financial documents.
43. The Fulmers did in fact both make timely payments and handed over what
they were told by PNC loan officers would be adequate financial documents.
44. By declaring the Fulmers in default when no such action was warranted,
the defendants breached their obligations under the contracts.
7
45. Due to the Defendants' failure to fully perform under the contract, the
Fulmers have had to expend substantial sums of money in seeking refinancing and
payment of excess fees and penalties to PNC.
WHEREFORE, Plaintiffs demand judgment against Defendants in an amount in
excess of the compulsory arbitration limitations, together with costs, interest and any
other relief the Court deems appropriate.
Respectfully submitted,
FENSTERMACHER AND ASSOCIATES, P.C.
DATED: /iOr)
~
U. .0 n . Fenstermacher
Supreme Court I.D. #29940
115 East Trindle Road
Mechanicsburg, PA 17050
(717) 691-5400
Attorney for Plaintiffs
8
EXHIBIT 'A'
PROMISSORY NOTE
Borrower: THOMAS A. FULMER (SSN: 180-46-8379)
DIANE S, FULMER (SSN: 196-44-6683)
RR 2 BOX 146
WILLIAMSPORT, PA 1n01
Lender: PNC BANK, NATIONAL ASSOCIATION
4242 CARLISLE PIKE
CAMP HILL, PA 17001-8874
Principal Amount: $558,000,00 Interest Rate: 8.000% Date of Note: January 21, 1999
PROMISE TO PAY. THOMAS A. FULMER and DIANE S. FULMER ("Borrower") promise 10 pay 10 PNC BANK, NATIONAL ASSOCIATION
("Lender"), or order, In lawful money of the United Slales of America, Ihe principal amount of Five Hundred Fifty Eight Thousand & 001100
Dollars ($558,000.00), togelher with Inleresl atlhe rale of 8.000% per annum on Ihe unpaid prlnclp!ll balance from January 21, 1999, unlll paid
In full.
PAYMENT. Borrower will pay this loan In 59 regular payments of $5,381.86 each and one Irregular lasf payment estimated at $446,799.59.
Borrower's first payment Is due March 1,1999, and all subsequent payments are due on the same day of each month aller that. Borrower's
final payment due February 1, 2004, will be for all principal and all accrued Interest not yet paid. Payments Include principal and Interest. The
annual inlerest rate for this Note is computed on a 365/360 basis; that is. by applying the ratio of the annual Interest rate over a year of 360 days,
mulliplied by lhe outstanding principal balance, mulliplied by Ihe actual number of days the principal balance is outs landing. Borrower will pay Lender
at Lender's address shown above or at such other place as Lender may designate In wrlling. Unless otherwise agreed or required by applicable law,
payments will be applied fimt to accrued unpaid Interest, then to principal, and any remaining amount 10 any unpaid collection costs and late charges.
PREPAYMENT PENALTY. Upon prepayment oflhls Nole, Lender Is enlllled to the following prepayment penalty: On any business day, upon
paymenl of all accrued unpaid Interest on this Note, and upon five (5) business day's prior wrlllen notice to Lender, the Borrower may prepay
all or part of the oUlstandlng principal of this Note; provided, however, thai the Borrower also agrees to pay Lender as compensation for the
cost of lldvanclng fixed rate funds, an amount equal to the Cost of Prepayment.
"Cosl of Prepayment" means an amount equal to the present value, If positive, of the product of (a) the difference between (I) the yield, on the
dale of this Note, of a U. S. Treasury obligation with a maturity similar 10 this Note minus (II) the yield on the prepayment date, of a U. S.
Treasury obligation with a maturity similar to the remaining maturity of this Note and (b) Ihe principal amount to be prepaid, and (c) Ihe
number of years, InclUding fractional years, from the prepayment date to the maturity date of this Note. The yield on any U. S. Treasury
obligation shall be delermlned by reference to Federal Reserve Statistical Release H.15(519) "Selected Interest Rates". For purposes of
making present value calCUlations, the yield 10 maturity of a similar maturity U. S. Treasury obligation on Ihe prepayment date shall be deemed
the discount rate. . The Cost of Prepaymenl shall also apply 10 any paymenls made aller acceleration of the malurlty of this Note. Except for the
foregoing, Borrower may pay all or a portion of the amount owed earlier than il is due. Early payments will not, unless agreed to by Lender In writing.
relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, they will reduce Ihe principal balance
due and may resull in Borrower making fewer payments.
LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment
or $100.00, whichever Is less.
DEFAIA. T. Borrower will be in defaull if any of the following happens: (a) Borrower fails 10 make any payment when due. (b) Borrower breaks any
promise Borrower has made 10 Lender, or Borrower fails to comply with or to perform when due any other term, obligation, covenant, or condition
contained in this Note or any agreement related to this Note, or in any other agreement or loan Borrower has with Lender. (c) Any representalion or
slatement made or furnished to Lender by Borrower or on Borrower's behalf is false or misleading in any material respect either now Of al the time
made or furnished. (d) Borrower dies or becomes insolvent, a receiver is appointed for any part of Borrower's properly, Borrower makes an
assignment for Ihe benefit of creditom, or any proceeding is commenced either by Borrower or against Borrower under any bankruptcy or insolvency
laws. (e) Any creditor tries to take any of Borrower's properly on or in which Lender has a lien or security interest. This includes a garnishmenl of any
of Borrower's accounts with Lender. (f) Any of the events described in this default section occurs with respect to any guarantor of this Note. (g) A
material adveme change occum in Borrower's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is
impaired.
LENDER'S RIGHTS. Upon default, Lender may, aHer giving such nolices as required by applicable law; declare the entire unpaid prinCipal balance on
this Note and all accrued unpaid interes\ immediately due, and then Borrower will pay that amount. Upon default, Including failure to pay upon final
maturity, Lender, at its option, may also, if permitted under applicable law, increase Ihe interest rate on this Note 5.000 percentage poInts. The Interest
rate will not exceed the maximum rate permitted by applicable law. Lender may hire or pay someone else to help collecl this Note if Borrower does not
pay. Borrower also will pay Lender that amount. This includes, subject to any limits under applicable law, Lender's altorneys' fees and Lender's legal
expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings (including efforts to modify or
vacate any automatic stay or injunction), appeals, and any anticipaled post-judgment collection services. If not prohibited by applicable law, Borrower
also will pay any court costs, In addition to all other sums provided by law. If judgment is entered in connection with this Note, Interest will continue to
accrue on this Note aHer judgment at the existing interest rate provided for In this Note. This Note has been delivered to Lender and accepted by
Lender In the Commonweallh of Pennsylvania. If there Is a lawsuit, Borrower agrees upon Lender's request to submit to the Jurisdiction Of the
courts of CUMBERLAND County, the Commonwealth of Pennsylvania. Lender and Borrower hereby waive the right to any Jury trial In any
action, proceeding, or counterclaim brought by either Lender or Borrower agalnsllhe other. This Nole shall be governed by and construed In
accordance wllh the laws of the Commonwealth of Pennsylvania.
RIGHT OF SETOFF. Borrower grants 10 Lender a contractual security interesl in, and hereby assigns, conveys, delivers, pledges, and Iransrers to
Lender all Borrower's right, title and Interest in and to, Borrower's accounts with Lender (whether checking, savings, or some other account), Including
withoutlimllation all accounts held Jointly with someone else and all accounts Borrower may open In the future, excluding however all IRA and Keogh
accounts, and all trust accounts for which the grant of a security Interest would be prohlbiled by law. Borrower aulhortzes Lender, to the extent
permilted by applicable law, to charge or setoff all sums owing on this Note against any and all such accounts. .
COllATERAL. This Note is secured by a Mortgage dated January 21, 1999, to Lender on real property located In LYCOMING County,
Commonweallh of Pennsylvania, and a Mortgage dated January 21, 1999, to Lender on real properly located In CLINTON County, Commonwealth of
Pennsylvania, all the terms and conditions of which are hereby incorporated and made a part of this Note.
. .
'''A.R 2000 COMPLIANCE, Borrower has reviewed the areas within its business and operations which could be aversely affected by, and has
~\oped or is developing a program to address on a timely basis the risk that certain computer applications used by Borrower may be unable 10
<lize and perform properly date-sensitive functions involving dates prior 10 and after December 31, 1999 (the ''Year 2000 Problem"). The Year
j?1-?1-1999 rnVIVII.;:J.;:JVn I I"tV I....
I =:08n No (Continued).
2000 Problem will not restlll, and I~ not reasonably expected to result, In any material adverse effect on the business, pr5pertles, assets, financial
condition, results of operallons or prospects of Borrower, or the ability of Borrower to duly and punctually payor perform its obligallons hereunder and
under the Related Documents. , '.
. ":1- -
LETTER AGREEMENT. This Note is Issued pursuant to a Leller Agreement dated January 8,1999 and the documents referred to therein, all the terms
and conditions of which are Incorporated herein by reference.
GENERAL PROVISIONS. Lender may delay or forgo enforcing any of Its rights or remedies under this Note without losing them, Borrower and any
other person who signs, guarantees or endorses this Note, to the extent allowed by law, waive presentment, demand for payment, protest and notice of
dishonor. Upon any change In the terms of this Note, and unless otherwise expressly stated In writing, no party who signs this Note, whether as maker,
guarantor, accommodallon maker or endorser, shall be released Irom liability. All such parties agree that Lender may renew or extend (repeatedly and
lor any length of lime) this loan, or release any party or guarantor or collateral; or impair, fall to realize upon or perfect Lender's security Interest In the
collateral; and take any other acllon deemed necessary by Lender without the consent of or nollce 10 anyone. All such parties also agree that Lender
may modify this loan without the consent of or notice to anyone other than the party with whom the modification Is made. The obligations under this
Note are joint and several. If any portion of this Note Is for any reason determined to be unenforceable, it will not affect the enforceability of any other
provisions of this Note.
CONFESSION OF JUDGMENT. BORROWER HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR THE PROTHONOTARY
OR CLERK OF Am COURT IN THE COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE, TO APPEAR AT ANY TIME FOR BORROWER AFTER
A DEFAULT UNDER THIS NOTE, AND WITH OR WITHOUT COMPLAINT FILED, AS OF Am TERM, CONFESS OR ENTER JUDGMENT AGAINST
BORROWER FOR THE ENTIRE PRINCIPAL BALANCE OF THIS NOTE, ALL ACCRUED INTEREST, LATE CHARGES, AND ANY AND ALL AMOUNTS
EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECURING THIS NOTE TOGETHER WITH INTEREST ON SUCH
AMOUNTS, TOGETHER WITH COSTS OF SUIT, AND AN ATTORNEY'S COMMISSION OF TEN PERCENT (10%) OF THE UNPAID PRINCIPAL
BALANCE AND ACCRUED INTEREST FOR COLLECTION, BUT IN ANY EVENT NOT LESS THAN FIVE HUNDRED DOLLARS ($500) ON WHICH
JUDGMENT OR JUDGMENTS ONE OR MORE EXECUTIONS MAY ISSUE IMMEDIATELY; AND FOR SO DOING, THIS NOTE OR A COPY OF THIS
NOTE VERIFIED BY AFFIDAVIT SHALL BE SUFFICIENT WARRANT. THE AUTHORITY GRANTED IN THIS NOTE TO CONFESS JUDGMENT
AGAINST BORROWER SHALL NOT BE EXHAUSTED BY ANY EXERCISE OF THAT AUTHORITY, BUT SHALL CONTINUE FROM TIME TO TIME AND
AT ALL TIMES UNTIL PAYMENT IN FULL OF ALL AMOUNTS DUE UNDER THIS NOTE. BORROWER HEREBY WAIVES Am RIGHT BORROWER
MAY HAVE TO NOTICE OR TO A HEARING IN CONNECTION WITH Am SUCH CONFESSION OF JUDGMENT, EXCEPT Am NOTICE AND/OR
HEARING REQUIRED UNDER APPLICABLE LAW WITH RESPECT TO EXECUTION OF THE JUDGMENT, AND STATES THAT EITHER A
REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THIS CONFESSION OF JUDGMENT PROVISION TO BORROWER'S ATTENTION OR
BORROWER HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL.
PRIOR TO SIGNING THIS NOTE, EACH BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE AND THE NOTICE TO
COSIGNER SET FORTH B8-0W. EACH BORROWER AGREES TO THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A
COMPLETED COPY OF THE NOTE.
THIS NOTE HAS BEEN SIGNED AND SEALED BY THE UNDERSIGNED.
NOTICE TO COSIGNER
You are being asked to guarantee thIs debt. Think carefully before you do. If the borrower doesn1 pay the debt, you will have to. Be sure
you can afford to pay If you have to, and that you want to accept this responsibility,
You may have to pay up to the full amount of the debt If the borrower does not pay. You may also have to pay late fees or collection costs,
which Increase this amount.
The lender can collect this debt from you wllhout t1rsttrylng to collect from the borrower. The lender can use the same collection methods
against you that can be used against the borrower, such as suing you, garnishing your wages, etc. If this debt Is ever In default, that fact may
become a part of YOUR credit record.
This notice Is not the contract that makes you liable for the debt.
Fixed Rale. Balloon.
LASER PRO, Reg. U.S. Pal. & T.M. 011., Ver. 3.28 (c) 1999CFI ProServlc.., Inc. Allrlghlor..erved.IPA-D20 FULMER.LN Cn.OVl)
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RECORDATION REQUESTED BY:
PNC BANK, NATIONAL ASSOCIATION
4242 CARLISLE PIKE
CAMP HILL, PA 17001-8874
LS:9~
-.
i
\~.,. t,
STATE OF PENNSYlVANIA)
WHEN RECORDED MAIL TO: ss
PNC BANK, NATIONAL A~g~~Qfr.ClINTON )
630 DRESHER ROAD, SUITE 200
HORSHAM, PA 19044 'hereby certify that the within Mortg
and the accompanying Bond are sa 'sf/ad 01
record.
Witness (I'IY hendfind sea' this day
of ''lY7/'b dL~ 200(
,
"
SPACE ABOVE THIS LINE IS FOR RECORDER'S USE ONLY
TGAGE
S FUTURE ADVANCES
THIS MORTGAGE IS DATED JANUARY 21,1999, between THOMAS A. FULMER and DIANE S. FULMER, whose
address is RR 2 BOX 146, WII:.t1AMSPORT, PA 1n01 (referred to below as "Grantor"); and PNC BANK,
NATIONAL ASSOCIATION, whose address is 4242 CARLISLE PIKE, CAMP HILL, PA 17001-8874 (referred to
below as "Lender").
CX:J
=-:::
GRANT OF MORTGAGE. For valuable consideration, Grantor grants, bargains, sells, conveys, asslgns, transfers, releases, confirms and
mortgages to Lender all of Grantor's right, title, and interest in and to the following described real property, together with all existing or sUbsequently
erected or affixed buildings, improvements and fixtures; all streets, lanes, alleys, passages, and ways; all easements, rights of way, all liberties,
privileges, tenements, hereditaments, and appurtenances thereunto belonging or anywise made appurtenant hereafter, and the reversions and
remainders with respect thereto; all water, water rights, watercourses and ditch rights (including stock in utilities with ditch or irrigation rights); and all
other rights, royalties, and profits relating to the real property, including without limitation all minerals, oil, gas, geothermal and similar matters, located
in CLINTON County, Commonwealth of Pennsylvania (the "Real Property"):
SEE EXHIBIT A ATTACHED HERETO AND MADE A PART HEREOF
The Real Property or its address is commonly known as 205 WOODWARD AVENUE, WOODWARD TOWNSHIP,
PA 1 n45. The Real Property tax identification number is .
Grantor presently assigns to Lender all of Grantor's right, tille, and interest in and to all leases of the Property and all Rents from the Property. In
addition, Grantor grants to Lender a Uniform Commercial Code security interest in the Personal Property and Rents.
DEFINITIONS. The following words shall have the following meanings when used in this Mortgage. Terms not otherwise defined in this Mortgage shall
have the meanings attributed to such terms in the Uniform Commercial Code. All references to dollar amounts shall mean amounts in lawful money of
the United States of America.
Existing Indebtedness. The words "Existing Indebtedness" mean the indebtedness described below in the Existing Indebtedness section of this
Mortgage.
Grantor. The word "Grantor" means THOMAS A. FUlMER and DIANE S. FLLMER. The Grantor is the mortgagor under this Mortgage.
Guarantor. The word "Guarantor" means and includes without limitation each and all of the guarantors, sureties, and accommodation parties in
connection with the Indebtedness.
Improvements. The word "Improvements" means and includes without limitation all existing and future improvements, buildings, structures,
mobile homes affIXed on the Real Property, facilities, additions, replacements and other construction on the Real Property.
Indebtedness. The word "Indebtedness" means all principal and interest payable under the Note and any amounts expended or advanced by
Lender to discharge obligations of Grantor or expenses incurred by Lender to enforce obligations of Grantor under this Mortgage, together with
interest on such amounts as provided in this Mortgage. In addition to the Note, the word "Indebtedness" includes all obligations, debts and
liabilities, plus interest thereon, of Grantor to Lender, or anyone or more of them, as well as all claims by Lender against Grantor, or anyone or
more of them, whether now existing or hereafter arising, whether related or unrelated to the purpose of the Note, whether VOluntary or otherwise,
whether due or not due, absolute or contingent, liquidated or unliquidated and whether Grantor may be liable individually or joinlly with others,
whether obligated as guarantor or otherwise, and whether recovery upon such Indebtedness may be or hereafter may become barred by any
statute of limitations, and whether such Indebtedness may be or hereafter may become otherwise unenforceable.
Lender. The word "Lender" means PNC BANK, NATIONAL ASSOCIATION, its successors and assigns. The Lender is the mortgagee under this
Mortgage.
Mortgage. The word "Mortgage" means this Mortgage between Grantor and Lender, and includes without limitation all assignments and security
interest provisions relating to the Personal Properly and Rents.
Note. The word "Note" means the promissory note or credit agreement dated January 21, 1999, in the original principal amount of
$325,000.00 from Grantor to Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and
substitutions for the promissory note or agreement.
Personal Property. The words "Personal Properly" mean all equipment, fixtures, and other articles of personal property now or hereafter owned
by Grantor, and now or hereafter attached or affixed to the Real Property; together with all accessions, parts, and additions to, all replacements of,
and all substitutions for, any of such property; and together with all proceeds (including without limitation all insurance proceeds and refunds of
premiums) from any sale or other disposition of the Property.
Property. The word "Properly" means collectively the Real Property and the Personal Property.
Real Property. The words "Real Properly" mean the property, interests and rights described above in the "Grant of Mortgage" seelion.
Related Documents. The words "Related Documents" mean and include without limitation all promissory notes, credit agreements, loan
o
o
o
-0
C":l
o
01-21-1999
Loan No
MORTGAGE
(Continued) .
Page 2
agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, and all other instruments, agreements and
documents, whether now or hereafter existing, executed in connection with the Indebtedness.
Rents. The word ''Rents" means all present and future rents, revenues, income, issues, royalties, profits, llnd other benefits derived from the
Properly. (' " . ",',r:.' '.. .,.", : ~ .-.
THIS MORTGAGE, INCLUDING THE ASSIGNMENT OF RENTS AND THE SEc6~:11lINTIi'REST.lNl'HE ~ENTS AND PERSONAl PROPERTY, IS
GIVEN TO SECURE (1) PAYMENT OF THE INDEBTEDNESS AND (2) PERFORMANct::' OF AlL OBLIGATIONS OF GRANTOR UNDER THIS
MORTGAGE AND THE RELATED DOCUMENTS. THIS MORTGAGE IS GIVEN AND ACCEPTED ON THE FOLLOWING TERMS:
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PAYMENT AND PERFORMANCE. Except as otherwise proVIded In tfilS Mortgage, GrantOr shall pay tq l.-ender all,amounts secured by thiS Mortgage
as they become due, and shall strictly perform all of Grantor's oflligations under,lhiS Mortgage. "~,"_' -.
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POSSESSION AND MAINTENANCE OF THE PROPERTY. Grantor agrees that Grantor'~ J;los~e,ssiQraI)R ljSe.ofl!1e. Properly shall be governed by the
following provisions: \i' ..... ___ . \, _' _.-., -. \ .
. ,\
Possession and Use. Until in default, Grantor may remain in possessio~! anctcontrol'6fllJ'fif 6pe7iifeliiiCf manage the Properly and collect the
Rents from the Properly.
Duly to Maintain. Grantor shall maintain the Properly in fenantalllecondition ,and promptlY'perlorm all repairs, replacements, and maintenance
necessary to preserve its value. i. . ,J '-..... _., _
Hazardous Substances. The terms "hazardous waste," "hazardous substance," "disposal," "release," and "threatened release," as used in this
Mortgage, shall have the same meanings as set forth in the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as
amended, 42 U.S.C. Section 9601, et seq. ("CERCLAj, the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499
("SARAj, the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901, et seq., or other applicable state or Federal laws, rules, or regulations adopted pursuant to any of the foregoing. The terms
"hazardous waste" and "hazardous substance" shall also include, without limitation, petroleum and petroleum by-products or any fraction thereof
and asbestos. Grantor represents and warrants to Lender that: (a) During the period of Grantor's ownership of the Properly, there has been no
use, generation, manufacture, storage, trealment, disposal, release or threatened release of any hazardous waste or substance by any person on,
under, about or from the Properly; (b) Grantor has no knowledge of, or reason to believe that there has been, except as previously disclosed to
and acknowledged by Lender in writing, (i) any use, generation, manufacture, storage, treatment, disposal, release, or threatened release of any
hazardous waste or substance on, under, about or from the Properly by any prior owners or occupants of the Properly or (ii) any actual or
threatened litigation or claims of any kind by any person relating to such mailers; and (c) Except as previously disclosed to and acknowledged by
Lender in writing, (i) neither Grantor nor any tenant, contractor, agent or other authorized user of the Properly shall use, generate, manufacture,
store, treal, dispose of, or release any hazardous waste or substance on, under, about or from the Properly and (ii) any such activity shall be
conducted in compliance with all applicable federal, state, and local laws, regulations and ordinances, including without limitation those laws,
regulations, and ordinances described above. Grantor authorizes Lender and its agents to enter upon the Properly to make such inspections and
tests, at Grantor's expense, as Lender may deem appropriate to determine compliance of the Properly with this section of the Mortgage. Any
inspections or tests made by Lender shall be for Lender's purposes only and shall not be construed to create any responsibility or liability on the
part of Lender to Grantor or to any other person. The representations and warranties contained herein are based on Grantor's due diligence in
investigating the Properly for hazardous waste and hazardous substances. Grantor hereby (a) releases and waives any future claims against
Lender for indemnity or contribution in the event Grantor becomes liable for cleanup or other costs under any such laws, and (b) agrees to
indemnify and hold harmless Lender against any and all claims, losses, liabilities, damages, penalties, and expenses which Lender may direcUy or
indirectly sustain or suffer resulting from a breach of this section of the Mortgage or as a consequence of any use, generation, manufacture,
storage, disposal, release or threatened release of a hazardous waste or substance on the properties. The provisions of this section of the
Mortgage, including the obligation to indemnify, shall survive the payment of the Indebtedness and the satisfaction and reconveyance of the lien of
this Mortgage and shall not be affected by Lender's acquisition of any interest in the Properly, whether by foreclosure or otherwise.
Nuisance, Waste. Grantor shall not cause, conduct or permit any nuisance nor commit, permit, or suffer any stripping of or waste on or to the
Properly or any portion of the Properly. Without limiting the generality of the foregoing, Grantor will not remove, or grant to any other parly the
right to remove, any timber, minerals (including oil and gas), soil, gravel or rock products without the prior wrillen consent of Lender.
Removal of Improvements. Grantor shall not demolish or remove any Improvements from the Real Properly without the prior wrillen consent of
Lender. As a condition to the removal of any Improvements, Lender may require Grantor to make arrangements satisfactory to Lender to replace
such Improvements with Improvements of at least equal value.
Lender's Right to Enter. Lender and its agents and representatives may enter upon the Real Properly at all reasonable times to allend to
Lender's interests and to inspect the Properly for purposes of Grantor's compliance with the terms and conditions of this Mortgage.
Compliance with Governmental Requirements. Grantor shall promplly comply with all laws, ordinances, and regulations, now or hereafter in
effect, of all governmental authorities applicable to the use or occupancy of the Properly, including without limitation, the Americans With
Disabilities Act. Grantor may contest in good faith any such law, ordinance, or regulation and withhold compliance during any proceeding,
including appropriate appeals, so long as Grantor has notified Lender in writing prior to doing so and so long as, in Lender's sole opinion,
Lender's interests in the Properly are not jeopardized. Lender may require Grantor to post adequate security or a surety bond, reasonably
satisfactory to Lender, to protect Lender's interest.
Duly to Protect. Grantor agrees neither to abandon nor leave unallended the Properly. Grantor shall do all other acts, in addition to those acts
set forth above in this section, which from the character and use of the Properly are reasonably necessary to protect and preserve the Properly.
DUE ON SALE - CONSENT BY LENDER. Lender may, at its option, declare immediately due and payable all sums secured by this Mortgage upon the
sale or transfer, without the Lender's prior written consent, of all or any part of the Real Properly, or any interest in the Real Properly. A "sale or
transfer" means the conveyance of Real Properly or any right, title or interest therein; whether legal, beneficial or equitable; whether voluntary or
involuntary; whether by outright sale, deed, installment sale contract, land contract, contract for deed, leasehold interest with a term greater than three
(3) years, lease-option contract, or by sale, assignment, or transfer of any beneficial interest in or to any land trust holding title to the Real Properly, or
by any other method of conveyance of Real Properly interest. If any Grantor is a corporation, partnership or limited liability company, transfer also
includes any change in ownership of more than twenty-five percent (25%) of the voling stock, partnership interests or limited liability company interests,
as the case may be, of Grantor. However, this option shall not be exercised by Lender if such exercise is prohibited by federal law or by Pennsylvania
law.
TAXES AND LIENS. The following provisions relating to the taxes and liens on the Properly are a part of this Mortgage.
Payment. Grantor shall pay when due (and in all events prior to delinquency) alllaxes, payroll taxes, special taxes, assessments, water charges
and sewer service charges levied against or on account of the Properly, and shall pay when due all claims for wor1< done on or for services
rendered or material furnished to the Properly. Grantor shall maintain the Properly free of all liens having priority over or equal to the interest of
Lender under this Mortgage, except for the lien of taxes and assessments not due, except for the Existing Indebtedness referred to below, and
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except as otherwise provided in the following'paragraph.
Right To Contest. Grantor may withhold payment of any tax, assessment, or claim in connection with a good faith dispute over the obligation to
pay, so long as Lender's interest in the Property is not jeopardized. If a lien arises or is filed as a result of nonpayment, Grantor shall within fifteen
(15) days after the lien arises or, if a lien is filed, within fifteen (15) days after Grantor has notice of the filing, secure the discharge of the lien, or if
requested by Lender, deposit with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender in an amount sufficient
to discharge the lien plus any costs and attorneys' fees or other charges that could accrue as a result of a foreclosure or sale under the lien. In
any contest, Grantor shall defend itself and Lender and shall satisfy any adverse judgment before enforcement against the Property. Grantor shall
name Lender as an additional obligee under any surety bond furnished in the contest proceedings.
Evidence of Payment. Grantor shall upon demand furnish to Lender satisfactory evidence of payment of the taxes or assessments and shall
authorize the appropriate governmental official to deliver to Lender at any time a written statement of the taxes and assessments against the
Property.
Notice of Construction. Grantor shall notify Lender at least fifteen (15) days before any work is commenced, any services are furnished, or any
materials are supplied to the Property, if any mechanic's lien, materialmen's lien, or other lien could be asserted on account of the work, services,
or materials. Grantor will upon request of Lender furnish to Lender advance assurances satisfactory to Lender that Grantor can and will pay the
cost of such improvements.
PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring the Property are a part of this Mortgage.
Maintenance of Insurance. Grantor shall procure and maintain policies of fire insurance with standard extended coverage endorsements on a
replacement basis for the full insurable value covering all Improvements on the Real Property in an amount sufficient to avoid application of any
coinsurance clause, and with a standard mortgagee clause in favor of Lender. Grantor shall also procure and maintain comprehensive general
liability insurance in such coverage amounts as Lender may request with Lender being named as additional insureds in such liability insurance
policies. Additionally, Grantor shall maintain such other insurance, including but not limited to hazard, business interruption and boiler insurance
as Lender may require. Policies shall be written by such insurance companies and in such form as may be reasonably acceptable to Lender.
Grantor shall deliver to Lender certificates of coverage from each insurer containing a stipulation that coverage will not be cancelled or diminished
without a minimum of thirty (30) days' prior written notice to Lender and not containing any disclaimer of the insurer's liability for failure to give
such notice. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way
by any act, omission or default of Grantor or any other person. Should the Real Property at any time become located in an area designated by the
Director of the Federal Emergency Management Agency as a special flood hazard area, Grantor agrees to obtain and maintain Federal Flood
Insurance for the full unpaid principal balance of the loan, up to the maximum policy limits set under the National Flood Insurance Program, or as
otherwise required by Lender, and to maintain such insurance for the term of the loan.
Application ,of Proceeds. Grantor shall prompUy notify Lender of any loss or damage to the Property. Lender may make proof of loss if Grantor
fails to do so within fifteen (15) days of the casualty. Whether or not Lender's security is impaired, Lender may, at its election, apply the proceeds
to the reduction of the Indebtedness, payment of any lien affecting the Property, or the restoration and repair of the Property. If Lender elects to
apply the proceeds to restoration and repair, Grantor shall repair or replace the damaged or destroyed Improvements in a manner satisfactory to
Lender. Lender shall, upon satisfactory proof of such expenditure, payor reimburse Grantor from the proceeds for the reasonable cost of repair
or restoration if Grantor is not in default under this Mortgage. Any proceeds which have not been disbursed within 180 days after their receipt and
which Lender has not committed to the repair or restoration of the Property shall be used first to pay any amount owing to Lender under this
Mortgage, then to pay accrued interest, and the remainder, if any, shall be applied to the principal balance of the Indebtedness. If Lender holds
any proceeds after payment in full of the Indebtedness, such proceeds shall be paid to Grantor.
Unexpired Insurance at Sale. Any unexpired insurance shall inure to the benefit of, and pass to, the purchaser of the Property covered by this
Mortgage at any trustee's sale or other sale held under the provisions of this Mortgage, or at any foreclosure sale of such Property.
Compliance with ExIsting Indebtedness. During the period in which any Existing Indebtedness described below is in effect, compliance with the
insurance provisions contained in the instrument evidencing such Existing Indebtedness shall conslilute compliance with the insurance provisions
under this Mortgage, to the extent compliance with the terms of this Mortgage would conslilute a duplication of insurance requirement. If any
proceeds from the insurance become payable on loss, the provisions in this Mortgage for division of proceeds shall apply only to that portion of
the proceeds not payable to the holder of the Existing Indebtedness.
Grantor's Report on Insurance. Upon request of Lender, however not more than once a year, Grantor shall furnish to Lender a report on each
existing policy of insurance showing: (a) the name of the insurer; (b) the risks insured; (c) the amount of the policy; (d) the property insured, the
then current replacement value of such property, and the manner of determining that value; and (e) the expiration date of the policy. Grantor
shall, upon request of Lender, have an independent appraiser satisfactory to Lender determine the cash value replacement cost of the Property.
EXPENDITURES BY LENDER. If Grantor fails to comply with any provision of this Mortgage, including any obligation to maintain Existing Indebtedness
in good standing as required below, or if any action or proceeding is commenced that would materially affect Lender's interests in the Property, Lender
on Grantor's behalf may, but shall not be required to, take any action that Lender deems appropriate. Any amount that Lender expends in so doing will
bear interest at the rate provided for in the Note from the date incurred or paid by Lender to the date of repayment by Grantor. All such expenses, at
Lender's option, will (a) be payable on demand, (b) be added to the balance of the Note and be apportioned among and be payable with any
installment payments to become due during either (i) the term of any applicable insurance policy or (Ii) the remaining term of the Note, or (c) be
treated as a balloon payment which will be due and payable at the Note's maturity. This Mortgage also will secure payment of these amounts. The
rights provided for in this paragraph shall be in addition to any other rights or any remedies to which Lender may be entitled on account of the default.
Any such action by Lender shall not be construed as curing the default so as to bar Lender from any remedy that it otherwise would have had.
Grantor's obligation to Lender for all such expenses shall survive the entry of any mortgage foreclosure judgment.
WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of the Property are a part of this Mortgage.
Title. Grantor warrants that: (a) Grantor holds good and marketable title of record to the Property in fee simple, free and clear of all liens and
encumbrances other than those set forth in the Real Property description or in the Existing Indebtedness section below or in any title insurance
policy, title report, or final title opinion issued in favor of, and accepted by, Lender in connection with this Mortgage, and (b) Grantor has the full
right, power, and authority to execute and deliver this Mortgage to Lender.
Defense of Title. Subject to the exception in the paragraph above, Grantor warrants and will forever defend the title to the Property against the
lawful claims of all persons. In the event any action or proceeding is commenced that questions Grantor's title or the interest of Lender under this
Mortgage, Grantor shall defend the action at Grantor's expense. Grantor may be the nominal party in such proceeding, but Lender shall be
entitled to partiCipate in the proceeding and to be represented in the proceeding by counsel of Lender's own choice, and Grantor will deliver, or
cause to be delivered, to Lender such instruments as Lender may request from time to time to permit such participation.
Compliance With Laws. Grantor warrants that the Property and Grantor's use of the Property complies with all existing applicable laws,
ordinances, and regulations of governmental authorities.
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EXISTING INDEBTEDNESS. The following provisions concerning existing indebtedness (the "Existing Indebtedness") are a part of this Mortgage.
Exlsllng Lien. The lien of this Mortgage securing the Indebtedness may be secondary and inferior to an existing lien. Grantor expressly
covenants and agrees to pay, or see to the payment of, the Existing Indebtedness and to prevent any default on such indebtedness, any default
under the instruments evidencing such indebtedness, or any default under any security documents for such indebtedness.
Default. If the payment of any installment of principal or any interest on the Existing Indebtedness is not made within the time required by the note
evidencing such indebtedness, or should a default occur under the instrument securing such indebtedness and not be cured during any
applicable grace period therein, then, at the option of Lender, the Indebtedness secured by this Mortgage shall become immediately due and
payable, and this Mortgage shall be in default.
No Modification. Grantor shall not enter into any agreement with the holder of any mortgage or other security agreement which has priority over
this Mortgage by which that agreement is modified, amended, extended, or renewed without the prior wrillen consent of Lender. Grantor shall
neither request nor accept any future advances under any such security agreement without the prior wrillen consent of Lender.
CONDEMNATION. The following provisions relating to condemnation of the Property are a part of this Mortgage.
Application of Net Proceeds. If all or any part of the Property is condemned by eminent domain proceedings or by any proceeding or purchase
in lieu of condemnation, Lender may at its election require that all or any portion of the net proceeds of the award be applied to the Indebtedness
or the repair or restoration of the Property. The net proceeds of the award shall mean the award after payment of all actual costs, expenses, and
allorneys' fees incurred by Lender in connection with the condemnation.
Proceedings. If any proceeding in condemnation is filed, Grantor shall prompUy notify Lender in writing, and Grantor shall promptly take such
steps as may be necessary to defend the action and obtain the award. Grantor may be the nominal party in such proceeding, but Lender shall be
entilled to participate in the proceeding and to be represented in the proceeding by counsel of its own choice, and Grantor will deliver or cause to
be delivered to Lender such instruments as may be requested by it from time to time to permit such participation.
IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following provisions relating to governmental taxes, fees
and charges are a part of this Mortgage:
Current Taxes, Fees and Charges. Upon request by Lender, Grantor shall execute such documents in addition to this Mortgage and take
whatever other action is requested by Lender to perfect and continue Lender's lien on the Real Property. Grantor shall reimburse Lender for all
taxes, as described below, together with all expenses incurred in recording, perfecting or continuing this Mortgage, including without limitation all
taxes, fees, documentary stamps, and other charges for recording or registering this Mortgage.
Taxes. The following shall constitute taxes to which this section applies: (a) a specific tax upon this type of Mortgage or upon all or any part of
the Indebtedness secured by this Mortgage; (b) a specific tax on Grantor which Grantor is authorized or required to deduct from payments on the
Indebtedness secured by this type of Mortgage; (c) a tax on this type of Mortgage chargeable against the Lender or the holder of the Note; and
(d) a specific tax on all or any portion of the Indebtedness or on payments of principal and interest made by Grantor.
Subsequent Taxes. If any tax to which this section applies is enacted subsequent to the date of this Mortgage, this event shall have the same
effect as an Event of Default (as defined below), and Lender may exercise any or all of its available remedies for an Event of Default as provided
below unless Grantor either (a) pays the tax before it becomes delinquent, or (b) contests the tax as provided above in the Taxes and Liens
section and deposits with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender.
SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relating to this Mortgage as a security agreement are a part of this
Mortgage.
Security Agreement. This instrument shall constitute a security agreement to the extent any of the Property constitutes fixtures or other personal
property, and Lender shall have all of the rights of a secured party under the Uniform Commercial Code as amended from time to time.
Security Interest. Upon request by Lender, Grantor shall execute financing statements and take whatever other action is requested by Lender to
perfect and continue Lender's security interest in the Rents and Personal Property. In addition to recording this Mortgage in the real property
records, Lender may, at any time and without further authorization from Grantor, file executed counterparts, copies or reproductions of this
Mortgage as a financing statement. Grantor shall reimburse Lender for all expenses incurred in perfecting or continuing this security interest.
Upon default, Grantor shall assemble the Personal Property in a manner and at a place reasonably convenient to Grantor and Lender and make it
available to Lender within three (3) days after receipt of wrillen demand from Lender.
Addresses. The mailing addresses of Grantor (debtor) and Lender (secured party), from which information concerning the security interest
granted by this Mortgage may be obtained (each as required by the Uniform Commercial Code), are as stated on the first page of this Mortgage.
FURTHER ASSURANCES; ATTORNEY-IN-FACT. The following provisions relating to further assurances and allorney-in-fact are a part of this
Mortgage.
Further Assurances. At any time, and from time to time, upon request of Lender, Grantor will make, execute and deliver, or will cause to be
made, executed or delivered, to Lender or to Lender's designee, and when requested by Lender, cause to be filed, recorded, refiled, or
rerecorded, as the case may be, at such times and in such offices and places as Lender may deem appropriate, any and all such mortgages,
deeds of trust, security deeds, security agreements, financing statements, continuation statements, instruments of further assurance, certificates,
and other documents as may, in the sole opinion of Lender, be necessary or desirable in order to effectuate, complete, perfect, continue, or
preserve (a) the obligations of Grantor under the Note, this Mortgage, and the Related Documents, and (b) the liens and security interests
created by this Mortgage on the Property, whether now owned or hereafter acquired by Grantor. Unless prohibited by law or agreed to the
contrary by Lender in writing, Grantor shall reimburse Lender for all costs and expenses incurred in connection with the mailers referred to in this
paragraph.
Attorney-In-Fact. If Grantor fails to do any of the things referred to in the preceding paragraph, Lender may do so for and in the name of
Grantor and at Grantor's expense. For such purposes, Grantor hereby irrevocably appoints Lender as Grantor's allorney-in-fact for the purpose
of making, executing, delivering, filing, recording, and doing all other things as may be necessary or desirable, in Lender's sole opinion, to
accomplish the mailers referred to in the preceding paragraph.
FULL PERFORMANCE. If Grantor pays all the Indebtedness when due, and otherwise performs all the obligations imposed upon Grantor under this
Mortgage, Lender shall execute and deliver to Grantor a suitable satisfaction of this Mortgage and suitable statements of termination of any financing
statement on file evidencing Lender's security interest in the Rents and the Personal Property. Grantor will pay, if permilled by applicable law, any
reasonable termination fee as determined by Lender from time to time.
DEFAULT. Each of the following, at the option of Lender, shall constitute an event of default ("Event of Default") under this Mortgage:
Default on Indebtedness. Failure of Grantor to make any payment when due on the Indebtedness.
Default on Other Payments. Failure of Grantor within the time required by this Mortgage to make any payment for taxes or insurance, or any
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other payment necessary to prevent filing of or to effect discharge of any lien.
Compliance Default. Failure of Grantor to comply with any other term, obligation, covenant or condition contained in this Mortgage, the Note or in
any of the Related Documents.
False Statements. Any warranty, representation or statement made or furnished to Lender by or on behalf of Grantor under this Mortgage, the
Note or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished.
Defective Collaterallzatlon. This Mortgage or any of the Related Documents ceases to be in full force and effect (including failure of any collateral
documents to create a valid and perfected security interest or lien) at any time and for any reason.
Death or InSOlvency. The death of Grantor or the dissolution or termination of Grantor's existence as a going business, the insolvency of Grantor,
the appointment of a receiver for any part of Grantor's properly, any assignment for the benefit of creditors, any type of creditor workout, or the
commencement of any proceeding under any bankruptcy or insolvency laws by or against Grantor.
Foreclosure, Forfeiture, etc. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or
any other method, by any creditor of Grantor or by any governmental agency against any of the Properly. However, this subsection shall not apply
in the event of a good faith dispute by Grantor as to the validity or reasonableness of the claim which is the basis of the foreclosure or forefeiture
proceeding, provided that Grantor gives Lender written notice of such claim and furnishes reserves or a surety bond for the claim satisfactory to
Lender.
Breach of Other Agreement. Any breach by Grantor under the terms of any other agreement between Grantor and Lender that is not remedied
within any grace period provided therein, including without limitation any agreement concerning any indebtedness or other obligation of Grantor to
Lender, whether existing now or later.
Existing Indebtedness. A default shall occur under any Existing Indebtedness or under any instrument on the Properly securing any Existing
Indebtedness, or commencement of any suit or other action to foreclose any existing lien on the Properly.
Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies
or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness.
Adverse Change. A material adverse change occurs in Grantor's financial condition, or Lender believes the prospect of payment or performance
of the Indebtedness is impaired.
RIGHTS AND REMEDIES ON DEFAlA..T. Upon the occurrence of any Event of Default and at any time thereafter, Lender, at its option, may exercise
anyone or more of the following rights and remedies, in addition to any other rights or remedies provided by law:
Accelerate Indebtedness. Subject to applicable law, Lender shall have the right at its option without notice to Grantor to declare the entire
Indebtedness immediately due and payable.
UCC Remedies. With respect to all or any part of the Personal Properly, Lender shall have all the rights and remedies of a secured parly under
the Uniform Commercial Code.
Collect Rents. Lender shall have the right, without notice to Grantor, to take possession of the Properly and, with or without taking possession of
the Properly, to collect the Rents, including amounts past due and unpaid, and apply the net proceeds, over and above Lender's costs, against
the Indebtedness. In furtherance of this right, Lender may require any tenant or other user of the Property to make payments of rent or use fees
direclly to Lender. If the Rents are collected by Lender, then Grantor irrevocably designates Lender as Grantor's attorney-in-fact to endorse
instruments received in payment thereof in the name of Grantor and to negotiate the same and collect the proceeds. Payments by tenants or
other users to Lender in response to Lender's demand shall satisfy the obligations for which the payments are made, whether or not any proper
grounds for the demand existed. Lender may exercise its rights under this subparagraph either in person, by agent, or through a receiver.
Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the Property, with the power to
protect and preserve the Properly, to operate the Properly preceding foreclosure or sale, and to collect the Rents from the Properly and apply the
proceeds, over and above the cost of the receivership, against the Indebtedness. The receiver may serve without bond if permitted by law.
Lender's right to the appointment of a receiver shall exist whether or not the apparent value of the Properly exceeds the Indebtedness by a
substantial amount. Employment by Lender shall not disqualify a person from serving as a receiver.
Judicial Foreclosure. Lender may obtain a judicial decree foreclosing Grantor's interest in all or any part of the Properly.
Possession of the Property. For the purpose of procuring possession of the Properly, Grantor hereby authorizes and empowers any attorney of
any court of record in the Commonwealth of Pennsylvania or elsewhere, as attorney for Lender and all persons claiming under or through Lender,
to sign an agreement for entering in any competent court an amicable action in ejectment for possession of the Properly and to appear for and
confess judgment against Grantor, and against all persons claiming under or through Grantor, for the recovery by Lender of possession of the
Properly, without any stay of execution, for which this Mortgage, or a copy of this Mortgage verified by affidavit, shall be a sufficient warrant; and
thereupon a writ of possession may be issued forthwith, without any prior writ or proceeding whatsoever.
Nonjudicial Sale. If permitted by applicable law, Lender may foreclose Grantor's interest in all or in any part of the Personal Properly or the Real
Properly by nonjudicial sale.
Deficiency Judgment. Lender may obtain a judgment for any deficiency remaining in the Indebtedness due to Lender after application of all
amounts received from the exercise of the rights provided in this section.
Tenancy at Sufferance. If Grantor remains in possession of the Properly after the Properly is sold as provided above or Lender otherwise
becomes entitled to possession of the Properly upon default of Grantor, Grantor shall become a tenant at sufferance of Lender or the purChaser of
the Properly and shall, at Lender's option, either (a) pay a reasonable rental for the use of the Properly, or (b) vacate the Properly immediately
upon the demand of Lender.
Other Remedies. Lender shall have all other rights and remedies provided in this Mortgage or the Note or available at law or in equity.
Sale of the Property. To the extent permitted by applicable law, Grantor hereby waives any and all right to have the properly marshalled. In
exercising its rights and remedies, Lender shall be free to sell all or any part of the Properly together or separately, in one sale or by separate
sales. Lender shall be entilled to bid at any public sale on all or any portion of the Properly.
Notice of Sale. Lender shall give Grantor reasonable notice of the time and place of any public sale of the Personal Properly or of the time after
which any private sale or other intended dispOSition of the Personal Properly is to be made. Unless otherwise required by applicable law,
reasonable notice shall mean notice given at least ten (10) days before the time of the sale or disposition.
Waiver; Ejection of Remedies. A waiver by any parly of a breach of a provision of this Mortgage shall not constitute a waiver of or prejudice the
party's rights otherwise to demand strict compliance with that provision or any other provision. Election by Lender to pursue any remedy shall not
01-21-1999
Loan No
MORTGAGE
(Continued)
Pagi! (;
exclude pursuit of any other remedy, and an election to make expenditures or take action to perform an obligation of Grantor under this Mortgage
after failure of Grantor to perform shall not affect Lender's right to declare a default and exercise its remedies under this Mortgage.
Attorneys' Fees; Expenses. If Lender institutes any suit or action to enforce any of the terms of this Mortgage, Lendef'shall be entifled to recover
such sum as the court may adjudge reasonable as attorneys' fees at trial and on any appeal. Whether or not any court action is involved, all
reasonable expenses incurred by Lender that in Lender's opinion are necessary at any time for the protection of its interest or the enforcement of
its rights shall become a part of the Indebtedness payable on demand and shall bear interest from the date of expenditure until repaid at the rate
provided for in the Note. Expenses covered by this paragraph include, without limitation, however subject to any limits under applicable law,
Lender's attorneys' fees and Lender's legal expenses whether or not there is a lawsuit, including attorneys' fees for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or injunction), appeals and any anticipated post-judgment collection services, the cost of
searching records, obtaining tille reports (including foreclosure reports), surveyors' reports, and appraisal fees, and tille Insurance, to the extent
permitted by applicable law. Grantor also will pay any court costs, in addition to all other sums provided by law.
NOTICES TO GRANTOR AND OTHER PARTIES. Unless otherwise provided by applicable law, any notice under this Mortgage shall be in writing,
may be sent by telefacslmile (unless otherwise required by law), and shall be effective when actually delivered, or when deposited with a nationally
recognized overnight courier, or, if mailed, shall be deemed effective when deposited in the United States mail first class, certified or registered mail,
postage prepaid, directed to the addresses shown near the beginning of this Mortgage. Any party may change Its address for notices under this
Mortgage by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address. All copies of
notices of foreclosure from the holder of any lien which has priority over this Mortgage, and notices pursuant 42 Pa. C.S.A. Section 8143, et seq., shall
be sent to Lender's address, as shown near the beginning of this Mortgage. For notice purposes, Grantor agrees to keep Lender informed at all times
of Grantor's current address.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Mortgage:
Amendments. This Mortgage, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the
matters set forth in this Mortgage. No alteration of or amendment to this Mortgage shall be effective unless given in writing and signed by the
party or parties sought to be charged or bound by the alteration or amendment.
Annual Reports. If the Property is used for purposes other than Grantor's residence, Grantor shall furnish to Lender, upon request, a certified
statement of net operating income received from the Property during Grantor's previous fiscal year in such form and detail as Lender shall require.
"Net operating income" shall mean all cash receipts from the Property less all cash expenditures made in connection with the operation of the
Property.
Applicable Law. Thts Mortgage has been delivered to Lender and accepted by Lender In the Commonwealth of Pennsylvania. Thts
Mortgage shall be governed by and construed In accordance with the laws of the Commonwealth of Pennsylvania,
Captton Headings, Caption headings in this Mortgage are for convenience purposes only and are not to be used to interpret or define the
provisions of this Mortgage.
Merger. There shall be no merger of the interest or estate created by this Mortgage with any other interest or estate in the Property at any time
held by or for the benefit of Lender in any capacity, without the written consent of Lender.
Multiple Parties. All obligations of Grantor under this Mortgage shall be joint and several, and all references to Grantor shall mean each and
every Grantor. This means that each of the persons signing below is responsible for all obligations in this Mortgage.
Severability. If a court of competent jUrisdiction finds any provision of this Mortgage to be invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision invalid or unenforceable as to any other persons or circumstances. If feasible, any such
offending provision shall be deemed to be modified to be within the limits of enforceability or validity; however, if the offending provision cannot be
so modified, it shall be stricken and all other provisions of this Mortgage in all other respects shall remain valid and enforceable.
Successors and Assigns. Subject to the limitations stated in this Mortgage on transfer of Grantor's interest, this Mortgage shall be binding upon
and inure to the benefit of the parties, their heirs, personal representatives, successors and assigns. If ownership of the Property becomes vested
in a person other than Grantor, Lender, without notice to Grantor, may deal with Grantor's successors with reference to this Mortgage and the
Indebtedness by way of forbearance or extension without releasing Grantor from the obligations of this Mortgage or liability under the
Indebtedness.
Time Is of the Essence. Time is of the essence in the performance of this Mortgage.
Waivers and Consents. Lender shall not be deemed to have waived any rights under this Mortgage (or under the Related Documents) unless
such waiver is in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of
such right or any other right. A waiver by any party of a provision of this Mortgage shall not constitute a waiver of or prejudice the party's right
otherwise to demand strict compliance with that provision or any other provision. No prior waiver by Lender, nor any course of dealing between
Lender and Grantor, shall constitute a waiver of any of Lender's rights or any of Grantor's obligations as to any future transactions. Whenever
consent by Lender is required in this Mortgage, the granting of such consent by Lender in any instance shall not constitute continuing consent to
subsequent instances where such consent is required.
EACH GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MORTGAGE, AND EACH GRANTOR AGREES TO ITS
TERMS.
::::::::i:::::::::i:i::"i::i:::~::::::::::;;:::::::~l:::
.. ------
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BK I 0 0 0 PG 0 I 6
01-21-1999
Loan No
MORTGAGE
(Continued)
Page 7
Signed, acknowledged and delivered In the presence of:
X ~~, c~
Wit"," ~ - (
X
Witness
Signed, acknowledged and delivered In the presence of:
X ~~ z::..~
WI ess
X
Witness
CERTIFICATE OF RESIDENCE
I hereby certify, that the precise address of the mortgagee, PNC BANK, NATIONAL ASSOCIATION, herein is as follows:
4242 CARLISLE PIKE, CAMP HILL, PA 17001-8874
Attorney or Agent for Mortgagee
INDIVIDUAL ACKNOWLEDGMENT
STATE OF
PENNSYLVANIA
COUNTY OF
LYCOMING
I
ISS
I
On this, the (;11$ day of January , 19~, before me Sherry J. Losch , the
undersigned Notary Public, personally appeared THOMAS A. FULMER and DIANE S. FULMER, known to me (or satisfactorily proven) to be the
person whose names are subscribed to the within instrument, and acknowledged that they executed the same for the purposes therein contained.
In witness whereof, I hereunto set my hand and official seal.
Notarial Seal
Sherry J. Losch, Notary Public
Williamsport, LycomlOg County
... r
. J:J},IJthtt 9' Y~..A
Notary Public in d for the Slate of _ Penn sy 1 van i a
LASER PRO, Reg. ..SJ1
rvlces, Inc. All rights reserved. [PA-G03 FULMER1.LN C29.DVL)
BK too 0 PG 0 I 7
ALL those two (2) certain adjoining parcels of land situate on
the Southerly side of u.S. Highway Route No. 220, now PA Highway
No. 150 in Woodward Township, Clinton County, Pennsylvania, more
particularly bounded and described as follows:
PARCEL NO.1: BEGINNING at an iron pipe at the intersection of
the South line of PA highway Route 150 and the East line of
public road leading North from Dunnstown; thence by a curve along
the South line of PA Highway Route No. 150, the chord of which is
North seventy-two (72) degrees zero (0) minutes East, two hundred
twenty-five and seven tenths (225.7) feet to an iron pipe; thence
along land now or formerly of Don D. Richey (now Parcel No. 2
hereinafter described), South five (5) degrees thirty (30)
minutes West, two hundred fifty-three and four tenths (253.4)
feet to an iron pipe; thence by the same, North eighty-four- (84)
degrees thirty (30) minutes West, two hundred seven (207) feet to
an iron pipe on the East line of the aforementioned public road
leading North from Dunnstown; thence by the East line of said
public road, North five (5) degrees thirty (30) minutes East, one
hundred sixty-three and four tenths (163.4) feet to the place of
beginning. Containing one (1) acre more or less.
EXCEPTING AND RESERVING, for the use and benefit of Lock Haven
Suburban Water Company, its successors and assigns, a right-of-
way of the width of fifteen (15) feet along the Western boundary
of the above-described land for the installation and maintenance
of a passageway and water course by means of pipes for the
conveying of water through the said strip of land, with the right
of ingress, egress and regress in the said Lock Haven Suburban
Water Company, for the purpose of repairing and cleaning said
pipes and water course.
The improvements consist of a one-story brick building occupied
as a personal care home.
PARCEL NO.2: BEGINNING at an iron pipe on the South line of PA
Highway Route No. 150 leading from Lock Haven to Jersey Shore,
said iron pipe being the Northeast corner of land now or formerly
of Fred MCKenzie; thence by a curve along the South line of PA
Highway Route No. 150, the chord of which is North seventy-seven
(77) degrees fifty (50) minutes East, seventy and five tenths
(70.5) feet to an iron pipe; thence by other land now or formerly
of Fred McKenzie, South five (5) degrees thirty (30) minutes
West, two hundred seventy-four and eight tenths (274,8) feet to
an iron pipe; thence by the same, North eighty-four (84) degrees
thirty (30) minutes West, sixty-seven and two tenths (67.2) feet
to an iron pipe at the Southwest corner of land now or formerly
of Fred McKenzie; thence by said land now or formerly of Fred
McKenzie, North five (5) degrees thirty (30) minutes East, two
hundred fifty-three and four tenths (253.4) feet to an iron pipe,
the place of beginning. Containing four tenths (,4) of an acre
more or less.
BK I 0 0 0 PG 0 I 8
SUBJECT to the restriction that no building shall be erected on
said premises nearer to the South line of said PA Highway Route
No. 150 than sixty (60) feet, as measured Southward along the
Western line of said premises from the above-referred to iron
pipe located at the Northeast corner of lands now or formerly of
Fred McKenzie.
BEING the same premises which Mohawk, Inc., by its Deed dated
November 21, 1990, and recorded in Clinton County Deed Book 451,
page 202, did grant and convey unto Thomas A. Fulmer and Diane S,
Fulmer, his wife, mortgagors herein.
FOR IDENTIFICATION PURPOSES ONLY, the above premises are known as
Tax Parcel 1A-H-0001 on the records in Clinton County.
PARCEL NO.3: ALL that certain piece and parcel of land situate
in Woodward Township, Clinton County, Pennsylvania, according to
the survey of H. Richard Ohl, registered surveyor, made on August
6, 1981, bounded and described as follows, to-wit:
BEGINNING at an iron pin lying along the Eastern boundary line of
land formerly of the Mohawk Motel, and now of Thomas A. Fulmer
and Diane S, Fulmer, his wife, being South five (5) degrees
thirty (30) minutes West a distance of one hundred ninety-five
and eight tenths (195.8) feet from an iron pin lying along
Pennsylvania Route No. 150 and at the point of intersection with
the Southwest corner of two (2) roadways now or formerly owned by
Robert Wise; thence along the southern boundary line of a roadway
now or formerly owned by Robert Wise North eighty-eight (88)
degrees forty-five (45) minutes East a distance of fifty-four
(54) feet to an iron pin; thence along the Western boundary line
of the Burkett Trailer Court, now or formerly owned by Robert
Wise, South one (1) degree twenty-two (22) minutes West, a
distance of seventy-one and four tenths (71.4) feet to an iron
pin; thence along the Northern boundary line of the Burkett
Trailer Court, now or formerly owned by Robert Wise, North
eighty-nine (89) degrees thirty (30) minutes West a distance of
fifty-nine (59) feet to an iron pin; thence along the Eastern
boundary line formerly of the Mohawk Motel, and now of Thomas A.
Fulmer and Diane S. Fulmer, his wife, North five (5) degrees.
thirty (30) minutes East a distance of seventy (70) feet to an
iron pin, the place of beginning. Containing 0.09 acres,
The improvements thereon consist of a one story brick building.
BEING the same premises which Robert J. Burkett and Marjorie A,
Burkett, his wife, by their Deed dated June 1, 1992, and recorded
in Clinton County Deed Book 548, page 230 did grant and convey
unto Thomas A. Fulmer and Diane S. Fulmer, his wife, Mortgagors
herein.
Mortgagors also grant an convey to Mortgagee, its successors and
assigns, in common with the State Bank of Avis (see Miscellaneous
Book 56, page 85), and Robert C. Wise (see Miscellaneous Book 77
BK , 0 0 0 PG 0 I 9
page 1193), their heirs, successors and assigns, the free and
uninterrupted use, liberty and privilege of, and passage in and
along, all the following described parcel of land in Woodward
Township, Clinton County, Pennsylvania, for the purpose of
ingress and egress between PA Route 150 and the property
described above as follows:
BEGINNING at an iron pin on the South side of PA Highway Route
No. 150, said iron pin being situate at the Northeast corner of
land formerly of the Mohawk, Inc., now, Fulmer et ux; thence
South five (5) degrees thirty (30) minutes West, a distance of
one hundred ninety-five and eight tenths (195.8) feet to an iron
pin; thence North eight-eight (88) degrees forty-five (45)
minutes East, a distance of fifty-four (54) feet to an iron pin;
thence North five (5) degrees thirty (30) minutes East, a
distance of forty-five and eight tenths (45.8) feet; thence South
eighty-seven (87) degrees zero (0) minutes West, a distance of
twenty-one (21) feet; thence North five (5) degrees thirty (30)
minutes East, a distance of one hundred fifty (150) feet to an
iron pin; thence West along PA Highway Route No. 150 a distance
of thirty-three (33) feet to an iron pin, the place of beginning,
BEING the same right-of-way excepted and reserved in Deed from
Robert J. Burkett and Marjorie A. Burkett, his wife, Grantors
herein, to Robert C. Wise, in Clinton County Miscellaneous Book
77, page 1193.
FOR IDENTIFICATION PURPOSES ONLY, the above premises is known as
Tax Parcel #lA-H-0002C on the records in Clinton County.
BK I 0 0 0 PG 0 2 0
. .
EXHIBIT 'B'
PROMISSORY NOTE
~(Q)~'1
References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item.
Borrower: THOMAS A. FULMER (SSN: 180-46-8379)
DIANE S. FULMER (SSN: 196-44-5683)
333 ERTEL ROAD
WILLlAMSPORT, PA ln01
Lender: PNC BANK, NATIONAL ASSOCIATION
4242 CARLISLE PIKE
CAMP HILL, PA 17001-l1874
Principal Amount: $25,000,00 Initial Rate: 10.500% Date of Note: October 25, 2000
PROMISE TO PAY. THOMAS A. FUlMER and DIANE S. FUlMER ("Borrower") promise to pay to PNC BANK, NATIONAL ASSOCIATION
("Lender"), or order, In lawful money of the United States of America, the principal amount of Twenty Five Thousand & 00/100 Dollars
($25,000.00) or so much as may be outstanding, together with Interest on the unpaid outstanding principal balance of each advance. Interest
shall be calculated from the date of each advance until repayment of each advance.
PAYMENT. Borrower will pay this loan In accordance with the following payment schedule:
Borrower will pay regular monthly payments of accrued Interest beginning November 25, 2000, and all subsequent Interest
payments are due on the same day of each month after that. Borrower will pay this loan In one payment of all outstanding
principal plus all accrued unpaid Interest on the Expiration Date. Borrower may borrow, repay and reborrow hereunder
until the Expiration Date, subject to the terms and conditions of this Note. The "Exptration Date" shall mean April 25, 2001,
or such later date as may be designated by written notice from Lender to Borrower. Borrower acknowledges and agrees
that In no event will Lender be under any obligation to extend or renew the loan or this Note beyond the Initial Explrallon
Date. In no event shall the aggregate unpaid principal amount of advances under this Note exceed the face amount of this
Note.
The annual interest rate for this Note is computed on a 365/360 basis; that is, by applying the ratio of the annual interest rate over a year of 360 days,
multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender
al Lender's address shown above or at such other place as Lender may designate in writing. Unless otherwise agreed or required by applicable law,
payments will be applied first to accrued unpaid interest, then to principal, and any remaining amount to any unpaid collection costs and late charges.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from time to time based on changes in an index which is the Lender's
prime rate (the "Indexj. The index is a rate per annum as publicly announced by Lender from time to time as its prime rale. The prime rate is not tied
to any external rate or index and it does not necessarily reflect the lowest rate of interest actually charged by Lender to any particular class or category
of customers. Lender will tell Borrower the current Index rate upon Borrower's request. Borrower understands that Lender may make loans based on
other rates as well. The interest rate change will not occur more often than each day. The Index currently Is 9.500% per annum. The Interest rate
to be applied to the unpaid principal balance of this Note will be at a rate of 1.000 percentage point over the Index, resulting In an Initial rate of
10.500% per annum. NOTICE: Under no circumstances will the interest rate on this Note be more than the maximum rate allowed by applicable law.
PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not, unless agreed to
by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments of accrued unpaid interest. Rather, they will reduce the
principal balance due.
LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment
or $100.00, whichever Is less.
DEFAUlT. Borrower will be in defaull if any of the following happens: (a) Borrower fails to make any payment when due. (b) Borrower breaks any
promise Borrower has made to Lender, or Borrower fails to comply with or to perform when due any other term, obligation, covenant, or condition
contained in this Note or any agreement related to this Note, or in any other agreement or loan Borrower has with Lender. (c) Any representation or
statement made or furnished to Lender by Borrower or on Borrower's behalf is false or misleading in any material respect either now or at the time
made or furnished. (d) Borrower dies or becomes insolvent, a receiver is appointed for any part of Borrower's property, Borrower makes an
assignment for the benefit of creditors, or any proceeding Is commenced either by Borrower or against Borrower under any bankruptcy or insolvency
laws. (e) Any creditor tries to take any of Borrower's property on or in which Lender has a lien or security interest. This includes a garnishment of any
of Borrower's accounts with Lender. (f) Any of the events described in this default section occurs with respect to any guarantor of this Note. (g) A
material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is
impaired.
LENDER'S RIGHTS. Upon default, Lender may, after giving such notices as required by applicable law, deciare the entire unpaid principal balance on
this Note and all accrued unpaid interest immediately due, and then Borrower will pay that amount. Upon default, including failure to pay upon final
maturity, Lender, at its option, may also, if permitted under applicable law, increase the variable interest rate on this Note to 6.000 percentage points
over the Index. The interest rate will not exceed the maximum rate permitted by applicable law. Lender may hire or pay someone else to help collect
this Note if Borrower does not pay. Borrower also will pay Lender that amount. This includes, subject to any limits under applicable law, Lender's
attorneys' fees and Lender's legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services. II not
prohibited by applicable law, Borrower also will pay any court costs, in addition to all other sums provided by law. If judgment is entered in connection
with this Note, interest will continue to accrue on this Note after judgment at the interest rate applicable to this Note at the time judgment is entered.
This Note has been delivered to Lender and accepted by Lender In the Commonwealth of Pennsylvania. If there Is a lawsuit, Borrower agrees
upon Lender's request to submit to the Jurisdiction of the courts of CUMBERLAND County. the Commonwealth of Pennsylvania. Lender and
Borrower hereby waive the right to any jury trial In any action, proceeding, or counterclaim brought by either Lender or Borrower against the
other. This Note shall be governed by and construed In accordance with the laws of the Commonwealth of Pennsylvania.
RIGHT OF SETOFF. Borrower grants to Lender a contractual security interest in, and hereby assigns, conveys, delivers, pledges, and transfers to
Lender all Borrower's right, title and interest in and to, Borrower's accounts with Lender (whether checking, savings, or some other account), including
wilhoutlimilation all accounts held jointly with someone else and all accounts Borrower may open in the future, excluding however all IRA and Keogh
accounts, and all trust accounts for which the grant of a security interest would be prohibited by law. Borrower authorizes Lender, to lhe extent
permitted by applicable law, to charge or setoff all sums owing on this Note against any and all such accounts.
COLLATERAL. This Note is secured by, in addition to any other collateral, a Mortgage dated October 25, 2000, to Lender on real property located in
CLINTON County, Commonwealth of Pennsylvania, and a Mortgage daled October 25, 2000, to Lender on real property located in L YCOMING County,
Commonwealth of Pennsylvania, all the terms and conditions of which are hereby incorporated and made a part of lhis Note.
~n~ .?\'. ~
)VI\~~ri?Oo.'h "
U LOaU~~V ~
PROMISSORY NOTE
(Continued)
Page 2
LINE OF CREDIT. This Note evidences a revolving line of credit. Advances under this Note may be requested orally by Borrower or by an authorized
person. Lender may, but need not, require that all oral requests be confirmed in writing. All communications, instructions, or directions by telephone or
otherwise to Lender are to be directed to Lender's office shown above. The following party or parties are authorized to request advances under the line
of credit until Lender receives from Borrower at Lender's address shown above written notice of revocation of their authority: THOMAS A. FULMER
and DIANE S. FULMER. Borrower agrees to be liable for all sums either: (a) advanced in accordance with the instructions of an authorized person or
(b) credited to any of Borrower's accounts with Lender. The unpaid principal balance owing on this Note at any time may be evidenced by
endorsements on this Note or by Lender's internal records, including daily computer print-outs. Lender will have no obligation to advance funds under
this Note if: (a) Borrower or any guarantor is in default under the terms of this Note or any agreement that Borrower or any guarantor has with Lender,
including any agreement made in connection with the signing of this Note; (b) Borrower or any guarantor ceases doing business or is insolvent; (c)
any guarantor seeks, claims or otherwise attempts to limit, modify or revoke such guarantor's guarantee of this Note or any other loan with Lender; or
(d) Borrower has applied funds provided pursuant to this Note for purposes other than those authorized by Lender.
CLEANUP PROVISION. Borrower acknowledges and agrees that prior to the Expiration Date and annually thereafter if the Expiration Date is extended,
all amounts borrowed under the line of credit hereunder must be repaid in full so that there is no outstanding principal balance for a period of at least
30 consecutive days.
FINANCIAL INFORMATION PROVISION. Borrower agrees to deliver any financial and other business information concerning Borrower that Lender
may request from time to time, such as annual and interim financial statements (all of which shall be prepared in accordance with generally accepted
accounting principles) and federal income tax returns.
YEAR 2000 COMPLIANCE. Borrower has reviewed the areas within its business and operations which could be adversely affected by, and has
developed or is developing a program to address on a timely basis the risk that certain computer applications used by Borrower may be unable to
recognize and perform properly date-sensitive functions involving dates prior to and after December 31, 1999 (the ''Year 2000 Problem"). The Year
2000 Problem will not result, and is not reasonably expected to result, in any material adverse effect on the business, properties, assets, financial
condition, results of operations or prospects of Borrower, or the ability of Borrower to duly and punctually payor perform its obligations hereunder and
under the Related Documents.
GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower and any
other person who signs, guarantees or endorses this Note, to the extent allowed by law, waive presentment, demand for payment, protest and notice of
dishonor. Upon any change in the terms of this Note, and unless otherwise expressly stated in writing, no party who signs this Note, whether as maker,
guarantor, accommodation maker or endorser, shall be released from liability. Atl such parties agree that Lender may renew or extend (repeatedly and
for any length of time) this loan, or release any party or guarantor or collateral; or impair, fail to realize upon or perfect Lender's security interest in the
collateral; and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender
may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this
Note are joint and several. If any portion of this Note is for any reason determined to be unenforceable, it will not affect the enforceability of any other
provisions of this Note.
CONFESSION OF JUDGMENT. BORROWER HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR THE PROTHONOTARY
OR CLERK OF ANY COURT IN THE COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE, TO APPEAR AT ANY TIME FOR BORROWER AFTER
A DEFAULT UNDER THIS NOTE, AND WITH OR WITHOUT COMPLAINT FILED, AS OF ANY TERM, CONFESS OR ENTER JUDGMENT AGAINST
BORROWER FOR THE ENTIRE PRINCIPAL BALANCE OF THIS NOTE, ALL ACCRUED INTEREST, LATE CHARGES, AND ANY AND ALL AMOUNTS
EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECURING THIS NOTE TOGETHER WITH INTEREST ON SUCH
AMOUNTS, TOGETHER WITH COSTS OF SUIT, AND AN ATTORNEY'S COMMISSION OF TEN PERCENT (10%) OF THE UNPAID PRINCIPAL
BALANCE AND ACCRUED INTEREST FOR COLLECTION, BUT IN ANY EVENT NOT LESS THAN FIVE HUNDRED DOLLARS ($500) ON WHICH
JUDGMENT OR JUDGMENTS ONE OR MORE EXECUTIONS MAY ISSUE IMMEDIATELY; AND FOR SO DOING, THIS NOTE OR A COpy OF THIS
NOTE VERIFIED BY AFFIDAVIT SHALL BE SUFFICIENT WARRANT. THE AUTHORITY GRANTED IN THIS NOTE TO CONFESS JUDGMENT
AGAINST BORROWER SHALL NOT BE EXHAUSTED BY ANY EXERCISE OF THAT AUTHORITY, BUT SHALL CONTINUE FROM TIME TO TIME AND
AT ALL TIMES UNTIL PAYMENT IN FULL OF ALL AMOUNTS DUE UNDER THIS NOTE. BORROWER HEREBY WAIVES ANY RIGHT BORROWER
MAY HAVE TO NOTICE OR TO A HEARING IN CONNECTION WITH ANY SUCH CONFESSION OF JUDGMENT, EXCEPT ANY NOTICE AND/OR
HEARING REQUIRED UNDER APPLICABLE LAW WITH RESPECT TO EXECUTION OF THE JUDGMENT, AND STATES THAT EITHER A
REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THIS CONFESSION OF JUDGMENT PROVISION TO BORROWER'S ATTENTION OR
BORROWER HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL.
PRIOR TO SIGNING THIS NOTE, EACH BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE
VARIABLE INTEREST RATE PROVISIONS AND THE NOTICE TO COSIGNER SET FORTH BELOW. EACH BORROWER AGREES TO THE
TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COpy OF THE NOTE.
. ..........-...............................
.. .........................................
. . ."""""""":'?:::!!::'::::?::':t$gSPF
NOTICE TO COSIGNER
You are being asked to guarantee this debt. Think carefully before you do. If the borrower doesn't pay the debt, you will have to. Be sure
you can afford to pay If you have to, and that you want to accept this responsibility.
You may have to pay up to the full amount of the debt If the borrower does not pay. You may also have to pay late fees or collection costs,
which Increase this amount.
The lender can collect this debt from you without first trying to collect from the borrower. The lender can use the same collecllon methods
against you that can be used against the borrower, SUCh as suing you, garnishing your wages, etc. If this debt Is ever In default, that fact may
become a part Of YOUR credit record.
This nollce Is not the contract that makes you liable for the debt.
Variable Rate. Line of Credit.
LASER PRO, Reg. U.S. Pat. & T.M. Off.. Ver. 3.29a (C) Concentrex 2000 All rIghts reserved. (PA-D20 E3.29 FULMER5.LN C39.0VL]
DISCLOS' lE FOR CONFESSION OF J )GMENT ~ (Q) lPY
References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item.
Borrower: THOMAS A. FULMER (SSN: 180--46-8379)
DIANE S. FULMER (SSN: 196-44-5683)
333 ERTEL ROAD
WILLlAMSPORT, PA 1n01
Lender: PNC BANK, NATIONAL ASSOCIATION
4242 CARLISLE PIKE
CAMP HILL, PA 17001-8874
DISCLOSURE FOR CONFESSION OF JUDGMENT
I AM EXECUTING, THIS ~&AY OF 0 e~
ME TO REPAY THAT AMOUNT.
, 20'll'C , A PROMISSORY NOTE FOR $25,000.00 OBLIGATING
A. I UNDERSTAND THAT THE NOTE CONTAINS A CONFESSION OF JUDGMENT PROVISION THAT WOULD PERMIT LENDER TO ENTER
JUDGMENT AGAINST ME IN COURT, AFTER A DEFAULT ON THE NOTE, WITHOUT ADVANCE NOTICE TO ME AND WITHOUT OFFERING
ME AN OPPORTUNITY TO DEFEND AGAINST THE ENTRY OF JUDGMENT. IN EXECUTING THE NOTE, BEING FULLY AWARE OF MY
RIGHTS TO ADVANCE NOTICE AND TO A HEARING TO CONTEST THE VALIDITY OF ANY JUDGMENT OR OTHER CLAIMS THAT LENDER
MAY ASSERT AGAINST ME UNDER THE NOTE, I AM KNOWINGLY, INTELLIGENTLY, AND VOLUNTARILY WAIVING THESE RIGHTS,
INCLUDING ANY RIGHT TO ADVANCE NOTICE OF THE ENTRY OF JUDGMENT, AND I EXPRESSLY AGREE AND CONSENT TO LENDER'S
ENTERING JUDGMENT AGAINST ME BY CONFESSION AS PROVIDED FOR IN THE CONFESSION OF JUDGMENT PROVISION.
B. I FURTHER UNDERSTAND THAT IN ADDITION TO GIVING LENDER THE RIGHT TO ENTER JUDGMENT AGAINST ME WITHOUT
ADVANCE NOTICE OR A HEARING, THE CONFESSION OF JUDGMENT PROVISION IN THE NOTE ALSO CONTAINS LANGUAGE THAT
WOULD PERMIT LENDER, AFTER ENTRY OF JUDGMENT, TO EXECUTE ON THE JUDGMENT BY FORECLOSING UPON, ATTACHING,
LEVYING ON, TAKING POSSESSION OF OR OTHERWISE SEIZING MY PROPERTY, IN FULL OR PARTIAL PAYMENT OF THE JUDGMENT.
HOWEVER, LENDER MUST PROVIDE NOTICE TO ME UNDER APPLICABLE LAW IN EXECUTING ANY CONFESSED JUDGMENT. IN
EXECUTING THE NOTE, BEING FULLY AWARE OF MY RIGHTS TO ADVANCE NOTICE AND A HEARING AFTER JUDGMENT IS ENTERED
AND BEFORE EXECUTION ON THE JUDGMENT, I AM KNOWINGLY, INTELLIGENTLY AND VOLUNTARILY WAIVING THESE RIGHTS, AND I
EXPRESSLY AGREE AND CONSENT TO LENDER'S EXECUTING ON THE JUDGMENT, IN ANY MANNER PERMITTED BY APPLICABLE
STATE AND FEDERAL LAW.
C. AFTER HAVING READ AND DETERMINED WHICH OF THE FOLLOWING STATEMENTS ARE APPLICABLE, AND BY PLACING MY
INITIALS NEXT TO EACH STATEMENT WHICH APPLlES,I REPRESENT THAT:
INITIALS
~
1. I WAS REPRESENTED BY MY OWN INDEPENDENT LEGAL COUNSEL IN CONNECTION WITH THE NOTE.
2. A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THE CONFESSION OF JUDGMENT PROVISION IN THE NOTE TO
MY ATTENTION.
D. I CERTIFY THAT MY ANNUAL INCOME EXCEEDS $10,000; THAT THE BLANKS IN THIS DISCLOSURE WERE FILLED IN WHEN I
INITIALED AND SIGNED IT; AND THAT I RECEIVED A COpy AT THE TIME OF SIGNING.
NED AND SEALED BY THE UNDERSIGNED.
(SEAL)
LASER PRO, Reg. U.S. Pat. & T.M. Off., Ver. 3.29a(C}Concentrex 2000 All rights reserved. [PA-D30 E3.29 F3.29 FULMERS.LN C39.0VL)
DISCLOS' lE FOR CONFESSION OF J )GME~Tt(Q)lPlf
References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item.
Borrower: THOMAS A. FULMER (SSN: 180-46-8379)
DIANE S. FULMER (SSN: 196-44-5683)
333 ERTEL ROAD
WILLlAMSPORT, PA 17701
Lender: PNC BANK, NATIONAL ASSOCIATION
4242 CARLISLE PIKE
CAMP HILL, PA 17001-8874
DISCLOSURE FOR CONFESSION OF JUDGMENT
I AM EXECUTING, THIS ~AY OF OL~
ME TO REPAY THAT AMOUNT.
,20 lft:l, A PROMISSORY NOTE FOR $25,000.00 OBLIGATING
A. I UNDERSTAND THAT THE NOTE CONTAINS A CONFESSION OF JUDGMENT PROVISION THAT WOULD PERMIT LENDER TO ENTER
JUDGMENT AGAINST ME IN COURT, AFTER A DEFAULT ON THE NOTE, WITHOUT ADVANCE NOTICE TO ME AND WITHOUT OFFERING
ME AN OPPORTUNITY TO DEFEND AGAINST THE ENTRY OF JUDGMENT. IN EXECUTING THE NOTE, BEING FULLY AWARE OF MY
RIGHTS TO ADVANCE NOTICE AND TO A HEARING TO CONTEST THE VALIDITY OF ANY JUDGMENT OR OTHER CLAIMS THAT LENDER
MAY ASSERT AGAINST ME UNDER THE NOTE, I AM KNOWINGLY, INTELLIGENTLY, AND VOLUNTARILY WAIVING THESE RIGHTS,
INCLUDING ANY RIGHT TO ADVANCE NOTICE OF THE ENTRY OF JUDGMENT, AND I EXPRESSLY AGREE AND CONSENT TO LENDER'S
ENTERING JUDGMENT AGAINST ME BY CONFESSION AS PROVIDED FOR IN THE CONFESSION OF JUDGMENT PROVISION.
B. I FURTHER UNDERSTAND THAT IN ADDITION TO GIVING LENDER THE RIGHT TO ENTER JUDGMENT AGAINST ME WITHOUT
ADVANCE NOTICE OR A HEARING, THE CONFESSION OF JUDGMENT PROVISION IN THE NOTE ALSO CONTAINS LANGUAGE THAT
WOULD PERMIT LENDER, AFTER ENTRY OF JUDGMENT, TO EXECUTE ON THE JUDGMENT BY FORECLOSING UPON, ATTACHING,
LEVYING ON, TAKING POSSESSION OF OR OTHERWISE SEIZING MY PROPERTY, IN FULL OR PARTIAL PAYMENT OF THE JUDGMENT.
HOWEVER, LENDER MUST PROVIDE NOTICE TO ME UNDER APPLICABLE LAW IN EXECUTING ANY CONFESSED JUDGMENT. IN
EXECUTING THE NOTE, BEING FULLY AWARE OF MY RIGHTS TO ADVANCE NOTICE AND A HEARING AFTER JUDGMENT IS ENTERED
AND BEFORE EXECUTION ON THE JUDGMENT, I AM KNOWINGLY, INTELLIGENTLY AND VOLUNTARILY WAIVING THESE RIGHTS, AND I
EXPRESSLY AGREE AND CONSENT TO LENDER'S EXECUTING ON THE JUDGMENT, IN ANY MANNER PERMITTED BY APPLICABLE
STATE AND FEDERAL LAW.
C. AFTER HAVING READ AND DETERMINED WHICH OF THE FOLLOWING STATEMENTS ARE APPLICABLE, AND BY PLACING MY
INITIALS NEXT TO EACH STATEMENT WHICH APPLIES, I REPRESENT THAT:
INITIALS
1. I WAS REPRESENTED BY MY OWN INDEPENDENT LEGAL COUNSEL IN CONNECTION WITH THE NOTE.
~ 2. A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THE CONFESSION OF JUDGMENT PROVISION IN THE NOTE TO
MY ATTENTION.
D. I CERTIFY THAT MY ANNUAL INCOME EXCEEDS $10,000; THAT THE BLANKS IN THIS DISCLOSURE WERE FILLED IN WHEN I
INITIALED AND SIGNED IT; AND THAT I RECEIVED A COpy AT THE TIME OF SIGNING.
THIS DISCLOSURE HAS BEEN SIGNED AND SEALED BY THE UNDERSIGNED.
AFFIANT: ~ / /1
X m~:ewt6~;;w::?~TZjiaV~;:;;:i?Ei'}fnf (SEAL)
DIANE S. FULMER
LASER PRO, Reg. U.S. Pal. & T.M. Off., Ver. 3.29a (C) Concentrex 2000 All rights reserved. [PA-D30 E3.29 F3.29 FULMERS.LN C39.0VL)
BL....lNESS ENTERPRISE AFFIDL lIT
(C(Q)[p1f
References in the shaded area are for Lender's use only and do nollimit the applicability of this documenlto any particular loan or item.
Borrower: THOMAS A. FUlMER (SSN: 180-46-8379)
DIANE S. FUlMER (SSN: 196-44-5683)
333 ERTEL ROAD
WILLlAMSPORT, PA 17701
Lender: PNC BANK, NATIONAL ASSOCIATION
4242 CARLISLE PIKE
CAMP HILL, PA 17001-8874
AFFIDAVIT
COUNTY OF c' 0 -A..~
)
) SS
COMMONWEALTH OF PENNSYLVANIA)
We, THOMAS A. FULMER and DIANE S. FUlMER, have entered Into a credit agreement with PNC BANK, NATIONAL ASSOCIATION
dated October 25, 2000. We hereby certify that the proceeds of this extension of credit are to be utilized In the conduct of a business
enterprise engaged In the business of HEAL THCARE (the "business enterprise"). The undersigned exercise actual control over the
managerial decisions of the business enterprise.
Subscribed and sworn to by us, under penalty of perjury, this ~~ day of 0 ~~
,20~.
THIS AFFIDAVIT HAS BEEN SIGNED AND SEALED BY THE UNDERSIGNED.
~~
THOMAS A. LMER
...... ,................."............................
::;::::::::::::::::~::::::::::::::::::::::::::::::::::~:::~:~:::::::::::::::::::::~{{$~l~:~
.,l;5'4 day of O~D, 20~ .
~~A:.~/
Notary Public
Sworn to and subscribed before me this
NolarfaJ Seal
Unda A. Confer, Notary Public
Stat. CoIIega BolO, CenInl County
My Commission ElqIlres Aug. 27, 2001
Member, Pennsylvania Association of Notaries
LASER PRO, Reg. U.S. Pat. & T.M. Off., Ver. 3.29a (C) Concentrex 2000 All rights reserved. [PA-D35 E3.29 F3.29 FULMERS.LN C39.0VLI
RECORDATION REQUESTED BY:
PNC BANK, NATIONAL ASSOCIATION
4242 CARLISLE PIKE
CAMP HILL, PA 17001-8874
WHEN RECORDED MAIL TO:
PNC BANK, NATIONAL ASSOCIATION
8800 TlNICUM BOULEVARD
PHILADELPHIA, PA 19153
(Ccg\PV
SPACE ABOVE THIS LINE IS FOR RECORDER'S USE ONLY
OPEN - END MORTGAGE
THIS MORTGAGE SECURES FUTURE ADVANCES
THIS MORTGAGE IS DATED OCTOBER 25, 2000, between THOMAS A. FULMER and DIANE S. FULMER, whose
address is 333 ERTEL ROAD, WILlIAMSPORT, PA 17701 (referred to below as "Grantor"); and PNC BANK,
NATIONAL ASSOCIATION, whose address is 4242 CARLISLE PIKE, CAMP HILL, PA 17001-8874 (referred to
below as "Lender").
GRANT OF MORTGAGE. For valuable conslderallon, Grantor grants, bargains, sells, conveys, assigns, transfers, releases, confirms and
mortgages to Lender all of Grantor's right, title, and interest in and to the following described real property, together with all exisling or subsequently
erected or affixed buildings, improvements and fixtures; all streets, lanes, alleys, passages, and ways; all easements, rights of way, all liberties,
privileges, tenements, hereditaments, and appurtenances thereunto belonging or anywise made appurtenant hereafter, and the reversions and
remainders with respect thereto; all water, water rights, watercourses and ditch rights (including stock in utilities with ditch or irrigation rights); and all
other rights, royallies, and profits relating to the real property, including without Iimitalion all minerals, oil, gas, geothermal and similar mailers, located
in CLINTON County, Commonwealth of Pennsylvania (the "Real Property"):
SEE RIDER "A" ATTACHED HERETO AND MADE A PART HEREOF
The Real Property or its address is commonly known as 205 WOODWARD AVENUE, WOODWARD TOWNSHIP,
PA 17745. The Real Property tax idenlificalion number is lA-H-1 and lA-H-0002C.
Grantor presently assigns to Lender all of Grantor's right, litle, and interest in and to all leases of the Property and all Rents from the Property. In
addition, Grantor grants to Lender a Uniform Commercial Code security interest in the Personal Property and Rents.
DEFINITIONS. The following words shall have the following meanings when used in this Mortgage. Terms not otherwise defined in this Mortgage shall
have the meanings attributed to such terms in the Uniform Commercial Code. All references to dollar amounts shall mean amounts in lawful money of
the United States of America.
Grantor. The word "Grantor" means THOMAS A. FULMER and DIANE S. FULMER. The Granlor is the mortgagor under this Mortgage.
Guarantor. The word "Guarantor" means and includes without limitation each and all of the guarantors, sureties, and accommodation parties in
connection with the Indebtedness.
Improvements. The word "Improvements" means and includes without limitation all existing and future improvements, buildings, structures,
mobile homes affixed on the Real Property, facilities, additions, replacements and other construction on the Real Property.
Indebtedness. The word "Indebtedness" means all principal up to $25,000.00 outstanding under the Note at any time and interest payable under
the Note and any amounts expended or advanced by Lender to discharge obligations of Grantor or expenses incurred by Lender to enforce
obligalions of Grantor under this Mortgage, together with Interest on such amounts as provided in this Mortgage. In addition to the Note, the word
"Indebtedness" includes all obligations, debts and liabilities, plus interest thereon, of Grantor to Lender, or anyone or more of them, as well as all
claims by Lender against Grantor, or anyone or more of them, whether now existing or hereafter arising, whether related or unreiated to the
purpose of the Note, whether voluntary or otherwise, whether due or not due, absolute or contingent, liquidated or unliquidated and whether
Grantor may be liable Individually or jointly with others, whether obligated as guarantor or otherwise, and whether recovery upon such
Indebtedness may be or hereafter may become barred by any statute of limitations, and whether such Indebtedness may be or hereafter may
become otherwise unenforceable. Speclftcally, without limitation, this Mortgage secures a revolvtng line of credit, which obligates Lender
to make advances to Grantor unless Grantor falls to comply with all the terms of the Note. The liens and security interests created
.pursuant to this Mortgage covering the Indebtedness which may be created In the future shall relate back to the date of this Mortgage.
Lender. The word "Lender" means PNC BANK, NATIONAL ASSOCIATION, its successors and assigns. The Lender is the mortgagee under this
Mortgage.
Mortgage. The word "Mortgage" means this Mortgage between Grantor and Lender, and includes without limitation all assignments and security
interest provisions relating to the Personal Property and Rents.
Note. The word "Note" means the promissory note or credit agreement dated October 25, 2000, in the original principal amount of
$25,000.00 from Grantor to Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and
substitutions for the promissory note or agreement. NOTICE TO GRANTOR: THE NOTE CONTAINS A VARIABLE INTEREST RATE.
Personal Property. The words "Personal Property" mean all equipment, fixtures, and other articles of personal property now or hereafter owned
by Grantor, and now or hereafter allached or affixed to the Real Property; together with all accessions, parts, and additions to, all replacements of,
and all substitutions for, any of such property; and together with all proceeds (including without limitation all insurance proceeds and refunds of
premiums) from any sale or other disposition of the Property.
Property. The word "Property" means collectively the Real Property and the Personal Property.
Real Property. The words "Real Property" mean the property, interests and rights described above in the "Grant of Mortgage" section.
10-25-2000
Loan No
MORTGAGE
(Continued)
Page ';!
Related Documents. The words "Related Documents" mean and include without limitation all promissory notes, credit agreements, loan
agreements, enVIronmental agreements, guaranties, security agreements, mortgages, deeds of trust, and all other instruments, agreements and
documents, whether now or hereafter existing, executed in connection with the Indebtedness.
Rents. The word "Rents" means all present and future rents, revenues, income, issues, royalties, profits, and other benefits derived from the
Property.
THIS MORTGAGE, INCll,JDlNG THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN THE RENTS AND PERSONAL PROPERTY, IS
GIVEN TO SECU~i;: (1) P~YME,NT OF ,THE ,INDEBTEDNESS AND (2) PERFORMANCE OF All OBLIGATIONS OF GRANTOR UNDER THIS
MORTGAGE ANDm-IE RELATED DOCUM!;{'l.TS. THIS MORTGAGE IS GIVEN AND ACCEPTED ON THE FOllOWING TERMS:
PAYMENT AND PERFORMANCE. Except as otherwise provided in this Mortgage, Grantor shall pay to lender all amounts secured by this Mortgage
as they become due, and shall strictly perform all of Grantor's obligations under this Mortgage.
POSSESSION AND MAINTENANCE OF THE PROPERTY. Grantor agrees that Grantor's possession and use of the Property shall be governed by the
following provisions:
Possession and Use. Until in default, Grantor may remain in possession and control of and operate and manage the Property and collect the
Rents from the Property.
Duty to Maintain. Grantor shall maintain the Property in tenantable condition and promptly perform all repairs, replacements, and maintenance
necessary to preserve its value.
Hazardous Substances. The terms "hazardous waste," "hazardous substance," "disposal," "release," and "threatened release," as used in this
Mortgage, shall have the same meanings as set forth in the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as
amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499
("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901, et seq., or other applicable state or Federal laws, rules, or regulations adopted pursuant to any of the foregoing. The terms
"hazardous waste" and "hazardous substance" shall also include, without limitation, petroleum and petroleum by-products or any fraction thereof
and asbestos. Grantor represents and warrants to lender that: (a) During the period of Grantor's ownership of the Property, there has been no
use, generation, manufacture, storage, treatment, disposal, release or threatened release of any hazardous waste or substance by any person on,
under, about or from the Property; (b) Grantor has no knowledge of, or reason to believe that there has been, except as previously disclosed to
and acknowledged by lender in writing, (i) any use, generation, manufacture, storage, treatment, disposal, release, or threatened release of any
hazardous waste or substance on, under, about or from the Property by any prior owners or occupants of the Property or (ii) any actual or
threatened litigation or claims of any kind by any person relating to such matters; and (c) Except as previously disclosed to and acknowledged by
lender in writing, (i) neither Grantor nor any tenant, contractor, agent or other authorized user of the Property shall use, generate, manufacture,
store, treat, dispose of, or release any hazardous waste or substance on, under, about or from the Property and (ii) any such activity shall be
conducted in compliance with all applicable federal, state, and local laws, regulations and ordinances, including without limitation those laws,
regulations, and ordinances described above. Grantor authorizes lender and its agents to enter upon the Property to make such inspections and
tests, at Grantor's expense, as lender may deem appropriate to determine compliance of the Property with this section of the Mortgage. Any
inspections or tests made by lender shall be for lender's purposes only and shall not be construed to create any responsibility or liability on the
part of lender to Grantor or to any other person. The representations and warranties contained herein are based on Grantor's due diligence in
investigating the Property for hazardous waste and hazardous substances. Grantor hereby (a) releases and waives any future claims against
lender for indemnity or contribution in the event Grantor becomes liable for cleanup or other costs under any such laws, and (b) agrees to
indemnify and hold harmless lender against any and all claims, losses, liabilities, damages, penalties, and expenses which lender may directly or
indirectly sustain or suffer resulting from a breach of this section of the Mortgage or as a consequence of any use, generation, manufacture,
storage, disposal, release or threatened release of a hazardous waste or substance on the properties. The provisions of this section of the
Mortgage, inctuding the obligation to indemnify, shall survive the payment of the Indebtedness and the satisfaction and reconveyance of the lien of
this Mortgage and shall not be affected by Lender's acquisition of any interest in the Property, whether by foreclosure or otherwise.
Nuisance, Waste. Grantor shall not cause, conduct or permit any nuisance nor commit, permit, or suffer any stripping of or waste on or to the
Property or any portion of the Property. Without limiting the generality of the foregoing, Grantor will not remove, or grant to any other parly the
right to remove, any timber, minerals (including oil and gas), soil, gravel or rock products without the prior written consent of Lender.
Removal of Improvements. Grantor shall not demolish or remove any Improvements from the Real Properly without the prior written consent of
Lender. As a condition to the removal of any Improvements, Lender may require Grantor to make arrangements satisfactory to Lender to replace
such Improvements with Improvements of at least equal value.
Lender's Right to Enter. Lender and its agents and represenlatives may enter upon the Real Properly at all reasonable times to aUend to
lender's interests and to inspect the Properly for purposes of Grantor's compliance with the terms and conditions of lhis Mortgage.
Compliance with Governmental Requirements. Grantor shall promptly comply with all laws, ordinances, and regulations, now or hereafter in
effect, of all governmental authorities applicable to the use or occupancy of the Properly, including without limitation, the Americans With
Disabililies Act. Grantor may contest in good faith any such law, ordinance, or regulation and wilhhold compliance during any proceeding,
inciuding appropriate appeals, so long as Grantor has notified Lender in writing prior to doing so and so long as, in Lender's sole opinion,
Lender's interests in the Properly are not jeopardized. Lender may require Grantor to post adequate security or a surety bond, reasonably
satisfactory to Lender, to protect Lender's interest.
Duty to Protect. Grantor agrees neither to abandon nor leave unattended the Property. Grantor shall do all other acts, in addition to those acts
set forth above in this section, which from the character and use of the Property are reasonably necessary to protect and preserve the Properly.
DUE ON SALE - CONSENT BY lENDER. Lender may, at its option, declare immediately due and payable all sums secured by this Mortgage upon the
sale or transfer, withoulthe lender's prior written consent, of all or any part of the Real Properly, or any interest in the Real Properly. A "sale or
transfer" means the conveyance of Real Property or any right, title or interest therein; whether legal, beneficial or equitable; whether voluntary or
involuntary; whether by outright sale, deed, installment sale contract, land contract, contract for deed, leasehold interest with a term greater than three
(3) years, lease-option contract, or by sale, assignment, or transfer of any beneficial interest in or to any land trust holding title to the Real Properly, or
by any other method of conveyance of Real Property interest. If any Grantor is a corporation, partnership or limited liability company, transfer also
inciudes any change in ownership of more than twenty-five percent (25%) of the voting stock, partnership interests or limited liability company interests,
as the case may be, of Grantor. However, this option shall not be exercised by lender if such exercise is prohibited by federal law or by Pennsylvania
law.
TAXES AND liENS. The following provisions relating to the taxes and liens on the Property are a part of this Mortgage.
Payment. Grantor shall pay when due (and in all events prior to delinquency) all taxes, payroll taxes, special taxes, assessments, water charges
and sewer service charges levied against or on account of the Property, and shall pay when due all claims for work done on or for services
rendered or material furnished to the Property. Grantor shall maintain the Property free of all liens having priority over or equal to the interest of
10-25-2000
Loan No
MORTGAGE
(Continued)
Page 3
Lender under this Mortgage, except for the lien of taxes and assessments not due, and except as otherwise provided in the following paragraph.
Right To Contest. Grantor may withhold payment of any tax, assessment, or claim in connection with a good faith dispute over the obligation to
pay, so long as Lender's interest in the Property is not jeopardized. If a lien arises or is filed as a result of nonpayment, Grantor shall within fifteen
(15) days after the lien arises or, if a lien is filed, within fifteen (15) days after Grantor has notice of the filing, secure the discharge of the lien, or if
requested by Lender, deposit with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender in an amount sufficient
to discharge the lien plus any costs and attorneys' fees or other charges that could accrue as a result of a foreclosure or sale under the lien. In
any contest, Grantor shall defend itself and Lender and shall satisfy any adverse judgment before enforcement against the Property. Grantor shall
name Lender as an additional obligee under any surety bond furnished in the contest proceedings.
Evidence of Payment. Grantor shall upon demand furnish to Lender sallsfactory evidence of payment of the taxes or assessments and shall
authorize the appropriate governmental official to deliver to Lender at any lime a written statement of the taxes and assessments against the
Property.
Notice of Construction. Grantor shall notify Lender at least fifteen (15) days before any work is commenced, any services are furnished, or any
materials are supplied to the Property, if any mechanic's lien, materialmen's lien, or other lien could be asserted on account of the work, services,
or materials. Grantor will upon request of Lender furnish to Lender advance assurances satisfactory to Lender that Grantor can and will pay the
cost of such improvements.
PROPERTY DAMAGE INSURANCE. The following provisions relallng to insuring the Property are a part of this Mortgage.
Maintenance of Insurance. Grantor shall procure and maintain policies of fire insurance with standard extended coverage endorsements on a
replacement basis for the full insurable value covering all Improvements on the Real Property in an amount sufficient to avoid application of any
coinsurance clause, and with a standard mortgagee clause in favor of Lender. Grantor shall also procure and maintain comprehensive general
liability insurance in such coverage amounts as Lender may request with Lender being named as additional insureds in such liability insurance
policies. Additionally, Grantor shall maintain such other insurance, including but not limited to hazard, business interruption and boiler insurance
as Lender may require. Policies shall be written by such insurance companies and in such form as may be reasonably acceptable to Lender.
Grantor shall deliver to Lender certificates of coverage from each insurer containing a sllpulation that coverage will not be cancelled or diminished
without a minimum of thirty (30) days' prior written notice to Lender and not containing any disclaimer of the insurer's liability for failure to give
such notice. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way
by any act, omission or default of Grantor or any other person. Should the Real Property at any time become located in an area designated by the
Director of the Federal Emergency Management Agency as a special flood hazard area, Granlor agrees to obtain and maintain Federal Flood
Insurance for the full unpaid principal balance of the loan and any prior liens on the property securing the loan, up to the maximum policy limits set
under the National Flood Insurance Program, or as otherwise required by Lender, and to maintain such insurance for the term of the loan.
Application of Proceeds. Grantor shall promptly notify Lender of any loss or damage to the Property. Lender may make proof of loss if Grantor
fails to do so within fifteen (15) days of the casualty. Whether or not Lender's security is impaired, Lender may, at its elecllon, apply the proceeds
to the reduction of the Indebtedness, payment of any lien affecting the Property, or the restoration and repair of the Property. If Lender elects to
apply the proceeds to restoration and repair, Grantor shall repair or replace the damaged or destroyed Improvements in a manner sallsfactory to
Lender. Lender shall, upon satisfactory proof of such expenditure, payor reimburse Grantor from the proceeds for the reasonable cost of repair
or restoration if Grantor is not in default under this Mortgage. Any proceeds which have not been disbursed within 180 days after their receipt and
which Lender has not committed to the repair or restoration of the Property shall be used first to pay any amount owing to Lender under this
Mortgage, Ilien to pay accrued interest, and the remainder, if any, shall be applied to the principal balance of the Indebtedness. If Lender holds
any proceeds after payment in full of the Indebtedness, such proceeds shall be paid to Grantor.
Unexpired'Jnsurance at Sale. Any unexpired insurance shall inure to the benefit of, and pass to, the purchaser of the Property covered by this
Mortgage at any trustee's sale or other sale held under the provisions of this Mortgage, or at any foreclosure sale of such Property.
Grantor's Report on Insurance. Upon request of Lender, however not more than once a year, Grantor shall furnish to Lender a report on each
existing policy of insurance showing: (a) the name of Ihe insurer; (b) the risks insured; (c) the amount of the policy; (d) the property insured, the
then current replacement value of such property, and the manner of determining that value; and (e) the expiration date of the policy. Grantor
shall, upon request of Lender, have an independent appraiser satisfactory to Lender determine the cash value replacement cost of the Property.
TAX AND INSURANCE RESERVES. Upon request by Lender and subject to applicable law, Grantor shall pay to Lender each month on the day
payments are due under the Note until the Note is paid in full, a sum ("Escrow Funds") equal to one-twelfth of (a) all annual taxes, special taxes,
assessments, water charges and sewer service charges levied against or on account of the Property and (b) annual premiums for policies of fire
insurance with all risks standard extended coverage required under this Mortgage ("Escrow Items"). Lender may estimate the amount of Escrow Funds
on the basis of current data and a reasonable estimate of future Escrow Items. All Escrow Funds shall be held by Lender and applied to pay the
Escrow Items when due. Lender will not charge for holding and applying the Escrow Funds, analyzing the account, or verifying the Escrow Items,
unless Lender pays Grantor interest on the Escrow Funds and applicable law permits Lender to make such a charge. Grantor and Lender may agree
in writing that interest shall be paid on the Escrow Funds. Unless an agreement is made or applicable law requires interest to be paid, Lender shall not
be required to pay Grantor any interest or earnings on the Escrow Funds. The Escrow Funds are pledged as additional security for the amounts
secured by this Mortgage. If the amount of the Escrow Funds held by Lender, together with the future monthly payments of Escrow Funds prior to the
due dates of the Escrow Items, shall exceed the amount required to pay the Escrow Items when due, the excess shall be, at Grantor's opllon, either
promptly repaid to Grantor or credited to Grantor in scheduled payments of Escrow Funds. If the amount of the Escrow Funds held by Lender is not
sufficient to pay the Escrow Items when due, Grantor shall pay to Lender any amount necessary to make up the deficiency in one or more payments as
required by Lender.
EXPENDITURES BY LENDER. If Grantor fails 10 comply with any provision of this Mortgage, or if any action or proceeding is commenced that would
materially affect Lender's interests in the Property, Lender on Grantor's behalf may, but shall not be required to, take any action that Lender deems
appropriate. Any amount that Lender expends in so doing will bear interest at the rate provided for in the Note from the date incurred or paid by
Lender to the date of repayment by Grantor. All such expenses, at Lender's option, will (a) be payable on demand, (b) be added to the balance of the
Note and be apportioned among and be payable with any installment payments to become due during either (i) the term of any applicable insurance
policy or (ii) the remaining term of the Note, or (c) be treated as a balloon payment which will be due and payable at the Note's maturity. This
Mortgage also will secure payment of these amounts. The rights provided for in this paragraph shall be in addition to any other rights or any remedies
to which Lender may be entitled on account of the default. Any such action by Lender shall not be construed as curing the default so as to bar Lender
from any remedy that it otherwise would have had. Grantor's obligation to Lender for all such expenses shall survive the entry of any mortgage
foreclosure judgment.
WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of the Property are a part of this Mortgage.
Title. Grantor warrants that: (a) Grantor holds good and marketable title of record to the Property in fee simple, free and clear of all liens and
e,ncumbrances other than those set forth in the Real Property description or in any title insurance policy, title report, or final title opinion issued in
favor of, and accepted by, Lender in connection with this Mortgage, and (b) Grantor has the full right, power, and authority to execute and deliver
this Mortgage to Lender.
10-25-2000
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MORTGAGE
(Continued)
Page :l
Defense of Title. Subject to the exception in the paragraph above, Grantor warrants and will forever defend the title to the Property against the
lawful claims of all persons. In the event any action or proceeding is commenced that questions Grantor's title or the interest of Lender under this
Mortgage, Grantor shall defend the action at Grantor's expense. Grantor may be the nominal party in such proceeding, but Lender shall be
entitled to participate in the proceeding and to be represented in the proceeding by counsel of Lender's own choice, and Grantor will deliver, or
cause to be delivered, to Lender such instruments as Lender may request from time to time to permit such participation.
Compliance With Laws. Grantor warrants that the Property and Grantor's use of the Property complies with all existing applicable laws,
ordinances, and regulations of governmental authorities.
CONDEMNATION. The following provisions relating to condemnation of the Property are a part of this Mortgage.
Application of Net Proceeds. If all or any part of the Property is condemned by eminent domain proceedings or by any proceeding or purchase
in lieu of condemnation, Lender may at its election require that all or any portion of the net proceeds of the award be applied to the Indebtedness
or the repair or restoration of the Property. The net proceeds of the award shall mean the award after payment of all actual costs, expenses, and
attorneys' fees incurred by Lender in connection with the condemnation.
Proceedings. If any proceeding in condemnation is filed, Grantor shall promptly notify Lender in writing, and Grantor shall promptly take such
steps as may be necessary to defend the action and obtain the award. Grantor may be the nominal party in such proceeding, but Lender shall be
entitled to participate in the proceeding and to be represented in the proceeding by counsel of its own choice, and Grantor will deliver or cause to
be delivered to Lender such instruments as may be requested by it from time to time to permit such participation.
IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following provisions relating to governmental taxes, fees
and charges are a part of this Mortgage:
Current Taxes, Fees and Charges. Upon request by Lender, Grantor shall execute such documents in addition to this Mortgage and take
whatever other action is requested by Lender to perfect and continue Lender's lien on the Real Property. Grantor shall reimburse Lender for all
taxes, as described below, together with all expenses incurred in recording, perfecting or continuing this Mortgage, including without limitation all
taxes, fees, documentary stamps, and other charges for recording or registering this Mortgage.
Taxes. The following shall constitute taxes to which this section applies: (a) a specific tax upon this type of Mortgage or upon all or any part of
the Indebtedness secured by this Mortgage; (b) a specific tax on Grantor which Grantor is authorized or required to deduct from payments on the
Indebtedness secured by this type of Mortgage; (c) a tax on this type of Morfgage chargeable against the Lender or the holder of the Note; and
(d) a specific tax on all or any portion of the Indebtedness or on payments of principal and interest made by Grantor.
Subsequent Taxes. If any tax to which this section applies is enacted subsequent to the date of this Mortgage, this event shall have the same
effect as an Event of Default (as defined below), and Lender may exercise any or all of its available remedies for an Event of Default as provided
below unless Grantor either (a) pays the tax before it becomes delinquent, or (b) contests the tax as provided above in the Taxes and Liens
section and deposits with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender.
SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relating to this Mortgage as a security agreement are a part of this
Mortgage.
Security Agreement. This instrument shatl constitute a security agreement to the extent any of the Property constitutes fixtures or other personal
property, and Lender shall have all of the rights of a secured party under the Uniform Commercial Code as amended from time to time.
Security Interest. Upon request by Lender, Grantor shall execute financing statements and take whatever other action is requested by Lender to
perfect and continue Lender's security interest in the Rents and Personal Property. In addition to recording this Mortgage in the real property
records, Lender may, at any time and without further authorization from Grantor, file executed counterparts, copies or reproductions of this
Mortgage as a financing statement. Grantor shatl reimburse Lender for atl expenses incurred in perfecting or continuing this security interest.
Upon default, Grantor shall assemble the Personal Property in a manner and at a place reasonably convenient to Grantor and Lender and make it
available to Lender within three (3) days after receipt of writlen demand from Lender.
Addresses. The mailing addresses of Grantor (debtor) and Lender (secured party), from which information concerning the security interest
granted by this Mortgage may be obtained (each as required by the Uniform Commercial Code), are as stated on the first page of this Mortgage.
FURTHER ASSURANCE; ADDITIONAL AUTHORIZATION. The following provisions relating to further assurances and additional authorization are a
part of this Mortgage.
Further Assurances. At any time, and from time to time, upon request of Lender, Grantor will make, execute and deliver, or will cause to be
made, executed or delivered, to Lender or to Lender's designee, and when requested by Lender, cause to be filed, recorded, refiled, or
rerecorded, as the case may be, at such times and in such offices and places as Lender may deem appropriate, any and all such mortgages,
deeds of trust, security deeds, security agreements, financing statements, continuation statements, instruments of further assurance, certificates,
and other documents as may, in the sole opinion of Lender, be necessary or desirable in order to effectuate, complete, perfect, continue, or
preserve (a) the obligations of Grantor under the Note, this Mortgage, and the Related Documents, and (b) the liens and security interests
created by this Mortgage as first and prior liens on the Property, whether now owned or hereafter acquired by Grantor. Unless prohibited by law
or agreed to the contrary by Lender in writing, Grantor shall reimburse Lender for all costs and expenses incurred in connection with the matters
referred to in this paragraph.
Additional Authorization. If Grantor fails to do any of the things referred to in the preceding paragraph, Lender may do so for and in the name of
Grantor and at Grantor's expense. For such purposes, Grantor hereby irrevocably authorizes Lender to make, execute, deliver, file, record and do
all other things as may be necessary or desirable, in Lender's sole opinion, to accomplish the matters referred to in the preceding paragraph. It is
understood that nothing set forth herein shall require Lender to take any such actions.
FULL PERFORMANCE. If Grantor pays atl the Indebtedness when due, and otherwise performs all the obligations imposed upon Grantor under this
Mortgage, Lender shatl execute and deliver to Grantor a suitable satisfaction of this Mortgage and suitable statements of termination of any financing
statement on file evidencing Lender's security interest in the Rents and the Personal Property. Grantor will pay, if permitted by applicable law, any
reasonable termination fee as determined by Lender from time to time.
DEFAULT. Each of the following, at the option of Lender, shall constitute an event of default ("Event of Default") under this Mortgage:
Default on Indebtedness. Failure of Grantor to make any payment when due on the Indebtedness.
Default on Other Payments. Failure of Grantor within the time required by this Mortgage to make any payment for taxes or insurance, or any
other payment necessary to prevent filing of or to effect discharge of any lien.
Compliance Default. Failure of Grantor to comply with any other term, obligation, covenant or condition contained in this Mortgage, the Note or in
any of the Related Documents.
False Statements. Any warranty, representation or statement made or furnished to Lender by or on behalf of Grantor under this Morfgage, the
10-25-2000
Loan No
MORTGAGE
(Continued)
Page 5
Note or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished.
Defective Collaterallzatlon. This Mortgage or any of the Related Documents ceases to be in full force and effect (including failure of any collateral
documents to create a valid and perfected security interest or lien) at any time and for any reason.
Death or Insolvency. The death of Grantor or the dissolution or termination of Grantor's existence as a going business, the insolvency of Grantor,
the appointment of a receiver for any part of Grantor's property, any assignment for the benefit of creditors, any type of creditor workout, or the
commencement of any proceeding under any bankruptcy or insolvency laws by or against Grantor.
Foreclosure, Forfeiture, etc. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or
any other method, by any creditor of Grantor or by any governmental agency against any of the Property. However, this subsection shall not apply
in the event of a good faith dispute by Grantor as to the validity or reasonableness of the claim which is the basis of the foreclosure or forefeiture
proceeding, provided that Grantor gives Lender written notice of such claim and furnishes reserves or a surety bond for the claim satisfactory to
Lender.
Breach of Other Agreement. Any breach by Grantor under the terms of any other agreement between Grantor and Lender that is not remedied
within any grace period provided therein, including without limitation any agreement concerning any indebtedness or other obligation of Grantor to
Lender, whether existing now or later.
Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies
or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness.
Adverse Change. A material adverse change occurs in Grantor's financial condition, or Lender believes the prospect of payment or performance
of the Indebtedness is impaired.
RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of any Event of Default and at any time thereafter, Lender, at its option, may exercise
anyone or more of the following rights and remedies, in addition to any other rights or remedies provided by law:
Accelerate Indebtedness. Subject to applicable law, Lender shall have the right at its option without notice to Grantor to declare the entire
Indebtedness immediately due and payable.
UCC Remedies. With respect to all or any part of the Personal Property, Lender shall have all the rights and remedies of a secured party under
the Uniform Commercial Code.
Collect Rents. Lender shall have the right, without notice to Grantor, to take possession of the Property and, with or without taking possession of
the Property, to collect the Rents, including amounts past due and unpaid, and apply the net proceeds, over and above Lender's costs, against
the Indebtedness. In furtherance of this right, Lender may require any tenant or other user of the Property to make payments of rent or use fees
directly to Lender. If the Rents are collected by Lender, then Grantor irrevocably authorizes Lender to endorse instruments received in payment
thereof in the name of Grantor and to negotiate the same and collect the proceeds. Payments by tenants or other users to Lender in response to
Lender's demand shall satisfy the obligations for which the payments are made, whether or not any proper grounds for the demand existed.
Lender may exercise its rights under this subparagraph either in person, by agent, or through a receiver.
Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the Property, with the power to
protect and preserve the Property, 10 operate the Property preceding foreclosure or sale, and to collect the Rents from the Property and apply the
proceeds, over and above the cost of the receivership, against the Indebtedness. The receiver may serve without bond if permitted by law.
Lender's right to the appointment of a receiver shall exist whether or not the apparent value of the Property exceeds the Indebtedness by a
substantial amount. Employment by Lender shall not disqualify a person from serving as a receiver.
Possession of the Property, For the purpose of procuring possession of the Property, Grantor hereby authorizes and empowers any attorney of
any court of record in the Commonwealth of Pennsylvania or elsewhere, as attorney for Lender and all persons claiming under or through Lender,
10 sign an agreement for entering in any competent court an amicable action in ejectment for possession of the Property and to appear for and
confess judgment against Grantor, and against all persons claiming under or through Grantor, for the recovery by Lender of possession of the
Property, without any stay of execution, for which this Mortgage, or a copy of this Mortgage verified by affidavit, shall be a sufficient warrant; and
thereupon a writ of possession may be issued forthwith, without any prior writ or proceeding whatsoever.
Deftclency Judgment. Lender may obtain a judgment for any deficiency remaining in the Indebtedness due to Lender after application of all
amounts received from the exercise of the rights provided in this section.
Tenancy at Sufferance. If Grantor remains in possession of the Property after the Property is sold as provided above or Lender otherwise
becomes entitled to possession of the Property upon default of Grantor, Grantor shall become a tenant at sufferance of Lender or the purchaser of
the Property and shall, at Lender's option, either (a) pay a reasonable rental for the use of the Property, or (b) vacate the Property immediately
upon the demand of Lender.
Other Remedies. Lender shalL have all other r,ights and remedies provided in this Mortgage or the Note or available at law or in equity. .
Sale of the Properfy. To the extent permitted by applicable law, Grantor hereby waives any and all right to have the property marshalled. in
exercising its rights and remedies, Lender shall be free to sell all or any part of the Property together or separately, in one sale or by separate
sales. Lender shall be entitled to bid at any public sale on all or any portion of the Property.
Notice of Sale. Lender shall give Grantor reasonable notice of the time and place of any public sale of the Personal Property or of the time after
which any private sale or other intended disposition of the Personal Property is to be made. Unless otherwise required by applicable law,
reasonable notice shall mean notice given at least ten (10) days before the time Of the sale or disposition.
Waiver; Election of Remedies. A waiver by any party of a breach of a provision of this Mortgage shall not constitute a waiver of or prejudice the
party's rights otherwise to demand strict compliance with that provision or any other provision. Election by Lender to pursue any remedy shall not
exclude pursuit of any other remedy, and an election to make expenditures or take action to perform an obligation of Grantor under this Mortgage
after failure of Grantor to perform shall not affect Lender's right to declare a default and exercise its remedies under this Mortgage.
Allorneys' Fees; Expenses. If Lender institutes any suit or action to enforce any of the terms of this Mortgage, Lender shall be entitled to recover
such sum as the court may adjudge reasonable as attorneys' fees at trial and on any appeal. Whether or not any court action is involved, ail
reasonable expenses incurred by Lender that in Lender's opinion are necessary at any time for the protection of its interest or the enforcement of
its rights shail become a part of the Indebtedness payable on demand and shail bear interest from the date of expenditure until repaid at the rate
provided for in the Note. Expenses covered by this paragraph include, without limitation, however subject to any limits under applicable law,
Lender's attorneys' fees and Lender's legal expenses whether or not there is a lawsuit, including attorneys' fees for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or injunction). appeals and any anticipated post-judgment collection services, the cost of
searching records, obtaining title reports (including foreclosure reports), surveyors' reports, and appraisal fees, and title insurance, to the extent
permitted by applicable law. Grantor also wiil pay any court costs, in addition to ail other sums provided by law.
10-25-2000
Loan No
MORTGAGE
(Continued)
Page 6
NOTICES TO GRANTOR AND OTHER PARTIES. Unless otherwise provided by applicable Jaw, any notice under this Mortgage shall be in writing,
may be sent by telefacsimile (unless otherwise required by law), and shall be effective when actually delivered, or when deposited with a nationally
recognized overnight courier, or, if mailed, shall be deemed effective when deposited in the United States mail first class, certified or registered mail,
postage prepaid, directed to the addresses shown near the beginning of this Mortgage. Any party may change its address for notices under this
Mortgage by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address. All copies of
notices of foreclosure from the holder of any lien which has priority over this Mortgage, and notices pursuant 42 Pa. C.S.A. Section 8143, et seq., shall
be sent to Lender's address, as shown near the beginning of this Mortgage. For notice purposes, Grantor agrees to keep Lender informed at all times
of Grantor's current address.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Mortgage:
Amendments. This Mortgage, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the
matters set forth in this Mortgage. No aiteration of or amendment to this Mortgage shall be effective uniess given in writing and signed by the
party or parties sought to be charged or bound by the alteration or amendment.
Annual Reports. If the Property is used for purposes other than Grantor's residence, Grantor shall furnish to Lender, upon request, a certified
statement of net operating income received from the Property during Grantor's previous fiscal year in such form and detail as Lender shall require.
"Net operating income" shall mean all cash receipts from the Property less all cash expenditures made in connection with the operation of the
Property.
Applicable Law. This Mortgage has been delivered to Lender and accepted by Lender In the Commonwealth 01 Pennsylvania. This
Mortgage shall be governed by and construed In accordance with the laws 01 the Commonwealth 01 Pennsylvania.
Caption Headings. Caption headings in this Mortgage are for convenience purposes only and are not to be used to interpret or define the
provisions of this Mortgage.
Merger. There shall be no merger of the interest or estate created by this Mortgage with any other interest or estate in the Property at any time
held by or for the benefit of Lender in any capacity, without the writlen consent of Lender.
Multiple Parties. All obligations of Grantor under this Mortgage shall be joint and several, and all references to Grantor shall mean each and
every Grantor. This means that each of the persons signing below is responsible for all obligations in this Mortgage.
Severability. If a court of competent jurisdiction finds any provision of this Mortgage to be invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision invalid or unenforceable as to any other persons or circumstances. If feasible, any such
offending provision shall be deemed to be modified to be within the limits of enforceability or validity; however, if the offending provision cannot be
so modified, it shall be stricken and all other provisions of this Mortgage in all other respects shall remain valid and enforceable.
Successors and Assigns. Subject to the limitations stated in this Mortgage on transfer of Grantor's interest, this Mortgage shall be binding upon
and inure to the benefit of the parties, their heirs, personal representatives, successors and assigns. If ownership of the Property becomes vested
in a person other than Grantor, Lender, without notice to Grantor, may deal with Grantor's successors with reference to this Mortgage and the
Indebtedness by way of forbearance or extension without releasing Grantor from the obligations of this Mortgage or liability under the
Indebtedness.
Time Is 01 the Essence. Time is of the essence in the performance of this Mortgage.
Waivers and Consents. Lender shall not be deemed to have waived any rights under this Mortgage (or under the Related Documents) unless
such waiver is in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of
such right or any other right. A waiver by any party of a provision of this Mortgage shall not constitute a waiver of or prejudice the party's right
otherwise to demand strict compliance with that provision or any other provision. No prior waiver by Lender, nor any course of dealing between
Lender and Grantor, shall constitute a waiver of any of Lender's rights or any of Grantor's obligations as to any future transactions. Whenever
consent by Lender is required in this Mortgage, the granting of such consent by Lender in any instance shall not constitute continuing consent to
subsequent instances where such consent is required.
EACH GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MORTGAGE, AND EACH GRANTOR AGREES TO ITS
TERMS.
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ledged and delivered in the presence 01:
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10-25-2000
Loan No
MORTGAGE
(Continued)
Page 7
CERTIFICATE OF RESIDENCE
I hereby certify, that the precise address of the mortgagee, PNC BANK, NATIONAL ASSOCIATION, herein is as follows:
4242 CARLISLE PIKE, CAMP HILL, I'A 17001-8874
~ ------
Attorney or Agent for M~ee
INDIVIDUAL ACKNOWLEDGMENT
STATE OF
.~ 0 t:.:l:~
:1l.! \...._Q
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COUNTY OF
On this, the J.~ day of O~'L.> ,20m:) ,before me ----- ,the
undersigned Notary Public, personally appeared THOMAS A. FULMER and DIANE S. FULMER, known to me (or satisfactorily proven) to be the
persort>.vhose names are subscribed to the within instrument, and acknowledged that they executed the same for the purposes therein contained.
'" """.~ .,~.... , ,,,,,,,,"~' my 'M' M' ,mo. ~,. ~L!..' . Q ~. ~ ~
..f>jgtary P~lllie iR aABler tl,6 Oldie 61
LASER PRO, Reg. U.S. Pal. & T.M. Off., Ver. 3.29a (e) Concentrex 2000 All rIghts reserved. (PA-G03 E3.29 F3.29 FULMERS.LN C39.0VLJ
Nolarlal Seal
Unda A. Conler, Notary Public
State College Born, Cenlr9 County
My Commission Expires Aug. ?:T, 2001
Member, Pennsylvania Association 01 Notaries
RIDER "A", Page 1
ALL those two (2) certain adjoining parcels of land situate on
the Sout~erly side of u.s. Highway Route No. 220, now PA Highway
No. ~50 ~n Woodward Township, Clinton County, Pennsylvania, more
part~cularly bounded and described as follows:
PARCEL NO.1: BEGINNING at an iron pipe at the intersection of
the South line of PA highway Route 150 and the East line of
public road leading North from Dunnstowu; thence by a curve along
the South line of PA Highway Route No. 150, the chord of which is
North seventy-two (72) degrees zero {OJ minutes East, two hundred
twenty-five and seven tenths (225.7) feet to an iron pipe; thence
along land now or formerly of Don D. Richey (now Parcel No. 2
hereinafter described), South five (5) degrees thirty (30)
minutes West, two hundred fifty-three and four tenths (253.4)
feet to an iron pipe; thence by the same, North eighty-four- (84)
degrees thirty (30) minutes West, two hundred seven (207) feet to
an iron pipe on the East line of the aforementioned public road
leading North from Dunnstown; thence by the East line of said
public road, North five (5) degrees thirty (30) minutes East, one
hundred sixty-three and four tenths (163.4) feet to the place of
beginning. Containing one (1) acre more or less.
EXCEPTING AND RESERVING, for the use and benefit of Lock Haven
Suburban Water Company, its successors and assigns, a right-of-
way of the width of fifteen (15) feet along the Western boundary
of the above-described land for the installation and maintenance
of a passageway and water course by means of pipes for the
conveying of water through the said strip of land, with the right
of ingress, egress and regress in the said Lock Haven Sub~rban
Water Company, for the purpose of repairing and cleaning said
pipes and water course.
The improvements consist of a one-story brick building occupied
as a personal care home.
PARCEL NO.2: BEGINNING at an iron pipe on the South line of PA
Highway Route No. 150 leading from Lock Haven to Jersey Shore,
said iron pipe being the Northeast corner of land now or formerly
of Fred McKenzie; thence by a curve along the South line of PA
Highway Route No. 150, the chord of which is North seventy-seven
(77) degrees fifty (50) minutes East, seventy and five tenths
(70.5) feet to an iron pipe; thence by other land now or formerly
of Fred McKenzie, South five (5) degrees thirty (30) minutes
West, two hundred seventy-four and eight tenths (274.8) feet to
an iron pipe; thence by the same, North eighty-four (84) degrees
thirty (30) minutes West, sixty-seven and two tenths (67.2) feet
to an iron pipe at the Southwest corner of land now or formerly
of Fred McKenzie; thence by said land now or formerly of Fred
HcKenzie, North five (5) degrees thirty (30) minutes East, two
hundred fifty-three and four tenths (253.4) feet to an iron pipe,
the place of beginning. Containing four tenths (.4) of an acre
more or less.
RIDER "A", Page 2
SUBJECT to the restriction that no building shall be erected on
said premises neare= to the South line of said PA Highway Route
No. 150 than sixty (50) feet, as measured Southward along the
Western line of said p~emises from the above-referred to iron
pipe located at the Northeast corner of lands now or formerly of
Fred McKenzie.
BEING the same premises which Mohawk, Inc., by its Deed dated
November 21, 1990, and recorded in Clinton County Deed Book 451,
page 202, did grant and convey unto Thomas A. Fulmer and Diane s.
Fulmer, his wife, mortgagors herein.
FOR IDENTIFIC~TION Pu~POSES ONLY, the above premises are known as
Tax Parcel 1A-H-0001 on the records in Clinton County.
PARCEL NO.3: ALL that certain piece and parcel of land situate
in Woodward Township, Clinton County, Pennsylvania, according to
the survey of H. Richard Ohl, registered surveyor, made on August
6, 1981, bounded and described as follows, to-wit:
BEGINNING at an iron pin lying along the Eastern boundary line of
land formerly of the Mohawk Motel, and now of Thomas A, Fulmer
and Diane S. Fulmer, his wife, being South five (5) degrees
~hirty (30) minutes West a distance of one hundred ninety-five
and eight tenths (195.8) feet from an iron pin lying along
Pennsylvania Route No. 150 and at the point of intersection with
the Southwest corner of two (2) roadways now or formerly owned by
Robert wise; thence along the southern boundary line of a roadway
now or formerly owned by Robert wise North eighty-eight (88)
degrees forty-five (45) minutes East a distance of fifty-four
(54) feet to an iron pin; thence along the Western boundary line
of the Burkett Trailer Court, now or formerly owned by Robert
wise, South one (1) degree twenty-two (22) minutes West, a
distance of seventy-one and four tenths (71.4) feet to an iron
pin; thence along the Northern boundary line of the Burkett
Trailer Court, now or formerly owned by Robert Wise, North
eighty-nine (89) degrees thirty (30) minutes West a distance of
fifty-nine (59) feet to an iron pin; thence along the Eastern
boundary line formerly of the Mohawk Motel, and now of Thomas A.
Fulmer and Diane S. Fulmer, his wife, North five (5) degrees-
thirty (30) minutes East a distance of seventy (70) feet to an
iron pin, the place of beginning. Containing 0.09 acres.
The improvements thereon consist of a one story brick building.
BEING the same premises which Robert J. Burkett and Marjorie A.
Burkett, his wife, by their Deed dated June 1, 1992, and recorded
in Clinton County Deed Book 548, page 230 did grant and convey
unto Thomas A. Fulmer and Diane S. Fulmer, his wife, Mortgagors
herein.
Mortgagors also grant an convey to Mortgagee, its successors and
assigns, in common with the State Bank of Avis (see Miscellaneous
Book 56, page 85), and Robert C. Wise (see Miscellaneous Book 77
RIDER "A", Page 3
page 1193), tfieir heirs, successors and assigns, the free and
uninterrupted use, liberty and privilege of, and passage in and
along, all the following described parcel of land in Woodward
Township, Clinton County, Pennsylvania, for the purpose of
ingress and egress between PA Route 150 and the property
described above as follows:
BEGINNING at an iron pin on the South side of PA Highway Route
No. 150, said iron pin being situate at the Northeast corner of
land formerly of the Mohawk, Inc., now, Fulmer et UX; thence
South five (5) degrees thirty (30) minutes West, a distance of
one hundred ninety-five and eight tenths (195.8) feet to an iron
pin; thence North eight-eight (88) degrees forty-five (45)
minutes East, a distance of fifty-four (54) feet to an iron pin;
thence North five (5) degrees thirty (30) minutes East, a
distance of forty-five and eight tenths (45.8) feet; thence South
eighty-seven (87) degrees zero (0) minutes West, a distance of
twenty-one (21) feet; thence North five (5) degrees thirty (30)
minutes East, a distance of one hundred fifty (150) feet to an
iron pin; thence West along PA Highway Route No. 150 a distance
of thirty-three (33) feet to an iron pin, the place of beginning.
BEING the same right-of-way excepted and reserved in Deed from
Robert J. Burkett and Marjorie A. Burkett, his wife, Grantors
herein, to Robert C. Wise, in Clinton County Miscellaneous Book
77, page 1193.
FOR IDENTIFICATION PURPOSES ONLY, the above premises is known as
Tax Parcel #lA-H-0002C on the records in Clinton County.
EXHIBIT 'c'
... ....~.... -.
I UL...I.ICI"'\.::J r-LN
'-I." "...........,.........................0
834 P02
JRN 21 '1213 1121:53
PROMISSORl NOTE
SorroWer:
THOMAS A. FULMER (SSN: ll't' .~ 8379)
DIANE S. FULMER (SSN: 19-4-51183)
333 EFlTEL FlOAD
.....IllIAMSPoRT, PA 17?a1
lender:
PNC BANX, NATIONAL ASSOCIATION
42&2 CARLISLE Il'IkE
CAMP HILL, PA '17001-1187&
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Pririclplll Amount: $358,204.00 Interest Rate: 9.250% Date of Note: De~rl:ler 8, 2llpO
PROMISE TO PAY. THOMAS A. Fl.ILMER ..,0 DIANE S. "Ul..M~ ("BDn-..r") prom_ 10 p~ 10 PNC BANK. ....ATIONALFASSOC....'I1ION
("Lender"), or order, In '-'III 11I0ney of Ihe Unlllld S~es ot America. tlte p,:II'lclplIl alnou,,' of '11"..e .....ndrad Fifty EIght. houlWld 11.vo
Hundreo Fallr & 001'100 DolI_ (Sl!lII,204.o0), Il;Igether with Interl!!Sl at Ihe ''''e of oal)'J/. per IlnJl.UI1l on tile unpllld P"r'lclp I blllllnc.. 1m
....-..-. ~d -.. .... Gii1:? .
PAYMEMT. Borrower will Pill)' thIs loen 11'112 Paymenl at $1I,a10.U JlllJment. Borrower's f1rat I'Byment III du", Decembel~, 2llllU, BlIdlan
"u/llteQuenl payments are d1.le on the &lime dlll/ of eac 11I1 r aI, Borrawer's ftnal paymenl'A1111 be due on Novembe, , ZcD6, II"" III
be t6r 1111 principal IInd 311 &:>crued Inter....1 nOl yet p3ld. PlIymenhl In "Jude prlnelpel and l"lereq~. Tn" annual Inter"SI ral ,lor Ihlo Nott it.
computed on " 365/'360 basts; Ihat Is, by applyIng 111.. raUo of tha ..nnusJ Intef.'lsl rale 0""," II \leer of 360 dlly!<, mUlliplied by the DUlslahdlng pnn1' 01
balance. mUltipli"d by Ih" ilctual nUmb"" 01 days tlla prlnclpill balanca is ClutstandlhQ- Borrower WIU. pay u'(Idar at Lender's address s~wn lIbo".. at
sUch'other place lis Ul'":1er l'rI8.y designale in wriWng. lJl'1less othllrWiSa Ilgl8lld or required by applicable liW, paymenlS will be appllels flrsl to aeCf ad
unpE(id intemst, then 10 Prtncfpll.l, and IIny remaining amount 10 any unpaid "oll!JC~on cosl!l and /ala chargels, ~
PREPA'fI\lJEJtiIT. Borrower may pay without Donally all or a portion 01 Ihe amo':'", owad """Ier 'Mn Ills d"e. ElI1ly Paymenllo will nDt. 'lIe.. agree 10
by Ulndar In wr1l1ng. retia"" BorrowBr 01 BQmlwar't; <>!)llgalion ID c"nllnue 10 make payment. under Ihe pa1rment schedule. Ra'''er, Ih y will reouc91h8
principal balancG due and may resullln Borrower l'IIaldnlllewer Pllymenlll, ,
LATE CHARGE. It a payman! is f5 CllIVs or mo",,~. Br;>rrowerwlll be charged 5.000% 01 the unp3ld PDI110n of Ihe rellullll'l)' schtdUled lIIIYmfnl
or S1ClD,OO, whl<:hever Is Ie". I
DEFAlI..T. BorrOWer will be. in default II any 01 the follo....,nll happen:;: (a) BOrTOWtor flllls to make any P~.Ymenllllhen due. (b) Bort~\Yar b.....ks dny
promise I3orrowElf' has made fa Lander, or Borrowe, falls to comply Wllh Dr Ie perferm I4'h9n dUO any olher lerm, Dbtiga1ion, CO"enlln~ Dr conQl~on
conla.ined In this Nol", or any agrtl8"1ent relatlld 10 this NoI9, or: In IIny olher B~l'8emllnl C>r loan BOrroWllr h',IS will! Lender. (e) BorrOWf: defaults Un~8r
any lean, extension of OISdlt, security 1l9reeme"l, Purchasll or sales agtEll'lment, or any ather agl'Bl;lmel11. .on laver 01 any olhB/' cl'8dl! or person r:al
may mal9rlally aflec:1 any at BOI'ro....ar's PrDDElrt)I 0( BQrrow~ ability III repay Ihls Nllla or partorm BOlToWlilr'" obUgllllons under {hts N ~ Dr any Dr he
Relalad DOCUmenlS, (d)Any rePl'EP.loiInlIlllo., or stalelT1B1lt rnlldll or Il.If'nlsheelto L"nder by BorrOWllr..or on'E1;j;rOlller's bllhilll Is false.or fsI~<l!ng In ny
mBtenBll1lSpect "lther now or lltlhe IIIn9 made 0( furnished:' {e) Borrower dies or blilcOmEB insoJven~ a fllCaiver Is appolnllld for any .*rt /lrBOrrow~r's
property. Borrower maklls an assllilnmenl for the benellllll creditors, or any Pt0C99dlr'lg Is commencod ellhst by Borrowllr Dr llgeinSlrBorrower un~6r
any bankruptcy or Insol.....nc:y law". (f) Any credltcr trias 10 !lIke 'lny 01 B"rroWllr's prOpllrty on or III whlct! Lender has a lien or "ElCLzt~1y IntElr8s1. onis
IneluclllS " garnlshmenl 01 any af BorrDwer's "cz:ounb with Lander. (g) Any ollhe aVRnls dascnbed in tN,. &:l"fsult section DCt:Urs wi raspect 10. any
guaranlor Dr lhis NDte. (h) A malarial RdV9rn8 chang.. OCOUts in Borrowar's financIal ~onclJllon, or L"ndllr believes the P"'''pec ol paymantlor
parformance 01 fh.. Indebt..d....... is impaired. . ~
LENDE!:l'S RIGKTS. Upon dufault, Londer mIJY. alll>r giVing sU"h nolic:&s a" raqulred by appticabla law. declare th" entlrll unpaid pr; Ipal bal9n"" n
t~is Note end all .accrued unpaid inl&n!lsf imm..dlaIBty II"", anll than Borrnwar wfII Day Ihel emount. Upo" dBtllull. inclUding r..Nura pay upon n 01
matlJrity, Lander, al ils optiDn, may also, ir permiltlld undllr applicable III"', Illcrll!\sllthe Inlarat rata on Ihis Nola 6.DOll percl;!ntage pO~ls. The Inlo t
rllla will not BXCeEld Ihll m~murn rata permllled by al'pUcabla law. Landar mll.v hira or pay Somllon!l elsa Ii, help coUI;lI:\ Ihls Nata if ad.rTO'Ner does 01
pay. BOrT"""..r also ",IU PIl.Y LeOdllr that EUIIounl This i'lCludes. subjllct to any IlmJls Undar applicablet law, LIII1der's atromeys' lees Il.Ifd Landor's ""ilal
a>;panses whlllller Dr not there Is a lawsuit, Including eltorneys' IBBS IInd "'gel ~ensElS for bllnkrupl1::y Oroeeedings Qncludlng e"~t1S 10 mDdllt1 or
vaeara any auttJmlllie stay or iniunE:!lon), apPElBIs. and any Ilntfclpalod ppst-judgment collBclion servlcEls. 11 '101 prohIbflad by epPfiClll;1le law, 80rro,!,Br
also will pey any court eosl$, in addilicn 10 all other SUtn5 prOVided by Jaw. If judgment is entered in connecllEIn with this Note. Inler~l will conUnuoIlo
accru.. on thIs NQ!e after JUdljlt1l3nl etlhe m:lsling Inlares. raJa providell ror In 1lI1$ Note. ThIs NI;lIe flU DE"'n C1e1lvel'9d 10 L."nder ~d lla:ePled Iby
L~nder ." lhe CommoltWl!allh at Pennsylvania. If Iftlll'e 1$ a latlrllUlI, BOrroWer agrees Upon Lender'S I1IIql1esr 10 subm" 10 lhe lu Isdlcllon 01 ih~
courts 01 CUMBElU.AJiIb CounlY, the CQmmonweallh ot PennSYlvania. Lender end Sorrvwer herebJr wlllve the rl9'n 10 "ny ury Irlal In 'ny
,"cUon, proceeding, Dr coun"'rcllllll\ brought bY ellllor Lender or Borrower a91llnsI tile olher. This NOlI! shllll be lloVerned bya d COIl.lrue~ In
accordance with 'tie I_a or the COII\monWeelth of Pennsylvania. I
I'lIGil:lT OF SETOFF. 13olnlw8r grants 10 le"eler a ClQnlraclual sec:urlly ihlarast In. and h"",by assigns, el>nveys, dalill8rs. pledges, rand t"'ns,..~ Ie
Lender ~II ~O~owar's rlghl. We Ilnd I~ In anello, BorrOWer's E1CCOun!$ with Lander (Whelher cheeking. saVings. or som.. otller aC!:ounl). IncIUCl1t1g
w;thO. ut 'Imitalion aU accounts hilld jalnlly wlth llom8Ol1e else IInd all accounts Borrower may aplln In t~ tUI unJ, ~ Udfng howEMI' ellRA and Keqgh
B",ounts. ane! all trust e=unts tElr Wl'lich Ihe 9renl of II secUrity Inl_ wauld bll prohlbltlld by lalli, l~oITclWer author_ Lend (, 10 Iha .>;\enl
PQrrrlllled by applicable la...., 10 charge Dr setOll' all SUms OWing on Illis NolllllQlIfnsl any and ell SUch aecounls. j
CXIlL4TEFlAJ.... This Nab; is securac;l by. In addition to IIny other collalaral, a Mortgage dillad DeeembO( 8, :!aOO, 10 Lender on raal p pany local In
CLINTON CDunty, Commonwealth of Pennsylvania. Md a Mortgage dalBd D&c:ember 8, 2OJO, to L.endflr on real propElf1y IocaIB In L YCOMlrilG
County, Commgnweallh af Pennsyt""'nla, alllhe terms anll condlllons or Wl"lch iI,.. hereby Inco'PolRled IInd lIlade a part ollhls Nola. I T
FINANCiAl INFORMATION PROVISION, BDtrOwar llgrees 10 dellvar any financial and other bUSiness InthrTl1atlcn concarnlng BDn-clwer Ihl\l Len~Qr
may request from lime Ie ""'''. S~h liS annual and InlEll'lm lInllnclal statements (all of whleh sllall be pr&PllIed In eeeordanca wi'h gal.eraHy HceaP~' (l
aecoUnUnll Pr1t1ClplllS) I!lId IBderallncomlltu: rBturns.~
YEAR 2DOIl COllolPLlA)ICE. a"lTowBr :.ho& n!llIfewlld Ille al'ea,s within Its t1~_ and opwaUDru> which could b.. adw!llely a d by 11'10
dllv"lopee Of Is dRllel"plng a program 10 adClI'llSs On a Hmely bll3ls th" rlslc lIla! certain complEl1lr. appllc:af.101t5 used by B~ Y b" . unable to
r""O\ln!za and perform properly dat&-.len::;llive luncUons InVolving dale; prior to and afl8r D"""mber ~l. m99 (It'e "Year 2t:lClO P'Db mj. n.. 'r~ar
2000 Preblem will '101 result, and is nol f'llBsonably <llIpaC'l&d 10 result, In any "'alarlal IIdwrsa """'" On the buslnesa, properties,' ...15, Mnan illt
condlllDn, l'B!lults of op8ra'lon5 Clt proaplOcl8 0' BgrrDwer, or Ih.. ability Elf Elorrcwar \0 duly and pUnctually pe', or pelTOrm lis ObllllEllIcnf"rnunder 8 d
under [ha Ra1af9cl DOClllmmts. . . I
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L..oO.~ ..............~................. ..........0
- .:0, ~,...o~""''' c ULl'II::J<:~ J-'CH 834 P03
DISCLOSURE FOR CONFESSION OF JUDGMENT
~UU't
Borrower: THOMAS A. FUlMER (S5N: 'a~379)
DIANE S, FUlIIIIER (SSN: 19_4-5883)
333 ERTEl ROAD
WILl.rAMSPORT, PA 17701
L.ender; PNC BANK, NATIOI~AL ASSOCIATION
4242 CARLISLE pme:
CAMP H"-L. PA 17001-81174
>AM <>><"""....'".. II~.AY "" b 0 ~ 0 .. Lv . ~= A "'...,"'''' No", '.R "'.....00 oal,..UI..
ME TO REPAY TH4T AMOUNT. ;
A. I UNDERST"NO THAT THE NOTE CONTAINS A CONPE!SSION OF JlJcGMENT PROVISION THAT WOULD PERMIT LENDER Jo Elm;:",
JUDGMENT ....GAINS"( Me IN COURT. AFI'E!R A DEFAUlT ON THE HOTE, WITHOIJT ADV4NCE NOTU:E TO ME AND W'1ljOUT ~FFEFlI"'G
ME: AN OPPORTUIlIIT... TO DEFEND AGAINST THE ENTRY OF JUDGMENT, IN ~CUTING THe ~Ol'E, aEING FULLY AWAtE OF My
RIGlfTs TO ADVANCE NOTICE AND TO A HEARING 'to CONTEST THE VAL,IDIT'r OF ANY JUDGMEN'r OR OTHER CLAIMS THA LENDER
MAY "SSERT AGAINST IlIlE UNOER THE NOTE, I .4\M KNOWINGLY. INTElLIGENTL.... AND VOLUI~TARIL... WAIVING THES RIGHTS,
INCLUDING .Il.NY RIGHT 'to ADVAJlCI;; NOTICE OF THE ENTRY OF JUDGMENT, AND I EXPR~SSL Y AGREE: AND CQNSEliIT TO LENDER'S
fIlTERING JUDI3MEH't AGAINST MlO BY CONFESSION "S PROVIDED !'OR IN THE CONFESSION OF JUDGMENT PROVISION. ~
B. I FURTHER UNDERSTAND TH.ll,T IH ADOITION To GIVING LENDER THE RIGHT TO ENTER .:UDGIIIIENT AGAINST ME IWITHOUT
ADVANCE NOTICE OR A HEARING, THE CONFESSION OF JUDGMENT PROV/SION IN THE NOTE ALSO COI\ITAINS LANGU4GE THAT
.....OUlD PERMIT LENDER. AFTER eNTRY OF JUDGMENT, TO EXECUTE ON THE JUDGMENT BY FORECLOSU.G UPON, A'JirACHINtO.
lEVYlllIG OM, TAKING POSSESSION 01" OR OTHERWIse S!:IZING MY PROPERTY, IN FULl OR PARTIAL P"YMENT OF THE JUDGMENT.
HOWEVER. LeNDER MUST PROVIDE NOTICE To ME UNDER APPLIClU3LE LAW IN EXECUTING ....NY CONFESSED JUDG~ENT. IIlI
EXEClJTlNG THE NOTE, BEING FULl.Y AWARE OF MY RIGHTS TO ADVANCE, NOTICll AND A HE~IIIG AFTER JUDGMENT IS NTERED
ANe BEFOAe EXECUTION ON TtlE JUDGMENT, I AM I(NOWINGl,\" lI'nEU.;JGENTLY AND VOLUNTARILY WAIVING THESE RIG S, AMP I
EXPRESSLy AGREE AND CONSENT TO lENDER'S EXECUTING ON TflE .JUDGMeNT, IN ANY MAriNER PERMITTED BY AP/:-L/CABLS:
STATE AND FEDJ;:RAL LAw. i
c. AFTER HAVING Rl:AD AND DETERMINED WHICH OF THE FcLLOWIIlIG STATEMEN'ts AflE APPLICABLE, AHD By' PLACING My
INITIALS NEl/T TO EACH STATEMENT WHICIi APPLIES, I REPRESENT nt4T: i
DISCLOSURE FOR CONFESSION OF JUDGME:NT
INITIALS
THIS OrSClOSUFlI:: HAS BEEH SIGNeo ANO SEALED BY THre: UNDERSIGNED.
~ ~
J:'~'::-' .m"-~~~E ....-.. ~-~~~(SEALI
. 'DIANE S, FUlMeR
i
,. I WAs RePRESENTED BT M., OWN INDEPfNDENT LEGAL C01JNSa IN CONNECTION WITIi THE NOTE. f
2. A FlEPRJ;:SENTATIVE OF LENDeR SPECIFICALLY CAU..ED THE CONFESSION OF JUDGMENT PROVISION IN THJNOTE TO
MY ATTENTION. r
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D. I. CERTIF., THAT My ANIlCUAl II\!COMt: EXCEeDS S10,OOO; 'tHAT THE Bl.Il.NI(S IN THIS DISCLOSURE WERE FILlED 1+ WHEN I
INITIALED AND SIGNEtlIT; AND TIiAT I RECEIV~D .4\ COPT AT THE TIME OF SIClNING. I
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1Y
CASEA PAO, ".g. U.... Pat.' T.IIoI. 011" V.r. 129a (C) CDMconlr"...oc lIl1rlghls (...rw.d.I~A_D3' e!1Z> F3.Z> FUU"flR..LN cOo,Q"LI
r
UJ.I ':::J.I U.J
.lU:.JU
t'Ml1'i'481829
FULM!:RS PCH
LA conSUl LIng
LgJ Ull
1334
COMMERCIAL SECURITY AGREEMENT
Borrower:
TI10MAS A, FULMER (SSN: 18__379)
DIANE S. FULMER (SSN: 19_"-58113)
RR;lBO.ll: 146
W'LLIAMSJ>ORT, PA 17701
Lender;
PNC BANK. PlATIOIiAL ASSOCIATION
4242 CARLISLE PIl(E
OAMP HIll., "A 171:01..a874
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THIS COMMERCIAL SECURITY AGREEMENT I.. entered 11'110 beNrIll!!n THOMlAS A. FUl..MER and DIIINE S. FULME;R (referred to beloll{ as ,
"Gramor"); anel PHe BANk, NATIONAL ASSOCIATION (referred to below as '''Lenaer''). For valu8ble cl)nslclerallon, Grllnlor grant... 10 Lenaer i
a security Interest In the Collaleralla ....cur.. Ihe Ind"blednllSll and agrees. that Lender shall have ttle rl9hl$ statecl In '''Is Agreement wllh I
respeclla Ine Collalernl. In addlllon to all other rlghll!l whIch Lender "'''Y hINe bJl law. ,
DE;FINITIDNS, The ronowlng "lords sl'1e(l heve Ihe lollowll'lg rT1eenlnlls when Used in Ihis Agree men!. Tamm not otherwlee defined In Ihil Agreement I
shall hev.. the meanings Ilnrlbuted to suoh t..rms In 11'1.. Uniform Commerotal Cod... All references to acll~r amol./ms snail meen emo~nls In I'''''/ul I
manel of the Unlllld Slates 01 Ame/'lea. I I
Agreernl!l1t, The word "^greemen'" means Ihls Commercial Sel;lurlly Al:lr_mant, as !hIs Commercial .3ecurily Ag",ement may be amended or i
modified from time 10 time, together wllh all e",hlbits and """"edul.... I\llached 10 this Commercial Security Ag",..me"! from time 10 11m!!.
,
CollaleraL The word 'Collateral' meens Il'I" 101l0lolllng descrlb9d propel1Y 01 Gmnlor, whsll'ler now owned or llereeller acqui"'d, ~h8th.r now
...;sting or h"reallDr arising, and wherl!lller locell'ld; f
All Inventory, chane! peper, lICCOU11Ia, eqUipment and general Intangibles, Ioget/ler wUlI Ihe follOWIng speolllcaltY described
properry: tNSTR,UME'NTS AND DQCUMr:NTS' ;
In addlllon, the word "Cellateral" Includes BlIlhe lollowlng, whalher new oWned or herellller aO'luired, "helher now ,,;o;Isllng or her~a~er arising. I
and wnarever loolllad: ,
(a) All e!1achments. accesslol'ls, accessories, tools. parls, =uppl[es, IllQreases. and addlllons 10 ano all replacerT1enls or end SU~Slitullo ns lor I
any property described ebove. : I
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(b) All products ahd produoe 01 ~ny 01 the prop..rIy dsscrlbed In Ihls Collateral sliIctlon. f I
(0) All ea::oul'Il., general Intangibles, 'Instruments, mnts, monies, paymel'lts. and all other rlghl;, arlsl"ll oul ot " sale. ledse, or oll,.r I
dispos~'on ct any QI the property d"""ribed in Ihis Collelsrs! seelion. , .! I
(d) All proc:..eds (Including Il'Isurance prOCeeds) from Ihe sale, dllGtructlon. loss. or other dlsposJllo, 01 an~ of Ihe property d...~ribed in Inis .
Collateral section. ~ :
fa) All r""ords and dala relating 10 al'lY 0' the pl'l:lparty dSlOCrlbed 11'1 Ihl. CollalersJ "",,1101'1, whllttler In '118 term of a writing, pholograph, ,I
mlcron!m, microliolte, ct electronic madia, together IoIIllh all of Granter's righi, Ilfle, an!:! 'nlereslln Md 10 all compUler sofhws ra'lui,.d 10 I
ulill2ll, creale, maintain, and prOcess any SUCh rOlCords Or data on ,;,Iect'onic media. I I
Evanl 01 Default, The words "Event er Delaulr mean and Include without limltiltiell any Of rhe Evenls of Default sel forth below ih the secllon :
t~led "EvenlS or Default,' i I
COrenlor. The word -Gmnter' lTIeans THOMAS A. FULMER and DIANE S, FULMER, i
Guar....lor. The word "Gull$1lnlol" '""!Ins an!:! Includes \ltll/toulllmllotlon each and all ollhe gueranto"" sureUe:;, and accommodsrlon parties In I
coonecllol'l "'ilh Iha Indebledness. I
Indebledn....". The "'orel 1na..btednas:,," mean" IH" Indebl9dness eVIdenced by Ihe NoIe, Inolualng ~II prlnclp~1 and IntelBst. tog~!har with all I
other Indebtedness and eesls and ellipenses fer Which Grantor Is responsible under Ihls Agl'BBmenl or U ndar any 01 the Related Odeumenls. In ,
aodlllon, Ihe word "Indabtedness" includes all other obligations, debts and fiabililies, pills interest the,'aan, of Granlor, er any on~ or mOra 0/ ;
tham, to lander, as Well as all claims by Lender l\g;llnsl Grllnter, or eny 'me or more allhem, whe~el exlstil'lg now or Isler, Wheiher they ate !
volunlar, or Involunta",. due or nQI due. direct I)r IndIrect, ebsolute or c::onllngenl, liquidated er unliqlJldaled; Whelher Grllnlor may be lIa':>Je I
Indlvld~lIy or Joll'I"Y w~h olhe",; wI\..lher Gll\nlor may be obllgll,tud as gUarantor. su....ly. accommodall"n party or olherwlss: whelher r..co,",,'Y i
upon suell Indebtedness m,lY be or h_tt.... may b!lcoml;l b'lrred by IIny "'eMe 01 IImllallons; end ",r"~ther such indabtednesl; may be Dr .
hereafter may become olherwis.e unenlol'ClJQble, I '
L..nd!l'. The word "Lender" m8Elns PNC BANk, NATIO~L ASSOCIATION,'l'" su""asSCrs and assigns.- ! I
Nole. The Word 'Nola' "''''Ins Ihe nete or oredll agreel11Bnt deled December 8, 2000, in Ihe principal a "",unt 01 :1358,204.00 IrO~'THOMAS A.
FULMER and DIANE S. FULMER II) Landsr. logether with ..II renewals el. -..nsions or. modlHeatloM 01. rellnQncings of, consolid trons Dr and I '
sllbSllluticns lor rne nole or C(1!!dlt agreemenl.
Fielated OOCUlTlenhl. The Words "Releted DOCllm"nls" melln and Include WlIMoUI Iimllallol) all promissory .,oles, "radij agre manIs, loao
agreament., environmentsl "r;;reemenls, guarllnlles, seol/rlly eQ",emenls, mortgllges, <teeds 01 tn.,sl, and all olher In.truments, agr .menlS and
doouments, .....t,sther no'" or herea1tar existing, e:l8culed in connecliol'l wilh the Indebtedness. l
RIGHT OF SETOFF, Granlor hereby gfllnls Lender q l;:ontrac1uelsecurity Inlereslln and he"'byassigns, con'/sy" d"IIvers, pledges, ..nf:uanstars all
or Gramor'. rlgnl, IIl1e snd ;n,s<8,,1 In ..nd 10 Gn.nto,." ""COUnls ...llh Lend..r (whetPIe<' "heck!n;, savings, or some other acc""nt). Inc/udlllg .11
aeeounl. held jOlnliy wi!M somaon" else ana all aa:ounls Granlor may Cpen In lh" luture, S1<lotuding, ho""""~,,, alf IRA and Keogh .c" nls, and all
trusl accounts ror ....llleh the 9ranl 01 q .scurn)' Inlerest ""auld be proMibfled by law. ~ranlor authorlzas Lend"r, 10 the eXlent permilted Yappllcable
Is.w, Ie! charg& or salolt ell Indebledness aglllnst any end 1111 such IlccounLs, end, al Lender's option. te adrr1lnlslrallvely f"",ze all suc accOunls to
.lfow ~ender 10 prolllCt lendar's chBrge and selolf righls prDvlded In Ihls peragrabh. 1
O!lLIGATIONS OF GRANTOR. Gmnlor warranls Ilnd ,,!>vanants te loInder as lellQws:
Perleollon or S..curl'" Interesl. Granlcr Ilg~ to .."ecuta =uch nnenclng st..\e",enls ane! I.. lake whatever olMer "cUons are 'luc:;ted oy
Lender 10 partee. and QOnl/nue lender's security Il'Ileresl In Ihe C!>II..leral. Upon requesl or Lander, Granlor Will dell"er to Lender ~ny and all 01
Ih" document. INldenclng 0.- conslilulln51 th.. Collat..ral, end Granlor .,111 nole Lander's interest "pcn any and all chall,,1 paper II nol dellvered 10
Lender tor possession by Lander. Granlor hereby Irrevocably aull'lo,lzes Lender 10 execute eny docum"'nls necessary to pe""cl oi- to <onlinus
the se<ouri\y Inleres! grented In this Agra..ment. Londer me~ ..I any Ume. and without further Butt. orizarlon from Grantor, ri\" a car~on,
U.LI ';;'.LI UJ .LV. JJ. r=:Jl1..t'k:r(.q'='lt:l::::''::t
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I Photographic lOr other r"PrcdU<:>\ion of lIny finl\n<;zJng sla.emenl Or Of this Agreament for US9 as a Rn"nclng statement. Granto will r"imbu~
lender lor all e"pens.., ler the Plll'1&c!/Dn and the oontlnuallDn of 11'111 perl&cUon of L..n<;ler's SScI,lri!y Interest '" Ihe Coliatel'llJ. G 'anlor prompt
""11 notlly lender befDre an)' changllln Grantl;lr's na1Tl9 including any ohanga 10 fha aSl;Um"d bUsln""s names or COronlor. Thllll~.. cont/nuln
SeCUrity AlIreemunt and will conllnlle In elfect even Ihoug" all or IIn~ Plll't of Ihe Indebtedness Is paid In 11,111 and eveil thoUllh for ~
period 01 lIme GranlOr """'IlIotlle Indebted 10 Lender. r I
No \tlolallon. The """"utlon an<;l deUvery ollhls Agreement will not viole Ie any law or agream..nt ~ o""rnlng Granlor or 10 WhiJh Gr.nlor Is .
~ I I
Erdorceablllly of CollQterlll, _ To 11'1.. ..~Ienl trI.. CollaleM11 consists 01 accounls, chaltal paper, or genel"'I'nlangibr..s, Ihe Collale"'~ is enforceable
In aCCordance with lis ~rrT1S, IS genuifl8, and complies with applicable l.aw:. c:onoer'ning lorm, ccn!e"t and manner 01 preparallon ~nd eXaculion'
an" all persons Bppeanng to be obhgat..d on 1110 Collarer.., haw aulhOllIy and capacity ID contraOI anl:1 ara in raet oblJgElted as IhelJl app..ar 10 bJ
on Ihe ColI~leral. _At the Ume ..ny '""COUl'l b9C:omes SUbject l<;l a security Imatestln favor or Lendllr, tha aOCQunl shall be a good and "<Illq
accounl rep="nhng an t.lndls~uted, bona fide Ind..blaC!"ess incurr&;ld by Ih.. aeoounl debtor, l,lt merc/'1andtse held subjejtct I" de!iv....,l
Inslructlons or therelelore Shipped or deliv"r"d pursuant to a contract of sale, Or for servlo"", ther"lcrora performed by Grantor Wilh or lor rh~
aCCOUnt deblor; th..", shall be no seloffs or oountBl"Clllims against any Eluch aecoun!; and no "g,'eemenl Under Which any ldeductlon. o(
diSCOUnts may!l.. clalm"d shall have been mad", with th" eCcount deblor elrCl!lpt those disclosed to 1,E>r1der In Wrilll'lg. f '
' Loeatlon of lI>e C.:aIlIltenlL Granll:lr, upon "'quest of lender. Will d..,iver to LandB! In form siWsleelol'Y to Lencl"r a schedule 01 h.el propertieJ
and Collateral [ocations relating Ie Grantor's operations, Ineluding wII"out Iimltalion the 10llowing; (al all real properTy ol'lned or belng purch.sec;
by Grantor: (b 1 all r...., prOP..rty beIng rented Dr leesed by Granlor; (clan slorage lacilllJes owned, renll~d, leased. or being used by Grantor; an'1
(d) all olller properties Where Collaler-aJ is or may ba 10Cl!Il"d. Except;n Ihe ordinary course 01 it" busin..ss, Granlor shall nt>l remove thEj
Coil<lleral ,,"om jjs 8>:isting 10Callons "'lIhoUI the prIor 1lI"""n l;Onsenl of L..nder. I I
Rem 0"'" Df Coll/Jt~aL Grllnlor shal kaep the Collalaraf (or Ie the e:dentlh.. CeI/Gleral co""jab> of ilt"-~gible Prap..rty such as aceoun!.., the!
records oonc..mfng l~e Col/alBtal) el Granlor's addl'llss shown abOve, or al aUoh ath..r I~tlol\s a. lira ll""..plab'a 10 Lender. /5:a:ept In the
ordinary course of Its busln""., 'ncJUellng Ihe sales "r Inllentory. Grantor shall 1'01 r..mo"," the ColIll.h;,rallrom lis exl$lIng locallons ~lhout 1'10 orio~
wrillen consent 01 Lander, To Ine sxtenl Illatlhe Collateral consists 01 vehfcles, or other lill..d pro~,rty, Granier shall nOl lake lor permll 'nyl
acllon ""-/licn would r..qulre applioaUon for cerlifl<late" 01 UIIe ror !he vahicl... oul.ide the Commanw"'1lth or P"nnsylvania, without tJie prior wrillenl
consent of Lender. j I
Tnon-""lCtlons InvolVing CD.IaI.ral. Ert;"pI for Inv..nlory sold or aecqun!s collect..d in the ordInary I;~wse 01 Granlors business: Grantor shail
not sell, oll..r 10 ...1" " olherwi.... lr..nsler or dispose Of the COll8leral. Whil.. GrMlor Is not in d..laull Under IhJs Agreement, Grtntor may sell
'Invanlory, but onJy In Ihe ordinary cou"'e 01 its bllslness and onty 10 buyer1; ~l'Io quaUly RS.. buyW' In trle ordInary course of blJ5inloss. A s.le Inl
the ordinary COUrse Of Grantor's business does f'lallnclude a Ir"nsler In partial or lolal satlslaoUon 01 a debt or any bulk .ale. Gnllllor shall nol
pledge, mortgage. "nc:umbar or olherwis.. permlllhe COllatBraJ 10 be sUbj",,! to any lien. S9Curity Interest. enoUmbronoe. or charg.., ether than,lh"l
security InlE>te5t ",rovier"d for In lhis Ag",a",en~ withoul Ihe prier Wrillen consenl 01 Lend..r. 'Tl,ls Inc/Udl~s secu~1y inlernst. ..v..n "!Junlor 'n tight I
10 the seourity intarasts granted Und"r Ihis AgraernBJlI. 1J"less Wal\o'lld by Lender, all Pl'oc..eds from llny ~Isposlfion or tll" Cellateral (lor Whatever I
reeson) shall b.. held In IrusI lOr Lender and shall not be Commingled 11I111'1 any olher fU. nds; proVlr.'"d however, this "'qulre~ent shall nOI'1
,eonslilura consent by Len""r 10 any '<llIe or other dispOSition. Upon reeelpt. Grantor s~all Immadiately d~jlver any such proceeds "'Il..nder_
Title. Granlor "'pr"sEmls and Warrilnls 10 L..nd.... Ihal It hold. !load and mark..tabl.. UIIe ID [he enllaleral, 1me and clear of II all ~ens and,
,encumbrances !!Jieepl for the Ilen 01 tINs Agreement, No ~ru!lncing slatemenl covering anI' 01 Ihe COIIMllClI'lIf Is on ~Ie In any ",Ubi ~ ornce other i
than thos.. which ...."ect 11'1" security ;nl",resl er98tad by tnl~ Agr""m..nt or to "'hich Lander has SPlIJC,i~caJlY eoos..nred. Granlori shall deISM I
Lendar's righls in the Collaterol againsllhe oI..im~ Ilnd demllnd:s of !III oilier persons. I
Col....teral Seheclules Ilnd Locations. As allan aQ Lo;Jnder shall raqiJino, and Insofar as Ihe Collaleral consist. of il.Cl:ounlsl ana genotall
intangibles. Grantor sl1>lll deliver 10 Lender sell"d,,'... of 'ueh Collllleral, Includinll such Information ...~; landar mllY r....ulre. Incl ding ~'lhoul ,
limitation n!lm"s and addressas 01 aCCounl debto.,; and agings of ac~unls and genaral Intanglble!l. Insofar as tha Col~"" I consISts 011
inv..ntery and eqUlp",..nl, Grantor shall deliVer 10 Lande., illS often as Landar Shall raqulr... sueh ~sts_ da.crlptions, ahd design Ions 01 suoh,
Coll'lleral as Ll!nder "'..y requlre to id..nHry Ihe nature, extent. and location of SUCh Collateral. Such intarmatloh shall be Gubmilt d lor Gr~nlor
and ea"n of its sUbsidJarlas or rnlaI..C1 c:ampanilis.
Maintenance ..nd IlUlpecllon or Collllleral, Grantor shall maintain all tanllible Colllllliral In gOl!d condlllQn and r..palr. Grantor W I not commlr
or parmlt damage to or daslrucllon or Ihe Colral..ral or ."y part of tha Colllllera'. Lender and hs d..sl~ naled representallves "-n agents snail
hB"'a the righl at all "'"sonabl" timBS to azamirJ8, Inspect. and audil Ih" CoUalloraJ wherever localed. Grantor Shall immedliJIBly n Iry lender 01
all""""," Involving lhe return, .-..j..CliQn, reposslisslon, loss Dr damaQe of or 10 any CollataraJ; 01 any ....quest for credit or adJu.lm!>nt er of any,
olher dispule arising >II~h respeello Ihe COllaleral; "nd gene'ally of all hap",enlngs and events llflgcling Ih.. CollaterElI or the value tlhO amount I
of the Colla ~ral. _ I
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,ues, AS~$Smenl!l....d Lh,n.!iL Granlor "'ill Pay when dUe a" tazes, aSS~m..nls and liens upon Ihe COllateral. its us.. or opa'all n, Upon Ihi. I
Agreemenr, lip on any Flromlssery note or not..s e"l<;leneing Iha Indebtellnliss, or Upon any 01 fhe Olher R,,'alBd DOCurnBn~_ ranlor m.y I
.,.,itnllold any SUch payment or may alect"" conlest any rian if Granlor is In Iload faith conduoting an apprepriatE> proceeding '" contasl the,
obligation 10 Pay and so long IlS Lender's In'..r"",'ln thli Collaklral is not j",cpardIZlld in Lender's sole opinion. If tha Collarer,,1 is st.bJecled 10 a ,
lIen "'hlen io: not dlscharg8d wilhln ijrte"n (15l dll~, GranIer shall c/eposil wllh L..ndar cash, a sulllel"nll:Orporata SUlety bona Dr iDther security !
salislaclory to Lender in an amounr adequallllo provldl:! for th.. discha'tle of th.. lien plus any Inta",st, OOllI!<, atlorn.rys' lees or Dlhe!Chsr9as Ihal
=uld .ecrue as a resul! of loreclosure or sala 01 the CoII..t..ral. In "ny com"" Granlor Elhall defen<l it"..I' and Lander l\nd shall sa isry any 11'1.01
adva/1le Judgment belor.. enforcement against the COllateral. Grantor .hell name Lander as an "ddlllonaJ obligee und,.. any suraly bond
rurnls^ed In lhe lOOnlc:sl pro""..dings_
ComPlIance With Governmental F1equJremenls, Grantor sll11l1 COmply prompll)' with ail I....s, arclinances, rul... and regu lions Of all I
ga"Wrnme..laJ autherJ~lI$, now Or heraarter in erreot, applicable 10 11'1.. ownership, producllon, disposlUon, or !Jsa of tha Callaler"l. 'Granier may
contest In 900d ralth any SUch law, ordinanes or "'9Ulaff,," Bnd -itllhold complianca <lUring any prOcee"-'n9, ;nclUding "DProp (ItU1 a;ppel:1/::i, $0 I
lon9 as Lana",,'s inlarest in the Colf",taral, In Lander', opmian, I. nal jeopardlil:ed. ,
I
H1IZ8rdoua SUbslances. Grantor reprBS<ln19 Bnd Warrants that Ih.. Coll"teral ne""r lias been, aM n"'..r ",ill Oe so long a. thl Agreement i
remaIns a lI..n on Ihe Collateral. used for Ih.. gener"lion, rnanulilcture. slorag", tranSPor'lallo'1, t",alm.."" disposal, release or threElti!ned raleasa I
01 any h'il:ardous "'lIste or subsla"ca. 8.S Ihose I..rms ano da~n..d In the CblT1prehenslvg EnVironment'" r!"sponse, CompanSlltlon.l.and lIsbilily
Acl or 1980. as amendad, 42 U-S.C. SecUO"l gSOI, et seq. ("OEFlCLA"). lhe SUpertund Ams"<Itnanl:!: and FlI~ulhorizalion Ac1 01 19861 Pub. L No_
99--499 (-SARA"). 1~8 Hazar<loUS JIIIa18ri"ls iransporlaUon Acl, "9 U_S.C, StretlQn 1801, et ""'10. lhe Flesourr.e Conservallon and Rec~.."ry A(:~ 44
U_S,C. S..clion BOO 1 , et seq., or Oln..r applicable sial.. or Federall"ws. rul..s. or regulllllons adoptad JOursullnl ~ any Qr Iha foreeOiflll. Tho {.rms I
-ho:>ardoU5 Wasle" ana "hazardous sl-'bsrallce" snail ,,1'0 InclUlle. wilhoUlllmilation. Pelmleum and pstroleL m bY-prOducts or any fraclion thereor
and asbeslos. T~" reprBSa""'licns and warrantiotS conlalnad hEll'tlln arB be.ed on Granlor's dUe dirtgenca in in"8!i1l9a~<1\l Ina fella1eral tor
he...rdous wasles and Sub"tanc~. Grantor nereby (a) tel...."... and wa;_ any rutur.. Claims ag"inSI Len'ler For inel..mni~1 Or conlriFullon in II'.
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FULMERs PCH
COMMERCIAL SECURITY AGREEMEN"r
(ContInUed)
.!.l\. \"'UllbUl.l..l.llK
LlfJ Ul.J
Ei3"1 P12
JAN 21 '03 10:59
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JRN 21 '03 1121:57
12-08-2000 COMMERCIAL SECURITY AGREEMENT Page 31!
Loan No (Continued)
avanl Grantor beeQm.... liablo rer deanul' or other eMb under any sue'" 19,ws. and (b) agrees 10 indem"ity and hold harmlsss Ls der again.. I
any and all claims and losses rSlll,llling from a breach er this provision Qr Ihls Agreement. This ebllgallQn !o indemnify shall survive he paymen: I
ollne Indabladness and lh" salislaotlon 01 this Agreement I
"'alntenanc:e 01 C~Blly Insurance. GranlO/ shall procure Md malnlalfl, all risks insurance, Includln~ withoul IImllaUon lire, tn.~and lIablll'y I
c'overage together Y'llh suci'l olhar insuraMe as Lendlar may raqlllm with respact to Ih" Collal"ral, In form, amounlB, coverag and baSiS
reasonebly acceptable to Lender anl;llssuad by 8 company er companies rS8.onably aoceplabls 10 !""nder. Granlor, upon reque t of l.ander, I
will deljver to Lender Irom lime 10 lima Ihe policies 0, certmeate~ ollnsuranc" In lorm sati.faolory to L8,'cler, inc:Judlnll stipulations Ih~l covB"'g.' '
will nol be c:anC8l1ad er dimi"lshed without at leaslthlrty (30) da.,..' J)rlor written /lotios to Lender and not.includlng allY dl."laime, ofrthe Insurer','
liability for failure to give such a nolic... Eac~ insurance policy also shall indude an endorsemem providIng that coverage In lavcr~f Lender will
not be Impaired in any WilY by any IIQt, omissIon er dsfautl or Srantor or ..ny other parnon. In connection with a.1I porlCies Cove ng ass.ls in
which Lender hOlds or is offered a S8Cul'lIy Interest, Granlor will plollide Lender with such loss J)lIyabl.. or olher endorsem..nls a LEnder may
requir.. If Sramor at any time fall= lCl oblain or mainlaln any insurance as rsquired undtol' this Agreem!lnl. Lender may (but shall nol'ba obligated I
to) obtain such insurance.... Lender de..ms appropriate. Includln\j if It so chooses "single Inlerwt lI1Surance," which "'III cover <ilnly L.nd.r's
in""rest in the CQllalemL : I
Appllcllllon or In"ul1Ulce' ProQeeds. Granlor shall prbmptly noUIY Lender of any less or dllmage 10 ihe Colla1eraL Lena", may ~ak" proof of I
loss If Grantor fa"s 10 do SO wilhln Rfleen (15) 1:I"ys of Ihe casually. AlIl'roceeds of any Insurance on ':he Collater"t, Including accrUed proceeds,
thereon, shall be h..ld by Lender as part of (he Colla tarsi. If Lender con."nls 11:1 rel'air er replacement ollne damaged or desb"ay~d Collateral,
l8nder shall, upon sah.factOl'Y preel of expenditure, pay 0, Illimburse Granter trom the pl'Ocseds lor t"e rsasonsble cost of repair ~r ,eslar"I'on. '
II Lander does net conaent to repair er replacement of the Cellateral, Letidar shah relaln a sufficient amounl of the proceeds to ~I\Y all of 1I',sl
Ind9bl"dness, and shell pay the balano," to Granier. Any proeeeds which 'have not been disbursed within six (6) months aller Ihetr 'eoeipl ~nd ,
\Uhlcn Granlor has nol Com mined to Ihe repair Qr restoration at the Conaleral shall b.. used 10 prel'''Y Ihe Indebtadnass. .
Insur....ce Resen/es. Lenclar may require Granlor to malnlaln wllh Lendor f'eSEllVGf; lor paymenl of In=lUranc" premiums. which rEl.~rvBs shall ~e
craaled by mClnlhly payrnenls from Cilrllnlor of a S!.lm astimahld by Lender 10 be sufficient to produee, at leasl fitl..sn (15) Claf.; belera the
premium due dam, amounts alleasf eq~ IQ the insurance premiums 10 be paid. "fillaan (15) days before paymenl is due. the laserve funds
ars insunlcien!, GranlQr shall upon demand plIll any dencienc)' to Lend.... lha rase....o lund>; shall b. held by Lender as a genad depcsit ,nd
shall conslllula Ii non-lnterOil'Sl-beartng aCI;:Qun! which Lender mllY satisfy by ~lIymenl of !he Insurance pr"mlums required to be palCl by Grantor
as thay b6Come <I"e. Lender does nol held the reseN" tunCls In IrlJ~1 for GranlOr, IInd Lender Is m'l the agent 01 Grantor for p~ymenl el Ihe
insurance p""mlurns required 10 be Pllid by Granlor, Ti'le raspotJsibillly lor l/le payment or p"'mlums s~lall ramaln Granter's sole res~onsibility.
InSlJTence Flepons. Grllnler, upon requasl 01 lender, sh..U lurnlsh to Lender report= on each .'.;~"ng polloy of Insuranca Jl1e\Ulng SUch
information as Lender may r~Qnably request IncludlnQthe followln,,: (a) the nam.. at the Insurer; (lI) Ihe r151<$ insured; (c) the amount 01 the,
policy; (d) t!le property insured: (<>) Ih.. than cUrr~nt value on the basis 0/ which insUrance has been obtaineClllnd the manner d! delerm,nin~ I
Ihill value; and (I) the expirallon date of !he policy, In addlUon, Granlor sha" upon request by L.end,~r (however nol nIl''''' ollen "'an annually),
have an indepenCent appraiser satisfaCtory 10 Lender asl8rmine. as Ilpplfatble, the ollsh Yalue or l'lipla:eOlent cost of the CellateraU ~
GRANTOR'S FliGHT TO POSSESSION AND TO COLLECT ACCOUNTS, lJ~til de/aUII and I!;Ilcept as I)therwise provided bele'" with res!,eel lei
accounts. GrenIer may /lave goss&ssloll ollhe tangibla par.tonal Proplilrty and benanl;:lal use Qf all1he COllitlefll1 and may USIiI II in any Ibwrul manner,
noll~co""i!l1enl witn lhis Agreem..nl or 11'1.. Related Oocum..nls, prollid..d lhat Granlor's rillhl to posses..ioll and beneflCilll use shall nol apply 10 anYI
Collateral ..,!lere pesse""i",n of lhe Collateral by L.ender Is requimd by law 10 perfal;:ll.lilnder's security hllerasl in such Collateral. tln~1 olnetwlse,
nolilled by L.nder. Grantor may oollect any of Ihe C<Illaleral conslsllnll 01 ac:ounls, At any 11m.. and """I' lnough no Evenl QI Delau~ !.xisl5, Lenderl
mayex.rclse its rights 10 I;:ollecl the accounts Qnd to nollfy account debtor.; to make payments directly 10 l.ender ler application 10 Ihe Indebtedness.'
\I lender at any lime has possession of any Collateral, whelHsr befere '>r ..IIer an Even! 01 Default, Lender shall be deemed to h~ve exerci'ed,
reasonable care In Ihe custody '1nd prsssrvellon ef tM Collal"ralll Lender lakeS such acllon lor thai I:Hsrp.,,;e as Grantor Shall requesl 01as Lender, in,
Lender's SOla discreUon. shall deem apprQpria.le undsr Ih. clreumstancas, but failure 10 honor a.ny ",'quesl by Grantor shall nol of Hsell De deemed 10'
b. a ,fa.ure 10 exsrciae reasonabl.. care. Lender shall nOI bs required Ie take asty steps neC8ssary \0 preselVB any rights In th.. CollalerSl against priori
parties, nor to prolecl, prilserve or maintain any seeurilY Intel'lisl g'ven 10 Sllcure the lndlilbledness. r
EXPENDI11.IRES BY l...ENDER. If nol disc~ed or paid whsn due, Lende' may (but shall not be obi galad Ie) disCharge er paylany amounls!
raq"i""d 10 ba dl."ha~ed or paid by Granlor UrullII' Ihls Agree"',,"l, indudlnll without IImllation aD lues, U,,"s. seeurlly inlerests, encu~brancss, andl
olher claims. 'II any Ilms levied Or placed on Ihe Colla.IeIra!. Lender 111$0 may (but ahall nol bfl obligated Ie) pa.y 811100515 for insuring, maintaining an~
pre.elVing Ihe c"llat"ral All such expendJturas Incurred or paid by l.ender lor such purposes wiU Ihen bear Inlarsst at the rilte Cha.rWBCI under thej
l\IoI8'lrom,lhe date in~Ur"1d or paid by Lender 10 rho dale of repayment by Granlor. All sue" expenses '11'11 become II part Of Ihe Indet,lednm:s 8nd.l
al L,mde,s opUon, "",II (a) be payable on demand, (b) ba added to Ine 1:Ja.lancs of the Nola and be !lp~'ortioned among and ba payable "',Ih any:
Installmsnl payments to bQ<::oma due .durlnll "ither (I) IhB hmn at liny appllcat>1e insuranc.. policy or (Ii) 'h.. remaining h>rm ollhe NOloi. or (e) ba:
treated as a balloon paymenl whloh ",,11 be dUB and payal:llll al the Note's maturity. This Agreemenl '1"'0 will sacure payment Of Ihese amounls. Such:
right shall be In addillon 10 ..II olher rights !\nd remedies 10 whlci'l Lender may be entilled upon the ceCUrren,;e el an Event of De/Quit. :
EVEHTS OF DEFAUlT. E..ch or the lc>lIowlrtg shell constitute an EVIl", 01 DefaLll1 under Ihls Agreement: I
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Oelaull on Indebtedness. FlIilura 01 Grantor Ic mllke any payment when i:tua on the Indebtedness. ~
:Olher DerBUII". FaJlu", of Granlor Ie cQmply With or to psrfcrm any other: term, obligation, COllenan! ,r condition ccntained In thisl Agreement o~
.n a.ny of the RelalQd DOCUments cr In any elh",r '1greemenl b..lWe8n Lander ane! Grantor. 'J'
O"laullln F......r of Ti'llrd Pllr1leS. Should ~orrC'Mo' or any Granlcr delll~~ Under any loan, extensiOn 0' crl'dit, SI!lCU,ily agreemeJI, purcha.e o'
seles agr:""ment, or any o,lhar ..gra..ment, 'n favor /If any other creditor or parson Ihat may ,"alalially affect any 01 Borrowe~s p'operty o~
Borrewer 5 or any Gr..nlor s ability te repay the Loans Or pllrform thalr respecllllrit obllgallons Under Ihis Agreemenl Qr any ~f Ihe Aelal.d
Documents. ~ '
F"ISA!! S'8Iern"ot.... Any wa"'an~y, r"l'rassnl"~on or slalemen! ma~e er furnl.hed to Lender by or On behel! Ql Granier UnCIer thl~ ~gr""men/. lh~
Not" or Ihe Relllted Doeum&nls IS false Or misleading In l\ny ml\ler'lill1Ospecl, ..lIh", now or a.llne time 'Tlad~ Or furnished. r
,
o<:l"cllve COIlOllerellzatlo.... This Agreement 0' ..ny c/lh.. Related Do~urnanhl caas"~ ,,, boo in fUll foro::e and erract (incluoingi i>lilure 01 .n~
collalaral documenls to creale .. valid and I'erfacte<l seCUrity Inlsr.... or lI..n) al any lirn.. and 10' any reason. I
Death or lnsalv~",cy. The death 01 Granlor or !he alssoluUon 0' lerminatlon. of Granlor's eX/etenc:e as a going business, Ih~1 in'olvency cl
Grantor, the "l'pOlntment of II recel"er ler any pllrt of Grantor's prcperty, any assognrnen. lor the bene~1 of <:red;'o"" any type 01 cr~dltor WOrKovl;
or Ihe ccmmencernBl'lt 01 any proceeding under any ba'1)r.",plcy or In.olvency la",: by or against Granl'~r_ ~ I'
C"'dflor or Forfeiture ProC88dlnlla. CcmmanCl;lmenl of 10rllCfasura Or lorfeiture prOt:esdlngs. whather by jUdideJ l"or.e"d~ng. sell-help
repessesslon or any elher lTIelhod. by any cnodilcr or Grllnlcr er by ..rty governmental agsncy a9.;.;nsl the Collat.ral or any ~ther callaler.
securing the Indebrudness. Thi. includes it g..rnlshment of any Ql Granlor's "..pOSit accounts Wll~ len'~er_ i I
Fl..lLMERS PCH
1334 Pll
V_L' ".u V" .LV. "" 1'57137481829 FULMERs PCH E:::34 P13 JR~~ 21 ' 1,13 11: (llj
COMMERCIAL SECURITY AGREEMENT ! Pagel 4
(ContinUed) I I
: I .k
EvenlB Affecting COllarenlDt. I\ny of 11'1.. pre~edrnll avanls o"c~rs wilh respB(:1 to "ny Guaramor 01' any or Ihe )n<:lebtedness or ~UCh GUarant~
dies Or becomes Incompalcmf.
AdVerse Change. A material adVerse clt"ng" aceUJ'5 In Gra"tor's ilnan~lal conalllon, or Lanller oell8vBS Ihe prospect ~f paY"'enl of
_ performance 01 Ilta Indebtedn...s Is Impaired. I ;
RIGHTS ANI) REMeDIES Olll DEFAULT. If an E""nl 01 Cefllull accurs under litis Agree~nl, at any lim" Iherea1ler, Lender shall hava_~1I the righb; c\
a s~cured par1y under Ihe Pannsylval'Jla UlllIgrm COlT1mercfaJ Cllde. In addmon and wlthoulllmitll,Uon, L. nd"r may a..-on:lsa "ny one fr mare of (hil
follOwing riglt's and rem"tjl8S: i
Accelerllle Indebtedness. Lendsr may deefa'lllhe anfire IndeblBdn&.ls, Including any prepayment J:'''l'Ii\lty which Grantor Wouldlbe reqUired I"
pay, immediately due and payable, without nollc9. I ,
. A&SI!lllblo Collateral. lender- may requl", Granlor 10 deliver '0 I..ender all or any poJ'!lon of Ihe Co11aleral and any and ..1/ CBri/fIc~I"" ollllle and
other docUm"nts ""/allng to th.. COllallilral. Lender may requlno Grantor 10 Iissemble the Collal"rlll an j make It S.vaJI.u.le ID Lond~r at a pl.ce Id
1>0 designaled by Lender. Lender also snail ha"", fUll power 10 enler upon the properly of Granbr to taka possessl"n of arid remove thf.
CollataraJ_ II Ihe Collalernl cOlllalns oth..r goods n"l COvered ):oy -Ihis AQr&ement 101 Ihe lime Of repc>,;sessJc"" Gtanlor agrees L"hder may t~i<"
SUch other goods. prO\l!cled lhat L"nder mak.., nollsona"le oIforis 10 r..rum them to Granlgr ell..r repos ;"'5slon. I,
- Selllhe Collale",r. lender shan hllVe lull pOWer 10 sell, lease, tranSfer, or otherwise e1eal wilh the Collaleral or proc,"eds !hereof ,,* Its own namd
. or that 0/ ananlor. L.and"r may sellin.. Colle.l9raJ lit Ilublic ..l.Iollon or "rlvale sale. Unlass Ihe CDllalel'af Ihmatens 10 decline spee~ily in valUe o~
Is Of II type eUslomarlfy sold on Il recogni2lld rns.tI<8t, I.ende. ""ll give Grantor reasonable notic" 01 11_., I/me afll!r whloh any prlv~jg sale or .n~
olher Int..nd8d dlsoosillon of the CoIlQleral is 10 be made. The requiramenls 01 re""onabla notiCE! shall be met II sllCh nolloe is giwn .1 Je~st te~
(10) days bafore lit" limE! of the sale or disposillon. All e~pElnsBS relallng to 11'111 disposition 01 lI>e Colleleral, Ineluc;ling without limlls'ion th~
"'penses or relaking, hOlding, Insuring, preparing lor ~'a and s..lling the ColJaler~I, 51'1<\11 become II part of tne Indebtedness s~cur.d by Ihd
Agreement and sh"lI be payable on delT1and, wltP1 inleresl at Ihe Note r...1e from dal.. of e~pendilure until repaid. ,
APPoint Receiver. To Ihe extenl parmittad by appllcs!>l" laW, Lendar shall havlllhe /ollo"'lng rlghls and remadlr.i regardIng Ihe .bpoinlment 0'1
a mee/ver; (a) Lender may nave a r~VI!r appoifl"'d as a mallBr or nah!, (b) 111" receiver m..y bll an "mployee of lender ;;:r:;d may SBrve
wllheut bond, and (c) ell lees 01 Ille receiver and his or ~.,.. allorney shall becDm" part of IhtllndBblBdhess seoURld by Inls Agreemenl and snal~
Oe payaoJa on demand. ",ilh In''''rest at 11'1.. Nole rale from data 0' expendlfu", until rep41d, ctl I
Colloct Revenues. ~llDly Accounta. L"nde., elltlar its..11 cr 'ltrough a "'o..iver, may oolki!;llhe paYments, "'nts, income, and ra ues from 11'1"
Col'ate",l. Lender may at any fims in ils dlse...tion transfer any Collaltlrallnto 11:5 own name or !hal '" its nominee and receive e p'~ments,
renls, income, Il(ld revenues therefrom and 110ld the same as sE!<lurtly fOr Ihe IndabtednlOSS or apply II to payment 01 the Indebte ness In suchl
. order of preference as lender may delermlne. InsD'ar as the Colla/eral oonslsts of !lCcgunls, general Intangibles, Insurance pollole~. Instruments'l
challel paper, Choses In adion. or sJrnllar propgr1y, LendS( may demand, coll..cl, recelpl lor. sellle, compromise, adlust, sua to<J loreclose, or,
realize an 11'10 Cellale",1 .s lender may d..Iermlne, IIth"Iher Or not IndeblQdness or Collalsr.lls Ihert due. For these pur~oses, Le/nder may. ""I
behaJl of and in the name of Grantor. race/lIB, Op"n an" dIspose o( ml\i1.\1ddreS5ed 10 Grunll;>r; change .ny aClClress to "'hlch man and paymen",!
are Ic be sent; and endcm;e noles, <:1'1"Oks, drall!;:, money orders, dooumenls 01 tille, Inslrumenls and i'!ems perta,lnlne 10 paymenll sn/pmen!, orl
.sloral/e of any CellalerQI. To faeilil.Je colleol/on, Lender may notily ,ccDunl deblor.;; and obllgol'!: Dn aTIY Colla!arallO make paym~nls <:llTeolly 101
~"n<:ler. t
'Obl,,'n Denclenl:Y. "Lender cl1oos;'" 10 Gell any or all gf the Collat"Tal, lender' may oblBln a. judgmenl a!;lainsl Grantor forny deficiency I
remaining on the Indebledness due ID Lender aIIIor .pplleallcn of all ..mounts TeC9;o"ed frDm 11'1.. E!XarelSiI' al Ill.. righls provldecl In Ih A9reemenl.1
.Granlor shall be lIaole fer a <:leHolt.ncy even If th~ iranellclJon deScribed In 11'11: SUbSBCtiall is a sale of ..ceoun", gr challal paper_ I _
.olner RtghlB 1I11d R"m~!L Lender shall h.ve all Iha r1ghlli and "'medies of a se"'Urad aadihr uncl"r the provislans oj Ihe Uniform.1
,Comm..rcial Code, liS ma)' be amond"d frem time 10 lime. In ademon, Lender shall have and may exerCise .\Iny or all other rlllhts a~d remadles Ih
ms~ have available alia.., In eqLJlly. Or olherwise. I
CUmulallve R"ntedJtl,.. All 0' ~"nder's rights and remlld'es, whelher ev1C1anced by !hIs Agreemenl or the RelaleCl Dooumenls orl b~ any olher II
writing, SNail be CUmulaliv" and may be SXerc::I....d ~Ingutarly Dr CQnCLI"'en!ry. Eleollon by Lender to pUn,lUQ any remedy Shall not ..-.!cJUde pUr7i:ull
01 any olher rB",..dy, and an election 10 malle exp"nditures or to lak" a<:1ion 10 pe,'orm an obllglltlon or Grafltor under this A9tmem, aner I
Granlor's rallure 10 perform, shall nOIl(lfecl lend..r's right to declare a defaull and 10 exercise lis rem"dle".
MISC;:ELLANI;OUS P~OVISIOIOlS. The following miscellaneous provisions are e: pan or this Agreaman~ r I
AJ1Iendmtlnrs. This Agreement, toge!tler with any Fiala!"d Doouments. constitutas the antire underslar'lclng and agreement or thJ parlJes as 10 :
the mallars set lorth in Ihis Agreement. No altllfation 0' or amendlT1"nllo litis Agreemenl shall be elfacti lIB unless give" In wrlllng .;r;d signed by I
Ihe party or parties sought 10 be charged Dr bound by Ihe allOlrli\llon or amendm"n" I I
Appl/ClIDre law_ This Agl10emenl Itas be..n dellVl!red to Lende. and aO:cQpmd by Lend". In Ihe COmM'IQnWeallh of pennSYlvania_I: If lh~re is "-
lawsuil, Granlo, agreBS upon Lenders reqUros:t fo submit fo the jurisdicllc/I1 of the courts of Ihe ComM'lonwQ1ll!h 01 PennSYlva"la. Lender and ;
Granlor hereby wai"" Ihe right 10 any Jury trial In any action, t;lroceadlng. Or counlerclalm brought by eftl,er Lender or Granlor agai Sf the olher. !
This Agraemenl shall be governeCl by and conain,Jed In accordance with thala"'" of In.. Commonweallh c,l Penneylvania. i
Allorn"ys' F"ea; Expen....s. Grantor agrees 10 pay Upon Clemand ai' 01 Lenders cosls and "xpe"""",, Including allorneys' Ie... nd lender',
legal expenses. incurred In connaclion ...111, the enforcement or Ihis Agreemen'- Lender may pay ~ameone else 10 halp enfet"e lhi Agreement,
~na Gr"ntor sh..tl P'ly lh.. cgs1s and expenses of such "nforeel'l1ent. Casls and ElXpenses Includ.. l"neler's IIlIorneys' lees and le~al expen$es
whelhar or noJ lhsr.. is .. lawsull, InClUding allorll813' lees and legal ex~/'I!Ies ror bankruplcy proceedings (and Including ",,0""1g modify or
vacale any aulomlllic sl~y or InjunclIon), aPPBll,ls. and any anhciparGld POSI-JUdgment collscl!on servJ"",.. Gran!or also shall p~y I eoun cosll;
ana suoh ad<:li~onaJ fe..s as may ba direelec:t by Ih" OOUrt.
Cap lion Headlngs_ Caption P1"adlng~ In lhis Agreement ere to< convenl.",c.. purposes only "nd ",re n"1 10 ba Used 10 Ime'Prvt or define Ihe
provlslQns of Ihi. "Gr"ement, _ i
MlJllIl'f.. Parnes. _All obllga1l0"s Of Grantor IIndar Ihls As"'emenl Shllll be )o/nt IInd sevaral, and all r.If.>I-ences 10 Grantor .hail me~n each and
every Grantor. This meaN; Ihal..ach ollhe .-arsons signing O"lov, 15 responsibla lor all obligatiOns in this A9",emenL ;
Holices. AI! noli""" rsqulred 10 be given undar tltls p,grsem..nt shall be lliv:Bn In ""riling, may ba ...nl by lelefaesirnl!.. (unless Olh~rWlse required
by law), and shl>lI be etleQ""e IIYh..n aCh.JaUy d"'i",,,red or ""hen dallosiled .wilh a nallon..lly recognizee overniglll courier or depb.ited In lhe
Unil~d Slales mail, lIrsl class, postolle prep~ld, add/'B!;Sed 10 tho> Darty to "'ltom Ilt6 nollce Is 10 !>.. givlln .llhe .ddre.s ohown ebevb_ Any porty ,
may ch"nge Its addr~ss lor nollCE!s Under this AgrQamenl by giving 'ermal wrlrten noli",.. 10 lha cll1at pli\rlies, spacifying lnet tho pUwose er the
notic.. is fo cheng" Ihe pQr1y's addr..ss_ To Ihe exlenl parmined by applicable law If Iher" i. more Ihan one Granlor, nollce 10 any, GranIer wil!
oonsliliJls nollee to all Grantors, For nolle" PUrpOSes, Grantor w;n keep Lend"r rnlo..m"<:l al al/limes 0' G~nt()r's C~ml/11 addrass(es)_'
Addllion", A!AhorlZa/lon_ Grllntor hereby authDrlZes Lender, with full power or sub~lilution, to eX""'llle In Granlor's n..me an~ Qocumenls
L.../\ \...Ullb lJ..1. t. .1.111S
~UJ..,,*
12-~-2000
Loa" No
.LV. oJ oJ
'5"'1'07481829
LIlt. '-'UU~U.J.LJ.ll~
FULMERs PCH Ei34
COMMERCIAL. SECURITY AGREEMENT
(ContInued)
~UJ.iJ
., 2-011-2000
Loan No
P14
JAN 21
'1213 11: 121121
Page 5 i
f,
necessary 10 pertecl or continue Ih" ...curily Inl..rest granted in this Agreement and, without furlh." aUI"e~tion from GranIer, to iii" a oarbon,
phol"llraphic or otner r"producfion of en~ nnllnclng sllllernenl or 01 Ihi. Agr8"menl lor IJ5a as a ~na"olng sl..lement. Granlor wIll reimburse
Lender lor all "xpenses fer the perl9cllQn anCl oanllnuaUon af the per1ecllon 01 Lande,'s security Interns; In Ih" ColI"IQrBI. Ills I,Ind!rSlOOa ana
~'''!!e1 IlIal "'" exercl.!Oe ot Ihl.. aulhorl_llon bV lender shall be on behall ot lellder IInd nol Cltl behllll or Grlllllor. lend r Is nol on
"llent a, II1IUctary or Grantar. HOWever. In e.leR:ls/ng Ih" 8UlIlort2ll1lon III'IIIIIed 118l'ebV. Lender ll/'JZlII ""!!re'",, rt!llsonable OUUan Ond
prUdonce ana ...ender "1'MlI1 keep tull and llIr;:curale ",cord 01.'1 "\11111", ~(:elpls lInel dlsbur!lllmenlll. :
~oveI1lDln!y, It a <oourt of compelenl Ju'lsdlctlon nnCls any provision of Inlli Alireemenl 10 be Invalid 0' unenforcBable lls 10 GrIv person or
clrcumslance, SUch nndl"g snall not rander Inal ProviSion Invdel or Unanlorcaable as 10 any Cltner pal'sons or clrcumslancre. If ""sible, any
such offending pravision snall be d8lHT1ed 10 be modirie!5 10 be wlll1in lna limits of enlo'C9abilily 0' vai<dity; however. if fhe orr"ndihg proviSion
cennol b.. so modlfled, it shall be ~trickBn and all olhar pro...lslons of Illls Agreement in all elhar "",peets "hall remaln \lalld ~nd enforcfeabl8.
Successor Inlefest". The t"rms 01 1"ls Agreemenl sl1"/I ba binding Upon Granlor, Md upon lOr 1'110"8 heir;;, pe~onal """,}esentatlves,
SUccessors, and assigns, and shall be emofCBable by L.ender and Its sUcces~olS and assigns. i
war...",_ Lende, shall nol b.. d....m..d 10 have waivad any Iighls under lliis Ag.....menl unl""" such IIi'aiver Is "Iven In wrmng an~ signed by
Lender. No d!!lay or omission en the part 01 lender In eXen:lslng liMY rlghl Ghllll Opel'lllBas a wai"'er 01 51JCn "l;Iht or 'lny olner r'9ht IA waiver by
w.nder of a provision of Ihis Agreemenl shall not prejudice ..r consdtu18 a Waiver 01 Lend...'s right olherwise to Clemena sDiet cornplianCll wil~
Ihat p""vision or Gny olha, provlslon '"this Agrwemenl No p,lo< w..I....' by '-,,,,der, ner any cou",,, 01 dealing between Leno'e, .nd GrQnlor, shall
oon.tIlule a waiver of ...ny 01 Lender's rlglll. or of anY of Grantor's obllgllflo~s as 10 MY lUlU'" Iransaollons. Whenever Ihe consent lor Lender 1$
n:!qulred under this Agreemant, ine gr"nflng of SUch oons..n! by LBnder In any Instanoe shan not oonslllU!l' cQntlnulng consenl tojsubs8quenl
Inslances whem such consent Is reqUired and in all cas"s suo/' consent mllY be granted or wlfhhetd in th.. sole dlscfQflon 01 Lender./.:
EACH GRANTOR ,",ClCNCWLEDGES HA.VING READ AlL THE PROVISIONS OF THIS COMI\IIERCIAl ~>ECURITY AGREEMENT, AND EACH
GRAIiTOR AGReES TO ITS Tt!RMS. THIS AGREEMENT IS PATED DECEMBIOR a,200D. ,
~_~.n~~'~~
...........,.,......,., ................. -...., ''WW.JI ... ~ "",...... .....
. .' .... -~~I~ !I'll.. ".'.,,'"
. . ol '... . ! ~M. X..., I. .
MAS A, MER -.. . $, FlI.MER .
. '''"::''~~~AAJ;:
LASER ~~o. All'. U.s.. Pal. &. r.M. orr.. Vi!lI". J.1iI9~ (0) Ccru:en're:':20oo AllrJght.$r'.ur~d,.lPA_E4D Ea.~i1 ~G.2'iJ FUt.MER&,L.fIlI 031),0\11,1
.. " .
EXHIBIT '0'
'r,o 515 0577
. .,
January 14,2002
o PNCBAN<
Thomas A. Fulmer
Diane S. Fulmer
333 Ertel Road
Williamsport, Pa. 1770 I
RE: Loan Number: 31702714 - Notes~1071257)~160452,nd 601074355
rttGO JAN 1 , ~
Dear ~/fr. ~vlrs. Fulnier:
Please be advised that you are in default under various financial covenants and terms of the Loan
Documents relative to the above referenced loans. Said defaults include but are not limited to the
following:
I. You have not delivered to the Bank, within 120 days after fiscal year end 1999 and 2000, as
prepared on a compiled basis by a certified public accountant, financial statements for the
trucking company entity and the personal home care entity.
"Financial Statements" means the consolidated and consolidating balance sheet and statements of
income and cash flows prepared in accordance with generally accepted accounting principles in
effect from time to time ("GAAP") applied on a consistent basis (subject in the case of interim
statements to normal year-end adjustments).
2. Another financial covenant requirement, per the loan documents, is Debt Service Coverage of
greater than 1.25x is required and must be maintained at all times. The Debt Service Coverage is
out of compliance.
As a result of the foregoing defaults, all loans from PNC Bank to you are considered in default
and the "Default Rates" of inter;::st as stated in the Promissory Notes will be initiated
immediately. PNC Bank, N.A. retains its rights and remedies under the Notes to accelerate the
entire debt at a future date. Please contact the undersigned at (570) 961-6245 to schedule a
meeting to discuss in detail the precise avenue to be used to exit the credit.
Thank you,
A member of The PNC Financial Services Group
201 Penn Avenue Scranton Pennsylvania 18503
VERIFICATION
We, Thomas A. Fulmer and Diane S. Fulmer, hereby certify and verify that the
facts set forth in the foregoing Complaint are true and correct to the best of our
knowledge, information and belief. We understand that any false statements herein are
subject to the penalties of 18 Pa. C. S. 94904 relating to unsworn falsification to
authorities.
~~~
-- Thomas A. Fulmer
--
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Diane S. Fulmer
DATE:
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JANET M. COOK,
Plaintiff
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYL VANIA
v.
CIVIL ACTION - LAW
THOMAS M. HAXALL,
Defendant
NO. 02-0369 CIVIL TERM
ORDER OF COURT
AND NOW, this 21 st day of February, 2003, upon consideration of Defendant's
Motion To Compel Answers to Defendant's Interrogatories and Respond To Defendant's
Request for Production of Documents, a Rule is hereby issued upon Plaintiff to show
cause why the relief requested should not be granted.
RULE RETURNABLE within 20 days of service.
BY THE COURT,
Hubert X. Gilroy, Esq.
4 North Hanover Street
Carlisle, P A 17013
Attorney for Plaintiff
William C. Stubits, Esq.
Christina J . Westall, Esq.
The Bellevue, Fifth Floor
200 South Broad Street
Philadelphia, P A 19102
Attorneys for Defendant
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THOMAS A. FULMER and DIANE S,
FULMER,
COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY
Plaintiffs,
NO,: 03-369 CIVIL TERM
vs.
PNC BANK, N.A. and FRANK
DeSTEF ANO,
Defendants.
PRAECIPE FOR ENTRY OF APPEARANCE
TO: CUMBERLAND COUNTY PROTHONOTARY
Please enter the appearance of the undersigned as counsel for the Defendants,
PNC BANK, NATIONAL ASSOCIATION, and FRANK DeSTEFANO, in the above-
captioned action.
KREDER BROOKS HAILSTONE LLP
BY:
Michael J. D 11 hue, Esquire
Supreme Co J.D. No. 25906
220 Penn Avenue, Suite 200
Scranton, P A 18503
Telephone: (570) 346-7922
Attorneys for Defendants
Date: February 27, 2003
CERTIFICATE OF SERVICE
AND NOW, this
d1
day of February, 2003, I, Michael J. Donohue, a
member of the firm of Kreder Brooks Hailstone LLP, hereby certify that I have this day
served the within Praecipe for Entry of Appearance, by depositing a copy thereof in the
United States Mail, postage prepaid, at Scranto Pennsylvania, addressed to the party or
attorney of record as follows:
John R. Fenstermacher, Esquire
5115 East Trindle Road
Mechancisburg, P A 17050
KREDER BROOKS HAILSTONE LLP
BY:
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TO: THOMAS A. FULMER and DIANE S, FULMER
YOU ARE HEREBY NOTIFIED TO FILE A WRITTEN
RESPONSE TO THE ENCLOSED NEW MATTER
WITHIN TWENTY (20) DAYS FROM SERVICE HEREOF
OR A JUDGMENT MAY BE ENTERED AGAINST YOu.
MICHAEL J. DONOHUE, ESQUIRE
THOMAS A. FULMER and DIANE S.
FULMER,
COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY
Plaintiffs,
NO.: 03-369 CIVIL TERM
vs.
PNC BANK, N.A. and FRANK
DeSTEFANO,
Defendants.
ANSWER AND NEW MATTER
Defendant, PNC Bank, National Association, ("PNC"), and Frank DeStefano, by
their attorneys, Kreder Brooks Hailstone LLP, makes the following Answer to plaintiffs'
Complaint:
1-8, The averments of paragraphs 1 through 8 are admitted.
9. As to the averments of paragraph 9, it is admitted that plaintiffs, Thomas
A. Fulmer and Diane S, Fulmer, (the "Fulmers") were not late on a payment to PNC
during the term of the loan relationship. However, as more fully set forth in New Matter,
the Fulmers were in material breach of loan covenants, to wit: the Fulmers failed to
deliver to PNC within 120 days after fiscal year 1999 and 2000 financial statements for
the trucking company entity and the personal home care entity plaintiffs operated.
Additionally, PNC's analysis of the financial condition ofthe plaintiffs indicated that they
, r ,
did not maintain debt service reserve coverage greater than 1.25., as required in the
contract documents,
10. The averments of paragraph 10 are denied. It is denied that PNC increased
the interest rates on December 17,2001. Furthermore, it is denied that PNC increased the
interest rate knowingly and arbitrarily. PNC was acting within its rights in increasing the
interest rates as a result of the aforesaid breaches by the plaintiffs.
11. The averments of paragraph 11 are denied. It is denied that PNC no
longer desired to have participation in the managed health care industry, PNC's desire to
terminate the loan relationship in this particular case was caused by the plaintiffs'
breaches,
12, With regard to the averments of paragraph 12, it is averred that the letter
speaks for itself.
13, With regard to the averments of paragraph 13, it is averred that the letter
speaks for itself,
14, With regard to the averments of paragraph 14, it is averred that plaintiffs'
breaches related to calendar years 1999 and 2000.
15. The averments of paragraph 15 are denied.
16. The averments of paragraph 16 are admitted,
17. The averments of paragraph 17 are denied.
18. With regard to the averments of paragraph 18, it is admitted that PNC
negotiated a Forebearance Modification Repayment Agreement with the Fulmers which
would give the Fulmers additional time to find another lender and which would
substantially reduce the increased interest. However, the Fulmers refused to sign the
Agreement.
2
. , ~
19, With regard to the averments of paragraph 19, after reasonable
investigation, Defendants are without sufficient knowledge or information to form a
belief as to the truth thereof. The same is therefore denied and strict proof demanded.
20. The averments of paragraph 20 are admitted.
21. With regard to the averments of paragraph 21, after reasonable
investigation, defendant PNC is without sufficient knowledge or information to form a
belief as to the truth thereof. The same is therefore denied and strict proof demanded.
22. With regard to the averments of paragraph 22, after reasonable
investigation, defendant PNC is without sufficient knowledge or information to form a
belief as to the truth thereof. The same is therefore denied and strict proof demanded,
23. With regard to the averments of paragraph 23, after reasonable
investigation, defendant PNC is without sufficient knowledge or information to form a
belief as to the truth thereof. The same is therefore denied and strict proof demanded.
24, The averments of paragraph 24 are admitted.
25. With regard to the averments of paragraph 25, it is admitted that all
payments made at the payoff of the loan were proper under the loan documents.
26. The averments of paragraph 26 are denied. The actions ofPNC were not
"unwarranted" but rather were permissible and proper under the loan documents.
27. The averments of paragraph 27 are denied,
WHEREFORE, it is respectfully requested that plaintiffs Complaint be dismissed.
COUNT I
Negligence
28, Paragraphs 1 through 27 of Defendants' Answer are incorporated herein
as if more fully set forth at length,
3
. ,
29, The averments of paragraph 29 are denied as stated, The defendants had a
duty to manage the loan relationship in accordance with the contractual documents,
which they did,
30, The averments of paragraph 30 are denied, It is denied that the defendants
breached any duty owing to plaintiffs and that the actions ofPNC and their agents were in
accordance with the contractual documents.
31. With regard to the averments of paragraph 31, it is denied that defendants
were in breach of any obligations to the plaintiffs.
WHEREFORE, it is respectfully requested that plaintiffs' Complaint be
dismissed.
COUNT II
Breach of Fiduciary Duty
32. Paragraphs 1 through 31 of Defendants' Answer are incorporated herein as
if more fully set forth at length.
33, The averments of paragraph 33 are denied. Defendants owed no fiduciary
duty to the plaintiffs, On the contrary, the relationship between the plaintiffs and PNC
was a commercial relationship based upon a contract. It was an arm's length relationship
and not a fiduciary relationship,
34. The averments of paragraph 34 are denied.
35. The averments of paragraph 35 are denied, The defendants breached no
duty or obligation to the Fulmers by seeking to negotiate a Forebearance Agreement in
which there would be a mutual forebearance and waiver of rights,
36. As to the averments of paragraph 36, it is denied that Frank DeStefano was
a fiduciary of the plaintiffs or that he owed any fiduciary duty to the plaintiffs,
4
. .
37. The averments of paragraph 37 are denied. It is further denied that PNC
or Frank DeStefano had any desire to leave the managed health care industry,
38. The averments of paragraph 38 are denied. Plaintiffs did not comply with
their legal obligations under the contracts as more specifically set forth in New Matter.
39. The averments of paragraph 39 are denied. It is denied that any agent of
PNC informed plaintiffs that their tax return documents would suffice to meet the
requirements of financial compilations prepared by accountants.
WHEREFORE, it is respectfully requested that plaintiffs' Complaint be
dismissed.
COUNT III
Breach of Contract
40. Paragraphs 1 through 39 of Defendants' Answer are incorporated herein as
if more fully set forth at length,
41. The averments of paragraph 41 are denied.
42. The averments of paragraph 42 are conclusions of law to which no
response is required. To the extent that a response may be deemed to be required, the
same are denied,
43. As to the averments of paragraph 43, it is admitted that the plaintiffs'
breach did not relate to any failure to make timely payments, The remainder of the
averments of paragraph 43 are denied.
44. As to the averments of paragraph 44, it is denied that the defendants
breached any obligations under the contract.
45. The averments of paragraph 45 are denied. On the contrary, defendants
fully performed PNC's obligations under the contract.
5
WHEREFORE, it is respectfully requested that plaintiffs' Complaint be
dismissed,
NEW MATTER
By way of New Matter, defendants allege as follows:
46, Plaintiffs' Complaint does not set forth a cause of action upon which relief
can be granted.
47, Plaintiffs' Complaint does not set forth a cause of action in negligence.
Plaintiff alleges a purely economic injury without any bodily injury or property damage.
Such claims do not lie in negligence,
48, Plaintiffs' Complaint does not set forth a cause of action for breach of a
fiduciary duty. The loan relationship is a commercial relationship in which parties deal at
arm's length. PNC never assumed any fiduciary responsibility towards the plaintiffs or
their businesses.
49. On January 8, 1999, plaintiffs accepted the provisions of a commitment
letter from PNC relating to the loan for $558,000 and $325,000. The commitment letter
and the exhibit made a part thereof is attached hereto, made a part hereof and marked
Exhibit A.
50, Under the aforesaid commitment letter, plaintiffs had a financial reporting
covenant which stated:
"The Borrower will promptly submit to the Bank such
information relating to the Borrower's affairs (including but
not limited to annual financial statements and tax returns
for the Borrower and any guarantor) or any security for the
Term Loans as the Bank may reasonably request."
51. The plaintiffs also had a financial covenant which stated:
"The Borrower will maintain at all times a ratio of Cash
Flow to the total of Current Maturities plus Unfunded
6
. .
Capital Expenditures of at least 1.25 to 1.00, "Cash Flow"
means net income Vlus depreciation plus amortization plus
other non-cash items, less dividends. "Current Maturities"
means the current principal maturities of all indebtedness
for borrowed money (including but not limited to
amortization of capitalized lease obligations) having an
original term of one year or more, as well as any
prepayments of such indebtedness prior to scheduled
maturity. "Unfunded Capital Expenditures" means capital
expenditures made from the Borrower's funds other than
borrowed funds."
52. Both of the above covenants were breached by plaintiffs and PNC acted
within its rights under the contract to increase the applicable rate of interest on each note
by 5%,
WHEREFORE, it is respectfully requested that plaintiffs' Complaint be
dismissed.
Respectfully submitted,
KREDER BROOKS HAILSTONE LLP
BY:
ASk
220 Penn Avenue, Suite 200
Scranton, P A 18503
(570) 346-7922
ue, Esquire
Attorney J.D. .: 25906
Attorneys for Defendants
7
VERIFICATION
I, Frank DeStefano, Assistant Vice President ofPNC Bank, National Association, do hereby
aver that the facts set forth in the foregoing Answer are true and correct to the best of my
information, knowledge and belief. I understand that false statements herein are made subject to the
Rules of 18 Pa. C,S. 94904 relating to unsworn falsification to authorities.
PNC BANK, NATIONAL ASSOCATION
BY:---:t~ - ~~
Frank DeStefano
Assistant Vice President
PNCJBANK
CX~f(
J
."
January 8, 1999
Thomas A. Fulmer
Diane S. Fulmer
RR 2, Box 146
Williamsport, PA 17701
Re: $558,000,00 Tenn Loan "A"
Re:. $325,000,00 Tenn Loan "B"
Dear Mr. & Mrs. Fulmer:
We are pleased to inform you that PNC Bank, National Association (the "Bank"), has
approved your request for two term loans to Thomas A. Fulmer and Diane S. Fulmer. (the
"Borrower"). We look forward to this opportunity to help you meet the financing needs of your
business. As your primary bank, we want to supply all your banking needs.
I
All the details regarding your loans are outlined in the following sections of this letter. If
these terms are satisfactory, please follow the instructions for proceeding with your loans
provided at the end of this letter.
1. Type of Facility and Use of Proceeds. This is a term loan in the amount of $558,000.00
(the "Term Loan A"). The proceeds of the Term Loan may be used.. for refinance of existing
debt and property improvements.
2. Interest Rate. Interest on the unpaid balance of the Term Loan will be charged at a rate
per annum of eight percent (8.00%).
3. Repayment. The principal amount of the Term Loan, together with interest, shall be paid
in equal consecutive monthly installments over five years with a fifteen year amortization and a
balloon payment of all outstanding principal and interest at the end of the fifth year. Interest will
be due and payable on a monthly basis, and will be computed 'On the basis of a year of 360 days
and paid on the actual number of days elapsed.
4. Type of Facility and Use of Proceeds. This is a term loan in the amount of $325,000.00
(the "Term Loan B"). The proceeds of the Term Loan may be used for refinancing and
consolidating existing debt.
5. Interest Rate. Interest on the unpaid balance of the Term Loan will be charged at a rate
per annum of eight and one-quarter of one percent (8.25%).
EXHIBIT
Form 7C - Multistate Rev. 3/95
I
A
- 1 -
<i9
~
6. Repayment. The principal amount of the Term Loan, together with interest, shall be paid
in equal consecutive monthly installments over four years. Interest will be due and payable on a
monthly basis, and will be computed on the basis of a year of 360 days and paid on the actual
number of days elapsed.
7. Notes. The obligation of the Borrower to repay the Term Loans shall be evidenced by
promissory notes (the "Notes ") in form and content satisfactory to the Bank. The Notes will also
contain a prepayment cost recovery provision requiring. a payment to the Bank equal to the losses
incurred by the Bank as a result of said prepayment.
8. Security. The Borrower must cause the following to be executed and delivered to the
Bank in form and content satisfactory to the Bank as security for the Ter.m Loans:
(a) a security agreement granting the Bank a first priority perfected lien on the
Borrower's existing vehicles as listed on attached Exhibit "B".
(b) a mortgage containing an assignment of leases and rents, granting the Bank: first and
second priority perfected liens on the real property of the Borrower located at RR 2, Box
146, Williamsport, PA 17701 and a mortgage containirig an assignment of leases and
rents, granting the Bank first and second priority perfected liens on the real property of
the Borrower located at 205 Woodward Avenue, Lock Haven, PA 17745
(the "Property").
Because the Term Loans are secured by vehicles and real property, hazard insurance must be
maintained on such property, in such amounts and with such coverages as are acceptable to the
Bank, containing a standard lender loss payable or mortgagee clause in favor of the Bank.
9. Covenants. Unless compliance is waived in writing by the Bank or until payment in full
of the Term Loans: .
(a) The Borrower will promptly submit to the Bank such information relating to the
Borrower's affairs (including but not limited to annual financial statements and tax returns
for the Borrower and any guarantor) or any security for the Term Loans as the Bank may
reasonably request.
(b) The Borrower will not make or permit any change in the nature of its business as
carried on as of the date of this letter or in its senior management or equity ownership.
(c) The Borrower will comply with the financial and other covenants included in Exhibit
"A" hereto.
10. Representations and Warranties. To induce the Bank to extend the Term Loans, the
Borrower represents and warrants as follows:
(a) The Borrower's latest financial statements provided to the Bank are true, complete
and accurate in all material respects and fairly present the financial condition, assets and
liabilities, whether accrued, absolute, contingent or otherwise and the results of the
Form 7C - Multistate Rev. 3/95
- 2 -
o
Borrower's operations .for the period specified therein. The Borrower's'financial
statements have been prepared in accordance with generally accepted accounting
principles consistently applied from period to period subject in the case of interim
statements to normal year-end adjustments. Since the date of the latest financial
statements provided to the Bank, the Borrower has not suffered any damage, destruction
or loss which has materially adversely affected its business, assets, operations, financial
condition or results of operations.
(b) There are no actions, suits, proceedings or governmental investigations pending or, to
the knowledge of the Borrower, threatened against the Borrower which could result in a
material adverse change in its business, assets, operations, financial condition or results of
operations and the're is no basis known to the Borrower or its officers, directors or
shareholders for any such action, suit, proceedings or investigation.
(c) The Borrower has filed all returns and reports that are required to be filed by it in
connection with any federal, state or local tax, duty or charge levied, assessed or imposed
upon the Borrower or its property, including unemployment, social security and similar
taxes and all of such taxes have been either paid or adequate reserve or other provision
has been made therefor.
(d) If not a natural person, the Borrower is duly organized, validly existing and in good
standing under the laws of the state of its incorporation or organization and has the power
and authority to own and operate its assets and to conduct its business as now or proposed
to be carried on, and is duly qualified, licensed and in good standing to do business in all
jurisdictions where its ownership of property or the nature of its business requires such
qualification or licensing. '
(e) The Borrower has full power and authority to enter into the transactions provided for
in this Letter Agreement and has been duly authorized to do so by all necessary and
appropriate action and when executed and delivered by the Borrower, this Letter
Agreement and the other loan documents executed and delivered pursuant hereto will
constitute the legal, valid and binding obligations of the Borrower enforceable in
accordance with their terms,
(t) There does not exist any default or violation by the Borrower of or under any of the
terms, conditions or obligations of: (i) its organizational documents; (ii) any indenture,
mortgage, deed of trust, franchise, permit, contract, agreement, or other instrument to
which it is a party or by which it is bound; or (iii) any law, regulation, ruling, order,
injunction, decree, condition or other requirement applicable to or imposed upon the
Borrower by any law or by any governmental authority, court or agency.
11. Real Estate Matters.
(a) Flood Insurance. If the Property is located in an area designated as a flood hazard
area by any governmental agency, the Borrower will provide the Bank, at the Borrower's
expense, with a policy of flood insurance in an amount equal to the value of the Property
to be insured or the maximum amount available under the federal flood insurance
program, whichever is less.
Form 7C - Multistate Rev. 3/95
- 3 -
@
(b) Title Insurance. The Borrower will provide the Bank, at the Borrower's expense,
with an ALTA (1992 form) policy of title insurance in favor of the Bank as mortgagee
and in an amount not less than the amount of the Term Loans, with premium paid
thereon, insuring that the Bank I s lien on the Property is a valid first lien, and with only
such exceptions as the Bank deems acceptable.
12. Fees. On the date of the Notes, the Borrower shall pay to the Bank a fee of $4,185.00
and $2,437.50. The Borrower will reimburse the Bank for the Bank's out-of-pocket expenses
incurred or to be incurred in conducting Dee, title and other public record searches, and in
filing and recording documents in the public records to perfect the Bank's liens and security
interests. The Borrower shall also reimburse the Bank for the Bank's expenses (including the
reasonable fees and expenses of the Bank's outside and in-house counsel) in documenting and
closing this transaction and in connection with any amendments, modifications, renewals or
enforcement actions relating to the Term Loan.
13. Additional Provisions. Before the disbursement of the Term Loans, the Borrower agrees
to sign and deliver to the Bank the Notes and other required documents and such other
instruments and documents as the Bank may reasonably request, such as certified resolutions,
incumbency certificates or other evidence of authority.
Prior to execution of the final documents, the Bank may terminate this letter if a material adverse
change occurs with respect to the Borrower, any guarantor, any collateral for the Tenn Loans or
any other person or entity connected in any way with the Term Loans, or if the Borrower fails to
comply with any of the terms and conditions of this letter, or if the Bank reasonably determines
that any of the conditions cannot be met.
This letter is governed by the laws of the Commonwealth of Pennsylvania. No modification or
waiver of any of the terms of this letter will be valid and binding unless agreed to in writing by
the Bank. When accepted, this letter and the other documents described herein will constitute the
entire agreement between the Bank and the Borrower concerning the Term Loans, and shall
replace all prior understandings, statements, negotiations and written materials relating to the
Term Loans.
To accept these terms, please sign the enclosed copy of this letter as set forth below and return it
to the Bank within 15 days from the date of this letter. If accepted, the fmal documents must be
executed within 30 days from the date of this letter, or this letter may be terminated at the Bank's
option without liability or further obligation of the Bank.
Form 7C - Multistate Rev, 3/95
-4-
ED
Thank you for giving PNC B.ank this opportunity to work with your b\1siness. We look forward
to other ways in which we may be of service to your business or to you personally.
Very truly yours,
PNC BANK, National Association
By: f!Jcs (b 00v
Peter S. Bower, Business Banking Officer
Form 7C - Multistate Rev. 3/95
- 5 -
6:)
ACCEPTANCE
With the intent to be legally bound hereby, the above terms and conditions are hereby agreed to
and accepted this 8"\1.... day of ~ ~ ' 1999. ,
BO OW
Form 7C - Multistate Rev. 3/95
- 6 -
$
EXHffiIT A
. -
FINANCIAL REPORTING COVENANTS:
(a) The Borrower will deliver to the Bank:
(i) Financial Statements for the trucking company entity and the personal home
care entity, within 120 days after fiscal year end, prepared on a compiled basis by
a certified public accountant acceptable to the Bank.
(ii) Personal financial statements and federal income tax return for each calendar
year, within 120 days after year end.
"Financial Statements" means the consolidated and consolidating balance sheet and
statements of income and cash flows prepared in accordance with generally accepted
accounting principles in effect from time to time ("GAAP") applied on a consistent basis
(subject in the case of interim statements to normal year-end adjustments).
FINANCIAL COVENANTS:
The Borrower will maintain at all times a ratio of Cash Flow to the total of Current
Maturities plus Unfunded Capital Expenditures of at least 1.25 to 1.00. "Cash Flow"
means net income plus depreciation plus amortization plus other non-cash items I less
dividends. "Current Maturities" means the current principal maturities of all indebtedness
for borrowed money (including but not limited to amortization of capitalized lease
obligations) having an original term of one year or more, as well as any prepayments of
such indebtedness prior to scheduled maturity. "Unfunded Capital Expenditures" means
capital expenditures made from the Borrower's funds other than borrowed funds.
NEGATIVE COVENANTS:
(a) The Borrower will not create, assume, incut or suffer to exist any mortgage, pledge,
encumbrance, security interest, lien or charge of any kind upon any of its property, now
owned or hereafter acquired, or acquire or agree to acquire any kind of property under
conditional sales or other title retention agreements; provided, however, that the
foregoing restrictions shall not prevent the Borrower from:
(i) incurring liens for taxes, assessments or governmental charges or levies which
shall not at the time be due and payable or can thereafter be paid without penalty
or are being contested in good faith by appropriate proceedings diligently
conducted and with respect to which it has created adequate reserves;
(ii) making pledges or deposits to secure obligations under workers'
compensation laws or similar legislation; or
Form 7C - Multistate Rev. 3/95
- 7 -
eo
(iii) granting liens or security interests in favor of the Bank.
(b) The Borrower will not create, incur, guarantee, endorse (except endorsements in the
course of collection), assume or suffer to exist any indebtedness, except (i) indebtedness
to the Bank, (ii) open account trade debt incurred in the ordinary course of business and
not past due, or (iii) other indebtedness disclosed on the Borrower's latest Financial
Statements which have been provided to the Bank prior to the date of this letter,
(c) The Borrower will not liquidate, merge or consolidate with any person, firm,
corporation or other entity, or sell, lease, transfer or otherwise dispose of all or any
substantial part of its property or assets, whether now owned or hereafter acquired.
(d) The Borrower will not make acquisitions of all or substantially all of the property or
assets of any person, firm, corporation or other entity.
(e) The Borrower will not make or have outstanding any loans or advances to or
otherwise extend credit to any person, finn or corporation, except in the ordinary course
of business.
CLD\LTRAGMT.7C Rev. 3/95
Form 7C - Multistate Rev, 3/95
- 8 -
(8;
YEARJMAKE/MODEL
./
1998 DODGE RAM PICKUP
~i'P1 ~. J( I HI'J~ _
.j 1998 MACK CH613
J 1998 MACK CH613
01 U'~I'i wuRTI1 T ~w
J 1991 INTERNA TJONAL 4900
.j 1993 MACK CH613
1993 WALINGA TANKERt6500
091U.L-L1:Iro JAl'IJU!.R,8668 "
J ~'1?RUHAUF TA~.(WOO-
1980 WOOLEVER VAN
1981 WOOLEVER VAN
1995 GBI TANK, 2635
J 1999 POLAR TANKER, 6500
"EXHmIT Btt
VIN#/SN
3B7KF2220W.G112591
~ M1AA13Y9Ptn....9tJ3ft4
IM1AA18YIWW085146
IM1AA18Y1WW098351
1x..~DB9Xhll" "lJI\81_.
1HTSDNUN7MH391559
1M1AAI3Y2PW022985
2W9I1C4029P9001004
JI"Jj~
TDl-2528
6446521
1793874
69703165
1PMS54321XI021311
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@
PROMISSORY NOTE
References in the shaded area are for Lender's use only and do not limit the a
Borrower: THOMAS A. FULMER (SSN: 180-46-8379)
DIANE S. FULMER (SSN: 196-44-5683)
RR 2 BOX 146
WILLIAMSPORT, PA 1n01
Lender: PNC BANK, NATIONAL ASSOCIATION
4242 CARLISLE PIKE
CAMP HILL, PA 17001-aS74
Principal Amount: $558,000.00 Interest Rate: 8.000% Date of Note: January 21, 1999
PROMISE TO PAY. THOMAS A, FULMER and DIANE S. FULMER ("Borrower") promise to pay to PNC BANK, NATIONAL ASSOCIATION
("Lender"), or order, In lawful money of the Un lied States o. America, the principal emount of Five Hundred Fifty Eight Thousand & 001100
Dollars ($558,000.00), together wllh Interest et the rete of 8.000% per ennum on the unpaid prlnclpjll belance from January 21, 1999, unlll paid
tn full.
PAYMENT. Borrower will pay this loan In 59 regular payments of $5,381.86 each and one Irregular last payment estimated at $446,799.59,
Borrower's first peyment Is due March 1, 1999, and ell subsequent payments ere due on Ihe same day of each month aner that. Borrower's
f1nel paymenl due February 1,2004, will be for ell prlnctpal and ell eccrued Interest not yet paid. peyments Include principal and Interest. The
annual interest rate for this Note is computed on a 365/360 basis; that Is, by applying the ratio of the annual interest rate over a year of 360 days,
multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender
at Lender's address shown above or at such other place as Lend8fJ may designate in writing, Unless otherwise agreed or required by applicable law,
payments will be applied first to accrued unpaid Interest, then to principal, and any remaining amount to any unpaid collection costs and late charges,
PREPAYMENT PENALTY. Upon prepeyment of this Note, Lender Is entitled to the following prepayment penalty: On any business day, upon.
peyment of all accrued unpeld Interest on this Nole, and upon five (5) business dey's prior written notice to Lender, Ihe Borrower mey prepay
all or pert Of the outstendlng principal of this Note; provided, however, that the Borrower also agrees to pay Lender as compensation for the
cosl of 8dvenclng flxed rate funds, an emount equal to the Cost of Prepeyment.
"Cost of Prepeyment" means an emount equal to the present value, If positive, of the product of (a) the difference between (I) the yield, on the
dete of this Note, of a U. S. Treesury obligation wllh a meturlty similar to this Note minus (II) the yield on the prepayment date, of a U. S.
Treasury obllgellon with a meturlty similar to the remaining maturity of this Note end (b) the principal amount to be prepaid, and (c) the
number of years, Including fr8Ctlonal years, from the prepeyment date to the maturity dete 0' this Note. The yield on any U. S. Treasury
obllgellon shall be delermlned by reference to Federel Reserve Stallsllcal Releese H,15(519) "Selected Interest Rates". For purposes of
making present value calculellons, the yield to melurlty of a simller meturlty U. S. Treesury obligation on 'he prepayment date shall be deemed
the discount rete. .The Cost of Prepeyment shall elso epply to eny payments mede ener eccelerellon of the maturity of this Note. Except for the
foregoing, Borrower may pay all or a portion of the amount owed earlier than it Is due. Earty payments will not, unless agreed to by Lender In writing,
relieve Borrower of Borrower's obligation to conlinue to make payments under the payment schedule. Rather, they will reduce the principal balance
due and may resull in Borrower making fewer payments.
LATE CHARGE. If a payment is 15 deys or more lete, Borrower will be charged 5.000% of the unpeld portion of the regularty scheduled payment
or $100.00, whichever Is less.
DEFAlA. T. Borrower will be in defaull if any of the following happens: (a) Borrower fails to make any paymenl when due. (b) Borrower breaks any
promise Borrower has made to Lender, or Borrower fails to comply with or to perform when due any other term, obligation, covenant, or condition
contained in this Note or any agreement related to this Nole. or in any other agreement or loan Borrower has with lender. (c) Any representation or
statement made or furnished to Lender by Borrower or on Borrower's behalf is false or misleading in any material respect either now or at the time
made or furnished. (d) Borrower dies or becomes insolvent, a receiver is appointed 'or !!ny part of Borrower's property. Borrower makes an
assignment for the benefit of creditors, or any proceeding is commenced either by Borrower or against Borrower under any bankruptcy or insolvency
laws. (e) Any credi10r tries to take any of Borrower's property on or in which lender has a lien or security interest. This includes a garnishment of any
of Borrower's accounts with Lender. (') Any of the events described in this defaull section occurs with respect to any guarantor of this Note. (g) A
material adverse change occurs in Borrower's financial condilion, or Lender believes the prospecl of payment or performance of the Indebtedness Is
impaired.
LENDER'S RIGHTS. Upon default, Lender may, after giving such notices as required by applicable law;'declare the entire unpaid piincipal balance on
this Note and all accrued unpaid interes\ immediately due, and Ihen Borrower will pay that amount. Upon defaull, including failure to pay upon final
maturity, Lender, at its option, may also, if per milled under applicable law, increase the inferest rate on this Note 5.000 percentage points. The Interest
rate will not exceed the maximum rate permitted by applicable law, lender may hire or pay someone else to help collect this Note if Borrowar does nol
pay, Borrower also will pay lender that amount. This includes, subjecl to any limits under applicable law, lender's attorneys' fees and lender's legal
expenses whelher or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings (including e"orts to modify or
vacale any automatic stay or injunction), appeals, and any anticipated post-judgment collection services. If not prohibited by applicable law, Borrower
also will pay any court costs, in addition to all other sums provided by law. If judgment is entered in connection with this Note, interest will continue to
accrue on this Note after judgment at the existing interest rate provided for in this Note. This Note has been delivered to Lender and accepted by
Lender In the Commonwealth of Pennsylvania. If there Is a lawsuit, Borrower agrees upon Lender's request to submit to the Jurisdiction of the
courts of CUMBERLAND County, the Commonweallh of Pennsylvenla. . Lender and Borrower hereby waive the right to any jury trial In any
8Cllon, proceeding, or counterclaim brought by either Lender or Borrower egalnst the other. This Note shall be governed by and construed In
8Ccordance with the laws o. the Commonwealth of Pennsylvania.
RIGHT OF SETOFF. Borrower grants to Lender a contractual security Interest in, and hereby assigns, conveys, delivers, pledges, and transfers to
Lender all Borrower's right, title and interest in and to, Borrower's accounts with Lender (whether checking, savings, or some other account), including
without limitation all accounts held Jointly with someone else and all accounts Borrower may open In the future, excluding however all IRA and Keogh
accounts, and all frust accounts for which the grant of a security Interest would be prohibited by law. Borrower authorizes Lender, to the extenl
permitted by applicable law, to charge or setoff all sums owing on this Note against any and all such accounts..
COLLATERAL. This Note is secured by a Mortgage dated January 21, 1999, to Lender on real property located in L YCOMING County,
Commonwealth o. Pennsylvania, and a Mortgage dated January 21, 1999, to lender on real property located in CLINTON County, Commonwaalth of
Pennsylvania, all the terms and conditions of which are hereby incorporated and made a part of this Note,
. .
.~A.R 2000 COMPLIANCE. Borrower has reviewed the areas within its business and operations which could be aversely aHected by, and has
'\lloped or is developing a program to address on a timely basis the risk that certain computer applications used by Borrower may be unable 10
~ize and perlorm properly dale-sensitive functions involvinQ dates prior 10 and after December 31, 1999 (lhe "Year 2000 Problem"). The Year
/101-21-1999 PROMISSORY NOTE
~m~ ~~oo~
. = ~ooo Problem wlll not result, and Is not reasonably' expected to result, In any m~terial adverse effect on the business, properties, assets, financial
condition, results of operations or prospects of Borrower, or the ability 01 Borrower to duly and punctually payor perform Its obligations hereunder and
under the Related Documents. .' . " .
LETTER AGREEMENT. This Note Is issued pursuant 10 a Leiter Agreemenl dated January 8,1999 and the documents referred to therein, all the lerms
and conditions of which are Incorporated herein by reference,
GENERAl PROVISIONS. lender -may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower and any
other person who signs, guarantees or endorses this Note, to the extent allowed by law, waive presentment, demand for payment, protest and notice of
dishonor. Upon any change In the terms of this Nole, and unless otherwise expressly slated In writing, no party who signs this Note, whether as maker,
guaranlor, accommodatton maker or endorser, shall be released from liability. All such parties agree thai Lender may renew or extend (repeatedly and
for any length of time) thlsloan, or release any party or guarantor or collateral; or impair, fall to realize upon or perfecl Lender's security Inlerest In the
collaleral; and lake any other action deemed necessary by Lender wilhout the consent of or notice to anyone. All such parties also agree Ihat Lender
may modify this loan without the consent of or notice to anyone other than the party with whom the modification Is made, The obligations under this
Nole are joint and several. If any portion of this Note Is for any reason delermined to be unenforceable, it will not anect the enforceability of any other
provisions of this Note.
CONFESSION OF JUDGMENT. BORROWER HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR THE PROTHONOTARY
OR CLERK OF Am COURT IN THE COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE, TO APpEAR AT ANY TIME FOR BORROWER AFTER
A DEFAULT UNDER THIS NOTE, AND WfTH OR WITHOUT COMPLAINT FILED, AS OF ANY TERM, CONFESS OR ENTER JUDGMENT AGAINST
BORROWER FOR THE ENTIRE PRINCIPAL BAlANCE OF THIS NOTE, ALL ACCRUED INTEREST, LATE CHARGES, AND ANY AND AlL AMOUNTS
EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COlLATERAL SECURING THIS NOTE TOGETHER WITH INTEREST ON SUCH
AMOUNTS, TOGETHER WITH COSTS OF SUIT, AND AN ATTORNEY'S COMMISSION OF TEN PERCENT (10%) OF THE UNPAID PRINCIPAL
BALANCE AND ACCRUED INTEREST FOR COLLECTION, BUT IN ANY EVENT NOT LESS THAN FIVE HUNDRED DOLLARS ($500) ON WHICH
JUDGMENT OR JUDGMENTS ONE OR MORE EXECUTIONS MAY ISSUE IMMEDIATELY; AND FOR SO DOING, THIS NOTE OR A COPY OF THIS
NOTE VERIFIED BY AFFIDAVIT SHALL BE SUFFICIENT WARRANT. THE AUTHORITY GRANTED IN THIS NOTE TO CONFESS JUDGMENT
AGAINST BORROWER SHALL NOT BE EXHAUSTED BY ANY EXERCISE OF THAT AUTHORITY, BUT SHALL CONTINUE FROM TIME TO TIME AND
AT ALL TIMES UNTIL PAYMENT IN FULL OF ALL AMOUNTS DUE UNDER THIS NOTE. BORROWER HEREBY WAIVES Am RIGHT BORROWER
MAY HAVE TO NOTICE OR TO A HEARING IN CONNECTION WITH Am SUCH CONFESSION OF JUDGMENT, EXCEPT ANY NOTICE AND/OR
HEARING REQUIRED UNDER APPLICABLE LAW WITH RESPECT TO EXECUTION OF THE JUDGMENT, AND STATES THAT EITHER A
REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THIS CONFESSION OF JUDGMENT PROVISION TO BORROWER'S ATTENTION OR
BORROWER HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL.
PRIOR TO SIGNING THIS NOTE, EACH BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE AND THE NOTICE TO
COSIGNER SET FORTH BELOW. EACH BORROWER AGREES TO THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A
COMPLETED COpy OF THE NOTE,
Page 2
THIS NOTE HAS BEEN SIGNED AND SEALED BY THE UNDERSIGNED.
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S. Fl.l...MER .............. '.
NOTICE TO COSIGNER
You are being asked to guarantee this debt. Think carefully before you do. If the borrower doesn't pay the debt, you will have to. Be sure
you can afford to pay If you have to, and that you want to accept this responsibility.
You may have to pay up to the full amount of the debllf the borrower does not pay. You may also have to pay late fees or collection costs,
which Increase this amount.
The lender can collect this debt from you without first trying to collect from the borrower. The lender can use the same collection methOds
against you Ihat can be used against the borrower, such as suing you, garnishing your wages, etc. If this deblls ever In defeult, thet fact may
become a part of YOUR credit record,
This notice Is not the contract that mak~s you lIabte for the debt.
LASER PRO, Reg. U.S. Pal. & T.M. Oil., Ver. 3.28 (c)' 999 CFI ProServlces.lnc. All rlghlsrnerved.IPA-020 FULMER.LN C29.0VL)
Fixed Rale. Balloon.
-...---
. PROMISSORY NOTE
Borrower: THOMAS A. FUlMER (SSN: 180-46-8379)
DIANE S. FlA.MER (SSN: 196-44-5683)
RR 2 BOX 146
WILLIAMSPORT, PA 1m1
lender: PNC BANK, NATIONAL ASSOCIATION
4242 CARLISLE PIKE
CAMP HILL, PA 17001-8874
Principal Amount: $325,000.00 Interest Rate: 8.250% Date of Note: January 2', 1999
PROMISE TO PAY. THOMAS A. FlA..MER and DIANE S. FUlMER ("Borrower") promise to pay to PNC BANK, NATIONAL ASSOCIATION
("Lender"), or order, In lawful money of the United Slates of America, the principal amount of Three Hundred Twenly Five Thousand & 00/100
Dollars ($325,000.00), together with Interest at the rate of 8.250% per annum on the unpaid principal balance from January 21, 1999, until paid
in full.
PAYMENT. Borrower will pay this loan In 48 payments of $8,008.72 each payment. Borrower's first payment Is due March 1, 1999, and all
subsequent payments are due on the same day of each month after that. BorrOWer's final payment will be due on February 1,2003, and will be
for all principal and all accrued Interest not yet paid. Payments Include principal and Interest. The annual.lnteresl rale lor this Note is compuled
on a 365/360 basis; that is, by applying the ralio of the annual interest rate over a year 01 360 days, multiplied by the outstanding principal balance,
multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender at Lender's address shown above or at such
other place as Lender may designate in writing, Unless otherwise agreed or required by applicable law, payments will be applied first to accrued
unpaid interest, Ihen 10 principal, and any remaining amount 10 any unpaid collection costs and lale charges.
PREPAYMENT PENAlTY. Upon prepayment of this Note, Lender Is entltled to the following prepayment penally: On any business day, upon
payment of all accrued unpaid Interest on this Note, and upon five (5) business day's prior written notice to Lender, the Borrower may prepay
all or part of the outstanding principal of this Note; provided, however, that the Borrower also agrees to pay Lender as compensation for the
cost 01 advancing fixed rate funds, an amount equal to the Cost of Prepayment.
"Cost of Prepayment" means an amount equal to the present value,lf positive, 01 the product of (a) the difference between (I) the yield, on Ihe
date of this Note, of a U. S. Treasury obligation with a maturlly similar to this Note minus (II) the yield on the prepayment date, of a U. S,
Treasury obllgallon with a maturlly similar to the remaining maturity of this Note and (b) the principal amount to be prepaid, and (c) the
number of years, Including fractional years, from the prepayment date to the maturity date of this Note. The yletd on any U. S. Treasury
obllgallon shall be determined by relerence to Federal Reserve Slatlstlcal Release H.15(519) "Selected Interest Rates". For purposes of
making present value calCUlations, the yield to maturity of a similar maturity U. S. Treasury obligation on Ihe prepayment date shall be deemed
the discount rate. The Cost of Prepayment shall also apply to any payments made after acceleration of the maturity of this Note. Except for the
foregoing, Borrower may pay all or a porlion of the .amount owed earlier than it is due. Early payments will not, unless agreed to by Lender in wriling,
relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, Ihey will reduce the principal balance
due and may result in Borrower making fewer payments.
LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularty scheduled payment
or $100.00, whichever Is less.
DEF~ULT. Borrower will be in default if any 01 the following happens: (a) Borrower fails to make any payment when due. (b) Borrower breaks any
promise Borrower has made to Lender, or Borrower lails to comply with or 10 perform when due any other term, obligation, covenant, or condilion
contained in this Nole or any agreement relaled .10 this .Note, or in any other agreement or loan Borrower has with Lender. (c) Any representation or
statement made or furnished to Lender by Borrower or on Borrower's behalf is false or misleading in any material respect either now or al the lime
made or furnished. (d) Borrower dies or becomes insolvent, a receiver is appointed for any part of Borrower's property, Borrower makes an
assignment for the benefit of creditors, or any proceeding is commenced eilher by Borrower or against Borrower under any bankruptcy or inSOlvency
laws. (e) Any creditor tries to take any of Borrower's property on or in which Lender has a lien or security inlerest. This includes a garnishment of any
of Borrower's accounls with Lender, (f) Any 01 the events described in this default section occurs with respect to any guarantor 01 this Note. (g) A
material adverse change OCCUrs in Borrower's financial condition, or Lender believes Ihe prospect of payment or performance of the Indebtedness is
impaired.
LENDER'S RIGHTS. Upon default, Lender may, after giving such notices as required by applicable law, declare the entire unpaid principal balance on
Ihis Note and all accrued unpaid interest immediately due, and then Borrower will pay that amount. Upon default, including failure 10 pay upon final
malurity, Lender, al its option, may also, if permitted under applicable law, increase the interest rate on this Note 5.000 percentage points, The inlerest
rate will nol exceed Ihe maximum rate permitted by applicable law, Lender may hire or pay someone else to help collect this Note if Borrower does nol
pay. Borrower also will pay Lender that amount. This includes, subjeclto any limits under applicable law, Lender's attorneys' fees and Lender's legal
expenses whelher or not there is a lawsuit, including allorneys' fees and legal expenses for bankruptcy proceedings (including eHorts to modily or
vacate aflY automatic stay or injunction), appeals, and any anticipated post-judgment collection services. If not prohibited by applicable law, Borrower
also will pay any court costs, in addilion 10 all olher sums provided by law. If judgment is enlered in connection with this Note, interest will continue 10
accrue on this Note alter judgment althe existing interest rate provided for in this Nole. This Note has been delivered to Lender and accepted by
Lender In the Commonwealth of Pennsylvania. If there Is a tawsult, Borrower agrees upon Lender's request to submit to the Jurisdiction of the
courts of CUMBERLAND County, the Commonwealth 01 Pennsylvania, Lender and Borrower hereby waive the right to any jury trial In any
acllon, proceeding, or counterclaim brought by either Lender or Borrower against the other. This Note shall be governed by and construed In
accordance with the laws of the Commonwealth of Pennsylvania. .
RIGHT OF SETOFF. Borrower grants to Lender a contractual security interest in, and hereby assigns, conveys, delivers, pledges, and Iransfers to
Lender all Borrower's righi, title and inlerest in and to, Borrower's accounls with Lender (whether checking, savings, or some other account), including
withoullimitalion all accounts held join.lly with someone else and all accounts Borrower may open in the future, excluding however all IRA and Keogh
accounts, and all trust accounts for whiCh-the grant of a security interesl would be prohibiled by taw. "Borrower authorizes Lender, to the exlent
permilled by applicable law, to charge or setoH all sums owing on this Note against any and all such accounts.
COLLATERAl. This Nole is secured by, in addition to any other collateral, a Mortgage dated January 21, 1999,10 Lender on real property located in
CLINTON County, Commonwealth 01 Pennsylvania, and a Mortgage daled January 21, 1999, to Lender on real properly located in L YCOMING County,
Commonwealth of Pennsylvania, all the terms and condilions of which are hereby incorporated and made a part 01 this Note.
YEAR 2000 COMPLIANCE. Borrower has review.ed lhe arellS within its business and operations which could be aversely aHeeted by, and has
developed or is developing a program 10 address on a Iimely basis the risk that certain computer applications used by Borrower may be unable 10
recognize and perform properly dater-sensitive functions involving dales prior to and after December 31, 1999 {the "Year 2000 Problem"). The Year
2000 Problem will nol result, and is not reasonably expected to result, in any malerial adverse effect on the business, properties, assets, financial
.
'. ~9 PROMISSORY NOTE
\ P . (Continued)
~i;ion, results of operations or prospects of Borrower, or the ability of Borrower to duly and punctually payor perform lis obligations hereunder and
under the Related Documents. . .
LETIER AGREEMENT. This Note Is issued pursuant to a Leiter Agreement dated January 8, 1999 and the documents referred to therein, all the terms
and conditions of which are incorporated herein by reference.
GENERAl.. PROVISIONS. lender may delay or forgo enforcing any of its rights or remedies under this Note wilhoutlosing them. Borrower and any
other person who signs, guarantees or endorses this Note, to the exlent allowed by law, waive presentment, demand for payment, protest and notice of
dishonor, Upon any change In the terms of this Note, and unless otherwise expressly stated in writing, no party who signs this Note, whether as maker,
guarantor, accommodation maker or endorser, shall be released from liability. Ail such parties agree that Lender may renew or extend (repeatedly and
lor any length 01 time) this loan, or release any party or guarantor or collateral; or impair, fail to realize upon or perfect Lender's security interest in the
collateral; and take any other action deemed necessary by Lender without the consent of or notice to anyone. Ail such parties also agree that Lender
may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this
Note are joint and several. If any portion of this Note is for any reason determined to be unenforceable, it will not affect the enforceability of any other
provisions of this Note.
CONFESSION OF JUDGMENT. BORROWER HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR THE PROTHONOTARY
OR CLERK OF ANY COURT IN THE COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE, TO APPEAR AT ANY TIME FOR BORROWER AFTER
A DEFAULT UNDER THIS NOTE, AND WITH OR WITHOUT COMPLAINT FILED, AS OF Am TERM, CONF;ESS OR ENTER JUDGMENT AGAINST
BORROWER FOR THE ENTIRE PRINCIPAL BALANCE OF THIS NOTE, ALL ACCRUED INTEREST, LATE CHARGES, AND AtfY AND ALL AMOUNTS
EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECURING THIS NOTE TOGETHER WITH INTEREST ON SUCH
AMOUNTS, TOGETHER WITH COSTS OF SUIT, AND AN ATTORNEY'S COMMISSION OF TEN PERCENT (10%) OF THE UNPAID PRINCIPAl
BALANCE AND ACCRUED INTEREST FOR COLLECTION, BUT IN ANY EVENT NOT LESS THAN FIVE HUNDRED DOLLARS ($500) ON WHICH
JUDGMENT OR JUDGMENTS ONE OR MORE EXECUTIONS MAY ISSUE IMMEDIATELY; AND FOR SO DOING, THIS NOTE OR A COPY OF THIS
NOTE VERIFIED BY AFFIDAVIT SHALL BE SUFFICIENT WARRANT. THE AUTHORITY GRANTED iN THIS NOTE TO CONFESS JUDGMENT
AGAINST BORROWER SHALL NOT BE EXHAUSTED BY ANY EXERCISE OF THAT AUTHORiTY, BUT SHALL CONTINUE FROM TIME TO TIME AND
AT ALL TIMES UNTIL PAYMENT IN FULL OF ALL AMOUNTS DUE UNDER THIS NOTE. BORROWER HEREBY WAIVES ANY RIGHT BORROWER
MAY HAVE TO NOTICE OR TO A HEARING IN CONNECTION WITH ANY SUCH CONFESSION OF JUDGMENT, EXCEPT ANY NOTICE AND/OR
HEARING REQUIRED UNDER APPLICABLE LAW WITH RESPECT TO EXECUTION OF THE JUDGMENT, AND STATES THAT EiTHER A
REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THIS CONFESSION OF JUDGMENT PROVISiON TO BORROWER'S ATTENTION OR
BORROWER HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL.
PRIOR TO SIGNING THIS NOTE, EACH BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE AND THE NOTICE TO
COSIGNER SET FORTH BELOW. EACH BORROWER AGREES TO THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A
COMPLETED COpy OF THE NOTE.
Page 2
SEALED BY THE UNDERSIGNED.
~ 'J ~
.
xwr::::::f::::::;:;:F~.::~::::~:e;&:.::m;~:~,:~W:..(~j~li8~~rl
NOTICE TO COSIGNER
You are being asked to guarantee this debt. Think carefully before you do. If the borrower doesn't pay the debt, you will have to. Be sure
you can aNord to pay If you have to, and that you want to accept this responsibility.
You may have 10 pay up to the full amount of the debt If the borrower does not pay. You may also have 10 pay late fees or collecllon costs,
which Increase this amount.
The lender can collect this debt from you wlthoul first trying to collect from the borrower. The lender can use the same collecllon methods
against you that can be used against the borrower, such as suing you, garnishing your wages, etc. If this debt Is ever In default, that fact may
become a part of YOUR credit record.
This no lice Is not. the contract that makes Y9U liable for the debt.
Fixed Rate. Installment.
LASER PRO, Reg. U.S. Pat. & T.M. Off" Ver. 3.26 (c) 1999 CFI ProServlces. Inc. All rIghts reserved. (PA-020 FULMER1,LN C29.0VL)
.. III "
CERTIFICATE OF SERVICE
AND NOW, this
j?;.
day of March, 2003, I, Michael J. Donohue, a
member ofthe firm of Kreder Brooks Hailstone LLP, hereby certify that I have this day
served the within Answer and New Matter by depositing a copy thereof in the United
States Mail, postage prepaid, at Scranto Pennsylvania, addressed to the party or attorney
of record as follows:
John R. Fenstermacher, Esquire
5115 East Trindle Road
Mechancisburg, P A 17050
KREDER BROOKS HAILSTONE LLP
BY:
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THOMAS A. FULMER, and
DIANE S, FULMER,
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
Plaintiffs
v.
DOCKET NO. 03-369 Civil Term
PNC BANK, N,A. and FRANK
DeSTEFANO,
Defendants
PLAINTIFFS' REPLY TO DEFENDANTS' NEW MATTER
AND NOW come the Plaintiffs, by and through their attorneys, the Offices of
Fenstermacher and Associates, P,C" and files this Reply to Defendants' New Matter, as
follows:
46. Paragraph 46 of Defendants' New Matter states a conclusion of law to
which no response is required, A failure to state a cause of action can not be raised in
the new matter and must be raised by preliminary objection, To the extent that a
response is required, Plaintiffs' Complaint does set forth a cause of action upon which
relief may be granted.
47, Paragraph 47 of Defendants' New Matter states a conclusion of law to
which no response is required. A failure to state a cause of action can not be raised in
the new matter and must be raised by preliminary objection, To the extent that a
response is required, Plaintiffs' Complaint does set forth a cause of action in
negligence. Defendants PNC and DeStefano were aware of the contract that existed
with the Fulmers and as such could foresee the harm their actions would cause to
Plaintiffs' interests. Furthermore, Defendants PNC and DeStefano intentionally
subverted the purposes of the contract with the Fulmers as more fully set forth in
Plaintiffs' Complaint, herein incorporated by reference.
48. Paragraph 48 of Defendants' Answer and New Matter states a conclusion
of law to which no response is required. A failure to state a cause of action can not be
raised in the new matter and must be raised by preliminary objection. To the extent that
a response is required, PNC did owe a fiduciary duty to the plaintiffs and plaintiffs'
businesses.
49. Admitted.
50. Admitted in part and Denied in part. The documents referenced in this
paragraph are written documents which speak for themselves, Furthermore, PNC and
its officers changed the terms of the Plaintiffs' loan as more completely set forth in
Plaintiff's Complaint.
51, Admitted. The documents referenced in this paragraph are written
documents which speak for themselves, Furthermore, PNC and its officers changed the
terms of the Plaintiffs' loan as more properly set forth in Plaintiff's Complaint.
52, Paragraph 52 of Defendants' Answer and New Matter states a conclusion
of law to which no response is required. To the extent that a response is required,
paragraph 52 is denied. Plaintiffs did not breach their agreements with PNC and at all
2
times followed the requirements of the agreements. Furthermore, PNC did not act
within its rights under the contract to increase the rates by 5%,
WHEREFORE, Plaintiffs demand judgment against Defendants in an amount in
excess of the compulsory arbitration limitations, together with costs, interest and any
other relief the Court deems appropriate.
Respectfully submitted,
FENSTERMACHER AND ASSOCIATES. P.C.
John Fenstermacher
\ Supreme Court I.D, #29940
j 5115 East Trindle Road
Mechanicsburg, PA 17050
(717) 691-5400
Attorney for Plaintiffs
DATED: 3ft ojD,J
3
CERTIFICATE OF SERVICE
AND NOW, on this L~
day of 'r1t1.<..d ,2003, I, John R.
Fenstermacher, Esquire, hereby certify that I have served the foregoing Plaintiffs' Reply
to Defendants' New Matter, by mailing a true and correct copy by United States first
class mail, addressed as follows:
Michael J. Donohue, Esquire
220 Penn Avenue
Scranton, PA 18503
Attorney for PNC Bank, N.A. and Frank DeStefano
FENSTERMACHER AND ASSOCIATES, P,C,
B~
~hn R. Fenstermacher
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THOMAS A. FULMER and DIANE S.
FULMER,
COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY
Plaintiffs,
NO,: 03-369 CIVIL TERM
vs,
PNC BANK, N,A. and FRANK
DeSTEFANO,
Defendants.
MOTION FOR JUDGMENT ON THE PLEADINGS
Defendants, PNC Bank, National Association, and Frank DeStefano, through their
counsel, Kreder Brooks Hailstone, LLP, pursuant to Pa. Rule of Civil Procedure 1034
moves this Honorable Court to enter judgment on the pleadings in their favor and cites
the following reasons therefor:
1. Plaintiffs, Thomas A. Fulmer and Diane S, Fulmer ("Fulmer"), filed a
Complaint on or about January 23,2003,
2. Defendants have filed an Answer and New Matter, Fulmer has filed a
Reply to the New Matter and the pleadings are now closed.
3, The Complaint avers, inter alia, that:
a, Fulmer executed three promissory notes in favor ofPNC Bank; the
first in the amount of$558,000, the second in the amount of $25,000, and the third in the
amount of$358,204;
b, Fulmer was never late on any payments to PNC;
c. PNC arbitrarily increased the interest rate on the notes by 5%
without having any legal basis to do so; and
d, PNC raised the rates on the notes because it desired to end its
participation in the managed heaIthcare industry,
4. Defendants' Answer alleged, inter alia, that:
a, Fulmer was required under the contract documents to provide
specific and detailed financial information to PNC Bank during the life ofthe loan and
that Fulmer was required to maintain a ration of cash flow to debt and unfunded capital
expenditures of 1.25 to 1;
b. Fulmer failed to provide the documentation to the Bank; and
c. The Bank discovered that the proper ratio was not maintained by
Fulmer and that the Bank's action in raising the interest rate was fully justified under the
contract documents.
MOTION TO DISMISS COUNT I
Negligence
5, Count I of plaintiffs' Complaint sounds in negligence.
6, Plaintiffs cause of action is properly one for breach of contract and not
tort and the claim is not properly brought under a theory of negligence,
7. The "gist" ofthe action is clearly one in contract and the proper theory of
plaintiffs cause of action is one of contract and not of tort.
WHEREFORE, defendants respectfully request that Count I be dismissed.
2
MOTION TO DISMISS COUNT II
Breach of Fiduciary Duty
8. In Count II Fulmer alleges that a fiduciary relationship exists between
them and the defendants and that the defendants breached that fiduciary duty in raising
the interest rates on the loans.
9, The relationship between Fulmer and PNC is one of debtor and creditor.
The contracts were negotiated at arm's length.
10. There is no special relationship between Fulmer and PNC to warrant the
imposition of a fiduciary duty.
11. No fiduciary duty exists on the part of a bank towards its debtors.
WHEREFORE, it is respectfully requested that Count II be dismissed.
MOTION TO DISMISS FRANK DESTEFANO AS TO COUNT III
Breach of Contract
12, In Count III Fulmer makes a claim under breach of contract against PNC
Bank and Frank DeStefano. Frank DeStefano is not a party to the contract.
13. Frank DeStefano is not a proper party to the litigation under the contract.
14. Actions in breach of contract may only be brought against parties to the
contract.
3
WHEREFORE, it is respectfully requested that Frank DeStefano be dismissed as
a party to this lawsuit.
KREDER BROOKS HAILSTONE LLP
BY:
,/
, Esquire
Attorney I.D, No. 25906
Attorneys for Defendants
220 Penn Avenue, Suite 200
Scranton, PA 18503
(570) 346-7922
4
CERTIFICATE OF SERVICE
AND NOW, this -.!l ~. day of May, 2003, I, Michael J. Donohue, a member
of the firm of Kreder Brooks Hailstone LLP, hereby certify that I have this day served the
within Motion for Judgment on the Pleadings and Praecipe for Argument by depositing a
copy thereof in the United States Mail, postage prepaid, at Scranton, Pennsylvania,
addressed to the party or attorney of record as follows:
John R. Fenstermacher, Esquire
5115 East Trindle Road
Mechanicsburg, P A 17050
KREDER BROOKS HAILSTONE LLP
BY:
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THOMAS A. FULMER, and
DIANE S. FULMER,
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
Plaintiffs
v.
DOCKET NO. 03-369 Civil Term
PNC BANK, N.A. and FRANK
DeSTEFANO,
Defendants
PLAINTIFFS' REPLY TO DEFENDANTS' MOTION FO.R JUDGMENT ON
THE PLEADINGS
AND NOW come the Plaintiffs, by and through their attomeys, the Offices of
Fenstermacher and Associates, P.C., and file this Reply to Defendants' Motion for
Judgment on the Pleadings, as follows:
1. Admitted, as set forth in the Complaint.
2. Admitted, as set forth in the Complaint.
3.
a.
Admitted, as set forth in the Complaint.
b. Admitted, as set forth in the Complaint.
c. Admitted, as set forth in the Complaint.
d. Admitted, as set forth in the Complaint.
4.
a.
Admitted, as set forth in the Answer; however, it is denied that
.specific and detailed" financial information was required.
b. Admitted, as set forth in the Answer; however, it is denied that the
Plaintiffs failed to provide documentation to Bank.
c. Admitted, as set forth in the Answer; however, it is denied that the
proper ratio was not maintained and that the Bank was justified in its actions.
MOTION TO DISMISS COUNT I
Nealiaence
5. Admitted.
6. Denied. Plaintiffs' claim is properly brought under a theory of negligence.
7. Denied. Defendants' actions clearly sound in negligence as more fully set
forth in Plaintiffs' Complaint.
WHEREFORE, Plaintiffs respectfully request that Defendants' Motion to Dismiss
Count I be DENIED.
MOTION TO DISMISS COUNT 1\
Breach of Fiduciary Dutv
8. Denied. Defendants established a fiduciary relationship with Plaintiffs by
structuring and micro-managing Plaintiffs' business.
9. Denied. The relationship went beyond a mere debtor/creditor relationship.
10. Denied. The relationship involved the Bank involving itself in all the
businesses ofthe borrower.
11. Denied. A fiduciary relationship existed.
WHEREFORE, Plaintiffs respectfully request that defendants' Motion to Dismiss
Count 1\ be DENIED.
2
MOTION TO DISMISS FRANK DESTEFANO AS TO COUNT III
Breach of Contract
12. Denied. Frank DeStefano, individually, and as agent for PNC, breached
the implied and express contract by and between the Plaintiffs and Defendants.
13. Denied. Frank DeStefano is a proper party.
14. Denied. Frank DeStefano breached the implied and express contracts by
and between Plaintiffs and Defendants.
WHEREFORE, Plaintiffs respectfully request that Defendants' Motion to Dismiss
Frank DeStefano as to Count III be DENIED.
Respectfully submitted,
FENSTERMACHER AND ASSOCIATES. P.C.
J hn Fenstermacher
upreme Court I.D. #29940
5115 East Trindle Road
Mechanicsburg, PA 17050
(717) 691-5400
Attorney for Plaintiffs
DATED: &(ttJ~)
3
CERTIFICATE OF SERVICE
AND NOW, on this t?~ day of June, 2003, I, John R. Fenstermacher,
Esquire, hereby certify that I have served the foregoing Plaintiffs' Reply to Defendants'
Motion for Summary Judgment on the Pleadings, by mailing a true and correct copy by
United States first class mail, addressed as follows:
Michael J. Donohue, Esquire
220 Penn Avenue
Scranton, PA 18503
Attorney for PNC Bank, N.A. and Frank DeStefano
FENSTERMACHER AND ASSOCIATES, P.C.
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PRAECIPE FOR LISTING CASE FOR ARGUMENT
TO THE PROTHONOTARY OF CUMBERLAND COUNTY:
Please list the within matter for the next Argument Court.
THOMAS A. FULMER and DIANE S.
FULMER,
COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY
Plaintiffs,
NO.: 03-369 CIVIL TERM
vs.
PNC BANK, N.A. and FRANK DeSTEFANO,
Defendants.
1. State matter to be argued (i.e., plaintiff's motion for new
trial, defendant's demurrer to complaint, etc.):
Motion for Judgment on the Pleadings.
2. Identify counsel who will argue case:
(a) for plaintiff: John R. Fenstermacher, Esquire
address: 5115 East Trindle Road
Mechancisburg, PA 17050
(b) for defendant: Michael J. Donohue, Esquire
address: 220 Penn Avenue, Suite 200
Scranton, PA 18503
3. I will notify all parties in writing within two days that
this case has been listed for argument.
4. Argument Court Date:
MiC?!:fk!iu?d:::
Kreder Brooks Hailstone, LLP
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THOMAS A. FULMER and DIANE:
S. FULMER,
Plaintiffs
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
vs.
CIVIL ACTION - LAW
03-0369 CIVIL
PNC BANK, N.A. and FRANK
DESTEFANO,
Defendants
IN RE: MOTION FOR JUDGMENT ON THE PLEADINGS
BEFORE BAYLEY AND HESS, J.J.
ORDER
'/ "
AND NOW, this ... day of January, 2004, the complaint as to the defendant, Frank
DeStefano, is DISMISSED.
The defendants' motion for judgment on the pleadings with respect to Count II is
GRANTED and the plaintiffs' claim for breach of fiduciary duty is DISMISSED.
The balance of the defendants' motion for judgment on the pleadings is DENIED.
BY THE COURT,
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v'John Fenstermacher, Esquire
For the Plaintiffs
vMichael J. Donohue, Esquire
For the Defendants
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THOMAS A. FULMER and DIANE:
S. FULMER,
Plaintiffs
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
vs.
CIVIL ACTION - LAW
03-0369 CIVIL
PNC BANK, NA and FRANK
DESTEFANO,
Defendants
IN RE: MOTION FOR JUDGMENT ON THE PLEADINGS
BEFORE BAYLEY AND HESS, J.J.
MEMORANDUM AND ORDER
In this case, the plaintiffs entered into loan agreements with the defendant, PNC Bank. In
December 200 I, the defendant declared the plaintiffs in default of their agreements claiming that
they had failed to provide required financial documentation and failed to maintain a ratio of cash
flow to debt. The plaintiffs allege that they had provided all ofthe information which PNC Bank
officers had sought and that the bank simply concocted an excuse to terminate their loans.
The plaintiffs filed a complaint on or about January 23, 2003, alleging three causes of
action against the defendant. Count I alleges that the bank was negligent in handling the
plaintiffs' account. Count II alleges the breach ofa fiduciary duty on the part of the defendant.
Count III alleges breach of contract. Pending before the court is a motion of the defendants for
judgment on the pleadings.
The parties have agreed that Frank DeStefano, sued in his individual capacity, may be let
out ofthe case. Our order will so reflect.
We agree with the defendants that Count II of the plaintiffs' complaint should be
dismissed. In Cortez v. Keystone Bank, Inc., 2000 U.S. Dist. LEXIS 5705, 24 (E.D. Pa. 2000),
the plaintiffs alleged that the defendant bank breached a fiduciary duty owed to them beyond
03-0369 CIVIL
their lending contract. The court, in holding that the bank had no such duty, stated that "[a]
fiduciary duty arises from a special relationship of trust and confidence in which there is
confidence reposed by one side and domination and influence exercised by the other." Cortez,
at 27. According to the court, "Pennsylvania law follows the 'well recognized principle that a
lender is not a fiduciary of the borrower' unless the lender gains' substantial control' over the
borrower's business affairs." Id. The court in Cortez found no evidence that the bank had
gained such control over the plaintiffs affairs and there was no indication that there was any
relationship other than the conventional borrower and lender relationship. Id. Likewise, in the
present action, there is no allegation that the defendant had substantial control over the plaintiffs'
business affairs, nor is there anything to suggest that this was more than a traditional borrower
and lender relationship. Consequently, defendant's motion to dismiss Count II should be
granted.
The defendant contends, also, that Count I, a claim in negligence, should be dismissed.
At this stage of the proceedings, we are, however, unable to agree that the "gist of the action" is
so clearly one of contract that the tort action cannot proceed. We will leave for another day the
question of whether the "gist of the action" doctrine or, if asserted, the economic loss doctrine,
precludes recovery in tort.
ORDER
'"
AND NOW, this .l / day of January, 2004, the complaint as to the defendant, Frank
DeStefano, is DISMISSED.
The defendants' motion for judgment on the pleadings with respect to Count II is
GRANTED and the plaintiffs' claim for breach of fiduciary duty is DISMISSED.
2
The balance of the defendants' motion for judgment on the pleadings is DENIED.
BY THE COURT,
John Fenstermacher, Esquire
For the Plaintiffs
. /lei
Michael 1. Donohue, Esquire
F or the Defendants
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PW?pE FOR LISTING CASE FOR TRIAL
(Must be typewritten and submitted In dupUcate)
TO TIm PROmONOfARY OF CUMBERLAND COUNTY
PI_ Iilllbe foDowm, cue:
o for JURY trial at the next term of civil court.
III for trial wfthoata JIlI'Y.
--.-...-----...----...-..---....------..----....
CAPTION OF CASE
(Mt/.n cllptlo" ".",t be rurud ill full)
THOMAS A. FULMER AND
DIANE S. FULMER,
~hcck one)
Civil Action - Law
Appeal from arbintion
o
(other)
(plaintifl)
VII.
The trial Ust wW be called on R-77-06
and
PNC BANK, N.A. AND
FRANK DeSTEFANO,
(Defendant)
Triab co_mee on 9-18-06
PretrlalswW be beld OIL 8-30-06
(BtWft IIH tI1u 5. before pNtrUJls
VB.
No.
O~-O~fiQ
. Civil Term
Indicate the attorney who will 1ry case for the party who files this praecipe:
John R. Fenstermacher. Esquire
Indicate trial counsel for other parties jfknown:
Michael J. Donohue, Es uire
John R. Fenstermacher
This case is ready for trial.
Date: .Tnly lA. 7001\
Plaint.iffs
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KREDER BROOKS HAILSTONE LLP
By: Michael J. Donohue
ID#: 25906
220 Penn Avenue, Suite 200
Scranton, P A 18503
(570) 346-7922
Attorneys for Defendant
THOMAS A. FULMER and DIANE S.
FULMER
COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY
Plaintiffs
vs.
PNC BANK, NA
Defendant
NO. 03-369 CIVIL TERM
MOTION FOR SUMMARY JUDGMENT
FILED ON BEHALF OF DEFENDANT. PNC BANK. N.A.
Defendant, PNC Bank, N.A., by its attorneys, Kreder Brooks Hailstone, moves this
Honorable Court to enter Summary Judgment in its favor and against Plaintiffs, Thomas A. Fulmer
and Diane S. Fulmer and, in support thereof, respectfully represents:
1. Plaintiffs filed this action seeking damages allegedly caused by Defendant's breach
of contract and/or negligence in declaring the Plaintiffs in default on three loans and promissory
notes. 1
The parties by stipulation agreed to the dismissal of Frank DeStefano, sued in his
individual capacity, leaving only the Bank as a party Defendant. Furthermore, per Order of Court
dated January 21,2004, Count II of Plaintiffs' Complaint alleging breach of fiduciary duty was
dismissed.
2. Plaintiffs operated two (2) personal care home facilities and a trucking business for
which they sought financing from PNC Bank.
3. On January 8, 1999, PNC sent to the Fulmers a letter agreement dated January 8, 1999
setting forth the terms of the loan to be made to the Fulmers.
4. The aforesaid letter agreement is attached hereto, made a part hereof and marked
Exhibit "I".
5. The aforesaid letter agreement included an Exhibit A setting forth the borrowers'
covenants.
6.
8,1999.
7.
The aforesaid letter agreement was accepted and executed by the Plaintiffs on January
On January 21, 1999, the Fulmers executed a Promissory Note in the amount of
$558,000 to PNC Bank that included mortgages on the real property owned by the Fulmers (the
January 21, 1999 Note).
8. On October 25, 1999, the Fulmers executed a Promissory Note in the amount of
$25,000 (the October 25, 1999 Note).
9. On December 8, 2000, the Fulmers executed a Promissory Note in the amount of
$358,204 secured by mortgages on real and personal property owned by the Fulmers (the December
8,2000 Note).
10. The aforesaid Notes contain provisions that "This note is issued pursuant to a letter
agreement dated January 8, 1999 and the documents referred to therein, all the terms and conditions
of which are incorporated herein by reference."
I I. The aforesaid letter agreements required the Fulmers to provide PNC Bank with
specific financial information during the terms of the loans including "1. financial statements for
the trucking company and the personal home care entity within 120 days of fiscal year end, prepared
on a compiled basis by a certified public accountant acceptable to the bank; 2. personal financial
statements and federal income tax statements for each calendar year within 120 days after year end."
12. By way of financial covenants, the Fulmers were required by the terms of the letter
agreement to maintain a ratio of cash flow cash to debt and unfunded capital expenditures of 1.25
to 1.00.
13. The Bank declared the loans to be in default as a result of the Fulmers failure to
provide the required financial documents and as a result of the failure to maintain the required cash
flow ratio.
14. Plaintiffs allege in Count I of their Complaint that the Bank was negligent in
management of the Fulmers' account and in particular in classifying the loans as being in default.
15. In their Complaint, Count III, Plaintiffs allege breach of contract against the Bank in
declaring the Plaintiffs in default when no such action was warranted.
16. Thomas Fulmer admitted in his Deposition (pages 22, 23) that the Plaintiffs did not
send the financial documents required by the terms of the letter agreement, but stated that he felt he
had no obligation to do so as a result of a prior oral statement by a Bank agent, Peter Bower, that it
would not be required to send those documents.
17. Plaintiffs' claim thattheir obligations under the written contract are void because they
were contradicted by a pre-existing oral agreement is barred by the Parole Evidence Rule.
18. In his Deposition Plaintiff, Thomas A. Fulmer, stated that his damages were
"financial" but did not explain or provide any evidence or proof of damages other than he was
required to pay higher default interest rates following the loan being declared in default and he
retained the services of a financial consultant and attorney because of the dispute with the Bank
(Fulmer Depos. pp. 59-69.)
19. Thomas A. Fulmer is claiming damages for emotional distress caused by the Bank's
actions. He testified in his Deposition that he considered suicide in that he mentioned his suicidal
ideations to his family doctor on one occasion in a phone conversation but received no treatment
therefor.
20. Plaintiffs' claims arise solely from a contract between the parties and the tort claim
sounding in negligence is collateral thereto and barred by the "Gist of the Action" Doctrine.
21. To maintain a cause of action for breach of contract, a Plaintiff must establish the
existence of a contract, a breach of a duty imposed by the contract, and resultant damages.
22. After extensive discovery, Plaintiffs have produced no evidence in support of
damages legally sufficient to sustain any cause of action as against Defendant.
23. Defendant is entitled to judgment as a matter of law on all claims set forth in
Plaintiffs' Complaint.
WHEREFORE, Defendant, PNC Bank, N A, respectfully requests that this Honorable Court
enter Summary Judgment.
Respectfully submitted,
KREDER BROOKS HAILSTONE LLP
220 Penn Avenue, Suite 200
Scranton, PA 18503
(570) 346-7922
By:
Michael J. Donohue, Es e
Attorneys for Defendant,
PNC Bank, National Association
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EXHIBIT "1"
. .
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"
PNCJBANK
January 8, 1999
Thomas A. Fulmer
Diane S. Fulmer
RR 2, Box 146
Williamsport, PA 17701
Re: $558,000.00 Tenn Loan "A"
Re: $325,000.00 Tenn Loan "B"
Dear Mr. & Mrs. Fulmer:
We are pleased to infonn you that PNC Bank, National Association (the "Bank"), has
approved your request for two tenn loans to Thomas A. Fulmer and Diane S. Fulmer (the
"Borrower"). We look forward to this opportunity to help you meet the financing needs of your
business. As your primary bank, we want to supply all your banking needs.
All the details regarding your loans are outlined in the following sections of this letter. If
these tenns are satisfactory, please follow the instructions for proceeding with your loans
provided at the end of this letter.
1. Tvpe of Facilitv and Use of Proceeds. This is a tenn loan in the amount of $558,000.00
(the "Term Loan A"). The proceeds of the Tenn Loan may be used..for refmance of existing
debt and property improvements,
2. Interest Rate. Interest on the unpaid balance of the Tenn Loan will. be charged at a rate
per annum of eight percent (8.00%).
3. Repayment, The principal amount of the Tenn Loan, together with interest, shall be paid
in equal consecutive monthly installments over five years with a fifteen year amortization and a
balloon payment of all outstanding principal and interest at the end of the fifth year. Interest will
be due and payable on a monthly basis, and will be computed on the basis of a year of 360 days
and paid on the actual number of days elapsed.
4. Tvoe of FaciIitv and Use of Proceeds. This is a tenn loan in the amount of $325,000.00
(the "Term Loan B"). The proceeds of the Term Loan may be used for refinancing and
consolidating existing debt.
5, Interest Rate. Interest on the unpaid balance of the Tenn Loan will be charged at a rate
per annum of eight and one-quarter of one percent (8.25%).
Form 7C - Multistate Rev. 3/95
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6. Rl:1lavment. The principal amount of the Term Loan, together with interest, shall be paid
in equal consecutive monthly installments over four years. Interest will be due and payable on a
monthly basis, and will be computed on the basis of a year of 360 days and paid on the actual
number of days elapsed.
7. Notes. The obligation of the Borrower to repay the Term Loans shall be evidenced by
promissory notes (the "Notes ") in form and content satisfactory to the Bank. The Notes will also
contain a prepayment cost recovery provision requiring a payment to the Bank equal to the losses
incurred by the Bank as a result of said prepayment.
8. Security. The Borrower must cause the following to be executed and delivered to the
Bank in form and content satisfactory to the Bank as security for the Term Loans:
(a) a security agreement granting the Bank a first priority perfected lien on the
Borrower's existing vehicles as listed on attached Exhibit "B".
(b) a mortgage containing an assignment of leases and rents, granting the Bank first and
second priority perfected liens on the real property of the Borrower located at RR 2, Box
146, Williamsport, PA 17701 and a mortgage containing an assignment of leases and
rents, granting the Bank first and second priority perfected liens on the real property of
the Borrower located at 205 Woodward Avenue, Lock Haven, PA 17745
(the "Property ").
Because the Term Loans are secured by vehicles and real property, hazard insurance must be
maintained on such property, in such amounts and with such coverages as are acceptable to the
Bank, containing a standard lender loss payable or mortgagee clause in favor of the Bank.
9. Covenants. Unless compliance is waived in writing by the Bank or until payment in full
of the Term Loans:
(a) The Borrower will promptly submit to the Bank such infonnation relating to the
Borrower's affairs (including but not limited to annual financial statements and tax returns
for the Borrower and any guarantor) or any security for the Term Loans as the Bank may
reasonably request.
(b) The Borrower will not make or permit any change in the nature of its business as
carried on as of the date of this letter or in its senior management or equity ownership.
(c) The Borrower will comply with the financial and other covenants included in Exhibit
"A" hereto.
10. Reoresentations and Warranties. To induce the Bank to extend the Term Loans, the
Borrower represents and warrants as follows:
(a) The Borrower's latest fmancial statements provided to the Bank are true, complete
and accurate in all material respects and fairly present the fmancial condition, assets and
liabilities, whether accrued, absolute, contingent or otherwise and the results of the
Form 7C. Multistate Rev. 3/95
- 2 -
e
Borrower's operations for the period specified therein. The Borrower's financial
statements have been prepared in accordance with generally accepted accounting
principles consistently applied from period to period subject in the case of interim
statements to normal year-end adjustments. Since the date of the latest financial
statements provided to the Bank, the Borrower has not suffered any damage, destruction
or loss which has materially adversely affected its business, assets, operations, financial
condition or results of operations.
(b) There are no actions, suits, proceedings or governmental investigations pending or, to
the knowledge of the Borrower, threatened against the Borrower which could result in a
material adverse change in its business, assets, operations, financial condition or results of
operations and there is no basis known to the Borrower or its officers, directors or
shareholders for any such action, suit, proceedings or investigation.
(c) The Borrower has filed all returns and reports that are required to be filed by it in
connection with any federal, state or local tax, duty or charge levied, assessed or imposed
upon the Borrower or its property, including unemployment, social security and similar
taxes and all of such taxes have been either paid or adequate reserve or other provision
has been made therefor.
(d) If not a natural person, the Borrower is duly organized, validly existing and in good
standing under the laws of the state of its incorporation or organization and has the power
and authority to own and operate its assets and to conduct its business as now or proposed
to be carried on, and is duly qualified, licensed and in good standing to do business in all
jurisdictions where its ownership of property or the nature of its business requires such
qualification or licensing.
(e) The Borrower has full power and authority to enter into the transactions provided for
in this Letter Agreement and has been duly authorized to do so by all necessary and
appropriate action and when executed and delivered by the Borrower, this Letter
Agreement and the other loan documents executed and deliyered pursuant hereto will
constitute the legal, yalid and binding obligations of the Borrower enforceable in
accordance with their terms.
(f) There does not exist any default or violation by the Borrower of or under any of the
terms, conditions or obligations of: (i) its organizational documents; (ii) any indenture,
mortgage, deed of trust, franchise, pennit, contract, agreement, or other instrument to
which it is a party or by which it is bound; or (iii) any law, regulation, ruling, order,
injunction, decree, condition or other requirement applicable to or imposed upon the
Borrower by any law or by any governmental authority, court or agency.
11. Real Estate Matters.
(a) Flood Insurance. If the Property is located in an area designated as a flood hazard
area by any goyernmental agency, the Borrower will provide the Bank, at the Borrower's
expense, with a policy of flood insurance in an amount equal to the value of the Property
to be insured or the maximum amount available under the federal flood insurance
program, whichever is less.
Form 7C - Multistate Rev. 3/95
- 3 -
6)
(b) Title Insurance. The Borrower will provide the Bank, at the Borrower's expense,
with an ALTA (1992 form) policy of title insurance in favor of the Bank as mortgagee
and in an amount not less than the artlount of the Term Loans, with premium paid
thereon, insuring that the Bank's lien on the Property is a valid first lien, and with only
such exceptions as the Bank deems acceptable.
12. Fees. On the date of the Notes, the Borrower shall pay to the Bank a fee of $4,185.00
and $2,437.50. The Borrower will reimburse the Bank for the Bank's out-of-pocket expenses
incurred or to be incurred in conducting UCC, title and other public record searches, and in
filing and recording documents in the public records to perfect the Bank's liens and security
interests. The Borrower shall also reimburse the Bank for the Bank's expenses (including the
reasonable fees and expenses of the Bank's outside and in-house counsel) in documenting and
closing this transaction and in connection with any amendments, modifications, renewals or
enforcement actions relating to the Term Loan.
13. Additional Provisions. Before the disbursement of the Term Loans, the Borrower agrees
to sign and deliver to the Bank the Notes and other required documents and such other
instruments and documents as the Bank may reasonably request, such as certified resolutions,
incumbency certificates or other evidence of authority .
Prior to execution of the final documents, the Bank may terminate this letter if a material adverse
change occurs with respect to the Borrower, any guarantor, any collateral for the Term Loans or
any other person or entity connected in any way with the Term Loans, or if the Borrower fails to
comply with any of the terms and conditions of this letter, or if the Bank reasonably determines
that any of the conditions cannot be met.
This letter is governed by the laws of the Commonwealth of Pennsylvania. No modification or
waiver of any of the terms of this letter will be valid and binding unless agreed to in writing by
the Bank. When accepted, this letter and the other documents described herein will constitute the
entire agreement between the Bank and the Borrower concerning the Term Loans, and shall
replace all prior understandings, statements, negotiations and written materials relating to the
Term Loans.
To accept these terms, please sign the enclosed copy of this letter as set forth below and return it
to the Bank within 15 days from the date of this letter. If accepted, the final documents must be
executed within 30 days from the date of this letter, or this letter may be terminated at the Bank's
option without liability or further obligation of the Bank.
Form 7C - Multistate Rev. 3/95
- 4-
@
Thank you for giving PNC Bank this opportUnity to work with your business. We look forward
to other ways in which we may be of service to your business or to you personally.
Very truly yours,
PNC BANK, National Association
By: fJc S (b~
Peter S. Bower, Business Banking Officer
- 5 -
Form 7C - Multistate Rev. 3/95
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ACCEPTANCE
With the intent to be legally bound hereby, the above terms and conditions are hereby agreed to
and accepted this g-n... day of ""'J,~ ' 1999.
BO 0
,
- 6 -
Form 7C - Multistate Rev. 3/95
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EXHIBIT A
FINANCIAL REPORTING COVENANTS:
(a) The Borrower will deliver to the Bank:
(i) Financial Statements for the nucking company entity and the personal home
care entity, within 120 days after fiscal year end, prepared on a compiled basis by
a certified public accountant acceptable to the Bank.
(ii) Personal fmancial statements and federal income tax return for each calendar
year, within 120 days after year end.
"Financial Statements" means the consolidated and consolidating balance sheet and
statements of income and cash flows prepared in accordance with generally accepted
accounljng principles in effect from time to time ("GAAP") applied on a consistent basis
(subject in the case of interim statements to normal year-end adjustments).
FINANCIAL COVENANTS:
The Borrower will maintain at all times a ratio of Cash Flow to the total of Current
Maturities plus Unfunded Capital Expenditures of at least 1.25 to 1.00. "Cash Flow"
means net income plus depreciation ~ amortization ~ other non-cash items less
dividends. "Current Maturities" means the current principal maturities of all indebtedness
for borrowed money (including but not limited to amortization of capitalized lease
obligations) having an original tenn of one year or more, as well as any prepayments of
such indebtedness prior to scheduled maturity. "Unfunded Capital Expenditures" means
capital expenditures made from the Borrower's funds other than borrowed funds.
NEGATIVE COVENANTS:
(a) The Borrower will not create, assume, incur or suffer to exist any mortgage, pledg..,
encumbrance, security interest, lien or chlIrge of any kind upon any of its property, now
owned or hereafter acquired, or acquire or agree to acquire any kind of property under
conditional sales or other title retention agreements; oroyided, however, that the
foregoing restrictions shall not prevent the Borrower from:
(i) incurring liens for taxes, assessments or governmental charges or levies which
shall not at the time be due and payable or can thereafter be paid without penalty
or are being contested in good faith by appropriate proceedings diligently
conducted and with respect to which it has created adequate reserves;
(ii) making pledges or deposits to secure obligations under workers'
compensation laws or similar legislation; or
Form 7C - Multistate Re".3/95
- 7 -
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(iii) granting liens or security interests in favor of the Bank.
(b) The Borrower will not create, incur, guarantee, endorse (except endorsements in the
course of collection), assume or suffer to exist any indebtedness, except (i) indebtedness
to the Bank, (ii) open account trade debt incurred in the ordinary course of business and
not past due, or (iii) other indebtedness disclosed on the Borrower's latest Financial
Statements which have been provided to the Bank prior to the date of this letter.
(c) The Borrower will not liquidate, merge or consolidate with any person, fIIm,
corporation or other entity, or sell, lease, transfer or otherwise dispose of all or any
substantial part of its property or assets, whether now owned or hereafter acquired.
(d) The Borrower will not make acquisitions of all or substantially all of the property or
assets of any person, fIIm, corporation or other entity.
(e) The Borrower will not make or have outstanding any loans or advances to or
otherwise extend credit to any person, firm or corporation, except in the ordinary course
of business.
CLD\LTRAGHT.7C Rev. 3/95
Form 7C - Multistate Rev. 3/95
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KREDER BROOKS HAILSTONE LLP
By: Michael J. Donohue
ID#: 25906
220 Penn Avenue, Suite 200
Scranton, PA 18503
(570) 346-7922
Attorneys for Defendant
THOMAS A. FULMER and DIANE S.
FULMER
COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY
Plaintiffs
vs.
PNC BANK, NA
Defendant
NO. 03-369 CIVIL TERM
CERTIFICATION OF COUNSEL
Pursuant to Cumberland County Rule 208.3(a)(2), the undersigned counsel certifies that
Judge Hess has previously ruled on Defendant's Motion for Judgment on the Pleadings.
Respectfully submitted,
KREDER BROOKS HAILSTONE LLP
220 Penn Avenue, Suite 200
Scranton, P A 18503
(570) 346-7922
By:
ue, Esquire
fendant,
ional Association
, ..~ .
4 ., .
. I. .
CERTIFICATE OF SERVICE
AND NOW, this 20th day of JULY, 2006, I, Michael J. Donohue, a member of the firm
of Kreder Brooks Hailstone LLP, hereby certify that I have this day served the within MOTION
FOR SUMMARY JUDGMENT and supporting BRIEF, by depositing a copy thereof in the
United States Mail, postage prepaid, at Scranton, Pennsylvania, addressed to the party or attorney
of record as follows:
John R. Fenstermacher, Esquire
5115 East Trindle Road
Mechancisburg, P A 17050
r, "'-..~
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.')
~ ;:-1
...."
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1
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IN THE COURT OF COMMON PLEAS
OF CUMBERLAND COUNTY, PENNSYLVANIA
2
THOMAS A. FULMER and
3 DIANE S. FULMER,
ORIGINAL
4
Plaintiffs,
5
-vs-
DOCKET NO.
03-369 CIVIL TERM
6 PNC BANK, N.A., and
FRANK DeSTEFANO,
7
Defendants.
8
Thursday, August 5, 2004
9 - - -
10 Oral deposition of THOMAS A. FULMER
11 taken pursuant to notice, was held at the offices
12 of Fenstermacher & Associates at 5115 East
e 13 Trindle Road, MechanicSburg, PA 17050,
14 commencing at 10:25 a.m. , on the above date,
15 before Denise L. Travis, Court Reporter and
16 Notary Public in and for the Commonwealth of
17 Pennsylvania.
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VERITEXT REPORTING COMPANY, LLC
25B Vreeland Road, Suite 301
Florham Park, New Jersey 07932
(800) 227-8440
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APPEARANCES:
2
3 FENSTERMACHER & ASSOCIATES, P.C.
5115 East Trindle Road
4 Mechanicsburg, PA 17050
BY: JOHN R. FENSTERMACHER, ESQ.
5 (717) 691-5400
6
For - Plaintiffs
7
8 KREDER, BROOKS & HAILSTONE, LLP
220 Penn Avenue
9 Suite 200
Scranton, PA 18501
10 BY: MICHAEL DONOHUE, ESQ.
(570) 346-7922
11
For - Defendants
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ALSO PRESENT:
15 Diane Fulmer
John Godfrey
16 Justin Barber, Esq.
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WITNESS EXAMINATION BY PAGE
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Thomas Fulmer Mr. Donohue 4
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E X H I B I T S
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14 EXHIBIT DESCRIPTION PAGE
15 Fulmer
16 1 Commitment 17
Letter
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2 Letter, 1/21/00, 36
18 Martin to Fulmer
19 3 2000 Tax Return 42
20 4 Financial Package 49
21 5 SAC Report 53
22 6 Letter, 1/14/02, 55
DeStefano to
23 Fulmer
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(It is hereby stipulated and agreed
by and among counsel for the respective
parties that sealing is waived and that
all objections, except as to the form of
the question, be reserved until the time
of trial.)
THOMAS A. FULMER, having been duly
sworn by Denise L. Travis, Notary Public,
was examined and testified as follows:
12
e 13 EXAMINATION BY MR. DONOHUE:
14 Q Mr. Fulmer, good morning.
15 A Good morning.
16 Q Could you state your name and
17 address for the record, please?
1B A Thomas A. Fulmer. And I live at 333
19 Ertel Road, williamsport, PA, 17701.
20 Q Mr. Fulmer, as you know, my name is
21 Michael Donohue, and I'm a lawyer representing
22 PNC in the lawsuit that you and your wife have
23 brought against PNC. And today is the day set
24 for the taking of your deposition. And I know
4It 25 you've attended depositions in this case.
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1 Have you ever given a deposition?
2 A No, I haven't.
3 Q Well, I'll give you a few
4 instructions. And I'm sure you've heard them
5 from Mr. Fenstermacher in the depositions we have
6 taken. I'll be asking you a series of questions.
7 And I'd ask you to just answer them based on your
8 recollection. Don't guess and don't speculate.
9 If you don't remember, that's a perfectly
10 appropriate answer. That's the truthful answer.
11 So don't hesitate to say that you don't remember,
12 if that's the answer.
13 If I don't make myself clear or if
14 you don't hear me or if you don't understand the
15 question, just let me know, and I'll be happy to
16 repeat or rephrase the question.
17 Often in conversation when a person
18 asks a question and the person he's talking to
19 knows where he's going, there's a habit to start
20 answering before the question is finished; but
21 that's no good in a deposition, because our
22 reporter has to take down all of my question and
23 all of your answer. So wait until the end of my
24 question before you start - - before you start
25 your answer. And please answer orally rather
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than with a nod or a shake of your head so that
the answer can be transcribed. Okay?
A Yes.
Q What is your highest level of
education?
A Eleventh grade.
Q And what high school did you
attend?
A South Williamsport.
Q And when did you finish the 11th
grade?
A In 1974.
Q And having met you, I have to
express surprise that your -- your highest level
of education is 11th grade.
Is there any reason you didn't
finish high school?
A I knew more than the teachers.
Q Fair enough. Have you gone to any
classes or taken any courses since leaving
school?
A Courses that the State has told us
that we have to have to be licensed to run a
personal care home.
Q And what courses were they? What
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1 areas do they cover?
2 A It's taking care of the residents,
3 knowing what DEP wants in their guidelines for us
4 to do.
5 Q You -- your businesses are in the
6 area of the operation of personal care homes and
7 in the trucking business. Correct?
8 A Yes.
9 Q And that's a very interesting
10 combination.
11 When did you start in the personal
12 care business? How did you get your start?
13 A In 1986, we opened Fulmer's Personal
14 Care Home in Williamsport. And we ran that for
15 several years.
16 In 1990, we bought the one in Lock
17 Haven, which was a motel. And we totally
18 converted it to a personal care home.
19 Q Before you purchased the
20 Williamsport facility in 1986, did you have any
21 experience before that time in the operation of
22 personal care homes?
23 A Not really. My parents always had
24 one or two elderly people living with us.
25 Q What did you -- how did you make
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your living before you purchased the Williamsport
facility?
A The Williamsport facility is our
home. It's our own personal home. I built it
from scratch.
Q Okay. And it was in 1986 that
you -- strike that.
Before -- before it was a personal
care facility, it was a -- it was your family
home?
A It was our own residence, yes.
Q How big is it?
A I don't know. It's -- I built onto
it a couple times. The original one we built in
1976 was about 2,200 square feet.
Q And when you opened it as a personal
care home, how many beds did it have?
A Eight.
Q And at its largest point, how many
beds did the Williamsport facility have?
A Thirty-one.
Q Now, is the Williamsport facility
still open?
A No.
Q When did it close?
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A May of 2001.
Q Okay. And I noticed you looked at
your wife. We'll take her deposition in a
second. I know you're just trying to be helpful;
but that's an example of if you're not sure, just
let me know.
A I thought it was 2001, but the years
go so quickly.
Q Now, you opened the -- what's the --
the Lock Haven facility, you opened that in 1990?
A I bought it in 1990. It was opened
on April 15, 1990, opening date.
Q And was it --
A Or '91. I'm sorry.
Q Okay. It opened on April 15, 1991?
A Yes, tax day.
Q Tax day. How large -- is that still
in operation?
A Absolutely.
Q How large was it when you opened it,
how many beds approximately?
A Eight-nine.
Q And how large -- how many beds
today?
A
I'm sorry.
I have to take that
VERITEXT COURT REPORTING SERVICES (800) 227-8440
It was 73, and now it's 89.
Q When did you first get into the
trucking business?
A At Williamsport, we used to run a
little low on water. And I had to carry water
for the personal care home. And that's when
trucking sort of opened up.
Q It was to provide the water supply
for your res for your personal care facility
in Williamsport?
A Yes.
Q Because the public water wasn't
sufficient to provide the water that a personal
care facility needs?
A That's correct.
Q Now, you got into it by purchasing a
truck to haul the water to the facility. Is
that
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A Yes. That's right.
Q Was that a tanker type truck?
A Yeah. It was a flatbed truck that
had a we put a tank on and off of it. So we
used the truck for two different things.
Q And at the once you had the
did you then use it for other things
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besides supplying water to your personal care
home?
A Not at first.
Q
Okay.
But as time went on?
A As time went on, yes, we did use it.
Q And was it a truck that specialized
in water, for instance, hauling and providing
water to other places that needed water?
A Yes. Swimming pools and other
people that needed, you know, the same situation
that we were in, needed drinking water, we hauled
for them.
Q And it started -- and forgive me if
I asked before. When did you buy the first
truck?
A
Q
facility,
expand?
About '89, 1989.
And like your personal care
did the truck side of your business
A Yes, it did.
Q As the years went by, you bought
more and more trucks?
A Yeah. There was a need for it. So
we purchased some more.
Q And as your trucking business
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expanded, did your trucking service move beyond
hauling and providing water?
A Yes. We were actually leased onto a
company that hauled freight.
Q What company was that?
A Trenco, T-r-e-n-c-o.
Q And do you still do business with
Trenco?
A Absolutely not.
Q When did you stop doing business
with Trenco?
A I don't have that date in my mind,
but I could find it for you.
Q Okay. I just wanted to see if you
remembered.
What was the reason for your -- the
termination of your relationship with Trenco?
A The fuel got so expensive that it
was hard to make a profit.
Q Did you have to get licensed to
operate your trucking business with either the
state or the federal government? Did you have to
get licensed by the lee or any any
governmental agency to be a --
A When we first started, I didn't need
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any license, except to haul water for ourselves
for the personal care home. And DEP gave us that
license. When we were leased onto another
company, no, you didn't need another license,
because you used their license.
Q Besides your own home and Trenco,
were you providing trucking services for anybody
else?
A In time, but not at first.
Q It was just you'd lease tractors to
Trenco. Is that correct?
A The tractor and the driver.
Q Did there come a time when you
purchased trailers?
A A few, yes, because Trenco told me
they would give me more percentage if we had our
own trailer.
Q Okay. All right.
correct -- strike that.
Did you ever incorporate any of your
And am I
businesses?
A In 1990, we incorporated, and we
dissolved it the next year.
Q So who were the owners of your
businesses?
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A Diane Fulmer, Tom Fulmer.
Q Now, when you started your
businesses, I assume, like every small
businessman, you had a relationship with a bank?
A Sure.
Q What do you recall what bank you
did business with when you opened your businesses
starting from the
A Jersey Shore State Bank.
Q And they're located in Jersey Shore,
Pennsylvania?
A Actually, that's the main office. I
think they have moved their main office to
Williamsport. But they have branches allover,
yeah.
Q And was Jersey Shore your bank for
the personal care homes as well as the trucking
business?
A Yes.
Q And you -- you had your accounts
with the Jersey Shore Bank?
A Yes.
Q And you had loans with the Jersey
Shore Bank?
A Yes.
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1 Q And did there come a time in or
2 around 1998 that you approached PNC to establish
3 a banking relationship with PNC?
4 A Actually, I got a phon€ call from
5 Peter Bower. And he said, I'd like to sit down
6 and talk wi th you.
7 And I wasn't looking to change, but
8 I'm always open to suggestion. So he came up and
9 met with us. And he talked to us.
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Q And where was Mr. Bower located at
that point?
A At the Williamsport PNC office.
Q And he had basically a marketing
meeting with you?
A Basically, yeah.
Q Okay. And did he review the
circumstances of your business, ask you questions
about your business?
A Sure. Yeah.
Q Both the trucking and the personal
care business?
A Yes.
Q And did he propose to you that PNC
could meet your banking needs?
A Yes, he did. He said that they had
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1 an ability to help us.
2 Q And was that in 1998?
3 A Yes, it was.
4 Q Okay. I know I say that. The
5 letter and the loan documents that I'll show you
6 in a few minutes were in January of 1999. And I
7 saw some of the bank documents, the workups, were
8 in 1998. So it was in or around that time. Is
9 that correct?
10 A That's right. Yeah.
11 Q Okay. And at that time, you had
12 loans relating to the trucking business and loans
13 relating to the personal care business. Is that
14 correct?
15 A That's right.
16 Q But you and your wife were the
17 owners of both businesses. Is that correct?
18 A Sole proprietors.
19 Q Okay. Either of them were ever --
20 around then, they weren't incorporated. There
21 wasn't a partnership. You were the owners, and
22 it was your business?
23 A That's right.
24 Q And did you and Mr. Bower discuss
25 two loans to go to your - - one to your trucking
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1 company and one to your personal care facility?
2 A Yes.
3 (Fulmer Exhibit 1, Commitment
4 Letter, marked for Identification.)
5 Q Okay. And I'll show you what we'll
6 refer to as Fulmer Exhibit 1. And I'll suggest
7 to you that it is the commitment letter on two
8 loans to PNC Bank -- or rather from PNC Bank to
9 you. And I'll ask you, first, do you recognize
10 that document?
11 A Yes.
12 Q And on page 6 of the document under
. 13 Acceptance, is that the signature of you and your
14 wife, Diane?
15 A Yes, it is.
16 Q Okay. And do you recall how you
17 received this document?
18 A It came in the mail.
19 Q Okay. And did you and your wife
20 read it?
21 A Yeah. We looked it over.
22 Q Okay. And were the terms set forth
23 in it acceptable to you?
24 A I don't understand the question.
. 25 Q I see that you signed - - I mean, you
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. 1 signed. You signed it under the acceptanc€. So
2 you accepted it.
3 A Yeah.
4 Q After you received it, were there
5 any further negotiations between you and PNC
6 Bank? Was there anything that you didn't agree
7 to that you called them and wanted changed?
8 A No - -
9 Q Okay.
10 A - - no.
n Q And when you r€ad it, did you
12 understand it?
. 13
14
15 that.
16
17 a - -
18 A.
A Yes, I did.
Q And subsequently to the -- strike
Before we go any further, there is
attached to the letter, there is an Exhibit
19 Was the Exhibit A included with the
20 letter at the time you signed it?
21 A I think so.
22 Q Okay. And subsequently to signing
23 the letter, was there a loan closing with PNC at
24 which you went to PNC and signed the promissory
. 25 note and the documents to close the loan?
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A No.
Q How did the signing of the loan
papers take place?
A At our lawyer's office.
Q And who was your lawyer at that
time?
A Robert Wise.
Q Were there representatives of PNC at
your lawyer's office?
A No.
Q They just sent the -- okay.
Besides you and Diane and the
lawyer, was there anybody else at the lawyer's
office?
A The lawyer's secretary.
Q Okay. And you signed the promissory
notes
A Yes.
Q -- and the mortgage?
A Yes.
Q And the loan was put in place. Is
that correct?
A Yes.
Q Okay. Now, let me ask you to turn
to page 2 and refer to Paragraph 6, which is
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1 entitled "Covenants." And just take a minute and
2 read Paragraph --
3 MR. FENSTERMACHER: Paragraph 9.
4 Right?
5 MR. DONOHUE: Yes.
6 THE WITNESS: Okay.
7 BY MR. DONOHUE:
8 Q And the last subparagraph of
9 Paragraph 9, Subparagraph C, refers to Exhibit A.
10 And I'll ask you to turn back to Exhibit A and
11 read the first paragraph of Exhibit A, which is
12 financial reporting covenants.
e 13 THE WITNESS: Can we take a break?
14 I want to talk to John.
15 MR. DONOHUE: Okay.
16 (Brief recess from the record. )
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17 BY MR. DONOHUE:
18 Q Now, while you were gone, I thought
19 of something I skipped and wanted to ask you.
20 A personal care facility, is that
21 different than a nursing home?
22 A Yes, it is.
23 Q Okay. Is it different from an
24 assisted living center?
25 A Not really.
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Q Okay. What level of
self-sufficiency are your residents?
A They can be immobile, but we have to
have enough staff on duty to take care of the
immobile.
Q Okay. But it's fair to say they're
in better shape than people in nursing homes. Is
that fair?
A No.
Q Okay. I was just wondering, what's
the difference between a nursing home and a
personal care home?
A The cost.
Q Okay. And -- and you don't
provide -- strike that.
Do you provide nursing services?
A Yes.
Q Is a personal care facility licensed
19 by the State of Pennsylvania?
20 A Yes.
21 Q And nursing homes are also licensed
22 by the State of Pennsylvania?
23 A Correct.
24 Q And the level of care provided is
e 25 different?
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A Sometimes.
Q I think my -- getting back to this
agreement, did you read the financial reporting
covenants on Exhibit A?
When are you
MR. FENSTERMACHER:
saying?
BY MR. DONOHUE:
Q At the time you signed it.
A I read them, but I was told by Peter
Bower that there would be no need to be doing
that.
Q All right. When did he tell you
there would be no need to doing that?
A He actually told me that before I
got this letter.
Q And what did he tell you with regard
to the reporting covenants? What reporting would
be required?
A
schedules
sufficient.
He said my 1040 tax form and my
all my schedules would be
22 Q Okay. And he told you that sometime
23 prior to January 8, 1999 - -
24 A Yes.
e 25 Q - - when he sent you this letter?
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A Yes.
Q Okay. Now, I think you said you did
read the letter when you got it.
A Yes.
Q And did you read Exhibit A when you
received it?
A I read it. I read it, and it was a
form letter. And seeing that I had already a
contract with Peter Bower by verbal contract, I
thought that, well, he couldn't change that. So
it didn't mean what Peter told me to do.
Q Okay. You believe that you prior
to January 8, you already had a contract with
PNC?
A With Peter, yes.
Q And he's a representative of PNC?
A Yes.
Q So the contract was your oral
agreement with Peter Bower rather than with
rather than the commitment letter which you and
your wife signed?
A When I had the discussion with
Peter, I took his word. It was better than a
handshake.
When I do business, I always take
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1 someone's word. If somebody calls me on the
2 phone and says, hey, do this, do that, that's a
3 verbal agreement. I don't break my verbal
4 agreements. I've been in business for a few
5 years. And when someone asks me to do something
6 or I tell them I'm going to do something, that is
7 a verbal agreement. And I do exactly what I say.
8 Q Okay. Now, when you -- when you
9 read Exhibit A. the financial reporting
10 covenants, and it stated, The borrower will
11 deliver to the bank, quoting Paragraph 2,
personal financial statements and federal income
tax return for each calendar within 120 days
after year end -- and it goes on to define
financial statements in stating, Financial
statements means the consolidated and
consolidating balance sheets and statements of
income and cash flows prepared in accordance with
generally accepted accounting principles in
effect from time to time, GAAP, applied on a
consistent basis, subject in the case of interim
statements to normal year-end adjustments.
And did you notice that that was
very different than Mr. Bower's statement that
25 your tax returns would be sufficient?
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1 A I had a verbal agreement with Peter
2 Bower. And he told me -- and I did exactly what
3 he told me to do.
4 Q Okay. But this is my question. Did
5 you notice that the document that came from PNC
6 had requirements and provisions beyond that
7 verbal agreement? Did you notice it?
8 A I had a verbal agreement with Peter
9 Bower to do exactly what he told me to do. And I
10 did exactly what the man told me to do.
11 Q I know. And, Mr.
12 A This is a form letter.
13 Q Okay. Mr. Fulmer, I'm really not
14 being argumentative. And I know and you've
15 repeated several times that you had a verbal
16 agreement with Peter Bower. I may not accept it,
17 but I understand it. But I'm asking you a
18 question now that goes beyond that. Okay? And
19 it is simply, when you read it -- I know you read
20 it you say you had a verbal agreement. But
21 what I'm getting at is and the question I'm
22 getting at is, when this letter came that you
23 considered a form letter, which you signed, did
24 you notice that it had requirements beyond
25 providing your tax returns to PNC?
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1 A Peter Bower was my -- was my bank
2 representative. And when he told me to do
3 something, I did exactly what he told me to do.
4 If a letter would come in the mail and Peter
5 said, Do it this way, who do you believe, the
6 letter or the man that told you verbally?
7 Q Okay. That's fine. That's fine.
8 Can we were you concerned that there was a
9 difference between what Peter Bower had told you
10 verbally
11 A Not
12 Q Let me finish. Remember my
13 instructions. Let me finish.
14 A Okay.
15 Q Were you concerned that the letter
16 which came from the bank which you and your wife
17 signed contained covenants and requirements that
18 were beyond what Peter had told you orally?
19 A I wasn't concerned because Peter was
20 the one that made the verbal agreement and told
21 me what to do. I did exactly what the man told
22 me to do.
23 Q And you weren't concerned that you
24 were signing papers with a bank committing
25 yourself to do things beyond what he had verbally
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1 told you to do?
2 A He didn't tell me to do these
3 things.
4 Q And did you ever after receiving
5 this letter call Mr. Bower and discuss the fact
6 that what he had told you to do orally was
7 different than what this letter required you to
8 do?
9 A State that again.
10 Q Did you call Mr. Bower and say, for
11 instance, Peter, you told me one thing and this
12 commitment letter tells me another?
13 That's all. I'm not being
14 difficult.
MR. FENSTERMACHER: After he signed
the commitment letter?
MR. DONOHUE: After he received the
commitment letter.
THE WITNESS: I didn't call Peter,
because Peter and I had talked previously.
BY MR. DONOHUE:
Q In your dealings with the Jersey
Shore Bank, had you ever signed commitment
letters?
A Yeah.
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1 Q Had you ever noticed a difference
2 between what the Jersey Shore banker had told you
3 orally and what was contained in their form, in
4 their letters?
5 A There was nothing different.
6 Q Okay. You - - you indicated that you
7 were represented by counsel at least at the time
8 of the closing of this mortgage?
9 A Yes.
10 Q Do you recall if you ever shared
11 this commitment letter with your counsel?
12 A I don I t remember.
13 Q Okay. At any rate, the -- moving
14 down Exhibit A from financial reporting covenants
15 to financial covenants --
16 MR. FENSTERMACHER: Page 7.
17 MR. DONOHUE: Page 7.
18 BY MR. DONOHUE:
19 Q And let me just ask you to take a
20 minute and read the financial covenants.
21 And did you read that?
22 A When?
23 Q When you received the letter.
24 A I read it, but I come back to what
25 Peter told me. And I did exactly what Peter told
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1 me to do. So I thought Peter had more authority
2 than -- than his letter.
3 Q Okay. So you didn I t believe the
4 bank had the right to enforce any of these
5 covenants in the letter, is that correct, beyond
6 what was said orally by Peter Bower?
7 A No. I didn't say that at all. I
8 said Peter and I had an agreement. And I was
9 doing exactly what Peter had told me to do. I
10 did exactly what they told me to do.
11 Q So your agreement with the bank was
12 your oral agreement with Mr. Peter Bower, who is
13 the bank's representative. Is that correct?
14 A You have to rephrase your question.
15 Q Was your agreement with PNC Bank the
16 oral agreement which you had entered into with
17 Peter Bower, the bank's representative?
18 A Peter Bower was the bank.
19 Q That I s fine. I accept that.
20 A Now, do I trust in Peter's word?
21 Q No. That's not my question.
22 Was your agreement -- you had an
23 agreement with PNC Bank. Is that correct?
24 A Yes.
25 Q And was the agreement with PNC Bank
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the oral agreement which you had with Peter
Bower? Is that what you're saying?
A The agreement with PNC was to pay
back the money that we borrowed and do it exactly
the way the letter says; but Peter gave us -- or
Peter gave me my tax returns would be sufficient.
7 Now, if you go ahead.
8 Q I didn't mean to interrupt you. Are
9 you finished? I didn't mean to interrupt you.
10 A Yes.
11 Q I understand that. But moving
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beyond the tax returns to the financial
covenants okay?
A Urn-hum.
Q And I asked you to read the
financial covenant.
A Urn-hum.
Q And I asked you if you read it and
if you understood it.
A Okay.
Q I asked you if you read it. I don't
know if I asked you if you understood it.
Did you read it when you received
this letter?
A Yeah.
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1 Q And did you understand it?
2 A Yeah. I did exactly what it said.
3 Q Okay. And it says that -- and I
4 quote, The borrower will maintain at all times a
5 ratio of cash flow to the total of current
6 maturities plus unfunded capital expenditures of
7 at least 1.25 to 1.0.
B And then it goes on to define those
9 three terms, cash flow, current maturities, and
10 unfunded capital expenditures.
11 And you said you read it and you
12 understood it. Is that correct?
13 A Yes. And I -- yes.
14 Q Okay. And did you understand that
15 this covenant required you to maintain a cash
16 flow at or above the level of expenditures? Did
17 you understand what that was requiring?
1B A Yes. And I did.
19 Q Okay. And did you understand that
20 that required -- that requirement went over and
21 above making the payments to the bank?
22 A I did exactly what this said.
23 Q Okay. Now, the banking relationship
24 between you and PNC began and you made your
25 payments in 1999. Is that correct?
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A When we commenced the loan.
Q And did there come a time when Mr.
Bower left the bank?
A Yeah. His mind left, too.
Q Excuse me?
A His mind went with him.
Q Okay.
A In other words, he took all of his
thoughts with him.
Q How do you know that?
A Because he wasn't there anymore. If
you would leave this room, you would take your
mind with you.
Q Yeah.
A And you wouldn't be here.
Q That's fair enough, fair enough.
But Mr. Bower left the bank. And
his mind went with him, physical and spiritual.
A Absolutely.
Q Everything left the bank.
A Yeah.
Q Did he have a -- did he have a
successor at the bank, Ms. Leanne Martin?
A Yes, he did.
Q Okay. And were you advised that Mr.
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taking over your banking relationship with PNC?
A No.
Q Okay. Did you ever learn that Mr.
Bower was leaving and Ms. Martin was taking over
your banking relationship with PNC?
A No.
Q Did you ever have any communication
with Ms. Leanne Martin?
A Yes.
Q And when -- do you recall when your
first communication was with Leanne Martin?
A The year 2000.
Q Okay. And do you recall what that
communication was?
A I called her and asked her if I
could borrow some more money.
Q Okay. And how did you know to call
Ms. Martin?
A I called Peter Bower's office. And
it said to call -- no. It -- the answering
service answered and said, Peter Bower is no
longer with the bank, all phone calls to be
referred to Leanne Martin.
Okay.
Q
So did you get through to
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1 Leanne Martin?
2 A Yes.
3 Q Okay. And do you recall what you
4 said to her and what she said to you?
5 A Yeah. I said, Leanne, I need some
6 money. I said, Is it possible to get some more
7 money from the bank, another -- you know, add it
8 with this other loan?
9 Q Do you recall how much you needed?
10 A 84, 000.
11 Q And do you recall why - - was there a
12 specific reason you needed it?
13 A Yeah. I wanted to do some
14 improving.
15 Q Okay. Across the board to the --
16 had you you had opened -- both facilities were
17 open at that point. Is that correct?
18 A Yes.
19 Q Was it improvement of the homes as
20 opposed to improvement of the trucking business?
21 A Improvement of both.
22 Q And it was in 2000 that you made
23 that call?
24 A
25 Q
Yes.
And do you recall what she said to
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She said, Sure.
Come up and talk to
And did you do that?
Yes.
Was she at the Williamsport office?
No.
Where was she?
A State College.
Q So did you go down to State College
and meet with her?
A My wife and I went over to State
College and met with her.
Q Can you estimate the approximate
time of that meeting?
A About 2:30 in the afternoon.
Q At what month or date?
A I'm thinking -- I don't have that
date in my mind. I don't know.
Q Okay. And did you get the loan you
21 were looking for?
A Yes. But while we were there, I sat
down and talked with her. And I said, Leanne, I
said, I've submitted all of my taxes and stuff to
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you folks.
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And she said, Yes, I know.
no problem with that.
I said, Okay.
All right.
Exact words.
All right. Did you get the loan for
I'll have to look at some of my
I don't have the exact date.
Was this sometime in 2000?
Yes.
(Fulmer Exhibit 2, Letter, 1/21/00,
Martin to Fulmer, marked for
Identification.)
Q Now, let me show you what we'll
refer to as Fulmer Exhibit 2.
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$85,000?
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that loan?
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I have
84 , 0 0 0, ye s .
Do you recall when you closed on
Yes.
When?
When was it?
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Okay.
Have you had a chance to read
Yes.
Have you ever seen it before?
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A Never.
Q Never got it?
A Never.
Q All right. Do you recall when the
closing of your loan -- the $84,000 loan, do you
remember whether it was the winter of calendar
year 2000 or the spring or the summer?
A I think it was the fall.
Q Okay. During calendar year 2000,
did you undertake an expansion of your trucking
business?
A Maybe a little.
Q Did you purchase more trucks?
A Leased.
Q Okay. You leased. Did you lease
additional trucks?
A Yes.
Q How many?
A I don't know.
Q Okay. At the time of the beginning
of this banking relationship with PNC in 1999, do
you recall approximately how many trucks you
owned?
A No.
Q And at the time of the beginning of
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1 the banking relationship with PNC, do you -- did
2 you lease trucks that you didn't own?
3 A Yeah. I had a few.
4 Q And do you recall how many?
5 A It was either three or four.
6 Q Did you own more than you leased?
7 A I don't know.
8 Q And at the time of the beginning of
9 the banking relationship with PNC, do you recall
10 how many trailers you owned?
11 A No, I don't.
12 Q When you -- in 2000 -- calendar year
13 2000, you indicated that you leased some
14 additional trucks?
15 A Yes.
16 Q Do you recall from whom you leased
17 them?
18 A Telmark, I think, it was.
19 Q But you don 1 t recall how many
20 additional trucks you leased?
21 A I think it was two.
22 Q Was it necessary for you to take out
23 a loan to lease the additional trucks?
24 A No.
25 Q At any time during your banking
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1 relationship with PNC, did you take out any
2 additional loans with any other banks, to your
3 knowledge?
4 A I may have.
5 Q But you don't remember?
6 A I don't have it in front of me.
7 Q Do you still have a banking
8 relationship with those banks, do you know?
9 A With what banks?
10 Q With the - - with the banks besides
11 PNC that you had a banking relationship with
12 while PNC was your bank.
13 A I didn't have any other banks.
14 Q Okay. Now, you said when you first
15 met with Leanne Martin to discuss the $84,000
16 loan you said to her - - and I don't mean to
17 paraphrase you. But you said to her, I had sent
18 you folks my tax return.
19 And she said to you, That's fine.
20 Is that correct? I don't mean to
21 A She said, Yes. We have them on
22 file.
23 And I said, That's all I have to
24 give you right here.
25 She said, That's okay. I have no
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problem with that.
Q Now, was that your only conversation
with Leanne Martin concerning what financial
documents you had to give the bank?
A Yeah.
Q Did Leanne Martin ever request
anything additional from you with regard to
documents or financial information?
9 A No.
10 Q Okay. And besides that one
11 conversation, do you ever recall the subject
12 coming up between you and Leanne Martin?
e 13 A About what?
14 Q About that, about providing
15 financial information to PNC Bank?
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A No.
Q Okay. And when you obtained the --
when you obtained the $84,000 loan, did you have
to provide PNC with any financial documentation
besides your income tax return?
A No.
Q Okay. During calendar year 2000,
how was your -- how were your businesses doing?
A Okay.
Q During calendar year 2000 -- strike
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that.
During your banking relationship
with PNC Bank, did you understand that you had
made financial covenants to PNC Bank concerning
the performance of your businesses?
A Say that again.
Q Referring back to the paragraph that
we went over initially previously back on page 7,
did you understand that the financial covenants
provided covenants over and above repayment to
PNC?
A I had that.
Q
Excuse me?
You had that?
A I had that.
Q Okay. What I'm getting at is, did
you understand that PNC could declare your loan
to be in default even if you had made timely
payments under the loan if your business wasn't
meeting a certain criteria?
A I was meeting that criteria.
Q Okay. That's fine. We can talk
about that. But you understood that that
criteria and that covenant concerning your
business's financial performance existed?
A Yeah.
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1 Q Okay.
2 (Fulmer Exhibit 3, 2000 Tax Return,
3 marked for Identification.)
4 Q We'll refer to this next exhibit as
5 Fulmer Exhibit 3, and I'll ask you to take a look
6 at that.
7 Is that your tax return for calendar
8 year 2000, the joint income tax return of Thomas
9 A. and Diane S. Fulmer?
10 A It looks all to be here.
11 Q Okay. Now, on page 1, I guess the
12 bottom line is business income or loss. And on
13 line 12, it reflects that there was a loss of
14 $99,156 for calendar year 2000. Is that correct?
15 A That's what it says here.
16 Q Okay. And is that accurate?
17 A I don't know.
18 Q Okay.
19 A I'm not an accountant.
20 Q Okay. Is -- fine. Is that 1040 the
21 tax return that you and your wife submitted to
22 the Internal Revenue Services for calendar year
23 2000 ?
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Yeah.
Okay.
Now,
assuming that the tax
Q
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1 return that you submitted to the IRS was accurate
2 and truthful -- and you submit truthful tax
3 returns. Right?
4 A Yeah.
5 Q Of course. What accounted for the
6 loss of in excess of $99,000 in your businesses
7 for calendar year 2000?
8 A say the question again.
9 Q What accounted for the almost
10 $100,000 in losses in your business for calendar
11 year 2000?
12 A If we knew that, we would be pretty
13 smart. I don't know.
14 Q Well, I mean, was there - - was
15 business down? Were the number of patients down
16 in your homes? That's what I'm getting at. Were
17 there any problems in your business that caused
18 you to have to suffer a $100,000 loss in your
19 businesses for calendar year 2000?
20 A I take my -- I take my taxes to an
21 accountant, and he saves me as much money as he
22 can. How he does it and stuff, I don't know.
23 I'm not an accountant.
24 Q Well, were you aware that this
25 income tax return was being submitted to PNC as
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1 part of your financial covenants in their
2 performance of your loan?
3 A Okay.
4 Q Is that a yes?
5 A Yeah --
6 Q Okay.
7 A -- yeah.
8 Q And you -- you didn't believe you
9 had the obligation to submit anything beyond it,
10 but you did submit your income tax returns.
11 Correct?
12 A Because Peter and Leanne said it
13 would be fine.
14 Q Okay.
15 MR. FENSTERMACHER:
16 two-minute break?
17 MR. DONOHUE:
18 (Brief re<::ess
19 BY MR. DONOHUE:
20 Q Getting back to your tax return, Mr.
21 Fulmer, we all, like everyone else, have
22 professional tax preparers who prepare our tax
23 returns and within the bounds of fairness submit
24 the returns to the IRS minimizing our tax
25 liability within the bounds of honesty and the
Can we take a
Sure.
from the record.)
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e 1 law. We all understand that.
2 (Attorney Justin Barber enters the
3 room. )
4 Q But I guess my question was.
5 businesses are in the -- are in operation to make
6 a profit and to avoid loss.
And as a general
7 rule, when businesses are being successful, they
8 show a profit; and when they're struggling, they
9 show a loss.
And your tax return shows a loss in
10 the operation of business for calendar year 2000
11 in the amount of $99,156.
12
And my question is, do you recall
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Was there a
14
reason in the operation of your businesses that
15 required you to show a loss for calendar year
16 2000?
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A
Is this a loss? Are you saying that
18 there's a loss here?
19
Q
It saysl Business income or loss.
20 And it says negative $99,156.
And I believe that
21 reflects a loss I yes.
22
A
Okay.
So you -- you are admitting
23 that you don't know how to read tax records.
24 That's not a loss.
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Q
Okay.
What is it?
Explain it to
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A Do you know what depreciation is?
Q Yes.
A Compile it there and tell me is it a
loss.
Q Mr. Fulmer --
MR. FENSTERMACHER: Please answer
the question.
BY MR. DONOHUE:
Q Today I'll ask the questions, and
you give the answers. Okay?
A Okay.
Q But the line does read, Business
income or loss.
And the line indicates minus
$99,156. And I guess my question is to you
yeah. I'm comfortable referring to it as a loss
since that's the way it's labeled. And I'm
asking you to let me know what -- what is the
reason for the indication that there was a loss
on business of $99,156.
A There was not a loss.
Q Okay. What happened -- explain to
me the entry of that -- on that line.
A I'm not a tax accountant.
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fine. I'll move on.
A I don't know how to explain it.
Q Okay.
A I'm sure Leanne could explain it,
because she had no problems with it.
Q Okay. Did there come a time in
calendar year -- at any time that you applied for
another loan from PNC Bank above the $84,000
loan?
A I asked for a line of credit.
Q Okay. In what amount? Do you
recall?
A I don't have that in my mind --
Q Okay.
A no.
Q Do you recall whether it was a
substantial line of credit? I mean, was it more
than a million dollars?
A No.
Q Was it more than a half million
dollars? I'm just wondering if I put any range
on this.
MR. FENSTERMACHER: If you don't
remember, you don't remember.
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1 BY MR. DONOHUE:
2 Q If you don't remember, you don't
3 remember.
4 A I don't remember.
5 Q Okay. And you can't tell me, for
6 instance, whether it was $25,000 or any range
7 whatsoever?
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MR. FENSTERMACHER:
He already said
he doesn't remember.
MR. DONOHUE: That's it.
BY MR. DONOHUE:
Q Do you recall whether Leanne
required you to submit any financial information
in support of your new loan application?
A She didn't request anything.
Q Okay. Did you submit any financial
reports in response to your request for a new
loan?
Okay.
A I submitted a nine-month
compilation.
Okay. And why did you do that?
I thought it would be good of me to
23
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Q
A
do that.
Q Okay. It wasn't anything that was
required by PNC. You just thought it would be
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2 A I thought it would be good on a
3 financial picture to do that.
4 Q Urn-hum. Okay. And it was
5 any request on the part of PNC. It was
6 something that you did voluntarily?
7 A Yes.
8 Q Okay.
9 (Fulmer Exhibit 4, Financial
10 Package, marked for Identification.)
11 Q And I'll show you Fulmer Exhibit 4.
12 Have you had a chance to look at that?
13 A Yeah.
14 Q What is it?
15 A I don't know. I've never seen it.
16 Q Okay. Is it the financial documents
17 that you submitted in support of your request for
18 a line of credit with PNC?
19 A No.
20 Q Okay. All right. Going to the
21 first page, did your stationery at Fulmer's
22 Personal Care Homes have a little flag on it like
23 that?
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without
just
A
Yeah.
Q
And this letter to Leanne Martin
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1 states, Enclosed are the financial reports you
2 requested.
And it lists a balance sheet as of
September 14, 2001; P -- profit and loss,
cumulative 2001; profit and loss, August 2001;
vendor balance summary; truck and trailer list.
And I noticed that it is not signed, but the name
that appears on the bottom is Thomas A. Fulmer.
And it's your testimony today that
you've never seen that document?
A I have never seen this document.
Q Okay. Do you have any idea why this
document how this document containing the
balance sheets, profit-and-loss statements,
vendor balance summaries, and truck and trailer
lists got into the possession of PNC Bank?
A No, I don't know how.
Q Now, you said you submitted
financial information because you thought it
would be a good thing to do in support of your
request for that balance sheet -- not the balance
22 sheet, the line of credit. Is that correct?
23 A No. I never asked for this at all.
24 Q That wasn't my question.
25 You said you submitted some
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1 financial information, some financial records to
2 PNC in support of that request for the loan. Is
3 that true?
4 A I gave her my tax returns and a
5 nine-month compilation from the accountant.
6 Q Okay. But you didn't give her that?
7 A I didn't, no.
8 Q Okay, okay. Just referring to it - -
9 and I know you don't - - take a look at it. And
10 go to the first page after the letter, which
11 says, Balance sheet, Fulmer - - Fulmer's Personal
12 Care Homes, balance sheet as of September 14,
e 13 2001.
14 Now, September 2001, was that the
15 approximate time in which you were making
16 application for a new loan to PNC?
17 A I don't know. I don't have that
18 date in front of me.
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19 Q Okay. The document referred to as
20 balance sheet contains three pages. Okay? And
21 the bottom page there's three lines. It says net
22 income, total equity, total liabilities and
23 equity. And net income, the entry there is
24 negative $123,649.06.
25 Now, here's my question. I know
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that you are a complete stranger to this
document, but do you know whether that statement
of net income as of September 14, 2001, was
accurate?
MR. FENSTERMACHER: I'm going to
object. You're asking him to interpret a
document which he says he hasn't seen and
didn't prepare.
MR. DONOHUE:
No, I'm not, John.
and I'll rephrase it.
I understand what he
I'll ask it again,
I'll rephrase it.
says, but
MR. FENSTERMACHER: Mike, ask your
question in the abstract. Don't refer to
this, if you have a question about --
MR. DONOHUE: Okay. All right.
I'll ask it -- fine.
BY MR. DONOHUE:
Q Do you know whether your businesses
in September of 2001 had a net income of negative
$123,649.06 as of September 14, 2001? Would you
dispute the accuracy of that?
A I don't know. I don't know what
this document is. I've not seen it.
Q Okay.
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MR. DONOHUE:
What are we up to,
2
five?
3
COURT REPORTER:
Five.
4
MR. DONOHUE:
Okay.
5
(Fulmer Exhibit 5, SAC Report,
6 marked for Identification.)
7 BY MR. DONOHUE:
8
I'll show you what I'll refer to as
Q
9 Fulmer Exhibit 5.
And as I show it to you, I'll
10 tell you that I don't -- have you ever seen that
11 document before? I'll tell you it's an internal
12 bank document in which the bank examined the
I . performance of loan after the third
, 13 a quarter
I
14 2001 and that I provided it to your counsel as
15 part of the discovery in this case. And I'll ask
16 whether -- to start out whether or not you've
17 ever seen that document.
18
No, I have not.
A
19
Okay.
I'm going to ask you to turn
Q
20 to the fourth page where it says financial
21 analysis.
And I'm just going to read the
22 statements that the bank -- that is written there
23 by the bank.
And I'm going to ask you whether
24 you know today one by one whether those --
. 25 whether those statements are accurate or
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inaccurate. And under Financial Analysis,
Comments, NO.1, In 2000, the Fulmers reported a
loss of $99,000 on revenues of 1,674,000 --
$1,674,000.
Do you know whether -- can you say
today whether that statement is accurate or
inaccurate?
A I know nothing about it.
Q Okay. The second sentence, Through
10 9/14 of this year, they lost $187,000 on revenues
11 of 1,166,000.
12 Do you know whether that statement
. 13 is accurate or inaccurate?
14 A I know nothing about it .
15 Q Okay. And you can't say one way or
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the other whether or not it's true?
A I know nothing about it
Q Okay.
A -- nothing.
Q Bear with me. We'll just go through
this, and then we'll move on. There's only a
couple more sentences.
Based on company-prepared numbers,
the trucking operation lost $216,000 on revenues
of $532,000.
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1 Do you know whether that's accurate
2 or inaccurate?
3 A I know nothing about that.
4 Q Okay. williamsport personal care
5 home lost $147,000 on earnings of $130,000.
6 Again, do you know anything about
7 that?
8 A Nothing.
9 Q Okay. And finally, the Lock Haven
10 earned $179,000 on revenues of $504,000.
11 Again, can you tell us whether
12 that's accurate or inaccurate?
13 A I know nothing about it.
14 (Fulmer Exhibit 6, Letter, 1/14/02,
15 DeStefano to Fulmer, marked for
16 Identification.)
17 Q And I'll show you what we'll refer
18 to as Fulmer Exhibit 6.
19 A I have the original of this. Do you
20 need it?
21 Q No, we don't need it.
22 Do you recognize that letter?
23 A Yes.
24 Q And was it a letter -- the letter of
25 January 14, 2002, sent to you by Mr. DeStefano,
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1 assistant vice president of PNC Bank?
2 A I received it.
3 Q And the bottom line of this Ie t te r
4 is that the bank declared your loan in default.
5 Is that correct?
6 A That's what the letter says.
7 Q Okay. Now, again, we'll go through
8 the -- starting with the second paragraph, No.1,
9 second paragraph -- and I'll ask again whether
10 each statement he makes is accurate and
11 inaccurate -- or inaccurate. And I'll give you a
12 chance to explain. I really will.
13 It says and I quote, You have not
14 delivered to the bank, within 120 days after
15 fiscal year end 1999 and 2000, as prepared on a
16 compiled basis by certified public accountant,
17 financial statements for the trucking company and
18 the personal care entity.
19 Now, is that an accurate statement?
20 A I go back to my original statement.
21 When Peter sent us the letter, before that letter
22 came to us, he said that tax returns and all the
23 schedules were sufficient.
24 Q Okay. I appreciate that. And I
25 don't want to go back and refight that battle.
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1 But do I understand correctly that while it is
2 accurate that you did not send those documents to
3 the bank, you feel you did not have any
4 obligation to send them to the bank because of
5 the oral assurance given to you by Mr. Bower? Is
6 that correct?
7 A That's correct.
8 Q Okay. That I s good.
9 Number 2, Another financial covenant
10 requirement per the loan documents is debt
11 service coverage of greater than 1.25x is
12 required and must be maintained at all times.
13 The debt service coverage is out of compliance.
14 Now, can you tell us whether that
15 statement is accurate or inaccurate?
16 A It's false.
17 Q Okay. At all times, you
18 maintained -- it's your testimony that you
19 maintained the debt service coverage required in
20 the loan documents?
21 A Yes.
22 Q Okay. Did you ever at any time
23 provide documents to PNC Bank which confirmed
24 that your businesses had maintained the debt
25 service coverage required in the loan documents?
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A They never asked for them.
Q Now, PNC declared the loan to be in
default and placed your loans into a default
interest rate, which was a higher interest rate.
Correct?
A Yes.
Q And eventually, you obtained
refinancing at another bank and paid the PNC debt
off in its entirety. Is that correct?
A Yes.
Q And who is your new bank?
A That's -- I'd rather not answer
that.
You have to
MR. FENSTERMACHER:
answer it.
MR. DONOHUE: You just told him he
does have to answer it?
MR. FENSTERMACHER: Yeah, I just
said he had to answer it.
MR. DONOHUE: Okay.
THE WITNESS: Vine Street Financial.
BY MR. DONOHUE:
Q Now, in this lawsuit, you claim that
PNC violated their correct contractual
obligations by declaring your loan in default.
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e 1 Correct?
Yes.
2 A
3 Q And that you suffered damages as a
4 result of PNC's actions in doing that?
5 A Absolutely.
6 Q Explain to me what are your
7 damages.
8 THE WITNESS: Do I have to answer
9 that?
10 MR. FENSTERMACHER: Yeah. Do the
11 best you can. And to the extent you don't
12 understand them or can't explain it,
It 13 that's fine; but do it to the best of your
14 abili ty.
15 THE WITNESS: Financial.
16 BY MR. DONOHUE:
17 Q Okay. And let's -- before you go
18 into others, let's stop at financial, because
19 that's the one I'm most interested in.
20 What financial damages have you
21 suffered?
22 A Hundreds of thousands of dollars.
23 Q And how have you suffered hundreds
24 of thousands of dollars in damages?
. 25 A To refinance, it cost me dearly
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because of what they did. Besides raising the
interest rate to an exorbus (phonetic) -- how do
you say the word an enormous amount, it has
just cost me, you know, tremendous.
Q Okay. Mr. Fulmer, my job, you know,
in representing PNC is to find out, you know,
what damages you suffered so we can so we can
evaluate them. I mean, let me ask you this:
Your loan with Vine Street -- Vine Street
10 Financial. Is that it?
11 A Yeah.
12 Q Does it have a higher interest rate
. 13 than the PNC loan?
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A No.
Q So there's been no increase in
there's been no increase in your interest in the
new loan from the new lender. Correct? You're
not paying any extra -- once the loan was in
place with Vine Street Financial, you weren't
paying any extra money in interest. Is that
correct?
A I didn't pay any more money in
interest; but to get there, I paid much more to
get there.
All right.
How did you pay much
Q
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2 A I can't believe you're asking this
3 question.
4 Q Oh, hey, it's an essential question.
5 I can't believe you can't answer it.
6 Strike the question.
Forgive me.
7 MR. FENSTERMACHER: Thank you.
8 MR. DONOHUE: All right.
9 THE WITNESS: It has just cost us
10 dearly. It has just cost me dearly. If
11 you want numbers and everything and how
12 it - - how I determined how much it cost, I
. 13 can do that; but I can't do that right
14 this minute.
15 BY MR. DONOHUE:
16 Q All right.
17 MR. FENSTERMACHER: Answer it as
18 best you can. We'll provide an expert
19 report as to damages obviously. But all
20 I can say is try to answer Mike's
21 question as completely as you can. That's
22 all.
23 BY MR. DONOHUE:
24 Q I'm not trying to be difficult. I'm
. 25 just - - I just want to find out what damages you
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I mean, I'll go through it. For a
while, I know PNC put you at the default interest
rate, which was a much higher rate. Is that
A That's correct.
Q And during that time, until you got
the new loan, you were paying -- were you paying
that high interest rate?
A Yes.
Q Okay.
A And I paid it every month.
Q There you go. So the extra interest
rate for the months in which you were paying the
default interest rate were damages?
A Beyond -- yes.
Q That's it.
A Yes.
Q Now, was there money you spent --
was there money you spent in order to get the
loan? I mean, did you have to make out-of-pocket
expenditures to hire anybody to give Vine Street
Financial what they wanted?
A Yes.
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Q Okay. And do you know who you
hired?
A John Godfrey.
Q Okay. Who is sitting with us today?
A Yes.
Q And has been with us for all of the
depositions?
A Yes.
Q Okay.
A I hired an attorney -- two
attorneys.
Q All right.
A That's beside John. Actually, three
attorneys. I had an appraisal firm, doctor
office -- strike that. Stress, stress and --
stress was unbelievable.
Q Okay. But that's the nonfinancial
we'll get to that. Just the financial
All right?
And as you sit here -- okay. Any
other financial losses that you suffered as a
result of the misconduct of PNC Bank?
A I can't think right this minute.
Q Okay. Now, you said you suffered
You know, you were just very upset to
stuff.
stuff.
stress.
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have gotten this letter and then dealt with PNC
Bank after they declared this loan in default.
Is that correct?
A Absolutely. I was under so much
stress that I was thinking of suicide.
Q Is that right? Did you seek any
professional help as a result of your suicidal
ideations?
A I talked to my doctor over the
telephone.
Q Okay. Did you take any -- did he
prescribe any medications?
A No. We talked about it and stuff,
and I tried to deal with it.
Q Okay. And did you -- besides
your -- was that your family doctor?
A Yeah.
Q And what's his name?
A Mike Jones.
Q Okay. Did you see any mental health
professional?
A No.
Q Besides the financial losses that
we've talked about to the extent that you can
talk about them today and the stress, did you
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2 alleged breach of PNC Bank?
3 A I remember one incident where we had
4 paid off one of the loans, and it actually held
5 up the closing because PNC did not -- they did
6 not --
7 Q satisfy the mortgage?
8 A Satisfy. And it cost us an extra
9 couple days.
10 Q okay. Besides the extra couple
11 days, do you know if it cost you any money?
12 A Extra money in interest and stuff,
13 yeah.
14 Q For a couple of days?
15 A Yeah. It almost felt like they had
16 me paying a high interest and they didn't want to
17 get rid of me then.
18 Q Okay. And we'll move on, but
19 anything else that you can think of in damages
20 you suf fered as a result of this?
21 A I'm sure I could come up with a
22 whole handful, but right this minute I can't
23 think.
24 Q Okay. Now, do you still operate the
25 Williamsport facility?
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A No.
Q Okay. When did you close the
Williamsport facility?
A May of 2001.
Q That was before PNC declared the
business in default?
A Yeah.
Q Okay. Do you still operate the Lock
Haven is it Lock Haven?
A (Witness nods head affirmatively.)
Q The Lock Haven facility?
A Yes.
Q And how many beds are you operating
there now?
A Eight-nine.
Q Is that the largest number you ever
had?
A That's the number of beds, yeah.
Q Okay. And today, how many -- how
many trucks do you own?
A Three.
Q Is that three tractors?
A Two tri-axles and one tractor.
Q The tri-axle is a smaller truck than
a tractor-trailer? Or forgive me. 1--
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1 A It's -- it's a straight truck. It
2 doesn't pull a trailer.
3 Q Okay. Do you own any trailers?
4 A Not that pulls on the road.
5 Q Okay. Do you - - do you lease any
6 trucks?
7 A No.
8 Q Is your truck business substantially
9 downsized from what it once was?
10 A Yes.
11 Q And what's the reason for that?
12 A Employee abuse.
e 13 Q Of your equipment?
14 A Yes.
15 Q And you just - - is it fair to say
16 you just weren't making - -
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17 A Didn't need the headaches anymore.
18 MR. DONOHUE: Okay. Thanks, Mr.
19 Fulmer. That's all I have.
20 MR. FENSTERMACHER: I may have a
21 couple questions; but if you don't mind,
22 can we do it after lunch?
23 How long do you think
24 MR. DONOHUE: Much shorter.
25 MR. FENSTERMACHER: Yeah. I would
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expect that.
(Lunch break taken from 12:11 p.m.
to 1:10 p.m.)
MR. DONOHUE:
John, you're the one
who left open the possibility.
MR. FENSTERMACHER:
I have no
questions for Mr. Fulmer
(Deposition adjourned at 1:10 p.m.)
I have read the transcript of my
deposition and it is true and accurate, except
for any corrections noted on the attached errata
sheet.
13
ThomaS-A~-FUlmer--------------
---------------
14 Date
15
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C E R T I F I CAT E
I, Denise L. Travis, the officer before
whom the within deposition(s) was taken, do
hereby certify that the witness whose testimony
appears in the foregoing depositions was duly
sworn by me on said date and that the transcribed
deposition of said witness is a true record of
the testimony given by said witness;
That the proceeding is herein recorded
fully and accurately;
That I am neither attorney nor counsel,
nor related to any of the parties to the action
in which these depositions were taken, and
further that I am not a relative of any attorney
or counsel employed by the parties hereto, or
financially interested in this action.
--~~-~~~--------------
Denise L. Travis, Reporter
Notary Public in and for the
Commonwealth of Pennsylvania
My commission expires
April 20, 2006
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accept 25:16 29:19 appears 50:8 69:6 40:4,1541:3,447:9 business 7:7,1210:3
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VERITEXT COURT REPORTING SERVICES (800) 227-8440
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entirety 58:9 10:14,1711:1817:1 folks 35:25 39: 18 46:16
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..PNCJBANK
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January 8, 1999
Thomas A. Fulmer
Diane S. Fulmer
RR 2, Box 146
Williamsport, PA 17701
Re: $558,000.00 Term Loan "A"
Re: $325,000.00 Term Loan "B"
Dear Mr. & Mrs. Fulmer:
We are pleased to inform you that PNC Bank, National Association (the "Bank"), has
approved your request for two term loans to Thomas A. Fulmer and Diane S. Fulmer (the
"Borrower"). We look forward to this opportUnity to help you meet the financing needs of your
business. As your primary bank, we want to supply all your banking needs.
All the details regarding your loans are outlined in the following sections of this letter. If
these tenns are satisfactory, please follow the instructions for proceeding with your loans
provided at the end of this letter.
1. Tvoe of Facilitv and Use of Proceeds. This is a term loan in the amount of $558,000.00
(the "Term Loan A"). The proceeds of the Term Loan may be used, for refinance of existing
debt and property improvements.
2. Interest Rate. Interest on the unpaid balance of the Term Loan will be charged at a rate
per annum of eight percent (8.00%).
3. Repavment. The principal amount of the Term Loan, together with interest, shall be paid
in equal consecutive monthly installments over five years with a fifteen year amortization and a
balloon payment of all outstanding principal and interest at the end of the fifth year. Interest will
be due and payable on a monthly basis, and will be computed on the basis of a year of 360 days
and paid on the actual number of days elapsed.
4. Tvoe of Facilitv and Use of Proceeds. This is a term loan in the amount of $325,000.00
(the "Term Loan B"). The proceeds of the Term Loan may be used for refinancing and
consolidating existing debt.
5. Interest Rate. Interest on the unpaid balance of the Term Loan will be charged at a rate
per annum of eight and one-quarter of one percent (8.25%).
Form 7C - Multistate Rev. 3/95
IJlHlBIT MO.L
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6. Renavment. The principal amount of the Term Loan, together. with interest, shall be paid
in equal consecutive monthly installments over f~ur years. Interest wIll be due ~d payable on a
monthly basis, and will be computed on the basIs of a year of 360 days and paid on the actual
number of days elapsed.
7. Notes. The obligation of the Borrower to repay the Term Loans shall be eviden~ed by
promissory notes (the "Notes ") in form and content satisfactory to the Bank. The Notes WIll also
contain a prepayment cost recovery provision requiring a payment to the Bank equal to the losses
incurred by the Bank as a result of said prepayment.
8. Security. The Borrower must cause the following to be executed and delivered to the
Bank in form and content satisfactory to the Bank as security for the Term Loans:
(a) a security agreement granting the Bank a first priority perfected lien on the
Borrower's existing vehicles as listed on attached Exhibit "B".
(b) a mortgage containing an assignment of leases and rents, granting the Bank first and
second priority perfected liens on the real property of the Borrower located at RR 2. Box
146, Williamsport, PA 17701 and a mortgage containing an assignment of leases and
rents, granting the Bank first and second priority perfected liens on the real property of
the Borrower located at 205 Woodward Avenue, Lock Haven, PA 17745
(the "Property").
Because the Term Loans are secured by vehicles and real property, hazard insurance must be
maintained on such property, in such amounts and with such coverages as are acceptable to the
Bank, containing a standard lender loss payable or mortgagee clause in favor of the Bank.
9. Covenants. Unless compliance is waived in writing by the Bank or until payment in full
of the Term Loans:
(a) The Borrower will promptly submit to the Bank such information relating to the
Borrower's affairs (including but not limited to annual fmancial statements and tax returns
for the Borrower and any guarantor) or any security for the Term Loans as the Bank may
reasonably request.
(b) The Borrower will not make or permit any change in the nature of its business as
carried on as of the date of this letter or in its senior management or equity ownership.
(c) The Borrower will comply with the fmancial and other covenants included in Exhibit
"A" hereto.
10. Re'(lresentations and Warranties. To induce the Bank to extend the Term Loans, the
Borrower represents and warrants as follows:
(a) The Borrower's latest financial statements provided to the Bank are true, complete
and accurate in all material respects and fairly present the financial condition, assets and
liabilities, whether accrued, absolute, contingent or otherwise and the results of the
Form 7C . Multistate Rev. 3/95
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Borrower's operations for the period specified therein. The Borrower's fmancial
statements have been prepared in accordance with generally accepted accounting
principles consistently applied from period to period subject in the case of interim
statements to normal year-end adjustments. Since the date of the latest fInancial
statements provided to the Bank, the Borrower has not suffered any damage, destruction
or loss which has materially adversely affected its business, assets, operations, financial
condition or results of operations.
(b) There are no actions, suits, proceedings or governmental investigations pending or, to
the knowledge of the Borrower, threatened against the Borrower which could result in a
material adverse change in its business, assets, operations, fmancial condition or results of
operations and there is no basis known to the Borrower or its officers, directors or
shareholders for any such action, suit, proceedings or investigation.
(c) The Borrower has fIled all returns and reports that are required to be fIled by it in
connection with any federal, state or local tax. duty or charge levied, assessed or imposed
upon the Borrower or its property, including unemployment, social security and similar
taxes and all of such taxes have been either paid or adequate reserve or other provision
has been made therefor.
(d) If not a natural person, the Borrower is duly organized, validly existing and in good
standing under the laws of the state of its incorporation or organization and has the power
and authority to own and operate its assets and to conduct its business as now or proposed
to be carried on, and is duly qualifIed, licensed and in good standing to do business in all
jurisdictions where its ownership of property or the nature of its business requires such
qualifIcation or licensing.
(e) The Borrower has full power and authority to enter into the transactions provided for
in this Letter Agreement and has been duly authorized to do so by all necessary and
appropriate action and when executed and delivered by the Borrower, this Letter
Agreement and the other loan documents executed and delivered pursuant hereto will
constitute the legal, valid and binding obligations of the Borrower enforceable in
accordance with their terms.
(t) There does not exist any default or violation by the Borrower of or under any of the
terms, conditions or obligations of: (i) its organizational documents; (ii) any indenture,
mortgage, deed of trust, franchise, pennit, contract, agreement, or other instrument to
which it is a party or by which it is bound; or (iii) any law, regulation, ruling, order,
~unction, decree, condition or other requirement applicable to or imposed upon the
Borrower by any law or by any governmental authority, court or agency.
11. Real Estate Matters.
(a) Flood Insurance. If the Property is located in an area designated as a flood hazard
area by any governmental agency, the Borrower will provide the Bank, at the Borrower's
expense, with a policy of flood insurance in an amount equal to the value of the Property
to be insured or the maximum amount available under the federal flood insurance
program, whichever is less.
Form 7C - Multistate Rev. 3/95
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(b) Title Insurance. The Borrower will provide the Bank, at the Borrower's expense,
with an ALTA (1992 form) policy of title insurance in favor of the Bank as mortgagee
and in an amount not less than the amount of the Term Loans, with premium paid
thereon, insuring that the Bank's lien on the Property is a valid first lien, and with only
such exceptions as the Bank deems acceptable.
12. Fees. On the date of the Notes, the Borrower shall pay to the Bank a fee of $4,185.00
and $2,437.50. The Borrower will reimburse the Bank for the Bank's out-of-pocket expenses
incurred or to be incurred in conducting DCC, title and other public record searches, and in
filing and recording documents in the public records to perfect the Bank's liens and security
interests. The Borrower shall also reimburse the Bank for the Bank's expenses (including the
reasonable fees and expenses of the Bank's outside and in-house counsel) in documenting and
closing this transaction and in connection with any amendments, modifIcations, renewals or
enforcement actions relating to the Term Loan.
13. Additional Provisions. Before the disbursement of the Term Loans, the Borrower agrees
to sign and deliver to the Bank the Notes and other required documents and such other
instruments and documents as the Bank may reasonably request, such as certified resolutions,
incumbency certificates or other evidence of authority .
Prior to execution of the final documents, the Bank may terminate this letter if a material adverse
change occurs with respect to the Borrower, any guarantor, any collateral for the Term Loans or
any other person or entity connected in any way with the Term Loans, or if the Borrower fails to
comply with any of the terms and conditions of this letter, or if the Bank reasonably determines
that any of the conditions cannot be met.
This letter is governed by the laws of the Commonwealth of Pennsylvania. No modifIcation or
waiver of any of the terms of this letter will be valid and binding unless agreed to in writing by
the Bank. When accepted, this letter and the other documents described herein will constitute the
entire agreement between the Bank and the Borrower concerning the Term Loans, and shall
replace all prior understandings, statements, negotiations and written materials relating to the
Term Loans.
To accept these terms, please sign the enclosed copy of this letter as set forth below and return it
to the Bank within 15 days from the date of this letter. If accepted, the final documents must be
executed within 30 days from the date of this letter, or this letter may be terminated at the Bank's
option without liability or further obligation of the Bank.
Form 7C - Multistale Rev. 3/95
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Thank you for giving PNC Bank this opportunity to work with your business. We look forward
to other ways in which we may be of service to your business or to you personally.
Very truly yours,
PNC BANK, National Association
By: fJ:s (b ~
Peter S. Bower, Business Banking Officer
- 5 -
Form 7C. Mullistate Rev. 3/95
@
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ACCEPT ANCE
With the intent to be legally bound hereby, the above terms and conditions are hereby agreed to
and accepted this S"'""- day of ">~ ' 1999.
- 6 -
Form 7C - Multistate Rev. 3/95
63
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EXHillIT A
FINANCIAL REPORTING COVENANTS:
(a) The Borrower will deliver to the Barue
(i) Financial Statements for the trucking company entity and the personal home
care entity, within 120 days after fiscal year end, prepared on a compiled basis by
a certified public accountant acceptable to the Bank.
(ii) Personal fmancial statements and federal income tax return for each calendar
year, within 120 days after year end.
"Financial Statements" means the consolidated and consolidating balance sheet and
statements of income and cash flows prepared in accordance with generally accepted
accounlling principles in effect from time to time ("GAAP") applied on a consistent basis
(subject in the case of interim statements to normal year-end adjustments).
FINANCIAL COVENANTS:
The Borrower will maintain at all times a ratio of Cash Flow to the total of Current
Maturities plus Unfunded Capital Expenditures of at least 1.25 to 1.00. "Cash Flow"
means net income plus depreciation plus amortization plus other non-cash items less
dividends. "Current Maturities" means the current principal maturities of all indebtedness
for borrowed money (including but not limited to amortization of capitalized lease
obligations) having an original term of one year or more, as well as any prepayments of
such indebtedness prior to scheduled maturity. "Unfunded Capital Expenditures" means
capital expenditures made from the Borrower's funds other than borrowed funds.
NEGATIVE COVENANTS:
(a) The Borrower will not create, assume, incur or suffer to exist any mortgage, pledg,;.,
encumbrance, security interest, lien or charge of any kind upon any of its property, now
owned or hereafter acquired, or acquire or agree to acquire any kind of property under
conditional sales or other title retention agreements; provided, however, that the
foregoing restrictions shall not prevent the Borrower from:
(i) incurring liens for taxes, assessments or governmental charges or levies which
shall not at the time be due and payable or can thereafter be paid without penalty
or are being contested in good faith by appropriate proceedings diligently
conducted and with respect to which it has created adequate reserves;
(ii) making pledges or deposits to secure obligations under workers'
compensation laws or similar legislation; or
Form 7C - Multistate Rev. 3/95
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(iii) granting liens or security interests in favor of the Banic
(b) The Borrower will not create, incur, guarantee, endorse (except endorsements in the
course of collection), assume or suffer to exist any indebtedness. except (i) indebtedness
to the Bank, (ii) open account trade debt incurred in the ordinary course of business and
not past due, or (iii) other indebtedness disclosed on the Borrower's latest Financial
Statements which have been provided to the Bank prior to the date of this letter.
(c) The Borrower will not liquidate, merge or consolidate with any person, firm,
corporation or other entity, or sell, lease, transfer or otherwise dispose of all or any
substantial part of its property or assets, whether now owned or hereafter acquired.
(d) The Borrower will not make acquisitions of all or substantially all of the property or
assets of any person, firm, corporation or other entity.
(e) The Borrower will not make or have outstanding any loans or advances to or
otherwise extend credit to any person, firm or corporation, except in the ordinary course
of business.
CLD\LTRAGMT.7C Rev. 3/95
Form 7C - Mullislale Rev. 3/95
- 8 -
@
,
", ' ..
YEAR/MAKEIMODEL
1998 DODGE RAM PICKUP
" 1991 MACK CH613
I 1998 MACK CH613
v' 1998 MACK CH613
.I 1990 KENWORTH T-800
J 1991 INTERNATIONAL 4900
..; 1993 MACK CH613
1993 WALINGA TANKER, 6500
/ 1971 ALLmD TANKER, 8000
./ 1956 FRUHAUF TANKER,4000
1980 WOOLEVER VAN
1981 WOOLEVER VAN
1995 GBI TANK, 2635
j 1999 POLAR TANKER, 6500
"EmmIT B"
VIN#lSN
3B71CF2220W611Z591
IM2AA13Y9MWOI3384
1MlAA18Y1WW085146
1M1AA18YIWW098351
1XKDDB9X62J539002
. 1HTSDNUN7MH391559
1MlAA13Y2PW02298S
2W9HC4029P9001004
B711080A
TD12528
6446521
1793874
69703165
lPMS54321X1021311
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PNClBANK.
January 21,2000
Thomas A. and Diane S. Fulmer
333 Ertel Road
Williamsport, Pennsylvania 17701
Re: Updated financial information
Dear Mr. and Mrs. Fulmer:
It is time again to request the customary updated fmancial information. This information is vital
in providing you with the best possible customer service. Further, this information will enable
us to act on any future requests you may have in a more timely manner.
Would you kindly forward a copy of the following information to my attention:
Signed 1999 federal income tax returns for Thomas and Diane Fulmer.
Signed updated personal financial statements (form enclosed.)
1999 annual compiled financial statements for Fulmer's Personal Care Home and
Fulmer Trucking Company.
If you have applied for a filing extension on your tax returns, please send a copy of the extension
request.
If you have any questions concerning this information, or if I may be of any service, please call
my office at (814) 231-1741. As always, thank you for your time and consideration.
Sincer~ _
>>d _
Leanne R. Martin
Vice President
Ie
~
IXHIBR' NO.Ql..
"'8046~7~.
.
..
'~m 1040
Label L
(See A
instructions B
on page 19.) E
L
Use theiRS
label. H
Otherwise, E
please print R
or type. E
Presidential
Election Campaign
See a e 19.
1
Filing Status 2
3
Check. only
one box.
Exemptions
I f more than six
dependents,
see page 20.
Income
Attach
Forms W-2 and
W.2G here.
Also attach
Form(s) 1099-R
if tax was
withheld.
If you did not
get a W-2,
see page 21.
Enclose, but do
not attach, any
payment. Also,
please use
Form 1040-V.
Adjusted
Gross
Income
. '.'.
"!
Depanment 01 the Treasury- Inter'
U.S. Individuallnt
991
lenue Service
.e Tax Return
2000
For the ear Jan. 1-Dec, 31, 2000. or other tax ear be innin
,2000. endin
Your first name and initial
Last name
THOMAS A.
FOLMER
I
If a jl. m", :;..... first name & initial
DIANE S.
last name
FOLMER
,20
OMS No, 1545-0074
Your social security number
180-46-8379
Home address (number and street). If you have a P.O. box, see page 19.
333 ERTEL ROAD
Spouse's social security number
196-44-5683
... Important! ...
You must enter
your SSN(s) above.
Apt. no.
City, lown or post office, state, and ZIP code. If you have a foreign address. see page 19.
WILLIAMSPORT PA 17701
~
4
5
6a
Note. Checking "Yes" will not change your tax or reduce your refund.
Do ou, or our souse if filin a 'oint return, want 53 to 0 to this fund?
Single
Married filing joint return (even if only one had income)
Married filing separate return, Enter spouse's social security no. above
and full name here,....
Head of household (with Qualifvin~ peirson), (See page 19.) If the qualifying person is a child
but not your dependent. enter this child's name here. ....
Quali in widower with de endent child ear souse died.... See a e 19.
Yourself. If your parent (or someone else) can claim you as a dependent on his or her tax
return, do not check box 6a
You
~ n Yes iXI
b
Souse
Dependents:
(2) Dependent's
social security number
c
(3) Dependent's
relationship to
First name
Last name
ou
JEFFREY
TREVOR
202-60-3978
191-62-4341
SON
SON
FULMER
FULMER
d
7
8a
b
9
10
11
12
13
14
15a
16a
17
18
19
20a
21
22
23
24
25
26
27
28
29
30
31.
32
33
Total number of exemotions claimed
Wages, salaries, tips. etc. Attach Form(s) W-2
Taxable interest. Attach Schedule B if required
Tax-exempt interest. Do not include on line 8a
Ordinary dividends. Attach Schedule B if required , . . . . . . , . . . .. .,.".
Taxable refunds, credits, or offsets of state and local income taxes (see page 22) . ., ......,....,...
Alimony received,.,............,.."........""...,.,..,..."....,..,."..",...........,..
Business income or (los5). Attach Schedule C orC-EZ,.,....,.,.,..,..".,.....,',.,.,........~
CapitalgaJn or (loss). Attach Schedule D if required. If not required, check here" ~
Other gains or (losses). Attach Form 4797. .. .. ..
Total IRA distributions ~ I b Taxable amount (see page 23)
Total pensions and annuities ~ b Taxable amount (see page 23)
Rental real estate. royalties. partnerShips. S corporations, trusts, elc. Attach Schedule E
Farm income or (loss). Attach Schedule F
Unemployment compensation. . . . . . . , , , . . . . . . . , . , . . . . . . . . ,
Social security benefits. @J . . . . . ''I'' b' Taxable amount (see page 25)
Other income. List type & amI. (see page 25) , , , , :RJ::~':r . .RE,BATE~ . , . . ' , , . , , , . . . , , . . . . , . .
Add the amounts in the far richt column for lines 7 throuah 21. This is "our total Income )Ii.
IRA deduction (see page 27) . 23
Student loan interest deduction (see page 27) , ". .....,.. 24
Medical savings account deduction. Attach Form 8853 , , , . . . . . . . . , . 25
Moving expenses. Attach Form 3903 ... 26
One-half of self-employment tax. Attach Schedule SE 27
Self-employed health insurance deduction (see page 29) . 28
Self-employed SEP. SIMPLE. and qualified plans 29
Penalty on early withdrawal of savings... ,.,. ,'..... ,.. .... , 30
Alimony paid b Recipient's SSN'" 31a
Add lines 23 through 31 a
Subtract line 32 from line -22: Thi~ 'i~.~~~; ~di~.S't~d ~'r~'s.~ i~~~'~~""""""'."""".' .. ,......
ISb I
.
.
...
For Disclosure. Privacy Act. and Paperwork Reduction Act Notice, see page 56.
DAA
9
10
11
12
13
14
15b
16b
17
18
19
20b
21
22
"3
No
No
No. ot boxes
checked on
6a and 6b
No. ot your
children on 6c
(4) ex. .if who:
Qf~~lc~~d . lived with
tax credit you
see p . 20). did not live
with you due
to divorce or
separation
(see page 20)
Oependents on
Be not en.
tered above
Add numbers
~~:~~~ on J"41
10 000
752
---1.
---1.
7
8a
241
480
-99 156
2.422
100
-85 161
~
EXHIBIT NO.~
S-ln-()4 N
32
33
-85 161
Form 1040 (20001
li:W.lti8J79
'f F~lfn 104(J" .
I
, T
C
2000) - - Paoe2
ax and 34 Amount from line 33 (adju~ . gross income) 34 -85 161
red its 35. Check jf: 0 You were 65 or alder. 0 Blind', o SPOU~~ ~as 65 or oloer, o Blind.
Add the number of boxes checked above and enter the lotal h$re ~ 35. T
b II you are married filing separately and ~ur spouse ilemizes deductions. or ~
Standard you were a dUDI-r;talus alien, see page , and check here . 35b
Deduction 36 Enter your itemized deductions from Schedule A, line 28, or standard deduction shown
for Most - on the left, But see page 31 10 find your standard deduction if you checked any box on 7 350
People line 35a or 35b or if someone can claim you as a dependent. . 36
37 Subtract line 36 from line 34 .... 37 -92 511
Single 38 If line 34 is $96,700 or less. multiply $2,800 by the lOlal number of exemptions claimed on
$4.400
Head of line 6d.1f line 34 is over $96,700, see the worksheet on page 32 for the amount to enter. 38 11 200
household: 39 T,j1xable Income. Subtract line 38 from line 37, If line 38 is more than line 37, enter -0. 39 0
$6.450 40 Tax (see page 32). Check if any tax is from . 0 Formls) 8814
Married filing b 0 Form 4972 . 40 0
jOinUyor ....... ....
Qualifying 41 Alternative minimum tax. Attach Form 6251 .. ...... .... ". 41
.....idow(er): 42 Add lines 40 and 41 ..... ..... .. .... ~ 42
$7,350 43 Foreign tax credit. Attach Form 1116 if required, 43
Married 44 Credit for child & oependent care expenses. Attach Form 2441 44
filing 45 Credit for the elderly or the disabled, Attach Schedule R 45
separately: .....
S3.675 46 Education credits, Attach Form 8863 " 46
....... .....
47 Child tax credit (see page 36) .' " 47
........ ".
48 Adoption credit. Attach Form 8839 48 .
Other. Check if from a 8 F~;;'; 3800 " n ..,. ". ".
49 b Form 8398
c 0 Form 8801 d Form (specify) 49
50 Add lines 43 through 49. These are your total credits. .......... 50
.."".. "...".. ........". ".
51 Subtract line 50 from line 42. If line 50 is more than line 42, enter ~O- ~ 51 0
Other 52 Self-employment tax. Attach Schedule SE . . ...... ...... ". ..... 52
..... ...... ....
Taxes 53 Social security and Medicare tax on tip income not reported to employer. Attach Form 4137 53
" ".
54 Tax on lRAs, other retirement plans, and MSAs, Attach Form 5329 if required 54
....... ....... .....
55 Advance earned income credit payments from Form{s) W-2 ,... 55
....... "., " ,.., ......... " .."
56 Household employment taxes. Attach Schedule H 56
". .,.. ..... . . . . . . . , ". '.".,'............." "
57 Add lines 51 . 56. This is your total tax ~ 57 0
58 Federal income tax withheld from Forms W~2 and 1099 58 '.if::I'
Payments ............
59 2000 estimated tax payments & amount applied from 1999 return 59 10 500
If you have a 60a Earned income credit (EIC) 60. .:{.
qualifying Nontaxable earned income: a~~~~'t"" ~. , . . . . . . . . , " "I '~$ ,',~.
b
child, attach ..,',-.
SChedu}f E1C. &\ype ~ ............ . . . , . . . . , . . . , . . . . ' . , ".,......."....... ~i.~ .,
61 Excess social security and RRTA tax withheld (see page 50) .,..... 61 ....,.:::.
62 Additional child tax credit. Attach Form 8812 82 :.:~~:
, , . , . . . , . . . , , . . . . , , . . . ........,
63 Amount paid with request for ext. to file (see pg. 50) 63 .,~.
'.:;
64 Other payments, Check if from a 0 Form 243S b' . 0 ' F~~' ~ ~ 36 64 ,....,..:;
65 Add lines 58. 59. 60a, & 61 - 64. These art 'lour \otal Davments ~ 65 10 500
Refund 66 If line 65 is more than line 57, subtract line 57 from line 65. This is the amount you overpaid 68 10 500
K<llleit 670 Amount of line 66 YOr want refunded to ~ou . . . . . . . . . . . . . D .. . . .. . . . . . . . . . . . . . . . . . . . ~ 67. 7 000
directly ......
deposited! ~ b
Routing number ~ c Type: Checking 0 Savings
See page SO ~ d Account number 1
and fill in 67b, Amount of line 66 you want aoclied to your 2001 estima.ted tax ~ 68 I
67c. and 67d. 68 3 500
..,'
89 If line 57 is more than line 65, subtract line 65 from line 57. This is the amount you owe. .. ~ ~
Amount ~ ..,
You Owe For details on how to pay. see page 51 .,.. .......... ........ .I;oi............ ...... ~ 69
70 Estimated tax penalty, Also include on line 69 -,..'--- ~ :~.:::'~::-;.,..: ~~';"..: ...
THOMAS A
& DIAN'
FULMER
180 46 8379
Sign
Here
Joint retum? III...
See page' 9. ,.
Keep a copy
fer your
records.
Under P.enallles of perj.ur)t. I deda~ tt\at \ t\a-.,e exammea thIS return and aocompanylng schedules and statements. and to the best of my knowted~ and
belief, lney are true, correct. and complete. DeClaration of preparer (other than taxpayer) is based on aU infonnation of Which preparer has any k/"lOWledge,
Your signature Date Your occupation Oay\ime phOne number
SELF-EMPLOYED
Spouse's signature, If a joint return, both must sign.
Date
Spouse's ot.eup;ltion
Preparet's
~
Date
2 15
EMERT & ASSOCIATES P.C.
131 EAST MAIN STREET
LOCK HAVEN
~K
_1m
Prepa..... SSN or PTtN
P00053884
EIN 23-2812643
Paid $' naMe
Pre parer's Frnn's name (or
Use Only you"ifseif-employed). ~
address, and ZIP code
PA 17745
Phone no.
570-748-6505
Fonn 1040 (2000)
OM
1 :bb.4~,-,,-
Form 1045 Application for Tentative Refun, OMS ~ 1545-0098
~ Before you fill in this form, read the separate instructions.
~ Do l}ot attach to your ineom. tax return-mall in a separate envelope. 2000
Department of the Treasury ~ For use bv individuals. estates or trusts.
Inlemal Revenue Service
Name (and name of spouse if filing jointly) Soc. sec. or employer 10 number
Please THOMAS A. & DIANE S . FULMER 180-46 8379
type Number, street, and apt. or suite no. If you have a P.O. box. see page 2 of the instructions. Spouse's soc. sec. number (SSN)
or 333 ERTEL ROAD 196-44 5683
print City, town or post office. state, and ZIP code. If you have a foreign address. see page 2 of the lnstr. Telephone number (optlcr'ai)
WILLIAMS PORT PA 17701 570-322-1829
I · Net operating loss (from Schedule A, line 27. on pg, 2) b Unu::;ed general buS;..-.ess credit
1 This aoolication is filed to carrv back: S 89 156 s 0
2. For the calendar year 2000. or other tax year b Da~"t{ ~e~; ;as ,O<j
beoinnino . 2000. .ndino .20
3
4
If this application is for an unused credit created by another carryback, enter year of the first carrybacj()o
If you filed a joint return (or separate return) for some, but not all. of the tax years involved in figuring the carryback. list the
years and specify whether joint (J) or separate (5) return for each'"
tf SSN for carryback year is different from above. enter a SSN'" and b Year(s)....
If you changed your accounting period. give date permission to change was granted'"
Have you filed a petition in Tax Court for the year(s) to which the carryback is to be applied?
Is any part of the decrease in tax due to a loss or credit from a tax shelter required to be registered? .
If you are carrying back a net operating loss did this cause the release of foreign tax credits or the release
H:: ~ ~~
5
6
7
8
9
of other credits due to the release of the foreien tax credit? See DaOe 2 of the instructions n "'.. !Xl No
Computation of - preceding 2ND preceding 12/31/98 -ll! preceding 12/31/99
Decrease in Tax tax vear ended ~ tax vear ended ~ tax v@ar 'mr.led ....
See page 2 of the instructions. Before Afte' Before Atler Belf;re J..f1er
Note: ~~~ta is blank, Skip lines carrvback ca"""back carrvback carrvback C8rtVback
10 throu h 16. :.;;Il'TVback
10 Adjusted gross income, 57.781 57 781 45 381 45 381
11 Nel operating loss deduction atler
carryback. See pg. 2 of the instr. 89 156 45 772
12 Subtract line 11 from line 10 . 57 781 -31 375 45 381 -391
13 Deductions. See pg. 3 of the inSlr. 14 397 14 397 15 671 15 671
14 Subtract line 13 from Hne 12 43 384 -45 772 29 710 -16 062
15 Exemptions. See pg. 3 of the instr. 10 800 10 800 11 000 11 000
16 Taxable inc. Line '4 minus line 15 32 584 -56 572 18 710 -27 062
17 Income tax. See page 3 of me
Instr, and attach an explanation
4 702 2 715
18 General business credit. See page
3 of the InStructions . . .
19 ~~:~" SEE STMT 1 1 500
fy . .......
20 Total credits. Add lines 18 and 19 1 500
21 Subtract line 20 from line 17 4 702 1 215
22 Recapture taxes
...
23 Alternative minimum tax
...
24 Self.emplayment tax. 7 488 7 488 6 893 6 893
25 Other
taxes.... . ...... ...... ...
26 Total lax. Add lines 21 through 25 12 190 7 488 8,108 6 893
27 Enter Ihe amount from the "Atler
carryback" COlumn on line 26 for 7 488 .... .. 6 893 - -
Bacn,.., ... T ..26......
28 :1..e:~.,.ase in tax. lne minus 4 702 215
1
29 Overpayment of tax due to a claim of right adjustment under section 1341 (b)(1) (attach computation)
...... ... .... .... .....
30 Susnended research credit allowed for current vear (see oaoe 3 of the instructions \
Sign
Here
Keep a copy of
this application
for your records.
7 signature (If Form 1045 is filed Jointly. both must sign)
Neme ~ EMERT & ASSOCIATES P . C.
131 EAST MAIN STREET
Add'e" ~ LOCK HAVEN PA 17745
For Disclosure. Privacy Act, and Paperwork Reduction Act Notice, see page 5 of the instructions.
DAA
Under penalties of perjury, I deClare that I have examined this application and accompanying schedules and statements. and Ir) the !)oS!.l of my
knowledge and belief. they are true, correct. and complete.
~ Y?nature
~
OiJle
:..--
~
Preparer Other
Than Taxpayer
D,J18
2/~5/01
",.- 1 045(2000)
1804138379.
. .
:;chedules A&B (Form 1040) 2000
... "lame(s) shown on Form 1040. Do not enter name and social t I number if shown on other side.
THOMAS A. & DIANE S. FULMER
Schedule B-Interest and Ordinary Dividends
OMS No. 154s.D074 Pa e 2
Your social security number
180-46-8379
Attachment
Sequen~ No. 08
Note. If "OU had over $400 in taxa Ie mterest. vou must also complele art I,
Part I 1 list name of payer. If any interest is from a seller-financed mortgage and the Amou nt
Interest buyer used the property as a personal residence, see page B-1 and list this
interest first. Also. show that buyer's social security number and address'" '" "....
See page B-' L,INDA ,FRY/~:r:R, ,B,ENDERS ,
a.nd the 324 BRo.AD, , STREE,T"" WILLIAMS,POR':r" PA 106
;nSlruclions for JSSB-:REPT ,lJNDER, 2.3-:2421.200 37
For1'T'l 1040.
line 8a.) PNCBANK 609
....................
Note. If you 1
'"
received a Form
1099-INT. Form
1099-010. or .... ........ ....... '"
substitute '" .......... ....... ..... .".........
statement from
a brokerBge firm. " ..' ................ ..... ..... ,.. ...... .....
list the firm's ..... ..... ........ . . . . . . . . ,..
r.ame as the ....... '.. .... .. .....
payer and enter .....
the lotal interest .................. ........ .... .......... . . . . . . . . .... ....
shown on that ....,. .. .......... .... ...... ..,
lonn ..'
2 Add the amounts on line 1 2 752
3 Excludable interest on series EE and I U.S. savings bonds issued after 1989
from Form 881S.line 14. You must attach Form 8815 ......... .., ..... 3
4 Subtract Une 3 from line 2. Enter the result here and on Form 1040. line 8a ~ 4 752
b
P II
Part II
Ordinary
Dividends
Note. If vou had over $400 in ordinarv dividends. vou must also comolete Part Ill.
5 List name of payer, Include only ordinary dividends. If you received any capital
gain distributions, see the instructions for Form 1040, line 13"" .........
GR()vr:rH, ,~" OF" ~J:l.:rCA
~,sIiIN.c;T.oN ~U.AL"""",
NEW,I>E::RSP:Ec:T:rVE FUND34482
NEW WORLD FUND A
Amount
(See page B-'
and the
instructions for
Form 1040.
line 9.)
50
125
34
32
.......,....,. .,....................."........................... .............,...........
Note. If you
received a Form
1099.o1Vor
substitute
statement from
a brokerage firm.
list the firm's
name as the
payer and enter
the Ordinary
aiviClends shown
on tnat form.
,
5
....,........... ..........................., ..............,................
.......................................,..... ..................................."...
Part III
Foreign
Accounts
and Trusts
6 Add the amounts on line 5. Enter the total here and on Form 1 040. line 9
You must complete this part if you (a) had over $400 of interest or ordinary dividends: (b) had a foreign
account: or lei received a distribution from, or were a "rantor of, or a transferor to, a foreinn trust.
7a At any time during 2000, did you have an interest in or a signature or other authority over a financial
account in a foreign country, such as a bank account. securities account, or other financial
account? See page 8-2 for exceptions and filing requirements for Form TO F 90-22.1 ............".............. . . . .
If "Yes: enter the name of the foreign country'" ...,.,..........."........,.,......,.....,...... ...........
During 2000. did you receive a distribution from. or were you the grantor of, or transferor to, a
foreion trust? If "Yes: vou mav have to file Form 3520. See oaoe B-2
~
6
241
Yes No
x
(See
page B-2.)
b
8
For Paperwork Reduction Act Notice, see Form 1040 Instructions.
DAA
x
Schedule B (Form 1040) 2000
.180468379-
SCHEDULE C Profit or Loss From Business OMS No. 1545-0074
(Form 1040) (Sole Proprietorship) 2000
.... Partnerships, joint ventures, etc.. must file Form 1065 or Form 1065-B,
Oeoanment 01 the Treasury .. Attach to Form 1040 or Form 1041. .... See Instructions for Schedl,lle C (Form 10401. Attachment 09
Internal Revenue Service (99) Seauence No.
Name of proprietor Socl.1 security number (SSN)
THOMAS A. FULMER 180-46-8379
A Principal business or profession, including product or service (see page C-1 of the instr~ctions) B Enter code from pages C-7 & 8 I
CARE HOME SERVICE ~ 623000
C Business name. If no separate business name, leave blank. 0 Employer 10 number (EIN), If .ny
FULMER'S PERSONAL CARE HOME 23-2421200
E Business address (including suite or room no.l~ .333. ERTEL. ROAD.
Ci ,townor ostoffice.state,andZIPcode WILLIAMS PORT PA 17701
F Accounting method: (1 \ Cash 12) Accrual (3) Other (specify)~
G Did you "materially participate" in the operation of this business during 20001 If "No," see page C-2 for limit on losses. .
H If au started or ac uired this business durin 2000, check here
Part I Income
'!iQ'yes
No
~
1 Gross receipts or sales. Caution. If this income was reported to you on Form W-2 and the "Statutory
employee" box on that form was checked, see page C-2 and cheCK here. ~ 0 1 996 136
2 Returns and allowances .... ... 2 28 568
3 Subtract line 2 from line. i .., ...... ... ..' 3 967 568
........... .......
4 COSl of goods sold (from line 42 on page 2) 4
5 Gross pl'ofit. Subtract line 4 from line :3 5 967.568
6 Other income, including Federal and state gasoline or fuel tax credit or refund
(see page C-3) . .... ... SEE .S,~.2.,. 6 706 777
7 Gross income. Add Jines 5 and 6 ~ 7 1 674 345
Part II Exnenses. Enter exr enses for business use of your home onlv on line 30.
8 Advertising 8 7 330 19 Pension and profit-sharing plans. 19
....... ....
9 Bad debts from sales or 20 Rent or lease (see page C-4):
services (see page C-3) 9 . Vehicles. machinery, and equipment 20. 11 101
.........
10 Car and truck expenses 536" b Other business property . . . . . . . . . 20b
(see page C-3\. 10 35 21 Repairs and maintenance 21 16 463
...... .. ."..'
11 Commissions and fees 11 22 Supplies (not included in Part III) . 22
12 Depletion ., 12 23 Taxes and licenses 23 84 100
...... ....
13 Depreciation and section 179 24 Travel. meals, and entertainment:
expense deduction {not included a Travel...... . .... ..... 24a
in Part III} (see page C.3) .., 13 161 118 b Meals and
14 Employee benefit programs entertainment
(other than on line 19} 14 46 748 c Enter nonde.duct-
.... ible amount in-
15 Insurance (other than health) 15 35 958
..... eluded an line 24b
16 Interest: (see page C-S)
a Mortgage (paid to banks, etc.) . 16. 63 ,856 d Subtract line 24c from Une 24b 24d
b Other 16b 9 596 25 Utilities 25 60 325
...... 573
17 Legal and professional 26 Wages (less employment credits) 26 671
services 17 3 042 27 Other expenses (from line 48 on
18 Office ex.oense 18 7 030 naoe 2\ 27 657 627
28 Total expenses before expenses for business use of home. Add lines 8lhrough 27 in columns ~ 28 1 773 501
'.,.
29 Tentative profit (loss). Subtract line 28 from line 7 29 -99 156
.. ....... ....... ... ... ..... ..... .... ... ..... . . . . . . . .
30 Expenses for business use of your home. Attach FOl'm 8829 30
. . . . . . . ....... ...... .... ... .. ......
31 Net profit or (loss). Subtract line 30 from line 29,
-If a profit. enteron Form 1040, line 12, and also on Schedule SE, line 2 (statutory employees,
see page C-6). Estates ano trusts, enter on Form 1041. line 3. 31 -99 156
elf a loss. you must go to hne 32.
32 If you have a loss. check the box that describes your investment in this activity (see page C~).
elf you checked 32a. enter the loss on Form 1040, line 12, and also on Schedule SE,line 2
(statutory employees, see page C-6). Estates and trusts, enter on Form 1041. line 3.
elf YOU checked 32b. YOU must attach Form 6198.
For Paperwork Reduction Act Notice. see Form 1040 Instructions.
OM
}
} ~~:
~ All Irwes\ment is 21\ lis\(.
o Some investment is not
at risk.
Schedule C (Form 1040) 2000
180468379
THOMAS A. FULMER 180-46-8379
. Schedule C (Form 1040) 2000 CARE HOME .RVICE Paoe 2
Part III Cost of Goods Sold (see paCe C-6)
33 Melhod(s) used 10
value closing inventory: a 0 Cost b 0 Lower of cost or mark~t c 0 Other (attach explanation)
34 Was there any change in determining quantities. costs, or valuations between opening and closing inventory? If
~Yes," attach explanation. 0 Yes 0 No
35 Inventory at beginning of year. If different from last year's closing inventory. attach explanation
35
36 Purchases less cost of items withdrawn for personal use.
36
37 Cost of labor. Do not include any amounts paid to yourself .
37
38 Materials and supplies ..
38
39 Other costs
39
40 Add lines 35 through 39
40
41 Inventory at end of year. , .
41
42 Cost of
Part IV
oads sold. Subtraclline 41 from line 40, Enter the result here and on a e 1, line 4 42
Information on Your Vehicle, Complete this part only if you are claiming car or truck expenses on
line 10 and are not required to file Form 4562 for this business, See the instructions for line 13 on page
C-3 to find out if you must file. '
43 When did you place your vehicle in service for business purposes? (month, day, year~
44 Of the total number of miles you drove your vehicle during 2000. enter the number of miles you used your vehicle for:
a Business
D Commuting. .
c Other
45 00 you (or your spouse) have another vehicle available for personal use?..
46 Was your vehicle available for use during off.duty hours? .
47a 00 you have evidence to support your deduction? . . . .
b If "Yes," is the evidence written?
Part V Other Ex enses. List below business ex enses not included on lines 8-26 or line 3D,
FOOD PURCHASES
........... ..............
PATIENT MEDICATIONS
PATI:Et;T,SUPP:LJ:ES
SANITATION., " " .
RESIDENT ACTIVITIES
POSTAGE
....... ...... ....
.T.E:r.EPHCll-<E, ,&" :r':e:LE:VISIqN
PLANS & PERMITS
EDti~T~~~/TM~iliI~G.. .
SHOP. EJCPE:N,S:e",
HOtJ,SEKE:E:P,ING
LI.B~Y ".
BAl'!:K.. c:liA.B:~,E S , , , , , . , , .
T:p.UC:KJ:t;c;-:-T~t;C:Cl. , , , , , , , , , , , . ,
,TRtJC::KIt;c;-:-~:r:E~, ,!1A,u:r..It;c;, , .
TRtJC:I<J:t;c;-:-M.A:r:r'!iE:~S, , , , , , , ,
,T,:p.t!C::KJ:t;c;, ,WS~C,E"""
,T:p.UC::K ,~E,~,L" !l:e:~YI,C:E,
AMORTIZAT.ION..","""""""""" .
Yes No
Yes No
Yes No
Yes No
85 955
4 102
10 444
4 746
5 284
1 906
20 053
91
302
13 698
32 632
673
5 597
201 881
171 114
55 703
32 203
10 843
400
48 Total other ex enS8S. Enter here and on a e 1. line 27 .
OM
48 657 627
Schedule C (Form 1040) 2000
.180468379 FULMER, THOMAS A. & DIANE S.
. 180-46"8379 Federal Statements
CARE HOME SERVICE
Statement 2 . Schedule C, Line 6 - Other Income
Description
TRUCKING-1099, MATTHEWS TKG
TRUCKING-1099,TOWN&COUNTRY
TRUCKING-1099,TRENCO INC.
WATER HAULING
CODE SECTION 481 A ADJUSTMENT
PA TAX REBATES
TOTAL
$
Amount
83,234
15,342
390,225
208,809
-7,046
16,213
706,777
$
2
.1'80468379 FULMER, THOMAS /> & DIANE S.
180-46-8379 Federal Statements
CARE HOME SERVICE
Description
PAYROLL TAXES
OTHER TAXES
REAL ESTATE TAXES
TOTAL
Schedule C, Line 23 - Taxes and Licenses
Amount
$ 58,414
1,335
24,351
$ 84,100
'SQ46E379
Form 1116
Foreign Tax Credit
...ividual, Estate, Trust, or Nonresident Alien Indlvi..
~ Attach to Form 1040, 1040NR, 1041. or 990-T.
IJIo See seoarate instructions.
OMS No. 1545-0121
Depanment of the Treasury _.
Inlemal Revenue SeNlce (991
Name
2000
AttaChment 1 9
Sen"Onee No.
Identifying number
as shown on page 1 of your tax relum
THOMAS A.
FULMER
180-46-8379
Use a separate Form 1116 for each category of income listed below. See Categories of Income on page 3 of the instructions. Check only one
box on each Form 1116. Report all amount!tin U.S. dollars except where specified in Part II below.
a ~ Passive income d ~ Shipping income
b 0 High withholding tax e Dividends from a DISC or former DISC
interest Certain distributions from a foreign
c 0 Financial services income sales corporation (FSC) or former
FSC
9
h
~ Lump.sum distributions
Section 901 (j) income
Certain income re-sourced by treaty
General limitation income
k Resident of (name of countryllJlo
Note: If you paid taxes to only one foreign country or U.S. possession. use column A in Part I and line A in Part II. Jf you paid taxes to
more than one foreiQn country or U.S. possession. use a separate column and line for each country or possession.
Part I Taxable Income or Loss From Sources Outside the United States Ifor Catecorv Checked Above)
Forei n Countrv or U.S. FJossession Total
A 8 C rAdd cols. A. 8, and C.l
I Enter the name of the foreign
country or U.S. possession. ~ NETHERLANDS
1 Gross income from sources within
country shown above and of the type
checked above. See page 7 of the inslr.:
548 1 548
Deductions and losses (Caution: See pages
8 and 9 of the instructions):
2 Expenses definitely related 10 the income on
1Jne 1
(att.slmt.) ...
3 Pro rata share of other deductions
not definitely related:
a Certain itemized deductions or
standard deduction. See instructions 7 350
b Other ded.
(att.stmt.) ....... ....... ....
c Add lines 3a and 3b ..... 7 350
d Gross foreign source inc. See instr. 548
e Gross inc. from all sources. See inslr. 1 688 340
f Divide line 3d by line 3e. See instr. 0.000<
9 Multiply line 3c by Hne 3f ..... 2
4 Pro rata share of interest expense.
See instructions:
a Home mortgage interest (use work. .
sheet on page 9 of the instructions)
b Other interest expense. ... ...
5 Losses from foreign sources. . . . . . . . .
6 Add lines 2. 30. 4a. 4b. and 5 2 6 2
7 Subtract line 6 from line 1. Enter the result here and on line 14. naoe 2 ~ 7 546
Part II Foreicn Taxes Paid or Accrued (See DaDe 9 of the instructions.)
c Credit is claimed Forelcn taxes oaid or accrued
for tax..
0 (~1 must In forejCln currencv In U.S. dollars
u cone)
n (m) Paid Taxes withheld at source on: (51 Other Taxes withheld at source on: (w) Other (x) Total foreign
t n 1 Accrue foreign taxes foreign taxes taxes paid or
r (01 Date paid (q) Rents paid or (ul Rents paid or accrued (add ,cols.
y (p) Dividends and royalties (r) Interesl
or accrued accrued (t) Dividends and royalties (v)lnteresl accrued (t) through{w))
A VARIOUS 6 6
8
C
B Add lines A throuch C. column lxt Enter the total here and on line 9. oaoe 2 ~I 8 6
DAA For Paperwork Reduction Act Notice, see page 12 of the instructions.
Form 1116 (20001
1804683i9.
THOMAS A. FULMER
Form" 16 (2000)
180-46-8379
Pace 2
Part III
Figuring the Credit
9 Enter Ihe amount from line 8. These are your total foreign taxes paid
or accrued for the category of income checked above Part I . 9 6
10 Carryback or carryover (at!. detailed computation) 10
11 Add lines 9 and 10 11 6
12 Reduction in foreign taxes. See page 10 of the instructions. 12
13 Subtract line' 2 from line 11. This is the total amount of foreign taxes available for credit. 13 6
14 Enter amount from line 7. This is your taxable income or (loss) from
sources outside the United Slates (before adjustments) for the category
or income checked above Part l. See page 10 of the instructions 14 546
15 Adjustments to line 14. See page 10 of the instructions 15
16 Combine the amounts on lines 14 and 15. This is your net foreign
source taxable income. (If the result is zero or less, you have no foreign
tax credit for the category of income you checked above Part I. Skip
lines 17 lhrough 21. However, if you are filing more than one Form
1116. you must complete line 19.) 16 546
'" . . . . . . . . . .....,.
17 Individuals: Enter the amount from Form 1040, line 37. If you are a
nonresident alien. enter the amount from Form 1 040NR. line 36.
Estates and trusts: Enter your taxable income without the deduction
for your exemption ........ " 17 -92 511
.........
Caution: If you figured your tax using the special rates on capital gains, see page 12 of the instructions.
18 Divide line 16 by line 17. If Une 16 is more than line 17. enter "1" 18 1.0000
..... '" ,', ........ ..' ..... .....
19 Individuals: Enter the amount from Form 1040, line 40. If you are a nonresident alien. enter the
amount from Form 1040NR. line 39.
Estates and trusts: Enler the total of Form 1041, Schedule G, lines 1a and 1b, or the total of Form 990-T,
lines 36 and 37 .... ...... ..... ..' ........ ..... .... .... .... .., 19
20 Multiply line 19 by line 18 (maximum amount of credit) . 20
........ .. ..... ........
21 Enter the smaller of line 13 or line 20. If this is the only Form 1116 you are filing, skip lines 22 through
30 and enter this amount on line 31. Othernise, complete the appropriate line in Part IV. See page
, 2 of the instructions ~ 21
Part IV
Summary of Credits From Separate Parts 111 (See page 12 of the instructions,)
22 Credit for taxes on passive income
22
23 Credit for taxes on high withholding tax interest
23
24 Credit for taxes on financial services income
24
25 Credit for taxes on shipping income .... . . . . . , . . . . .
26 Credit for taxes on dividends from a DISC or former DISC and certain
distributions from a FSC or former FSC
25
26
27 Credit for taxes on lump-sum distributions
27
28
Credit for taxes on certain income re.saurced by treaty
28
29
30
31
32
33
Credit for taxes on general limitation incame , , . . . . .. .........
Add lines 22 through 29 ..................... ...... .......
Enter the smaller of line 19 or line 30
Reduction of credit far international bo~~~tt ~p~r~ti;~~.' S~~. instructi~~~ f~'r'li~e 12 o~' ~~~~ 10 . ... .....
Subtract line 32 from line 31. This is your foreign tax credit. Enter here and on Form 1040.lin~ 4'3;" '" ..
Form 1040NR, line 42: Form 1041. Schedule G. line 2a: or Form 990-T, line 40a
29
30
31
32
~
33
Fann 1116 12000)
OM
j80468~7S.
Form 4562
Depreciation and Amortization
(Including Information on Listed Property)
OMS No. 1545-0172
Department of the Treasury
Internat Revenue Service (991
Name(s) shown on return
THOMAS A. & DIANE S. FULMER
.,. See se arate instructions.
.,. Attach this form to our return.
2000
Attachment 67
Seauence No.
Identifying number
180-46-8379
Business or activity to which this form relates
CARE
Part I
HOME SERVICE
Election To Expense Certain Tangibie Property (Section 179)
Note: If you have any "listed oroperty." complete Part V before YOU complete Part i.
1 Maximum dollar limitation. If an enterprise zone business. see page 2 of the instructions, 1 S20.000
2 Total cost of section 179 property placed in service. See page 2 of the instructions. 2
3 Threshold cost of section 179 property before reduction in limitation. 3 5200.000
4 Reduction in limitation. Subtract line 3 from line 2. If zero or less, enter -0. 4
5 Dollar limitation for tax year. Subtract line 4 from line 1. If zero or less, enter -0-. If married
fiJino seoarate!v. see oaoe 2 of the instructions 5
lal Description of oropenv tbl Cost (business use onlvl Icl Elected cost
6
7 Listed propeny. Enter amount from line 27 ....... I 7
8 Total elected cost of section 179 property. Add amounts in column (c), lines 6 and 7. ........... ........ ...... 8
.......
9 Tentative deduction. Enler the smaller of line 5 or line 8 ... ..... ,... ............ ........ .... .. 9
......
10 Carryover of disallowed deduction from 1999. See page 3 of the instructions ...... ...... ... .. .... .... .... '" .... ... 10
11 Business income limitation. Enter the smaller of business income (not less than zero) or line 5 (see instructions) 11
12 Section 179 expense deduction. Add lines 9 and 10, but do not enter more than line 11 ........ 12
13 CarrYover of disallowed deduction to 2001. Add lines 9 and 10, less line 12 ~ I 13
I'oI01e: wo nOI use art II or I""art III below or liliited property ~utomobiie$. certain other v hiCles cellul r I lephones,
cem"n c:omouters or orooenv used for entertainment rec:re~tlon or amtJsemf!nll. In!:If!II~ w::e Part V'or ~SI9d nroOf!rtv.
Part II MACRS Depreciation for Assets Placed in Service Only During Your 2000 Tax Year (Do nol include J;Sled prooe,,>,.1
Section A.General Asset Account Election
14 If you are making the election under section 168(i)(4) to group any assets placed in service during the tax year into one
or more qeneral asset accounts. check this box. See paQe 3 of the instructions ..,. u..
Section B-General De reciation System lGDS\ See oaoe 3 of lhe instructions.l
{a) Classification of property
15a 3-vear orooertv
b 5~vear property
c 7 -vear orooertv
d 1 O~vear property
e 15-year property
f 20.vear orooertv
0 25-vear oronerty
h Residential rental
orooerty
i Nonresidential real
orooerty
.
(b) Month and
year placed in
service
{cj Basis for depreciation
(business/investment use
"""Iv:~;" I .
(d) Recovery
period
(e) Convention
(f) Method
(g) Depreciation deduction
43 381 5.0 HY S L 4 338
12 652 7.0 HY S L 904
43 103 10.0 HY S L 2 155
10 677 15.0 HY S L 356
2S vrs. S/L
27.5 vrs. MM S/L
27.5 vrs. MM S/L
39 vrs. MM S/L
MM S/L
Section C~Alternative Decreciation System (ADS ISee Oal'le 5 of the instructions.l
1 Sa Class life S/1
b 12.vear 12vrs. S/L
c 40~vear 40 vrs. MM S/L
Part III Other Deoreciation 100 not include listed oropertv.) (See pace 5 of the instructions.)
17 GOS and ADS deductions for assets placed in service in tax years beginning before 2000 . ........
18 Property subject to section 168(f)( 1 ) election ....
19 ACRS and other deoreciation
Part IV Summarv (See pace 6 of the instructions.)
20
21
Listed property. Enter amount from line 26 .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total. Add deductions from line 12. Jines 15 and 16 in column (g), and lines 17 through 20. Enter
here and on the appropriate lines of your return. Partnerships and S corporations-see instructions
For assets shown above and placed in service during the current year. I
enter the Clortion of the basis attributable to section 263A costs 22
17 145 086
18
19 4 688
20 3 591
21 161 118
Form 4562 (20001
22
For ~aperwork Reduction Act Notice. see page 9 of the instructions.
DAA
I~04&B37~
.'0,",456212000\ THOMAS A. & DIANE FULMER 180-46-8379.aoo2
Part V Listed Property- (Include aut"",obiles. certam other vehicles. cellular tele,_ ..Jnes, certain computers, and
property used for entertainment, recreation, or amusement.)
Note: For any vehicle for which you are using the standard mileage rate or deducting lease expense. complete only
23a 23b columns la) throuch (c\ of Section A all of Section B and Section C If aoollcabie
Section A.De reciation and Other Information Caution: ee a e 7 f the instructi ns for limits for assen er automobiles.
233 Do ou have evidence to su ort the busn.linvest. use claimed? Yes N 23b ]f"Yes," is the evidence written? No
(i)
Elected
section 179
cost
(a)
Type of prop.
(list vehicles
firt
(b)
Date placed in
service
(e)
Busn./invesl.
os,
ercentaoe
(d)
Cosl or other
basis
(e)
Basis for depreciation
(businesslinvestment
us onl
m
Recovery
period
(g)
Methodl
Convention
(h)
Depreciation
deduction
24 Pronem used more than 50% in a l'lualified business use (See Da e 6 of the instructions. :
97 TO) OTA CAMP.) -175
8/05/99 100.000;' 17 957 17 957 5.0 S /L-M(' 3 591
0;'
25 Prooert used 50% or less in a oualified business use rSee oaoe 6 of the instructions.}:
0 SIL-
o S/L-
26 Add amounts in column (h). Enter the total here and on line 20. page 1 .... .... j 26 3 591
Add amounts in column fi). Enter the total here and on line 7, nane 1 . . , . . . ...... I 27
27
Section B..lnformatlon on Use of Vehicles
Complete this section for vehicles used by a sole proprietor, partner. or other "more than 5% owner: or related person.
II vou provided vehicles to vour emplo ees. first answer the Questions in Section C to see if ou meet an exceo tion to comoletino this section for those vehicles.
28 Total businessfinvestment miles driven during (0) (b) (e) (d) (e) In
the year (do not include commuting miles- Vehicle 1 Vehicle 2 Vehicle 3 Vehicle 4 Vehicle 5 Vehicle 6
see page 1 of the instructions) .. .....
29 Total commuting miles driven during the year. . ..
....
30 Total other personal (noncommutlng)
miles driven ..... ...
."....
31 Total miles driven during the year.
Add lines 28 through 30 ... ...
32 Was the vehicle available for personal Yes No Yes No Yes No Yes No Yes No Yes No
use during off-duty hours? , .
33 Was the vehicle used primarily by a
more than 5% owner or related person? .....
34 Is another vehicle available for
nersonal use?
Section C-Questions for Employers Who Provide Vehicles for Use by Their Employees
Answer these questions to determine jf you meet an exception to completing Section B for vehicles used by employees who
are not more than 5% owners or related oersons. See oaoe 8 of the instructions.
Yes No
36
Do you maintain a written policy statement that prohibits all personal use of vehicles. including commuting.
by your employees? ............ ...................................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Do you maintain a written policy statement that prohibits personal use of vehicles. except commuting, by your employees?
See page 8 of the instructions for vehicles used by corporate .officers. directors. or 1 % or more owners ..............
Do you treat all use of vehicles by employees as personal use? ..................,..... . . . . . . . . . . . . .. ........................
Do you provide more than five vehicles to your employees. obtain information from your employees about
the use of the vehicles, and retain the information received? ................. . . .. .. . .. . . , , . . .. .,...........................
Do you meet the requirements concerning qualified automobile demonstration use? See page 8 of the instructions
Note: If vour answer to 35. 36. 37. 38, or 39 is "Yes." do not comnlete Section B for the covered vehicles.
35
37
38
39
Part VI
Amortization
(b) (e) (d) (e) (~
(al Amortlzation
Date amortiz.ation Amortizable Code period or Amonlzation for
Description of costs begins amount section "ercent8oe this year
40
our 2000 tax ear See a e 8 of the instructions. :
41
42
400
400
'0,", 4562 (2000)
41 Amortization of costs that began before 2000 .
42 Total. Add amountS in column (f . See a e 9 of the instructions for where to re ort
DAA
.
'1804€8379 FULMER, THOMAS ~, & DIANE S,
180-46-8379 Federal Statements
Statement 1 . Form 1045, Line 19 . Other Credits
Descri ption
3rd yr 3rd yr 2nd yr 2nd yr 1st yr 1st yr
Before After Before After Before After
fORM 8863
$ $ $ $ $ 1,500 $
TOTAIS 0 $ 0 $ 0 $ 0 $ 1,500 $ 0
1
i' -1804t38379 "FULMER, THOMA~\. & DIANE S.
180-46-8379 Federal Asset Report
FYE: 12/31/2000 CARE HOME SERVICE
7.year GDS Property:
109 3" WACKcRIWATER TANK-175
110 TOOLS-TRUCKING 175
6115/00
6115/00
6.297
6,355
1265?
6,297 7 HY S/L
6,355 7 HY S/L
J? 652
o
o
o
450
454
9041
- -, I
1 O."ear' CDS Pro~ert\': 6115/00 3,839 3,839 10 HY S/L 0 192
105 WILLIAM PORI LANDSCAPE 151
107 LH IMPROVEMENTS-15101 6/15100 17,401 17,401 10 HY S/L 0 870
III WILLlAMSPORT IMP-151 6115100 4,100 4,100 10 HY S/L 0 205
113 CAPITALIZED LABOR-151 6/15/00 5,541 5,541 10 HY S/L 0 277
114 CAPITALIZED LABOR-15101 6/15100 12,222 ]2,222 ]0 HY S/L 0 61 I
43,]03 43,103 0 2,155
15-~ear ODS prosert~ .5115/00 ]0,677 10,677 ]5 HY S/L 0 356
16 WILLIAM PO T IMP-151
10,677 10,677 0 356
Prior MACRS:
4 WMSPT IMPR.-151 6115/87 18,150 18,150 10 HY SIL 18,150 0
5 WMSPT IMPR.-151 6115/88 16,166 16,166 15 HY S/L 12.394 1,078
6 WMSPT EQUIP-I 59 6/15/88 23,143 23,143 7 HY S/L 23,142 0
7 GARAGE 40X60-151 6/01/89 48,000 48,000 20 HY S/L 25,200 2,400
8 WMSPT 2 SH EDS-] 51 7/02/89 2,700 2,700 10 HY S/L 2,700 0
9 WMSPT SALT SPR-159 10/01/89 2,200 2,200 7 HY S/L 2,198 0
10 WMSPT ROAD IMP-]51 1]/0]/89 24,000 24,000 10 HY S/L 24,000 0
II WMSPT F & F-167 3/31/89 5,800 5,800 7 HY S/L 5,800 0
12 WMSPT GENERATO-167 6/01/89 ],443 1,443 7 HY S/L 1,442 0
13 WMSPT ADDITION-151 6/15/90 4,618 4,618 15 HY S/L 2,926 308
15 WMSPT-BLOG REPAIRI5] 9/25/96 1,325 1,325 ]0 HY S/L 464 133
]6 LOCK HAVEN-BLOGI5101 4/01/91 328,000 328,000 31 MMS/L 90,688 10,413
17 LH-F&F ROOMS-16701 1/01/91 48,000 48,000 10 HY S/L 40,800 4,800
18 LH-F&F LlVING-16701 1/01/91 48,433 X 38,433 ] 0 HY S/L 42,667 3,843
19 LH-KITCHEN EQ-15901 1/01/91 28,962 28,962 10 HY S/L 24,617 2,896
20 LH-HAIR ROOM-15101 1/01/91 8,200 8,200 10 HY S/L 6,970 820
21 LH-COAL STOVE-I 5901 1/01/91 8,731 8,731 10 HY S/L 7,421 873
22 LH-BLDG IMPR.-15101 6115/91 8,294 8,294 10 HY S/L 7,048 829
23 WMSPT-EQUIP-167 6/15/91 4,403 4,403 7 HY S/L 4,403 0
24 LH-EQUIP-15901 6115/9] 3,862 3,862 7 HY S/L 3,862 0
25 WMSPT-F&F-167 6115/9] 7,268 7,268 7 HY SIL 7,268 0
26 LH-F&F-16701 6/15/91 11,606 11,606 7 HY S/L 11,606 0
27 WMSPT-SEPTIC -15] 6115/91 1,555 ] ,555 ]0 HY SIL 1,325 156
28 LH-COAL SHED 1510 I 12/10/96 6,828 6,828 15 HY S/L 1,593 455
29 AIR COND.-WMSPT-159 8/01/90 1,682 1,682 7 HY SIL 1,682 0
30 COPIER-WMSPT-159 10/13/90 625 625 5 HY S/L 625 0
31 BLlNDS-WMSPT-167 12/03/90 587 587 7 HY S/L 587 0
33 CARPET-WMSPT-159 7115/92 775 775 5 HY S/L 775 0
34 WELDlNG-WMSPT-159 7119/92 825 825 7 HY S/L 825 0
35 BLOG IMPROV.-LHI5]01 5/26/92 9,841 9,841 10 HY S/L 7,380 984
36 REP AIRS-LH-] 51 0 I 9/03/92 6,426 6,426 7 HY S/L 6,426 0
37 CHAIRS-LH- I 6701 12114/92 1,253 X 0 3 HY S/L 1,253 0
39 Furn & fixt.-LH 1670 I 1/25/93 886 X 0 3 HY SIL 886 0
40 STORAGE CABINET-6701 3/05/93 178 178 7 HY SIL 164 14
41 10 4/05/93 375 375 7 HY SIL 350 25
42 FURNITURE-WMSPT- I 67 4/06/93 5,360 X 0 3 HY SIL 5,360 0
43 FAUCET & LA V.-16701 5/28/93 358 X 240 7 HY S/L 340 18
, 18046'8379 FULMER, THOMAS
i
. I . 180-46-8379
FYE: 12/31/2000
& DIANE S.
Federal Asset Report
CARE HOME SERVICE
, 1:924 .
58 PLOW/SPREADER. I 59 9/03/93 2,073 2,073 7 HY S/L 149
59 WASHERIDRYERS.159 9/03/93 2,926 2,926 7 HY S/L 2,717 209
60 L. H. ADDITION.15101 8/01/93 92,454 92,454 39 MMS/L 15,115 2,371
61 WMSPT-PAVING.151 9/15/96 10,808 10,808 10 HY S/L 3,782 1,081
, ""--62 MAZDA.WMSPT.175 9/03/93 9.286 9,286 5 HY S/L 9,286 0
70 REPAIRS,WMSPT.151 6/15/95 8,000 8,000 10 HY S/L 3,600 800
71 REPAIRS, L.H..15101 6/15/95 8,000 8,000 10 HY S/L 3,600 800
73 WMSPT.SAL T DISP.-159 5/01/96 4,878 4,878 10 HY S/L 1,707 488
74 SMSPT.WATER LlNE.151 10/18/96 706 706 10 HY S/L 247 71
75 TRUCK REPAIR.175 6/21/96 4,816 4,816 5 HY S/L 3,372 963
76 WMSPT.PAVER-159 7/25/96 5,000 5,000 7 HY S/L 2,500 714
..77 98 DODGE 2500 .175 12108/97 19,758 19,758 5 HY S/L 9,879 3,952
~78 71 ALLlEDTANKER-175 6/04/97 13,638 13,638 5 HY S/L 6,819 2,728
~80 91 INTL. 4900 TRUCK. I 75 2/19/97 19,701 19,701 5 HY S/L 9,851 3,940
_ 81 56 FRUEHAUF 4000 GAL TANKER. I 75 7/10/97 5,807 5,807 5 HY S/L 2,904 1,161
~82 90 KEN WORTH T.800 TRACTOR. 175 7/29/97 21,181 21,181 5 HY S/L 10,591 4,236
85 2600 GAL WATER TANK-159 6/15/97 3,249 3,249 7 HY S/L 1,160 464
86 BLOG IMPROV.-WMSPT.151 6/15/97 19,247 19,247 15 HY S/L 3,208 1,283
87 DISHW ASHER- WMSPT.167 6/14/97 411 411 5 HY S/L 206 82
88 SEPTIC TANK.WMSPT.159 4/15/97 546 546 7 HY S/L 195 78
89 OAK WARDROBE.WMSPT-167 8/02/97 435 435 7 HY S/L 155 62
90 W ASHER,DISHW ASHER.LH.16701 6/14/97 2,348 2,348 5 HY S/L 1,174 470
"'91 93 MACK PURPLE.175 5/12/98 32,370 X 17,370 5 HY S/L 20,211 3,474
92 98 MACK.175 1/05/99 94,022 94,022 7 MQS/L 11,753 13,432
93 2000 MACK S#1405.175 10/05/99 107,437 107,437 7 MQS/L 1,919 15,348
94 2000 MACK S# 2002.175 10/05/99 104,000 104,000 7 MQS/L 1,857 14,857
,.95 98 MACK CH.613.175 1/21/98 90,031 90,031 7 HY S/L 12,862 12,862
96 99 MACK CH613.175 1/21/99 104,221 104,221 7 MQS/L 13,028 14,889
-97 POLAR TANKER TRL..175 1/21/99 43,141 43,141 7 MQS/L 5,393 6,163
98 99 GREAT DANE TRL..175 2/10/99 17,461 17.461 7 MQS/L 2,183 2.494
100 CAPITALIZE REPAIRS.151 6/15/99 7.D00 7,000 10 MQS/L 438 700
I 101 CAPITALIZE REPAIRS-1511 6/15/99 5,000 5,000 10 MQ S/L 313 500
102 CAPITALIZE TRK REPAIR-175 6/15/99 15,000 15,000 5 MQS/L 1,875 3,000
1,592,999 1,549,246 586,297 145,086
Other De~reciation: 6/15/86 93,750 93,750 20 MOS/L 63,677 4,688
1 W SPT BLOG-151
2 WMSPT IMPR.-151 6/15/86 3,092 3,092 3 MOS/L 3,092 0
3 WMSPT IMPR.-151 6/15/86 13,268 13,268 10 MOS/L 13,268 0
103 Land-Prior Years 6/15/86 150,000 150,000 0 - Land 0 0
Total Other Depreciation 260,110 260,110 80,037 4,688
Total ACRS and Other Depreciation 260,110 260,110 80,037 4,688
Listed proee%: 8/05/99 17,957 L 17,957 5 MQSIL 1,347 . 3,591
99 9710 TA CAMRY-175
17,957 17,957 1,347 3,591
Amortization:
32 AMORTIZATION-LH-179 11/01/90 5,997 5,997 15 MOAmorl 3,666 400
Asset
44
45
46
47
48
49
50
51
52
53
54
55
56
57
Description
MAPLE CHESTS-LH 16701
6 BEDDING SETS-L670 I
12 CHAIRS-LH.1670 I
6 BEDDING SETS.16701
CAB. & LOCKERS-16701
CHAIRS.LH-1670 I
MAPLE CHESTS-16701
40 GAL WTR HTR-159
SWEEPER-WMSPT-159
WATER TANK-LH-15901
P TROWEL,HEATER 15901
HONDA GEN ERA TOR.159
KITCHEN EQUIP.159
MAGNUM STOKERS-I 59
Date
In Service
9/14/93
10/15/93
11/24/93
12/31/93
12/13/93
12/31/93
12/31/93
3/10/93
3/03/93
7/01/93
2/08/93
3/12/93
9/03/93
9/03/93
Cost
2,152
1,780
3,506
1,780
6,397
1,918
922
162
300
800
1,325
949
1,854
3345
Bus
% 179
X
X
X
X
X
Basis Per Conv Meth
--
o 3 HY S/L
03 HYS/L
03 HYS/L
o 3 HY S/L
6,397 7 HY S/L
03 HYS/L
922 7 HY S/L
162 7 HY S/L
300 5 HY S/L
800 7 HY S/L
1,325 7 HY S/L
949 7 HY S/L
1,854 7 HY S/L
3345 10 HY S/L
Prior
2,152
1,780
3,506
1,780
5,940
1,918
857
ISO
300
742
1,230
883
1,722
2 176
Current I
oi
o
o
o
457
o
65
12
o
58
95
661
132
33\
I
. i . 18Q468379 FULMER, THOMA~ A.. & DIANE S.
180-46-8379 Federal Asset Report
FYE: 12/31/2000 CARE HOME SERVICE
Asset
Description
Date Bus
In Service Cost % 179 Basis Per Conv Meth Prior Current
--
5,997 5,997 3,666 400
1,986,876 1,943,123 671,347 161,518
0 0 O. 0
1,986,876 1,943,123 671,347 161,518
Grand Totals
Less: Dispositions
Net Grand Totals
'"
~~-14-~! lZ:Bl ,ULMER ATe
ID=!"'~932218511
.... ..
'-
Fulmer's Personal Care Homes
333 Ertel Road
WiUifll'rUport, PA 17701
14 September 2001
Leanne R. Marlin
FAX 814-231-3667
Enclosed are the financial reports you requested:
Balance sheet as of September 14, 2001
P&:L, CumuItrJive 2001
P&:L, August, 2001
Vendor Balance Summary
TrucJc and Trailer List
The debt we believe needs restructuring is slU1l1Nlrized below:
SkUJ Steer Leases
Wheel Lathe Lease
Credit Lines
Truck and Trailer Leases
lJ,407
10,728
46,617
770,617
Total
$972,808
Thomas A. Fulmer
SEP-14-2G01 12:23
5703221850
~
99%
1'. ~I
P.01
ID=571il32211:l1:>b1
r'.(:i:":::
<
~~-~~-~L ~~;~l rVLM~H pIC
ASSETS
Current Assets
Checking/Savings
1000 . Cash in Bank - Checking
Tota~ Checking/Savings
Accounts Receivable
1110 . Accounts l'leceivable
Total Accounts l'leceivable
Other Current Assets
1010 Petty Cash, wmBport
1011 Petty Cash, Lock Haven
1145 Employee Advances
1110 Road Expense Advance
Total Other Current Assets
,
'-
"::Ii AM
09/14/01
__a
Fulmer's Personal Care Homes
Balance Sheet
As of Sep~r 14, 2001
Sep 14, 01
-123,285.72
h._.__.~.___'_~' .
-123,285.72
23,600.72
. .........,-..--
23,600.72
200.00
600.00
928.28
2,724.19
.---."
4,452.47
Total Current Assets
Fixed Assets
-95,232.53
1500
15J.0
15J.1
1520
1590
1591
1600
1670
1671
1680
1'750
1760
1790
1800
1900
Land
Building - Williamsport
Buil.ding - Lock Bayen
Accum. Deprec. - BUilding
Equipment - Williamsport
Equipment - Lock Baven
Accum. Depree. - Equipment
Furniture/Fixtures - wmsport
Furn./Fixtures - Lock Haven
AcCWD. Depree. - F /F
Vehicles
AcCUDl. Depree. - VelUcles
Amortization - Lock Baven
Accum. Aaortization
Accum. Depr, Est'd 2001
150,000.00
296,542.00
518,460.00
-351,564.00
54,532.00
43,680.00
-89,122.00
25,707.00
131,892.00
-152,229.00
760,066.00
-235,879.00
5,997.00
-4,067.00
-106,920.00
Total Fixed Assets
TOTAL ASSETS
LIABILITIES , EQUITY
LiabiJ.ities
Current Liabilities
Accounts Payable
2000 . Accounts Payable
Total Accounts PayabJ.e
1,047,095.00
951.,862.47
100,714.67
_._...~-
100,714.67
Page 1.
SEP-14-2001 12:23
5703221850
98%
P.02
ID=~ 1;i;.:s;':::':::la:3l:l!
r.O'~
W~-14-Wl 1~:~2 YULH~R Al,e
..
,
11:3& AM
09/14/01
Ac<:N81Il..I.
Fulmer's Personal Care Homes
Balance Sheet
As of september 14, 2001
Other Current Liabilities
Sep 14, 01
2050
2061
2064
2080
2090
2:100
2:109
2:111
2114
2116
2122
2124
2:125
2:126
2127
2133
2135
2137
2138
2139
2142
2:146
2147
2148
2149
2150
2151
2153
2330
2331
Accrued Payroll Liabilities
PNA, Anna Andrus
PNA, Eugene Arnold
PNA, Osc:~ W. Bowes
PNA, Larry Brink
PNA, Sherry Bryan
PNA, Natalie DeGanlO
PNA, oliver Edwards
PNA, Wendell Englert
PNA, Clifford Wallace Fox
PNA, Belen Glass
PNA, RQa. Grenarei
PNA, Bd.i th Hi tchcock
PNA, Shawanda Bubble
PNA, RQl:lert Huff
PNA- Mildred Karschner
PNA, William Rupert
PNA, Phyllis R.auc:h
PNA, Jane Rami.ck
PNA, Eva SteUer
PNA, Virginia Turner
PNA, Ruth Wettlaufer
PNA, Charlotte Witmer
PNA, Robert Wbi te
PNA, Ruth Weaver
PNA, Miriam Mark Wills
PNA, Myrna G. Welty
PHA, Paul Walton
Taxes Payable - Local, wmsport
Taxes Payable, Local, Lock Bave
2,790.81
201.48
180.27
183.16
-608.86
-362.65
-23.24
175.09
-4.00
-236.92
160.07
32.57
53.00
-50.33
13 .52
119.67
20.84
96.18
71.42
60.73
-77 . 66
158.26
-1,663.64
21.41
196.99
105.05
175.00
-23.94
1,188.32
711.95
Total Other Current Liabilities
3,664.55
104,379.22
Total Current Liabilities
Long Term Liabilities
2200 Note Payable, PNC 31702114
2201 . Note Payable, PNe 74355
2204 . Note Payable, PNC Mtq 71251
Total Lonq Term Liabilities
322,592.98
8,587.56
504,415.11
_.'_ _8..~.?!?.~_~.:?~
Total Liabilities
939,974.87
SEP-14-2001 12:24
Page 2
5703221850
98%
P.03
~_ 6~ ~~ ~~.~~ rV~"~n ~,.~
lL1=:;:"U1\..1;C::~.LC~\Y
"
,
11::1& AM
09/14/01
Accrual Basl.
Fulmer's Personal Care Homes
Balance Sheet
As of Sepcember 14, 2001
Equity
3000 Openi.nq Sal J:qui ty
3170 Owners' Orawinq
3180 Est. FIT, For.m 1040
3181 Est. Pa SIT, PA40
3182 Est. Tax, Local
3.2 00 OwD.ers' Equ.i ty
3900 ~tained Earnings
Het Xncome
Total Equ.:i. ty
TOTAL LXABILITIES & EQUITY
SEP-14-2001 12:24
57032218513
r.\:II'-+
Sep 14, 01
1,521.66
-125,878.24
-7,000.00
-1,320.00
-360.00
303,318.93
-34,745.69
-123,649.06
.....-....-.---. -
11,887.60
951,862.47
.._."~_. -..-.-
Page 3
98%
P.04
t:I~-lq.-tll
,
";21_
09/14/01
.......-
12:~Z YVLHER A'G
ItlCOI08
4000 Resident Charges, W...
4010 Pesid8nt Cha~ges, L...
4170 Ilesident Ile~uncls, W...
4171 Resident Retunds, L...
4191 Iles. Ilent Rebate, L...
4500 Interest Income
4700 Fulme~ 'rrucltinll, 'l'R...
4705 Ful8e: T:uckinq, MA...
4710 Fl>lme~ Water lIaulinq
TOtal. InCOllle
Expense
5000
5150
5151
5170
5171
5200
5201
5240
5250
5251
5260
5290
5291
5295
5296
5300
5301
5400
5401
5420
5421
5430
5431
5440
5441
5460
5461
5520
5521
5522
5523
5540
5541
5560
5620
5621
5640
5641
5650
5660
5661
5700
5720
5820
6010
6011
60:il0
60:ill
6210
G~os. .898./Sala~i.s
foo4 Purc:ha.es, Wil...
foo4 Purc:hases, Lee...
Resident MedB, "ilL..
Resident _s, Lock...
Resident Supplies,
Raa~t supplies,
Insuranoe, PD/CGL
Ins. C:QIIDI.. Auto
Ins. Comm. "1'ruek
Insu.ra:noe, 1t'ork1llen I . . .
InS!. HMO, Wasport
Ins. JD<<), Lock Haven
Ins. HN:), F'I1l.I18:c' 'l'r...
Ins. Gz:oup Life
Fac:.i.l.i ty Na,int., Wi...
FaciI;. ty Maine., Lo...
Advertising, Willia...
Advertising, Lock H...
Utilities. Willi..........
t7tili ties, Lock Haven
Sanitation, Willi......
Sani~~jon, Lock Haven
Coaaunicati.ons, Wj.l...
Comaunications, Loc...
Houpekeep1.ng, Wi.lli....
Housekeeping, Lock ...
l\.uto Operation
Truck Ope.ation, Tr...
T:r\lck Operati.on, Wa...
Truck Operation, a.m....
Residant Activiti..eo...
aes. A.eti vi ties, 1.0...
P1ans/Pe>::ILi.u
Equi_nt bntal, "...
!:qui_nt Rental., L...
Shop Expense, lfasport
Shop Expen..., Leek ...
Truck Wheel service
Interest:, Mortgage
In~re8t, No~es/Trade
payroll Taxes, F:ICA...
Pay.z:oll Taxe., PA t7. . .
Peprec:i.at1on
O~fiee Supplies, WJsL...
O~fi08 Supplies, Le...
Pos~., W1aspo:r~
Postage, Lock Haven
Profee8ional Services
SEP-14-2001 12:24
ID=~-~:3Z21ts~t:i
I"'uJaer I S perao:t:Lil.l Care HOllIeS
Profi t , Less by Class
~ <tb.:o. J.'\l9'I'_t 2001
n
0.00
0.00
0.00
0.00
0.00
0.00
172,064.07
169,534. 04
190,588.74
532,la6.85
180,930.;'1
0.00
0.00
0.00
C.CO
0.00
O.CO
172.00
0.00
41,279.03
4,368.50
0.00
an.oo
4,411.31
0.00
0.00
0.00
325.48
0.00
0.00
0.00
0.00
0.00
-39.99
-7.84
0.00
0.00
0.00
104,574.70
156,144.87
157,628.95
0.00
0.00
0.00
0.00
0.00
3,696.04
0.00
2,384.00
0.00
0.00
13.857.62
4,500.37
'2,632.00
0.00
0.00
0.00
0.00
0.00
5703221850
Ul
sw
,..-.-..,.-........, .--.-.- .-.--.--.....--
WL
0.00
503,028.63
0.00
-12,613.09
13.455,12
0,00
0.00
0.00
0.00
003,870.66
1.60,848.94
0.00
44,287.64
0.00
1,789.87
0.00
2,210.76
3,425.58
652.00
0.00
4,368.50
0.00
3,921.82
0.00
0.00
0.00
6,397.74
0.00
1,485.43
0.00
23,269.36
0.00
985.00
0.00
4,200.97
0.00
11,125.30
-1,438.06
0.00
0.00
0.00
0.00
936.29
30.00
0.00
1,,982.00
0.00
11.1.40
0.00
0.00
0.00
12,198.34
4,976.62
19,920.00
0.00
987.95
0.00
119.06
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
O.CC
O.CO
0.00
0.00
0.00
515.00
0.00
23.22
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
1~S,1~3.40
0.00
-4,935.96
0.00
0.00
O. 'tl
0.00
0.00
0.00
130,258.15
77,539.60
12,162.65
0.00
1, '188.2'/
0.00
1,330.2"'i
0.00
5,476.9',
2.,08".79
0.00
5,371. 00
4,19B.90
0.00
0.00
1,542.70
2,057.74
0.00
2,041.12
0.00
16,264.62
0.00
2,223.76
0.00
6,888.77
0.00
4,554.01
0.00
24,516.78
0.00
0.00
0.00
1,059.20
0.00
25.00
2,852.46
0.00
3,392.47
0.00
0.00
49,057.49
9,752.96
5,862.80
2,1\9<1.26
14,168.00
2,853.27
0.00
1,230.44
0.00
1,125.00
98%
r.t:!";:)
TOTAL
135,193.40
503,028.63
-4,935.%
-1,7,,613.09
13,455.12
0.71
172,064.07
169,534.04
190,588.74
.~._._---
1,166,315.66
419,319.11
12,162.65
44,287.64
1,788.27
1,789.87
1,330.27
2,210.76
9,076.55
2,739.79
41,279.03
14,108.00
4,198.90
4,738.62
4.411.. 31
1,542.70
2,572.74
6,397.74
2,389.82
1.485.43
16,264.62
23,269.36
2,223.76
985.00
6,848.'18
4.193.13
4,554.01
11,125.30
23,0'/8. T?
104. 574.70
156,144.87
157.628.95
1,059.20
936.29
55.00
2,852.46
1,952.00
7,088.51
111. 40
2,384.00
49,051.49
9,752.96
31, 918.16
11,971.47
106,920.00
2,~53.2'/
9B7.95
1,2~O.44
119.06
1,125.00
p",9'> 1
P.05
ti~-lq.-t:ll
l~;ti~ rV~MCK pr.~
ll)=::.--t:l'<.sZZl~:Hi
- -- .t"'. tiC>
.
11:%7_
09/U/01
FuJ.mex I a pez:son.al C~e Homes
Profit & Los. by Clus
Ja.a1lll.1:Y t:b.:o__ Mvulit 2001
-,-
F'1' LH SW WL TOTAL
.--.-.....-. . .~..._.__..
6270 Education/Training,.. . 0.00 0.00 0.00 130.00 130.00
6271 Education/Training,... 0.00 475.00 0.00 0.00 475.00
6290 Library, Willi8lllSpo:1: 0.00 0.00 0.00 346.41 346.11
6291 Library, Lock Haven 0.00 56.32 0.00 0.00 56.32
6310 !lank Sez:vio8 Fees 0.00 0.00 0.00 2,169.68 2,169.69
6560 Pay:011 Expenses 214.50 732.00 0.00 1,223.20 2,169.70
6700 Taxes, Real Estate, . . . 0.00 0.00 0.00 9,531.87 9,531.87
6701 Taxes, Real Estate, . . . 0.00 13,733.10 0.00 0.00 13,733.10
6702 'laxes, Real Estate,. . . 0.00 0.00 2,133.29 0.00 2,133.29
6720 'taxes, Bus. priv. , 0.00 0.00 0.00 227.45 227.45
6721 Taxes, Bus. priv. , ... 0.00 1,020.41 0.00 0.00 1,020.41
..."..-- ~...._.'_._.._.._---
Total Expens. 748,089.11 324,809.54 2,671.51 277,548.93 \,353,119.09
..~.."._.- .' -"-.----
Net Inoome -215,902.26 179,061.12 -2,671.51 -147,290.78 -166,903.43
-...'.....-"..-......-..... . ....--.--.-,..-,..... ...-,....."".....,.
PaqeZ
SEP-14-2e01 12:25
5703221850
98%
P.06
El9-14-Ell 12:El3 --FULMER p.c ID=!'-El322185El P.97
11:2:1..... Fulmllr 's I1erao....l Care liomes
09/14/01 Profi.t , Loss by Class
AM,..I.... lwqust 2001
n Lli SW ilL TOTAL
------- .......-.--.-
IneOllle
4000 Resident Charges, W... 0.00 0.00 0.00 -476.59 -476.59
4010 Resident Charges, L.. . 0.00 72,960.78 0.00 0.00 72,960.78
U7l Resident Refunds, L... 0.00 -2,149.56 0.00 0.00 -2,149.56
4191 Res. Rent Rebate, L. .. 0.00 250.00 0.00 0.00 250.00
4700 Fulmer Truckin'l, TR.. . 18,393.98 0.00 0.00 0.00 18,393.98
4705 Fulmer T:rucking, MA. .. 22,181. 07 0.00 0.00 0.00 22,181.07
4710 Fulmar Water Haulin'l 32,176.08 0.00 0.00 0.00 32,176.08
---., ____....H ...--.--
Total IncolIIe 72,751.13 71,061. 22 0.00 -476.59 143,335.76
Expense
5000 Gross Wages/Salaries 35,111. 68 29,812.77 0.00 667.20 65,591.65
5151 Food Purchases, Loc.. . 0.00 6,022.46 0.00 0.00 6,022.46
5171 Resident MecI.s, Lock.. . 0.00 801.06 0.00 0.00 801.06
5201 Resident Supplies, 0.00 192.86 0.00 0.00 192.86
5240 Insurance, PD/CGL 0.00 825.39 0.00 581. 49 1,406.88
5250 :Ins. Co.... Auto 0.00 123.25 0.00 468.61 591. 86
5251 Ins. COGIIl. Truck 11,386.04 0.00 0.00 0.00 11,386.04
5260 Insurance, Workmen' .. . ~ 774.00 774.00 0.00 0.00 1,548.00
5291 Ins. lIMO, Lock Haven 817.00 -76.84 0.00 0.00 740.16
5295 Ins. lIMO, Ful_r Tr... -41.34 0.00 0.00 0.00 -41. 34
5300 Facili ty llIain t. , Wi.. . 0.00 0.00 90.00 0.00 90.00
5301 Facility Maint., Lo.. . 0.00 1,531.43 0.00 0.00 1,531. 43
5401 Advertising, Lock Ii... 0.00 93.44 0.00 0.00 93.44
5420 Utilities, Williams... 0.00 0.00 0.00 766.22 766.22
5421 Util;ities, Lock Haven 0.00 1,847.82 0.00 0.00 l,8n.82
5440 Communications, WH... -39.99 0.00 0.00 805.89 765.90
5441 Co_unications, Loc.. . 0.00 492.54 0.00 0.00 492.54
5460 Houseklll8ping, Willi.. . 0.00 0.00 0.00 40.00 40.00
5461 Housekelllping, Lock ... 0.00 1,745.95 0.00 0.00 1,745.95
5520 Auto Operation 0.00 -210.00 0.00 3,080.71 2,870.71
5521 Truck Operation, 'J:'r.. . 10,544.13 0.00 0.00 0.00 10,544.13
5522 Truck Operation, Wa.. . 24,263.68 0.00 0.00 0.00 24,263.68
5523 T:ruck Operation, IQ... . 38,717.12 0.00 0.00 0.00 38,717.12
5541 Res. Aetivities, Lo.. . 0.00 72.62 0.00 0.00 72.62
5620 Equipment lIental, W... 0.00 0.00 0.00 351.92 351.92
5621 Equipment lIental, Loo. 0.00 247.75 0.00 0.00 247.75
5640 Shop Expense, _port 2,351.95 0.00 0.00 0.00 2,351.95
5650 Truck Wheel Service 298.00 0.00 0.00 0.00 298.00
5660 Interest, Mortgage 0.00 0.00 0.00 6,111. 94 6,111. 94
5661 Interest, Notes/Trade 0.00 0.00 0.00 1,530.28 1,530.26
5700 Payroll Taxes, FICA.. . 2,702.46 2,336.64 0.00 14 4. 61 5,183.71
5720 Payroll Taxas, PA U... 936.68 465.86 0.00 0.00 1,402.74
5820 Dlllpreciation 9,104.00 2,490.00 0.00 1,771. 00 13,365.00
6010 Office Supplies, Wlal. . . 0.00 0.00 0.00 301. 67 301. 87
6011 Office Supplies, Lo.. . 0.00 92.82 0.00 0.00 92.82
6030 Posta!J8, _port 0.00 0.00 0.00 210.80 210.80
6271 Education/Training,... 0.00 15.00 0.00 0.00 15.00
6290 Library, WillilUlUlpO.,t 0.00 0.00 0.00 18.00 18.00
6291 Lib",ary, Lock Haven 0.00 -9.00 0.00 0.00 -9.00
Page 1
SEP-14-2001 12:25
5703221850
98%
P.07
&9-14-&1 12:&4 FULMER ~'C
u;zeMl
09/14/01
An........
6310 . Bank San-ice Fees
6560 . Payroll Expenses
!rotal Ezp8nse
Net Income
5EP-14-2001 12:25
ID=="1l322185&
p.&a
Fulmer's Pe:sona~ C&~ Hames
Profi t , Loss by CJ.ass
Auqus't. 2001
FT loB SW WI. 'l'O'.rAL
--. ._..".~._.__.. ,.---...-- ..,-,.-....-.
0.00 0.00 0.00 406.97 406.97
214.50 732.00 0.00 1,223.20 2,169.70
..... ..... ._- --........, ...
137,140.11 50.4l9.82 90.00 18,480.71 206,130.64
--.---... ."._n.__
-6-4,388.99 20,641.40 -90.00 -19,957.30 -62,794.99
~_...._._-- ........,,-....-..,.
Page 2
5703221850
98%
P.08
89-14-91 12:84 FULMER f'C
10:U AM
09/14/01
Fulmer's Personal Care Homes
Vendor Balance Summary
Ul Trallsac't.ions
1040ES
A&AAUTO
Abundan~ Life Foods
AMElUGAS
Applied Industrial Technologies
AT&T001
AT&T112S
AT&Tl127
AT&T8691
AT&T9552
AUGUSTA
BARRWL
BASTIAN
Borough of Montoursville
BOWERSOX
BRASS
BRIAR
BRYANT
JlD'.l:'l'EllDUSTLH
C&C
CASES 18.Jo St<'ID._~nt:.e.___m
CME6 _7~~LSJUQ-'~.Tf,EJ!: _.___
ClmTEQ
CIT5029
C:n.'5047
CIT7789
CONSECO
Cumberland Truck Equi~nt Co.
DEERE
DMV
EAGLE
Zaa~ Manufacturing Co:z:p.
EXPRESS
FEESER
FNBJlANlt
BA1>TIi'Y90912 W\4-EEL L.ATl-'E.
BAm.EY90971 K-100 'TRACToR.
Heavy Duty Par~s
HIGHLAND
INDPIPE
IRS2290-V
JR
l\J!:L1J!:R
Lewistown Paper Company
Lock Haven Radiology Assoc::ia~es
M&M
$7RJOC^
A",-, TRA [lH _
1.15T
SEP-14-2001 12:25
5703221850
ID=~~83221B58
p.tI~
Jan 5, 13
3,500.00
3.17
126.40
252.26
24.28
17.79
143.58
32.86
118.18
40.69
45.50
10.94
1,313.57
2,344.00
568.79
193.84
184.50
30.00
102.32
1,145.14
_4.,223.04
7,184.75
50.67
51,522.00
11,129.62
167,517.00
14 5.95
365.45
306.26
115.00
23.30
17,273.02 'TRAILU 8'i
156.37 ~~I~
3,294.62
12,966.90
10,728.00
24,900.75
873.76
9,154.18
70:60
4,077.00
24.17
524.15
557.19
5.38
78.00
Page 1
98%
P.09
99-14-91 12:94 FULMER ,.~
10:32 AM
09/14/01
YlA,.!IFEST 7~2t{Z
rlmvJ~f (pO 339
SEP-14-2001
Fulmer's Personal Care Homes
Vendor Balance Summary
All TXAnsactions
NBHA8648 c.R.fIllT CItR.D
ME1.LON BA,JK. c.R.E.D I r I-Il'Ji~
MERCEDES-BENZ C.~D I'" C4P..D
MICHELE
MONTOUR
MOTORTRUCK
MSITO
NCDS
OneBeacon2319
Options Wi11iamsport
PA40ES
PEPSI
Pt.ATPLUS9372
Pt.ATPLOS9380
PLATPLUS9398
PP&L3
PP&L7
PP&L9
Press-Enterprise, Xnc.
PROGR
Schon Brothers
SH'ORCO
SOMERSET
SPEEDWAY
Standard Pundinq Corporation
StdFunding354615
SUBURB
SON
CR.,e:D I T
CAP-OS
( Prk)
Sunoco, Xnc.
SWOCOI'LT
SOPElUOR
SUSQMOTR
Susquehanna Urologic Associates
TBLMUK SEE TRuCK. ~TR(:jllU LIST
Toshiba America Xnfo Sys Inc.
TULPE
VALFABMS
Verizon4398
W7lTlUNS -rM ILL/i. 1f)7Z
liDdSPOIlTAUTO
mc
TOTAL
ID=~~93221BS9
Jan 5, 13
5,720.02
12,600.00
9,312.63
53.50
1,072.94
634.43
120.00
74.20
344.00
38.00
600.00
278.25
5,383.24
6,902.24
6,700.05
270.38
367.76
173.75
252.08
1,183.72
-67.73
1,595.08
10,839.00
910.15
4,952.34
44,941.04
306.48
116.20
18.78
16,497.22
367.68
2,471.23
32.11
355,495.00
1,666.32
27.95
210.64
29.94
8,190.00
37.20
30.95
838,217.71
5'0 Vf)tr1Arzy
Sl<IDSTEfRS IP./07 17{JCJ(+TRAILi!.
L"\ Tl4E. 10728 LEASES
CRE.DITLI.JES Y~(P17 ~7'70tGI7
tJr0 LF.A<;; E 5" CF UE:T..;4. y AN!.) ~'\1ArJ I FE.$T FVN 0 IrJ(,j)
12: 26 5703221850 98%
P.18
972 808
,
Page 2
- 131f6"91
P.W
Thomas and Diane Fulmer
ASSETS
Liquid
Cash
CSV, Life Ins. 12/31/98
CSV, Life Insurance
Bonds
S.T.
Personal Property (-3%)
14214
27450
400
December 31, 1999
LIABILITIES
Immediate Obligations
Leases, Auto (1 year)
42064 S.T.
Home Furnishings 63341
S.T. 63341
Real Estate(+3%)
Primary Residence
Equity, Business
S.T.
165000
45684
210684
lFU\s 50007
S.T. 50007
TOTAL ASSETS
ffle:TAFPFS'99
$366,096
TOTAL LIABILITIES
26304
26304
$26,304
NET WORTH $339,792
Pvu.ollaL F~ S;ta;t.eme.."
.
TiI.orrru aM. ~ FuhneA
ASSETS
L4u.i..d
Ca..oh.
Ch.e..c.h-i.n.9 I<c c <J'J./'tJ:.
CSV, We. !~
2ortd.1.
'Re..6-l.den:U' Ac.c.ow1.t.-6
S.T.
Pvu.ollaL PILClPeJl-ty (- 3% )
~mob.UAA
TooL!.
Load=/Eq~
T'lJ.l.Cil.J./T~
Home. F~
S.T.
'R~ E~~{+3')
P~ 'ReM.cten.c.e.**
'Re.'~q".u. 1995 APrvuV 6a.~
Land. , s.o (rrrvrJW;.)
Fu.tmeJz.'.o Loch. liwen.
Fu.tmeJz.' ~ ll)MpO>L:tu
S.T.
Note 'ReW.-lJC1b.e4., VSY
!'RM
LllltIU> 'ReW.-lJC1b.e4.
A~'R~
'Road Ex.pen.M. Adu=
S.T.
TOTAL ASSETS
Ve.c.emb= 31, 1998
LtAl3!LtT!ES
I/lrlled.la.te. ObU.ga.U.OM
3750
-53559
27450
400
5503
~ Pa.ya.bte.
L~, ~ (1 !flULll.)
CJtecWt. Urt.e. ReM..IUIe.
33046
26304
lli15
-16456
S.T.
72165
LoaM
17252 N~ p~
12690
43197 Loadvt.
5(1363
21120
147829
6530(1
Zi6268
S.T.
71483
Mo<z.:tga.ge.
175000
765520
531191
Land, So. ll)MpQ1Lt:
PCH, Loch. fWle.n.
PCt{, Wi ~, -<anu,pQ1Lt: **
S.T.
~, Loch. Ha.ue.n.
43846i
26563
1471711
S.T.
465031
11 579 Ta.x.e.6 (!n,,'"nDn a.ceU.. pa.ya.bte)
39252
4804
4863
1417
61915 S.T.
$1,8(13,438 TOTAL LIAI3ILITIES
$608,679
NET WORTH $1,194,759
p~ 'R~ EMaitlI. Va.tu.e.6:
8/7/90, $375,000
4/7/92, $1,040,000
3/31/93, $1,240,000
3/31/94, $1,375,600
12/31/94, $1,678,958
12/31/95, $1,433,944
Adjrute.d:tD book. and 1995 Appouti &at.
12/31/96. $1,471,711
12/31/97, No Change., 12/31/98 No Change.
J:n~.~A~n~~O~ ~/?~/QO
MAY-10-1999 15:02
717 327 6060
99%
P.22
"J ...
,
SAC Report
3rd Quarter, 2001
SAC Report Finalized on: 11/1412Wl
/
IRAM: R
General Information:
Master Relationship Name: FULMER, THOMAS A Master Power ID: 0001296514
Customer Name: FULMER, THOMAS A Customer Power ID: 0001296514
Segment: BUS BNK I Cost Center; 0006527 I Market: CPA
SIC Code Number: 6059 SIC Code Title: NURSING AND PERSONAL
CARE FACILITIES, NE
COC Code Number: 095 COC Code Title: Healthcare, NEC
Relationship Manager: LEANNE R MARTIN Phone Number: 814-231-1734
"Account Credit Manager: Ralph W Hult;n Phone Number: 717-730-2489
Supplemental Information:
LOB Manager: Dennis E Maul
CRC Manager:
Annual Review: No
Trend: Down
ExltlRetain: Exit
Decision made to Exit 09/0112001
Relationship on:
Number of Years Borrowing: 2 years and < or = 5 years
Primary cause: Marketllndustry deterioration
Phone Number: 717-730-2230
Phone Number:
loan in the Held for Sale No
Portfolio?:
Type of Business: Personal care home; trucking
(Please limit to 30 characters)
ACBS Obligor Number: 31702714
Contributing causes: Inadequate internal accounting
controls, Major
xpansion/relocation,
Management
~eakness/changes
Origination Date: 01/2111999
Date on WL: new
SNC (YIN):
No
Orlg. WL MRE:
ERROR: Cannot convert text to a
number
Date Non~Accrual: n/a
Current Quarter. Prior Quarter: Prior Year:
IDHE $823,158 $0 $0
IMRE $823,158 $0 $0
Current
Recommended
Obligor Risk Rating:
Facility Risk Rating:
Disclosure Status:
High PPL:
07
Accrual
No
7
7
Accrual
Yes
rJ \rl\ V
198"" NO..5..
." ...
,
Risk Rating Rationale:
DSC per 2000 tax return was .92x, and 9/14/01 interim statement shows
cash flow of ($21M), with a loss of ($187M) on revenues of $1166M.
Liquidity Is minima!, and there is no secondary source of income.
Collateral appears adequate, Management weaknesses are apparent, as
borrower expanded trucking operation and sustained a 9 month loss of
$216M in that line of business.
Disclosure Status/NPA Potential Rationale
Reserve:
Pool
Reserve Rationale:
CoHateral appears adequate and payments are current.
Charge Off History:
N/A
Recommended Charge Off:
None
Charge Off Rationale:
N1A
NON-PERFORMING ASSET CHECKLIST
GENERAL.
No
Is the valuation and/or assessment of collectlbility current and well documented?
Is the loan supported by a strong guarantor with documented capacity/incentive to support?
Yes
PPL.
Yes
Is there a high pOlentialfor the loan(s) to become non-performing within the next 180 days? (If "Yes''.
complete Disclosure Rational.)
NON-ACCRUAL.
No
No
No
No
Is the ultimate collection of principal or interest in Question?
Will the loan be more than 90 days past due by quarter end?
Is there a collateral value short fall?
Are Collection activities delayed andfor poorly defined?
RESTRUCTURED
No
No
No
No
Has Ihe matur"y of the original obligation been extended?
tf "Yes" Number of extensions:
Term of extensions:
Has the original amortization schedule been extended?
Has the interest rate of the loan been reduced?
Has the bank received equity and/or assets in full or partial exchange of the indebtedness?
1. Action Plan:
(Discuss the current plan and any changes to your plan here)
New on watchlis!.
...
Recommended action plan: transfer 10 CRC and extt,
2, Collateral Analysis:
2a. Is your debt cross-collateralized?: Yes
2b. Is your debt secured/unsecured?: Secured
2c, Collateral Analysis Table. Fill in all categories that apply:
($OOO's) Valuation Valuation Method Gross (%) . Net
Date
Eligible AIR 0 0% 0
Inventory 0 0% 0
Q 0% Q
Sub-Tolal 0 0
Short Tenn Debt $0
Short Term LTV 0,0%
Equipment 0% 0
Real estate 09/t995 FMV 1,020 80% 816
trucks and trailers 09/2000 BV 272 40% 109
Sub-Total 272 925
Long Tenn Debt 823
Long Term L TV 89,0%
Total Collateral 272 925
Total Debt 823
Total Collateral 102
Surplus
Allin LTV 89,0%
Ineligible Receivables Amount: $0.00
Ineligible Receivables Comment:
Ineligible Inventory Amount: $0,00
Ineligible Inventory Comment:
Collateral Comments:
Trucks and trailers valued by a truck dealer November 1998. Since the valuation has not been
updated since then, the margin was decreased to compensate for that.
DOCUMENTATION EXCEPTIONS: MISSING HAZARD INSURANCE
3, Background:
The Fulmers opened their first personal care home, a 31 bed facility, in Williamsport in 1986,
followed by an 89 bed home in Look Haven in 1991, The Willlamsport home also Includes the
Fulmers residence. Earlier this year Fulmer closed the WilHamsport home for efficiency
purposes, and moved all but two of the residents to the Lock. Haven home, which had 44
available beds, With this move, Lock Haven has generated net income of $179M for the first
8 months of the year, while the closed Williamsport home lost $147M,
The operation of the personal care homes could have generated sufficient cash flow to
service their debt had the borrower not undertaken a major expansion of thelr trucking
operation at a time when the Industry was experiencing severe strains. The Fulmers began
their trucking business hauling water for the WilIiamsport personal care home, which did not
have access public water systems. In order to generate additional revenues, they also hauled
water for swimming pools and other household uses. From that start they added a few more
trucks and trailers, which they leased to other trucking companies and earned a comfortable
profit. In 2000, however, they undertook a significant expansion of the trucking operation,
leasing them through Telmar\<.. This decision was made without consulting the Bank, and has
led to substantial losses in 2001. The financial condition of the borrower came to our attention
in the third quart.r, wh.n they appli.d for and were turn.d down for a $972M loan to refinance
truck. and trailer leases and various other loans related to the trucking operation.
4. Covenant Compliance:
Is your debt cross-d.fault.d7:
Out of Compliance
Yes
Comments:
DSC >/= 1.25x required /.92x .ctual as of 12/31/2000.
5. Financial Analysis:
Comments:
Interim
In 2000 the Fulm.rs r.ported a los$ of ($99M) on rev.nu.s of $1674M. Through 9/14 of this
year th.y 10$t $187M on revenu.s of $1166. Bas.d on company-prepar.d numbers, the
trucl<ing operalion losl $216M on r.v.nues of $532M, Williamsport personal care home lost
$147M on r.venues of $130M, and Lock Hav.n earned $179M on r.venu.s of $504M. Debt
cov.rage was n.gative [CF = (21)]
Leverage @ 9/1412001 was 78.33:1. Equity was $12M
6. Guarantor Analysis:
Personal
If you select "Part" as the Type of Guarantee, you must enter the part. of the loan that has been guaranteed next to "Enter Amt. or
0/0".
Guarantor Statement Typ. of AdJual.d Net Liquid A..ets Total L1ablllll.. Contlng.nt AGI
D.t. Guarantee Worth Liabilities
Thomas/Diane 03/01/2001 J&S $491.00 $67.00 $26.00 ERROR: C.nnot ($85.00)
Fulmer convert text to a
number
7. Facility: Pl.... complel. the tabl. below for all facility Information.
Number: Typ.: DHI!.: Facility Rating: Purpos.: Tenn: Amortization: Source of
Rep.ym.nt:
601071257 Term Loan $500.484.00 7 REFIN 5 15 Cash Flow From
Operations
601074355 Term Loan $8,053.00 7 ACQ 5 5 Cash Flow From
Operations
601604522 Term Loan $314,621.00 7 FA 6 6 Cash Flow From
Operations
$823,158.00
Do you have additional facility In/onnatlon to reporl? NO
~RC Manaaement Onlv
Action Requested:
Collater.' An.lysls:
Facility Description:
I!!J
File Attachments: mrerpt.doc NO SPREADS AVAILABLE
Approved by SAC Committee:
. .
Fulmer's PersOfltl/ Care Homes
JJJ Ertel RoluJ
W",g~J1Ort, PAI770]
14 SepIDnber 20fJ1
l.<<uIM R. Marlin
FAX 814-131-3667
EIIClMed tue tlIefllf"'~ 14p..jtJ,.u ~
lWtI!t<< sItut llS of Sfpltlfffber U, 1(J()1
1'6:1., CIIIIUII4Iive 2(J(J]
Pd:L, Augrut, 2901
Vmdcw BIIlGlJCe SJIIIfIII/UY
Truck lWI Tf1fi4rr Li6t
Tlfe debI N1l!' bdit:w MMls ~~ is.~ /JdDw:
SWSlHr LHm
WIHd Udle I.ase
Credit LIMs
Tl'udr tDUl T,lIilu u-
TOIIll
TIw_A. Fulmu
SEP-14-2001 12:23
!5?03221850
1I,407
10,728
46,617
77',6J7
$971,808
w/.
P.Bl
.
!:.~~ u
6-';-
January 14, 2002
0PNCBAN<
Thomas A. Fulmer
Diane S. Fulmer
333 Ertel Road
Williamsport, Pa. 1770 I
RE: Loan Number: 31702714 - Notes: 601071257, 601604522 and 601074355
Dear Mr. Mrs. Fulmer:
Please be advised that you are in default under various financial covenants and terms of the Loan
Documents relative to the above referenced loans. Said defaults include but are not limited to the
following:
1. You have not delivered to the Bank, within 120 days after fiscal year end 1999 and 2000, as
prepared on a compiled basis by a certified public accountant, financial statements for the
trucking company entity and the personal home care entity.
"Financial Statements" means the consolidated and consolidating balance sheet and statements of
income and cash flows prepared in accordance with generally accepted accounting principles in
effect from time to time ("GAAP") applied on a consistent basis (subject in the case of interim
statements to normal year-end adjustments).
2. Another financial covenant requirement, per the loan documents, is Debt Service Coverage of
greater than 1.25x is required and must be maintained at all times. The Debt Service Coverage is
out of compliance.
As a result of the foregoing defaults, all loans from PNC Bank to you are considered in default
and the "Default Rates" of interest as stated in the Promissory Notes will be initiated
immediately. PNC Bank, N.A. retains its rights and remedies under the Notes to accelerate the
entire debt at a future date. Please contact the undersigned at (570) 961-6245 to schedule a
'. .1
.. 1. _ ____..1 L_ ___~L LL_ ___..1:..
_......,"".-...~,-:~,_."._c,.:.--:.............-...
.
(>
C'
<--.)
C::::l
2=,:':~
,
('-,.)
C:.')
,.
THOMAS A. FULMER AND
DIANE S. FULMER,
PLAINTIFFS
V.
PNC BANK, N.A. AND
FRANK DeSTEFANO,
DEFENDANTS
AND NOW, this
-zh
: IN THE COURT OF COMMON PLEAS OF
: CUMBERLAND COUNTY, PENNSYLVANIA
: 03-0369 CIVIL TERM
ORDER OF COURT
day of July, 2006, IT IS ORDERED that a non-
jury trial shall be conducted in Courtroom Number 2, Cumberland County Courthouse,
Carlisle, Pennsylvania on Thursday, August 31, 2006, at 8:45 a.m.
~n R. Fenstermacher, Esquire
For Plaintiffs
~hael J. Donohue, Esquire
For Defendants ~
Court Administrator
:sal
\/ t};
~,~
D
, ,\"
t.~
cr.
--c..,.
KREDER BROOKS HAILSTONE LLP
By: Michael J. Donohue
ID#: 25906
220 Penn A venue, Suite 200
Scranton, P A 18503
(570) 346-7922
Attorneys for Defendant
THOMAS A. FULMER and DIANE S.
FULMER
COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY
Plaintiffs
vs.
NO. 03-369 CIVIL TERM
PNC BANK, N.A.
Defendant
MOTION TO CONTINUE NON-JURY TRIAL.
OR TO STRIKE THE CASE FROM THE NON-JURY TRIAL LIST
Defendant, PNC Bank, National Association, through its attorneys, Kreder Brooks
Hailstone LLP, hereby requests that the above captioned case be continued from the trial list
commencing September 18, 2006, or that it be stricken from the list and cites the following
reasons therefore:
1. This is an action in which the plaintiffs claim that PNC violated their rights by
declaring three commercial loans to be in default.
2. PNC has defended, stating that the defendants violated the financial covenants and
the reporting covenants of a letter agreement which was incorporated into the promissory notes
which established the contracts between plaintiffs and PNC.
. )0
3. Defendants filed a Motion for Summary Judgment, and supporting brief on July
21,2006.
4. On July 19,2006, Plaintiffs filed a Praecipe for Listing Case for Trial. Plaintiffs'
counsel was aware of the intention of defense counsel to file a Motion for Summary Judgment.
5. The Motion for Summary Judgment alleges, inter alia, that plaintiffs' barred by
the parole evidence rule and that plaintiffs' claims on a theory of negligence are barred by the
"gist of the action" rule and the Economic Loss Doctrine.
6. At the time of the filing of plaintiffs' complaint, defendant made preliminary
objections some of which were granted and some denied.
7. One ofthe preliminary objections related to the "jist of the action" rule. The
opinion of the court, by Judge Hess (copy attached) stated "we will leave for another day the
question of whether the "gist of the action" doctrine or, if asserted the Economic Loss Doctrine,
precludes recovery in tort.
8. The Preliminary Objections are well taken and, at the very least, will substantially
narrow the issues for trial.
9. This case has never previously been listed for trial.
10. PNC has fully cooperated with the discovery producing six bank officers and
former bank officers for depositions at the office of Plaintiffs' counsel.
11. This is case is a non-jury trial and consideration of the Defendants' Motion for
Summary Judgment will not substantially delay the case.
2
.- >
WHEREFORE, it is respectfully requested that the case be stricken from the September
Trial List or that the trial be continued until the Court considers Defendants' pending Motion for
Summary Judgment.
Respectfully submitted,
KREDER BROOKS HAILSTONE LLP
Dated:
1 - 2 1- 0 (,
By
~
Michael J. Dono
Attorney J.D. No. A 25906
ATTORNEYS FOR DEFENDANT,
PNC BANK, NATIONAL ASSOCIATION
220 Penn Avenue, Suite 200
Scranton, P A 18503
(570) 346-7922
3
I( .... :.
THOMAS A. FULMER and DIANE: IN THE COURT OF C0MJ\10N PLEAS OF
S. FULMER, CUMBERLAND COUNTY, PENNSYLVANIA
Plaintiffs
Ys.
CIVIL ACTION - LAW
03-0369 CIVIL
PNC BANK., N.A. and FRANK.
DESTEFANO,
Defendants
IN RE: MOTION FOR JUDGMENT ONTHE PLEADINGS
BEFORE BAYLEY AND HESS, 1.1.
ORDER
7/ "
AND NOW, this ~ day of January, 2004, the complaint as to the defendant, Frank
DeStefano, is DISMISSED.
The defendants' motion for judgment on the pleadings with respect to Count II is
GRANTED and the plaintiffs' claim for breach of fiduciary duty is DISMISSED.
The balance of the defendants' motion for judgment on the pleadings is DENIED.
BY THE COURT,
John Fenstermacher, Esquire
For the Plaintiffs
/l4
Michael 1. Donohue, Esquire
For the Defendants
:rlm
( ..... :..
THOMAS A. FULMER and DIANE : IN THE COURT OF COMMON PLEAS OF
S. FULMER, CUMBERLAND COUNTY, PENNSYLVANIA
Plaintiffs
vs.
CIVIL ACTION - LAW
03-0369 CIVIL
PNC BANK, N.A. and FRANK
DESTEFANO,
Defendants
IN RE: MOTION FOR JUDGMENT ON THE PLEADINGS
BEFORE BAYLEY AND HESS, J.J.
MEMORANDUM AND ORDER
In this case, the plaintiffs entered into loan agreements with the defe.ndant, PNC Bank. In
December 2001, the defendant declared the plaintiffs in default of their agreements claiming that
they had failed to provide required fmancial documentation and failed to maintain a ratio of cash
flow to debt. The plaintiffs allege that they had provided all of the information which PNC Bank
officers had sought and that the bank simply concocted an excuse to terminate their loans.
The plaintiffs filed a complaint on or about January 23,2003, alleging three causes of
action against the defendant. Count I alleges that the bank was negligent in handling the
plaintiffs' account. Count II alleges the breach of a fiduciary duty on the part of the defendant.
Count III alleges breach of contract. Pending before the court is a motion of the defendants for
judgment on the pleadings.
The parties have agreed that Frank DeStefano, sued in his individual capacity, may be let
out of the case. Our order will so reflect.
We agree with the defendants that Count II of the plaintiffs' complaint should be
dismissed. In Cortez v. Keystone Bank, Inc., 2000 U.S. Dist. LEXIS 5705, 24 (E.D. Pa. 2000),
the plaintiffs alleged that the defendant bank breached a fiduciary duty owed to them beyond
f ... ~
03-0369 CIVIL
their lending contract. The court, in holding that the bank had no such duty, stated that "[a]
fiduciary duty arises from a special relationship of trust and confidence in which there is
confidence reposed by one side and domination and influence exercised by the other." Cortez,
at 27. According to the court, "Pennsylvania law follows the 'well recognized principle that a
lender is not a fiduciary of the borrower' unless the lendergains 'substantial control' over the
borrower's business affairs." Id. The court in Cortez found no evidence that the bank had
gained such control over the plaintiff's affairs and there was no indication that there was any
relationship other than the conventional borrower and lender relationship. Id. Likewise, in the
present action, there is no allegation that the defendant had substantial control over the plaintiffs'
business affairs, nor is there anything to suggest that this was more than a traditional borrower
and lender relationship. Consequently, defendant's motion to dismiss Count II should be
. granted.
The defendant contends, also, that Count I, a claim in negligence, should be dismissed.
At this stage of the proceedings, we are, however, unable to agree that the "gist of the action" is
so clearly one of contract that the tort action cannot proceed. We will leave for another day the
question of whether the "gist of the action" doctrine or, if asserted, the economic loss doctrine,
precludes recovery in tort.
ORDER
"
AND NOW, this../.I day of January, 2004, the complaint as to the defendant, Frank
DeStefano, is DISMISSED.
The defendants' motion for judgment on the pleadings with respect to Count II is
GRANTED and the plaintiffs' claim for breach of fiduciary duty is DISMISSED.
2
. .... ,.
The balance of the defendants' motion for judgment on the pleadings is DENIED.
BY THE COURT,
John Fenstermacher, Esquire
F or the Plaintiffs
~. Ad..
7A. Hess, J.
Michael J. Donohue, Esquire
F or the Defendants
:rlm
.. W" __ ..
CERTIFICATE OF SERVICE
AND NOW, this 27th day of JULY, 2006, I, Michael J. Donohue, a member of the firm
of Kreder Brooks Hailstone LLP, hereby certify that I have this day served the within
PRAECIPE TO CONTINUE NON-JURY TRIAL, OR TO STRIKE THE CASE FROM
THE NON-JURY TRIAL LIST and RULE by depositing a copy thereof in the United States
Mail, postage prepaid, at Scranton, Pennsylvania, addressed to the party or attorney of record as
follows:
John R. Fenstermacher, Esquire
5115 East Trindle Road
Mechancisburg, P A 17050
t' 'II> "
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THOMAS A. FULMER AND
DIANE S. FULMER,
PLAINTIFFS
: IN THE COURT OF COMMON PLEAS OF
: CUMBERLAND COUNTY, PENNSYLVANIA
V.
PNC BANK, NA AND
FRANK DeSTEFANO,
DEFENDANTS
: 03-0369 CIVIL TERM
ORDER OF COURT
AND NOW, this
Dt
day of August, 2006, the bench trial scheduled
for August 31, 2006, IS CANCELLED.1
cn.-:
Edgar B. Bayley, J.
John R. Fenstermacher, Esquire
For Plaintiffs
Michael J. Donohue, Esquire
For Defendants
Court Administrator
:sal
1 The bench trial was scheduled prematurely because there was a motion for
summary judgment filed by defendant on July 21, 2006. Counsel shall list the
summary judgment for argument court.
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KREDER BROOKS HAILSTONE LLP
By: Michael J. Donohue
ID#: 25906
220 Penn Avenue, Suite 200
Scranton, P A 18503
(570) 346-7922
Attorneys for Defendant
THOMAS A. FULMER and DIANE S.
FULMER
COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY
Plaintiffs
vs.
PNC BANK, N.A.
Defendant
NO. 03-369 CIVIL TERM
MOTION FOR SUMMARY JUDGMENT
FILED ON BEHALF OF DEFENDANT. PNC BANK. N.A.
Defendant, PNC Bank, N.A., by its attorneys, Kreder Brooks Hailstone, moves this
Honorable Court to enter Summary Judgment irt its favor and against Plaintiffs, Thomas A. Fulmer
and Diane S. Fulmer and, in support thereof, respectfully represents:
1. Plaintiffs filed this action seeking damages allegedly caused by Defendant's breach
of contract and/or negligence in declaring the Plaintiffs in default on three loans and promissory
notes. ]
The parties by stipulation agreed to the dismissal of Frank DeStefano, sued in his
individual capacity, leaving only the Bank as a party Defendant. Furthermore, per Order of Court
dated January 21,2004, Count II of Plaintiffs' Complaint alleging breach of fiduciary duty was
dismissed.
,
2. Plaintiffs operated two (2) personal care home facilities and a trucking business for
which they sought financing from PNC Ban1e
3. On January 8, 1999, PN C sentto the Fulmers a letter agreement dated January 8, 1999
setting forth the terms of the loan to be made to the Fulmers.
4. The aforesaid letter agreement is attached hereto, made a part hereof and marked
Exhibit "I".
5. The aforesaid letter agreement included an Exhibit A setting forth the borrowers'
covenants.
6. The aforesaid letter agreement was accepted and executed by the Plaintiffs on January
8, 1999.
7. On January 21, 1999, the Fulmers executed a Promissory Note in the amount of
$558,000 to PNC Bank that included mortgages on the real property owned by the Fulmers (the
January 21, 1999 Note).
8. On October 25, 1999, the Fulmers executed a Promissory Note in the amount of
$25,000 (the October 25, 1999 Note).
9. On December 8, 2000, the Fulmers executed a Promissory Note in the amount of
$358,204 secured by mortgages on real and personal property owned by the Fulmers (the December
8,2000 Note).
10. The aforesaid Notes contain provisions that "This note is issued pursuant to a letter
agreement dated January 8, 1999 and the documents referred to therein, all the tenns and conditions
of which are incorporated herein by reference."
11. The aforesaid letter agreements required the Fulmers to provide PNC Bank with
specific financial information during the terms of the loans including "1. financial statements for
the trucking company and the personal home care entity within 120 days offiscal year end, prepared
on a compiled basis by a certified public accountant acceptable to the bank; 2. personal financial
statements and federal income tax statements for each calendar year within 120 days after year end."
12. By way of financial covenants, the Fulmers were required by the tenns of the letter
agreement to maintain a ratio of cash flow cash to debt and unfunded capital expenditures of 1.25
to 1.00.
13. The Bank declared the loans to be in default as a result of the Fulmers failure to
provide the required financial documents and as a result of the failure to maintain the required cash
flow ratio.
14. Plaintiffs allege in Count I of their Complaint that the Bank was negligent in
management of the Fulmers' account and in particular in classifying the loans as being in default.
15. In their Complaint, Count III, Plaintiffs allege breach of contract against the Bank in
declaring the Plaintiffs in default when no such action was warranted.
16. Thomas Fulmer admitted in his Deposition (pages 22, 23) that the Plaintiffs did not
send the financial documents required by the terms of the letter agreement, but stated that he felt he
.'
,
had no obligation to do so as a result of a prior oral statement by a Bank agent, Peter Bower, that it
would not be required to send those documents.
17. Plaintiffs' claim that their obligations under the written contract are void because they
were contradicted by a pre-existing oral agreement is barred by the Parole Evidence Rule.
18. In his Deposition Plaintiff, Thomas A. Fulmer, stated that his damages were
"financial" but did not explain or provide any evidence or proof of damages other than he was
required to pay higher default interest rates following the loan being declared in default and he
retained the services of a financial consultant and attorney because of the dispute with the Bank
(Fulmer Depos. pp. 59-69.)
19. Thomas A. Fulmer is claiming damages for emotional distress caused by the Bank's
actions. He testified in his Deposition that he considered suicide in that he mentioned his suicidal
ideations to his family doctor on one occasion in a phone conversation but received no treatment
therefor.
20. Plaintiffs' claims arise solely from a contract between the parties and the tort claim
sounding in negligence is collateral thereto and barred by the "Gist of the Action" Doctrine.
21. To maintain a cause of action for breach of contract, a Plaintiff must establish the
existence of a contract, a breach of a duty imposed by the contract, and resultant damages.
22. After extensive discovery, Plaintiffs have produced no evidence in support of
damages legally sufficient to sustain any cause of action as against Defendant.
.
,
23. Defendant is entitled to judgment as a matter of law on all claims set forth in
Plaintiffs' Complaint.
WHEREFORE, Defendant, PNC Bank, N.A., respectfully requests that this Honorable Court
enter Summary Judgment.
Respectfully submitted,
KREDER BROOKS HAILSTONE LLP
220 Penn Avenue, Suite 200
Scranton, P A 18503
(570) 346-7922
By:
Michael J. Donohu
Attorneys for Deft ant,
PNC Bank, National Association
,
KREDER BROOKS IlAILSTONE LLP
By: Michael J. Donohue
ID#: 25906
220 Penn Avenue, Suite 200
Scranton, P A 18503
(570) 346-7922
Attorneys for Defendant
THOMAS A. FULMER and DIANE S.
FULMER
COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY
Plaintiffs
vs.
PNC BANK, N.A.
Defendant
NO. 03-369 CNIL TERM
BlUEF IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT
FILED ON BEHALF OF DEFENDANT. PNC BANK. N.A.
Statement of Facts
Between January, 1999 and December, 2000, Plaintiffs obtained three business and/or
personal loans with PNC Bank that were secured by Promissory Notes and Mortgages on the
Fulmers' real property located in Woodward Township, Clinton County and Williamsport, Lycoming
County, Pennsylvania and certain vehicles. The first loan was confirmed on January 8, 1999 when
the Fulmers received a commitment letter regarding Loan "A" in the amount of$558,000 and Loan
"B" in the amount of$325,000. The Fulmers signed a Promissory Note on January 21,1999 in the
Loan "A" principal amount of $558,000. A second loan in the principal amount of $25,000 was
made on October 25, 2000, the date the Fulmers executed and delivered a Promissory Note in that
amount to the Bank. The third loan which is the subject ofthis litigation, was made on December
8, 2000 in the principal amount of $358,204 and was similarly secured and subject to certain
compliance requirements as set forth in the commitment letter dated January 8, 1999.
All of the loans were subject to the letter agreement of January 8, 1999, attached as Exhibit
1 attached thereto. That agreement imposed covenants upon the Fulmers in several areas,
specifically including financial reporting covenants and financial covenants. These covenants, set
forth more extensively in the body of the Brief required Plaintiffs to submit annual financial
statements compiled by a certified public accountant as well as tax returns. Also, the Plaintiffs were
required to maintain a ratio of cash flow to the total maturitiliS~." ~rR~fl'lJn . J .'U.]JJ
of at least 1.25 to 1.00. Mr. Fulmer admits that he did not comply with the reporting requirements,
citing a pre-existing oral understanding with a Bank Loan Officer. He denies that he failed to
maintain the required cash flow ratio although his financial records dated September 4, 2001 differ
with that conclusion.
PNC determined that the Fulmers were in material breach ofloan covenants in that they had
failed to deliver to the Bank within 120 days for fiscal years 1999 - 2001, financial statements for
the trucking company entity and personal home care entities Plaintiffs operated and a bank analysis
of their financial condition indicated they did not maintain the required debt service reserve coverage
of 1.25 to 1.00. Non-compliance with the debt service reserve requirement was not uncovered by
2
PNC until Plaintiffs submitted certain financial documents to obtain additional financing to
undertake an expansion of their trucking business on September 14, 2001.
On January 14, 2002, the Bank notified the Fulmers they were in default under various
financial covenants and terms of the loan documents and the default rates of interest as stated in the
Promissory Notes for each loan would be initiated immediately despite the fact the Fulmers were
current in their monthly payments.
After certain negotiations, the Fulmers subsequently secured replacement financing through
Vine Street Financial and paid off the indebtedness to the Bank. The Fulmers admitted their new
loan from this new lender did not result in a higher interest rate than the PNC loan. (T. Fulmer
Depos., p. 60.) Mr. Fulmer also admitted that the Williamsport home health facility had been closed
in Mayof2001, prior to when the Bank declared the loans in default. (T. Fulmer Depos., p. 66.)
Plaintiffs bring this action against the Bank alleging negligence in declaring their loans in
default since they had been paying the required monthly installment payments and breach of contract
for wrongfully declaring them in default. The Fulmers claim damages in an unspecified amount.
In their Complaint, paragraph 25, Plaintiffs aver that the pay offfor the PNC loans included
no retroactive adjustment for penalty interest and required a non-negotiable $5,000 payment to PNC
as a legal charge. In their Complaint, Plaintiffs claim they have suffered substantial damages in
expending $102,715.28 to refinance their PNC debt as well as excess and/or penalty fees imposed
3
by PNC. (Paragraph 26.) Although unclear, Plaintiffs appear to assert that their financial damages
consist of the increase in interest payments made as a result ofPNC implementing the higher default
interest rates, the cost to hire an individual by the name of John Godfrey to assist them in providing
financial help and in obtaining the replacement loan and the attorney fees incurred regarding the
dispute. Plaintiff, Thomas Fulmer, also alleges that he suffered stress. (T. Fulmer Depos., pp. 58-
67.)
Defendant has filed a Motion for Summary Judgment and the matter is ripe for decision.
Issues
1. Should the Court dismiss Plaintiffs' case because of Plaintiffs' admitted failure to
provide the financial records required in their contract with the Bank and dismiss
Plaintiffs' claim of a prior oral understanding which contradicted the written
contract?
(Suggested answer in the affirmative.)
II. Do Plaintiffs state a valid cause of action for negligence where the dispute arises
from a bank's exercise of its right to declare loans in default arising from loan
contract documents?
(Suggested answer in the negative.)
Ill. Whether Plaintiff's claim for negligence is barred by the "Gist of the Action"
Doctrine?
(Suggested answer in the affirmative.)
4
lV. Whether Plaintiffs' claims for damages are barred by the Economic Loss Doctrine?
(Suggested answer in the affirmative.)
V. Have Plaintiffs sustained any direct or legally recognizable damages under the facts
and circumstances of this case?
(Suggested answer in the negative.)
Discussion
Standard of Review
1-
One of the contract documents between the Plaintiffs and PNC is the commitment letter
dated January 8,1999 and attached to the Motion as Exhibit 1. Plaintiff, Thomas Fulmer, admitted
that he read and signed the document. In that document, Plaintiffs made the following covenant:
"FINANCIAL REPORTING COVENANTS:
(a) The Borrower will deliver to the Bank:
(I) Financial Statements for the trucking company entity and the
personal home care entity, within 120 days after fiscal year end,
prepared on a compiled basis by a certified public accountant and
acceptable to the Bank.
(ii) Personal financial statements and federal income tax return for
each calendar year, within 120 days after year end.
5
"Financial Statements" means the consolidated and consolidating balance
sheet and statements of income and cash flows prepared in accordance with
generally accepted accounting principles in effect from time to time
("GAAP") applied on a consistent basis subject in the case of interim
statements to normal year-end adjustments.
Mr. Fulmer admits in his Deposition that he never provided the documents as stated in that
covenant. However, he states on pages 22 and 23 of his Deposition that he did not feel he was
obligated to provide those documents to the Bank even though they were required in the written
contract as a result of a prior oral agreement with Bank Officer, Peter Bower. Mr. Fulmer's
testimony, on page 22 and 23 of his Deposition was:
Q. . . . did you read the financial reporting covenants on Exhibit A?
MR. FENSTERMACHER: When are you saying?
BY MR. DONOHUE:
Q. At the time you signed it.
A. 1 read them, but 1 was told by Peter Bower that there would be no need to be doing
that.
Q. All right. When did he tell you there would be no need to doing that?
A. He actually told me that before I got this letter.
Q. And what did he tell you with regard to the reporting covenants? What reporting
would be required?
A. He said my 1040 tax form and my schedules - - all my schedules would be sufficient.
6
A. Okay. And he told you that sometime prior to January 8, 1999 --
A. Yes.
Q. - - when he sent you this letter?
A. Yes.
Q. Okay. Now, I think you said you did read the letter when you got it.
A. Yes.
Q. And did you read Exhibit A when you received it?
A. I read it. 1 read it, and it was a form letter. And seeing that I had already a contract
with Peter Bower by verbal contract, I thought that, well, he couldn't change that.
So it didn't mean what Peter told me to do.
Q. Okay. You believe that you - - prior to January 8, you already had a contract with
PNC?
A. With Peter, yes.
Q. And he's a representative ofPNC?
A. Yes.
Q. So the contract was your oral agreement with Peter Bower rather than with - - rather
than the commitment letter which you and your wife signed?
A. When I had the discussion with Peter, I took his word. It was better than a
handshake.
Throughout the entirety of his Deposition, Mr. Fulmer admits that he did not comply with
the reporting requirements set forth in the commitment letter and states that his reason for not doing
7
so was that he felt he was bound not by the terms of the written contract but by an oral agreement
with Peter Bower made prior to the execution of that contract.
PNC has made a Motion for Summary Judgment based on the Parol Evidence Rule. The law
in Pennsylvania applying the Parole Evidence Rule was thoroughly set forth by our Supreme Court
in the case of Yocca v. The Pittsburf!h Steelers Soorts. Inc., 478 Pa. 479, 854 A.2d 425 (2004). This
was a lawsuit by some Steelers season ticket holders seeking to disregard some terms in the Stadium
Builder License contract and to require the Steelers to comply with some statements in a brochure
which had been sent to season ticket holders prior to the contract. The Supreme Court affirmed the
ruling of the Trial Court and held that the lawsuit should be dismissed under the Parol Evidence
Rule. On page 497 of its opinion, the Court adopted the reasoning of the prior case of Gianni v.
Russell & Co., 281 Pa. 320, 126A.2d 791 (1924) in explaining the Parole Evidence Rule as follows:
"Where the parties, without any fraud or mistake, have deliberately put their
engagements in writing, the law declares the writing to be not only the best, but the only,
evidence of their agreement. All preliminary negotiations, conversations and verbal
agreements are merged in and superseded by the subsequent written contract . .. and unless
fraud, accident or mistake be averred, the writing constitutes the agreement between the
parties, and its terms and agreements cannot be added to nor subtracted from by parol
evidence.
The Court reviewed the contract and found that it contained the entire agreement between
the parties with respect to the matters provided for therein. The Court concluded that the SBL
Agreement represented the parties' entire contract with respect to the sale ofSBLs and that the
8
Parole Evidence Rule bars the admission of any evidence of previous oral or written negotiations or
agreements entered into between the parties concerning the sale ofSBLs, such as the SBL brochure.
The reasoning of Yoka and the cases cited therein apply equally to this case. Mr. Fulmer cites
an unspecified previous oral conversation with a bank representative in which it was allegedly said
that he would only have to provide tax returns to the bank. Mr. Fulmer acknowledges that he read
the commitment letter and its exhibit requiring additional detailed financial information but assumed
he could disregard that as a result of the alleged previous oral representations.
In the recent case of Yount v. First National Bank of Port Allevanv, 686 A.2d 539 (Pa. Super.
2005), the Superior Court affirmed dismissal of a case in which the contracting party sought to avoid
the clear terms of the written contract based on prior oral representations. The case cites the Y oka
case in stating "Once a writing is determined to be the parties' entire agreement, the Parole Evidence
Rule applies and evidence of any previous oral or written negotiations or agreements involving the
same subject matter as the contract is almost always inadmissible to explain or vary the terms of the
contract." The Court also adopted the reasoning of Blumenstock v. Gibson, 811 A.2d 1029, 1037
(Pa. Super. 2002) in concluding "The case law clearly holds that a party can not justifiably rely on
prior oral representations yet sign a contract denying the existence of those representations". In this
case, Mr. Fulmer can not be allowed to sign a contract committing himself to making specific
financial disclosures to PNC alleging a prior oral conversation in which it was represented that he
would have to make different and far less stringent disclosures.
9
Summary Judgment may be granted if, after completion of relevant discovery, an adverse
party who bears the burden of proof at Trial has failed to produce evidence of facts essential to the
cause of action. Pa. R.C.P. S 1035.2. If the record contains insufficient evidence offacts to make
out a prima facie cause of action, there is no issue to be submitted to a Jury and Summary Judgment
should be granted as a matter of law. Summary Judgment is appropriate where the pleadings,
discovery, record admissions, and affidavits demonstrate that there is no genuine issue of material
fact and that the moving party is entitled to judgment as a matter oflaw. A proper grant of Summary
Judgment depends upon a record that either shows the material facts are undisputed or contains
insufficient evidence of facts to make out a prima facie cause of action or defense. Noel v. First
Financial Bank, 855 A.2d 90 (Pa. Super. 2004). In making this determination, the record must be
viewed in a light most favorable to the non-moving party, with all doubts as to the existence of a
genuine issue of material fact being resolved against the moving party. Allen v. Mellinf!er, 625 A.2d
1326 (Pa. Cmwlth. 1993), App. Den. 644 A.2d 738 (Pa. 1994); Boverv. Walker, 714 A.2d 458 (Pa.
Super. 1998).
II and III
The Bank's first two arguments concern Plaintiffs' cause of action for negligence. There is
a conceptual distinction between breach of contract and tort claims. Where the allegedly negligent
10
act is really no more than a failure to live up to the contract, negligence claims will not be permitted.
Etoll. Inc. v. Elias/SavionAdvertisini!. Inc., 811 A.2d 10 (Pa. Super. 2002); Pittsburf!h Construction
Co. v. Griffith, 834A.2d 572 (Pa. Super. 2003), App. Den. 8S2A.2d313 (Pa. 2004). A claim should
be limited to a contract claim when the parties' obligations are defined by the terms of the contract
and not by the larger social policies embodied by the Law of Torts. Bohler Uddeholm Am.. Inc. v.
Ellwood GrouD. Inc., 247 F.3d 79 (3d. Cir. 2001), Cert. Den. 534 US 1162, 122 S. Ct. 1173, 152
L.Ed 2d 116 (2002). In keeping with this principle, there has developed the "Gist of the Action"
Doctrine which operates to preclude a Plaintiff from recasting ordinary breach of contract claims into
tort claims. The Doctrine bars tort claims where the duties allegedly breached are created and
grounded in the contract itself and arise solely from the contract between the parties. Pittsburf!h
Construction Co., Supra. The negligence alleged against the Bank arises solely from the manner in
which it declared the contract in default and has no other source than the terms and provisions of the
loan documents between the parties. The contract is the essential ground or object of the action, i.e.,
the gist of the action, and the alleged tort is collateral thereto. The alleged negligent act is simply
a failure to perform in accordance with what Plaintiff interprets to be the contractual terms of their
loan and arises solely from the contractual obligations in relation to these loans.
When a Plaintiff alleges that a Defendant committed a tort in the course of carrying out a
contractual agreement, Pennsylvania Courts should examine the claim and determine whether the
11
"Gist" or "Gravamen" of it sounds in contract or tort. Y occa v. Pittsburflh Steelers Svorts. Inc., 806
A.2d 936 (Pa. Cmwlth. 2002); Pittsburflh Construction Co., Supra. The test is not limited to
discrete instances of conduct; rather, the test is, by its own terms, concerned with the nature of the
action as a whole. Etoll. Inc., Supra. It is clear that the Plaintiffs seek redress under a valid written
contract for actions by PNC Bank which were authorized by the contract, whether or not
appropriately exercised.
IV and V
Furthermore, no cause of action exists for negligence that causes only economic loss. Aikens
v. Baltimore & Ohio RR Co., 501 A.2d 277 (Pa. Super. 1985); General Public Utilities v. Glass
Kitchens of Lancaster. Inc., 542 A.2d 567 (Pa. Super. 1988). Although Mr. Fulmer asserts he
suffered from stress and that "I was thinking of suicide", emotional reaction in the absence of any
physical injury is not compensable under Pennsylvania Law either in tort or contract. Troutman v.
Tabb, 427 A.2d 673 (Pa. Super. 1981); Emerman v. Baldwin, 142 A.2d 440 (Pa. 1958). In tort,
emotional distress in the absence of physical injury is not a recoverable damage unless the Plaintiff
was in personal danger and feared a physical impact. Niederman v. Brodskv, 161 A.2d 84 (Pa.
1970). Obviously, that exception to the general rule does not apply to the case at bar.
12
In breach of contract actions, a Plaintiff can not recover for psychic suffering or emotional
distress unless accompanied by bodily injury or where the breach is of such a type that serious
emotional disturbance is a particularly likely result. Rittenhouse Reflencv Affiliates v. Pass en, 482
A.2d 1042 (Pa. Super. 1984); Rodflers v. Nationwide, 496A.2d 811 (Pa. Super. 1985). Plaintiffs
stress, whether real or imagined, is not a direct and foreseeable result of a breach of a contract to lend
money.
The basic question is whether there are any identifiable damages recoverable under the law
under the circumstances herein presented. No cause of action exists for negligence that causes only
economic loss. Aikens v. Baltimore & Ohio RR Co., 501 A.2d 277 (Pa. Super. 1985); General
Public Utilities v. Glass Kitchens ofLancaster. Inc., 542 A.2d 567 (Pa. Super. 1988); Rvan v. Lower
Merion Twv., 205 F. Supp. 2d. 434 (E.D. Pa. 2002). Nor is Plaintiffs alleged stress a foreseeable
"injury" from simply calling in a loan.
Other than the default interest rate and default fee recovered by PNC per the loan documents
once the loans were declared in default, the only other identifiable damage claim by Plaintiffs
involves the hiring of a financial consultant and retaining their attorneys. The general rule is that
damages in a breach of contract action are not recoverable unless they can fairly and reasonably be
considered as arising naturally from a breach, or as being within the contemplation of the parties at
the time the contract was made as a probable result of any breach. Compensation is only given for
13
those injuries which are a direct and foreseeable result assuming that a breach had occurred. Reimer
v. Tien, 514 A.2d 566 (Pa. Super. 1986). Aside from the fact that attorney fees are not recoverable
as an item of damage in a negligence claim and is otherwise not recoverable unless provided under
the contract or by statute (42 Pa. C.S.A. ~ 2503), it can not be presumed that the Bank or any other
lender would contemplate or consider a creditor would retain a financial consultant or hire an
attorney simply because a default on a loan was declared. Although Plaintiffs seek to recover the
costs for same, such costs are not a direct and foreseeable result of the breach nor can this item be
considered as being within the contemplation of the parties when the loans were made. See Reimer
v. Tien, Supra. where it was held that a former medical student's costs of learning Spanish and
traveling to and from Mexico in anticipation of attending medical school was not a direct and
foreseeable result of any breach on the part of the medical school.
Plaintiffs have failed to allege and/or present any evidence in support ofa legally identifiable
and recoverable item of damage. Their failure to meet the third requirement for a breach of contract
cause of action is fatal. Defendant, PNC Bank is entitled to Summary Judgment.
Respectfully submitted,
KREDER BROOKS HAILSTONE LLP
220 Penn Avenue, Suite 200
Scranton, PA 18503
(570) 346-7922
By:
~{
Michael J. Donoh
Attorneys for De dant,
PNC Bank, National Association
14
. --
PRAECIPE FOR LISTING CASE FOR ARGUMENT
(Must be typewritten and submitted in duplicate)
TO THE PROTHONOTARY OF CUMBERLAND COUNTY:
Please list the within matter for the next Argument Court.
-----------------.--.-------------------.---------------------------------------------------------------------------.
CAPTION OF CASE
(entire caption must be stated in fUll)
Thomas A. Fulmer and Diane S. Fulmer,
(plaintiff)
VS.
PNC Bank, N.A.
(Defendant)
No. 369
03
Term
I. State marter to be argued (i.e., plaintiff's motion for new trial, defendant's demurrer to
complaint, etc.):
Defendant's Motion for Summary Judgment.
2. Identify counsel who will argue cases:
( a) for plaintiff:
John R. Fenstemacher, Esq.
(Name and Address)
5115 East Trindle Road., Mechanicsburg, PA 17050
(b) for defendant:
Michael J. Donohue, Esq.
(Name and Address)
220 Penn Ave., Suite 200, Scranton, PA 18503
3. I will notify all parties in writing within two days that this case has been listed for argument.
4. Argument Court Date:
October 25, 2006
Michael J.
Print your name
Defendant
Dateo
8/25/06
Attorney for
. -'.'lit
CERTIFICATE OF SERVICE
AND NOW, this 25th day of AUGUST, 2006, 1, Michael J. Donohue, a member of the
firm of Kreder Brooks Hailstone LLP, hereby certifY that I have this day served the within
PRAECIPE FOR LISTING CASE FOR ARGUMENT, by depositing a copy thereof in the
United States Mail, postage prepaid, at Scranton, Pennsylvania, addressed to the party or attorney
of record as follows:
John R. Fenstermacher, Esquire
5115 East Trindle Road
Mechancisburg, P A 17050
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THOMAS A. FULMER, and
DIANE S. FULMER,
: IN THE COURT OF COMMON PLEAS
: OF CUMBERLAND COUNTY,
: PENNSYLVANIA
Plaintiffs
v.
: DOCKET NO. 03-369 Civil Term
PNC BANK, N.A.,
Defendants
REPLY IN OPPOSITION TO MOTION FOR SUMMARY JUDGMENT
AND NOW come Thomas A. Fulmer and Diane S. Fulmer, hereinafter
"Fulmers," by and through their attorneys, the Offices of Fenstermacher and Associates,
P.C., and files this Plaintiffs' Reply to Defendant's Motion for Summary Judgment:
1. Admitted.
2. Admitted.
3. Admitted in part, denied in part. It is admitted that the January 8, 1999
commitment letter contained many of the terms of the contract however it
misstated the previously agreed upon terms as to the fmancial reporting
requirements of the loans.
4. No response is required.
5. Admitted in part, denied in part. It is admitted that Exhibit "A" set forth some of
the borrowers' covenants, however it is denied that it does so accurately.
6. Admitted in so much as the Fulmers signed the January 8, 1999 commitment
letter.
7. Admitted.
8. Admitted.
9. Admitted.
,
10. Admitted.
11. Admitted in part, denied in part. It is admitted that the January 8, 1999
commitment letter did state that such financial information was required to fulfill
the Fulmers reporting obligations, however it is averred that the Fulmers were
told by Peter Bower, PNC Business Banking Officer, that such reporting
requirements were unnecessary and that in order to comply with their obligations,
the Fulmers need only provide their 1040 tax form and schedules.
12. Admitted.
13. Admitted in part, denied in part. It is admitted that this is the reason that PN C
gave as to why they declared the loans to be in default, it is denied that the
Fulmers materially breached the terms of the financial reporting covenant. It is
also denied that the Fulmers failed to maintain the required cash flow ratio.
14. Admitted.
15. Admitted.
16. Admitted.
17. Denied. Plaintiff's claim that their obligations under the written contract are void
because they were contradicted by a pre-existing oral agreement is not barred by
the Parol Evidence Rule because the Parol Evidence Rule is inapplicable to this
set of facts.
18. Admitted. By way of further explanation, the Fulmers have provided an expert
report to Defense which includes an exact list of damages they have incurred due
to PNC's breach of contract.
19. Admitted.
2
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20. Admitted. Plaintiffs agree to the dismissal of Count I sounding in Negligence.
21. Admitted.
22. Denied. Plaintiffs have produced an expert that will testify that Plaintiffs have
incurred over $100,000 as a direct result ofPNC's actions.
23. Denied. Genuine issue of material fact still exist, therefore PNC is not entitled to
judgment as a matter of law.
WHEREFORE, Plaintiffs, Thomas and Diane Fulmer, respectfully request that
this Honorable Court deny Defendant's Motion for Summary Judgment as to Count III of
Plaintiffs' Complaint, dismiss Count I of Plaintiffs' Complaint, and that judgment be
entered in Plaintiffs' favor, together with costs and such other and further relief as this
Court deems proper.
Respectfully submitted,
FENSTERMACHER AND ASSOCIATES,
P.C
By:
Jo R. Fenstermacher, Esqwre
S preme Court I.D. #29940
Matthew Aaron Smith, Esquire
Supreme Court I.D. #94603
5115 East Trindle Road
Mechanicsburg, P A 17050
(717) 691-5400
Attorneys for Plaintiffs
Dated: lo. Od-; W ~ 200'
3
".
CERTIFICATE OF SERVICE
AND NOW, on this 2o"f1'\day of October, 2006, I, Matthew Aaron Smith, Esquire,
hereby certify that I have served the foregoing Plaintiffs' Reply in Opposition To
Defendant's Motion for Summary Judgment, by mailing a true and correct copy by
United States first class mail, addressed as follows:
Michael J. Donohue. Esq.
220 Penn Avenue, Suite 200
Scranton, PA 18503
FENSTERMACHER AND ASSOCIATES,
P.C.
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# 10 Oct. 25, 2006 - Argument
THOMAS A. FULMER and
DIANE S. FULMER
: IN THE COURT OF COMMON PLEAS OF
: CUMBERLAND COUNTY, PENNSYLVANIA
V.
PNC BANK, N.A.
: NO. 2003 - 0369 CIVIL TERM
IN RE: DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
BEFORE OLER. GUIDO. JJ.
ORDER OF COURT
AND NOW, this 11TH day of DECEMBER, 2006, after review of the briefs filed
by the parties in support of their respective positions, and having heard argument thereon,
Defendant's Motion for Summary Judgment is GRANTED in part and DENIED in part.
It is GRANTED as to the counts sounding in negligence. In all other respects, it is
DENIED.
Edward E. Guido, J.
:sld
, .
~ R. Fenstermacher, Esquire
F or the Plaintiffs
--\
~ichael J. Donohue, Esquire
For the Defendant
Court Administrator
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