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HomeMy WebLinkAbout99-05504 i p D? GREG KREIDER and TODD KREIDER, individually and t/d/b/a SHIRK ENTERPRISES, INC. Plaintiffs V. DAVID R. GONDER and LEE K. GONDER, individually and t/d/b/a GONDER, INC. Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY CIVIL ACTION - LAW NO: qi - 550` PRAECIPE FOR ENTRY OF JUDGMEN'T' TO THE PROTHONOTARY: Please enter judgment in favor of GREG KREIDER, TODD KREIDER, and SHIRK ENTERPRISES, INC. and against DAVID R. GONDER, LEE K. GONDER, and GONDER, INC. in accordance with the attached instrument as follows: Unpaid balance of note $30,527.84 5$ late fee $ 1,526.39 Costs $ 50.00 Attorneys fees 1 526.39 Total 33,630.62 Address for the Defendants is c/o World Cup Ski and Cycle, 4500 Old Gettysburg Pike, Mechanicsburg, PA 17055. Address for Plaintiffs is c/o Greg Kreider, 418 North Charlotte Street, Lancaster, PA 17603. Date: 0/ -7 90i STEVENS & LVE, By: Danielle .Z. Dinsmore, Esquire Court I.D. 76457 One Penn Square Lancaster, PA 17602 (717) 291-1031 Attorneys for Plaintiffs LANC/42919/99999.914 I HEREBY CERTIFY that a true and correct copy of the foregoing Praecipe for Entry of Judgment was served this ?n day of following: 1999, by first class mail, postage prepaid, upon the MR.LEE GONDER GONDER, INC C/O WORLD CUP SKI AND CYCLE 4500 OLD GETTYSBURG ROAD MECHANICSBURG, PA 17055 Danielle . Dinsmore LRNC/42919/99999.919 $ 60,000.00 November 14, 1995 Camp Hill, Pennsylvania JUDGMENT NOTE FOR VALUE RECEIVED, the Undersigned, GONDER, INC., 0PAI DAVID Ig GUNDER and LEE R. GONDER, (hereinafter collectively 4a referred to as "Borrower") do promise to pay to SHIRR ENTERPRISES, INC. (hereinafter referred to as "LENDER") the sum of Sixty Thousand and 00/100 ($60,000.00) Dollars, together with interest on the unpaid principal balance at the rate of nine (98) percent per annum. All principal and interest shall be repaid in thirty-six (36) equal monthly installments of One Thousand Nine Hundred Seven and 99/100 ($1,907.99) Dollars, applied first to interest and the remainder to reduction to principal, with the first payment being due on December 14, 1995, and subsequent payments being due on the 14th day of each month thereafter until paid in full; provided, however, that all principal and interest, if not sooner paid, shall be due and payable in full on November 14, 1998. In the event that any payment shall not be paid within fifteen (15) days of the due date, a late payment fee of five (58) percent of the monthly principal and interest payment shall be due and payable from BORROWER. Further, in the event that any payment shall remain unpaid for a period in excess of thirty (30) days, LENDER, at its sole option, shall have the right to accelerate the entire indebtedness due and demand payment in full. Said acceleration and demand for payment in full shall be in writing forwarded to BORROWER by hand-delivery or first class mail at 803 Cocklpt, DRGr Street, Mechanicsburg, Pennsylvania 17055. All payments of ?- principal and interest from BORROWER to LENDER. shall be paid to LENDER at 830 Flory Mill Road, Lancaster, Pennsylvania 17601 or at such other address as Lender may provide to BORROWER in writing. BORROWER shall have the right to prepay in whole or in part at any time without penalty. BORROWER hereby empowers the Prothonotary or any attorney of any Court of record within the United States or elsewhere to appear for BORROWER and, with or without declaration, enter judgment against BORROWER in favor of Lender, together with costs of suit and reasonable counsel fees in an amount equal to five, (58) percent of the amount due. TO THE EXTENT permitted by applicable law, BORROWER hereby waives inquisition and condemnation of any property that may be levied upon by virtue of any execution which may issue forthwith f ?. upon such confession of judgment, and further waives all errors in said proceedings, together with stay of or exemption from execution or extension of time of payment which may be given by any statute now in force or which may be enacted hereafter, or by any usage or custom. No single exercise of the foregoing warrant shall be deemed to exhaust the power to confess judgment granted herein, whether or not any such exercise shall be held by any court to be invalid, void or voidable, but the power shall continue undiminished and may be exercised from time to time as often as LENDER shall elect until all sums payable or that may become payable by BORROWER pursuant hereto shall have been paid in full. A copy hereof may be entered in lieu of the original. PRESENTMENT for payment, demand, notice of dishonor, protest and notice of protest are hereby waived by BORROWER and all endorsers hereof. This Note shall be construed and enforced in accordance with the laws of the Commonwealth of Pennsylvania. WITNESS our hands and seals the day and year first above written. GONDER, INC. BY: DAMC)RG&J4- (SEAL) I?auAd RG1thcQn? (SEAL) DAVID R. GONDER Lem K G6-641., (SEAL) LEE K. GONDER i w GREG KREIDER and TODD KREIDER, individually and t/d/b/a SHIRK ENTERPRISES, INC. Plaintiffs V. DAVID R. GONDER and LEE K. GONDER, individually and t/d/b/a GONDER, INC. Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY CIVIL ACTION - LAW No. Q9- 550. PRAECIPE FOR ENTRY OF APPEARANCE TO THE PROTHONOTARY: Please enter the appearance of Danielle S. Dinsmore on behalf of GREG KREIDER and TODD KREIDER, individually and t/d/b/a SHIRK ENTERPRISES, INC. in the above action. Serve all papers at One Penn Square, P.O. Box 1594, Lancaster, PA 17608-1594. Notice by copy hereof is given to all counsel of record. Date: "1 9? STEVENS & LE By. Danielle S insmore, Esquire Court I.D. 76457 One Penn Square Lancaster, PA 17602 (717) 291-1031 Attorneys for Plaintiffs UNC/42919/99999.914 . I HEREBY CERTIFY that a true and correct copy of the foregoing Praecipe for Entry of Appearance was served this day of , 1999, by first class mail, postage prepaid, upon the following: MR. LEE GONDER GONDER, INC C/O WORLD CUP SKI AND CYCLE 4500 OLD GETTYSBURG ROAD MECHANICSBURG, PA 17055 Danielle Dinsmore LANC/42919/99999.914 c? 1 «) 5-51: I v m s Q ?" r GREG KREIDER and TODD KREIDER, individually and t/d/b/a SHIRK ENTERPRISES, INC. Plaintiffs V. DAVID R. GONDER and LEE K GONDER, individually and t/d/b/a GONDER, INC. Defendants TO THE PROTHONOTARY: IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY CIVIL ACTION - LAW No.?/lj - S? Please enter the appearance of Danielle S. Dinsmore on behalf of GREG KREIDER and TODD KREIDER, individually and t/d/b/a SHIRK ENTERPRISES, INC. in the above action. Serve all papers at One Penn Square, P.O. Box 1594, Lancaster, PA 17608-1594. Notice by copy hereof is given to all counsel of record. Date: "1 l q STEVENS & LE By. Danielle S Dinsmore, Esquire Court I.D. 76457 One Penn Square Lancaster, PA 17602 (717) 291-1031 Attorneys for Plaintiffs LANC/41919/99999.914 I HEREBY CERTIFY that a true and correct copy of the foregoing Praecipe for Entry of Appearance was served this day of ` , 1999, by first class mail. postage prepaid, upon theefollowing: MR. LEE GONDER GONDER, INC C/O WORLD CUP SKI AND CYCLE 4500 OLD GETTYSBURG ROAD MECHANICSBURG, PA 17055 Dan elle S D nsmore LANC/97619/99999.914 :s cn 'i cn U (.1 GREG KREIDER and TODD KREIDER, individually and t/d/b/a SHIRK IN THE COURT OF COMMON PLEAS ENTERPRISES, INC. OF CUMBERLAND COUNTY Plaintiffs , , v. CIVIL ACTION-LAW DAVID R. GONDER and LEE K. GONDER, individually and t/d/b/a GONDER, INC. : No: 99-5504 Defendants. NOTICE UNDER RULE 2958.1 OF JUDGMENT MM EXECUT ION THEREON NOTICE OF DEFENDANTS' RIGHTS To: David R. Gonder Lee K. Gonder t/d/b/a Gonder, Inc. c/o World Cup Ski and Cycle 4500 Old Gettysburg Pike Mechanicsburg, Pennsylvania 17055 a ainst A judgment in the amount of $33,630.62 has been entered 4 you and in favor of the Plaintiffs without any prior notice or hearing based on a confession of judgment contained in a written agreement or other paper signed by you. The sheriff may take your money or other property to pay the judgment at any time after thirty (30) days after the date on which this notice is served on you. You may have legal rights to defeat the judgment or to prevent your money or property from being taken. YOU MUST FILE A PETITION SEEKING RELIEF FROM THE JUDGMENT AND PRESENT IT TO A JUDGE WITHIN THIRTY (30) DAYS AFTER THE DATE ON WHICH THIS NOTICE IS SERVED ON YOU OR YOU MAY LOSE YOUR RIGHTS. 09/23/99/LANC/42999/99999. 853 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: Lawyer Referral Service Court Administrator Cumberland County Courthouse Carlisle, PA 17013 (717) 240-6200 STEVENS `&' • ,L•E?Eo a Dated: 9'a3?99 By: g`^^ - Danielle S. jbinsmore, Esquire Attorney I.D. No. 76457 One Penn Square Lancaster, PA 17602 (717) 291-1031 Attorneys for Plaintiffs ,,rv 09/77/99/LANC/47999/99999. 653 I HEREBY CERTIFY that a true and correct copy of the foregoing Notice Under Rule 2958.1 of Judgment and Execution Thereon was served this 3 day of S ew7?, 1999, by first class mail, postage prepaid, return receipt requested, upon the following: David R. Gonder Lee K. Gonder Gonder, Inc. c/o World Cup Ski and Cycle 4500 Old Gettysburg Pike Mechanicsburg, Pennsylvania 17055 DATED: VA 5/9? .I\3?4'WYIti.? Dan ell D nsmore 09/23/99/LhNC/42999/99999.993 ¢d c? N U7 ?G :C V c: • r LL1 N ?Z u.4. 41 ?? 1(1. cn m U i 1 rp' Y Y A- .F YS ,''414 OCT 12 199 GREG KREIDER and TODD KREIDER, : IN THE COURT OF COMMON PLEAS OF Individually and Ud/b/a SHIRK CUMBERLAND COUNTY, PENNSYLVANIA ENTERPRISES, INC., Plaintiffs V. DAVID R. GONDER and LEE K. GONDER, Individually and t/d/b/a GONDER, INC., Defendants DOCKET NO. 99-5504 CIVIL ACTION - LAW JURY TRIAL DEMANDED ORDER AND RULE TO SHOW CAUSE AND NOW, the / V day of October, upon consideration of Defendants' Petition to Strike Off And/Or Open Judgment, a rule is issued upon the Plaintiff to show cause why the requested relief shall not be granted. Rule returnable within 20 days. AND FURTHER, upon consideration of Defendants' Petition to Strike Off And/Or Open Judgment, it is hereby ORDERED that all collection or enforcement proceedings under the Judgment are hereby STAYED until further Order of the Court. BY TH COURT J. - : ,:?r '??liY Pc.?!f? ?.i. .:,1. oa ? 0? a? F .. GREG KREIDER and TODD KREIDER, : IN THE COURT OF COMMON PLEAS OF Individually and t/d/b/a SHIRK CUMBERLAND COUNTY, PENNSYLVANIA ENTERPRISES, INC., Plaintiffs V. DAVID R. GONDER and LEE K. GONDER, Individually and t/d/b/a GONDER, INC., Defendants DOCKET NO. 99-5504 CIVIL ACTION - LAW JURY TRIAL DEMANDED DEFENDANTS' PETITION TO STRIKE-OFF AND/OR OPEN JUDGMENT AND NOW come the Defendants, by and through their counsel, Charles R. Gerow, Esquire, and file this Petition to Strike-Off and/or Open Judgment, as follows: 1. The parties entered into an Agreement of Sale on or about November 14, 1995 for the sale of business assets and inventory consisting of a ski and bike shop. A copy of the Agreement is attached hereto as Defendants' "Exhibit A." 2. As part of such Agreement of sale, Defendants executed a Judgment Note for $60,000. A copy of said Note is attached hereto as Defendants' "Exhibit B," 3. Said Judgment Note is the basis for Plaintiffs Judgment by Confession. Petition to Strike-Off and/or Open Judgment 4. Pursuant to the terms of the Judgment Note, any acceleration or demand for payment shall be made in writing and forwarded to Defendant by hand-delivery or first class mail at 803 Cocklin Street, Mechanicsburg, PA 17055. 5. No such notice was provided to the Defendants prior to the filing of Plaintiffs Praecipe for Entry of Judgment. a I 6. The Praecipe for Entry of Judgment does not contain any document evidencing that the required notice was provided prior to entry of judgment, and is therefore void on its face. WHEREFORE, Defendants respectfully request this Honorable Court Strike-Off and/or Open the Judgment by Confession, and further issue a stay of all proceedings until a full hearing is provided to the Defendants. Petition to Open Judgment Claim I NUAIN 7. Prior to entering into the Agreement of Sale, Plaintiffs made numerous knowingly false misrepresentations, said misrepresentations being: a. that Plaintiffs would have access to and use of all current suppliers of inventory; b. that Plaintiffs would be provided a current and accurate mailing list of all customers and potential customers in the greater Harrisburg area; C. that Plaintiffs would be provided all tools being utilized in the commercial business; d. that a Ski Tuner machine had been overhauled in 1994 and had a new motor; s 2 e. that Plaintiffs would not encumber any assets of the business without the express approval of the Buyers; and f. That Plaintiffs would convey all assets free and clear of liens or encumbrances and that Plaintiff owned such assets free and clear of all claims and demands of any nature. 8. Contrary to these misrepresentations, it was subsequently determined that: a. all of Plaintiffs' then current suppliers were owed money, and such suppliers would, accordingly, not ship on credit. All such suppliers required Defendants to pay C.O.D. as a result of Plaintiffs' poor credit history and non- payment to suppliers; b, the mailing list was outdated, and consisted of a substantial number of customers outside of the greater Harrisburg area; C. the tools represented to be part of the sale were not the property of Plaintiffs, but rather of Plaintiffs' employees, and were removed from the commercial business and those tools not so removed were of inferior quality and/or damaged; and d. the Ski Tuner machine had never been overhauled and had no new parts. e. Plaintiffs had entered into a lease program not disclosed to Defendants promising a 70% cash return on certain "purchases." 3 9. Plaintiffs additionally misrepresented the financial condition of their business by overstating its value and providing incorrect sales figures. Said misrepresentations were an inducement for Defendants to enter into negotiations which led to the Agreement of Sale. 10. Plaintiffs misrepresented the nature and condition of the office equipment to be provided as part of the sale, and further exchanged equipment represented to be part of the sale with inferior or damaged equipment. 11. Plaintiff misrepresented the nature and condition of the Bar Coding system to be provided as part of the sale. 12. The skis and poles that were to be available for rental were not so available. 13. Plaintiffs knew, or reasonably should have known, that Defendants would rely on these material misrepresentations. 14. Defendants justifiably relied upon the material misrepresentations of the Plaintiffs in entering into negotiation for and the Agreement of Sale. 15. Due to Plaintiffs' material misrepresentations, Defendants have been substantially injured. WHEREFORE, Defendants respectfully request this Honorable Court Open the Judgment by Confession, and further issue a stay of all proceedings until a full hearing is provided to the Defendants. 9 Claim II NEGLIGENT MISREPRESENTATION 16. Paragraphs 7 through 15 are incorporated fully herein by reference. 17. Plaintiffs knew, or reasonably should have known, that the material misrepresentations set forth above were false, and that the Defendants would justifiably rely on such misrepresentations. 18. Due to Plaintiffs' material misrepresentations, Defendants have been substantially injured. WHEREFORE, Defendants respectfully request this Honorable Court Open the Judgment by Confession, and further issue a stay of all proceedings until a full hearing is provided to the Defendants. Claim III BREACH OF CONTRACT 19. Paragraphs 16 through 18 are incorporated fully herein by reference. 20. Pursuant to the terms of the Agreement of Sale, Plaintiffs were to provide certain mailing lists, tools and office equipment and other assets, unencumbered and free from any claims or demands, as set forth above. 21. Plaintiffs failed to provide such items and, therefore, are in breach of the Agreement of Sale. 5 WHEREFORE, Defendants respectfully request this Honorable Court Open the Judgment by Confession, and further issue a stay of all proceedings until a full hearing is provided to the Defendants. Claim IV BREACH OF THE COVENANT OF GOOD FAITH AND FAIR DEALING 22. Paragraphs 19 through 21 are incorporated fully herein by reference. 23. The Agreement of Sale contained an implied covenant of good faith and fair dealing. 24. For the reasons set forth in Paragraphs 7 through 19 above, Plaintiffs breached that covenant. WHEREFORE, Defendants respectfully request this Honorable Court Open the Judgment by Confession, and further issue a stay of all proceedings until a full hearing is provided to the Defendants. Claim V AFFIRMATIVE DEFENSES 25. Paragraphs 22 through 24 are incorporated fully herein by reference. 26. Plaintiffs' Judgment by Confession should be opened under the doctrine of unclean hands. 27. Plaintiffs Claims are barred by the applicable Statutes of Limitations. 28. Plaintiffs Claims are barred by the Doctrine of Laches. 6 WHEREFORE, Defendants respectfully request this Honorable Court Open the Judgment by Confession, and further issue a stay of all proceedings until a full hearing is provided to the Defendants. submitted, Charles R. Ger*, Esquire Supreme Court I.D. #32888 Attorney for Defendants 5115 East Trindle Road Mechanicsburg, PA 17055 (717) 975-3536 VERIFICATION I, David R. Gondar, hereby certify and verify that the facts set forth in the foregoing Defendant's Petition to Strike-Off and/Or Open Judgment are true and correct to the best of my knowledge, information and belief. I understand that any false statements herein are subject to the penalties of 18 Pa. C. S. §4904 relating to unswom falsification to authorities. )W3" David R. Gondar DATE: l0 12 Y9 CERTIFICATE OF SERVICE AND NOW, on this 8th day of October, 1999, I, Charles R. Gerow, hereby certify that I have served the Defendants' Petition to Strike-Off And/Or Open Judgment by mailing a true and correct copy by United States first class mail and certified mail, return receipt requested, addressed as follows: Danielle S. Dinsmore, Esquire Stevens & Lee One Penn Square Lancaster, PA 17602 Charles R. Gero9 M? k? 41 EXHIBIT "A" ASSET PURCHASE AGREEMENT THIS AGREEHENT, dated as of the Hrl day of November, 1995, by and between Shirk Enterprises. Inc.. A Pennsylvania corpgration (hereinafter referred to as "Seller"), and Gonder. Inc. a Pennsylvania corporation (hereinafter referred to as "Buyer"). WHEREAS, Seller owns and operates a bicycle and ski sales, rental and repair business, which Business has a retail outlet located at the Cedar Cliff Hall in Camp Hill, Cumberland County, Pennsylvania; (hereinafter "Business" or "the Business") and WHEREAS, Seller desires to sell and Buyer desires to purchase the assets of the Business as specified herein in accordance with the terms and conditions of this Agreement; and WHEREAS, Seller is the lessee of record attached hereto and made a part hereof and marked as Exhibit "A", notwithstanding the fact that the language of the lease sets forth "Era Ski and Bicycle Shop, Inc'$ (sic) as lessee. WHEREAS, Seller desires to assign and Buyer desires to have assigned to them the above-described lease for said retail outlet in accordance with the terms of this. Agreement. NOW, THEREFORE, in consideration of the mutual promises herein contained and the payments hereinafter provided, the parties hereto agree as follows: 1. SALE M2 PURCHASE O_g ASSETS. At the Closing hereinafter provided for, Seller shall sell, transfer and assign to Buyer, and Buyer shall purchase all of Seller's right, title and. interest in and to all of the assets of the Business (hereinafter referred to as the "Assets"), located at Cedar Cliff Hall, Camp Hill, Cumberland County, Pennsylvania, including the personal property described hereinbelow, free and clear of all liens and encumbrances, all as adjusted for changes occurring in the ordinary course of business as permitted hereunder between the date hereof and the date of Closing, which assets include: a. All property and assets of the Business of every kind and description wherever located, including claims, rights and choses in action, whether choate or inchoate, licenses, trademarks, technology, and including but not limited to the inventory, furniture, fixtures, equipment and vehicles and assets described generally in the attached Exhibit "B"; d. All ( to th@ Busih lhts under Seller's written contracts relating i i L. &% the-Glest , ?Optiqued av TyMliekj z,?•r; ?casel?}e F3selfe , yl--i i 1 CS 1+ X14 -.?• •.-? a.. ft,114 go ; Sac EYhtbi ?c. A31: custoaBr fides, lists and records of the • Business; d. S;iohtother assets; angible or intangiblf- including conkract rfgh'ts, agreements; insurance policies licenses, oral or written,-*Iatsng t the Business; agd e. The ?busiiiess tselepYone number, mailing address and. all advertising for the-Business. 2. PURCHASE IC A6 full consideration for the Assets of; Seller,-Euyer:•sha}1 pay to Seller a purchase price of One Ftundred Thirty Five Thousand ($135,000.00)• DOLLARS (the "purchase priaellt%:.The purchase price specified herein shall be paid as follows: a. Sgvtnty Five Thousand ($75,000.00) DOLLARS to be paid at Closing, is cash or by cashier or certified check; b. Sixty Thousand-($60,000.00) DOLLARS to be paid by Buyers to Seller in Thirty Six equal payments at Nine Percent (9$) per annum interest beginning one calendar month after the Closing of this Agreement. C. The purchase price shall be allocated as follows: Fixtures and Equipment: Twenty Five Thousand ($25,000.00) DOLLARS Lease, location, customer base, vendors, business volume, and use of. name,-Fifty Thousand ($50,000.uU) DOIU,:27 Inventory: !Fifty nmusand ($50,000.00) DOLLARS based upon $56,666.67.@x•75 per dollar. 100 pairs of rental ski packages (skis, boots, bindings, pales, etc.): Ten Thousand ($10,000.00) DOLLARS. to Seller s?etMfo th in Paragraphe2.b, offthetPurchasetandess Sale Agreement of even date herewith, Buyer shall execute and deliver a personal guarantee note by Lee and David Gondar securing all assets listed in Exhibit "B". Seller agrees that all security interests granted to Seller herein shall be subordinate to the security interests granted to any third party lender by Buyer. 4. LIABILITIES Buyer is assuming no liabilities of , Seller.whe pet,t:ig, 1,, with 4!14! Bulk-Sales In the event Buyer shall be required to make any payment on account of liabilities incurred by Seller, D6 40.4 Seller agrees to indemnify and hold harmless Buyer and to accept an amount equal to the next monthly installment payment due under the Note of this Agreement less the amount of payment made by Buyer as full satisfaction for the regular monthly payment. 5. CLOSING, The date of Closing ("Closing") of this transaction shall be on or before November 14, 1995, time being of the essence, or on such other date mutually agreed to by the parties in writing, at which time title and possession of the Assets shall be transferred, conveyed and delivered to Buyer. The Closing (hereinafter referred to as the "Closing") shall be at Farmers Bank and Trust Carlisle Office, or such other location as the parties may mutually agree. 6. BUYER'S CONDITIONS PE CLOSING. The obligations of Buyer hereunder to purchase the Assets and close hereunder shall be subject to the satisfaction of the conditions set forth in Subparagraphs a. through j, as follows: a. The buyer shall have received from Melvin Newcomer, Esquire, counsel for the Seller, a favorable opinion dated as of the Closing date, in form and substance satisfactory to Buyer and its counsel, Charles R.Gerow, Esq., to the effect that, to the best of their knowledge, and without special investigation: (i) Seller is a duly organized and validly existing corporation in good standing under the laws of the State of Pennsylvania. (ii) Seller has the corporate power to carry on its business as and where such business is now being conducted. Incorporati(ii) No rov of the of onior By-lawslofothe SellerAor, to the best of such counsel's knowledge, no provision of any contract, agreement or other instrument to which it is a party prevent Seller from delivering good title to the Assets to the Buyer in the manner contemplated hereby or otherwise prohibit or would be breached by the consummation of the transactions contemplated herein. (iv) Seller has full power, legal right and authority to enter into, execute and deliver this Agreement, and to consummate the transactions contemplated herein; and this Agreement has been duly executed and delivered by the Seller and is a valid and legally binding obligation of each of them, enforceable in accordance with its terms except as its validity and enforceability may be limited by bankruptcy, insolvency or similar laws of general application affecting the enforcement of creditors' rights generally. b. No action or proceeding shall have been instituted before any court, agency or other governmental body to restrain or prohibit the transactions contemplated hereby. C. The representations and warranties of the Seller contained in this Agreement shall be true and correct in all respects as of the Closing Date, with the same effect as though such representations and warranties had been made on such date. All of the covenants and agreements of the Seller to be performed on or before the Closing Date pursuant to the terms hereof, shall have been duly performed. d. All proceedings to be taken in connection with the transactions contemplated by this Agreement and all documents incident thereto shall be reasonably satisfactory in form and substance to the Buyer and their counsel, and the Buyer shall have received copies of all of such documents and other evidence as the Buyer and their counsel may reasonably request in order to establish the consummation of such transactions. e. There shall have been no material adverse change or damage to the premises, the assets, or the business of the Seller. f. The Seller shall have delivered to the Buyer and the corporation all the documents that they are required to deliver hereunder. g. To the extent such approval or consent is available or obtainable prior to closing, Buyer shall have obtained the approval or consent of such government agencies or bodies, as Buyer shall deem reasonably necessary in connection with the consummation of the purchase. h. Buyer shall have obtained financing commitments on or before closing in an amount of one Hundred Sixty Thousand ($160, 000.) DOLLARS from third party lenders, at a rate not to exceed 10.5% interest per annum for the first three years and under other terms and conditions reasonably acceptable to Buyer. A. k. 06 I. SellerAshall have delivered te the Buyer the c4-(4 executed Agreement Not to Compete in the form attached hereto as Exhibit "D. J. This Purchase and Sale Agreement shall be executed at the time of Closing, unless closing is delayed beyond November 14, 1995 in which case it shall be executed as of November 14, 1995. 6. BEPRESENTATIONS AND WARRANTIES OF WARRANTIES OF SELLER Seller hereby represents and warrants the following to be true on the date of this Agreement and as of the Date of Closing: a. The Seller owns the Assets and property free and clear of all claims, liens, mortgages, security interests, encumbrances, claims and demands of any nature. b. Shirk Enterprises, Inc. is a corporation duly existing, qualified and in good standing under the laws of the State of Pennsylvania, and is and shall be duly empowered to execute this Agreement and to do any and all things required or desirable for consummation of all transactions contemplated thereby. C. The execution and performance of this Agreement and the documents necessary to close have been and will be duly authorized by all prerequisite corporate proceedings by Seller, including the approval of Seller's Board of Directors and stockholders and, when so delivered, constitute a legal and binding obligation. Seller is not bound by or subject to any contractual or other obligation that would be violated by Seller's execution or performance of this Agreement. d. Execution and delivery of this Agreement and consummation of the transactions contemplated hereby do not conflict with or result in a breach of any of the terms, provisions, or conditions of Seller's Certificate of Incorporation , By-laws, or any statute, regulation, or court or administrative order or process applicable or any agreement, lease, or other agreement or instrument to which Seller is a party, or by which it is bound, nor does execution of this Agreement and consummation of the transaction contemplated hereby constitute a default thereunder; Buyer and each shareholder of Buyer acknowledge that each representation of Seller is made to the best of Seller's actual knowledge. e. The Assets shall be operated and maintained in accordance with Seller's normal operating standards until the Closing except reasonable wear and tear incurred in the normal course of Seller's Business is permitted. f. Seller shall not sell, dispose of, transfer or encumber any of the Assets after the execution of this Agreement except in the regular course of its business and with the express approval of Buyer. h. There are no employment contracts, union contracts, pension, profit sharing or retirement plans, agreements or obligations for the benefit of any employee or other person relating to the Business. i. The execution of this Agreement between the parties constitutes a legal and binding obligation and is not a violation of any other agreement, and there is no voluntary agreement between the Seller and any other party for the sale of any of the Assets to be sold under this Agreement. j. Seller believes the Exhibits to this Agreement set forth are true, complete and accurate information describing the matter set forth therein. k. Seller has furnished to Buyer its financial statements for the years ended 1992 and 1993, 1994 respectively. There are no liabilities of Seller, contingent or otherwise, including, without limitation, any tax liability of any nature whatsoever, 'which are not disclosed by or reflected fully in such financial statements or disclosed in a schedule provided to Seller by Buyer. Seller has duly filed all federal, state, county, and city income tax returns and other tax returns of every kind and description, and there are presently no claims for tax deficiencies pending against Seller by any taxing authority, nor does Seller know of any basis for the making of any claim by any taxing authority for any tax deficiency against Seller. Seller further warrants and represents that all of its tax returns have been filed when due and in accordance with generally accepted accounting principles and that it has disclosed all material facts regarding its business to Buyer. The federal income tax returns of Seller have been audited for the years set forth on a schedule provided by Seller to Buyer. 1. Since the date of its most recent financial statement referred to in section k. hereof, except as disclosed in this Agreement, Seller has not: (i) Entered into any transaction out of the ordinary course of business; (ii) Had any change in its financial condition, assets, business or its customer list, other than changes in the ordinary course of business, none of which changes in the ordinary course of business has been materially adverse. (iii) Suffered any fire, riot, explosion, earthquake, windstorm, strike or other labor trouble, lockout, flood, act of God, or of the public enemy, casualty, condemnation, confiscation, requisition, embargo, activity of the Armed Forces of the United States, revocation of license or right to do business, cancellation or modification of contracts by governmental authority, government regulation or order restricting the operation of its business, cancellation or modification of any franchise, right, contract, license or agreement or any other event which has materially and adversely affected its business, operations, property or assets; (iv) Had any material change in the accounting principles and practices theretofore followed by Seller; or (v) Entered into any sale or transfer of any of the Purchased Assets, except in the ordinary course of business, and deposition of any of its intangible assets. M. The inventories set forth on the Balance Sheet are properly valued, in accordance with generally accepted accounting principles (FIFO). Except for o')solete items which have been fully written off, inventories consist of items of quality and quantity currently usable and saleable in the ordinary course of business. Seller holds no materials on consignment and has title to no materials in the possession of others. n. No purchase commitment for materials, supplies, component parts or other items of inventory to which Seller is a party, is in excess of normal, ordinary, usual and current requirements of its business or at a price in excess of the current reasonable market price. To the best of Seller's knowledge each of the contracts and agreements to which Seller is a party is a valid and binding obligation to the parties thereto in accordance with its terms and conditions. To the best of Seller's knowledge, no party to any such contract or agreement is in default with respect to any term or condition thereof, nor has any event occurred which, through the passage of time or the giving of notice, or both, would constitute a default thereunder or would cause the acceleration of any obligation of any party thereto or the creation of a lien or encumbrance upon any asset of Seller being transferred hereunder. o. Seller is not in default under or in violation of, any applicable statute, law, ordinance, decree, order, rule, regulation of any governmental body, or in default under, or in violation of, any provision of its articles of incorporation, by-laws, any promissory note, inde^+'!!re or any evidence of indebtedness or security therefor, lease, contract, purchase or other commitment or any other agreement to which Seller is a party or by which Seller is bound which may result in any adverse effect on the business or condition, financial or otherwise, of Seller. p. There is no suit, claim, action or proceedings now pending or threatened before any court, administrative or regulatory body, or any governmental agency, nor is Seller aware of any grounds therefor, to which Seller is a party or which may result in any judgement, order, decree, liability, or other determination which will, or could have any material adverse effect upon the business or conditions, financial or otherwise, of Seller. No such judgment, order or decree has been entered against Seller nor any such liability incurred which has, or could have, such effect. There is no claim, action or proceeding now pending or threatened before any court, administrative or regulatory body, or any governmental agency, which will, or could prevent or hamper the consummation of the transactions contemplated by this Agreement. q. On information and belief, no representation or warranty by Seller, or in any certificate, exhibit, schedule or other document furnished or to be furnished by Seller pursuant thereto, contains or will Contain any untrue statement of a material or omits or will omit to state a material fact necessary to make the statements contained therein not misleading. r. Seller shall indemnify and hold Buyer harmless from any claim or liability that Buyer may be subject to as a result of the failure of either party hereto to comply with any laws pertaining to the transfer of assets in bulk, including the Pennsylvania Bulk Sales Act, as more specifically set forth in paragraphs 10 and 16. 8. REPRESENTATIONS AND WARRANTIES 2F- BUYER. Buyer makes the following representations and warranties to Seller as an inducement to enter into and consummate this Agreement as contemplated herein: a. Buyer has entered into no contract that will interfere with Buyer's ability to consummate this transaction as contemplated herein. b. There is no litigation, proceeding or governmental investigation pending or, so far as known to Buyer, threatened, against or relating to Buyer or Buyer's business or the transaction contemplated by this Agreement , nor is there any basis known to Buyer for such action. C. No representation or warranty by Buyer in this Agreement or any statement of certificate furnished or to be furnished to Seller pursuant hereto or in connection with the transactions contemplated hereby contains or will contain any untrue statement of material fact or omits or will omit any material fact. 9. REPRESENTATION TQ SURVIVE CLOSING. All of the representations and warranties contained herein (including all statements contained in any exhibit or certificate or other instrument delivered by or on behalf of Seller pursuant to this Agreement or in connection with the transactions contemplated by it) are a material part of the consideration of the sale of the Assets and the inducement for Buyer to buy the Assets and Seller to sell the Assets. For the purposes of each representation and warranty contained herein, Seller and Buyer are materially relying upon the representations of each other. 10. INDEMNITY. Seller agrees to indemnify and hold harmless the Buyer from and against all claims, liabilities, losses, costs, damages, and expenses arising out of, or sustained by the Buyer or the corporation by reason of: a. The imposition of transferee liability pursuant to laws relating to sales in bulk. b. Any breech of any representation, warranty or covenant of the Seller contained herein or in any agreement, certificate, document, schedule or exhibit relating to or delivered pursuant hereto. The Buyer shall, subsequent to Closing, indemnify, defend and hold Seller harmless from any and all claims, debts, demands, judgements, actions or causes of action asserted against Seller, which accrue subsequent to Closing and which relate to Buyer's operation of the business after Closing, lntlo.tiei amy a4v1a, of ac p., a.u+,i •v; of tk• leue ?O naw? otµ MearNaea pw,km Ln,14.1 Pu+,a+al4• L*-U 11. AGREEMENT NOT To COMPETE. Seller and Buyer agree to enter into an Agreement Not to Compete under terms and conditions identical to those set forth in Exhibit "D" attached hereto. 12. OPERATION PENDING CLOSING. During the period from the date hereof to the Date of Closing: a. Seller shall: (i) Conduct the Business according to the ordinary and usual course and use Seller's best efforts to maintain and preserve the organization of the Business, its employees and relationships with suppliers, customers and others; and (ii) Inform Buyer in writing from time to time of the development of any material matters relating to the business, including, without limitation, any adverse changes in results of operations or financial position of the Business or any litigation, proceeding or government investigation instituted or threatened against Seller relating to the Business or the occurrence of any factor which might give rise to any litigation, proceeding or investigation as aforesaid. b. Seller shall not, without the prior written consent of Buyer: (i) Mortgage, pledge or 'subject to lien, security interests or other obligations or encumbrance any of the property or Assets; (ii) Sell or otherwise transfer any of the Assets other than the sale of inventory in the ordinary course; (iii) Enter into any contract or agreement relating to the business not in the usual ordinary course or terminate or make any material change in any such contracts; or (iv) Increase or agree to increase in any manner the compensation of any of the employees of the Business or commit the Business to any pension, retirement or profit sharing plan or agreement or employment agreement with or for the benefit of any employee or other person. C. Seller shall afford the Buyer and its counsel, auditors and authorized representatives full access to all personnel, properties, records and documents of the Business and shall furnish such financial and other information with respect to the Business, its personnel and property as Buyer may reasonably require. d. Except as otherwise provided in this Agreement, all revenues, profits, losses and liabilities resulting from the ownership or operation of seller's Business and the Assets before the Date of Closing shall accrue to and be the responsibility of Seller. All revenues, profit, losses and liabilities resulting from the ownership or operation of the Assets after the Date of Closing shall accrue to and be the responsibility of Buyer. Seller shall keep the Assets adequately insured against fire and casualty until the Date of Closing. If any part of the Assets is damaged or destroyed by fire or casualty before the Date of Closing, such Assets shall be replaced or repaired at the Seller's expense. If it is impossible or impractical to repair or replace such Assets before the Date of Closing, the purchase price shall be reduced by the amount of the loss resulting from the fire or casualty, unless the value of such damaged or destroyed Assets exceeds FIFTY THOUSAND ($50,000) DOLLARS, in which case, at Buyer's option, this Agreement may be terminated and all deposits returned in full to Buyer. Prior to closing, all risk of loss shall be borne by Seller; after the Date of Closing, all risk of loss shall be borne by Buyer. e. Seller will cause all property owned or leased by it to be insured against all ordinary and insurable risks (except in respect of any leased property where the terms of the lease do not impose on lessee the obligation to maintain insurance) and will operate, maintain and repair all its property in a careful, prudent and efficient manner. f. Each party to the Agreement hereby covenants and agrees to furnish all information and to make all filings required by any statute or governmental regulation. 13. TRANSFER. Simultaneously with the payment on the Date of Closing as specified hereinabove, Seller shall convey by bill of sale absolute, all personal property described in Exhibit "B" to Buyer or by assignment or endorsement of certificate of title, as the case may be, free of all liens, encumbrances, conditions and limitations. 14. TERMINATION. This Agreement may he terminated at any time prior to Closing: a. By mutual consent of the Buyer and the Seller; or b. By the Buyer pursuant to paragraph 12 d. or if any of the conditions of the Buyer's obligation to close have not been met at or before the Closing and have not been waived by the Buyer. 15. DEFAULT. If either party fails to perform under this Agreement, the defaulting party shall refund any money paid to the defaulting party by the non-defaulting party, and the Agreement shall terminate and the liability of the parties shall cease; or the non-defaulting party may exercise any right it has, including bringing an action for specific performance. 16. ASSIGNMENT OF LEASE. Seller hereby assigns to Buyer all interests in a lease between Seller and Heartland Properties Limited Partnership together with an addendum thereto for the retail outlet at the Cedar Cliff Mall, Camp Hill, Pennsylvania. Seller specifically represents that they are the lessee of record under the terms of a lease agreement with Heartland Properties Limited Partnership for said premises notwithstanding the fact that the lease document sets forth "Era Ski & Bike Shop, Inc." as the lessee. Seller warrants to Buyer that there is an express agreement between Seller and Heartland Properties Limited Partnership to amend the lease by changing the name of the lessee only. G l1` P ia 17. RIGHT TO USE NAME. As additional consideration for the purchase of assets by Buyer under this Agreement, Seller hereby agrees to allow Buyer to continue to use th< tradenamo "Era Ski and Bike Shop" provided, however, that it be used with some distinguishing name in addition thereto, specifically "Era Ski and Bike Shop-West" or "Era Ski and 0y Bike Shop--?a}}nn n or some other mutually agreed upon d i ti il"°? es gna o allowance shall remain in effect for not t$A more than eighteen (18) months from the date of Closing. 18. CONSULTING AGREEMENT. As additional consideration for the purchase of assets by Buyer under this Agreement, Gregory Kreider and Todd Kreider agree to provide consulting services relating to the operation of the Business to Buyers for a period of two (2) years from the date of Closing. Said consulting services shall be general in nature and shall be provided upon reasonable request of Buyer, Seller making themselves reasonably available to Buyers. 19. WAIVER OF BREACH. No failure of or failure to enforce a breach of this Agreement shall constitute a waiver of any other or subsequent breach. 20. CUMULATIVE REMEDIES. The remedies afforded in this Agreement are cumulative to each other and to all other remedies provided by law. 21. UNENFORCEABILITY QE ANY MOSISIONS. The unenforceability or invalidity of any provision of this Agreement shall not affect the enforceability and validity of the remainder of this Agreement, which shall continue in full force and effect. 22. NOTICE. Notice required or permitted hereunder shall be in writing and shall be delivered by hand or deposited in the United States mail addressed to the Seller, Shirk Enterprises, Inc., at 830 Flory Mill Road, Lancaster, PA 17601, with a copy to Melvin E. Newcomer, Esq., at P.O. Box 539, Lancaster, PA 17608-0539,and to Buyer, Gonder, Inc., at 803 Cocklin Street, Mechanicsburg, PA 17055, and a copy to Charles R. Gerow, Esq., at 4725 Charles Road, Mechanicsburg, PA. 17055 23. ASSIGNMENT. Except with the express written consent of the other party hereto, this Agreement shall not be assignable or otherwise transferred in whole or in part. This Agreement shall inure to the benefit of and be binding upon the parties and their respective successors and assigns. Notwithstanding the foregoing, Buyer shall have the right to have the real property described in exhibit "A" and the other assets acquired hereunder conveyed to a related third person or entity; provided, however, that any assignment shall not discharge assignor's liability or obligation to any other party to this Agreement, and all assignees shall assume all obligations and liabilities of this Agreement. 24. BROKERAGE. Seller and Buyer represent that there is no broker or agent involved in effecting this transaction. Seller and Buyer hereby agree to indemnify and hold each other harmless for any liability or claim for the payment of any commission, including interest and attorney's fees, arising from the conduct of the other party. These representations are made as a part of the consideration of this transaction. This paragraph shall survive the passage of title and delivery of the deed and other conveyancing documents. 25. HEADINGS. All headings used herein are for convenience and reference only and shall not be deemed to have any substantive effect. 26. ENTIRE AGREEMENT. This Agreement along with the Purchase and Sale Agreement executed by the parties contemporaneously herewith, and the exhibits and documents delivered pursuant hereto, constitute the entire contract between the parties hereto, pertaining to the subject matter hereof, and supersede all prior and contemporaneous agreements, understandings, negotiations, and discussions, whether written or. oral, of the parties; and there are no representations,-warranties, or other agreements between the parties in connection with the subject matter hereof, except as specifically set forth herein or therein. No supplement, modification or waiver of this Agreement shall be binding unless executed in writing by the parties to be bound thereby. A breach of this Agreement shall be deemed to be a breach of the Purchase and Sale Agreement executed contemporaneously herewith, and vice versa. 27. FURTHER INSTRUMENTS AND ACTIONS. Each party shall deliver any further instruments and take any further action that may be reasonably requested by the other in order to carry out the provisions and purposes of this Agreement. 28. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania. 29. SELLER'S CLOSING OBLIGATIONS. At Closing, Seller shall deliver to Buyer the following documents: a. Assignments, Consents, Bills of Sale, Certificates of Title and other documents or instruments of transfer and which shall contain full warranties of title as shall be effective to vest in Buyer all of Seller's right, title and interest in and to all of the Assets being conveyed hereunder, free and clear of all liens, charges, encumbrances, and restrictions; b. All contracts, files, commitments and rights pertaining to Seller's Business and other data relating to its operations; C. Certificates of Good Standing for Shirk Enterprises, Inc. d. Resolution of Board of Directors of Shirk Enterprises, Inc., along with a certificate of Incumbency of Directors and officers, authorizing execution, delivery and performance of this Agreement and all documents required for closing; e. Certified copy of Minutes of Shareholders' meetings of Shirk Enterprises, Inc. authorizing the entry and completion of all transactions hereunder; f. Transfer of all insurance policies, permits, license and use rights of the Business; g. Closing Statement and Opinion of Sellers Counsel; h. (Xa t retail wilt tiLalILZTiG2-CV be supplied te guy - ??unl I ,?V - - _'•-•:,?w?..,..,.? .?-.rte. 30. BUYER'S CLOSING OBLIGATIONS. At Closing, Buyer shall deliver to Seller: a. Payment of the sums due pursuant to this Agreement; b. Execution of all agreements executed by Seller which require Buyer's agreement and execution; C. Execution of Security Agreement and Financing Statements; d. Closing Statement. IN WITNESS WHEREOF, and intending to be legally bound, the undersigned have executed this AGREEMENT as of the date first written above. ATTEST: SELLER: BY: Presiden irk Enterprises Incorporated ATTEST: BUYER: ?.. K C.. BY: DA 6P.?ia _ President, Gonder, Inc. Stone grinder: purchased last year with new motor, purchase price: $14,999 Wintersteiger wax machine: purchased in 1994, purchase price: $5,000 Vermont calibrator Mounting vices, jigs, p-tex gun, drills and *_ars, and all other ski tools Peterson insole machine: purchase price: $800 . Raichle Thermo Flex machine: purchase price: $500 Park double floor stand Park truing stand All bike tools Vitansel bike display stands Computer equipment: new in 1994, includes computer, monitor, printer, UPS, modem, and all. software including The General Store and barcode system: value $5,000 Telephone system Credit card machine Stereo equipment and TV and VCR, purchased 8 months ago Security system: purchase price $1,800 Anti-shoplift system All counters, four-way racks, cascade racks, track lighting, sunglass displays and other P.O.P. stands Signs: Sign along Route #83 is key and sign on building All fixtures. EXHIBIT "C" Seller has provided at closing vendor verifications in writing from the following suppliers: Salomon, Merlin, Marker, Elan, Alpina, Lange/Dynastar, Atomic, Tecnica and Volkl. In addition, Seller has agreed to cooperate with Buyer in continuing to use good faith efforts to secure getting vendor verifications in writing from the following suppliers: The North Face, Fischer/Raichle, Morrow, Lamar, Airwalk, Windell, Swag and Specialized. EXHIBIT "D' Agreement Not To Compete As additional consideration for the purchase identified in this Agreement, Buyer and Seller agree to a reciprocal covenant not to compete. Buyer agrees that for a period of five years from the date of closing, it will not open a retail/wholesale location selling bicycle and/or ski items within Lancaster County. Seller agrees that for a period of five years from the date of closing, it will not open a retail./wholesale location selling bicycle and/or ski items within Dauphin County or in any area within the Commonwealth of Pennsylvania west of the Susquehanna River. the parties agree that in the event of a breach of this provision, the non-breaching party shall be entitled to equitable relief in a court of competent jurisdiction, which equitable relief shall include but not be limited to, a permanent injunction prohibiting the establishment of the location. The equitable relief shall be in addition to any remedies at law available to the parties. ?,.,_ K G,d A 1 • 1 Buyer and Seller further agree that there have been adjustments to the purchase price set forth in Paragraph 2 of this Agreement as follows: 1) A credit to Sellers of $240 for additional inventory over and above that listed in Paragraph 2(c) of this Agreement, 2) A credit to Sellers of $1294 as proration for rental payments made by Seller for the month ?f N--nmbar., 3) A debit to Sellers of $1800 for the Security System listed in Exhibit "B", it being understood and agreed by Buyers that the Security System will be removed from the leased premises at Cedar Cliff Mall. It is understood and agreed that Buyers are entitled to and shall take a $266 credit on the first payment due Sellers under Paragraph 2(b) and the corresponding Note thereto. Sellers agree to have the advertising sign located along Route 83 repaired at their expense within 15 days of closing by a workman whose work is fully guaranteed for a period of at least 90 days. EXHIBIT "B" $ 60,000.00 November 14, 1995 Camp Hill, Pennsylvania JUDGMENT NOTE FO®R VALUE RECEIVED, the Undersigned, GONDER, INC., D7A DAVID R GONDER and LEE R. GONDER, (hereinafter collectively referred to as "Borrower") do promise to pay to SHIRK ENTERPRISES, INC. (hereinafter referred to as "LENDER") the sum of Sixty Thousand and 00/100 ($60,000.00) Dollars, together with interest on the unpaid principal balance at the rate of nine (98) percent per annum. All principal and interest shall be repaid in thirty-six (36) equal monthly installments of One Thousand Nine Hundred Seven and 99/100 ($1,907.99) Dollars, applied first to interest and the remainder to reduction to principal, with the first payment being due on December 14, 1995, and subsequent payments being due on the 14th day of each month thereafter until paid in full; provided, however, that all principal and interest, if not sooner paid, shall be due and payable in full on November 14, 1998. In the event that any payment shall not be paid within fifteen (15) days of the due date, a late payment fee of five (58) percent of the monthly principal and interest payment shall be due and payable from BORROWER. Further, in the event that any payment shall remain unpaid for a period in excess of thirty (30) days, LENDER, at its sole option, shall have the right to accelerate the entire indebtedness due and demand payment in full. Said acceleration and demand for payment in full shall be in writing forwarded to BORROWER by hand-delivery or first class mail at 803 Cockltpt Dos Street, Mechanicsburg, Pennsylvania 17055. All payments of X44 principal and interest from BORROWER to LENDER. shall be paid to LENDER at 830 Flory Mill Road, Lancaster, Pennsylvania 17601 or at such other address as Lender may provide to BORROWER in writing. BORROWER shall have the right to prepay in whole or in part at any time without penalty. BORROWER hereby empowers the Prothonotary or any attorney of any court of record within the United States or elsewhere to appear for BORROWER and, with or without declaration, enter judgment against BORROWER in favor of Lender, together with costs of suit and reasonable counsel fees in an amount equal to five. (58) percent of the amount due. TO THE EXTENT permitted by applicable law, BORROWER hereby waives inquisition and condemnation of any property that may be levied upon by virtue of any execution which may issue forthwith upon such confession of judgment, and further waives all errors in said proceedings, together with stay of or exemption from execution or extension of time of payment which may be given by any statute now in force or which may be enacted hereafter, or by any usage or custom. No single exercise of the foregoing warrant shall be deemed to exhaust the power to confess judgment granted herein, whether or not any such exercise shall be held by any court to be invalid, void or voidable, but the power shall continue undiminished and may be exercised from time to time as often as LENDER shall elect until all sums payable or that may become payable by BORROWER pursuant hereto shall have been paid in full. A copy hereof may be entered in lieu of the original. PRESENTMENT for payment, demand, notice of dishonor, protest and notice of protest are hereby waived by BORROWER and all endorsers hereof. This Note shall be construed and enforced in accordance with the laws of the Commonwealth of Pennsylvania. WITNESS our hands and seals the day and year first above written. GUNDER, INC. BY: .,.' 6C ,4- -(SEAL) i•-,bu.ud R 6C114 (SEAL) DAVID R. GONDER (SEAL) LEES R. GONDE -- c: L.' . L. L v o STEVENS & LEE By: Danielle S. Dinsmore Court I.D. 76457 One Penn Square Lancaster, PA 17602 (717) 291-1031 Attorneys for Plaintiffs GREG KREIDER and TODD KREIDER, individually and t/d/b/a SHIRK ENTERPRISES, INC., IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY Plaintiffs V. DAVID R. GONDER and LEE K. GONDER, individually and t/d/b/a GONDER, INC., Defendants CIVIL ACTION - LAW No. 99-5504 The Honorable Kevin A. Hess PLAINTIFFS' BRIEF IN SUPPORT OF THEIR MOTION TO COMPEL I. STATEMENT OF FACTS This action was initiated after the Plaintiffs, Greg and Todd Kreider t/d/b/a Shirk Enterprises, Inc. (the "Kreiders"), filed a Complaint for Entry of Judgment by Confession against the. Defendants, David and Lee Gonder( the "Gonders"). See Plaintiffs' Praecipe for Entry of Judgment by Confession attached hereto as Exhibit "A." The judgment amount represents the unpaid portion of the purchase price of a ski and bicycle shop that was sold to the Gonders pursuant to an Asset Purchase Agreement and Judgment Note. Essentially, the Gonders simply stopped making the required payments after they were half way into the term of their loan. After repeated requests were made by the Kreiders for payment, the loan was accelerated and demand S IA 66842v b99sJ9.a 14 A A, .. was made for payment in full. This was done in accordance with the terms of the Judgment Note. The Gonders never responded in any manner to this demand. On October 12, 1999, the Gonders filed a Petition to Open and/or Strike Off the Judgment claiming that the Kreiders fraudulently induced them to enter into the Asset Purchase Agreement by making false representations about various conditions of the sale. The Gonders also claim that the Kreiders breached the Asset Purchase Agreement by not fulfilling its terms. Despite these egregious claims (which were never raised until the Kreiders demanded payment), the Gonders have done nothing to cooperate with discovery or to otherwise move this case toward a resolution. Plaintiffs filed their Answer on or about November 1, 1999. On February 23, 2000, the Kreiders served upon the Gonders Interrogatories and Requests for Production of Documents pursuant to Pa. R.C.P. 4005 and 4009.11. See Plaintiffs' Interrogatories and Request for Production of Documents attached hereto as Exhibit "B." Under Pa. R.C.P 4006 and 4009.12, the Gonders responses were due by no later than March 24, 2000. Counsel for the Kreiders has made repeated demands for responses to these discovery requests, and also, requesting dates for the Gonders depositions. See letters dated December 6, 1999, March 13, 2000 and April 5, 2000 from Danielle S. Dinsmore, Esquire addressed to Charles R. Gerow, Esquire requesting dates for depositions and requesting responses to discovery attached hereto as Exhibit "C." To date, no response whatsoever has been forthcoming from the Gonders. The Kreiders file the within Brief in Support of their Motion to Compel responses to their discovery requests. 2 SL 166842v r j99999.814 I H. ISSUE PRESENTED WHETHER PLAINTIFFS SHOULD BE COMPELLED TO RESPOND TO DISCOVERY REQUESTS WITHIN TWENTY (20) DAYS OR SUFFER SANCTIONS? Suggested Answer: Yes. III. ARGUMENT Pa. R.C.P. 4005 and 4009.11 permit a party to serve upon any other party written Interrogatories and Request for Production of Documents. See Pa. R.C.P. 4005 and 4009.11. On or about February 23, 2000, the Kreiders properly served on the Gonders Interrogatories and Requests for Production of Documents. To date, the Gonders have failed to provide any responses whatsoever to these requests. This discovery has been pending for three months. The Gonders have had ample opportunity to answer the interrogatories and collect the requested documents. Collection proceedings have been stayed pending the disposition of the Defendants Petition to Strike. The Kreiders are unable to execute on their judgment and collect the money that is due them because of the Gonders delay in cooperating with efforts to move this case forward. The Gonders noncompliance with the discovery rules is deliberate and unjustified. As the party initiating the Petition to Strike Off and/or Open the Judgment, the Gonders have the duty to diligently prosecute their Petition. Even so, despite repeated requests for this discovery, Defendants have not responded. See letters dated December 6, 1999, March 13, 2000 and April 5, 2000 from Danielle S. Dinsmore, Esquire addressed to Charles R. Gerow, Esquire requesting dates for depositions and requesting responses to discovery attached hereto as Exhibit "C." St.[ 66942v"9999.814 Plaintiffs submit that Defendants should be compelled to respond to these discovery requests. Pursuant to Pa. R.C.P. 4019, this Court has the authority to compel such action and to impose sanctions for a party's failure to comply with legitimate discovery requests. Under all the circumstances, the Kreiders respectfully request that this Court enter an Order directing Defendants to produce responses to its discovery within twenty (20) days or, thereafter, suffer sanctions upon further motion. IV. CONCLUSION Based upon the authorities and analysis cited herein, Plaintiffs, Greg and Todd Kreider individually and t/d/b/a Shirk Enterprises, Inc. respectfully request that the Gonders be compelled to respond to its written Interrogatories and Request for Production of Documents within twenty (20) days or, thereafter, suffer sanctions. Dated: Maya, 2000 STEVENS & LEE By Danielle S. D' ore Attorney I.D. No. 76457 One Penn Square P.O. Box 1594 Lancaster, Pennsylvania 17608-1594 (717) 291-1031 Attorneys for Plaintiffs 4 SLI 668420/9M9.814 CERTIFICATE OF SERVICE 1, DANIELLE S. DINSMORE, ESQUIRE, certify that on this date, I served a certified true and correct copy of the foregoing Plaintiffs' Brief in Support of Their Motion to Compel upon the following counsel of record, by depositing the same in the United States mail, postage prepaid, addressed as follows: Charles R. Gerow, Esquire 51 IS East Trendle Road Mechanicsburg, PA 17055 Danielle S. Dinsmor Date: ?5 31 oa SLI 66842YI,99999.5I4 a e e GREG KREIDER and TODD KREIDER, IN THE COURT OF COMMON PLEAS OF individually and t/d/b/a SHIRK CUMBERLAND COUNTY ENTERPRISES, INC. Plaintiffs c-- `o o V. 'CW CIVIL ACTION - LAW`!.;. rn .7 'o DAVID R. GONDER and LEE K. S GONDER, individually and ;: t/d/b/a GONDER, INC. C r w Defendants : NO e504 :? F? : PRAECIPE FOR ENTRY OF JUDGMENT TO THE PROTHONOTARY: Please enter judgment in favor of GREG KREIDER, TODD KREIDER, and SHIRK ENTERPRISES, INC. and against DAVID R. GONDER, LEE K. GONDER, and GONDER, INC. in accordance with the attached instrument as follows: Unpaid balance of note $30,527.84 5$ late fee $ 1,526.39 Costs $ 50.00 Attorneys fees $ 1.526.39 Total $33,630.62 Address for the Defendants is c/o World Cup Ski and Cycle, 4500 Old Gettysburg Pike, Mechanicsburg, PA 17055. Address for Plaintiffs is c/o Greg Kreider, 418 North Charlotte Street, Lancaster, PA 17603. Date: (/ 7I C1 STEVENS & LgE, By; bvi_ell Danielle„S. Dinsmore, Esquire Court I.D. 76457 One Penn Square Lancaster, PA 17602 (717) 291-1031 Attorneys for Plaintiffs LRNC/42slS/90999.914 1•- 1 CERTIFICATE OP BER Q I HEREBY CERTIFY that a true and correct copy of the foregoing Prascipe for Entry of Judgment was served this day of 4z--, 1999, by first class mail, postage prepaid, upon the following: MR-LEE GONDER GONDER, INC C/O WORLD CUP SKI AND CYCLE 4500 OLD GETTYSBURG ROAD MECHANICSBURG, PA 17055 Danielle S. Dinsmore LANC/42 sL/99999.614 $ 60,000.00 November 14, 1995 Camp Hill, Pennsylvania JUDGMENT NOTE FOR VALUE RECEIVED, the Undersigned, GONDER, INC., pR4 DAVID R GONDER and LEE R. GONDER, (hereinafter collectively referred to as "Borrower") do promise to pay to SHIRK ENTERPRISES, INC. (hereinafter referred to as "LENDER") the sum of Sixty Thousand and 00/100 ($60,000.00) Dollars, together with interest on the unpaid principal balance at the rate of nine (98) percent per annum. All principal and interest shall be repaid in thirty-six (36) equal monthly installments of One Thousand Nine Hundred Seven and 99/100 ($1,907.99) Dollars, applied first to interest and the remainder to reduction to principal, with the first payment being due on December 14, 1995, and subsequent payments being due on the 14th day of each month thereafter until paid in full; provided, however, that all principal and interest, if not sooner paid, shall be due and payable in full on November 14, 1998. In the event that any payment shall not be paid within fifteen (15) days of the due date, a late payment fee of five (58) percent of the monthly principal and interest payment shall be due and payable from BORROWER. Further, in the event that any payment shall remain unpaid for a period in excess of thirty (30) days, LENDER, at its sole option, shall have the right to accelerate the entire indebtedness due and demand payment in full. Said acceleration and demand for payment in full shall be in writing forwarded to BORROWER by hand-delivery or first class mail at 803 CocklirL DRC; Street, Mechanicsburg, Pennsylvania 17055. All payments of principal and interest from BORROWER to LENDER. shall be paid to LENDER at 830 Flory Mill Road, Lancaster, Pennsylvania 17601 or at such other address as Lender may provide to BORROWER in writing. BORROWER shall have the right to prepay in whole or in part at any time without penalty. BORROWER hereby empowers the Prothonotary or any attorney of any Court of record within the United States or elsewhere to appear for BORROWER and, with or without declaration, enter judgment against BORROWER in favor of Lender, together with costs of suit and reasonable counsel fees in an amount ecual to five. (58) percent of the amount due. TO THE EXTENT permitted by applicable law, BORROWER hereby waives inquisition and condemnation of any property that may be levied upon by virtue of any execution which may issue forthwith G upon such confession of judgment, and further waives all errors in said proceedings, together with stay of or exemption from execution or extension of time of payment which may be given by any statute now in force or which may be enacted hereafter, or by any usage or custom. No single exercise of the foregoing warrant shall be deemed to exhaust the power to confess judgment granted herein, whether or not any such exercise shall be held by any court to be invalid, void or voidable, but the power shall continue undiminished and may be exercised from time to time as often as LENDER shall elect until all sums payable or that may become payable by BORROWER pursuant hereto shall have been paid in full. A copy hereof may be entered in lieu of the original. PRESENTMENT for payment, demand, notice of dishonor, protest and notice of protest are hereby waived by BORROWER and all endorsers hereof. This Note shall be construed and enforced in accordance with the laws of the Commonwealth of Pennsylvania. WITNESS our hands and seals the day and year first above written. GONDER, INC. BY- L-aW241 GOIJ¢._ (SEAL) Z01 6 R clc+'de_. (SEAL) DAVID R. GONDER _ L.e1 K G1.104, (SEAL) LEE K. GONDER ?11 L?J p? RG N H y 3 .jN `,;N t(( ?Jf i)' r {1? ,.ay? ;:-`S i i f.11:Y STEVENS & LEE Danielle S. Dinsmore Attorney I.D. No. 76457 One Penn Square P.O. Box 1594 Lancaster, Pennsylvania 17608-1594 (717)399.6636 Attorney for Greg and Todd Kreider and Shirk Enterprises, Inc. IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL, ACTION - LAW GREG KREIDER and TODD KREIDER, Individuals and t/d/b/a SHIRK ENTERPRISES, INC., Plaintiffs Docket No. 99-5504 VS. DAVID R. GONDER and LEE K. GONDER, Individually and t/d/b/a GONDER, INC., Defendants JURY TRIAL DEMANDED REQUEST FOR PRODUCTION OF DOCUMENTS OF GREG AND TODD KREIDER AND SHIRK ENTERPRISES, INC. DIRECTED TO DAVID R. GONDER, LEE K. GONDER AND GONDER, INC. - FIRST SET 02/23/00/SLI 44696v1/00000,000 I f n. . ..7 N? t ? To: David R. and Lee K. Gonder, and Gonder, Inc. C/O Charles R. Gerow, Esquire 5115 East Trindle Road Mechanicsburg, Pennsylvania 17055 PLEASE TAKE NOTICE, that you are hereby required, pursuant to Pa. R.C.P. 4009, as amended, to produce for inspection, examination and copying, at the offices of Stevens & Lee, 1 Penn Square, P.O. Box 1594, Lancaster, Pennsylvania 17608-1594 not later than thirty (30) days after service of this Request, the following documents. These requests shall be continuing. If you or anyone acting on your behalf learns of additional documents responsive to this request, you shall produce such documents by Supplemental Responses. DEFINITIONS AND INSTRUCTIONS A. "You" and "your" refers to the person or persons to whom these Requests are propounded. B. "And" and "or" shall be construed conjunctively and disjunctively so as to bring within the scope of this request for production any information which might otherwise be construed to be outside its scope. C. "Document" means any correspondence, memorandum, interoffice communication, agreement, minutes, report, note, schedule, book of accounts, ledger, invoice, receipt, purchase order, pleading, questionnaire, contract, bill, check, draft, diary, log, proposal, bid, recording, telex, telegram, drawing, picture, table, graph, chart, map or survey, including the original and working copies, handwritten drafts of all of the above and any copies thereof which are different from the original by way of interlineation or notation, including any transcript or 02a3ro0isr.I 44696vIro0000.000 2 summary of the foregoing and any other tangible date compilations from which information may be used, including word processor systems. D. If you claim that the subject matter of a document or oral communication is privileged, you are required to identify the document or communication by stating the following information: 1. Its nature, (e.g., letters, memorandums, tape recordings, etc.); 2. Its date (or if it bears no date, the date when it was prepared); 3. The name, address, employer and job position of the signer or signers (or if there is no signer, of the person who prepared it); 4. The name, address, employer and job position of the person, if any, to whom the document was sent; 5. The name, address, employer and job position of each person known or believed to have originals or copies of the documents; or 6. A brief statement of the subject matter of the document and state each ground or basis on which you contend that the document or oral communication is privileged. E. If you do not have possession, custody or control of a document request, but know who does have possession, custody or control, you are required to identify the 3 03123/00/SLI 41696AM0000.000 document and the person who has possession, custody or control in the manner requested in subparagraph D thereof. YOU ARE REQUESTED TO PRODUCE THE FOLLOWING DOCUMENTS All documents that were provided to you by plaintiffs at any time. 2. All documents, as defined above, in your possession which refer or relate to plaintiffs in any respect. 3. All documents, as defined above, in your possession which refer or relate to the lease with C.M. Cumberland Management for the premises located at the Cedar Cliff Mall. 4. Gonder, Inc.'s articles of incorporation. 5. All documents, as defined above, in your possession which refer or relate to your credit terms or method of payment with the vendors identified in response to Interrogatory No. 12. from 1995 until the present. 6. All federal and state corporate income tax returns for Gonder, Inc. for the years 1995 to the present. All financial statements, whether fiscal year end or interim, for Gonder, Inc. for the years 1995 to the present. 8. Al federal and state personal income tax returns for Lee K. Gonder and David R. Gonder for the years 1995 to the present. 9. All documents, as defined above, in your possession which refer or relate to your purchase of the ski and cycle shop from the plaintiffs located at the Cedar Cliff Mall. 10. The resumes of Lee K. Gonder and David R. Gonder. 4 02/21100/SLI 44696v1/00000.000 11. All of Gonder Inc.'s accounts receivable and account payable ledgers from 1995 until the present. 12. Any document, as defined above, in your possession which refers or relates to the ski tuner machine. 13. All documents, as defined above, in your possession which refers or relates to the bar coding system. 14. Any document, as defined above, in your possession which refers or relates to the allegedly damaged or inferior equipment identified in response to Interrogatories No. 13 and 17. 15. All documents, as defined above, in your possession which refer or relate to the lease program promising a 70% cash return on certain purchases. 16. All expert opinions, reports, summaries, or other writings in your possession or control or in the possession of your attorney which relate to the subject matter of this litigation. 17. All statements of any person(s) who will be called as a witness at the trial of this matter. 5 62133/00/SLI 44696v1100066.000 18. Any and all documents referred to or identified in your responses to plaintiffs' interrogatories. Dated: a 9- STEVENS & LEE % By: U Danielle S. Dinsmore Attorney I.D. No. 76457 One Penn Square P.O. Box 1594 Lancaster, Pennsylvania 17608-1594 (717) 399-6636 Attorney for Plaintiffs, Todd and Greg Kreider and Shirk Enterprises, Inc. 6 02/23/00/3L144696vl/0=0.000 CERTIFICATE OF SERVICE I, DANIELLE S. DINSMORE, ESQUIRE, certify that on this date, I served a certified true and correct copy of the foregoing REQUEST FOR PRODUCTION OF DOCUMENTS upon the following counsel of record, by depositing the same in the United States mail, postage prepaid, addressed as follows: Charles R. Gerow, Esquire 5115 East Trindle Road Mechanicsburg, Pennsylvania 17055 Date: February 23, 2000 03133/00/SLI 446960/00000.000 STEVENS & LEE Danielle S. Dinsmore Attorney I.D. No. 76457 One Penn Square P.O. Box 1594 Lancaster, Pennsylvania 17608-1594 (717) 3996636 Attorney for Greg and Todd Kreider and SLirk Enterprises, Inc. IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW GREG KREIDER and TODD KREIDER, Individuals and t/d/b/a SHIRK ENTERPRISES, INC., Plaintiffs Docket No. 99-5504 vs. DAVID R. GONDER and LEE K. GONDER, Individually and t/d/b/a GONDER, INC., Defendants JURY TRIAL DEMANDED INTERROGATORIES OF GREG AND TODD KREIDER AND SHIRK ENTERPRISES, INC. DIRECTED TO DAVID R. GONDER, LEE K. GONDER, AND GONDER, INC. - FIRST SET 1 02/23 /00/5 L 14962 t v. /00000.000 To: David R. and Lee K. Gonder and Gonder, Inc. C/O Charles R. Gerow, Esquire 5115 East Trindle Road Mechanicsburg, Pennsylvania 17055 PLEASE TAKE NOTICE, that you are hereby required, pursuant to Pennsylvania Rule of Civil Procedure No. 4001, et seq., to serve upon the undersigned a copy of your answers and objections, if any, in writing and under oath, to the following Interrogatories within thirty (30) days after service of the Interrogatories. The answers shall be inserted in the spaces provided. If there is insufficient space to answer an Interrogatory, the remainder of the answer shall follow in a supplemental sheet. These Interrogatories shall be deemed to be continuing Interrogatories. If between the time of filing your answers and the time of trial of this matter, you, or anyone acting on your behalf, learn of any further information not contained in your answers, or if you learn that any information set forth in your answers is or has been inaccurate or incorrect, you shall promptly file and serve supplemental answers. DEFINITIONS The following definitions are applicable to these Interrogatories: 1. "Document" means any written, printed, typed, or other graphic matter of any kind or nature, however, produced or reproduced, including photographs, microfilms, photographs, video and audio tapes, punch cards, magnetic tapes, discs, data cells, drums and other date compilations from which information can be obtained. 2. "Identify" or "Identity" means when used in reference to - - (1) a natural person, his or her: (a) full name; and (b) present or last known address and employment address 03123100/al.I 44621Vtro0000.000 (including street name and number, city or town and state or country); (2) a document: (a) its description (e.g., letter, memorandum, report, etc.), title and date; (b) its subject matter; (c) its author's identity; (d) its addressee's identity; (e) its present location; and (t) its custodian's identity; (3) an oral communication: (a) its date; (b) the place where it occurred; (c) its substance; (d) the identity of the person who made the communication; (e) the identity of each person to whom such communication was made; and (f) the identity of each person who was present when such communication was made; (4) a corporate entity: (a) its full corporate name; (b) its date and place of incorporation, if known; and (c) its present address and telephone number; (5) any other context: a description of sufficient particularity that the same may thereafter be specified and recognized, including relevant dates and places, and the identification of relevant people, entities, and documents. 3. "Incident" means the occurrence that forms the basis of your Petition to Strike Off and/or Open Judgment or similar pleading. 4. "Person" means a natural person, partnership, association, corporation, or government agency. INSTRUCTIONS The following instructions are applicable to these Interrogatories. 1. Duty to answer. - - The Interrogatories are to be answered in writing, verified, and served upon the undersigned within thirty (30) days of their service on you. Objections must be signed by the attorney making them; in your answers, you must furnish such information as is available to you, your employees, representatives, agents, and attorneys. Your 0In3/OO/SLI 44631 vl /OOOOo.Ooo answers must be supplemented and amended as required by the Pennsylvania Rules of Civil Procedure. 2. Claim of privilege. - - With respect to any claim of privilege or immunity from discovery, you must identify the privilege or immunity asserted and provide sufficient information to substantiate the claim. 3. Option to produce document. - - In lieu of identifying documents in responses to these Interrogatories, you may provide copies of such documents with appropriate references to the corresponding Interrogatories. 4 0723/00/sl.l 44621v1/00000.000 INTERROGATORIES Interrogatory No. 1. State: (a) Your full name; (b) Each other name, if any, which you have used or by which you have been known; (c) The address of your present residence and the address of each other residence which you have had during the past five years; (d) Your present occupation and the name and address of your employer; (e) Date of your birth; (f) Your Social Security number; (g) Your military service and positions held, if any; and (h) The schools you have attended and the degrees or certificates awarded, if any. ANSWER: 5 07/23/001SLI aacxroirooooo.oao Interrogatory No. 2. With respect to Gonder, Inc., state: (a) Any other name by which it is known or has been known; (b) Date and state of incorporation; (c) Names of shareholders and percentage of stock attributed to each; (d) Name of the members of the Board of Directors; and (e) Name and address of all corporate employees and the positions held. 6 02/22/00/SU e4621viro0000.000 Interrogatory No. 3. If you are covered by a type of insurance, including any excess or umbrella insurance, that might be applicable to the incident in this matter, state the following with respect to each such policy: (a) The name of the insurance carrier which issued the policy; (b) The name insured under each policy and the policy number of each policy; (c) The type(s) and effective date(s) of each policy; (d) The amount of coverage provided for injury to each person, for each occurrence, and in the aggregate for each policy; (e) Each exclusion, if any, in the policy which is applicable to any claim thereunder and any reasons, if any, why you or the carrier claim the exclusion is applicable. ANSWER: 02/22/00/SLI 44621v1/00000.000 Interrogatory No. 4. Pursuant to Pa. R.C.P. 4003.5, please identify each witness you expect to call as an expert at trial, and state the qualifications of each such expert. ANSWER: 8 02123/COISLI 44611vl/OO 0.000 Interrogatory No. 5. Pursuant to Pa. R.C.P. 4003.5, for each expert identified, please state the subject matter to which he or she is to testify, the substance of facts and opinions to which he or she is to testify and the basis for each opinion. ANSWER: 02123f001SL144621v1l00000.000 Interrogatory No. 6. Identify sufficiently for requests for production, all texts, journals, documents, reports, photographs, diagrams, statistics or other material which each expert identified in the previous Interrogatory consulted or relied upon in forming his or her opinion or in preparing his or testimony. (In lieu of answering Interrogatories 4 through 7, you may file your answers through a signed report from each expert, or you may have these Interrogatories answered by the expert(s). If the expert(s) answer(s) the Interrogatories, the "expert(s) answering the Interrogatories" must sign the affidavit attached to these Interrogatories. If an expert's signed report is filed in lieu of answering Interrogatories 4 through 7, pursuant to Pa. R.C.P. 4003.5, please see that the expert's opinion, facts on which the expert is relying, and basis for each opinion are set forth clearly.) ANSWER: 10 02r22100131.144621vl/00000.000 Interrogatory No. 7. Identify all documents which your expert(s) intend(s) to use at trial, including, but not limited to, any authoritative text or joumal to be used at trial that each expert has prepared in preparation for trial. ANSWER: 11 02/17AXWLI 446210=000.000 Interrogatory No. 8. For each expert identified, please state whether each such expert ever testified in court in the last five (5) years, stating the case name, court and number, whether the expert testified for plaintiff or defendant and the fee charged. ANSWER: 12 02/23/001SLI 44621v1/000O0.000 Interrogatory No. 9. Please identify all persons who have any knowledge of or information as to the facts pertaining to the subject matter of this litigation or the allegations contained in Defendants' Petition to Strike Off and/or Open Judgment. ANSWER: 13 07/17/00/SLI 41621vl/00000.000 Interrogatory No. 10. Please identify all witnesses other than experts already identified whom you intend to call at trial, and state the facts to which each such witness will testify. ANSWER: 14 02/23100/SLI 44631vlro0000.000 Interrogatory No. 11. Do you intend to use any books, magazine or other writing at the trial of this matter, and if so, please describe the writing in detail as to author, publisher and copyright date, and state the identity of each present custodian of said writing. ANSWER: 15 02t23/00ISLI e4621vl/00000.000 Interrogatory No. 12. In paragraph 8(a) of Defendants' Petition to Strike Off and/or Open Judgment ("Defendants' Petition"), you contend that, "All of plaintiffs' then current suppliers were owed money, and such suppliers would, accordingly, not ship on credit. All such suppliers required defendants to pay COD as a result of plaintiffs' poor credit history and non- payment to suppliers." With respect to such allegation, please state each fact or circumstance which you contend supports this contention, identify each witness with knowledge relative to this contention and identify each document which discusses, refers to, or in any way pertains to the information contained in said allegation. Also, specifically provide: (1) All vendors by name, address, telephone number and product line who denied you credit because of the Plaintiffs' credit history, and; (2) The dates of each such denials and the method of denial (by writing or verbal conversation). ANSWER: 02M/001SLI e4621VIro0000.000 16 Interrogatory No. 13. In paragraph 8(c) of Defendants' Petition you contend, "The tools represented to be part of the sale were not the property of plaintiffs, but rather of plaintiffs' employees, and were removed from the commercial business and those tools not so removed were of inferior quality and/or damaged." With respect to such allegation, please state each fact or circumstance which you contend supports this contention, identify each witness with knowledge relative to this contention and identify each document which discusses, refers to, or in any way pertains to the information contained in such allegation. Also, specifically identify: (1) Each such tool that allegedly belonged to the Plaintiffs' employees; (2) To whom each tool allegedly belonged (including their full name and last known address); (3) When the tools were allegedly removed from your premises, and; (4) Specifically identify each and every tool you claim was defective and the nature of the alleged defect. ANSWER: 02/23/00/SLI 446210100000.000 I ?? ?. ?. 1w ?.......... .ate. Interrogatory No. 14. In paragraph 13 of Defendants' Petition, you contend, "The Ski Tuner machine had never been overhauled and had no new parts." With respect to such allegation, please state each fact or circumstance which you contend supports this contention, identify each witness with knowledge relative to this contention and identify each document which discusses, refers to, or in any way pertains to the information contained in such allegation. ANSWER: 18 07r2L00/S L 1 41631 v I /00000, 000 Interrogatory No. 15. In paragraph 8(e) of Defendants' Petition, you contend, "Plaintiffs had entered into a lease program not disclosed to defendants promising a 70% cash return on certain 'purchases'." With respect to such allegation, please state each fact or circumstance which you contend supports this contention, identify each witness with knowledge relative to this contention and identify each document which discusses, refers to, or in any way pertains to the information contained in such allegation. Also, specifically identify the terms and conditions of this lease program and itemize the damages allegedly incurred by you as a result of this lease program. ANSWER: 19 07/17/00/SLI 4462 MIC0000.oco Interrogatory No. 16. In paragraph 9 of Defendants' Petition, you contend, "Plaintiffs additionally misrepresented the financial condition of their business by overstating its value and providing incorrect sales figures. Said misrepresentations were an inducement for defendants to enter into negotiations which led to the Agreement of Sale." With respect to such allegation, please state each fact or circumstance which you contend supports this contention, identify each witness with knowledge relative to this contention and identify each document which discusses, refers to, or in any way pertains to the information contained in such allegation. Also, specifically identify: (1) How much, you claim, the business was allegedly overstated and the method of such overstatement (i.e.: in writing or by verbal communication); (2) Specifically itemize the allegedly overstated sales figures. ANSWER: 20 omaroo/SW 44621vV00000.000 Interrogatory No. 17. In paragraph 10 of Defendants' Petition, you contend, "Plaintiffs misrepresented the nature and condition of the office equipment to be provided as part of the safe, and further exchanged equipment represented to be part of this sale with inferior damaged equipment." With respect to such allegation, please state each fact or circumstance which you contend supports this contention, identify each witness with knowledge relative to this contention and identify each document which discusses, refers to, or in any way pertains to the information contained in such allegation. Also, specifically identify: (1) Each and every piece of equipment which was allegedly misrepresented, and; (2) Specifically itemize each and every piece of equipment which was allegedly exchanged for inferior or damaged equipment and state the nature of such damage or inferiority. ANSWER: 03/2200/SLI 44621v1/00000.000 21 Interrogatory No. 18. In paragraph I I of Defendants' Petition, you contend, "Plaintiff misrepresented the nature and condition of the Bar Coding system to be provided as part of the sale." With respect to such allegation, please state each fact or circumstance which you contend supports this contention, identify each witness with knowledge relative to this contention and identify each document which discusses, refers to, or in any way pertains to the information contained in such allegation. ANSWER: 22 ozaarooisLI 4462 roiroaaoo.ooo Interrogatory No. 19. In paragraph 14 of Defendants' Petition, you contend, "Defendants justifiably relied upon the material misrepresentations of the plaintiffs in entering into negotiations for and the Agreement of Sale." With respect to such allegation, please state each fact or circumstance which you contend supports this contention, identify each witness with knowledge relative to this contention and identify each document which discusses, refers to, or in any way pertains to the information contained in such allegation. ANSWER: 23 02127/00/S L 1 446210/00000.000 Interrogatory No. 20. In paragraph 15 of Defendants' Petition, you contend, "Due to plaintiffs' material misrepresentations, defendants have been substantially injured." With respect to such allegation, please state each fact or circumstance which you contend supports this contention, identify each witness with knowledge relative to this contention and identify each document which discusses, refers to, or in any way pertains to the information contained in such allegation. Specifically identify and itemize each such item of damages you contend you have sustained. ANSWER: .3 ?k1t tN. i 2r 03I23=/SLI 44621vIro0000.000 24 Interrogatory No. 21. State with particularity the factual basis for each claim/or count in Defendants' Petition. ANSWER: Dated: A3 D? 02122100isU 446210100000.000 STEVENS & LEE By: Danielle S. Dinsmd e Attorney I.D. No. 76457 One Penn Square P.O. Box 1594 Lancaster, Pennsylvania 17608-1594 (717) 291-1031 25 CERTIFICATE OF SERVICE I, DANIELLE S. DINSMORE, ESQUIRE, certify that on this date, I served a certified true and correct copy of the foregoing INTERROGATORIES upon the following counsel of record, by depositing the same in the United States mail, postage prepaid, addressed as follows: Charles R. Gerow, Esquire 5115 East Trindle Road Mechanicsburg, Pennsylvania 17055 Date: ,I A3IlYD 26 ozrtaioo/sLiaoezrv /00000.000 C:7 LAW OFFICES OF STEVENS & LEE AIt WEsimetaat ComnmAr1CN PLEASE RESPOND To LANCASTER December 6, 1999 VIA FAX AND MAIL Charles R. Gerow, Esquire 5115 East Trindle Road Mechanicsburg, Pennsylvania 17055 Re: Kreider v. Gonder Cumberland County No. 99-5504 Dear Mr. Gerow: DIAL DIRECT (717) 399-66M EMAIL dsd@stevenslee.com I am in receipt of your letter dated December 2, 1999. I called your office and left messages on three separate occasions to discuss a deposition schedule in this matter. None of my phone calls were returned which precipitated my December 1, 1999 letter. I wanted to try to get at least some of these depositions completed before the end of the year because January is already quite full for me. However, I understand if December is not convenient for you. I would propose that we try and complete the depositions of your clients and mine in the week of February 14, 2000. I anticipate that I will need a day or less to depose both Lee and David Gonder. Please let me know at your earliest convenience if this will work for you and your clients. Very truly yours, STEVENS & L Danielle S. Dinsmore One Penn q.are. P.O. Bea 1594. Lanpften PA 1,708.1594 • 717.191.1031 Fas 717-394-772h 1415 Saute 70 East. Suite 500, Cherry Hill, sl 06034 • 6CO-354-9200 Fas 6U9.3s"llt 208 Nonh Thins Sevvt. Suite 310, P.O. &+s IOW, Harrlsburg, PA 17108.200 • 71. 14.1'250 Fax 71734.14:9 190 Brodhead 8.•ad.5uite 2ttl. P.O. &n 2M.M. Lehigh Palley, PA 18002-0631) . 611491-0111 Fa. 610.6414175 IBIS kl.arket Street, 14th Fluor, Philadelphia, PA 19103. 215.53-0IW • Fas 215.851-0214 111 North Sisth Stmt, PO. &IS 679. Reading PA 1960341611 • oI W784W Fan 610.376.5610 116 Nonh Washington Avenue, SWte 28. Scranton, PA 18503 • S70-343-I82N Fas S70 :43-1592 SLI 26289vI SM9.85Asoe Clenhardie Corpon:e Center, 123 Drummers Lrne. P.O. &n 2M, Wayne, PA 19087-019h • 610-961.1480 Fas nI1Mi;-Cl4 IN S. Franklin Street, Wilkes-Sam. PA 18111.1188. 5:0.823-6116 Fas 570-823.1149 LAW OFFICES OF STEVENS & LEE A PRDFIISSLNAI CCAFOAATICN RLEASE RESPOND TO LANCASTER March 13, 2000 Charles R. Gerow, Esquire 5115 East Trindle Road Mechanicsburg, PA 17055 Re: Kreider v. Gonder Cumberland County No.: 99-5504 Dear Counsel: FILE COPY (717)399.6636 EMAII. dsdestevenslee.com I would like to schedule the depositions of your clients, Lee and David Gonder. I propose the following dates, April 19, 20, 25, 26 or 27. Please get back to me as soon as possible confirming one of these dates or proposing others if these are unavailable. Very truly yours, STEVENS & LEE kk Danielle S. Dinsmore cc: Greg Kreider one P,•mr yuue. Po. Bon 15.4. Lanaa•nr, PA 1:605.1544.717•'_91.1031 Faa 717-344.772b 141? gouh• 70 East. Suit, San. Ch<tn' Hill, NJO.W4 • 556.354.9:01 Fn 856.354.9111 3u H;9 \nrth Third Smut. Suite 3111, 110. B+v G,I4d , 1larrisbut& PA 17105.20917 • 717-2.14-1240 Fan 71793M 19U Br dhead goad, Suite 201, P.O. Ouv 2057V. Lehigh valley, PA 1,W02.0830 • 610.01-7111 Fa. 614091.717, IBIS %larket SIMM. 14th Floor. Philadelphia, PA 19103 •'-IS-575.0100 • Fan 215$51-0214 III \nrth Skit, Stnet. P.O. Boa heading. 1'A WMD-011;4 • 104' N-2000 FaT 610.376.5610 116; Wirth W,,hinglun Avenue. Suit, 211. Swanton, PA 18511 • 570-313.1827 Fa. 570.343.1892 One Glenhardie Cogghran• Center. 12:5 Drummers Lane, PO. Bea 236, Wayne, PA 190874236 • 614961.1480 FaT 610.667-1364 03113MOiSLI 51390v1/99999.854 12t1 S. F6mAhn Street. Wilk -BJRe. PA 18701.11&9 • S-,M23-6116 Fas 570.823.1149 RA3 DrUeare Avenue. Suite SIX), I6'Ilminglun, DE 19601 • 7@b51.515A Fee AL'fi54•Sltll IAwCrnaso• STEVENS & LEE A PAmEs3viAL COR w Txx/ One Penn Square P. O. Box 1594 Lancaster, PA 17608.1594 (717) 291.1031 Fax (717) 394.7726 April 5, 2000 Charles R. Gerow, Esquire 5115 East Trindle Road Mechanicsburg, PA 17055 Re: Kreider v. Gordon Cumberland County No. 99-5504 Dear Mr. Gerow: FIL F Cop Y DIAL DatEL7: (717) 399.6636 EMAIL dsd®stevenslee.com In reviewing this file I note that your client's responses to our interrogatories and request for production of documents were due by no later than March 23, 2000. As of this date I have not received the same. As you are aware, we cannot move this case forward or schedule the depositions of your clients until I have received those responses. Please forward full and complete responses to this discovery by no later than April 21 or I will be forced to file a motion to compel with the court. My clients are understandably anxious to resolve this matter. If you have any questions or concerns regarding the above please do not hesitate to call me. Very truly yours, ST EVENS & LEE acs, / /1-7 V / Danielle S. Dinsmore DSD:Ijk(@kqn) cc: Greg Kreider • Cherry Hill • Reading • Harrisburg • Lancaster • Lehigh Valley • Philadelphia • Scranton • Valley Forge • Wilkes-Barre • Wilmington 04105100/3 L 158021 v 1949999.314 STEVENS& LEE By: Danielle S. Dinsmorc Court I.D. 76457 Ono Penn Squarc Lancastcr, PA 17602 (717)291-1031 Attorneys for Plaintiffs GREG KREIDER and TODD KREIDER, individually and t/d/b/a SHIRK ENTERPRISES, INC., Plaintiffs V. DAVID R. GONDER and LEE K. GONDER, individually and t/d/b/a GONDER, INC., Defendants AVIV IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY CIVIL ACTION - LAW No. 99-5504 The Honorable Kevin A. Hess ORDER AND NOW, this F'o day of(-v,,.,_ , 2000, upon consideration of Plaintiffs, Greg Kreider and Todd Kreider, individually and t/d/b/a Shirk Enterprises, Inc.'s Motion to Compel Responses to Interrogatories and Request For Production of Documents, it is hereby ORDERED and DECREED that Defendants shall respond to these discovery requests within twenty (20) days of the date of the service of this Order or, thereafter, suffer sanctions, upon further motion, as permitted under Pa. R.C.P. 4019, which may include preclusion of evidence at trial, attorneys' fees and costs, and the entry of judgment of non pros. BY THE COURT: ? CIO SLI 668040/99999.814 q • o , _? ,,.,...? .> _;? :? i,. ::) -?_: 1 ?,? V? _; jj?U n ,. '? _ U STEVENS &. LEE By: Danielle S. Dinsmore Court 1.13. 76457 One Penn Square Lancaster, PA 17602 (717) 291-1031 Attorneys for Plaintiffs GREG KREIDER and TODD KREIDER, individually and t/d/b/a SHIRK ENTERPRISES, INC., IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY Plaintiffs V. DAVID R. GONDER and LEE K. GONDER, individually and t/d/b/a GONDER, INC., Defendants CIVIL ACTION - LAW No. 99-5504 The Honorable Kevin A. Hess PLAINTIFFS' MOTION TO COMPEL AND NOW, by and through their counsel, Stevens & Lee, Plaintiffs, Greg and Todd Kreider, individually and t/d/b/a Shirk Enterprises, Inc. (hereinafter referred to collectively as the "Kreiders"), file the within Motion to Compel and in support thereof aver as follows: This action was initiated when the Kreiders filed a Complaint for the Entry of a Judgment by Confession against the Defendants in connection with the sale of a bicycle and ski store located in Camp Hill, Pennsylvania pursuant to an Asset Purchase Agreement and Judgment Note. A true and correct copy of the Praecipe for Entry of Judgment as well as the Judgment Note is attached hereto as Exhibit "A." 2. On or about October 12, 1999, Defendants Petitioned to Strike Off and/or Open the Judgment. S L 166804v1/99999.R14 3. By Order dated October 13, 1999, the Court Issued an Order and Rule to Show Cause why the requested relief should not be granted and ordered that all collection and enforcement proceedings under thejudgment were to be stayed pending the disposition of the Defendants' Petition. 4. On November I, 1999, Plaintiffs filed and properly served their Answer to Defendants Petition to Strike. 5. Subsequently, counsel for the Kreiders repeatedly attempted to obtain dates from Defendants to schedule their depositions. 6. Additionally, on or about February 23, 2000, counsel for the Kreiders served upon the Defendants Requests For Production of Documents and Interrogatories pursuant to Pa. R.C.P. 4005 and 4009.11. A true and correct copy of the Request For Production of Documents and Interrogatories is attached hereto as Exhibit "B." 7. Despite the Defendants request to Strike Off and/or Open the Judgment citing fraud and breach of contract, it has been almost impossible to urge them to move this case forward towards a resolution. 8. Essentially, Defendants have ignored every request for deposition and have completely ignored and not responded to Defendants' Interrogatories and Request For Production of Documents. See letters dated December 6, 1999, March 13, 2000 and April 5, 2000 from Danielle S. Dinsmore, Esquire addressed to Charles R. Gerow, Esquire requesting dates for depositions and requesting responses to Interrogatories and Request For Production of Documents attached hereto as Exhibit "C." 9. Despite repeated requests for responses to discovery and dates for depositions, Defendants have not responded in any manner whatsoever. SIA 66SU40199999.914 10. Pursuant to the Pa. R.C.P. 4006 and 4009.12, Defendants' responses to discovery were due by no later than March 24, 2000. 11. Defendants' failure to comply with the discovery rules is blatant and unjustified. 12. The Kreiders are prejudiced by Defendants' failure to respond to these discovery requests because the information is needed to pursue witness investigation, evaluate the Defendants' claims as set forth in their Petition to Strike Off and/or Open Judgment and prepare the case for trial. The Kreiders are further prejudiced by the Defendants' failure to cooperate because they are unable to collect the monies that are due and owing until Defendants' Petition is resolved. 13. Pa. R.C.P. 4019 authorizes this Court to enter an appropriate Order compelling Defendants' compliance with a discovery request. 81.1 66804 v 1 199999.814 WHEREFORE, Plaintiffs, Greg and Todd Kreider, individually and t/d/b/a Shirk Enterprises, Inc., respectfully request this Honorable Court to find in their favor on their Motion to Compel and enter an Order compelling Defendants to respond to their Request For Production of Documents and Interrogatories within twenty (20) days of the date of this Order, or thereafter suffer sanctions as permitted by Pa. R.C.P. 4019, after a hearing, which may include preclusion of evidence at trial, attorneys' fees and costs and the entry of judgment of non pros. Dated: May, 2000 S7' VENS & LEE By Danielle S. Di ore Attorney I.D. No. 76457 One Penn Square PA. Box 1594 Lancaster, Pennsylvania 17608-1594 (717) 291-1031 Attorneys for Plaintiffs 4 ILI 669040199999.1114 CERTIFICATE OF SERVICE I, DANIELLE S. DINSMORE, ESQUIRE, certify that on this date, I served a certified true and correct copy of the foregoing Plaintiffs' Motion to Compel upon the following counsel of record, by depositing the same in the United States mail, postage prepaid, addressed as follows: Charles R. Gerow, Esquire 5115 East Trendle Road Mechanicsburg, PA 17055 Danielle S. Dinsmore Date: X1:3 00 SIJ 448040,99999.914 r cr r . u% U;- Cf) ?? l'J GREG KREIDER and TODD KREIDER, individually and t/d/b/a SHIRK ENTERPRISES, INC., Plaintiffs vs. IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION- LAW Docket No. 99-5504 DAVID R. GONDER and LEE K. GONDER, individually and t/d/b/a GONDER, INC., Defendants JURY TRIAL DEMANDED ANSWER TO PETITION TO STRIKE OFF AND/OR OPEN JUDGMENT WITH NEW MATTER AND NOW come the Respondents, Greg and Todd Kreider, trading and doing business as Shirk Enterprises, by and through their counsel, Stevens & Lee, and file the within Answer to the Petition to Strike Off and/or Open Judgment and New Matter as follows: Admitted. Admitted. Admitted. ANSWER TO PETITION TO STRIKE OFF AND/OR OPEN JUDGMENT 4. Admitted. 5. Denied. It is specifically denied that Petitioners were never sent notice of the acceleration and demand for payment as required by the Judgment Note. To the contrary, proper notice of default and demand for payment of the entire remaining balance of the Judgment Note was delivered upon the Petitioners on October 10, 1997 by first class mail at 803 Cocklin Street, Mechanicsburg, Pennsylvania 17055. By way of further response, SL110048v1/00000.000 WC U r: t. r CC S' f: LL U "' r_ Cl rn U Petitioners were sent subsequent written demands for payment and have had actual notice of their default and obligation to repay the accelerated balance of the Note for the past two years. $gg A true and correct copy of the Notice attached hereto as Exhibit "A." 6. Denied. It is specifically denied that the Judgment by Confession entered against the Petitioners is void. To the contrary, as evidenced by the Notice attached hereto as Exhibit "A," proper notice was sent and received by the Petitioners. Petitioners, therefore, had actual knowledge of the Respondents' demand for payment. By way of further response, entry of judgment against the Petitioners pursuant to the Judgment Note was properly made and without error. Furthermore, Petitioners specifically waived "inquisition and condemnation of any property that may be levied upon by virtue of any execution which may issue forthwith upon such confession ofjudgment, and further waives all errors in said proceedings, together with stay of or exemption from execution or extension of time of payment which may be given by any statute now in force or which may be enacted hereafter, or by any usage or custom." Seepage 2 of the Judgment Note attached hereto as Exhibit "B." WHEREFORE, Respondents respectfully request this Honorable Court deny Petitioners' Request to Strike and/or Open the Judgment entered against them and further request that the stay of proceedings previously Ordered be lifted. ANSWER TO PETITION TO OPEN JUDGMENT Claim 1 - Fraud Respondents hereby incorporate by reference the averments set forth in paragraphs 1 through 6 of the foregoing Answer as if set forth fully herein. S L 1160480/00000.000 Denied. Respondents made no such knowingly false misrepresentations prior to entering into the Agreement of Sale. By way of further response, the Agreement of Sale sets forth the full and complete agreement between the parties. The Agreement of Sale, being a writing, speaks for itself and any mischaracterization on the part of the Petitioners is specifically denied. (a) Denied. It is specifically denied that Respondents falsely represented that Petitioners would have access to and use of all current suppliers of inventory. To the contrary, Respondents specifically DID NOT agree to this provision in the Agreement of Sale. As evidenced in Section 29(h) of the Agreement of Sale, Respondents specifically lined out the provision that guaranteed current trade line brands would continue to be supplied to the Petitioners. This deletion was agreed to and attested to by all of the parties. See Section 29(h) of the Agreement of Sale attached hereto as Exhibit "C." By way of further response, Respondents rightfully chose not to agree to this provision because it would have improperly bound the activities of third party vendors not party to this contract. (b) Denied. It is specifically denied that Respondents made false representations with respect to the mailing list of all customers and potential customers in the greater Harrisburg area. Respondents did, in fact, provide a current and accurate mailing list of all of their Harrisburg customers. The computer system included in the assets of the business contained the current names and addresses of all of the Respondents' customers in the Harrisburg area. Petitioners only had to utilize the mailing list software in order to access this information. Respondents cannot fathom why Petitioners chose not to utilize this tool. sLI 16048viro0000.000 (c) Denied. It is specifically denied that Respondents made false representations with respect to tools included in the sale. Respondents, in fact, supplied all the tools provided for in the Agreement of Sale. Petitioners went through the shop at the time of closing and approved the tool inventory. (d) Denied. It is specifically denied that Respondents made false representations with respect to the ski tuner machine. The ski tuner in question was, in fact, overhauled and a new motor installed in 1994. (e) Denied. It is specifically denied that the Respondents made any false representations with respect to assets included in the sale. By way of further response, Respondents deny that any such assets were in fact encumbered by them at any time relevant to this sale. 8. (a) Denied. It is specifically denied that Respondents had a "poor credit history" with the suppliers at either their Camp Hill or Lancaster locations which negatively impacted the Petitioners. To the contrary, Respondents had, and continue to have a successful, long-standing business relationship with all of their vendors in their remaining store. Respondents are not required to pay COD for supplies. By way of further response, Respondents' credit standing with its vendors has no bearing on the Petitioners' ability to procure credit with the same vendors. All of Respondents' current vendors were notified of the sale of the shop to the Petitioners. It was then up to the Petitioners to apply for credit and/or establish credit with these vendors. This was made clear to the Petitioners at the time of sale. Again, Respondent could not legally, and did not, assure that Petitioners would be extended credit by a third party vendor not subject to the Agreement of Sale. sW 1604M uoo00o.GM 4 8. (b) Denied. Respondents incorporate their responses to paragraph 7(b) of the foregoing as if set forth fully herein. By way of further response, it is denied that the mailing list was outdated. To the contrary, the list had been updated just prior to the closing date. 8. (c) Denied. It is specifically denied that the tools sold to the Petitioners were of inferior quality or damaged. Petitioners inspected the tools subject to the Agreement of Sale and knew what they were purchasing. It is likewise specifically denied that the tools referenced in the Agreement of Sale were not the Respondents to sell. By way of further response, Respondents have no knowledge or information relating to the removal of tools from Petitioners' premises. Therefore, these allegations are denied and strict proof thereof is demanded at trial. 8. (d) Denied. Respondents incorporate their response to paragraph 7(d) as if set forth fully herein. 8. (d) The "lease program" referenced in this paragraph was, in fact, a sales program for growing junior skiers. This promotion was explained to the Petitioners prior to the sale. The program in no way encumbered or bound the Petitioners to rebate any money. By way of further response, Petitioners did not continue this program in their store and did not pay a cash return to anyone and therefore were not damaged. Participants in the program came to the Respondents' Lancaster store to continue the program after being turned away by the Petitioners. Had the Petitioners continued this program, they would have realized a profit from it and a continuous stream of return business. 5 SLI 160480/00000.000 9. Denied. It is specifically denied that Respondents misrepresented the condition of their business by overstating its value and providing incorrect sales figures. To the contrary, Petitioners were supplied with all of the Respondents' corporate financial statements and tax returns prior to entering into the Agreement of Sale. These financial statements and tax returns were prepared by and attested to by the Respondents' accounting firm. By way of further response, Petitioners were invited to, and did, inspect the source documents underlying those financial statements such as invoices and accounts receivable ledgers. 10. Denied. The office equipment was not misrepresented as alleged. By way of further response, Respondents are unclear as to what "equipment" was allegedly "exchanged" and therefore cannot reasonably respond to this averment. The allegations contained in this paragraph are therefore denied and strict proof is demanded at trial. 11. Denied. It is specifically denied that Respondents misrepresented the nature and condition of the bar coding system. To the contrary, Petitioners were informed as to what they needed to do to utilize the bar coding system. 12. Denied. It is specifically denied that the skis and poles that were to be made available for rental were not so available. By way of further response, 100 sets of rental skis were provided and accounted for prior to the sale. Petitioners inspected and accounted for this equipment personally. 13. Denied. It is specifically denied that Respondents made any material misrepresentations. By way of further response, Respondents had no such knowledge. 6 S L 1160490100000.000 14. Denied. It is specifically denied that Respondents made any material misrepresentations. By way of further response, the remaining averments in this paragraph constitute conclusions of law to which no response is required. 15. Denied. It is specifically denied that Respondents made any material misrepresentations. By way of further response, the remaining averments in this paragraph constitute conclusions of law to which no response is required. WHEREFORE, Respondents respectfully request this Honorable Court deny Petitioners' Request to Strike and/or Open the Judgment entered against them and further request that the stay of proceedings previously Ordered be lifted. Claim 2 - Neeli¢ent Misrenresentation 16. Respondents incorporate herein by reference paragraphs 1 through 15 of the foregoing as if set forth fully herein. 17. Denied. The averments in this paragraph constitute conclusions of law to which no response is required. To the extent that a response is required, it is specifically denied that Respondents made false representations to the Petitioners. By way of further response, Respondents had no such knowledge. 18. Denied. It is specifically denied that Respondents made any material misrepresentations. By way of further response, the remaining averments in this paragraph constitute conclusions of law to which no response is required. WHEREFORE, Respondents respectfully request this Honorable Court deny Petitioners' Request to Strike and/or Open the Judgment entered against them and further request that the stay of proceedings previously Ordered be lifted. 7 S I. 11604 8 v I /00000.000 Claim 3 - Breach or Contract 19. Respondents incorporate herein by reference paragraphs I through IS of the foregoing as if set forth fully herein. 20. Denied. The Agreement of Sale, being a writing, speaks for itself. Therefore, Respondents will rely on the terms of the Agreement itself and not Petitioners' characterization of them. Any mischaracterization on the part of the Petitioners is specifically denied. 21. Denied. Respondents fully performed their obligations under the Agreement of Sale. The remaining averments in this paragraph constitute conclusions of law to which no response is required. WHEREFORE, Respondents respectfully request this Honorable Court deny Petitioners' Request to Strike and/or Open the Judgment entered against them and further request that the stay of proceedings previously Ordered be lifted. Claim 4 - Breach of the Covenant of Good Faith and Fair Dealin 22. Respondents incorporate herein by reference paragraphs 1 through 21 of the foregoing as if set forth fully herein. 23. The averments contained in paragraph 23 are conclusions of law to which no response is required. To the extent a response is required, Respondents at all times acted in good faith. 24. The averments in paragraph 24 are conclusions of law to which no response is required. To the extent a response is required, Respondents fully performed under this Agreement of Sale. SLI 10048v1/00000.000 8 WHEREFORE, Respondents respectfully request this Honorable Court deny Petitioners' Request to Strike and/or Open the Judgment entered against them and further request that the stay of proceedings previously Ordered be lifted. Claim 5 - Affirmative Defenses 25. Respondents incorporate herein by reference paragraphs I through 24 of the foregoing as if set forth fully herein. 26. - 28. The averments contained in paragraphs 26 through 28 constitute conclusions of law to which no response is required. WHEREFORE, Respondents respectfully request this Honorable Court deny Petitioners' Request to Strike and/or Open the Judgment entered against them and further request that the stay of proceedings previously Ordered be lifted. NEW MATTER 29. Respondents at all times acted with good faith and fair dealing in connection to the Agreement of Sale herein at issue. 30. Respondents fully performed under the Agreement of Sale. 31. At no time prior to their default, did the Petitioners ever mention that they had a problem with the Respondents performance under the Agreement of Sale. 32. Respondents believe and therefore aver that this Petition and the allegations made herein are an attempt by the Petitioners to wrongfully avoid a promise of payment and financial obligation they made with the Respondents. 33. Petitioners purchased substantial inventory from the Respondents during the early months of their ownership of the Camp Hill store. 9 SLI 160480/000D0,000 34. To date, Petitioners still owe Respondents in the amount of $2,365.64 for inventory that they ordered and received but did not pay for. 35. During 1997, Petitioners were in arrears in excess of $35,000.00 to their landlord for back rent. 36. Petitioners have a history of not paying financial obligations. 37. The Petition to Strike and/or Open Judgment fails to state a claim upon which relief can be granted. 38. No act on the part of the Respondents caused any damage to the Petitioners. Dated: November 1, 1999 STEVENS & LEE By-? Danielle S. Dinsmo Attomey I.D. No. 76457 One Penn Square P.O. Box 1594 Lancaster, Pennsylvania 17608-1594 (717) 291-1031 Attomeys for Greg and Todd Kreider 10 S L 116048v I /00000.000 VERIFJCA-L I, TODD KREMER, verify that f am the Plaintiff in the within action; that the attached Answer To Petition To Strike Off And/Or Open Judgment is based upon the facts of which I have personal kno%Nledge or information furnished to me by counsel, that the language of the document is that of counsel and not my wxn, and that the facts set forth in the foregoing document are true and cvrrect to the best of my knowledge, information and belief. I understand that the strenrent, herein are made subject to the penalties of S Pa. C.S.A. §4904 relating to utstk'onr falsification to authorities Date. October I,-)9c; 11 16/2659. SLi 160430,00M 000 r VERfPIC:?TI()N 1, GREG KREMER, verify that I am the Plaintiff in the within action; that the attached Ansurr'fo Pe nion'fo Strike Off And/or Opel, Judgment is based upon the facts of which I have personal knowledge or information furnished to me by counsel; that the language of the document is that of counsel and not lily oivn, and that the facts set forth in the foregoing document are title and correct to the best of my knowledge. information and belief. I understand that the statements herein are made subject to the penalties of 18 Pa C S A. §4904 relating to unswotn Falsification, to authorities ? // Date. Oc,obe 009 l0 Z7:y9.'SLl 16049910f,Mn ON) 12 CERTIFICATE OF SERVICE I, DANIELLE S. DINSMORE, ESQUIRE, certify that on this date, I served a certified true and correct copy of the foregoing Answer To Petition To Strike OfI'And/Or Open Judgment upon the following counsel of record, by depositing the same in the United States mail, postage prepaid, addressed as follows: Charles R. Gerow, Esquire 5115 East Trindle Road Mechanicsburg, PA 17055 Date: November 1, 1999 SL116048v1/00000.000 Danielle S. Dins re 13 KLUXEN & NEWCOMER ATTORNEYS AT LAW 339 North Duke Street P. 0. Box 539 Lancaster, Pennsylvania 17808-0539 Melvin E. Newcomer Stephanie L Michel-S"nor David S.10uxen, Jr. October 10, 1997 (1977-1993) David R. Gonder, Lee K. Gonder Gonder, Inc. 803 Cocklin Street Mechanicsburg, PA 17055 Re: Shirk Enterprises, Inc. Unpaid Judgment Note Dear Messrs. Gonder: Telephone No. (717)393-7885 Fax No. (717) 393-0382 Our firm represents Shirk Enterprises, Inc., the lender under a Judgment Note dated November 14, 1995, entered into by Gonder, Inc., and the two of you. My client informs me that you have failed to make the required monthly payments for August and September, 1997. Pursuant to the terms of the note, this letter will serve as notice that the entire unpaid balance of the Judgment Note is accelerated and demand is made for payment in full. Failure to make payment in full will result in the initiation of further legal action against you. Having received this notice, I trust that you will make arrangements to pay the entire unpaid balance immediately. I look forward to hearing from you in that regard. Very truly yours, MELVIN E. NEWCOMER MEN : pam cc: Greg Kreider '=a COPY FOR YOUR INFORMATION ® m».» iimv mcaecu trvn N{Yy'1N , !Ac. _- 1 1. 1. $ 60,000.00 November 14, 1995 Camp Hill, Pennsylvania JUDGMENT NOTE FOR VALUE RECEIVED, the Undersigned, GONDER, INC., DAVID R. GONDER and LEE R. GONDER, (hereinafter collectively referred to as "Borrower") do promise to pay to SHIRR ENTERPRISES, INC. (hereinafter referred to as "LENDER") the sum of Sixty Thousand and 00/100 ($60,000.00) Dollars, together with interest on the unpaid principal balance at the rate of nine (9%) percent per annum. All principal and interest shall be repaid in thirty-six (36) equal monthly installments of One Thousand Nine Hundred Seven and 99/100 ($1,907.99) Dollars, applied first to interest and the remainder to reduction to principal, with the first payment being due on December 14, 1995, and subsequent payments being due on the 14th day of each month thereafter until paid in full; provided, however, that all principal and interest, if not sooner paid, shall be due and payable in full on November 14, 1998. In the event that any payment shall not be paid within fifteen (15) days of the due date, a late payment fee of five (5S) percent of the monthly principal and interest payment shall be due and payable from. BORROWER. Further, in the event that any payment shall remain unpaid for a period in excess of thirty (30) days, LENDER, at its sole option, shall have the right to accelerate the entire indebtedness due and demand payment in full. Said acceleration and demand for payment in full shall be in writing forwarded to BORROWER by hand-delivery or first class mail at 803 Cocklmn. DRGT Street, Mechanicsburg, Pennsylvania 17055. All payments of ?-Y4 principal and interest from BORROWER to LENDER shall be paid to LENDER at 830 Flory Mill Road, Lancaster, Pennsylvania 17601 or at such other address as Lender may provide to BORROWER in writing. BORROWER shall have the right to prepay in whole or in part at any time without penalty. BORROWER hereby empowers the Prothonotary or any attorney of anv Court of record within the United States or elsewhere to .aopear for BORROWER and, with or without declaration, enter judgment acainst BORROWER in favor of Lender, together with costs of suit and reasonable counsel fees in an amount equal to five, (53) percent of the amount due. TO THE EXTENT permitted by applicable law, BORROWER hereby waives inquisition and condemnation of any property that may be levied upon by virtue of anv execution which may issue forthwith upon such confession of judgment, and further waives all errors in said proceedings, together with stay of or exemption from execution or extension of time of payment which may be given by any statute now in force or which may be enacted hereafter, or by any usage or custom. No single exercise of the foregoing warrant shall be deemed to exhaust the power to confess judgment granted herein, whether or not any such exercise shall be held by any court to be invalid, void or voidable, but the power shall continue undiminished and may be exercised from time to time as often as LENDER shall elect until all sums payable or that may become payable by BORROWER pursuant hereto shall have been paid in full. A copy hereof may be entered in lieu of the original. PRESENTMENT for payment, demand, notice of dishonor, protest and notice of protest are hereby waived by BORROWER and all endorsers hereof. This Note shall be construed and enforced in accordance with the laws of the Commonwealth of Pennsylvania. WITNESS our hands and seals the day and year first above written. GONDER, INC. BY: L-mil/ 9G.d- (SEAL) (SEAL) DAVID R. GONDER L..,... K G.L. (SEAL) LEE K. GONDER V" Exhibk C ® mw:m ,iw3 my>new ron anwm i ASSET PURCHASE AGREEMENT THIS AGREEMENT, dated as of the /y'w day of November, 1995, by and between shirk Enterprises. Inc.. A Pennsylvania corporation (hereinafter referred to as "Seller"), and Gonder. Inc.. a Pennsvlvania corporation (hereinafter referred to as "Buyer"). WHEREAS, Seller owns and operates a bicycle and ski sales, rental and repair business, which Business has a retail outlet located at the Cedar Cliff Mall in Camp Hill, Cumberland County, Pennsylvania; (hereinafter "Business" or "the Business") and WHEREAS, Seller desires to sell and Buyer desires to purchase the assets of the Business as specified herein in accordance with the terms and conditions of this Agreement; and WHEREAS, Seller is the lessee of record attached hereto and made a part hereof and marked as Exhibit "A", notwithstanding the fact that the language of the lease sets forth "Era Ski and Bicycle Shop, Inc" (sic) as lessee. WHEREAS, Seller desires to assign and Buyer desires to have assigned to them the above-described lease for said retail outlet in accordance with the terms of this Agreement. NOW, THEREFORE, in consideration of the mutual promises herein contained and the payments hereinafter provided, the parties hereto agree as follows: 1. 2&E = PURCHASE U ASSETS. At the Closing hereinafter provided for, Seller shall sell, transfer and assign to Buyer, and Buyer shall purchase all of Seller's right, title and interest in and to all of the assets of the Business (hereinafter referred to as the "Assets"), located at Cedar Cliff Mall, Camp Hill, Cumberland County, Pennsylvania, including the personal property described hereinbelow, free and clear of all liens and encumbrances, all as adjusted for changes occurring in the ordinary course of business as permitted hereunder between the date hereof and the date of Closing, which assets include: a. All property and assets of the Business of every kind and description wherever located, including claims, rights and choses in action, whether choate or inchoate, licenses, trademarks, technology, and including but not limited to the inventory, furniture, fixtures, equipment and vehicles and assets described generally in the attached Exhibit "B"; b. All rights under Seller's written contracts relating to the Business, ?.h Da wW c. All customer files, lists and records of the Business; d. Such other assets, tangible or intangible, including contract rights, agreements, insurance policies and licenses, oral or written, relating to the Business; and e. The business telephone number, mailing address and all advertising for the Business. 2. PURCHASE PRICE. As full consideration for the Assets of Seller, Buyer shall pay to Seller a purchase price of One Hundred Thirty Five Thousand ($135,000.00) DOLLARS (the "purchase price"). The purchase price specified herein shall be paid as follows: a. Seventy Five Thousand ($75,000.00) DOLLARS to be paid at closing, in cash or by cashier or certified check; b. Sixty Thousand ($60,000.00) DOLLARS to be paid by Buyers to Seller in Thirty Six equal payments at Nine Percent (9%) per annum interest beginning one calendar month after the Closing of this Agreement. c. The purchase price shall be allocated as follows: Fixtures and Equipment: Twenty Five Thousand ($25,000.00) DOLLARS Lease, location, customer base, vendors, business volume, and use of name: Fifty Thousand ($50,000.00) DOLLARS Inventory: Fifty Thousand ($50,000.00) DOLLARS based upon $66,666.67 @ .75 per dollar. 100 pairs of rental ski packages (skis, boots, bindings, poles, etc.): Ten Thousand ($10,000.00) DOLLARS. !*Mh%ed Ze, 99F at the signing ef- this I any ; Sys EYl 1'G°. yLueluWal 3. SECURITY. As partial security for the indebtedness to Seller set forth in Paragraph 2.b, of the Purchase and Sale Agreement of even date herewith, Buyer shall execute and deliver a personal guarantee note by Lee and David Gonder securing all assets listed in Exhibit "B" Seller agrees that all security interests granted to Seller herein shall be subordinate to the security interests granted to any third party lender by Buyer. 4. LIADZLIII. Buyer is assuming no liabilities of Seller. °"''' Gwlea *e . In the event Buyer shall be required to make any payment on account of liabilities incurred by Seller, Seller agrees to indemnify and hold harmless Buyer and to accept an amount equal to the next monthly installment payment due under the Note of this Agreement less the amount of payment made by Buyer as full satisfaction for the regular monthly payment. O h date transaction shall beonorbefore o November 114, 1995, of this time being of the essence, or on such other date mutually agreed to by the parties in writing, at which time title and possession of the Assets shall be transferred, conveyed and delivered to Buyer. The Closing (hereinafter referred to as the "Closing") shall be at Farmers Bank and Trust Carlisle Office, or such other location as the parties may mutually agree. 6. BUYER-LE CONDITIONS 9E C O IN The obligations of Buyer hereunder to purchase the Assets and close hereunder shall be subject to the satisfaction of the conditions set forth in Subparagraphs a. through J. as follows: a. The buyer shall have received from Melvin Newcomer, Esquire, counsel for the Seller, a favorable opinion dated as of the Closing date, in form and substance satisfactory to Buyer and its counsel, Charles R.Gerow, Esq., to the effect that, to the best of their knowledge, and without special investigation: Seller organized validly existing corporation in good standing under the laws of the State of Pennsylvania. (ii) Seller has the corporate power to carry on its business as and where such business is now being conducted. 0• Y? (iii) No provisions of the Articles of Incorporation or By-laws of the Seller or, to the best of such counsel's knowledge, no provision of any contract, agreement or other instrument to which it is a party prevent Seller from delivering good title to the Assets to the Buyer in the manner contemplated hereby or otherwise prohibit or would be breached by the consummation of the transactions contemplated herein. (iv) Seller has full power, legal right and authority to enter into, execute and deliver this Agreement, and to consummate the transactions contemplated herein; and this Agreement has been duly executed and delivered by the Seller and is a valid and legally binding obligation of each of them, enforceable in accordance with its terms except as its validity and enforceability may be limited by bankruptcy, insolvency or similar laws of general application affecting the enforcement of creditors' rights generally. b. No action or proceeding shall have been instituted before any court, agency or other governmental body to restrain or prohibit the transactions contemplated hereby. C. The representations and warranties of the Seller contained in this Agreement shall be true and correct in all respects as of the Closing Date, with the same effect as though such representations and warranties had been made on such date. All of the covenants and agreements of the Seller to be performed on or before the Closing Date pursuant to the terms hereof, shall have been duly performed. d. All proceedings to be taken in connection with the transactions contemplated by this Agreement and all documents incident thereto shall be reasonably satisfactory in form and substance to the Buyer and their counsel, and the Buyer shall have received copies of all of such documents and other evidence as the Buyer and their counsel may reasonably request in order to establish the consummation of such transactions. e. There shall have been no material adverse change or damage to the premises, the assets, or the business of the Seller. f. The Seller shall have delivered to the Buyer and the Corporation all the documents that they are required to deliver hereunder. g. To the extent such approval or consent is available or obtainable prior to Closing, Buyer shall have obtained the approval or consent of such government agencies or bodies, as Buyer shall deem reasonably necessary in connection with the consummation of the purchase. h. Buyer shall have obtained financing commitments on or before Closing in an amount of One Hundred Sixty Thousand ($160, 000. )DOLLARS from third party lenders, at a rate not to exceed 10.5% interest per annum for the first three years and under other terms and conditions reasonably acceptable to Buyer. 0. Mj{Vyt? L{s1?4w?s.? fi D& de-li"Lmed to the Buyer .?i. Seller1shall have the mµ-4 executed Agreement Not to Compete in the form attached hereto as Exhibit I'D. J. This Purchase and Sale Agreement shall be executed at the time of Closing, unless Closing is delayed beyond November 14, 1995 in which case it shall be executed as of November 14, 1995. 6. REPRESENTATIONS AND WARRANTIES OF SELLER Seller hereby represents and warrants the following to be true on the date of this Agreement and as of the Date of Closing: a. The Seller owns the Assets and property free and clear of all claims, liens, mortgages, security interests, encumbrances, claims and demands of any nature. b. Shirk Enterprises, Inc. is a corporation duly existing, qualified and in good standing under the laws of the State of Pennsylvania, and is and shall be duly empowered to execute this Agreement and to do any and all things required or desirable for consummation of all transactions contemplated thereby. C. The execution and performance of this Agreement and the documents necessary to close have been and will be duly authorized by all prerequisite corporate proceedings by Seller, including the approval of Seller's Board of Directors and stockholders and, when so delivered, constitute a legal and binding obligation. Seller is not bound by or subject to any contractual or other obligation that would be violated by Seller's execution or performance of this Agreement. d. Execution and delivery of this Agreement and consummation of the transactions contemplated hereby do not conflict with or result in a breach of any of the terms, provisions, or conditions of Seller's Certificate of Incorporation , By-laws, or any statute, regulation, or court or administrative order or process applicable or any agreement, lease, or other agreement or instrument to which Seller is a party, or by which it is bound, nor does execution of this Agreement and consummation of the transaction contemplated hereby constitute a default thereunder, Buyer and each shareholder of Buyer acknowledge that each representation of Seller is made to the best of Seller's actual knowledge. e. The Assets shall be operated and maintained in accordance with Seller's normal operating standards until the Closing except reasonable wear and tear incurred in the normal course of Seller's Business is permitted. f. Seller shall not sell, dispose of, transfer or encumber any of the Assets after the execution of this Agreement except in the regular course of its business and with the express approval of Buyer. h. There are no employment contracts, union contracts, pension, profit sharing or retirement plans, agreements or obligations for the benefit of any employee or other person relating to the Business. i. The execution of this Agreement between the parties constitutes a legal and binding obligation and is not a violation of any other agreement, and there is no voluntary agreement between the Seller and any other party for the sale of any of the Assets to be sold under this Agreement. j. Seller believes the Exhibits to this Agreement set forth are true, complete and accurate information describing the matter set forth therein. k. Seller has furnished to Buyer its financial statements for the years ended 1992 and 1993, 1994 respectively. There are no liabilities of Seller, contingent or otherwise, including, without limitation, any tax liability of any nature whatsoever, which are not disclosed by or reflected fully in such financial statements or disclosed in a schedule provided to Seller by Buyer. Seller has duly filed all federal, state, county, and city income tax returns and other tax returns of every kind and description, and there are presently no claims for tax deficiencies pending against Seller by any taxing authority, nor does Seller know of any basis for the making of any claim by any taxing authority for any tax deficiency against Seller. Seller further warrants and represents that all of its tax returns have been filed when due and in accordance with generally accepted accounting principles and that it has disclosed all material facts regarding its business to Buyer. The federal income tax returns of Seller have been audited for the years set forth on a schedule provided by Seller to Buyer. 1. Since the date of its most recent financial statement referred to in section k. hereof, except as disclosed in this Agreement, Seller has not: (i) Entered into any transaction out of the ordinary course of business; (ii) Had any change in its financial condition, assets, business or its customer list, other than changes in the ordinary course of business, none of which changes in the ordinary course of business has been materially adverse. (iii) Suffered any fire, riot, explosion, earthquake, windstorm, strike or other labor trouble, lockout, flood, act of God, or of the public enemy, casualty, condemnation, confiscation, requisition, embargo, activity of the Armed Forces of the United States, revocation of license or right to do business, cancellation or modification of contracts by governmental authority, government regulation or order restricting the operation of its business, cancellation or modification of any franchise, right, contract, license or agreement or any other event which has materially and adversely affected its business, operations, property or assets; (iv) Had any material change in the accounting principles and practices theretofore followed by Seller; or (v) Entered into any sale or transfer of any of the Purchased Assets, except in the ordinary course of business, and deposition of any of its intangible assets. M. The inventories set forth on the Balance Sheet are properly valued, in accordance with generally accepted accounting principles (FIFO). Except for obsolete items which have been fully written off, inventories consist of items of quality and quantity currently usable and saleable in the ordinary course of business. Seller holds no materials on consignment and has title to no materials in the possession of others. n. No purchase commitment for materials, supplies, component parts or other items of inventory to which Seller is a party, is in excess of normal, ordinary, usual and current requirements of its business or at a price in excess of the current reasonable market price. To the best of Seller's knowledge each of the contracts and agreements to which Seller is a party is a valid and binding obligation to the parties thereto in accordance with its terms and conditions. To the best of Seller's knowledge, no party 'to any such contract or agreement is in default with respect to any term or condition thereof, nor has any event occurred which, through the passage of time or the giving of notice, or both, would constitute a default thereunder or would cause the acceleration of any obligation of any party thereto or the creation of a lien or encumbrance upon any asset of Seller being transferred hereunder. o. Seller is not in default under or in violation of, any applicable statute, law, ordinance, decree, order, rule, regulation of any governmental body, or in default under, or in violation of, any provision of its articles of incorporation, by-laws, any promissory note, indenture or any evidence of indebtedness or security therefor, lease, contract, purchase or other commitment or any other agreement to which Seller is a party or by which Seller is bound which may result in any adverse effect on the business or condition, financial or otherwise, of Seller. p. There is no suit, claim, action or proceedings now pending or threatened before any court, administrative or regulatory body, or any governmental agency, nor is Seller aware of any grounds therefor, to which Seller is a party or which may result in any judgement, order, decree, liability, or other determination which will, or could have any material adverse effect upon the business or conditions, financial or otherwise, of Seller. No such judgment, order or decree has been entered against Seller nor any such liability incurred which has, or could have, such effect. There is no claim, action or proceeding now pending or threatened before any court, administrative or regulatory body, or any governmental agency, which will, or could prevent or hamper the consummation of the transactions contemplated by this Agreement. q, on information and belief, no representation or warranty by Seller, or in any certificate, exhibit, schedule or other document furnished or to be furnished by Seller pursuant thereto, contains or will contain any untrue statement of a material or omits or will omit to state a material fact necessary to make the statements contained therein not misleading. r. Seller shall indemnify and hold Buyer harmless from any claim or liability that Buyer may be subject to as a result of the failure of either party hereto to comply with any laws pertaining to the transfer of assets in bulk, including the Pennsylvania Bulk Sales Act, as more specifically set forth in paragraphs 10 and 16. 8. REPRESENTATIONS AND wARRANTIES of BUYER. Buyer makes the following representations and warranties to Seller as an inducement to enter into and consummate this Agreement as contemplated herein: a. Buyer has entered into no contract that will interfere with Buyer's ability to consummate this transaction as contemplated herein. b. There is no litigation, proceeding or governmental investigation pending or, so far as known to Buyer, threatened, against or relating to Buyer or Buyer's business or the transaction contemplated by this Agreement , nor is there any basis known to Buyer for such action. C. No representation or warranty by Buyer in this Agreement or any statement of certificate furnished or to be furnished to Seller pursuant hereto or in connection with the transactions contemplated hereby contains or will contain any untrue statement of material fact or omits or will omit any material fact. 9. REPRESENTATION TD SURVIVE CLOSING. All of the representations and warranties contained herein (including all statements contained in any exhibit or certificate or other instrument delivered by or on behalf of Seller pursuant to this Agreement or in connection with the transactions contemplated by it) are a material part of the consideration of the sale of the Assets and the inducement for Buyer to buy the Assets and Seller to sell the Assets. For the purposes of each representation and warranty contained herein, Seller and Buyer are materially relying upon the representations of each other. 10. INDEMNITY. Seller agrees to indemnify and hold harmless the Buyer from and against all claims, liabilities, losses, costs, damages, and expenses arising out of, or sustained by the Buyer or the Corporation by reason of: a. The imposition of transferee liability pursuant to laws relating to sales in bulk. b. Any breech of any representation, warranty or covenant of the Seller contained herein or in any agreement, certificate, document, schedule or exhibit relating to or delivered pursuant hereto. The Buyer shall, subsequent to Closing, indemnify, defend and hold Seller harmless from any and all claims, debts, demands, judgements, actions or causes of action asserted against Seller, which accrue subsequent to Closing and which relate to Buyer's operation of the business after Closing lnewottei Rey aortal of atk., ortttA? e44 of }hr, lauft dtjfty..r u4h (?. Heerrt4.4 P.w•WU LW4.4 P404.4.s1i,. 11. AGREEMENT = = COMPETE. Seller and Buyer agree tKU to enter into an Agreement Not to Compete under terms and conditions identical to those set forth in Exhibit "Die attached hereto. 12. OPERATION PENDING CLOSING. During the period from the date hereof to the Date of Closing: a. Seller shall: (i) Conduct the Business according to the ordinary and usual course and use Seller's best efforts to maintain and preserve the organization of the Business, its employees and relationships with suppliers, customers and others; and (ii) Inform Buyer in writing from time to time of the development of any material matters relating to the business, including, without limitation, any adverse changes in results of operations or financial position of the Business or any litigation, proceeding or government investigation instituted or threatened against Seller relating to the Business or the occurrence of any factor which might give rise to any litigation, proceeding or investigation as aforesaid. b. Seller shall not, without the prior written consent of Buyer: (i) Mortgage, pledge or subject to lien, security interests or other obligations or encumbrance any of the property or Assets; (ii) Sell or otherwise transfer any of the Assets other than the sale of inventory in the ordinary course; (iii) Enter into any contract or agreement relating to the business not in the usual ordinary course or terminate or make any material change in any such contracts; or (iv) Increase or agree to increase in any manner the compensation of any of the employees of the Business or commit the Business to any pension, retirement or profit sharing plan or agreement or employment agreement with or for the benefit of any employee or other person. C. Seller shall afford the Buyer and its counsel, auditors and authorized representatives full access to all personnel, properties, records and documents of the Business and shall furnish such financial and other information with respect to the Business, its personnel and property as Buyer may reasonably require. d. Except as otherwise provided in this Agreement, all revenues, profits, losses and liabilities resulting from the ownership or operation of Seller's Business and the Assets before the Date of Closing shall accrue to and be the responsibility of Seller. All revenues, profit, losses and liabilities resulting from the ownership or operation of the Assets after the Date of Closing shall accrue to and be the responsibility of Buyer. Seller shall keep the Assets adequately insured against fire and casualty until the Date of Closing. If any part of the Assets is damaged or destroyed by fire or casualty before the Date of Closing, such Assets shall be replaced or repaired at the Seller's expense. If it is impossible or impractical to repair or replace such Assets before the Date of Closing, the purchase price shall be reduced by the amount of the loss resulting from the fire or casualty, unless the value of such damaged or destroyed Assets exceeds FIFTY THOUSAND ($50,000) DOLLARS, in which case, at Buyer's option, this Agreement may be terminated and all deposits returned in full to Buyer. Prior to Closing, all risk of loss shall be borne by Seller; after the Date of Closing, all risk of loss shall be borne by Buyer. e. Seller will cause all property owned or leased by it to be insured against all ordinary and insurable risks (except in respect of any leased property where the terms of the lease do not impose on lessee the obligation to maintain insurance) and will operate, maintain and repair all its property in a careful, prudent and efficient manner. f. Each party to the Agreement hereby covenants and agrees to furnish all information and to make all filings required by any statute or governmental regulation. 13. TRANSFER. Simultaneously with the payment on the Date of Closing as specified hereinabove, Seller shall convey by bill of sale absolute, all personal property described in Exhibit "B" to Buyer or by assignment or endorsement of certificate of title, as the case may be, free of all liens, encumbrances, conditions and limitations. 14. TERMINATION. This Agreement may be terminated at any time prior to Closing: a. By mutual consent of the Buyer and the Seller; or b. By the Buyer pursuant to paragraph 12 d. or if any of the conditions of the Buyer's obligation to close have not been met at or before the Closing and have not been waived by the Buyer. 15. DEFAULT. If either party fails to perform under this Agreement, the defaulting party shall refund any money paid to the defaulting party by the non-defaulting party, and the Agreement shall terminate and the liability of the parties shall cease; or the non-defaulting party may exercise any right it has, including bringing an action for specific performance. 16. ASSIGNMENT 4E LEASE. Seller hereby assigns to Buyer all interests in a lease between Seller and Heartland Properties Limited Partnership together with an addendum thereto for the retail outlet at the Cedar Cliff Mall, Camp Hill, Pennsylvania. Seller specifically represents that they are the lessee of record under the terms of a lease agreement with Heartland Properties Limited Partnership for said premises notwithstanding the fact that the lease document sets forth "Era Ski & Bike Shop, Inc." as the lessee. Seller warrants to Buyer that there is an express agreement between Seller and Heartland Properties Limited Partnership to amend the lease by changing the name of the lessee only. P y 17. RIGHT N C= NAME. As additional consideration for the purchase of assets by Buyer under this Agreement, Seller hereby agrees to allow Buyer to continue to use the tradename "Era Ski and Bike Shop" provided, however, that it be used with some distinguishing name in addition thereto, specifically "Era Ski and Bike Shop-West" or "Era Ski and cr4 Bike Shop-4"-----4-"11 or some other mutually agreed upon desi natioA?"?allowance h ll t i i ff t f g s a or no rema n n e ec t ? more than eighteen (18) months from the date of closing. l 18. CONSULTING AGREEMENT. As additional consideration for the purchase of assets by Buyer under this Agreement, Gregory Kreider and Todd Kreider agree to provide consulting services relating to the operation of the Business to Buyers for a period of two (2) years from the date of Closing. Said consulting services shall be general in nature and shall be provided upon reasonable request of Buyer, Seller making themselves reasonably available to Buyers. 19. WAIVER QE BREACH. No failure of or failure to enforce a breach of this Agreement shall constitute a waiver of any other or subsequent breach. 20. CUMULATIVE REMEDIES. The remedies afforded in this Agreement are cumulative to each other and to all other remedies provided by law. 21. UNENFORCEABILITY 9.E MX PROVISIONS. The unenforceability or invalidity of any provision of this Agreement shall not affect the enforceability and validity of the remainder of this Agreement, which shall continue in full force and effect. 22. NOTICE. Notice required or permitted hereunder shall be in writing and shall be delivered by hand or deposited in the United States mail addressed to the Seller, Shirk Enterprises, Inc., at 830 Flory Nill Road, Lancaster, PA 17601, with a copy to Melvin E. Newcomer, Esq., at P.O. Box 539, Lancaster, PA 17608-0539,and to Buyer, Gonder, Inc., at 803 Cocklin Street, Mechanicsburg, PA 17055, and a copy to Charles R. Gerow, Esq., at 4725 Charles Road, Mechanicsburg, PA. 17055 23. ASSIGNMENT. Except with the express written consent of the other party hereto, this Agreement shall not be assignable or otherwise transferred in whole or in part. This Agreement shall inure to the benefit of and be binding upon the parties and their respective successors and assigns. Notwithstanding the foregoing, Buyer shall have the right to have the real property described in exhibit "A" and the other assets acquired hereunder conveyed to a related third person or entity; provided, however, that any assignment shall not discharge assignor's liability or obligation to any other party to this Agreement, and all assignees shall assume all obligations and liabilities of this Agreement. 24. BROKERAGE. Seller and Buyer represent that there is no broker or agent involved in effecting this transaction. Seller and Buyer hereby agree to indemnify and hold each other harmless for any liability or claim for the payment of any commission, including interest and attorney's fees, arising from the conduct of the other party. These representations are made as a part of the consideration of this transaction. This paragraph shall survive the passage of title and delivery of the deed and other conveyancing documents. 25. HEADINGS. All headings used herein are for convenience and reference only and shall not be deemed to have any substantive effect. 26. ENTIRE AGREEMENT. This Agreement along with the Purchase and Sale Agreement executed by the parties contemporaneously herewith, and the exhibits and documents delivered pursuant hereto, constitute the entire contract between the parties hereto, pertaining to the subject matter hereof, and supersede all prior and contemporaneous agreements, understandings, negotiations, and discussions, whether written or. oral, of the parties; and there are no representations, -warranties, or other agreements between the parties in connection with the subject matter hereof, except as specifically set forth herein or therein. No supplement, modification or waiver of this Agreement shall be binding unless executed in writing by the parties to be bound thereby. A breach of this Agreement shall be deemed to be a breach of the Purchase and Sale Agreement executed contemporaneously herewith, and vice versa. 27. FURTHER INSTRUMENTS AM ACTIONS. Each party shall deliver any further instruments and take any further action that may be reasonably requested by the other in order to carry out the provisions and purposes of this Agreement. 28. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania. 29. SELLER'S CLOSING OBLIGATIONS. At Closing, Seller shall deliver to Buyer the following documents: a. Assignments, Consents, Bills of Sale, Certificates of Title and other documents or instruments of transfer and which shall contain full warranties of title as shall be effective to vest in Buyer all of Seller's right, title and interest in and to all of the Assets being conveyed hereunder, free and clear of all liens, charges, encumbrances, and restrictions; b. All contracts, files, commitments and rights pertaining to seller's Business and other data relating to its operations; C. Certificates of Good Standing for Shirk Enterprises, Inc. d. Resolution of Board of Directors of Shirk Enterprises, Inc., along with a certificate of Incumbency of Directors and officers, authorizing execution, delivery and performance of this Agreement and all documents required for Closing; e. Certified copy of Minutes of Shareholders' meetings of Shirk Enterprises, Inc. authorizing the entry and completion of all transactions hereunder; f. Transfer of all insurance policies, permits, license and use rights of the Business; g. Closing Statement and Opinion of Sellers Counsel; h. 33 C:a and/'or affeLed 23y btftl? • ..i Fi 1i °?osrarr-vYr' by ?n 1 30. BUYER'S CLOSING OBLIGATIONS. At Closing, Buyer shall deliver to seller: a. Payment of the sums due pursuant to this Agreement; b. Execution of all agreements executed by Seller which require Buyer's agreement and execution; C. Execution of Security Agreement and Financing Statements; d. Closing Statement. IN WITNESS WHEREOF, and intending to be legally bound, the undersigned have executed this AGREEMENT as of the date first written above. ATTEST: SELLER: BY: Presiden , irk Enterprises Incorporated ATTEST: BUYER: BY: pawA R ao,-A.0- President, Gonder, Inc. Exhibit Stone grinder: purchased last year with new motor, purchase price: $14,999 Wintersteiger wax machine: purchased in 1994, purchase price: $5,000 Vermont calibrator Mounting vices, jigs, p-tex gun, drills and taps, and all other ski tools Peterson insole machine: purchase price: $800 . Raichle Thermo Flex machine: purchase price: $500 Park double floor stand Park truing stand All bike tools Vi.tansel bike display stands Computer equipment: new in 1994, includes computer, monitor, printer, UPS, modem, and all software including The General Store and barcode system: value $5,000 Telephone system Credit card machine Stereo equipment and TV and VCR, purchased 8 months ago Security system: purchase price $1,800 Anti-shoplift system All counters, four-way racks, cascade racks, track lighting, sunglass displays and other P.O.P. stands Signs: Sign along Route #83 is key and sign on building All fixtures EXHIBIT "C" Seller has provided at closing vendor verifications in writing from the following suppliers: Salomon, Merlin, Marker, Elan, Alpina, Lange/Dynastar, Atomic, Tecnica and Volkl. In addition, Seller has agreed to cooperate with Buyer in continuing to use good faith efforts to secure getting vendor verifications in writing from the following suppliers: The North Face, Fischer/Raichle, Morrow, Lamar, Airwalk, Windell, Swag and Specialized. EXHIBIT "D' Agreement Not To Compete As additional consideration for the purchase identified in this Agreement, Buyer and Seller agree to a reciprocal covenant not to compete. Buyer agrees that for a period of five years from the date of closing, it will not open a retail/wholesale location selling bicycle and/or ski items within Lancaster County. Seller agrees that for a period of five years from the date of closing, it will not open a retail /wholesale location selling bicycle and/or ski items within Dauphin County or in any area within the Commonwealth of Pennsylvania west of the Susquehanna River. The parties agree that in the event of a breach of this provision, the non-breaching party shall be entitled to equitable relief in a court of competent jurisdiction, which equitable relief shall include but not be limited to, a permanent injunction prohibiting the establishment of the location. The equitable relief shall be in addition to any remedies at law available to the parties. fit... K G,,,.L, Buyer and Seller further agree that there have been adjustments to the purchase price set forth in Paragraph 2 of this Agreement as follows: 1) A credit to Sellers of $240 for additional inventory over and above that listed in Paragraph 2(c) of this Agreement, 2) A credit to Sellers of $1294 as proration for rental payments made by Seller for the month of November, 3) A debit to Sellers of $1800 for the Security System listed in Exhibit "B", it being understood and agreed by Buyers that the Security System will be removed from the leased premises at Cedar Cliff Mall. It is understood and agreed that Buyers are entitled to and shall take a $266 credit on the first payment due Sellers under Paragraph 2(b) and the corresponding Note thereto. Sellers agree to have the advertising sign located along Route 83 repaired at their expense within 15 days of closing by a workman whose work is fully guaranteed for a period of at least 90 days. GREG KREIDER and TODD IN THE COURT OF COMMON PLEAS OF Individually and t/d/b/a SHIRK CUMBERLAND COUNTY, PENNSYLVANIA ENTERPRISES, INC., Plaintiffs 99-5504 CIVIL VS. CIVIL ACTION-LAW DAVID R. GONDER and LEE K. GONDER, Individually and t/d/b/a GONDER, INC., Defendants JURY TRIAL DEMANDED IN RE: PETITION TO STRIKE OFF AND/OR OPEN JUDGMENT ORDER AND NOW, this Zo' day of September, 2000, hearing in the above captioned matter is set for Wednesday, November S, 2000, at 9:30 a.m. in Courtroom Number 4, Cumberland County Courthouse, Carlisle, PA. Danielle S. Dinsmore, Esquire For the Plaintiffs Charles R. Gerow, Esquire For the Defendants Arn BY THE COURT, 4 Kevi . Hess, J. oo 0 Gf 'nJ;Y 00 SEP 2 ! „I•i 7: 59 CUW12tnLt- ,iu CUUNTY PENNSYLVANIA GREG KREIDER and TODD Individually and t/d/b/a SHIRK ENTERPRISES, INC., Plaintiffs VS. IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA 99-5504 CIVIL CIVIL ACTION - LAW DAVID R. GONDER and LEE K. GONDER, Individually and t/d/b/a GONDER, INC., Defendants JURY TRIAL DEMANDED IN RE: PETITION TO STRIKE OFF AND/OR OPEN JUDGMENT ORDER AND NOW, this G r? day of November, 2000, at the request of counsel for the parties, hearing in the above captioned matter set for Wednesday, November 8, 2000, is continued to Thursday, December 21, 2000, at 10:30 a.m. in Courtroom Number 4, Cumberland County Courthouse, Carlisle, PA. Danielle S. Dinsmore, Esquire For the Plaintiffs Charles R. Gerow, Esquire For the Defendants :rlm BY THE COURT, 00 hM'.? -u fui 11: 23 Clk6i.:c :v i,G GGUi??IY GREG KREIDER and TODD KREIDER : IN THE COURT OF COMMON PLEAS OF Individually and t/d/b/a SHIRK CUMBERLAND COUNTY, ENTERPRISES, INC., PENNSYLVANIA Plaintiffs VS. DAVID R- GONDER and LEE K. GONDER, Individually and t/d/b/a GONDER, INC., Defendants DOCKET NO. 99-5504 CIVIL ACTION - LAW JURY TRIAL DEMANDED PRAECIPE TO WITHDRAW PETITION TO STRIKE OFF AND/OR OPEN JUDGMENT TO THE PROTHONOTARY: Kindly mark the Defendants Petition to Strike Off and/or Open Judgment settled, discontinued and withdrawn with prejudice. DATE:aweL 2vv, 20" BY: 4: CHARLES R. GER ESQUIRE Attorney I.D. No. 32888 4725 Charles Road Mechanicsburg, Pennsylvania 17055 (717 975-3536 Attorney for Defendants N) c) ti s n STEVENS & LEE Danielle S. Dinsmore Attorney I.D. No. 76457 One Penn Square P.O. Box 1594 Lancaster, Pennsylvania 17608-1594 (717) 3996636 Attorney for Greg and Todd Kreider and Shirk Enterprises, Inc. IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW GREG KREIDER and TODD KREIDER, Individuals and t/d/b/a SHIRK ENTERPRISES, INC., Plaintiffs vs. Docket No. 99-5504 DAVID R. GONDER and LEE K. GONDER, :. Individually and t/d/b/a GONDER, INC., Defendants :: JURY TRIAL DEMANDED PRAECIPE TO SATISFY JUDGMENT TO THE PROTHONOTARY: Please mark the Judgment Lien in the amount of $33,360.62, entered against Defendants and in favor of the Plaintiffs, in the above referenced matter as SATISFIED. Dated: ) g 0 STEVENS & LEE By: L-? Danielle S. Dinsmo e Attorney I.D. No. 76457 One Penn Square P.O. Box 1594 Lancaster, Pennsylvania 17608-1594 (717) 399-6636 Attorney for Plaintiffs, Todd and Greg Kreider and Shirk Enterprises, Inc. 11/03l00/SU 114030vl/99999.854 CERTIFICATE OF SERVICE I, DANIELLE S. DINSMORE, ESQUIRE, certify that on this date, I served a certified true and correct copy of the foregoing PRAECIPE TO SATISFY JUDGMENT upon the following counsel of record, by depositing the salve in the United States mail, postage prepaid, addressed as follows: Charles R. Gerow, Esquire 5115 East Trindle Road Mechanicsburg, Pennsylvania 17055 VL4Dism ? Danielle Se, Esquire l Date: 11 I g t o I 11/02/00/SLI 114030v1/99999.954 co s N l? v `' 4 CDE v o V