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HomeMy WebLinkAbout09-05-08 5056041103 REV-1500 Ex(os-o5> PA Department of Revenue OFFICIAL USE ONLY Bureau of Individual Taxes County Code Year File Number PO BOX 280501 INHERITANCE TAX RETURN ~( ~~ U6~ / Harrisburg, PA 17128-0501 RESIDENT DECEDENT 1 ENTER DECEDENT INFORMATION BELOW Social Security Number Date of Death Date of Birth 172-:36-1168 05/13/05 05/31/46 Decedent's Last Name BAKER Suffix Decedent's First Name JAMES (If Applicable) Enter Surviving Spouse's Information Below Spouse's Last Name Suffix BAKER Spouse's :iocial Security Number FILL IN APPROPRIATE BOXES BELOW Spouse's First Name CAROLE THIS RETURN MUST BE FILED IN DUPLICATE WITH THE REGISTER OF WILLS MI R MI D 1. Original Retum ^ 2. Supplemental Return ^ 3. Remainder Retum (date of death prior to 12-13-82) ^ 4. (Limited Estate ^ 4a. Future Interest Compromise (date of ^ 5. Federal Estate Tax Retum Required death after 12-12-82) a 6. Decedent Died Testate ^ 7. Decedent Maintained a Living Trust ~ 8. Total Number of Safe Deposit Boxes (Attach Copy of Will) (Attach Copy of Trust) ^ 9. Litigation Proceeds Received ^ 10. Spousal Poverty Credit (date of death ^ 11. Election to tax under Sec. 9113(A) between 12-31-91 and 1-1-95) (Attach Sch. O) CORRESPONDENT - THIS SECTION MUST BE COMPLETED. ALL CORRESPONDENCE AND CONFIDENTIAL TAX INFORMATION SHOULD BE DIRECTED TO: Name Daytime Telephone Number DAVID A• PHILLIPS, CPA (717) 5011222 -~ o ~ - Firm Name (If Applicable) ~ -` REGISTER, US LY ~~ 3 WAGGONER, FRUTIGER & DAUB, LLP ~_~~, I ~-- , '~~ ~ tai ~ !at ~ ,' t -_~ " - First line of address ! .~` - 5006 E • TRINDLE RD • , SUITE 200 ~~c '~: -~- Second line of address ,i ~ ~ N r~ -~ c" W City or Past Office State ZIP Code DATE FILED MECHANICSBURG PA 17050-3647 Correspcmdent's e-mail address: D P H I L L I P S a W F D C P A• C O M Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, ca~rrect and complete. Declaration of preparer other than the personal representative is based on all information arer has any knowledge. SIGNA OF PERSON SPON E FOR FILING RETURN DATE SI TUR P ~ THER REPRESENTATIVE DATE ADDRESS 5006 E• TRINDLE RD•, SUITE 200, MECHANICSBURG, PA 17050-3647 PLEASE USE ORIGINAL FORM ONLY Side 1 15056041103 ~wasa~ t.ooo 15056041103 ~ ~\ ``' 15056042104 REV-1500 EX Decedent's Social Security Number 172-36-1168 Decedent's Name: JAMES R • BAKE R RECAPITULATION 1. Real estate (Schedule A) 1 2. Stocks and Bonds (Schedule B) . 2. 3. Closely Held Corporation, Partnership or Sole-Proprietorship (Schedule C) . 3. 15 O O O O 4. Mortgages & Notes Receivable (Schedule D). . 4. 5. Cash, Bank Deposits & Miscellaneous Personal Property (Schedule E) . 5. 6. Jointly Owned Property (Schedule F) ~ Separate Billing Requested 6. 7. Inter-Vivos Transfers & Miscellaneous Non-Probate Property (:>chedule G) ~ Separate Billing Requested 7. O • 8. Total Gross Assets (total Lines 1-7). 8. 15 O O O O . D 0 9. Funeral Expenses & Administrative Costs (Schedule H) . 9. 7 8 2 O 10. Debts of Decedent, Mortgage Liabilities, & Liens (Schedule I). 10. 11. Total Deductions (total Lines 9 & 10) . 11. 12. Net Value of Fatale (Line 8 minus Line 11) 12. 13. Charitable and Governmental Bequests/Sec 9113 Trusts for which an election to tax has not been made (Schedule J) . 13. 14. Net Value Subject to Tax (Line 12 minus line 13) 14. TAX (:OMPUTATION -SEE INSTRUCTIONS FOR APPLICABLE RATES 15. Amount of Line 14 taxable at the spousal tax rate, or transfers u er Sec. 9116 ~ 14 218 0 • (;a)(1.2) x .o 15. 16. Amount of Line 14 taxable at lineal rate X .0- 16. 17. Amount of Line 14 taxable at sibling rate X .12 17. 18. Amount of Line 14 taxable at collateral rate X .15 18. 19. T'AX DUE 19. 20. FILL IN THE BOX IF YOU ARE REQUESTING A REFUND OF AN OVERPAYMENT Side 2 7820.00 142180.00 142180.00 0• 15056042104 ~wasae~.ooo 15056042104 REV-1500 EX Page 3 Decedent's Complete Address: File Number 21-08-0087 DECEDENTS NAME JAMES R. BAKER STREET ADDRESS 53 EDGEWOOD DR. CITY MECHANICSB RG STATE PA ZIP 170 5-2710 Tax Payments and Credits: 1. Tax Due (IPage 2 Line 19) 2. Credits/P;ayments A. Spousal Poverty Credit B. Prior Payments C. Discount 3. Interest/Penalty if applicable D. Interestl E. Penalty (1) 0 Total Credits (A + g + C) (2) Q Total lnteresUPenalty(D + E) (3) 4. If Line 2 i:s greater than Line 1 + Line 3, enter the difference. This is the OVERPAYMENT. Fill In box on Page 2, Llne 20 to request a refund. (4) 5. If Line 1 + Line 3 is greater than Line 2, enter the difference. This is the TAX DUE. (5) A. Enter the interest on the tax due. (5A) B. Enter the total of Line 5 + 5A This is the BALANCE DUE. (56) 0 Make Check Payable to: REGISTER OF WILLS, AGENT PLEASE ANSWER THE FOLLOWING QUESTIONS BY PLACING AN "X" IN THE APPROPRIATE BLOCKS 1. Did decedent make a transfer and: ~ N^o a. retain the use or income of the property transferred; X b. retain the right to designate who shall use the property transferred or its income; ^ X c. retain a reversionary interest; or . ^ X d. receive the promise for life of either payments, benefits or care? ^ X 2. If death occurred after December 12, 1982, did decedent transfer property within one year of death ^ ^ without receiving adequate consideration? . X 3. Did decedent own an "in trust for" or payable upon death bank account or security at his or her death? . ^ X^ 4. Did decedent own an Individual Retirement Account, annuity, or other non-probate property which contains a beneficiary designation? .. .... ... .. ~ ^ IF THE ANSYVER TO ANY OF THE ABOVE QUESTIONS IS YES, YOU MUST COMPLETE SCHEDULE G AND FILE IT AS PART OF THE RETURN. For dates of death on or after July 1, 1994 and before January 1, 1995, the tax rate imposed on the net value of transfers to or for the use of the surviving spouse is three (3) percent [72 P.S. X9116 (a) (1.1) (i)]. For dates of death on or after January 1, 1995, the tax rate imposed on the net value of transfers to or for the use of the surviving spouse is zero (0) percent (72 P.S. §9116 (a) (1.1) (ii)]. The statute does not exempt a transfer to a surviving spouse from tax, and the statutory requirements for disclosure of assets and filing a tax return are still applicable even if the surviving spouse is the only beneficiary. For dates of death on or after July 1, 2000: The tax rate imposed on the net value of transfers from a deceased child twenty-one years of age or younger at death to or for use of a natural parent, an adoptive parent, or a stepparent of the child is zero (0) percent [72 P.S. ~116(a)(1.2)]. The tax rate unposed on the net value of transfers to or for the use of the decedent's lineal beneficiaries is four and one-half (4.5) percent, except as noted in 72 P.S.116(1.2) [72 P.S. ~9116(a)(1)]. The tax rate imposed on the net value of transfers to or for the use of the decedent's siblings is twelve (12) percent [72 P.S. ~116(a)(1.3)]. A sibling is defined, under Section 9102, as an individual who has at least one parent in common with the decedent, whether by blood or adoption. 7 W4671 1.000 REV•lsaa EX+ (6-9EI) SCHEDULE C COMMONWF.f~LTH OF PENNSYLVANIA CLOSELY-HELD CORPORATION, INHERITANCE TAX RETURN PARTNERSHIP ORSOLE-PROPRIETORSHIP E NT JAMES R. BAKER 21-OS-0087 Scherdule C-1 or C-2 (including all supporting information) must be attached for each Gosely-held corporation/partnership interest of the decedent, other than a sole-proprietorship. See instructions for the supporting information to be submitted for sde-proprietorships. ITEM VALUE AT NUMBER DESCRIPTION DATE OF DEATH ~. THE DECEDENT OWNED A SOLE-PROPRIETORSHIP KNOWN AS J.R. BAKER ADVERTISING. THE ESTATE VALUES THE BUSINESS AT $150,000. 150,000 THE DECEDENT'S SURVIVING SPOUSE, CAROLE D. BAKER, SOLD THE BUSINESS TO AN UNRELATED PARTY ON APRIL 21, 2006 FOR $150,000 IN ACCORDANCE WITH THE TERMS OF A BILL OF SALE AND ASSET PURCHASE AGREEMENT, COPIES OF WHICH ARE ATTACHED TO THIS RETURN. ALSO ATTACHED ARE SCHEDULES C, FORM 1040, FOR THE YEAR 2005 AND THE FOUR PRECEDING YEARS, 2001 THROUGH 2004, INCLUSIVE. TOTAL (Also enter on line 3, Recapitulation) I $ 15 0 , 0 0 0 . 0 0 (If more space is needed, insert additional sheets of the same size) ~wass~ t.ooo REV•1510 EX + (6-SIB) COMMONWEALTH OF PENNSYLVANIA INHEIRITANCE TAX RETURN RESIDENT DECEDENT SCHEDULE G INTER-VIVOS TRANSFERS ~ MISC. NON-PROBATE PROPERTY ESTATE OF FILE NUMBER JAMES R. BAKER 21-08-0087 This schedule must be completed and filed if the answer to any of questions 1 through 4 on the reverse side of the REV-1500 COVER SHEET is yes. ITEM NUMBS DESCRIPTION OF PROPERTY INCUDEI}ENNdEOFTFETRANSFEREE,nfIRRELAT10N5HPTOOECEDENrAW mnnreOFTRMSFEA.ATfAgiACOPYOFTIfDEFAFORREALESTATE. DATE OF DEATH VALUE OF ASSET %OFDECD'S INTEREST EXCLUSION IFAPPUCAFlLE TAXABLE VALUE ~, ROTH IRA ACCOUNT #AFY-206300; SP017SE IS BENEFICIARY 14,064 100 14,064 0 2 SIM]?LE IRA ACCOUNT #AFY-209236; SPOUSE IS BENEFICIARY 57,925 100 57,925 0 DECEDENT HAD NOT ATTAINED AGE 59 :L/2 AT HIS DATE OF DEATH. PREH7A.TURE DISTRIBUTIONS WOULD BE SUBJECT TO A 10~ PENALTY. TOTAL (Also enter on line 7, Recapitulation) ~ $ (If more space is needed, insert additional sheets of the same size) 7W46AF 1.000 REV-1511 EX+ (~p.p6) SCHEDULE H COMMONNlEALTH OF PENNSYLVANIA FUNERAL EXPENSES Sr INHERITANCE TAX RETURN ADMINISTRATIVE COSTS RESIDENT DECEDENT ESTATE OF FILE NUMBER JAMES R. BAKER 21-08-0087 Debts of decedent must be reported on Schedule I. ITEM NUMBER DESCRIPTION AMOUNT A. FUNERAL EXPENSES: ~, MYERS FUNERAL HOME, INC. - FUNERAL COSTS 5,459 2 ST. LUKE'S EPISCOPAL CHURCH - COLUMBARIUM NICHE 800 B. 1 ADMINISTRATIVE COSTS: Personal Representative's Commissions Name of Personal Representative(s) Street Address City State Zip Year(s) Commission Paid: 2. Attorney Fees 3. Family Exemption: (If decedent's address is not the same as Gaimant's, attach explanation) Claimant Street Address City State Zip Relationship of Claimant to Decedent 4. Probate Fees 61 5. Accountant's Fees 6. Tax Retum Preparer's Fees 1, 5 0 0 7. TOTAL (Also enter on line 9, Recapitulation) ~ $ 7 , 8 2 0 . 0 0 7W46AG 1.000 (If more space is needed, insert additional sheets of the same size) REV-1513 EX+ (~I-00) COMMONWEP~LTH OF PENNSYLVANIA INHERIT4NCE TAX RETURN RESIDENT DECEDENT SCHEDULE J BENEFICIARIES ESTATE OF FILE NUMBER JAMES R. 'BAKER 21-OB-0087 RELATIONSHIP TO DECEDENT AMOUNT OR SHARE NUMBER NAME AND ADDRESS OF PERSON(S) RECEMNG PROPERTY Do Not List Trustee(s) OF ESTATE I TAXABLE DISTRIBUTIONS [indude outright spousal distributions, and transfers under Sec. 9116 (a) (1.2)] 1 CAROLE D. BAKER SPOUSE 100 53 EDGEWOOD DR. MECHANICSBURG, PA 17055 ENTER DOLLAR AMOUNTS FOR DISTRIBUTIONS SHOWN ABOVE ON LINES 15 T HROUGH 18, AS APPROPRIATE, O N REV-1500 COVER SHEET II NON-TAXABLE DISTRIBUTIONS: A. SPOUSAL DISTRIBUTIONS UNDER SECTION 9113 FOR WHICH AN ELECTION TO TAX IS NOT BEING MADE B. CHARITABLE AND GOVERNMENTAL DISTRIBUTIONS TOTAL OF PART II -ENTER TOTAL NON-TAXABLE DISTRIBUTIONS ON LINE 13 OF REV-1500 COVER SHEET $ (If more space is needed, insert additional sheets of the same size) 7 W46AI 1.000 Estate of James R. Baker File Number 21-08-0087 Attachments to PA Inheritance Tax Return Tab No. Description Last Will and Testament 2. Bill of Sale and Asset Purchase Agreement 3. Schedule C, Form 1040 - -Years 2001 through 2005 4. Individual Retirement Accounts at May 31, 2005 LAST WILL AND TESTAMENT OF JAMES R. BAKER I, JAMES R. BAKER, of New Cumberland, Cumberland County, Pennsylvania, being of sound and disposing mind and memory, do make, publish and declare this, my Last Will and fiestament, hereby revoking all Wills and Codicils by me at any time hereto- fore made. ITEM I: I direct that all inheritance and estate taxes becoming due by reason of my death, whether such taxes may be payable by my estate or by any recipient of any property, shall be paid by my Executrix out of the property passing under this will, which is not specifically devised or bequeathela, as an expense or cost of administration of my estate. My Executrix 'shall have no duty or obligation to obtain reimbursement for zany such tax paid even though on proceeds of insurance or other property not passing under this Will. ITEM II: Z hereby exercise all other powers of appointment which I may have at the time of my death in favor of my Executrix, and all assets subject to all such powers of appointment shall be distributed to my Executrix in her fiduciary capacity. ITEM III: I give, devise and bequeath all of my jestate, whether real, personal or mixed, of whatsoever kind and ~wherescever situate, unto my beloved wife, Carole D. Baker, ca !i ( SEAL ) Page 1 of 4 pages James R. Baser absolutely and in fee. However, in the event that my beloved wife, Carole D. Baker, should predecease me, then in that event, I give, devise and bequeath all of my estate, whether real, personal or mixed, of whatsoever kind and wheresoever situate, in equal shares, to my children, Brian Ronald Baker and Jason Robert Baker, per stirpes. ITEM IV: In the event that my sons, Brian and Jason, shall be under eighteen (18) years of age at the time of my death, and entitled to receive any portion of my estate, I direct the payment of his interest in my estate be made to his legally appointed guardian. Any legacy or share to which my sons, Brian and Jason, may become entitled from my estate or from any life insurance which I may have may be invested or retained in a bank account or accounts as to the said guardian, in its sole discretion, it may deem advisable; and I authorize it to apply such parts of the income and principal as unto it, in its sole discretion, it may appear to be necessary for the education and maintenance of my sons, Brian and Jason, and any balance remaining in the hands of the said guardian shall be paid to my sons, Brian and Jason, when they attain the age of eighteen (18) years . I' ITEM V: In the settlement of my estate, my Executrix shall possess the following powers, among others, for the best interest of the beneficiaries: (a) To sell either at public or private sale and upon such terms and conditions as my executrix may deem advantageous to my estate, any or all real or personal estate or interest therein, whether owned by me severally or in conjunction with other (sFAi.) Page 2 of 4 pages James R. Baker pe rsons or acquired after my death by my Executrix, and to consummate said sale or sales by sufficient deeds or other instruments to the purchaser or purchasers, conveying a fee simple title, free and clear of all trust and without liability of the purchaser or purchasers to see to the application of the purchase cmney or to make inquiry into the validity of said sale or sales; also, to make, execute, acknowledge and deliver any and all deeds, assignments, options or other writings which may be necessary or desirable, in carrying out any of the powers conferred upon my Executrix in this paragraph or elsewhere in my Will. (b) To pay all costs, taxes, expenses and charges in connection with the administration of my estate. (c) To distribute my estate in kind or in money. If such distribution is made in kind, said assets are required to be distributed at their respective values, on the date or dates of their distribution. (d) To do all other acts in the Executrix's judgment deemed necessary or desirable for the proper and advantageous management, investment and distri- bution of my estate. ITEM VI: If my wife, Carole D. Baker, shall die within a period of ninety days after my death, I do direct that she shall be deemed to have predeceased me and that the pro- visions of my Will shall be construed upon that assumption. 1=~.~ ~ (SEAL) Page 3 of 9 pages James R. Baker During the portion of such ninety days as my wife shall actually survive me, she shall have the right to the use and enjoyment as wife tenant of the real and personal property devised and bequeathed to her herein. ITEM VII: In the event my sons, Brian and Jason, acquire any interest in my estate, and it is necessary to appoint a guardian for my sons, I hereby direct that the Dauphin Deposit Trust Company be appointed guardian for my sons, Brian and Jason, and to manage their funds until they reach the age of eighteen (18). Said guardian shall have all of the powers permitted by la' and those given to my Executrix as stated in this, my Last Will and Testament. I hereby appoint Evelyn R. Weaver as Guardian of the person of my children. ITEM VIII: I hereby nominate, constitute and appoint Carole D. Baker, my beloved wife, as Executrix of my estate. In the event she predeceases me or is unable to serve or does not desire to serve, I nominate, constitute and appoint Evelyn R. Weaver, as Executrix of my estate. Neither my Executrix nor the guardian shall be required to file any bond or other security with any court pursuant to the administration of my estate. IN WITNESS WHEREOF, I have set my hand and seal to this, my Last Will and Testament, consisting of this and the preceding three (3) pages, at the end of each page of which I have also set my hand and affixed my seal for greater security and better identification, this~~ ~ay of ~/o/~Il.)1C /~' 1975. (SEAL) James Baker Page 4 of 4 pages We the undersigned hereby certify that the foregoing Will was signed, sealed, published and declared by the afore- named Testator as and for his Last Will and Testament, in the presence of us, who, at. his request, and in his presence and in the presence of each other, have hereunto set our hands and seals the day and year above written, and we certify that at the time of the execution thereof, the said Testator was of sound and disposing mind and memory. (SEAL) Residing at1DG~ -d'(i..;c.~/~ /_;l_E'~~1'r~.c:~2( (SEAL) Residirq at ".~ /c .,-l o - - BILL OF SALE KNOVd ALL MEN BY THESE PRESENTS, that Carole D. Baker, an adult individual currently with a principal business address of 5325 East Trindle Road, Mechanicsburg, Pennsylvania, 17055, Cumberland County, Pennsylvania (herein called "Seller"), in consideration of the sum of ~ S~ooW not less than One Hundred Fifty Thousand Dollars ($150,000) paid to her by Elite Personnel, Inc., a Pennsylvania business corporation, with its principal place of business at 839 Mazket Street, Lemoyne, Pennsylvania 17043, Cumberland County, Pennsylvania, (herein called "Buyer"), in accordance with the terms and conditions of an Asset Purchase Agreement, the terms of which aze ucorporated herein by this reference, has granted, bargained, sold, transferred, and delivered, and by these presents does grant, bargain, sell, transfer, and deliver unto Buyer, its successors and assigns, all of the assets listed on Exhibit "A" attached hereto and incorporated by reference. TO HAVE AND HOLD the same unto the Buyer, its successors and assigns forever. AND does for Seller's heirs, administrators, and assigns covenant to and with the Buyer and its successors and assigns that she is the lawful owner of the said assets, they aze firee from all encumbrances, that she has the right to sell the same as aforesaid, and that she will warrant the title and defend the sale of said assets unto the Buyer, its successors and assigns against the lawful claims anti demands of all persons whomsoever. This Bill of Sale and the referenced Asset Purchase Agreement contain the entire understanding between the parties hereto, and supersedes any prior written or oral agreements between them respecting the written subject matter. There aze no representations, agreements, arrangements, or understandings, oral or written, between the parties hereto relating to the subject matter of this instrument which aze not fully expressed herein or in the said Asset Purchase Agreement. IN WITNESS WHEREOF, we have hereunto set our hands and seals this o~ ~~ day of Apri12006. WITNESS: Cazole D. Baker, Seller ATTEST: _ t~ Secre COMMONWEALTH OF PENNSYLVANIA COUNTY OF CUMBERLAND ELITE PERSONNEL, INC. ~i ~~,-~ Brian J. Gaughan, President Buyer On this, the ~ ~ .day of Apri12006, before me, the undersigned officer, personally aFipeazed Carole D. Baker, known to me (or satisfactorily proven) to be the person whose name is subscribed to the within instruument and acknowledged that she executed the same for the purposes therein contained. 1n witness whereof, I hereunto set my hand and official seals. '~/2(.cc~uo.~ c~.~~ Notary Public COMMONWEALTH,OF PENNSYLVANIA Nolarfal Seal Valerie S. Sladv>ick, Notary Public Hampden Tr~P-. Q~riberland Cour~y My Corm~ssbn E~ires Nw. 30, 2008 Member, Pennsylvania Association Of Notaries 2 COMMONWEALTH OF PENNSYLVANIA COUNTY OF CUMBERLAND 9-C On this, the day ~~ of April 2006, before me, the undersigned officer, personally appeared Brian J. Gaughan, known tome (or satisfactorily proven) to be the person whose name is subscribed to the within instrument and acknowledged that he executed the same for the purposes therein contained. - In witness whereof, Y hereunto set my hand and official seals. ~G..Lt~u_u,o.~,~~ ~,~t~cc~ Notary Public COMMONWEALTH OF PENNSYLVANIA Notarial Seal Valerie S. Stadv~idc, Notary P~b6c Twp•. Cumberland CouNy I'M Conrnission E~ires Nov. 30, 2008 Member, Pennsylvania Aasoclation pt Notar(es • APR-64-2006 10:20 AM OWNSTAIRS EQUIPMENT & SUPPLI : 1. Screen print presses; Antcc (2) 2. Screen print dryer; Lawson (I) 3. Screen print dryer; Harco (1) 4. Screen image burner; Nuarc (1) S. Screen print flash dryers (2) 6. Ink P. 01 "~ .. 35,000 SS,S00 S1,500 $3,000 SS00 S200 7. Screens (approx 200 (c~ S20/pc) $4,000 8. Squeegees (approx 70 Q Sl0/pc) $700 4. Scrccn stretcher (I) $100 ! 0. Scrtcn image burner (old unit) { 1) 3100 11. Miac. supplies (tape, sprey tack, cleaning supplies, vinyl letters) S 100 12. Heat press machine fo- vir.,yl (1) $1 OQ 13. Tables (5) S50 14. Drawer cabinets (3) 330 15. Clothing inventory (hats, t-shirt, sweatshirts) 350 .Zn y,~o BRIAN'S OFFICE (GRAPHICS): I . Camptjter desk (3 piece) (1) 51 p0 2. Black & White laser printer; Xantc (1) $SO 3. Color lases printer; QMS (1) S75 4. Scanner; HP (1) S25 S. Vinyl cutter; Stahl's (1) S7S ' 6. Carnputcr tower, keyboazd, mouse, speakers; Dell (1) S 1 SO 7. External hard drive (for backing up files); Wcstcm Digital (1) 510 S. 21"monitor, Panasonic (I} 525 9. Computer battery backup, surge protector: APC (1) S10 10. Velum material for film positives $200 11. Developer & dryer for film positives 525 l 2. Vinyl for vinyl cutter 5200 13. Dolly's (2} t20 14. Paper cutter (1) S I O I S. Cabinet (1) S 10 16. Table (1} S10 l7. Cabinets for positives (3) $30 /a w.t' KITCHEN: !. File cabinets; vertical 4 drawer (10) $100 2. File cabinets; horizontal 2 drawer (4) 540 3. Cabinets; storage (2) $20 4. Tables (I) S10 5. Vacuum cleaners (2) S20 6. Chairs {6) 530 d~ ~N APJ2--04-2006 10:20 AM 7. Shclvc { 1) 8. Refrigerator (1) 9. Microwave (1) 10. Rolling table {1) 11. Safe (1) 12. Slotted wooden mini drawer cabinet (1) OFFICE WORK AREA: 6. Fax machine (1) 7. Cabinet; small black 2 drawer (1~ 8. File-cabinet; vertical 4 drawer l) 9. File cabinet; horizontal 3 drawer (2) 10. Fila cabinet; horizontal 4 drawer (1) 1 I . Credenza (1) 1 Z. Display cases with storage below (2) 13. Computer desk (3 piece); Eileen (1) 14. Computer tower, keyboard, mouse (1) IS. Monitor (1) 16. Printer (1) 17. Desks with drawers (3) 18. Table no drawer with backboard (1) 19. Copier (I ) 20. Phones (throughout building) (6) CENTER ROOM: P. 02 ss SS SS S5 $2S -_-- S10 .275 350 S20 S20 S20 S10 SSO S20 S100 SSO S10 s2s S75 S25 S10 S60 /9~S- 1. Tabic (1} S10 2. Chairs (4) $20 3. Clothing display racks (S) $SO 4. Clothing book display holders (2) S20 S. Clothing on display (assorted jackets, t-shirts, sweats, golf shirts) SSO 6. Display units on wall (9) S90 ,Z,y~o FRONT ROOM: I . Clothing on display (assorted jackets, t-shins, sweat, golf shirts) S 1 SO 2. Clothing racks (2) S20 3. Clothing book display holders (3) 330 4'Go 1. Computer desk (4 piece + matching book case); JC (1) $500 2. Cotnputcr desk (3 piece); Mom (1) 5100 ASSET PURCHASE AGREEMENT THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made and entered into as of the day of April, 2006, by and between Elite Personnel, Inc., a Pennsylvania business corporation, with its principal office at 839 Market Street, Lemoyne, Pennsylvania 17043 (the "Purchaser's and Carole D. Baker, an adult individual, t/d/b/a J. R. Baker .Advertising, with a principal business address of 5325 East Trindle Road, Mechanicsburg, Pennsylvania 17055 (the "Seller). WITNESSETH: WHEREAS, the Purchaser is interested in acquiring a screen printing, specialty advertising, and embroidery business; and WHEREAS, the Seller owns a sole proprietorship business, which presently provides screen printing, specialty advertising, and embroidery services to the public, known as J.R. Baker Advertising (the "Business'; and WHEREAS, the Seller is the owner of certain equipment, inventory and certain other assets, which are used in the Business; and . WHEREAS, the Seller desires to sell and the Purchaser desires to purchase, certain assets as set forth herein and the Business as a going concern. NOW, THEREFORE, in consideration of the mutual promises and condition$ herein contained and for good and valuable consideration, the receipt of which is hereby acknowledged, the parties covenant and agree as follows: 1. Sale of the Assets of the Business. (a) Sale and Pwchase. At the Closing (as hereinafter defined), Seller will sell, convey, assign, transfer and deliver to the Pwchaser, and the Pwchaser will purchase from Seller, all the assets, property and business of every kind and description, tangible and intangible, personal and mixed, of the Business and of the Seller that are used or intended for use in connection with the operation of the Business as a going concern, free and clear of all liens and encumbrances, which are owned or leased by Seller on the date hereof or acquired or leased by Seller between the date hereof and the Closing Date (as hereinafter defined), including without limitation, all useable or saleable. inventory owned by the Seller in connection with the Business on the Closing Date; all furnitwe, fixtures, machinery and equipment owned by the Seller in connection with the Business on the Closing Date; all customer lists, correspondence files and records, customer files, productions records, pwchasing records, inventory records, software and hardware, data files and disks; accounts receivable and accounts payable relating to the direct materials cost of inventory on the Closing Date; goodwill of the Business; the Business's current telephone numbers; the use of the Business's name pursuant to this Section and any variation thereof (such assets, property and business to be acquired being hereinafter called the "Purchased Assets"), substantially all of which aze listed in Exhibit A attached hereto, but excepting, however, the property specifically referred to in subsection (b). (b) Excluded Assets. The following assets and property shall be retained by Seller and are excluded from the definition of Purchased Assets (the "Excluded Assets': (i) all prepaid expenses that are not transferable or of benefit to future periods; (ii} all insurance policies, binders, and reserves of Seller and all rights of Seller under such policies including, without limitation, any prepaid premiums and any insurance claims or insurance proceedings arising from or relating to the operation of the Business prior to the Closing; (iii) all claims of Seller for refunds or credits with respect to, and prepaid items relating to, all federal, state, local, and foreign taxes, of any nature whatsoever; (iv) all books and records of Seller directly relating to the Excluded Assets, and any worksheets, notes, files, or documents primarily related thereto; (v) all cash, cash equivalents, and investments; (vi) any real estate of Seller; (vi) one (1) antique jelly cupboard; (vii) one (1) wood and glass display case; (viii) two (2) small antique dressers; (ix) two (2) small wooden chests; (x) one (1) small wooden antique desk; (xi) one (1) computer, monitor and printer (Cazole's desk); (xii) one (1) metal rack; (xiii) one (1) answering machine; and (xv) numerous trophies and miscellaneous trinkets on Carole's and her husband's desk. 2 2. Purchase Price and Payment. (a) Purchase Price. The purchase price to be paid by the Purchaser to Seller for the Purchased Assets shall be $150,000 (the "Purchase Price"), plus reimbursements for direct materials cost expended and paid by Seller prior to Settlement, and for which Purchaser shall receive payment. (b) Payment. The Purchase Price shall be payable by the Purchaser at the Closing by certified, bank, or attorney escrow check. (c) Allocation. The Purchase Price shall be allocated among the assets as follows: (i) Equipment and furnishings $25,000.00 (ii) Supplies and instruments $25,000.00 (iii) Goodwill and Records $65,000.00 (iv) Noncompetition Agreement $35,000.00 3. Non-Assumption by the Purchaser of Liabilities. The Purchaser shall not assume, and shall not be liable for, any obligations or liabilities of Seller and the Business of any nature whatsoever, express or implied, fixed or contingent, except, Purchaser assumes and agrees toy pay: (a) all accounts payable of the Business as of the Closing Date which relate directly to direct materials cost of inventory. 4. CloS1IIg. (a) Date and Location. The closing (the "Closing") of the transactions contemplated hereby shall take place at the offices of Pecht & Associates, PC, located at 1205 Manor Drive, Suite 200, Mechanicsburg, Pennsylvania 17055 at 2:00 p.m. local time, on Apri121, 2006 (the "Closing Date"), or such other prior date as the parties may mutually agree. (b) Temunation. In the event that the Closing shall not have taken place on or prior to Apri121, 2006, or such other date as may have been agreed upon in writing by the parties, then any party may, at its option, terminate this Agreement by written notice to the other parties and all of the rights and obligations of the parties hereunder shall terminate, except as to confidentiality and as provided in subsection (c). (c) Damages for Failure to Close; Damages for Breach. Each party hereto shall be liable for damages to the other party for any breach of such party's representations, warranties, agreements or covenants that results in a failure to close 3 under this Agreement; such liability, however, shall be limited to the extent of the documented expenses of the other party incurred in connection with the transactions contemplated by this Agreement, including reasonable attorneys' fees. Upon the breach of any provision of this Agreement after the Closing Date, each party shall have the rights and remedies as provided herein, or any other remedy available at law or equity against the respective defaulting party. (d) Transfer Taxes. Any transfer taxes of any kind imposed in connection with the consummation of the transactions contemplated hereby (including, without limitation, personal property transfer taxes) shall be divided evenly by Seller and Purchaser. (e) Documents to Be Delivered by the Seller. At the Closing, Seller shall deliver to the Purchaser: (i} a Bill of Sale, in the form of Exhibit "B"; (ii) except as provided in any Assignment and Assumption Agreement, assignments of all leases, agreements, contracts, licenses and franchises included in the Purchased Assets; (iii) such further instruments of assignment, conveyance or transfer or other documents of further assurance covering the Purchased Assets or any part thereof as the Purchaser may reasonably require to assure the full and effective assignment and transfer to it of the Purchased Assets and all the right, title, and interest therein of Seller; (iv) Noncompete Agreement, which is included in this Agreement as Section 9; (v) such further documents as the Purchaser may deem reasonably necessary and desirable. . (g) Documents to Be Delivered by the Purchaser. At the Closing, the Purchaser shall deliver to Seller: (i) a check as set forth in Paragraph 2(b) hereof; (ii) such further documents as Seller may deem reasonably necessary and desirable 5. Rearesentations and Warranties of Seller. Seller hereby represents and w~u-rants to the Purchaser as follows: (a) Assets and Properties. Seller has good, valid and marketable title to all of the Purchased Assets, free and clear of all liens, pledges, mortgages, security interests, a claims, restrictions, defects of title or encumbrances of any nature whatsoever. (b) Leaal Proceedings: Compliance with Law. There are no disputes, claims, actions, suits or proceedings, arbitrations, investigations or legal proceedings of any nature pending or, to the knowledge of Seller, threatened against or affecting Seller, the Business or the Purchased Assets. Seller does not have any knowledge of any state of facts that might reasonably form the basis of any claim, liability or litigation against Seller. Seller owns or possesses in the operation of the Business all franchises, licenses, permits, consents, approvals, rights, waivers and other authorizations, governmental or otherwise, which aze necessary for her to conduct the Business as now conducted; Seller is not in default, nor has she received any notice of any claim or default thereunder, or any notice of any other claim or proceeding or threatened proceeding relating thereto; and neither the execution or delivery of this Agreement nor the consummation of the transactions contemplated hereby will require any notice or consent thereunder or have any material adverse effect thereon. (c) No Third PartyOptions. There are no existing agreements, options, commitments or rights with, to or in any person to acquire any of the Purchased Assets or any interest therein, except for this Agreement and those contracts entered into in the normal course of business consistent with past practice for the sale of products or services of Seller. 6. Representations and Warranties of Purchaser. The Purchaser hereby re)~resents and warrants to the Seller as follows: (a) Purchaser is a corporation duly existing, qualified and in good standing under the laws of the Commonwealth of Pennsylvania, and is and shall be duly empowered to execute this Agreement and to do any and all acts required or desirable for consummation of the transactions contemplated hereby. (b) The execution and performance of this Agreement and the documents necessary to complete the transaction will be duly authorized by all requisite corporate proceedings of Purchaser, including the approval of Purchaser's Board of Directors, and, when so delivered shall constitute a legal and binding obligation of Purchaser. Purchaser is not bound by or subject to any contractual or other obligation that would be violated by Purchaser's execution or performance of this Agreement. (c) The execution and delivery of this Agreement and consummation of the transaction contemplated hereby do not conflict with or result in a breach of any of the terms, provisions, or conditions of Purchaser's Articles of Incorporation, Bylaws, or any statute, regulation, or court or administrative order or process applicable or any agreement, lease, or other agreement or instrument to which Purchaser is a party, or by which it is bound, nor does execution of this Agreement and consummation of the transactions contemplated hereunder constitute a default thereunder. 7. Conditions Precedent to the Purchaser's Obligations. All obligations of the PPurchaser to consummate the transactions contemplated hereby are subject to the fulfillment or waiver by Purchaser, prior to or at the Closing, of each of the following conditions: (a) Representations and Warranties. The representations and warranties of Seller contained in this Agreement or in any Schedule, Exhibit, certificate, statement or document delivered pursuant to the provisions hereof shall be true on and as of the Closing Date in all material respects and shall have been true in all material respects as of the date hereof. Seller shall have performed and complied with all agreements and conditions required by this Agreement to be performed or complied with prior to or at the Closing, and Seller, individually, and as owner of the Business, shall have delivered to the Purchaser any certificate or certificates required hereby dated as of the Closing Date to such effect. (b) Purchaser Consents and Approvals. The Purchaser shall have obtained all reasonably necessary consents and approvals required or deemed necessary or desirable by it in connection with the execution of this Agreement and the consummation of the transactions contemplated hereby. (c) Legal Matters. No suit, action, investigation or legal or administrative proceeding shall have been brought or shall have been threatened which questions the validity or legality of the transactions contemplated hereby in the manner herein provided or, in the opinion of the Purchaser, would make the transactions contemplated hereby imprudent or unadvisable in the light of any applicable law, rule or regulation. (d) No Damage or Adverse Change. The Business and/or the Purchased Assets shall not have been, and shall not be threatened to be, adversely affected in any way as a result of fire, explosion, earthquake, disaster, accident, labor dispute, litigation, change in technology, obsolescence ofproduct or service, flood, action of governmental body or agency, embargo, riot, civil disturbance, uprising, activity of armed forces or act of God or public enemy or any other event or occurrence. (e) Regulator~Compliance and Approvals. The Purchaser shall be satisfied that (i) all approvals, permits, consents, licenses or qualifications from any federal, state or other regulatory body having jurisdiction over any aspect of the transactions contemplated hereby or required under any law, statute, rule, ordinance or regulation to carry out the transactions contemplated hereby shall have been obtained and shall not contain any condition that, in the reasonable judgment of the Purchaser, is unduly burdensome, and (ii) that the parties shall have complied with all statutes, laws, ordinances, regulations, orders or rules of any federal, state, local or other governmental agency or body or any other type of regulatory body applicable to the consummation of the transactions contemplated hereby. 6 8: IndemniCcation. (a) Indemnification B S~ eller. From and after the Closing, Seller shall reimburse and indemnify and hold the Purchaser harmless against and in respect of (i) any liability of Seller of any nature whatsoever, whether accrued, absolute, contingent or otherwise, existing at the Closing Date, to the extent not disclosed in this Agreement or in any Schedule hereto, or arising solely in the ordinary course of business between the date hereof and the Closing Date; (ii} any claim, damage, loss, expense, liability or deficiency resulting from (A) any material misrepresentation, breach of warranty or nonfulfillment of any covenant or agreement on the part of Seller under this Agreement or from any material misrepresentation in or omission from any, Schedule, agreement, document, statement, list, certificate or other instrument furnished to the Purchaser by Seller in connection with the negotiation, execution or performance of this Agreement, (B) the failure of Seller to deliver any assets included in the Purchased Assets, or (C) the failure of Seller to provide to the Purchaser the benefits of any contract or agreement included in the Purchased Assets; and (iii) any action, suit, claim, proceeding, investigation, audit, demand, assessment, fine, judgment, settlement, cost or other expense (including, without limitation, reasonable audit and legal fees) incident to any of the foregoing or to the enforcement of this Section. (b) Indemnification by Purchaser. Purchaser shall defend, indemnify and hold the Seller harmless from and against all claims, demands, liabilities, damages, losses and out-of-pocket expeases, including reasonable attorneys' fees, caused by or arising out of the breach of any agreement of or representation and warranty made by Purchaser in this Agreement, or arising from or incidental to the conduct of the Business subsequent. to Closing or any actions or inactions of the Purchaser subsequent to Closing. (c) Method of Asserting Claims. Etc. All claims for indemnification under this Agreement shall be asserted and resolved as follows: (i) In the event that any claim or demand for which a party would be liable to the other hereunder is asserted against or sought to be collected from such party by a third party, the party seeking indemnification (the "Indemnified Party") shall promptly notify the other party (the "Indemnitor Part}'} of such claim or demand, specifying the nature of such claim or demand (the "Claim Notice"). The Indemnitor Party shall have 20 days from the mailing by certified mail of the Claim Notice (the "Notice Period") to notify the Indemnified Party whether or not the Indemnitor Party desires, at herlits sole cost and expense, to defend the Indemnified Party against such claim or demand. In the event that the 7 Indemnitor Party notifies the Indemnified Party within the Notice Period that the Indemnitor Party desires to defend the Indemnified Party against such claim or demand, except as hereinafter provided, the Indemnitor Party shall have the right to defend the Indemnified Party by appropriate proceedings, which proceedings shall be promptly settled or prosecuted to a final conclusion; provided, however, that the Indemnitor Party shall reimburse and indemnify, and hold the Indemnified Party harmless against and in respect of any and all damages arising out of any such settlement or final conclusion. If the Indemnified Party desires to .participate in, but not control, any such defense or settlement, it may do so at its sole cost and expense. If, in the reasonable opinion of the Indemnified Party, any such claim or demand involves an issue or matter which could have a materially adverse effect on the Business, operations, assets, properties or prospects of the Indemnified Party, the Indemnified Party shall have the right to control the defense or settlement of any such claim or demand, and its reasonable costs and expenses shall be included as part of the indemnification obligation of the Indemnitor Party hereunder, provided, however, the Indemnified Party shall not settle any such claim or demand without the prior written consent of the Indemnitor Party, which consent shall not be unreasonably withheld, delayed or conditioned. If the Indemnitor Party elects not to defend the Indemnified Party against such claim or demand, whether by not giving the Indemnified Party timely notice as provided.above or otherwise, -then the amount of any such claim or demand, or, if the same be contested by either party (but the Indemnified Party shall not have any obligation to do so), then that portion thereof as to which such defense is unsuccessfixl,'shall be conclusively deemed to be a liability of the Indemnitor Party hereunder. (ii) In the event either party should have a claim against the other hereunder which does not involve a claim or demand being asserted against or sought to be collected from her/it by a third party, the Indemnified Party shall promptly send a Claim Notice with respect to such Claim to the Indemnitor Party. If the Indemnitor Party does not notify the Indemnified Party within the Notice Period that the Indemnitor Party disputes such claim, the amount of such claim shall be conclusively deemed a liability of the Indemnitor Party. (d) Payment of Indemnification Obligations. Each party agrees to pay promptly to the other the amount of all damages, losses, deficiencies, liabilities, costs, expenses, claims and other obligations to which the foregoing indemnity relates. (e) Arbitration. (i) All disputes between the parties under this Section shall be settled by arbitration in Cumberland County, Pennsylvania, before a single arbitrator pursuant to the rules of the American Arbitration Association. Arbitration maybe commenced at any time by any party hereto by giving written notice to the other party to the dispute that such dispute has been referred to arbitration under this Section. The arbitrator shall be selected by the joint agreement of Seller and the 8 Purchaser, but if they do not so agree within 20 days after the date of the notice referred to above, the selection shall be made pursuant to the rules of the Association from the panels of arbitrators maintained by such Association. Any award rendered by the azbitrator shall be conclusive and binding upon the parties hereto. Any award shall be accompanied by a written opinion of the arbitrator giving the reasons for the award. This provision for arbitration shall be specifically enforceable by the parties and the decision of the arbitrator in accordance herewith shall be final and binding and there shall be no right of appeal therefrom. Each party shall pay its own expenses of arbitration and the expenses of the arbitrator shall be equally shazed; except, however, that if in the opinion of the arbitrator any claun for indemnification or any defense or objection thereto was unreasonable, the arbitrator may assess, as part of its award, all or any part of the arbitration expenses of the other party (including reasonable attorneys' fees} and of the arbitrator against the party raising such unreasonable claim, defense or objection. (ii) Notwithstanding the foregoing, to the extent that a party to this Agreement has the right to and seeks equitable remedies pursuant to the terms of this Agreement, such party shall have the right to seek such equitable remedies in court without regard to this Section. To the extent that :arbitration may not be legally permitted hereunder and the parties to any dispute hereunder may not at the time of such dispute mutually agree to submit such dispute to arbitration, any party may commence a civil action in a court of appropriate jurisdiction to resolve disputes hereunder. Nothing contained in this Section shall prevent the parties from settling any dispute by mutual agreement at any time. (f) Bulk Transfers. The parties hereby waive compliance with the bulk transfers law and any other similar laws in any applicable jurisdiction in respect of the transactions contemplated by this Agreement. Seller shall indemnify and hold harmless the Purchaser from and against any liabilities, damages, costs and expenses resulting from or arising out of (i) the parties' failure to comply with any such laws in respect of the transactions contemplated by this Agreement, or (ii) any action bmught or levy made as a result thereof, other than those liabilities that have been expressly assumed, on such terms as expressly assumed, by the Purchaser pursuant to this Agreement. 9. Survival of Representations and Warranties. All representations and warranties made by Seller and the Purchaser in this Agreement or pursuant hereto shall survive the Closing for a period of two(2) years. Notwithstanding any investigation or audit conducted before or after the Closing Date or the decision of the Purchaser to complete the Closing, the Purchaser shall be entitled to rely upon the representations, warranties and agreements set forth herein or pursuant hereto 10. Covenant Not to Compete. (a) Covenant By Seller. As consideration for Purchaser entering into this Agreement, for a period of two years from and after the Closing Date, Seller and her son, 9 Brian Baker, shall not, unless acting as an officer or agent of or consultant to the Purchaser, its nominee or any affiliate thereof, directly or indirectly, own, manage, operate, finance, join, control or participate in the ownership, management, operation, financing or control of, or be connected as an officer, partner, principal, agent, representative, consultant or otherwise, or use or permit her name to be used in connection with, any business or enterprise engaged in the business of screen printing, specialty advertising, embroidery, or similar services or other support services in competition with the Purchaser, its nominee or any affiliate thereof, within the following counties of Pennsylvania: Cumberland, Perry, York, Adams, Lebanon, Lancaster, and Dauphin or relating to work or services for any business, person, or entity identified or listed on Exhibit C, attached hereto and incorporated herein, including all present contracts and any contracts negotiated through April 21, 2006. (b) Exclusion. The provisions of this Section shall not be construed to prohibit the ownership by Seller of not more than one percent of any class of securities of any corporation having a class of securities registered pursuant to the Securities Exchange Act of 1934 that is engaged in a business in competition with the Purchaser, its nominee or any affiliate thereof. (c) Severability. In the event that any provision of this Section should ever be deemed to exceed the time or geographic limitations or any other limitations imposed by applicable law in any jurisdiction or under any set of circumstances, it shall be deemed reformed so as to continue to apply to the maximum extent permitted by applicable law in such jurisdiction or under such circumstances. (d) Equitable Remedies. Seller specifically acknowledges and agrees that the restrictions imposed by this Section aze reasonable and necessary to protect the legitimate interests of the Purchaser, that the Purchaser would not have entered into this Agreement in the absence of such restrictions, that any violation of such restrictions will result in irreparable injury to the Purchaser, that the remedy at law for any breach of the restrictions will be inadequate, and that, in the event of any breach, the Purchaser, in addition to any other relief available to it, shall be entitled to temporary and permanent injunctive relief without the necessity of proving actual damages. Seller further specifically acknowledges and agrees that the Purchaser or its nominee shall be entitled to an equitable accounting of all earnings, profits and other benefits arising from any breach of this Section, and further agrees to pay the reasonable legal fees and expenses incurred by the Purchaser, its nominee or any successor or assign thereof in enforcing the restrictions contained in this Section. Seller shall have no liability for the breach of this Section by Brian Baker. Seller's and Brian Baker's liability under this Section shall not be joint and several. 11. Employees. From and after the Closing Date, the Purchaser shall continue to employ Carole Baker and Brian Baker in substantially the same positions, with substantially the same fringe benefits, and on such other terms as Purchaser shall determine; provided, however, nothing herein shall be deemed to prohibit Purchaser from terminating any such employee after the Closing Date. Purchaser will determine in its discretion whether it will continue to employ 10 any other employees of Seller after the Closing Date. For all employees that remain in the employ of Purchaser, Purchaser shall be liable for the payment of all salaries after the Closing L>ate. 12. Taxes. (a) Seller shall reimburse and indemnify and hold the Purchaser harmless against and in respect of any and all taxes of Seller for any taxable year or period ending on or before the Closing Date, as well as the portion of any such taxes for a taxable year or period beginning before and ending on the Closing Date that are attributable to the portion of such year or period, provided that Seller shall be entitled to all refunds of such taxes. (b) Purchaser shall reimburse and indemnify and hold Seller harmless against and in respect of any and all taxes arising in connection with the Business or Purchased Assets relating to any taxable year or period or portion of any taxable year or period beginning after the Closing Date, provided that Purchaser shall be entitled to all refunds of such taxes. 13. Use of the Name of Business. The Purchaser may retain and utilize the name of the Business in connection with the use of the Purchased Assets and the operation of the Business for a period not to exceed five years after the Closing Date. Purchaser shall indemnify and hold Seller harmless .against and in respect of any liability arising from Purchaser's use of such name after the Closing Date in connection with the Business, including reasonable attorney fees in connection therewith. 14. Brokerage Fees and Expenses. (a) Brokerage Fees. The parties hereto represent and warrant that all negotiations relative to this Agreement have been carried on by them directly without the intervention of any person, firm or corporation. Each party will indemnify the other and hold such other party harmless against and in respect of any claim~for brokerage or other commissions relative to this Agreement or the transactions contemplated hereby made by any person, fine or corporation claiming through such party. (b) Expenses. Except as provided in this subsection, each party hereto shall pay its own expenses, including, without limitation, the reasonable fees and expenses of its counsel, incurred in connection with this Agreement and the transactions contemplated hereby. 15. Contents of Agreement: Parties in Interest: Amendment: Assignment. Etc. This Agreement sets forth the entire understanding of the parties hereto with respect to the subject matter hereof. Any previous agreements or understandings between the parties regarding the: subject matter hereof are merged into and superseded by this Agreement. This Agreement maybe amended, modified or supplemented only by written instrument duly executed by Seller and the Purchaser. All representations, warranties, covenants, terms and conditions of this 11 Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective heirs, personal representatives, successors and permitted assigns of the parties hereto. Neither party shall assign this Agreement without the prior written consent of the other party. 16. Notices. All notices and other communications that are required or permitted hereunder shall be sufficient if given in writing and delivered by registered or certified mail, rE;turn receipt requested, postage prepaid, as follows (onto such other addressee or address as shall be set forth in a notice given in the same manner): If to the Purchaser: Brian J. Gaughan, President Elite Personnel, Inc. 839 Market Street Lemoyne, PA 17043 If to Seller: Carole D. Baker J.R Baker Advertising 5325 East Trindle Road Mechanicsburg, PA 17055 With a copy to: Wix, Wenger & Weidner Attn: Peter G. Howland 508 N. Second Street Harrisburg, PA 17101 17. Governing Law. This Agreement shall be interpreted and enforced in accordance with the substantive laws of the Commonwealth of Pennsylvania, without reference to the principles governing the conflicts of laws applicable in that or any other jurisdiction. 18. Counterparts. This Agreement maybe executed in two or more counterparts, earh of which shall be deemed to be an original instrument, but all such counterparts together shall constitute one and the same instrument. 19. Cooperation. Subject to the terms and conditions hereof, each of the parties hereto shall use reasonable efforts to take, or cause to be taken, such action, to execute and deliver, or cause to be executed and delivered, such additional documents and instruments and to do, or cause to be done, all things reasonably necessary, proper or advisable under the provisions of this Agreement and under applicable law to consummate and make effective the transactions and undertakings contemplated by this Agreement and to vest in Purchaser all right, title and intf,rest in and to the Purchased Assets, whether at or after the Closing. 20. Severability. Any provision of this Agreement which is invalid or unenforceable in any jurisdiction or under any circumstance shall be ineffective to the extent of such invalidity or unenforceability only, without invalidating or rendering unenforceable the remaining provisions hereof in such jurisdiction or under such circumstances, and any such invalidity or unenforceability shall not invalidate or render unenforceable such provision in any other jurisdiction or under any other circumstances. 12 IN WITNESS WHEREOF, this Agreement has been executed as of the day and year first written above. 'WITNESS: SELLER: Carole D. Baker t/d/b/a J.R. Baker Advertising ATTEST: Brian J. Gaughan, Secretary Brian Baker, for the purposes of Paragraph 9 only PURCHASER: ELITE PERSONNEL, INC., a Pennsylvania corporation By: 13 Brian J. Gaughan, President SCHEDULE C (Form 1 q40) Department o1 the Treasury Internal Revenue Service (99) Name of proprietor Profit or Loss From Business (Sole Proprietorship) - Partnerships, joint ventures, etc., must file Form 1065 or 1085-8. Attach to Form 1040 or 1041. -See Instructions for Schedule C (Form Attachment M/~ Sequence No. Va Social security number (SSN) A Principal business or profession, including product or service (see page C-2) B Enter code horn pages C-B, 9, a to ADVERTISING SPECIALTIES - 453220 C Business name. If no separate business name, leave blank. p Employer iD number (E„~, it any JAMES R BAKER 25 -1649563 E Business address (including suite or room no.) - 5 3 2 5 TRINDLE RD . ---------------- City, town or post office, state, and ZIP code MECHANI CSBURG PA 17 0 5 5 ------- ---------- F Accounting method: (1)[] Cash (2)® Accrual (3)Q Other (specify) - G _ _ _ _ _ _ _ _ _ Did you `materially participate' in the operation of this business during 2005? If'No; see page C-3 for limit on losses .. ------- ................ -------- ®Yes 0 No H If you started or acquired this business during 2005, check here - Part I Income 1 Gross receipts or sales. Caution. If this income was reported to you on Form W-2 and the "Statutory employee' box on that form was checked, see page C-3 and check here -.-.,_-.-.,. ............. ............................................................. - [~ ~ 1 8 6 3 412 . 2 Returns and allowances ............................................................................................................................. ............. 2 - 3 7 7 . 3 Subtractline2fromlinel ..................................... ........ ................. -. 3 863 035. 4 Cost of goods sold (from line 42 on page 2) ................. .....-..-...- 4 56 505 . 5 Gross profit. Subtract line 4 from-line 3 ........................................................................................................ ............. 5 2 9 6 5 3 0. 6 Other income, including Federal and state gasoline or fuel tax creditor refund (see page C-3) g 7 Gross income. Add lines 5 and 6 - 7 2 9 6 5 3 0. Part II; Expenses. Enter expenses for business use of vour home only on line 30. 8 Adv(:rtising ................................... 6 1 2 2 0. is Office expense 18 11 6 8 8 9 Car and truck expenses ....................---................... 19 Pension and profit-sharing plans ------------------ f9 . 4 6 8 0 . (see page C-3) -.,..-.-.$TMT..-5._.. 9 2 7 2 6 . 20 Rent or lease (see page C-5): 10 Commissions and fees .................. f0 a Vehicles, machinery, and equipment 20a 11 Conl:ract labor ----_--.... b Other business property ......................... 20b (see pageC-4) .............................. 11 21 Repairs and maintenance 21 3 849 12 DepleCbn ............................. ...... 12 .,..---,.,,.-,-----........ 22 Supplies (not included in Part III) 22 . 13 Depreciation and section 179 ---...-,..---- 23 Taxes and licenses .................................... 23 16 449. expense deduction (not included in Part III) (see page C-4) ..................... 13 10 116. 24 Travel, meats, and entertainment a Travel 24a 14 Employee benefit programs (other than on tine 19) ............................. 14 25 17 9 . .................................................. b Deductible meals and entertainment (see page C-5) 24b 15 Insurance (other thanheaith) ... -.--- 15 5 411. .---.---..-.-......, 25 Utilities 25 15 147 16 Interest ................................ .............. 28 Wages (less employment credits) ...----. 28 . 15 7 4 9 9 . a Mortgage (paid to banks, etc,) ..._.-.- 16a 27 Other expenses (from line 48 on b Oth(:r .......................................... 16b page 2) 27 6 9 91 t7 Legal and professional services 17 1 7 8 0 . ........................---........................ . . - ?8 Total expenses before expenses for business use of home. Add lines 8 through 27 in columns ,.... - 28 2 6 2 7 3 5 . >9 TenRative profit (bss). Subtract line 28 from line 7 ...................................................... ................................................... 29 3 3 7 9 5 . 10 Expenses for business use of your home. Attach Form 8829 ................................................ ...... ... 30 31 Net profit or (loss). Subtract line 30 from line 29. . If a profit, enter on Form 1040, line 12, and also on Schedule SE, line 2 (statutory employees, see page C-6). 1 Estates and trusts, enter on Form 1041, line 3. If' 31 3 3 7 9 5 . . Ir a loss, you must go to nne sz. ~ 32 If you have a loss, check the box that describes your investment in this activrty (see page C-6). • If you checked 32a, enter the loss on form 1040, line 12, and also on Schedule SE, line 2 (statutory employees, see page C-6). Estates and trusts, enter on Form 1041, line 3. 32a 0 sllat r ~ ment . If you checked 32b, you must attach Form 6198. Your loss maybe limited. 3PD 0 is° of ai ~.~ Went l_HA For Paperwork Reduction Act Notice, see page C-7 of the instructions. Schedule C (Form 1040) 2005 s2ooo~ of-tt-oa ~~+-~.+~~~u ~nc~7n r~rn_pau~.7 2n11S_ (]9f1n1 RAKER. JAMES R DAP-BAK2 Schedule C (Form 1040) 2005 JAMES R & CAROLE D BAKER 17 2 - 3 6 -116 8 Pa e 2 Partsfll- Cost of Goods Sold (see page C-6) 33 Method(s) used to value closing inventory. a ^ Cost b ^ Lower of cost or market c ^ Other (attach explanation) 34 W'as there any change in determining quantities, costs, or valuations between opening and closing inventory? If "Y'es; attach explanaCbn ................................................................................................................................................ ^ Yes ^ No 35 I n~ventory at beginning of year. If different from last year's closing inventory, attach explanation .................................. .. 35 4 12 5 . 36 Purchases less cost of items withdrawn for personal use ....................................................................................... 36 5 6 6 5 0 5 . 37 Cost of labor. Do not include any amounts paid to yoursetf •------,...• ........................................................................ 38 Materials and supplies .................................................................................................................................... 39 Other costs ................................................................................................................................................... 40 Add lines 35 through 39 ................................•-•---....................-----.................................................................. 41 Inventory at end of year 0. 42 Cost of oods sold. Subtract line 41 from line 40. Enter the result here and on a e 1, line 4 42 5 6 6 5 0 5 . Part IV'= Information on Your Vehicle. Complete this part only if you are claiming car or truck expenses on line 9 and are not required to file Form 4562 for this business. See the instructions for line 13 on page C-4 to fnd out 'rf you must file Form 4562. 43 Vllhen did you place your vehicle in service for business purposes? (month, day, year) - / / 44 Ot the total number of miles you drove your vehicle during 2005, enter the number of miles you used your vehicle for: a Business b Commuting c Other 45 Do you (or your spouse) have another vehicle available for personal use? ................................................................ 46 Was your vehicle available for personal use during off-duty hours? ---,.- 47 a Do you have evidence to support your deductwn? ----•--.,.,.,•.•.-,---,•,,,,,, b It'Yes; is the evidence written? Part V Other Expenses. List below business expenses not included on lines 8.26 or 6ne 30. MISCELLANEOUS 434. DUES 2 650. CREDIT CARD FEES 3 596. AMORTIZATION 311. 48 Total other expenses. Enter here and on 520002/ 11-12-OS ~~n7n~2~1 ~n~2~n nAP-BAKE) ............ ^ Yes ^ No -_-..-.-_.-- ^ Yes ^ No ................................................................... LJ Yes LJ No n Yes n No 2005.09001 BAKER, JAMES R Schedule C (Form 1040) 2005 DAP-BAK2 JAMES R & CAROLE D BAKER 172-36-1168 SCHEDULE C CAR AND TRUCK EXPENSES STATEMENT 5 DESCRIPTION 2002 TOYOTA CAMRY - 1216 BUSINESS MILES @ $0.485 2002 TOYOTA CAMRY - 2467 BUSINESS MILES @ $0.405 2005 TOYOTA AVALON - 845 BUSINESS MILES @ $0.485 2005 TOYOTA AVALON - 1795 BUSINESS MILES @ $0.405 TOTAL TO SCHEDULE C, LINE 9 ~~n~nZ~1 ~n~~~n nnn-RAxF..7 2005.09001 BAKER. JAMES R AMOUNT 590. 999. 410. 727. 2,726. STATEMENT(S) 5 DAP-BAK2 SCHEDULE C (Form 1040) Department at the Treasury Internal Revalue Service Name of proprietor Profit or Loss From Business (Sole Proprietorship) - Partner:hips, joint ventures, etc., must file Form 1085 or 1065-B. Attach to Form 1040 or 1041. -See Instructions for Schedule C Attachment )). Sequence No.09 Social security number (SSN) r,JAM~S K tSA1Ci'-iii A Prinripal business or profession, including product or service (see page C-2) ADVERTISING SPECIALTIES B Enter cads from papas C-7, a, a 9 - 453220 C Business name. If no separate business name, leave blank. JAMES R BAKER p Empk>yx ID numtxr tEiN), N any 25-1649563 E Business address (including suite or room no.) - 5 3 2 5 TRINDLE RD . ------------------- City, town or post office, state, and ZIP code MECHANI CSBURG , PA 17 0 5 5 ------- --------- F G H Accounting method: (1)0 Cash (2)® Accrual (3)0 Other (specify) - _ _ _ _ _ _ _ _ _ Did you'materialy participate' in the operation of this business during 2004? If'No; see page C-3 for limit on losses ---- If you started or acquired this business during 2004, check here _ _ _ _ _ _ _ _ ----------------------- _ -------- --- ®Yes 0 Na - Part l Income 1 Grosis receipts or sales. Caution. If this income was reported to you on Form W-2 and the `Statutory employee` box on .............................................................................. . . that form was checked, see page C-3 and check here - ~ 1 9 7 0 9 3 9 . 2 ..... . . Returns and allowances .................................. ...... ......... ............................ ... ........... 2 3 .................................. . Subtract line 2 from line 1 ........................................................................... ........... 3 9 7 0 9 3 9. 4 ................................................. Cost of goods sold (from line 42 on page 2) ...................................................... ........... 4 6 41 1 8 . 5 .............................................. Gross profit. Subtract line 4 from line 3 ...................................................................................... . .. ........... 5 3 2 9 8 01. 8 .............. .. . Other income, including Federal and state gasoline or fuel tax creditor refund (see page C-3) ..................................... ........... 8 7 Gross income. Add lines 5 and 6 - 7 3 2 9 8 01. Pef't 11 ExpenS@S. Enter expenses for twsiness use of your home only on line 30. 8 Advl;rtising 8 4 18 0 . 19 Pension and profit-sharing plans --....- -----_-_-„ 19 4 4 3 6 . 9 .................................... Car and truck expenses 4 $TMT (see page C-3) 9 3 2 4 9 . 20 Rent or lease (see page C-5): a Vehicles, machinery, and equipment .-....-..--- 20a 10 ... .... -....-.-. Corclmissions and fees 10 b Other business property ---------..,,.. ...,...._... 20b 11 .................. Corctract labor 21 Repairs and maintenance ............... ............ 21 4 115 . (see page C-4) 11 22 Supplies (not included in Part III) .-. ..-.-------- 22 12 .............................. Deplletion 12 23 Taxes and licenses ---------.--_.,_-....... ._...-...... 23 17 012 . 13 .................................... Depireciation and section 179 expE:nse deduction (not included in 24 Travel, meals, and entertainment a Travel ....................................... ............ 24a .......... Part III) (see page C-4) 13 9 7 7 3 . b Meals and 14 ........... Employee benefit programs (other . ............. entertainment 1 2 5 8 . ... than on line 19) 14 2 7 6 4 9 . ... . c Enter nondeductible 15 ........................ . . -... Insurance (other than heahh) 15 6 4 81 . amount included on line 24b 16 ..., . . Interest (see page C-5) .................. 6 2 9 . a etc.) Mortgage (paid to banks 18a d Subtract line 24c from line 24b ------ ------------ 24d 6 2 9 . b , ...-..... OthE:r 18b 25 Utilities ...................................... ............ 25 17 216 . 17 .......................................... Legal and professional . 28 Wages (less employment credits) --- ------------ 28 16 4 6 5 0 . ..... services 17 1 4 6 5 . 27 Other expenses (from line 48 on 18 .................................. Offk:e ex ense 18 9 819. a e 2 27 10 2 41. 28 29 30 31 2 Totat expenses before expenses for business use of home. Add lines 8 through 27 in columns ................................. Tenttative profit (bss). SubUact line 28 from line 7 ............................................................................................. Expenses for business use of your home. Attach Form 8829 .............................................................................. Net profit or (loss). SubVact line 30 from line 29. • If a profit, enter on form 1040, line 12, and also on Schedule SE, line 2 (statutory employees, see page C-6). Estates and trusts, enter on Form 1041, line 3. • If a loss, you must go to line 32. If you have a loss, check the box that describes your investment in this acClvity (see page C-6). • If you checked 32a, enter the loss on Form 1040, line 12, and also on Schedule SE, line 2 (statutory employees, see page C-6). Estates and trusts, enter on Form 1041, line 3. • If you checked 32b, you must attach Form 8198. ...... - 28 2 8 0 915 . ............ 29 4 8 8 8 6 . ............ 30 31 4 8 8 8 6 . l investment 328 is at risk. 32b 0 ;; ~; ~;~ent LHA For Paperwork Reduction Act Notice, see Form 1040 instructions. 420001 11-~03-04 Schedule C (Form 1040) 2004 ~a~~n~2>~ 7n6?.30 DAP-BAKEJ 2004.09040 BAKER, JAMES R DAP-BAK1 Schedule C (Form 1040) 2004 JAMES R BAKER 17 2 - 3 6 -116 8 Pa e 2 Pert l; Cost of Goods Sold (see page C-s) 33 Method(s) used to value closing inventory. a ^ Cost b ^ Lower of cost or market c ^ Other (attach explanation) 34 Was there any change in determining quantities, costs, or valuations between opening and closing inventory? If 'y'es; attach explanation ..............................................................•-•------......................................---................................ ^ Yes ^ No 35 Inventory at beginning of year. if different from last year's closing inventory, attach explanation ....•....--•------------------------ 35 3 , 8 7 4 . 36 Purchases less cost of items withdrawn for personal use -_.•-•--.•-.•.•....--••• ............................................................... 38 6 41 3 8 9 . 37 Cost of labor. Do not include any amounts paid to yourself .................................................................................... 37 38 Materials and supplies .................................................................................................................................... 39 Other costs ..............................................................................................................•----.......................---...... 40 Add lines 35 through 39 ................................................................................................................................. 41 Inventory at end of year ................................................................................................................................. a7 4 1 L 5 . 42 Coat of oods sold. Subtract line 41 from line 40. Enter the result here and on a e 1, line 4 42 6 41 13 8 . Part IVY Information on Your Vehicle. Complete this part only if you are claiming car or truck expenses on line 9 and are not required to file Form 4562 for th's business. See the instructions for line 13 on page C-4 to fnd out 'rf you must file Form 4562. 43 1/Vhen did you place your vehicle in service for business purposes? (month, day, year) - / / 44 Oaf the total number of miles you drove your vehicle during 2004, enter the number of miles you used your vehicle for: a Business b Commuting c Other 45 Coo you (or your spouse) have another vehicle available for personal use? .............................................................................. ^ Yes ^ No 46 trVas your vehicle available for personal use during off-duty hours? .................................................................................... ^ Yes ^ No 47 a Do you have evidence to support your deduction? ............................................................................................................ ^ Yes ^ No b 11' Yes; is the evidence written? Yes No Patt V ' Other Expenses. List below business expenses not included on lines 8-26 or ine 30. TRADE SHOWS 1 675. DUES 2 200. CREDIT CARD CHARGES 4 180. BAD DEBTS 1 875. AMOR~.CI ZATION 311. 48 lfotal other a enses. Enter here and on a e 1 line 27 48 10 2 41 . azooov ii-os-oa Schedule C (Form 1040) 2004 ~o~~n-~~a ~n~2~n nA1?-SAKEJ 2004.09040 BAKER, JAMES R DAP-BAK1 JAMES R & CAROLE D BAKER 172-36-1168 SCHEDULE C CAR AND TRUCK EXPENSES STATEMENT 4 DESCRIPTION 1997 TOYOTA 4 RUNNER - $2914 GAS, OIL, REPAIRS, ETC. AT 23.67$ 2002 TOYOTA CAMRY - $1198 GAS, OIL, REPAIRS, ETC. AT 76.56 VEHICLE NUMBER 8 - $2974 GAS, OIL, REPAIRS, ETC. AT 55.21$ TOTAL TC> SCHEDULE C, LINE 9 ~9~~n~2~3 706230 DAP-BAKEJ 2004.09040 BAKER, JAMES R AMOUNT 690. 917. 1,642. 3,249. STATEMENT(S) 4 DAP-BAK1 SCHEDULE C B i P fit L F OM8NO.1545-0074 (Form 1040) DepartmentaftheTreasury Internal Revalue Service teal rom us ness ro or oss (Sole Proprietorship) - Partnerships, joint ventures, etc., must file Form 1065 or 1085-B. - Attach to Form 1040 or 1041. -See Instructions for Schedule C Form 1040. 2003 Aseq~ue~ No.09 Name of proprietor JAMES R BAKER Social security number (SSN) - - A Principal business or profession, including product or service (see page C-2) ADVERTISING SPECIALTIES B Enter code horn pages C-7, e. a e - 453220 C Business name. If no separate business name, leave blank. JAMES R BAKER D Employer to number (EIN~ if any 25-1649563 E Business address (including suite or room no.) - 5 3 2 5 TRINDLE RD . ------------------- City,town or post office, state, and ZIP code MECHANI CSBURG , PA 17 0 5 5 ------- --------- F G H Accounting method: (1)~ Cash (2)® Accrual (3)Q Other (specify) - _ _ _ _ _ _ _ _ _ Did pou'materialty participate' in the operation of this business during 2003? If'No; see page C-3 for limit on losses ••., If you started or acquired this business during 2003, check here _ _ _ _ _ _ _ ,..•-.••--•• ........... _ _ _ _ _ _ _ _ _ _ ..• ®Yea Q No - Part I Income 1 Gross receipts or sales. Caution. If this income was reported to you on Form W-2 and the'Statutory employee' box on that form was checked, see page C-3 and check here .,.....,.•• ............................................................................ - 0 1 1 0 8 0 0 9 8 . 2 Returns and allowances ................................................................................... .•------............. . .. . ........... 2 3 ............... . . . Subtract line 2 from line 1 ............................................................................................................................ ........... 3 1 0 8 0 0 9 8. 4 Cost of goods sold (from line 42 on page 2) ............................... .................................................... . ........... 4 7 4 6 4 4 . 5 ............... . .................................................................................................. . . . Gross profit. Subtract line 4 from line 3 ........... 5 3 3 3 6 9 4. 6 . • . . . Other income, including Federal and state gasoline or fuel tax credit or refund (see page C-3) ..........................•-•..•.•..- .. •.._--.. 8 7 Gross income. Add lines 5 and 6 - 7 3 3 3 6 9 4. Part II Expenses. Enter expenses for twsiness use of your home only on line 30. 8 Advt:rtising 8 5 816. 19 Pension and profit-sharing plans ..,•,• -.,..---.•., 19 4 258. 9 .................................... Car and truck expenses STMT 4 (see page C-3) 9 3 5 0 7 . 20 Rent or lease (see page C-5): a Vehicles, machinery and equipment ,-.,..-..... 20a 10 .... .....-... .-. Commissions and fees 10 13 12 6 . b Other business property --.---.----.--. ..-..-.-.,., 20b 11 ••• ............... Conl:ract labor 21 Repairs and maintenance ............... ............ 21 5 18 5 . (see page C-4) 11 22 Supplies (not included in Part III) -.- ---.-__ •- 22 12 .-..-.--.-,••„ ............... Depletion 12 23 Taxes and licenses.,.-..•---.....-.......- ...-........ 23 16 925'. 13 --.--..-.•.• ........................ Depreciation and section 179 expense deduction (not included in 24 Travel, meals and entertainment a Travel ----• ...............•-•-.••.,.......... .....-....-. 24a Part III) (see page C-4)----..--.•.,•........ 13 11 516. b Meals and 14 Employee benefit programs (other entertainment -.------..., •--.-- 1 9 7 8 . ,,,,,,,,,,,,•,....- than on line l9) -- , 14 22 604. c Enter nondeductible 15 „• • , Insurance (other than health) -.---..-.-.. 15 6 3 8 5 . amount included on line 24b 16 Interest '.' (see page C-5) .................. 9 8 9 . a Morlgage (paid to banks, etc.} 18a d Subtract line 24c from line 24b ...... ............ 24d 9 8 9 . b -------.. Othe;r 18b 25 Utilfties ...........---......................... ............ 25 2 0 0 8 5 . 17 .......................................... Legal and professional 26 Wages (less employment credits) --- ------------ 26 16 4 2 4 0 . ......................... services 17 1 10 0 . 27 Other expenses (from line 48 on 18 -.,• .......... Office ex ense 18 11 8 5 8 . a e 2 27 11 017 . 28 29 30 31 2 Total expenses before expenses for business use of home. Add lines 8 through 27 in columns ................................. Tentative profit (bss). Subtract line 28 from line 7 ..,•.••.• .................................................................................... Expt:nses for business use of your home. Attach Form 8829 .............................................................................. Net profit or (loss). Subtract line 30 from line 29. • If a profit, enter on Form 1040, line 12, and also on Schedule SE, line 2 (statutory employees, see page C-6). Estates and trusts, enter on Form 1041, line 3. • If a loss, you must go to line 32. If ycu have a loss, check the box that describes your investment in this acTivity (see page C-6). • If you checked 32a, enter the loss on Form 1040, line 12, and also on Schedule SE, line 2 (statutory employees, see page C-6). Estates and trusts, enter on Form 1041, line 3. • If you checked 32b, you must attach Form 8198. ...... - 28 2 9 8 611 . ............ 29 3 5 0 8 3 . ............ 30 31 3 5 0 8 3 . 2a ~ slat riek~~t Sono investment 32b is not at risk. LHA For Paperwork Reduction Act Notice, see Form 1040 instructions. 320001 10-08-03 Schedule C (Form 1040) 2003 ,~~nn~~~ ~n~~~n nAP-RAKF..T 2003.09000 BAKER, JAMES R DAP-BAK1 Schedule C. (Form 1040) 2003 JAMES R BAKER 17 2 - 3 6 -116 8 Pa e 2 Bart. ttl Cost of Goods Sold (see page c-s) 33 Method(s) used to value closing inventory. a ^ Cost b ^ Lower of cost or market c ^ Other (attach explanation) 34 W'as there any change in determining quantities, costs, or valuations between opening and closing inventory? If 'Y'es," attach explanation ................................................................................................................................................ ^ Yes ^ No 35 Inventory at beginning of year. If different from last year's closing inventory, attach explanation .................................... 35 4 5 9 8 . 3g Purchases less cost of items withdrawn for personal use ....................................................................................... 36 ____ 7 45 , 6 8 0 . 37 Cost of labor. Do not include any amounts paid to yourself ------------------------------------------------------------------------------------ 38 Materials and supplies .................................................................................................................................... 39 171her costs ................................................................................................................................................... 40 Add lines 35 through 39 ................ 41 Inventory at end of year ................................................................................................................................. 41 ~ ti "/ 4 . 42 Cost of ooda sold. Subtract line 41 from line 40. Enter the result here and on a e 1, line 4 42 7 4 6 4 0 4 . ...Part IV Information on Your Vehicle. Complete this part only 'd you are claiming car or truck expenses on line 9 and are not required to file Form 4562 for th's business. See the instructions for Gne 13 on page C-4 to fnd out 'd you must file Form 4562. 43 When did you place your vehicle in service for business purposes? (month, day, year) - / / 44 l7f the total number of miles you drove your vehicle during 2003, enter the number of miles you used your vehicle for: a Business b Commuting c Other 45 Duo you (or your spouse) have another vehicle available for personal use? .............................................................................. ^ Yes ^ No 4g lhlas your vehicle available for personal use during off-duty hours? .................................................................................... ^ Yes ^ No 47 a Duo you have evidence to support your deduction? ............................................................................................................ ^~--7 Yes ^ No h If'Vac • is tha avirlonra wrlttan~ I I Yes ~ Ne Part V ' Other E enses. List below business ex nses not included on lines 5-26 or Gne 30. TRADE SHOWS 1 978. DUES 43. CREDIT CARD CHARGES 6 385. BAD DEBTS 2 300. AMOR'I'I ZATION 311. 48 Total other expenaea. Enter here and on page 1, line 27 4g 11 017 . Sc hedule C (Form 104012003 1~~a()22E~ 706230 DAP-BAKE) 2003.09000 BAKER, JAMES R DAP-BAK1 JAMES R & CAROLE D BAKER 172-36-1168 SCHEDULE C CAR AND TRUCK EXPENSES STATEMENT 4 DESCRIPTION 1997 TOYOTA 4 RUNNER - $2810 GAS, OIL, REPAIRS, ETC. AT 45.89$ 2002 TOYOTA CAMRY - $1042 GAS, OIL, REPAIRS, ETC. AT 74.42$ VEHICLE :NUMBER 7 - $2301 GAS, OIL, REPAIRS, ETC. AT 62.68$ TOTAL TO SCHEDULE C, LINE 9 ~2~an22F~ 706230 DAP-BAKEJ 2003.09000 BAKER, JAMES R AMOUNT 1,290. 775. 1,442. 3,507. STATEMENT(S) 4 DAP-BAK1 SCHEDULE C (Form 1040) Department of the Treasury Internal Revenue Service (99) Profit or Loss From Business (Sole Proprietorship) - Partnerships, joint ventures, etc., must file form 1085 or Form 1085-8. Anach to form 1040 or Form 1041. -See Instructions for Schedule C (Form 1 OMB Attachment SeQuence No.09 Name of proprietor JAMES R BAKER Social severity number (SSN) - - A Prinr:ipal business or profession, including product or service (see page C-1) ADVERTISING SPECIALTIES B Enter code horn pages C-7, a, 8 e - 453220 C Business name. If no separate business name, leave blank. JAMES R BAKER D Employer to number (E'"), if any 25-1649563 E Business address (including suite or room no.) - 5 3 2 5 TRINDLE RD . ------------------- C'lty, town or post office, state, and ZIP code MECHANICSBURG . PA 17 0 5 5 ------- ------ --- F G H Accounting method: (1)~ Cash (2)® Accrual (3)~ Other (specify) - _ _ _ _ _ _ _ _ _ Did you materially participate' in the operation of this business during 2002? If'No; see page C-3 for limit on losses .... If you started or acquired this business during 2002, check here _ _ _ _ _ _ _ _ ....................... _ -------- ... ®Yes 0 No - Part I Income 1 Gross receipts or sales. Caution. If this income was reported to you on Form W-2 and the'Statutory employee' box on .............................................. ... see page C-3 and check here that form was checked - ~ 1 1 13 5 4 8 7 . 2 .................................... , Returns and allowances . . ............................................. . ........... 2 3 ........................................................................... Subtract line 2 from line 1 ..... . ...... 3 1 13 5 4 8 7. 4 Cost of goods sold (from line 42 on page 2) 4 7 2 5 8 7 . 5 Subtract line 4 from line 3 Gross profit ............................................... .... ........... 5 3 4 2 9 0 0. 6 . ...................................................... Other income, including Federal and state gasoline or fuel tax creditor refund (see . page C-3) ..................................... ........... 8 7 Gross income. Add lines 5 and 6 - 7 3 4 2 9 0 0. Rart I I Expenses. Enter expenses for twsiness use of your home only on line 30. 8 Adv(;rtising 8 3 618. 19 Pension and profit-sharing plans _.-.-.. ..-....---- 19 4 278. 9 .................................... Bad debts from sales or services (see page C-3) 9 3 580. 20 a Rent or lease (see page C-5): Vehicles, machinery, and equipment .-_..__,.... _ 20a 10 .................. Car and truck expenses b Other business property ............... ............ 20b $TMT 4 (see pageC-3) 10 3 404. 21 Repairs and maintenance ............... ............ 21 6 157. 11 ... _... ......._. Comlmissions and fees 11 15 97 6 . 22 Supplies (not included in Part III) --- -....__.._.. 22 12 ...... ......... Depletion t2 23 Taxes and licenses--.......-._...-......._ _.._....--.. 23 12 950. 13 .................................... Depreciation and sectron 179 expense deductan (not included in 24 a Travel, meals, and entertainment ............................ Travel ............ 24a . . . Part III) (see page C-4) 13 15 0 71 . b ........... Meals and 14 ............... .. . Employee benefit programs (other entertainment ------------------ 2 618 . ...... than on line l9) 14 19 900. c Enter nondeductible 15 ..................... . .._..,--. Insurance (other than health) 15 6 317. amount included on line 24b 18 _ _ Interest (see page C-5) .................. 1 3 0 9. a etc.) Mortgage (paid to banks 18a 3 518. d Subtract line 24c from line 24b ...... ............ 24d 1 3 0 9 . b , -....,... anf;r 1sb 25 utilities ..................... . ............ 25 19 218 . 17 .......................................... Legal and professional 28 .............. ... Wages (less employment credits) ... ............ 28 151 4 9 5 . ..... services 17 1 0 0 0 . 27 Other expenses (from line 48 on 18 ..................... ............. Office ex ense 1 12 4 7 4. a e 2 27 12 8 8 8. 28 Total expenses before expenses for bus iness use of home. Add lines 8 t hrough 2 7 in columns ................................. ...... - 28 2 9 3 15 3 . 29 Tenliative profit (loss). Subtract line 28 from line 7 ....................................................................................... 30 Expenses for business use of your home. Attach Form 8829 ........................................................................ 31 Net profit or (loss). Subtract line 30 from line 29. • If a profit, enter on Form 1040, line 12, and also on Schedule SE, line 2 (statutory employees, see page C-6). Estates and trusts, enter on Form 1041, line 3. • If a loss, you must go to line 32. 32 If you have a loss, check the box that describes your investment in this activity (see page C-6). • If you checked 32a, enter the loss on Form 1040, line 12, and also on Schedule SE, line 2 (statutory employees, see page C-6). Estates and trusts, enter on Form 1041, line 3. • If you checked 32b, you must attach Form 8198. LHA For Paperwork Reduction Act Notice, see Form 1040 instruction:. zzooot n-oa-az ,~~~nzn~r ~nF2~n nAP-RAKE.7 2002.08000 BAKER, JAMES R All investment 328 is at risk. 32b 0 s«ne investment is not at risk. Schedule C (Form 1040) 2002 DAP-BAK1 Schedule C QForm 1040) 2002 JAMES R BAKER 17 2 - 3 6 -116 8 Pa e Part 111 Cost of Goods Sold (see page C-6) 33 Method(s) used to value closing inventory. a ^ Cost b ^ Lower of cost or market c ^ Other (attach explanation) 34 Wa,s there any change in determining quantities, costs, or valuations between opening and closing inventory? If 'Yes; attach explanation ................................................................................................................................ -.,_, ^ Yes ........... ^ No 35 Inventory at beginning of year. If different from last year's closing inventory, attach explanation ••--.--_..•..--•-----_. .. 35 4 215 . 36 Purchases less cost of items withdrawn for personal use ---•.....•----------- --•-- .... 36 7 9 2 9 7 0 . 37 Cost of labor. Do not include any amounts paid to yourself -__--•••....--•---, •• . 37 38 Materials and supplies ....................................•- ............................................................................................• 38 39 Other costs ....................................................................................................................................•-----......... 39 40 Add lines 35 through 39 ....................•....-.•.,....-.-_--........ -.....--.--_-•--....... 40 7 9 7 18 5 . 41 Im~entory at end of year ................................................................................................................................. 41 4 5 9 8 . 42 Cost of ooda:old. Subtract line 41 from line 40. Enter the result he-e and on a e 1, line 4 42 7 9 2 5 8 7 . Part IV Information on Your Vehicle. Complete this part only'rf you are claiming car or truck expenses on line 10 and are t i to file Form 4562 for th's business. See the instructions for line 13 on page G4 to fnd out if you must file. no req u red 43 When did you place your vehicle in service for business purposes? (month, day, year) - / / 44 Of the total number of miles you drove your vehicle during 2002, enter the number of miles you used your vehicle for: a Business b Commuting c Other 45 Do you (or your spouse) have another vehicle available for personal use? .............................. ^ Yes ^ No 46 Was your vehicle available for personal use during off-duty hours? ............................. ^ ^ No .............................. Yes 47 a Do you have evidence to support your deductan? ............................... ^ Yes [^ No b If "Yes' is the evidence written? Yes No ::Pelt V Other E enses. Last below business ex uses not included on tines 8.26 or 6ne 30. TRADE SHOWS 2 180. DUES 4 217. CREDIT CARD CHARGES 6 180. AMORTIZATION 311. 48 Total other expenses. Enter here and on zzooov ii-oa-oz a ~r~n~~ ~r '7n~7Zn TIIIU-RAKF..T line 27 2002.08000 BAKER, JAMES R 48 ~ 12,888, Schedule C (Form 1040) 2002 DAP-BAK1 JAMES :R & CAROLE D BAKER 172-36-1168 SCHEDULE C CAR AND TRUCK EXPENSES STATEMENT 4 DESCRIPTION 1997 TOYOTA 4 RUNNER - $2769 GAS, OIL, REPAIRS, ETC. AT 55.36$ 2002 TOYOTA CAMRY - $959 GAS, OIL, REPAIRS, ETC. AT 68.50$ VEHICLE :NUMBER 10 - $1925 GAS, OIL, REPAIRS, ETC. AT 63.04$ TOTAL TO SCHEDULE C, LINE 10 ~z~~n~~•~ 7n~2~0 DAP-BAKE) 2002.08000 BAKER, JAMES R AMOUNT 1,533. 657. 1,214. 3,404. STATEMENT(S) 4 DAP-BAK1 SCHEDVJLE C Profit or Loss From Business OMB No. 1545-0074 (Form 1040) (Sole Proprietorship) 20 1 Departmento'dmeTreasury - Partnerships, jointventurea, etc., mustfile Form 1085 or Form 1085-B. attachment Internal Reverwe Service c9e) - Attach to form 1040 or Form 1041. -See Instructions for Schedule C Form 1040. sequence No.09 Name of proprietor Social security number (SSN) JAMES R BAKER - - A Prinr;ipal business or profession, including product or service (see page C-1) B Enter code from pages C-7 6 8 ADVERTISING SPECIALTIES - 453220 C Business name. If no separate business name, leave blank. p employer to number tEIN), it any JAMES R BAKER 25-1649563 E Business address (including suite or room no.) - 5 3 2 5 TRINDLE _RD ----------------------------- City, town or post office state and ZIP code MECHANI CSBURG , PA 17 0 5 5 F Acca~unting method: (1)0 Cash (2)® Accrual (3)0 Other (specify) - _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ -------- G Did you materially participate' in the operation of this business during 2001? If'No; see page C-2 for limit on losses .............................. ®Yes 0 No H If you started or acquired this business during 2001, check here - Income 1 Gross receipts or sales. Caution. If this income was reported to you on Form W-2 and the'Statutory employee' box on .............................. - 0 see page C-2 and check here that lform was checked 1 1 141 19 5 . ......................................................... , 2 Returns and allowances 2 ............................................................................ ................................................ 3 Subtract line 2 from line 1 3 1 141 19 5 . ....................................................................................... .................................. . 4 Cost of goods sold (from line 42 on page 2) 4 8 0 2 0 6 7 . .. .......................................................................... .......................................... Subtract line 4 from line 3 . . .. 5 Gross profit 5 3 3 9 12 8. .. . . . ............................................•--.................... ...........••-...-.-.---.---.--•„-,_,., including Federal and state gasoline or fuel tax credit or refund (see page C-3) 6 Other income 8 , ........ 7 Gross income. Add lines 5 and 6. - 7 3 3 9 12 8 . :..Part III Expenses. Enter expenses for business use of your homeonly on line 30. 8 AdvE:rtising 8 4 815. 19 Pension and profit-sharing plans .-.--...-.,..__... 19 4 , 0 3 9 . .................................... 9 Bad debts from sales or services (see page C-3) 9 3 8 5 0 . 20 Rent or lease (see page C-4): a Vehicles, machinery, and equipment --..--..-..- 20a -• ................ 10 Car and truck expenses b Other business property ........................... 20b $TMT 4 (see page C-3) 10 2 5 0 6 . 21 Repairs and maintenance ........................... 21 7 815 . ... .... .......,. 11 Commissions and fees 11 12 7 8 9 . 22 Supplies (not included in Part III) ..----__.-_-_.- 22 ------------------ 12 Depletion 12 -._•.•-..•-•-.....---........,.,.._ 23 Taxes and licenses 23 12 922. .................................... 13 Depreciatwn and section 179 expense deduction (not included in - 24 Travel, meals, and entertainment .................................... .. a Travel 24a ....... Part III) (see page C-3) 13 11 3 61 . ••.---•-•• .. . b Meals and .............. 14 Employee benefit programs (other entertainment ----..,,,,,. 2 815 . than on line 19) 14 19 7 9 8 . •..•„ c Enter nondeductible ........................... 15 Insurance (other than health) 15 6 2 6 0 . amount included on line 24b ...--....,•• 16 Interest: .... (see page C-5) 1 4 0 8. etc ) a Mortgage (paid to banks t6a 5 618. .............. d SubVact line 24c from line 24b ------------------ 24d 1 4 0 7 . . .,.-..-., , b Othf:r 1 b 25 Utilities ....................... .. 25 18 141 . .......................................... al and professional 17 Le ......................... . 26 Wages (less employment credits) --------------- 28 14 6 3 0 5 . g . .. services 17 1 040. 27 Other expenses (from line 48 on . ................................... 18 Office ex ease 18 11 6 4 2 . a e 2 27 13 2 31. 28 Total expenses before expenses for bus iness use of home. Add lines 8 t hrough 27 in columns ....................................... - 28 2 8 3 5 3 9 . 29 Tenllative profit (bss). Subtract line 28 from line 7 „ ..................................................................................... 30 Expenses for business use of your home. Attach Form 8829 ........................................................................ 31 Net profit or (loss). Subtract line 30 from line 29. • If a profit, enter on Form 1040, line 12, and also on Schedule SE, line 2 (statutory employees, see page C-5). Estates and Vusts, enter on Form 1041, line 3. • If a loss, you must go to line 32. 32 If you have a loss, check the box that describes your investment in this activity (see page C-6). • If you checked 32a, enter the loss on Form 1040, line 12, and also on Schedule SE, line 2 (statutory employees, see page C-5). Estates and Vusts, enter on Form 1041, line 3. . If you checked 32b, you must attach Form B198. LHA For Paperwork Reduction Act Notice, see Form 1040 instructions. tzooot to--ze-ot All investment 328 is at risk. 32b Q 5ort1e investment is not at risk. Schedule C (Form 1040) 2001 ,~,cn~nn ~n~~~n T1AP-RAKF.,T 2001.08000 BAKER, JAMES R DAP-BAK1 Schedule C (Form 1040) 2001 AMES R BAKER 17 Z - 3 6 -116 8 Pa e 2 art I I;. Cost of Goods Sold (see page c-6) __ 33 Method(s) used to value closing inventory. a ^ Cost b ^ Lower of cost or market c ^ Other (attach explanaton) 34 Was there any change in determining quantities, costs, or valuations between opening and closing inventory) If 'Yes; attach explanation ^ Yes ^ No 35 Inventory at beginning of year. If different from last year's closing inventory, attach explanation ,-,•-,.• ............................ 35 3 9 8 4 . 38 ................................................... Purchases less cost of items withdrawn for personal use 38 8 0 2 2 9 8 . .................................... 37 ............................................... . Do not include any amounts paid to yourself Cost of labor 37 .•••,•,•• .......................... . . 38 ..........................................•-••-• Materials and supp-ies 38 .................................................................................... 39 ..................................... . 04her costs 39 . ............................................................................................................ 40 ..................................... Add lines 35 through 39 40 8 0 6 2 8 2 . ............................................................................................ 41 ..................•---................. Inventory at end of year 41 4 215 . .......................................................................................... 42 Cost of oods sold. Subtract line 41 from line 40. Enter the result here and on a e 1, line 4 42 8 0 2 0 6 7 . .Part IV Information on Your Vehicle. Complete this part only'rf you are claiming car or truck expenses on line 10 and are not required to file Form 4562 for this business. See the instructions for line 13 on page C-3 to fnd out 'd you must file. 43 IM1~hen did you place your vehicle in service for business purposes? (month, day, year) - / / 44 Of the total number of miles you drove your vehicle during 2001, enter the number of miles you used your vehicle for: a Business b Commuting c Other 45 Do you (or your spouse) have another vehicle available for personal use? .............................................................................. ^ Yes 48 Nlas your vehicle available for use during off-duty hours? ................................................................................................... ^ Yes 47 a Do you have evidence to support your deduction? ............................................................................................................ ^ Yes b If "Yes' is the evidence written? n Yes Part V Other Expenses List below business expenses not included on lines 8.26 or Gne 30. TRADE SHOWS DUES CREDIT CARD CHARGES AMORTIZATION 11. 48 )total other expenses. Enter here and on „cn~no ~n~~~n nAp-RAKF.,T 1, line 27 4 Schedule C (Form 1040) 2001 2001.08000 BAKER, JAMES R DAP-BAK1 ^ No ^ No n No JAMES R & CAROLE D BAKER 172-36-1168 SCHEDULE C CAR AND TRUCK EXPENSES STATEMENT 4 DESCRIPTION CAR AND TRUCK EXPENSES FROM STATEMENT SBE TOTAL TO SCHEDULE C, LINE 10 ~+ i...,nn ~nc7~n nnD_AIlKF'.T 2001. 08000 BAKER, JAMES R AMOUNT 2,506. 2,506. 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