Loading...
HomeMy WebLinkAbout08-6589/ REAGER & ADLER, P.C. BY: THEODORE A. ADLER, ESQUIRE Attorney I.D. No. 16267 Email: Tadler ,ReagerAdlerPC.com BY: JOHN H. PIETRZAK, ESQUIRE Attorney I.D. No. 79538 Email: Jpietrz"ReagerAdlerPC.com 2331 Market Street Camp Hill, PA 17011 Telephone: (717) 763-1383 Facsimile: (717) 730-7366 Attorneys for Plaintiff L Cubed Company L CUBED COMPANY, : IN THE COURT OF COMMON PLEAS 1248 South Mountain Road : CUMBERLAND COUNTY, PENNSYLVANIA Dillsburg, PA 17019 Plaintiff, : VS. : Civil Action No. D P-. (g' P9 ems ; D DAVID A. BARIC 19 W. South Street Carlisle, PA 17013 And O'BRIEN, BARIC & SCHERER Attorneys at Lave 19 W. South Street Carlisle, PA 17013 Defendants. PRAECIPE TO ISSUE WRIT OF SUMMONS TO THE PROTHONOTARY: Please issue a Writ of Summons to the Defendants in the above referenced matter. REAGER & ADLER, P.C. Dated: November 7, 2008 By: a1A T ore A. Adler, Esquire 4f Attorney I.D. No. 16267 John H. Pietrzak, Esquire Attorney I.D. No. 79538 2331 Market Street Camp Hill, PA 17011-4642 (717) 763-1383 WRIT OF SUMMONS TO THE ABOVE-NAMED DEFENDANT(S): YOU ARE NOTIFIED THAT THE ABOVE-NAMED PLAINTIFF(S) HAS/HAVE COMMENCED AN ACTION AGAINST YOU. Date: (BepzT5tothon tary N C'D -.0 j,71 SHERIFF'S RETURN - REGULAR CASE NO: 2008-06589 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND L CUBED COMPANY VS BARIC DAVID A ET AL KENNETH E GOSSERT , Sheriff or Deputy Sheriff of Cumberland County,Pennsylvania, who being duly sworn according to law, says, the within WRIT OF SUMMONS was served upon BARIC DAVID A the DEFENDANT at 0015:26 HOURS, on the 14th day of November , 2008. at 19 W SOUTH STREET CARLISLE, PA 17013 by handing to DAVID A BARIC DEFENDANT a true and attested copy of WRIT OF SUMMONS together with and at the same time directing His attention to the contents thereof. Sheriff's Costs: Docketing Service Affidavit Surcharge alolloS So Answers: 18.0011 5.00 00' • 10.0011 R. Thomas Kline . 001 33.00 11/17/2008 REAGER & ADLER Sworn and Subscibed to By: before me this day of A.D. SHERIFF'S RETURN - REGULAR t, . CASE NO: 2008-06589 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND L CUBED COMPANY VS BARIC DAVID A ET AL KENNETH E GOSSERT , Sheriff or Deputy Sheriff of Cumberland County,Pennsylvan''ia, who being duly sworn according to law, says, the within WRIT OF SUMMONS was served upon O'BRIEN BARIC & SCHERER the DEFENDANT at 0015:26;HOURS, on the 14th day of November , 2008 at 19 W SOUTH STREET CARLISLE, PA 17013 DAVID A BARIC by handing to LAW PARTNER a true and attested copy of !WRIT OF SUMMONS together with and at the same time directing His attention to the contents thereof. Sheriff's Costs: So Answers: Docketing 6.00 Service .00 Affidavit .00 Surcharge 10.00 R. Thomas Kline 00 lQ?or?0 ?- 16. 11/17/2008 REAGER & ADLER Sworn and Subscibed to before me this day By of A. D. L CUBED COMPANY, : IN THE COURT OF COMMON PLEAS 1248 South Mountain Road : CUMBERLAND COUNTY, PENNSYLVANIA Dillsburg, PA 17019 Plaintiff, VS. : Civil Action No. 08-6589 ? DAVID A. BARIC : Jury Trial Demanded c) 19 W. South Street : -- --+ Carlisle, PA 17013 r n rri And c a -a 8 -n O'BRIEN, BARIC & SCHERER C:) Attorneys at Law = CD c -77 19 W. South Street ' Carlisle, PA 17013 Defendants NOTICE YOU HAVE BEEN SUED IN COURT. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this Complaint and Notice are served, by entering a written appearance personally or by attorney and filing in writing with the Court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so the case may proceed without you and a judgment may be entered against you by the Court without further notice for any money claimed in the Complaint or for any other claim or relief requested by the Plaintiff. You may lose money or property or other rights important to you. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW. THIS OFFICE CAN PROVIDE YOU WITH INFORMATION ABOUT HIRING A LAWYER. IF YOU CANNOT AFFORD TO HIRE A LAWYER, THIS OFFICE MAY BE ABLE TO PROVIDE YOU WITH INFORMATION ABOUT AGENCIES THAT MAY OFFER LEGAL SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE OR NO FEE. Cumberland County Bar Association 32 South Bedford Street Carlisle, PA 17013 1-800-990-9108 AVISO USTED HA SIDO DEMANDADO/A EN CORTE. Si usted desea defenderse de las demandas que se presentan mds adelante en las siguientes paginas, debe tomar accion dentro de los proximos veinte (20) dias despuds de a notificacion de esta Demanda y Aviso radicando personalmente o por medio de un abogado una comparecencia escrita y radicando en la Code por escrito sus defensas de, y objecciones a, las demandas presentadas aqua en contra suya. Se le advierte de que si usted falla de tomar accion como se describe antenormente, el caso puede proceder sin usted y un fallo por cualquier suma de dinero reciamada en la demanda o cualquier otra reclamacion o remedio solicitado por el demandante puede ser dictado en contra suya por la Code sin mds aviso adicional. Usted puede perder dinero o propiedad u otros derechos importantes para usted. USTED DEBE LLEVAR ESTE DOCUMENTO A SU ABOGADO INMEDIATAMENTE. SI USTED NO TIENE UN ABOGADO, LLAME 0 VAYA A LA SIGUIENTE OFICINA. ESTA OFICINA PUEDE PROVEERLE INFORMACION A CERCA DE COMO CONSEGUIR UN ABOGADO. SI USTED NO PUEDE PAGAR POR LOS SERVICIOS DE UN ABOGADO, ES POSIBLE DUE ESTA OFICINA LE PUEDA PROVEER INFORMACION SOBRE AGENCIAS CUE OFREZCAN SERVICIOS LEGALES SIN CARGO O BAJO COSTO A PERSONAS DUE CUALIFICAN. Cumberland County Bar Association 32 South Bedford Street Carlisle, PA 17013 1-800-990-9108 REAGER & ADLER, P.C. BY: THEODORE A. ADLER, ESQUIRE Attorney I.D. No. 16267 Email: Tadler@ReagerAdlerPC.c_om 2331 Market Street Camp Hill, PA 17011 Telephone: (717) 763-1383 Facsimile: (717) 730-7366 Attorneys for Plaintiff L Cubed Company L CUBED COMPANY, 1248 South Mountain Road Dillsburg, PA 17019 Plaintiff, VS. DAVID A. BARIC 19 W. South Street Carlisle, PA 17013 And O'BRIEN, BARIC & SCHERER Attorneys at Law 19 W. South Street Carlisle, PA 17013 Defendants. IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA Civil Action No. 08-6589 Jury Trial Demanded COMPLAINT AND NOW comes Plaintiff, L Cubed Corporation, by and through their attorneys, Reager & Adler, PC, who files this Complaint and, in support thereof, alleges the following: 1. Plaintiff, L Cubed Company ("L Cubed") is a Pennsylvania business corporation, with its registered address at 1248 South Mountain Road, Dillsburg, York County, Pennsylvania 17019. 2. Defendant, David A. Baric, Esquire (`Banc"), is an attorney licensed to practice law in the Commonwealth of Pennsylvania, who maintains a principal place of business located at 19 West South Street, Carlisle, Cumberland County, Pennsylvania. 3. Defendant, O'Brien, Baric and Scherer, is, upon information and belief, an unincorporated entity operating as a law firm, which maintains a principal place of business located at 19 West South Street, Carlisle, Cumberland County, Pennsylvania. 4. Baric, at all relevant times, acted as an authorized agent and/or within the course and scope of his employment with O'Brien, Baric and Scherer. 5. On or about November 9, 2005, Leonard Lobaugh and TAM Systems, Inc. ("TAM Systems") signed a letter of intent whereby Lobaugh offered to purchase the assets of TAM Systems. Lobaugh was president of L Cubed. 6. In or about February, 2006, L Cubed retained Baric to represent it with respect to the negotiation and preparation of the Asset Purchase Agreement ("APA") to implement the terms of the letter of intent. A copy of a letter confirming Baric's representation of L Cubed is attached hereto as Exhibit "A." 7. Baric represented L Cubed during the negotiations for the asset purchase and advised L Cubed with respect to the terms of the APA which set forth the terms and conditions of the asset sale from TAM Systems to L Cubed. (A copy of the Asset Purchase Agreement is attached hereto as Exhibit "B".) 2 8. On March 1, 2006, L Cubed and TAM Systems conducted a settlement on the sale of the business from TAM Systems to L Cubed. 9. Baric represented L Cubed at the closing. 10. The APA, in pertinent part, provided that, as part of the purchase price for the business, L Cubed would pay TAM Systems 10% of its gross profits derived from the business for a period of 6 years after March 1, 2006 based upon L Cubed's tax returns. 11. At the closing, and prior to signing the APA, Leonard Lobaugh, President of L Cubed, told Baric that the definition of "gross profits" in the APA was not consistent with what L Cubed had agreed to. Rather, the installment payment calculations were to be based on net profits. 12. Baric advised Lobaugh that the definition could be corrected after closing and advised Lobaugh to sign the APA. 13. Based on Baric's advice, Lobaugh signed the APA. 14. Following the closing, Baric attempted to obtain an amendment to the APA to reflect that "net profits" were to be the basis for calculating the installment payments due TAM Systems. 15. On May 22, 2007, Baric advised L Cubed that TAM Systems was refusing to agree to any amendments to the APA. 16. L Cubed replaced Baric as its counsel on July 11, 2007. 3 17. On December 2, 2009, TAM Systems filed a complaint against L Cubed and others alleging that L Cubed failed to pay TAM Systems commissions in accordance with the APA (the "TAM Lawsuit"). A copy of the complaint is attached hereto as Exhibit "C". COUNT I (PROFESSIONAL NEGLIGENCE) 18. L Cubed incorporates herein by reference paragraphs 1 through 17 of this complaint as if more fully set forth at length herein. 19. Baric and O'Brien, Baric and Scherer were retained by L Cubed to provide it with legal counsel and representation, including in connection with the negotiation, drafting and closing of the APA at issue. 20. Baric was present and provided legal counsel and representation to L Cubed at the closing on March 1, 2006. 21. Prior to the execution of all closing documents on March 1, 2006, L Cubed advised Baric that the APA needed to be corrected to reflect the fact that installment payments due TAM Systems were not to be calculated based on gross profits but were to be calculated based on net profits. Net profits were to be defined as total revenues less expenses, excluding stockholder bonuses, unnecessary capital expenditures and expenses not necessary for the operation of L Cubed. 22. Despite L Cubed's request, no amendments, corrections or revisions were made to the APA prior to its being signed by the parties. 4 23. Baric advised L Cubed to execute the closing documents, including the APA, as they existed, and to close the transaction even though the APA did not reflect the correct method or basis for calculating L Cubed's payments due under the APA. Baric advised L Cubed that the APA would be amended following closing to reflect the correct basis for the calculation of the installment payments due TAM Systems. 24. L Cubed, in reliance on Baric's advice, signed the APA. 25. Baric agreed to undertake the drafting of the amendment to the APA and, in fact, draft amendments were exchanged between counsel for TAM Systems and Baric. 26. Ultimately, TAM Systems refused to execute any amendment to the APA. 27. In the TAM Lawsuit, TAM Systems demands that it be paid installments based upon L Cubed's reported gross profits utilizing what TAM Systems describes is "standard cost accounting." 28. Baric, in his capacity as L Cubed's legal counsel, owed a duty to advise L Cubed not to execute the APA and any related closing documents while the APA, as drafted, contained an erroneous or ambiguous term as to the method and basis for calculating L Cubed's installment payments due under the APA, and he breached that duty by failing to do so. 29. Baric had a professional responsibility to L Cubed to make certain that the terms of the APA accurately reflected the agreement of L Cubed prior to the APA being executed and he breached that responsibility by failing to do so. 5 30. Had Baric not breached his professional duties and responsibilities, L Cubed would not be a defendant in the TAM Lawsuit, would not have to incur costs, including attorneys' fees, to defend said lawsuit, and would not be exposed to possible liability for the damages being sought in the TAM Lawsuit. 31. Defendant, O'Brien, Baric and Scherer, owed and breached a duty to L Cubed to supervise and oversee Baric in his representation of L Cubed and/or is vicariously liable for said conduct. 32. If TAM Systems is entitled to recover any of the damages it seeks in the TAM Lawsuit, then Baric and O'Brien, Baric and Scherer are solely liable for such damages. 33. Alternatively, if TAM Systems is entitled to recover any of the damages it seeks in the TAM Lawsuit, then Baric and O'Brien, Baric and Scherer are liable over to L Cubed for indemnification, and/or are jointly and severally liable for contribution with L Cubed. WHEREFORE, L Cubed respectfully requests that this Court enter judgment in its favor and against Defendants David A. Baric, Esquire and O'Brien, Baric and Scherer for all costs, including attorneys' fees, associated with having to defend the TAM Lawsuit, plus indemnification for any judgment entered against it as a result of the TAM Lawsuit; said damages being in excess of $50,000. 6 COUNT TWO (BREACH OF CONTRACT) 34. L Cubed incorporates herein by reference paragraphs 1 through 33 of this complaint as if more fully set forth at length herein. 35. L Cubed and Baric entered into a professional services agreement whereby Baric agreed to provide legal services in exchange for payment of legal fees. 36. In agreeing to represent L Cubed, Baric impliedly contracted to exercise reasonable competence in the services provided. 37. Baric breached his implied contractual obligation to exercise reasonable competence in the services provided. 38. Had Baric not breached his implied duty to exercise reasonable competence in the services provided, L Cubed would not be a defendant in the TAM Lawsuit, would not have to incur costs, including attorneys' fees, to defend said lawsuit, and would not be exposed to possible liability for the damages being sought in the TAM Lawsuit. 39. At all times relevant hereto, Baric was acting in the course of his employment and was an employee of Defendant, O'Brien, Baric & Scherer. 40. Defendant, O'Brien, Baric & Scherer, is vicariously liable for the actions of its employee Baric. 41. If TAM Systems is entitled to recover any of damages it seeks in the TAM Lawsuit, then Baric and O'Brien, Baric & Scherer are solely liable for such damages. 7 42. Alternatively, if TAM Systems is entitled to recover any of the damages it seeks in the TAM Lawsuit, then Baric and O'Brien, Baric & Scherer are liable over to L Cubed for indemnification and/or are jointly and severally liable for contribution with L Cubed. WHEREFORE, L Cubed respectfully requests that this Court enter judgment in its favor and against Defendants David A. Baric, Esquire and O'Brien, Baric and Scherer for all costs, including attorneys' fees, associated with having to defend the TAM Lawsuit, plus indemnification for any judgment entered against it as a result of the TAM Lawsuit; said damages being in excess of $50,000. COUNT III (BREACH OF FIDUCIARY DUTY) 43. L Cubed incorporates herein by reference paragraphs 1 through 42 of this complaint as if more fully set forth at length herein. 44. At closing, Baric advised L Cubed that TAM Systems and its attorneys had agreed that the installment payments to be paid TAM Systems were to be calculated based on net profits. 45. Baric advised L Cubed that TAM Systems and its attorneys had agreed to sign an amendment to the APA following closing. 46. TAM Systems and its attorneys contend there was never any such agreement. 8 47. As its attorney, Baric owed L Cubed the duty to diligently, faithfully and legitimately perform every act necessary to protect, conserve and advance the interests of L Cubed. 48. By misrepresenting what TAM Systems and its attorneys had agreed to, Baric failed to carry out the aforementioned duties and, as such, breached his fiduciary duty to L Cubed. 49. Had Baric not breached his fiduciary duty, L Cubed would not be a defendant in the TAM Lawsuit, would not have to incur costs, including attorneys' fees to defend said lawsuit, would not have to incur costs, including attorneys' fees, to defend said lawsuit, and would not be exposed to possible liability for the damages being sought in the TAM Lawsuit. 50. At all times relevant hereto, Baric was acting in the course of his employment and was an employee of Defendant, O'Brien, Baric & Scherer. 51. Defendant, O'Brien, Baric & Scherer, is vicariously liable for the actions of its employee Baric. 52. If TAM Systems is entitled to recover any of the damages it seeks in the TAM Lawsuit, then Baric and O'Brien, Baric and Scherer are solely liable for such damages. 9 a 53. Alternatively, if TAM Systems is entitled to recover any of the damages it seeks in the TAM Lawsuit, then Baric and O'Brien, Baric and Scherer are liable over to L Cubed for indemnification and/or are jointly and severally liable for contribution with L Cubed. WHEREFORE, L Cubed respectfully requests that this Court enter judgment in its favor and against Defendants David A. Baric, Esquire and O'Brien, Baric and Scherer for all costs, including attorneys' fees, associated with having to defend the TAM Lawsuit, plus indemnification for any judgment entered against it as a result of the TAM Lawsuit; said damages being in excess of $50,000. Respectfully submi Date: q 102 C` 1 I? REAGER & L C. r / Theodofe A. Adler, Esquire Attorney I.D. No. 16267 2331 Market Street Camp Hill, PA 17011 Telephone: (717) 763-1383 Facsimile: (717) 730-7366 ,Reag?erAdlerPC.com Email: Tadlerg Counsel to Plaintiff, L Cubed Company 10 VERIFICATION I, Leonard L. Lobaugh, Jr., hereby verify that I am the President of L Cubed Corporation and, as such, I am authorized to verify that the averments of the foregoing Complaint are true and correct to the best of my personal knowledge, information and belief. I understand that false statements herein are made subject to the penalties of 18 Pa. C.S. §4904, relating to unsworn falsification to authorities. Date: q I ' ? ? o Law Offices O'BRIEN, BARIC & SCHERER 19 West South Street Carlisle, Pennsylvania 17013 i(obert L. O'Brien (717) 249-6873 David A. Baric Fax (717) 249-5755 Michael A. Scherer direct: dbaric@obslaw.com February 14, 2006 VIA FACSIMILE: (717) 249-7334 James D. Hughes, Esquire Salzmann Hughes 354 Alexander Spring Road, Suite 1 Carlisle, Pennsylvania 17013 RE: Tam Systems, Inc. Dear Jim: I have been retained by Len Lobaugh, Jr. regarding the purchase of the assets of Tam Systems, Inc. I have reviewed a copy of the Letter of Intent dated November 9, 2005 and the subsequent letter extending the period to close on the purchase. It is my understanding you are preparing an asset purchase agreement and I would ask that you forward a draft to me as soon as possible. We are in the process of creating a new corporate entity for Mr. Lobaugh which will be named Tam Systems, Ltd. I will be forwarding consent forms for execution by your client to our use of the name Tam Systems, Ltd. Please be advised that two (2) entities exist of record for your client being Tam Systems Corporation and Tam Systems, Inc. Two (2) UCC filings are of record for Tam Systems, Inc. One filing is held by De Lage Landen Financial Services, Inc. and lists the security as one "Gradal". The second filing is held by M&T Bank and extends to all assets of Tam Systems, Inc. Copies of these filings are enclosed for your reference. The Letter of Intent references payoff of an outstanding obligation to M&T Bank. Preliminarily, I am not certain the asset purchase price will ultimately be sufficient to retire that obligation in full and I would ask that you inform me of how that debt will be handled in the event the final purchase price is not sufficient to payoff the loan. James Hughes, Esq. 02/14/06 letter page 2 Please contact me at your earliest convenience to discuss this matter. Very truly yours, 'BRIEN, B SCHERER ?V David A. Baric, Esquire DAB/jl Enc. cc: n Lobaugh, Jr. w/Enc. File dab.dir/corporate/tamsystems/hughesltr ASSET PURCHASE AGREEMENT ?? yYl?ecx? THIS ASSET PURCHASE AGREEMENT, is made as of this day offebrasry, 2006, by and between TAM SYSTEMS, INC., a business corporation organized and existing under the laws of the Commonwealth of Pennsylvania, with its principal offices located at 1248 South Mountain Road, Dillsburg, York County, Pennsylvania 17019 (hereinafter referred to as "Seller"); and L CUBED CORPORATION, a Pennsylvania corporation to have its principal place of business at 1248 South Mountain Road, Dillsburg, York County, Pennsylvania 17019 (hereinafter referred to as "Buyer"). WITNESSETH: WHEREAS, Seller currently operates an agricultural and commercial construction business, located at 1248 South Mountain Road, Dillsburg, York County, Pennsylvania; and WHEREAS, Seller is desirous of selling to Buyer substantially all of Seller's assets and Buyer is desirous of purchasing the same from the Seller upon on the terms and conditions hereinafter set forth. NOW THEREFORE, in consideration of the mutual covenants contained herein, in reliance upon the representations and warranties contained herein, and subject to the conditions contained herein, the parties hereto agree as follows: 1. SALE OF ASSETS: Seller agrees to sell and deliver to Buyer, and Buyer agrees to purchase and take from Seller, all of Seller's inventory, furnishings, leasehold improvements, fixtures supplies, goodwill, customer lists and other rights owned by Seller for use in the operation of Seller's business, the same being more particularly described in Exhibit "A", attached hereto and incorporated herein by this reference (herein collectively called "Assets"). Page 1 of 19 Specifically excluded from the Assets to be sold under this Agreement are those assets listed on Exhibit "A-1 ", attached hereto and incorporated herein by this reference. Except as otherwise disclosed herein, Seller shall transfer all right, title and interest in the Assets to Buyer, free and clear of all liens, encumbrances, security interests, restrictions and claims of any nature whatsoever except those which are created herein and those which have been disclosed to Buyer in this Asset Purchase 2. ASSUMPTION OF LIABILITIES: At or prior to Closing, as defined below, Buyer shall assume those liabilities of Seller as set forth on Exhibit "B", attached hereto and incorporated herein by this reference and indemnify and hold Seller harmless from the same. Seller shall remain liable for all accrued salaries, wages, vacation pay and benefits as well as all sales, income and other applicable taxes accruing to the date of Closing. 3. INSURANCE: Buyer shall establish its own health. insurance and workers compensation insurance for those employees hired by Buyer. 4. LEASE OF REAL AND PERSONAL PROPERTY: a. Personal Property: (1) Cranes: At Closing, Buyer shall enter into a lease agreement for a Pioneer crane, listed as number 21 on the Seller's list of motor vehicles (the "Crane Lease"), which Crane Lease shall be in a form that releases Seller from any and all responsibility under Seller lease for said crane. Seller shall use its best efforts to assure the Lessor agrees to the lease agreement with Buyer. Seller and Buyer acknowledge that Seller has rights under a lease to a Harleysville Crane, which lease is expressly excluded from the Assets which are part of this sale and which lease shall be retained by Seller. Page 2 of 19 (2) Automobiles: Buyer shall assume leases to the following four (4) trucks as of the Closing Date: (a) 2001 F550 (Motor Vehicle No. 60) (b) 2001 F450 (Motor Vehicle No. 61) (c) 2001 F550 (Motor Vehicle No. 62) (d) 2001F550 (Motor Vehicle No. 63) (the "Truck Leases") (3) Forklift. Buyer shall assume the lease for a Gradall forklift listed as number 65 as on the Seller's list of motor vehicles, as of the Closing Date. Seller use its best efforts to assure the Lessor agrees to the assumption of the lease by Buyer. b. Real Property: Buyer shall enter into a commercial lease agreement for the real property located at 1248 South Mountain Road, Dillsburg, York County, Pennsylvania in a fonru mutually agreeable to both Buyer and the property owner (the `Land Lease"); which lease agreement shall expressly relieve Seller from any and all obligations under any lease of Seller for said real property. The monthly rent for said commercial lease shall be $700.00 and the lease shall be triple net to Buyer, The lease shall have a term of one (1) year. 5. ACCOUNTS RECEIVABLE / PAYABLE: a. Accounts Payable: Buyer shall not receive or assume any rights or obligations to accounts payable unless specifically set fort in Exhibit "B". b. Accounts Receivable: Buyer shall not receive or assume any rights or obligations to accounts receivable of Seller other than as expressly set forth herein. Buyer shall collect accounts receivable on behalf of Seller for a period of sixty (60) days following Closing. , This obligation shall not require Buyer to undertake collection actions on behalf of Seller. Further, Buyer shall provide Seller with an accounting of all receipts Buyer collects on behalf of Seller, showing all amounts collected and all amounts Page 3 of 19 P remaining due to Seller after sixty (60) days post Closing, which Buyer shall provide to Seller no later than seventy-five (75) days after Closing. After said sixty (60) day period, Buyer shall not have any obligation to collect any accounts of behalf of Seller, but should Buyer receive any monies on Seller's accounts receivable, Buyer shall promptly turn over such sums to Seller. Buyer shall cooperate with Seller by indorsing any checks made payable to Buyer, but rightly due to Seller during or after the initial sixty (60) period post Closing. Buyer shall pay to Seller all amounts received on Seller's behalf under this Paragraph 5 within ten (10) days of the receipt of such monies. In lieu of Buyer paying such funds to Seller, where such monies are received in the form of a check, Buyer shall indorse said check if required and provide such check to Seller within ten (10) days of Buyer's receipt of said check. C. Prepaid Accounts: Buyer shall pay to Seiler, at Closing, such prorated portion of any obligations of the business prepaid by Seller for such period accounts are prepaid extending beyond the Closing Date. 6. FORK IN PROGRESS: At Closing, Seller shall assign all contracts for work in progress or otherwise listed on Exhibit "C" to Buyer. Buyer shall pay to Seller ten (10%) of the net profits of the works in progress listed on Exhibit "C". No percentage of any loss on works in progress shall be attributable to Seller. Buyer shall pay to Seller all profits allocable to Seller with respect to works in progress within ten (10) days of the receipt of the final fees for each project, but in no even later than one (1) year form the Closing Date, regardless of the status of work completion or collections of fees unless the customer fails or refuses to pay based upon an alleged defect in work performed by Seller or insolvency of the customer. The parties recognize that Seller has invested a significant amount of time and resources to acquire contracts relating to the construction of an ethanol plant currently scheduled to be located in Franklin County, Pennsylvania. If Buyer enters into a contract for work relating to said ethanol plant within one (1) year after the Closing Date, said contract shall be treated as a work in progress under the terms of this Agreement and Buyer shall pay to Seller ten percent (10%) of the net Page 4 of 19 profits to Buyer relating to such contract in addition to any other sums due to Seller under this Agreement. With respect to the works in progress listed as Waste Management Building and Larry Jester Bin on Exhibit "C", Buyer shall first apply any sums due to Seller under this Paragraph 6 to the clients' deposit, which is to be retained by Seller, and then, any amount due under this Paragraph 6 over and above the amount of the deposit shall be paid to Seller under the terms set forth above. The deposits on each project, retained by Seller, are: Waste Management Building: $37,000.00 Larry Jester Bin $20,000.00 7. CLOSING DATE: All of the transactions contemplated herein shall be consummated at the respective time and place as the parties hereto may mutually agree upon on or before March 31, 2006, unless otherwise extended in writing by agreement of the parties hereto (herein called "Closing Date" or "Closing"). Regardless of the specific Closing Date, the transaction contemplated hereunder shall be effective as of the first (P) day of March 2006. 8. PURCHASE PRICE: Buyer shall pay to Seller for the Assets the sung of five hundred and five thousand one hundred and fifty six and 00/100 Dollars ($505,156.00) plus ten percent (10%) of the Gross Profits (as defiled in subsection b.) of Buyer relating the business sold hereunder for a period of six (6) years after the Closing Date as set for the under subparagraph c and the prepaid amounts as set forth in subparagraph b below. below (herein called "Purchase Price"). The parties agree that the Purchase Price shall be paid in United States Dollars and be allocated in the manner set forth on the attached Exhibit "D", attached hereto and incorporated herein by this reference. The Purchase Price shall be paid as follows; At Closing or within ten (10) days thereafter, Buyer shall tender to the Seller a sum of five hundred and five 'thousand one hundred and fifty six and 00/100 Dollars ($505,156.00) to Seller via a bank check, attorney escrow check or other certified Page 5 of 19 funds, a part of which shall be paid directly to M&T Bank for the release of security interests in the Assets with the remainder being paid to Seller; and b. At Closing or within ten (10) days thereafter, Buyer shall tender to the Seller such prepaid amounts as are due under Paragraph 5. c.; and c. Buyer shall pay to Seller ten percent (10%) of Buyer's Gross Profits derived from the business sold hereunder for a period of six (6) years after the Closing Date. Buyer shall pay said Gross Profits to Seller within thirty (30) days of each anniversary of the Closing Date during the said six (6) year period. For the purposes of this Agreement, Gross Profits shall mean the gross profits as shown on Buyer's tax return 9. CONDITION OF ASSETS AND RISK OF LOSS: Buyer asserts that it has had the opportunity to inspect the Assets prior to time of executing this Asset Purchase Agreement and acknowledges that the Assets are in a condition acceptable to Buyer. Seller does not warrant the condition of the Assets and the Assets are sold "AS IS", with no express or implied warranties thereon, includingg warranties of merchantability or fatness for a particular purpose, other than the manufacturers' warranties existing on such assets as of the date of Closing hereunder. Seller shall maintain the Assets in their present condition and state of repair between the date of this Agreement and the Closing Date, ordinary wear and tear alone excepted. Seller shall bear all risk of damage to or loss of the Assets until the Closing Date. After the Closing Date, Buyer shall bear all risk of damage to or loss of the Assets. 10. TAXES PAID: Seller shall comply with all provisions of the Pennsylvania Fiscal Code, as amended, in connection with its sale of the Assets to Buyer. Seller hereby covenants and agrees to pay any and all taxes due on a federal, state or local level as a result of this transaction and that any and all such taxes shall be solely the responsibility of the Seller. Seller also certifies that, to the best of its knowledge, all taxes which may result in any lien against the Assets, including any and all unemployment taxes, have been paid or will be paid Page 6 of 19 from the proceeds of this sale. In the event that any such taxes remain outstanding, the Seller shall promptly pay the same to the appropriate taxing authority and hereby agrees to indemnify and hold harmless the Buyer from any and all claims, judgments and liens as a result thereof. This warranty and representation shall survive the Closing for a period not to exceed six (6) years after the Closing Date. Further, Buyer shall have the right to set off any and all liabilities so imposed upon the Buyer against any amount(s) due or to become due from Buyer to Seller under the terms of this Agreement. 11. EMPLOYEES: a. Buyer shall enter into an employment contract with Galen Julius Linder terms mutually agreeable to Buyer and Galen Julius. Seller currently retains three (3) employees on disability, Chuck Preeburn, Walter Clegg and Robert Smith. These three disabled employees shall remain the responsibility of Seller after the Closing Date and until the following dates: Chuck Freeburn May 4, 2006 Walter Clege April 5, 2006 Robert Smith June 29, 2006 Notwithstanding the above dates, at any such time as Buyer may hire any of the above mentioned persons as an employee of Buyer, Buyer assume all responsibility for said person as an employee of Buyer. Pension Plans - Seller shall retain all responsibility for any pension plans in place for the benefit of Seller's employees which Seller shall administer in accordance with the terms and conditions of such plans. Buyer may elect to establish a pension plan for any of Buyer's employees, which plan shall be administered separate and apart from Seller's pension plans. Page 7of19 12. SELLER'S COVENANTS, REPRESENTATIONS AND WARRANTIES: Seller hereby covenants, represents and warrants to Buyer that to the best of Seller's knowledge, information and belief: a. Seller is the sole owner of the Assets with full right and lawful authority to sell and deliver the same to Buyer hereunder, and the sale and delivery of the Assets to Buyer hereunder will not violate the rights or interests of any person or entity; b. Seller has not entered into any other agreement regarding the sale or transfer of any of the Assets which is still in effect; C. Seller is not involved as a debtor in any proceedings under any federal or state bankruptcy or insolvency laws; All of the covenants, representations and warranties of Seller set forth in this Agreement shall be deemed to have been made again by Seller at Closing and shall survive Closing for a period of sip (b) years. 13. CONDITIONS PRECEDENT TO CLOSING - BUYER: Buyer's obligation to purchase and take the Assets from Seller and to comply with any other obligations imposed upon Buyer under this Agreement are conditioned and contingent upon the occurrence of each of the following events or existence of each of the following circumstances Seller's compliance with all the other terms and conditions of this Agreement which are to be performed or observed by it on or before the Closing Date. 14. CONDITION PRECEDENT TO CLOSING - SELLER: Seller's obligation to sell and deliver the Assets to Buyer and to comply with any other obligations imposed upon Seller under this Agreement is conditioned and contingent upon Buyer's compliance with all the Page 8 of 19 terns and conditions of this Agreement which are to be performed or observed by Buyer on or before the Closing Date. 16. CLOSING DOCUMENTS: a. Seller shall duly execute and deliver to Buyer the following documents and instruments at Closing: 1. A Bill of Sale in forn-i acceptable to Buyer and Seller, which exhibit is incorporated herein by this reference, said document duly executed by Seller, transferring good and marketable title to the Assets to Buyer; 2. Such other documents and instruments as are reasonably requested by Buyer in connection herewith; 3. Minutes or Consent of Board of Directors of Seller authorizing all actions contemplated under the Sales Agreements. b. Buyer shall duly execute or cause to have executed and deliver to Seller the following documents and instruments at Closing: 1. Minutes or resolutions of the Board of Directors of Buyer authorizing all actions contemplated under the Sales Agreements; 2. All other documents required under the Sales Agreements; and 3. Such other documents and instruments as are reasonably requested by Seller in connection herewith. 16. OTHER DOCUMENTS: Seller and Buyer shall also deliver to each other, both before and after Closing, such other documents and instruments as may be reasonably required for the proper consummation of the transactions contemplated in this Agreement and for the proper fulfillment of the covenants, representations and warranties contained in this Agreement. 17. INDEMNIFICATION AND SETOFF: Each party agrees to indemnify and hold harmless the other party for and from any and all liability or loss the other party may suffer Page 9 of 19 (including but not limited to court costs and reasonable attorney's fees) on account of a party's breach of any terns, covenant, warranty or representation set forth herein or in any of the documents and instruments executed or delivered in connection herewith. All the terms, covenants, warranties and representations set forth herein shall survive Closing and the execution and/or delivery of any documents and/or instruments before, at or after Closing for a period of six (6) years. Further, Buyer shall have the right to set off any and all liabilities so imposed upon the Buyer against any amount(s) due or to become due from Buyer to Seller under the terms of this Agreement. 18. NOTICES: Any notice to be given hereunder shall be given in writing and delivered personally or by registered or certified mail, return receipt requested, postage prepaid, to the respective parties at the following locations: Seller: Marlin. C. Fleming, President TAM Systems, Inc. 1248 South Mountain Road Dillsbti rk, PA 17109 Copy to : James D. Hughes, Esquire Salzmann Hughes, P.C. 354 Alexander Spring Road, Suite 1 Carlisle, PA 17013 Buyer: Leonard L. Lobaugh, Jr. 5 Logan Drive Gardners, PA 17324 Copy to: David A. Baric, Esquire O'Brien, Baric & Scherer 19 West South Street Carlisle, PA 17013 19. NO BROKER'S COMMISSION: Neither party hereto shall be liable for any broker's commission in connection with the transactions hereunder, and each party acknowledges Page 10 of 19 and represents to the other party that it has not had any dealings, negotiations or consultations with any broker concerning the transactions hereunder for which compensation is due. 20. CONFIDENTIALITY: All parties hereto agree that all of the terms and conditions of this Agreement shall remain confidential and shall only be relayed to the parties hereto or their duly appointed representatives to the extent that such terms and conditions are not considered public knowledge or a part of the public domain or as necessary to enforce the terms of this Agreement. 21. WAIVER - CONFLICT OF INTEREST: In order to retain a certain continuity of knowledge and experience with the business to be sold hereunder with respect to legal representation, the parties recognize that Buyer has been a party to discussion with Seller and Seller's counsel, Salzmann Hughes, P.C., who has also assisted Buyer with other legal matter prior to the execution of this Agreement. Buyer and Seller acknowledge that Salzmann Hughes, P.C. has been the legal counsel for Seller, has represented Seller during the course of this transaction, and the possibility that a conflict of interest could exist. Buyer and Seller hereby waive arly and all conflict of interest on the part of Salzmann Hughes, P.C. with regard to any prior representation of Buyer and current representation of Seller in this transaction. Buyer specifically recognizes that Salzmann Hughes, P.C. represents the Seller during the course of the transaction contemplated under this Agreement and does not represent Buyer for that purpose. 22. 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. Page I i of 19 23. COOPERATION: Subject to the terms and conditions hereof, each of the parties hereto shall use its best 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 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 Buyer all right, title and interest in and to the Assets or Inventory, whether at or after the Closing. 24. BULK SALES LAW COMPLIANCE: The parties hereto expressly waive compliance with the provisions of the Pennsylvania Bulk Sales Law, and the Seller shall indemnify and hold the Buyer harmless from and against any and all liabilities imposed upon the Buyer resulting from such non-compliance, other than with respect to the Liabilities assumed by the Buyer pursuant to this Agreement. Further, Buyer shall have the right to set off any and all liabilities so imposed upon the Buyer against any amount(s) due or to become due from Buyer to Seller under the temis of this Agreement. 25. ASSIGNMENT, This Agreement shall not be assignable by the Seller without the prior written consent of Buyer. The Buyer shall have the right at any time prior to Closing to assign this Agreement to its nominee without obtaining the Seller's consent provided however that any such assignment shall only be effective if it is assigned to an entity which is owned at least fifty-one percent (51%) by Leonard L. Lobaugh, Jr.. In all other cases, this Agreement shall not be assignable by Buyer without the prior written consent of Seller. To the extent assignable, this Agreement shall be binding upon, and inure to the benefit of the Buyer and its successors and assigns and the Seller and its successors and assigns. 26. NAME RIGHTS: At Closing, Seller shall execute and deliver to Buyer a consent to Buyer's appropriation of the name "TAM SYSTEMS", which Seller shall not grant to anyone other than Buyer prior to, at or after Closing, but which name Seller shall continue to use until such time as Seller has completed the process of winding up and dissolving Seller Page 12 of 19 corporation. Seller shall move promptly after Closing to wind up and dissolve. Seller shall not have the right to continue operating the corporation as providing construction services or materials to the public, except as permitted under Paragraph 27 below, after the Closing and Seller shall not do so. At such time as Seller dissolves as a corporate entity, Seller shall consent to the appropriation of exclusive rights to the name "TAM SYSTEMS" to Buyer and Seller shall prepare and deliver to Buyer any reasonably required documentation of said consent. 27. NON-COMPETITION: For a period of six (6) years from the date of Closing, Setter and Marlin C. Fleming agree they will not operate, own, work for or have any affiliation with any business which offers substantially the same services or materials or could be said to compete with Buyer within two hundred (200) miles of Dillsburg, Pennsylvania. Notwithstanding any other provision in this Agreement to the contrary, nothing in this Agreement shall prohibit Seller from selling any and all assets presently owned of Seiler not being purchased-by Buyer hereunder, whether or not such sale competes directly or indirectly with Buyer. 28. MISCELLANEOUS: This Agreement shalt be construed under and governed by the taws of the Commonwealth of Pennsylvania. This Agreement constitutes the entire agreement between the parties with respect to the sale and transfer of the Assets and Inventory, and there are no agreements, conditions or understandings, either oral or written, between Seller and Buyer relating to these matters other than those which are contained in this Agreement. For the purposes of interpreting this Agreement, the masculine shall include the feminine and neuter, and vice versa, and the singular shall include the plural, and vice versa, unless contrary intent appears. The subject headings of the paragraphs of this Agreement are included for the purpose of convenience only and shall in no way affect the meaning or construction of any term or provision hereof. The above WHEREAS clauses and the attached Exhibits are integral and substantive parts of this Agreement and are hereby incorporated herein by reference. This Agreement shall inure to the benefit of and shall be binding upon each of the parties hereto and their respective heirs, executors, administrators, successors and assigns. This Agreement may be Page 13 of 19 altered or amended only by a written agreement signed by both Seller and Buyer. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement. IN WITNESS WHEREOF, and intending to be legally bound, the parties hereto formally execute this Agreement of Sale as of the day and year first above written. SELLER ATTEST: TAM SYSTEMS, INC. By: C'Z? (SEAL) Marlin C. Fleming, Pr sident WITNESS (SEAL) Marlin C. Fleming BUYER TE T: r L CUBED CORPORATION (SEAL) onard L. gh, r., a dent Page 14 of 19 TAM SYSTEMS, INC., Plaintiff V. L CUBED CORPORATION, d/b/a TAM SYSTEMS, LENARD L. LOBAUGH, JR. & MARTIN M. SACKS & ASSOCIATES, Defendants To: L Cubed Corporation c/o John H. Pietrzak, Esquire Reager & Adler, PC 2331 Market Street Camp Hill, PA 17011 IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA DOCKETNO. C)?, iS3& 0(vi ( : CIVIL ACTION - LAW : JURY TRIAL DEMANDED NOTICE TO DEFEND You have been sued in Court. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this Complaint and notice are served, by entering a written appearance personally or by attorney and filing in writing with the Court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so the case may proceed without you and a judgment may be entered against you by the Court without further notice for any money claimed in the Complaint or for any other claim or relief requested by the Plaintiff. You may lose money or property or other rights important to you. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP. Cumberland County Bar Association 32 South Bedford Street Carlisle, PA 17013 Telephone No. (717) 249-3166 In TestilR-41-y i h --rc- ut„o se! my hand and the seal of said Court at Carlisle, Pa. U? This ...Ad.... day_ of.... ......... Pr honotar+f TAM SYSTEMS, INC., Plaintiff V. L CUBED CORPORATION, d/b/a TAM SYSTEMS, LENARD L. LOBAUGH, JR. & MARTIN M. SACKS & ASSOCIATES, Defendants To: Lenard L. Lobaugh, Jr. c/o John H. Pietmak, Esquire Reager & Adler, PC 2331 Market Street Camp Hill, PA 17011 : IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA DOCKET NO. : CIVIL ACTION - LAW : JURY TRIAL DEMANDED NOTICE TO DEFEND You have been sued in Court. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this Complaint and notice are served, by entering a written appearance personally or by attorney and filing in writing with the Court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so the case may proceed without you and a judgment may be entered against you by the Court without further notice for any money claimed in the Complaint or for any other claim or relief requested by the Plaintiff. You may lose money or property or other rights important to you. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP. Cumberland County Bar Association 32 South Bedford Street Carlisle, PA 17013 Telephone No. (717) 249-3166 TAM SYSTEMS, INC., Plaintiff V. L CUBED CORPORATION, d/b/a TAM SYSTEMS, LENARD L. LOBAUGH, JR. & MARTIN M. SACKS & ASSOCIATES, Defendants To: Martin M. Sacks & Associates 4775 Linglestown Road Harrisburg, PA 17112 IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA : DOCKET NO. : CIVIL ACTION - LAW : JURY TRIAL DEMANDED NOTICE TO DEFEND You have been sued in Court. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this Complaint and notice are served, by entering a written appearance personally or by attorney and filing in writing with the Court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so the case may proceed without you and a judgment may be entered against you by the Court without further notice for any money claimed in the Complaint or for any other claim or relief requested by the Plaintiff. You may lose money or property or other rights important to you. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP. Cumberland County Bar Association 32 South Bedford Street Carlisle, PA 17013 Telephone No. (717) 249-3166 Salzmann Hughes, P.C. James D. Hughes, Esquire Attorney I.D. No. BY: David H. Martineau, Esquire Attorney I.D. No. 84127 354 Alexander Spring Road, Suite 1 Carlisle, PA 17015 Telephone: 717-249-6333 Attornew for Plaintiff TAM SYSTEMS, INC., Plaintiff V. L CUBED CORPORATION, d/b/a TAM SYSTEMS, LENARD L. LOBAUGH, JR. & MARTIN M. SACKS & ASSOCIATES, Defendants IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA DOCKET NO. CIVIL ACTION - LAW JURY TRIAL DEMANDED COMPLAINT AND NOW, comes the Plaintiff, TAM Systems, Inc., by and through its counsel, SALZMANN HUGHES, P.C., and files this Complaint and in support thereof avers the following: 1. Plaintiff, TAM Systems, Inc. (hereinafter "TAM Systems") is a Pennsylvania business corporation with an address at 1250 South Mountain Road, Dillsburg, York County, Pennsylvania 17019. 2. Defendant, L Cubed Corporation, d/b/a TAM Systems (hereinafter "L Cubed") is a Pennsylvania business corporation with its registered address at 1248 South Mountain Road, Dillsburg, York County, Pennsylvania 17019. 3. Defendant Lenard L. Lobaugh, Jr. (hereinafter "Lobaugh") is an adult individual who at all times relevant hereto has been the President of L Cubed. 4. Defendant, Martin M. Sacks & Associates is an accounting firm with an address at 4775 Linglestown Road, Harrisburg, Dauphin County, Pennsylvania 17112 (hereinafter referred to as "Sacks"). 5. Until March 1, 2006, TAM Systems operated a construction business at 1248 South Mountain Road, Dillsburg, Pennsylvania 17019, owning certain assets, both tangible and intangible, goodwill and contracts for business (hereinafter referred to as the "Business") 6. On March 1, 2006, the parties conducted settlement on the sale of the Business from TAM Systems to L Cubed (hereinafter referred to as "Settlement"), 7. The sale of the Business from TAM Systems to L Cubed was in the form of an asset sale including goodwill and the right to operate under the name "TAM Systems" (hereinafter referred to as the "Asset Sale") 8. From March 1, 2006 until present, L Cubed has operated the Business. 9. Prior to the March 1, 2006 settlement, the parties negotiated the terms of an Asset Purchase Agreement, executed at Settlement, setting forth the terms and conditions of the Asset Sale. A true and convect copy of the Asset Purchase Agreement is attached hereto as Exhibit "A" and incorporated herein by this reference. 10. L Cubed was represented by legal counsel during the negotiations of the Asset Purchase Agreement and at Settlement. 11. Paragraph 8(c) of the Asset Purchase Agreement provided that as part of the purchase price for the Business, L Cubed would pay TAM Systems an amount based upon the Gross Profits of the Business as follows: Buyer [L Cubed] shall pay to Seller [TAM Systems] ten percent (10%) of Buyer's Gross Profits derived from the business sold hereunder for a period of six (6) years after the Closing Date. Buyer shall pay said Gross Profits to Seller within thirty (30) days of each anniversary of the Closing Date during the said six (6) year period. For the purposes of this Agreement, Gross Profits shall mean the gross profits as shown on Buyer's tax return. 12. The Closing Date as that term is used in the Asset Purchase Agreement is March 1, 2006. 13. All negotiations for the Asset Purchase Agreement took place in Carlisle, Cumberland County, Pennsylvania. 14. Settlement occurred in Carlisle, Cumberland County, Pennsylvania. 15. The transaction of the asset sale of the Business from TAM Systems to L Cubed, which is the subject matter of this Complaint, occurred in Cumberland County, Pennsylvania. 16. During the period that the parties were negotiating the terms of the Asset Sale, TAM Systems provided L Cubed with current and historical financial records, including, but not limited to tax returns, for the Business. 17. All financial records provided to L Cubed relating to the Gross Profits of the Business as reported on a tax return were kept using a standard cost accounting system. (hereinafter referred to as "Standard Accounting"). 18. At the time of forming the Asset Purchase Agreement, all negotiations between the parties were based upon records kept using Standard Accounting. 19. At all times prior to entering into the Asset Purchase Agreement and conducting Settlement, the understanding of the parties regarding the profitability of the Business was based upon Standard Accounting. 20. At no time prior to Settlement, did the parties discuss the possibility of utilizing any alternative accounting method. 21. The agreed upon terms of the Asset Sale and the definitive Asset Purchase Agreement between the parties were based upon utilization of Standard Accounting. 22. Plaintiff filed a tax return for the year 2006 on or about March 15, 2007 for the portion of the calendar year 2006 during which L Cubed owned the Business (hereinafter referred to as the "2006 Original Return"). The 2006 Original Return is incorporated herein by this reference, but not attached to this Complaint at Defendant L Cubed's request. 23. The 2006 Original Return utilized Standard Accounting. 24. It is believed that L Cubed maintained its internal accounting records utilizing the same Standard Accounting. 25. The 2006 Original Return reported a Gross Profit of One Million Three Hundred Sixty- Two Thousand Three Hundred Seventy-Five Dollars ($1,362,375). 26. The amount of the Purchase Price due from L Cubed to TAM Systems pursuant to paragraph 8(c) of the Asset Purchase Agreement for the period of March 1, 2006 through December 31, 2006 is One Hundred Thirty-Six Thousand Two Hundred Thirty-Seven and 50/100 Dollars ($136,237.50). 27. After filing the 2006 Original Return, L Cubed expressed its opinion that payment of $136,237.50 was too high. 28. After filing the 2006 Original Return, L Cubed refused to pay TAM Systems the amount due by the date due under the Asset Purchase Agreement or upon later demand by TAM Systems. 29. After filing the 2006 Original Return, L Cubed instead requested that TAM Systems agree to amend the Asset Purchase Agreement in order to reduce the amount of money owed to TAM Systems based upon the profitability of the Business for 2006 and future years. 30. TAM Systems did not agree to any proposed amendment to the Asset Purchase Agreement. 31. By letter from counsel of July 20, 2007, L Cubed informed TAM Systems that because TAM Systems did not agree to amend the Asset Purchase Agreement, it intended to file an amended tax return for 2006 utilizing the full absorption accounting method (hereinafter referred to as "Full Absorption Accounting"). 32. The effect of amending the 2006 tax return would be to artificially decrease the gross profits reported. 33. On or about March 7, 2008, L Cubed filed an amended 2006 tax return (hereinafter referred to as the "2006 Amended Return") reporting a gross profit of Five Hundred Forty-Six Thousand Eight Hundred Ninety Eight Dollars ($546,898). The 2006 Amended Return is incorporated herein by this reference, but not attached to this Complaint at Defendant L Cubed's request. 34. Filing the 2006 Amended Return increased the taxable ordinary business income of L Cubed from $293,838 to $331,540. 35. The Full Absorption Accounting method is intended to for use by businesses that hold significant amounts of inventory for long periods of time. 36. The Business does not hold significant amounts of inventory for long periods of time. 37. There was no legitimate business purpose to amending the tax returns to utilize the Full Absorption Accounting. 38. In its letter of July 20, 2007, L Cubed made clear that it would change accounting methods only to affect the amount of money due to TAM Systems under the Asset Purchase Agreement. 39. On or about March 18, 2008, L Cubed filed a tax return for the calendar year of 2007, utilizing Full Absorption Accounting (hereinafter referred to as the "2007 Return"). The 2007 Return is incorporated herein by this reference, but not attached to this Complaint at Defendant L Cubed's request. 40. The 2007 Return reported a gross profit of Four Hundred Thirty-Eight Thousand Four Hundred Eighty-Seven Dollars ($438,487). 41. On or about March 20, 2009, L Cubed filed an amended tax return for the calendar year of 2008, utilizing Full Absorption Accounting (hereinafter referred to as the "2008 Return"). The 2008 Return is incorporated herein by this reference, but not attached to this Complaint at Defendant L Cubed's request. 42. L Cubed had previously filed an original 2008 tax return showing the same gross profit as the amended 2008 Return and utilizing the same accounting method. 43. The 2008 Return reported a gross profit of Nine Hundred One Thousand Seven Hundred Eighty-Six Dollars ($901,786). 44. TAM Systems has made repeated demands for payment of sums due to it under the Asset Purchase Agreement. 45. Despite TAM Systems' repeated demands, L Cubed has not paid the money due to TAM Systems under the Asset Purchase Agreement. 46. Despite TAM Systems' repeated demands, L Cubed has never even tendered payment of amounts due for 2006 through 2008 as reflected by its own accounting. 47. The Asset Purchase Agreement provides that L Cubed will pay TAM Systems costs of suit and reasonable attorney fees if L Cubed breaches the Asset Purchase Agreement. 48. All actions taken by L Cubed set forth in this Complaint were taken at the direction of Lobaugh, President of the company. 49. In addition to L Cubed, Lobaugh, Jr. individually, is liable to Plaintiff under the doctrine of participation. COUNTI BREACH OF CONTRACT (TAM Systems, Inc. v. L Cubed Corporation & Lenard L. Lobaugh, Jr.) { 50. The allegations set forth in Paragraphs 1 through 49 of this Complaint are incorporated j herein as if set forth in full. 51. L Cubed has an obligation under the Asset Purchase Agreement to pay TAM Systems ten percent (10%) of gross profits of the business for the years 2006 through 2008. 52. The payment to TAM Systems based upon the gross profits of the Business for 2006 was due no later than March 31, 2007. 53. The payment to TAM Systems based upon the gross profits of the Business for 2007 was due no later than March 31, 2008. 54. The payment to TAM Systems based upon the gross profits of the Business for 2008 was due no later than March 31, 2009. 55. The expectations of the parties at the time of entering into the Asset Purchase Agreement was for the gross profits of the Business to be determined using Standard Accounting. 56. For the time period of March 1, 2006 through December 31, 2006, L Cubed owes TAM Systems the sum of One Hundred Thirty-Six Thousand Two Hundred Thirty-Seven and 50/100 Dollars ($136,237.50). 57. Analysis of the 2007 Return reveals that gross profits as determined by Standard Accounting for the time period of January 1, 2007 through December 31, 2007 are approximately One Million Three Hundred Forty Thousand Ninety-Six Dollars ($1,340,096). 58. For the time period of January 1, 2007 through December 31, 2007, L Cubed owes TAM Systems the sum of One Hundred Thirty-Four Thousand Nine and 60/100 Dollars ($134,009.60). 59. Analysis of 2008 Return reveals that gross profits as determined by Standard Accounting for the time period of January 1, 2008 through December 31, 2008 are approximately One Million Eight Hundred Seventy Thousand Two Hundred Fifty-Four Dollars ($1,870,254). 60. For the time period of January 1, 2008 through December 31, 2008, L Cubed owes TAM Systems the sum of One Hundred Eighty-Seven Thousand Twenty-Five and 40/100 Dollars ($187,025.40). 61. L Cubed has not yet reported its gross profits for January 1, 2009 through March 1, 2009. 62. The total sum owing from L Cubed to TAM Systems for the period of March 1, 2006 through December 31, 2008 is Four Hundred Fifty-Seven Thousand Two Hundred Seventy-Two and 50/100 Dollars ($457,272.50) plus additional sums due based upon the currently unreported gross profit from January 1, 2009 through March 1, 2009. 63. The sum of $457,272.50 plus additional sums based upon the currently unreported gross profit from January 1, 2009 through March 1, 2009, have been due and owing to TAM Systems since at least March 31, 2009. 64. L Cubed has breached its obligation to pay TAM Systems the portion of the purchase price related to the gross profits of the Business, as set forth under Paragraph 8(c) of the Asset Purchase Agreement by failing to pay TAM Systems the sum of Four Hundred Fifty-Seven Thousand Two Hundred Seventy-Two and 501100 Dollars ($457,272.50) plus additional sums due based upon the currently unreported gross profit from January 1, 2009 through March 1, 2009. 65. As a result of L Cubed's breach of its obligations under the Asset Purchase Agreement, TAM Systems has suffered damages in the amount of Four Hundred Fifty-Seven Thousand Two Hundred Seventy-Two and 50/100 Dollars ($457,272.50) plus additional sums due based upon the currently unreported gross profit from January 1, 2009 through March 1, 2009. 66. All actions taken by L Cubed set forth in Count I of this Complaint were taken at the direction of Lobaugh. 67. In addition to L Cubed, Lobaugh, individually, is liable to Plaintiff under the doctrine of participation. WHEREFORE, Plaintiff, TAM Systems, Inc., prays this Honorable Court to enter judgment in favor of Plaintiff and against Defendants L Cubed Corporation, d/b/a TAM Systems and Lenard L. Lobaugh, Jr. in an amount exceeding Four Hundred Fifty-Seven Thousand Two Hundred Seventy-Two and 50/100 Dollars ($457,272.50) plus reasonable attorney fees and costs of suit and interest. COUNT 11 UNJUST ENRICHMENT (TAM Systems, Inc. v. L Cubed Corporation & Lenard L. Lobaugh, Jr.) (Plead in the Alternative) 68. The allegations set forth in Paragraphs 1 through 67 of this Complaint are incorporated herein as if set forth in full. 69. TAM Systems conferred a benefit upon L Cubed by transferring all assets of the Business to L Cubed on or about March 1, 2006. 70. The Business was desired by L Cubed. 71. L Cubed has retained the Business. 72. L Cubed has operated the Business at all times since March 1, 2006, deriving a profit therefrom. 73. L Cubed would be unjustly enriched if it were permitted to retain the Business without paying TAM Systems the fair market value of the Business. 74. The agreement of the parties with respect to purchase price, reflected in the terms of the Asset Purchase Agreement was an arm's length transaction with both parties represented by counsel. 75. The arm's length agreement of the parties with respect to purchase price as reflected in the terms of the Asset Purchase Agreement, is the fair market value of the Business. 76. It is reasonable to expect that the performance of the Business for the period of 2009, 2010, 2011 and January 1, 2012 through April 30, 2012 will be at least on par with the performance of the Business from March 1, 2006 through December 31, 2008. 77. L Cubed has been unjustly enriched in the value of the Business over and above what they paid to TAM Systems at Settlement. 78. Based upon the past profitability of the Business and an expectation of similar future performance, L Cubed has been unjustly enriched in the amount of approximately Eight Hundred Ninety-Nine Thousand Seven Hundred Forty-Eight and 90/100 ($899,748.90). 79. As a result of L Cubed's unjust enrichment, TAM Systems has been damaged in the amount of the value of the benefit conferred, Eight Hundred Ninety-Nine Thousand Seven Hundred Forty-Eight and 90/100 ($899,748.90). 80. All actions taken by L Cubed set forth in Count II of this Complaint were taken at the direction of Lobaugh. 81. In addition to L Cubed, Lobaugh, individually, is liable to Plaintiff under the doctrine of participation. WHEREFORE, Plaintiff prays this Honorable Court to enter judgment in favor of Plaintiff, TAM Systems, Inc. and against Defendants L Cubed Corporation, d/b/a TAM Systems and Lenard L. Lobaugh, Jr. in the amount of Eight Hundred Ninety-Nine Thousand Seven Hundred Forty-Eight and 90/100 ($899,748.90) plus reasonable attorney fees and costs of suit and interest. COUNT III QUANTUM MERUIT (TAM Systems Y. L Cubed Corporation & Lenard L. Lobaugh, Jr.) (Plead in the Alternative) 82. The allegations set forth in Paragraphs 1 through 81 of this Complaint are incorporated herein by this reference. 83. TAM Systems has conferred a benefit upon L Cubed in the form of transferring the Business to L Cubed. 84. Defendant accepted and retained the benefit of the Business. 85. Based upon the past profitability of the Business and an expectation of similar future performance, the fair and reasonable value of the Business over and above what was paid at Settlement is Eight Hundred Ninety-Nine Thousand Seven Hundred Forty-Eight and 90/100 ($899,748.90). 86. Despite TAM Systems' reasonable demands, L Cubed has failed to pay the sum of Eight Hundred Ninety-Nine Thousand Seven Hundred Forty-Eight and 90/100 ($899,748.90) to Tarn Systems. 87. All actions taken by L Cubed set forth in Count III of this Complaint were taken at the direction of Lobaugh. 88. In addition to L Cubed, Lobaugh, individually, is liable to Plaintiff under the doctrine of participation. WHEREFORE, Plaintiff prays this Honorable Court to enter judgment in favor of Plaintiff, TAM Systems, Inc. and against Defendants L Cubed Corporation, d/b/a TAM Systems and Lenard L. Lobaugh, Jr. in the amount of Eight Hundred Ninety-Nine Thousand Seven Hundred Forty-Eight and 90/100 ($899,748.90) plus reasonable attorney fees and costs of suit and interest. COUNT IV Tortious Interference with Existing Contractual Relationship (TAM Systems v. Martin M. Sacks & Associates) 89. The allegations set forth in Paragraphs 1 through 88 of this Complaint are incorporated herein by this reference. 90. The Asset Purchase Agreement is an existing contract between TAM Systems and L Cubed. 91. During the time period of March 2006 to present, Sacks provided accounting services to L Cubed, including, but not limited to the preparation of L Cubed's federal tax returns. 92. It is believed and therefore averred that Sacks provided L Cubed with the recommendation that switching to Full Absorption Accounting would result in a lower gross profit being reported on L Cubed's federal tax return. 93. It is believed and therefore averred that Sacks had knowledge of the terms of the Asset Purchase Agreement with respect to L Cubed's gross profits at the time of the recommendation referred to in Paragraph 83 above. 94. It is believed and therefore averred that Sacks acted as described in this Count IV with the intent to assist L Cubed's attempt to artificially lower the payments due to TAM Systems under the Asset Purchase Agreement. 95. Sacks did not act with any privilege or legitimate justification. 96. As a result of Sacks actions, TAM Systems has been damaged in the amount of Four Hundred Fifty-Seven Thousand Two Hundred Seventy-Two and 50/100 Dollars ($457,272.50) plus additional sums due based upon the currently unreported gross profit from January 1, 2009 through March 1, 2009. WHEREFORE, Plaintiff prays this Honorable Court to enter judgment in favor of Plaintiff, TAM Systems, Inc. and against Defendant Martin M. Sacks & Associates, in the amount exceeding Four Hundred Fifty-Seven Thousand Two Hundred Seventy-Two and 50/100 Dollars ($457,272.50) plus reasonable attorney fees and costs of suit and interest. COUNT V CIVIL CONSPIRACY (TAM Systems v. L Cubed Corporation, Lenard L. Lobaugh, Jr. & Martin M. Sacks & Associates) 97. The allegations set forth in Paragraphs 1 through 96 of this Complaint are incorporated herein by this reference. 98. Defendant Sacks provides accounting services to L Cubed. 99. Sacks prepared all tax returns relevant to this Complaint for L Cubed Corporation, including, without limitation, the 2006 Original Return, the 2006 Amended Return, the 2007 Return and the 2008 Return. 100. It is believed and therefore averred that Sacks advised L Cubed that switching to Full Absorption Accounting would reduce its obligation to TAM Systems under the Asset Purchase Agreement. 101. Sacks assisted L Cubed in attempting to defraud TAM Systems by preparing and filing the 2006 Amended Return, the 2007 Return and the 2008 Return utilizing an accounting method specifically chosen to artificially reduce the amounts owed to TAM Systems under the Asset Purchase Agreement. 102. Sacks and L Cubed acted for the common purpose of breaching the Asset Purchase Agreement by artificially lowering the amounts shown as Gross Profits on L Cubed's income tax returns for 2006, 2007 and 2008. 103. As a result of the actions taken by Sacks and L Cubed, TAM Systems has been damaged in the amount of Four Hundred Fifty-Seven Thousand Two Hundred Seventy-Two and 501100 Dollars ($457,272.50) plus additional sums due based upon the currently unreported gross profit from January 1, 2009 through March 1, 2009. 104. All actions taken by L Cubed set forth in Count I of this Complaint were taken at the direction of Lobaugh. 105. In addition to L Cubed, Lobaugh, individually, is liable to Plaintiff under the doctrine of participation. WHEREFORE, Plaintiff prays this Honorable Court to enter judgment in favor of Plaintiff, TAM Systems, Inc. and against Defendants, L Cubed Corporation, d/b/a TAM Systems, Lenard L. Lobaugh, Jr. and Martin M. Sacks & Associates, in the amount of Four Hundred Fifty-Seven Thousand Two Hundred Seventy-Two and 50/100 Dollars ($457,272.50) plus reasonable attorney fees and costs of suit and interest. COUNT VI DECLARATORY JUDGMENT (TAM Systems v. L Cubed Corporation) 106. The allegations set forth in Paragraphs 1 through 105 of this Complaint are incorporated herein by this reference. 107. Asset Purchase Agreement provides for payments based upon the gross profit of the Business for 2009, 2010, 2011 and January through February 2012 which sums have not been determined and are not yet due. 108. Defendant L Cubed may attempt to utilize the same Full Absorption Accounting to artificially limit the gross profits of the Business in determining amounts due to TAM Systems in the future. 109. The issues raised in this Complaint may come before the Court again in future years. 110. If L Cubed continues to utilize the Full Absorption Accounting, TAM Systems may be subjected to the need for repeated litigation of the same issue. Ill. The issue of the accounting method to be utilized in determining the sum due to TAM Systems under the Asset Purchase Agreement is a proper issue for declaratory judgment. WHEREFORE, Plaintiff, TAM Systems, Inc., prays this Honorable Court to enter declaratory judgment, directing that future sums due to TAM Systems, Inc. under the terms of the Asset Purchase Agreement of March 1, 2006 be determined utilizing Standard Accounting practices. SALZMANN HUGHES, P.C. By: James D. Hughes, Esquire Attorney I.D. 58884 David H. Martineau, Esquire Attorney I.D. No. 84127 354 Alexander Spring Road, Suite 1 Carlisle, PA 17015 (717) 249-6333 Attorneys for Plaintiff Dated: December 2, 2009 EXHIBIT "A" ASSET PURCHASE AGREEMENT BETWEEN TAM SYSTEMS, INC. L CUBED CORPORATION DATED MARCH 1, 2006 r . ? t ASSET PURCHASE AGREEMENT /-V 111ARVI# THIS ASSET PURCHASE AGREEMENT, is made as of this day of Fcbruary, 2006, by and between TAM SYSTEMS, INC., a business corporation organized and existing under the laws of the Commonwealth of Pennsylvania, with its principal offices located at 1248 South Mountain Road, Dillsburg, York County, Pennsylvania 17019 (hereinafter referred to as "Seller"); and L CUBED CORPORATION; a Pennsylvania corporation to have its principal place of business at 1248 South Mountain Road, Dillsburg, York County, Pennsylvania 17019 (hereinafter referred to as "Buyer"). WITNESSETH: WHEREAS, Seller currently operates an agricultural and commerciAl construction business, located at 1248 South Mountain Road, Dillsburg, York County, Pennsylvania; and WHEREAS, Seller isdesirous of selling to Buyer substantially all of Seller's assets and Buyer is desirous of purchasing the same from the Seller upon on the terms and conditions hereinafter set forth. NOW THEREFORE, in consideration of the mutual covenants contained herein, in reliance upon the representations and warranties contained herein, and subject to the conditions contained herein, the parties hereto agree as follows: 1. SALE OF ASSETS: Seller agrees to sell and deliver to Buyer, and Buyer agrees to purchase and take from Seller, all of Seller's inventory, furnishings, leasehold improvements, fixtures supplies, goodwill, customer lists and other rights owned by Seller for use in the operation of Seller's business, the same being more particularly described in Exhibit "A", attached hereto and incorporated herein by this reference (herein collectively called "Assets") Page 1 of 19 Specifically excluded from the Assets to be sold under this Agreement are those assets listed on Exhibit "A-1", attached hereto and incorporated herein by this reference. Except as otherwise disclosed herein, Seller shall transfer all right, title and interest in the Assets to Buyer, free and clear of all liens, encumbrances, security interests, restrictions and claims of any nature whatsoever except those which are created herein and those which have been disclosed to Buyer in this Asset Purchase 2. ASSUMPTION OF LIABILITIES: At or prior to Closing, as defined below, Buyer shall assume those liabilities of Seller as set forth on Exhibit "B", attached hereto and incorporated herein by this reference and indemnify and hold Seller harmless from the same. Seller shall remain liable for all accrued salaries, wages, vacation pay and benefits as well as all sales, income and other applicable taxes accruing to the date of Closing. 3. INSURANCE: Buyer shall establish its own health insurance and workers compensation insurance for those employees hired by Buyer. 4. LEASE OF REAL AND PERSONAL PROPERTY: a. Personal Property: (1) Cranes: At Closing, Buyer shall enter into a lease agreement for a Pioneer crane, listed as number 21 on the Seller's list of motor vehicles (the "Crane Lease', which Crane Lease shall be in a form that releases Seller from any and all responsibility under Seller lease for said crane. Seller shall use its best efforts to assure the Lessor agrees to the lease agreement with Buyer. Seller and Buyer acknowledge that Seller has rights under a lease to a Harleysville Crane, which lease is expressly excluded from the Assets which are part of this sale and which lease shall be retained by Seller. Page 2 of 19 (2) Automobiles: Buyer shall assume leases to the following four (4) trucks as of the Closing Date: (a) 2001 F550 (Motor Vehicle No. 60) (b) 2001 F450 (Motor Vehicle No. 61) (c) 2001 F550 (Motor Vehicle No. 62) (d) 2001 F550 (Motor Vehicle No. 63) (the "Truck Leases") (3) Forklift. Buyer shall assume the lease for a Gradall forklift listed as number 65 as on the Seller's list of motor vehicles, as of the Closing Date. Seller use its best efforts to assure the Lessor agrees to the assumption of the lease by Buyer. b. Real Prop=: Buyer shall enter into a commercial lease agreement for the real property located at •1248 South Mountain Road, Dillsburg, York County, Pennsylvania in a form mutually agreeable to both Buyer and the property owner (the "Land Lease"), which lease agreement shall expressly relieve Seller from any and all obligations under any lease of Seller for said real property. The monthly rent for said commercial lease shall be $700.00 and the lease shall be triple net to Buyer. The lease shall have a term of one (1) year. 5. ACCOUNTS RECEIVABLE / PAYABLE: a. Accounts Payable: Buyer shall not receive or assume any rights or obligations to accounts payable unless specifically set fort in Exhibit "B". b. Accounts Receivable: Buyer shall not receive or assume any rights or obligations to accounts receivable of Seller other than as expressly set forth herein. Buyer shall collect accounts receivable on behalf of Seller for a period of sixty (60) days following Closing. • This obligation shall not require Buyer to undertake collection actions on behalf of Seller. Further, Buyer shall provide Seller with an accounting of all receipts Buyer collects on behalf of Seller, showing all amounts collected and all amounts Page 3 of 19 remaining due to Seller after sixty (60) days post Closing, which Buyer shall provide to Seller no later than seventy-five (75) days after Closing. After said sixty (60) day period, Buyer shall not have any obligation to collect any accounts of behalf of Seller, but should Buyer receive any monies on Seller's accounts receivable, Buyer shall promptly turn over such sums to Seller. Buyer shall cooperate with Seller by indorsing any checks made payable to Buyer, but rightly due to Seller during or after the initial sixty (60) period post Closing. Buyer shall pay to Seller all amounts received on Seller's behalf under this Paragraph 5 within ten (10) days.of the receipt of such monies. In lieu of Buyer paying such funds to Seller, where such monies are received in the form of a check, Buyer shall indorse said check if required and provide such check to Seller within ten (10) days of Buyer's receipt of said check. C. Prepaid Accounts: Buyer shall pay to Seller, at Closing, such prorated portion of any obligations of the business prepaid by Seller for such period accounts are prepaid extending beyond the Closing Date. 6. WORK IN PROGRESS: At Closing, Seller shall assign all contracts for work in progress or othcrwise listed on Exhibit "C" to Buyer. Buyer shall pay to Seller ten (10%) of the net profits of the works in progress listed on Exhibit "C". No percentage of any loss on works in progress shall be attributable to Seller. Buyer shall pay to Seller all profits allocable to Seller with respect to works in progress within ten (10) days of the receipt of the final fees for each project, but in no even later than one (1) year farm the Closing Date, regardless of the status of work completion or collections of fees unless the customer fails or refuses to pay based upon an alleged defect in work performed by Seller or insolvency of the customer. The parties recognize that Seller has invested a significant amount of time and resources to acquire contracts relating to the construction of an ethanol plant currently scheduled to be located in Franklin County, Pennsylvania. If Buyer enters into a contract for work relating to said ethanol plant within one (1) year after the Closing Date, said contract shall be treated as a work in progress under the terms of this Agreement and Buyer shall pay to Seller ten percent (10%) of the net Page 4 of 19 profits to Buyer relating to such contract in addition to any other sums due to Seller under this Agreement. With respect to the works in progress listed as Waste Management Building and Larry Jester Bin on Exhibit "C", Buyer shall first apply any sums due to Seller-under this Paragraph 6 to the clients' deposit, which is to be retained by Seller, and then, any amount due under this Paragraph 6 over and above the amount of the deposit shall be paid to Seller under the terms set forth above. The deposits on each project, retained by Seller, are: Waste Management Building: $37,000.00 Larry Jester Biri $20,000.00 7. CLOSING DATE: All of the transactions contemplated herein shall be consummated at the respective time and place as the parties hereto may mutually agree upon on or before March 3.1, 2006, unless otherwise extended in writing by agreement of the parties hereto (herein called "Closing Date" or "Closing"). Regardless of the specific Closing Date, the transaction contemplated hereunder shall be effective as of the first (1") day of March 2006. 8.. PURCHASE PRICE:. Buyer shall pay to Seller for the Assets the sum of five hundred and five thousand one hundred and fifty six and 00/100 Dollars ($505,156.00) plus ten percent (10%) of the Gross Profits (as defined in subsection b.) of Buyer relating the business sold hereunder for a period of six (6) years after the Closing Date as set for the under subparagraph c and the prepaid amounts as set forth in subparagraph b below. below (herein called "Purchase Price"). The parties agree that the Purchase Price shall be paid in United States Dollars and be allocated in the manner set forth on the attached Exhibit "D", attached hereto and incorporated herein by this reference. The Purchase Price shall be paid as follows: a.. At Closing or within ten (10) days thereafter, Buyer shall tender to the Seller a sum of five hundred and five thousand one hundred and fifty six and 00/100 Dollars ($505,156.00) to Seller via a bank check, attorney escrow check or other certified Page S of 19 funds, a part of which shall be paid directly to M&T Bank for the release of security interests in the Assets with the remainder being paid to Seller; and b. At Closing or within ten (10) days thereafter, Buyer shall tender to the Seller such prepaid amounts as are due under Paragraph 5. c.; and Buyer shall pay to Seller ten percent (10%) of Buyer's Gross Profits derived from the business sold hereunder for a period of six (6) years after the Closing Date. Buyer shall pay said Gross Profits to Seller within thirty (30) days of each anniversary of the Closing Date during the said six (6) year period. For the purposes of this Agreement, Gross Profits shall mean the gross profits-as shown on Buyer's tax return 9. CONDITION OF ASSETS AND RISK OF LOSS: Buyer asserts that it has had the opportunity to inspect the Assets prior to time of executing this Asset Purchase Agreement and acknowledges that the Assets are in a condition acceptable to Buyer. Seller does not warrant the condition of the Assets and the Assets are sold "AS IS", with no express or implied }warranties thereon, including faarranties of merchantability or fitness for a particular purpose, other than the manufacturers' warranties existing on such assets as of the date of Closing hereunder. Seller shall maintain the Assets in their present condition and state of repair between the date of this Agreement and the Closing Date, ordinary wear and tear alone excepted. Seller shall bear all risk of damage to or loss of the Assets until the Closing Date. After the Closing Date, Buyer shall bear all risk of damage to or loss of the Assets. J.O. TAXES PAID: Seller shall comply with all provisions of the Pennsylvania Fiscal Code, as amended, in connection with its sale of the Assets to Buyer. Seller hereby covenants and agrees to pay any and all taxes due on a federal, state or local level as a result of this transaction and that any and all such taxes shall be solely the responsibility of the Seller. Seller also certifies that, to the best of its knowledge, all taxes which may result in any lien against the Assets, including any and all unemployment taxes, have been paid or will be paid Page 6 of 19 from the proceeds of this sale. In the event that any such taxes remain outstanding, the Seller shall promptly pay the same to the appropriate taxing authority and hereby agrees to indemnify and hold harmless the Buyer from any and all claims, judgments and liens as a result thereof. This warranty and representation shall survive the Closing for a period not to exceed six (6) years after the Closing Date. Further, Buyer shall have the right to set off any and all liabilities so imposed upon the Buyer against any amount(s) due or to become due from Buyer to Seller under the terms of this Agreement. 11. EMPLOYEES: a. Buyer shall enter into an employment contract with Galen Julius under terms mutually agreeable to Buyer and Galen Julius. b. Seller currently retains three (3) employees on disability, Chuck Freeburn, Walter Clegg and Robert Smith. These three disabled employees shall remain the responsibility of Seller after the Closing Date and until the following dates: Chuck Freeburn May 4, 2006 Waiter Clege April 5, 2006 Robert Smith June 29, 2006 Notwithstanding the above dates, at any such time as Buyer may hire any of the above mentioned persons as an employee of Buyer, Buyer assume all responsibility for said person as an employee of Buyer. C. Pension Plans - Seller shall retain all responsibility for any pension plans in place for the benefit of Seller's employees which Seller shall administer in accordance with the terms and conditions of such plans. Buyer may elect to establish a pension plan for any of Buyer's employees, which plan shall be administered separate and apart from Seller's pension plans. Page 7 of 19 12. SELLER'S COVENANTS, REPRESENTATIONS AND WARRANTIES: Seller hereby covenants, represents and warrants to Buyer that to the best of Seller's knowledge, information and belief: a. Seller is the sole owner of the Assets with full right and lawful authority to sell and deliver the same to Buyer hereunder, and the sale and delivery of the Assets to Buyer hereunder will not violate the rights or interests of any person or entity; b. Seller has not entered into any other agreement regarding the sale or transfer of any of the Assets which is still in effect; C. Seller is not involved as a debtor in any proceedings under any federal or state bankruptcy or insolvency laws; All of the covenants, representations and warranties of Seller set forth in this Agreement shall be deemed to have been made again by Seller at Closing and shall survive Closing for a period of six (6) years. 13. CONDITIONS PRECEDENT TO CLOSING - BUYER: Buyer's obligation to purchase and take the Assets from Seller and to comply with any other obligations imposed upon Buyer under this Agreement are conditioned and contingent upon the occurrence of each of the following events or existence of each of the following circumstances Seller's compliance with all the other terms and conditions of this Agreement which are to be performed or observed by it on or before the Closing Date. 14. CONDITION PRECEDENT TO CLOSING - SELLER: Seller's obligation to sell and deliver the Assets to Buyer and to comply with any other obligations imposed upon Seller under this Agreement is conditioned and contingent upon Buyer's compliance with all the Page 8 of 19 terms and conditions of this Agreement which are to be performed or observed by Buyer on or before the Closing Date. 16. CLOSING DOCUMENTS: a. Seller shall duly execute and deliver to Buyer the following documents and instruments at Closing: 1. A Bill of Sale in form acceptable to Buyer and Seller, which exhibit is incorporated herein by this reference, said document duly executed by Seller, transferring good and marketable title to the Assets to Buyer, 2. Such other documents and instruments as are reasonably requested by Buyer in connection herewith; 3. Minutes or Consent of Board of Directors of Seller authorizing all actions contemplated under the Sales Agreements. b. Buyer shall duly execute or cause to have executed and deliver to Seller the following documents and instruments at Closing: 1. Minutes or resolutions of the Board of Directors of Buyef authorizing all actions contemplated under the Sales Agreements; 2. All other documents required under the Sales Agreements; and 3. . Such other documents and instruments as are reasonably requested by Seller in connection herewith. . 16. OTHER DOCUIVIENTS: Seller and Buyer shall also deliver to each other, both before and after Closing; such other documents and instruments as may be reasonably required for the proper consummation of the transactions contemplated in this Agreement and for the proper fulfillment of the covenants, .representations and warranties contained in this Agreement. 17. INDEMNIFICATION AND SETOFF: Each party agrees to indemnify and hold harmless the other party for and from any and all liability or loss the other party may suffer Page 9 of 19 (including but not limited to court costs and reasonable attorney's fees) on account of a party's breach of any term, covenant, warranty or representation set forth herein or in any of the documents and instruments executed or delivered in connection herewith. All the terms, covenants, warranties and representations set forth herein shall survive Closing and the execution and/or delivery of any documents and/or instruments before, at or after Closing for a period of six (6) years. Further, Buyer :shall have the right to set off any and all liabilities so imposed upon the Buyer against any amount(s) due or to become due from Buyer to Seller under the terms of this Agreement. 18. NOTICES: Any notice to be given hereunder shall be given in writing and delivered personally or by registered or certified mail, return receipt requested, postage prepaid, to the respective parties at the following locations: Seller: Marlin C. Fleming, President TAM Systems, Inc. 1248 South Mountain Road Dillsburg, PA 17109 Copy to : James D. Hughes, Esquire Salzmann Hughes, P.C. 354 Alexander Spring Road, Suite 1 Carlisle, PA 17013 Buyer: Leonard L. Lobaugh, Jr. 5 Logan Drive Gardners, PA 17324 Copy to: David A. Baric, Esquire O'Brien, Baric & Scherer 19 West South Street Carlisle, PA 17013 19. NO BROKER'S COMMISSION: Neither party hereto shall be liable for any broker's commission in connection with the transactions hereunder, and each party acknowledges Page 10 of 19 and represents to the other party that it has not had any dealings, negotiations or consultations with any broker concerning the transactions hereunder for which compensation is due. 20. CONFIDENTIALITY: All parties hereto agree that all of the terms and conditions of this Agreement shall remain confidential and shall only be relayed to the parties hereto or their duly appointed representatives to the extent that such terms and conditions are not considered public knowledge or a part of the public domain or as necessary to enforce the terms of this Agreement. 21. WAIVER - CONFLICT OF INTEREST: In order to retain a certain continuity of knowledge and experience with the business to be sold hereunder with respect to legal representation, the parties recognize that Buyer has been a party to discussion with Seller and Seller's counsel, Salzmann Hughes, P.C., who has also assisted Buyer with other legal matter prior to the execution of this Agreement. Buyer and Seller acknowledge that Salzmann Hughes, P.C. has been the legal counsel for Seller, has represented Seller during the course of this transaction, and the possibility that a conflict of interest could exist. Buyer and Seller hereby waive any and all conflict of interest on the part of Salzmann Hughes, P.C. with regard to any prior representation of Buyer and current representation of Seller in this transaction. Buyer specifically recognizes that Salzmann Hughes, P.C. represents the Seller during the course of the transaction contemplated under this Agreement and does not represent Buyer for that purpose. 22. 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. Page 11 of 19 f 23. COOPERATION: Subject to the terms, and conditions hereof, each of the parties hereto shall use its best 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 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 Buyer all right, title and interest in and to the Assets or Inventory, whether at or after the Closing. 24. BULK SALES LAW COMPLIANCE: The parties hereto expressly waive compliance with the provisions of the Pennsylvania Bulk Sales Law, and the Seller shall indemnify and hold the Buyer harmless from and against any and all liabilities imposed upon the Buyer resulting from such non-compliance, other than with respect to the Liabilities assumed by the Buyer pursuant to this Agreement. Further, Buyer shall have the right to set off any and all liabilities so imposed upon the Buyer against any amount(s) due or to become due from Buyer to Seller under the terms of this Agreement. 25. ASSIGNMENT. This Agreement shall not be assignable by the Seller without the prior written consent of Buyer. The Buyer shall have the right at any time prior to Closing to assign this Agreement to its nominee without obtaining the Seller's consent provided however that any such assignment shall only be effective if it is assigned to an entity which is owned at least fifty-one percent (51%) by Leonard L. Lobaugh, Jr.. In all other cases, this Agreement shall not be assignable by Buyer without the prior written consent of $eller. To the extent assignable, this Agreement shall be binding upon, and inure to the benefit of the Buyer and its successors and assigns and the Seller and its successors and assigns. 26. NAME RIGHTS: At Closing, Seller shall execute and deliver to Buyer a consent to Buyer's appropriation of the name "TAM SYSTEMS", which Seller shall not grant to anyone other than Buyer prior to, at or after Closing, but which name Seller shall continue to use until such time as Seller has completed the process of winding up and dissolving Seller Page 12 of 19 corporation. Seller shall move promptly after Closing to wind up and dissolve. Seller shall not have the right to continue operating the corporation as providing construction services or materials to the public, except as permitted under Paragraph 27 below, after the Closing and Seller shall not do so. At such time as Seller dissolves as a corporate entity, Seller shall consent to the appropriation of exclusive rights to the name "TAM SYSTEMS" to Buyer and Seller shall prepare and deliver to Buyer any reasonably required documentation of said consent. 27. NON-COIMIPET MON: For a period of six (6) years from the date of Closing, Seller and Marlin C. Fleming agree they will not operate, own, work for or have any affiliation with any business which offers substantially the same services or materials or could be said to compete with Buyer within two hundred (200) miles of Dillsburg, Pennsylvania. Notwithstanding any other provision in this Agreement to the contrary, nothing in this Agreement shall prohibit Seller from selling any and all assets presently owned of Seller not being purchased by Buyer hereunder, whether or not such sale competes directly or indirectly with Buyer. 28. MISCELLANEOUS: This Agreement shall be construed under and governed by the laws of the Commonwealth of Pennsylvania. This Agreement constitutes the entire agreement between the parties with respect to the sale and transfer of the Assets and Inventory, and there are no agreements, conditions or understandings, either oral or written, between Seller and Buyer relating to these matters other than those which are contained in this Agreement. For the purposes of interpreting this Agreement, the masculine shall include the feminine and neuter, and vice versa, and the singular shall include the plural, and vice versa, unless contrary intent appears. The subject headings of the paragraphs of this Agreement are included for the purpose of convenience only and shall in no way affect the meaning or construction of any term or provision hereof. The above WHEREAS clauses and the attached Exhibits are integral and substantive parts of this Agreement and are hereby incorporated herein by reference. This Agreement shall inure to the benefit of and shall be binding upon each of the parties hereto and their respective heirs, executors, administrators, successors and assigns. This Agreement may be Page 13 of 19 altered or amended only by a written agreement signed by both Seller and Buyer. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement. IN WITNESS WHEREOF, and intending to be legally bound, the parties hereto formally execute this Agreement of Sale as of the day and year first above written. SELLER ATTEST: TAM SYSTEMS, INC. Ely: ? (SEAL) 14larlin C. Fleming, )?#dent WITNESS: A + ST: (SEAL) arlin C. + emi BUYER L CUBED CORPORATION AL) onard L. gh, Jr. res ent IAW Page 14 of 19 16 VERIFICATION I have read the statements made in this document and they are true and correct to the best of my knowledge, information and belief. I understand that false statements herein made are subject to the penalties of 18 Pa.C.S.A. § 4904, relating to unsworn falsification to authorities. TAM SYSTEMS, INC. By: arlin Fleming, President Date: Z! IJ .7 CERTIFICATE OF SERVICE I hereby certify that on the rday of - , 2010, I have caused a true and correct copy of the foregoing Complaint to be served upon the following counsel of record via First Class. Mail, postage prepaid, addressed as follows: David A. Baric, Esquire 19 W. South Street Carlisle, PA 17013 O'Brien, Baric & Scherer Attorneys at Law 19 W. South Street Carlisle, PA 17013 C 4? Alana L. So WWI Legal Assistant LY ~~~~Q'~~~~~ i" T~~~ ~"~J ~~~uT~F~'+ i~~4DCT 21 Pry ~' ~ ~'~t~~~Rt-~1~iD CQl~~3i'` `~° ~h'~'5Yl,-4'r''~~' ~t L CUBED COMPANY, 1248 South Mountain Road Dillsburg, PA 17019 Plaintiff, vs. DAVID A. BARK 19 W. South Street Carlisle, PA 17013 And O'BRIEN, BARK & SCHERER Attorneys at Law 19 W. South Street Carlisle, PA 17013 IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA Civil Action No. 08-6589 Jury Trial Demanded Defendants. CERTIFICATE OF MERIT AS TO DEFENDANT. O'BRIEN, BARK & SCHERER The undersigned counsel for Plaintiff L Cubed certifies that: [ ] an appropriate licensed professional has supplied a written statement to the undersigned that there is a basis to conclude that the care, skill or knowledge exercised or exhibited by Defendant in the treatment, practice or work that is the subject of the Complaint, fell outside acceptable professional standards and that such conduct was a cause in bringing about the harm; AND/OR [X] the claim that Defendant deviated from an acceptable professional standard is based solely on allegations that other licensed professionals for whom this Defendant is responsible deviated from an acceptable professional standard and an appropriate licensed professional has supplied a written statement to the undersigned that there is a basis to conclude that the care, skill or knowledge exercised or exhibited by the other licensed professional in the treatment, practice or work that is the subject of the Complaint, fell outside acceptable professional standards and that such conduct was a cause in bringing about the harm; OR [ ]expert testimony of an appropriate licensed professional is unnecessary for prosecution of the claim against this Defendant. Date: 1 Q, 3` `\~ Respectfully REAGER & ADLE~, /I Theodore A. Attorney I.D. No. 16267 2331 Market Street Camp Hill, PA 17011 Telephone: (717) 763-1383 Facsimile: (717) 730-7366 Email: Tadler(c~Rea~erAdlerPC.com Counsel to Plaintiff, L Cubed Company 2 CERTIFICATE OF SERVICE ~5~ I hereby certify that on the~$tti day of October, 2010, I have caused a true and correct copy of the foregoing Certificate of Merit to be served upon the following counsel of record via First Class Mail, postage prepaid, addressed as follows: Bryon R. Kaster, Esq. Dickie McCamey & Chilcote 1200 Camp Hill Bypass Suite 205 Camp Hill, PA 17011 Joseph S. D. Christof, II, Esq. Dickie McCamey & Chilcote Two PPG Place, Suite 400 Pittsburgh, PA 15222-5402 Alana L. Soude Legal Assistant 1 Defendants. °~ ~ Y,.y -~ ~ ~ `~ cz~ r-n ~-°, ~~i ~ GrJ ~ :~~ N ~ r - __., o n ~ ~ ~ :~~ t~ ;~~, c -- ~ rb.j °-i -~: ^.c: F CERTIFICATE OF MERIT AS TO DEFENDANT. DAVID A. BARIC The undersigned counsel for Plaintiff L Cubed certifies that: [X] an appropriate licensed professional has supplied a written statement to the L CUBED COMPANY, 1248 South Mountain Road Dillsburg, PA 17019 Plaintiff, DAVID A. BARIC 19 W. South Street Carlisle, PA 17013 And IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA vs. :Civil Action No. 08-6589 Jury Trial Demanded O'BRIEN, BARIC & SCHERER Attorneys at Law 19 W. South Street Carlisle, PA 17013 undersigned that there is a basis to conclude that the care, skill or knowledge exercised or exhibited by Defendant in the treatment, practice or work that is the subject of the Complaint, fell outside acceptable professional standards and that such conduct was a cause in bringing about the harm; AND/OR [ ]the claim that Defendant deviated from an acceptable professional standard is based solely on allegations that other licensed professionals for whom this Defendant is responsible deviated from an acceptable professional standard and an appropriate licensed professional has supplied a written statement to the undersigned that there is a basis to conclude that the care, skill or knowledge exercised or exhibited by the other licensed professional in the treatment, practice or work that is the subject of the Complaint, fell outside acceptable professional standards and that such conduct was a cause in bringing about the harm; OR [ ]expert testimony of an appropriate licensed professional is unnecessary for prosecution of the claim against this Defendant. Respectfully Date: (©~ a `' IO Theodore A. Adle~Esquire Attorney I.D. No. 16267 2331 Market Street Camp Hill, PA 17011 Telephone: (717) 763-1383 Facsimile: (717) 730-7366 Email: Tadler ,ReagerAdlerPC.com Counsel to Plaintiff, L Cubed Company 2 CERTIFICATE OF SERVICE a~+ I hereby certify that on the,l$~k day of October, 2010, I have caused a true and correct copy of the foregoing Certificate of Merit to be served upon the following counsel of record via First Class Mail, postage prepaid, addressed as follows: Bryon R. Kaster, Esq. Dickie McCamey & Chilcote 1200 Camp Hill Bypass Suite 205 Camp Hill, PA 17011 Joseph S. D. Christof, II, Esq. Dickie McCamey & Chilcote Two PPG Place, Suite 400 Pittsburgh, PA 15222-5402 Alana L. Soud s, Legal Assistant "782088.doc DICKIE, MCCAMEY & CHII.COTE, P.C. BY: Bryon R. I{aster, Esquire ATTORNEY FOR: DEFENDANTS ATTORNEY I.D. N0.91707 DAVID A. BARK, ESQUIRE, AND O'BRIEN, 1200 Camp Hill Bypass, Suite 205 BARK & SCHERER Camp Hill, PA 17011 (717)731-4800 (Tele) (717)731-4803 (Fax) L CUBED COMPANY, Plaintiff, v. DAVID A. BARK and O'BRIEN, BARK & SCHERER, IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA N0.08-6589-CV CIVIL ACTION Defendants. JURY TRIAL DEMANDED ~;=, ~; V - ~~"' 1. ^.~ ~, y Y`f NOTICE TO PLEAD T -~~ -- ~,~~~ ~ ~~ TO: L CUBED COMPANY ;~~;- `~' -~a ~ ~ , Theodore Adler, Esquire M ~ a ~ REAGER & ADLER, PC '~ ~,'~' 2331 Market Street ~ -`` Camp Hill, PA 17011 YOU ARE HEREBY NOTIFIED TO PLEAD TO THE WITHIN ANSWER WITH NEW MATTER WITHIN TWENTY (20) DAYS OF THE DATE OF SERVICE OF THIS PLEADING OR JUDGMENT MAY BE ENTERED AGAINST YOU. Respectfully submitted, DICKIE, MCCAMEY & CHILCOTE, P.C. Date: October 29 2010 B Y Bryon R. Kaster, Esquire ATTORNEY I.D. NO. 91707 1200 Camp Hill Bypass, Suite 205 Camp Hill, PA 17011-3700 (717) 731-4800 Attorney for Defendants, David A. Baric, Esquire, and O'Brien, Baric & Scherer DICKIE, MCCAMEY & CHILCOTE, P.C. BY: Joseph S.D. Christof II, Esqiure ATTORNEY I.D. NO. 19699 BY: Bryon R. ICaster, Esquire ATTORNEY I.D. N0.91707 L CUBED COMPANY, Plaintiff, v. DAVID A. BARK and O'BRIEN, BARK & SCHERER, Defendants. ATTORNEY FOR: DEFENDANTS DAVID A. BARK, ESQUIRE, AND O'BRIEN, BARK & SCHERER IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA N0.08-6589-CV CIVIL ACTION JURY TRIAL DEMANDED ANSWER WITH NEW MATTER Defendants, David A. Baric and O'Brien, Baric & Scherer (herein collectively referred to as "Defendants"), by and through their counsel, Dickie, McCamey & Chilcote, P.C. and responds to the allegations in Plaintiffls Complaint as follows: 1. Admitted upon information and belief. 2. Admitted. 3. Denied. O'Brien, Baric and Scherer no longer exists. The firm's name is Baric and Scherer, which is an unincorporated entity. 4. Admitted. 5. After reasonable investigation, Defendants are without knowledge or information sufficient to form a belief as to the truth of the averment. Strict proof is demanded at the time of trial. 6. Admitted. However, by way of further response, at the time of Defendants were retained by L Cubed, much of the negotiation and preparation of the APA had already taken place. 7. Admitted in part. Denied in part. It is denied that the APA set forth all of the terms and conditions of the asset sale from TAMS Systems to L Cubed. Specifically, L Cubed and counsel for TAM Systems had agreed upon a definition of "gross profits" involving net profits plus dividends and extraordinary capital expenditures, which was not set forth in the APA. Furthermore, it is denied that Defendants represented L Cubed during the entirety of the negotiations for the asset purchase. At the time of Defendants were retained by L Cubed, much of the negotiation and preparation of the APA had already taken place. Admitted. 9. Admitted. 10. The APA is a document that speaks for itself and no further response is required. By way of further response, L Cubed and counsel for TAM Systems had agreed upon a definition of "gross profits" involving net profits plus dividends and extraordinary capital expenditures, which was not set forth in the APA. 11. Denied as stated. At the time of the closing and prior to signing the APA, Lobaugh approved a definition of "gross profits" that was based upon net profits plus dividends and extraordinary capital expenditures. 12. It is admitted only that Defendant Baric advised Lobaugh to sign the APA based upon the agreement between L Cubed and counsel for TAM Systems that the understood 2 definition of "gross profits" would be based upon net profits plus dividends and extraordinary capital expenditures, which was not set forth in the APA. 13. It is admitted only that Lobaugh signed the APA. Regarding the additional averments set forth in this paragraph, after reasonable investigation, Defendants are without knowledge or information sufficient to form a belief as to the truth of the averment. Strict proof is demanded at the time of trial. 14. Denied as stated. The parties had agreed at closing that 10% of net profits plus dividends and extraordinary capital expenditures would be the basis for calculating the installment payments due TAM Systems. Following the closing, Defendant Baric attempted to obtain an amendment reflecting the agreement reached at the closing. 15. Admitted. 16. After reasonable investigation, Defendants are without knowledge or information sufficient to form a belief as to the truth of the averment. Strict proof is demanded at the time of trial. 17. The Complaint is a document that speaks for itself and no further response is required. Count I (Professional NegJ~igence) 18. Defendants hereby incorporate their responses to paragraphs 1 through 17 as if fully set forth herein. 19. Admitted. 3 20. Admitted. 21. Denied as stated. At the time of the closing and prior to signing the APA, L Cubed and counsel for TAM Systems agreed to a definition of "gross profits" that was based upon net profits plus dividends and extraordinary capital expenditures. 22. Denied as stated. At the time of the closing and prior to signing the APA, L Cubed and counsel for TAM Systems agreed to a definition of "gross profits" that was based upon net profits plus dividends and extraordinary capital expenditures. However, no written amendments, corrections or revisions were made to the APA at that time. 23. Denied as stated. At the time of the closing and prior to signing the APA, L Cubed and counsel for TAM Systems agreed to a definition of "gross profits" that was based upon net profits plus dividends and extraordinary capital expenditures. 24. It is admitted only that L Cubed signed the APA. Regarding the additional averments set forth in this pazagraph, after reasonable investigation, Defendants are without knowledge or information sufficient to form a belief as to the truth of the averment. Strict proof is demanded at the time of trial. 25. Admitted. 26. Admitted. 27. Admitted. 4 28. The averments set forth in this paragraph state a legal conclusion to which no response is required. To the extent that a response is required, the averments are denied with strict proof demanded at the time of trial. 29. The averments set forth in this paragraph state a legal conclusion to which no response is required. To the extent that a response is required, the averments are denied with strict proof demanded at the time of trial. 30. The averments set forth in this paragraph state a legal conclusion to which no response is required. To the extent that a response is required, the averments are denied with strict proof demanded at the time of trial. 31. The averments set forth in this paragraph state a legal conclusion to which no response is required. To the extent that a response is required, the averments are denied with strict proof demanded at the time of trial. 32. The averments set forth in this paragraph state a legal conclusion to which no response is required. To the extent that a response is required, the averments are denied with strict proof demanded at the time of trial. 33. The averments set forth in this paragraph state a legal conclusion to which no response is required. To the extent that a response is required, the averments are denied with strict proof demanded at the time of trial. WHEREFORE, Defendants respectfully request that this Honorable Court enter judgment in favor of Defendants and against Plaintiff. COUNT II REACH OF CONTRACT 34. Defendants hereby incorporate their responses to paragraphs 1 through 33 as if fully set forth herein. 35. The averments set forth in this paragraph state a legal conclusion to which no response is required. 36. The averments set forth in this paragraph state a legal conclusion to which no response is required. To the extent that a response is required, the averments are denied with strict proof demanded at the time of trial. 37. The averments set forth in this paragraph state a legal conclusion to which no response is required. To the extent that a response is required, the averments are denied with strict proof demanded at the time of trial. 38. The averments set forth in this paragraph state a legal conclusion to which no response is required. To the extent that a response is required, the averments are denied with strict proof demanded at the time of trial. 39. The averments set forth in this paragraph state a legal conclusion to which no response is required. 40. The averments set forth in this paragraph state a legal conclusion to which no response is required. To the extent that a response is required, the averments are denied with strict proof demanded at the time of trial. 6 41. The averments set forth in this paragraph state a legal conclusion to which no response is required. To the extent that a response is required, the averments are denied with strict proof demanded at the time of trial. 42. The averments set forth in this paragraph state a legal conclusion to which no response is required. To the extent that a response is required, the averments are denied with strict proof demanded at the time of trial. WHEREFORE, Defendants respectfully request that this Honorable Court enter judgment in favor of Defendants and against Plaintiff. COUNT III BREACH OF FIDUCIARYI 43. Defendants hereby incorporate their responses to paragraphs 1 through 42 as if fully set forth herein. 44. Denied as stated. At the time of the closing and prior to signing the APA, L Cubed and counsel for TAM Systems agreed to a definition of "gross profits" that was based upon net profits plus dividends and extraordinary capital expenditures. 45. Denied. However, counsel for TAM Systems had agreed to the method of calculation based upon net profits plus dividends and extraordinary cash expenditures. 46. Denied. Counsel for TAM Systems, Jim Hughes, Esquire, had acknowledged in a telephone conversation that the agreement was that the definition of "gross profits" was to be based upon net profits plus dividends and extraordinary capital expenditures. 47. The averments set forth in this paragraph state a legal conclusion to which no response is required. 7 48. The averments set forth in this paragraph state a legal conclusion to which no response is required. To the extent that a response is required, the averments are denied with strict proof demanded at the time of trial. 49. The averments set forth in this paragraph state a legal conclusion to which no response is required. To the extent that a response is required, the averments are denied with strict proof demanded at the time of trial. 50. The averments set forth in this paragraph state a legal conclusion to which no response is required. 51. The averments set forth in this paragraph state a legal conclusion to which no response is required. To the extent that a response is required, the averments are denied with strict proof demanded at the time of trial. 52. The averments set forth in this paragraph state a legal conclusion to which no response is required. To the extent that a response is required, the averments are denied with strict proof demanded at the time of trial. 53. The averments set forth in this paragraph state a legal conclusion to which no response is required. To the extent that a response is required, the averments are denied with strict proof demanded at the time of trial. WHEREFORE, Defendants respectfully request that this Honorable Court enter judgment in favor of Defendants and against Plaintiff. NEW MATTER 54. Defendants hereby incorporate their responses to paragraphs 1 through 53 as if fully set forth herein. 55. Plaintiff s claims are barred and / or limited by the applicable statute of limitations. 56. At the time of the closing and prior to signing the APA, L Cubed and counsel for TAM Systems agreed to a definition of "gross profits" that was based upon net profits plus dividends and extraordinary capital expenditures. 57. The damages allegedly suffered by Plaintiff are the result of the actions or inactions of other parties over whom Defendants had no control. 58. Defendants did not breach any duty or obligation owed to Plaintiff. 59. Defendants conduct was not the legal cause or proximate cause of any legally recognized damages incurred by Plaintiff. WHEREFORE, Defendants respectfully request that this Honorable Court enter judgment in favor of Defendants and against Plaintiff. 9 Respectfully Submitted, DICKIE, MCCAMEY & CHILCOTE, P.C. Date: October 29, 2010 By: Bryon R. Kaster, Esquire ATTORNEY I.D. N0.91707 1200 Camp Hill Bypass, Suite 205 Camp Hill, PA 17011-3700 (717) 731-4800 Joseph 5.D. Christof II, Esgiure ATTORNEY I.D. NO. 19699 Two PPG Place Pittsburgh, PA 15222-5402 (412) 281-7272 Attorneys for Defendants, David A. Baric, Esquire, and O'Brien, Baric & Scherer 10 775565 VERIFICATION I, David Bazic, Esquire, hereby verify that the facts set forth in the foregoing Answer with New Matter to Plaintiff's Complaint are true and correct to the best of my knowledge, information and belief. I understand that false statements herein are made subject to the penalties of 18 Pa.C.S. §4904, relating to unsworn falsification to authorities. ~'/~~~ David Baric, Esquire CERTIFICATE OF SERVICE AND NOW, October 29, 2010, I, Bryon R. Kaster, Esquire, hereby certify that I did serve a true and correct copy of the foregoing ANSWER WITH NEW MATTER upon all counsel of record by depositing, or causing to be deposited, same in the U.S. mail, postage prepaid, at Camp Hill, Pennsylvania, addressed as follows: By First-Class Mail: Theodore Adler, Esquire REAGER & ADLER, PC 2331 Market Street Camp Hill, PA 17011 Bryon R. Kaster, Esquire 0 , L CUBED COMPANY, : IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff, VS. : Civil Action No. 08-6589 DAVID A. BARIC : Jury Trial Demanded a , ` 71 j d A n c- 41 O'BRIEN, BARIC & SCHERER ISO Defendants. REPLY OF PLAINTIFF. L CUBED COMPANY TO DEFENDANTS' NEW MATTER 54. Paragraph 54 of Defendants' New Matter is an incorporation by reference paragraph to which no response is required. 55. Denied as a legal conclusion. 56. Denied as stated. In further response, Plaintiff incorporates herein the averments of paragraph 21 of its Complaint. 57. Denied as a legal conclusion. To the extent the averments of paragraph 57 of Defendants' New Matter are deemed to be averments of fact, Plaintiff avers that Defendants could have simply advised Plaintiff not to close on the settlement until the agreement of sale was consistent with Plaintiff's expectations. 58. Denied as a legal conclusion. 59. Denied as a legal conclusion. WHEREFORE, Plaintiff respectfully requests this Court to enter judgment in its favor and against Defendants. Respectfully submitted, REAGER & ADXER C" Date: November 12, 2010 Theodore A. Adler, Esquire Attorney I.D. No. 16267 2331 Market Street Camp Hill, PA 17011 Telephone: (717) 763-1383 Facsimile: (717) 730-7366 Email: Tadler(aReagerAdlerPC.com Counsel to Plaintiff, L Cubed Company 2 VERIMATION I, Leonard L. Lobaugh, Jr,, hereby verify that I am the President of L Cubed Corporation and, as such, I am authorized to verify that the averments of the foregoing. Reply to Defendants, New Matter are true and correct to the best of my personal knowledge, information and belief. I understand that false statements herein are made subject to the penalties of 18 Pa. C.S. §4904, relating to unswom falsification to authorities. Date: f//4? / 0 CERTIFICATE OF SERVICE I hereby certify that on the "day of November, 2010, I have caused a true and correct copy of the foregoing Reply to New Matter to be served upon the following counsel of record via First Class Mail, postage prepaid, addressed as follows: Bryon R. Kaster, Esq. Dickie McCamey & Chilcote 1200 Camp Hill Bypass Suite 205 Camp Hill, PA 17011 Joseph S. D. Christof, II, Esq. Dickie McCamey & Chilcote Two PPG Place, Suite 400 Pittsburgh, PA 15222-5402 / Theodore A. Adler, Esquire Reager & Adler, P.C. h a"°y C) 3a ca ?c ? Cs ..._. REAGER & ADLER, P.C. Theodore A. Adler, Esquire Attorney I.D. No. 16267 TAdler@ReagerAdlerPC.com 2331 Market Street Camp Hill, PA 17011 Telephone: '(717) 763-1383 Facsimile: (717) 730-7366 L CUBED COMPANY, Plaintiff vs. DAVID A. BARIC And O'BRIEN, BARIC & SCHERER, Defendants IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA Civil Action No. 08-6589 Jury Trial Demanded PRAECIPE TO DISCONTINUE TO THE PROTHONOTARY: Please mark the above-captioned lawsuit as settled and discontinued with prejudice. Respectfully submitted, Date: May 21, 2012 REAGER &,4DLERl4C. Theodore A. Adler, Esquire Attorney I.D. No. 16267 2331 Market Street Camp Hill, PA 17011 Telephone: (717) 763-1383 Email: Tadler@ReagerAdlerPC.com Counsel to Plaintiff, L Cubed Company .J CERTIFICATE OF SERVICE I hereby certify that on this 21" day of May, 2012, I have caused a true and correct copy of the foregoing Praecipe to Discontinue to be served upon the fallowing counsel of record via First Class Mail, postage prepaid, addressed as follows: Joseph S. D. Christof, II, Esq. Dickie McCamey & Chilcote Two PPG Place, Suite 400 Pittsburgh, PA 15222-5402 Alana L. Souders, Legal Assistant to Theodore A. Adler, Esquire