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HomeMy WebLinkAbout10-7174IN THE COURT OF COMMON PLEAS OF COUNTY, PENNSYLVANIA CITIZENS BANK OF PENNSYLVANIA, CIVIL DIVISION Plaintiff, NO.: / 0 -7 l? g c Tv •, j -tG/m vs. GOODRICH AND COMPANY PROMOTIONS, INC., a Pennsylvania business corporation, Defendant. COMPLAINT IN BREACH OF CONTRACT AND NOW, comes Citizens Bank of Pennsylvania, by and through it's counsel Grenen & Birsic, P.C., and files this Complaint in Breach of Contract, and in support thereof avers as follows: 1. The Plaintiff is Citizens Bank of Pennsylvania ("Plaintiff'), a state bank organized and existing under the laws of the Commonwealth of Pennsylvania, with an office located at 443 Jefferson Boulevard, Warwick, RI 02886. 2. The Defendant, Goodrich and Company Promotions, Inc., is a Pennsylvania business corporation with a principal place of business at 5 Kasey Court, Suite 201, Mechanicsburg, PA 17055 (hereinafter "Defendant"). 3. On or about June 21, 2007, Plaintiff approved Defendant for a business line of credit pursuant to the terms of a certain Business Line of Credit Agreement ("LOC") in the original principal amount of $100,000.00 (the LOC and Approval Letter are hereinafter collectively referred to as the "Note"). A true and correct copy of said Note is marked as Exhibits "A" attached hereto and made a part hereof. 4. On or about February 11, 2010, Defendant executed and delivered to Plaintiff a certain Modification Agreement ("Modification"). A true and correct copy of the Modification is attached hereto, marked Exhibit "B" and made a part hereof. 5. Under the terms of the Note, as modified by the Modification, Defendant promised to pay to Plaintiff the sum of $100,000.00 with interest thereon at the contractual rate set forth in the Note. 6. Defendant is in default under the terms and conditions of the Note, as modified by the Modification for failing to make payments when due under the terms and conditions of the Note. 7. The Note and Modification have not been released, transferred or assigned. 8. Any and all conditions precedent to payment to Plaintiff have been satisfied. 9. The amount due and owing to Plaintiff under aforesaid Note, as modified by the Modification is as follows: Principal $99,000.00 Interest to 10/14/10 $ 4,571.87 Late Charges to 10/14/10 $ 864.03 TOTAL $104,435.90 [The remainder of this page has been intentionally left blank] WHEREFORE, Plaintiff demands judgment against Defendant for the sum of $104,435.90 with interest on the principal sum ($99,000.00) from October 14, 2010 at the Default Rate of Interest equal to $17.18 per diem (as may change from time to time in accordance with the Note, as modified by the Modification), together with costs and reasonable and actually incurred attorney's fees. Respectfully Submitted, GRENEN & BIRSIC, P.C. By: J i er, squire MD. #87325 Attorneys for Plaintiff One Gateway Center Ninth Floor Pittsburgh, PA 15222 (412) 281-7650 EXHIBIT "A" xx Citizens Bank BUSINESS CREDIT LINE AGREEMENT LENDER: 0 Cltftm Bart of Rhode Island 1 CRlsens Plaza Clttq Bank Now Hampshire 878 giro yys« CWze Bank of Pennsylvania ® 1735 Mnearket Street Providence, R102003 Manchester, NN 03101 Philadelphia, PA 19103 ? Citizens Ban V Connecticut 63 P.ugem (Y II Drive CRIs•ns yyak tN Massachusetts 28 Beats it t Clthions Bank ? Now London, CT 06320 .e Boston, MA 02109 919 North Marker inner(, suit. 200 Wilmington, De 19101 ? If chocked here, this loan is guaranteed by the Small Business Admini stration ("SBA"). This Business Credit Line Agreement (the "Agreement") sea forth the terms of a credit line ('Credit Line") established under a letter ("Approval Letter") from the Lender ("Lender% "we", "us" or "our") identified above to an applicant (the "Borrower" or" you'). The Borrower has submitted an application ("Application") for the Credit Line which incorporates the terms of this Agreement by reference to evidence the obligation to repay sums advanced under the Credit Line. Certain person(s) ("Guarantor") have, or may in the future, guaranty obligations under this Agreement. The Borrower and any Guarantor irrevocably accept the toms of the Approval Lamar and this Agreement by the Borrower taking an advance ("Advance") under the Credit Line. The words *you* and "yours" mean the Borrower, and each of them if more than one, and "we." "our," and 'Us* mean the Lanier. The term "Loan Documents" mans the Application, this Agreement, the Approval Letter, any guaranty and any other documents executed in cormection with the Credit Line. 1. Credit Limit. We have established a Credit Line for your short-term borrowing needs with a limit (the 'Credit Limit") set forth in the Approval Letter. The Credit Limit is the maximum principal amount you may have outstanding under the Credit Line at arty time. We reserve the right, in our sole discretion, to reduce your Credit Limit or terminate your Credit Line as provided below. 2. Purpose. This Credit Line is for business purposes only, and may not be used for consumer, household or other personal purposes. 3. Loans. Is) We agra to make Advances to you until the occurrence of an Event of Default (as defined in Paragraph 17, below) or notice of termination of the Credit Line: provided that the aggralister principal amount outstanding does rot exceed the Credit Limit. You agree o repay the Advances in accordance with this Agreement. Lender reserves the right, at any time, in its sole discretion to suspend Borrower's right to receive Advances on suspicion of feud or misuse without notice. Lender may monitor Borrower's Advances for evidence of money laundering, criminal or fraudulent conduct. If Lender determines that fraud, criminal or money laundering activities have taken place or Lender has reasonable grounds to suspect such activities have taken place. Lender has the right to take appropriate actions including suspending Borrower's right to receive Advances under or terminating Borrower's Credit Line. (b) Letters of Credit: If there is no Default under this Agreement, Borrower shall be entitled to request that the Lender issue commercial or standby letter of credit under this Agreement (subject to the limitations described above) pursuant to the following conditions: (I) Issuance of Letters of Credit. From time to time on any business day occurring prior to Default or demand hereunder, the Borrower may request the issuance of commercial or standby letters of credit (each s "Letter of Credit" and collectively, 'Letters of Credit') for its own account in respect ofobl(gations of the Borrower in stated face amounts (each such stated face amount not to be less than S 1,000) requested by the Borrower on such day with an expiry date not later than the earlier of one year from the date of such issuance: or extend the expiry date of an existing Letter of Credit previously issued hereunder to a date not later than one year from the date of such extension. No issuance or extension are Letter of Credit shall be made if, after giving effect thereto: (a) the aggregate face amount of all outstanding Letters of Credit, 2LU (b) the aggregate outstanding principal amount of all outstanding advances under this Agreement is greater than (c) the principal amount of this Agreement. To request the issuance of a Letter of Credit (or the extension of an outstanding Lour of Credit) the Borrower shall hand deliver to the Lender a notice requesting the issuance of s Letter of Credit, or identifying the Letter of Credit to be extended, the date o f issuance or extension, the data on which such Later of Credit is to expire (which shall comply with the limitations set out above) as well as submitting the appropriate letter of credit application on the Lender': standard form. By requesting the issuance ore Letter of Credit (or the extension of an outstanding Letter of Credit). and by signing the Larder's standard form of leperof credit application, Borrower will be deemed to have agreed to the terms of this section of this Agreement (captioned "LETTERS OF CREDIT'). Each Letter of Credit issued by the Lender shall be, in addition to the terms hereof, subject to the terms std condition of my form of letter of credit application or other agreement submitted or entered into by the Borrower in connection with the issuance of any Letter of Credit. In the event of any inconsistency between the terns and conditions of this Agreement, the Loan Agreement, and the terms of any form letter of credit application or other agreement submitted or entered into by the Borrower in connection with the issuance of any Letter of Credit, the terms and condition of such letter of credit application or other agreement shall control. (II) Available Credit. The credit available under this Agreement shall be reduced by the amount of all issue( and outstanding Lenin of Credit. In the event that the Lander pays any draft under any Letter of Credit, the Lender may charge the amount of such draft as an advance under this Agreement, and such advance shall bear interest under and be subject to all of the other turns of this Agreement. (111) ReimbonemeaL If the Lender shall honor or otherwise make any disbursement in respect of a Letter of Credit, the Borrower stall reimburse the Lender in the full principal amount of such disbursement by paying to the Lefler an amount equal to such disbursement not later than the close of business on the day such disbursement is made. Notwithstanding the foregoing, the Borrower may. subject to the toms and conditions of this Agreement, request that such reimbursement payment be financed by mans of an advance hereunder. The Borrower acknowledges and agues that the Lender is under no obligation to so honor any such request and that unless the Borrower shall reimburse the Lender in toil on the date such disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the data rich un-reimbursed disbursement is made to but excluding the date that the Borrower reimburses such disbursement. at the rate per annum then applicable to advances hereunder. (Iv) Letter or Credit Fees. The Borrower agrees to pay to :he Lender a Letter of Credit fee in an amount equal to the then applicable interest rate for advances hereunder multiplied by the sated face amount of all Letters of Credit outstanding, such fee to be paid monthly in arrears in accordance with the payment schedule set out below. The Borrower further agrees to pay to the Lender (i) on the date of (x) the issuanw of each Letter of Credit, (y) each increase in the rated face amount thereof and (z) each extension (automatic or otherwise) of the stated expiry date thereof, an issuance fee as provided for in the letter of credit application or other agreement submitted or entered into by the Borrower in connection with such issuance, increase or extension, and (ii) all reasonable costs and expenses incurred by the Lender in connection with such Letter of Credit. (v) Cash Collaterailxation. If the Larder shall make demand hereunder or upon the occurrence of any Default, on the day that the Borrower receives notices from the Lender demanding the deposit of cash collateral. the Borrower shall deposit in an account with the Lender, in the name of and for the benefit of the Lender, an amount in cash equal to the aggregate amount of all Letters of Credit then outstanding. Such deposit shall be held by the Lender as collateral for the payment and performance of the obligations of the Borrower with respect to such outstanding Letters of Credit. this Agreement, the Loan agreement. and any application or agreement submitted or entered into by the Borrower in connection with the issuance of any Letter of Credit. The Lender shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. Other than interest earned on the investment of such deposits, which such investments shall beat the option and sole discretion of the Lender and at the Borrower's risk and expense, such deposits shall not bear internal. Interest or profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Lender aa reimburse the Lender for Later of Credit disbursements for w hich it hits not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for outstanding Letters of Credit. or. if demand has been made hereunder, be applied to satisfy other obligations of the Borrower under this Agreement If the Borrower is required to provide an amount of cash collateral hereunder as a result of the occurrence of s Default, and the Lender shall refrain from demanding payment hereunder, such amount (to the extern not applied as aforesaid) shall be returned to the Borrower within 3 business days after all Defaults have been cured or waived. SBLOCsmdI Rev.05107 Page 2 4, Fees. The following few apply to your Credit Line: a) PaekaLlag Fee. Upon acceptance of the Approval Letter, by requesting an Advance or otherwise. you may be required to pay us a packaging fee of $250 (less any fee paid in connection with the Application) by means of an Advance under the Credit Line, which shall not be subject to any ref4nd upon termination. b) Aaaaal Fee, On each yearly anniversary of the date of this Agreement, you will be billed for the Armual fee of $150 which shall not be subject to any reefed upon termination. c) Late Fee. If any payment is not made within fifteen (15) days after it is due, you may be required to pay us a late fee of(!) $35, or (ii) five percent (51%) of the overdue payment, whichever is greater. d) Collection Fees. if any payment is not made when due, you will pay m any rtaaomble collection costs including, but not limited to, legal foes and court cost. S. latereat Rate, The outmoding principal balance of each Advance dull bear interest until paid at the Prime Rate plus a certain number of peranale point (dse "Marlin'). Tha init4h Marlin is sat forth in tha Approval Latter and does tat exceed eight (11%) percent. "Prime Ratc' shall mean iha rate pabl)ahad is ar the pnnrvailinL prime o+e u banks in lice United States• or, if no longer published a ianr eau dalaflltilned fMmirane? nrarsy stocapMd urvies chosen by the lwrdar• Rla Prpne Rea is a reference rate and does not tecesw(ly reprato de bweN or but nu cholad b my of our cueamen lateral rat odjuattneme tinder this Agreement shall be effective (i) wi1A napes b tha Peimnr Rote on the acme dace thin air adjustment is desanmined to love oexarrird, and (H) with respect to any Marg(q adjtwmaest as t)a date set krih In a ratio at m to you. Arty intereor rate djustmem :hall be applicable to the entire balance omstoridint unda? thla Agraantea4 ss wall p to alt Aefvanseea made tberealter under this Agraanant. For SBA guaranteed loans, the interest rate will tdtmge on tha Aral day of the ealemdar month foNowmL a ehanLe in tle Prime Rate. This interest nu chute will tat o=r more often than one teach month. Intenees dsall be ooraptsted dally on tle bwb of s 364day year. We may, within our tote discretion from HMO to time, but no earlier rhos ota year from de date of the Approval Lester, increase or decrease the Margin. Any change in the Margin shag be effective upon not lea than thirty (30) days' notice to you. You may, or your option, elect to terminate this Agreement rather than be bound by a change in the Margin. If you decide to terminess this Agnew . you must give us written notice of your decision to do so before the effective date of the change and you mum pay all vaunts outstanding trader this Agramau prior to the effective daft of the change. In PA, for business loans to tan-corporation borrowers in amounts Ion than or equal to 510,000, the maximum allowable interest rate is currently 18"h. All linesof credit an priced subject to credit smosasrerst. 6. Payments. This Agreement is payable ON DEMAND. Until demand is made, you shall pay the principal and interest according to the following schedule: You must snake regular monthly payments on the date ("Payment Date") sal forth in your billing statement. The first Payment Date will be one month after the due of the Approval Letter and monthly on the same day of the month thereafter. On each Payment Date, you must pay the following amounts: © If the box at the beginning of" paragraph is checked, your regular momhiy payments will be equal to the sum of (a) accrued intereor and any other charges posted to the account at de close of the billing cycle, plus (b) any amount which is poor due, plus (c) any annoum by which the esutilodinL priaeipal balance of the loans esceads the Credit Limit (except s a yeah of a reduction by us of your Credit Limit). This miaimwa monthly payment will not rectos tha principal mat is outwemding on the Credit Line, and will result in preuer expetua over rte life of the Credit Lies Amount. !n dditian to dos rainhaurn monthly payment tat fath above, you agree than u leas once during each 12 ownseetspve ealeadar mentb period (beginning on tha date of the Approwl Latter) you will roduee, for a period of 30 consecutive days, the principd baloce otter Credit Lino to not Dare duct fifty pencam (SOY.) of the highem out+anding principal balance on the Credit Line for ifie ptecedinL 12 colander months. Unless the box at the beginning of the preceding paragraph bs bean chocked, your regular monthly payment will be equal to the sum of (a) accrued interest and ashy other charges pointed to the account at the close of the billing cycle, plus (b) principal in the minimum amount of (i) 1200.00. or (ii) two percent (2%) of the outoaoding principal balance at the close of the billing cycle, whichever is greater (however, the minimum payment will never wend the entire onchi mm outmh a lingy plus (c) any amount which is past due, plus (d) any amount by which the outstanding principal balance of the Loon exceeds the Credit Limit (except as a result of % reduction by us of your Credit Limit). You may make additional repayments of principal at any time, but these additional payments will not release you from the obligation to make payments on the next Payment Date. Upon the occurrence of an Event of Default (act defined in Paragraph 17, below) or termination of the Credit Line, all amounts outmWing under the Credit Line will be due and payable in }416 However, in our tole discretion. we may allow you to pay the amounts outstanding over s period of time ("Extension Atreaneeo'): We will indicate our approval of an Extension Atrwment by a notation on your billing statement or offer writen notice. Unless we indicaor a different atrmegetna it in written notice to you, an Extension Agreement will require momhty payments on the Payment Dow equal to the sum of (a) accrued interest and other charges posted to your account al the close of your billing cycle, plat (b) one thirty-sixth (1/36th) of the principal balance outstanding when we terminated the Credit Line, plus (c) any amount which is pet due. All outstanding amounts subject to an Extension Agreement will be due and payable in full if then is a subsequent Event of Default. Any payment due art a Saturday. Sunday or other banking holiday may be made on the first day we are open after the date due, but interem and other charges shall be computed through the date on which payment is actually made. All payments will be made to Lender at the address on the billing statement is lawful currency of the United Stars orAmerica. If you pay us with a chock or similar instrument that has notations or instructions on or with the check, you agree that (i) we may ignore those rotations and instructions except as expressly provided below; and (ii) we may credit my payment we receive to your Credit Lint (including a check), and our crediting of that payment will not mean that we have agreed to any notations or instructions on or with that payment. If you went to pay the outstanding balance of the Credit Line U full with a check or similar inarument that has such special notations or instructions on it or with it, but nor close the Credit line, you mum send the payment (including special notations or instructions) to Loan Operations, Citizens Bank, I Citizens Drive, Riverside. RI 02915. If you warm to pay the Credit lire in full with a check or similar instrument that has such special rotations or instructions on it or with it, and clan the Credit Line, you mum send the payment (including special notations or instructions) to Loan Operations, Citizens Bank. I Citizens Drive. Riverside, R102915. If payment in full is received at any other address, (i) we may ignore any special notations or instructions, and (ii) our crediting any such check or other instrument to the Credit Line does not mean that we have agreed ado special notations of instructions. 7. Requesting Advaates. You may request an Advance by using the special loan checks we will give you. The following rules apply to your use of special loan checks. a) Lost or Scot" Special Loan Check& You agree to tell us if special loan checks aft lost or stolen. or if you believe someone is using your Credit Line without your permission. The fwtest wry to notify us of lost or stolen checks is by calling us at 1.8004-BUSINESS. b) Forged Special Loan Cheeks. You agree that we do not have to pay any of your special loan checks if we believe the signature on to check has been forged, unless you tell us to. c) Postdated Special Lou Check& if you due a special loan check with a date that is later than the dale on which you actually wrote the spatial loss cheek, you some that we tansy pay the special ban check even if we pay it or post it to your Credit Line on a due which is earlier than the date on the special loan check. d) Stopping Payment on a Special Loco Cbeck. You an ask us to stop payment on any special loan check you have written that has not been paid by calling us at the telephone number shown on your statement. The mop payment will be effective 24 hours after we we in receipt of your request. You will receive a written confirmation from us that the stop has been placed. You can cancel a stop payment by notifying us in writing. e) We Are Not Liable. We will not be liable if anyone fails to honors special loan check written by you. Page 3 I) Paying Special Loan Checks in Excess of Your Credit Limit. We do not have to pay any special loan check that would cause you to go over your Credit Limit. However, we may do so if we choose. g) Paying Special Loan Checks After Termination. We will not pay any additional special loan checks presented to us for payment after we send you notice of termination of the Credit Line (as provided in Paragraph 14, below). If you terminate the Credit Line (as provided in Paragraph 14, below), you will be responsible for paying any additional Advances we make to pay special ban checks which art presented to us for payment before we have had a reasonable amount of time to implement your termination notice. Once we have implemented your termination notice, we will not pay any additional special loan checks presented to us for payment L Dow if you have so indicated on the Application and have completed an authorization on the form we provided to you. you authorize us to debit your Citizens Bank business checking account with us for all sums (including, without limitation. principal. interest and fees) payable under this Agreement and the Loan Docunentst provided, however, that this provision shall not obligate us to create or allow any overdraft, and further provided the such authority shall not relieve you of the obligatton to assure that payments are made if there arc riot sufftciern good hands in your account. You understand dun in exchange for your authorization to deduct your payments from your checking account we have reduced the Interest raw payable under this Agreement by one percent (1%). If you close your checking account. if you revoke your suthorlandon to debit payments from your checking account, or if automatic payments are otherwise terminated for any reason, we have the right to increeae the Margin on your Credit Line by one pare" (1lea), without any prior notice to you. Unless payments are made by automatic debit of your decking account, you must make payments to Lender at the address on the billing statement in lawful currency of the United Scows of America. 9. Billing Statements. We will provide you each month with a billing statemea showing the Payment Date, the minimum amount due on the Payment Dials, the current interest raw, any changes in the interest rue, any Advances, all payments made. the principal balance of all Advances, and other appropriate debits and credits. All entries in your account will be made in accordance with our customary accounting practices in effect hom time to time. Any failure to record Advances, interest or other chargesor any error in so recording shall not limit or otherwise reduce your obligations to us under the Loa Documents. The balance shown on our most recent printout of your account, absent manifest error of omission, will be presumptive evident of the amounts due and owing by you to us under this Agreement. 10. Default Interest After the occurrence of an Event of Default (as defined in Paragraph 17, below), and whether before or after a judgment is isatted, we may impose, in our sole discretion, on all principal and other amounts outstanding and payable under the Loan Documents, intereu until paid in full at the raw (the 'Default Rate") of four percent (4K) in excess of the rate described in Paragraph S (above). For business loans to non-corporation borrowers in amounts lea than or equal to S 10,000, the total maximum allowable interest rate is currently Ig% 11. Maximum Rate of Interest. All provisions of this Agreement are expressly subject w the condition that. in no event shall the amount paid or agreed to be paid to us hereunder said downed interest under applicable law exceed the maximum rate of interest allowed by applicable law (the "Maximum Allowable Rate"). In de event thus fulfillment of any provision of this Agreement results in a determination that the interest rate hereunder is in excess of the Maximum Allowable Rate, the obligation to be fblfilied shall be reduced, as promptly as practicable after such determination is made, to eliminate such excess. Any amount collected in excess of the Maximum Allowable (late prior so the date on which the obligation is reduced shall be applied to and deemed a prepayment of the unpaid principal balance of the Advances. IL Prepaymeut You shall have the right at any time and from time to time to prepay the unpaid principal balance of all Advances in whole or in pan, without premium or penalty, but with accrued interest and other charges to the day of such prepayment on the amount preWkL 13. Reduction of Credit Line. We may reduce your Credit Limit at any time, in our sole discretion, by written notice to you. Any reduction will be effective on the dote specified in our notice (which may be the date of the notice). You will rot be entitled to further Advances if the aggregate principal amount of all Advances outstanding would exceed the reduced Credit Limit If the aggregate principal amount of all Advances outstanding exceeds the reduced Credit Limit on the effective date of the reduction, you must pay a sum sufficient to reduce the outstanding principal balance to the reduced Credit Limit within thirty (30) days of the effective date of the reduction. 14. Termination. The Credit Line will terminate automatically upon tlne occurrence of an Event of Default (as defined in Paragraph 17, below). We may terminate the Credit Line at any time, in our sole discretion, upon a date specified in written notice to you which date will beat least thirty (30) days after the date of our notice. You will not be entitled to further Advances from the due of our notice, even though termination is effective at a future date. Upon termination, all amounts owing under the Loan Documents shall be due and payable in full. You may terminate the Credit Lim at any time by written notice to us, provided there is no outstanding balance of principal, interest or other charges. IS. Representation and Warranties. You represent and warrant that (i) all information contained in the Application or otherwise furnished to us by you or any Guarantor is accurate and complete, (id) if you an not an individual. you are duly organized. validly existing and in good sanding under the law of the state where you are organized, (iii) you have all material licenses, permits and registrations needed to conduct your business. (iv) the person(s) signing the Loan Documents is duly authorized. (v) the Loan Documents are valid, bending and enforceable against you and any Guarantors. and (vi) you arc under no legal restriction that would prevent borrowing under this Agreement. 16. Coveaunts. You covenant and agree (i) to keep the representation and waranties contained in Paragraph 13 trueat all time: (ii) to operate in accordance with all present sad future laws and goventmernal regulations; (tin) to pay all your obligations when due: (iv) to furnish us with such information regarding your business and financial condition, and that of arty Guarantors, as we may reasonably request: (v) to allow us and our representatives to inspect your business operations and books and records (and to make copies thereof) at reasonable times upon reasonable notice; (vi) to maintain the current name of your company or business including but not limited to filing all necessary reports with your jurisdiction of organization; and (vii) to refrain from any dissolution, consolidation, merger, sale of assets outside the ordinary courts, or change of ownership. 17. Eventsel Default The occurrence of any of the following ("Event of Default") with respect to any Borrower or any Guarantor shall constitute a default under the Loan Documents: (i) failure to pay when due any principal, interest or other charge relating to the Advances; (ii) failure of any representation or warranty made in connection with any of the Loan Documents to be true when made; (iii) delivery of any false or misleading certificate, financial statement or other written document in connection with the Advances; (iv) failure to observe any covenant contained in the Loan Documents; (v) overdraft of any checking account with the Lender, (vi) default under any agreement with the Lender (whether in the Loan Documents or otherwise); (vii) notice from any Guarantor terminating a guaranty, death of a Guarantor, or assertion that a guaranty is not in full force and effect as to all Advances; (viii) suspension of business for a reason other than strike, casualty or other cause beyond your control: (ix) commencement of any voluntary or involuntary proceeding under the Bankruptcy Code, appointment of a custodian (as defined in the Bankruptcy Code), commencement of any other insolvency proceeding, or inability to pay debts generally as they become due: (x) attachment or other judicial encumbrance of property; (xi) occurrence of any material uninsured casualty loss; Page 4 (xii) indictment for criminal activity; (xiii) any material adverse change in financial condition or business prospects which leads the Lender to believe that performance of any agreement or undertaking with the Larder is or may be substantially impaired: (xiv) If Lender has a good !lath belief" Bormwer or any Co-Obligor has committed or has attempted to commit an act of fraud involving Lander. An act of fraud shall include but will rot be limited to (a) Borrower giving or mtempring to give Lender false, misleading or Inaccurate imfoemaaon to Lender; (b) Borrower failing to provide material information about the Borrower as requested by Lender from time to time; or (c) Borrower taking my action or failing to take action with the intent to deceive or mislead us. or (xv) If Borrower fails to make timely payments to mother creditor as reflected in Borrower's credit report or if any account of yours with another creditor is closed by that creditor because or Borrower's misuse of or default on the account. IS. Rereedles. Upon the occurrence of an Event of Default (era defined in Paragraph 17, above), (i) you shall have no fisher right to borrow under the Credit Lint, (ii) all outstanding suwwsq under the Credit Line are due and payable, (iii) the outstanding amounts shall am interest at the Default Rate, and (iv) we have the right to bring suit and exercise all rights and remedies available under applicable law, it. Cost of Collection. You agree to pay all expenses incurred by us in connection with the enforcement of our rights under the Loan Documents to the exaem allowed by law iscladkW but not limited b, all appraisal, accounting and legal fees (including, but not limited to, allocated costs of in-house counsel) and meted disbursements. 20. Notices. All noticee shall be in writing, sailed so or delivered to each party to the following addresses: If to the Borrower or GumaUor, at the address to forth in the Application; If to the Lender, Citiuro Bank, Business Banking Conner, One Citizens Drive, Riverside, RI 02915; Or such other anddeea as any party may specify by prior notice to the other party. 21. Amendments and Waivers. The Loan Docurno may be anatded only by (a) writing signed by the Lender and the Borrower, or (b) the Lender providing written notice to the Borrower at taut thirty (30) days prior to the proposed effective date of the amendment. If the Lender proposes an arWWRNM Lyon thirty (30) days' notice, the ammdintot will become effective without the signoure of the Borrower males the Borrower gives within to the Lander prior so the proposed effective due tie the Borrower does not accept the amendment. No delay in exercising army, right shall constitute a waiver or affect our right to act at a laser time. No waiver or consent shalt be effective unless in writing signed by the party, grafting the waiver or consent. No waiver of an Event of Default (a described in Paragraph 17, above) or specific provision shall affect any oche Event of Default or other provision. Any waiver shall be effective only for the specific instance indicated in die waiver. 22. Joint red Several Distillations. If the Application is signed by more thin one Borrower, all obligations of the Borrowers under the Loan Documents are their joint and several obligations, and all references to the Borrower herein shall be deemed to refer to each of them, either of them, and all of them. 23. Cumulative Rome", Satef , The rights and remedies provided the Lender in this Agreemam and in the other Loan Documents shall be cumulative and shall be in addition b and not in desolation of any rights or remedies provided the Lender in any outer document, instrument or agreement or under applicable law and may be exercised concurrently or successively. The Borrower grants the Lender the right of seraff aphat s0 deposits and property of the Borrower now or hereafter lit the possession of the Lender without regard to the adequacy of collateral. 24. Entire Agreement; Asafgaa "t. Successors and Assigaa The Lout Documents supersede all prior agreements between the panics with respect to the Credit Line, whether oral or written. The Lean Documents constitute the entire agreement between the panics with respect to the Credit Line. Borrower shall not be entitled to assign any of its rights or obligations under the Lean Documents without Lender's prior written Laurent. Lawler "I be entitled to map some or all of its rights wider the Lawn Documents without notice to or consent of Borrower. This Agreement and the Lan Dammam shall be binding upon and 'ware to the benefit of Borrower. Lender and their r- I -dve successors, wilts, trustee. receivers, admirnistm ors, postr al representatives. legatees and devisees. 15. Leader Linblity. The Lender shall not be liable for arty loss sustained by any party resulting from sty action. omission or failure to act by the Lando, whether with respect to the exercise or enf nvernent of the Lader's rights or remedies under the Loan Documents. or otherwise. unless such loss is caused by the actual MUNI misconduct of the Larder conducted in bad faith. IN NO EVENT SHALL THE LENDER EVER BE LIABLE FOR CONSEQUENTIAL OR PUNITIVE DAMAGES, ANY RIGHT OR CLAIM THERETO BEING EXPRESSLY AND UNCONDITIONALLY WAIVED. 26. Indemnification. The Borrower hereby indemstifnes and agree to protect, defend and hold harmless the Lender and the Lender's directors, officers, employees, agents. attorneys ad shareholders from sod against any and all loam. damages, expenses or liabilities of any kind or nature and Nom any suite, claim or datanda. Including all reasonable counsel fees incurred in investigating, evaluating or defending such claim, suffered by any of then mad caused by, relating to, arising out of. resulting from, or in any way corrected with this Agreement, the Applicator, the other Loan Docameom ad any transaction contemplated heroin or therein including, but not limited to, claims bond upon any act or faihne to set by the Larder. If the Borrower shall have knowledge or any claim or liability hereby indemnified against, it shall promptly give written notice thereof to the Lender. The Borrower acknowledges that this covenant shall survive payment of all Advances. 27. WAIVER OF TRIAL BY JURY. THE LENDER, THE BORROWER AND ANY GUARANTOR HEREBY VOLUNTARILY. INTENTIONALLY AND IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING HEREAFTER INSTITUTED BY OR AGAINST THE LENDER, THE BORROWER OR ANY GUARANTOR OF ANY KIND, IN ANY COURT, ARISING OUT OF THIS AGREEMENT, THE APPLICATION, THE OTHER LOAN DOCUMENTS OR ANY RELATED DOCUMENTS. 21L WAIVER OF PREJUDGMENT HEARING, THE BORROWER AND ANY GUARANTOR 0) ACKNOWLEDGE THAT THIS AGREEMENT IS A PART OF A COMMERCIAL TRANSACTION AND (ii) TO THE EXTENT PERMITTED BY ANY STATE OR FEDERAL LAW, WAIVE THE RIOHTTHE BORROWER OR ANY GUARANTOR MAY HAVE TO PRIOR NOTICE OF AND A PRIOR COURT HEARING ON THE RIGHT OF ANY HOLDER OF THIS AGREEMENT TO ANY REMEDY OR COMBINATION OF REMEDIES THAT ENABLES SAID HOLDER BY WAY OF ATTACHMENT, FOREIGN ATTACHMENT, GARNISHMENT, REPLEVIN, OR OTHER PREJUDGMENT PROCESS TO DEPRIVE THE BORROWER OR ANY GUARANTOR OF PROPERTY, AT ANY TIME, PRIOR TO FINAL JUDGMENT IN ANY LITIGATION INSTITUTED IN CONNECTION WITH THIS AGREEMENT, AND FURTHER WAIVES ANY REQUIREMENT OF LENDER TO POST A BOND OR OTHER SECURITY IN CONNECTION WITH SUCH REMEDY. 29. Consent to Jurladictfon. The Borrower and any Guarantor consent to the personal jurisdiction in any court of the state in which the main office of the Lender is located. 30. Waiver of Personal Service. The Borrower and any Guarantor waive personal service of process in connection with any action or prooeed,ng commenced by the leader in connection with the Loan Documents, spacing that such service may be made by certified mail to the address specified in this Agreement for notices. 31. Descriptive Headlags; Contest. The captions in this Agreement are for convenience of reference only ant shall not define or limit any provision. Whenever the contest requires, reference in this Apartment to the neuter gender shall include the masculine and/or feminine gender. and the singular number shall include the plural and in each case, vice versa. Page 5 32. Survival. This Agreement and all covenants, agreement& representations and warranties made herein and in any certificates delivered pursuant hereto shall survive any making by the Lender of arty Advances and the execution and delivery of any Loan Documents and shall continue in full force and effect until this Agreement is terminated and all obligations of the Borrower to the Lender are paid in full. 33. Choke of Law. This Agreement and all other Loan Documents are entered into under and shall be construed. interpreted. enforced and goverrxd by the laws of the state in which the Lender's main office is located. 30. Maim Disclosure. If the address for the Borrower is Maine. the following notice applies: Notice. Under Kleine law, no promise. contract or agnsmant to lend money, extend credit, forbear from collection of & debt or make any other accommodation for the repayment of s debt for moss than 5250,000 may be enforced in court against Lender, unless the promise, contract or agreament is in writing and signed by Lender. Accordingly Borrower cannot enforce arty and promise to extend credit unless it is contained in a written document signed by Lender, nor can any chap, forbearance, or other accommodation relating to any extension of credit by Lender to Borrower be enforced, unless it is in writing signed by Lender. 35. Seal. This Agreement is made as an instrument under seal. %lb a Citizens Bank GOODRICH & COMPANY PROMOTIONS, INC. 335 SOUTHVIEW DRIVE MECHANICSBURG, PA 17055 I Citizens Drive Mail Stop: RDC160 Riverside, RI 02915 06/21/2007 Congratulations! We have approved your recent request for a Citizens Bank Business Credit Line Account ("Credit Line") with a credit limit amount of $ 100,000.00 Your interest rate will be based upon an Index as outlined in the enclosed Business Credit Line Agreement ("Agreement") plus a Margin of 0.000 %. Please read the Agreement carefully before using the Business Credit Line Account. is document is incorporated by reference into the enclosed Agreement and shall be considered as a part thereof. For your convenience, we have enclosed a book of temporary checks. You may begin to utilize these checks immediately. A Business Credit Line checkbook has been ordered for you and you should receive it within 10 to 14 days. If you have any questions concerning your new Credit Line, please feel free to call us at 1-800-4-BUSINESS. Thank you for choosing Citizens Bank as your Business Partner. CITIZENS BANK Retail Lending Services Enc.: Business Credit Line Agreement SBWelcome Rev. 01/07 EXHIBIT "B" 9 0 MODIFICATION AGREEMENT This Modification Agreement (the "Agreement"), dated as of February 11, 2010 is made by and among GOODRICH AND COMPANY PROMITIONS INC (the "Borrower"), with an address of 5 Kasey Court, Suite 201, Mechanicsburg, Pa. 17055; Robert S. Goodrich (the "Guarantor") with an address of 5 Kasey Court, Suite 201, Mechanicsburg, Pa. 17055 and Citizens Bank of Pennsylvania, successor by merger to Citizens Bank with an address of One Citizens Plaza RFC- 160, Providence Rhode Island 02903 (the 'Bank"). RECITAL OF FACTS WHEREAS, on or about June 21, 2007, The Borrower executed and delivered to the Bank a Commercial Note in the principal amount of One Hundred Thousand Dollars ($100,000.00) (together with all extensions and modifications); WHEREAS, to secure the payment and performance of the Note, the Guarantors executed and delivered Guaranty dated June 21, 2007 (together with all amendments and modifications thereto, the "Guaranty", guarantying the Borrower's obligations under the Note; WHEREAS, the guaranty recited above, with all other documents executed in connection with the Agreement including all extension and modification agreements are collectively referred to as the "Loan Documents"; WHEREAS, as of November 20, 2009 the unpaid principal balance is $ 99,000.00 unpaid and accrued interest is $1,838.17 and late fees in the amount of $ 313.89; WHEREAS, the Borrower, the Guarantor and the Bank have agreed to modify the terms and provisions set forth herein. NOW, THEREFORE, in consideration of the foregoing recitals and of the mutual covenants and agreements herein contained, in reliance upon the representations and warranties set forth below and for other good and valuable consideration, the Borrower, the Guarantor and the Bank agree as follows: 1. The above recitals are incorporated herein by reference and are expressly made a part of the terms hereof. n 2. The Loan Agreement, as defined above, is hereby amended as follows: The borrower has requested the account return ?o interest only payments: The principal payments due for August 21, September 21, October 21, 2009, November 21, 2009 and December 21, 2009 will be deferred to the new maturity date of January 21, 2021, The borrower will pay the interest owing of $92.87 for the month of December 21, 2009 at the time of signing the agreement, The borrower will make interest`6nlVpayments from and including January 21, 2010 and each month there after on the 21st day of the month, thru and including January 21, 2011, Beginning February 21, 2011 and each month thereafter on the 21st day of the month, the borrower will make principal and interest payments of $1,111.57 thru and including December 21, 2020, A final payment of all principal, interest, late charges, and fee's owing will be due and payable on January 21, 2021. Interest will remain on a variable basis at WSM +3.00%, The borrower will pay a one time Modification fee of $150.00 at the time of signing the new agreement. Should the borrower make all future payments on time, the past due late charges due for August, September, October, November and December 21, 2009 will be waived. No prepayment penalty will be assessed on this loan. 3. The Borrower and Guarantor hereby covenant, warrant and represent that the loan was made for commercial purposes. 4. The Borrower and Guarantor remiss, release and forever discharge the Bank and each of the Bank's present, future and former officers, directors, employees and agents from any and all claims, losses, liabilities, demands and causes of action of any kind whatsoever, if any, whether absolute or contingent, known or unknown, matured or unmatured that the Borrower and the Guarantor may now have or ever had, in whatever capacity, against the Bank or its present, future or former officers, directors, employees and agents. 5. The Borrower and Guarantor hereby ratify and confirm in all respects and without condition all of the terms and provisions of the Documents, as modif ied herein, as applicable, and agree that said terms and provisions, except to the extent expressly modified herein or therein, continue in full force and effect. With respect to the payment and performance of any obligation under the Documents, as modified herein, the Borrower and Guarantor acknowledge and agree that they do not have any defense, right of set off, recoupment or counterclaim against the Bank, all of which are hereby waived. 6. In any case where the provisions of this Agreement differ from the provisions of the Loan Documents, the parties agree that the terms set forth herein shall govern. 7. This Agreement shall inure to, and be binding upon, the parties hereto in the same manner and to the same extent as is set forth in the Loan Documents. IN WITNESS WHEREOF, the Borrower, the Guarantor and the Bank have each caused this Agreement to be duly executed and delivered as an instrument under seal as of the day and year first above written. BORROWER: GOODRI cl ND COMP ,PROMOTIONS INC _ By:- Name./Robert S. Goodrich GUARANTOR: Robert S=:7 h Na ? obert S. Goodrich, Personally *me: Thomas H. Dolan Title: Vice President This section left blank gurpely REAFFIRMATION OF GUARANTOR(S) In order to induce the Bank to enter into the Modification Agreement set forth above, the Guarantors), for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, hereby: (a) consents to the execution of the Modification Agreement by the Borrower, (b) agrees and confirms that the Loan Agreement remains in full force and effect with respect to the Note and/or the Guaranty, as amended above, and (3) there are not setoffs or defenses against the Guarantor's obligation or against the Bank's right to exercise any rights and remedies available to the Bank under the Modification Agreement. Executed this 11th day of February2010 OR. GU Vjr rt S. Goodrich, Personally VERIFICATION Kerin Palumbo, Workout Officer and duly authorized representative of Citizens Bank of Pennsylvania, deposes and says subject to the penalties of 18 Pa. C.S.A. §4904 relating to unworn falsification to authorities that the facts set forth in the foregoing pleading are true and correct to her information and belief. Kerin Palumbo Workout Officer Citizens Bank of Pennsylvania SHERIFF'S OFFICE OF CUMBERLAND COUNTY 11 1 Ronny R Anderson Sheriff Jody S Smith Chief Deputy Richard W Stewart Solicitor OF THE PRO HONOTARY 2010 DEC -2 PM 3.4 S CUMBERLAND COUNTY PENNSYLVANIA Citizens Bank of Pennsylvania Case Number vs. 2010-7174 Goodrich & Company Promotions, Inc., SHERIFF'S RETURN OF SERVICE 11118/2010 03:24 PM - William Cline, Corporal, who being duly sworn according to law, states that on November 18, 2010 at 1524 hours, he served a true copy of the within Complaint and Notice, upon the within named defendant, to wit: Goodrich & Company Promotions, Inc., by making known unto Lisa Goodrich, adult in charge at 1595 W. Lisburn Road, Mechancisburg, Cumberland County, Pennsylvania 17055 its contents and at the same time handing to her personally the said true and correc/cf the same. WLPAM-CLINE, DEPUTY SHERIFF COST: $37.44 November 19, 2010 SO ANSWERS, RON R ANDERSON, SHERIFF id; ipourtV"'cte S."nff. 7e!ec o?t. loc IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CITIZENS BANK OF PENNSYLVANIA, CIVIL DIVISION r? c ma) :M :Z M ?r ?D r-.C Ao =o Dc CJ L w 0 x r»- -Q m ?a o xo o-n zF) orV1 Plaintiff, VS. GOODRICH AND COMPANY PROMOTIONS, INC., a Pennsylvania business corporation, NO.: 10-7174 TYPE OF PLEADING. Js w PRAECIPE FOR DEFAULT Defendant. JUDGMENT (Breach of Contract) I HEREBY CERTIFY THAT THE ADDRESS OF THE PLAINTIFF IS: 443 Jefferson Boulevard Warwick, RI 02886 AND THE DEFENDANT IS: FILED ON BEHALF OF PLAINTIFF: Citizens Bank of Pennsylvania COUNSEL OF RECORD FOR THIS PARTY: Joseph A. Fidler, Esquire Pa. I.D. #87325 GRENEN & BIRSIC, P.C. One Gateway Center Ninth Floor Pittsburgh, PA 15222 (412) 281-7650 tS(Y(v7 Goodrich and Company Promotions, Inc. c/o Robert Goodrich, President 1595 W. Lisburn Road Mechanicsburg, PA 17055 IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CITIZENS BANK OF PENNSYLVANIA, CIVIL DIVISION Plaintiff, NO.: 10-7174 VS. GOODRICH AND COMPANY PROMOTIONS, INC., a Pennsylvania business corporation, Defendant. PRAECIPE FOR DEFAULT JUDGMENT TO THE PROTHONOTARY: Kindly enter a default judgment in the above-captioned case in favor of Plaintiff and against Defendant, Goodrich and Company Promotions, Inc., a Pennsylvania business corporation, in the amount of $104,435.90, which is itemized as follows: Principal $99,000.00 Interest to 10/14/10 $ 4,571.87 Late Charges to 10/14/10 $ 864.03 TOTAL $104,435.90 with interest on the principal sum ($99,000.00) from October 14, 2010 at the Default Rate of Interest equal to $17.18 per diem (as may change from time to time in accordance with the Note, as modified by the Modification), together with costs and reasonable and actually incurred attorney's fees. GRENEN & BIRSIC, P.C. B se le r, Esquire A rneys for Plaintiff AFFIDVAIT OF NON-MILITARY SERVICE AND CERTIFICATE OF MAILING OF NOTICE OF INTENT TO TAKE DEFAULT JUDGMENT COMMONWEALTH OF PENNSYLVANIA ) SS: COUNTY OF ALLEGHENY ) Before me, the undersigned authority, a Notary Public in and for said County and Commonwealth personally appeared Joseph A. Fidler, Esquire, attorney for and authorized representative of Plaintiff who, being duly sworn according to law, deposes and says that the Defendant was not in the military service of the United States of America to the best of his knowledge, information and belief and certifies that the Notices of Intent to take Default Judgment was mailed in accordance with Pa. R.C.P. 237.1, as evidenced by the attached copy: Sworn and subscribed before me this day of , 2010. N ary Public COMMONWEALTH OF PENNSYLVANL4 Notarial Seal Elizabeth M. Cagnon, Notary Public City of Pittsburgh, Allegheny County My Commission Expires Tan. 6, 2012 Member, PennsAvania Asswation of Notaries, IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY PENNSYLVANIA CITIZENS BANK OF PENNSYLVANIA, vs. Plaintiff, GOODRICH AND COMPANY PROMOTIONS, INC., a Pennsylvania business corporation, Defendant. TO: Goodrich and Company Promotions, Inc. c/o Robert Goodrich, President 1595 W. Lisburn Road Mechanicsburg, PA 17055 DATE OF NOTICE: December 9, 2010 CIVIL DIVISION NO.: 10-7174 IMPORTANT NOTICE YOU ARE IN DEFAULT BECAUSE YOU HAVE FAILED TO ENTER A WRITTEN APPEARANCE PERSONALLY OR BY ATTORNEY AND FILE IN WRITING WITH THE COURT YOUR DEFENSES OR OBJECTIONS TO THE CLAIMS SET FORTH AGAINST YOU. UNLESS YOU ACT WITHIN TEN DAYS FROM THE DATE OF THIS NOTICE, A JUDGMENT MAY BE ENTERED AGAINST YOU WITHOUT A HEARING AND YOU MAY LOSE YOUR PROPERTY OR OTHER IMPORTANT RIGHTS. YOU SHOULD TAKE THIS NOTICE TO A 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 THAI' MAY OFFER LEGAL SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE OR NO FEE. Cumberland County Bar Association 32 S. Bedford Street Carlisle, PA 17013 (717) 249-3166 or Toll Free (800) 990-9108 By: FIRST CLASS MAIL, POSTAGE PREPAID GRENENXBI,RSIC, P. On ateway Center, Ninth Floor P' tsburgh, PA 15222 (412) 281-7650 IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CITIZENS BANK OF PENNSYLVANIA, CIVIL DIVISION Plaintiff, NO.: 10-7174 vs. GOODRICH AND COMPANY PROMOTIONS, INC., a Pennsylvania business corporation, Defendant. NOTICE OF ORDER, DECREE OR JUDGMENT TO: Goodrich and Company Promotions, Inc. c/o Robert Goodrich, President 1595 W. Lisburn Road Mechanicsburg, PA 17055 ( ) Plaintiff (XX) Defendant ( ) Additional Defendant You are hereby notified that an Order, Decree or Judgment was entered in the above-captioned proceeding on ( ) A copy oft e Order or Decree is enclosed, or (XX) The judgment is as follows: $104,435.90 with interest on the principal sum ($99,000.00) from October 14, 2010 at the Default Rate of Interest equal to $17.18 per diem (as may change from time to time in accordance with the Note, as modified by the Modification), together with costs and reasonable and actually incurred attorney's fees. De y