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HomeMy WebLinkAbout11-6489RITE AID HDQTRS. CORP, : IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff, NO. 11- 4#481 CIVIL TEE ". «, vs. PEGASUS TECHNOLOGY, INC. Defendant. CIVIL ACTION - LAW NOTICE TO DEFEND r" Wes; 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 Telephone: (717) 249-3166 9 ga.oo Po Arn/ et 19187 & 4&3338 RITE AID HDQTRS. CORP, vs. Plaintiff, IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. CIVIL PEGASUS TECHNOLOGY, INC. CIVIL ACTION - LAW Defendant. AVISO USTED HA SIDO DEMANDADO/A EN CORTE. Si usted desea defenderse de las demandas que se presentan mas adelante en las siguientes paginas, debe tomar acci6n dentro de los pr6ximos veinte (20) dias despu6s de la notificaci6n de esta Demanda y Aviso radicando personalmente o por medio de un abogado una comparecencia escrita y radicando en la Corte por escrito sus defensas de, y objecciones a, las demandas presentadas aqui en contra suya. Se le advierte de que si usted falla de tomar acci6n como se describe anteriormente, el caso puede proceder sin usted y un fallo por cualquier suma de dinero reclamada en la demanda o cualquier otra reclamaci6n o remedio solicitado por el demandante puede ser dictado en contra suya por la Corte sin mas 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 O 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 QUE ESTA OFICINA LE PUEDA PROVEER INFORMACION SOBRE AGENCIAS QUE OFREZCAN SERVICIOS LEGALES SIN CARGO O BAJO COSTO A PERSONAS QUE CUALIFICAN. Cumberland County Bar Association 32 South Bedford Street Carlisle, PA 17013 Telephone: (717) 249-3166 RITE AID HDQTRS. CORP, Plaintiff, IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. CIVIL VS. PEGASUS TECHNOLOGY, INC. CIVIL ACTION - LAW Defendant. COMPLAINT Plaintiff Rite Aid HDQTRS. Corp. ("Rite Aid"), by its undersigned attorneys, files this Complaint alleging as follows: PARTIES 1. Rite Aid is a Delaware corporation with its principal place of business at 30 Hunter Lane, Camp Hill, Pennsylvania 17011. 2. On information and belief, defendant Pegasus Technology, Inc., ("Pegasus") is a California corporation with a principal place of business at 12806 Schabarum Avenue #F, Irwindale, California 91706. JURISDICTION AND VENUE 3. This court has jurisdiction pursuant to 42 Pa.C.S. §931(a). 4. Venue in this Court is proper because the cause of action arose in Cumberland County and a transaction or occurrence took place out of which the cause of action arose in Cumberland County. 5. The parties have also agreed that any lawsuit brought with regard to the Guaranteed Sales Agreement, executed between the parties must be venued in this Court: "Any lawsuit brought with regard to this Guaranteed Sales Agreement will be venued in the Court of Common Pleas, Cumberland County, Pennsylvania." A true and correct copy of the Guaranteed Sales Agreement ("GSA"), a valid and enforceable written contract, is attached to this Complaint as Exhibit A. RELEVANT FACTS 6. Rite Aid is a national drug store chain with its principal office in Cumberland County, Pennsylvania. 7. At all times relevant to this Complaint, Pegasus was involved in the manufacture, sale and distribution of electronic products including digital ATSC LCD TVs. 8. Rite Aid and Pegasus entered into the GSA in which Pegasus "guarantee[d] the sale of [Pegasus's] product to Rite Aid at both Customer Service Centers (i.e. distribution centers) and retail locations." See Exhibit A. 9. Under the GSA, Rite Aid had the right to return all unsold product to Pegasus for a cash refund. 10. Specifically, the GSA provided: If at any time Rite Aid determines in its sole discretion that Vendor's product(s) performance continues to be unacceptable, Rite Aid will have the right to return at Vendor's expense all unsold product(s) to Vendor's facility in return for Vendor's cash payment to Rite Aid for any products for which Rite Aid has paid, but have not been sold. See Exhibit A. 11. Rite Aid has determined in its sole discretion that Pegasus' products performance continues to be unacceptable. 12. In breach of the GSA, Pegasus has failed and refused to guarantee the sale of its Products. -2- 13. During the parties' business relationship, Rite Aid and Pegasus entered into other agreements with regard to the sale, distribution, return and marketing of Pegasus's Products in Rite Aid's stores. 14. On March 25, 2010, Rite Aid and Pegasus entered into a Rite Aid Returns Agreement ("Returns Agreement") that provided the manner in which Pegasus's products could be returned to Pegasus. 15. A true and correct copy of the Returns Agreement is attached to this Complaint as Exhibit B. 16. The Returns Agreement permitted Pegasus to direct how Rite Aid should handle damaged, defective, outdated and discontinued goods ("unsaleable product"). See Exhibit B. 17. Pegasus decided that the unsaleable product should be scanned and scanned and shipped back to Pegasus and Pegasus agreed to pay a fee for this particular method of disposition. See Exhibit B. 18. Pegasus also agreed to pay the following processing fees for damaged, defective, outdated, and discontinued goods: Direct Product Cost - $0.085; Post Damage - $0.111, Ops through Scan - $0.101, all totaling $0.297. See Exhibit B. 19. At various times during the parties' business relationship, Pegasus incurred these fees pursuant to the Returns Agreement, which Pegasus has refused to pay. 20. Due to the fees and expenses charged pursuant to the agreements described above ("Fees"), as of August 15, 2011, Pegasus's account with Rite Aid has a $554,322.78 negative balance, which is expected to grow after all returns are processed and other -3- account charge backs are applied. A statement of the account of the negative balances and summary sheets reflecting this amount is attached as Exhibit C. 21. On information and belief, the amount due and owing to Rite Aid will continue to increase. 22. Furthermore, as a result of Pegasus's actions, Rite Aid has been left with over $914,810.00 worth of Products in its stores, all of which Rite Aid cannot currently return to Pegasus due to its failure to honor its agreements with Rite Aid. See Exhibit D. 23. During the course of their relationship, the parties also entered into Incremental Investment Agreements by which Pegasus agreed to participate in various Rite Aid events including, but not limited to, rain checks issued by Rite Aid. Copies of the Incremental Investment Agreements are attached hereto as Exhibit E. 24. As of the date of the filing of this Complaint, Pegasus is in breach of the GSA and the Returns Agreement and other related account contracts and agreements because it refuses to pay Rite Aid the negative balance on its account. COUNTI BREACH OF CONTRACT 25. Rite Aid incorporates the averments in paragraphs 1 through 24 above as if fully set forth herein. 26. As noted above, Rite Aid and Pegasus entered into various valid and enforceable written agreements under which Pegasus agreed to pay certain Fees. 27. To date, Pegasus owes Rite Aid $554,322.78 in Fees. See Exhibit C. 28. Despite repeated requests, Pegasus refuses to pay the negative account balance of $554,322.78 to Rite Aid. -4- 29. Further, as a result of Pegasus's actions, Rite Aid has been left with over $914,810.00 worth of Products in its stores, all of which Rite Aid cannot currently return to Pegasus due to its failure to honor its agreements with Rite Aid. See Exhibit D. 30. Rite .Aid has performed all conditions precedent under all Agreements with Pegasus. 31. Pegasus is in breach of the GSA, the Returns Agreement and all related agreements because it has failed to pay the negative balance on its account. 32. Pegasus refuses to accept the return of its product in exchange for a cash payment to Rite Aid for those products. 33. Rite Aid has suffered damages in excess of $1,469,13.2.70, an amount that will increase as additional returns and other Fees are processed, due to the breaches of Pegasus. 34. Pegasus's refusal to accept the return of its product has caused ongoing damage to Rite Aid. WHEREFORE, Rite Aid requests judgment in an amount in excess of $1,469,132.70, an order compelling Pegasus to accept the return of its unsold product at Pegasus's cost, plus interest, costs and all other amounts deemed appropriate by the Court. COUNT II ANTICIPATORY BREACH OF CONTRACT 35. Rite Aid incorporates by reference the averments in paragraphs 1 through 34 above as if fully set forth herein. 36. Pegasus unequivocally communicated to Rite Aid that it would not pay for product returned by Rite Aid in the manner required by the Agreements. This statement was convened by Pegasus's Chief Executive Officer, Yin Tu Bao. -5- 37. Pegasus's failure to accept the return at its expense of all unsold product in exchange for a payment to Rite Aid for any products for which Rite Aid has paid but had not been sold would constitute a material breach of the Agreements. 38. As a direct and proximate result of Pegasus's anticipatory breach, Rite Aid suffered monetary damages in excess of the jurisdictional amount requiring arbitration by this Court. 39. Pegasus's conduct is without excuse or justification. 40. Pegasus's conduct constitutes an anticipatory breach of the GSA. 41. As a result of Pegasus's anticipatory breach, Rite Aid has suffered damages in excess of $1,469,13.2.70. 42. Pegasus refuses to accept the return of its product in exchange for a cash payment to Rite Aid for those products. 43. Pegasus's refusal to accept the return of its product has caused ongoing damage to Rite Aid. WHEREFORE, Rite Aid requests judgment in an amount in excess of $1,469,132.70, an order compelling Pegasus to accept the return of its unsold product at Pegasus's cost, plus interests, costs and all other amounts deemed appropriate by the Court. COUNT III UNJUST ENRICHMENT 44. Rite Aid incorporates the averments in paragraphs 1 through 43 above as if fully set forth herein. 45. In the event Pegasus contends no contractual relationship exists, Rite Aid is entitled to recover the outstanding amounts to prevent Pegasus from being unjustly enriched. -6- 46. As is customary in the industry, Pegasus was to pay for certain Fees associated with the sale of its product. 47. Pegasus owes Rite Aid $554,322.78 in Fees. See Exhibit C. 48. Rite Aid has a reasonable expectation to receive the Fees incurred. 49. Pegasus reasonably should have expected to pay the Fees as such Fees are custom in the industry. 50. It would be inequitable for Pegasus to receive the benefit of the $554,322.78 still owed to Rite Aid. 51. As is customary in the industry, Pegasus was to permit returns of its product and pay certain fees related to those returns. 52. As a result of Pegasus's actions, Rite Aid has been left with over $914,810.00 worth of Products in its stores, all of which Rite Aid cannot currently return to Pegasus due to its failure to honor its agreements with Rite Aid. See Exhibit D. 53. It would be inequitable for Pegasus to receive the benefit of the profits earned on said Products without permitting Rite Aid to return the Products. 54. In the event the contracts are deemed to be unenforceable, Rite Aid has no adequate remedy at law. 55. Rite Aid is entitled to collect the outstanding balance, plus interest, from Pegasus under the doctrine of unjust enrichment. 56. Pegasus refuses to accept the return of its product in exchange for a cash payment to Rite Aid for those products. 57. Pegasus's refusal to accept the return of its product has caused ongoing damage to Rite Aid. -7- WHEREFORE, Rite Aid requests that judgment be entered against Pegasus in the amount of $1,469,132.70, an order compelling Pegasus to accept the return of its unsold product at Pegasus's cost, plus interest, costs and all other amounts deemed appropriate by the Court. COUNT IV DECLARATORY JUDGMENT 58. Rite Aid incorporates the averments in paragraphs 1 through 57 above as if fully set forth herein. 59. A justiciable controversy between the parties exists with respect to Rite Aid's right to return unsold Product to Pegasus in exchange for a cash payment by Pegasus. 60. As a result of this controversy, a declaratory judgment is both necessary and proper to set forth the rights and obligations that exist between the parties. WHEREFORE, Rite Aid requests that this Court afforded declaratory relief in the form of an Order declaring that Rite Aid has the right to return to Pegasus at Pegasus's expense all unsold Product in return for a cash payment by Pegasus to Rite Aid for any Product for which Rite Aid has paid but that has not yet been sold, costs, and all other relief deemed appropriate by the Court. COUNT V BREACH OF CONTRACT - SPECIFIC PERFORMANCE 61. Rite Aid incorporates by reference the averments in paragraphs 1 through 60 above as if fully set forth herein. 62. As evidenced by the GSA, a copy of which is attached as Exhibit A, Rite Aid has the right to return all unsold Product to Pegasus at Pegasus's expense in exchange for a cash payment by Pegasus to Rite Aid. -8- 63. Pegasus's refusal to accept the return of the unsold Product for which Rite Aid has paid but has not yet been sold constitutes a breach of the GSA. 64. Rite Aid has substantially performed its obligations under the GSA or those obligations have been excused. 65. Rite Aid has no adequate remedy at law other than specific performance to remedy this breach of the GSA. 66. Rite Aid has a reasonable fear that Pegasus will permanently refuse to accept the return of its product and to pay for that product. 67. As a result of Pegasus' refusal to accept the return of its product in exchange for a cash payment to Rite Aid, Rite Aid has been left with over $914,810.00 worth of Products in its stores, all of which Rite Aid cannot currently return to Pegasus due to its failure to honor its agreements with Rite Aid. WHEREFORE, Rite Aid requests judgment in the form of an order of specific performance compelling Pegasus to accept the return of all Product for which Rite Aid has paid -9- but which has not yet been sold at Pegasus's expense and compelling Pegasus to make a cash payment to Rite Aid in an amount not less than $945,945 for the amount of that Product. Respectfully su P. Do PA 59891) o (P 1555 PEPPER HAMILTON LLB' 100 Market Street, Suite 200 P.O. Box 1181 Harrisburg, PA 17108-1181 717.255.1155 800.420.0618 Fax downeyb@pepperlaw.com alcarof@pepperlaw.com Date: August 16, 2011 Attorneys for Plaintiff Rite Aid HDQTRS. Corp. -10- EXHIBIT A RITE AID GUARA.YTEED SALES AGREEMENT Rite Aid will consider Vendor's product(s) for distribution and sale under the terns and conditions set forth in this Agreement. In consideration of Rite Aid's agreement to review a new entry into its mix. as well as in consideration of the mutual premises contained herein, the parties agree as follows: 1. Vendor will guarantee the We of Vendor's product(s) to Rite Aid at both Customer Service Centers (i.e. distribution centers) and retail locations. 2. During the first one hundred twenty (120) days, or such other period as Rite Aid may determine in its sole discretion (it being understood by Vendor that Rite Aid may terminate this Agreement in its sole discretion at any tima, for any reason whatsoever) following the date if the Vendor's first delivery of product(s) to Rite Aid (the '"Review Period"), Vendor's account will be on a review status to permit Rite Aid to assess the performance of the product(s). After the Review Period, Rite Aid will pay only for those product(s) that are actually sold, and Rite Aid's payment will be reduced by any and all cash discounts or other debit amounts (including, but not limited to, advertising, displays, markdowns and price protection) due to Rite Aid. If at the end of the Review Period, Rite Aid determines, in its sole discretion, that the Vendor's product(s) is not selling at an acceptable rate, then Rite Aid will have the right to (a) require Vendor to review and modify Vendor's marketing plan to ensure future success and (b) extend the due date of the original invoice submitted by Vendor. Rite Aid also has the right to require a cash payment, as described in paragraph (3) below. The foregoing righs are not exclusive. At the end of the Review Period, Rite Aid may terminate this Agreement, plans the Vendor on Rite Aid's customary payment terms, or extend the Review Period as Rite aid, in its sole discretion, so desires. If at any time Rite Aid determines in its sole discretion that Vendor's product(s) performance continues to be unacceptable, Rite Aid will have the right to return at Vendor's expense all unsold product(s) to Vendor's facility in return for Vendor's cash payment to Rite Aid for any products for which Rite Aid has paid, but have not been sold. Vendor's payment to Rite Aid shall be made (a) by wire transfer of immediately available funds or certified check, and (b) no later than fifteen (15) days after Rite Aid has returned the product(s). Vendor acknowledges and agrees that in the event that any of Vendor's allowances are funded with "free product" from Vendor, that "free product" will be treated identically to product purchased from Vendor by Rite Aid. This includes, but is not limited to, returns of this product to Vendor. Upon settlement of Vendor's account, all outstanding invoices will be paid promptly, lass any and all cash discounts or other debit amounts due to Rite Aid. 5. The terms and conditions of this Agreement are in addition to, and in no way limit, Rite .aid's rights and remedies under Rite Aid's Vendor Profile, standard terms and conditions or purchase orders. In the event of inconsistency between the terms and conditions of the Agreement and any of the foregoing document,, this Agreement will govern. 6. The parties agree that Pennsylvania taw governs this Agreement not withstanding its cuntlicts of law provisions. Any lawsuit brought with regard to this Guaranteed Sales Agreement will be venued in the Court of Common Pteas, Cumberland County, Pennsylvania. 7. The parties specifically agree that 13 Pa. C.S.A. 32326 & 2327(b) are inapplicable and that Vendor will accept returned goods in their "as-is" condition. 8. All returns are at risk of vendor. 9. Vendor can not assign any product covered by this Agreement to any third party without the express written consent of a Vice President of Category Management. Rite Aid is enthusiastic about the opportunity to distribute product(s) into the marketplace. Rite Aid wishes you every success in your endeavor to provide a product that is unique. Please allow Rite Aid to assist you in your distribution needs by arranging for a duly authorized officer to sign and data this Agreement on behalf of your company, and return the executed letter to Rite Aid's Merchandising Department. Vendor: Q 5-J,5 , 00 ? BY: Authod Si Date: V Rar.sad .6?2'11,M7 EXHIBIT B RITE AID RETURNS AGREEMENT Please note: A Separate Returns Agreement must be filled out for each vendor number. Company Name: i,C,??15?1S QLh?ol? l;ic-- -_- Contact Name: A Phone # ".)- Fax # Vendor Numoer. E-Mail Address: _1 i,/a OffA4A LA - Y+m Invoice Address: Shi,pping Address: Category Manager: _ .r -, /4- Associate Category Manager. TERMS OF AGREEMENT: A. Unsaleable Merchandise 1. All vendors will be charged the following processing fees for damaged, defective, outdated, and discontinued goods. These fees are based on the findings from the joint industry Task Force Study (JIR): DPC (Direct Product Cost) $0.085 Post Darrage $0.111 Ops through Scan: U 101 $0.297 2. All vendors must determine a method of disposition for their unsa"ble products. Elated on the CODE/DESCRIPTIONS listea below, the vendor representative will check (X) the method his/her company has authorized Rite Aid to use. The additional charge, shown in () at the end of the description, •,v,il be added to the charges above. CODE DESCRIPTION WIR COST) COPT Scan and disposition is left up to the discretion of Rite Aid ($0.020) DONA Scan and donate ($0.030) SHOK -;)4 Scan and ship back to vendor (50.130) OPEN RAS REQUIRED WITH THIS OPTION RAS NOTE: Any product remaining in the reclamation centers for 45 days from the date of invoice, without a Return Authorization Number, will be disposed of at the discretion of Rite Aid Corporation. Rite Aid Corporation will not entertain ANY requests for payback of product that falls into this category. 3. All products will be billed at Rite Aid's current list cost + JIR billing factors (DPC, Post Damage Handling, RCC Charges, Disposition Charges) unless otherwise agreed to in writing by Rite Aid Corporation. Vendor billing is not to exceed 130% of Rtte Aid's IW cost, Freight will be shipped on Rite Aid's preferred carr;ers. All freight costs wi8 be cnarged back to ;he vendor. Rev 1D2107 4. All changes to policies must be in writing to Rite Aid Corporation. Approved policy changes %vil take affect within 30 days following their approval. 5. All vendors will agree to forward a copy of their current national policy regarding reclamation to be reviewed by Rite Aid Corporation. This will be sent to: Rib Aid Corporation 30 Hunter Lane Camp Hill, PA 17011 Attention: Manager, Front End Rotuma S. Alt damaged and outdated invoices are available through the Rite Aid Paperless Invoice System using the Carolina Supply Chain Services Website at www.carchnasupplvcna+nservoss.r? Vendors should contact the Manager. Front End Returns, at 717-214-8832 to request setup of their Company's authorized user. (See Page 3) a. Recall Merchandise Please note: The disposidone on page 1 QQ NOT appiy to repNs. A separate agreement MUST be filled out for ati recalls at the time the recall Is being activated. This allows a vendor to have a sepsrsto disposition on recalls than they have on damaged and outdated retums. 1. AN recall invoices are available through the Rite Aid Paperless Invoice System using the Carolina Supply Chain Services Website at www.carolinasucolychainservices. com. Vendors should contact the Manager, Front End Returns, at 717-214-8832 to request setup of their Company's authorized user. (See Page 3) The signatures below by the appropriate Category Manager of Rite Aid Corporation and the vendor representative of said company denote their understanding and of the abov agreement. Signatur (Vendor Representative) Date Sign a (Autltoriz Aid ation) Date A sus ?u.tnolo?? ?:fL . Rite Aid Corporation Cbiinpany Rav 1012347 EXHIBIT C Description Doc # Doc Dte Doc Due Dte Gross Amt Net Amt Hold Ind Offset Transaction H436690901 10/28/2010 10/29/2010 $682,000.00 $682,000.00 Y Store Markdowns 0334191 11/4/2010 11/4/2010 ($6,900.00) ($6,900.00) Freight Charges 9670185739 10/27/2010 11/18/2010 ($22.10) ($22.10) US[ Unsaleables D027535445 11/19/2010 11/22/2010 ($785.80) ($785.80) N USI Unsaleables D020822452 11/19/2010 11/22/2010 ($982.25) ($982.25) N USI Unsaleables D020031446 11/19/2010 11122/2010 ($1,637.08) ($1,637.08) N Store Markdowns 0362900 12/1/2010 12/1/2010 ($380.00) ($380.00) Freight Charges 1358824970 11/1/2010 12/2/2010 ($100.97) ($100.97) Store Markdowns 0339910 12/2/2010 12/2/2010 ($38,832.00) ($38,832.00) Freight Charges 9670188327 11/312010 12/3/2010 ($39.60) ($39.60) Freight Charges 0070189385 11/4/2010 12/6/2010 ($57.44) ($57.44) Store Markdowns 0337611 12/9/2010 12/9/2010 ($9,190.00) ($9,190.00) Store Markdowns 0356611 12/16/2010 12/16/2010 ($3,740.00) ($3,740.00) USI Unsaleables D022678452 12/17/2010 12/20/2010 ($1,506.11) ($1,506.11) N USI Unsaleables D021799446 12/17/2010 12/20/2010 ($3,012.22) ($3,012.22) N Store Markdowns 0340177 12/23/2010 12/23/2010 ($6,310.00) ($6,310.00) Store Markdowns 0340320 12/30/2010 12/30/2010 ($5,770.00) ($5,770.00) Freight Charges 0070207775 12/20/2010 1/14/2011 ($20.64) ($20.64) USI Unsaleables D024395452 1/14/2011 1/17/2011 ($3,601.57) ($3,601.57) N USI Unsaleables D023418446 1/14/2011 1/17/2011 ($2,357.39) ($2,357.39) N Freight Charges 9670211940 12/29/2010 1/27/2011 ($36.68) ($36.68) USI Unsaleables D025163446 2/18/2011 2/21/2011 ($3,667.05) ($3,667.05) N USI Unsaleables D026209452 2/18/2011 2/21/2011 ($4,059.95) ($4,059.95) N USI Unsaleables D032596445 2/18/2011 2/21/2011 ($8,774.72) ($8,774.72) N Store Markdowns 0380225 3/1/2011 3/1/2011 ($412.00) ($412.00) USI Unsaleables D026921446 3/18/2011 3/21/2011 ($654.83) ($654.83) N USI Unsaleables D028102452 3/18/2011 3/21/2011 ($982.25) ($982.25) N USI Unsaleables D028624446 4/15/2011 4/18/2011 ($130.97) ($130.97) N USI Unsaleables D029934452 4/15/2011 4/18/2011 ($130.97) ($130.97) N USI Unsaleables D036106445 4/15/2011 4/18/2011 ($65.48) ($65.48) N Freight Charges 9670278431 4/19/2011 5/6/2011 ($8.82) ($8.82) Freight Charges 1358828638 4/25/2011 5/16/2011 ($172.26) ($172.26) Freight Charges 6713220618 4120/2011 5/16/2011 ($239.42) ($239.42) USI Unsaleables D037822445 5/20/2011 5/23/2011 ($3,339.63) ($3,339.63) N US] Recalls R007242452 5/20/2011 6/3/2011 ($15,908.80) ($15,908.80) N USI Unsaleables D033454452 6/17/2011 6/20/2011 ($327.42) ($327.42) N USI Recalls R009396445 6/17/2011 711/2011 ($1,956.00) ($1,956.00) N USI Recalls R009806445 7/15/2011 7/29/2011 ($391.20) ($391.20) N USI Recalls R006196446 7/15/2011 7/29/2011 ($652.00) ($652.00) N US] Recalls R008285452 7/15/2011 7/29/2011 ($521.60) ($521.60) N Grand Total Including Hold 3554,322.78 $554,322.78 RA Books Page 1 of 1 EXHIBIT D a O L 1 ?- 2 u hi ?t ao 1 Ir ? i 7 i. x 1; a m c m Z5 r< ?, a E 0 v ? o m r" ni m ? LL L d r ` w ? IT 1? it w f ? CO) co m a0 r may. a ° t MI M M rm I t co m m r? ci?o O 1 I ? c m m? C1 C I 4, C9' N N; N ? I d ? m I , N CD c? (N CD N I m^. U• CJ C TO tl1 O Of O O c ? J C? 4 f0 m W a ti cd -} ? -} d F- c ? l0 ? Fes- .. Y 2l cu R O r 0 cn p G ? Y ? N M. ms- 'Op ? ? 4 1 O N O O L) e O'i e - 0) Of m 2 s N O O EXHIBIT E R/F# 0002-9249 RITE AID 30 HUNTER LANE CAMP HILL, PA 17011 MAILING ADDRESS: PO BOX 3165 HARRISBURG, PA 17105 ATTENTION: A1P ACCOUNTING & ANALYSIS EMAIL: VENDORBILLING@RITEAID.COM INVOICE DATE 11104.+2010 PEGASUS TECHNOLOGY INC ED HERALD 12806 SCHABARUM AVE #F IRWINDALE, CA 91706 PLEASE REFER TO INVOICE NUMBER IN ALL CORRESPONDENCE BASED ON PREVIOUS PAYMENT HISTORY, THE INVOICE AMOUNT WILL BE DEDUCTED WITHIN 1-30 DAYS IF NOT PAID IN FULL CHARGETYPE AMOUNT INVOICED STORE MARKDOWN $6,900.00 BALANCE DUE: PLEASE PAY THIS AMOUNT: $6,900.00 CONTRACT NBR: 0334191 XREF NBR: 0334191 Page 1 of 3 INVOICE NUMBER: 43669-0334191 Notes: R/F#:0002-9249 CONTRACT NUMBER: 0334191 VENDOR NUMBER: 43669 Event ID: ONSL20101022001 Item Number Item Description 0134600 LCD TV 7IN ST07-B Page 2 of 3 INVOICE NUMBER: 0334191 VENDOR NAME: PEGASUS TECHNOLOGY INC Event Description: 10124 EJW CIRC COM HI ALLWELL Allowance Amount Units Total 10.00 690 6,900.00 690 6,900.00 R/F* 0002-9249 a ?}l m p? X 41 FP £J? 3 C m IL tl ; 2 1 ? z `? fax ` - it! P 4 d y ? ? S it S ? J E i s t ? .Q Cti 5 _ Page 3 of 3 K4 n 3 m °p G 4?i o ? s a r a J ? Z ? g?g S A 9 ? ? m r R ? R n ? p s ? el n ? z 8 r q J a O ? X ' o EO a x jn A a r " s m W e l yAi A RIF# 0003-3838 INVOICE DATE: 12/09/2010 PEGASUS TECHNOLOGY INC ED HERALD 12806 SCHABARUM AVE #F IRWINDALE, CA 91706 RITE AID 30 HUNTER LANE CAMP HILL, PA 17011 MAILING ADDRESS: PO BOX 3165 HARRISBURG, PA 17105 ATTENTION: A/P ACCOUNTING & ANALYSIS EMAIL: VENDORBILLING c@RITEAID.COM PLEASE REFER TO INVOICE NUMBER IN ALL CORRESPONDENCE BASED ON PREVIOUS PAYMENT HISTORY, THE INVOICE AMOUNT WILL BE DEDUCTED WITHIN 1-30 DAYS IF NOT PAID IN FULL CHARGE TYPE AMOUNT INVOICED STORE MARKDOWN $9,190.00 BALANCE DUE: PLEASE PAY THIS AMOUNT: $9,190.00 CONTRACT NBR: 0337611 XREF NBR: 0337611 Page 1 of 3 INVOICE NUMBER: 43669-0337611 Notes RIF#:0003-3838 CONTRACT NUMBER: 0337611 VENDOR NUMBER: 43669 Event ID: GNSL20101126001 Item Number Item Description 0134600 LCD TV 7IN ST07-B Page 2 of 3 INVOICE NUMBER: 0337611 VENDOR NAME: PEGASUS TECHNOLOGY INC Event Description: 11128 EIW CIRC COM HI ALLWELL Allowance Amount 10.00 Units Total 919 9,190.00 919 9,190.00 R/F#:0003-3838 Page 3 of 3 F n s 7 ? E g 19 m' n R g? g? p n g X '?. ?T yr Q g A ? 8 dn S W P s? M A = o L o 8 i o ? 6 O Olp v V [1 K A[ IE R/F# 0003-0969 INVOICE DATE: 12/02/2010 PEGASUS TECHNOLOGY INC ED HERALD 12806 SCHABARUM AVE #F IRWINDALE, CA 91706 RITE AID 30 HUNTER LANE CAMP HILL, PA 17011 MAILING ADDRESS: PO BOX 3165 HARRISBURG, PA 17105 ATTENTION: AJP ACCOUNTING & ANALYSIS EMAIL: VENDORBILLING@RITEAID.COM PLEASE REFER TO INVOICE NUMBER IN ALL CORRESPONDENCE BASED ON PREVIOUS PAYMENT HISTORY, THE INVOICE AMOUNT WILL BE DEDUCTED WITHIN 1-30 DAYS IF NOT PAID IN FULL CHARGE TYPE AMOUNT INVOICED STORE MARKDOWN $38,832.00 BALANCE DUE: PLEASE PAY THIS AMOUNT: $38,832.00 CONTRACT NBR: 0339910 XREF NBR: 0339910 Page I of4 INVOICE NUMBER: 43669-0339910 Notes: R/F# 0003-0969 CONTRACT NUMBER: 0339910 VENDOR NUMBER: 43669 Event ID: GNS120101125001 Item Number Item Description 0134600 LCD TV 7IN ST07-B Page 2 of4 INVOICE NUMBER: 0339910 VENDOR NAME: PEGASUS TECHNOLOGY INC Event Description: 11125 HI 1 LOW THANKSGVG COM Allowance Amount Units Total 16.00 2,403 38,448.00 2,403 38,448.00 R/F#:0003-0969 CONTRACT NUMBER: 0339910 VENDOR NUMBER: 43669 Event ID: GNSL20101125004 Item Number Item Description 0134600 LCD TV 7IN ST07-B Page 3 of4 INVOICE NUMBER: 0339910 VENDOR NAME: PEGASUS TECHNOLOGY INC Event Description: 11!25 THNKSGVG VALUE CIRC PROG Allowance Amount Units Total 16.00 24 384.00 24 384.00 R/F#:0003-0969 Page 4 of4 0 d J 7?! 3 ? ? fY} i IP b e f E' ?} s ?? ee s V 7 v ? ? yya ? o ffi ? $ }Rye ? L S ? T 8 T INE A ? ro t ? s r ? m 6 e u e S7 t? R/F#: 0003-4560 Page 1 of 3 RITE AID 30 HUNTER LANE CAMP HILL, PA 17011 MAILING ADDRESS: PO BOX 3165 HARRISBURG, PA 17105 ATTENTION: A/P ACCOUNTING & ANALYSIS EMAIL: VENDORBILLING@RITEAID.COM INVOICE DATE: 12/23/2010 INVOICE NUMBER: 43669-0340177 PEGASUS TECHNOLOGY INC ED HERALD 12806 SCHABARUM AVE #F IRWINDALE, CA 91706 PLEASE REFER TO INVOICE NUMBER IN ALL CORRESPONDENCE BASED ON PREVIOUS PAYMENT HISTORY, THE INVOICE AMOUNT WILL BE DEDUCTED WITHIN 1-30 DAYS IF NOT PAID IN FULL CHARGE TYPE AMOUNT W VOICED STORE MARKDOWN $6,310.00 BALANCE DUE: PLEASE PAY THIS AMOUNT: $6$10!00 CONTRACT NBR: 0340177 XREF NBR: 0340177 Notes: R/F#:0003-4560 CONTRACT NUMBER: 0340177 VENDOR NUMBER: 43669 Event ID:GNSL20101210001 Item Number Item Description 0134600 LCD TV 7IN ST07-9 Page 2 of 3 INVOICE NUMBER: 0340177 VENDOR NAME: PEGASUS TECHNOLOGY INC Event Description: 12112 EJW CIRC COM HI ALLWELL Allowance Amount Units Total 10.00 631 6,310.00 631 6,310.00 RIF# 0003-4560 t Page 3 of 3 A ?jOj o!? 4 N t?3 00 ? S 'w ?ry s ? 'Qj 9 P ad n c-1 S ?- t yl?y $ i S 41 fi ? ? ? F ?t ugpu , ! ? i .? F R/F#:0003-5982 INVOICE DATE: 12/3012010 PEGASUS TECHNOLOGY INC ED HERALD 12806 SCHABARUM AVE #F IRWINDALE., CA 91706 RITE AID 30 HUNTER LANE CAMP HILL, PA 17011 MAILING ADDRESS: PO BOX 3165 HARRISBURG, PA 17105 ATTENTION: A/P ACCOUNTING & ANALYSIS EMAIL: VENDORBILLJNG@RITEAID.COM PLEASE REFER TO INVOICE NUMBER IN ALL CORRESPONDENCE BASED ON PREVIOUS PAYMENT HISTORY, THE INVOICE AMOUNT WILL BE DEDUCTED WITHIN 1-30 DAYS IF NOT PAID IN FULL CHARGE TYPE AMOUNT INVOICED STORE MARKDOWN $5,770.00 BALANCE DUE: PLEASE PAY THIS AMOUNT: $5,770.00 CONTRACT NBR: 0340320 XREF NBR: 0340320 Page I of 3 INVOICE NUMBER: 43669-0340320 Notes RIF#:0003-5982 CONTRACT NUMBER: 0340320 VENDOR NUMBER: 43669 Event ID: ONSL20101217001 Item Number Item Description 0134600 LCD TV 7IN ST07-B Page 2 of 3 INVOICE NUMBER: 0340320 VENDOR NAME: PEGASUS TECHNOLOGY INC Event Description: 12/19 E/W CIRC COM HI ALLWELL Allowance Amount Units Total 10.00 577 5,770.00 577 5,770.00 R/F#: 0003-5982 Page 3 of 3 s 7 # _ . lift R3 ! Y Y s o ?+ A R a x ¢ 5 6 ? A 1p g ? c a 8 Y A ?? .R i O Z 6 ? 6 ? ? I s j i m R!F# 0003-4204 INVOICE DATE: 12/16/2010 PEGASUS TECHNOLOGY INC ED HERALD 12806 SCHABARUM AVE #F IRWINDALE, CA 91706 RITE AID 30 HUNTER LANE CAMP HILL, PA 17011 MAILING ADDRESS: PO BOX 3165 HARRISBURG, PA 17105 ATTENTION: A/P ACCOUNTING & ANALYSIS EMAIL: VENDORBILLING@RITEAID.COM PLEASE REFER TO INVOICE NUMBER IN ALL CORRESPONDENCE BASED ON PREVIOUS PAYMENT HISTORY, THE INVOICE AMOUNT WILL BE DEDUCTED WITHIN 1-30 DAYS IF NOT PAID IN FULL CHARGE TYPE AMOUNT INVOICED STORE MARKDOWN $3,740.00 BALANCE DUE: PLEASE PAY THIS AMOUNT: $3,740.00 CONTRACT NBR: 0356611 XREF NBR: 0356611 Page I of 3 INVOICE NUMBER: 43669-0356611 Notes: R/F#: 0003-4204 CONTRACT NUMBER: 0356611 VENDOR NUMBER: 43669 Event ID: GNSL20101203001 Page 2 of 3 INVOICE NUMBER: 0336611 VENDOR NAME: PEGASUS TECHNOLOGY INC Event Description: 12/5 EIW CIRC COM HI ALLWELL Item Number Item Description Allowance Amount Units Total 0134600 LCD TV 7IN ST07-B 10.00 374 3,740.00 374 3,740.00 R/F#:0003-4204 01/82!20C'8 05:49 IR263378655 d N c? d ? y 3 s` z? ? r s t g ? N R a I sr a?Re F p ¦~s ? ya ¦ ?? i S ?S S I e? g ?sR°e ±c W ? w w }? g R 2 ? d or S s? n x 9 L G 4 Q6 e A K w Page 3 of 3 PNE: 01101 ?m i p?> b P ? i C ? v n Z O Q o .? w Q 1 J 7 R/F#:0003-0644 INVOICE DATE: 12/01/2010 PEGASUS TECHNOLOGY INC ED HERALD 12806 SCHABARUM AVE #F IRWINDALE, CA 91706 RITE AID 30 HUNTER LANE CAMP HILL, PA 17011 MAILING ADDRESS: PO BOX 3165 HARRISBURG, PA 17105 ATTENTION: A1P ACCOUNTING & ANALYSIS EMAIL: VENDORBILLING@RITEAID.COM PLEASE REFER TO INVOICE NUMBER IN ALL CORRESPONDENCE BASED ON PREVIOUS PAYMENT HISTORY, THE INVOICE AMOUNT WILL BE DEDUCTED WITHIN 1-30 DAYS IF NOT PAID IN FULL CHARGE TYPE AMOUNT INVOICED RAIN CHECKS $380.00 BALANCE DUE: PLEASE PAY THIS AMOUNT: $380B0 CONTRACT NBR: 0362900 XREF NBR: 0362900 Page I of 5 INVOICE NUMBER: 43669-0362900 Notes: R/F# 0003-0644 CONTRACT NUMBER: 0362900 VENDOR NUMBER: 43669 Original Contract Number: 0333881 Page 2 of 5 INVOICE NUMBER: 0362900 VENDOR NAME: PEGASUS TECHNOLOGY INC Event Start Date: 812 712 0 1 0 Item Number Item Description BB Amount Units Total 0134600 LCD TV 7IN ST07-B 10.00 2 20.00 0134600 LCD TV 7IN ST07-B 10.00 4 40 00 0134600 LCD TV 7IN ST07-B 10.00 2 . 20 00 0134600 LCD TV 7IN ST07-B 10.00 2 . 20.00 0134600 LCD TV 7IN ST07-B 10.00 2 20.00 0134600 LCD TV 7IN ST07-B 10.00 2 20.00 0134600 LCD TV 7IN ST07-B 10.00 2 20.00 0134600 LCD TV 7IN ST07-B 10.00 2 20.00 0134600 LCD TV 7IN ST07-B 10.00 2 20.00 Sub Total 20 200.00 R!F#:0003-0644 CONTRACT NUMBER: 0362900 VENDOR NUMBER: 43669 Original Contract Number: 0334191 Page 3 of 5 INVOICE NUMBER: 0362900 VENDOR NAME: PEGASUS TECHNOLOGY INC Event Start Date: 10/22/2010 Item Number Item Description BB Amount Units Total 0134600 LCD TV 71N ST07-B 10.00 2 20 00 0134600 LCD TV 7IN ST07-B 10.00 2 . 20 00 0134600 LCD TV 7IN ST07-B 10.00 2 . 20 00 0134600 LCD TV 7IN ST07-B 10.00 2 . 20 00 0134600 LCD TV 7IN ST07-B 10.00 2 . 20 00 0134600 LCD TV 7IN ST07-B 10.00 2 . 20.00 Sub Total 12 120.00 R/F#:0003-0644 CONTRACT NUMBER: 0362900 VENDOR NUMBER: 43669 Original Contract Number: 0339044 Page 4 of 5 INVOICE NUMBER: 0362900 VENDOR NAME: PEGASUS TECHNOLOGY INC Event Start Date: 9117/2010 Item Number Item Description BB Amount Units Total 0134600 LCD TV 71N ST07-B 10.00 4 40.00 Sub Total 4 40.00 R/F#:0003-0644 CONTRACT NUMBER: 0362900 VENDOR NUMBER: 43669 Original Contract Number: 0339621 Item Number Item Description 0134600 LCD TV 7IN ST07-B Page 5 of 5 INVOICE NUMBER: 0362900 VENDOR NAME: PEGASUS TECHNOLOGY INC Event Start Date: 10/1/2010 BB Amount Units Total 10.00 2 20.00 Sub Total 2 20.00 Grand Total 38 380.00 BJF# 0004-2857 INVOICE DATE: 03/0112011 PEGASUS TECHNOLOGY INC ED HERALD 12806 SCHABARUM AVE #F IRWINDALE. , CA 91706 RITE AID 30 HUNTER LANE CAMP HILL, PA 17011 MAILING ADDRESS: PO BOX 3165 HARRISBURG, PA 17105 ATTENTION: A/P ACCOUNTING & ANALYSIS EMAIL: VENDORBILLLNG@RITEAID.COM PLEASE REFER TO INVOICE NUMBER IN ALL CORRESPONDENCE BASED ON PREVIOUS PAYMENT HISTORY, THE INVOICE AMOUNT WILL. BE DEDUCTED WITHIN 1-30 DAYS IF NOT PAID IN FULL CHARGE TYPE AMOUNT INVOICED RAIN CHECKS $412.00 BALANCEDUE: PLEASEPAYTHISAMOUNT: $412.00 CONTRACT NBR: 0380225 XREF NBR: 0380225 Page 1 of 6 INVOICE NUMBER: 43669-0380225 N ote s R!F#:0004-2857 CONTRACT NUMBER: 0380225 VENDOR NUMBER: 43669 Original Contract Number: 0337611 Item Number 0134600 Item Description LCD TV 7IN ST07-B Page 2 of 6 INVOICE NUMBER: 0380225 VENDOR NAME: PEGASUS TECHNOLOGY INC Event Start Date: 11/26/2010 BB Amount Units Total 10.00 2 20.00 ............ . Sub Total 2 20.00 R/F#:0004-2857 CONTRACT NUMBER: 0380225 VENDOR NUMBER: 43669 Original Contract Number: 0339910 Item Number Item Description 0134600 LCD TV 7IN ST07-B 0134600 LCD TV 7IN ST07-B Page 3 of 6 INVOICE NUMBER: 0380225 VENDOR NAME: PEGASUS TECHNOLOGY INC Event Start Date: 11/25/2010 BB Amount Units Total 16.00 2 32.00 16.00 10 160.00 Sub Total 12 192.00 R/F# 0004-2857 CONTRACT NUMBER: 0380225 VENDOR NUMBER: 43669 Original Contract Number: 0340177 Item Number Item Description 0134600 LCD TV 7IN ST07-B Page 4 of 6 INVOICE NUMBER: 0380225 VENDOR NAME: PEGASUS TECHNOLOGY INC Event Start Date: 12/10/2010 BB Amount Units Total 10.00 2 20.00 Sub Total 2 20.00 R/F#:0004-2857 CONTRACT NUMBER: 0380225 VENDOR NUMBER: 43669 Original Contract Number: 0340320 Page 5 of 6 INVOICE NUMBER: 0380225 VENDOR NAME: PEGASUS TECHNOLOGY INC Event Start Date: 12/17/2010 Item Number Item Description BB Amount Units Total 0134600 LCD TV 7IN ST07-B 10.00 2 20 00 0134600 LCD TV 7IN ST07-B 10.00 2 . 20 00 0134600 LCD TV 7IN ST07-B 10.00 2 . 20 00 0134600 LCD TV 7IN ST07-B 10.00 2 . 20 00 0134600 LCD TV 7IN ST07-B 10.00 2 . 20 00 0134600 LCD TV 7IN ST07-B 10.00 2 . 20 00 0134600 LCD TV 7IN ST07-B 10.00 2 . 20 00 0134600 LCD TV 7IN ST07-B 10.00 2 . 20.00 Sub Total 16 160.00 R/F#:0004-2857 CONTRACT NUMBER: 0380225 VENDOR NUMBER: 43669 Original Contract Number: 0356611 Page 6 of 6 INVOICE NUMBER: 0380225 VENDOR NAME: PEGASUS TECHNOLOGY INC Event Start Date: 12/3/2010 Item Number Item Description BB Amount Units Total 0134600 LCD TV 7111 ST07-B 10.00 2 20.00 Sub Total 2 .................. 20.00 Grand Total 34 412.00 VERIFICATION I, J. Patrick Hayes, hereby state that I am authorized to make this verification on behalf of Rite Aid Hdgtrs. Corp. I verify that the foregoing document was prepared with the assistance and advice of counsel, and in reliance upon counsel's advice; that the document, subject to inadvertent or undiscovered errors, is based upon and therefore limited by the records and information still in existence, presently recollected and thus far discovered in preparation of this document; and that subject to the limitations set forth herein, the statements contained in this document are true and correct to the best of his knowledge, information and belief. The language of the foregoing document is that of counsel. It is understood that the statements herein are made subject to the penalties of 18 Pa. C.S.A. § 4904 relating to unsworn falsification to authorities. Dated: RITE AID HDQTRS. CORP, Plaintiff, vs. IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 11-6489 CIVIL TERM PEGASUS TECHNOLOGY, INC. CIVIL ACTION - LAW _ Defendant. kr-- AFFIDAVIT OF SERVICE PURSUANT TO PA. R.C.P. 405 c s- COMMONWEALTH OF PENNSYLVANIA SS: COUNTY OF DAUPHIN THE UNDERSIGNED, Frederick Alcaro, being duly sworn according to law, does depose and say as follows: 1. I am a competent adult and an attorney duly admitted to the Bar of the Supreme Court of the Commonwealth of Pennsylvania, having Attorney Identification Number 91555. 2. On August 22, 2011, I caused the Complaint to be served upon defendant Pegasus Technology, Inc. by the mailing of a true and correct copy of the Complaint to the defendant's principal place of business by United States certified mail, return receipt requested, postage prepaid, addressed as follows: Pegasus Technology, Inc., 12806 Schabarum Avenue #F Irwindale, CA 91706. c?7 X(Z) 5;4= va C) _ `y^.> I received the return receipt, which was delivered and accepted at Pegasus Technology, Inc., 12806 Schabarum Avenue #F, Irwindale, CA 91706, on August 24, 2011, by or on behalf of the defendant, thereby completing service pursuant to Pa. R.C.P. 403. The original return receipt signed by or on behalf of the defendant is attached hereto as Exhibit "A". Respectfully submitted, Frederick Alcaro (PA 91555) PEPPER HAMILTON LLP 100 Market Street, Suite 200 P.O. Box 1181 Harrisburg, PA 17108-1181 717.255.1155 717.238.0575 Fax alcarof@pepperlaw.com Date: August 30, 2011 Attorneys for Plaintiff Rite Aid Hdgtrs.Corp. SWORN TO AND SUBSCRIBED BEFORE ME THIS ` 0 DAY OF C kta- 2011. W q/ Notary Public 1/wJI s v COMMONWEALIN OF NOTARIAL MAL PAMELA K. BISHOP, Notry Pubk qty of H , Dauphin County Commission U'004.51 01.5 -2- EXHIBIT «A99 ¦ Complete Items 1, 2, and 3. Also complete Item 41f Restricted Delivery Is desired. ¦ Print your name and address on the reverse so that we can return the card to you. ¦ Attach this card to the back of the mailpleoe, t or on the front If space permits. Article Addressed to: Pegasus Technology, Inc. 12806 Schabarum Avenue #F Irwindale, CA 91706 A. X 13 Agent 71,ne ? Addressee B. Received by (P~ Name) c. ofpelnre?y D. is delivery address different from Item i? O 5Yes If YES, enter delivery address below: ? No 3. Service Type 11 Certified Mail E3 Express Mail E3 Registered ? Return Receipt for Merchandise ? Insured mail 13 C.O.D. 4. Restricted Delivery? Pit Fee) 2. Article Number (ftistr from serwos MW Ps Form 3811, February 2004 Domestic Return Receipt 102sa -M-1540 CERTIFICATE OF SERVICE I hereby certify that on August 30, 2011, a copy of the foregoing document was served by United States mail, first class postage prepaid, addressed as follows: Pegasus Technology, Inc. 12806 Schabarum Avenue #F Irwindale, CA 91706 Frederick Alcaro RITE AID HDQTRS. CORP., IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff, NO. 11-6489 CIVIL TERM VS. PEGASUS TECHNOLOGY, INC. CIVIL ACTION - LAW" Defendant. PRAECIPE FOR ENTRY OF APPEARANCE TO THE PROTHONOTARY: Y. Co r') ..: _ .C, C) C.:) ? 5: C? 7 Kindly enter my appearance on behalf of Plaintiff Rite Aid Hdqtrs. Corp. Respectfully submitted, Kathleen A. Mullen (PA 84604) PEPPER HAMILTON LLP 100 Market Street, Suite 200 P.O. Box 1181 Harrisburg, PA 17108-1181 Phone: (717) 255-1155 Fax: (717) 238-0575 Email: mullenk@pepperlaw.com Attorney for Plaintiff Dated: March 2, 2012 Rite Aid HDQTRS. Corp. CERTIFICATE OF SERVICE I hereby certify that on March 2, 2012, a copy of the foregoing document was served by United States first class mail, postage prepaid, addressed as follows: Evan C. Pappas, Esquire Shumaker Williams, P.C. 3425 Simpson Ferry Road Camp Hill, PA 17011 Kathleen A. Mullen (PA 84604) RITE AID HDQTRS. CORP., IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA V. No. 11-6489 Civil Term PEGASUS TECHNOLOGY, INC., c") -1 -g Defendant CIVIL ACTION- LAW NOTICE TO PLEAD )PI CI =C TO: RITE AID HDQTRS. CORP., Plaintiff --and- BRIAN P. DOWNEY, ESQUIRE, its attorney You are hereby notified to file a written response to the enclosed Amended Answer with New Matter and Counterclaims within twenty (20) days from service hereof or a judgment may be entered against you. Dated: June 29, 2012 SHUMAKER WILLIAMS, P.C. By ` Evan C. Pappas, I.D. #20 3 Ryan P. Siney, I.D. #209190 Kenneth J. McDermott, I.D. #205555 P.O. Box 88 Harrisburg, PA 17108 (717) 763-1121 Attorneys for Defendant RITE AID HDQTRS. CORP., Plaintiff V. PEGASUS TECHNOLOGY, INC., Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA No. 11-6489 Civil Term CIVIL ACTION- LAW DEFENDANT'S AMENDED ANSWER WITH NEW MATTER AND COUNTERCLAIMS TO PLAINTIFF'S COMPLAINT AND NOW COMES Defendant, Pegasus Technology, Inc. (hereinafter "Pegasus"), by and through its attorneys, Shumaker Williams, P.C., and files this Answer with New Matter and Counterclaims to Plaintiff's Complaint and in support thereof states the following: PARTIES 1. Admitted. 2. Admitted. JURISDICTION AND VENUE 3. Denied. The averments of paragraph 3 are conclusions of law to which a response is not necessary. To the extent a response is deemed to be required, the averments of paragraph 3 are denied. 4. Denied. The averments of paragraph 4 are conclusions of law to which a response is not necessary. To the extent a response is deemed to be required, the averments of paragraph 4 are denied. 5. Denied. The averments of paragraph 5 attempt to summarize a written document which speaks for itself and, therefore, the same are denied and strict proof of the same is hereby demanded at time of trial. By way of further answer, Rite Aid HDQTRS. CORP.'s ("Rite Aid") bald assertion that the contract is valid and enforceable is a legal conclusion and the same is denied. RELEVANT FACTS 6. Admitted. 7. Admitted. 8. Denied. The averments of paragraph 8 attempt to summarize a written document which speaks for itself and, therefore, the same are denied and strict proof of the same is hereby demanded at time of trial. By way of further answer, Pegasus denies Rite Aid's interpretation of this contract as providing that Pegasus would guarantee that its product would sell in Rite Aid stores. To the contrary, the contract merely guarantees that Pegasus will guarantee the sale of its product to Rite Aid. Pegasus has never indicated that it is unwilling or unable to sell its product to Rite Aid. 9. Denied. The averments of paragraph 9 attempt to summarize a written document which speaks for itself and, therefore, the same are denied and strict proof of the same is hereby demanded at time of trial. Furthermore, the averments of paragraph 9 constitute conclusions of law, to which no response is necessary. To the extent a response is deemed to be required, Rite Aid only has the right to return all unsold products under the GSA when "[Pegasus'] product(s) performance continues to be unacceptable." 2 10. Denied. The averments of paragraph 10 attempt to summarize a written document. which speaks for itself and, therefore, the same are denied and strict proof of the same is hereby demanded at time of trial. See also, 19 11. Denied. It is denied that Pegasus' products and/or performance were ever unacceptable or deemed to be unacceptable by Rite Aid and strict proof of the same is hereby demanded at time of trial. 12. Denied. It is denied that Pegasus was required to "guarantee" the sale of its products. By way of further answer, it would be commercially unreasonable and impossible for Pegasus to guarantee that their products, selected by Rite Aid to be placed in Rite Aid stores, would be purchased by customers. By way of further answer, it is alleged that Pegasus only guaranteed to sell its products to Rite Aid and continues to guarantee the same. 13. Admitted with clarification. It is admitted that other agreements may have been executed between the parties. It is denied that Rite Aid may generally allege terms from and rely upon any of those referenced agreements when the same were not attached to the Complaint. 14. Denied. The averments of paragraph 14 attempt to summarize a written document which speaks for itself and, therefore, the same are denied and strict proof of the same is hereby demanded at time of trial. Moreover, although Rite Aid alleges that Rite Aid and Pegasus entered into a Returns Agreement on March 25, 2010, the referenced Returns Agreement attached to the Complaint as Exhibit "B" purports to have been signed by Pegasus on March 28, 2010, and signed by Rite Aid on March 30, 2010. 3 15. Denied. The averments of paragraph 15 attempt to summarize a written document which speaks for itself and, therefore, the same are denied and strict proof of the same is hereby demanded at time of trial. 16. Denied. The averments of paragraph 16 attempt to summarize a written document which speaks for itself and, therefore, the same are denied and strict proof of the same is hereby demanded at time of trial. By way of further answer, it is not alleged, nor could it be alleged, that any of the product provided by Pegasus was "damaged," "defective," "outdated" or "discontinued." 17. Denied. The averments of paragraph 17 attempt to summarize a written document which speaks for itself and, therefore, the same are denied and strict proof of the same is hereby demanded at time of trial. 18. Denied. The averments of paragraph 18 attempt to summarize a written document which speaks for itself and, therefore, the same are denied and strict proof of the same is hereby demanded at time of trial. 19. Denied. The averments of paragraph 19 are denied and strict proof of the same is demanded at time of trial. 20. Denied. The averments of paragraph 20 attempt to summarize a written document which speaks for itself and, therefore, the same are denied and strict proof of the same is hereby demanded at time of trial. By way of further answer, it is denied that the allegations made by Rite Aid in paragraph 20, stated to be "as of August 15, 2011," can be taken as true and correct since the Verification of these allegations, signed by J. Patrick Hayes, was dated prior to August 15, 2011. 4 21. Denied. It is denied that any alleged amounts owed to Rite Aid will continue to increase. Rite Aid has not alleged that it has continued to purchase any more products from Pegasus beyond those purchases that are the subject of this action. According to Rite Aid's own GSA, Rite Aid should have only paid for Pegasus' products actually sold at customer service centers and retail locations. Moreover, Rite Aid alleges, without any factual or legal bases for the allegations, that the asserted increase will occur because of the processing of returns and application of other charge backs. 22. Denied. The averments of paragraph 22 are denied and strict proof of the same is demanded at time of trial. It is denied that any actions of Pegasus have caused Rite Aid to be in possession of more than $914,810.00 of products for which it has already paid. To the contrary, according to Rite Aid's own GSA, Rite Aid should have only paid for Pegasus' products actually sold at customer service centers and retail locations. 23. Denied. The averments of paragraph 23 attempt to summarize a written document which speaks for itself and, therefore, the same are denied and strict proof of the same is hereby demanded at time of trial. By way of further answer, portions of Exhibit "E" are illegible. 24. Denied. The averments of paragraph 24 are conclusions of law to which a response is not necessary. By way of further answer, any alleged breaches of contracts not attached to Rite Aid's Complaint cannot serve as additional bases for damages or contracts allegedly breached in Count I of the Complaint as they are outside of the scope of this action. 5 COUNTI BREACH OF CONTRACT 25. Paragraph 25 is an incorporation paragraph to which no response is required. 26. Denied. The averments of paragraph 26 are conclusions of law to which a response is not necessary. By way of further answer, it is alleged that all contracts were drafted by Rite Aid, are unclear and contain contradictory provisions. Therefore, the interpretation of these contracts should be construed against Rite Aid and in favor of Pegasus. 27. Denied. The averments of paragraph 27 are conclusions of law to which a response is not necessary. To the extent a response is deemed to be required, it is denied that Pegasus owes Rite Aid $554,322.78 and a detailed accounting of amounts allegedly owed is hereby demanded. 28. Denied. The averments of paragraph 28 are conclusions of law to which a response is not necessary. To the extent a response is deemed to be required, it is denied that Pegasus owes Rite Aid $554,322.78, and a detailed accounting of amounts allegedly owed is hereby demanded. By way of further answer, it is specifically denied that Rite Aid has made repeated requests for Pegasus to pay such amount to Rite Aid, and strict proof of same is demanded at time of trial. 29. Denied. The averments of paragraph 28 are conclusions of law to which a response is not necessary. To the extent a response is deemed to be required, it is denied that Rite Aid has been left with over $914,840.00 worth of Pegasus products in Rite Aid's stores, or that Rite Aid could not return any such products to Pegasus. See also, response to 122. 6 30. Denied. The averments of paragraph 30 are conclusions of law to which a response is not necessary. To the extent a response is deemed to be required, it is denied that Rite Aid has performed all conditions precedent under all agreements with Pegasus and strict proof of same is demanded at time of trial. 31. Denied. The averments of paragraph 31 are conclusions of law to which a response is not necessary. To the extent a response is deemed to be required, it is denied that Pegasus is in breach of the GSA, the Returns Agreement and all related agreements or that it has failed to pay the negative balance on its account and strict proof of same is demanded at time of trial. 32. Denied. The averments of paragraph 32 are conclusions of law to which a response is not necessary. By way of further answer, it. is denied that Pegasus refuses to accept any return of its products from Rite Aid. 33. Denied. It is denied that Rite Aid has suffered damages in excess of $1,469,13.2.70 [sic], or that such amount will increase. By way of further answer, it is denied that Pegasus breached any contract between it and Rite Aid. 34. Denied. It is denied that Pegasus has caused damages to Rite Aid and strict proof of same is demanded at time of trial. WHEREFORE, Defendant, Pegasus Technology, Inc., respectfully requests this Honorable Court to enter judgment in its favor and against Plaintiff, Rite Aid HDQTRS. Corp., together with costs, attorneys' fees, and such other relief as the Court may deem appropriate. 7 COUNT II ANTICIPATORY BREACH OF CONTRACT 35. Paragraph 35 is an incorporation paragraph to which no response is required. 36. Denied. The averments of paragraph 36 attempt to summarize a written document which speaks for itself and, therefore, the same are denied and strict proof of the same is hereby demanded at time of trial. Moreover, Pegasus denies that it unequivocally communicated to Rite Aid that it would not pay Rite Aid for any returned products for which Rite Aid had previously paid Pegasus. By way of further answer, Pegasus denies Rite Aid's attempt to refer collectively to "Agreements" as said term has not been defined in the Complaint and Pegasus is, therefore, unaware of what specific agreement or agreements are referred to. 37. Denied. The averments of paragraph 37 are conclusions of law to which a response is not necessary. 38. Denied. The averments of paragraph 38 are conclusions of law to which a response is not necessary. 39. Denied. The averments of paragraph 39 are conclusions of law to which a response is not necessary. 40. Denied. The averments of paragraph 40 are conclusions of law to which a response is not necessary. 41. Denied. The averments of paragraph 41 are conclusions of law to which a response is not necessary. 8 42. Denied. To the contrary, Pegasus desires to have its product returned immediately; however, Pegasus denies not only that any damages are due Rite Aid, but also the amount of such damages alleged to be due Rite Aid, and demands strict proof of the same at time of trial. 43. Denied. The averments of paragraph 43 are conclusions of law to which a response is not necessary. WHEREFORE, Defendant, Pegasus Technology, Inc., respectfully requests this Honorable Court to enter judgment in its favor and against Plaintiff, Rite Aid HDQTRS. Corp., together with costs, attorneys' fees, and such other relief as the Court may deem appropriate. COUNT III UNJUST ENRICHMENT 44. Paragraph 44 is an incorporation paragraph to which no response is required. 45. Denied. The averments contained in paragraph 45 constitute conclusions of law to which no response is necessary. By way of further answer, Pegasus denies these allegations because it. is unable to determine to what Rite Aid refers as "the outstanding amounts." 46. Denied. The averments of paragraph 46 attempt to summarize a written document which speaks for itself and, therefore, the same are denied and strict proof of the same is hereby demanded at time of trial. 47. Denied. It is denied that Rite Aid owes such an amount and strict proof of the same is demanded at time of trial. 48. Denied. The averments of paragraph 48 are conclusions of law to which a response is not necessary. 9 49. Denied. The averments of paragraph 49 are conclusions of law to which a response 1s not necessary. 50. Denied. The averments of paragraph 50 are conclusions of law to which a response is not necessary. 51. Denied. Returns were subject to Rite Aid's Returns Agreement and other side agreements made between the parties. 52. Denied. It is denied that Rite Aid should have any product in inventory for which Pegasus is required to pay any amounts pursuant to any agreement between them. Upon information and belief, Rite Aid has not paid Pegasus for the televisions remaining in Rite Aid's inventory. Furthermore, Pegasus has and remains willing and able to receive the television units; however, Rite Aid has breached its agreement by failing to comply with the terms of the Returns Agreement. Specifically, instead of returning the televisions immediately to Pegasus, Rite Aid has held them hostage, demanding Pegasus pay Rite Aid large sums of money, not believed to be justified by the agreements, before the televisions are returned. 53. Denied. The averments of paragraph 53 are conclusions of law to which a response is not necessary. 54. Denied. The averments of paragraph 54 are conclusions of law to which a response is not necessary. 55. Denied. The averments of paragraph 55 are conclusions of law to which a response is not necessary. To the extent a response is deemed to be required, it is denied that Rite Aid has been unjustly enriched, or that Rite Aid is entitled to collect an "outstanding balance, plus interest, from Pegasus," and strict proof of the same is demanded at time of trial. 10 56. Denied. To the contrary, Pegasus desires to have its product returned; however, Pegasus denies not only that any damages are due Rite Aid, but also the amount of such damages claimed to be due Rite Aid, and demands strict proof of the same at time of trial. 57. Denied. It is denied that Pegasus has refused to accept return of its products or that any such alleged refusal has caused ongoing damage to Rite Aid and strict proof of the same is demanded at time of trial. WHEREFORE, Defendant, :Pegasus Technology, Inc., respectfully requests this Honorable Court to enter judgment in its favor and against Plaintiff, Rite Aid HDQTRS. Corp., together with costs, attorneys' fees, and such other relief as the Court may deem appropriate. COUNT IV DECLARATORY JUDGMENT 58. Paragraph 58 is an incorporation paragraph to which no response is required. 59. Denied. The averments of paragraph 59 are conclusions of law to which a response is not necessary. 60. Denied. The averments of paragraph 60 are conclusions of law to which a response is not necessary. WHEREFORE, Defendant, Pegasus Technology, Inc., respectfully requests this Honorable Court to enter judgment in its favor and against Plaintiff, Rite Aid HDQTRS. Corp., together with costs, attorneys' fees, and such other relief as the Court may deem appropriate. 11 COUNT V BREACH OF CONTRACT - SPECIFIC PERFORMANCE 61. Paragraph 61 is an incorporation paragraph to which no response is required. 62. Denied. The averments of paragraph 62 attempt to summarize a written document which speaks for itself and, therefore, the same are denied and strict proof of the same is hereby demanded at time of trial. 63. Denied. The averments of paragraph 63 are conclusions of law to which a response is not necessary. 64. Denied. The averments of paragraph 64 are conclusions of law to which a response is not necessary. 65. Denied. The averments of paragraph 65 are conclusions of law to which a response is not necessary. 66. Denied. The averments of paragraph 66 are conclusions of law to which a response is not necessary. 67. Denied. It is denied that Rite Aid should have any product in inventory for which Pegasus is required to pay any amounts pursuant to any agreement between them. Upon information and belief, Rite Aid has not paid Pegasus for the televisions remaining in Rite Aid's inventory. Furthermore, Pegasus has and remains willing and able to receive the television units; however, Rite Aid has breached its agreement by failing to comply with the terms of the Returns Agreement. Specifically, instead of returning the televisions immediately to Pegasus, Rite Aid has held them hostage, demanding Pegasus pay Rite Aid large sums of money, not believed to be justified by the agreements, before the televisions are returned. 12 WHEREFORE, Defendant, Pegasus Technology, Inc., respectfully requests this Honorable Court to enter judgment in its favor and against Plaintiff, Rite Aid HDQTRS. Corp., together with costs, attorneys' fees, and such other relief as the Court may deem appropriate. NEW MATTER 68. The averments and defenses contained in paragraphs 1 through 67 above are hereby incorporated by reference as if fully set forth below. 69. In accordance with Pa.R.C.P. 1033, Pegasus has obtained Rite Aid's consent to file this Amended Answer with New Matter and Counterclaims. A true and correct copy of the correspondence evidencing this consent is attached hereto as Exhibit "A." 70. Pegasus and Rite Aid entered an agreement whereby Pegasus would provide Rite Aid seven inch flat-screen televisions for sale in Rite Aid's retail locations. The contracts evidencing the agreement between Rite Aid and Pegasus (the "Contracts") are attached to the Complaint as Exhibits "A" and "B" and are incorporated herein by reference. 71. In addition to the Contracts, other documents evidence the agreement between Pegasus and Rite Aid. 72. Specifically, a letter dated March 25, 2010 and addressed to Rite Aid provides a summary of the general terms of the parties agreement, including that the price per unit was $65.00, that Rite Aid would pay Pegasus for 50% of the initial shipment of televisions, and, once that amount was sold, issue payment to Pegasus for any other units sold every 30 days. A true and correct copy of this letter is attached hereto as Exhibit "B." 13 73. Additionally, credit memos and invoices exchanged between Pegasus and Rite Aid also establish that the unit price of each television was $65.00. True and correct copies of the credit memos and invoices are attached hereto as Exhibit "C." 74. Pegasus shipped a total of 23,290 units to Rite Aid pursuant to the Contracts. 75. Rite Aid only paid for a potion of the units sent to them by Pegasus. 76. Upon information and belief, Rite Aid has paid to Pegasus a total of $811,889.50 to date. 77. This amount represents a payment by Rite Aid for only approximately 12,490 units since each unit was sold to Rite Aid for a unit cost of $65.00. 78. It is believed and therefore averred that Rite Aid is still in possession of less than 10,166 units. 79. Since 23,290 units were originally shipped to Rite Aid, Rite Aid has sold at least 13,124 of Pegasus' units at their retail locations. 80. Accordingly, since Rite Aid only paid for 12,490 units, Rite Aid has sold at least 634 of Pegasus' units that Rite Aid has not yet paid for, and this number is believed to be increasing. 81. The GSA between Pegasus and Rite Aid states that Rite Aid shall make monthly payments for those items that have actually sold. 82. Rite Aid has paid only for 12,490 units and has failed to make any required payment to Pegasus for the other units sold by Rite Aid. 83. Rite Aid currently owes Pegasus at least $41,210.00 specifically for those units sold by Rite Aid in excess of what Rite Aid has already paid. 14 84. It is believed and therefore averred that Rite Aid has sold an unknown number of Pegasus units for less than their unit cost of $65.00. 85. Such sales of Pegasus product for less than the agreed upon unit price is not authorized under the GSA or any other applicable contract between Pegasus and Rite Aid. 86. Since Rite Aid agreed to purchase Pegasus' product for $65.00 per unit', any sales by Rite Aid of Pegasus units for less than Rite Aid's cost should result in a loss attributable to Rite Aid - not to Pegasus. 87. The GSA requires that Rite Aid return the unsold units back to Pegasus, and issue an invoice to Pegasus for associated freight and/or returns charges. 88. Rite Aid never shipped units back to Pegasus and never issued a returns and/or shipping invoice. 89. It is believed that Rite Aid may attempt to justify its sales of Pegasus product for drastically reduced prices alleging that they were mitigating their damages. 90. Rite Aid was not justified to mitigate any alleged damages because Rite Aid did not have any damages to mitigate. 91. Rite Aid had no damages to mitigate because they have not yet paid for the items they are currently selling at drastically reduced prices. 92. Therefore, Rite Aid is in possession of the remaining Pegasus units "on credit" and Pegasus expects to be paid $65.00 per unit for each unit actually sold. ' The GSA requires :Rite Aid to purchase each Pegasus unit for $65 per unit. However, the parties occasionally agreed, for short finite periods of time, that Pegasus would accept less than the full purchase price to accommodate Rite Aid's offering of promotional discounts for the product. 15 93. It is believed and therefore averred that any damages Rite Aid alleges they are owed from Pegasus are a result of their having sold Pegasus units for less than they agreed to pay for those units. 94. No provision exists in the GSA or any other contract for Rite Aid to unilaterally change the amount they owe Pegasus for the sale of each unit. 95. Rite Aid is obligated to pay Pegasus the amount of $65.00 for each unit sold. 96. Rite Aid has failed to pay Pegasus the amount it is owed since Rite Aid has sold more of Pegasus' units than they have paid for. 97. Although Rite Aid is believed to have been selling Pegasus' products for less than cost, Rite Aid has still received a substantial benefit from said sales because they have failed to pay Pegasus for the units that have been sold (with the exception of the first payment made by Rite Aid) and have retained all of the proceeds from said sales. 98. Rite Aid's alleged injuries or losses, if any, were caused by Rite Aid's own actions or inactions. 99. Rite Aid's alleged injuries or losses, if any, were caused by actions or events outside of control of Pegasus. 100. Rite Aid's alleged injuries or losses, if any, were caused by acts or omissions of a person or persons other than Pegasus. 101. Rite Aid's claims are barred by its failure to mitigate damages. 102. Rite Aid's claims may be barred in whole or in part by the doctrine of failure of consideration. 16 103. Rite Aid's claims may be barred in whole or in part by the doctrine of impossibility of performance. 104. Rite Aid's claims may be barred in whole or in part by the applicable statute of limitations. 105. Rite Aid's claims may be barred in whole or in part by the doctrine of estoppel. 106. Rite Aid's claims may be barred in whole or in part by the doctrine of laches. 107. Rite Aid's claims may be barred in whole or in part by the doctrine of waiver 108. Rite Aid's claims may be barred in whole or in part by the doctrine of release. 109. Rite Aid's claims may be barred in whole or in part by the doctrine of accord and satisfaction. 110. Rite Aid's claims may be barred in whole or in part based on the statute of frauds. 111. Rite Aid's claims may be barred in whole or in part by the doctrine of unclean hands. COUNTERCLAIMS COUNTI BREACH OF CONTRACT 112. The averments and defenses contained in paragraphs 1 through 111 above are hereby incorporated by reference as if fully set forth below. 113. Pegasus and Rite Aid entered an agreement whereby Pegasus would provide Rite Aid seven-inch flat-screen televisions for sale in Rite Aid's retail locations. The contracts evidencing the agreement between Rite Aid and Pegasus (the "Contracts") are attached to the Complaint as Exhibits "A" and "B" and are incorporated herein by reference. 17 114. In addition to the Contracts, other documents evidence the agreement between Pegasus and Rite Aid. 115. Specifically, a letter dated March 25, 2010 and addressed to Rite Aid provides a summary of the general terms of the parties agreement, including that the price per unit was $65.00, that Rite Aid would pay Pegasus for 50% of the initial shipment of televisions, and, once that amount was sold, issue payment to Pegasus for any other units sold every 30 days. A true and correct copy of this letter is attached hereto as Exhibit "B." 116. Additionally, credit memos and invoices exchanged between Pegasus and Rite Aid also establish that the unit price of each television was $65.00. True and correct copies of the credit memos and invoices are attached hereto as Exhibit "C." A. Failure to Pay Pegasus for Televisions Sold 117. Pegasus performed its obligations under the Contracts by providing 23,290 televisions to Rite Aid. 118. In exchange for the 23,290 televisions, Rite Aid provided a partial payment to Pegasus. 119. Rite Aid agreed to provide monthly payments to Pegasus for any televisions sold beyond the amount for which it originally paid. 120. It is believed and therefore averred that Rite Aid currently possesses fewer than 10,166 televisions. 121. Therefore, upon information and belief, Rite Aid has sold more than 50% of the initial shipment of televisions. 18 122. Accordingly, Rite Aid has sold televisions for which it has failed to issue payment to Pegasus. 123. Rite Aid's refusal to pay Pegasus for the televisions sold is a breach of the Contracts between the parties. 124. At the agreed upon price of $65 per television, Pegasus has suffered damages of more than $41,210 as a result of Rite Aid's breach.2 B. Selling the Televisions for Less Then Agreed Upon Price of $65 125. Per the Contracts, Rite Aid agreed to sell the televisions for $65 per unit. 126. Any reduction in sale price was to be agreed upon by both Pegasus and Rite Aid. 127. Rite Aid has breached the Contracts by unilaterally selling the televisions for less than $65. 128. Pegasus has suffered damages as a result of Rite Aid's breach. C. Breach of GSA/Returns Agreement 129. Paragraph 3 of the GSA provides: "Rite Aid will have the right to return at Vendor's expense all unsold product(s) to Vendor's facility in return for Vendor's cash payment to Rite Aid for any products for which Rite Aid has paid, but have not been sold." 130. Paragraph 3 of the GSA also provides that the payment to Rite Aid "shall be made (a) by wire transfer of immediately available funds or certified check, and (b) no later than (15) days after Rite Aid returned the product(s)." 2 Damages are believed to be at least S41,210.00, although, discovery is necessary to determine the full extent of damages owed to Pegasus. 19 131. Furthermore, pursuant to Section A, 2 of the Returns Agreement, Pegasus authorized Rite Aid to scan and ship any unsalable products directly to Pegasus. 132. Rite Aid did not send the unsold televisions back to Pegasus. 133. Instead, Rite Aid, without prior notice that it considered the items to be unsalable, attempted to collect a substantial sum of money from Pegasus before it would return the items and/or force Pegasus to enter into other agreements for the return of the unsold televisions. 134. Such actions by Rite Aid were a breach of both the GSA and the Returns Agreement. 135. Pegasus has suffered and continues to suffer damages as a result of Rite Aid's breach, namely that it has not been able to resell the televisions and, since the units have been held by Rite Aid for such a long period of time, their value has decreased. WHEREFORE, Counterclaim Plaintiff, Pegasus Technology, Inc., respectfully requests this Honorable Court to enter judgment in its favor and against Counterclaim Defendant, Rite Aid Hdqtrs. Corp. in an amount in excess of $50,000, plus attorneys' fees, court costs, and interest, the immediate return of any unsold televisions, and any other relief this Court deems appropriate. COUNT II DIMINUTION OF VALUE/COMMERCIAL DISPARGMENT 136. The averments and defenses contained in paragraphs 1 through 135 above are hereby incorporated by reference as if sully set forth below. 137. By selling the televisions for less than $65, (and in some cases, substantially less than $65), Rite Aid has caused Pegasus to suffer harm to its reputation in the business community. 20 138. Rite Aid is a national drug store chain. 139. Rite Aid sold and continues to sell Pegasus' televisions in numerous markets across the nation. 140. By selling the televisions for less than $65, Rite Aid has created a new, lower price point in the marketplace, which will force other sellers of Pegasus' televisions to reduce their prices to remain competitive. 141. Reducing the price causes the products to appear inferior to consumers. 142. By intentionally reducing the price, Rite Aid has made a false statement as to the value and quality of Pegasus' televisions. 143. Rite Aid either intended to cause harm to Pegasus or at least reasonably should have known that the reduction in price would harm Pegasus' business. 144. Pegasus has suffered financial harm as a result of Rite Aid's actions. 145. Additionally, because Rite Aid has not returned the televisions to Pegasus, Pegasus has not been able to resell the televisions. 146. Electronics, including the portable televisions at issue here, typically lose value as the model becomes older. 147. Due to the length of time that Rite Aid has refused to return the televisions to Pegasus, the televisions have lost value. 21 WHEREFORE, Counterclaim Plaintiff, Pegasus Technology, Inc., respectfully requests this Honorable Court to enter judgment in its favor and against Counterclaim Defendant, Rite Aid Hdqtrs. Corp. in an amount in excess of $50,000, plus attorneys' fees, court costs, and interest, the immediate return of any unsold televisions, and any other relief this Court deems appropriate. COUNT III UNJUST ENRICHMENT 148. The averments and defenses contained in paragraphs 1 through 147 above are hereby incorporated by reference as if fully set forth below. 149. In the alternative to a finding of a breach of an express contract, Pegasus is entitled to relief because Rite Aid has been unjustly enriched. 150. As stated above, Pegasus and Rite Aid entered into an agreement in which Rite Aid agreed to pay Pegasus for televisions sold. 151. Rite Aid received 23,290 televisions from Pegasus. 152. Upon information and belief, Rite Aid paid for approximately half of those televisions. 153. However, upon information and belief, Rite Aid has sold more than half of the televisions. 154. Rite Aid has failed to pay Pegasus for the additional televisions it has sold beyond those for which it has paid. 155. Rite Aid has received and enjoyed the benefit of retaining the proceeds from the sale of the additional televisions. 22 156. Rite Aid's act of retaining these proceeds is unjust because it was required to pay Pegasus monthly for the units sold. 157. Based on the foregoing, Rite Aid has been unjustly enriched at the expense of Pegasus. WHEREFORE, Counterclaim Plaintiff, Pegasus Technology, Inc., respectfully requests this Honorable Court to enter judgment in its favor and against Counterclaim Defendant, Rite Aid Hdqtrs. Corp. in an amount in excess of $50,000, plus attorneys' fees, court costs, and interest, the immediate return of any unsold televisions, and any other relief this Court deems appropriate. SHUMAKER WILLIAMS, P.C. Dated: June 29, 2012 By 1709 Evan C. Pappas, I.D. #200103 Ryan P. Siney, I.D. #209190 Kenneth J. McDermott, I.D. # 205555 P.O. Box 88 Harrisburg, PA 17108 (717) 763-1121 Attorneys for Defendant :247810 23 "PM gpwgg? From: "Downey, Brian" <DOWNEYB@pepperlaw.com> To: 'Evan Pappas' <ecp@shumakerwilliams.com.> Date: 3/6/2012 9:27 AM Subject: RE: Pegasus/Rite Aid call That is not a problem. I believe we have already served discovery requests so you will be getting them this week. Brian P. Downey Attorney at Law Pepper Hamilton LLP 100 Market Street, Suite 200 Harrisburg, PA 17108-1181 717.255.1192-Direct 717.319.4952-Mobile 866.422.1305-Direct Fax 717.238.0575-Fax 215.981.4004-Philadelphia phone downeyb@pepperlaw.com www.pepperlaw.com From: Evan Pappas [mailto:ecp@shumakerwilliams.com] Sent: Monday, March 05, 2012 9:35 AM To: Downey, Brian Subject: RE: Pegasus/Rite Aid call Brian, This shall confirm that, pursuant to Pa.R.C.P. 1033 you have agreed on behalf of Rite Aid to allow Pegasus to amend its Answer without having to first seek leave of court. It is also understood that the filing if such Amended Answer may contain counterclaims against Rite Aid. Please respond to this email in the affirmative. We appreciate your courtesy. Regards, Evan C. Pappas, Esquire SHUMAKER WILLIAMS, P.C. 3425 Simpson Ferry Road Camp Hill, PA 17011 Phone: (717) 763-1121 Fax: (717) 763-7467 www.shumaker.willi,ams.com Exhibit "A" March 25, 2010 Mark Coleman Rite Aid Corporation 30 Hunter Lane Camp Hill. PA 17011 Dear Mark: Pursuant to our discussions regarding Pegasus Technology Inc, this letter serves to confirm the parameters for the program proposed for Rite Aid for the 7" LCD TV. Model Number: ST-07 Product Description: 7" LCD Portable ACST TV with 2 hour battery Cost: $65.00 Freight: Prepaid Quantity: 20,000 (estimated) - 24,000 total available units Delivery Date: 1 May 20 f 0 Guaranteed Sale Terms: 50°x6 paid net 60 from delivery Additional pmts every 30 days thereafter based on sell-thru We are working on the New Vendor Paperwork. We will have this to Linda as soon as possible. Please let me know if this meets with Rite Aid's approval, or if you need any additional information. Regards, Scott Bryant Exhibit B PEGASUS a nnnnnnnnt PFGASUS TECHNOLOGY. INC. 12806 SCHABARUM AVE, UNIT F IRWINDALE_ CA 91706 TEL: 626-337-8600 Fax:626-337-8655 Customer Rite Aid ValIla%es 30 I Jul wl Lauc Camp ;Jill. PA 17011 J Q (7 J Exhibit "C" Credit Memo Date Credit No. 8j24,'20 10 468 PEGASUS L, nnnnnnn,n PEGASUS TECHNOLOGY. INC. 12806 SCHABARUM AVE, UNIT F IRWINDALE, CA 91706 TEL: 626-337-8600 Fax:626-337-8655 Customer Rite Aid Pat Hayes 30 Hunter Lane Camp Hill, PA 17011 Credit Memo Date Credit No. 2010!824 468 PEGASUS nnnnnnm s M 16 Rite Aid - Damage & Outdated Invoice i gistration No.or VAT Number 2-Company address. Invoice Date3Bank inW15/2010 Invoice Nurrigaontact P616Wdli1Bax number. Period Number. 08 Vendor Number: 43669 C Sort Path: 1 TT8 AR Number Bill To: PEGASUS TECHNOLOGY INC 12806 SCHABARUM AVE #F IROANDALE. CA 91706 Remit To: Rite Aid PO BOX 3165 HARRISBURG. PA 17105-3185 Please include invoice number with remittance. Invoice Section: D016427446-1776-1 HOLD Item Item Prodamage Extended Identifier Description Item# Quantity Cost OPC Totals 04969658256 LCD TV 71N ST07-B 0134600 10 65.00 00850 6508500 10 650.8500 Summary of Retum/Processing Costs Post Damage Cost Reclamation Center Cost Expense Per Item 01110 1.1100 02870 2.8700 Invoice total: 654.133 Product listed above in section(s) DEST. BURN. and HAZ was disposed of at the point of scan due to the damaged condition of the product Product listed above in section(s) of COPT and DONA will not be returned as per your disposition request. Product listed above n section of HOLD. wlhout an open aulhorzabon will need to be authorized on Invoice Link for return. This is a ;fisting of items that were processed between 09/1512010 and t0112l2010 at our Reno. NV reclamation center VIEB ACCESS KEY 07725.857565475893169 toff Pr-r. ACI IS 000000016 PEGASUS FLCIINOLUGY. rNC. 12806 SCHAr3ARUM AVE. UNIT F IRWINDALE. CA 91706 TEL: 626-337-8600 Fax:626-337-8655 Credit Memo Date Credit No. 1;312011 198 PEGASUS nonnnnma Sir q41010 Invoice Date: 11/19/2010 Invoice Number: D020031446 Period Number: 09 Vendor Number: 43669 C Rite Aid - Damage & Outdated Invoice AR Number Bill To: PEGASUS TECHNOLOGY INC 12806 SCHABARUM AVE #F IRWINDALE, CA 91706 InvOICe Section: 0020031446-ISCO-1 Item Item - Identifier Description 04969658256 LCD TV 71N ST07-B Remit To: Rite Aid PO BOX 3165 HARRISBURG, PA 17105-3165 Please include invoice number with remittance --- -- - - -- --- - - -- ---- DEST? Predamage Extended item# Quantity Cost DPC Totals 0134600 1 65.00 0.0850 65.0850 1 65.0850 Summary of Retum/Processing Costs Expense Per Item Post Damage Cost 0.1110 0.1110 Reclamation Center Cost 0.2870 0.2870 -- - - 65.48 Invoice Section: D020031"6.1TT6.2 _ HOLD Item Item Predamage Extended Identifier Description Item# Quantity Cost DPC Totals 04969658256 LCD TV 71N ST07-B 0134600 24 65.00 00850 1,562.0400 24 1,562.0400 Expense Per Summary of Return/Processing Costs Item Post Damage Cost 0.1110 2.6640 Reclamation Center Cost 02870 6.8880 • e?• aw ? Invoice Section Summary - -----_.___-.___..__..-.---------------___-- -- ---------_-______._.. _I Quantity DEST D020031 446-7724 1 SCO-1 1 65.48 HOLD D020031446-77241TT6-2 24 1,571.59 2S 1,637.08 Invoice Totai: 1,637.07 Product I!sted above in section(s) DEST BURN. and HAZ was disposed of at the point of scan due to the damaged condition of the product Product listed above in section(s) of COPT and DONA will not be returned as per your disposition request. Product listed above n section of HOLD without an open authorization will need to be authorized on Invoke Link for return This is a !isting of items that were processed between 10/13/2010 and 11/16/2010 at our Reno, NV reclamation center. WEB ACCESS KEY 07724-857565425893169 1 of 1 PFGASI IS nnnnnnms PEGASUS TECHNOLOGY, INC. 12806 SCHABARUM AVE, UNIT F IR W INDALE, CA 91706 'rEL: 626-337-8600 Fax:626-337-8655 Customer Rite Aid Pat Hayes 30 Hunter Lane Camp Hill, PA 17011 Credit Memo Date Credit No. 2010/11/27 358 P F G AS 11 S nnnnnnn,)r RITE ` AID Invoice Date: Invoice Number: Period Number: Vendor Number: Sort Path: AR Number: Bill To: Rite Aid - Damage & Outdated Invoice 11119n010 D027535445 09 43669 C 1TT6 PEGASUS TECHNOLOGY INC 12806 SCHABARUM AVE #F IRWINDALE, CA 91706 f Invoice Section: D027535445-1TT6-1 Item Item Identifier Description 04969658256 LCD TV 71N ST07-B Please include invoice number with remittance. HOLD Predamage Extended ItemM Quantity Cost DPC Totals 0134600 12 65.00 0.0850 781.0200 12 781.0200 Summary of Return/Processing Costs Post Damage Cost Reclamation Center Cost Expense Per Item 0 1110 1.3320 02870 3.4440 Invoice Total: 785.80 Product listed above in section(s) DEST. BURN, and HAZ was disposed of at the point of scan due to the damaged cord,tion of the product Product fisted above in section(s) of COPT and DONA will not be returned as per your d,sposdion request. Product listed above n Section of HOLD, without an open authorization will reed to be authorized on Invoke Link for return This is a bstirg of terns ,hat were processed between 10/1312010 and 1111612010 at our Rural Halt, NC reclamation center N.EB ACCESS KEY p7724-85756542589169 1of1 Remit To: Rite Aid PO BOX 3165 HARRISBURG, PA 17105-3165 orc na is nnnnnnn» 1 t. PEGASUS TECHNOLOGY, INC. 12806 SCHABARUM AVE, UNIT F IR W INDALE, CA 91706 TEL: 626-337-8600 Fax:626-337-8655 Customer Rite Aid Pat Hayes 30 Hunter Lane Camp Hill, PA 17011 Credit Memo Date Credit No. 201019/1 655 PEGASUS nnnnnnmo RITE [AID, Invoice Date: Invoice Number: Period Number. Vendor Number: Sort Path AR Number. Bill To: Rite Aid - Damage & Outdated Invoice 09/17/2010 D014784446 07 43669 C 1TT6 PEGASUS TECHNOLOGY INC 12806 SCHABARUM AVE #F IRWINDALE, CA 91706 Remit To: Rite Aid PO BOX 3165 HARRISBURG, PA 17105-3165 Please include invoice number with remittance. Invoice Section: D014764446.1TT6-1 HOLD Item Item Predamage Extended Identifier Description Item# Quantity Cost DPC Totals 04969658258 LCD TV 71N ST07-B 0134600 49 55.00 0.0850 3,189.1650 49 3.189.1650 Expense Per Summary of Rsturn/Processing Costs Item Post Damage Cost 0.1110 5.4390 Reclamation Center Cost 0.2870 14 0630 Invoice Total: 3,208.67 Product listed above n section(s) DEST. BURN. and HAZ was disposed of at the point of scan due to the damaged condition of the product. Product listed above :n section(s) of COPT and DONA will not be eturned as per your disposition request Product 'isted above in section of HOLD. withoLt an open authorization writ need to be authorized on Invoice Link for return This is a listing of items that were processed between 08/1812010 and 09/1412010 at our Reno. NV reclamation center. WEB ACCESS KEY 07724.857585425893169 1of1 pFr aclIf nnnnnnnzn PEGASUS TECHNOLOGY, INC. 12806 SCHABARUM AVE, UNIT F IRWINDAL.E, CA 91706 TEL: 626-337-8600 Fax:626-337-8655 Customer Rite Aid Pat Ilayes 30 Hunter Lane Camp Hill, PA 17011 I, `lutlt?c (? c Credit Memo Dane Credit No. 2010/9/1 633 vFr,eci I r 00000003' ITE Invoice Date: Invoice Number: Period Number: Vendor Number: Sort Path: AR Number: Bill To: Rite Aid - Damage & Outdated Invoice 09/17/2010 0015178452 07 43669 C 1TT6 PEGASUS TECHNOLOGY INC 12806 SCHABARUM AVE #F IRWINDALE, CA 91706 Remit To: Rite Aid PO BOX 3165 HARRISBURG, PA 17105-3165 Please include invoice number with remittance. Invoice Section: D015178452-1TT6-1 ^ Item Item Identifier Description Item# Quantity 04969658256 LCD TV 71N ST07-8 0134600 9 9 Summary of Return/Processing Costs Post Damage Cost Reclamation Center Cost HOLD Predarri Extended Cost DPC Totals 65.00 0.0850 585.7650 585.7550 Expense Per Item 0.1110 0.9990 0.2870 2.5830 i ? Invoice Total: 588.35 ; Product listed above in section(s) DEST. BURN. and HAZ was disposed of at the point of scan due to the damaged condition of the product. Product listed above m section(s) of COPT and DONA will not be returned as Der your disposition request Product I sted above in section of HOLD, without an open authcrizat on will need to be authorized on Invoice Link for return. This is a listing of •tems that were processed between 0811812010 and 091140310 at our Carlisle. PA reclamation center. WEBACCESSKEY 07724.857565425893+69 1of 1 PEGASUS 000000032 PEGASUS TECHNOLOGY, INC. 12806 SCHABARUM AVE, UNIT F IRWINDALE, CA 91706 TEL: 626-337-8600 Fax:626-337-8655 Customer Rite Aid Pat Hayes 30 Hunter Lane Camp Hill, PA 17011 Credit Memo Date Credit No. 2010/11/8 446 P.O. No. Project Item Description Oty Rate Amount ST07-B processing processing 7' Digital LCD TV, UPC400049696582568 post damage cost reclamation center cost products completly received -10 -t0 -t0 65.085 0.111 0.287 -650.85 -1.11 -2.87 Total N r5-653.83 Invoices `TS654.83 Balance Credit N 150.00 PEGASUS nnonnonad PEGASUS TECHNOLOGY, INC. 12806 SCHABARUM AVE, UNIT F IRWINDALE, CA 91706 TEL: 626-337-8600 Fax:626-337-8655 Customer Rite Aid Pat Hayes 30 Hunter Lane Camp Hill. PA 17011 Credit Memo Date Credit No. 2010/9/1 654 `X . PEGASUS nnnnnnnza RITE Invoice Date. Invoice Number: Period Number: Vendor Number: AR Number: Bill To: 10/15/2010 0023780445 08 431369 C PEGASUS TECHNOLOGY INC 12806 SCHABARUM AVE #F IRWINOALE, CA 91706 Rite Aid - Damage & Outdated Invoice Please include invoice number with remittance Invoice Section: D023780445-1SCO-2 - Item - Item Identifler rta.,. -*1-- DEST 04969658256 LCD TV 71N ST07-13 Remit To: Rite Aid PO BOX 3165 HARRISBURG, PA 17105-3165 Predamage Extended Item# Quantity Cost DPC Totals 0134600 1 65.00 0.0850 65.0850 1 65.0850 Summary of Return/Processing Costs Post Damage Cost Reclamation Center Cost Invoice Section: D023780445-1TT6-1 Item Item Identifier Description 04969658258 LCD TV 71N ST07-B Predamage Extended Item# Quantity Cost DPC Totals 0134600 30 65.00 0.0850 1.952.5500 30 1,952 5500 Summary of Return/Processing Costs Post Damage Cosl Reclamation Center Cost Expense Per Item 0.1110 33300 02870 8.6100 ems..,, Invoice Section Summary Quantity Total DEST D023780445-77241SC0 2 1 65 48 HOLD D023780445-77241TT6-1 30 1,96449 31 2,029.97 Invoice Total: 2,029.97 Product listed above in section(s) DEST. BURN. and HAZ was disposed of at the point of scan due to the damaged condition of the product Product listed above in secbonlsl of COPT and DONA will not be returned as per your dispcsd;on request Product listed above in section of HOLD without an open authorization will need to be authorized on Invoke Link for return This is a Lsting of items that were processed between 09/15/2010 and 10112/2010 at our Rural Hall, NC reclamation center ;,;EB ACCESS KEY p7724-857565425893169 1 of 1 Expense Per Item 01110 0.1110 0.2870 02870 HOLD PEGASUS nnnnnnn2c PEGASUS TECHNOLOGY, INC. 12806 SCHABARUM AVE, UNIT F IR W INDALE, CA 91706 `I-EL: 626-337-8600 Fax:626-337-8655 Customer Rite Aid Pat Hayes 30 Hunter Lane Camp HAL PA 17011 Credit Memo Date Credit No. 2010/9/1 473 PEGASUS nnnnnnnzo RITE AIDS Invoice Date: Invoice Number: Period Number: Vendor Number: AR Number: Bill To: Rite Aid - Damage & Outdated Invoice 10/15/2010 D016988452 08 43669 C PEGASUS TECHNOLOGY INC 12806 SCHABARUM AVE #F IRWINDALE, CA 91706 Remit To: Rite Aid PO BOX 3165 HARRISBURG, PA 17105-3165 Please include invoice number with remittance. 1 nvoice Section: D016988452-1SCO-2 r - DEST Item Item Predamage Extended Identifier Description Item# Quantity Cost DPC Totals 04969658256 LCD TV 71N ST07-B 0134600 1 65.00 0.0850 65.0850 1 65.0850 Expense Per Summary of ReturnlProcessing Coats Item Post Damage Cost 0.1110 0.1110 Reclamation Center Cost 0.2870 0.2870 _ 63.48 Invoice Section: 0016988432-1TT6-1 HOLD _-- Item Item ' --- _-_ - Predamage Extended Identifier Description Item# Quantity Cost DPC Totals 04969658256 LCD TV 71N ST07-B 0134600 19 65.00 0.0850 1,236.6150 19 1,236.6150 Summary of Return/Processing Costs Expense Per Item Post Damage Cast 0.1110 2.1090 Reclamation Center Cost 0.2870 5.4530 1" 42 invoice Section Summary Quantity Total DEST D016988452-77241SCO-2 1 65.48 HOLD 0016988452-77241TT6-1 19 1.244.18 20 1,309.66 `^ v - - Invoice Total _ 1,309.66 Product listed above in section(s) DEST BURN. and HAZ was disposed of at the point of scan die to the damaged condition of the product Product listed above in section(s) of COPT and DONA will not be returned as per your disposition request. Product listed above in section of HOLD, without an open authorization will need to be authorized on Invoice Link for return This is a listing of items that were processed between 09/1512010 and 10/12/2010 at our Carlisle. PA reclamation center VVJEB ACCESS KEY C)7724-857565425893169 1of1 PEGASUS nnnnnnn';io PEGASUS TECHNOLOGY, INC. 12806 SCHABARUM AVE, UNIT F IRWINDALE, CA 91706 TEL: 626-337-8600 Fax:626-337-8655 Customer Rite Aid Pat Mayes 30 Hunter Lane Camp Hill, PA 17011 Credit Memo Date Credit No. 2010/9/ i 656 PEGASUS nnnnnnnnc Invoice Date: 0 8/20120 1 0 Invoice Number D013345452 Period Number 06 Vendor Number: 43669 C Rite Aid - Damage & Outdated Invoice AR Number: Bill To: PEGASUS TECHNOLOGY INC 12806 SCHABARUM AVE #F IRWINDALE. CA 91706 Invoice Section: 0013345452-1SC0-1 Remit To: Rite Aid PO BOX 3165 HARRISBURG, PA 17105-3165 Item Item Identifier Description Itemtll 04969658256 LCD TV 71N ST07-8 0134600 Please include invoice number with remittance. DEST? Predamage Extended Quantity Cost DPC Totals 1 6500 0.0850 65.0850 1 -65 0850 Summary of Return/Processing Costs Post Damage Cost Reclamation Center Cost Invoice Section: D013345452-1TT8-2 item'------------'item---- Identifier Description 04969658256 LCD TV 71N ST07-0 Item# Quantity 0134600 34 34 Summary of ReturnlProcessing Costs Post Damage Cost Reclamation Center Cost Expense Per Item 0.1110 3.7740 02870 9.7580 Invoice Section Summary Quantity Total DEST 0013345452-77241SCO-1 _- _? 1 6548 HOLD D013345452-77241 TT6-2 34 2 226 42 35 2,291.91 Invoice Total: 2,291.90 Product listed above in section(s) REST. BURN and HAZ was disposed of at the point of scan due to the damaged condition of the product. Product listed above in section(s) of COPT and DONA will not be returned as per your disposition request. Product listed above m section of HOLD, mthout an open authorization will reed to be authorized on Invoice Link for return. This s a listing of items that were processed between 07114/2010 and 08/17i2010 at our Carlis e. PA reclamation center NEB ACCESS KEY 07724-857565425893169 1 of 1 Expense Per Item 0.1110 0.1110 0.2870 0.2870 ---- -- -- 65.48 HOLD Predamage Extended Cost DPC Totals 6556 0.0850 2,212.8900 2.212.8900 PEGASUS AnAAAI1I1 A G PEGASUS TECHNOLOGY. INC. 12806 SCHABARUM AVE, UNIT F IR W INDALE, CA 91706 TEL: 626-337-8600 Fax:626-337-8655 Customer Rite Aid Pat Hayes 30 Hunter Lane Camp Hill, PA 17011 Credit Memo "ate Credit No. 2010/11/8 445 acr: e a is 000000047 Rite Aid - Damage S Outdated Invoice AID Invoice Date 0812012010 Invoice Number D013084446 Period Number: 06 Vendor Number. 43669 C Sort Path 1TT6 AR Number: Bill To: PEGASUS TECHNOLOGY INC 12806 SCHABARUM AVE #F IRWINDALE. CA 91706 Remit To: Rite Aid PO BOX 3165 HARRISBURG, PA 17105-3165 Please include invoice number vnth remittance. Invoice Section: D013064416-17713-1 HOLD j Item Item Predama a Extended Identifier Description Itemi# Quantity Cost DPC Totals 04969658256 LCD TV 71N ST07-B 0134600 11 65 00 00850 715 9350 11 715 9350 Summary of Return/Processing Costs Post Damage Cost Reclamation Center Cost Expense Per Item 0.1110 12210 02870 3.1570 Invoice Total: 720.31 Product listed above in section(s) DEST BURN and HAZ was disposed of at the point of scan due to the damaged condition of the product Product 'isled above in section(s) of COPT and DONA vnU not be returned as per your disposdion request Product Isted above in section of HOLD without an open authorization vntl need to be authorized on Invoice Link for return. This s a listing of items that were processed between 0711412010 and 0811712010 at our Reno. NV reclamation center 4VEB ACCESS KEY 07 7 24-857 56 5425893 169 1of1 pFr:ett tt 000000048 PEGASUS TECHNOLOGY, INC. 12806 SCHABARUM AVE, UNIT F IRWINDALE, CA 91706 TEL: 626-337-8600 Fax:626-337-8655 Customer Rite Aid Pat Hayes 30 Hunter Lane Camp Hill. PA 17011 Credit Memo Date Credit No. 2010/1111 413 13:r All is 000000049 tl? a RITE 'AID6z J Invoice Date. Invoice Number: Period Number. Vendor Number Sort Path: AR Number Bill To: 0812012010 D020394445 06 43669 C 1TT6 PEGASUS TECHNOLOGY INC 12806 SCHABARUM AVE #F IRWINDALE. CA 91706 Invoice Section_D02039444S-1TT6_1 Rite Aid - Damage & Outdated Invoice Please include invoice number with remittance. - -----------HOLD' Item Item Predamage Extended Identifier Description Item# Quantity Coat DPC Totals 04969658256 LCD TV 71N ST07-8 0134600 12 65.00 0.0850 781 0200 12 781 0200 Summary of Return/Processing Costs Post Damage Cost Reclamation Center Cost Expense Per Item 0.1110 13320 0.2870 3.4440 Invoice Total: 786.80 Product listed above in sect on(s) DEST BURN and HAZ was dispcsed of at the point of scan due to the damaged condition of the product. Product listed above in section(s) of COPT and DONA vnll rot be relurred as per your disposition request. Product listed above in section of HOLD. without an open authortzation will need to be aulhorized on invoice Link for return This is a listing of items that were processed between 0711412010 and 08/1712010 at our Rural Hall NC reclamation center NEB ACCESS KEY 07724-857565425893169 1of 1 Remit To: Rite Aid PO BOX 3165 HARRISBURG, PA 17105-3165 oCc A a IC 00000005( Aµti VERIFICATION fhe undersigned, Jing Jian, hereby certifies that: She is authorized to make this verification; The facts set forth in the foregoing Answer with New Matter and Counterclaims are true and correct to the best of her knowledge, information and belief; and 4. She is aware that any false statements herein are made subject to the penalties of 18 Pa.C.S. §4904 relating to unsworn falsification to authorities. PEGASUS TECHNOLOGY, INC. Dated: 4/42 14%. "-?' mg Jian CERTIFICATE OF SERVICE I, Evan C. Pappas, Esquire, of the law firm of Shumaker Williams, P.C., hereby certify that I served a true and correct copy of the foregoing Defendant's Amended Answer with New Matter and Counterclaims to Plaintiff's Complaint on this date by depositing a copy of the same in the possession of the United States mail, first-class, postage prepaid, addressed as follows: Brian P. Downey, Esquire Frederick Alcaro, Esquire PEPPER HAMILTON LLP 100 Market Street, Suite 200 P.O. Box 1181 Harrisburg, PA 17108-1181 SHUMAKER WILLIAMS, P.C. Dated: June 29, 2012 By Evan C. Pappas P.O. Box 88 Harrisburg, PA 17108 (717) 763-1121 Fil.Er~-4rF~G~ , i Fig p~~~K~NOTARI 2~~'? ~~~G 15 ~ t0~ 33 ...,..~eca4 ~.Nt] COUNTY PENNS RITE AID HDQTRS. CORD, IN THE COURT OF COMA+~ON PLEA OF CUMBERLAND COUNTY, PENNSY VANIA Plaintiff, NO. 11-6489 CIVIL TERM vs. PEGASUS TECHNOLOGY, INC. ~ CIVIL ACTION -LAW Defendant. RESPONSE TO PEGASUS TECHN0~.,4GY, INC.'S NEW MATTER AND GQUNTERGLAIMS Plaintiff Rite Aid HDQTRS. Corp. ("Rite Aid"), by and through its attorneys, Pepper Hamilton LLP, hereby files this Answer to New Matter and Counterclaims i response to the New Matter and Counterclaims filed by Pegasus Technology, Inc.: NEW MATTER 68. Rite Aid incorporates the allegations of paragraphs 1 through 67 of its Complaint as fully as those the same were set forth herein at length. 69. Admits. 70. The allegations in this paragraph purport to characterize the terms of written agreements between Rite Aid and Pegasus Technology, Inc., ("Pegasus"). Rite Aid denies all attempts by Pegasus to characterize those agreements ("Contracts") in a manner inconsistent with their terms. By way of further answer, Pegasus guaranteed Rite Aid that Pegasus products would sell in Rite Aid stores and that Pegasus would accept the return of all unsold product and pay various fees outlined in the Contracts. By way of further answer, any payment obligation by Rite Aid was subject to the terms of the Guaranteed Sales Agreement rather than the terms of Exhibit B. 71. Denies as stated. Rite Aid incorporates by reference its response to Paragraph 70 above as fully as though the same were set forth at length herein. 72. Denies. Rite Aid specifically denies that the letter attached as Exhibit accurately describes the terms of the Agreement between Rite Aid and Pegasus. Rite Aid incorporates by reference its response to Paragraph 70 above as fully as though the same were forth at length herein. 73. The allegations contained in this paragraph constitute attempts by to characterize the terms of written documents which speak for themselves. All allegations contrary to the tenors of those documents are specifically denied. 74. Admits. 75. Admits that, in accordance with the Contracts, Rite Aid has only paid certain of the units supplied to date. 76. Admits. 77. Denies. To the contrary, this psy~ent re~~cts the payments made according to the terms of the Agreements between the parties. 78. Admits. 79. Denies. 80. Denies. By way of further answer, this allegation relies an incorrect conclusion regarding the rights and obligations of the parties under the Contracts to which no responsive pleading is required. 81. Denies. By way of further answer, Pegasus attempts to mischaracterize the terms of a written document which speaks for itself. All efforts by Pegasus to characterize that document in a manner inconsistent with its terms are denied. -2- 82. Denies as stated. To the contrary, Rite Aid has only made payment to Pegasus to the extent payments were required to be made under the Contracts. 83. Denies. To the contrary, Rite Aid does not owe Pegasus this sum. 84. Rite Aid admits that because Pegasus refused to honor its obligations under the Contracts, Rite Aid was forced to sell certain Pegasus units for less than $65.00 per unit in an attempt to mitigate Rite Aid's damages. 85. Denies. To the contrary, Rite Aid was authorized to take steps mitigate its damages. 86. Denies. To the contrary, Pegasus is liable to Rite Aid for the damages Rite Aid has incurred as the result of Pegasus' breaches of the Contracts. Still by way of answer, this allegation constitutes a purported conclusion of law to which no responsive is required. Further, any characterizations ofthe GSA, which is a written document that for itself, are denied. 87. The allegations contained in this paragraph constitute purported conclusions of law to which no responsive pleading is required. To the extent tht~t any may be required, Pegasus refused to accept product from Rite Aid until after Rite Aid this litigation. By way of further answer, any characterizations of the GSA, which is a document that speaks for itself, are denied. 88. Rite Aid admits that it has not shipped units back to Pegasus or yet i a returns andlor shipping invoice. By way of further answer, until some point after Rite Aid initiated this litigation, Pegasus refused to accept the return of its product. It was only after Aid initiated litigation that Pegasus agreed to comply with this aspect of the Contracts. -3- 89. After reasonable investigation, Rite Aid is without knowledge or information sufficient to form a belief as to the true of any allegation as to what Pegasus may believe and, therefore, such allegations aze deemed to be denied. 90. Denies. To the contrary, Rite Aid was permitted to mitigate damages. Still by way of further answer, Pegasus's breaches of the Contracts resulted in damages to Aid. To the extent the allegations contained in this paragraph constitute purported of law, no responsive pleading is required. 91. Denies. To the contrary, Rite Aid was permitted to mitigate damages. Still by way of further answer, Pegasus's breaches of the Contracts resulted in damages to Aid. 92. After reasonable investigation, Rite Aid is without knowledge or information sufficient to form a belief as to what "Pegasus expects" and, therefore, such allegation is deemed to be denied. Still by way of fuurther answer, Pegasus is not entitled to receive the monies claimed in this paragraph. By way of further answer, Rite Aid is in the process of returning unsold televisions to Pegasus. 93. Denies as stated. To the contrary, Rite Aid is owed money by Pegasus the result of Pegasus' breaches of the Contracts. Rite Aid is entitled to recover those Rite Aid attempted to mitigate its damages by attempting to sell units at prices the public was willing to pay. 94. The allegations contained in this para~ph constitute purported conclusions of law to which no responsive pleading is required. To the extent that any may be required, Rite Aid denies any suggestion by Pegasus that Rite Aid was not authorized attempt mitigate its damages caused by Pegasus' breaches of the Contracts. By way of -4- answer, any characterizations of the GSA, which is a written document that speaks for itself, denied. 95. The allegations contained in this paragraph constitute purported cor~iusions of law to which no responsive pleading is required. To the extent that any may be required, Rite Aid denies any suggestion by Pegasus that Rite Aid was not authorized attempt mitigate its damages caused by Pegasus' breaches of the Contracts. Still by way of further answer, Rite Aid denies-that it owes the money claimed by Pegasus. 9b. The allegations contained in this paragraph constitute purported conclusions of law to which no responsive pleading is required. To the extent that any may be required, Rite Aid denies any suggestion by Pegasus that Rite Aid was not authorized attempt mitigate its damages caused by Pegasus' breaches of the Contracts. Still by way of further answer, Rite Aid denies that it owes the money claimed by Pegasus. 97. The allegations contained in this paragraph constitute purported conclusions of law to which no responsive pleading is required. To the extent that any may be required, Rite Aid denies any suggestion by Pegasus that Rite Aid was not authorized attempt mitigate its damages caused by Pegasus' breaches of the Contracts. Still by way of further answer, Rite Aid denies that it owes the money claimed by Pegasus. 98. Denies. To the contrary, the damages Rite Aid incurred were the direct results of Pegasus's breaches of Contracts. Still by way of further answer, the allegations contained in this paragraph constitute purported conclusions of law to which no responsive pleading is required. 99. Denies. To the contrary, the damages Rite Aid incurred were the direct result of Pegasus' breaches of Contracts. Still by way of further answer, the allegations -5- contained in this paragraph constitute purported conclusions of law to which no responsive pleading is required. 100. Denies. To the contrary, the damages Rite Aid incurred were the result of Pegasus' breaches of Contracts. Still by way of further answer, the allegations contained in this paragraph constitute purported conclusions of law to which no responsive pleading is required. 101. Denies. To the contrary, the damages Rite Aid incurred were the result of Pegasus' breaches of Contracts. Still by way of further answer, the allegations contained in this paragraph constitute purported conclusions of law to which no responsive pleading is required. 102. Denies. To the contrary, the damages Rite Aid incurred were the direct result of Pegasus' breaches of Contracts. Still by way of further answer, the allegations contained in this paragraph constitute purported conclusions of law to which no responsive pleading is required. 103. Denies. To the contrary, the damages Rite Aid incurred were the direct result of Pegasus' breaches of Contracts. Still by way of further answer, the allegations contained in this paragraph constitute purported conclusions of law to which no responsive pleading is required. 104. Denies. To the contrary, the damages Rite Aid incurred were the direct result of Pegasus' breaches of Contracts. Still by way of further answer, the allegations contained in this paragraph constitute purported conclusions of law to which no responsive pleading is required. -6- 105. Denies. To the contrary, the damages Rite Aid incurred were the direct result of Pegasus' breaches of Contracts. Still by way of further answer, the allegations contained in this paragraph constitute purported conclusions of law to which no responsive pleading is required. 106. Denies. To the contrary, the damages Rite Aid incurred were the direct result of Pegasus' breaches of Contracts. Still by way of further answer, the allegations contained in this paragraph constitute purported conclusions of law to which no responsive pleading is required. 107. Denies. To the contrary, the damages Rite Aid incurred were the direct result of Pegasus' breaches of Contracts. Still by way of fiirther answer, the allegations contained in this paragraph constitute purported conclusions of law to which no responsive pleading is required. 108. Denies. To the contrary, the damages Rite Aid incurred were the direct result of Pegasus' breaches of Contracts. Still by way of further answer, the allegations contained in this paragraph constitute purported conclusions of law to which no responsive pleading is required. 109. Denies. To the contrary, the damages Rite Aid incurred were the direct result of Pegasus' breaches of Contracts. Still by way of further answer, the allegations contained in this paragraph constitute purported conclusions of law to which no responsive pleading is required. 110. Denies. To the contrary, the damages Rite Aid incurred were the direct result of Pegasus' breaches of Contracts. Still by way of further answer, the allegations -7- contained in this paragraph constitute purported conclusions of law to which no responsive pleading is required. 111. Denies. To the contrary, the damages Rite Aid incurred were the direct result of Pegasus' breaches of Contracts. Still by way of farther answer, the allegations contained in this paragraph constitute purported conclusions of law to which no responsive pleadmg is required. COUNTERCLA,IINiS COUNTI BREACH OF CONTRACT 112. Rite Aid incorporates. by reference paragraphs 1 through 67 of its Complaint and paragraphs 68 through 111 above as fully as though the same were set forth at length herein. 113. Admitted in part. Rite Aid admits that it entered into an agreement Pegasus by which Pegasus guaranteed the sale of Pegasus products in Rite Aid stores. Rite denies that Pegasus has satisfied its obligations under the Contracts. Rite Aid denies that B accurately reflects the terms of the agreement between the parties. 114. Denies as stated. By way of further response, Rite Aid incorporates by reference its response to Paragraph 70 above as fully as though the same were set forth at herein. 115. Admits in part and denies in part. Rite Aid specifically denies that B of the Counterclaim accurately reflects the terms of the agreement between the parties. Aid admits that Exhibit A of the Complaint accurately reflects the terms of the agreement between the parties. Rite Aid admits that Pegasus entered into other agreements with Rite -8- Still by way of further answer, Rite Aid incorporates by reference its response to Paragraph above as fully as though the same were set forth at length herein. 116. Rite Aid incorporates its response to Paragraph 73 above as fully as though the same were set forth at length herein. A. Fin to Fav Pegasus for Telewisio-sa Sid 117. Denies. Rite Aid specifically denies that Pegasus satisfied its under the Contrast simply by providing televisions to Rite Aid. To the contrary, Pegasus has breached its obligations under the Contracts. 118. Admits in part and denies as stated in part. Rite Aid admits that it has made payments to Pegasus.. Rite Aid incorporates its response to Paragraph 76 above as fiill}~ as though the same were set forth at length herein. The remaining allegations in this paragraph denied. 119. Denies. Rite Aid incorporates its responses to Paragraphs 78 to 80, inclusive, above as fully as though the same were set forth at length herein. 120. Admits.. Rite Aid incorporates its responses to Paragraphs 78 to $0, inclusive, above as fully as though the same were set forth at length herein. 121. Denies. Rite Aid incorporates its responses to Paragraphs ?8 to 80, inclusive, above as frilly as though the same were set forth ~ length herein. 122. Denies. Rite Aid incorporates its responses to Paragraphs 78 to 80, inclusive, above as fully as though the same were set forth s~ length herein. By way of response, Rite Aid incorporates by reference its response to Paragraph 70 above as fully as though the same were set forth at length herein. 123. Denies. To the contrary, Rite Aid has not breached the Contracts the parties. -9- 124. Denies.. To the contrary, Rite Aid has not breached the Contracts the parties. Still by way of further answer, Pegasus has not suffered any damages as the result the conduct of Rite Aid. B. Stl.the Tekvisfo~a for Leas Tlt Ua~rn Fnkx of 125. Denies. To the contrary, Rite Aid did not agree to sell the televisions $65 per unit. 12b. Denies. To the contrary, no Contract provision provides Pegasus with tl~i authority. 127. Denies. By way of further answer, Rite Aid incorporates its re~onses Paragraphs 125 and 126 above as fully as though the same were set forth at length herein. 128. Denies. By way of further response, Rite Aid incorporates by responses to Paragraphs 122 through 127, inclusive above, as fully as though the same were forth at length herein. C. of GSAJRetNtrns Aeaent 129. Rite Aid admits that Pegasus has quoted accurately from a portion of Guaranteed Sale Agreement. 130. Rite Aid admits that Pegasus has quoted accurately from a portion of Guaranteed Sale Agreement. 131. Admits that Rite Aid has the authority to scan and ship unsalable directly to Pegasus. By way of further answer, the Returns Agreement is a written document, which speaks for itself. 132. Admits that Rite Aid has not yet returned the unsold televisions to Pegasus. By way of further answer, Pegasus refused to accept the unsold televisions until Rite Aid instituted suit. Still by way of further answer, after Rite Aid instituted this litigation, -10- Pegasus agreed to accept the return of the unsold televisions a~ the parties are in the process completing that return. 133. Denies. Rite Aid incorporates by reference its response to Paragraph 1 above as fully as though the same were set forth at length herein. 134. Denies. To the contrary, Rite Aid did not breach the GSA or the Agreement. By way of further answer, Rite Aid incorporates by reference its responses to Paragraphs 131 through 133, inclusive above, as fully as though the same were set forth at herein. 135. Denies. Rite Aid specifically denies that Pegasus has suffered any damages as the result of any action by Rite Aid. WHEREFORE, Rite Aid HDQTRS. Corp. respectfully requests that the Court enter judgment in its favor and against Pegasus Technology, Inc., and that Pegasus' Counterclaim be dismissed with prejudice and that Rite Aid be awarded its fees, costs, .and other relief deemed appropriate by the Court. COUNT II ~NUTION OF VALUEICQI~ CIAL l4PARC,~IV~NT 136. Rite Aid incorporates the allegations of Paragraphs 1 through b7 of its Complaint and Paragraphs 68 through 135 of this response as fully as though the same were forth at length herein. 137. Denies. Rite Aid specifically denies that Pegasus has been damaged any action of Rite Aid. 138. Admits. 139. Rite Aid admits that it attempted to sell Fegasus's televisions in markets across the nation. -11- 140. After reasonable investigation, Rite Aid is without knowledge or information sufficient to form a belief as to the truth of the~allegations contained in this paragraph and, therefore, such allegations are deemed to be denied. By way of fiuther Rite Aid has the right to independently determines the price of resale of Pegasus' products. 141. After reasonable investigation, Rite Aid is without knowledge or information sufficient to form a belief as to the truth of the allegations contained in this paragraph and, therefore, such allegations are deemed to be denied. By way of further Rite Aid has the right to independently determines the price of resale of Pegasus' products. 142. Denies. Rite Aid specifically denies that charging a price for a product that customers are willing to pay makes a statement as to the value or quality of that product. way of further answer, Rite Aid has the right to independently determines the price of resale Pegasus' products. 143. Denies. Rite Aid denies both that it intended to cause harm to Pegasus,'..: that it should have known that the reduction in price would harm Pegasus's business, or that Pegasus' business was harmed by any action of Rite Aid. 144. Denies. Rite Aid incorporates by reference its responses to Paragraphs 141 through 143 above, inclusive, as fully as though the same were set forth at length herein. 145. Denies. By way of further response, Rite Aid incorporates its responses to Paragraphs 129 through 13 5 above as fully as though the same were set forth at length herein. 146. After reasonable investigation, Rite Aid is without knowledge or information to form a belief as to Pegasus' assertion that the portable televisions have lost and, therefore, such allegation is deemed to be denied. By way of further answer, any -12- diminution in the value of Pegasus' product is the direct result of Pegasus's refusal to accept return of the product as requested by Rite Aid. 147. Denies. By way of further answer, Rite Aid incorporates its re~onse Paragraph 146 above as fully as though the same were set forth at length herein. WHEREFORE, Rite Aid HDQTRS. Corp. respectfully requests that the Court enter judgment in its favor and against Pegasus Technology, Inc., and that Pegasus' Counterclaim be dismissed with prejudice and that Rite Aid be awarded its fees, costs, and other relief deemed appropriate by the Court. COUNT III UNausr >~~~~ 148. Rite Aid incorporates the alleg~ona of Paragraphs 1 through 67 of its Complaint and Paragraphs 68 through 147 of this response as fully as though the same were forth at length herein. 149. Denies. To the contrary, Rite Aid has been damaged by Pegasus' to comply with its obligations under the Contracts. 150. Rite Aid incorporates its responses to Paragraphs 74 through 97 as fully~~ as though the same were set forth at length herein. 151. Rite Aid incorporates its responses to Paragraphs 74 through 97 as fully as though the same were set forth at length herein. 152. Rite Aid incorporates its responses to Paragraphs 74 through 97 as fully as though the same were set forth at length herein. 153. Rite Aid incorporates its responses to Paragraphs 74 through 97 as though the same were set forth at length herein. as -13- 154. Rite Aid incorporates its responses to Paragraphs 74 through 97 as fully as though the same were set forth at length herein. 155. Rite Aid denies that it has been benefited by retaining proceeds. To contrary, Rite Aid has been damaged by Pegasus' breaches of the Contracts. Still by way of further answer, Rite Aid incorporates its responses to Paragraphs 74 through 97 as fully as though tl~e same were set forth at length herein. WHEREFORE, Rite Aid HDQTRS. Corp. respectfully requests that the Court enter judgment in its favor and against Pegasus Technology, Inc., and that Pegasus' Counterclaim be dismissed with prejudice and that Rite Aid be awarded its fees, costs, and other relief deemed appropriate by the Court. NEW MATTER Rite Aid hereby alleges the following affirmative defenses in its New Matter. asserting such defenses, Rite Aid assumes no burden not already accorded to it under the law. 156. Pegasus' claims aze barred in whole or in part because they fail to state claim upon which relief can be granted. 157. Pegasus' claims are barred in whole or in part for lack of 158. Pegasus' claims are barred in whole or part by the equitable doctrines waiver, lathes, estoppel, and/or unclean hands. 159. Pegasus' claims aze barred in whole or in part because it has not any compensable damages. 160. Pegasus' claims aze barred because of its failure or inability to perform under the terms of the relevant contract between the parties. 161. Pegasus' claims aze barred in whole or in part for failure to mitigate damages. -14- 162. Pegasus' claims aze barred in whole or in part for its failure to act in faith. 163. Pegasus' claims aze barred in whole or in part because of its own breaches of the agreements with Rite Aid. 164. Pegasus' claims aze barred in whole or in part by the terms of the Guaranteed Sales Agreement andlor Returns Agreement. 165. Rite Aid hereby gives notice that it intends to rely upon such other defenses as may become available or may appeaz during discovery in this case or othervvise, Rite Aid hereby reserves the right to amend this Answer to assert any and all such defenses. WHEREFORE, Rite Aid HDQTRS. Corp. respectfully requests that the Court enter judgment in its favor and against Pegasus Technology, Inc., and that Pegasus' Counterclaim be dismissed with prejudice and that Rite Aid be awazded its fees, costs, and other relief deemed appropriate by the Court. Dated: August 14, 2012 Brian P. Dvwuey (PA 59891) Kathleen Mullen (PA 84604) PEP~'~R HAMILTON LLP 100 Market Street, Suite 200 P.O. I~x' 1181 Harrisburg, PA 17108-1181 Phone: (717) 255-1155 Fax: (717) 238-0575 Email: downeyb~?upepperlaw.com mullenk@p~pperlaw. com Attorney for Pla~r~t 'R~ti Aid HTRS: Corp. -15- vE~ca~oly I, Kathleen A. Mullen, state that I am counsel for Plaintiff Rite Aid HDQTRS. Corp. in this motion, that I am authorized to make this verification on its behalf and that the statements made in the foregoing Rite Aid HDQTRS Corp. 's Response to Pegasus Inc. 's New Matter and Counterclaims aze true and correct to the best of my knowledge, information and belief. I understand that the statements aze made subject to the penalties of 1 Pa.C.S. § 4409 (unsworn falsification to authorities). ~~ . ~- Kathleen A. Mullen Attorney for Plaintiff Rite Aid HDQTRS. Corp. DATED: August 14, 2012 CERTIFICATE OF SERVICE I hereby certify that on August 14, 2012, a copy of the foregoing document served by United States first class mail and email, addressed as follows: Evan C. Pappas, Esquire Shumaker Williams, P.C. 3425 Simpson Ferry Road Camp Hiil, PA 17011 Kathleen A. Mullen `112 AUU 20 A~4 ~~ 30 rttM~~RI AHD COUNTY RITE AID HDQTRS. CORP, vs. Plaintiff, PEGASUS TECHNOLOGY, INC. Defendant. IN THE COURT OF COMMON PLEA OF CUMBERLAND COUNTY, PENNSY VANIA NO. 11-6489 CIVIL TERM CIVIL ACTION -LAW PRAECIPE TO SUBSTITUTE TO THE PROTHONOTARY: Please substitute the attached original verification for the verification origi attached to Rite Aid HDQTRS. Corp.'s Response to Pegasus Technology, Inc.'s New Matter a Counterclaims, filed on August 15, 2012. Dated: August 17, 2012 Brian P. Downey (PA 59891) Kathleen Mullen (PA 84604) PEPPER HAMILTON LLP 100 Market Street, Suite 200 P.O. Box 1181 Harrisburg, PA 17108-1181 Phone: (717) 255-1155 Fax: (717) 238-0575 Email: downeyb@pepperlaw.com mullenk@pepperlaw. com Attorney for Plaintiff Rite Aid HDQTRS. Corp. VERIFICATION I, Paul Pisauro, hereby state that I am authorized to make this verification on behalf of Rite Aid HDQTRS. Corp. I verify that the foregoing document was prepared with assistance and advice of counsel, and in reliance upon counsel's advice; that the document, subject to inadvertent or undiscovered errors, is based upon and therefore limited by the and information still in existence, presently recollected and thus far discovered in preparation this document; and that subject to the limitations set forth herein, the statements contained in document are true and correct to the best of his knowledge, information and belief. The language of the foregoing document is that of counsel. It is understood that the statements herein are made subject to the penalties of 18 Pa. C.S.A. § 4904 relating to unsworn falsification to authorities. Paul Pisauro ~i~vl. ~S,/-~c>fi~ CERTIFICATE OF SERVICE I hereby certify that on August 17, 2012, a copy of the foregoing document served by United States first class mail, addressed as follows: Evan C. Pappas, Esquire Shumaker Williams, P.C. 3425 Simpson Ferry Road Camp Hill, PA 17011 t~ Kathleen A. Mullen RITE AID HDQTRS. CORP. IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY,PENNSYLVANIA Plaintiff, VS. CIVIL ACTION NO. 11-6489 � ) -a PEGASUS TECHNOLOGY, INC., r-°n� a► rn- • cent"' ." o � Defendant. c© N o zo Z5 CD M CERTIFICATE PREREQUISITE TO SERVICE ��-4 ° OF SUBPOENA PURSUANT TO RULE 4009.22 As a prerequisite to service of a subpoena for documents and things pursuant to Rule 4009.22,plaintiff's counsel certifies that Pegasus Technology, Inc. has agreed to waive the notice period pursuant to Pa. R. Civ. P. 4009.21 et seq. A copy of the Notice of Intent is attached as Exhibit A. r Dated: April 11, 2013 Brian P. Downey(PA 59891) Kathleen A. Mullen(PA 84604) PEPPER HAMILTON LLP 100 Market Street, Suite 200 P.O. Box 1181 Harrisburg, PA 17108-1181 Phone: (717)255-1155 Fax: (717)238-0575 Email: downeyb @pepperlaw.com mullenk@pepperlaw.com Attorneys for Plaintiff Rite Aid Hdatrs. Corp. RITE AID HDQTRS. CORP. IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY,PENNSYLVANIA Plaintiff, VS. CIVIL ACTION NO. 11-6489 PEGASUS TECHNOLOGY, INC., Defendant. : PLAINTIFF'S NOTICE OF INTENT TO SERVE A SUBPOENA TO PRODUCE DOCUMENTS AND THINGS FOR DISCOVERY PURSUANT TO RULE 4009.21 OF THE PENNSYLVANIA RULES OF CIVIL PROCEDURE TO: COUNSEL FOR DEFENDANT Plaintiff Rite Aid Hdqtrs. Corp. intends to serve a subpoena identical to the one that is attached to this Notice. You have twenty (20) days from the date listed below in which to file of record and serve upon the undersigned an objection to the subpoena. If no objection is made the subpoena may be served. Date: April 5, 2013 Brian P. Downey(PA 59891) Kathleen A. Mullen(PA 84604) PEPPER HAMILTON LLP 100 Market Street, Suite 200 P. O. Box 1181 Harrisburg, PA 17108-1181 Phone: 717.255.1155 Fax: 717.238.0575 Email: downeyb @pepperlaw.com mullenk @pepperlaw.com Attorneys for Plaintiff Rite Aid Hdgtrs. Corp. COMMONWEALTH OF PENNSYLVANIA COUNTY OF CUMBERLAND RITE AID HDQTRS. CORP. Plaintiff File No. 11-6489 VS; PEGASUS TECHNOLOGY, INC. CIVIL ACTION - LAW Defendant SUBPOENA TO ATTEND AND TESTIFY TO: DOUBLE D DIVERSIFIED, INC. 8400 E Prentice Ave., Suite 605, Greenwood Village, CO 80111 1. You are ordered by the court to come to Pepper Hamilton LLP,Suite 200, 100 Market Street (Specify Courtroom or other place) at Harrisburg , Dauphin County, Pennsylvania, on May 15,2013 at 10:00 o'clock, A. K. to testify on behalf of Plaintiff Rite Aid Hdqtrs. Corp. in the above case, and to remain until excused. 2. And bring with you the following: See attached Rider. If you fail to attend or to produce the documents or things required by this subpoena, you may be subject to the sanctions authorized by Rule 234.5 of the Pennsylvania Rules of Civil Procedure, including but not limited to costs, attorney fees and imprisonment. REQUESTED BY A PARTY/ATTORNEY IN COMPLIANCE WITH Pa.R.C.P.No.234.2(a): Name: Kathleen A.Mullen Address: Pepper Hamilton LLP Suite 200, 100 Market Street,P.O.Box 1181,Harrisb Telephone: (717)255-1155 Supreme Court ID# PA 84604 BY THE COURT: Prothonotary/Clerk, Civil Division Date: Seal of the Court Deputy, Official Note: This form of subpoena shall be used whenever a subpoena is issuable,including hearings in connection with depositions and before arbitrators,masters,commissioners,etc. in compliance with Pa.R.C.P.No.234.1. If a subpoena for a production of documents,records or things is desired,complete paragraph 2. (Eff. 7/97) SUBPOENA RIDER I. Definitions A. "You"or"Double D" shall mean Double D Diversified, Inc. and/or any subsidiaries, affiliates,parent corporations, officers, employees, agents, attorneys, representatives or any other persons or entities acting or purporting to act in concert with or on Double D Diversified's behalf. B. "Plaintiff' or"Rite Aid" shall include Plaintiff Rite Aid Hdqtrs. Corp., along with any subsidiary or affiliate and where applicable, Rite Aid's officers, employees,agents, attorneys, representatives or any other persons or entities acting or purporting to act in concert with or on Rite Aid's behalf. C. "Defendant"or"Pegasus" shall mean Pegasus Technology, Inc. and, where applicable any officers, employees, agents, attorneys, representatives or any other persons or entities acting or purporting to act on in concert with or on Defendant's behalf. D. "Document" shall be defined to the broadest extent permitted by the applicable rules and shall include, without limitation, every writing or record of every type and description that is or has been in your possession, control or custody, or of which you have knowledge, including but not limited to videotapes,photographs, charts, notes, records, reports, letters, memoranda, books,magazines, notebooks, diaries,papers, agreements, contracts, bills, statements, invoices, analyses, transcripts, correspondence, telegrams, a mails, drafts, data processing discs or tapes and computer produced interpretations thereof, instructions, announcements and sound recordings and transcripts thereof. Document shall also include all copies that are not identical to the original, such as those bearing marginal comments, alterations or other notations not present on the original document as originally written, typed or otherwise prepared. E. "Related to,""relating to,"or"relates to"means supporting, connected with, regarding, constituting, containing, discussing, concerning, referring to, evidencing, or in any way pertaining to the subject matter of the Request for Production where used. II. Documents To Be Produced I. Any and all documents in any way related to Double D's representation of Pegasus in any and all business dealings with Rite Aid, including but not limited to the negotiation and/or execution of any and all contracts between Pegasus and Rite Aid, sales of Pegasus' products to Rite Aid, returns or attempted returns of products by Rite Aid to Pegasus, and/or any and all discussions of money owed or claimed to be owed as between Pegasus and Rite Aid; 2. Any and all documents in any way related to Pegasus' business dealings with Rite Aid, including but not limited to the negotiation and/or execution of any and all contracts between Pegasus and Rite Aid, sales of Pegasus' products to Rite Aid,returns or attempted returns of products by Rite Aid to Pegasus, and/or any and all discussions of money owed or claimed to be owed as between Pegasus and Rite Aid; 3. Any and all documents in any way related to any communications between Double D, including its agents, employees, officers or directors, or any and all persons acting on its behalf,and Pegasus including its agents,employees,officers or directors, or any and all persons acting on its behalf, in any way concerning Pegasus' business dealings with Rite Aid, including but not limited to the negotiation and/or execution of any and all contracts between Pegasus and Rite Aid, sales of Pegasus' products to Rite Aid, returns or attempted returns of products by Rite Aid to Pegasus, Pegasus' compliance or failure to comply with state electronic recycling laws and/or any and all money owed or claimed to be owed as between Pegasus and Rite Aid; and 4. Any and all documents in any way related to any communications between Double D, including its agents,employees,officers or directors,or any and all persons acting on its behalf, and Rite Aid, including its agents,employees, officers or directors, or any and all persons acting on its behalf, in any way concerning Pegasus' business dealings with Rite Aid, including but not limited to the negotiation and/or execution of any and all contracts between Pegasus and Rite Aid, sales of Pegasus' products to Rite Aid,returns or attempted returns of products by Rite Aid to Pegasus, Pegasus' compliance or failure to comply with state electronic recycling laws and/or any and all money owed or claimed to be owed as between Pegasus and Rite Aid. -2- CERTIFICATE OF SERVICE I, Kathleen A. Mullen, hereby certify that on April 5, 2013, a true and correct copy of the foregoing Notice of Intent to Serve Subpoena was served via First Class U. S. Mail, postage prepaid upon the following: Evan C. Pappas, Esquire Shumaker Williams, P.C. 3425 Simpson Ferry Road Camp Hill, PA 17011 Kathleen A. Mullen(PA 84604) CERTIFICATE OF SERVICE I, Kathleen A. Mullen, hereby certify that on April 11, 2013, a true and correct copy of the foregoing Certificate Prerequisite was served via First Class, U.S. Mail,postage prepaid, upon the following: Evan C. Pappas, Esquire Shumaker Williams, P.C. 3425 Simpson Ferry Road Camp Hill, PA 17011 Kathleen A. Mullen(PA 84604) RITE AID HDQTRS. CORP., IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA C: � w", V. No. 11-6489 Civil Term n -s PEGASUS TECHNOLOGY, INC., Defendant CIVIL ACTION- LAW r-;z ZX cz PETITION FOR LEAVE OF COURT TO WITHDRAW ' AS COUNSEL PURSUANT TO PA.R.C.P. 1012(b) AND NOW COMES Evan C. Pappas, Esquire, Kenneth J. McDermott, Esquire, and the law firm of Shumaker Williams, P.C. (collectively referred to as "Counsel"), to state the following Petition for Leave of Court Pursuant to Pa.R.C.P. 1012(b) to Withdraw as Counsel for Defendant, Pegasus Technology, Inc. ("Defendant"): 1. This action was commenced by Plaintiffs filing of a Complaint on or about August 17, 2011. 2. Counsel were retained by Defendant to defend its interests in the above matter. 3. Counsel represented Defendant by filing an Answer with New Matter to Plaintiffs Complaint, serving discovery and responding to discovery, and attending a mediation conference. 4. Counsel's representation of Defendant was at all times zealous and diligent. 5. During the course of their representation of Defendant, Counsel incurred attorneys' fees and expenses. 6. Defendant has not paid Counsel in full for the attorneys' fees and expenses incurred in this action. 7. On April 15, 2013, Defendant emailed Counsel indicating that Counsel should stop work on the case and that Defendant would retain new counsel. 8. By letter dated June 19, 2013, Counsel informed Defendant that since its accounts were past due and since Defendant has not retained replacement counsel, Counsel would move to withdraw as its counsel sometime after July 1, 2013. A true and correct copy of the June 19, 2013 letter is attached hereto as Exhibit"A". 9. No response was received from Defendant to Counsel's June 19, 2013 letter. 10. Counsel believes that Defendant would not be unduly prejudiced by having to obtain new counsel to represent it in this action as this action has not been scheduled for trial. 11. Counsel for Plaintiff, Rite Aid HDQTRS. Corp., concurs in the filing of this Petition provided that Defendant retain new counsel concurrently with the entry of any order permitting Evan C. Pappas, Esquire, Kenneth J. McDermott, Esquire, and the law firm of Shumaker Williams, P.C. to withdraw. WHEREFORE, Evan C. Pappas, Esquire, Kenneth J. McDermott, Esquire, and the law firm of Shumaker Williams, P.C., respectfully request that this Honorable Court grant their Petition for Leave of Court Pursuant to Pa.R.C.P. 1012(b)to Withdraw as Counsel. SHUMAKER WILLIAMS, P.C. Dated: July L 6, 2013 By v - ppas, I.D. #200103 Kenneth J. McDermott, I.D. #205555 P.O. Box 88 Harrisburg, PA 17108 (717) 763-1121 :254906 2 .. l �J � i &_ SHUMAKER WRITER'S DIRECT DIAL NUMBER: 717.909.1655 MILLI AMS P.C. WRITER'S E-MAIL: pappas @shumakerwilliams.com Admitted to Pennsylvania and New Jersey Bars - LEGAL AND BUSINESS COUNSEL June 19, 2013 Jing Jian PEGASUS TECHNOLOGY INC. 12806 Schabarum Ave. #F Irwindale, CA 91706 Via First-Class Mail and Email to jing @pegasusus.com Re: Rite Aid HDQTRS. Corp. v. Pegasus Technology, Inc. C.C.P. Cumberland County,No. 11-6489 Our File No. 11-857(2) Dear Jing: We are writing to determine the status of our representation of Pegasus. At this time we have still not heard back form you regarding whether Pegasus has retained another lawyer or whether this firm will continue its representation of Pegasus. During this delay, we have been asked by Rite Aid's attorney to respond to questions about the deposition of Mr. Bao, including a request for documents related to Mr. Bao, and a demand that Pegasus pay for the translator for Mr. Bao's deposition. Since we have been told not to perform any further work on this matter, we are not able to resolve these and other issues that are necessary to address. We are concerned that our inability to handle ongoing matters for Pegasus and Pegasus' failure to hire replacement counsel is causing prejudice to the case and our ability to vigorously defend against Rite Aid's allegations. Please let us know by July 1, 2013 whether we will be continuing our representation of Pegasus. We would also like to remind you that invoices are severely past due and must be paid as soon as possible. The total amount past due and owing to date is $4,229.60. We would very much enjoy continuing our representation of Pegasus and look forward to hearing from you soon regarding your decision. However, if we do not hear from you by July 1, 2013, we will be forced to file a Motion to withdraw our representation of Pegasus soon thereafter. Sincerely, CORRESPONDENCE P.O.BOX 8; HARRISBURG,PA 1710 B Y van C. Pappas PHONE: 717.763.112 FAX: 717.763.741 ECP/mac:254533 CAMP HILL, PA 717.763.1121 STATE COLLEGE, PA 814.234.3211 TOWSON, MD 410.825.5223 YORK, PA 717.848.5134 mail @shumakerwilliams.com VERIFICATION The undersigned, Evan C. Pappas, Esquire, hereby verifies and states that: 1. He is counsel for Defendant, Pegasus Technology Inc., in the within action; 2. The facts set forth in the foregoing Petition for Leave of Court Pursuant to Pa.R.C.P. 1012(b) to Withdraw as Counsel are true and correct to the best of his knowledge, information, and belief; and 3. He is aware that any false statements herein are made subject to the penalties of 18 Pa.C.S.A. §4904, relating to unsworn falsification to authorities. SHUMAKER WILLIAM P.C. Dated: Julyl�!, 2013 By Evan C. Pappas, I.D. #200103 P.O. BOX 88 Harrisburg, PA 17108 (717) 763-1121 CERTIFICATE OF SERVICE I, Evan C. Pappas, Esquire, of the law firm of Shumaker Williams, P.C., hereby certify that I served a true and correct copy of the foregoing Petition for Leave of Court Pursuant to Pa.R.C.P. 1012(b) to Withdraw as Counsel this date by depositing a copy of the same in the Possession of the United States mail, first-class, postage prepaid, addressed as follows: Kathleen A. Mullen, Esquire Pepper Hamilton LLP Suite 200 100 Market Street P.O. Box 1181 Harrisburg, PA 17108-1181 Attorney for Plaintiff Pegasus Technology Inc. 12806 Schabarum Ave. #F Irwindale, CA 91706 SHUMAKER WILLIAMS, P.C. Dated: July& 2013 By 0.77 \_\ _Kennet . Mc P.O. Box 88 Harrisburg, PA 17108 (717) 763-1121 RITE AID HDQTRS. CORP., IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA V. No. 11-6489 Civil Tenn PEGASUS TECHNOLOGY, INC., -Zia Z3 —i MM c— 'T1 Defendant CIVIL ACTION- LAW ;rm C= r;i-- ;z-;D r-- -v cf)r– — :,73 <:r> 0A CD r ;Z: --4(7) ORDER C)cj Z? f � AND NOW, this day of 2013, upon consideration of the TKition 6 r, Leave of Court Pursuant to Pa.R.C.P. 1012(b) to Withdraw as Counsel, IT IS HEREBY ORDERED THAT: (1) A Rule is issued upon Respondents, Rite Aid HDQTRS. Corp. and Pegasus Technology, Inc., to show cause, if any they may have, why Evan C. Pappas, Esquire, Kenneth J. McDermott, Esquire, and the law firm of Shumaker Williams, P.C., should not be granted leave to withdraw as counsel; (2) Respondents shall file an answer to the Petition within twenty(20) days of service of this Order; (3) The Petition shall be decided under Pa.R.C.P. 206.7. (4) Notice of the entry of this Order shall be provided to all parties by Petitioner. BY THE COURT: fly J. 4,van C. Pappas,Esquire, Shumaker Williams,P.C.,P.O. Box 88, Harrisburg,PA 17108 ✓kathleen A. Mullen,Esquire, P.O. Box 1181, Harrisburg, PA 17108-1181 t./Pegasus Technology Inc., 12806 Schabarum Ave.#F, Irwindale, CA 91706 RITE AID HDQTRS. CORP. : IN THE COURT OF COMMON PLEAS OF : CUMBERLAND COUNTY,PENNSYLVANIA Plaintiff, vs. : CIVIL ACTION NO. 11-6489 PEGASUS TECHNOLOGY, INC., i • Defendant. • - RITE AID HDQTRS. CORP.'S RESPONSE TO c THE RULE TO SHOW CAUSE AS TO WHY DEFENDANT'S = " COUNSEL SHOULD NOT BE GRANTED LEAVE TO WITHDRAW Plaintiff Rite Aid HDQTRS. Corp. ("Rite Aid"), by and through its undersigned counsel, hereby responds to the Rule To Show Cause issued by the Court on July 18, 2013 as follows: 1. This matter was commenced by Rite Aid on August 17, 2011. 2. Discovery is ongoing between the parties. Rite Aid has served a corporate designee deposition notice on Pegasus for August 27, 2013. 3. Rite Aid has no objection to the Petition to Withdraw filed by Messrs. Pappas and McDermott and the firm of Shumaker Williams, P.C. so long as Defendant Pegasus Technology, Inc. ("Pegasus") is able to substitute replacement counsel.. 4. Because it is a corporation, Pegasus cannot proceed pro se in this action. See Westmoreland County v. RTA Group, Inc., 767 A.2d 1144, 1149, n. 8 (Pa. Commw. Ct.) (noting it is "well-established law"that nonattorneys may not represent corporations and other unincorporated associations), app. denied, 788 A.2d 382 (Pa. 2001); Walacavage v. Excel!2000, Inc., 480 A.2d 281, 284-85 (Pa. Super. 1984) (holding that"law is clear"that corporation may appear in court only through an attorney admitted to practice before the court). 5. Any delay in Pegasus' obtaining of replacement counsel will cause Rite Aid prejudice as Rite Aid seeks to complete discovery and promptly resolve this matter. 6. As such, Rite Aid would respectfully request that the Court require that Pegasus retain replacement counsel within fifteen (15) days of the date of any order permitting Pegasus' current counsel to withdraw or suffer consequences including default and dismissal of Pegasus' counterclaim. Respectfully submitted, Dated: July 25, 2013 Brian P. Downey (PA 59891) Kathleen A. Mullen(PA 84604) PEPPER HAMILTON LLP 100 Market Street, Suite 200 P.O. Box 1181 Harrisburg, PA 17108-1181 Phone: (717) 255-1155 Fax: (717) 238-0575 Email: downeyb @pepperlaw.comn mullenk@pepperlaw.com hullt @pepperlaw.com Attorneys for Plaintiff Rite Aid Hdqtrs. Corp. -2- CERTIFICATE OF SERVICE I hereby certify that on July 25 2013, a copy of the foregoing was served by United States first class mail, postage prepaid, addressed as follows: Evan C. Pappas, Esquire Shumaker Williams, P.C. 3425 Simpson Ferry Road Camp Hill, PA 17011 Pegasus Technology, Inc. 12806 Schabarum Ave, #F Irwindale, CA 91706 Kathleen A. Mullen RITE AID HDQTRS. CORP. : IN THE COURT OF COMMON PLEAS OF : CUMBERLAND COUNTY,PENNSYLVANIA Plaintiff, vs. : CIVIL ACTION NO. 11-6489 • PEGASUS TECHNOLOGY, INC., • Defendant. ORDER AND NOW, this day of , 2013, upon consideration of Defendant's Counsel's Petition for Leave of Court to Withdraw as Counsel Pursuant to Pa. R.C.P. 1012(b) and Rite Aid HDQTRS. Corp.'s Response, it is hereby ORDERED that Defendant's Motion is GRANTED on the condition that Pegasus retain replacement counsel within fifteen (15) days of the date of this order or suffer consequences including default and dismissal of Pegasus' counterclaim. BY THE COURT: J. Distribution List: Kathleen A. Mullen, Esquire Pepper Hamilton LLP Suite 200, 100 Market Street P.O. Box 1181 Harrisburg, PA 17108-1181 Evan C. Pappas, Esquire Shumaker Williams, P.C. 3425 Simpson Ferry Road Camp Hill, PA 17011 Pegasus Technology, Inc. 12806 Schabarum Ave, #F Irwindale, CA 91706 Brian P.Downey(PA 59891) OF HE PRO T HONO ifi FF y Kathleen A. Mullen(PA 84604) PEPPER HAMILTON LLP 2013 SEP 26 AN 10i 0 7 100 Market Street, Suite 200 PO Box 1181 CUMBERLAND COUNTY Harrisburg,PA 17108-1181 PENNS YLVANIA 717.255.1155 717.238.0575 (fax) Attorneys for Plaintiff Rite Aid Hdgtrs. Corp. RITE AID HDQTRS. CORP., IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff, VS. CIVIL ACTION NO. 11-6489—Civil PEGASUS TECHNOLOGY, INC. Defendant. JOINT PRAECIPE TO DISCONTINUE TO THE PROTHONOTARY: Please mark all claims and counterclaims in the above-captioned matter settled and discontinued with prejudice pursuant to Pa. R.C.P. 229. Respectfully submitted, ZEvan . . ' Tian P. D ey (PA 9 ­1� een A. ullen (PA 604} Shumaker, Williams, P.C. PEP N1L 3425 Simpson Ferry Road 100 Market Street, Suite 200 Camp Hill, PA 17011 P.O. Box 1181 Harrisburg, PA 17108-1181 Attorneys for Defendant Attorneys for Plaintiff