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HomeMy WebLinkAbout04-5089TUCKER ARENSBERG, P.C. By: F. Stephenson Matthes PA I.D. No. 67408 111 North Front Street P.O. Box 889 Harrisburg, PA 17108-0889 Telephone: 717-234-4121 Facsimile: 717-232-6802 THE LEGACY BANK, 2600 Commerce Drive Harrisburg, PA 17110, Plaintiff, HEALTHCORE, LLC 47 West Pomfret Street Carlisle, PA 17013, Defendant. COURT OF COMMON PLEAS CUMBERLAND COUNTY CIVIL DIVISION NO. 4~/./'_ ENTRY OF APPEARANCE PRAECIPE FOR ASSESSMENT OF DAMAGES AND CONFESSION OF JUDGMENT TO THE PROTHONOTARY: Kindly enter our appearance for and on behalf of the Defendant above named. Pursuant to the authority contained in the Warrant of Attorney separately set forth in the Loan Agreement dated May 5, 2003, a true and correct copy of which is attached as Exhibit A to the Complaint filed in this action, we hereby appear for the Defendant in this matter, HealthCore, LLC, and confess judgment authorized, in favor of the Plaintiff and against the Defendant, as follows: DAMAGES ARE ASSESSED AS FOLLOWS: Principal balance under the Note/Loan Agreement dated May 5, 2003 as of August 5, 2004 Interest through August 5, 2004 $300,000.00 2,614.59 $302,614.59' *Together with all late charges and reasonable attorneys' fees as per Loan Agreement (to be determined) Dated: 72448.1 ~A kD. No. 67408 111 North Front Street P.O. Box 889 Harrisburg, PA 17108-0889 Telephone: 717-234-4121 Facsimile: 717-232-6802 Attorneys for Plaintiff, The Legacy Bank -2- TUCKER ARENSBERG, P.C. By: F. Stephenson Matthes PA I.D. No. 87408 111 North Front Street P.O. Box 889 Harrisburg, PA 17108-0889 Telephone: 717-234-4121 Facsimile: 717-232-6802 THE LEGACY BANK, 2600 Commerce Drive Harrisburg, PA 17110, Plaintiff, COURT OFCOMMONPLEAS CUMBERLAND COUNTY v. CIVIL DIVISION Defendant. HEALTHCORE, LLC 47 West Pomfret Street Carlisle, PA 17013, NO. COMPLAINT IN CONFESSION OF JUDGMENT Plaintiff, The Legacy Bank (the "Bank"), by and through its attorneys, Tucker Arensberg, P.C., files this Complaint for judgment by confession pursuant to Pennsylvania Rules of Civil Procedure 2950-2956 and, in support hereof, states as follows: 1. The Bank is a national banking association with an address at 2600 Commerce Drive, Harrisburg, Pennsylvania 17110. 2. Defendant, HealthCore, LLC, is a Pennsylvania corporation with a last known address at 47 West Pomfret Street, Carlisle, Pennsylvania 17013. 3. The Defendant executed that certain Note/Loan Agreement dated May 5, 2003 (the "Note") pursuant to which the Defendant agreed to all terms and of payment and all other conditions thereunder. True and correct copies of the Note/Loan Agreements are attached hereto and incorporated herein as Exhibits "A". 4. The Note authorized the confession of judgment against the Defendant. 5. As a result (among other things) Borrower's failure to pay certain amounts as and when due under the Agreements, events of default occurred under the Agreements. 6. Pursuant to the terms of the Agreements, upon the occurrence of an event of default, the Bank was authorized to declare all amounts payable under the Agreements to be immediately due and payable. 7. On or about August 10, 2004, the Bank sent letters to Borrower, notifying the Borrower of the occurrence of events of default under the Agreements (the "Default Letters") and declaring the unpaid principal amount of the Agreements, interest accrued thereon, and all other amounts owing under the Agreements to be immediately due and payable in full. True and correct copies of the Default Letter are attached hereto and incorporated herein by reference as Exhibit "B". 8. Notwithstanding default and demand, the Borrower has not paid the full amounts owed to the Bank under the Agreement. 9. Pursuant to the terms of the Agreements, upon the occurrence of an event of default under the Note, the Bank may appear for and confess judgment against the Defendant for the amounts due and owing under the Note. 10. Under the terms of the Note, the Bank is entitled to recover from the Defendant the costs of any suit, including attorneys' fees. 11. Under the terms of the Note, the Defendant agreed that the Courts of Common Pleas of the Commonwealth of Pennsylvania and any United States District Court in Pennsylvania shall have jurisdiction with respect to matters involving the Note. 12. As of August 5, 2004, the amounts due and owing by the Defendant to the Bank under the Note are as follows: Principal balance under the Note/Loan Agreement dated May 5, 2003 as of August 5, 2002 Interest through August 5, 2004 $300,000.00 2,614.59 $302,614.59' *Together with all late charges and reasonable attorneys' fees as per Loan Agreement (to be determined) 13. The Note has not been assigned by the Bank. 14. The Bank's claims against the Defendant are not based upon a residential mortgage and Act 6 does not apply. 15. No judgment has been entered on the Note in any jurisdiction. 16. The confession of judgment provision appearing in each of the Notes is less than twenty (20) years old. 17. Judgment in favor of the Bank and against the Defendant is not being entered against a natural person in a consumer credit transaction. -3- 18. Judgment in favor of the Bank and against the Defendant as demanded is authorized by the confession of judgment provisions contained in the Note. WHEREFORE, the Bank, as authorized by the Warrant of Attorney contained in the Note, hereby demands that judgment by confession be entered in its favor and against the Defendant, in the amount of $302,614.59, plus interest accruing after August 5, 2004, plus costs and attorneys' fees and requests such other and further relief as the Court may deem proper. Dated: /~ ~ ,,'~/ 72487.1 ~CKEI ~ENSBERG, P-C. P.O. Box 889 Harrisburg, PA 17108-0889 Telephone: 717-234-4121 Facsimile: 717-232-6802 Attorneys for Plaintiff, The Legacy Bank -4- CERTIFICATE OF SERVICE AND NOW, this ~ day of (~(_..~{~ , 2004, I, Dawn T. Heilman, Legal Secretary to F. Stephenson Matthes, Esquire, for the firm of Tucker Arensberg, P.C., hereby certify that I have this day served a true and correct copy of the within document, by mailing same by U.S. Mail, Certified Return Receipt, postage prepaid, addressed as follows: HealthCore, LLC 47 West Pomfret Street Carlisle, PA 17013 72101.1 LOAN NUMB~.R L~ ~AME ACCT. NUMBER aTE DATE INn'[ALS 1001-01575 HealthCare LLC 05/05/03 RM NOTE AMOUNT {NDEX Iw/Margin) RATE MATURITY DATE LOAN PURPOSE $300,000.00 Wall Street Journal Prime plus 5.25% Payable on Demand Commercial 1.000% PROMISSORY NOTE (Commercial - Revolving Drew - Variatile Ra~e) DATE AND PARTIES. The date of this Promissory Note (Note) is May 5, 2003. The pa~ies and their addresses are: LENDER: THE LEGACY BANK 2500 Commerce Drive Harrisburg, Pennsylvania 17110 Telephone: (717) ~41-3400 SORROWER: HEALTHCORE LLC a Pennsylvania Corporation 47 West Pomfret Street Carlisle, Pennsylvania 17013 1. DEFINITIONS. As used in this No~e, the terms have the fdilewlng meanings: from fime to time under the terms of this Note up to the maximum outstanding principal balance of $300,000.00 (P~inci~al}, plus interest from the date of disbursement, on the unpaid outstanding PrincJpei balance until paid in full. increase three percent (3%) during the period which noticed default continues. Such default interest rate shall apply to the ou~anding principal balance of the longer available, you wilr SUbstrata a similar index. You wilt give me notice of your choice, {3} Calculation Of Change. On each Change Date, you wilJ calculste the interest Rate. which will he the Current index plus 1.000 pertain. The reeult of HealthCare LLC ~,. ADDITIONAL CHARGES. As additional c~ aeration, I agree to pay, or have paid, the fees and char6 red on the APPENDIX: FEES AND CHARGES, which is 6. GOVERNIND AGREEMENT. This Note is further governed by the Commercial Loan Agreement exectJted between you and me as par: of this Loan, as modified. shall be payable monthly on any unpaid princlpal balance on the 5th of each month beginning June 5, 2003_ Security Agreement - HeatthCore LLC HealthCore LLC 11. ASSUMPTIONS. Someone buying the Prope~y cannot assume the obligation. You may decrare the entire balance of the Note to be immediately due and payable upon the creation of, or contract for the creation of, any lien, encumbrance, or transfer of the Property. 12. WAIVERS AND CONSENT. To the extent not prohibited by law, I waive protest, presentment for payment, demand, notice of acceleration, notice of intent to accelerate and notice of dishonc~. A. Additional Waivers By ~o~ower. in addition, I, and any party to this Note and Loan, to the extent permitted by ~aw, consent to certain actions you may take, and generally waive defenses that may be available based on these actions or based on the status of a party to this Note. Ill You may renew or extend payments on this Note, regardless of the number of such renewals or extensions. [E! You may release any Borrower, endorser, guarantor, surety, accommodation maker or any other co-signer. 13} You may release, substitute or impair any Proper:y securing th~s Note. {41 You, or any institu~on participating in this Note, may invoke your right of set-off. lEi You may enter into any sales, repurchases or participations of this Note to any person in any amounts and I waive notice of such sales, repurchases or participations, (6) I agree that any of us signing this Note as a Borrower is authorized to modify the terms of this Note or any instrument securing, guarantying ~r relating 13. APPUCABLE LAW. This Note is governed by the laws of Pennsylvania, the United States of America and to the extent required, by the laws of the jurisdiction law. Any provision that appoints you as an agent is not subje~ to the provisions of 20 Pa.C.S.A. Section 5601 et seq. (Chapter 56; Decedents, Estates and 14. JDINT AND INDIVIDUAL LIABILITY AND ~LlCCE~ORS. My obligation to pay this Loan is independent of the obligation of any other person who has lS. AMENDMENT, INTEGRATION AND SEVERABIM'i-~. This Note may not be amended or modified by oral agreement. No amendment or modification of this Note 16. INTERPRETATION. Whenever u~ed, the singular includes the plural ~nd the plural includes the singular. The section headings are for convenience only amd are 17. NOTICE, FINANCIAL REPORTS AND ADDITIONAL DOCUMENTS. Unless othe~'wise required by law, any notice will be given by delivering it or mailing it by first FieaithCore LLC PA/4fkachura00623900003872011050603N e1996 Sankers Systems, inc., St. Cloud, MN E,,~=~M 19. ERRORS AND OMISSIONS. I agree, f re. .ted by you. to fully cooperate in the co.action, if nece·. in the reasonable discretion of you of any and all loan WARRANT OF AUTHORITY TO CONFESS JUDGMENT. Upon default, in addition to all other remedies and dght~ available to you. by signing below I irrevocably Kri~t~[l~aer, Me.bed/ I/ BORROWER: HeaF;hCore By Kr Kerr. Member HealthCore LLC Bankers Systems. inc.. St. Cloud. MN F~3~u APPENDIX: FEES AND CHARGES AS described in the ADDITIONAL CHARGES section of ~he attached Note, I agree to pay, or have paid, the== additionar fees and charges. NealthCore i. LC Pennsylvania Promissory Nete PA/4fkachura00623900003872011050503N Bankers Systems, lnG., St. Cloud. MN E.~I~u LOAN NUMBER LO~ .AME ACCT. NUMBER .EMENT DAT~ 1001~01575 HealthCare LLC 05/05/03 NOTE AMOUNT INDEX ~w/Margin) RATE MATURITY DATE $300,000.00 Weir Street Journal Pdme plus 5.25% Payable on Demand 1.000% Creditor Uae Only RM LOAN PURPOSE Commercial COMMERCIAL LOAN AGREEMENT Revolving Draw Loan DATE AND PARTIES. The date of this Commercial Loan Agreement {Agreement) is May E, 2003. The parties and their addresses are as follows: LENDER: THE LEGACY BANK 2600 Commerce Drive Harrisburg, Pennsylvania 17110 BORROWER: HEALTHCARE LLC a Pennsylvania Corporation 47 West Pomfrst Street Carlisle, Pennsylvania 17013 1. DEFINITIONS. For the purposes of this Agreement, the following terms have the following meanings. A. Ac=ounting Terms, In this Agreement, any accounting terms that are not specifically defined will have their customary meanings under generally accepted acoounting principles. B. Insiders. Insiders include those defined as insiders by the United States Bankruptcy Code, as amended; or to the extent lef~ undefined, include without limitation any officer, employee, stockholder or member, director, partner, or any immediate family member of any of the foregoing, or any person or entity which, directly or indirectly, controls, is controlled by or is under common control with C. Loan. The Loan refers to this transac~on generally, including obligations and duties arising from the terms of all documents prepared or submitted for this D. Pronouns. The pronouns '1", 'me' and "my" refer to every Borrower signing this Agreement, individua]ly or together, and their heirs, successors and assigns. "You' end "your" refers to the Loan's lender, any participants or syndicators, or any person or company that acquires an interest in the Loan and their E. P~aperty, Property is any property, real, personal or intangible~ that secures my performance of the obligations of this Loan. 2. ADVANCES. Advances under this Agreement ere made according to the followlng terms and conditions. A. Multiple Advances - Revolving. In accordance with the terms of this Agreement and other Loan documents, you will provide me with a revolving draw note and the maximum o~tstanding principal balance wilt not exceed $300,000.00 (Principal). B. Requests for Advances. My requests are a warranty that I am in compliance with all the Loan documents. When required by you for a particular method of advance, my requests for an advance must specify the requested amount and the date and be eccompanled with any agreements, documents, and i~struments that you require for the Loan, Any payment by you of any check, share draf! or other charge may, at your option, constitute an advance on the Loan to me. advances will be made Jn United States dollars. I will indemnify you and hold you harmless for your reliance on any request for advances that you reasonably believe to be genuine. To the extent permitted by law, I will indemnify you and hold you harrnJess when the person making any request represents that authorized this person to request an advance even when this person is unauthorized or this person's signature is not genuine. I or anyone I authorize to act on my behalf may request advances by the following methods. (1! I make a request in person. (2} I make a request by phone. (3J I make a request by mail. C. Adva~lce LImRaBone. In addition to any other Loan conditions, requests for, and access to, advances are sub~ect to the following limitations. I1} Discretionary Advances. You will make all Loan advances at your sole discretion. 12} Advance Amount. Subject to ~he terms and conditions contained in this Agreement, advances will be made in axec~y the amount J request. 13) C~t-Off Time. Requests for an advance received before 02:00 PM will be made on any day that you are open for business, on the day for which the advance is requested. [4J Disbursement of Advances. On my fulfillment of this Agreement's terms and conditions, you will disburse the advance in any manner as you end I agree. IS) Credit Limit. I understand that you will not ordinarily grant a request for an advance that would cause the unpaid principal of my Loan to be greater than the Principal limit. You may, at your option, grant such a request Wlthou~ obligating yourselves to do so in the future. ($) Records. Your records will be =oncJuslva evidence as to the amount of advances~ the Loan's unpaid principal balances and the accrued interest. D. Conditions, I will satisfy all of the following conditions before you either issue any promissory notes or make any advances under this Agreement. I1) No Default. There has not been a default under this Agreement or other Loan documents nor would a default result fron~ making the Loan or any (2} Information. You have received all documents, information, certifications and warranties aa you may require, all property executed, if appropriate, on forms acceptable to you. This includes, but is not limited to, the documents and other items listed in the Loan Checklist Report which is hereby incorporated by reference into this Agreement. (3) inspections. You have made all inspections that you consider necessary and are setisRed with this inspection, HealthCare LLC {4) Conditions and Covenants. I w~, de performed and complied with all conditions required f advance and all covenants in this Agreement and any other Loan documents. iS) Warranties and Representations. The warranties and representations contained in this Agreement are true and correct at the time of making the requested advance. lB} Financial Statements. My most recent financial statements and other financial reports, delivered to you, are current, complete, true and accurate in all material respects and fairly represent my financial condition. 17~ Bankruptcy Proceedings. No proceeding under the United States Bankruptcy Code has been commenced by or against me or any of my affiliates. E. Add;tional Conditions. All draws and/or advances must be requested in writing via fax or in person and are subject to a 24 hour processing period B, DEMAND. I agree to fully repay the Loan on demand. ~.. WARRANT]ES AND REPRESENTATIONS. I make to you the following warranties and representations which will continue as long as this Loan is in effect, except when this Agreement provides otherwise. A. Power. I am duly organized, and validly existing and in good standing in all jurisdictions in which I operate. I have the power and authority to enter into this transaction and to carry On my business or activity as Jt is now being conducted and, as applicable, am qualified to do so in each jurisdiction in which I operate. B. Authority. The execution, delivery and performance of this Loan and the obligation evidenced by the Note are within my powers, have been duly authorized, have received all necessary governmental approval, will not violate any provision of law, or order of court or governmental agency, and will not violate any agreement to which I am a party or to which I am or any of my property is subject. C. Name and Place of Business. Other than previously disclosed in writing to you I have not changed my name or principal place of business within the last 10 years and have not used any other trade or fictitious name. Without your prior written consent, I do not and will not use any other name and will preserve my existing name, trade names and franchises. D. Lean Purpose. This Loan is for Commercial purposes. E. No Other Liens. t own or lease all property that I need to conduct my business and activities. I have good and marketable title to all property that I own or lease. All of my Property is free and clear of all liens, security interests, encumbrances and other adverse claims and interests, except those to you or those you consent to in writing. F. Compliance ~Nith Laws. I am not violating any laws~ regulations, rules, orders, judgments or decrees applicable to me or my property, except for those which I am challenging in good faith through proper proceedings after providing adequate reserves to fully pay the claim and its challenge should I lose, G. Legal Dispute. There are no pending or threatened lawsuits, arbitrations or other proceedings against me or my proper~y that singly or together may materially and adversely affect my property, operations, financial condition, or business. H. Adverse Agreements. I am not a party to, nor am I bound by, any agreement that is now or is likely to become materially adverse to my business, Property or operations. I. Other Claims. There are no outstanding claims or rights that would conflict with the execution, delivery or performance by me of the terms and conditions of this Agreement or the other Loan documents. No outstanding claims or rights exist that may result in a lien on the Proper~y, the Property's proceeds and the proceeds of proceeds, except liens that were disclosed to and agreed to by you in writing. J. Solvency. I am able to pay my debts as they mature, my assets exceed my [iabflitles and I have sufficient capital for my current and planned business and other activities. I will not become insolvent by the execution or performance of th~s Loan. S. FINANCIAL STATEMENTS. I will prepare and maintain my financial records using consistently applied generally accepted accounting principles then in effect. I will provide you with financial information in a form that you accept and under the following terms. current, complete, true and accurate in all material respects, includes all of my direct or contingent liabilities and there has been no material adverse change in my financial condition, operations or business since the date the financial information was prepared. es soon as available or at least within SO days after the close of each of my fiscal years. Any annual financial statements that I provide you will be compiled C. SEC Reports. ~ will provide you with true and correct copies of all reports, notices or statements that I provide to the Securities end Exchange Commission, D. Requested Information. I wilt provide you with any other information about my operations, financial affairs and condition within 30 days after your request. 6. COVENANTS. Until the Loan and all related debts, fiabgJtles and obligations are paid and discharged, I wilt comply with the following terms, unless you waive A. Pa~'tJcipatlen. I consent to you participating or syndicating the Loan and sharing an'/ information that you decide is necessary about me and the Loan with the other participants or syndicators. B. Inspection. Upon reasonable notice, I will permit you or your agents to enter any of my premises and any location where my Property is located during regular business hours to do the following. (1} You may inspect, audit, check, review and obtain copies from my books, records, journals, orders, receipts, and any correspondence and other business related data. 12) You may discuss my affairs, finances and business with any one who provides you with evidence that they are a creditor of mine, the sufficiency of which will be subject to your sole discretion. ~B! You may inspect my Property, audit for the use and disposition of the Properw's proceeds and proceeds of proceeds; or do whatever you decide is necessary to preserve and protect the Property and your interest in the Property. After prior notice to me, you may discuss my financial condition and business operations with my independent accountants, Jf any, or my chief financial officer and I may be present dudng these discussions. As long as the Loan is outstanding, I will direst all of my accountants and auditors to permit you to examine my records in their possession and to make copies of these records. You will usa your best efforts to maintain the confidentiality of the information you or your agents obtain, except you may provide your regu~stor, if any, with required information about my financlal condition, operation and business or that of my parent, sutisidiaries or affiEates, C. Business Requirements. I will preserve and maintain my present existence and good standing in the jurisdiction where I am organized and a~J of my rights, privileges and franchises. I will do all that is needed or required to continue my business or activities as presently conducted~ by obtaining licenses, permits and bonds everywhere I engage in business or activities or own, lease or locate my property. I will obtain your prior wdtten consent before I cease my business or before I engage in any new line of business that is materially different from my present business. D. Compliance with Laws, I will not violate any laws, regulations, rules, orders, judgments or decrees appE~able to me or my Property, except for those which I challenge in good faith through proper proceedings after providing adequate reserves to fully pay the claim and ~ts appeal should I lose. Laws include without limitation the Federal Pair Labor Standards Act requirements for producing goods, the federal Employee Retiremen~ Income Security Act of lg74's requirements for the establishment, funding and management of qualified deferred compensation plans for employees, health and safety laws, environmental laws, tax laws, licensing and permit laws. On your request, I will provide you with written evidence that I have fully and timely paid my taxes, assessments ar~other Pennsylvania Commercial Loan Agreement Initial PA/4fkachuraO06£3go0003872011050503Y ©1996 Bankers Systems, Inc., St. Cloud, MN F--~--------~r~~ adequately provide for the payment of these taxes, assessments and other charges that have accrued buc are not yet due and payable. E. New Organizations. [ will obtain your written consent and any necessary changes to the Loan documents before I organize or participate in the organ[zatlon F. Dealings w;th ineldars. [ will not purchase, acquire or lease any proper~y or services from, or sell, provide or lease any prope~y or services to, or permit any G. Other Debts. I will pay when due any and ail other debts owed or guaranteed by me and will faithfully perform, or comply with all the conditions and obligations imposed on me concerning the debt or guaranty. H. Other Liabilities. I will not incur, assume or permit any debt evidenced by notes, bonds or similar obligations, except: debt in existence on the date of this Agreement and fully disclosed to you; debt subordinated in payment to you on conditions and terms acceptable to you; accounts payable incurred in the ordinary course of my business and paid under customary trade terms or contested in good faith with reserves satisfactory to you. I. Notice te You. I will promptly notify you of any material change tn my financial condition, of the occurrence of a default under the terms of this Agreement, or a default by me under any agreement between me and any third party which materially and adversely affects my property, operations, flnancia[ condition or business. J. Certification of No Default. On your request, my chief financial officer or my independent accountant wilJ provide you with a written certification that to the condition or event which with the giving of notice or lapse of time or both wouJd constitute a defauif. As requested, my chief financial officer or my independent action, condition or event of default does exist, the certificate must accurately and fully disclose the exigent and nature of this action, condition or event and K. Use of Loan Proceeds. I will not permit the loan proceeds to be used to purchase, carry, reduce, or retire any loan originally incurred to purchase or carry any margin stock or otherwise cause the Loan to violate Federal Reserve board Regulations G, U, or X, or 5action 8 of the Securities and Exchange Act of 1934 and its regulatlons, as amended. L. Dispose of No Asse~s. Without your prior wdt~en consent or as the Loan documents permit, I wilJ not sell, lease, assign, transfer, dispose of or otherwise distribute a~J or substantially all of my assets to any person other than in the ordinary course of business for the assets' depreciated book vaJue or more, NI. NO Other Liens. [ wiJl not create, permit or suffer any ~ien or encumbrance upon any of my properties for or by anyone, other than you, except for: nonconsensual liens imposed by ~aw arising out of the ordinary course of business on obligations that are not overdue or which [ am contesting tn good faith after making appropriate reserves; valid purchase money security interests on personal property; or any other liens specifically agreed to by you in writing. N. Guaranties. I will not guaranty or become liable in any way as surety, endorser {other than as endorser of negotiabJe instruments in the ordinary course of business) or accommodation endorser or otherwise for the debt or obligations of any other person or entity, except to you or as you otherwise specifically agree in writing. with the passage of time or giving of notice, or both, would constitute a default under any agreement, document, instrument or undertaking to which I am a par~y or by which ~ may be bound. P. Legal Disputes. [ will promptly notify you in writing of any threatened or pending lawsuit, arbitration or other proceeding against me or any of my property, not identified in my financial statements, or that singly or together with other proceedings may materially and adversely affect my property, operations, financial condition or business. I will use my best efforts to bring about a favorable and speed,/result of any of these [awsuits, arbitrations or other proceedings. Q. Other Notices. I wi[J immediately provide you with any information that may materially and adversely affect my ability to perform this Agreement and of its R. Ne Change in Capital. ~ will not release, redeem, retire, purchase or otherwise acquire, directly or indirectly, any of my capital stock or other equity security or partnership interest, or make any change in my capita~ structure, except to the extent required by any agreemect~ signed pdor to this Agreement and S. Loan Obligations. I will comply with the terms and agreements contained in this Agreement and Jn the other Loan documents. T~is may include without limitation insurance policies for public liability, fire, hazard and extended risk, workers compensation, and, at your request, business interruption and/or rant loss insurance. At your request, J will deliver to you certified copies of ali of these insurance policies, binders or certificates. I will obtain and maintain a mortgagee or loss payee endorsement for you when these endorsements are available. I will immediately notify you of cancellation or termination of insurance, I will require uti insurance policies to provide you with at least 10 days prior written notice to you of cancellation or modification. I authorize my insurer and you to exchange all relevant information related to any contract of insurance required by any document executed as part of this Loan. U. Properb/Maintenanoe. I will keep all tangible and intangible proper~y that I consider necessary or useful in my busines~ in good working condition by making all needed repairs, replacements and improvements and by making all rental, lease or other payments due on this proper~y. V. Property Loss. I will immediately notify you, and the insurance company when appropriate, of any matetia~ casualty, loss or depreciation to the Property or W. Accounts Receivable Collection. I will collect and otherwise enforce all of my unpaid Accounts Receivable at my cost and expense, until you end my reserves for the purpose they were set aside for, as long as I am not in default under this Agreement. You may directly pay these reserved items, reimburse me Y. Additional Covenante. Total Owner's Compensation shell be limited to the greater of the sum of Owner*s income tax liabi[ity~ life insurance and disability insurance premiums or 50% of accrual basis profit, with a minimum amount of $100,000.00. 7, COLLECTION EXPENSES AND A'tq'ORNEYS' FEES. On or after Default, to the extent permitted by law, I agree to pay alt expenses of collection, enforcement or protection of your rights and remedies under this Agreement. Expenses include, but are not limited to, at'corneys' fees, court costs and other legal expenses. These expenses are due and payable immediately, if not paid immediately, these expenses wiJl bear interest from the date of payment until paid in full at the highest interest rate in effect as provided for in the terms of this Loan. All fees and expenses will be secured by the Proper~y I have granted to you, if any. To the extent permitted by the United States Bankruptcy Code, I agree to pay the reasonable attorneys' fees you incur to colrect this debt as awarded by any court exercising jurisdiction under the Sankruptcy Code. HealthCore LLC Pennsylvania Commercial Loan Agxeement ~niti PA/4fkachuraOO623900003872011050503Y elSS6 Bankers Systems, Inc., St. Cloud, MN ~ g. APPLICASLE LAW. This Agreement is gu.~*ned by the laws of Pennsylvania, the United States o~ ~rica and to the extent required, by the laws of the jurisdiction where the Property [s located. In the event of a dispute, the exclusive forum, venue and place of jurisdiction will be in Pennsylvania, unless otherwise required by law. Any provision that appoints you as an agent is not subject to the provisions of 20 Pa.C.S.A. Section 5601 et seq. (Chapter 56; Decedents, Estates and Fiduciaries Code). By exercising any of your rights under this Agreement, you do so for your sole benefit. 9, JOINT AND INDIVIDUAL LiABILiTY AND SUCCESSORS. My obligation to pay this Loan is independent of the obt}gation of any other parson who has also agreed to pay it. You may sue me alone, or anyone else who ia obligated on this Loan~ or any number of us together, to collect this Loan. F. xi:endJ~lg this Loan Or new obligation~ under this Loan, will not affect my duty under this Loan and I will still be obligated to pay this Loan. The duties and benefits of this Loan will bind and benefit the successors and assigns of you and me. 10. AMENDMENT, INTEGRATION AND SEVERABILITY. This Agreement may not be amended or modified by oral agreement. No amendment or modification of this Agreement is effective unless made in writing and executed by you and me. This Agreement is the complete and final expression of the understanding between you and me. Jf any provision of this Agreement is unenforceable, then the unenforceable provision will be severed a~d the remaining provisions will still be enforceable. 11. INTERPRETATION. Whenever used, the singular includes the plura~ and the plural includes the singular. The section headings are for convenience only and are not to be used to interpret or define the terms of this Agreement. 12. NOTICE, FINANCIAL REPORTS AND ADDITIONAL DOCUMENTS. Unless otherwise required by/aw, any notice will be given by delivering it or mailing it by first class ma~l to the appropriate party's address listed in the DATE AND PARTIES section, or to any other address designated Jn writing. Notice to one pac~y wil~ be deemed to be notice to all parties. I will inform you in writing of any change in my name, address or other application information. I witl provide you any financial sl:atement or information you request, All financial statements and information I give you will be correct and complete. I agree to sign, deliver, and file any additional documents or certifications that you may consider necessary to perfect, continue, and preserve my obligations under this Loan and to confirm your lien status on any Property. Time is of the essence. 13. SIGNATURES. Sy signing under seal, i agree to the terms con~alned in this Agreement. J also acknowledge receipt of a copy of this Agreement. (Seall HearthCore LLC Pennsy)vania Commercial Loan Agreement PA/4fkachuraO0623900003872011050503Y °lggfi Sankers Systems, Inc., St. Cloud, MN ~ August 10, 2004 Jenine J. Kerr Krista K. Baer HealthCore, LLC 47 W. Pomfret St. Carlisle, PA 17013 RE: NOTICE OF DEFAULT Promissory Note between The Legacy Bank and HealthCore, LLC dated May 5, 2003, in the Principal Amount of $300,000.00, Legacy Account #100101575 (hereinafter referred to as the Line of Credit) Dear Ms. Kerr and Ms. Baer: In our Written Notice of Maturity dated May 12, 2004 (copy attached), we informed you the Line of Credit would not be renewed and required that the Line of Credit be paid in full by August 5, 2004. You have failed to comply with this requirement, and as a result we hereby provide you with a WRITTEN NOTICE OF DEFAULT. Based upon this default, we will exercise our fight provided in the loan documents to increase the interest rate on the Line of Credit by 3% to a floating rate of Wall Street Journal Prime plus 4% until the loan is paid in full. Should you wish to discuss this matter, please contact me at (717) 441- 3400 extension 129. Sincerely, THE LEGACY BANK Robert E. McDonald Director of Commercial Services TUCKER ARENSBERG, P.C. By: F. Stephenson Matthes PA I.D. No. 67408 111 North Front Street P.O~ Box 889 Harrisburg, PA 17108-0889 Telephone: 717-234-4121 Facsimile: 717-232-6802 THE LEGACY BANK, 2600 Commerce Drive Harrisburg, PA 17110, Plaintiff, HEALTHCORE, LLC 47 West Pomfret Street Carlisle, PA 17013, Defendant. : COURT OF COMMON PLEAS CUMBERLAND COUNTY CIVIL DIVISION AFFIDAVIT COMMONWEALTH OF PENNSYLVANIA CUMBERLAND COUNTY SS. Mark Ste~Sns, being duly sworn according to law, deposes and says that he is a CFO of The Legacy Bank, that he is duly authorized to make this affidavit on behalf of Plaintiff; that the facts set forth in the foregoing Complaint In Confession Of Judgment are true and correct to the best of his information and belief; and that the Note (as defined in the Complaint) which is attached as an Exhibit to the Complaint In Confession Of Judgment is a true and correct copy of the original executed by the Defendant. Swor]L~to and subscribed before me this "~ day of October, 2004. 72453.1 BARBARA L, SARIANO Notary Su~quet~anna Twp, Dauphin C~!~ ~ ~, Comm~s~ Expires ku~uat 2 -2- TUCKER ARENSBERG, P.C. By: F. Stephenson Matthes PA I.D. No. 67408 111 North Front Street P.O. Box 889 Harrisburg, PA 17108-0889 Telephone: 717-234-4121 Facsimile: 717-232-6802 THE LEGACY BANK, 2600 Commerce Drive Harrisburg, PA 17110, COURT OF COMMON PLEAS CUMBERLAND COUNTY Plaintiff, CIVIL DIVISION HEALTHCORE, LLC 47 West Pomfret Street Carlisle, PA 17013, Defendant. AFFIDAVIT OF NON-MILITARY SERVICE COMMONWEALTH OF PENNSYLVANIA CUMBERLAND COUNTY SS Before me, the undersigped Notary Public, in and for said County and State, personally appeared Mark SteJll~ns, CFO of The Legacy Bank, Plaintiff herein who, as an authorized representative thereof, being duly sworn according to law, deposes and says that the Defendant is not in the military service of the the best of his knowledge, information and be~/,~ ~ ~ ~!rkIS~n~Mar n~ The Legacy Sworn to~nd subscribed before me t~his ~ day of ~c__J~ber,2004. 72457.1 TUCKER ARENSBERG, P.C. By: F. Stephenson Matthes PA I.D. No. 67408 111 North Front Street P.O. Box 889 Harrisburg, PA 17108-0889 Telephone: 717-234-4121 Facsimile: 717-232-6802 THE LEGACY BANK, 2600 Commerce Drive Harrisburg, PA 17110, COURT OF COMMON PLEAS CUMBERLAND COUNTY Plaintiff, v, CIVIL DIVISION HEALTHCORE, LLC 47 West Pomfret Street Carlisle, PA 17013, NO. Defendant. : AFFIDAVIT OF INCOME COMMONWEALTH OF PENNSYLVANIA SS CUMBERLAND COUNTY Mark Stej~ns, being duly sworn according to law, deposes and says that he is a CFO of The Legacy Bank; that he is a duly authorized representative of Plaintiff; and that to the best of his knowledge, information and belief thcJ~come of the Defendant is in excess of $10,000.00 per year. Mark Stte~er~, CFp The Legacy Bank Sworn.0~ and Subscribed before me th'is ~ day of Octo, b~r, 2004; 72461,1 TUCKER ARENSBERG, P.C. By: F. Stephenson Matthes PA I.D. No. 67408 111 North Front Street P.O. Box 889 Harrisburg, PA 17108-0889 Telephone: 717-234-4121 Facsimile: 717-232-6802 THE LEGACY SANK, 2600 Commerce Drive Harrisburg, PA 17110, Plaintiff, HEALTHCORE, LLC 47 West Pomfret Street Carlisle, PA 17013, Defendant. COURT OF COMMON PLEAS CUMBERLAND COUNTY CIVIL DIVISION NO. AFFIDAVIT OF NONAPPLICABILITY OF GOODS AND SERVICES INSTALLMENT SALES ACT COMMONWEALTH OF PENNSYLVANIA SS CUMSERLAND COUNTY Mark Ste~ns, being duly sworn according to law, deposes and says that he is a CFO of The Legacy Bank; that he is a duly authorized representative of Plaintiff; that the Complaint In Confession Of Judgment does not arise out of a retail installment sale, contract, or account, as defined under the Goods and Services Installment Sales Act, 69 Pa. Stat. Ann. §1101, et seq,; and that the foregoing facts are true and correct to the best of h~-~pwl..e, dge, information and belief. TVl~a~c?;a)n~~. Mark St n k Swo~o and Subscribed before me this..~__~ N~ary public 72473.1 TUCKER ARENSBERG, P.C. By: F. Stephenson Matthes PA I.D. No. 67408 111 North Front Street P.O. Box 889 Harrisburg, PA 17108-0889 Telephone: 717-234-4121 Facsimile: 717-232-6802 THE LEGACY BANK, 2600 Commerce Drive Harrisburg, PA 17110, HEALTHCORE, LLC 47 West Pomfret Street Carlisle, PA 17013, Plaintiff, COURT OF COMMON PLEAS CUMBERLAND COUNTY CIVIL DIVISION Defendant. AVERMENT OF DEFAULT COMMONWEALTH OF PENNSYLVANIA SS. CUMBERLAND COUNTY Mark Ste~ns, being duly sworn according to law, deposes and says that he is a CFO of The Legacy Bank, that he is a duly authorized representative of Plaintiff; that the Defendant executed the Note (as defined in the Complaint), true and correct copies of which are attached to the Complaint; that the Defendant is in default under the Note; and that there is $302,614.59 due and owing under the Note as of August 5, 2004.I/~~ ~~ Mark S~'e'~n~'-C~O v"7 ' -- Th L ¢ic~ Bank eeg cy Ba Swor~,o and subscribed before me Notary Public. 72477.1 BARBARA L &ARIA'NO, TUCKER ARENSBERG, P.C. By: F. Stephenson Matthes PA I.D. No. 67408 111 North Front Street P~O. Box 889 Harrisburg, PA 17108-0889 Telephone: 717-234-4121 Facsimile: 717-232-6802 THE LEGACY BANK, 2600 Commerce Drive Harrisburg, PA 17110, COURT OF COMMON PLEAS CUMBERLAND COUNTY Plaintiff, CIVIL DIVISION HEALTHCORE, LLC 47 West Pomfret Street Carlisle, PA 17013, NO. Defendant. AFFIDAVIT OF COMMERCIAL TRANSACTION COMMONWEALTH OF PENNSYLVANIA : SS CUMBERLAND COUNTY Mark Ste~ns, being duly sworn according to law, deposes and says that he is a CFO of The Legacy Bank; that he is a duly authorized representative of Plaintiff; that the underlying transaction relative to this Complaint In Confession Of Judgment is a commercial transaction to the best of his know~ I I Mark Sl~l;~r~, C'F(~ The Legacy l~ank Sworn to ~ subscribed before me this ~ day of October, 2004. Notary Public 72483.1 Susquehanna Twp,, Dauphin TUCKER ARENSBERG, P.C. By: F. Stephenson Matthes PA I.D. No. 67408 111 North Front Street P.O. Box 889 Harrisburg, PA 17108-0889 Telephone: 717-234-4121 Facsimile: 717-232-6802 THE LEGACY BANK, 2600 Commerce Drive Harrisburg, PA 17110, COURT OF COMMON PLEAS CUMBERLAND COUNTY Plaintiff, CIVIL DIVISION HEALTHCORE, LLC 47 West Pomfret Street Carlisle, PA 17013, NO. Defendant. VERIFICATION Mark SteVens hereby states that he is CFO of The Legacy Bank, and verifies that the statements made in the foregoing Complaint In Confession of Judgment are true and correct to the best of his knowledge, information and belief. The undersigned understands that the statements made therein are made subject to penalties of 18 Pa. Mar~e[;eri~l, CFO~ lhe Legacy Bank 72496/I TUCKER ARENSBERG, P.C. By: F. Stephenson Matthes PA I.D. No. 67408 111 North Front Street P.O. Box 889 Harrisburg, PA 17108-0889 Telephone: 717-234-4121 Facsimile: 717-232-6802 THE LEGACY BANK, 2600 Commerce Drive Harrisburg, PA 17110, HEALTHCORE, LLC 47 West Pomfret Street Carlisle, PA 17013, Plaintiff, Defendant. COURT Of COMMON PLEAS CUMBERLAND COUNTY CIVIL DIVISION NO. ~/./_ ~'~:~ ACT 105 OF 2000 NOTICE A JUDGMENT HAS BEEN ENTERED AGAINST YOU BY CONFESSION OF JUDGMENT. PURSUANT TO 42 PA. C.S.A. §2737.1, IF YOU WERE INCORRECTLY IDENTIFIED AS A DEFENDANT IN THE COMPLAINT IN CONFESSION OF JUDGMENT, YOU MAY BE ENTITLED TO COSTS AND REASONABLE ATTORNEY FEES AS DETERMINED BY THE COURT. YOU MAY TAKE ACTION TO STRIKE THE JUDGMENT BY FOLLOWING THE PROCEDURE IN RULE 2959 WHICH IS AS FOLLOWS: PennsvIvania Rule of Civil Procedure 2959 - Strikin~ Off Judgment. (a)(1) Relief From a judgment by confession shall be sought by petition. Except as provided in subparagraph (2), all grounds for relief whether to strike off the judgment or to open it must be asserted in a single petition. The petition may be filed in the county in which the judgment was originally entered, in any county to which the judgment has been transferred or in any other county in which the sheriff has received a writ of execution directed to the sheriff to enforce the judgment. (2) The ground that the waiver of the due process rights of notice and hearing was not voluntary, intelligent and knowing shall be raised only (i) in support of a further request for a stay of execution where the court has stayed execution despite the timely filing of a petition for relief from the judgment and the presentation of prima facie evidence of a defense; and (ii) as provided by Pennsylvania Rule of Civil Procedure 2958.3 or Rule 2973.3. (3) If written notice is served upon the petitioner pursuant to Rule 2956.1(c)(2) or Rule 2973.1 (c), the petition shall be filed within thirty days after such service. Unless the defendant can demonstrate that there were compelling reasons for the delay, a petition not timely filed shall be denied. (b) If the petition states prima facie grounds for relief the court shall issue a rule to show cause and may grant a stay of proceedings. After being served with a copy of the petition the plaintiff shall file an answer on or before the return day of the rule. The return day of the rule shall be fixed by the court by local rule or special order. (c) A party waives all defenses and objections which are not included in the petition or answer. (d) The petition and the rule to show cause and the answer shall be served as provided in Rule 440. (e) The court shall dispose of the rule on petition and answer, and on any testimony, depositions, admissions and other evidence. The court for cause shown may stay proceedings on the petition insofar as it seeks to open the judgment pending disposition of the application to strike off the judgment. If evidence is produced which a jury trial would require the issues to be submitted to the jury the court shall open the judgment. (f) The lien of the judgment or of any levy or attachment shall be preserved while the proceedings to strike off or open the judgment is pending. Dated and Served: October ~" ,2004 By Certified Mail Return Receipt Requested F~,St~'phedson Ma~thes No. 67408 111 North Front Street P.O. Box 889 Harrisburg, PA 17108-0889 Telephone: 717-234-4121 Facsimile: 717-232-6802 Attorneys for Plaintiff, The Legacy Bank 72444.1 -2- TUCKER ARENSBERG, P.C. By: F. Stephenson Matthes PA I.D. No. 67408 111 North Front Street P.O. Box 889 Harrisburg, PA 17108-0889 Telephone: 717-234-4121 Facsimile: 717-232-6802 THE LEGACY BANK, 2600 Commerce Drive Harrisburg, PA 17110, COURT OF COMMON PLEAS CUMBERLAND COUNTY Plaintiff, HEALTHCORE, LLC 47 West Pomfret Street Carlisle, PA 17013, CIVIL DIVISION Defendant. NOTICE Pursuant to Rule 236 of the Supreme Court of Pennsylvania, you are hereby notified that a JUDGMENT BY CONFESSION has been entered against you in the above-captioned proceeding. Copies of all documents that have been filed with the Prothonotary in support of the Confession of Judgment are attached hereto. If you have any questions concerning this Notice, please call, F. Stephenson Matthes, Esquire, at (717) 234-4121. 72465. t CHONOT,~RY TUCKER ARENSBERG, P.C. By: F. Stephenson Matthes PA I.D. No. 67408 111 North Front Street P,O. Box 889 Harrisburg, PA 17108-0889 Telephone: 717-234-4121 Facsimile: 717-232-6802 THE LEGACY BANK, 2600 Commerce Drive Harrisburg, PA 17110, Plaintiff, HEALTHCORE, LLC 47 West Pomfret Street Carlisle, PA 17013, Defendant. COURT OF COMMON PLEAS CUMBERLAND COUNTY CIVIL DIVISION NO. dC '307 ENTRY OF JUDGMENT BY CONFESSION AND ASSESSMENT OF DAMAGES Pursuant to the Complaint in Confession of Judgment filed in the within action and the Warrant of Attorney attached hereto, judgment is hereby entered against the Defendant, jointly and severally. DAMAGES ARE ASSESSED AS FOLLOWS: Principal balance under the Note/Loan Agreement dated May 5, 2003 as of August 5, 2004 $300,000,00 Interest through August 5, 2004 2,614,59 $302,614.59' *Together with all late charges and reasonable attorneys' fees as per Loan Agreement (to be determined) P/ROTHONOTARY / / / ~ 72469.1 -2-