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CITIZENS BANK OF PENNSYLVANIA,
Plaintiff
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
CNILDIVISION: LAW
No, ex, -l.,b/'J... C!juLCy~
Vs.
THOMAS SCOTT PENDERSEN,
NOTICE TO DEFEND
You have been sued in Court. If you wish to defend against the claims set forth in
the following pages, you must take action within twenty (20) days after this Document
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 Documents or for any other claim or relief requested by the Plaintiff. YOU
MAY LOSE MONEY OR PROPERTY OR OTHER RIGHTS IMPORTANT TO YOU.
YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU
DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR
TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU
CAN GET LEGAL HELP.
Cumberland County Bar Association
32 South Bedford Street
Carlisle, P A 17013
Telephone: 717-299-3166
'.
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
CIVIL DIVISION: LAW
CITIZENS BANK OF PENNSYLVANIA,
Plaintiff
No. 06 -l.-S"l~ Civil
vs.
THOMAS SCOTT PENDERSEN,
Defendant
COMPLAINT
1. The PLAINTIFF is CITIZENS BANK OF PENNSYL VANIA, a state banking
institution, organized and existing under the laws ofthe Commonwealth of Pennsylvania, with
one of its principal places of business at 525 William Penn Place, Suite 2720, Pittsburgh,
Allegheny County, Commonwealth of Pennsylvania 15219, and hereinafter sometimes referred to
as "Bank" and/or "Plaintiff."
2. The DEFENDANT is THOMAS SCOTT PENDERSEN, an adult male
individual, residing at 9 Todd Road, Carlisle, Cumberland County, Commonwealth of
Pennsylvania 17319, and hereinafter sometimes referred to as "Defendant".
3. On or about January 29,2004, Bank loaned to Obventio, Inc. and extended to
Obventio, Inc. a credit facility in the sum of $75,000.00.
4. To evidence the loan and credit facility of $75,000.00 made and extended by
P1aintiffto Obventio, Inc. as set forth in Averment 3 hereof, on or about January 29,2004,
Obventio, Inc., as obligor, executed a "Business Credit Line Agreement" in favor of Bank, as
obligee.
5. Attached hereto, marked Exhibit "A" and incorporated herein by reference is a
true and correct copy of the "Business Credit Line Agreement" for the face amount of $75,000.00
executed by Obventio, Inc., as obligor, in favor of Plaintiff, as obligee, on January 24,2004.
6. Obventio, Inc. is a Pennsylvania Close Corporation, organized and existing under
the laws of the Commonwealth of Pennsylvania, with its principal place of business at 3109
North Front Street, Harrisburg, Dauphin County, Commonwealth of Pennsylvania 17110.
7. Defendant owns 100% of the stock in Obventio, Inc.
8. To secure and to collateralize the obligations of Obventio, Inc. to Bank under the
"Business Credit Line Agreement" (Exhibit "A"), on or about January 29,2004, Defendant in
writing guarantied to Bank the amounts due by and liability of Obventio, Inc. to Bank under the
"Business Credit Line Agreement" (Exhibit "A").
9. Defendant's guaranty is set forth in the body ofthe "Business Credit Line
Agreement" (Exhibit "A") entitled "Personal Guaranty".
10. Neither the "Business Credit Line Agreement" (Exhibit "A") nor the "Personal
Guaranty" set forth therein has been assigned, transferred or negotiated by Plaintiff and Plaintiff
is the holder of the "Business Credit Line Agreement" (Exhibit "A") and "Personal Guaranty" set
forth therein and Plaintiff is the real party in interest.
11. The "Business Credit Line Agreement" (Exhibit "A") is payable on demand.
12. However, until demand is made on account of the "Business Credit Line
Agreement" (Exhibit "A"), Obventio, Inc. was obligated to pay to Bank interest on a monthly
basis.
13. Obventio, Inc. has not made regular monthly payments of interest under the
"Business Credit Line Agreement" (Exhibit "A") for the months of March, April, May, June,
July, August, September and October of 2006.
14. The failure of Obventio, Inc. to make regular monthly payments of interest for
the months of March, April, May, June, July, August, September and October of2006 constitutes
a default under the "Business Credit Line Agreement" (Exhibit "A").
15. As a result of the default by Obventio, Inc. as set forth in Averment 14 hereof
and pursuant to Bank's rights under the "Business Credit Line Agreement" (Exhibit "A"), on
October 27,2006, Bank issued a demand letter to Obventio, Inc. demanding payment in full of all
principal, interest, late charges and costs due on account of the "Business Credit Line Agreement"
(Exhibit "A").
16. Attached hereto marked Exhibit "B" and incorporated herein by reference is the
written demand dated October 27, 2006 sent to Obventio, Inc.
17. Obventio, Inc. did not pay Bank in full all principal, interest, late charges and
costs due on the "Business Credit Line Agreement" (Exhibit "A").
18. In addition, on October 27, 2006, Bank also issued a demand for payment upon
Defendant under Defendant's "Personal Guaranty" set forth in the body of the "Business Credit
Line Agreement" (Exhibit "A").
19. Attached hereto marked Exhibit "B" and incorporated herein by reference is the
written demand dated October 27, 2005 sent to Defendant.
20. Defendant did not pay Bank in full all principal, interest, late charges and costs
due and owing by Defendant to Bank on account of Defendant's "Personal Guaranty" set forth in
the body of the "Business Credit Line Agreement" (Exhibit "A").
21. As of November 6, 2006, the following amounts are owed by Obventio, Inc. to
Bank on account of the "Business Credit Line Agreement" (Exhibit "A") and thus owed by
Defendant under Defendant's "Personal Guaranty" set forth in the body of the "Business Credit
Line Agreement" (Exhibit "A"):
2
A.
B.
C.
Principal
Interest
Late Charges
$ 74,999.43
$ 4,500.97
$ 190.37
D.
Total
$79,690.77
22. In addition to the amounts due as set forth in Averment 21, pursuant to the
"Personal Guaranty" set forth in the body of the "Business Credit Line Agreement" (Exhibit
"A"), Bank is entitled to reasonable attorney's fees. Bank requests legal fees of $5,000.00.
21. The principal balance due on the "Business Credit Line Agreement" (Exhibit
"A"), being $74,999.43, is accruing interest at the rate of9.25.5% with the per diem amount
being $19.27 and Defendant is obligated for that interest under Defendant's "Personal Guaranty"
set forth in the body of the "Business Credit Line Agreement" (Exhibit "A").
WHEREFORE, the Plaintiff, Citizens Bank of Pennsylvania, prays for judgment in
favor of Citizens Bank of Pennsylvania and against the Defendant, THOMAS SCOTT
PENDERSEN, for the following amounts along with costs of suit:
A. Principal $74,999.43
B. Interest $ 4,500.97
C. Late Charges $ 190.37
D. Legal Fees $ 5,000.00
E. Total $84,690.77
Plus interest since the date of this Complaint until Judgment at the per diem amount of
$19.27.
Dated: November 6, 2006
~~
( -~
Jack F. Ream, sqUIre
Kain, Brown & Roberts LLP
119 East Market Street
York, PA 17401
J.D. 10241
Phone 1-717-843-8968
Fax 1-717-846-6676
E-mail: JckReam@aol.com
Attorney for the Plaintiff
CITIZENS BANK OF
PENNSYLVANIA
3
.-
COMMONWEALTH OF PENNSYLVANIA
SS:
COUNTY OF ALLEGHENY
Before me, a Notary Public, in and for the said
County and State, personally appeared JAMES N. WALSH, who,
being duly sworn according to law, doth depose and say that
he is a Banking Officer of CITIZENS BANK OF PENNSYLVANIA, a
state banking institution organized and existing under the
laws of the Commonwealth of Pennsylvania, and that as such
officer is authorized to make this Affidavit on behalf of
CITIZENS BANK OF PENNSYLVANIA and that the facts set forth
in the foregoing document are true and correct to the best
of his knowledge, information and belief.
CITIZENS BANK OF PENNSYLVANIA
(SEAL)
Sworn and Subscribed to
before me this ~+h day
of
Ocro0EfZ
, 2006.
d/AdAliJJM ()x~
Notary Public
COMMONWEALTH OF PENNSYLVANIA
Notarial Seal
~rea L. Quattrone. Notary Public
City Of Pittsburgh. Allegheny County
My Commission Expires Oct. 13. 2009
Member, Pennsylvania Association of Notaries
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EXHIBIT "A"
,.It",j ";C;TAi !=-'~':tC.[ "":1-
.,.
t:=~",BANK
LENDER:
BUSINESS CREDIT LINE AGREEMENT
o
CItizens Bank of Rhode Island
1 CltlzBns Plaza
Providence, RI 02903
O CItizens Bank New Hampshire
875 Elm Street
Manchester, NH 03101
r.:1x Citizens Bank of PBnnsylvanla
LAJ 1735 Market Street
Philadelphia. PA 19103
O CItizens Bank of Connecticut
63 Eugene O'Neill Drive
New L.:ondon, CT 06320
o Citizens Bank of Massachusetts
28 State Street
Boston, MA 02109
O Citizens Benk
919 North Market Street. Suite 200
Wilmington, DE 19801
o If checked here, this 10811 is guaranteed by the Small Business Administration ("SBA").
This Business Credit Line Agreement (the "Agreement") sets forth the terms ofa credit line ("Credit Line") established under a letter
("Approval Letter") from the Lender ("Lender", "we", "us" or "our") identified above to an applicant (the "Borrower" or "you"). The
Borrower has submitted an apptication (" Application") for the Credit Line which incorporates the terms ofthis Agreement by reference to
evidence the obligation to repay sums advanced under the Credit Line. Certain person(s) ("Guarantor") have, or may in the future, .
guaranty obligations under this Agreement. The Borrower and any Guarantor irrevocably accept the terms of the Approval Letter and thIS
Agreement by the Borrower taking an advance ("Advance") under the Credit Line. The words "you" and "yours" mean the Borrower, and
each of them if more than one, and "we, Ii "OUf," and tlus" mean the under. Tbe term "Loan Documents" means the Application, this
Agreement, the Approval Letter, any guaranty and any other documents executed in coDllection with the Credit Line.
1. Credit Limit We have established a Credit Line for your short-term borrowing needs with a limit (the "Credit Limit") set forth in the
Approval Letter. The Credit Limit is the maximum principal amount you may have outstanding under the Credit Line at any time. We
reserve the right, in our sole discretion, to reduce your Credit Limit ot tenninate your Credit Line as provided below.
2. Purpose. This Credit Line is for business purposes only, and may not be used for consumer, household or other personal purposes.
3. LoaDS. (a) We agree to tnake Advances to you until the occurreDce of an EveDt of Default (as defined in Paragrapb 17, below) or
notice oftemination of the Credit Line; provided that the aggregate principal amount outstanding does not exceed the Credit Limit. You
agree to repay the Advances in accordance with this Agreement.
(b) Letters of Credit: If there is no Default under this Agreement, Borrower shall be entitled to request that the Lender issue
commercial or standby letters of credit under this Agreement (subject to the limitations described above) pursuant to the following
conditions:
(i) Issuance of Letters of Credit From time to time on any business day occurring prior to Default or demand hereunder, the
Borrower may request the issuance of commercial or standby letters of credit (each a ''Letter of Credit" and collectively, "Letters of
Credit") forits own account in respect of obligations of the Borrowerin stated face amounts (each such stated face amount not to be less
than $1,000) requested by the Borrower on such day with an expiry date not later than the earlier of one year from the dat" of such
issuance; or extend the expiry date of an existing Letter of Credit previously issued bereunder to a date uot later tban one year from the
date of such extension.
No issuance or extension of a Letter of Credit shaU be made if, after giving effect thereto: (a) the aggregate face amount of an
outstanding Letters of Credit, ~ (b) the aggregate outstanding principal amount of all outstanding advances under tbis Agreement ~
=ater than (c) the principal amount of this Agreement.
To request the issuance of a Letter of Credit (or the extension ofan outstanding Letter of Credit) the Borrower shall hand deliver to the
Lender a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be extended, the date of issuance or
extension, the date on which such Letter of Credit is to expire (which shall comply with the limitations set out above) as wen as
submitting the appropriate letter of credit application on the Lender's standard form.
By requesting the issuance of a Letter of Credit (or the extension of an outstanding Letter of Credit), Bnd by signing the Lender's standard
fom of letter of credit application, Borrower will be deemed to have agreed to the terms of this section of this Agreement (captioned
"LETTERS OF CREDIT").
Each Letter of Credit issued by the Lender shall be, in addition to the terms bereof, subject to the terms and conditions of any form of
letter of credit application or other agreement submitted or entered into by the Borrower in cOlUlection with the issuance of any Letter of
Credit. In tbe event of any inconsistency between the terms and conditions of this Agreement, the Loan Agreement, and \he terms of any
fonn letter of credit application or other agreement submitted or entered into by the Borrower in coDllect;on with the issuance of any
Letter of Credit, the terms and condition of such letter of credit application or otber agreement shall controL
(ll) AvaUabte Credit The credit available under this Agreement shall be reduced by the amount of all issued and outstanding
Letters of Credit. In the event that the Lender pays any draft under any Letter of Credit, the Lender may charge the amount of such draft
as an advance UDder this Agreement, and such advance shall bear interest under and be subject to all of tbe other terms of this Agreement.
(III) Reimbursement If the Lender shall honor or otherwise make any disbursement in respect of a Letter of Credit, the
Borrower shall reimburse the Lender in the full principal amount of such disbursement by paying to the Lender an amount equal to such
disbursement not later than the close of business on the day such disbursement is made. Notwithstanding the foregoing, the Borrower
may, subject to the terms and conditions of this Agreement, request that such reimbursement payment be financed by means ofan advance
hereunder. The Borrower acknowledges and agrees that the Lender is under no obligation to so honor any such request and that unless
the Borrower shan reimburse the Lender in full on the date such disbursement is made, the unpaid amount thereof shall bear interest, for
each day from and including the date such un-reimbursed disbursement is made to but excluding tbe date that the Borrower reimburses
such disbursement, at the rate per annum then applicable to advances hereunder.
(Iv) Letter of Credit Fees. The Borrower agrees to pay to the Lender a Letter of Credit fee in an amount equal to the then
applicable interest rate for advances hereunder multiplied by the stated face amount of all Letters of Credit outstanding, such fee to be
paid monthly in urears in accordance with the payment schedule set out below. The Borrower further agrees to pay to the Lender (i) on
the date of (x) the issuance of each Letter of Credit, (y) each increase in the stated face amount thereof and (z) each extension (automatic
or otherwise) of the stated expiry date thereof, an issuance fee as provided for in the letter of credit application or other agreement
submitted or entered into by the Borrower in cOMection with such issuance, increase or extension, and (ii) all reasonable costs and
expenses incurred by the Lender in coDllection with such Letter of Credit.
(v) Casb Collaterallzadon. If the Lender shall make demand hereunder or upon the occurrence of any Default, on the day
that the Borrower receives notices from the Lender demanding the deposit of cash collateral, the Borrower shall deposit in an account with
the Lender, in the name of and for the benefit of the Lender, an amount in cash equal to the aggregate amount of all Letters of Credit then
outstanding. Such deposit shall be held by the Lender as collateral for the payment and perfonnance of the obligations of the Borrower
with respect to such outstanding Letters of Credit, this Agreement, the Loan Agreement, and any application or agreement submitted or
entered into by the Borrower in connection with the issuance of any Letter of Credit. The Lender shall have exclusive dominion and
control, including the exclusive right of withdrawal, over such account. Other than interest earned on the investment of such deposits,
which such investments shall be at the option and sole discretion of the Lender and at the Borrower's risk and expense, such deposits
shall not bear interest. Interest or profits, if any, on such investments shall accumulate in such acenunt. Moneys in such account shan he
applied by the Lender to reimburse the Lender for Letter of Credit disbursements for which it has not been reimbursed and, to the extent
not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for outstanding Letters of Credit, or, if
demand has been made bereunder, be applied to satisfy other obligations of the Borrower under this Agreement If the Borrower is
required to provide an amount of cash collateral hereunder as a result of the occurrence of a Default, and the Lender shall refrain from
demanding payment hereunder, such amount (to the extent not applied as aforesaid) shall be returned to the Borrower within 3 business
days after all Defaults have been cured or waived.
SBLOC - 06102
EXHIBIT "A"
Page 3
f) Paying Special Loan Cbecks in Excess of Your Credit Limit. We do not have to pay any speeia110an check that would
cause you to go over your Credit Limit. However, we may do so if we choose.
g) Paying Special Loan Cbecks After Termination. We will not pay any additional special loan checks presented to us for
payment after we send you notice of tennination of the Credit Line (as provided in Paragraph 14, below). If you tenninate the .
Credit Line (as provided in Paragraph 14, below), you will be responsible for paying any additional Advances we make to,.pa): . special
10Bn checks which are presented to us for payment before we have had a reasonable amount of time to Implement your tenmnatlon notice.
Once we have implemented your tennination notice, we will not pay ahy additional special loan checks presented to us for payment.
8. Debit. If you have so indicated on the Application and have completed an authorization on the fonn we provided to you, you authorize
us to debit your Citizens Bank business checking account with us for all sums (including, without limitation, principal, interest and fees)
payable under this Agreement and the Loan Documents; provided, however, that this provision shall not obligate us to create or allow any
overdraft, and further provided that such authority shall not relieve you of the obligation to assure that payments are made iftbere are not
sufficient good funds in your account. You understand that in exchange for your authorization to deduct your payments from your checking
account we have reduced the interest rate payable under this Agreement by one percent (1%). If you close your checking account. if you
revoke your authorization to debit payments from your checking account, or if automatic payments are otherwise tenninated for any reason,
we have the right to increase the Margin on your Credit Line by one percent (1 %), without any prior notice to you. Unless payments are
made by automatic debit of your checking account, you must make payments to Lender at the address on the billing statement in lawful
currency of the United States of America.
9. Billing Statements. We will provide you each month with a billing statement showing the Payment Date, the minimum amount due on
the Payment Date, the current interest rate, any changes in the interest rate, any Advances, all payments made, the principal balance of all
Advances, and other appropriate debits and credits. All entries in your account will be made in accordance with our customary accounting
practices in effect from time to time. Any failure to record Advances, interest or other charges or any error in so recording shall not limit or
otherwise reduce your nbligations to us under the Loan Documents. The balance shown on our most recent printout of your account, absent
manifest error or omission, will be presumptive evidence of the amounts due Bnd owing by you to us under this Agreement.
10. Default Interest. After the occurrence of an Event of Default (as defined in Paragrapb 17, below), and whether before or after a
judgment is issued, we may impose, in our sole discretion, on all principal and other amounts outstanding and payable under the Loan
Documents, interest until paid in full at the rate (the "Default Rate") of four percent (4%) in excess of the rate described in Paragrapb 5
(above). For business loans to non-corporation borrowers in amounts less than or equal to $10,000, the total maximum allowable interest rate
is currently 18%.
11. Maximum Rate of Interest. All provisions of this Agreement are expressly subject to the condition tha~ in no event shall the amount
paid or agreed to be paid to us hereunder and deemed interest under applicable law exceed the maximum rate of interest allowed by
applicable law (the "Maximum Allowable Rate"), In the event that fulfillment of any provision of this Agreement results in a detennination
that the interest mie hereunder is in excess of the Maximum Allowable Rate, the obligation to be fulfilled shall be reduced, as promptly as
practicable after sUcb detennination is made, to eliminate sucb excess. Any amount collected in excess of the Maximum Allowable Rate
prior to the date on which the obligation is reduced shall be applied to and deemed a prepayment of the unpaid principal balance of the
Advances.
12. Preplyment. You shall have the right at any time and from time to time to prepay the unpaid principal balance of all Advances in
whole or in part, without premium or penalty. but with accrued interest and other charges to the day of such prepayment on the amount
prepaid.
13. Reduction of Credit Line. We may reduce your Credit Limit at any time, in our sole discretion, by written notice to you. Any
reduction will be effective on the date specified in our notice (which may be the date oftbe notice). You will not be entitled to further
Advances if the aggregate principal amount of all Advances outstanding would exceed the reduced Credit Limit. If the aggragate principal
amount of all Adv;ances outstanding exceeds the reduced Credit Limit on the effective date of the reduction, you must pay e: sum sufficient to
reduce the outstanding principal balance to the reduced Credit Limit within thirty (30) days of the effective date of the reduction.
14. Termination. The Credit Line will tenninate automatically upon tbe occurrence of an Event of Default (as defined in Paragrapb 17,
below). We may tenninate the Credit Line at any time, in our sole discretion, upon a date specified in written notice to you which date will
be at least thirty (30) days after the date of our notice. You will not be entitled to further Advances from the date of our notice, even though
tennination is effective at a future date. Upon tennination, all amounts owing under the Loan Documents shall be due and payable in full.
You may tenninate the Credit Line at any time by written notice to us, provided there is no outstanding balance of principal, interest or other
charges.
15. Representation and Warranties. You represent and wammt that (i) all infonnation contained in the Application or otherwise furnished
to us by you or any Guarantor is accurate and complete, (ii) if you are not an individual, you are duly organized, validly existing and in good
standing under the law of the state where you are organized, (iii) you have all material licenses, pennits and registrations needed to conduct
your business, (iv) the person(s) signing the Loan Documents is duly authorized, (v) the Loan Documents are valid, binding and enforceable
against you and any Guarantors, and (vi) you are under no legal restriction that would prevent borrowing under this Agreement.
16. Covenants. You covenant and agree (i) to keep the representations and warranties contained in Paragraph 15 true at all times; (ii) to
operate in accordance with all present and future laws and governmental regulations; (Iii) to pay all your obligations when due; (iv) to furnish
us with such infonnation regarding your business and financial condition, and that of any Guarantors, as we may reasonably request; (v) to
allow us and our representatives to inspect your business operations and books and records (and to make copies thereof) at reasonable times
upon reasonable notice; (vi) to maintain the current name of your company or business including but not limited to filing all necessary
reports with your jurisdiction of organization; and (vii) to refrain from any dissolution, consolidation, merger, sale of assets outside the
ordinary course, or change of ownership.
17. Events of Default. The occurrence of any of the following ("Event of Default") with respect to any Borrower or any Guarantor shall
constitute a default under tbe Loan Documents:
(i) failure to pay when due any principal, interest or other charge relating to the Advances;
(ii) failure of any representation or warranty made io connection with any of the Loan Documents to be true when made;
(iii) delivery of any false or misleading certificate, financial stalement or other written document in connection with the Advances;
(iv) failure to observe any covenant contained in the Loan Documents;
(v) overdraft of any checking account with the Lender;
(vi) default under any agreement with the Lender (whether in the Loan Documents or otherwise);
(vii) notice from any Guarantor terminating a guaranty, death ofa Guarantor, or assertion that a guaranty is not in full force and effect as to
all Advances;
(viii) suspension of business for a reason other than strike, casualty or other cause beyond your control;
(ix) commencement ofany voluntary or involuntary proceeding under the Bankruptcy Code, appointment of a custodian (as defined in the
Bankruptcy Code), commencement of any other insolvency proceeding, or inability to pay debts generally as they become due;
(x) attachment or other judicial encumbrance of property;
(xi) occurrence of any material uninsured casualty loss;
Page 2
4. Fees. The following fees apply to your Credit Line:
a) Packaging Fee.
Upon acceptance of the Approval Letter, by requesting an Advance or othetwise, you may be required lo pay us a packaging fee of
$250 (less any fee paid in connection with the Application) by means of an Advance under lhe Credit Line, which shall not be subject
to any refund upon termination.
b) Annual Fee.
On each yearly anniversary of the date of tbis Agreement, you shall pay us an annual fee of $100 by means of an Advance under the
Credil Line which shall not be subject to any refund upon termination.
c) Late Fee.
If any payment is not made within fifteen (15) days after it is due, you may be required to pay us a late fee of (i) $35, or (il) five
percent (5%) of the overdue payment, wbichever is greater.
d) Collection Fees.
If any payment is not made when due, you will pay us any reasonable collection costs including, but not limited to, legal fees and
court costs.
5. lnterest Rate. The outstanding principal balance of each Advance shall bear interest until paid at the Prime Rate plus a certain number of
percentage points (the "Margin"). The initial Margin is set forth in the Approval Letter and does not exceed eight (8%) percent. "Prime Rate"
shall mean the prime rate published in The Wall Street Journal as the prevailing prime rate at banks in the United Stales, or, if no longer
published, a similar rate detennined from a commercially accepted service chosen by the Lender. The Prime Rate is a reference rate and does
not necessarily represent the lowest or best rate charged to any of our customers. Interest rate adjustments under this Agreement shall he
effective (i) with respect to the Prime Rate, on the same date that an adjustment is determined to have occurred, and (ii) with respect to any
Margin adjustment, on the date set forth in a notice sent to you. Any interest rate adjustment shall be applicable to the entire balance
outstanding under this Agreement, as well as to all Advances made thereafter under this Agreement. For SBA guaranteed loans, the interest rate
will change on the first day of the calendar month following a change in the Prime Rate. TIlis interest rate change wiJI not occur more often
than once each month. Interest shall be computed daily on the basis of a 365-day year (366 in any leap year) using the actual number of days
elapsed. We may, within our sole discretion fmm time to time, but no earlier than one year from the date of the Approval Letter, increase or
decrease the Margin. Any change in the Margin shall be effective upon not less than tbirty (30) days' notice to you. You may, at your option,
elect to tenninate this Agreement rather than be bound by a change in the Margin. If you decide to tenninate this Agreement, you must give US
written notice of your decision to do so before the effective date of the change and you must pay all amounts outstanding under this Agreement
prior to the effective date of the change. In PA, for business loans to non-corporation borrowers in amounts less than or equal to SIO,OOO, the
maximum allowable interest rate is currently 18%.
6. Payments. This Agreement is payable ON DEMAND. Until demand is made, you shall pay the principal and interest according to the
following schedule:
You must make regular monthly payments on the date ("Payment Date") set fnrth in your billing statement. The first Payment Date will be one
month after the date of the Approval Letter and monthly on the same day of the month thereafter. On each Payment Date, you must pay the
following amounts:
!il If the box at the beginning of this paragraph is checked, your regular monthly payments will be equal to the swn of (a) accrued
interest and any other charges posted to the account at the close of the billing cycle. plus (b) any amount which is past due, plus
(c) any amount hy which the outstanding principal balance of the Loans exceeds the Credit Limit (except as a result ofa reduction by us of your
Credit Limit). This minimum monthly payment will not reduce the principal that is outstanding on the Credit Line, and will result in greater
expenses over the life of the Credit Line Account. In addition to the minimum monthly payment set forth above, you agree that at least once
during each 12 consecutive calendar month period (beginning on the date of the Approval Letter) you will reduce, for a period aDO conseeutive
days, the principal balance of the Credit Line to not more than fifty percent (50%) of the bighest outstanding principal balance on the Credit
Line for the preceding 12 calendar months.
Unless the box at the beginning of the preceding paragraph has been cheeked, your regular monthly payment will he equal to the sum nf (a)
accrued interest and any other charges posted to the account at the close of the hilling cycle, plus (h) principal in the minimum amount of (i)
S200.00. or (il) two percent (2%) of the outstanding principal halance at the close of the billing cycle, whichever is greater (however, the
minimum payment will never exceed the entire amount outstanding), plus (c) any amount wbich is past due, plus (d) any amount by which the
outstanding principal balance of the Loans exceeds the Credit Limit (except as a result ofa reduction by us of your Credit Limit).
You may make additional repayments of principal at any time, hut these additional payments will nnt release you from the ohligation to make
payments on the next Payment Date. Upon the occurrence of an Event of Default (as defined in Paragraph 17, below) or termination of the
Credit Line, all amounts outstanding under the Credit Line will he due and payable in full. However, in our sole discretion, we may allow you
to pay the amounts outstanding over a period of time ("Extension Agreement"). We will indicate our approval of an Extension Agreement by a
notation on your billing statement or other written notice. Unless we indicate a different arrangement in written notice to you, an Extension
Agreement will require monthly payments on the Payment Date equal to the sum of (a) accrued interest and other charges posted to your account
at the close of your hilling cycle, plus (b) one thirty-sixth (1I36th) of the principal balailce outstanding when we tenninated the Credit Line, plus
(c) any amount which is past due. All outstanding amounts subject to an Extension Agreement will be due and payable in full if there is a
subsequent Event of Default. Any payment due on a Saturday, Sunday or other hanking holiday may be made on the first day we are open after
the date due, but inlerest and other charges shall be computed through the date on which payment is actually made. All payments will be made
to Lender at the address on the billing statement in lawful currency of the United States of America.
If you pay us with a check or similar instrument that has notations or instructiollB on or with the check, you agree that (i) we may ignore those
notations and instructions except as expressly provided helow; and (ii) we may credit any payment we receive to your Credit Line (including a
check), and our crediting of that payment will not mean that we have agreed to any notations or instructions on or with that payment.
If you want to pay the outstanding halance of the Credit Line in full with a check or similar instrument that has such special notations or
instructions on it or with it, but not c/ose the Credit Line, you must send the payment (including special notations or instructions) to Loan
Operations, Citizens Bank, I Citizens Drive, Riverside, RI 02915,
If you want to pay the Credit line in full with a check or similar instrument that has such special notations or instructions on it or with it, and
c/ose the Credit Line, you must send the payment (inclnding special notations or instructions) to Loan Operations. Citizens Bank, 1 Citizens
Drive, Riverside, RI 02915.
If payment ;" full is received at any other address, (i) we may ignore any special notations or instructions, and (ii) our crediting any such check
or other instrument to the Credit Line does not mean that we have agreed to the special notations or instructions.
7. Requesting Advances. You may request an Advance by using the special loan cheeks we will give you. The following rules apply to
your use of speeialloan checks.
a) Lost or Stolen Special Loan Checks. You agree to tell us if special loan checks are lost or stolen, or if you believe
someone is usillg your Credit Line without your pennission. The fastest way to notify uS of lost or stolen checks is by calling
us at ] -800-4-BUSINESS.
b) Forged Special Loan Checks. You agree that we do not have to pay any of your speeialloan checks if we believe the
signature on the check has been forged, unless you tell us to.
c) Postdated Special Loan Checks. If you date a special loan check with a dale that is later than the date on which you
actually wrote the special loan check, you agree that we may pay the special loan check, even if we pay it or post it to your
Credit Line on a date wbich is earlier than the date on the speeialloan cheek.
d) Stopping Payment on a Special Loan Check. You can ask us to stop payment on any special loan cheek you ha~e writt~n
that has not been paid hy calling us at the telephone number shown on your statement. A:n oral stop payment order WIll stay m
effect for fourteen (14) days, unless you confirm it in writing or tell us to cancel it. You can confinn your stop payment
order by writing to us at the address shown on your statement. A written stop payment request will stay in effect for six (6)
months, unless you tell us to cancel it.
e) We Are Not Liable. We will not be liable if anyone fails to honor a special loan check written by you.
Page 4
(xii) indictment for criminal activity; or
(xiii) any material adverse change in financial condition or business prospects which leads tbe Lender to believe that performance of any
agreement or undertaking with the Lender is or may be substantially impaired.
18. Remedies. Upon the OCCWTence of an Event of Default (as defined in Paragraph 17, above),
(i) you shall have no further right to borrow under the Credit Line, (ii) all outstanding amounts under the Credit Line are due and payable,
(iii) the outstanding amounts shall earn interest at the Default Rate, and (iv) we have the right to bring suit and exercise all rights and
remedies available under applicable law.
19. Cost or Collection. You agree to pay all expenses incurred by us in connection with the enforcement of our rigbts under the Loan
Documents to the extent allowed t)y law including, but not limited to, all appraisal, accounting and legal rees (including, but not limited
to. allocated costs ofin-house counsel) and related disbursements.
20. Notices. All notices shall be in writing, mailed to or delivered to each party to the following addresses:
If to the Borrower or Guarantor, at the address set forth in the Application;
If to the Lender, Citizens Bank, Business Banking Center, One Citizens Drive, Riverside, RI 02915;
Or such other address as any party may specify by prior notice to the other party.
21. Amendments and Waivers. The Loan Documents may be amended only by (a) writing signed by the Lender and the Borrower, or
(b) the Lender providing written notice to the Borrower at least thirty (30) days prior to the proposed effective date of the amendment. If
the Lender proposes an amendment upon thirty (30) days' notice, the amendment will become effective without the signature of the
Borrower unless the Borrower gives notice to the Lender prior to the proposed effective date that the Borrower does not accept the
amendment. No delay in exercising any right shall constitute a waiver or affect our right to act at a later time. No waiver or consent
shall be effective unless in writing signed by the party granting the waiver or consent. No waiver of an Event of Default (as described in
Paragrapb 17, above) or specific provision shall affect any other Event of Default or other provision. Any waiver sball be effective only
ror the specific instance indicated in the waiver.
22. Joint and Several Obligations. If the Application is signed by more than one Borrower, all obligations of the Borrowers under tbe
Loan Documents are their joint and several obligations, and all references to tbe Borrower herein shall be deemed to refer to each of
them, either of them, and all of them.
23. Cumulative Remedies: Setoff. The rights and remedies provided the Lender in tlris Agreement and in the other Loan Documents
shall be cumulative and shall be in addition to and not in derogation of any rights or remedies provided the Lender in any other document,
instrument or agreement or under applicable law and may be exercised concurrently or successively. Tbe Borrower grants the Lender the
right ofsetoff against all deposits and property of the Borrower now or hereafter in the possession of the Lender witbout regard to the
adequacy of collateral.
24. Entire Agreement; Assignment; Successors and Assigns. The Loan Documents supersede all prior agreements between the parties
with respect to the Credit Line, whether oral or written. The Loan Documents constitute the entire agreement between the parties with
respect to the Credit Line. Bnrrower shall not be entitled to assign any of its rights or obligations under the Loan Documents without
Lender's prior written consent. Lender shall be entitled to assign some or all of its rights under the Loan Documents without notice to or
consent of Borrower. This Agreement and the Loan Documents sball be binding upon and inure to the benefit of Borrower, Lender and
their respective successors, assigns, trustees, receivers, administrators, personal representatives, legatees and devisees.
25. Lender Liability. The Lender sball not be liable for any loss sustained by any party resulting from any action, omission or failure
to act by the Lender, whether with respect to the exercise or enforcement of the Lender's rights or remedies under the Loan Documents,
or otherwise. unless such loss is caused by the actual willful misconduct of tbe Lender conducted in bad faith. IN NO EVENT SHALL
THE LENDER EVER BE LIABLE FOR CONSEQUENTIAL OR PUNITIVE DAMAGES, ANY RIGHT OR CLAIM THERETO BEING
EXPRESSLY AND UNCONDmONAll Y WAIVED.
26. Indemnification. The Borrower hereby indemnifies and agrees to protec~ defend and hold hannless the Lender and the Lender's
directors, officers, employees, agents, attorneys and shareholders from and against any and all losses, damages, expenses or liabilities of
any kind or nature and from any suits, claims or demands, including all reasonable counsel fees incurred in investigating. evaluating or
defending such claim, suffered by any of them and caused by, relating to, arising out of, resulting from, or in any way connected with this
Agreement, the Application, the other Loan Documents and any transaction contemplated herein or therein including, but not limited to,
claims based upon any act or failure to act by the Lender. If the Borrower shall have knowledge or any claim or liability hereby
indemnified against, it sball promptly give written notice thereof to the Lender. The Borrower acknowledges that this covenant shall
survive payment of all Advances.
27. WAIVER OF TRIAL BY JURY. THE LENDER, THE BORROWER AND ANY GUARANTOR HEREBY VOLUNTARILY,
INTENTIONALLY AND IRREVOCABLY W AlVE All RIGHT TO TRIAL BY JURY IN ANY PROCEEDING HEREAFI'ER
INSTITUTED BY OR AGAINST THE LENDER, THE BORROWER OR ANY GUARANTOR OF ANY KIND, IN ANY COURT,
ARISING OUT OF TIllS AGREEMENT, THE APPUCATlON, THE OTHER LOAN DOCUMENTS OR ANY RELATED
DOCUMENTS.
28. WAIVER OF l'REJUDGMENT HEARING. THE BORROWER AND ANY GUARANTOR (i) ACKNOWLEDGE THAT THIS
AGREEMENT IS A PART OF A COMMERCIAL TRANSACTION AND (ii) TO THE EXTENT PERMfITED BY ANY STATE OR
FEDERAL LAW, WAIVE THE RIGHT THE BORROWER OR ANY GUARANTOR MAY HAVE TO PRIOR NOTICE OF AND A
PRIOR COURT HEARING ON THE RIGHT OF ANY HOLDER OF TInS AGREEMENT TO ANY REMEDY OR COMBINATION
OF REMEDIES THAT ENABLES SAID HOLDER, BY WAY OF ATIACHMENT, FOREIGN ATIACHMENT, GARNISHMENT,
REPLEVIN, OR OTHER PREJUDGMENT PROCESS TO DEPRIVE THE BORROWER OR ANY GUARANTOR OF PROPERTY, AT
ANY TIME, PRIOR TO FINAL JUDGMENT IN ANY LITlGATION INSTITUTED IN CONNECTION WITH THIS AGREEMENT,
AND FURTHER WAIVES ANY REQUIREMENT OF LENDER TO POST A BOND OR OTHER SECURITY IN CONNEctION
WITH SUCH REMEDY.
29. Consent to Jurisdiction. The Borrower and any Guarantor consent to the personal jurisdiction in any court of the state in whicb the
main office of the Lender is located.
30. Waiver of Personal Service. The Borrower and any Guarantor waive personal service of process in connection with any action or
proceeding commenced by the Lender in connection with the Loan Documents, agreeing that such service may be made by certified mail
to the address specified in this Agreement for notices.
31. Descriptive Headings; Context The captions in this Agreement are for convenience of reference only and shall not define or limit
any provision. Wbenever the context requires, reference in this Agreement to the neuter gender shall include the masculine lUId10r
feminine gender, ancj the singular number shall include the plural and in each case, vice versa.
32. Survival. This Agreement and all covenants, agreements, representations and warranties made herein and in any certificates
delivered pursuant hereto shall survive any making by the Lender of any Advances and tbe execution and delivery of any Loa!> Documents
and shall continue in full force and effect until this Agreement is terminated and all obligations of the Borrower to the Lender 'are paid in
full.
33. Choice of Law. This Agreement and all other Loan Documents are entered iota under and shall be construed, interpreted, enforced
and govemed by the laws of the state in which the Lender's main office is located.
34. Maine Dioclosllre. If the address for the Borrower is Maine, the following notice applies: Notice. Under Maine law, no promise,
contract or agreement to lend money, extend credi~ forbear from collection of a debt or make any other accommodation for the repayment
of a debt ror more th!U1 $250,000 may be enforced in court against Lender, unless the promise, contract or agreement is in wriling and
signed by Lender. Accordingly, Borrower cannot enforce any oral promise to extend credit unless it is contained in a writteo document
signed by Lender, nqr can any change, forbearance, or other accommodation relating to any extension of credit by Lender to Borrower be
enforced, unless it is in writing signed by Lender.
35. Seal. This Agreement is made as an instrument under seal.
KAIN, BROWN & ROBERTS LLP
ATTORNEYS AT LAW
........J .l\CK F. REAM II
SiTEVEN M. CARR
-"-UDREY E. WOLOSHIN'
""'AVlN W. MARKEV
-..bOHN N, ELLIOTT
119 EAST MARKET STREET
YORK, PENNSYLVANIA 17401-1278
Of COUNSEL
~()8ERT J 8ROWN
O<:::OWARD C R08ERTS
(717) 843-8968 EXT. 35
FAX (717) 846-6676
E-MAIL: jckream@aol.com
JACK F. REAM II
THOMAS E. COCHRAN 1842.1860
COCHRAN & HAY 1860-1883
COCHRAN.. WILLIAMS IB83-1912
COCHRAN. WILLIAMS 0. KAIN 1912-1930
GEORGE HAY KAIN 1930-1937
KAIN. KAIN 5. KAIN 1937-1958
KAIN, KAIN & BROWN 1958-1966
=0 lLM IN TAXATION
October 27,2006
Revised October 30, 2006
Mr. Thomas Scott Pedersen, President
Obventio, Inc.
3109 North Front Street
HalTisburg, PAl 711 0
Mr. Thomas Scott Pedersen
9 Todd Road
Carlisle, P A 17013
In Re: Citizens Bank of Pennsylvania
"Business Credit Line Agreement" for $75,000.00 dated January 29, 2004
Loan #8102104-0101
Dear Mr. Shearer:
I have been retained by Citizens Bank of Pennsylvania ("Bank") with regards to
the obligation and liability of Obventio, Inc. ("Borrower") to Bank arising under a
"Business Credit Line Agreement" for $75,000.00 dated January 29,2004, Loan
#8049963-0101 ("Loan"), which loan Mr. Thomas Scott Pederson ("Guarantor") has
personally guarantied by his Guaranty dated January 29,2004 ("Guaranty"). I have been
authorized and directed by the Bank to transmit this communication to you as guarantor
and as President of Borrower.
Pursuant to the te1111S and provisions of the "Business Credit Line Agreement" for
$75,000.00 dated January 29, 2004, Loan #8049963-0101, Borrower was to make
monthly payments of interest on account of the outstanding principal due and owing on
the "Business Credit Line Agreement" for $75,000.00 dated January 29,2004, Loan
#8049963-0101. Borrower has not made the monthly payments of interest for the months
of March, April, May, June, July, August, September and October of2006. The failure to
make the monthly payments of interest for the months of March, Aplil, May, June, July,
August, September and October 2006 constitutes a default by BOlTower under the
"Business Credit Line Agreement" for $75,000.00 dated January 29,2004, Loan
#8049963-0101.
EXHIBIT "B"
Mr. Thomas Scott Pedersen, President
Obventio, Inc.
Mr. Thomas Scott Pedersen
October 30, 2006
Page 2
As a result of the default by Bon-ower, Bank hereby:
1. Declares Bon-ower and Guarantor in default of the Loan;
2. Declares all principal owed by Bon-ower to Bank under the
"Business Credit Line Agreement" for $75,000.00 dated January 29,2004, Loan
#8049963-0101, and by Guarantor under the Guaranty be now immediately due and
payable in full; and
3. Demands payment in full by Bon'ower and Guarantor of all
principal, interest and late charges due Bank under the "Business Credit Line Agreement"
for $75,000.00 dated January 29,2004, Loan #8049963-0101, and under the Guaranty
ON OR BEFORE NOVEMBER 3, 2006.
As ofthe date of this letter, the following amounts are owed by Bon-ower and
Guarantor on account of the Loan and on account of the Guaranty:
Principal
Interest
Late Charges
Legal Fees
Total
$ 74,999.43
$ 4,308.29
$ 190.37
$ 750.00
$ 80,248.09
In addition, the principal balance of $80,248.09 is accruing interest at the per
diem an10unt of$19.27 per day.
h1 the event you do not pay to the Bank the sum of $80,248.09plus interest at the
per diem date of$19.27 for each day after October 27,2006 on or before NOVEMBER
6, 2006, then Banlc will immediately begin legal action to collect these amounts. In the
event Bank initiates legal action to collect these amounts, you will be obligated for all
reasonable legal fees inculTed by Bank.
Nothing herein constitutes a waiver of any and/or all of Bank's rights and
remedies all of which rights and remedies are expressly reserved for benefit of Bank.
Very truly yours,
Jack F. Ream
cc: Ms. Judi A. Gimigliano
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Total postage &. Fees \ $
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CJ Mr. Thomas Scott Pedersen, Pres~dB.tlt
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. .
. Complete items 1, 2, and 3. Also complete
item 4 if 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 mail piece,
or on the front if space permits.
1. Article Addressed to:
Mr. Thomas Scott Pedersen,
Obventio, Inc.
3109 North Front Street
Harrisburg, PA 17110
D. Is elivery address different from item 1?
If YES, enter delivery address below:
nt
3. Service Type
D Certified Mail
D Registered
D Insured Mail
D Express Mail
D Return Receipt for Merchandise
DC.a.D.
4. Restricted Delivery? (Extra Fee)
DYes
2
7005 2570 DODD 2063 4256
Domestic Return Receipt
102595-02-M-1540 :
PS Form 3811. February 2004
SENDER: COMPLETE THIS SECTION
. Complete items 1, 2. and 3. Also complete
item 4 if 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 mail piece,
or on the front if space permits.
1. Article Addressed to:
~r. Thomas SCott Pedersen
9 Todd Road
Carlisle, PA 17013
COMPLETE THIS SECTION ON DELIVERY
;a Agent
--D Addressee
eived by (flri"1jd,Nsme) C) Date of. Delivery
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D. Is delivery address differer( ~rri;~? DYes
If YES, enter deliv.~address.'. be10Yi: .'. No
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3. ,~,rvice Type ,
19"certified Mail Exp~'
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D Insured Mail D C.O.D.
4. Restricted Delivery? (Extra Fee) DYes
PS Form 3811, February 2004
7005 2570 DODD 2063 4270
Domestic Return Receipt
102595-02-M-1540
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IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYL VANIA
CIVIL DIVISION: LAW
CITIZENS BANK OF PENNSYLVANIA,
Plaintiff
No. 06-6512 Civil Term
Vs.
THOMAS SCOTT PENDERS EN,
Defendant
PRAECIPE TO DISMISS
Please dismiss the above-captioned matter without prejudice against the Plaintiff,
Citizens Bank of Pennsylvania.
Dated: November 15, 2006
KAIN, BROWN & ROBERTS LLP
By:~~
Jack F, Ream, Esquire
Attorney J.D. #10241
119 East Market Street
York, PA 17401
Telephone: 717-843-8968
Fax: 717-846-6676
R-mail: jckream@ao1.com
Attorney for Plaintiff
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