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HomeMy WebLinkAbout02-3078 IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA IFS GROUP, LLC, V. IAN M. CASTANEIRA, Plaintiff, NO. 02-3078 CIVIL CIVIL ACTION - LAW Defendant NOTICE TO PLEAD YOU ARE HEREBY NOTIFIED TO FILE A WRITTEN RESPONSE TO THE ENCLOSED PRELIMINARY OBJECTIONS OF DEFENDANT IAN M. CASTANEIRA TO PLAINTIFF'S COMPLAINT WITHIN TWENTY (20) DAYS FROM SERVICE HEREOF OR A JUDGMENT MAY BE ENTERED AGAINST YOU. Respectfully submitted, Dated: August 5, 2002 Robert E. 1 r. Attorney I. o. 21925 Marc A. Moyer Attorney I.D. No. 76434 KELLY, HOFFMAN & GODUTO LLP Post Office Box 62003 Harrisburg, PA 17106-2003 (717) 920-8100 Counsel for Defendant Ian M. Castaneira IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA IFS GROUP, LLC, Plaintiff, NO. 02-3078 CIVIL V. CIVIL ACTION - LAW IAN M. CASTANEIRA, Defendant PRELIMINARY OBJECTIONS OF DEFENDANT IAN M. CASTANEIRA TO PLAINTIFF'S COMPLAINT Defendant Ian M. Castaneira, by his counsel, Kelly, Hoffinan & Goduto LLP, respectfully interposes and files his Preliminary Objections to the Complaint filed by Plaintiff IFS Group, LLC ("IFS"), as follows: 1. On or about June 26, 2002, IFS initiated this action by filing a Complaint in the Court of Common Pleas of Cumberland County. The Complaint consisted of four counts, including breach of contract. 2. Castaneira was served with the Complaint on July 15, 2002. PRELIMINARY OBJECTIONS FAILURE TO COMFORM WITH RULE OF COURT 3. In Count I, the Complaint sets forth what purports to be a breach of contract claim. 4. Rules 1019(h) and (i) of the Pennsylvania Rules of Civil Procedure require that when any claim is based upon an agreement, the pleading must state specifically if the agreement is oral or written and, if written, the pleader must attach a copy of the writing to the pleading. S While IFS's Complaint refers to an "Exhibit `A"' in Paragraph 12, there is no Exhibit A attached to the Complaint. Further, there are no other documents attached to the Complaint purporting to constitute the writing, if any, giving rise to the breach of contract claim, 6• IFS should be required to file an Amended Complaint complying with the requirements of Rule 1019 of the Pennsylvania Rules of Civil Procedure. WHEREFORE, Defendant Ian M. Castaneira respectfully requests that the Court sustain his Preliminary Objections and require that Plaintiff IFS Group, LLC, submit an Amended Complaint in compliance with the Pennsylvania Rules of Civil Procedure. PRELIMINARY OBJECTION RAISING INSUFFICIENCY OF PLEADING 7. As noted, Count I of the Complaint purports to set forth a breach of contract claim. S. However, the claim does not set forthwith reasonable specificity of the basis for the breach of contract claim. 9. Accordingly, IFS should be required to file an Amended Complaint providing the material facts on which the cause of action is based as required by Pa. R. Civ. P. 1019(a). WHEREFORE, Defendant Ian M. Castaneira respectfully requests that the Court sustain his Preliminary Objections and require that Plaintiff IFS Group, LLC, submit an Amended Complaint in compliance with the Pennsylvania Rules of Civil Procedure. Respectfully submitted, Robert . Ke Attorney I.D. o. 21925 Marc A. Moyer Attorney I.D. No. 76434 KELLY, HOFFMAN &c GODUTO LLP Post Office Box 62003 Harrisburg, PA 17106-2003 Dated: August 5, 2002 (717) 920-8100 Counsel for Defendant Ian M Castaneira 3 CERTIFICATE OF SERVICE On this 5`'' day of August 2002, I, Pamela L. Russell a legal secret Kelly, Hoffman & ?' in the law firm of Goduto, LLP, hereby certify that I have, this day, served a true and correct copy of the foregoing PRELIMINARY OBJECTIONS OF DEFENDANT IAN M. CASTANEIRA TO PLAINTIFF'S COMPLAINT on the person(s) and at the addresses below named by United States First Class Mail, postage prepaid, in Harrisburg, PA; ( ) Stephen L. Grose Keefer, Wood, Allen & Rahal LLP 210 Walnut Street Post Office Box 11963 Harrisburg, PA 17108-1963 Counsel for Plaintiff c r o ? c ,;rn IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA IFS GROUP, LLC, Plaintiff NO. Od- - 30 7 vs. IAN M. CASTANEIRA, Defendant CIVIL ACTION - LAW NOTICE YOU HAVE BEEN SUED IN COURT. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this Complaint and Notice are served, by entering a written appearance personally or by attorney and filing in writing with the Court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so the case may proceed without you and a judgment may be entered against you by the Court without further notice for any money claimed in the Complaint or for any other claim or relief requested by the Plaintiff. You may lose money or property or other rights important to you. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP. CUMBERLAND COUNTY LAWYER REFERRAL SERVICE r 2 / GeoRINIM" - -h m- Cumberland County !..)c /`Soc ?afit o ?1 C(717)e 248, 17013 i NJ e, ? f 3 VC aW3tG6 NOTICIA Le han demandado a usted en la corte. Si usted quiere defenderse de estas demandas expuestas en las paginas siguientes, usted tiene viente (20) dias de plazo al partir de la fecha de la demanda y la notifcacion. Usted debe presentar una apariencia escrita o en persona o por abodago y archivar en la corte en forma escrita sus defensas o sus objeciones a las demandas en contra de su persona. Sea avisado que si usted no se defiende, la corte tomara medidas y puede entrar una orden contra usted sin previo aviso o notificacion y por cualquier queja o alivio que es pedido en la peticion de demanda. Usted puede perder dinero o sus propiedades o ostros derechos importantes para usted. LLEVE ESTA DEMANDA A UN ABODAGO BIMEDIATAMENTE. SI NO TIENT ABOGADO O SI NO TIENE EL DINERO SUFICIENTE DE PAGAR TAL SERVICIO, VAYA EN PERSONA O LLAME POR TELEFONO A LA OFICINA CUYA DIRECCION SE ENCUENTRA ESCRTTA ABAJO PARA AVERIGUAR DONDE SE PUEDE CONSEGUIR ASISTENCIA LEGAL. CUMBERLAND COUNTY LAWYER REFERRAL SERVICE Court Administrator Cumberland County Courthouse, 4th Floor Carlisle, PA 17013 (717) 240-6200 IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA IFS GROUP, LLC, Plaintiff NO. © a " 3 O r2T vs. IAN M. CASTANEIRA, Defendant CIVIL ACTION - LAW COMPLAINT AND NOW, comes the plaintiff, IFS Group, LLC, by and through its counsel, Keefer Wood Allen & Rahal, LLC, and files this complaint averring as follows: 1. PARTIES The Plaintiff, IFS Group, LLC (hereinafter referred to as "IFS"), is a limited liability company organized in Pennsylvania with a registered office located at 1205 Manor Drive, Suite 100, Mechanicsburg, Cumberland County, Pennsylvania 17055. 2. The defendant, Ian Castaneira (hereafter referred to as "Mr. Castaneira"), is adult individual who resides at 501 California Avenue, Harrisburg, Dauphin County, Pennsylvania 17109. II. FACTS 3. Mr. Castaneira and three other individuals entered into an agreement, which had an effective date of January 1, 2002, setting forth the names in which the operation of IFS would be conducted under the Limited Liability Company Act of the Commonwealth of Pennsylvania. 4. Each of the four (4) individuals were managers of IFS and their compensation for work performed on behalf of IFS was to be a salary paid only when IFS had sufficient cash flow to pay the same. 5. During the course of his employment, and before IFS had sufficient cash flow to pay salaries to the managers, advances were given to Mr. Castaneira by IFS and not the other managers by IFS, to be repaid by Mr. Castaneira from future earnings. 6. The advances by IFS to Mr. Castaneira were as follows: Date Check No. Amount 1/21/02 1021 $2,000 2/15/02 1104 $1,000 3/4/02 1106 $1,500 3/15/02 1115 $1,500 3/30/02 1127 IL I.5.00 TOTAL $7,500 7. In addition, IFS provided Mr. Castaneira with a laptop computer (model 7170) (hereinafter referred to as the "Computer") with a three (3) year warranty for use in performing his duties as an employee of IFS. 8. Mr. Castaneira was unable to satisfactorily perform his duties for IFS and as such, his employment was terminated on May 31, 2002. 9. In addition, under paragraphs 6.4 and 6.5 of the LLC Agreement for IFS (the "Agreement"), the remaining three (3) members of IFS voted to expel Mr. Castaneira by unanimous vote on May 31, 2002. 2 10. Mr. Castaneira never made the required capital contribution for his membership interest in IFS and therefore, was not entitled to any funds for the termination of his interest in IFS. 11. Mr. Castaneira was dismissed as manager of IFS pursuant to paragraph 9.7 of the Agreement. 12. Mr. Castaneira has refused and continues to refuse to repay IFS the $7,500 in advances, as evidenced by an invoice dated June 13, 2002, sent to Mr. Castaneira by IFS. A true and correct copy of this invoice is attached hereto as Exhibit "A." 13. In addition, Mr. Castaneira has refused and continues to refuse to return the Computer, with a value of $3,267. 14. In or about June, 2002, IFS was informed that Mr. Castaneira had been calling on clients of IFS that he had previously serviced while employed at IFS, specifically Dr. David Armesto and Dr. Richard Moser, in an apparent attempt to interfere with the existing business relationships between IFS and its clients. 15. The actions by Mr. Castaneira were intentional and without privilege and interfered with the existing and prospective business relationships between IFS and Drs. Armesto and Moser, and possibly others. COUNT I - BREACH OF CONTRACT 16. Paragraphs 1 through 15 above are incorporated here by reference as if set forth in full. 17. Despite several requests, Mr. Castaneira has refused to pay the $7,500 owed to IFS, which monies were advanced to him as stated above. 18. As a direct result of his refusal to pay, IFS has been damaged in the amount of $7,500. WHEREFORE, IFS requests that this Honorable Court enter judgment in its favor and against Mr. Castaneira in the amount of $7,500, plus costs, interest and such other relief as it deems fair and just. COUNT II - REPLEVIN 19. Paragraphs 1 through 18 above are incorporated here by reference as if set forth in full. 20. Mr. Castaneira has improperly and unlawfully taken goods of IFS (to wit, the Computer). 21. IFS seeks to have the Computer and all of its information, software and hardware returned to IFS by Mr. Castaneira. WHEREFORE, IFS requests that this Honorable Court enter judgment in its favor and against Mr. Castaneira directing him to return the Computer to its possession in the condition it was in at the time he removed it from IFS's offices, and grant such other relief as it deems fair and just. 4 COUNT III - CONVERSION 22. Paragraphs 1 through 21 above are incorporated here by reference as if set forth in full. 23. To the extent that Mr. Castaneira can no longer return the Computer that he removed from the offices of IFS, IFS seeks damages in the amount of $3,267 for the value of the Computer at the time it was unlawfully taken. WHEREFORE, IFS respectfully requests that this Honorable Court enter judgment in its favor and against Mr. Castaneira ordering Mr. Castaneira to either return the Computer or, pay to IFS $3,267 for the value of the Computer, and grant such other relief as it deems fair and just. COUNT IV - TORTIOUS INTERFERENCE WITH BUSINESS RELATIONSHIPS 24. Paragraphs 1 through 23 above are incorporated here by reference as if set forth in full. 25. Mr. Castaneira has intentionally and without privilege interfered with the existing business relationships between IFS and at least two of its clients. 26. It is believed, and therefore averred, that Mr. Castaneira has interfered or attempted to interfere with the existing business relationships between IFS and other clients. 27. Mr. Castaneira's acts in interfering with IFS's business relationships were undertaken with reckless disregard for the rights of IFS and without privilege. 28. As a direct and proximate result of Mr. Castaneira's tortious interference with IFS's existing and prospective business relationships, IFS has suffered and will suffer damages in an amount not yet quantified. WHEREFORE, IFS requests this Honorable Court enter judgment in its favor and against Mr. Castaneira in an amount to be determined after a hearing on this matter. Respectfully submitted, Dated: June c-'? 2002 KEEFER WOOD ALLEN & RAHAL, LLP By P N L. OSE Attorney I.D. #31006 210 Walnut Street P.O. Box 11963 Harrisburg, PA 17108-1963 (717) 255-8052 VERIFICATION The undersigned, Terry Lemon, Manager of IFS Group, LLC, hereby verifies and states that: 1. He is authorized to sign this verification on behalf of IFS Group, LLC; 2. The averments set forth in the foregoing Complaint are true and correct to the best of his knowledge, information, and belief; and He is aware that false statements herein are made subject to the penalties of 18 Pa.C.S. Sec. 4904, relating to unswom falsification to authorities. n f?"a .ti C Tai "1 1/ ? ?? r+J n Cl N 1 l >l C Y e SHERIFF'S RETURN - OUT OF COUNTY CASE NO: 2002-03078 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND IFS GROUP LLC VS CASTANEIRA IAN M R. Thomas Kline Sheriff or Deputy Sheriff who being duly sworn according to law, says, that he made a diligent search and and inquiry for the within named DEFENDANT to wit: CASTANEIRA IAN M but was unable to locate Him in his bailiwick. He therefore deputized the sheriff of DAUPHIN County, Pennsylvania, to serve the within COMPLAINT & NOTICE , 2002 , this office was in attached return from DAUPHIN Sheriff's Costs: So answer -_• Docketing 18.00 Out of County 9.00?? J Surcharge 10.00 R. Thomas Kline- Dep Dauphin Cc 29.25 Sheriff of Cumberland County .00 66.25 07/22/2002 KEEFER WOOD ALLEN RAHAL Sworn and subscribed to before me this zit day of aavA. D. c.. a Prothonotary' (off-re of t4r "-sheriff Mary Jane Snyder Real Estate Deputy William T. Tully Solicitor Dauphin County Harrisburg, Pennsylvania 17101 ph: (717) 255-2660 fax: (717) 255-2889 Jack Lotwick Sheriff Commonwealth of Pennsylvania IFS GROUP LLC County of Dauphin ' CASTANEIRA IAN M VS Sheriff's Return No. 1665-T - - -2002 OTHER COUNTY NO. 02-3078 AND NOW:July 15, 2002 at 9:35AM served the within COMPLAINT upon CASTANEIRA IAN M by personally handing to HIM J. Daniel Basile Chief Deputy Michael W. Rinehart Assistant Chief Deputy 1 true attested copy(ies) of the original COMPLAINT and making known to him/her the contents thereof at 501 CALIFORNIA AVE HBG, PA 17109-0000 Sworn and subscribed to before me this 15TH day,-of JULY, 2002 LP `n , \ PROTHONOTARY So Answers, Sheriff of Dauphin County, Pa. By e uty Sheriff Sh 'ff's Cos s:$29.25 PD 07/03/2002 RCPT NO 166305 GMILLER In-The Court of Common Pleas of Cumberland County, Pennsylvania IFS GROUP, LLC vs. Ian M. Castaneira SERVE: same No. 02 3078 ci Now, June zs, 2002 1, SHERIFF OF CUMBERLAND COUNTY, PA, do hereby deputize the Sheriff of Dauphin County to execute this Writ, this deputation being made at the request and risk of the Plaintiff. Sheriff of Cumberland County, PA Affidavit of Service Now, within upon at by handing to a and made known to 20_, at o'clock - _ M. served the copy of the original the contents thereof. So answers, Sheriff of COSTS Sworn and subscribed before SERVICE $ me this - day of 20_ MILEAGE AFFIDAVIT County, PA I VERIFICATION The undersigned, Terry Lemon, Manager of IFS Group, LLC, hereby verifies and states that: 1. He is authorized to sign this verification on behalf of IFS Group, LLC; 2. The averments set forth in the foregoing Complaint are true and correct to the best of his knowledge, information, and belief; and 3 He is aware that false statements herein are made subject to the penalties of 18 Pa.C.S. Sec. 4904, relating to unswom falsification to authorities. 11 L ;46 IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA IFS GROUP, LLC, Plaintiff, NO. 02-3078 CIVIL V. IAN M. CASTANEIRA, CIVIL ACTION - LAW Defendant NOTICE TO PLEAD TO: Stephen L. Grose Keefer, Wood, Allen & Rahal LLP 210 Walnut Street Post Office Box 11963 Harrisburg, PA 17108-1963 Counsel for Plaintiff YOU ARE HEREBY NOTIFIED TO FILE A WRITTEN RESPONSE TO THE ENCLOSED NEW MATTER AND COUNTERCLAIM WITHIN TWENTY (20) DAYS FROM SERVICE HEREOF OR A JUDGMENT MAY BE ENTERED AGAINST YOU. Respectfully submitted, Dated: September, 2002 Ro K ly, Jr. Attorne . . No. 21925 Marc A. Moyer Attorney I.D. No. 76434 KELLY, HOFFMAN & GODUTO LLP Post Office Box 62003 Harrisburg, PA 17106-2003 (717) 920-8100 Counsel for Defendant Ian M. Castaneira IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA IFS GROUP, LLC, Plaintiff, NO. 02-3078 CIVIL V. IAN M. CASTANEIRA, Defendant CIVIL ACTION - LAW ANSWER, NEW MATTER AND COUNTERCLAIM OF DEFENDANT IAN M. CASTANEIRA TO PLAINTIFF'S COMPLAINT AND NOW comes Defendant, Ian M. Castaneira ("Mr. Castaneira"), by and through his counsel, Kelly, Hoffman & Goduto LLP, to Answer Plaintiff's Complaint as follows: 1. PARTIES 1. ADMITTED. 2. ADMITTED. II. FACTS 3. DENIED as stated. It is ADMITTED that in March, 2002, Mr. Castaneira, Terry E. Lemon, Joseph E. Krichten, and Stephen D. Gift entered into an Operating Agreement, effective January 1, 2002. The Operating Agreement is a written document which speaks for itself and, therefore, need not be admitted or denied. 4. DENIED as stated. It is ADMITTED that Mr. Castaneira, Joseph E. Krichten, Terry E. Lemon and Stephen D. Gift were parties to the Operating Agreement. By way of further Answer, the terms and conditions regarding the compensation to be paid by IFS Group to its members are set forth in the Operating Agreement which, as a written document, speaks for itself. 5. DENIED. It is DENIED that IFS Group gave Mr. Castaneira "advances" which were to be repaid from future earnings or that such "advances" were given to Mr. Castaneira before IFS Group had sufficient cash flow to pay salaries. By way of further Answer, it is ADMITTED that IFS Group provided Mr. Castaneira with partial payments of his salary during the course of his employment, after the effective date of the Operating Agreement. 6. DENIED. It is DENIED that the IFS Group provided "advances" to Mr. Castaneira. By way of further Answer, it is ADMITTED that the amounts set forth in Paragraph 6 of Plaintiff's Complaint represent partial payments of Mr. Castaneira's salary. It is further ADMITTED that on December 18, 2001, Terry E. Lemon provided Mr. Castaneira with a partial payment of his salary on behalf of IFS Group in the amount of $2,000. 7. DENIED as stated. It is ADMITTED that during the course of his affiliation with IFS Group, Mr. Castaneira used a laptop computer (Model 7170) to assist him in performing his duties. 8. DENIED. It is DENIED that Mr. Castaneira was unable to satisfactorily perform his duties as a member of the IFS Group or that the termination of his membership with IFS Group was based upon unsatisfactory job performance. 9. DENIED. It is DENIED that Terry E. Lemon, Joseph E. Krichten and Stephen D. Gift properly terminated Mr. Castaneira as a member of IFS Group pursuant to Paragraphs 6.4 and 6.5 of the Operating Agreement. By way of further Answer, it is ADMITTED that on May 31, 2002, Mr. Castaneira was confronted by the three other members of IFS Group without any advance notice, and was informed that they had decided to terminate his continued participation with IFS Group. 2 10. The averments set forth in Paragraph 10 of Plaintiff's Complaint are conclusions of law to which no response is required. To the extent the averments are deemed to be factual in nature, it is DENIED that Mr. Castaneira failed to make the required capital contribution for his membership in the IFS Group or that he is not entitled to any funds resulting from the termination of his relationship with the IFS Group. 11. DENIED. It is DENIED that Mr. Castaneira was properly dismissed as a manager of IFS Group pursuant to Paragraph 9.7 of the Operating Agreement which, as a written document, speaks for itself. 12. DENIED. It is DENIED that Mr. Castaneira was provided $7,500.00 in "advances" or that Mr. Castaneira is obligated to repay IFS Group the $7,500.00 he received as partial payment of his salary. 13. DENIED. It is DENIED that Mr. Castaneira has wrongfully refused to return the computer to IFS Group, that he is obligated to return the computer to IFS Group, or that the computer has a value of $3,267.00. 14. After reasonable investigation, Mr. Castaneira lacks sufficient knowledge or information to form a belief as to the truth or falsity of the averments set forth in Paragraph 14 of Plaintiff's Complaint. The averments are, therefore, DENIED and strict proof thereof is demanded at time of trial. By way of further Answer, it is DENIED that Mr. Castaneira has attempted to interfere with existing business relationships between IFS Group and its clients. 15. DENIED. It is DENIED that Mr. Castaneira has interfered, intentionally or otherwise, and without privilege, with existing and prospective business relationships between IFS Group and Drs. Armesto and Moser. 3 COUNT I - BREACH OF CONTRACT 16. Paragraphs 1 through 15 of Defendant's Answer are incorporated by reference as if fully set forth herein. 17. DENIED. It is DENIED that IFS Group "advanced" Mr. Castaneira the amount of $7,500.00 or that Mr. Castaneira owes $7,500.00 to IFS Group. 18. The averments set forth in Paragraph 18 of Plaintiff's Complaint are conclusions of law to which no response is required. To the extent the averments are deemed to be factual in nature, it is DENIED that Mr. Castaneira has damaged IFS Group in the amount of $7,500.00. WHEREFORE, Defendant Ian Castaneira, respectfully requests that this Honorable Court enter judgment in his favor and against IFS Group, and that he be awarded attorneys fees, costs, interest and other such relief as this Honorable Court deems fair and just. COUNT II - REPLEVIN 19. Paragraphs 1 through 18 of Defendant's Answer and New Matter are incorporated by reference as if fully set forth herein. 20. The averments set forth in Paragraph 20 of Plaintiff's Complaint are conclusions of law to which no response is required. To the extent the averments are deemed to be factual in nature, it is DENIED that Mr. Castaneira has improperly and unlawfully taken goods belonging to IFS Group. 21. The averments set forth in Paragraph 21 of Plaintiff's Complaint do not constitute factual averments to which a response is required pursuant to the Pennsylvania Rules of Civil Procedure. 4 WHEREFORE, Defendant Ian Castaneira, respectfully requests that this Honorable Court enter judgment in his favor and against IFS Group, and that he be awarded attorneys fees, costs, interest and other such relief as this Honorable Court deems fair and just. COUNT III - CONVERSION 22. Paragraphs 1 through 21 of Defendant's Answer are incorporated by reference as if fully set forth herein. 23. The averments set forth in Paragraph 23 of Plaintiff's Complaint are conclusions of law to which no response is required. To the extent the averments are deemed to be factual in nature, it is DENIED that Mr. Castaneira has unlawfully taken a computer from the IFS Group or that Mr. Castaneira has caused IFS Group to suffer damages in the amount of $3,267.00. WHEREFORE, Defendant Ian Castaneira, respectfully requests that this Honorable Court enter judgment in his favor and against IFS Group, and that he be awarded attorneys fees, costs, interest and other such relief as this Honorable Court deems fair and just. COUNT IV - TORTIOUS INTERFERENCE WITH BUSINESS RELATIONSHIPS 24. Paragraphs 1 through 23 of Defendant's Answer and New Matter are incorporated by reference as if fully set forth herein. 25. DENIED. It is DENIED that Mr. Castaneira has interfered, intentionally or otherwise, and without privilege, with existing business relationships between IFS Group and at least two of its clients. 26. DENIED. It is DENIED that Mr. Castaneira has interfered or attempted to interfere, without privilege, with existing business relationships between IFS Group and other clients. 5 27. The averments set forth in Paragraph 27 of Plaintiff's Complaint are conclusions of law to which no response is required. To the extent the averments are deemed to be factual in nature, it is DENIED that Mr. Castaneira interfered with IFS Group's business relationships, without privilege, or that Mr. Castaneira did so with reckless disregard for the rights of IFS Group. 28. The averments set forth in Paragraph 28 of Plaintiff's Complaint are conclusions of law to which no response is required. To the extent the averments are deemed to be factual in nature, it is DENIED that Mr. Castaneira interfered with IFS Group's existing and prospective business relationships without privilege or that Mr. Castaneira has caused IFS Group to suffer damages. WHEREFORE, Defendant Ian Castaneira, respectfully requests that this Honorable Court enter judgment in his favor and against IFS Group, and that he be awarded attorneys fees, costs, interest and other such relief as this Honorable Court deems fair and just. NEW MATTER Plaintiff's Complaint fails to state a claim for which relief may be granted. 2. Plaintiff's claims are barred in whole or in part by the applicable statutes of limitation. 3. Plaintiff's claims are barred pursuant to the Limited Liability Company Operating Agreement of IFS Group, LLC. 4. All payments made to Mr. Castaneira by IFS Group constituted partial payments of Mr. Castaneira's annual salary. 5. At all times material to Plaintiff's Complaint, Mr. Castaneira satisfactorily performed each of his duties and responsibilities while serving as a member of IFS Group. 6 6. At no time material to Plaintiff's Complaint has Mr. Castaneira interfered or attempted to interfere, without privilege, with existing business relationships between IFS Group and its clients. 7. Plaintiff's claims are barred by accord and satisfaction. 8. At all times material to Plaintiff's Complaint, Mr. Castaneira fulfilled his contractual obligations to the Plaintiff, thereby barring Plaintiff's claims under the equitable doctrine of estoppel. 9. Plaintiff's claims are barred by the application of the Parole Evidence Rule. 10. Any harm suffered by the Plaintiff, all of which is denied, is a direct result of Plaintiff's own conduct, negligence, inadvertence or mistake. COUNTERCLAIM 1. Defendant Ian Castaneira is a licensed and registered securities representative holding Series 7, 24, 31, 63, and 65 licenses. 2. From June, 1996, until November 30, 2001, Mr. Castaneira was employed by Prudential Securities, Inc. ("PSI") and was engaged in the practice of selling investment products and providing financial services to clients as a general securities registered representative. 3. On March 2, 2001, Terry E. Lemmon and Stephen D. Gift formed a limited liability company named IFS Group, LLC in accordance with the Limited Liability Company Act, 15 Pa. C.S. § 8901 et. seq. 4. In March 2002, the Mr. Castaneira, Joseph E. Krichten, Terry E. Lemmon and Stephen D. Gift (collectively the "IFS Parties") entered into an Operating Agreement setting forth the terms and conditions of the IFS Group Partnership, effective January 1, 2002. App. "A." 7 5. On December 12, 2001, Mr. Castaneira entered into an individual Representative Agreement with Linsco/Private Ledger Corp. ("LPL") to serve as Mr. Castaneira's Broker/Dealer. 6. On or about May 15, 2002, Mr. Castaneira received a commission check in the amount of $3,648.92 representing commissions he had earned on various securities transactions. 7. On or about May 27, 2002, Mr. Castaneira received a commission check in the amount of $8,586.35 representing commissions he had earned on various securities transactions. 8. Pursuant to Article 4 of the Operating Agreement, Mr. Castaneira deposited the $12,235.27 in commission checks into IFS Group's general account with the understanding that the commission would be distributed to him as part of IFS Group's normal partnership distribution process. 9. Pursuant to Article 6.5 of the Operating Agreement, a partner with the IFS Group was permitted to be expelled as a partner from the IFS Group upon the unanimous vote of the other members of IFS Group. 10. Upon information and belief, Terry E. Lemmon, Stephen D. Gift and Joseph E. Krichten met prior to May 31, 2002, without Mr. Castaneira's knowledge, to discuss replacing Mr. Castaneira with Mr. Krichten as IFS Group's office manager and to discuss Mr. Castaneira's expulsion from IFS Group. 11. Upon information and belief, Terry E. Lemmon, Stephen D. Gift and/or Joseph Krichten convened a meeting or otherwise communicated with each other without Mr. Castaneira's knowledge prior to May 31, 2002, for the purpose of conspiring to oust Mr. Castaneira from IFS Group. 8 12. On May 31, 2002, Mr. Castaneira was confronted by the three other members of the IFS Group without any advance notice, and was informed that they had decided to terminate his continued participation with IFS Group. 13. Following May 31, 2002, Mr. Castaneira instructed LPL to deny IFS Group access to his clients. Mr. Castaneira also began the process of contacting his clients to inform them of his separation from IFS Group and to inform them of their options. 14. During these efforts, Mr. Castaneira was notified by several clients that they had received letters from Joseph Krichten/IFS Group asking them to open new accounts, transfer assets and/or change the representative of record without providing them with full or fair disclosure of the extent of the changes to their accounts. 15. Mr. Krichten/IFS Group's letters did not advise Mr. Castaneira's clients that he was no longer associated with IFS Group, or that the purpose and effect of the documents enclosed in the letters was to remove Mr. Castaneira as their representative by substituting Mr. Krichten and/or IFS Group. 16. On the contrary, by executing the documents enclosed with Mr. Krichten/IFS Group's letters, Mr. Castaneira's clients would have opened entirely new accounts identifying only Mr. Krichten as the broker of record, and would have authorized Mr. Krichten to transfer any assets in existing accounts to the new accounts. 17. On June 3, 2002, LPL informed Mr. Castaneira that it was terminating his registration status with LPL. 18. In ousting Mr. Castaneira as a member with IFS Group in the manner set forth above, IFS Group, acting through Terry E. Lemmon, Joseph E. Krichten and Stephen D. Gift did 9 not act fairly or in good faith towards Mr. Castaneira as a minority member of the collective partnership. 19. The conduct of Terry E. Lemmon, Joseph E. Krichten and Stephen D. Gift, acting on behalf of IFS Group as set forth above, was not exercised with due care, in good faith, or in a manner that an ordinarily prudent person would exercise under similar circumstances. COUNT I - REPLEVIN/CONVERSION Ian M. Castaneira v. IFS Group, LLC 20. Paragraphs 1 through 19 of Defendant's Counter-Claim are incorporated by reference as if fully set forth herein. 21. IFS Group, acting through its agents, servants and/or employees Terry E. Lemmon, Joseph D. Krichten and Stephen D. Gift, has improperly and unlawfully taken $12,235.27 in commissions and personal items including, but not limited to, a Hot-Sync cradle, a leather office chair and client files, to which Mr. Castaneira is entitled at a time when it knew or should have known it was going to terminate him as a member of IFS Group. 22. Mr. Castaneira seeks to have his commissions and personal property returned to him by IFS Group, LLC. WHEREFORE, Defendant Ian M. Castaneira respectfully requests that this Honorable Court enter judgment in his favor and against IFS Group in an unspecified amount yet to be determined. COUNT II - TORTIOUS INTERFERENCE WITH BUSINESS RELATIONS Ian M. Castaneira v. IFS Group, LLC 23. Paragraphs 1 through 22 of Defendant's Counter-Claim are incorporated by reference as if fully set forth herein. 10 24. It is believed and, therefore averred, that IFS Group, acting through its agents, servants and/or employees Terry E. Lemmon, Joseph D. Krichten and/or Stephen D. Gift contacted LPL about its termination of Mr. Castaneira as a member with IFS Group. 25. It is believed and, therefore averred, that IFS Group acting through its agents, servants and/or employees Terry E. Lemmon, Joseph D. Krichten and Stephen D. Gift contacted LPL about its termination of Mr. Castaneira as a member with IFS Group for the purpose of injuring Mr. Castaneira's business relationship with LPL. 26. It is believed and, therefore averred, that the IFS Group acting through its agents, servants, and/or employees Terry E. Lemmon, Joseph D. Krichten and Stephen D. Gift knew or should have known that the termination of Mr. Castaneira's Representative Agreement with LPL would result in considerable harm to Mr. Castaneira in the form of lost clients, business revenue and commissions. 27. It is believed and, therefore averred, that the IFS Group through its agents, servants and/or employees Terry E. Lemmon, Joseph D. Krichten and Stephen D. Gift intentionally interfered with the existing business relationship between Mr. Castaneira and LPL. 28. It is believed and, therefore averred, that the actions of IFS Group in contacting LPL through its agents, servants and/or employees Terry E. Lemmon, Joseph D. Krichten and Stephen D. Gift were undertaken with reckless disregard for the rights of Mr. Castaneira and without privilege. 29. As a direct and proximate result of IFS Group's tortious interference with Mr. Castaneira's existing and prospective business relationship with LPL, Mr. Castaneira has suffered, and will continue to suffer, damages in an amount yet to be determined. 11 WHEREFORE, Defendant Ian M. Castaneira respectfully requests that this Honorable Court enter judgment in his favor and against IFS Group in an amount in excess of $25,000.00, plus attorney's fees, costs, interest and other such relief as this Honorable Court deems fair and just. Dated: Soli ??? Z 0 0 Z Respectfully submitted, I ) ->?? Robert E. I 11 r. Attorney I.D. No. 21925 Marc A. Moyer Attorney I.D. No. 76434 KELLY, HOFFMAN & GODUTO LLP Post Office Box 62003 Harrisburg, PA 17106-2003 (717) 920-8100 Counsel for Defendant Ian M Castaneira 12 VERIFICATION I, Ian M. Castaneira, state that I have read the foregoing ANSWER, NEW MATTER AND COUNTERCLAIM OF DEFENDANT IAN M. CASTANEIRA TO PLAINTIFF'S COMPLAINT which has been drafted by my counsel. The factual statements contained therein are true and correct to the best of my information, knowledge, and belief, although the language is that of counsel and, to the extent that the content of the foregoing document is that of counsel, I have relied upon counsel in making this Verification. This statement is made subject to the penalties of 18 Pa. C.S.A. Section 4904 relating to unsworn falsification to authorities, which provides that if I make knowingly false statements, I may be subject to criminal penalties. y 10 Z- (77/- Date' Ian M. eira AMENDED AND RESTATED LIMITED LIABILITY COMPANY OPERATING AGREEMENT OF IFS GROUP, LLC Dated as of: January 1, 2002 TABLE OF CONTENTS TERMS AND CONDITIONS . . . . . . . . . . . . . . . . . . . . . 1 Article 1 1.1 1.2 1.3 PRELIMINARY MATTERS: EFFECTIVE DATE OF AGREEMENT FORMATION OF LLC. INITIAL MEMBERS ETC. . . . Effective date of Agreement; enforceability. . . . Formation of LLC . . . . . . . . . . . . . Registered anent and office; principal place of 1 1 2 business. . . . . . . . . . . . . . . . . . . . 2 1.4 Duration of LLC . . . . . . . . . . . . . . . . . . . 2 1.5 Tax classification of LLC . . . . . . . . . . . . . . 2 1.6 Fiscal and taxable year of LLC . . . . . . . . . . . 2 1.7 LLC method of accounting . . . . . . . . . . . . . . 2 1.8 Members of LLC on Effective Date . . . . . . . . . . 3 1.9 Admission of new members. . . . 3 1.10 Member liabilities to third parties . . . . . . . . 3 1.11 Reservation of LLC management to its managers. . 3 1.12 Admission of LLC as party to Agreement . . . . . . . 3 1.13 Effect of LLC Act . . . . . . . . . 3 1.14 Relation of Agreement to Certificate . . . . 3 1.15 Amendment of Agreement and Certificate . . . . . . . 3 Article 2 DEFINITION OF MEMBER, ETC.; SINGLE CLASS OF MEMBERS; MEMBER CONTRIBUTIONS OF CASH ETC TO LLC . . . . . . . . . . . . . . . . . . . . 4 2.1 Definition of member . . . . . . . . . . . . . . . . 4 2.2 Definition of LLC interest . . . . . . . . . . . . . 4 2.3 Single class of members. 4 2.4 Contributions of cash, etc to be made by members in exchange for their memberships . . . . 4 2.5 Specific functions and responsibilities of members; time commitments . . . . . . . . . . . . . . . 4 2.6 Member loans to LLC. . . . . . . . . . . . . . . . 5 Article 3 MEMBER VOTING RIGHTS; CERTAIN OTHER NON-ECONOMIC RIGHTS OF MEMBERS . . . . . . . . 5 3.1 Number of votes that members may cast. . 5 3.2 Matters which members may decide. . . . . . . . 5 3.3 Number of votes necessary to decide Member Matters . 5 3.4 Procedural rules governing votina . . . . . . . . . . 5 3.5 Right of members to obtain information and to inspect documents in LLC's possession or control 5 3.6 Right of members to bring action against in the name of or on behalf of the LLC or aaainst other members . 6 Article 4 CERTAIN ECONOMIC RIGHTS OF MEMBERS . 6 4.1 Allocations of LLC profits and losses to members . . 6 -i- 4.2 Allocations of distributions of LLC assets to members while thev are members . . . . . . . . . . . . . . . 6 4.3 No LLC duty to make distributions . . . . . . . . . . 6 4.4 No distributions of LLC profits and assets to members when they cease to be members . . . . . . . 7 4.5 Unlawful distributions; return of unlawful distributions . . . . . . . . . . . . . . . . . . . . 7 4.6 Right of members to receive draws . . . . . . . . . . 7 4.7 Right of members to receive from the LLC guaranteed -payments and other compensation for services for loan s and for other benefits provided by them to LLC . . . 7 4.8 Right of members to receive reimbursement from the LLC for expenses reasonably incurred by them on behalf of the LLC . . . . . . . . . . . . . . . . . . . 7 4.9 Right of dissenting members to require LLC to purchase their LLC interests. . . . . . . . . . . . . . . . 8 4.10 Definition of Buy-Out Matter . . . . . . . . . . . . 8 Article 5 TRANSFERS AND PLEDGES OF MEMBERSHIPS; LLC ADMISSIONS OF NEW MEMBERS . . . . . . . . . . . . . . o 5.1 Restrictions on right of members to transfer and pledge their membership rights . . . . . . . . . . . . . . . 8 5.2 Definition of transfer . . . . . 8 5.3 Admission as member of person accruiring membership rights of a member . . . . . . . . . . . . . . . . . 9 5.4 Admission as member of person whom the LLC intends to admit as member. . . . . . . . . . . . . . . . . . 9 Article 6 CESSATIONS OF MEMBERSHIPS. INCLUDING MEMBER RESIGNATIONS AND EXPULSIONS; RIGHT OF LL TO PURCHASE LLC INTERESTS OF CERTAIN FORMER MEMBERS . . . . . . . . . . . . . . . . . . . y 6.1 Events of cessation of memberships . . . . . . . . . 9 6.2 Definition of Serious Disability . . . 10 6.3 Right of members to resign from LLC• notice of resignation. . . . . . . 10 6.4 Right of members to expel a member* . . . . . . . 10 6.5 Voting requirements for expulsions of members. 10 6.6 Consecruences of cessation of membership . . . . . . 11 6.7 Right of LLC to reguire certain former members to sell their LLC interests to the LLC . . . . . . . . . . 11 6.8 Personal representatives . . . . . . . . . . . . . 12 Arti cle 7 CERTAIN MEMBER LIABILITIES FIDUCIARY DUTIES ETC . . . . . . . . . . . . . . . . . . . 12 -ii- 7.1 Members' personal liabilitv to the LLC and to other members for violations of their duties 12 7.2 Members' duties of good faith and fair dealing 12 7.3 Members' duty of care . . . . . . . . . . . . . . . 12 7.4 Members' duties in doing business with LLC . . . . 13 7.5 Members' duties with respect to LLC business opportunities . . . . . . . . . . . . . . . . . . . 13 7.6 Members' duty to keep other members informed. 13 7.7 Duty of manority members toward minoritv members 13 7.8 No member liability if a member relies on LLC information, on other LLC members, etc . . . . . . 13 7.9 No member liability for actions taken in good faith etc . . . . 14 7.10 Members' right to indemnification and advancement of litigation expenses . . . . . . . . . . . . . . . . 14 7.11 Liability insurance for members . . . . . . . . . 14 Article 8 MEMBERS' DUTY OF CONFIDENTIALITY . . . . 15 8.1 Duty of members to maintain confidentiality of LLC information . . . . . . . . . . . . . . 15 8.2 Definition of Confidential Information . . . . . . 15 8.3 Exceptions to duty of confidentiality . . . . . . . 16 Article 9 MANAGER QUALIFICATIONS, APPOINTMENTS FUNCTIONS DUTIES. LIABILITIES, ETC . . . . . . . . . . . 16 9.1 Manager qualifications . . . . . . . . . . . . . . 16 9.2 Manager's title . . . . . . . . . . . . . . . . . . 16 9.3 Manager functions. . . . . . 17 9.4 Method of appointing General Manager. . . . . . . 17 9.5 General Manager's term . . . . . . . . . . . . . . 17 9.6 Manager resignations . . . . . . . . . . . . . . . 17 9.7 Manager dismissals 17 9.8 No manager liability for claims against LC by third party . . . . . . . . . . . . . . . . . . . . . . . 17 9.9 Managers' exclusive right etc to bind LLC and to decide LLC matters . . . . . . . . . . . . . . . . 17 9.10 Managers' duty with respect to prevention of veil- piercing . . . . . . . . . . . . . . . . 18 9.11 Manager duties and personal liabilities etc. 19 9.12 Manager's valuation of contributions etc . . . . 19 9.13 Manager compensation . . . . . . . . . . . . . . . 19 Article 10 LLC BOOKS OF ACCOUNTS, REPORTS ETC . . . . . 19 10.1 Books of account . . . . . . . . . . . . . . . . . 19 10.2 Reports to members, etc . . . . . . . . . . . . . 20 Article 11 TAX PLANNING AND COMPLIANCE . . . . . . . . . 20 -iii- 11.1 Importance to LLC of tax management and compliance. . . . . . . . . . . 20 11.2 Appointment of LC tax adviser. . . . . . . . . 20 11.3 LLC tax returns . . . . . . . . . . . . 20 11.4 LLC provision of tax information to members . . . 20 11.5 LLC computation and recording of members' contributions, capital accounts and adiusted tax bases . . . . . . . . . 21 11.6 Planning of individual transactions . . . . . . . 21 11.7 Tax distributions . . . . . . . . . . . . . . . 21 Article 12 LLC DISSOLUTION, WINDING-UP AND LIQUIDATION; LIQUIDATION DISTRIBUTIONS . . . . . . . . . . 22 12.1 Definition ofLLC dissolution etc . . . . . . . . 22 12.2 Cessation of LLC's legal existence . . . . . . . . 22 12.3 Events causing dissolution . . . . . . . . . . . . 22 12.4 Grounds for order of dissolution by arbitrator . . 23 12.5 Exclusion of one or more members from participation in wind-up process, etc . . . . . . . . . . . . . . . 23 12.6 Winding-up of LLC . . . . . . . . . . . . . . . . 23 12.7 Determination of date for delivery of Certificate of Cancellation and for effective date of certificate 23 12.8 Compliance with the tax laws of this Commonwealth applicable to entitv dissolutions and liquidations. 24 12.9 Disposition of known and unknown claims against LLC . . . . . . . . 24 12.10 Distributions upon LLC liquidation . . . . . . . 24 Article 13 TERM OF AGREEMENT; TERMINATION, SURVIVAL OF CERTAIN BENEFITS AND DUTIES. ETC . . . . . . . 24 13.1 Term and termination . . . . . . . . . . . . . . . 24 13.2 Survival of accrued benefits, etc . . . . . . . . 25 13.3 Termination of duties under Articles 7 and 8 . . . 25 13.4 Arbitration of rights etc arising after terminati on of the LLC . . . . . . . . . . . . . . . . . . . . 25 Article 14 . . . . . . . . . . . . . . . . . . . . . 25 14.1 Mandatory arbitration of certain disputed matters 25 14.2 Definition of Arbitrable Matter . . . . . . . . . 25 14.3 Exclusions from definition . . . . . . . . . . . . 26 14.4 Rules governing arbitration . . . . . . . . . . . 26 14.5 Notice of arbitration . . . . . . . . . . . . . . 26 14.6 Selection of arbitrator . . . . . . . . . . . . . 26 14.7 No appeal, etc . . . . . . . . . . . . . . . . . . 26 14.8 Allocations of costs, fees etc 27 14.9 Awarding of litigation costs to prevailing party 27 -iv- Article 15 REPRESENTATIONS AND WARRANTIES BY MEMBERS AND MANAGERS; DUTY TO UPDATE; MEMBER LIABILITY FOR FALSE REPRESENTATIONS, ETC. . . . . . . . . . 27 15.1 Representations and warranties . . . . . . . . . . 27 15.2 Duty to update . . . . . . . . . . . . . . . . . . 28 15.3 Member liability . . . . . . . . . . . . . . . . . 28 Article 16 GENERAL PROVISIONS . . . . . . . . . . . . . . 28 16.1 Entire agreement . . . . . . . . . . . . . . . . . 28 16.2 Incorporation of exhibits . . . . . . . . . . . . 28 16.3 Governing law . . . . 28 16.4 Forum for resolution of disputes . . . . . . . . . 28 16.5 Notices . . . . . . . . . . . . . . . . . . . . . 29 16.6 Captions . . . . . . . . . . . . . . . . . . . . . 29 16.7 Freedom and enforceability of contract . . . . . . 29 16.8 Severability . . . . . . . . . . . . . . . . . . . 29 16.9 Waivers . . . . . . . . . . . . . . . . . . . . . 29 SIGNATURES AND DATES . . . 30 -v- TABLE OF EXHIBITS Exhibit A TABLE OF MEMBER CONTRIBUTIONS IN EXCHANGE FOR MEMBERSHIPS Exhibit B SPECIFIC FUNCTIONS AND RESPONSIBILITIES OF MEMBERS; MEMBER TIME COMMITMENTS Exhibit C LOANS TO BE MADE BY MEMBERS TO THE LLC Exhibit D RULES GOVERNING MEMBER DRAWS Exhibit E GUARANTEED PAYMENTS TO BE MADE BY LLC TO MEMBERS Exhibit F TYPES OF LLC MATTERS WHICH THE MEMBERS MAY DECIDE Exhibit G COMPENSATION TO BE PAID TO MANAGER -vi- PARTIES This Agreement, dated as of March 7, 2001, is between the following parties (the "Initial Members"): Stephen P. Gift, an individual, a resident of the Commonwealth of Pennsylvania, residing at 3 Truffle Glen Road, Mechanicsburg, Pennsylvania 17050; Terry E. Lemon, an individual, a resident of the Commonwealth of Pennsylvania, residing at 4 South Alydar Boulevard, Dillsburg, Pennsylvania 17019; Ian M. Castaneira, an individual, a resident of the Commonwealth of Pennsylvania, residing at 501 California Avenue, Harrisburg, PA 17109; and Joseph E. Krichten, an individual, a resident of the Commonwealth of Pennsylvania, residing at 750 Elm Terrace, York, Pennsylvania 17404. BACKGROUND A. The Initial Members have formed the LLC under the Limited Liability Company Act of the Commonwealth of Pennsylvania (the "LLC Act"),15 Pa. C.S. Ch. 89, for the principal purpose of financial consulting. B. This Agreement sets forth the agreement between or among the members concerning, among other things, their respective rights, duties and liabilities and the rights, duties and liabilities of the LLC's managers. TERMS AND CONDITIONS The Initial members, intending to be legally bound, agree as follows: Article 1 PRELIMINARY MATTERS: EFFECTIVE DATE OF AGREEMENT, FORMATION OF LLC, INITIAL MEMBERS, ETC. 1.1 Effective date of Agreement; enforceability. The effective date of this Agreement (the "Effective Date") shall be January 1, 2002. On and after that date, all rights, duties and 1 liabilities of the members as members and managers of the LLC shall be enforceable in accordance with the terms of the Agreement. 1.2 Formation of LLC. A Certificate of Formation has been filed with the Secretary of State of the Commonwealth of Pennsylvania. The LLC is a legal entity separate and independent from its members. 1.3 Registered agent and office; principal place of business. Upon its formation: a. The registered agent of the LLC shall be Stephen P. Gift. b. The registered office of the LLC shall be 1205 Manor Drive, Suite 200, Mechanicsburg, Pennsylvania 17055. C. The address of the registered agent shall be 1205 Manor Drive, Suite 200, Mechanicsburg, Pennsylvania 17055. d. The principal place of business of the LLC shall be 1205 Manor Drive, Suite 200, Mechanicsburg, Pennsylvania 17055. The managers of the LLC may change the LLC's principal place of business from time to time upon reasonable notice to the members. 1.4 Duration of LLC. Subject to the provisions of Article 12 (relating to dissolution of the LLC by vote of the members, etc.), the duration of the LLC shall be indefinite. 1.5 Tax classification of LLC. Under federal tax law and to the maximum extent possible under the tax laws of each state and the District of Columbia: a. The LLC shall be classified as an S corporation; and b. The LLC and its members shall be taxed as an S corporation and as shareholders. 1.6 Fiscal and taxable year of LLC. The fiscal and taxable year of the LLC shall be the calendar year. 1.7 LLC method of accounting. The LLC shall use the cash method of accounting to compute its taxable income. 2 1.8 Members of LLC on Effective Date. On the Effective Date, the sole members of the LLC shall be the Initial Members. 1.9 Admission of new members. After the formation of the LLC, persons who seek to acquire all or any part of the membership rights of existing members and persons to whom the LLC seeks to issue memberships shall become members only upon complying with the admission requirements set forth in Article 5 of this Agreement. 1.10 Member liabilities to third parties. No member or manager of the LLC shall be personally obligated to any third party for any debt, obligation or liability of the LLC solely by reason of being a member or manager. 1.11 Reservation of LLC management to its managers. The business and internal affairs of the LLC shall be managed exclusively by its managers who by unanimous action may delegate some or all of their management rights and responsibilities to a general manager (the "General Manager"). Only the managers, (or the General Manager, if the managers delegate management rights and responsibilities to a General Manager) shall have the right to bind the LLC in dealings with third parties, and, except as provided in Article 3.2, only the managers (or if so authorized, the General Manager) shall have the right to decide LLC matters. The managers shall be the Initial members until they resign as managers or cease to be members, in which case they shall automatically cease to be managers. 1.12 Admission of LLC as party to Agreement. The Initial members shall sign this Agreement on behalf of the LLC, making the LLC a party to this Agreement. 1.13 Effect of LLC Act. Except as otherwise provided in this Agreement, the business and internal affairs of the LLC shall be governed by the LLC Act (as this Act may be amended, supplemented, or replaced from time to time). 1.14 Relation of Agreement to Certificate. The Certificate of Formation is hereby incorporated into this Agreement. If there is any conflict between the provisions of this Agreement and those of the Certificate of Formation, the provisions of this Agreement shall prevail in resolving disputes among the members concerning any such conflict. 1.15 Amendment of Agreement and Certificate. No amendment of this Agreement or of the Certificate of Formation shall be 3 valid except upon the affirmative vote of seventy-five percent of Member Votes, as defined in Article 3.1 below. 1.16 Voting Rights. If, at any time, the LLC consists of only two (2) members, "majority" shall mean "unanimous" when used is this Agreement. Article 2 DEFINITION OF _MEMBER, ETC.; SINGLE CLASS OF MEMBERS; MEMBER CONTRIBUTIONS OF CASH ETC TO LLC 2.1 Definition of member. A member of the LLC means a person admitted as a member in accordance with the provisions of Article 5. Each member shall have the rights, duties and liabilities of members as provided in this Agreement and in the LLC Act. To the extent provided in this Agreement, members' rights shall include economic rights (including the right to share in allocations and distributions of LLC profits) and non- economic rights (including the right to vote on LLC matters). 2.2 Definition of LLC interest. For purposes of this Agreement, a member's LLC interest shall mean the member's share of the profits and losses of the LLC and the member's right to receive distributions of the LLC's assets. 2.3 Single class of members. The LLC shall have a single class of members. 2.4 Contributions of cash, etc to be made by members in exchange for their memberships. Promptly after the LLC's formation, the Initial Members shall, in exchange for their memberships, contribute to the LLC the cash, property and services and the promises of cash, property and services ("contributions") set forth in this Article and in the attached Exhibit A. Members admitted to the LLC after its formation shall make contributions in exchange for their memberships as determined by the managers. The members shall earn no interest on their contributions to the LLC. No member shall have a duty to make a contribution to the LLC except as provided in Exhibit A (as this exhibit may be amended from time to time). 2.5 Specific functions and responsibilities of members; time commitments. In conducting the business and internal affairs of the LLC, each of the Initial Members shall have the 4 specific functions and responsibilities and shall commit time to the LLC as set forth in the attached Exhibit B. Members admitted to the LLC after its formation shall have the specific functions and responsibilities and shall commit time to the LLC as set forth in amendments to that exhibit. 2.6 Member loans to LLC. The Initial Members shall make loans to the LLC as set forth in the attached Exhibit C. Members admitted to the LLC after its formation shall make loans to the LLC as set forth in amendments to that exhibit. Article 3 MEMBER VOTING RIGHTS; CERTAIN OTHER NON-ECONOMIC RIGHTS OF MEMBERS 3.1 Number of votes that members may cast. On each LLC matter, each member shall have one vote for each one percent of the member's share of profits and losses (a "Member Vote"). 3.2 Matters which members may decide. Each member, as a member and not as a manager, shall have the right to decide only the types of LLC matters ("Member Matters") set forth in this Agreement and in the attached Exhibit F. 3.3 Number of votes necessary to decide Member Matters. Each Member Matter shall be decided by the affirmative vote of members holding a majority of Member Votes; PROVIDED: a. No amendment of this Agreement shall be valid unless approved by the affirmative vote of seventy-five percent of Member Votes; and b. The votes required to expel a member shall be as set forth in Article 6.4. 3.4 Procedural rules governing voting. No vote by the members on Member Matters shall be deemed to be invalid on any procedural or similar ground in the absence of fraud or bad faith. For purposes of this Article 3.4, the terms "procedural or similar ground" shall be construed broadly. 3.5 Right of members to obtain information and to inspect documents in LLC's possession or control. During normal business hours and after reasonable notice to the managers, each member shall be entitled to obtain all information in the LLC's 5 possession or control and to inspect and copy all documents and other media in the LLC's possession or control. 3.6 Right of members to bring action against in the name of or on behalf of the LLC or against other members. Except to enforce an arbitration order under Article 14: a. No member in the member's capacity as a member may bring suit in any court for any reason against the LLC itself or against any other member as a member. b. No member may bring a suit or action against any third party in the name of or on behalf of the LLC except with the affirmative vote of other members holding a seventy-five percent of Member Votes (exclusive of the votes of the member seeking to bring suit). Any member may raise in arbitration under Article 14 any claim or issue that could be raised in any suit or action against, in the right of, or in the name of the LLC. Article 4 CERTAIN ECONOMIC RIGHTS OF MEMBERS 4.1 Allocations of LLC Arofits and losses to members. The LLC shall allocate its profits and losses to the members in proportion to their respective percent of member interests in the LLC; PROVIDED, that for purposes of this Article 4.1 and Article 4.2, contributions shall include only amounts actually contributed and not returned. 4.2 Allocations of distributions of LLC assets to members while they are members. Except as provided in Article 11.7 (relating to tax distributions), the LLC shall allocate distributions of its profits and assets to the members in proportion to their respective member interest in the LLC. 4.3 No LLC duty to make distributions. The LLC shall have no duty to make distributions of its cash or other assets to members except as determined from time to time by the affirmative vote of members having seventy-five percent of Member Votes; PROVIDED, a. Tax distributions. The LLC shall make distributions to the members in accordance with 6 Article 11.7 to the extent necessary to enable them to pay taxes on their shares of LLC profits. b. Licruidatina distributions. LLC distributions to members in connection with the LLC's liquidation shall be governed by Article 12. 4.4 No distributions of LLC profits and assets to members when they cease to be members. Except as provided in Article 4.9 (relating to buy-outs of dissenting members), no member shall be entitled to receive any distribution of LLC profits or assets or the value of the member's LLC interest because of the member's ceasing to be a member by reason of death, resignation, expulsion or otherwise. 4.5 Unlawful distributions; return of unlawful distributions. The LLC shall make no distribution of its assets to any member if the distribution will result in the LLC's having a negative net worth or will otherwise violate the LLC Act. Any member receiving any such distribution shall promptly return it to the LLC. 4.6 Right of members to receive draws. During any fiscal year of the LLC, members shall be entitled to draw on their shares of LLC profits for that year in accordance with the attached Exhibit D. Promptly after the end of each such year, the right, if any, of each member to receive draws shall be adjusted by the LLC on the basis of amounts actually drawn by the member during the previous year. 4.7 Right of members to receive from the LLC guaranteed payments and other compensation for services for loans and for other benefits provided by them to LLC. The guaranteed payments and other compensation which any member receives from the LLC for services, for loans and for other benefits which the member provides to the LLC shall be as provided in the attached Exhibit E. Amounts which members receive as guaranteed payments shall not affect the amount of allocations to them of LLC profits and losses or of LLC distributions. 4.8 Right of members to receive reimbursement from the LLC for expenses reasonably incurred by them on behalf of the LLC. As promptly as reasonably possible, the LLC shall reimburse each member for all expenses which that member reasonably incurs on behalf of the LLC and which the member reasonably documents. The expenses covered by this Article 4.8 shall include, without limitation, expenses relating to a member's use for the LLC's 7 benefit of equipment, tools, motor vehicles and real property owned by the member. 4.9 Right of dissenting members to require LLC to purchase their LLC interests. If a member dissents to the affirmative vote of members holding seventy-five percent of Member Votes on a Buy-Out Matter (as defined in Article 4.10) and if, in connection with this dissent, the member resigns from the LLC, the LLC shall purchase the member's LLC interest for its fair value and on other reasonable purchase terms. For purposes of this Agreement, the term "fair value" means fair market value as determined initially by the LLC, subject to arbitration under Article 14, without discount for marketability, lack of control, or any other factor. 4.10 Definition of Buy-Out Matter. For purposes of Article 4.9, Buy-Out Matter means: a. Whether the LLC shall sell more than 50% of its assets (by current fair market value) in a single transaction or in a series of related transactions; b. Whether the LLC shall participate in a conversion or merger; and c. Whether this Agreement shall be amended. All Buy-Out Matters shall be determined by the affirmative vote of members holding seventy-five percent of Member Votes. Article 5 TRANSFERS AND PLEDGES OF MEMBERSHIPS; LLC ADMISSIONS OF NEW MEMBERS 5.1 Restrictions on right of members to transfer and pledge their membership rights. No member shall transfer or pledge all or any of the member's rights as a member to any person, including any other member, except upon the affirmative vote of the members holding seventy-five percent of Member Votes (exclusive of Member Votes held by the transferring or pledging member). 5.2 Definition of transfer. For purposes of Article 5.1, "transfer" includes, without limitation: a. A transfer by sale or gift; 8 b. A transfer (whether by will, trust or otherwise) taking effect on the death of the transferor; and c. An involuntary transfer, including, without limitation, a transfer by operation of law, a transfer as the result of an execution on a judgment, a transfer pursuant to the order of a bankruptcy court, or a transfer pursuant to a divorce decree. Transfers and pledges in breach of the terms of this Article 5 shall be void and of no effect. 5.3 Admission as member of person acguirincr membership rights of a member. No person who acquires all or any of the membership rights of a member shall become a member of the LLC except upon the affirmative vote of members (other than the transferring member) holding seventy-five percent of Member Votes and upon the person's signing this Agreement as it may be amended from time to time. 5.4 Admission as member of person whom the LLC intends to admit as member. The LLC shall admit no person as a member of the LLC except upon the affirmative vote of members holding seventy-five percent of Member Votes and upon the person's signing this Agreement as it may be amended from time to time. Article 6 CESSATIONS OF MEMBERSHIPS. INCLUDING MEMBER RESIGNATIONS AND EXPULSIONS: RIGHT OF LLC TO PURCHASE LLC INTERESTS OF CERTAIN FORMER MEMBERS 6.1 Events of cessation of memberships. A Member shall cease to be a member only upon the occurrence of one of the following events: a. The member incurs a Serious Disability (as defined in Article 6.2); b. The member resigns in accordance with Article 6.3; C. The member dies (or, if the member is an entity, it incurs a dissolution or equivalent event); d. The member either files a petition for relief under the Bankruptcy Code or is the subject of an involuntary petition that is not dismissed within one hundred twenty (120) days; 9 e. The member is expelled from membership in the LLC in accordance with Articles 6.4 and 6.5; f. The member attempts to transfer to one or more other persons all of the member's membership rights in accordance with Article 5. 6.2 Definition of Serious Disability. A member shall be deemed to have incurred a Serious Disability within the meaning of Article 6.1(a) if the managers reasonably determine that because of any physical or mental disability, the member is unable to participate significantly in the business and internal affairs of the LLC for 180 consecutive calendar days. 6.3 Right of members to resign from LLC; notice of resignation. A member may resign as a member of the LLC upon giving written notice of resignation to the other members. The resignation shall be effective 180 calendar days after the notice has been given to all other members. 6.4 Right of members to expel a member. A member may be expelled from membership in the LLC by vote of other members in accordance with Article 6.5: a. If the member seriously breaches this Agreement and fails to cure the breach within a reasonable time after notice of breach has been given (if cure is possible); b. The member is convicted of a felony; C. The member engages in fraudulent or illegal actions in relation to the business or internal affairs of the LLC; or d. The member becomes the subject of a voluntary or involuntary bankruptcy petition. 6.5 Voting requirements for expulsions of members. A member may be expelled from membership in the LLC pursuant hereto if the other members vote as follows: a. LLC has five or more members. If at the relevant time, the LLC has five or more members, a member may be expelled by the affirmative vote of other members holder at least seventy-five percent of Member Votes (excluding those of the member sought to be removed); 10 b. LLC has three or four members. If, at the relevant time, the LLC has three or four members, a member may be expelled by the unanimous vote of other members (excluding those of the member sought to be removed); or c. LLC has two members. If, at the relevant time, the LLC has only two members, either member may petition for the expulsion of the other member in an arbitration proceeding under Article 14. 6.6 Conseauences of cessation of membership. Immediately upon a member's ceasing to be a member, the member shall cease to have any right, duty or liability as a member; provided that, except as otherwise provided in this Agreement: a. The member shall continue to own the member's LLC interest and to have all the rights of an owner of an LLC interest, until such interests are transferred as herein provided. b. The member shall continue to be subject to all liabilities accrued by the member before ceasing to be a member. 6.7 Right of LLC to require certain former members to sell their LLC interests to the LLC. The LLC may require a member to promptly sell the member's membership interests to the LLC for its fair value as initially determined by the LLC, subject to arbitration in accordance with Article 14 and upon other reasonable purchase terms: a. If the member either files a petition for relief under the Bankruptcy Code or is the subject of an involuntary petition that is not dismissed within one hundred twenty (120) days; b. If the member becomes a party to a divorce proceeding and the other members determine reasonably and in good faith that it is likely that as a result of that proceeding, all or any of the member's membership rights will be awarded to the member's spouse; C. If the member resigns from the LLC; d. If the member incurs a Serious Disability within the meaning of Article 6.2; 11 d. If the member incurs a Serious Disability within the meaning of Article 6.2; e. If the member is expelled under Article 6.4; or f. If an arbitrator orders such a sale under Article 14 on the ground that the sale is fair and reasonable in the circumstances. 6.8 Personal representatives. For purposes of this Article 6, the term "member" shall include any person exercising the powers of a member because of the member's Serious Disability or death. Article 7 CERTAIN MEMBER LIABILITIES. FIDUCIARY DUTIES, ETC. 7.1 Members' personal liability to the LLC and to other members for violations of their duties. Any member who, acting as a member or as a manager, violates a duty of that member as a member or manager under Articles 7.2 through 7.8 or under other articles of this Agreement shall be personally liable to the LLC and to the other members for money damages and for other appropriate relief; PROVIDED, that the member shall have no such liability: a. If the member meets the requirements of Article 7.9 (relating to reliance on LLC information, other LLC members, etc.) or Article 7.10 (relating to actions taken in good faith, etc.); or b. If an arbitrator under Article 14 finds that the imposition of the liability would be unfair or unjust in the circumstances. 7.2 Members' duties of good faith and fair dealing. In participating in the business and internal affairs of the LLC, each member, whether acting as a member or as a manager, shall act in good faith and shall deal fairly with the LLC and with other members. 7.3 Members' duty of care. In participating in the business and internal affairs of the LLC as members or as managers, members shall exercise the care that an ordinarily prudent person would exercise under similar circumstances; 12 PROVIDED, that if a member has special expertise, the member in participating in the LLC's business and internal affairs shall exercise the same care that a third party possessing comparable expertise would exercise. 7.4 Members' duties in doing business with LLC. A member, whether acting as a member or as manager, may engage in business with the LLC in a capacity other than as a member or manager only with the affirmative vote of disinterested members holding at least a majority of member Votes (exclusive of the votes of the interested member). The terms of any business arrangement permitted under this Article 7.5 shall be under arm's-length terms. 7.5 Members' duties with respect to LLC business opportunities. If a member learns (whether in the course of LLC business or otherwise) of a business opportunity relating to financial services that is potentially valuable to the LLC, the member shall promptly disclose the opportunity to the LLC. The member may exploit the opportunity for the member's personal benefit only if: a. The LLC fails to accept the opportunity within 15 business days after receiving notice of it provides written notice to the members that the LLC does not intend to pursue the opportunity; or b. After accepting it, the LLC fails to exploit it within ninety (90) calendar days. Whether the LLC shall accept the opportunity shall be decided by the affirmative vote of disinterested members holding seventy- five percent of Member Votes. 7.6 Members' duty to keep other members informed. Each member, whether acting as a member or as a manager, shall use reasonable efforts to keep all other members currently informed concerning the LLC's business and internal issues. 7.7 Duty of majority members toward minoritv members. Members who, alone or in combination with other members, take action on any LLC matter as a majority shall act fairly and in good faith toward minority members. 7.8 No member liability if a member relies on LLC information: on other LLC members etc. No member, whether acting as a member or as a manager, shall be personally liable to 13 the LLC or to other members for a claim of violation of the member's duties under Articles 7.2 through 7.8 to the extent that the member took the actions or made the omissions on which the claim is based in good faith and in reasonable reliance on: a. LLC records; b. Other LLC members, officers, and employees; and c. Consultants to the LLC whom the member reasonably believes to be competent in the matters in question. 7.9 No member liability for actions taken in good faith, etc. No member, whether acting as a member or as a manager, shall be personally liable to the LLC or to the other members for any action or omission by the member if the member can prove that the member took that action or made that omission on an informed basis, in good faith and in the honest belief that the action or omission was in the best interest of the LLC. 7.10 Members' right to indemnification and advancement of litigation expenses. A member, whether acting as a member or as a manager, shall be entitled: a. To indemnification for losses that the member incurs as a result of claims against the member by third parties because of actions and omissions of the member as a member or manager made in good faith; and b. To the advancement of litigation expenses arising from such claims; PROVIDED, that the procedures and standards applicable to such indemnifications and advancements of expenses shall be those set forth with respect to directors under the Pennsylvania Business Corporation Act, as amended and supplemented. 7.11 Liability insurance for members. Whether the LLC shall maintain an insurance policy to cover member or manager liabilities arising under this Agreement shall be determined by the affirmative vote of members holding a majority of Member Votes. 14 Article 8 MEMBERS' DUTY OF CONFIDENTIALITY 8.1 Duty of members to maintain confidentiality of LLC information. Each member, whether acting as a member or as a manager: a. Shall maintain Confidential Information (as defined in Article 8.2) in confidence; b. Except as required in conducting the business and internal affairs of the LLC, shall not disclose Confidential Information to any third party without the authorization of the managers (or, in the case of any disclosure proposed by a manager, without the affirmative vote of members holding a majority of Member Votes (exclusive of the Member Votes of the manager)); C. Shall make copies of documents and other media containing Confidential Information only for the benefit of the LLC; d. Shall use Confidential Information only for the benefit of the LLC; and e. Upon ceasing to be a member or manager, shall return to the LLC all documents and other media containing Confidential Information. 8.2 Definition of Confidential Information. For purposes of this Agreement, Confidential Information means: a. The terms of this Agreement; PROVIDED, that a member or manager may disclose these terms on a confidential basis to his or her spouse and professional advisers; b. Information that the LLC maintains in confidence and that has actual or potential economic value to the LLC because it is not generally known to others and is not readily ascertainable by them, which information shall include, without limitation: (1) Financial information relating to the LLC; 15 (2) Information relating to LLC marketing and business plans and strategies; (3) Information concerning the design and manufacturer of LLC products, the method of providing LLC services and product, and service ideas of the LLC regardless of development stage; and (4) Information in LLC personnel files and similar files concerning LLC members and employees; C. Information entrusted to the LLC in confidence by third parties; and d. Information reasonably designated by the managers orally or in writing as Confidential Information. 8.3 Exceptions to duty of confidentiality. Article 8.1 shall not apply to information: a. Which enters the public domain through no fault of a member; b. The disclosure of which is required by final order of a court of competent jurisdiction; C. The disclosure of which is made on a confidential basis to an arbitrator in an arbitration under Article 14. Article 9 MANAGER QUALIFICATIONS. APPOINTMENTS FUNCTIONS DUTIES, LIABILITIES. ETC. 9.1 Manager qualifications. The Initial Members of the LLC shall be its managers until they resign either as members or as managers. The managers may appoint a General Manager to perform such functions as they delegate to the General Manager which may include some or all of the rights and duties of the managers. All managers shall be natural persons and shall be members of the LLC. The General Manager shall have such other qualifications as are determined from time to time by the unanimous vote of all managers. 9.2 Manager's title. In performing management functions for the LLC, the General Manager, if appointed, may use the title 16 "Manager" or such other title or titles as the members may determine from time to time by unanimous vote of all managers. 9.3 Manager functions. The managers shall have general responsibility for managing the business and internal affairs of the LLC. The managers shall have such additional functions as are set forth in this Agreement and as members holding seventy- five percent of Member Votes may determine from time to time. 9.4 Method of appointing General Manager. The General Manager, if the managers determine that a General Manager should be appointed, shall be appointed by the unanimous vote of all managers. 9.5 General Manager's term. The term of General Manager shall be indefinite, but shall terminate upon the earliest of the date of the General Manager's (a) death, (b) resignation, or (c) dismissal as General Manager. 9.6 Manager resignations. Any manager may without liability resign as manager upon giving 180 calendar days' written notice to each member. 9.7 Manager dismissals. A manager may be dismissed as a manager at any time with or without cause by unanimous vote of all other managers (exclusive of the vote of the manager sought to be dismissed). 9.8 No manager liability for claims against LLC by third party. No manager as such shall have personal liability for a claim against the LLC by any third party. 9.9 Managers, exclusive right etc to bind LLC and to decide LLC matters. The managers shall have the following exclusive rights: a. Statements about the LLC. The managers shall have the exclusive right to bind the LLC in statements to third parties concerning the LLC; PROVIDED, that except with the advance approval of members holding a majority of member Votes, no managers shall make any statement or related series of statements concerning the LLC involving a financial exposure to the LLC exceeding $500. 17 b. Contracts. The managers shall have the exclusive right to sign contracts with third parties on behalf of the LLC; PROVIDED, that except with the advance approval of members holding a majority of Member Votes, no individual manager shall sign any contract or related series of contracts involving a financial exposure to the LLC of more than $500, although the managers collectively may agree to commit the LLC with respect to contracts or related series of contracts involving a financial exposure to the LLC of $100,000.00. C. Business decisions. The managers shall have the exclusive right to decide all LLC matters relating to the business of the LLC except those expressly reserved to the members under Article 3.2 (reserving certain LLC matters for decision by members). 9.10 Managers' duty with respect to prevention of veil- piercing. Managers shall take all reasonable measures to minimize the risk that any member or manager as such shall be held personally liable for the obligations of the LLC solely because of the member's status as a member or manager. These measures shall include, without limitation, the following: a. Use of "LLC" with LLC name. Managers shall ensure to the maximum reasonable extent that the abbreviation "LLC" appears after the name of the LLC in all LLC stationery, checks, business cards, invoices, advertisements and other media containing the name of the LLC and likely to be read by third parties. b. No commingling of funds. Managers shall ensure to the maximum reasonable extent that there is no commingling of the assets of the LLC with the assets of any LLC member. C. Adequate capitalization. Managers shall ensure that the LLC's cash and non-cash assets, cash flow, insurance and other financial resources enable it to meet its reasonably foreseeable liabilities when due. 18 d. No misleading of third parties. Managers shall take all reasonable measures to ensure that no third party reasonably believes that any member is personally liable for LLC obligations. 9.11 Manager duties and personal liabilities etc. The managers, acting as managers: a. Shall be subject to all of the duties set forth in Article 7 and under the other articles of this Agreement applicable to members acting as members; b. Shall be subject to all duties set forth in this Article 9; and c. Shall be personally liable for violations of their duties as members under Article 7, under other applicable articles of this Agreement, and under this Article 9. 9.12 Manager's valuation of contributions etc. Whenever, after the formation of the LLC, the LLC admits a person as a new member of the LLC, the managers (and not the members): a. Shall promptly determine in dollars a value for the contribution of that person in exchange for the person's membership or that there was no contribution; and b. Shall promptly notify all members concerning their determination. Thereafter, in the absence of fraud, the determination shall be conclusive as to the value of the contribution or as to whether there was a contribution. 9.13 Manager compensation. Managers shall not be compensated for their services as managers. 9.14 Manager indemnification. Managers shall be entitled to indemnification, advancement of litigation expenses and liability insurance as provided in Article 7. Article 10 LLC BOOKS OF ACCOUNTS, REPORTS ETC. 10.1 Books of account. The LLC shall maintain on a current basis accurate books of account in accordance with financial 19 standards normally applied to business organizations generally similar to the LLC in size and business activities. 10.2 Re-ports to members, etc. Through the provision of written financial reports or other appropriate measures, the LLC shall advise the members on a regular basis or upon demand of a member concerning the financial condition of the LLC. Article 11 TAX PLANNING AND COMPLIANCE 11.1 Importance to LLC of tax management and com-pliance. The members in their capacity as members and as managers acknowledge the importance to the LLC and the members of: a. Competent tax planning for the LLC and for themselves as members; and b. Full compliance by the LLC and by the members with federal and state tax requirements. 11.2 Appointment of LLC tax adviser. In connection with its formation and on a continuing basis thereafter, the members and the manager shall cooperate with the following tax adviser to ensure adequate LLC tax planning and compliance: Gift & Associates 1205 Manor Drive Mechanicsburg, PA 17055. The managers may change the LLC's tax adviser from time to time by the affirmative vote of seventy-five percent of Member Votes and upon reasonable notice to the members. 11.3 LLC tax returns. On a timely basis each year, the LLC shall accurately complete and file its federal income tax return and all applicable state returns. 11.4 LLC -provision of tax information to members. As soon as reasonably possible after the close of each of its taxable years, the LLC shall provide each member with a completed IRS Schedule K-1 and with all other documents and information relevant to the federal and state tax liabilities of the member as a member of the LLC; PROVIDED, that each member shall have sole responsibility for preparing and timely filing the member's federal and state tax returns and for paying 20 the member's taxes, and the LLC shall have no responsibility or liability with respect to these matters. 11.5 LLC computation and recording of members' contributions, capital accounts and adjusted tax bases. The LLC shall compute on a current basis and in accordance with applicable U.S. Treasury Department regulations and other applicable law the capital contributions and capital accounts of the members and their adjusted tax bases in their LLC interests. The LLC shall maintain current and accurate records concerning members' capital contributions, capital accounts and adjusted tax bases and, promptly after the request of any member, shall make these records available to the member. 11.6 Planning of individual transactions. Before undertaking any major transaction involving the LLC or any member in the member's capacity as a member: a. The LLC and each affected member shall consult with one or more partnership tax experts concerning the tax implications of the transaction; and b. The LLC and affected members shall make any tax elections and shall take any other actions necessary or appropriate in the circumstances to ensure tax compliance and maximum lawful tax avoidance. The issue of the fairness of any such transaction to the LLC and to the members shall be subject to arbitration. 11.7 Tax distributions. If any member requires a distribution of LLC profits in order to pay the member's federal or other tax liabilities on the member's share of LLC profits for any taxable year, the LLC shall, to the extent its financial condition reasonably permits, promptly make this distribution to the member; PROVIDED, that, as a condition for the distribution, (i) the LLC may, under reasonable conditions of confidentiality, require the member to disclose to the manager relevant information concerning the member's tax and financial affairs.; and (ii) that an equivalent distribution is made to all other members in accordance with Article 4.2 of this Agreement. 21 Article 12 LLC DISSOLUTION. WINDING-UP AND LIQUIDATION- LIQUIDATION DISTRIBUTIONS 12.1 Definition of LLC dissolution, etc. For purposes of this agreement, the following terms shall have the following meanings: a. Dissolution. The dissolution of the LLC shall mean the cessation of its normal business and the beginning of the process of winding up and liquidating its business. b. Winding up. The winding up of the LLC shall mean the process of concluding its existing business arrangements and preparing for its liquidation. C. Liquidation. The liquidation of the LLC shall mean the sale or other disposition of its assets and the distribution of its assets (or the proceeds of their sale or other disposition) to its creditors and to the members. 12.2 Cessation of LLC's legal existence. The LLC shall cease to exist as a legal entity on the effective date set forth in the Certificate of Cancellation delivered by the LLC to the Secretary of State in connection with its winding up. 12.3 Events causing dissolution. The LLC shall be dissolved: a. Upon the affirmative vote of members holding a majority of Member Votes; PROVIDED, that upon any such dissolution, members holding less than a majority of member votes may seek damages in arbitration under Article 14 for any injury unfairly resulting to them from the dissolution; b. Upon the issuance of an order of dissolution by a court or by the Secretary of State; C. Upon the issuance of an order of dissolution by an arbitrator under Article 14. The dissolution of an LLC by vote of the members shall be effective on the date specified in that vote or, if the members 22 do not specify a date, then on the date on which members holding a majority of member votes have voted to approve the dissolution. 12.4 Grounds for order of dissolution by arbitrator. Upon petition by any member, an arbitrator under Article 14 may issue an order dissolving the LLC on one or more of the following grounds: a. The LLC has obtained its Certificate of Formation through fraud; b. The LLC has exceeded or abused the authority conferred upon it by law; C. The LLC has conducted its business in a persistently fraudulent or illegal manner; d. The LLC has abused its power contrary to the public policy of this Commonwealth; e. There is a deadlock in LLC management which the members are unable to resolve and which is causing or which threatens to cause irreparable injury to the LLC or which prevents it from conducting its business or affairs to its advantage; or f. The dissolution of the LLC is reasonable and fair in the circumstances. 12.5 Exclusion of one or more members from participation in wind-up process, etc. Any member may petition an arbitrator under Article 14 to exclude one or more members or the manager from participating in the process of winding up and liquidating the LLC on the ground that, because of past wrongful conduct by the relevant members or the manager, their participation would be likely to affect that process adversely. 12.6 Winding-up of LLC. After the LLC is dissolved, the manager shall as expeditiously as reasonably possible: a. Wind up its business and internal affairs; and b. Cause its liquidation. During the wind-up period, the LLC shall accept no new business. 12.7 Determination of date for delivery of Certificate of Cancellation and for effective date of certificate. The date on 23 which the LLC shall deliver a Certificate of Cancellation to the Secretary of State for filing and the effective date of this certificate shall be determined by the affirmative vote of members holding a majority of Member Votes. 12.8 Compliance with the tax laws of this Commonwealth applicable to entity dissolutions and liquidations. The LLC shall make no distribution of its assets to its members in connection with its liquidation until it has complied with all applicable tax laws and regulations of this Commonwealth relating to its dissolution and liquidation. 12.9 Disposition of known and unknown claims against LLC. Promptly after the dissolution of the LLC, the LLC and the members shall take all reasonable measures under the laws of this Commonwealth to dispose of (and, to the extent possible, to bar) known and unknown claims against the LLC. 12.10 Distributions upon LLC liquidation. Upon completion of the LLC's winding-up but before the effective date of the Certificate of Cancellation, the LLC shall distribute its assets in the following order: a. First, the LLC shall pay (or shall make adequate provision to pay) its creditors; b. Second, the LLC shall distribute its assets to members in satisfaction of its liabilities for distributions to them under Article 4; C. Third, the LLC shall distribute its assets to members for the return of their contributions; and d. Fourth, the LLC shall distribute its assets to members in accordance with their right to share in distributions of its assets under Article 4. Article 13 TERM OF AGREEMENT: TERMINATION- SURVIVAL OF CERTAIN BENEFITS AND DUTIES ETC. 13.1 Term and termination. The term of this Agreement shall begin on the Effective Date (as defined in Article 1.1) and, except as provided in Articles 13.2 through 13.4, shall terminate on the effective date of the certificate of cancellation of the LLC's Certificate of Formation. 24 13.2 Survival of accrued benefits, etc. Benefits and liabilities accrued by the parties under this Agreement before its termination shall continue in full force and effect after its termination. 13.3 Termination of duties under Articles 7 and 8. Upon the termination of this Agreement, the duties of existing and former members under Article 7 (relating to certain fiduciary duties, etc., including duties not to compete) and under Article 8 (relating to confidentiality) shall terminate unless an arbitrator under Article 14 determines otherwise. 13.4 Arbitration of rights, etc. arising after termination of the LLC. Notwithstanding the termination of this Agreement, any party may, after that termination, initiate an arbitration under Article 14 to determine and enforce rights and duties of the parties arising with respect to: a. The LLC's winding up; b. Its liquidation; and c. Events occurring after the cancellation of its certificate of Formation. Article 14 ARBITRATION OF LLC DISPUTES 14.1 Mandatory arbitration of certain disputed matters. Any dispute among the members or between any member and the manager relating to Arbitrable Matters (as defined in Article 14.2) shall be exclusively and finally resolved by arbitration by a single arbitrator (the "Arbitrator"). 14.2 Definition of Arbitrable Matter. Arbitrable Matters shall include only the following types of matters: a. How to construe and enforce the provisions of this Article 14 (including any issue concerning the scope of these provisions); b. Whether the expulsion of a member under Articles 6.5 and 6.6 is fair; C. Whether a vote by majority members concerning the LLC's dissolution is fair to minority members; 25 d. Whether the purchase price or the other terms of purchase of a member's LLC interest pursuant to the terms of this Agreement is fair to the LLC and to the members; e. Any claim by a member in the member's capacity as a member against any other member in that other member's capacity as a member; f. Whether any action by the LLC or by the members is (a) contrary to this Agreement or (b) seriously unfair to any member; and g. Any other matter that, in the Arbitrator's view, is appropriate for decision under Article 14. 14.3 Exclusions from definition. Arbitrable Matters shall not include: a. Routine business matters of the LLC; and b. Matters requiring urgent judicial relief. 14.4 Rules governing arbitration. Except as otherwise provided in this Article 14, any arbitration (an "Arbitration") under this Article 14 shall be governed by the Rules of Commercial Arbitration of the American Arbitration Association ( II T T T " ) . 14.5 Notice of arbitration. Any member may initiate an Arbitration of any Arbitrable Matter. The initiating member shall do so by providing written notice of the Arbitration to the other members. The notice shall bear a current date, shall state the name of the initiating member, and shall briefly state the matter to be arbitrated. 14.6 Selection of arbitrator. If, within 10 business days after all the members entitled to notice of an Arbitration have received that notice, the members have not agreed among themselves as to the identity of the Arbitrator and the site of the Arbitration, the LLC shall immediately refer these matters for resolution by AAA's Philadelphia office in its sole discretion. 14.7 No appeal, etc. No member shall appeal any order of an Arbitrator under this Article 14 to any court. The LLC or any member may enter any such order in any court of competent jurisdiction. 26 14.8 Allocations of costs, fees, etc. The Arbitrator may allocate among the members the costs, fees and other expenses relating to an Arbitration in any manner that the Arbitrator shall determine to be appropriate in his or her absolute discretion; PROVIDED, that if the Arbitrator determines that a member has initiated an Arbitration without a reasonable basis for doing so, the Arbitrator shall assess against that member all costs of the LLC and the other members relating to the Arbitration, including, without limitation, the reasonable attorneys' fees of the LLC and the other members. 14.9 Awarding of litigation costs to prevailing party. If, in a suit in law or equity, any member or members seek judicial review of any issue arising in an arbitration under this Article 14, an Arbitrator under this Article may allocate to the losing parties in that suit all costs reasonably incurred by the prevailing parties. Article 15 REPRESENTATIONS AND WARRANTIES BY MEMBERS AND MANAGERS: DUTY TO UPDATE: MEMBER LIABILITY FOR FALSE REPRESENTATIONS, ETC. 15.1 Representations and warranties. Each member in the member's capacity as a member and as a manager represents and warrants as follows: a. Freedom of member to enter into Agreement etc. The member: (1) Is legally free to enter into this Agreement and to perform the member's obligations under the Agreement in accordance with its terms; and (2) Is not prevented from doing so by order of any court or other governmental authority, by any agreement with a third party (including an employment agreement, a noncompetition agreement, a nondisclosure agreement or any other agreement) or by any other cause. b. Good faith, full disclosure etc in negotiating terms of agreement. In negotiating and entering into this Agreement, the member has acted fairly 27 and in good faith and has disclosed to all other members all information reasonably likely to be relevant to them in determining whether to enter into the Agreement and to perform its obligations in accordance with its terms. C. Access to legal advice. Before signing this Agreement and accepting its terms, the member has had every reasonable opportunity to consider these terms and to review them with the member's attorney. d. Free acceptance of terms etc. The member has accepted the terms of this Agreement knowingly and freely. 15.2 Duty to update. If, after a member signs this Agreement, the member discovers that any of the above representations were erroneous when made or have become erroneous, the member shall immediately so advise the other members. 15.3 Member liability. A member shall be liable to the LLC and to the other members for monetary damages and other appropriate relief for any material misrepresentation or other breach of this Article 15. Article 16 GENERAL PROVISIONS 16.1 Entire agreement. This Agreement contains the complete agreement among the members concerning its subject matter, and it replaces all earlier agreements among them, whether written or oral, concerning its subject matter. 16.2 Incorporation of exhibits. All documents identified in this Agreement as exhibits to the Agreement are hereby incorporated in the Agreement and made an integral part of it. 16.3 Governing law. This Agreement shall be governed exclusively by the laws of the Commonwealth of Pennsylvania (exclusive of its laws governing choice of law). 16.4 Forum for resolution of disputes. Except to the extent that a member or the LLC seeks (i) the enforcement of an Arbitrator's ruling under Article 14 or (ii) emergency judicial relief, all disputes among the members relating to the Agreement shall be exclusively and finally resolved by arbitration under Article 14. 28 16.5 Notices. All notices under this Agreement shall be in writing. They shall be sent by fax or by certified U.S. mail, return receipt requested, to the members at their respective addresses as stated on the first page of this Agreement. A member may change the member's address for purposes of this Article 16.5 at any time upon reasonable notice to the other members. Notices under this Article 16.5 shall be deemed to have been received when actually received. 16.6 Captions. Captions in this Agreement are for convenience only and shall be deemed irrelevant in construing the provisions of the Agreement. 16.7 Freedom and enforceability of contract. The parties intend that, in construing and enforcing the provisions of the Agreement, arbitrators and judges shall give maximum effect to the principles of contractual freedom and contractual enforceability. 16.8 Severability. If any arbitrator or court finds any provision of this Agreement to be invalid or unenforceable, this finding shall not affect the validity or enforceability of any other provision of this Agreement. 16.9 Waivers. No express or implied waiver by any party of any right of that party under this Agreement in any specific circumstance shall be considered to waive that right of that party in any other circumstance. 16.10 Gender and Number. Whenever the context hereof requires, the singular shall include the plural and the plural the singular and the use of any gender shall be applicable to all genders. 29 SIGNATURES AND DATES In witness of their acceptance of the above terms and conditions, the parties, in their capacities as Members and as Managers, by themselves or by their duly authorized representatives, have duly signed and dated this Agreement as follows: Stephen P. Gift Terry Ev Le on Ian M. Castaneira C 4 E. Krichten IFS GROUP, LLC By: Stephen P. Gift[ Manager By: ?. Ter E. Lemon Man ger Y: Ian Castaneira Manager By : c... ?? - seph E. Krichten anager 30 EXHIBIT A TABLE OF MEMBER CONTRIBUTIONS IN EXCHANGE FOR MEMBERSHIPS Member Stephen P. Gift Contribution $100.00 Terry E. Lemon Ian M. Castaneira Joseph E. Krichten $100.00 $100.00 $100.00 31 EXHIBIT B SPECIFIC FUNCTIONS AND RESPONSIBILITIES OF MEMBERS; MEMBER TIME COMMITMENTS NONE. 32 EXHIBIT C LOANS TO BE MADE BY MEMBERS TO THE LLC NONE. 33 EXHIBIT D RULES GOVERNING MEMBER DRAWS Members will have no rights to draws other than as outlined in the LLC Operating Agreement and as determined by the Managers. 34 EXHIBIT E GUARANTEED PAYMENTS TO BE MADE BY LLC TO MEMBERS From the Effective Date until the first anniversary of the Effective Date the Initial Members shall receive the annual salaries set forth below as compensation for their services as employees of the LLC: Stephen P. Gift Terry E. Lemon . . . . Ian M. Castaneira . Joseph E. Krichten . . . $36,000.00 . . $36,000.00 . . $70,000.00 $70,000.00 Salaries payable to Stephen P. Gift and Terry A. Lemon shall be equal to the amount of the salaries payable to Ian M. Castaneira and Joseph E. Krichten at such time as the cash flow of the LLC permits, but not later than January 1, 2003. Salaries payable to the Initial member as employees of the LLC after the first anniversary of the Effective Date and salaries payable to other members as employees or to other employees shall be determined by the managers. 35 EXHIBIT F TYPES OF LLC MATTERS WHICH THE MEMBERS MAY DECIDE Except as otherwise expressly provided in the Agreement, the members may decide only the following types of LLC matters: A. MATTERS RELATING TO THE MANAGERS 1. Whom to elect as manager upon the resignation, death or dismissal of a manager; 2. Whether to permit any individual manager to bind the LLC in a single contract or in one or more related contracts involving an aggregate contract amount exceeding $500; 3. Whether to impose duties on managers in addition to those imposed under the Agreement; 4. Whether to obtain a liability insurance policy for managers and members in their capacity as such; 5. Whether and in what amount to compensate the General Manager if a General Manager is appointed by the managers of the LLC; B. LLC BUSINESS AND FINANCIAL MATTERS 1. Whether to approve the LLC's budget as proposed by the managers. 2. Whether, when and in what amount to distribute assets of the LLC to the members; 3. Whether, in a single transaction or in two or more related transactions, to permit the LLC to borrow money in an aggregate amount of $100,000 or more; 4. Whether to permit the LLC to make a significant change in its current business operations or objectives; 36 C. MATTERS INVOLVING IMPORTANT CHANGES IN LLC'S STRUCTURE AND GOVERNANCE 1. Whether the LLC shall sell all or substantially all of its assets; 2. Whether the LLC shall engage in a conversion or merger; 3. Whether the LLC shall be dissolved, the effective date of its dissolution and the effective date of its certificate of cancellation or its certificate of formation; 4. Whether to bring suit by or on behalf of the LLC; 5. Whether to amend this Agreement or the Certificate of Formation. D. MATTERS INVOLVING ADMISSIONS AND EXPULSIONS OF MEMBERS AND BUY-OUTS OF MEMBER'S MEMBERSHIP RIGHTS; MISCELLANEOUS MATTERS AFFECTING MEMBERS 1. Whether to permit a member to sell or otherwise to transfer all or any of the member's membership rights; 2. Whether to permit a member to pledge all or any of the member's membership rights; 3. Whether to admit a person as a member; 4. Whether to expel a member; 5. Whether to allow a member or manager to do business with the LLC and on what terms; 6. Whether to exploit a business opportunity disclosed to it by a member or manager; 37 EXHIBIT G COMPENSATION TO BE PAID TO MANAGERS (IN THEIR CAPACITY AS MANAGERS) None, except as the member may determine pursuant to Article 3.2 of this Agreement. 38 CERTIFICATE OF SERVICE On this it day of September, 2002, I, Robert E. Kelly, Jr., of the law firm of Kelly, Hoffman & Goduto, LLP, hereby certify that I have, this day, served a true and correct copy of the foregoing ANSWER, NEW MATTER AND COUNTERCLAIM OF DEFENDANT IAN M. CASTANEIRA TO PLAINTIFF'S COMPLAINT on the person(s) and at the address(es) below named by United States First Class Mail, postage prepaid, in Harrisburg, PA: Stephen L. Grose Keefer, Wood, Allen & Rahal LLP 210 Walnut Street Post Office Box 11963 Harrisburg, PA 17108-1963 Counsel for Plaintiff Z--?-- ;> -- Robert E. 1 r. n r> <-a - c. ; ? ° :,? -? • ? -n _ , ., ", °?? ? : ? ?'?f _..-. .;> ?? ;n < l _]i ?i ?? ? IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA IFS GROUP, LLC, Plaintiff, NO. 02-3078 CIVIL V. IAN M. CASTANEIRA, Defendant VS. STEPHEN P. GIFT, TERRY E. LEMON, and JOSEPH E. KRICHTEN, Additional Defendants CIVIL ACTION - LAW PRAECIPE FOR WRIT TO JOIN ADDITIONAL DEFENDANT TO THE PROTHONOTARY: Please issue a Writ of Summons to join Joseph E. Krichten as an Additional Defendant in the above-captioned matter. M c A. oye squire Attorney I.D o. 76434 KELLY, H FFMAN & GODUTO LLP Commerce Towers - 10'h Floor 300 North Second Street Post Office Box 62003 Harrisburg, PA 17108-2003 (717) 920-8100 Attorneys for Defendant Ian Castaneira September /), , 2002 C+: r, IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA IFS GROUP, LLC, Plaintiff, NO. 02-3078 CIVIL V. IAN M. CASTANEIRA, Defendant VS. STEPHEN P. GIFT, TERRY E. LEMON, and JOSEPH E. KRICHTEN, Additional Defendants TO: JOSEPH E. KRICHTEN 1205 Manor Drive, Suite 100 Mechanicsburg, PA 17055 CIVIL ACTION - LAW WRIT You are notified that Defendant, Ian M. Castaneira, has joined you as an additional defendant in this action, which you are required to defend. Date: Prothonotary By. Deputy IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA IFS GROUP, LLC, Plaintiff, NO. 02-3078 CIVIL V. IAN M. CASTANEIRA, Defendant VS. STEPHEN P. GIFT, TERRY E. LEMON, and JOSEPH E. KRICHTEN, Additional Defendants CIVIL ACTION - LAW PRAECIPE FOR WRIT TO JOIN ADDITIONAL DEFENDANT TO THE PROTHONOTARY: Please issue a Writ of Summons to join Stephen P. Gift as an Additional Defendant in the above-captioned matter. /11?& Marc A. Moyer, Es ire Attorney I.D. No. 76434 KELLY, HOFFMAN & GODUTO LLP Commerce Towers - 10`h Floor 300 North Second Street Post Office Box 62003 Harrisburg, PA 17108-2003 (717) 920-8100 Attorneys for Defendant Ian Castaneira September /), , 2002 v,, c.^ IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA IFS GROUP, LLC, Plaintiff, NO. 02-3078 CIVIL V. IAN M. CASTANEIRA, Defendant vs. STEPHEN P. GIFT, TERRY E. LEMON, and JOSEPH E. KRICHTEN, Additional Defendants TO: STEPHEN P. GIFT 1205 Manor Drive, Suite 100 Mechanicsburg, PA 17055 CIVIL ACTION - LAW WRIT You are notified that Defendant, Ian M. Castaneira, has joined you as an additional defendant in this action, which you are required to defend. Date: Prothonotary By Deputy IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA IFS GROUP, LLC, Plaintiff, NO. 02-3078 CIVIL V. IAN M. CASTANEIRA, Defendant VS. STEPHEN P. GIFT, TERRY E. LEMON, and JOSEPH E. KRICHTEN, Additional Defendants CIVIL ACTION - LAW PRAECIPE FOR WRIT TO JOIN ADDITIONAL DEFENDANT TO THE PROTHONOTARY: Please issue a Writ of Summons to join Terry E. Lemon as an Additional Defendant in the above-captioned matter. Attorney I.D. o. 76434 KELLY, H FMAN & GODUTO LLP Commerce Towers - 10th Floor 300 North Second Street Post Office Box 62003 Harrisburg, PA 17108-2003 (717) 920-8100 Attorneys for Defendant Ian Castaneira September k, 2002 C? r?.a -, . i ;? -:? ? . .`? s_' _' cs; ` c > ;' ? ;-; ? - - ., ` _ - -- •_ ? ``U -. C ? -.:: IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA IFS GROUP, LLC, Plaintiff, NO. 02-3078 CIVIL V. IAN M. CASTANEIRA, Defendant VS. STEPHEN P. GIFT, TERRY E. LEMON, and JOSEPH E. KRICHTEN, Additional Defendants TO: TERRY E. LEMON 1205 Manor Drive, Suite 100 Mechanicsburg, PA 17055 CIVIL ACTION - LAW WRIT You are notified that Defendant, Ian M. Castaneira, has joined you as an additional defendant in this action, which you are required to defend. Date: Prothonotary By Deputy Cumberland County, ss : The Commonwealth of Pennsylvania to Joseph E ri rhten , Gtel hen p rift-, (Name of Additional Defendant) and Terry E. Lewn You are notified that Ian M. Castaneira (Name (s) of Defendant (s) ) has (have) joined you as an additional defendant in this action, which you are re- quired to defend. Date _September 13, 20o2 n,rtia Y- Lnng Prodwnotary DeputyL- Joseph E. Krichten 1205 Manor Drive, Suite 100 Mechanicsburg, PA 17055 Stephen P. Gift 1205 Manor Drive, Suite 100 Mechanicsburg, PA 17055 Terry E. Demon 1205 Manor Drive, Suite 100 Mechanicsburg, PA 17055 H d J ON WW? .P a q woo I y 'Ih (D ?j [f.YYTT • MM'7.y 00 104 N ? H ? ? ?7 00 YO ? rn Q' ? aQ' ?Qu?i r" ?N(n O OC O rt, owoor d I-+ oWlrr m trJ o gr Z? ro ?? ?z t7l ro 1? H C7 a S 7 (7 0 N I W 0 co f? C 0 SHERIFF'S RETURN - REGULAR CASE NO: 2002-03078 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND IFS GROUP LLC VS CASTANEIRA IAN M GERALD WORTHINGTON , Sheriff or Deputy Sheriff of Cumberland County,Pennsylvania, who being duly sworn according to law, says, the within WRIT TO ADD'L DEFEN. was served upon GIFT STEPHEN P the ADD'L DEFENDANT, at 0010:05 HOURS, on the 18th day of September, 2002 at 1205 MANOR DRIVE SUITE 100 MECHANICSBURG, PA 17055 by handing to JOSEPH E. KRICHTEN (PARTNER) a true and attested copy of WRIT TO ADD'L DEFEN. together with and at the same time directing His attention to the contents thereof. Sheriff's Costs: So Answers: Docketing 18.00 Service 9.66 Affidavit .00 Surcharge 10.00 R. Thomas Kline .00 37.66 09/19/2002 KELLY, HOFFMAN, GODUTO Sworn and Subscribed to before By: w me this day of Deputy S iff ?C atitJaL A.D. 1rotho SHERIFF'S RETURN - REGULAR CASE NO: 2002-03078 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND IFS GROUP LLC VS CASTANEIRA IAN M GERALD WORTHINGTON , Sheriff or Deputy Sheriff of Cumberland County,Pennsylvania, who being duly sworn according to law, says, the within WRIT TO ADD'L DEFEN. was served upon LEMON TERRY E the ADD'L DEFENDANT, at 0010:05 HOURS, on the 18th day of September, 2002 at 1205 MANOR DRIVE SUITE 100 MECHANICSBURG, PA 17055 by handing to JOSEPH E. KRICHTEN (PARTNER) a true and attested copy of WRIT TO ADD'L DEFEN. together with and at the same time directing His attention to the contents thereof. Sheriff's Costs: Docketing 6.00 Service .00 Affidavit .00 Surcharge 10.00 .00 16.00 Sworn and Subscribed to before me this 7 ?-L' day of r?P .2...2. A.D. Prothonotary So Answers: 10 0? R. Thomas Kline 09/19/2002 KELLY, HOFFMAN, GODUTO By: q ,l 1._ 4Q Deputy ?iff SHERIFF'S RETURN - REGULAR CASE NO: 2002-03078 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND IFS GROUP LLC VS CASTANEIRA IAN M GERALD WORTHINGTON , Sheriff or Deputy Sheriff of Cumberland County,Pennsylvania, who being duly sworn according to law, says, the within WRIT TO ADD'L DEFEN. was served upon KRICHTEN JOSEPH E the ADD'L DEFENDANT, at 0010:05 HOURS, on the 18th day of September, 2002 at 1205 MANOR DRIVE SUITE 100 MECHANICSBURG, PA 17055 by handing to JOSEPH E. KRICHTEN a true and attested copy of WRIT TO ADD'L DEFEN. together with and at the same time directing His attention to the contents thereof. Sheriff's Costs: Docketing 6.00 Service .00 Affidavit .00 Surcharge 10.00 .00 16.00 Sworn and Subscribed to before me this 71" day of ©,Z:,, -2 ov,C, A. D. 'P othonotary So Answers: eA4W? 4?:- 2 R. Thomas Kline 09/19/2002 KELLY, HOFFMAN, GODUTO By: Deputy S iff IFS GROUP INC. vs Case No. 0? -3 0 7 0 IAN M. CASTANEIRA Statement of Intention to Proceed To the Court: npfpndant ran M Castanei ra intends to proceed with the above captioned matter. Y Print Name 3obert E. Kelly, Jr. Sign Name Kelly, Hoffman & Goduto LLP Date: 10/3/05 Attorney for Defendant Ian M. Castaneira Explanatory Comment The Supreme Court of Pennsylvania has promulgated new Rule of Civil Procedure 230.2 governing the termination of inactive cases and amended Rule of Judicial Administration 1901. Two aspects of the recommendation merit comment. 1. Rule ofcivil Procedure New Rule of Civil Procedure 230.2 has been promulgated to govern the termination of inactive cases within the scope of the Pennsylvania Rules of Civil Procedure. The termination of these cases for inactivity was previously governed by Rule of Judicial Administration 1901 and local rules promulgated pursuant to it. New Rule 230.2 is tailored to the needs of civil actions. It provides a complete procedure and a uniform statewide practice, preempting local rules. This rule was promulgated in response to the decision of the Supreme Court in Shop v. Eagle, 551 Pa. 360,710 A.2d 1104 (1998) in which the court held that "prejudice to the defendant as a result of delay in prosecution is required before a case may be dismissed pursuant to local rules implementing Rule of Judicial Administration 1901." Rule of Judicial Administration 1901(b) has been amended to accommodate the new rule of civil procedure. The general policy of the prompt disposition of matters set forth in subdivision (a) of that rule continues to be applicable. II Inactive Cases The purpose of Rule 230.2 is to eliminate inactive cases from the judicial system. The process is initiated by the court. After giving notice of intent to terminate an action for inactivity, the course of the procedure is with the parties. If the parties do not wish to pursue the case, they will take no action and "the Prothonotary shall enter an order as of course terminating the matter with prejudice for failure to prosecute." If a party wishes to pursue the matter, he or she will file a notice of intention to proceed and the action shall continue. a. Where the action has been terminated If the action is terminated when a party believes that it should not have been terminated, that party may proceed under Rule230(d) for relief from the order of termination. An example of such an occurrence might be the termination of a viable action when the aggrieved party did not receive the notice of intent to terminate and thus did not timely file the notice of intention to proceed. The timing of the filing of the-petition to reinstate the action is important. If the petition is filed within thirty days of the entry of the order of termination on the docket, subdivision (d)(2) provides that the court must grant the petition and reinstate the action. If the petition is filed later than the thirty-day period, subdivision (d)(3) requires that the plaintiff must make a show in to the court that the petition was promptly filed and that there is a reasonable explanation or legitimate excuse both for the failure to file the notice of intention to proceed prior to the entry of the order of termination on the docket and for the failure to file the petition within the thirty-day period under subdivision (d)(2). B. Where the action has not been terminated An action which has not been terminated but which continues upon the filing of a notice of intention to proceed may have been the subject of inordinate delay. In such an instance, the aggrieved party may pursue the remedy of a common law non pros which exits independently of termination under Rule 230.2. CERTIFICATE OF SERVICE On this 4'' day of October 2005, I, Pamela L. Russell, a legal secretary in the law firm of Kelly, Hoffman & Goduto LLP, hereby certify that I have, this day, served a true and correct copy of the foregoing STATEMENT OF INTENTION TO PROCEED on the person(s) and at the address(es) below named by United States First Class Mail, postage prepaid, in Harrisburg, PA: Stephen L. Grose, Esquire Keefer, Wood, Allen & Rahal LLP 210 Walnut Street Post Office Box 11963 Harrisburg, PA 17108-1963 Counsel for Plaintiff C; ri C> -n ? _ t.z .-i t"? "" ?:1 "?^. E= °-! _r h_ 1 "7 ?.?; C'1 -.'??. _? ' ???} ?; _ ? . ?7 Gv-? -' e r IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA IFS GROUP, LLC, Plaintiff, V. NO. 02-3078 CIVIL CIVIL ACTION - LAW IAN M. CASTANEIRA, Defendant vs. STEPHEN P. GIFT, TERRY E. LEMON, and JOSEPH E. KRICHTEN, Additional Defendants PRAECIPE FOR WITHDRAWAL OF APPEARANCE TO THE PROTHONOTARY: Kindly withdraw the appearance of Robert E. Kelly, Jr., Esquire, and Kelly, Hoffman & Goduto LLP, 300 North Second Street, I O'h Floor, Post Office Box 62003, Harrisburg, PA 17106-2003, on behalf of Defendant Ian M. Castaneira. Respectfully submitted: Robert E- Kell t, f. Attorney No. 21925 KELLY, HOFFMAN & GODUTO LLP Commerce Towers -10th Floor 300 North Second Street Post Office Box 62003 Harrisburg, PA 17101 (717) 920-8100 1 PRAECIPE FOR ENTRY OF APPEARANCE TO THE PROTHONOTARY: Kindly enter the appearance of Robert E. Kelly, Jr., Esquire, and Kelly, Parker & Cohen LLP, 300 North Second Street, 10t' Floor, Harrisburg, PA 17101, on behalf of Defendant Ian M. Castaneira. We are authorized to accept service of all documents in this matter. Respectfully submitted, Robert E.Kelly, it. / Attorney No. 219 5/ KELLY, PARKER & COHEN LLP Commerce Towers - 10`h Floor 300 North Second Street Harrisburg, PA 17101 (717) 920-2220 Dated: April 13, 2007 Counsel for Defendant Ian M. Castaneira. 2 CERTIFICATE OF SERVICE On this 13 day of April 2007, I, Lee S. Cohen, Esquire, in the law firm of Kelly, Parker & Cohen LLP, hereby certify that I have, this day, served a true and correct copy of the foregoing PRAECIPE FOR WITHDRAWAL OF APPEARANCE AND PRAECIPE FOR ENTRY OF APPEARANCE upon the person(s) and at the address(es) below named by United States First Class Mail, postage prepaid, in Harrisburg, PA: Stephen L. Grose, Esquire Keefer Wood Allen & Rahal, LLP 635 North 12th Street 4th Floor Lemoyne, PA 17043 Counsel for Plaintiff and Additional Defendants keeS. Cohen, Esquire 3 r-? [..J iY -.... -';') ? - _... ,} C ?? ?(' .,»,a ? . S' _1 ?,^"? .? :; 4' Robert E. Kelly, Jr. Attorney I.D. No. 21925 Lee S. Cohen Attorney I.D. No. 89278 KELLY, PARKER & COHEN LLP 300 North Second Street - 10 Floor Harrisburg, PA 17101 (717) 920-2220 FAX (717) 920-2370 rkelly@kpc-law.com Icohen@kpc-law.com IFS GROUP, LLC, PLEAS V. IAN M. CASTANEIRA, VS. : IN THE COURT OF COMMON Plaintiff, Defendant STEPHEN P. GIFT, TERRY E. LEMON, and JOSEPH E. KRICHTEN, Additional Defendants CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. 02-3078 CIVIL CERTIFICATE PREREQUISITE TO SERVICE OF SUBPOENA PURSUANT TO RULE 4009.22 As a prerequisite to service of subpoena for documents and things pursuant to Rule 4009.22, Defendant Ian M. Castaneira certifies that: (a) a notice of intent to serve subpoena with a copy of the subpoena attached thereto was mailed or delivered to each party prior to the date on which the subpoena is sought to be served, (b) a copy of the notice of intent, including the proposed subpoena, is attached to this certificate at Exhibit A, (c) the subpoena which will be served is identical to the subpoena attached to the notice of intent, (d) Plaintiff and Additional Defendants do not object to the service of the Subpoena and agree to waive the twenty-day notice requirement. Mee S. Cohen Attorney ID No.89278 KELLY, PARKER & COHEN LLP Commerce Towers, I V' Floor 300 North Second Street Harrisburg, PA 17101 (717) 920-2220 lcohen@kpc-law.com Attorneys for Defendant Dated: February 12, 2008 EXHIBIT A IFS GROUP, LLC, Plaintiff, VS. IAN M. CASTANEIRA, Defendant VS. STEPHEN P. GIFT, TERRY E. LEMON, and JOSEPH E. KRICHTEN, Additional Defendants IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. 02-3078 CIVIL NOTICE OF INTENT TO SERVE A SUBPOENA TO PRODUCE DOCUMENTS AND THINGS FOR DISCOVERY PURSUANT TO RULE 4009.21 Defendant, Ian M. Castaneira, intends to serve a subpoena, identical to the one attached to this Notice, on Linsco/Private Ledger Corp. You have twenty (20) days from the date listed below in which to file of record and serve upon the undersigned an objection to the subpoenas. If no objection is made the subpoenas may be served. ee S. Cohen A -- Attorney I.D. No. 89278 KELLY, PARKER & COHEN LLP 300 North Second Street, 10th Floor Harrisburg, PA 17101 (717) 920-2220 FAX (717) 920-2370 lcohen ,kpc-law.com Attorneys for Ian M. Castaneira Dated: February 4, 2008 COMMONWEALTH OF PENNSYLVANIA COUNTY OF CUMBERLAND IFS GROUP, LLC, Plaintiff vs IAN M. CASTANEIRA, Defendant File No. 02-3078 CIVIL vs STEPHEN P. GIFT, et al. SUBPOENA TO PRODUCE DOCUMENTS OR THINGS FOR DISCOVERY PURSUANT TO RULE 4009.22 Linsco/Private Ledger Corp., c/o CT Corporation Syst=em, 1515 Market TO: Street, Suite,1210, Philadelphia, PA 19102 (Name of Person or Entity) Within twenty (20) days after service of this subpoena, you are ordered by the court to produce the following documents or things: see Exhibit A attached hereto at Kelly, Parker & Cohen LLP, 300 N. Second St., 10th Floor, Harrisburg, PA 17101 (Address) You may deliver or mail legible copies of the documents or produce things requested by this subpoena, together with the certificate of compliance, to the party making this request at the address listed above. You have the right to seek in advance the reasonable cost of preparing the copies or producing the things sought. If you fail to produce the documents or things required by this subpoena within twenty (20) days after its service, the party serving this subpoena may seek a court order compelling you to comply with it. THIS SUBPOENA WAS ISSUED AT THE REQUEST OF THE FOLLOWING PERSON: Name Lee S. Cohen, Esquire Kelly, Parker & Cohen, LLP Address: 300 North Second Street/ 10th Floor Harrisburg, PA 17101 Telephone: 717-920-2220 Supreme Court ID # 89278 Attorney For: Defendant BY THE COURT: Prothonotary/Clerk, Civil Division Date Seal of the Court Deputy (Eff. 7/97) Exhibit "A" Any and all Commission and Fee Statement Reports, correspondence, memoranda (internal or external), or other documents relating to any commissions, compensation or other payments paid to IFS Group, LLC, Stephen P. Gift, Terry E. Lemon and/or Joseph E. Krichten, by Linsco/Private Ledger, Corp., or any of its related or affiliated entities, including but not limited to Marsh Private Client Life Insurance Services (and its predecessor Centrelink). CERTIFICATE OF SERVICE On this 4th day of February, 2008, I, Barbara J. Cusick, a legal secretary in the law firm of Kelly, Parker & Cohen LLP, hereby certify that I have, this day, served a true and correct copy of the foregoing NOTICE OF INTENT TO SERVE A SUBPOENA TO PRODUCE DOCUMENTS AND THINGS FOR DISCOVERY PURSUANT TO RULE 4009.21 on the person(s) and at the address(es) below named by United States First Class Mail, postage prepaid in Harrisburg, PA: Stephen L. Grose, Esquire Keefer, Wood, Allen & Rahal, LLP 210 Walnut Street Post Office Box 11963 Harrisburg, PA 17108-1963 Counsel for Plaintiff Barbara J. C ck CERTIFICATE OF SERVICE On this 12th day of February, 2008, I, Barbara J. Cusick, a legal secretary in the law firm of Kelly, Parker & Cohen LLP, hereby certify that I have, this day, served a true and correct copy of the foregoing CERTIFICATE PREREQUISITE TO SERVICE OF SUBPOENA PURSUANT TO RULE 4009.22on the person(s) and at the address(es) below named by United States First Class Mail, postage prepaid in Harrisburg, PA: Stephen L. Grose, Esquire Keefer, Wood, Allen & Rahal, LLP 210 Walnut Street Post Office Box 11963 Harrisburg, PA 17108-1963 Counsel for Plaintiff Barbara J. Cusi6 .. `- N c ?= ? ??,? ?., c.`?