CaseZ:OB-mc-OO346-DSC DocumentZ Filed12/17/2008 Page10f‘|4 MHDMDSDOCLMHM‘¥B FE|MH‘HEM Fme‘l‘|cxb$?? ames sn&;'§oib¢§§gggoum W““:T"“m“m::wmmc;,:;e:mu GREG;;";:”L:°°B - NG uNm'.D sums oF AMERICA, g v ‘M Pmnufr, § 0 “” b ";" §§ @@ 9 v. § Civil Action No. ch vBNTuREFuND m,L,P. § ' D¢f¢nd-m. § §_H£LILMM Be'bro this Court is the motion by the United State¢ of America, on behalf of the United Statos Smal] Business Administmfion (“SBA"), for a preliminary and perrth injunction and the appointment of the SBA as Permanent Reoeiver for CBO Venture Fund III, L.P. Thc-Coun, being fully advised lathe merits and having been informed that CED leum Fund Hl, L.P. has consented to the relief reun in the moh'on, hewa ORDERS, ADJUDGES A.ND DECREES TH'AT: I. Pursuant to the provisions of 15 U.,S.C. § 68'7¢:, this Court shall take exclusive jurisdiction of CEO Ventun: Fond IIl, L.P. ("CEO"), and all of its assets, wh¢¢mr lmc¢d, and me united sum small lansing Adminimuon ("sBA"),¢ is hereby mpointed receiver (“the Rnociver") of CBO to serve without bond until flth order of this Coun. The Rmciver is appoinwd for the p\npose ofadminis¢ering, marshalling lnd, if necessary, liquidating all of CEO'! assets 10 satisfy the claims of auditors thoro&om in the ord¢rofpr{ozity as determined by this Couct. Case 2:08-mc-00346-DSC DocumentZ Filed12/'|7/2008 Page20f'l4 UMHMDSDOC\DWHGN¥B Fli'|w:mmmmlm Fim&oot?i' 2. 'Ihe Raeeivershall have all powers, audioritr`es, rights and privileges heretoforemessedbythegmeralparmors,managm,omcas,mddimetomofCEO underapplieablestateandlbderal iawandbytl're€ertiiieateandl.irnitedl’armuship Agreement of said parmeraln'p, in addition to all powers and authority conferred upon the Rwelver by theprovisions of 15 U.S.C. § 687c and 23 U.S.C. § 754. The general partners, manners- di!wl°rs, officers, employees and omits of CEO are hereby dismissed Such pusonssl'rallhave no wtlwritywithreapeettoCEO'soperatiom orassets,exeeptasmay hereafterbew¢!>!¢$lygranbdbythelteeelyer. `l‘l'rellwelvershallassmneandeormnlthe operation ofCEO and shall prime and preserve all of its claims 3. The past endlor present oflleers, dkeetors, agents marragm, gamut partners aceountarns, attorneys andemployees of CBO, as welles all those-acting in their plaoe, are hereby ordord and directed to turn over to the Receiver forthwith all books, reemis, doouments, aceountsandall other instnmrentsandpapersofsaidpamershlp and all otirerassetsandpropertyoftireparmeralrip,whedrerrealorpersonal uponreeeiptof instructions by the Reeeiver regarding the time and plane of such production CEO shall furnish a written statement within Bve (5) days after the entry of this Order, listing the identity, location and estimated value of all mds ofCEO as well as the names, addresses md morrow ofalaim= ann brown swaim or ch. An persons having mmr-amy or possession of any assets or property of CBO. including CEO"s fenner general partner and former management eompany, are hereby directed to turn such property overto the Rw.eiver. 4. 'l`he Reoeiver shall promptly give notice of its appointment to allknown general and limited parmers, oliicers. dlreotors, agents, managers, employees shareholders Case 2:08-mc-00346-DSC Document 2 Filed 12/17/2008 Page 3 of 14 WMWMDSDOCMHM?KB Hitw'l@lmli® W\W meditors, debtors and agents of CEO. Ail persons and entities owing any obligations or debts to CEO shali, until further ordered by this Court. pay all such obligations in acwdmeuddrthemmsdmenfmthehceiver,mdiumcdptfmsuchpaymenmshau havethcsarneforeeandefl`ectasifCEO had~recelvedsuchpsymenta. 5. 'l`he Receiver is hereby authorized to open such Receiver‘s bank accounts. at banking or other linancial instihrtions, to errtend creditonbehalfo{CBO_, to utilize SBA pusomel,mdmmp|oymwhodmpemnndasmcessmy-wed'eenmtetlnopmuonof the-receiversal including but not limited to, attorneys and accomtants, and is further authorized to expend receivership funds to compensate such personnel in such amounts end upon mich terms as dre,Receiver mall deem reasonable inthr ofthe usual fees and billing practices and procedures of such pcrsonnel. 'l'he Reecivor is not required to obtain Court approval prior to the disbursement of receivership iinrda for payments to personnel employed by the Receiver or payments forerq)cnses incidental to administration of the Receivership. In addition, the Receiver is authorized to reimburse the SBA or ita employees for travel expenses incurred by SBA personnel in the establishment and administration ofthe receivership The Recelver may, without further orderof this Court,. transfer; compromisc, or otherwise dispose ofany claim orasset, otherthan real estate, whichwouldrresult innctpmoeodstotlreReceivcr. 6. CEO's past and/or present oft'icers, directors, agenta, managers general partnera, shareholders, employees and other appropriate persons (including, without limitation, CEO's portfolio of small business concerns and banks or other financial institutions doing business with CEO end/or CBO'& portfolio of small businc¢ comm) shall answerunder oath all questions which it may put to them by the Reoeiver regarding l Case 2:08-mc-00346-DSC Document2 Filed12/17/2008 Page'40f14 MMHWMDSDQCWQW?B Hilw:m?£liillm&& mm thebusimsofsaidparmership,ormyodwrmadermlevanttotheopmtion or administration oftire receivership or the collection of funds due w CEO. ln the event that the Reoeiver deems it necessary no require the appernance of the aforemention persons, the production ofdocurnents, infonnation, or any other form of discovery concerning the assets, property or bnainl¢ assets of CEO or any other matter relevant to tire operation or continuation crow neceva or are collection cramer due w cao, are wire shall directnoticeforanysuch appearancebycerlilied mai|,and saidpemons shall appearand giveanswer to the Recelver, produce documents orrubrnit to any other-form of discovery in accordance with the Federal Rules ol‘Civil Procedure. 7. 'l'he parties or prospective parties to any and all civil legal proceedings wherever located, including but not limited to arbitration prooeedings, bankruptcy or foreclosure ectiona, default proceedinga, or any other proceedings involving CEO or any assets ofCI:`.O, involving CEO or its present or past ollicers, directors, managers, or general partners or the Receiver, which parties have sued or have been sued for. or in connection wich, any action taken by CEO's oEleers, directors, managers, or general partners while acting in such capacity whether as plaintilf, defendant, third-party plaintiff, third'party defendant,' or otherwise or with respect to any assets ofCEO, are enjoined from taking any action, including discovery, commencing or condoning any legal proceeding of any nature inconnection with any proceeding 8. All pending civil legal proceedier wherever located, including arbitration proceedings, foreclosure activitiea,_ bankruptcy actions, or default proceedings, but excluding the irrstanl prooeedlng, involving CEO or any cf its mrs or any action of any nature taken by CBO's present orpast odicers, dlrectors, rnanegera, or general partners. Case 2:08-mc-00346-DSC Document2 Filed 12/17/2008 Page 5 Of 14 GMMHDMDSDOCMHGN*M Hil'mt:limm WW which parties havesued orhaveheen sued for, orin connection with, any action taken by them while acting in their official capacity whether as plainti&, defendant, third-party plaintiff third-party defendant or otherwiae, are stayed in their entirety, and all Courts having anyjuriadiotion thereof are enjoined front taking or permitting any action until further Ordcr of`this Court. 9. t CEO and its past and/or pruent directors, odicere. managera, general pamers, agents, employees and other persons acting in concert or participation therewith he, and they hereby are, enjoined ii'om either directly or indirectly taking any actions or causing any such action to betaken which would dissipatethe asaetsand property ofCEO to the detriment oftheR.ecciverappointcd in this came including but not limited to destruction of partnership records, or which would violate the Small Business Investment Act of 1958. as amended, (thc "SBl'.A"), 15 U.S.C. Secticn 661 et mg or the regulations prompted newman colo "Rogolouooo"), 13 c.Fn. § 1011 _o_; E. 10. 'Ihe Reoelver ls authorized to horrowon behalf of CEO,i'rornthe SBA, up to 3500.000, and is authorized to cause CEO to issue Reoelver's CertiEeates of lndehtedoeasinthe principal amounts ofthcsums borrowed.which certificates willbear interest at or about-ten(lO) percent perarurum and will have amaturity date no laterthan 18 months utter the date of leme. Said Receiver'a Certiiieates of indebtedness shall have priority over all other debts and obligations of CBO, utcluding administrative expenses of the Receivership, whether woody erdsling-or hereinafter incurred, including without limitation any claims of equity holders in CBO. ll. This Court determines and adjudicates thatCEO hac violated the capital ' impairment provisions of the SBIA and the Regulatiorra, as alleged in the Stipulated CaSe 2208-mC-00346-DSC DOCument 2 Filed 12/17/2008 Page 6 Of 14 MMDSDOCMHM¢D FiH`:Mi'lHim WG§W Compiaint for Bntry of Consent Order Appointing R.eceiver filed in this matter. Afcer completing its activities in accordance with this Order, the Receiver may submit a report to this Court mommending that CEO‘s license as an SBIC be revoked AGREED AHD ACIUOWLEDGED: CEO VENTURE FUND lil, L.P.' s/Ma,_/ l its ..»# on this /_~\ day ofDeoember, 2008. U.S. SMALL BUSINESS ADMNISTRA"|'ION By: Michele Long Pittman, Acting Director Oftiee ofLiquidation on this ____day ofDeeember, 2008. SO ORDEREDthis __ day of _ , 2008. mrs ndNomLs minn grams march moon CaSe 2:08~mC-OO346-DSC Document 2 Filed 12/17/2008 Page 7 Of 14 GMMHUMDSDDCMHMiB FEM$‘IHI* Fwe?i'oif?? compuwnrssuyofcmmorwappmmrv¢m¢dmnm. ms wiring rs marie mm win mrs one moment my mr ama tldsComtreocrmendingtlthBO’slioemeuanSBleerevcked. Acnmosnnacrcsowumcao= onovsr~'"mnnsunnm.r.r». By: its on this day of Dcoember, 2008'. U.S. SMALL BUS!NESS ADMINISTRATION longPi 05de indiviij m §§ town- THE HONORABLE UN]'I'ED STATES DISTRICT JUDGE CaSe 2:08-mC-00346-DSC Document 2 Filed 12/17/2008 Page 8 Of 14 ' lN THE»UNITED STATES DIS'I'RICI` COURT FOR THE WESTERN UISTRICT OF PENNSYLVANIA UNITED STA`I'ES OF AMERICA, § PlaintiH, § v., § Civil Action No. ceo vBNTuRB sunn nr, L.P. § ' sam l .SIBIL&EE.§§B§M.QBD.£B Before this Court is the motion by the United Ststes of America, on behalf ofthe United St.-.tes Small Business Adrninistratlon (“SBA"), for a preliminary and permanent injunction and the appointment of the SBA as Pernranent Reoeiver for CB{) `Venture Fund llI, L.P. 'I`lre-Ccurt, being fully advised in the merits and having been informed that CEO Venture Fund ill, L.P. has consented to the relief nqueswd in the motion, hewitt ORDERS, ADJUDGES AND DECREES TH`AT: l. Fr.trsuant to the provisions of 15 U.S.C. § 687e, this Court shall take exclusive jurisdiction of CEO Venture Fund IlI, L.P. ("CEO"), and all of its essets, wherever located, and the United Statee Small Business Adrninistration ("SBA"), is hereby appointed receiver (“tbe Rweiver”) of CEO to serve Without bond until further order ofthia Court. The Reeeiveris appointed forthe purpose of administering marshalling and, if necessary, liquidating all of CEO's assetstc satisfy the claims of creditors therefrom in the order of priority as determined by this Court. Case 2:08-mc-00346-DSC Document 2 Filed 12/17/2008 Page 9 of 14 2. The Receivershall have all powers authorities, rights and privileges huetoforepossessedbj'tbegerteral parmers. managers,otiioers,anddireotorsofCEO` under applicable state and thderal law and by the Certllicate and Lirnited partnership Agreernent`ofnld partnership, in addition to ali powers md authority conferred upon the waiver by are provision of rs u.s.c. § soto md rs u.s.c. § 754. nrc general powers managers directors, ohieers, employees and agents oi`CEO are hereby dismissedl Such persons shall haveno authority with respect to CBO's operations or mets. except as may hereaherbeexpresslygrantedbythekeoeiver. 'l`heReeelversha]l mmcandcontrol the operation of CEO and shall prnsue and pmerve all of its claims 3. Thepastand/orpresentoftiem, directors,agents,mansgers,generai partners, accountants attorneys and employees ofCEO. as well as all those actingin their place,areheteby-ordered anddireetedtonrmovertotheil.eoeiverforthwithallbooks, moords,domumnm,aeoommmddlodzrdnnwnmwandpapersofsaidparmrsldpmd all otirerassetsandpropertyofthepartnershlp,whotherrea| orpersona.l uponrweiptof hrsttuctions by the Receiver regardingth time and place of such production CEO shall furnish a written statement within dye (5) days alter the entry of this Order, listing the identity, location and estimated value ofa]| assets ofCEO as well as the nunes, addresses and amounts of claims ofall known creditors of CED. A.ll persons having eontrol, custody ’ or possession ofany assets orpropexty ofCEO, including CEO‘s fenner general partner and former management company, are hereby directed to turn such property over to the Rec.oiver. 4. 'Ihe Reeeivet shall promptly give notice of its appointment to all known general and limited partners, oMcers, directors, agents, managers, ernployees, shareholders Case 2:08-mc-00346-DSC Document 2 Filed 12/17/2008 Page 10 of 14 creditors, debtors and agents of CEO. All persons and entities owing any obligations or debtsto CBOshall, until fm'thcrorderedbythis€ourt. payall suchengations in accordancewiththe tennstllcr`eoftotheReceiver, and its mceipt`for such payments shall havethesameforecandeffeotasit`CEOhadreceivedsuchpaymants, 5. TbeReceiverislwrebyauthorincdtoopensuchReceivefsbmkwcormts,at bankingorother iinancial iastitations,to extend creditonbehalfofCEO_, touti.liaeSBA persormel,and toemploysuchcdrupersomrelasnececsarytoenbcmatetheoperntionof thereeeivership including but not limited to, attorneys and accomtants, and is further authorized to e)q)end receivership hinds to compensate such personnel in such amounts and upon such terms as the Receiver shall deem reasomble in light of the usual fees and billing practices and procedures of such petsomrel. The Receiver is not required to obtain Court approval prior to the disbursement ofmeivership funds for payments to personnel employed by tire Rweiver or payments ibt expenses incide to administration of the Receivership. in addition, the Receiveris authorized to reimburse the SBA or its employees for travel expenses incurred by SBA personnel in the establislunem and administration ofthe receivership The Receiver may, without furtheroder of this Court, transfer, oompmmise, or otherwise dispose of any claim or asset, otherthan real estate, which would result wasmdswneswav¢r. ' 6. CBO's past and/or present ofticers, directors, agents, managers general pamers. shareholders employees and other appropriate persons (including, without limitation, CEO's portfolio of mall business concerns and burks or other financial institutions doing business with CEO and/or CBO"a portfolio of small business concems) shall answer under oath all questions which it may put to them by the Receiver regarding Case 2108-mc-00346-DSC Document 2 Filed 12/17/2008 Page 11 of 14 the business of said pamership, or any other matterrelevan.t to the operation cr administration of the rweiverahip or the collection of hinds due to CEO. ln the event that the Reoeiver deems it necessary to acquire the appeai'mce ofthe aforementioned persons, the production cfdocuments, infonnation, or any other form of discovery concerning the mempropertyorbuaineaaaaaetsof€£O orany othermattertelevanttotheoperationor acbniniatration of the Receivership or the collection ofiirnde due to CEO, the Rweiver shall direct notice for any such appearance by certified mail, and said persons shall appear and giveanswartothe Receiver, produce doctnnents oreubmittoanyotherform ofdiecovery in accordance with theFederal R.ulce ofClvil Procedure. 7. 'l.'he partial or prospective parties to any and all civil legal proceedings whereverlocated, including but not limited to arbitration proceedings, bankruptcy or foreclosure actiona, default proceedinga, orany other proceedings involving CEO or any meter ofCEO, involving CEO or ita present or past oliieera, directors, managers, or general partners or the Receiver, which parties haveaued orhave been sued for, orinconnection with, any action taken by CED'a ochers, directora, managers, or general partners while acting in such capacity whether aa plaintiff, defendant third-pmy plaintiff, third~pmty dcfendent., or otherwise, or with respect to any assets ofC‘EO, are enjoined from taking my aetion, including dlaeovery, commencing or continuing any legal proceeding of any nance in connection with any proceeding B. All pending civil legal proceedings Wherever locetcd, including arbitration prcceedinga, foreclosme activitiea,_ bankruptcy actionc. or default proceedings, but excluding the instant prcceev.'iingl involving CEO or any ofits assets or any action oi"any nature taken by CEO'a present or past edioers, dieeotors, menagera, or general partnera. Case 2:08-mc-00346-DSC Document 2 Filed 12/17/2008 Page 12 of 14 which parties have sued or havebeen sued tbr, or in connection with, any action taken by mwhrlwangrnueooarcumpa¢nywh¢wnpranaadefenmoorrd-pmy plaintiff third-party defendant or otherwise, are stayed in their entirety, and all Courts having any jurisdiction thereof are enjoined from taking or permitting any action until further Order of this Corn'L 9. CEO and its past and/or present directors. oEicers, nranagers, general partrers, agents, employees and other persons acting in concert or participation therewith he, and they hereby are, enjoined ti~om either directly or indirectiy taking any actions or cmrsingenysuch action to be taken which would dissipate the assetsand property ofCEO to the detriment of the'Receiver appointed in this carrae, including hut not limited to destruction ofpartnership records, or which would violate the Srnali Business Inveatment Act of 19$8, as amended1 [the "SBIA"), 15 U.S.C. Section 661 et gp or the regulations promulgated tlre¢emrder, (the “Regulations"), 13 C.F.R. § 107.1 g W. ]U. TheReceiveris authorizedto borrowonbehelfofCEO,fromtheSBA,up to 3500,000, and is authorized to cause CEO to issue Receiver's Certilicates of Indebtedneas in the principal amounts of the sinus borrowed, which certificates will bear interest at or aboutten (10) percent perannurn and will have amaturity date no later than 18 months after the date of issue Said Receiver's Certilieatea oflndebtedn¢a shall have priority over all other debts and obligations of CEO. excluding administrative expmsea of the Receivership, whether presemly artisting-or-hereinafler incurred, including without limitation any claims of equity holders in CBO. ll. 'l`hisCourt determineaandadjudicstesthatCEOhesviolated timecapital ' impairment provisions of the SBlA and the Regulations, as alleged in the Stipulated Case 2:08-mc-00346-DSC Document 2 `Filed 12/17/2008 Page 13 of 14 Complaint for Bntry of Cousent Order Appointing Reeeiver filed in this matter. A.tier completing its activities in accordance with this Order, the Rweiver may submit a report to this Court mommending that CEO‘s license as an SBIC be revoked AGREED AND ACKNOWLEDGED: C`EO VENTURE FUND III, L.Pi lirr/j /€£'-`-/ on uthis /~i~/ _dayofDecemher, ZOOB. U.S. SMALL BUSINESS ADMIN!STRA'I'|ON Miclrele Long Pittrnaa, Acting Director Otiice of liquidation on this ___ day ofDecember, 2008. soormrrrra‘.man___day of__________, zons. innocuouser moran status ors'rnrc'r moon Case 2:08-mc-00346-DSC Document 2 F'l|ed 12/17/2008 Page 14 of 14 Comlaint forEntryofConsentOrdu'Appoint`ngmeii/ertiledinlhismatter. ABer completing its activities inaccordance wit‘nthisOrder, theReoeivermay aarbnritareponto thisCorntmcmmendhrg-thatCEO’slicenaeasanSBICberevolted. AGREEDANDACKNOWLEDGED: crovsriruasruunm,r.r. By: its on this day of December, 2008'. U.S. SMALL BUSINESS ADMINIS'I‘RATION Mic l.ong` twicech orrtlris_L__ yo 2008. SOORDEREDthisl ld¢yof THEHONORABLE UN]TED STATES DISTRIC!' JUDGE