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HomeMy WebLinkAbout96-01518 (~ . ~ 1" ' ~ "\ J ~~ ,~ ~ t J ~ j 11) " .... "'-10..". '"'>'. J J c.. ....... ~~ ~ ,; \)- . 4. On or about January 29, 1993, Keith L. Plasterer signed a Guaranty and Suretyship Agreement to Farmer~ Trust Company in connection with the mortgage and note executed by KLP Enterprises, Inc. A copy of the Guaranty and Suretyship agreement is attached hereto as Exhibit "C" and is incorporated herein by reference as though fully set forth. 5. KLP Enterprises, Inc. is the sole record owner in fee simple of said premises subject to said mortgage, by virtue of a Deed dated December 29, 1992 and recorded on February 1, 1993 and recorded in the Cumberland County Recorder's Office in Record Book "C", Vol. 36, Page 904, more specifically set forth in Exhibit "D", attached hereto and made a part hereof by reference. 6. Said note and said real estate mortgage are in default because Defendants herein have failed to pay the payments that were due and owing for February 13, 1996. After notice of delinquency was given February 26, 1996 Defendants still remain in default. 7. Said note and said real estate mortgage are in default because Defendants have failed to pay real estate taxes due and owing on the subject premises for 1994 School, 1995 County and Township and 1995 School taxes as stated in Article IV Events of Default: Remedies 4.01. III. NEGATIVE COVENANTS ~ 3.01 Liens; Leases. ............... ... .... .,. .. .... . l7 3.02 Mod it ications to Property Restrictions. ... ... .. l7 3.03 Hazardous Substances............ ... . .. . .. l7 3.04 Dissolution; Change of Business. ... ... .. . ... . 18 3.05 Indebtedness.... .... .... .... . . .. .. . .. . .. 18 3.06 Transfers. . ..... . .. . . . ... . .. . ... .. .. . . .. l8 IV. EVENTS OF DEFAULT; REMEDIES 4.01 4.02 4.03 4.04 4.05 4.06 4.07 Events of Default...... .......... .... ,. .... ....... Rem.di............. ......... ...... .. .. ........... (a) Primary Remedies................ .......... (b) Receiver....... ...... .... ... . ... . .. . ... ... . (c) (d) (e) (f) (g) (h) (i) Insurance POlicies......................... Application ot Proceeds................ .......... Right to Sue Without Prejudice................... Power to Modify Documents......................... Remedies Cumulative.............................. (a) Canerally.................................. (b) Other Security............................. Waiver of Stay, Extension, Moratorium Laws; Equity ot Redemption...................... Environmental site Assessments............. Riqht of Set-Off........................... Sales by Parcels........................... Effect ot Sale............................. Eviction of Mortgagor After Sale........... Confession of JUdgment for Ejectment....... 5.01 V. MISCELLANEOUS 5.02 5.03 5.04 5.05 5.06 5.07 Security and Priority of Advances................. (a) Loan Advances.............................. (b) Other Advances. ... ... ..... .. . ... . .. ... ..... Changes in Tax Law................................ Further Assurances.................. . .. .......... (a) Generally................................. (b) Filings..... . .......... ,. .... ... ....... . .. Amendments, Waivers, Etc....................... f". No Implied Waiver................................ Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expenses; Taxes; Attorneys' Fees.................. - ii - f3':""tJ15 '1;[1130 18 U 22 23 23 24 24 25 25 26 26 26 27 27 27 28 28 28 29 29 29 30 30 30 30 30 30 30 31 5.08 5.09 5.10 5.11 5.12 5.13 5.14 5.l5 Exhibit A ~ Assiqnment ot Leases. . .. . . . . .... .. J2 Jurisdiction; Etc...... . . . .. . . . . " n Interpretation......... .. .. . . .. J2 Invalidity of Certain Provisions. .. .. .. ..o. JJ Severability.................................. .. .... JJ Governing Law................................... .. . . . . . . ... 3J Time ot Essence; Duration; Survival. . . . . . . . " J2 Successors and Assigns. ........................ .. . . .. . ...... .. ... 3J Leqal Description - Hi m; !ItS '1-': 11:31 OPEN-END MORTGAGE AND SECURITY AGREEMENT THIS OPEN-END MORTGAGE AND SECURITY AGREEMENT (this "Mortgage"), dated as of January 29, 1993, made by XLP ENTERPRISES, INC., a Pennsylvania corporation having an office at Apartment 704, 1101 Lindham Court, Mechanicsburg, Pennsylvania 17055 ("Mortgagor"), to FARMERS TRUST COMPANY, a Pennsylvania corporation, having an office at One West Hiqh Street, Carlisle, Pennsylvania 17013 ("Mortgagee"), it .1 I H ~ a a ~ I Ii: WHEREAS, Mortgagor is justly indebted to Mortqagee in the principal sum of Three Million Eiqht Hundred Thousand and No/I00 Dollars ($3,800,000), as evidenced by, and to be repaid with interest thereon in accordance with, a promissory note of even date herewith made by Mortqagor to Mortgagee (as the same may be extended, renewed, refinanced, refunded, amended, modified or supplemented from time to time, and any replacement or successor note, the "Note"); NOW, THEREFORE, in consideration of $10.00 and other good and valuable consideration, the receipt of which is hereby acknowledged, and in order to secure: (a) the payment of the indebtedness evidenced by the Note, both principal and interest, and all amounts due or to become due under the Note, this Mortgage and any other loan documents executed in connection there- with, and any extensions, renewals, replacements or modifications of any thereof (the "Loan Documents"); and (b) the performance and observance of all cove- nants, agreements, obligations and liabilities of Mortgagor under or pursuant to the provisions of the Note, this Mortgage and the other Loan Documents, and any extensions, renewals, replacements or modifications of any thereof; (all of the foregoing being hereinafter collectively called the "Secured Obligations"), Mortgagor, intending to be legally bound, does hereby grant, bargain, sell, convey, warrant, assign, trans- fer, mortgage, pledge, grant a security interest in, set over and confirm unto Mortgagee, and its successors and assigns, all of Mortgagor's estate, right, title, interest, property, claim and demand, now owned or held or hereafter acquired or arising, in -, t r" r.''-li;. '_I) ,-:1132. and to the following property and rights (collectively, the "Mortgaged Property"): (a) the lands and premises more particularly described in Exhibit A hereto, together with all and singular the tenements, hereditaments and appurtenances thereunto belonging or in anywise appertaining, and also (i) any land lying within the right-of-way of any streets, open or proposed, adjoining the same, (ii) any easements, rights-of-way and rights used in connection therewith or as a means of access thereto, and (iii) any and all sidewalks, alleys, strips and gores of land adjacent thereto or used in connection therewith (all of the foragoing being hereinafter collectively called the "Land"); (b) all buildings, structures and other improve- ments now or hereafter erected or placed on the Land (collectively, the "Improvements"); (c) all materials, machinery, apparatus, equip- ment, fittings, fixtures, goods, chattels and other articles of personal property now or hereafter located on, attached to or used in connection with the Land or the Improvements (other than any personal property owned by any tenant occupying the Improvements and used by such tenant in connection with such occupancy), and all replacements thereof, additions thereto and sub- stitutions therefor (all of the toregoing, being hereinafter collectively called the "Equipment"), together with all deposits or payments made on any Equipment in connection with the conditional purchase thereof and all leases by Mortgagor as lessee of Equip- ment; (d) all licenses, permits, authorizations and agreements from Governmental Authorities (as definQd in Section 1.02) relating to the ownership, construction, occupancy, operation, management or use of the Land, the Improvements or the Equipment; (e) all contracts, licenses and agreements relat- ing to the ownership, design, construction, occupancy, operation, management or use of the Land, the Improve- ments or the Equipment; - 2 - F~;d llS ;-.',: U33 (t) all the remainder or remainders, reversion or reversions, rents, revenues, issues, profits, royal- ties, income and other benefits derived from any of the foregoing, all of which are hereby assigned to Mort- gaqee, who is hereby authorized to collect and receive the same, to give proper receipts and acquittances therefor and to apply the same to the payment of the Secured Obligations, notwithstanding the fact that the same may not then be due and payable, subject, however, to the right of Mortgagor to receive and use the same unless and until an Event of Default (as defined in Section 4.01) shall occur; (q) all proceeds of the conversion, voluntary or involuntary, of any of the foregoing into cash or liquidated claims, including all proceeds of the insur- ance required to be maintained by this Mortgage, all awards or other compensation heretofore or hereafter made to Mortgagor as the result of any Condemnation (as defined in section 2.05), all awards for changes ot the grades of streets and all awards for severance damages, all of which are hereby assigned to Mortgagee, who is hereby authorized to collect and receive the proceeds thereof, to qive proper receipts and acquittances therefor and, subject to Section 2.06, to apply the same to the payment ot the Secured Obligations, not- withstanding the fact that the same may not then be due and payable; (h) any monies deposited with Mortgagee pursuant to the terms hereof or of any other Loan Document; (i) all equipment, inventory, accounts, contract rights, general intangibles, instruments, documents and chattel paper (as those terms are defined in the Uni- form Commercial Code) of Mortqagor; and (j) all proceeds, both cash and non-cash, of any and all of the foregoing; TO HAVE AND TO HOLD the Mortgaged Property unto Mortgagee, its successors and assigns, forever; PROVIDED, HOWEVER, that if Mortgagor shall pay, perform and discharge the Secured Obligations in full, then this Mortgage and the estate hereby granted shall cease, terminate and become void; - 3 - boCt t 115 ,\'~ U34- AND, Mortgagor hereby agrees with Mortgagee as follows: ARTICLE I DEFINITIONS: REPRESENTATIONS AND WARRANTIES REGARDING TITLE AND ABSENCE OF HAZARDOUS SUBSTANCES 1.01. Definitions. Capitalized terms used herein which are not defined herein shall have the meanings assigned to them in the other Loan Documents. 1.02. Title. Mortgagor represents and warrants to Mortqagee that based upon the marked title commitment IS15-906 issued by Ticor Title Insurance Company, Mortgagor (a) has qood and marketable fee simple title to the Land and the Improvements and has good title to all Equipment and other property and rights comprising the Mortqaged Property, subject to no mortqage, lien, pledge, charge, security interest or other encumbrance or adverse claim ot any nature except Permitted EnCUmbrances (as defined in this Section 1.02), and (b) has full power and lawful authority to grant, bargain, sell, convey, warrant, assign, transfer, mortgage, pledge, grant a security interest in, set over and confirm unto Mortgagee, and its successors and assiqns, the Mortqaged Property as herein provided. Mortgagor will forever warrant and defend the title to the Mortgaged Property and the validity and first priority of the lien or estate, and the security interest, created hereby against the claims and demands ot all persons whomsoever. As used herein the term "Permitted Encumbrances" means (i) the easements, riqhts of way and other exceptions set forth in Schedule B-I ot the title policy insuring the lien of this Mortgage; (ii) liens in favor of Mortgagee: and (iii) inchoate liens for taxes, assessments or similar charges which are not due and payable or are being contested in qood faith at the time pursuant to and in compliance with the requirements of Section 2.07. 1.03. Hazardous Substances. Hazardous wastes, hazardous substances, hazardous materials, toxic substances, hazardous air pollutants or toxic pollutants, as those terms are used in, de tined in or listed under the Resource Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation and Liability Act, the Hazardous Materials Transportation Act, the Toxic Substances Control Act, the Clean Air Act and the Clean Water Act, or in any regulations promUlgating pursuant thereto, or in any other applicable Law, including without limitation those elements or compounds which are contained in the list of hazardous substances adopted by the United States Environmental - 4 - Crj.-" 1~, '." U:l5 Protection Agency or the list of toxic pollutants designated by Congress or said agency, or petroleum products, including without limitation, qasoline, diesel fuel, fuel oil, heatinq oil, kerosene, motor oil, used oil and waste oil (all of the foregoing are herein collectively called "Hazardous Substances"); and Hazardous Substances described herein as to which Mortgagor remains in compliance with all applicable Laws relaeing to the receipt, handling, use, storage, treatment, shipment or disposal of the same are herein collectively called "Permitted Sub- stances". As used herein the term "Law" means any law, constitution, statute, treaty, regulation, rule, ordinance, order, injunction, writ, decree or award of, or permit, approval or license granted by, any Governmental Authority, including those relating to zoning, subdivision, building, safety, fire protection or environmental matters. As used herein the term "Governmental Authority" means any government or political subdivision or. any agency, authority, bureau, central bank, commission, department or instrumentality of either, or any court, tribunal, grand jury or arbitrator, in each case whether foreign or domestic. ARTICLE II AFFIRMATIVE COVENANTS Mortgagor covenants to Mortgagee as follows: 2.01. ComDliance with Laws: Etc. Mortgagor shall comply with all Laws and all private covenants which at any time are applicable to the Mortgaged Property or Mortgaqor, and shall comply with the requirements of all policies of insurance required by this Mortgaqe and of the insurers under such policies. Hortqagor shall make any replacements, alterations or improvements to the Mortgaged Property as may be required by Law or such requirements even if unforeseen and/or extraordinary. Notwithstanding the foregoing, but provided Mortgagee's interests in the Mortgaged Property are not prejudiced in Mortgagee's reasonable judgment, nothing contained in this Section 2.01 shall prevent Mortgagor from contestinq, diligently and in good faith, compliance with any such laws or private covenants and Mortgagor shall not be obligated to comply with the provisions of this Section 2.01 until such time as such contest is adversely determined. 2.02. Maintenance and ReDair. Mortgagor shall not abandon or cause or permit any waste to the Improvements or the Equip- - 5 - ~~!~y t 115 !'~ 113f; ment, ehall maintain the Improvements and the Equipment in good repalr, working order and condition, except for reasonable wear and US., and shall restore, replace or rebuild the Improvements and th. Equipment or any part thereof now or hereafter damaged or destroyed by any casualty (whether or not insured against or insurable) or affected by any Condemnation (as defined below) with Improvements or Equipment of equivalent value and utility, whether or not the proceeds of insurance required hereunder or the award payable in respect of such Condemnation are sufficient for the purpose or are available to Mortgagor pursuant to Section 2. Otk for the purpose. All repairs, replacements, restorations, slterations and improvements to the Mortgaged Property shall be promptly performed in a good and workmanlike manner in compliance with all applicable Laws, private covenants and insurance requirements, shall be equivalent in quality of construction and ala.. to the original construction of the Improvements (the "proje.:t") and shall be subject to the terms and conditions set forth in Section 2.06(c) as if such repair, replacement, restora- tion, alteration or improvement were a restoration thereunder. 2.03. Alterations. Mortgagor shall not permit the Improve- ment. or the Equipment to be removed, demolished or materially altered, provided, however, that Mortgagor (i) shall make any r.placements, alterations or improvements which are required by Law (ii) may remove worn out Equipment if the same is concur- rently replaced with Equipment of equivalent value and utility and (iii) may make alterations to the Improvements without Mortgagee'. consent provided the cost of all such alterations during any twelve (12) month period does not exceed the amount of $50,000 and provided such alteration does not materially affect the value of the ~ortgaged Property. 2.04. Insurance. Unless waived in writing by Mortgagee, Mortgagor .hall maintain and keep in eftect the following policies of insurance: (a) policies of insurance against loss or damage to the Improvements and the Equipment by or from fire, lightning, windstorm, explosion, riot, riot attending a strike, civil 'commotion, aircraft and vehicles, smoke and such other hazards as are presently included in the so-called "fire and extended coverage" insurance: vandalism, malicious mischief and such other hazards as are presently included in the so-called "all risks to physical loss" insurance; and such other insurable hazards, including flood, as, under good insurance practices, from time to time are insured against for - 6 - iiCi'fIl5 ,,\ :In; improvements and equipment having similar functions and uses in the area where the Improvements and Equipment are located, in an amount which shall not be less than the greater ot (i) 100% of the "full replacement cost" of the Improvements and the Equipment, without deduc- tion tor physical depreciation, or (ii) an amount autficient to prevent Mortgagee and Mortgagor from becoming co-insurers within the terms of the applicable policies; the term "full replacement cost" shall mean the actual cost of replacing the Improvements and the Equipment, exclusi',e of the cost of excavations, foun- dations and footings below the lowest basement floor, and shall be determined from time to time at the request of Mortgagee (but not more frequently than once in any 24 calendar months) at the expense of Mortgagor, by an insurer or by an appraiser, engineer, architect or contractor designated by Mortgagor and approved by Mortqagee; (b) insurance against loss or damage to the major components of the air conditioninq and heating systems, tlywheels, steam pipes, steam turbines, steam engines, steam boilers, other pressure vessels, high pressure piping and machinery and elevators and escalators, if any, as are installed in the Improvements, including insurance against physical damage to the Improvements and the Equipment arising out of an accident covered thereunder and against loss of occupancy or use arising from breakdown of any of the foreqoing, in such amounts as are satisfactory to Mortgagee; (c) comprehensive general liability insurance on an "occurrence basis" against claims for bodily injury, death or property damage occurrinq on or about the Mortqaged Property (including elevators and escalators. if any) and on or in the streets adjoining the same, to afford protection in a "single limit" of not less than $1,000,000 in the event of bodily injury to or death of any number of persons or of damage to property arising out of one occurrence; (d) if the Land or any part thereof is situate in an area designated by the Federal Emergency Management Agency (or any successor thereto) as an area of special flood hazard for purposes of the National Flood Insur- ance Program, such policies of flood insurance as Mortgagee shall request, so as to enable Mortgagee to - 7 - ~,~~~ 1 t 15 ,\~~ 11:38 be in compliance with all Laws with respect to flood insurance coverage for the Mortgaged Property from time to time applicable to Mortgagee; (e) business interruption insurance and insurance against loss of "rental value" for a period of twelve months, in such amounts as are satisfactory to Mort- gagee; and (f) such other insurance with respect to the Mortgaqed Property in such amounts as may from time to time be reasonably required by Mortgagee against other insurable hazards or casualties which at the time are commonly insured against in the case of premises similarly situated, due regard being given to the height and type of buildings and improvements, their construction, location, use and occupancy. All policies of insurance shall be subject to the reasonable approval of Mortgagee as to insurance companies, amounts, expiration dates, form and content and shall name Mortgagee as an additional insured. All policies ot insurance maintained by Mortgagor pursuant to clause (a) shall contain the "replacement cost endorsement". All policies of insurance covering risks of physical loss shall provide that losses thereunder shall be payable to Mortgagee pursuant to a standard first mortgagee endorsement, without contribution, substantially equivalent to the New York standard mortgagee endorsement. At least 30 days prior to the expiration of any policy of insurance, Mortgagor shall furnish Mortgagee with evidence satisfactory to Mortgagee of the payment of the premium for, and the reissuance of a policy continuing, such insurance as required by this Mortgage. All policies of insurance shall contain an endorsement by the insurer that any loss shall be payable in accordance with the terms of such policy notwithstanding any act or negligence of Mortgagor which miqht otherwise give rise to a defense by the insurer to its payment for such loss and a waiver by the insurer of all rights of subrogation to any rights of Mortgagee and of all rights of set-off, counterclaim or deduction against the insureds. All policies of insurance shall also contain a provi- sion to the effect that any cancellation of or amendment to such insurance, including any reduction in the scope or limits of coverage, shall not be effective as to Mortgagee without at least 30 days' prior written notice to Mortgagee. Mortgagor shall not take out separate insurance with respect to the Mortgaged Prop- erty concurrent in form or contributing in the event of loss with that required by this Mortgage unless the same shall contain a - 8 - ~:> 1115 -.~'l 1133 sta~dard non-contributory lender's loss payable endorsement in favor ot ^nd in scope and form satisfactory to Mortgagee. 2.05. Damaoe or Condemnation. In the event of any damage to or destruction of the Improvements or the Equipment or any part thereot as a result of any casualty ("Damage"), or in the event the Land, the Improvements or the Equipment or any part thereot are taken or damaged as the result of the exercise of the power ot eminent domain or as the result ot any other govern- mental action for which compensation shall be given by any Governmental Authority ("Condemnation"), or if Mortgaqor shall receive any notice or advice of any Condemnation proceedings, Mortgagor shall give prompt notice thereof to Mortgaqee. In the event that Mortgagor shall fail to promptly settle, adjust or compromise any claims by Mortqagor tor Damage under any policy or policies of insurance required to be maintained by this Mortqage, or any claims for awards or other compensation payable in connection with any C~ndemnation, Mortgagee shall have the right, and is hereby authorized and empowered and irrevocably appointed attorney-in-fact of Mortgagor, to settle, adjust or compromise any claims by Mortgagor for Damage under any policy or policies of insurance required to be maintained by this Mortqage, or any claims tor awards or other compensation payable in connection with any Condemnation, except, so long as no Event of Default exists, those claims involvinq amounts ot less than $50,000. 2.06. ADDlication of Insurance Proceeds and Condemnation Awards. (a) Mortaaaee Election. All proceeds of the insurance required to be maintained by this Mortgage (including proceeds of business interruption or loss of rental value insurance) payable in connection with any Damaqe, and all awards or other compensation payable in connection with any Condemnation, shall be deposited with Mortqagee, except that any such proceeds or awards or other compensation aggregating less than $50,000 shall not be required to be so deposited. Provided no Event of Default exists, such proceeds or awards or other compensation (af~er deducting therefrom all reasonable costs and expenses, including attorneys' fees, incurred by Mortgagee in connection with the collection thereof regardless of the particular nature thereof and whether incurred with or without suit) ("Net Proceeds"), shall be applied by Mortgagee to the payment of the costs of restoring the Improvements and Equipment so damaged or taken to their value, utility - 9 - L"" t 115 -\: 114ft and condition immediately prior to such Damage or Condemnation (collectively, "Restoration Costs"). (b) ACDlication to Restoration. Mortgagor shall deposit with Mortgagee such additional amounts of money as may be necessary so that the Net Proceeds and such additional monies (collectively, "Restoration Funds") will be sufficient, in the reasonable judgment of Mortgagee, to pay all Restoration Costs during such restoration. Such Restoration Funds will be advanced by Mortgagee from time to time as the restoration work progresses upon the written request of Mortgagor subject to compliance by Mortgagor with such reasonable requirements and conditions as Mortgagee shall impose. Mortgagee shall not be required to apply Restoration Funds as aforesaid unless it reasonably determines that the amount thereof remaining after payment of the amount requested will be sufficient to pay the Restoration Costs in full, and Mortgagor shall promptly deposit with Mortgage. the amount of any deficiency, to be held and disbursed by Mortgagee as Restoration Funds in accordance with the provisions of this Section 2.06. Upon completion of such restoration to the satisfaction of Mortgagee and the payment ot the Restoration Costs in full, the balance of any Restoration FundS not required to be disbursed shall (i) in the case of a Damage, be disbursed to Mortgagor or as Mortgagor may direct and (ii) in the case of a Condemnation, be applied to the payment of the Secured Obligations in Such order as Mortgagee may determine until the same have been paid in full and then to Mortgagor or as Mortgagor may direct. (c) Permits: Plans: contractu. All restoration work following any Damage or Condemnation pursuant to this Mortgaqe shall be subject to the following terms and conditions: (i) no work shall be undertaken unless Mortgagor shall have procured and paid for all permits, approvals and authorizations of all Governmental Authorities required in connection with all of the work; and (ii) all work involving estimated Restoration Costs of more than $50,000 (exclusive of Project debt service) (x) shall be designed, constructed - lO - Cj, ! 115 .'; 1141 and completed in accordance with detailed plans and specifications and cost estimates reasonably acceptable to Mortgagee and prepared by an architect or engineer selected by Mortgagor and reasonably satistactory to Mortgagee and (y) shall be pertormed pursuant to tixed price construction contracts which are secured by payment and pertor- mance bonds in the amount of such contracts, such contracts and bonds to be in form and substance, and with contractors and suretie., reasonably satistactory to Mcrtqagee and to be executed and delivered prior to the commencement ot any of the work. (d) PaYment of Deficiencv. If (i) in the reason- able judgment ot Mortqagee the Mortgaged Property cannot be restored substantially to the value, utility and condition thereof immediately prior to such Damage or Condemnation or such restoration cannot be expected to be completed by the date upon which the unpaid principal balance of the Note and all unpaid interest and other sums under the Loan Documents are due and payable (the "Maturity Date"), and (ii) the Net Proceeds are not sutficient to pay the Secured Obliga- tions in full, Mortgagor shall promptly pay the defi- ciency. 2.07. Taxes and ImDositions: Mechanics' Claims. Mortqagor shall pay, before any tine, penalty, interest or cost attaches thereto, all taxes and assessments, qeneral and special, all water and sewer rents and all qovernmental charges and levies of any kind or nature whatsoever, which a~e now or hereafter assessed or imposod upon the Mortgaged Property or Mortqagor or become due and payable from Mortgagor or create a lien upon the Mortgaged Property (all such taxes, assessments, rents, charges and levies being herein collectively called "Impositions"), as well as all claims tor labor, materials or services which, if unpaid. might become a lien thereon (herein collectively called "Mechanics' Claims"), and shall furnish to Mortgagee promptly upon Mortgagee's request and as soon as reasonably possible, official receipts of the appropriate taxing or other authority, or other proof satistacto~1 to Mortgagee, evidencing the payment of all Impositions: provided, however, that it by law any Imposition is payable, or may at the option of the taxpayer be paid, in installments, Mortgagor may pay the same, or cause the same to be paid, together with any accrued interest on the unpaid balance thereof, in installments as the same become due and - 11 - i:I:"'- J 11 S ..~,: 1142. before any fine. penalty, interest or cost may be added thereto for the nonpayment thereof; and provided, further, that, if Mortgagor (a) contests the validity or amount of any Imposition or Mechanic's Claim in good faith and by appropriate proceedings which operate to pre'/ent any execution on any portion of th" Mortgaged Property, (b) deposits and maintains with Mortgagee a bond or other security s~tisfactory to Mortgagee in such amount as Mortgagee shall reasonably require to assure the discharge thereof, (c) thereafter dil~gently proceeds to cause such Imposition or Mechanics' Claim to be removed, paid or discharged of record, Mortgagor may defer payment thereof during the pendency of such contest. 2.08. Tax and Insurance Escrow. If requested by Mortgagee, Mortgagor shall pay to Mortgagee on the first day of each calen- dar month a sum equal to one-twelfth (1/12th) of the real estate tax.. on the Mortgaqed Property and premiums for insurance required hereby so as to enable Mortgagee to pay the same at least thirty days before they become due and Mortgagee shall do .0. Amounts so paid shall not be trust funds but may at the option of Mortgagee be commingled with qeneral funds of Mortgage.. No interest shall be ~aid on such amounts. If an Event of Default shall occur, Mortgagee shall have the right to apply any amounts paid to Mortgagee under this Section 2.08 aqainst all or any part of the Secured Obligations. If such real estate taxes and insurance premiums shall exceed the amounts paid into escrow under this Section 2.08, Mortgagor shall on demand pay the deficiency. Mortgagor shall furnish to Mortgagee tax and insurance bills in sutficient time to enable Mortgagee to pay such taxes and premiums, before interest and penalties accrue thereon. 2.09. Financial Statements. Mortgagor shall furnish or caused to be furnished to Mortgagee: (a) for Mortqagor, and any Guarantor, within 90 days after the end of each of its fiscal years, a balance sheet as of the end of such fiscal year and statements of income, retained earnings or partners' capital (as the case may be) and cash flows for such fiscal year, setting forth in comparative form the correspoflding figures for the preceding fiscal year, all in reasonable detail, prepared in accordance with GAAP by independent public accountants of recognized standing selected by Mortgagor and reasonably satisfac- tory to Mortgagee; - 12 - ~~od lf5 ',~:t 1143 (b) tor Mortgagor, and any Guarantor, within 45 days atter the end ot the first half of each of its fiscal years, a balance sheet AS ot the close ot such period and statements of income, retained earnings or partners' equity (as the case may be) and cash tlows for such period, all in reasonable detail and prepared in accordance with GAAP, subject, however, to year-end audit adjustments, and certified by the Mortgagor, or any Guarant~r, as the case may bel (c) within 45 days after the end ot each calendar quarter, a financial statement covering the operation of the Mortgaged Property for such calendar quarter, and setting torth in such detail as Mortgagee shall reasonably request, the status of leasing, the income, expenses and cash flow and other tinancial intormation relating to the Mortgaged Property, which financial statements shall be certified by the Mortgagor; (d) for Mortgagor., and any Guarantor, within 45 days atter the filing thereof, a copy of its federal income tax return tor each year; (e) with reasonable promptness, such other finan- cial and other information respecting the financial condition, business or operations of Mortgagor and any Guarantor, as Mortgagee may from time to time reasonably request. With respect to those financial statements which are required to be certified by Mortgagor, and any Guarantor, such certitication shall state that such financial statements are complete and correct, were prepared in accordance with GAAP and fairly present the financial condition at the respec- tive dates indicated therein and the results of opera- tions for the respective periods indicated therein ot Mortgagor (and its SUbsidiaries), and any Guarantor (and its Subsidiaries). 2.10. Securitv Interest. (a) uee Securitv Interest. This Mortgage con- stitutes both a mortgage and a "security agreement" within the meaning of the Uniform Commercial Code ot the applicable juriSdiction (the "Uec"), and the Mort- gaged Property includes both real and personal property and all other rights and interests, whether tangible or intangible in nature, of Mortgagor in the Mortgaged - 13 - .--- t 11~ -. f tl44- b:,~t l. .J ,.. Property. Mortgagor by executing and delivering this Mortgage has gr~nted to Mortgagee, as security tor the Secured Obligations, a security interest in and to (i) those portions ot the Mortgaged Property in which a security interest can be granted under the uec, and (ii) the Collateral, as detined below. Portions of the Mortgaged Property are or are to become tixtures as detined in the uce. This Mortgage constitutes and is etfective as a fixture tiling as provided in Section 9402 ot the uce. (b) Locations. Mortgagor shall maintain and keep the Equipment on the Landi shall maintain and keep its principal place of business and its chiet executive otfice at its address stated on the first page hereot and at no other location without thirty days' prior written notice to Mortgagee; and shall maintain and keep its records concerning the Mortgaged Property at the Improvements and at no other location without prior written notice to Mortgagee. (c) Collateral. "Collateral" means all of the following property of Mortgagor whether now owned or hereatter acquired or arising: Inventory, Accounts, money, deposit accounts, equipment, tixtures, general intangibles, chattel paper, instruments, documents and gOOds (as each of the preceding terms are defined in the aCe), accounts receivable, machinery and all other tangible and intangible personal property of Mortgagor ot every nature and description, and all substitutions, replacements, accessions and proceeds of allot the foregoing (inCluding, without limitation, insurance proceeds and condemnation awards). (d) Preservation. The Mortgagor will preserve the Collateral and all property used or usetul in the conduct of the operations ot the Mortgagor, and keep the same in good condition and repair (normal wear and tear excepted), and from time to time make, or cause to be made, all necessary and proper repairs, renewals, replacements, betterments and improvements thereto. The Mortgagor will defend the Collateral against all claims and demands ot all persons at any time claiming the same or any interest therein and, in the event the Mortgagee's security interest in the Collateral, or any part thereot, would be impaired by an adverse decision, allow the Mortgagee to contest or defend any such claim - 14 - L~; 1 , 1 ~ .., 1115 r,..... .,,~ . '4 or demand in the name ot the Xortgagor and the Mortga- gor agrees to pay, upon demand, the Mortgagee's reason- able costs, charges and expenses, including, without limitation, reasonable attorney's tees, in connection therewith. (e) Financinq Statements. From time to time, at the request ot the Mortgagee, the Mortgagor shall execute, deliver and tile all tinancing statements on Form Uee-1 or other instruments, and do all other acts as the Mortgagee deems necessary or desirable to per- fect tully, or to keep perfected, its security interest in the Collateral and pay upon demand all reasonable expenses, including, without limitation, attorney's fees, incurred by the Mortgagee in connection there- with. 2.11. Visitation. During normal busin$ss hours and upon reasonable notice, Mortgagor shall permit such persons as Mortgagee may designate to visit and inspect the Mortgaged Prop- erty, to examine the books, records and documents relating to the Mortgaged Property and take copies and extracts therefrom at normal business hours upon reasonable notice and to discuss the affairs of the Mortgagor relating thereto with the independent accountants of Mortgagor at such times and as otten as Mortgagee may reasonably request. Mortgagor hereby authorizes such independent accountants to discuss with Mortgagee the affairs ot thG Mortgagor. 2.12. Litiqation Affectinq Mortqaqed Procertv. Mortgagor shall appear in And contest any judicial or quasijudicial action or proceeding purporting to attect the security hereof or the rights or powers of Mortgagee, and shall pay within a reasonable time after demand therefor all costs and expenses, including costs of evidence of title and attorneys' tees, in any such action or proceeding in which Mortgagee may appear. 2.13. Indemnification. Mortgagee shall have no obligation or liability by reason of this Mortgage (or the liens or security interests in the Mortgaged Property granted hereby) or arising out ot the Mortgaged Property, nor shall Mortgagee be required or Obligated in any manner to perform or tulfill any obligations ot Mortgagor with respect to the Mortgaged Property. With the exception ot negligent acts and omissions ot Mortgagee, or its agents, servants, employees or contractors, Mortgagor hereby agrees to indemnify and defend Mortgagee against, and hold Mortgagee harmless trom, all costs, tines, penalties, tees - 15 - ~od 115 .y~ 114fl (including, without limitation, attorneys' tees), expenses, liabilities, losses, claims and damages that may at any time be asserted against or incurred by Mortgagee as a result of, or arising out of, or in any way related to or by reason of any Event ot Detault under this Mortgage (o~ the liens or security interests in the Mortgaged Property granted hereby), or any other Loan Document, including any cost, tine, penalty, fes, expense, liability, loss, claim or damage arising trom or related to Hazardous Substances or any Law concerning Hazardous Substances or other environmental matters relating to conditions that occur subsequent to the date of this Mortgage and including any and all claims and demands whatsoever which may be asserted against Mortgagee by reason ot any alleged obligation on its part to perform or discharge any Obligation with respect to the Mortgaged property. 2.14. Actions bv Mortoaoee to Preserve Mortoaoed proDerty. If Mortgagor shall fail to (a) ettect, maintain and keep in force the insurance required under the provisions ot Section 2.04, (b) make the payments required by section 2.07 or (c) pay, pertorm or observe any of the other Obligations required by this Mortgage or any other Loan Document to be paid, pertormed or observed by Mortgagor, then Mortgagee may effect, maintain, keep in force, pay, perform or observe the same. In connection therewith, Mortgagee shall have the right, but not the obligation, (i) upon the occurrence ot an Event ot Detault, to enter upon and take possession of the Mortgaged Property; (ii) to make such additions, alterations, repairs and improvements to the Mortgaged Property as Mortgagee may reasonably consider necessary or proper to keep the same in good condition and repair; (iii) to appear and participate in any action or proceeding atfecting or which may affect the security hereof or thereot or the rights or powers of Mortgagee hereunder or thereunder; (iv) to contest or compromise any lien, encumbrance or charge which in the reasonable judgment of Mortgagee may aftect the security ot this Mortgage or any other Loan Document, or to discharge the same, either by paying the amount claimed to be due or depositing in court a bond for the amount claimed or otherwise giving security tor such claim, or in such other manner as is or may be prescribed by law; and (v) in exercising such powers, to pay necessary and reasonable expenses including the fees and expenses of attorneys and all necessary or desirable consultants. All sums so expended by Mortgagee or expended to sustain the lien or estate or security interest created by this Mortgage or any other Loan Document or the priority hereof or thereof, or to protect or enforce any of the rights of Mortgagee under the terms of this Mortgage or any other Loan Document, or to recover or entorce any - 16 - ~Jod 115 r,I;[1147 ot the Secured Obligations or otherwise to secure the performance ot any obligation ot Mortgagor under this Mortgage or any other Loan Oocument, shall be paid by Mortgagor within five days after demand by Mortgagee with interest at the Oetault Rate (as defined in the Note) until paid. In any action or proceeding to foreclose this Mortgage, or to recover, collect or entorce the Secured Obligations, the provisions ot law respecting the recovery of costs, disbursements and allowances shall prevail unaffected by this covenant. 2.15. Estoccel eertiticates. Mortgagor, within ten days after notice from Mortgagee stating the amount of and the method of calculation of the Secured Obligations, shall furnish to Mortgagee a statement contirming the amount of the Secured Obligations and stating whether any ottsets or defenses exist against the Secured Obligations. ARTICLE III NEGATIVE COVENANTS Mortgagor covenants to Mortgagee as tollows: 3.01. Liens: Leases. Subject to the provisions of Section 4.01(h) below, Mortgagor shall not create, permit to accrue or suffer to exist any assignment, mortgage, lien, security interest, pledge, conditional sale or other title retention agreement, encumbrance or charge of, in, to or upon the Mortgaged Property, other than Permitted Encumbrances. Mortgagor shall not, without the prior written consent of Mortgagee, lease (as lessee) any of the Equipment or Improvements except in the ordinary course of business. 3.02. Modifications to Procertv Restrictions. Mortgagor shall not initiate, join in or consent to any change in any private covenant, zoning ordinance or other public or private restriction which would detract from or limit the value or util- ity ot the Mortgaged Property. 3.03. Hazardous Substances. Mortgagor shall not subsequent to the date of this Mortgage (a) cause, permit or allow the deposit or creation of any Hazardous Substances (other than Permitted Substances) at, on, in or under the Mortgaged Property; (b) use, permit or allow the use of Hazardous Substances (other than Permitted Substances) at, on, in or under the Mortgaged Property; or (c) cause, permit or allow the release or threatened - 17 - blloitllG ;!~:1148 release ot any Hazardous Substances at, on, in, under or trom the Mortgaged Property. 3.04. Dissolution; Chanoe ot Business. Mortgagor shall not dissolve, merge or consolidate with any other person or sell, transter or otherwise dispose ot all or a substantial portion of its assets. Mortgagor shall continue to engage in its business substantially as currently conducted and operated and shall not engage in any other business. 3.03. ~btedness. Subject to the provisions of Section 4.01(h) below, Mortgagor shall not at any time create, incur, assume or suffer to exist any debt ot Mortgagor, except trade debt in an aggregate amount not to exceed $50,000. 3.06. Transfers. Mortgagor shall not at any time transter title to the Mortgaged Property or any interest therein by sale, gift, lease, option, devise, operation ot law or otherwise (except that Mortgagor shall be allowed to replace Equipment in the ordinary course ot business). Mortgagor, if it is a partnership, shall not transfer any partnership interest, and if it is a corporation, shall not transfer any shares of stock, except a transter to family members and at no time shall Mortgagor transfer more than 49' of shares of stock in the aggregate to family members. ARTICLE IV EVENTS OF DEFAULT; REMEDIES 4.01. Events at Detault. the occurrence or existence ot events or conditions (whatever Cetault and whether voluntary, t ion of law): (a) Mortgagor shall fail to pay when due prin- cipal of the Note and such tailure to pay shall have continued for a period ot ten (10) days after written notice thereot to Mortgagor; provided, however, Mortgagee shall not be required to give such written notice more than once in any given twelve (12) month period or three (3) times during the term of this loan; or An Event of Cetault shall mean one or more of the following the reason tor such Event ot involuntary or effected by opera- (b) Mortgagor shall fail to pay when due interest on the Note or any other amount due hereunder or under - 18 - buG; t U5 ,rr Ha9 the Note or any other Loan Doc~ment and such failure shall have continued tor a period ot ten (10} days atter written notice thereof to Mortgagor; provided, however, Mortgagee shall not be required to give such written notice more than once in any given twelve (12) month period or three (3) times during the term of this loan; or (c} Any representation or warranty made by Mort- gagor or any Guarantor under this Mortgage or any other Loan Document or any statement made by Mortgagor or any Guarantor in any financial statement, certiticate, report, exhibit or document turnished by Mortgagor or any Guarantor to Mortgagee pursuant to or in connection with this Mortgage or any other Loan Document Shdll prove to have been talse or misleading in any material respect as ot the time when mad. (including by omission of material information necessary to make such repre- sentation, warranty or statement not misleading); or (d) Mortgagor shall default in the performance or observance of any covenant contained in Sections 2.03, and such detault shall have continued tor a periOd ot thirty (30) days after written notice thereot to Mortgagor, or 2.04, and such default shall have continued for a period of ten (10) days after written notice thereof to Mortgagor, or in Article III; or (e) Mortgagor shall default in the performance or observance ot any other covenant, agreement or duty under this Mortgage and such default shall have con- tinued for a periOd of thirty (30) days after written notice thereof to Mortgagor; or (f) Mortgagor or any Guarantor shall default in the performance or observance of any covenant, agree- ment or duty under the Note or any other Loan Document beyond any period of grace with respect thereto; or (g) An Event ot Default set forth in any other Loan Document shall occur; or (h) One or more jUdgments for the payment of money shall have been entered against Mortgagor or any Guarantor, which jUdgment or judgments exceed $10,000 in the aggregate, and such judgment or judgments shall - 19 - ~iJ~' II! ,)-~.~ 1150 - have remained undischarged, unstayed or unbonded for a period ot thirty (30) consecutive days; or (i) A writ or warrant of attachment, garnishment, execution, distraint or similar process shall have been issued against Mortgagor or any Guarantor which shall have remained undischarged and unstayed tor a period ot thirty (30) consecutive days; or (j) A proceeding shall have been instituted in respect ot Mortgagor or any Guarantor (i) seeking to have an order for reliet entered in respect ot Mortgagor or any Guarantor, or seeking a declaration or entailing a tinding that Mortgagor or any Guarantor is insolvent or a similar declaration or finding, or seeking dis- solution, winding-up, charter revocation or for- feiture, liquidation, reorganization, arrangement, adjustment, composition or other similar relief with respect to Mortgagor or any Guarantor, its assets or its debts under any law relating to bankruptcy, insolvency, relief of debtors or pro- tection of creditors, termination of legal enti- ties or any other similar law now or hereafter in eftect, or (ii) seeking appointment of a receiver, trustee, custodian, liquidator, assignee, sequestrator or other similar official for Mort- gagor or any Guarantor or tor all or any substan- tial part ot its property, and such proceeding shall result in the entry, making or grant of any such order for relief, declaration, finding, relief or appointment, or such proceeding shall remain undismissed and unstayed for a period of forty-tive (45) consecutive days; or (k) Mortgagor or any Guarantor shall become insolvent, shall become generally unable to pay its debts as they become due, shall voluntarily suspend transaction of its business, shall make a general assignment tor the benetit ot creditors, shall insti- tute a proceeding described in Section 4.01(k) (i) or shall consent to any such order tor relief, declara- tion, finding or reliet described therein, shall insti- - 20 - btiO; 1115 ru1l5t tute a proceeding described in Section 4.01(k) (ii) or shall consent to any such appointment or to the taking ot possession by any such otficial ot all or any sub- stantial part ot its property whether or not any such proceeding is instituted, shall dissolve, wind-up or liquidate itselt or any substantial part ot its prop- erty, or shall take any action in turtherance of any of the toregoing; or (1) Failure ot the Mortgagor to assign, transfer and deliver to Mortgagee a $50,000 Certificate ot Deposit issued in the name of Keith L. Plasterer to be deposited by February 15, 1993, which eertiticate ot Deposit is to be held as collateral security for this Mortgage. (m) For the purposes of this Section 4.01, it any non monetary detault is not reasonably capable of being cured within the cure period specified tor such default, it shall not be considered an Event of Default if Mortgagor commences to cure such default within the applicable cure period and diligently prosecutes same to completion. 4.02. Remedies. (a) PrimarY Remedies. It an Event of Default shall occur, Mortgagee may (x) by notice to Mortgagor, declare the Secured Obligations immediately due and payable without presentment, demand, protest or further notice ot any kind, all of which are hereby expressly waived; provided, however, that, in the case of an Event of Default specified in subsections (k) or (1) of Section 4.01, the Secured Obligations shall auto- matically become due and payable without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived; and/or (y) exercise any other right, power or remedy available to it at law or in equity, hereunder or under any other Loan Document without demand, protest or further notice of any kind, all of which are hereby expressly waived, except such as is expressly required hereby or by such other Loan Document. Without limiting the generality of the fore- going, Mortgagee may: (i) enter and take possession of the Mort- gaged Property or any part thereof, exclude Mort- gagor and all persons claiming under Mortgagor wholly or partly therefrom, and operate, use, - 21 - ---11' bU0t J5 :'l US:? manage and control the same, or cause the same to be operated by a person selected by Mortgagee, eithe~ in the name ot Mortgagor or otherwise, and upon such entry, trom time to time, at the expense ot Mortgagor and of the Mortgaged Property, make all such repairs, replacements, alterations, additions or improvements thereto as Mortgagee may deem proper, and collect and receive the rents, revenues, issues, protits, royalties, income and benetits thereot and apply the same to the payment ot all expenses which Mortgagee may be authorized to incur under the provisions ot this Mortgage and applicable law, the remainder to be applied to the payment, pertormance and discharge of the Secured Obligations in such order as Mortgagee may deter- mine until the same have been paid in full; (ii) institute an action for the toreclosure of this Mortgage and the sale of the Mortgaged Property pursuant to the jUdgment or decree of a court of competent jurisdiction; (iii) sell the Mortgaged Property to the highest bidder or bidders at pUblic auction at a sale or sales held at such place or places and time or times and upon such notice and otherwise in such manner as may be required by law, or in the absence of any such requirement, as Mortgagee may deem appropriate, and from time to time adjourn such sale by announcement at the time and place specified for such sale or for such adjourned sale or sales without turther notice except such as may be required by law; (iv) take all steps to protect and entorce the rights of Mortgagee under this Mortgage by suit for specific pertormance of any covenant herein contained, or in aid of the execution of any power herein granted or tor the enforcement of any other rights; and/or (v) exercise any or all of the rights and remedies available to a secured party under the uee, including the right to (A) enter the Mort- gaged Property and take possession of the Equip- ment without demand or notice and without prior jUdicial hearing or legal proceedings, which - 22 - "- ~:jGd 115 .J: 1153 Mortgagor hereby expressly waives, (B) require Mortgagor to assemble the Equipment, or any por- tion thereof, and make it available to Mortgagee at a place or places designated by Mortgagee and reasonably convenient to both parties and (C) sell all or any p~~tion ot the Equipment at public or private sale, without prior notice to M~rtgagor except as otherwise required by law (and it notice is required by law, aftsr ten days' prior written notice), at such place or places and at such time or times and in such manner and upon such terms, whether tor cash or on credit, as Mortgagee in its sole discretion may determine. As to any property subject to Article 9 ot the uce included in the Mortgaged Property, Mortgagee may proceed under the uee or proceed as to both real and personal property in accordance with the provisions of this Mortgage and the rights and remedies that Mort- gagee may have at law or in equity, in respect of real property, and treat both the real and per- sonal property included in the Mortgaged Property as one parcel or paCkage of security. Mortgagor shall have the burden of proving that any sale pursuant to this Section 4.02(a) or pursuant to the UCC was conducted in a commercially unreason- able manner. (b) Receiver. In any action to for.eclose this Mortgage, Mortgagee shall be entitled as a matter ot right to the appointment of a receiver of the Mortgaged Property and the rents, revenues, issues, profits, royalties, income and benefits thereof, without notice or demand, and without regard to the adequacy of the security for the Secured Obligations or the solvency ot Mortgagor. (c) Environmental Site Assessments. If an Event of Default shall occur, Mortgagor shall permit such persons as Mortgagee may designate ("Site Reviewers") to visit the Mortgaged Property and perform environ- mental site investigations and assessments ("Site Assessments") on the Mortgaged Property tor the purpose of determining whether there exists on the Mortgaged Property any environmental condition which could result in any liability, cost or expense to the owner or occupier ot the Mortgaged Property. Such Site Assess- ments may include both above and below the ground - 23 - ~iJGil115 "'11~'" ''''~' ;)"., -- testing tor environmental damage or the presence ot Hazardous Substances on the Mortgaged Property and such other tests on the Mortgaged Property as may be neces- sary to conduct the site Assessments in the opinion ot the site Reviewers. Mortgagor will supply to the site Reviewers such historical and operational intormation regarding the Mortgaged Property as may be reasonably requested by the Site Reviewers to tacilitate the Sit6 Assessments and will make available for meetings with the site Reviewers appropriate personnel having knowledge ot such matters. The cost of performing all Site Assessments shall be paid by Mortgagor within five days after demand by Mortgagee with interest at the Default Rate until paid. (d) Riaht of Set-Off.. If an Event of Default shall occur, Mortgagee and the holder ot any participa- tion in the Note shall have the right, in addition to all other rights and remedies available to it, to set-otf against and to appropriate and apply to the unpaid balance ot the Note and all other obligations of Mortgagor hereundar or under any other Loan Document any debt owing to, and any other funds held in any manner for the account of, Mortgagor by Mortgagee or such holder, including all funds in all deposit accounts (general or special) now or hereafter main- tained by Mortgagor with Mortgagee or such holder. Such right shall exist whether or not Mortgagee or any such holder shall have made any demand under the Note or any such participation or any other Loan Document and whether or not the Note or such participation or such other obligations are matured or unmatured. Mortgagor hereby confirms the foregoing arrangements and each such holder's and the Mortgagee's right of banker's lien and set-off and nothing in this Mortgage or any other Loan Document shall be deemed any waiver or prOhibition ot any such holder's or ot the Mort- gagee's right of banker's lien or set-off. (e) Sales bv Parcels. In any sale made under or by virtue ot this Mortgage or pursuant to any judgment or decree of court, the Mortgaged Property may be sold in one or more parts or parcels or as an entirety and in such order as Mortgagee may elect, without regard to the right of Mortgagor, or any person claiming under it, to the marshalling of assets. - 24 - fjc; l .1.1.:0: ... '~::1155 (t) Eftect ot Sale. The purchaser at any sale made under or by virtue ot this Mortgage or pursuant to any judgment or decree of court shall take title to the Mortgaged Property or the part thereot so sold free and discharged of the estate ot Mortgagor therein, the purchaser being hereby discharged trom all liability to see to the application of the purchase money. Any person, including Mortgagee, may purchase at any such sale. Mortgagee is hereby irrevocably appointed the attorney-in-tact ot Mortgagor in its name and stead to make all appropriate transters and deliveries of the Mortgaged Property or any portions thereof so sold and, for this purpose, Mortgagee may execute all appropriate instruments ot transfer, and may substitute one or more persons with like power, Mortgagor hereby ratitying and confirming all that its said attorneys or such substi- tute or 5ubstitutes shall lawfully do by virtue hereot. Nevertheless, Mortgagor shall ratify and confirm, or cause to be ratified and confirmed, any such sale or sales by executing and delivering, or by causing to be executed and delivered, to Mortgagee or to such pur- chaser or purchasers all such instruments as may be advisable, in the judgment of Mortgagee, for the pur- pose, and as may be designated, in such request. Any sale or sales made under or by virtue of this Mortgage, to the extent not prohibited by law, shall operate to divest all the estate. right, title, interest, prop- erty, claim and demand whatsoever, whether at law or in equity, of Mortgagor in, to and under the Mortgaged Property, or any portions thereof so sold, and shall be a perpetual bar both at law and in equity against Mortgagor, its successors and assigns, and against any and all persons claiming or who may claim the same, or any part thereof, by, through or under Mortgagor, or its successors or assigns. The powers and agency herein granted are coupled with an interest and are irrevocable. (g) Eviction ot Mortaaaor After Sale. If Mort- gagor fails or retuses to surrender possession of the Mortgaged Property after any sale thereof, Mortgagor shall be deemed a tenant at sufferance, subject to eviction by means of torcible entry and detainer pro- ceedings, provided that this remedy is not exclusive or in derogation of any other right or remedy available to Mortgagee or any purchaser ot the Mortgaged Property - 25 - "- Left ,'1:; .., i'.l'.11f!l'l ., i,)~) under any provision ot this Mortgage or pursuan~ to any judgment or decree ot court. (h) eontession ot Judqment tor Eiectment. For the purposes of the remedies attorded Mortgagee in section 4.02(a), Mortgagor hereby authorizes any attor- ney ot any court of record to appear for Mortgagor to sign an agreement ~or entering an amicable action ot ejectment tor po.session ot any ot the Mortgaged Prop- erty and to contess jud~ent thereon against Mortgagor in favor of Mortgagee, whereupon a writ may forthwith issue tor the immediate possession of any ot the Mort- gaged Property, without any prior writ or proceeding whatsoever; and for so doing, this Mortgage or a copy hereot verified by attidavit shall be a sutticient warrant. (i) Insurance ~olicies. In the event of a tore- closure sale pursuant to this Mortgage or other trans- fer of title or assignment ot the Mortgaged Property in extinguishment, in whole or in part, of the Secured Obligations, all right, title and interest of Mortgagor in and to all policies of insurance required under the provisions of Section 2.04 shall inure to the bene tit of and pass to the successor in interest of Mortgagor or the purchaser or grantee of the Mortgaged Property or any part thereof so transterred. 4.03. ADDlication of Proceeds. The proceeds of any sale mada either under the power of sale hereby given or unde~ a judgment, order or decree made in any action to foreclose or to enforce this Mortgage, shall be applied: (a) first to the payment of (i) all costs and expenses of such sale, including reasonable attorneys' fees, appraisers' fees and costs ot procuring title searches, title Insurance policies and similar items and (ii) all charges, expenses and advances incurred or made by Mortgagee in order to protect the lien or estate created by this Mortgage or the security aftorded hereby including any expenses of entering, taking possession of and operating the Mortgaged Prop- erty; (b) then to the payment ot any other Secured Obligations in such order as Mortgagee may determine until the same have been paid in full; and - 26 - iZ:;, 111~ !: t 15, (c) gagor, or to, or as any balance thereot shall be paid to Mort- to whosoever shall be legally entitled there- a court ot competent jurisdiction may direct. 4.04. Richt to Sue Without preiudice. If an Event ot Detault shall occur, Mortgagee shall have the right trom time ~o time to cause a sale ot the Mortgaged Property under the provi- sions ot this Mortgage or to sue for any sums required to be paid by Mortgagor under the terms ot this Mortgage as the same respec- tively become due, without regard to whether or not the Secured Obligations shall be due and without prejudice to the right ot Mortgagee thereatter to cause any such sale or to bring any action or proceeding ot foreclosure or otherwise, or to take other action, in respect ot any Event ot Detault existing at the time such earlier action or proceeding was commenced. 4.05. Power to Modifv Documents. Mortgagee may at any time or trom time to time renew or extend this Mortgage or any other Loan Document or amend or modity the same in any way, or waive any of the terms, covenants or conditions hereof or thereof in whole or in part, and may release any portion ot the Mortgaged Property or any other security, and grant such extensions and indulgences in relation to the Secured Obligations as Mortgagee may determine, without the consent of any junior lienor or encum- brancer and without any obligation to give notice ot any kind to any person and without in any manner affecting t~o priority ot the lien or security interest ot this Mortgage on or in any part of the Mortgaged property. Mortgagee may at any time or from time to time subordinate the lien or security interest of this Mortgage to any lease of space in the Improvements or any other agreement with respect to the occupancy or use of any part of the Mortgaged Property, or to any easement, restrictive covenant or other encumbrance on any part of the Mortgaged Property, or to any other lien on or security interest in any part of the Mort- gaged Property, or to any other interest of any person in or eo any part of the Mortgaged Property, in each case without the agreement or consent of Mortgagor or ot the tenant or other party holding the interest to which the lien or security interest hereof is being subordinated or ot any other person having a right or interest in any of the Mortgaged Property, without any Obligation to give notice ot any kind to any person, and without in any manner affecting (except to the extent specifically pro- vided in the instrument etfecting such SUbordination) the prior- ity ot the lien or security interest of this Mortgage on or in any part of the Mortgaged Property. 4.06. Remedies Cumulative. - 27 - hTG; I! l:'j ',1 ~1l~~ (a) Generallv. No right or remedy herein con- ferred upon or reserved to Mortgagee is intended to be exclusive ot any other right or remedy, and each and every such right and remedy shall be cumulative and in addition to any other right or remedy of Mortgagee under the Loan Documents or this Mortgage, or at law or in equity. The tailure of Mortgagee to insist at any time upon the strict observance or performance of any of the provisions ot this Mortgage, or to exercise any right or remedy provided tor herein or in the Loan Documents, shall not impair any such right or remedy nor be construed as a waiver or relinquishment thereot. Every right and remedy given by this Mortgage or the Loan Documents to Mortgagee, or to which Mortgagee may otherwise be entitled, may be exercised trom time to time and as often as may be deemed expedient by Mort- gagee, and no warrant shall be exhausted by the exer- cise thereot. Mortgagee may pursue inconsistent remedies. (b) Other Securitv. Mortgagee shall be entitled to enforce payment and performance of any Secured Obligations and to exercise all rights and powers und~r the Loan Documents or this Mortgage, or at law or in equity, notwithstanding that such Secured Obligations may now or hereafter be otherwise secured. Neither the acceptance of this Mortgage nor its enforcement, whether by court action or pursuant to the power ot sale or other powers herein contained, shall prejudice or in any manner affect Mortgagee's right to realize upon or enforce any other security now or hereafte~ held by Mortgagee in such order and manner as Mortgagee in its sole discretion may determine. 4.07. Waiver of Stav. Extension. Moratorium Laws: Eauitv of RedemDtion. Mortgagor shall not at any time (a) insist upon, plead or in any manner whatever claim or take any benefit or advantage ot any applicable present or tuture stay, extension or moratorium Law or (b) claim, take or insist upon any benefit or advantage ot any present or tuture Law providing for the valua- tion or appraisal of the Mortgaged Property prior to any sale or sales thereof which may be made under or by virtue ot the provi- sions of Section 4.0~; and Mortgagor hereby waives all benetit or advantage ot any such Law or Laws. Mortgagor, for itself and all who may claim under it, hereby waives any and all rights and equities ot redemption from sale under the power ot sale created hereunder or trom sale under any order or decree of toreclosure - 28 - bi'Jd 115 ,i':[ 115[) ot this Mortgage and all notice or notices ot .ei~uce, and all right to have the Mortgaged Property marshalled upon any toreclo- sure hereot. Mortgagee shall not be obligated to pursue or exhaust its rights or remedies as against any part ot the Mort- gaged Property before proceeding against any other part thereot and Mortgagor hereby waives any right or claim of right to have Mortgagee proceed in any particular order. Mortgagor hereby waives and releases all procedural errors, detects and imperfections in any proceedings instituted by Mortgagee under this Mortgage. ARTICLE V MISCELLANEOUS 5.'01. Securitv and prioritv ot Advances. (a) Loan Advance~. This Mortgage secures, and the Seoured Obligations include, future advances. All advances and indebtedness arising and accruing from time to time under the Loan Documents shall be secured hereby to the same extent as though the Loan Documents were fully incorporated in this Mortgage. U~der the Loan Documents advances may be made and indebtedness may be incurred from time to time hereafter, but each such advance or indebtedness shall be .ecured hereby as if made on the date hereof. Mortgagor hereby covenants and agrees that it will not exercise, and hereby waives, its right under 42 Pa. Stat. IS143(c) to limit the indebtedness secured by this Mortgage. (b) Other Advances. This Mortgage secures, and the Secured Obligations include, (i) all advances made by Mortgagee with respect to any ot the Mortgaged Property for the payment ot Impositions, maintenance charges, insurance premiums or costs incurred for the protection of any ot the Mortgaged Property or the lien of this Mortgage, and (ii) all expenses incurred by Mortgagee by reason ot an Event ot Default hereunder. As provided in 42 Pa. Stat. IS144, this Mortgage shall constitute a lien on the Mortgaged Property from the time this Mortgage is left of record (or, if this is a purchase money mortgage, trom the time ot delivery hereof to Mortgagee) tor, among other things, all such advances and expenses, plue interest thereon, regard- less of the time when such advances are made or such expenses are incurred. - 29 - b,:~d 11.5<: 11 en 5.0~. Chanaes in Tax Law. In the event ot the passage attar the date ot this Mortgage ot any Law deducting trom the value of the Mortgaged Property, tor the purpose ot taxation, any lian thereon, or changing in any way the Laws now in torce tor tha taxation ot mortgages, or debts secured thereby, tor state or local purposes, or the manner of the operation of any such taxes so as to aftect the interest ot Mortgagee, then and in such avant, Mortgagor shall bear and pay the tull amount ot such taxes, provided that it tor any reason payment by Mortgagor ot any such new or additional taxes would be unlawtul (including under the laws ot usury) Mortgagee may either declare the whole sum secured by this Mortgage, with interest thereon, to be imme- diately due and payable, or pay that amount or portion of such taxes as would be unlawtul to require Mortgagor to pay, in which event Mortgagor shall concurrently therewith pay the balance of said taxes. 5.03. Fur~her Assurances. (a) Generallv. From time to time upon the request of Mortgagee, Mortgagor shall, promptly and duly execute, acknowledge and deliver any and all such further instruments and documents as Mortgagee may reasonably deem necessary or desirable to confirm this Mortgage, to carry out the purpose and intent hereof, or to enable Mortgagee to enforce any ot its rights hereunder. 5.04. Amendments. Waivers. Etc. This Mortgage cannot be amended, modified, waived, changed, discharged or terminated except by an instrument in writing signed by the party against whom enforcement of such amendment, modification, waiver, change, discharge or termination is sought. 5.05. No ImDlied Waiver. No course of dealing and no delay or tal lure of Mortgagee in exercising any right, power or privilege under this Mortgage, the Note or any other Loan Docu- ment shall atfect any other or future exercise thereof or exer- cise of any other right, power or privilege; nor shall any single or partial exercise of any such right, power or privilege or any abandonment or discontinuance ot steps to entorce such a right, power or privilege preclude any turther exercise thereof or ot any other right, power or privilege. 5.06. Notices. All notices, requests, demands, directions and other communications (collectively "notices") under the provisions ot this Mortgage shall be in writing unless otherwise - 30 - ~j~( 1115.\::11fJ1 expressly permitted hereunder or thereunder and shall be sent by tirst- class or tirst-class express mail, or by tax with con- firmation in writing mailed first-class, in all cases with charges prepaid, and any such properly given notice shall be eftective when received. Any notice physically presented to the recipient shall be deemed received whether the recipient accepts or rejects the presentment. All notices shall be sent to the applicable party at its address stated on the first page hereof or in accordance with the last unr~voked written direction trom such party to the other party hereto. 5.07. EXDenses: Taxes: Attornevs' Fees. Mortgagor agrees to payor cause to be paid and to save Mortgagee harmless against liability for the payment of all reasonable out-ot-pocket expenses, including tees and expenses of counsel for Mortgagee, incurred by Mortgagee trom time to time (a) arising in connection with the preparation, execution, delivery and performance of this Mortgage, the Note and the other Loan Documents, subject nevertheless to the terms of Paragraph 3 of an Amendment to Purchase Agreement, d~ted December 30, 1992, between Mortgagor and Mortgagee, (b) relating to any requested amendments, waivers or consents to this Mortgage, the Note or any other Loan Document and (c) arising in connection with Mortgagee's enforcement or preservation of rights under this Mortgage, the Note or any other Loan Document, including such expenses as may be reasonably incurred by Mortgagee in the collection of the Note or the realization of security given for the Note. Mortgagor agrees to pay all stamp, document, transfer, recording or filing taxes or fees and similar impositions now or hereafter determined by Mortgagee to be payable in connection with this Mortgage, the Note or any other Loan Documents, and Mortgagor agrees to save Mortgagee harmless from and against any and all present or future claims, liabilities or losses with respect to or resulting from any omission by Mortgagor to payor delay in paying any such taxes, fees or impositions. Mortgagor agrees to pay and to save Mortgagee harmless against liability for the payment of all reasonable out-of-pocket expenses incurred by Mortgagee in con- nection with its review ot any repair, replacement, alteration, improvement or restoration to the Mortgaged Property in connection with the requirements of Sections 2.02, 2.03 and 2.06, including the reasonable fees and expenses of counsel for Mortgagee and of any architect engaged by Mortgagee to review plans and specifications, i.lspect work or provide advice with respect to determinations to be made by Mortgagee in connection therewith. In the event of termination adversely to Mortgagor of any action at law or suit in equity in relation to this Mortgage, the Note or any other Loan Document, Mortgagor will pay, in - 31 - ~:Od I 15 '.!::llC.~ addition to all other sums which Mortgagor may be required to pay, a reasonable sum for attorneys' fees incurred by Mortgagee in connection with such action or suit. All amounts payable by Mortgagor under this section 5.07 shall be paid within five days atter demand by Mortgagee with interest at the Detault Rate until paid. 5.08. Assianment ot Leases. Concurrently herewith, Mort- gagor has executed and delivered to Mortgagee by separate instru- ment an Assignment ot Leases and Rents dated as ot the date hereof and to be recorded, pursuant to which Mortgagor has assigned to Mortgagee all of its right, title and interest in and to all leases ot space in the Improvements, including all rents from such leases, all as therein more specifically set forth, which Assignment of Leases and Rents is incorporated herein by reference as fully and with the same eftect as it set forth herein at length. 5.09. Jurisdiction: Etc. Mortgagor irrevocably (a) agrees that Mortgagee, may bring suit, action or other legal proceedings arising out of this Mort.gage (other than those brought for the foreclosure or other realization on the real property security granted hereby), the Note or any other Loan Document, or the transactions contemplated hereby or thereby, in the courts of the Commonwealth of Pennsylvania in Cumberland County, Pennsylvania or the courts of the United States for the Middle District ot Pennsylvania I (b) consents to the jurisdiction of each such court in any such suit, action or proceeding I (c) waives any objection which Mortgagor may have to the laying of the venue ot any such suit, action or proceeding in any of such courts; and (d) waives any right it may have to a jury trial in connection with any suit, action or proceeding arising out of this Mortgage, the Note or any other Loan Document or the transactions contemplated hereby or thereby. 5.10. Interoretation. Unless the context otherwise requires, (a) the term "person" means an individual, corporation, partnership, trust, unincorporated association, joint venture, joint-stock company, government (including pOlitical sub- divisions), governmental authority or agency, or any other entity, (b) any reference in this Mortgage to "Mortgagor," "Mortgagee" or any other entity shall include its successors and assigns, (c) any reference to an Article or Section shall refer to the specitied Article or Section of this Mortgage, (d) words importing the singular number include the plural number, and vice versa, (e) the terms "hereof", "hereby", "hereto", "hereunder" and similar terms refer to this entire Mortgage, (t) the term - 32 - "including" shall mean "including without limitation", and (g) any reference to the Mortgaged Property shall rater to the Mort- gaged Property or any part thereot or any estate or interest therein. The captions or headings at the beginning ot each Article and Section hereot are for the convenience ot the parties and are not a part of this Mortgage. 5.11. Invaliditv ot Certain Provisions. It the security interest, lien or estate created by this Mortgage is invalid or unenforceable as to any part of the Secured Obligations, or as to any part of the Mortgaged Property, the unsecured or partially secured portion thereof shall be completely paid prior to the payment of the remaining and secured or partially secured portion thereof, and all payments made thereon, whether voluntary or pursuant to toreclosure sale or other enforcement action or procedure, shall be considered to have boen first paid on and applied to the full payment of that portion thereof which is not secured or fully secured by this Mortgage. 5.12. Sevarabilitv. If any term or provision of this Mortgage or the application thereof to any person or circumstance shall to any extent be invalid or unentorceable, the remainder ot tnis Mortgage, or the application of such term or provision to persons or circumstances other than those as to which it is invalid or unenforceable, shall not be affected thereby, and each term and provision of this Mortgage shall be valid and enforce- able to the fullest extent permitted by law. 5.13. Governina Law. This Mortgage shall be governed by, and construed in accordance with, the laws of the state in which the Land is located. 5.14. Time ot Essence: Duration: Survival. Time is of the essence with respect to allot Mortgagor's obligatians under this Mortgage and the other Loan Documents. All representations and warranties of Mortgagor contained herein or in any other Loan Document or made in connection herewith or therewith shall sur- vive the making of and shall not be waived by the execution and delivery of this Mortgage or the other Loan Documents, any investigation by Mortgagee or the making of any loan advance under the Loan Documents. All covenants and agreements of Mort- gagor contained herein or in any other Loan Document shall continue in full force and ettect trom and after the date hereot so long as Mortgagor may borrow under the Loan Documents and until payment in full ot the Secured Obligations. Without limitation, it is understood that all obligations ot Mortgagor to - 33 - .-. . blj'J~ 1 d5):: 11C4 .. HQTI; $3,800,000 January 29, 1993 Harrisburg, Pennsylvania FOR VALUE RECEIVED, KLP ENTERPRISES, INC., a Pennsylvania corporation ("Maker"), hereby promises to pay to the order of FARMERS TRUST COMPANY, a Pennsylvania corporation ("Bank"), the principal sum of Three Million Eight Hundred Thousand Dollars ($3,800,000), together with interest thereon, as tollows: 1. Detinitions. Capitalized terms used herein which are not de tined herein shall have the meanings assigned to them in the Mortgage or in the other Loan Documents. (a) "Detault Rate" means a rate per annum equal to two percent (2%) above the Loan Rate, or if such rate violates any Law, the highest rate permitted by Law. (b) "Loan Rate" means the rate set forth in paragraph 2 below. 2. Interest Rates and PaYments. (a) Loan Rate: PrinciDal and Interest PaYment Dates. (i) During the first thirty-six (36) months following the date hereof (the "First Period"), this Note shall bear interest at a fixed annual rate of seven percent (7%) on the unpaid principal amount ot the Loan (which rate shall be the "Loan Rate" during the First Period), and commencing on March 13, 1993, and on the first day of each of the next consecutive thirty-tive (35) months, Maker shall pay to Bank monthly payments of principal and interest, based upon a twenty (20) year amortization period, in the amount ot Twenty-Nine Thousand Four Hundred Sixty-One Dollars and Thirty-Six Cents ($29,461.36). (ii) On February 13, 1996 and on each subsequent February 13 occurring during the term of this Note, the rate of interest shall be revised to the then current Treasury Bill Index for maturities ot six (6) months plus four hun- dred fifty (450) Basis Points ("Revised Rate"). At no time shall the Revised Rate exceed ten percent (10%). The month- ly payment due hereunder shall be recalculated to provide for amortization of the then remaining principal and interest at the Revised Rate in equal monthly payments for EXHIBrr I -=.K the remaining portion of the original twenty (20) year amortization term. BanK shall have the right to adjust monthly payments more frequently than annually to avoid negative amortization. During the period described in this subsection (ii), the Revised Rate shall be the Loan Rate. (iii) Notwithstanding anything contained herein to the contrary, no interest shall be due hereunder from the date ot this Note through February 12, 1993. (b) Default Rate. During the continuation of any default by Maker in the payment of principal ot or interest on this Note, during the continuation of any Event of Default and/or after the maturity hereof (whether by acceleration or otherwise), both before and after judgment, the Loan shall bear interest at the Default Rate. (c) Calculations. Each interest rate hereunder shall be based on a year of 360 days and actual days elapsed. (d) Maturitv Date. Notwithstanding anything to the contrary contained in this Note or elsewhere in the Loan Documents, unless extended by an agreement executed by Maker and Bank, this Note shall mature on February 13, 2013, without further notice (the "Maturity Date"). On the Maturity Date the entire unpaid principal balance hereof, together with accrued interest thereon, and all other sums due and owing under the Loan Documents, shall become due and payable in full. (e) PreDavments. Maker shall have the right at its option to prepay this Note in whole at any time or in part from time to time without premium or penalty. The Maker shall notify the Bank in writing at least thirty (30) Calendar Days prior to the date such prepayment will be paid and shall specity in such writing the amount to be prepaid. On the date specified tor prepayment in the notice to the Bank, the principal amount of the Loan specified to be prepaid, together with all accrued but unpaid interest, tees, charges and the applicable premium (it any), shall be due and payable in their entirety. 3. Interest Rate Reimbursement. It any Law or guideline or interpretation or application thereof by any Governmental Autho~ity charged with the interpretation or administration - 2 - thereot or compliance with any request or directive ot any Governmental Authority (whether or not having the torce ot law) now existing or hereatter adopted subjects Bank to any tax or changes the basis of taxation with respect to this Note. Such amount shall be due and payable by Maker to Bank five (5) Busi- ness Days after such notice is given. 4. PaYments. All payments (including prepayments) to be made in respect of principal, interest or other amounts due from Maker hereunder or under any other Loan Document shall be payable by 12:00 Noon, Harrisburg time, on the day when due. Such pay- ments shall be made to Bank at its office at One West High street, Carlisle, Pennsylvania 17013, in Dollars in funds immediately available at such otfice without set-otf, counter- claim or other deduction of any nature. Any such payment received by Bank after 12:00 Noon, Harrisburg time, on any day shall be deemed to have been received on the next succeeding Business Day. Whenever any payment to be made under this Note or any other Loan Document shall be stated to be due on a day which is not a Business Day, such payment shall be made on the next fOllowing Business Day and such extension of time shall be included in computing interest, if any, in connection with such payment. To the extent permitted by law, after there shall have become due (by acceleration or otherwise) interest or any other amounts due from Maker hereunder or under any other Lo~n Docu- ment, such amounts shall bear interest for each day until paid (before and after judgment), payable on demand, at the Default Rate. 5. Late Charae. In the event that any installment of interest, principal, principal and interest or other sum shall become overdue tor a period in excess of fifteen (15) days, a "late charge" in the amount of 4% of such overdue installment shall be paid by Maker to Bank, which "late charge" shall be payable on demand. This charge shall be in addition to, and not in lieu of, any other remedy Bank may have and is in addition to any reasonable fees and charges of any agents or attorneys which Bank is entitled to employ on any default hereunder, whether authorized herein, or by law. 6. Default. If an Event of Default shall occur Bank may accelerate the indebtedness evidenced hereby in accordance with the provisions of the Loan Documents and may exercise the other rights and remedies provided it in the Mortgage and the other Loan Documents, as well as those it may have at law or in equity. - 3 - 7. Miscellaneous. This Note evidences the Loan and all other amounts payable by Make~ hereunder or under any other Loan Document. This Note is the "Note" reterred to in, and is entitled to the bene tits of, the Mortgage, which among other things provide for the acceleration ot the maturity hereot upon the occurrence ot certain events and tor prepayments in certain circumstances and upon certain terms and conditions. This Note is secured by and is entitled to the benetits ot the Mortgage and the other Loan Documents. The unpaid principal amount of this Note, the unpaid interest accrued hereon, the interest rate or rates applicable to such unpaid principal amount and the duration ot such appli- cability shall at all times be ascertained trom the records ot Bank, which shall be conclusive absent manitest error. Except as otherwise provided in the Loan Documents, Maker hereby expressly waives presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, pertormance, detault or enforcement of this Note, the Mortgage and the other Loan Documents, and an action tor amounts due hereunder or thereunder shall immediately accrue. All notices, requests, deman~s, directions and other com- munications (collectively, "notices") under the provisions hereof shall be in writinq unless otherwise expressly permitted here- under, shall be sent as provided in the Mortqaqe and shall be eftective when received. It this Note is placed in the hands of an attorney at law tor collection by reason of detault on the part ot Maker, Maker hereby agrees to pay to Bank in addition to the sums stated above, the reasonable costs ot collection, including a reasonable sum as attorneys' tees. This Note may not be amended, modified or supplemented orally. If any term or provision ot this Note o~ the application thereof to any Person or circumstance shall to any extent be invalid or unentorceable, the remainde~ ot this Note, or the application of such term or provision to Persons or circumstances other than those as to which it is invalid or unenforceable, shall not be attected thereby, and each term and provision of this Note shall be valid and enforceable to the fullest extent permitted by law. - 4 - This Note shall be governed by, and construed and enforced in accordance with, the laws ot the Commonwealth of Pennsylvania. This obligati~n shall bind Maker and its successors and assigns, and the benefits hereot shall inure to Bank and its successors and assigns. Time is of the essence with respect to matters of perfor- mance required of Maker under this Note. UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, MAKER HEREBY EMPOWERS ANY ATTORNEY OF ANY COURT OF RECORD WITHIN THE UNITED STATES OF AMERICA, OR ELSEWHERE, TO APPEAR FOR MAKER AND, WITH OR WITHOUT COMPLAINT FILED, CONFESS JUDGMENT, OR A SERIES OF JUDG- MENTS, AGAINST MAKER IN FAVOR OF ANY HOLDER HEREOF, AS OF ANY TERM, FOR THE UNPAID BALANCE OF THE PRINCIPAL AMOUNT OF THIS NOTE AND OTHER SUMS PAYABLE BY MAKER UNDER THE LOAN DOCUMENTS, TO- GETHER WITH UNPAID INTEREST ON SAID PRINCIPAL AMOUNT AND SAID OTHER SUMS AT THE RATE PROVIDED IN THIS NOTE, COSTS OF SUIT AND OTHER EXPENSES IN CONNECTION THEREWITH, TOGETHER WITH AN ATTOR- NEYS' REASONABLE COMMISSION FOR COLLECTION, ON WHICH JUDGMENT OR JUDGMENTS ONE OR MORE EXECUTIONS MAY ISSUE FORTHWITH. MAKER HEREBY WAIVES ANY RIGHT IT MAY HAVE TO FURTHER NOTICE OR TO A HEARING IN CONNECTION WITH THE ENTRY OF ANY SUCH CONFESSION OF JUDGMENT AND STATES THAT IT HAS BEEN REPRESENTED BY COUNSEL. THE MAKER HEREBY KNOWINGLY WAIVES ITS RIGHT TO TRIAL BY JURY IN ANY ACTION BROUGHT BY OR AGAINST THE MAKER ON, MENTIONING, RELATED TO OR CONNECTED WITH THIS NOTE OR THE OTHER LOAN DOCU- MENTS. IN WITNESS WHEREOF, Maker has duly executed and delivered this Note as of the date first above written. XLP E~~'~' Q Bv . ,----= \~. -~:, Name: Ke th L. Plasterer Title: President and Sole Ofticer (CORPORATE SEAL) - 5 - GUARANTY AND SURETYSHIP AGREEMENT THIS GUARANTY AND SURETYSHIP AGREEMENT (this "Guaranty") dated as ot the 29th day ot January, 1993, made by KEITH L. PLASTERER, an individual ("Guarantor") to FARMERS TRUST COMPANY, a Pennsylvania corporation ("Bank"), wIT N E SSE T H: WHEREAS, pursuant to a Note ot even date herewith between KLP ENTERPRISES, INC., a Pennsylvania corporation ("Borrower"), and Bank (as the same may be amended, modified or supplemented trom time to time, the "Note"), Bank has agreed to make a Loan of $3,800,000 to Borrower (capitalized terms used herein and not otherwise defined herein having the meanings assigned to them in the Note); WHEREAS, the Guarantor acknowledges receipt of copies of the Note and the other Loan Documents; and WHEREAS, the execution and delivery by Guarantor of this Guaranty is a condition to Bank's obligation to make the Loan to Borrower pursuant to the Note, and Guarantor expects to derive financial benetit trom the making of the Loan by Bank to Bor- rower; NOW, TIlEREFORE, in consideration ot the premises and other good and valuable consideration, the receipt of which is hereby acknowledged by Guarantor, and intending to be legally bound, Guarantor hereby agrees as follows: ARTICLE I GUARANTEE 1.01. Guaranteed Obliaations. Guarantor hereby uncondi- tionally and irrevocably guarantees to Bank and becomes surety to Bank tor the due, punctual and full payment and performance of, and covenants with Bank to duly, punctually and fully pay and pertorm, the following (collectively, the "Guaranteed Obliga- tions"): (a) all indebtedness of Borrower to Bank evidenced by the Note, both principal and interest, and any refinancing or refunding of any thereof, and all other amounts due or to become due under the Note and , rr the other Loan Documents, and any refinancing or refunding ot any thereot, whether now existing or hereatter arising, contracted or incurred; and (b) all covenants, agreements, obligations and liabilities ot Borrower under the Note and the other Loan Documents, whether now existing or hereafter arising, contracted or incurred, as and when such payment or performance shall become due (whether by acceleration or otherwise) in accordance with the terms ot the Loan Documents. 1.02. Guarantee Unconditional. The obligations of Guarantor hereunder are continuing, absolute and unconditional, irrespective of any circumstance whatsoever which might otherwise constitute a legal or equitable discharge or defense of a guarantor or surety. Without limiting the generality of the foregoing, the obligations of Guarantor hereunder shall remain in tull force and effect without regard to, and shall not be released, discharged or in any way affected by: (a) any amendment, modification or supplement to the Note or any other Loan Document; (b) any exercise or nonexercise of or delay in exercising any right, remedy, power or privilege under or in respect of this Guaranty, the Mortgage, the Note or any other Loan Document (even if any such right, remedy, power or privilege shall be lost thereby), or any waiver, consent, indUlgence or other action or inaction in respect thereof; (c) any bankruptcy, insolvency, arrangement, composition, assignment for the benefit of creditors or similar proceeding commenced by or against Borrower; (d) any failure to perfect or continue pertection of, or any release or waiver of, any rights given to Bank in any property as security for the pertormance of any of the Guaranteed Obligations; (e) any extension of time for payment or perfor- mance of any of the Guaranteed Obligations; (f) the genuineness, validity or enforceability of the Loan Documents; - 2 - (g) any limitation ot liability ot Borrower or its partners contained in any Loan Document; (h) any defense that may arise by reason ot the failure of Bank to tile or enforce a claim against the estate ot Borrower in any bankruptcy or other proceed- ing; (i) any voluntary or involuntary liquidation, dissolution, sale ot all or sUbstantially allot the property ot Borrower, or any marshalling ot assets and liabilities, or other similar proceeding affecting, Borrower or any ot its assets; (j) the release ot Borrower trom performance or observance ot any ot the agreements, covenants, terms or conditions contained in the Loan Documents by opera- tion of law; (k) the failure ot Bank to keep Guarantor advised of Borrower's financial condition, regardless of the existence of any duty to do so; (1) any part Property any sale or other transter of the Property or thereof or any foreclosure by Bank on the or any part thereof; or (m) any other circumstances which might otherwise constitute a legal or equitable discharge ot a guarantor or surety. No set-oft, claim, reduction or diminution of any obligation, or any defense of any kind or nature which Borrower or Guarantor now has or hereafter may have against Bank, shall be available hereunder to Guarantor against Bank. 1.03. No Notice or Dutv to Exhaust Remedies. The Guarantor hereby waives diligence, presentment, demand, protest and all notices ot any kind, and waives any requirement that Bank exhaust any right or remedy, or proceed first or at any time, against Borrower or any other guarantor of, or any security tor, any of the Guaranteed Obligations. This Guaranty constitutes an agreement of suretyship as well as of guaranty, and Bank may pursue its rights and remedies under this Guaranty and under the other Loan Documents in whatever order, or collectively, and shall be entitled to payment and performance hereunder not- withstanding such other Loan Documents and notwithstanding any - 3 - action taken by Bank or inaction by Bank to entorce any ot its rights or remedies against any other guarantor or any other Person or property whatsoever. 1.04. WAIVER OF SUBROGATION. ETC. NOTWITHSTANDING ANY PAYMENTS MADE OR OBLIGATIONS PERFORMED BY GUARANTOR BY REASON OF THIS GUARANTY (INCLUDING BUT NOT LIMITED TO APPLICATION OF FUNDS ON ACCOUNT OF SUCH PAYMENTS OR OBLIGATIONS), UNTIL SUCH TIME AS THE GUARANTEED OBLIGATIONS HAVE BEEN SATISFIED THE GUARANTOR HEREB~ IRREVOCABLY WAIVES AND RELEASES ANY AND ALL RIGHTS IT MAY HAVE AT ANY TIME (WHETHER ARISING DIRECTLY OR INDIRECTLY, BY OPERATION OF LAW, CONTRACT OR OTHERWISE) (A) TO ASSERT ANY CLAIM AGAINST BORROWER OR ANY OTHER PERSON, OR AGAINST ANY DIRECT OR INDIRECT SECURITY, ON ACCOUNT OF PAYMENTS MADE OR OBLIGATIONS PERFORMED UNDER OR PURSUANT TO THIS GUARANTY, INCLUDING WITHOUT LIMITATION ANY AND ALL RIGHTS OF SUBROGATION, REIMBURSEMENT, EXONERATION, CONTRIBUTION OR INDEMNITY, OR (B) TO REQUIRE THE MARSHALING OF ANY ASSETS OF BORROWER, WHICH RIGHT OF MARSHALING MIGHT OTHERWISE ARISE FROM PAYMENTS MADE OR OBLIGATIONS PERFORMED UNDER OR PURSUANT TO THIS GUARANTY, AND ANY AND ALL RIGHTS THAT WOULD RESULT IN SUCH GUARANTOR BEING DEEMED A "CREDITOR" UNDER THE UNITED STATES BANKRUPTCY CODE OF BORROWER OR ANY OTHER PER- SON. 1.05. CONFESSION OF JUDGMENT. (a) Upon an Event ot Default, Guarantor hereby irre- vocably authorizes and empowers any attorney of any court of record in the Commonwealth of Pennsylvania or in any juris- diction where permitted by law, to appear for and confess judgment against Guarantor (i) in anyone or more actions ot replevin instituted by Bank to obtain possession of any property of the Guarantor, without declaration or stay of exe~ution, and with costs of suit, provided that notice of such appearance and confession ot jUdgment is given promptly to Guarantor, and (ii) in any action brought under this Guaranty or under any other Loan Document for any amounts due under the Guaranteed Obligations, and for costs of suit and reasonable attorney's tees and costs, but in any event not less than $2,000, together with interest on any jUdgment so obtained at the Detault Rate, including interest at that rate trom and aftar the date of any sheriff's or judicial sale until actual payment is made to Bank of the full amount due. Guarantor waives and releases all its rights under any stay, exemption, appraisement and appeal laws now or here- atter in effect and all benefits that may accrue to Guaran- tor by virtue of any law or rule of court relating to a stay - 4 - of execution or exempting any property from levy or sale upon execution, and waives and releases all procedural errors in any such proceeding or judqment. If a copy ot this Guaranty, verified by affidavit by or on behalt of Bank, shall have been tiled in such action, it shall not be necessary to tile the original as a warrant of attorney. The authority to appear for and enter judgment hereunder against Guarantor ehall not be exhausted by the initial exercise thereot and may be exercised by Bank as otten as Bank shall deem necessary or desirable, and this Guaranty, or a veritied copy thereot, shall be a sufticient warrant. (b) IN GRANTING THIS WARRANT OF ATTORNEY TO CONFESS JUDGMENT, GUARANTOR HEREBY KNOWINGLY, INTEN- TIONALLY AND VOLUNTARILY, UNCONDITIONALLY WAIVES ANY AND ALL RIGHTS GUARANTOR HAS OR MAY HAVE TO PRIOR NOTICE AND AN OPPORTUNITY FOR A PRIOR HEARING UNDER THE RESPECTIVE CONSTITUTIONS AND LAWS OF THE UNITED STATES AND THE COMMONWEALTH OF PENNSYLVANIA. IN NEGOTIATING AND EXECUTING THIS GUARANTY, GUARANTOR HAS BEEN REPRESENTED BY COUNSEL OF ITS OWN CHOOSING. ARTICLE II REPRESENTATIONS. WARRANTIES AND COVENANTS 2.01. ReDresentations and Warranties. The Guarantor hereby represents, warrants and certities to Bank that the repre- sentations and warranties made by Borrower with respect to such Guarantor under the Note are true and correct on the date hereof. 2.02. that: Covenants. The Guarantor hereby covenants to Bank (a) Such Guarantor shall furnish to Bank the financial statements, certificates and other informa- tion with respect to such Guarantor required by Section 2.09 of the Mortgage. (b) Promptly upon becoming aware thereof, such Guarantor shall give Bank notice of (i) the commence- ment, existence or threat of any proceeding by or before any Governmental Authority against or affecting euch Guarantor or any of its Subsidiaries which, if adversely decided, would have a material adverse effect on the business, operations, condition (financial or - 5 - otherwise) or prospects ot such Guarantor or on its ability to pertorm its obligations hereunder or (ii) any material adverse change in the business, opera- tions, condition (financial or otherwise) or prospects of such Guarantor. (c) Such Guarantor shall permit such Persons as Bank may designate to examine such Guarantor's books and records relating to such Guarantor's tinancial condition and take copies and extracts theretrom at normal business hours upon reasonable notice and to discuss the attairs ot such Guarantor with its indepen- dent accountants at such times and as otten as Bank may reasonably request. Such Guarantor hereby ~uthorizes such independent accountants to discu~s with Bank the affairs of such Guarantor. ARTICLE III MISCELLANEOUS 3.01. Effect Of BankruDtcv Proceedinas. This Guaranty shall continue to be effective, or be automatically reinstated, as the case may be, if at any time payme~t, in whole or in part, of any of the Guaranteed Obligations is rescinded or must other- wise be restored or returned by Bank as a preference, fraudulent conveyance or otherwise under any bankruptcy, insolvency or similar Law, all ae though such payment had not been made. If an Event of Default at any time shall have occurred and be continu- ing or exist and declaration of default or acceleration under or with respect to any of the Loan Documents shall at such time be prevented by reason of the pendency against Borrower ot a case or proceeding under any bankruptcy or insolvency Law, Guarantor agrees that, for purposes of this Guaranty and his obligations hereunder, such Loan Documents shall be deemed to have been declared in default or accelerated with the same ettect as it such Loan Documents had been declared in default and accelerated in accordance with the terms thereof, and Guarantor shall forth- with pay the Guaranteed Obligations in full without further notice or demand. 3.02. Bank's Riaht of Set-Otf. If an Event of Default shall occur, Bank and the holder of any participation in the Loan Documents shall have the right, in addition to all other rights and remedies available to it, to set-off against and to appropriate and apply to the unpaid balance of the Guaranteed - 6 - Obligations any debt owing to, and any other tunds held in any manner for the account ot, Guarantor by Bank or such holder, including without limitation all tunds in all deposit accounts (general or special) now or hereafter maintained by Guarantor with Bank or such holder. Such right shall exist whether or not Bank or any such holder shall have made any demand under this Guaranty or any such participation or any other Loan Document and whether or not the Guaranteed Obligations or such participation are matured or unmatured. Gua~antor hereby confirms the tore- going arrangements and each such holder's and the Bank's right of banker's lien and set-oft and nothing in this Guaranty or any other Loan Document shall be deemed any waiver or prohibition of any such holder's or of Bank's right of banker's lien or set-off. 3.03. Further Assurances. From time to time upon the request ot Bank, Guarantor shall promptly and duly execute, acknowledge and deliver any and all such further instruments and documents as Bank may reasonably deem necessary or desirable to confirm this Guaranty, to carry out the purpose and intent hereof or to enable Bank to enforce any of its rights hereunder. 3.04. Amendments. Waivers. Etc. This Guaranty cannot be amended, mOditied, waived, changed, discharged or terminated except by an instrument in writing signed by the party against whom enforcement of such amendment, modification, waiver, change, discharge or termination is sought. 3.05. No ImDlied Waiver: Cumulative Remedies. No course of dealing and no delay or failure of Bank in exercising any right, power or privilege under this Guaranty or any other Loan Document shall affect any other or future exercise thereof or exercise of any other right, power or privilege; nor shall any single or partial exercise of any such right, power or privilege or any abandonment or discontinuance of steps to enforce such a right, power or privilege preclude any further exercise thereof or of any other right, power or privilege. The rights and remedies ot Bank under this Guaranty are cumulative and not exclusive of any rights or remedies which Bank would otherwise have under the other Loan Documents, at law or in equity. 3.06. Notices. All notices, requests, demands, direc- tions and other communications (collectively "notices") under the provisions ot this Guaranty shall be in writing unless otherwise expressly permitted hereunder and shall be sent by first-class or tirst-class express mail, or by fax with confirmation in writing mailed first-class, in all cases with charges prepaid, and any such properly given notice shall be effective when received. All - 7 - notices shall be sent to the applicable party addressed, if to Bank, One West High Street, Carlisle, PA 17013, Attention: Lynn S. Baker, Executive Vice President, and, it to any Guarantor, at the address for Guarantor set torth below its signature hereto, or in accordance with the last unrevoked written direction trom such party to the other parties hereto. 3.07. EXDenses. Guarantor agrees to payor cause to be paid and to save Bank harmless against liability for the payment of all reasonable out-of-pocket expenses, including tees and expenses of counsel for Bank, incurred by Bank from time to time arising in connection with Bank's entorcement or preservation of rights under this Guaranty, including but not limited to such expenses as may be incurred by Bank in connection with any default by Guarantor of any obligations hereunder. 3.08. Survival. All Obligations of Guarantor to make payments under Sections 3.01 or 3.07 hereot or to 'indemnity Bank (including indemnities by Borrower of Bank under the Loan Docu- ments) shall survive the payment and pertormance in full of the Guaranteed Obligations. 3.09. Jurisdiction: Etc. Guarantor irrevocably (a) agrees that Bank may bring suit, action or other legal proceed- ings arising out of this Guaranty in the courts of the Common- wealth of Pennsylvania in CUmberland County, Pennsylvania or the courts of the United States for the Middle District of Pennsyl- vania; (b) consents to the jurisdiction of each such court in any such suit, action or proceeding; and (c) waives any objection which Guarantor may have to the laying ot the venue ot any such suit, action or proceeding in any of such courts; and (d) waives any right Guarantor may have to a jury trial in connection with any such suit, action or proceeding. 3.10. Severabilitv. It any term or provision of this Guaranty or the application thereot to any person or circumstance shall to any extent be invalid or unenforceable, the remainder ot this Guaranty, or the application of such term or provision to persons or circumstances other than those as to which it is invalid or unenforceable, shall not be aftected thereby, and each term and provision of this Guaranty shall be valid and enforce- able to the fullest extent permitted by law. 3.11. eounteroarts. This Guaranty may be executed in any number of counterparts and by the difterent parties hereto on separate counterparts, each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute but one and the same instrument. - 8 - ") :f <)0 en \-"1 .-(') tl "- "''''' "i\ ~ ~ .-.Jl " ~~ r"\) t.~ @ ,,~ ~ -.) , , ~ ...,<"~ ':J ~ <::;, ~I.r; I.(i ::t- ~ """ ---=-- --~-::::::::::::::-- - - --, --=:-'::O--=c.:==r=.-. ___ _-==_____ .1 i --- - . ~ . . . . - ----- ---- -~-:==-=-._-- -- ---- ---- ~ ~ =-: ~ i~j'~ o cd r>> > ~ ~f~ ~!~81 ~l,qO~ ] ; u . ..