HomeMy WebLinkAbout07-0962IN THE COURT OF COMMON PLEAS
OF CUMBERLAND COUNTY, PENNSYLVANIA
SOVEREIGN BANK, successor in interest by merger
to Waypoint Bank, formerly known as Harris Savings
Bank
Plaintiff
vs.
MARKET STREET MUSIC, INC.
Defendant
TO: CLERK OF COURTS, CIVIL
CUMBERLAND COUNTY
WARRANT
Case No. Q''j _ 4fo~,
Confession of Judgment
Pursuant to the authority contained in the Promissory Note, a true and correct copy of
which is attached as Exhibit A to the Complaint filed in this action, I appear for the Defendant
and confess judgment against Defendant in the amount of $47,322.96, which includes interest to
January 12, 2007, plus interest at the rate stated in the Promissory Note, from and including
January 13, 2007, and costs.
LAMM RUBENSTONE LESAVOY
BUTZ & DAVID LL~
Zachary J. t~uire
Attorney o. 1119
7535 Windsor Dr., Suite 200
Allentown, PA 18195
(610) 706-4300
Appearing for Defendant on
the Confession
L:lu.l. I
7F/t»~,
355473-1
IN THE COURT OF COMMON PLEAS
OF CUMBERLAND COUNTY, PENNSYLVANIA
SOVEREIGN BANK, successor in interest by merger )
to Waypoint Bank, formerly known as Harris Savings j
Bank )
Plaintiff )
vs. )
MARKET STREET MUSIC, INC. j
Defendant )
Case No.
Confession of Judgment
COMPLAINT IN CONFESSION OF JUDGMENT
Plaintiff Sovereign Bank, by and through its legal counsel, Lamm Rubenstone Lesavoy
Butz & David LLC, states the following complaint in confession of judgment:
Plaintiff Sovereign Bank is a banking institution with offices at 619 Alexander
Road, Princeton, NJ 08540.
2. Plaintiff is the successor in interest by merger to Waypoint Bank, formerly known
as Harris Savings Bank.
Defendant Market Street Music, Inc. is a Pennsylvania Corporation with a
registered office at 13 E. Main Street, Mechanicsburg, PA 17055.
4. In order to document a commercial loan from Plaintiff to Defendant, Defendant
executed a Promissory Note in Plaintiff's favor dated November 6, 1998 in the amount of
$40,000.00 (the "Note"). A true and correct copy of the Note is attached hereto, made a part
hereof, and marked as Exhibit A.
355473-1
The loan is also documented by, inter alia, a Business Loan Agreement executed
in tandem with the Note. A true and correct copy of the Business Loan Agreement is attached
hereto, made a part hereof, and marked as Exhibit B.
6. Defendant is in default of its obligations under the Note for failing to make
required payments when due.
7. The Note has a confession of judgment clause which has not yet been exercised
and judgment thereon has not been entered.
8. The Note provides that upon default, Plaintiff is permitted to accelerate the Note
and enter judgment without demand or prior notice.
9. The Note provides that upon default, Plaintiff is entitled to collect an attorney's
fee of $500 or ten percent (10%) of the unpaid principal balance and accrued interest due under
the Note, whichever is greater.
10. Ten percent of the principal and interest due under the Note ($4,274.17) is a
reasonable figure for attorney's fees, expenses and costs to be incurred in this matter and in
liquidating Plaintiff s collateral.
11. After credit for all partial payments made, the full amount due to Plaintiff under
the Note is as follows, plus accruing interest:
Principal: $ 39,970.08
Interest to 1/12/07: $ 2,771.71
Late Fees $ 307.00
Attorney's fees: $ 4,274.17
TOTAL AS OF 1/12/07 $ 47,322.96
*per diem = $10.83
12. Plaintiff has not assigned its interests in the Note or the obligation it secures.
355473-1
13. Judgment is not being entered against a natural person in connection with a
consumer transaction.
WHEREFORE, Plaintiff demands the entry of judgment against Defendant in the
amount of $47,322.96 (which includes interest through January 12, 2007), plus (A) additional
interest at the rate stated in the Note from and including January 13, 2007 and (B) costs.
LAMM RUBENSTONE LESAVOY
BLITZ & DAVID L~,C/~
Zachary J e q•
Attorney No. 91119
7535 Windsor Drive, Suite 200
Allentown, PA 18195
(610) 706-4300
Attorneys for Sovereign Bank, successor in interest
by merger to Waypoint Bank, formerly known as
Harris Savings Bank
355473-1
VERIFICATION
I, John Giangrossi, hereby state and verify that I am an Assistant Vice President of
Sovereign Bank, successor in interest by merger to Waypoint Bank, formerly known as Harris
Savings Bank; that I am authorized to take this verification on behalf of said organization; and
that the facts set forth in the foregoing Complaint are true and correct to the best of my
knowledge, information and belief.
I understand that false statements herein are made subject to the penalties of 18 Pa.S.C.
§4904 relating to unsworn falsification to authorities.
Date: ~ , 2007
ame: Jo G angrossi
itle: Assis t Vice President
355473-1
Fxti~6.+ A
. Borrower. IYterket street.Music, Incorporatatt, (TiN: Lender: ~ N SeStrs t ~ •
25-3731172) P O door1711
13 E. Malrr Sl - Flarrlsbta'g, PA 17166
MaeMatlcskurg, PA 17065 =
Printipa! Amount 1~~ in[tlal Rate: 9.600°6 Date of Note: November 6, 1998
PROMISE TO PAY. Merkel Street Musk, Inco[porated (^eorrower") promises to pay to Harris Savings Bantc ("Lsndor")ti or order, In .lawttrt
raonsy of the Unlbd - witft Ur~est on ~ unpaid' i ~q ~n Pal tmtance of ~ ~ ~ Ird~erest strol/~ ~ct~ted trthe daf~e -
be outstanding, bgMher
of each advance untq ropayment- of each advance..
PAYMENT. don~pwer will .pay this ban bnmedfately upon Lender's de~• In addttbn, Borrower tllftil pay regular montfdy of alt '
date, n pecember 1, tsee, wqh aq aubsepu~rd Interest psymertte .
accrued unpdd Interest due es of e6rdr paynbrtt tt~n InS to be due on the
same day of each month alter tttst. The annual Interest race for ttds Note isb~ uteri ~pa~365/380 basls~;•ttnri ofdays the. pri tindPol baiaru~ is .
interest rata over a Year of 380 days, mtatipNed by the outstanding principal
outslanding.~ Borrower wYl pay l.mtder at'Lertders address shown above or at such other plar:e as Lender rriay dssignete in wrstg. Unless, otherwise, ;`. .
agreed or required by appibable Iaw, payments witl, be applied first b accrued unpaid' Interest, then b pdndpat, and arty rertnlning amount b any
unpaid coUectlon costs and late charges.
1fAR1ABLE INTEREST RATE. The Interest rate on this Note is subject b change from time b•time based on changes In an index wh~h ie (.®rrders
Prime Rata (the "Indaoc"). Ttds is the rate Lender oharges, or would charge. on 90-day unsecured loans io the most c-edltworthy,caPorate cristoniers.
Thta tab mgty ar.maY ~ be the lovrest rate available from Lender at any given time. Lender wig tell Borrower the current Ittd~ot nets upon Borrowers
• request. Borrower understands that Lender may make loans based on other rates as weft. Tire interest rate •change wltl rwt occur more often •tttan
t0 the unpaid principal bedsrlce Ot this Note will bar et a
each Day. The index cturengy b aooox per annum. The Interest. tale to be appgad
rate of 1.600 percetrtags Points over the Index, resuitMg In sn Inlgal rate of s.50076 per annum. NQi1CE Urider•no ctcurnstancws wfit the interest
rate on this Note be more than the me~dmum rate allowed by applicable law. - a ants wtll not, tmle~ agreed to
ppEPAYMENT. Borrower may pay without pent~lty afi or a portion of the amount owed eartler than it is due. f?arfy P ym
by Lender in writing, relieve Borrower of Borrowers obltgatlon to contlnue to make payments of arxxuad unpaid interest. Father.-they taB redoes the
principal, balance due. .
LATE CHAAGE. It a regularly scheduled inbsrest Payment is 1b days ornt ~ ~. and Borrower dco~ ~ P•ey the loan w~~ daY~aK~
payment or 510A0, whlCtleVCr Is greater. M.•Lender demands P4Y~
Lender's demand, Borrower also wlq be charged either 6A00% of the sum of the unpaid prh~clpal plus accrued unpaid interost or 310.00,
whichever b greeter. • . - Lerder'thaf
LENI><Bi'S RIGHTS. Lender may hire or pay someone else b'help cotlect this Note tf Borrower does not pay. Borroww'also wig pay
ficable law, tenders agomsYs' fees and Lenders legal expenses whether or not there is a
amount. This includes, subject b arty Emits under app
lawsuft, indudtng attorneys'-fees and legal expenses for benlwptcy Proceedings (lnduding snorts b modiy or vacate arty autoniatlo stay or tnjunctlon),
appeals. and arty arttbipated Post-lodgment cotleotlon services. If not prohbited by epp9twYbte law, Borrower eiso wtll pay arty court cor#ts, to addition
b aN other sums provided by Iaw. M judgment 18 entered in connection with this Note, interest wNt continue to accrue on this Note after judgment at the
interest rate epplirabte to this Note st the 9me Judgment, ~ entmed. This Note has- been delivered to Lender and accepted by Lender In the ; ,
Commonwealth of Pennsylvania. it thsro is a lawautt, Borrower agrees upon Lender's request to sut-ndt b the lruledtDtisti toT the ~~ 9,
DauptNm County, the-tbmmonweagh of Pminsytvanis. Lender and Borrower hereby waive the right b any jury trial In any actbn,l~
or oountarddm brought by either lsnd~ or Borrower against the other. Thb Note shag be governed by and conatrusd In aocordsnex with
ttte IeMns of the Commonw~ith of Pennsylvania. and transfers to
Rlf3tiT OF SETOFF. Borrower grants blender a-eontractuat security interest in, and hanky assigns. corneys, defivers,'piefiges, t •Mduding
Lender atl Borrower's right, title and Fnterest in and b, Borrowers accounts with lender (whetttef ic~~future, ~ ding h ~ al ~~d Keogh
wfthout Iimftatlon aq accounts held Jotntry wfth someone ebe and ell accounts Borrower mail open
sccourrts, and atl trust accounts for which the grant of a security interest would be prohibited by law. Borrower authorizes Lender, b the extent
psrmftted by apptlcable law, b charge or setolt atl sums owing on this Note agaMst arty and a0 such accounts, and, at Lenders option, .to
administratively freeze eN such accounts to allow Lender b protect Lenders charge and setoff rights provided on tilts paragraph.
LINE OF CRf~IT. This Note evidences a revolving tine of credit Advanrws under this Note may be requested orally by Borrower or by an authorized
person. lender may, but need not, require that all oral requests lee confirmed In wrfting. Ap communications, instructions, or directions by telephone, or
otherwise to Lender are b be, directed b Lenders office shown above. The fotlowirtg Party or Parties are authorized to~eq advanoes•~under She ane
of credit tmitl Lender receives from Borrower at Lender's address shown above written notice of revocatlon of tha6'authority: Ph111p J. Johansen b)
James E Johansen. Borrower agrees b be liable for afi sums either. (s) advanced in arxordance wfth tt-e instructions of an authorized pws
credited b any of Borrower's atx:ourris with Lender. The unpaid prfrx~pa~ ~ ~ der will hav onoaoba yation to advarxx fedunder th~Note i~
on this Note or by Lenders•internal records, including daffy computer p
(e) Borrower or arty guarantor is to default under the terms of this Bo~oovv~ o a m g~a to ~t ~ d~~ liminess or ~ olvent~ ( j parry guarantor
agreement made in connection wfth the signing of this Note; (b)
seeks. claims or otherwise attempts b fimit, modify or revoke such guarantor's guarantee of this Note or arty other loan wfth Lender, (d) Borrower has
applied funds provided pursuant to this Note for pctrposes•ottter than those authorized by Lender, or (e) Lender in good faith deems itself )nseeure
under this Note or any other agreement between Lender and Borrower.
ANNUAL REVIEW. The loan commitment will expire on April 30, 1999. The Lender will review the Loan annually for renewab and extensions; such
renewals and extensions to be granted predicated on the performance of the comparry and/or indi`tiduals and adherence to the Loan Agreement
and/or loan policy. ant,
SECURITY. AU collateral (as herein defined) is security for ttds Note and arty renewals, extensions and modifications thereof, and the paYm
t HARRIS
SAVINGS BANK ' '
PROMISSORY NO'T
t1-Olr-1998 PROMISSORY NOTE Page 2
Loan No 8877000554 (Cordlnuef~ •
performance and dtscharye of ap other present or future indebtedness, obpgaYtons and undertakings (whether individual. joint, saverel, direct,
nt or otherwise) of the Borrtw~ to a for the benefit of t.ender. whether ar(sing direcpy b Lender under tt>is Note or under any other .
conftnge • note ~ underfakings'rtow existing or hereirtatter erltliued into by Borrower to Lender. The term "ColNltarar' inductee eA tangible
agreement, promNsory
and intarpible Property (n descrtl»d in any mortgage. assignment or any other security document separately executed by the Borrower in favor of
Lender, and (In in which Borrower ties granted a security Interest td Lender pursuant to this Ndte.
GENERN- PROVISIONS. Lender may delay or forgo.enfordng any of its rights.or remedies under 1~~No~w ~ pa~~mp and notice
other person who signs, guarantees or endorses this Note. to the extent agowed by law, waive Press
dishonor. Upon any change in the terms of this Note, and unless otherwise sxpressiy stated in writing. no party who signs ttds Note, whether as. maker,
Igor any length of Umenloart, or release any Party ar uarentor or coUate~rel;'or impafrPafaN toare~elUze uponpor perfe tnder's seCtray itGio the
coliaterai; and take any other action deemed neceaean- by Lender without the co ~ whom the modification ie made.P N~anyy portlo~ tthls Note is
'may modify this Loan without the consent of or not(cA to anyone,other than the party
' foc any reason de~rrnined to be unenftxceable, It w1U not effect the enforceability of arty other provisions of this Note.
CONFESSION OF JUDGMENT. BORROWER HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR THE PROTHONOTARY
OR CLERK OF ANY COURT IN THE COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE. TO APPEAR AT ANY TIME FOR BORROWER AFTER
A pEFAULT UNDtB:t THIS NOTE, AND WITH OR WITHOUT COMPLAINT FILED, AS• OF ANY TERM. CONFESS OR ENTER JUDGMENT AGAINST
BORROWER FOR THE ENTIRE PRINgPAL t3N.ANCE OF THIS NOTE, ALL ACGRIJED INTEREST, LATE CHARGES, AND ANY AND ALL AMOUNTS
IXpE~p OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL CURING THIS NOTE TOGETHER WITH II~fEREST ON SUCH
AMOUNTS, TOGETFER WITH COSTS OF .SUtT, AND .AN ATTORNEY'S COMMISSION OF TEN PERCENT (1096) OF THE UNPAID PRINCIPAL
BALANCE ANQ ACCRUED' INTEREST FOR COL"L•ECTION, BIJT IN ANY EVENT NOT LESS THAN FIVE HUNDRED DOLLATi3 (6600) ON WHICH
Jt)OGMENT OR JUDGMI_NT'S ONE OR MORE ExECxJTIONS MAY ISSUE IMMEDIATELY; AND FOR SO DOING, THIS NOTE OR A COPY OF THIS
NOTE' VER1FlE0 BY AFFWAVIT Slii4t.L BE SUFFlCIEI~(T' WARRANT. ` THE AUTHORITY GRANTTfED ~ IN. • TMS NOTE TO CONFESS JUDGMENT
AGAINST BORROWER SHALL NOT BE EXHAUSTED BY ANY EXERCISE OF THAT AUTHORITY, BUT S1iALl CONTINUE FROM TIME TO TIME AND
AT ALL TIMES UNTIL PAYMENT IN FULL OF ALL AMOUNTS DUE UNDER THi6 NOTE. BORROWER I~REBI( WAIVES ANY RIGHT. BORROWER
MAY HAVE TO NOTICE OR TO A WEARfNt3 IN CONNECTION WITH ANY SUCH CONFESSION OF JUDGMENT, EXCEPT ANY NOTICE AND/Ot4
HEARING REQUIRED UNDER APPLICABLE LAW WITH RESPECT TO EXECUTION OF THE JUDGMENT, AND STATES THAT Ef11iER A. ,
REpRESEtJTAT1VE OF LENDER•SPEgFiCALLY CALLED~•TNIS CONFESSION OF .JUDGMENT PFiOVtSIOM TO BORROWER'S. ATTENTION OR
BpRROyVER HAS BEEN. REPRESENTED BY INDEPENDENT. LEGAL COUNSEL THE LIEN ARISING FROM ANY JUDGMENT CONFESSED OR
ENTERED PURSUANT TO THE FOREGOING AUTHORITY SHALL NOT EXTEND TO ANY OF BORROWER'S RESIDENTIAL. REAL PROPERTY AS
THAT TERM IS DEFINED IN THE PENNSYLVANIA ACT OF JANUARY 30,1974 (PA LAWS 13, NO.6), REFERRED TO AS THE LOAN INTEREST AND
PROTECTION LAW, AS AMENDED, AND THE HOLDER OF ANY JUDGMENT CONFESSED OR ENTERED PUI9SLJANT TO THE FORGOING
AUTHORITY SHALL NOT, IN ENFORCEMENT OF ANY SUCH JUDGMENT, EXECUT7:, LEVY OR OTHERWISE PROCEED AGAINST ANY SUCH
RESIDEI+iTWL REAL PROPERTY; PROVIDED, HOWEVER, THAT THE LIEN OF SUCH JUDGMENT Sl1ALL EXTEND TO SUCH RESIDENTIAL REAL
PROPERTY AND THAT THE HOLDER THEREOF SHALL BE PERMITTED TO EXECU'T'E, LEVY OfR PROCEED AGAINST SUCH RESIDENTIAL AEAL
PROPERTY FROM AND AFTER THE ENTRY OF A JUDGMENT AS CONTEMPLATED BY SECTiON 407 OF SUCH LOAN INTEREST AND
PROTECTION tAW AND RULES 2981 TO 2988 OF THE PENNSYLVANIA RULES OF CIVIL PROq~URE, OR SUCCESSOR OR SIMILAR STATUTES
AND•RULES. NO LIMITATION OF LiEN.OR ANY D~Ct3T.lON, LEVY OR OTF~R ENFORCEMENT CONTAINED IN THE IMMEDIATELY PRECEDING
SENTENCE SHALL APPLY WITH RESPECT TO ANY JUDGMENT OBTAINED OTHER THAN BY THE FOREGOING AUTHORITY TO CONFESS OR
ENTER JUDGMENT.
PRIOR TO SIGNtNO THiS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THlS NOTE, INCLUDINt# THE VARIABLE
iNTERHST RATE PROVISIONS. BORROWER AGREES TO THE TERMS OF THE NOTE AND•ACKNOWLEDGF~ RECEIPT OF A COMPLETED
COPY of THI? NOTE
THiS NOTE IiAS BEEN SIGNED AND SEALED BY THE UNDERSIGNED.
BORROWER:
Marioet I'trset"j~~,lncor~rM
~• E Jolbneen, Taaaedrer
"~. Sal .
rIM\IM IW.\ v,,,..-
Variable Rata Ltns of CredlL LAGER PRD, Reg. U.S. PaL 8 T.M. Ott., Var. 5.26 (a)1o96 CFI ProServkea, Inc. All rights reasrvsd. (PA-D20 MARKET.LN C7.DVLt
x~,b~-~
~HARRIS~c
SAVINGS BANK
Borrower: IYiartcet Street Music, • in~rporated • (71N: Lender: ttstrts savings eantc
.•25-1731122) 294 N. Serxmd Street
19 E Mdn St. P O Box 1711-
. • Mechanfceburg, PA tT055 Flarrtsbtarg, PA 17105
THIS BUSINESS LO,/W AGREEMie"NT between Market Stroet Music, incorporated ("Borrower") and Fleuris Savings Bank ("Lender") la made
end executed on the tolbwing terms and oondlibns. Borrower tras received prior commercial loans from Lender or tras applied to Lender for
a commerdN loan or loens.and ottrar flnanclal•accommodations, Including those which may be descMbed on any euttttbit or schedule attached
to this AgreetaeM. AO such !Dons and flnancial acaommodatlons, together with all tuturo loans and flnanctal.aocomnmdetlons from Lender to
Borrower, aro retmred to to this Agreement tndividudiy es the "Loan" and coileNively as the "Loans." Borrower understands and agrees. that:
(a) In granting, renewtnp, or finding any Loan, Lender is relying upon Borrower's ropreeatfetdons, warrantbs, and sgreemerrts, asset forth
In Chia Agreemsdt; (b) the granting, renewing, or extending of arry t.oan by !.ender at afl times ehail be subJsct to Lender's sole Judgment and
tlisteretion; and (o) all ouch Loans shill be and shalt rs'maln subject to the fo0owfng terms and condfllons of fhb Agreement.
TERM. This Agreement shall:be effactlve as of Novembe[ 6,1999, and shall continue thereafter unril all ladebtedness.ot•Borrower to Lender has been
performed in fug and the parties:terminate ttds Agreement in wrtihg.
DEFINITIONS. The fopowing'words shall have the fdlowing meanings when used in this Agreement. Terms not otherwise defined in this Agreement
shah .Nave the meanings att[ibuted to such terms in the Uniform Commercial Code. Atl references to dollar amounts shat{ mean amounts in lawful
money ~ the United States of America.
AgreOmenL-.The word "Agreement" means this Business Loan Agreement, as: this Business Loan Agreement may be amended or modified from
time to time. together with el(exhibits and schedules attached to this Business Loan Agreement from tlme to tlme. -
Borrower. The word "Borrower'' means Market Street Music, Incorporated. Tha word "Borrower" also includes, as eppltcable, all subsidfarias and
afflilates of Borrower as provided below ih the paragraph titled "Subsidiaries and Affiliates "
CERCLA. The word "CERCLA" means the Comprehensive Environmental Response, Compensation, and Liability Act of i980,_as amended.
Collateral. The word "Cotlateral" means and includes without Iimtlarion all propertyr and assets granted as copateral security for a Loan, whether
real or personal property, whether granted directly or indirectly; whether granted now or in the future, and whether granted is the corm of a security
interest, mortgage, deed of trust, assignment, piedye, chattel mortgage,. chattel trust, fadnr's Ilan, equipment trust; -condftlorrat~aela,lrust receipt,
lien, charge, Gen Or title rebrrtlon contract, lease or.consignment intended as a security devirre, or any other security or pen interest whatsoever,
whether oreated by law, contract, or otherwise. -
iB:tISA. The word "FRIBA" means the F~rrrpioyee Retirement Income Security Act of 1974, as amended.
Event of Default. The words "Event of Default" rrrean and include without limitation any of the Events of Default set forth below in the section titled
"EVEMi'S OF DEFAULT' .
Grantor. The word "Grantor" means and includes wtlhout Ilmitatlon each and all of the persons or entities granting a Security Interest in any
Copateral fa the Indebtedness, including without imitaton all Borrowers granting such a Security Interest.
(tuarantor. The word "Guarantor" means and includes without pmRarion each and ail of the guarantors, suretles, and accommodarion parries it
connsctlon with any Indebtedness.
indebtedness. The word 9ndebtedness" rr~ns end includes without-pmitation ail Loans, together with all other obppations, debts and pabilirie:
of Borrower to Lender, or $ny one or more of them, as wetl as all deims by Lender against Borrower, or arty one ar more of them; whether now or
hereafter existng, voluntary or Envoluntary, due or not due, absdute or contingent, pquidated or unpquidated; whether Borrower may be liable
individualty or jclntly with others; whether Borrower may be obpgated as a guarantor, surely, or otherwise; whether r~overy upon such
Indebtedness may be a.hereafter may become barred by any statute of Iimitatlons; and.whether such Indebtedness may be or hereafter may
become otherwise unenforceable.
Lender. The word'Lertder" means Harris Savings Bank, its suaressors and assigns.
Loan. The word 'Loan" or "Loans" means and includes wtlhout limitation any and ail commercial loans and financial accommodarions from
Lender to Borrower, whether now or hereafter e~asting, and 'Nowaver evidenced, induding without tlmitarion those loans and financla
accommoderions described herein or described on any. exhibit or schedule attached to this Agreement from time to time.
Note. The word "Note" means and Includes without limitation Borrower's promissory note or notes, ff any, evidencing Borrower's Loan obligation:
in favor of Lender, as well as arty substitute, replacement or refinancing note or notes therefor.
Permitted Liens. The words "Permitted Liens" mean: (a) Ilene and security interests securing Indebtedness owed ty Borrower to •Lender, (b
Bens for taxes, assessments, or similar charges either not yet due or being contested in good faith; (c) pens of materialmen, nr~hanics
warehouseman, or carriers, or other fika pens arising in the~ordinery course of business and securing obligatlons which are not yet delinquent; (d
purchase money pens or purchase money security interests upon or fn any praperiy acquired or held by Borrower In the ordinary course o
business to secure indebtedness outstanding on the data of this Agreement or permitted to be incurred under the paragraph of this Agreemen
tiried'fndebtednesssnd Liens"; (e) (fens and security interests which, as of the date of this Agreement, !rave been disclosed to and approved b;
the Lender in writing; and (f} those dens and security interests which in the aggregate constitute an immaterial and insignificant monetary amoun
with respect to the net value of Borrower's assets.
Related Documents. The words "Related Documents" mean and include without limitarion ail promissory notes, credit agreements, roar
agreements, environmental agreements, guaranries, security agreements, mortgages, deeds of trust, and all other instruments, agreements anc
documents, whether now or hereafter existing, executed In connection with the Indebtedness.
Security Agreement. The words "Security Agreement" mean and include without limitation arty agreements, promises; covenants, arrangements
understandings or other agreements, whether created by law, contract, or otherwise, evidencing, governing, representing, or creating a Securit;
BUSINESS LOAN AIGREEMENT
~~-os-998 t3UStNESS LOAN AGREEMENT Page 2
Loan No 6877000554 (Continued) •
Ingest
Security Interest. The words "Security Interest" mean and include without tlmNation any type of colisteral security, whether in the form of a Nen,
charge, mortgage, deed of trust, assignment, pledge, chattel mortgage, chattel trust, factor's Ian, equipment trust, conditional sale, trust receipt.
lien or titre retention contract, !ease. or cor>signmsnt Intended as a security device, or arty other security or lien interest whatsoever, whether
created bylaw, contract, or otherwise.
SARA. The wad "SARA" means the Superfund Amendments and Reauthorization Act of 19116 as now or hereafter amended.
CONDITIONS PRECEDENT TO t=ACH ADVANCE. Lender's ataigatlon to make the inNial Loan Advance and each subsequent Loan Advance under
this Agresrnent shat! tie subject to the tuiflNment to Lender's satisfaction of aN of the conditlons set forth in this Agreement and in the Related
Documens.
Loan Documents. Borrower she0 provide to Lender in form satisfactory to Lender the foAowing documents to the Loan: (a) the Note, (b)
SecurHy AgrsamenLs granting to Lender security interests. in the Collaferat, (c) Rnancing Statemerrts perlectirg Lender's Securty Interasta; (dj
evidence of insurencs as required below; and (e) arty other documents required under.this Agreement or by Lender or its counsel; including
without Nmitatlon any guaranties described below.
Borrower's Authorization. Borrower shall have provided in .form and substance satisfactory to Lender properly certified resolutions, duly
authorizing the executors and detivery of this Agreement, the Note and the Related Documents, and such other authorizatlor>s and other
documents and instruments as lender or its counsel, !n their sole discretion, may require,
Payment of Fees end Expenses. Borrower shall have: paid to Lender aN fees, charges, and other expenses which are then due and payable as
.specified in this Agreement or any Related Document.
Representations and Warranties. The representatlons and warranties set' forth in this Agreement, In the Related Documents, and in any
document or certlficate delivered to Lender under this Agreement are true and correct.
No Event of Detauft. There shatl not exist• at the time of any advents a condNion which would constNute an Event of Default under this
.Agreement
REPRESENTATIONS AND WARRANTiE3. Borrower represents and warrants to Lender, as of the date of this Agreement, as of the date of each
dlsbursemeM of Loan prooaeds, as of the date of any renewal, extension or modiftcation of any Loan, and at all tlmes arty Indebtedness e~dsts:
Organizetbn. Borrower Is a corporation which >s duly organized, validly existing; and in good standing under the Taws of the Commonwealth of
Pennsylvants and is vatldfy existing and in good standing in ail states in which Borrower is ddng business. Borrower has the fuN power and
authority to own its properties and to transact the businesses in which it is presently engaged or presently proposes to engage. Borrower also is
duly quatifled as a foreign corporation and is In good standing in aN states in which the failure to so queNfy would have a materlai adverse effect on
its businesses or financial condition.
Autborizatton. The execution, deNvery, and pertormarxre of tt~s Agreement and ap Related Documents by Borrower, to the extent to be exewted,
defnrered or pertormed by Borrower, have been duly authorized by aN ner:essary action by Borrower, do not require the~consent or approval of
arty other person, regulatory suthwity or governmental body; and do not coMAct with, result in a violation of, or constitute a defauN under (a) any
provision of ils articles of Encorporation or organization, or bylaws, ~ any agreement or other instrument binding upon Borrower or (b) any law,
governmental regulation; court decree, or order apptlcableto Borrower.
Flnandal Intorrrtatfon. Each financial statement of Borrower supplied to Lender truly and completely disclosed Borrower's flnarxxisai condition as .
of the date of the statement, and there has been no material adverse change in Borrower's financial condNion subsequent to the date of the most
recent flnandal statement supplied to Lender. Borrower has no material contingent obligations except as dlsdosed in such financial sfalemenis.
Legal iEibct. This. Agreement constitutes, and any instrument or agreement required herounder to be ghren by Borrower when delvered witl
constitute, legal, vatld and binding obligations of Borrower enforceable against Borrower In accordance wflh thek respective terms.
Properties. except es contemplated by this Agreement or as previously disclosed in Borrower's flnanclal statements or in writing to Lender and as
eaxpled by Lender, and except for property tax Nens for taxes not presently due and payable, Borrower owns and has good title to aN of
Borrowers properties free and clear ct all Security Interests, and has not executed any security documents or flnandng statements retatlng to such
properties. AN of Borrower's properties are tltled in Borrower's legal name, and Borrower has not used,. or flied a flnanclng statement under, any
other name for at toast the last flue (b} years. .
Hazardous Substances. The terms "ha~rdous Waste," "hazardous subsffince; "disposal," "release," and 'threatened release," as used in this
Agreement, shell have the same meanings as set forth in the "CERCLA; "SARA," the Hazardous Materials Trensportation Act, 49 U.S.C. Secficn
• 1601, et seq., the Resource Conservation and Recovery Act, 42 U:S.C. Section 13901, et seq., or other apptlcable state or~Federal laws, rules, or
regulations adopted pursuant to any of the foregoing. Except as disclosed to and adcnowiedged by Lander In wriflng, Borrower represents and
warrants that: (s) During the period of Borrower's ownership of the properftes, there tree been no use, generation, manufacture, storage,
treatment, disposal, release or threatened rel~se of arty hazardous waste or substance by any person on, under, about or from any of the
properties. ro) Borrower has no knowledge of, or reason to believe that there has been •{i) ar,y use, generetion, manufacture.: storage, treatment,
disposal, release, or threatened release of arty hazardous waste or substance on, under, about or from the properties by any prior owners or
oxupanis of arty of the properties, or (N) any actual or threatened litigation or claims of arty kind by any person relating to such matters. (c)
NeNher Borrower nor any tenant, contractor, agent or other authorized user'of any of the properties shell use, generete, manufacture, store, treat,
dispose of, or release any hazardous waste or substance on; under, about or from arty of the properties; and arty such activity shall be concluded
in compliance with all applicable federal, state, and local laws, regulations, and ordinances, including without Iimfitation those laws, regulations and
ordinances. described above. Borrower authorizes Lender and Its agents to enter upon the properties to make such inspections and tests as
- Lender may deem appropriate to determine compliance of the properties with this section of the Agreement. Any inspections or tests made by
Lender shall be at Borrowers expense and for Lenders purposes only and shalt not be construed to creatQ any responsthllity or liability on the part
of Lender to Borrower or to any other person. The representations and warranties contained herein are based on Borrowers due difigerx:e in
investigating the properties for hazardous waste and hazardous substances. Borrower hereby (a) releases and waives any future claims against
Lender for Indemnity or contribution in the event Borrower becomes liable for cleanup or ottrer costs under any such laws, and (b} agrees to .
indemnify and hold harmless Lender against any and alt claims, losses, NabNities, damages, penalties, and exper>ses whthh Lender may directly or
- indirectly sustain or suffer resulting from a breach of this section of the Agreement or as a consequence of any use, generation, manufacture,
storage, disposal, release or threatened release of a hazardous waste or substance on the properties. The provisions of this seoon of the
Agreement, including the obligation to indemnify, shah survive the payment of the Indebtedness and the termination or expiration of this
Agreement.and shah not be affected by Lenders acquisition of airy Interest in any of the properties, whether by foreclosure or othewise.
Litigation and Claims. No litigation, claim, investigation, administrative proceeding or similar action (including those for unpaid taxes} against
Borrower is pending or threatened, and no other event has occurred which may materially adversely affect Borrowers flnatxtal condition or
properties, other than Ntigation, claims, or ofF •events, if any, that have been disclosed to and.ack~ `edged by Lender in writing.
x
3=
y1-O6-1998 ~• BUSINESS LOAN AGREEM Page 3
.Loan No 8877000554 (Continued) ~ -
Taxes. To the best of Borrower's knowledge, all tax returns and reports of Borrower that are or were requked to.be t9ed, have been feed, and all
taxes, aaaessmerrb and other povemmentrd charges have been paid In full, +axept those presently being or to be contested by Borrower in good
faith in the rxdlnsry course m business and for wtr~h adequate reserves have been provided. ,
Lien Priority... Unless otherwise previously disdosed b Lender in writing, Borrower has not entered fnb or granted arty Security Agreements, or
permitted the f>Bng or aitaehmsnt of arty Security-Interests on or atfectirrg any of the Cotiaterel directly or indirectly securing repayment of
Borrower's loan and Note, that would be prior or that may in any way be superior b Lender's Sectstiy interests and rights in and to such
Colletaral. •
Binding Effect. Tills Agreement, the Note. ail Security Agreements dlreCtiy or Indirectly Securing repayment of Bon~ower+s Loan and Note and afl
of the Related Documents are binding upon Borrower as weti ~ as upon Borrower's successors. representatives and assrgns. and are Iegatiy
enforceable in accordance with their respective terms. '
Commercid Purposes. Borrower intends to use the Loan proceeds solely for business or commercial related purposes.
Employee eenetlt Plana.: Each employee.beneflt Plan as.to whictr Borrower may have erry tiabgtiy compUas in ail material. respects with all
applicable raqukenrerrts of law:and regulatlons,~and• (i} nor Reportable Event nor Protriblted Trerar-ctlon (as defined M ERISA} has occurred with
respect b arty such plan, (tl) Borrower has not withdrawn from arty such plan -or initiated steps b do so, (~ no steps. have been taken to
terrrrirrate arty such plan, and (iv) there are no unfunded tiabillUes other than those previousy dlsdosed to Lender in writing.
Location of Borrower's Offkxs and Records. Borrower's place of business, or Borrower's Chief eoaecutlve office, M Borrower has more than one
place of business, is located at 13 E. Main SL, Mechanicsburg, PA t70b6. Unless Borrower has designated othervvias in wrtiing tills beatlon is
• also ttre oftlce ~ offices where Borrower keeps its records concerning the Cotiaterai.
Yew ~OO..aorrower warrants and represents that afi software utilized in the conduct of eonower's busir>ass w8 have appropriate capabltities:end.
compatibUty for opsretlon to handle calendar dates tafling on or after January 1, 200q, and ati intorrnatlon pertaMing !o such calendar daffis, in the
same manner and wtih the same functionality es the software does respecting calendar dates falling ort or bebre December 3t, 1999. Further,
Borrower warrents and represents that the data-related user interface functions, data-iieids, and data-related program insiructlons and tunc8ons
of the software include. the indication of the century.
IMormatlon. Aq Information heretofore or contemporaneously herewith famished by Borrower to Lendef br the purposes of or in connection with
• this Agreement or any trensactlon~ contemplated hereby is, and all [nformeUon hereafter famished by a on behalf of Borrower to Lender will be,
true and accurate in•every. material respect on the da6e as of which such Inforrnatlon is dated or certified; and none of such Information is or will be
incomplete by omtitlng to state any material fact neCe~ary b make such iMorination not misleading.
Survival of Representations end Warranties. Borrower understands and agrees that Lender, without fndependenf invesdpation, is relying upor
the above representatlons and warranties In extending Loan Advances to Borrower. Borrower further agrees that the•foregoing representation:
and warrantee ~hafl be contindng in nature end shall remsln In full face and effect uMU such time as Borrower's Indebtedness shall be paid it
futi, or until this Agreement shell be terminated in the manner provided above, whichever ~ the last to occur.
AFFIRNFATIVE COVENANTS. Borrower covenards and agrees wtih Lender that, while this Agreement is in effect, Borrower will:
Utiprdlon. Prompfly Inform Lender in wdtlng of (a) ati material adverse changes in Borrower's flnarrdal condition,.and. -(tr) all existing and al
threatened titigatlon, daims, investigations, administrative proceedings or similar actions affecting Borrower or any tiuerentor which coutc
_ materially affect the flnandal condition of Bom~wer or the flnandal condition of any C~Iuarantor.
Fituurclat Records. Maintain Its books and records fn accordance with generally accepted accounting prindples, applied on a consistent basis
and perrnti Lender b examine end audit Borrower's books end records at all reasonable times.
Flrtarrcfal Statements Famish Lender with, as soon as available, but in no event later than ninety (90} days after the end ,of Bch fiscal year
Borrows~s balance sheet and income statement for the year ended, eomplled by a certified pubticaccountant satisfactory to Lender. Ail fined or
reports required to be provided under this Agreement shall be prepared in accordance with generefly accepted accounting principles, app'
a consistent basis, and certified by Borrower as being true and correct '
Additional Intormatlon. Famish such additional information and statements, fists of assets and Uabltittes, agings of receivables end payables
Inventory schedules, budgets, brecasts, tax returns, and other reports with respect b Borrower's financial condition and business operations. a:
Lender may request from time to time. .
Insurance. MshtMin fire and other risk insurance, public liability insurance, and such ottr~ insurance as Lender may require wtih respect tc
Borrower's properties and operations, in form, amounts, coverages and with insurance companies reasonably acxeptable to Lender. Borrower
upon request of Lender, will deliver to Lender from time la time the pofid~ or certificates of insurence in form satlsfactory b Lender, indudnnc
stlpulatians that coverages will not be cancelled or diminished without- at least thirty (30) days' prior written notice to Lender. 'Each insurance
..policy also shall indude an endorsement pravFding that coverage in favor of Lender wp1 not be impaired in any way by any act, omission or defau~
of Botrow~ or any other person. In conn~tion with all pafldes covering~assets in wtuch Lender holds or is offered a security interest tot the
Loans, Borrower wB provide Lender with such loss payable or other endarsemerrts as lender may require.
insurance Reports. Furrdsh b Lender, upon request of Lender, reports on each existing Insurance pdicy showing such information as Lende
may reasonably request, induding without limitation the fdlowing: (a) the name of the insurer,. (b) the risks insured; {c) the amount of the policy
{d) the properties insured; (e) the then current property values on the basis of which insurance has been obtained, and the manner c
determining those values; and (f) the expiration date of the policy. In addition. upon request of Lender (however not more often than annually
Borrower will have an independent appraiser satfsiactory to Lender determina, as appflcable, the actual cash value or replacement cost of an
Cotiateral. The cost of such appraisal shall be paid by Borrower.
Ouarantles. prior to disbursement of any Loan proceeds, furnish executed guaranties of the Loans in favor of Lender, executed by the guarantor
named below, on Lender's forms, and in the amounts arid under the conditions spelled out in those guaranties.
Gua rs Amounts
Phtitp J. Johansen Unlimited
James E. Johansen and Lynne C. Johansen Unlimited
Other Agreements. Comply with all terms and conditons of alt other agreements, whether now or hereafter existing, between Borrower and ar
other party and notify Lender immediately to writing of any default in connection with any other such agreements.
Loan Proceeds. Use all Loan proceeds solely for the foitowing specific purposes: Wor(dng capital.
Taxes, Charges and Liens.. Pay and discharge when due all of tie indebtedness and obligations, induding without Umitation sU assessment.
taxes, govemmenMl charges, levies and liens, of every kind and nature, imposed upon Borrower w its properties, income, or profits, prior to tt•
date on which penalties would attach, and alt lawful daims that, ti unpaid, might become a lien or ehar~ upon any of Borrower's properties
11..06-1998 BUSINESS LOAN AGREEMENT Page 4
Loan No 8877000554 (Coftttaued)
income. or proffis. Provided however, Borrower will not lie required to pay and discharge arty sudr assessment, tax, charge, levy, ten or claim so
long as (a) the legality of the same shall be contested in good faith by appropriate• proceedings, and (b) Borrower shag have established on its
books adequate reserves wtih respect b such contested assessment, tax,- ctsarge, levy. lien. or clahrs in axordance with generally accepted
accounting practices. Borrower, upon demand of Lender, will furnish to Lender evidence of payment of the assessments, taxes, charges, levies,
tiaras and cialms end will authorize the appropriate govemmentai offidel to deliver to Lender at any time a written statement of any assessments,
taxes, charges, levies, hens end claims against Borrower's properties, income, or profits.
Performance- Perform and comply with afi'terms, oondtilons, and provisions set forth in ttsis Agreement and in the Related Dxuments in a timely .
manner. and prornptiy notify Lender if Borrower teams of the occurrence of arty event which constttutes an Event of~Defatat under this Agreement
or under any of the Related Documents.
Operations. Maintain executive and management persgnnel with substantially the same quaAfications and experience ors the•prResertst executhrs
and management personnel; provide written notice to Lender of any change in executive and. management personnel; conduct its business affairs
in•e reasonable and prudent manner and in compliance with afi applicable federal, state and muntdpal laws, ordnances, rules and regulations
respecting its properties, charters, businesses and operations. including wtihout M>ttation, complianoe with the Amerkerns With Disabtiities Act and
wtth ati minimum funding standards and other requirements of ERISA ahd ocher laws appll~bie to Borrower's employee berteflt plans.
Inspection. Permit employees or agents d Lender at any reasonable time tp inspect any and all Cotiaterel for the Loan.or Loans and Borrower's
other properties and to examine or audtt Borrower's books, accounts, and records and to make copies and memoranda of Borrower's books,
acr~unts, and records. If Borrower now or at any time hereafter maintains any rerrords (including without Itndtation xmputer genereted records
and computer software programs for the gerseration of such records) to the possession of'a ttsird party, Borrower, upon request of Lender, shall
notify such party to permit Lander free axes to such records at all reasonable times and to provide Lender wtih copies of arty records ti may
request, ail at Borrower's expense.
Compliance Certificate. Unless waived !n writing by Lender, Provide Lender at I~st annually and at the time of-each disbursement of Loan
proceeds with a certificate execrated by Borrower`s chief fnandal officer, or other officer or person axeptable to tender. certifying. tt>at the
representations and warranties set. forth in this Agreement are true and correct as o- the dad of the certificate and further certNying that, as of the
date of the certificate, no Event of Default exists under this Agreement.
Environmental Compliance and Reports. Borrower shall comply in all respects with afi environmental protection ledertl, state and •local laws,
statutes, regulations and ordinances; not cause or permti fo exist, as a result ofsn intentional or unntentlonal action or omission on its pad or on .
the part of any third party, on property owned and/or occupied by Borrower, any environmental activHy'where datnaga may r~uti'to the
em(ronment, unless such envtronrrrentel activity is pursuant to and in compliance wtth the conditions of a permit Issued by the appropriate federal,
state or local governmentel atrtfsortties; shall famish to Lender promptly and in any event within thirty (30) days nfler receipt thereof a copy of any
notice, summons, hers, citation, directive, letter or other communication from any governmental agency or Instrumentality xncem(ng arty intentional
or unintentional action or omission orr Borrower's part In connection wRh any environmental activity whether ar not there is damage to the
environment and/or ottrer natural resources.
Addltlorml Assurances. Make, execute and deliver to Lender such promissory notes, mortgages, deeds of trust, security agreements, financing
statements. instruments. dxuments and other agreements as Lender or Its attorneys may reasonably request to evidence and secure the Loans
and to perfect ati Security Irs~rests. -
RECOVERY OF ADDITIONAL COSTS. if the imposition of or any change in any law, rule, regulation or gsrtdeline, or the interpretation or application of
any thereof by any court or administrative or governmental authority (including any request or polcy not having the force of law)•sha6 impose, modify or
make applicable any texas (exr:ept U.S. tederai, state or local Income or franchise taxes imposed on Lender), reserve requirements, capital adequacy
requtrements or other obtiga6ons which would (a) increase the cost. to Lender for extending or maintaining the credit facilities to which this Agreement
relates, (b) reduce the amounts payable to Lender under this Agreement or the Related Documents, or (c) reduce the rate of feturn on Lender's capital
a5 a xnsequenoe of Lender's obligations with respect to the credit far~ities to which this Agreement rntates, then Borrower agrees t0 Pay Lender such
additional amounts as will xmpensate Lender therefor, within flue (5) days after Lender's written demand for such payrtrent, wtsich demand shall be
axampanied by an explanation of such imposition or charge and a calculation [n reasonable detati of the additional amounts payable by Borrower,
which explanation and calculations strait be condusive in the absenr~ of manffest error.
NEGATIVE COVEf1ANl'S. Borrower cosrenants and agrees wfth Lender that while this Agreement is in effect, Borrower shall oat, without the prior
written consent of Lender.
Indebtedness and Liens. (a) Except~for trade debt incurred in the normal course of business and indebtedness to Lender contemplated by this
Agreement, create, incur or assume indebtedness for borrowed money, induding capital leases, (b) except as atiowed.as a Permitted Lien, sail,
transfer, mortgage. assign, pledge, lease, Brant a security interest in, or encumber any of Borrower's assets, or (c) seti wffh recourse any of
Borrower's axounts, except to Lender.
- ConttnWty o! Operrations. (a) Engage in any business activities substantially dKferent then ttsose in which Borrower is presently engaged, (b)
cease operetions, liquidate, merge, transfer, acquire or consolidate with any other entity, change ownership, change its name, disscve or transfer
or sefi Collateral out of the ordinary course of business, (c) pay any dividends on Borrower's stock (other than dividends payable in its stock);
provided, however that notwithstanding the foregoing,. but only so long as no Event of default has oxurred and ts,continutng or:wostld result from
the payment of dividends, ti Borrower is a "Subchapter S Corporation" (as defined In the Internal Revenue Code of 1986, as amended), Borrower
may pay cash dividends on its stock to~its shareholders from time to time In amounts necessary to enable the•sharehoidere to pay income taxes.
and make estimated income tax payments to satisfy their liabilities under faders! and state law which arise solely from their status as Shareholders
of a Subchapter S Corporation because of their ownership of shares of stock of Borrower, or (d) purchase or retire arty of Borrower's outstanding
shares or alter or amend Bonower's capital structure. -
• .Loans, Acquisitions and Quaranttes. (a) Loan, invest in or advance money or assets, tb) purchase, create or acquire any interest in any other
enterprise orenti#y, or (c) incur any obligation assurety or guarantor other than in the ordinary course of business. -
CES5ATION OF ADVANCES. If Lender has made any commitment to make any Loan to Borrower, wt-ether under this Agreement or under any other
agreement, Lender shall have no obligation to make Loan Advances or to disburse. Loan proceeds If: (a) Borrower or any Guarantor ES in defauti under
the terms of this Agreement or any of the Related Documents or any other agreement that Borrower or arty Guarantor has with Lender; (b) Borrower or
any Guarantor becomes insolvent, files a petition In bankruptcy or similar proceedings, or is adjudged a bankrupt; (c) there. oxurs a material adverse
change in Borrower's financial condition, In the financial condition of any Guarantor, or In ttie value of any Collateral securing arty Loan; (d) any
Guarantor seeks, claims or otherwise attempts to limit, modify or revoke such Guararsto~s guaranty of the Loan or any other loan-with Lender, or (e)
Lender in goad faith deems itself insecure, even though no Event of Default shall have oxtured. ••
ANNUAL REVIEW. The loan commltnrent will expire-on April 30, 1999. The Lender wifl review the Loan annually for renewals and extensions; such
renewals and extensions; to be granted predicated on the performance of the company and/or individuals and adherence to the Loan Agreement
and/or loan policy. l
LOAN DOCUMENTS. The Note and Related ~rnents, which shall survive closing, and the provisi. dereof are incorporated herein by reference.
-s:..
r 11-06-199g ~~ BUSfNESS LOAN AGREEM~. Page s
Loan No 8877000554 - (f"•orrt[nuefi)
TAX~RETURNS AND FlNANCIAL INFORMATION. Borrower wiq submit b Lender the guarantors financial statements and signed federal tax returns
compped•by a r~rtlfied pubUc accourrtnnt satistactary b Lender no later than ninety. (fl0) days attar the end of each fiscal year. Alt financial reports
required b• be provided under this Agreement shall be prepared in accordance with generaly accepted accouraing principles, applied on a consistent
basis and certlfied by Borrower as being true and correct
RIGHT OF SETOFF. Borrower grards to Lender a contractual securtly interest in, and trereby assigns, conveys, deUvers, pbdges, and-transfers to
- Lender a0 Borrower's right, title and interest in and to,-Borrower's•accounts with Lender (whettrer oiredcing, savings, or same other account), irrduding
without UmltaUon ail accounts held jdntiy with someone else and afi accounts Borrower may apes in the future, excluding however all iFiA end Keogh
accounts, and atl trust accounts for which the grartE of a securtty interest would be prohlbtied by law. Borrower authorizes Lender, b the extent -
permilted ~by applcable law, b oharye or setoff all sums owirq on the indebtedness against any and all such accounts, and, at Lenders option, b
administratlvelyireeze all such accounts fo allow Lender to protect Lenders charge grid setoff rights provided on this paragraph.
. EVENTS OF DEFAIH.T. Each of the following shall constitute an Event of Default under this Agreement: •
Default cn indebbdness. Failure of Borrower b make anypayment when due on the Loans. -
Other Defaults Fefiure of Borrower or any Grantor to comply wtih or to perform when due any other term, obligation, covenant or condition
contained in this Agnement or in any of the Related Documents, or faUtrre of Borrower b comply with or b Perform any other term, obligation,
covenant or condition contained in any other agreerc-erd between Lender and Borrower.
Faise~ Statements. Any warranty; representaUor- or statement made °r furnished b Lender by or on behalf of Borrower or anY Grantor undue th~-
Agreement crthe Related Documents is false or misleading [n any material respect at the tlme made or furnished, or becomes false or misleading
at any time thereafter. ~ .
Defective f~llaterdlzaUori;• This Agreement or any of the Related Documents ceases b be in full force and effect (irrduding.feNun3 of any
Security Agreement to create a valid and perfected Securtiy Interest) at any time and for any reason.
Insolvency. The dissolution or termination of Borrower's existence as a going business, the insolvency of Borcower, the appointment'of a receiver
for any part of Borrower's Property., any assignment. for the benefit of creditors, any iypa. of creditor workout, or the commencement. of any
prooeBding under any bankruptcy or msolvenoy laws by or against Borrower. •
Creditor or Forfeituro Proceedings. Commencement of foredosure or forfeiture proceedings, whether by Judicial proceeding. self-help,
repossession or any other method. by any creditor of Borcower, any creditor of any Grantor against any collateral securtng the Indebtedness, or by
arty governmental agency; This includes a garnishment, attachrtrent, or levy on or of any of Borrower's depostl accounts with Lender.
Events Affecting. OUerarrtor. Arry of the precedir~ events ocxurs with respect to arty Guarantor of any of the indebtedness or any Guarantor dies
or becomes Incompetent, or revokes or disputes the validity of, or Ifab(lity under, arty Guaranty of the Indebtedness.
Change In Ownership. Any change in ownership Of twenty-flare percent (2696) or more ai the common stack of Borrower.
Adverse Change. A material adverse change oxurs in Borrower's financial condition, •or Lender believes the prospect of payment or
performance of the Indebtedness is impaired.
lnsncurlty. Lender, in good faith, deems itself insecure.
EFFECT OF AN EVENT OF DEFALLT. If any Event of Default shag occur, except where otherwise provided in this Agreement or the Relates
Documents, atl commtlments and obligations of Lender under this Agreement or the. Related Documents ~ any other agreement immediately vri!
terminate (Mdudirrg any obtlgatlon to make loan Advarrcx~s oc disbursements), and, at Lender's option, all indebtedness immediately will become dur
and payable, all wtthout notice of any kind b Borrower, except that in the case of an Event of Defauti of the type described in the "Insdvency
subsectlon above, such acceleretion shell be automatic end not optional. In addition; Lender stroll have afi the rights and remedies provided In the
be cumuaUve and mayy be blexerdsed singularly orco uirren ~ Eactlonaby L rider purysue al~remedy shall nof~exdude pursuk of aniy~othe~
remedy, and an election tq make expenditures or to take action to perform an obligatlon of Borrower or of any Grantor sfrafi riot affect Lenders right tc
declare a default and to exerdse its rights and remedies. , .
MISCELLANE01lS PROVISIONS. The following miscellaneous provisions are apart Of this Agreement:
Amendments. This Agreement, together with airy Related Documents, constitutes the entire understanding and agreement cf the parties as to 1hr:
matters set forth in this Agreement Plc alteration of ar amendment to this Agreement shall be effedNe unless given in writing and signed by the .
party or parties sought to be charged or bound by the aUereUon or amendment.
Applicable l.aw. This Agreement has been delivered to Lender and accepted by Lender to the Commonwealth of Pennsytvanla.If there Is
a lawsuit, Borrower. agrees upon Lender's request to aubmB to the jurlsdictbn o! the courts of Dadphin County, the Commonwealth o
Penrrsylvanla. Lender and Borrower hereby waive the right to arty jury trial In arty action, proceeding, or couMardalm brought by elth'e
Lender dr Borrower against the other. This Agreement shall be governed by and construed in accordance with the laws of th'-
Commonwealth of pennsyivenla.
Caption Headings. Caption headings in this Agreement are for cornrenience purposes only and are not to be used to Interpret or define th
provisions of this Agreement
Multiple Parties; CoEporate Authority. All obligations of Borrower under this Agreement shell be joint and several, and ell references b Borcowe
shall mean each and every Borcnwer. This means that-each of the persons signing below is responsB~le for ail obligations in this Agreement
Consent to Loan PaRicipation. Borrower agrees and consents to Lender's sale or transfer, whether now or later, of~ae ortnore.parUdPatio
interests in the Loans to one or more purchasers, whether related or unrelated to Lender. Lender may provide, without any limitation whatsoeve
to arty one or .more purchasers, or potential purchasers, any Information or knowledge Lender may have about Borrower or about any other matte
• relating to the loan, and Borrower hereby waives any rights to privacy i! may have with respect to such matters. Borrower additionatly waives ar:
and elE notices of sale of participation interests, as well as ail notices of any repurohase of such partcpation interests. Borrower also agrees thr
the purchasers of any such participation interests wUl be considered as the absdute owners of such interests in the Loans and wUl have all th
rights granted under the pertidpafion agreement or agreements governing the sate of such partiCipaUon interests. Borrower further waives
rights of offset or counterclaim that It may have now or later against Lender or against any purchaser of such a participation interest an
unconditionally agrees that either Lender or such purohaser may enforce eorcowers obUgation under the Loans irrespective of the failure r.
insolvency of arty holder of any interest in the Loans. Borrower further agrees that the purchaser of any such participation interests may enforce i
interests irrespective of any personal claims or defenses that Borrower may have against Lender.
Costs and Expenses.. Borcower agrees to pay upon demand aA of Lenders expenses, including without limllation attorneys' fees. incurred
connection with the preparation, execution, enforcement, modification and collection of this Agreement or-.in .connection with the Loans mac
pursuant to this Agreement. Lender may pay someone else to help cdlect the Loans and to enforce this P,greement, end Borrower wilt pay th.
amount. This Mcludes, subject to any limits under applicable law, Lenders attorneys' fees and Lenders legal expenses, whether or not there is
71-06-1998 BUSINESS LOAN AGREEMENT Page s
Loan No 8877000654. (Cofltinue~
lawsuit, including attorneys' fees for bankruptcy proud. togs (hrcludirtg efforts to tnodtfy or vacate any atrtornatk stay or tnJurxtion), appeals, and
any anticipated posyudgment collection servir~. Borrower also win Pay any court costs, in addttlon b an other sums provided by taw.
Notices. An notlc~s required to be gNen under this Agreement shag be given fn writing, may be sent by telefacsimne (unless otherwise required
bylaw), and siren be efleCtlve when actually delivered or when deposited with a nanonany recognized overnight courier or deposited fn the United
States man, first class, postage prepaid, eddreseed to the party to whom the notloe k to be given at the adtir~s shown above. Any party may
change lie address for noltces under this Agreement by giving tprmal written notice b the other partite, spedfying that the purpose of the nonce fs
to change the party's address. To the extent permffted by appticabie law, ff there ta• more than one Borrower, notice b arty Borrower win constitute
notice b alt Borrowers. Fa nom purposes, Borrower wtil keep Lender Informed at an .times of Borrowers current address(es).
SeverabltHy. If a court of competent Jurisdiction ands any provision of this Agreement to be Invalid or unenforceable as to any person or
dreumstance, such finding Shan not render that provision irwatid or unenforceable as to any other persons or dreumstarrces. ff feasible, any such
offending provision shah be deemed b be •modffled to tie within the Artdts of enforceability or valldtiy; however, ff 1he offending provision cannot be
so modified, it shah be strkdcen and ail other provisions of this Agreement in en other respects shah remain vend and erdorceable.
Subsid~ries and Atflllates of Borrower. To the extent the context of any provisions of this Agreement makes it appropriate, including without
timitaiion arty representation, warranty or covenant, the word "Borrower' as used herein shah include an subsidlariea end attitiates of Borrower.
Notwlthsianding the foregoing trowever, under no circumstances shall this Agreement be construed to require Lender b• make any Loan or other
tlnandal accommodation to any subsidiary or afnilate of Borrower.
Successors arrd Asatgrre. All covenants and agreements contained by or on behalf of Borrower shah bind its successors and assigns and shah
Inure b the benefit of•Lender, Its successors end assigns. Borrower Shan not, however, have the dgM to assign Its rights under this Agreement or
any interest therein, without the prior wrRten consent of Lender.
Survival. Ati warrarrties, represerdations, and covenards made by Borrower in this Agreement or in arty certificate or other instrument delivered by
Borrower to Lender under this Agreement shall be considered'to have been retied upon by Lender and win'survive the rrrekirtg of the Loan. and
denvery to Ler>dar of the Related Documents, regardless of any investigation made by Lender or on Lenders behaff.
Time is of the Essence. Time ~ of the essence in the performance Of this Agreement.
Waiver. Lender Shan not be deemed to have waived any rights under this Agreement unless sudt waiver is given In witting and signed by
Lender. No delay or omission on the part of.Lender In- exercising any right shah operate as a waiver of such right or any other rigid. A waiver by
Lender of a provision of this Agreement shah not prejudice or constitute a waiver of Lenders right otherwise b demand sMd compnanoe with that
provision or arty other provision of this Agreement. No prior waiver by tender, nor arty course of cleating between Lender and Borrower, or
between Lender and arty Grantor, shall cortsttiute a waterer of arty of Lenders rights or of any obligations of Borrower or of any Grardor as b any
future transectiorrs. Whenever the consent of Lender is required under this Agreement, the gnuding of such consent by Lender in any instance
shah not constitute Continuing consent in subsequent instances where such consent (s required, and br an cases such consent maybe grerded or
withheld in the sole discretion of Lender.
BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN AGREEMENT, AND BORROWER AGREES TO
ITS TERMS. THIS AGREEMENT IS DATED AS OF NOVEMBER 8,1998.
THIS AGREEIIAENT HAS BEEN SIGNED AND SEALED BY THE UNDERSIGNED.
BORROWER:
c. loco
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LASER PRO, Rsg. U.S. Pat. 6 T.M. OH., Ver. 3.Y5 (x)199! CFI ProS~rvloes, Irtx. Atlrlghts reserved. (PA-C40 MARKET.LN C7.OVt.i .
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IN THE COURT OF COMMON PLEAS
OF CUMBERLAND COUNTY, PENNSYLVANIA
SOVEREIGN BANK, successor in interest by merger )
to Waypoint Bank, formerly known as Harris Savings )
Bank )
Plaintiff )
vs. )
MARKET STREET MUSIC, INC. )
Defendant )
Case No. O'7 -. g(o:L.
Confession of Judgment
CERTIFICATION OF PARTIES' ADDRESSES
I hereby certify that, according to Plaintiff s records, Defendant's last known
address is as follows:
Market Street Music, Inc.
13 E. Main Street
Mechanicsburg, PA 17055
2. I hereby certify that Plaintiff s address is as follows:
Sovereign Bank
Attention: John Giangrossi
619 Alexander Road, Second Floor
Princeton, NJ 08540
SOVEREIGN BANK, successor in interest by merger to
Waypoint B ,form rly known as Harris Savings Bank.
By:
J ian ssi, ssistant Vice President
Sworn and subscribed to
be ore me this `~3r`tday of
p,~ , 2007
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N A~tY PUBLIC
KATHLEEN COLLINS
~i4TARY PUBLIC OF N JERSEY
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IN THE COURT OF COMMON PLEAS
OF CUMBERLAND COUNTY, PENNSYLVANIA
SOVEREIGN BANK, successor in interest by merger
to Waypoint Bank, formerly known as Harris Savings
Bank
Plaintiff
vs.
MARKET STREET MUSIC, INC.
Defendant
Case No. ~'~' - ~(~ ~,
Confession of Judgment
AFFIDAVIT OF NON-MILITARY SERVICE
I hereby certify that, to the best of my knowledge, information and belief, Defendant is
not in the military service.
SOVEREIGN BANK, successor in interest by merger to
Waypoint Bank, formerly known as Harris Savings Bank.
B
Sworn and subscribed to
before a this
day of , 2007
N TARY PUBLIC
KATHLEEN COLUNS
NATARY PUBLK: OF NEWJERSEY
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IN THE COURT OF COMMON PLEAS
OF CUMBERLAND COUNTY, PENNSYLVANIA
SOVEREIGN BANK, successor in interest by merger
to Waypoint Bank, formerly known as Harris Savings
Bank
Plaintiff
vs.
MARKET STREET MUSIC, INC.
Defendant
Case No. o'j - Q`.~,
Confession of Judgment
AFFIDAVIT OF NON-CONSUMER PURPOSE
I hereby certify that, to the best of my knowledge, information and belief, the loan
evidenced by the Promissory Note and the Business Loan Agreement attached to Plaintiff s
Complaint was not made for consumer purposes.
SOVEREIGN BANK, successor in interest by merger to
Waypoint Bank, formerly known as Harris Savings Bank.
By:
J ian si, ssistant Vice President
Sworn and subscribed to
b ore me this r~ ~~day of
~~n , 200
~~~
N TARY PUBLIC
KATHLEEN COLLINS
NOTARY PUBLIC OF NEW JERSEY
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IN THE COURT OF COMMON PLEAS
OF CUMBERLAND COUNTY, PENNSYLVANIA
SOVEREIGN BANK, successor in interest by merger )
to Waypoint Bank, formerly known as Harris Savings )
Bank )
Plaintiff )
vs. )
MARKET STREET MUSIC, INC. )
Defendant )
Case No.Q~ -~~
Confession of Judgment
NOTICE TO DEFENDANT PURSUANT TO 42 Pa.C.S. & 2737.1
To: Market Street Music, Inc.
13 E. Main Street
Mechanicsburg, PA 17055
NOTICE IS HEREBY GIVEN THAT JUDGMENT IN THE ABOVE-CAPTIONED
MATTER HAS BEEN ENTERED AGAINST YOU. THE FOLLOWING IS THE
PROCEDURE YOU MUST FOLLOW IN ORDER TO STRIKE THE JUDGMENT AND/OR
SEEK TO HAVE THE JUDGMENT OPENED. PLEASE BE FURTHER ADVISED THAT
YOU ARE ENTITLED TO COSTS AND REASONABLE ATTORNEY' S FEES AS
DETERMINED BY THE COURT IF YOU HAVE BEEN INCORRECTLY IDENTIFIED.
~~u~
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You are entitled to file a petition to "strike" or "open" the judgment. In order to do so,
you must promptly file a petition with the Court of Common Pleas of Montgomery County,
Pennsylvania, as required by Rule 2959 of the Pennsylvania Rules of Civil Procedure. You file a
petition by leaving it with the clerk of courts or Prothonotary at the courthouse in Norristown,
Montgomery County, PA.
A petition is a formal statement of your reasons for challenging the judgment. You must
include the names of the parties at the top of the first page and the case number, which is shown
above. The petition must state your reasons for challenging the judgment in separate numbered
paragraphs. You have to sign the petition and include a sworn statement at the end of the
document verifying that the facts you state in the petition are true and accurate. You will waive
any defenses and objections not included in your petition to strike or open. You must therefore
make every effort to raise all possible issues and defenses in your petition to strike or open in
order to avoid waiving any claims.
355473-1
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If you elect to file a petition, it must meet the requirements of Rule 2959 of the Rules of
Civil Procedure. A full copy of Rule 2959 is attached to this Notice. You may also have to
comply with local rules of procedure in effect in the county where the judgment was entered.
If you do not file a petition challenging the judgment, the Plaintiff may take steps to
collect on the judgment by asking the Sheriff to seize your assets. Accordingly, you should
immediately seek the advice of attorney. If you wish to discuss the matter with an attorney but
do not know how to find one, you may request a referral by contacting the following agency:
CUMBERLAND COUNTY BAR ASSOCIATION
LAWYER REFERRAL SERVICE
32 S. BEDFORD ST.
CARLISLE, PA 17013
717-249-3166
Corporations maybe unable to represent themselves in court. If the defendants include a
corporation, the corporation must appear through an attorney if it intends to challenge the
judgment.
You may receive other papers and notices regarding the judgment. Those other papers do
not negate or override this Notice. Likewise, this Notice is not intended to and does not negate
any of the notices or information obtained in other papers that may be served upon you.
We reiterate that you are required to act promptly if you wish to seek relief from the
judgment. Under certain circumstances, you have only 30 days in which to file a petition after
papers are served on you. Even if the 30 day rule does not apply, you must act promptly in order
to protect your interests. Failing to act in a timely manner will render you unable to challenge
the judgment at a later time.
If you were incorrectly identified and the judgment was entered against you in error,
you may be entitled to collect costs and reasonable attorney's fees as determined by the Court.
LAMM RUBENSTONE LESAVOY
BLITZ & DAVID LLC
Zachary J. e , Es ' e
Attorney o.9
7535 Windsor Drive, Suite 200
Allentown, PA 18195
(610) 706-4300
Attorneys for SOVEREIGN BANK, successor in
interest by merger to Waypoint Bank, formerly
known as Harris Savings Bank.
355473-I
IN THE COURT OF COMMON PLEAS
OF CUMBERLAND COUNTY, PENNSYLVANIA
SOVEREIGN BANK, successor in interest by merger )
to Waypoint Bank, formerly known as Harris Savings )
Bank )
Plaintiff )
vs. )
MARKET STREET MUSIC, INC. )
Defendant )
Case No. 0~ '-' ~~
Confession of Judgment
NOTICE OF FILING JUDGMENT
(X) Notice is given that a judgment by confession in the above capt' ed matter has been
entered against you in the amount of $ ~~ 3~ 2 Q~ on ,
20[~.
(X) Copies of all documents filed with the Prothonotary/Clerk of Courts in support of the
within judgment is/are enclosed.
P OTH OTARY LERK OF COURTS
Per:
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If you have any questions concerning this judgment, please contact the following person:
Zachary J. Cohen, Esquire
One Windsor Plaza
7535 Windsor Drive, Suite 200
Allentown, PA 18195
(610) 706-4300
(THIS NOTICE IS GIVEN IN ACCORDANCE WITH PA.R.C.P. 236)
355473-1
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IN THE COURT OF COMMON PLEAS
OF CUMBERLAND COUNTY, PENNSYLVANIA
SOVEREIGN BANK, successor in interest by merger
to Waypoint Bank, formerly known as Harris Savings
Bank
Plaintiff
vs.
MARKET STREET MUSIC, INC.
Defendant
AFFIDAVIT OF SERVICE
COMMONWEALTH OF PENNSYLVANIA )
SS
COUNTY OF CUMBERLAND )
Case No. 07-962
Confession of Judgment
Dennis Huber, being duly sworn according to law, deposes and says that he is an
adult over the age of eighteen (18) years; that he served the items listed below on Market Street
Music, Inc. by handing them to James E. Johansen, Jr., Officer of said corporation and adult in
charge of the business for the time being, at 5223 Simpson Ferry Road, Mechanicsburg,
Pennsylvania 17055 on March 24, 2007, at 2:05 p.m.
(a) Warrant of Attorney;
(b) Complaint in Confession of Judgment; and
(c) Notice Under Rule 2958.1.
Deponent further avers that at the time of said service the said Defendant identified
herself to deponent.
b-~
Dennis Huber
SWORN TO AND~jJJ~,~CRIBED
BEF RE E THI ( Y OF
2007
Notary Pu is
COMMONWEALTH OF PENNSYLVANIA
Notarial Seal
Jane M. Beck, Notary Public
North 4Vhi6ahell Twp., Lehigh County
My Commission Expires Aug. 26.2008
Member, Pennsylvania Association of Notaries
360244-1
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