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KEYSTONE FINANCIAL BANK, N.A., : IN THE COURT OF COMMON PLEAS
successor by merger to PENNSYLVANIA : CUMBERLAND COUNTY, PENNSYLVANIA
NATIONAL BANK & TRUST COMPANY :
and FINANCIAL TRUST COMPANY,
Plaintiff
V. /
NO. ,
STEVEN M. DARDICK and
NECIA N. DARDICK,
Defendants : CIVIL ACTION -LAW
GONFFS j0N OF JUDGMENT
Pursuant to the authority contained in the Promissory Notes, Commercial Guaranty
agreements and Disclosure For Confession of Judgment documents, true and correct copies of
which are attached to the Complaint filed in this action, we appear for the Defendants and
confess judgment in favor of Plaintiff and against the Defendants as follows:
Principal amount due ........................ $770,314.58
Interest through September 27, 1999 ............ $ 16,591.00
Late charges through September 27, 1999 ........ $ 10,775.08
Plus accruing daily interest under the Promissory Notes, additional late charges, attorneys' fees
and costs of suit.
2. AS TO NECIA N. DARDICK:
Principal amount due .......................... $188,000.00
Interest through September 27, 1999 ............. $ 16,591.00
Late charges through September 27, 1999 ......... $ 10,775.08
Plus accruing daily interest under the Promissory Note, additional late charges, attorneys' fees
and costs of suit.
Respectfully submitted,
McNEES, WALLACE & NURICK
By l '
Michael A. Do trow
Attorney I.D. No. 36805
Chad F. Phipps
Attorney I.D. No. 78055
P. O. Box 1166
100 Pine Street
Harrisburg, Pennsylvania 17108-1166
(717) 232-8000
Attorneys for Keystone Financial Bank, N.A.,
successor by merger to Pennsylvania National Bank
& Trust Company and Financial Trust Company
Date: October 4, 1999
KEYSTONE FINANCIAL BANK, N.A., : IN THE COURT OF COMMON PLEAS
successor by merger to PENNSYLVANIA : CUMBERLAND COUNTY, PENNSYLVANIA
NATIONAL BANK & TRUST COMPANY
and FINANCIAL TRUST COMPANY,
Plaintiff
V.
NO.
STEVEN M. DARDICK and
NECIA N. DARDICK,
Defendants CIVIL ACTION - LAW
AND NOW, comes Plaintiff, Keystone Financial Bank, N.A., successor by merger to
Pennsylvania National Bank & Trust Company and Financial Trust Company, by and through its
counsel, the law firm of McNees, Wallace & Nurick, and files this Complaint pursuant to Pa. R.
Civ. P. 2951(b) forjudgment by confession and avers as follows:
Plaintiff Keystone Financial Bank, N.A., successor by merger to Pennsylvania
National Bank & Trust Company and Financial Trust Company ("Plaintiff') is a national banking
institution with offices located at 1415 Ritncr I lighway, P.O. Box 220, Carlisle, Cumberland
County, Pennsylvania 17013-0220.
2. Defendant Steven M. Dardick ("Mr. Dardick") is a married adult individual with a
last known address of 3805 Bellows Drive, Camp I till, Cumberland County, Pennsylvania
17011.
3. Defendant Necia N. Dardick ("Mrs. Dardick") is a married adult individual with a
last known address of 3805 Bellows Drive, Camp Hill, Cumberland County, Pennsylvania
17011.
4. Darcom Technologies, Inc. (the "Company") is a Pennsylvania corporation with
its registered office in Pennsylvania listed as 5521 Carlisle Pike, Suite 201, Mechanicsburg,
Cumberland County, Pennsylvania 17055, and its principal place of business is located at 77
Northeastern Boulevard, Nashua, New Hampshire 03062.
5. Mr. Dardick is the Chief Executive Officer of the Company.
6. On November 13, 1997, the Company entered into a Business Manager
relationship with Plaintiff, pursuant to which the Company executed The Business Manager
Agreement and a Business Loan Agreement, whereby Plaintiff extended to the Company a
Business Manager line of credit in the maximum amount of $600,000 (the "1997 Business
Manager Line"). A true and correct copy of the Business Manager Agreement and the Business
Loan Agreement executed in association with the 1997 Business Manager Line is attached hereto
as Exhibit "A".
7. On November 13, 1997, Mr. Dardick executed a Commercial Guaranty (the "1997
Guaranty") in favor of Plaintiff, whereby Mr. Dardick personally guaranteed the repayment of
any and all indebtedness of the Company to Plaintiff under the 1997 Business Manager Line. A
true and correct copy of the 1997 Guaranty, together with a signed Disclosure For Confession of
Judgment, is attached hereto as Exhibit "B".
-2-
8. On November 20, 1998, Mr. Dardick and Mrs. Dardick executed a Mortgage in
favor of Plaintiff regarding the residence located at 3805 Bellows Drive, Camp Hill, Cumberland
County, Pennsylvania, in order to secure repayment of the 1997 Business Manager Line and any
other amounts owing by the Company to Plaintiff at any time (the "First Mortgage"). A true and
correct copy of the First Mortgage is attached hereto as Exhibit "C".
9. On September 29, 1998, the Company executed a Promissory Note in favor of
Plaintiff in the principal amount of $188,000 to evidence a loan extended to the Company by
Plaintiff (the "1998 Note"). The 1998 Note was amended in part by the Change in Terns
Agreement dated May 27, 1999. A true and correct copy of the 1998 Note and the Change in
Terms Agreement is attached hereto as Exhibit "D".
10. On September 29, 1998, Mr. Dardick and Mrs. Dardick each executed a
Commercial Guaranty (the "1998 Guaranty") in favor of Plaintiff, whereby Mr. Dardick and Mrs.
Dardick jointly and severally personally guaranteed the repayment of the 1998 Note by the
Company to Plaintiff. A true and correct copy of the 1998 Guaranty, together with a signed
Disclosure for Confession of Judgment, is attached hereto as Exhibit "E".
11. On November 20, 1998, Mr. Dardick and Mrs. Dardick executed a Mortgage in
favor of Plaintiff regarding the residence located at 3805 Bellows Drive, Camp Hill, Cumberland
County, Pennsylvania, in order to secure repayment of the 1998 Note and any other amounts
owing by the Company to Plaintiff at any time (the "Second Mortgage"). A true and correct copy
of the Second Mortgage is attached hereto as Exhibit "F".
12. The Company has defaulted under its payment obligations to Plaintiff under the
1997 Business Manager Line and the 1998 Note.
-3-
13. On September 3, 1999, Plaintiff notified the Company and Mr. and Mrs. Dardick
by letter (the "Demand Letter") that all monies owed under the 1997 Business Manager Line, the
1998 Note, the 1997 Guaranty and the 1998 Guaranty must be paid to Plaintiff on or before
September 13, 1999. A true and correct copy of the Demand Letter is attached hereto as Exhibit
"G"
14. Subsequent to delivery of the Demand Letter, the Company has continued to fail
to make payment to Plaintiff and to otherwise comply with the terms of the 1997 Business
Manger Line and the 1998 Note, and the Company remains in default under the 1997 Business
Manager Line and 1998 Note.
15. Plaintiff reasserts and incorporates herein the allegations of Paragraphs 1 - 14.
16. Pursuant to the 1997 Guaranty, Mr. Dardick became personally liable for
repayment of the 1997 Business Manager Line by the Company to Plaintiff.
17. Mr. Dardick is in default tinder the 1997 Guaranty, having failed to make payment
to Plaintiff pursuant to the 1997 Guaranty and the Demand Letter.
18. The total sum due and owing to Plaintiff, as of September 28, 1999, under the
1997 Business Manager Line and the 1997 Guaranty is $582,314.58.
19. Judgment has not been entered in any jurisdiction on the attached instruments.
20. The attached instruments have not been assigned.
-4-
21. The Judgment is not being entered by confession against a natural person in
connection with a consumer credit transaction.
22. Mr. Dardick is not subject to the protection of the provisions of the Soldiers and
Sailors Civil Relief Act of 1940, as amended.
23. The Confession of Judgment Clause set forth in the 1997 Guaranty provides for
recovery of the entire unpaid balance of principal, accrued interest, finance charges, attorneys'
fees, costs and expenses of suit and collection fees.
24. Mr. Dardick's failure to make payment to Plaintiff pursuant to the terms of the
1997 Guaranty provides Plaintiff with the authority to file this Complaint.
WHEREFORE, as to Count 1, Plaintiff Keystone Financial Bank, N.A., successor by
merger to Pennsylvania National Bank & Trust Company and Financial Trust Company,
respectfully requests that this Honorable Court enter judgment by confession against Mr. Dardick
for monetary damages, as authorized by the attached 1997 Guaranty, in the amount of
$582,314.58, plus any interest provided for in the 1997 Business Manager Line loan documents,
both before and after entry of judgment, any permissible late charges, attorneys' fees, and all
costs of suit.
25. Plaintiff reasserts and incorporates herein the allegations of Paragraphs I - 24.
26. Pursuant to the 1998 Guaranty, Mr. Dardick and Mrs. Dardick became personally
liable for payment of the 1998 Note by the Company to Plaintiff.
-5-
27. Mr. Dardick and Mrs. Dardick arc each in default under the 1998 Guaranty,
having failed to make payment to Plaintiff pursuant to the 1998 Guaranty and the Demand Letter.
28. The total sum due and owing to Plaintiff, including accrued interest and late
charges, as of September 28, 1999, under the 1998 Note and the 1998 Guaranty is $215,366.08.
29. Judgment has not been entered in any jurisdiction on the attached instruments.
30. The attached instruments have not been assigned.
31. The Judgment is not being entered by confcssion against a natural person in
connection with a consumer credit transaction.
32. Mr. Dardick and Mrs. Dardick arc not subject to the protection of the provisions
of the Soldiers and Sailors Relief Act of 1940, as amended.
33. The Confession of Judgment clause set forth in the 1998 Guaranty provides for
recovery of the entire unpaid balance of principal, accrued interest, finance charges, attorneys'
fees, costs and expenses of suit and collection fees.
34. Mr. Dardick's and Mrs. Dardick's failure to make payment to Plaintiff pursuant to
the terms of the 1998 Guaranty provides Plaintiff with the authority to file this Complaint.
WHEREFORE, as to Count 11, Plaintiff Keystone Financial Bank, N.A., successor by
merger to Pennsylvania National Bank & Trust Company and Financial Trust Company,
respectfully requests that this Honorable Court enter judgment by confcssion against Mr. Dardick
and Mrs. Dardick for monetary damages, as authorized by the attached 1998 Guaranty, in the
amount of $215,366.08, plus accruing interest from September 28, 1999 of $48.31 per diem, as
-6-
provided in the 1998 Note, both before and after entry of judgment, additional late charges,
attorneys' fees, and all costs of suit.
Respectfully submitted,
McNEES, WALLACE & NURICK
6?-
By 0 k7
Michael A. DoUrow
Attorney I.D. No. 36805
Chad F. Phipps
Attorney I.D. No. 78055
P. O. Box 1166
100 Pine Street
Harrisburg, Pennsylvania 17108-1166
(717) 232-8000
Attorneys for Keystone Financial Bank, N.A.,
successor by merger to Pennsylvania National Bank
& Trust Company and Financial Trust Company
Date: October 4, 1999
.7-
KEYSTONE FINANCIAL BANK, N.A., : IN THE COURT OF COMMON PLEAS
successor by merger to PENNSYLVANIA : CUMBERLAND COUNTY, PENNSYLVANIA
NATIONAL BANK & TRUST COMPANY :
and FINANCIAL TRUST COMPANY,
Plaintiff
V.
NO.
STEVEN M. DARDICK and
NECIA N. DARDICK,
Defendants CIVIL ACTION -LAW
We hereby certify that the last known address of the Defendants is: Steven M. Dardick
and Necia N. Dardick, 3805 Bellows Drive, Camp Hill, Pennsylvania 17011.
Respectfully submitted,
McNEES, WALLACE & NURICK
By
Michael A. 13bctrow
Attorney I.D. No. 36805
Chad F. Phipps
Attorney I.D. No. 78055
P. O. Box 1166
100 Pine Street
Harrisburg, Pennsylvania 17108-1166
(717) 232-8000
Attorneys for Keystone Financial Bank, N.A.,
successor by merger to Pennsylvania National Bank
& Trust Company and Financial Trust Company
Date: October 4, 1999
KEYSTONE FINANCIAL BANK, N.A.
successor by merger to PENNSYLVANIA
NATIONAL BANK & TRUST COMPANY
and FINANCIAL TRUST COMPANY,
Plaintiff
IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY, PENNSYLVANIA
V.
NO.
STEVEN M. DARDICK and
NECIA N. DARDICK,
Defendants CIVIL ACTION -LAW
TO: Steven M. Dardick
3805 Bellows Drive
Camp Hill, Pennsylvania 17011
YOU ARE HEREBY NOTIFIED that on , 1999, a judgment by
confession of judgment was entered against you in the above matter in the amount of
$797,680.66, together with accruing daily interest, additional late charges, attorneys' fees and
costs.
Date:
Prothonotary
YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO
NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE
OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP.
Cumberland County Lawyer Referral Service
Court Administrator
Cumberland County Courthouse
Carlisle, Pennsylvania 17013
(717) 240.6200
We hereby certify that the following is the address of the Defendant stated in the
certificate of residence:
Steven M. Dardick
3805 Bellows Drive
Camp Hill, Pennsylvania 17011
Respectfully submitted,
McNEES, WALLACE & NURICK
By { .
Michael A. Do Crow
Attorney I.D. No. 36805
Chad F. Phipps
Attorney I.D. No. 78055
P. 0. Box 1166
100 Pine Street
Harrisburg, Pennsylvania 17108-1166
(717) 232.8000
Attorneys for Keystone Financial Bank, N.A.,
successor by merger to Pennsylvania National Bank
& Trust Company and Financial Trust Company
Date: October 4, 1999
KEYSTONE FINANCIAL. BANK, N.A. : IN THE COURT OF COMMON PLEAS
successor by merger to PENNSYLVANIA : CUMBERLAND COUNTY, PENNSYLVANIA
NATIONAL BANK & TRUST COMPANY :
and FINANCIAL TRUST COMPANY,
Plaintiff
V.
NO.
STEVEN M. DARDICK and
NECIA N. DARDICK,
Defendants : CIVIL ACTION -LAW
TO: Necia N. Dardick
3805 Bellows Drive
Camp Hill, Pennsylvania 17011
YOU ARE HEREBY NOTIFIED that on , 1999, a judgment by
confession of judgment was entered against you in the above matter in the amount of
5215,366.08, together with accruing daily interest, additional late charges, attorneys' fees and
costs.
Date:
Prothonotary
YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO
NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE
OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP.
Cumberland County Lawyer Referral Service
Court Administrator
Cumberland County Courthouse
Carlisle, Pennsylvania 17013
(717) 240-6100
We hereby certify that the following is the address of the Defendant stated in the
certificate of residence:
Necla N. Dardick
3805 Bellows Drive
Camp Hill, Pennsylvania 17011
Respectfully submitted,
McNEES, WALLACE & NURICK
By f'
Michael A. Doc row
Attorney I.D. No. 36805
Chad F. Phipps
Attorney I.D. No. 78055
P. 0. Box 1166
100 Pine Street
Harrisburg, Pennsylvania 17108-1166
(717) 232-8000
Attorneys for Keystone Financial Bank, N.A.,
successor by merger to Pennsylvania National Bank
& Trust Company and Financial Trust Company
Date: October 4, 1999
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FROM I MC NEES "LLPCE MJR MW
717 237 5300
1799.09-20 14t47 11464 P.02/04
Subject to the penalties of 18 Pa.C.S.A. § 4904, relating to unworn falsification to
authorities, I hereby certify that I am JACK V. HUTCHISON, Assistant Vice President - Special
Assets, at Keystone Financial Bank, N.A., successor by merger to Pennsylvania National Dank &
Trust Company and Financial Trust Company, and that I am authorized to verify the foregoing
Complaint For Confession of Judgment, and that the facts set forth in the foregoing are true and
correct to the best of my information and belief.
ck V lutchison
Assistant Vice President - Special Assets
Dated: September ZL, 1999
5coa?
THE BUSINESSIMANAGERO AGREEMENT
WITH BUSINESSES AND PROFESSIONALS
TO: Pennsylvania National Bank & FROM: Darcom Technologies Sr+c
Trust Co. 77 Northeastern Blvd.
One Keystone Plaza Nashua, NH 03082
Front & Market Streets
Harrisburg, PA 17101
(the "Bank") (the "Business")
The Business named above agrees to the following terms according to which, when accepted by
the Bank, the Business will receive payment for receivables arising from sales or services to
Customers and purchased by the Bank pursuant to the Bank's SusinesslManager plan.
SECTION 1: DEFINITIONS
1.1 "Credit Aoolication and Agreement" means a Credit Application and Agreement
executed by a Customer and any other agreement or documentation that governs the terms and
disclosures relating to a Receivable.
1.2 "Credit Memo" means a form reflecting a credit, other than a credit arising from a
payment, to a Customers account with the Business.
1.3 "Customer" means a debtor obligated on one or more Receivables which arose
from goods the Business sold or services it rendered to the Customer.
1.4 "Face Amount" of a Receivable means on any date the outstanding balance of
such Receivable (after taking Into account, without duplication, all payments, returns, credits, or
allowances of any nature at any time Issued, owing, granted or outstanding), plus any taxes
imposed in connection with such Receivable.
1.5 "Invoice" means an invoice or similar evidence of the terms of a sale of goods or
provislon of services previously made by the Business to a Customer.
1.8 "Net Amount" of a Receivable means the Face Amount of a Receivable less the
Service Charge.
1.7 "Obligations" means all of the Business's obligations to the Bank, whether pursuant
to this Agreement, under any note, contract, guaranty, accommodation or otherwise, however
and whenever created, arising or evidenced, whether direct or Indirect, absolute or contingent,
now or hereafter existing or due.
1.8 "Receivables" means all accounts, Instruments, contract rights, chattel paper,
documents, and general Intangibles arising from the Business's sale of goods or rendering of
services, and the proceeds thereof, and all security and guaranties therefore, whether now
existing or hereafter created, that are accepted by the Bank for purchase hereunder in the Bank's
sole and absolute discretion.
1.9 "Recourse Obligation" means the liability of the Business to the Bank under this
Agreement In an amount equal on any date to the Face Amount of Receivables on that date,
plus allomeys' fees (If Incurred) and accrued and unpaid finance charges related to such
Receivables. Upon a Default or termination under this Agreement, the Recourse Obligation shell
also Include the amount of all indemnities and other obligations arising under this Agreement.
1.10 "Reserve" means funds of the Business used to provide for the securing of the
Business's Recourse Obligation. "Reserve Account" means the deposit account of the Business
containing the Reserve established pursuant to Section 2.5 of this Agreement.
1.11 "Service Charge" means a discount equal to 3.9% of the Face Amount of each
Receivable the Business tenders to the Bank that is acquired by the Bank. The Service Charge
may be periodically reviewed and adjusted at the Bank's discretion, based on activity levels,
credit quality, and current economic conditions. The Business acknowledges that the Service
Charge is a discount for value and in no event constitutes interest or a similar charge and that
the transaction contemplated under this Agreement is not a transaction for the use, forbearance
or detention of money. The Service Charge is in the view of the parties a reasonable and
customary discount.
CTION 2: SALE: PURCHASE PRICE: BILLING AND COLLE=CTION: RESERV
2.1 Assignment and Sale. The Business hereby assigns and sells to the Bank as
absolute owner, with full recourse as set out below, the Business's entire interest in such of Its
currently outstanding Receivables es are described on attached Exhibit 2. 1, as well as its future
Receivables represented by Invoices it delivers to the Bank; provided, however, that at no time
shall the total Face Amount of Receivables outstanding exceed $000,000.00 unless agreed to in
a written document signed by the Bank. The Business and the Bank agree that the transaction
contemplated by this Agreement is an account purchase transaction and that the accounts are
being purchased by the Bank from the Business at a discount. The amount of the Recourse
Obligation shall be payable by the Business to the Bank on demand by the Bank following a
Default or termination under this Agreement.
2.2 Purchase Price. The purchase price of the Receivables shall be equal to the Net
Amount thereof. The Net Amount less the Reserve associated with the Receivables shall be
credited to the Business's primary account with the Bank on or before the second banking day
after delivery to the Bank of acceptable Invoices
2.3 Documentation. The Business will provide the Bank with Credit Applications and
Agreements. Invoices, and Credit Memos (If applicable) related to all sales and services creating
Receivables of Customers, and such other documents and proof of delivery of goods or
rendering of services as the Bank may require. As to the Receivables described on Exhibit 2.1,
the payment of the purchase price by the Bank as set forth in Section 2.2 hereof shall be
conclusive evidence of assignment and sale thereof, and, if the Bank so requires, any invoices
the Business may thereafter send (if any) will clearly Indicate that the related Receivables have
been assigned, sold, and are payable to the Bank only.
2.4 Billing, The Bank will send a monthly statement to all Customers Itemizing their
account activity during the preceding billing period, unless otherwise agreed by the parties. All
Customers will be instructed to make payments to a post office box controlled by the Bank. All
payments received from or for the account of a Customer will be applied to the obligations of that
Customer. Payment will be deemed made when received by the Bank. All variations,
modifications or extensions of Indebtedness on Receivables sold to the Bank hereunder will be
made only by the Bank. Nothing in this Agreement authorizes the Business to collect
Receivables sold to the Bank hereunder, but In the event the Business receives a payment
related to any Receivable after the Business has sold the Receivable to Bank, such payment
shall be deemed to have been received in trust for the Bank and the Business shall deliver such
payment to the Bank, properly endorsed, no later than the next banking day after receipt. The
Business will pay to the Bank any finance charges Incurred pursuant to the applicable Credit
Application and Agreement by a Customer because of delay on the Business's part in delivering
payments or Credit Memos to the Bank.
2.5 Reserve, The Bank may retain a portion of the sums payable to the Business, the
amount of which the Bank may adjust from time to time In its reasonable discretion, to provide
for satisfaction of the Business's Recourse Obligation. The Initial amount of the Reserve will be
equal to 10.00% of the Face Amount of all Receivables Initially purchased by the Bank.
Thereafter, and subject to the Bank's right to adjust the Reserve as set out above, the amount of
the Reserve will be Increased by 10.00% of the Face Amount of all Receivables purchased by
the Bank subsequent to its initial purchase of the Receivables. The Reserve will be held in a
separate, interest-bearing account for the benefit of the Business for as long as the Business has
any Recourse Obligation to the Bank and/or as long as there remain any Receivables purchased
by the Bank under this Agreement which have not been completely collected. The Business
shall not withdraw any portion of the Reserve without the consent of the Bank, and the Reserve
shall not be subject to turnover in any insolvency or bankruptcy proceeding commenced by or
against the Business as long as the Business has any Recourse Obligation to the Bank and/or as
long as there remain any Receivables purchased by the Bank under this Agreement which have
not been completely collected.
SECTION 3: REASSIGNMENT OF RECEIVABLES: SECURITY INTERES
3,1 Repurchase, With respect to any Receivables initially purchased by the Bank and
shown on Exhibit 2.1, the Bank may require the Business to repurchase all or any portion of such
Receivables if any minimum payment due on one or more of such Receivables remains unpaid
following 90 days after Its due date. With respect to any Receivables purchased subsequent to
the Bank's initial purchase hereunder, the Bank may require the Business to repurchase all or
any portion of such Receivables If any minimum payment due on one or more of such
Receivables remains unpaid following 90 days after its due date. For purposes of this
Agreement, the aging status of Receivables purchased from the Business as shown on the aging
of Receivables produced or generated by the Bank will be deemed conclusive (absent manifest
error) In determining which Receivables the Bank may require the Business to repurchase.
Regardless of when purchased, the Bank may require the Business to repurchase all or any
portion of Receivables for any particular Customer If such Customer Is bankrupt or Insolvent or If
any dispute arises with a Customer regarding such Receivables (including, without limitation, any
alleged deduction, defense, offset, preference claim or counterclaim thereto). The Bank may
also require the Business to repurchase all outstanding Receivables (a) upon a Default, as
defined In Section 8, or (b) upon the termination of this Agreement. Any decision by the Bank to
require the Business to repurchase less than the maximum amount permitted by this Agreement
shall not be deemed a waiver of the Bank's rights to require repurchase to the maximum extent
permitted by this Agreement. The provisions of this paragraph shall survive the expiration and/or
termination of this Agreement.
3.2 Effect of Repurchase. Immediately upon the sending of written notice by the Bank
that It Is requiring the Business to repurchase Receivables in accordance with paragraph 3.1, (a)
the Business shall be deemed to have repurchased such Receivables, and (b) the Business shall
be liable to the Bank for payment of the Recourse Obligation with respect to the repurchased
Receivables. Without any further notice or demand, the Bank may setoff and/or debit such
amount (and any amount necessary to bring the Reserve to the level required by the Bank in Its
sole and reasonable discretion) against the Business's Reserve Account or any other deposit
account of the Business with the Bank. In the event such accounts contain Insufficient funds for
the Bank's setoff or the Bank elects not to make such setoff, the Business agrees to pay any
such deficiency or shortfall on demand. Upon a repurchase of Receivables, the Bank shall have
no further Interest in the Receivables or undertaking with respect to the billing or collection of the
Receivables so repurchased. The provisions of this paragraph shall survive the expiration and/or
termination of this Agreement.
3.3 Security Interest. The Business hereby grants the Bank a security Interest and a
right of setoff in all of Its present and future accounts, Instruments, contract rights, chattel paper,
documents and general Intangibles on each case as defined in the Uniform Commercial Code as
In effect in the State whose low governs this Agreement) and the proceeds thereof, and all
returned, repossossed, and reclaimed goods, and related books and records, to secure all of the
Business's Obligations, and agrees to execute appropriate UCC•1 financing and other related
statements, The Business further sells and assigns the Bank all of the Business's rights as an
unpaid vendor or Ilenor, all of Its related rights of stoppage in transit, replevin and reclamation
and rights against third parties, and the Business agrees to cooperate with the Bank In exercising
these rights. In addition, the Business grants the Bank a security Interest and a right of setoff In
the Reserve and In the Reserve Account to secure all of the Business's Obligations. The
Business agrees to execute such additional documents and take such further action as Bank
deems necessary or desirable In order to perfect the security Interests granted herein, to
effectuate the sale and assignment of the Receivables, and otherwise to effectuate the purposes
of the Agreement. In the event that the Bank requires additional security for the Business's
obligations under this Agreement and the Business or other party executes additional security
agreements, pledge agreements, guaranties and documents of similar Import (collectively, the
"Additlonal Security Documentsj, terms used therein such as, but not limited to, 'loans,"
*Indebtedness," secured obligations,' and 'obligations," shall be deemed to include the Recourse
Obligation as defined herein, and notwithstanding the provisions of the Additional Security
Documents, the Recourse Obligation secured thereby shall not constitute loans or indebtedness.
SECTION 4: REPRESENTATIONS. WARRANTIF-%A-ND CANTS
4.1 Representations and Warranties. The Business represents and warrants that it is
fully authorized to enter into this Agreement and to perform hereunder, and that this Agreement
constitutes its legal, valid and binding obligation; that the Business is solvent and in good
standing In the State of Its organization; that Its Receivables are and that they will be at the time
of their creation, bona fide and existing obligations of Customers of the Business arising out of its
sales or services, free and clear of all security interests, liens, and claims whatsoever of third
parties and that the documentation under which the Receivables are payable authorize the payee
thereof to charge, collect and receive Interest at the rate provided In such documentation; that all
Receivables and all documents and practices related thereto comply with all applicable federal
and state laws; that the collateral of the Business in which a security interest Is granted in Section
3.3 hereof or any Additional Security Documents Is not subject to any other security interest, lien
or encumbrance whatsoever (except in favor of the Bank), and that the Business will not permit
such collateral to become so encumbered without the Bank's prior written consent; and that the
Business's Inventory is not subject to any security Interest, lien or encumbrance whatsoever and
that the Business will not permit Its Inventory to become so encumbered without the Bank's prior
written consent.
4.2 Covenants. The Business covenants that (i) It will allow the Bank to review and
Inspect during reasonable business hours, and the Business will supply, financial Information and
necessary documentation on the Business, any guarantors, or on any Customer upon the Bank's
request; and pl) with respect to each Receivable as It arises: (a) the Business will have made
delivery of the goods and/or will have rendered the services represented by the Invoice, and the
goods and/or services will have been accepted; (b) the Business will have preserved and will
continue to preserve any liens and any rights to liens available by virtue of the sales and/or
services; (c) the Customer will not be the Business's affiliate; (d) the Bank's copy of the Invoice
will be genuine and will comply with this Agreement; (e) the Business will have Ito knowledge of
any dispute or potential dispute that may impair the validity of the transaction or the Customer's
obligation to pay the related Receivable in accordance with its terms; (f) the Business will have
the right to render the services and/or to sell the goods creating the Receivable, and will do so in
accordance with all applicable laws; (g) the Business will have paid or provided for the payment
of all taxes arising from the transaction creating the Receivable; and (h) the Receivable will not
be subject to any deduction, offset, defense, or counterclaim.
SECTION 6: FORMS AND PROCEDURES: RESPONSIBILITY FOR USE
5.1 Forms and Procedures. The Business will use only forms, agreements, and
advertising materials supplied or approved by the Bank in connection with the Receivables and
will follow all procedures that are satisfactory to the Bank in connection with the use of such
forms, agreements, and advertising materials.
5.2 Responsibility, The Business will be solely responsible for the adequacy,
completeness and accuracy of the raw data and Its preparation in the form required and its
transmission to the Bank, and will Indemnify and hold the Bank and Its agents and employees
(and anyone else providing processing, billing, or receivables management services) harmless
from (and pay all reasonable attomeys' fees with respect to) any claim or liability sustained by
virtue of acting in reliance upon data furnished by the Business. The Business understands that
the form of credit application and agreement and other documentation the Bank supplies to the
Business should be reviewed by the Business's local counsel as the Bank makes no
representation or warranty as to their enforceability in the Business's stale or their compliance
with applicable federal and state laws. The Bank and the Business agree that the Bank is the
owner of all Receivables purchased by the Bank hereunder, except for those Receivables the
Bank has required the Business to repurchase, and that all activities of the Bank in connection
with the collection of Receivables, generation of information, and processing of data, is fo.* the
account of the Bank's own affairs; that the information generated in connection therewith is the
property of the Bank; and that the use of computers by the Bank In connection with its activities
under this agreement Is used to facilitate the performance of services other than "data
processing.' The Business will indemnify and hold the Bank and its agents, affiliates and
employees (and anyone else providing processing or billing services) harmless from (and pay all
reasonable attorneys' fees with respect to) any loss or claim Involving breach of warranty or
representation by the Business and from any loss or claim by any Customer relating to the
Receivables or to goods and/or services (or the manner or type of their sale or provision) giving
rise to Receivables purchased by the Bank hereunder, The provisions of this paragraph will
survive the termination and/or expiration of this Agreement.
SECTIONS: POWER OF ATTORNEY
r The Business appoints the Bank as its ahomeyin•fact to receive, open, and dispose of all
mall addressed to the Business pertaining to Receivables; to endorse the Business's name upon
any notes, acceptances, checks, drafts, money orders, and other evidences of payment of
Receivables that may come Into the Bank's possession, and to deposit or otherwise collect the
same; and to do all other acts and things necessary to carry out the terms of this Agreement.
This power, being coupled with an Interest, is irrevocable while any Receivable shall remain
unpaid regardless of the expiration or termination of this Agreement,
SECTION 7: APPLICABLE LAW
This Agreement shall be governed by, construed and enforced according to the laws of the
Commonwealth of Pennsylvania.
SECTION 8: DEFAU
8.1 Event of Default. The following events will constitute a default (a "Default") under
the terms of this Agreement: (a) the Business fails to pay the Recourse Obligation or any other
payment obligation of the Business under this Agreement on demand or the Business falls to pay
any Indebtedness of the Business owed to the Bank pursuant to its terms; (b) the Business falls
to perform any obligation, covenant or liability in connection with this Agreement within ten (10)
days after the date that written notice thereof Is given to the Business; (c) any warranty,
representation or statement whenever made by the Business in connection with this Agreement
proves to be false In any material respect when made, or the Business fails to disclose to the
Bank that any such warranty, representation or statement has become untrue in any material
respect; (d) dissolution or termination of the Business If the Business is a corporation,
partnership, or other entity, or if the Business is an Individual, the death of such individual; (e)
the Business's Insolvency; (f) the assignment for the general benefit of the Business's creditors,
the appointment of a receiver or trustee for its assets, the commencement of any proceeding
under any bankruptcy or Insolvency laws by or against the Business or any proceeding for the
dissolution or liquidation, settlement of claims against or winding up of Its affairs; (g) the
termination or withdrawal of any guaranty for the Business's Obligations; (h) the Business fails to
pay when due any tax Imposed on it or any tax lien is filed against the Business or any of its
assets; (I) any judgment against the Business remains unpaid, unstayed on appeal,
undischarged, unbonded or undismissed for a period of thirty (30) days; Q) the Business
discontinues its business as a going concern; or (k) the Bank In good faith deems the prospect of
the Business's payment or performance of its Obligations to have been Impaired.
8.2 Effect of Default. Upon the occurrence of any Default, In addition to any rights the
Bank has under this Agreement or applicable law, the Bank may Immediately terminate this
Agreement, at which time all Obligations the Business owes to the Bank will immediately
become due and payable without notice, and the Bank's obligations to the Business hereunder
will cease. After the occurrence of a Default, the Bank will have the right to withhold any further
payments to the Business, and none of the Bank's rights or collateral will be adversely affected
thereby.
SECTION 9: _NON-LIABILITY OF BANK: RELEAS
Except for a breach by the Bank of this Agreement, the Business hereby releases,
discharges, and acquits the Bank, Its officers, affiliates, directors, employees, participants,
successors and assigns from any and all claims, demands, losses, and liability of any nature
which the Business ever had, now or hereafter can, shall or may have in connection with or
arising out of the transactions contemplated herein or the documentation hereof. In addition to
the provisions of this Section and Section 5.2, the Bank shall not be liable for any Indirect,
special or consequential damages, such as loss of anticipated revenues or other economic loss
In connection with or arising out of any default in performance hereunder or other matter arising
herefrom. Nor shall the Bank be liable for any errors of judgment or mistake of fact when acting
as the Business's attorney-in-fact pursuant to Section 8, or liable for delay in the performance of
the Bank's duties caused by strike, lawsuit, Not, civil disturbance, fire, shortage of supplies or
materials, or any other cause reasonably beyond the Bank's control. The provisions of this
paragraph shall survive the expiration and/or termination of this Agreement.
SECTION 10: EFFECTIVE DATE• Tr:aeein'Alinke. olkir G EFFECT
This Agreement will be effective when accepted by the Bank, and will continue in full force
and effect until the earlier of: (a) one year after the effective date of this Agreement; or (b) sixty
(80) days after written notice of termination has been given by one party to the other (in each
case subject to Immediate termination upon a Default); and the term of this Agreement will
automatically be extended for periods of one year each following Its otherwise scheduled
termination. subject to Section 8.2 above and to the parties' rights to terminate this Agreement
under clause (b) of this Section 10. Upon termination of this Agreement, the Business will pay all
of Its Obligations to the Bank; and in any event the Business will remain liable to the Bank for
any deficiency remaining after liquidation of any collateral; and the Bank may withhold any
payment to the Business unless supplied with an Indemnity satisfactory to the Bank. This
Agreement shall bind the Business and the Business's heirs, executors, successors and assigns
and shall Inure to the benefit of the Bank and the Bank's successors and assigns. The Business
agrees that the Bank may delegate its duties hereunder, but that the Business may not do so
without the Bank's prior written consent. Following termination of this Agreement, any funds
remaining in the Reserve Account shall not be disbursed to the Business until the Business has
paid all of Its Obligations to the Bank and all Receivables have either been liquidated or
repurchased by the Business.
SECTION 11: ATTORNEYS FEES; PAST-DUE OBLIGATIONS; WAIVER; SEVERABILITY;
HEADINGS; ENTIRE AND CONTROLLING AGREEMENT; NOTICES;
COUNTERPARTS
The Business will pay all reasonable expenses Incurred by the Bank in connection with the
execution of this Agreement, including expenses incurred in connection with the filing of
financing statements, continuation statements and record searches, All past-due obligations of
the Business arising under this Agreement shall bear interest at the maximum nonusudous rate
permitted under applicable state or federal law. The Business hereby waives grace, demand
(other than demand pursuant to Section 2.1 hereof), presentment for payment, notice of dishonor
or default, notice of intent to accelerate, notice of acceleration, protest and notice of protest and
diligence in collecting and bringing of suit against the Business. Upon liquidation of any
collateral, settlement or prosecution of a dispute with any Customer, or enforcement of any
obligation of the Business hereunder, the Business will pay to the Bank, and the Bank may
charge to the Business's account, all costs and expenses Incurred, including reasonable
attomeys' fees, and such costs, expenses and fees shall constitute part of the Business's
Obligations. No delay or failure on the Bank's part In exercising any right, privilege, or option
hereunder shall operate as a waiver of such or of any other right, privilege, or option, and no
waiver, amendment or modification of any provision of this Agreement shall be valid inless in
writing signed by the Bank, and then only to the extent therein stated; the Bank does, however,
have the right to amend this Agreement upon thirty (30) days written notice to the Busli:ess.
Should any provision of this Agreement be prohibited by or Invalid under applicable law, the
validity of the remaining provisions shall not be affected. The headings herein are for
convenience only, and shall not define or limit the scope, extent, meaning or intent of this
Agreement. This Agreement embodies the Business's entire agreement as to Its affiliation with
the Bank's BuslnesslManager program, although the Business anticipates that the Bank will
subsequently outline certain depository and billing procedures. In the event of any Inconsistency
between this Agreement and any other agreement signed by the Business and the Bank in
connection with this Agreement, Including without limitation, any Additional Security Documents,
the terns and provisions of this Agreement shall control and the terms and provisions of any
such other document shall be Ineffective to the extent of any such Inconsistency. Any notice,
request or demand to be given hereunder will be deemed to be given when deposited with a
delivery service addressed to, or sent by registered or certified mail to, the address of the
recipient listed at the beginning of this Agreement. This Agreement may be executed in multiple
counterparts, which when taken together shall constitute one and the same Agreement.
SECTION 12: SPECIAL STIPULATIONS
A Commercial Security Agreement Covering All Business Assets.
The Personal Guarantees of D. Scott Dardick, Steven M. Dardlek and Thomas M. Dardlck,
BUSINESS:
By: t" 45-`? _ /0
D. Scott Dardick
Title: President
ACCEPTANCE.
This Agreement is accepted this PC day of Hwuj 4L
1hir
BANK: PENNSYLVANIA NATIONAL BANK
3 TRUST CO,
By: ?
arles M. Wasson
Title: Assistant Vice President
m Copyright 1995 by Private Business, Inc. All Rights Reserved. BuslnessIManager® Is a
registered trademark of Private Business, Inc.
0895.PBI
BUSINESS LOAN AGREEMENT
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801-30016
BMaR'
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140703•
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References In the shaded area are for Lenders use only and do not limit the applicability of this document to any particular loan or ham.
Borrower: Darcom Technologies, Inc. Lander: PENNSYLVANIA NATIONAL BANK AND TRUST COMPANY
77 Northeastern Boulevard CAMP HILL COMMUNITY OFFICE
Nashua, NH 03063 4231 TRINDLE ROAD
CAMP HILL, PA 17011
THIS BUSINESS LOAN AGREEMENT between Darcom Technologies, Inc. ("Borrower'( and PENNSYLVANIA NATIONAL BANK AND TRUST
COMPANY ("Lander") Is made and executed on the following farms and conditions. Borrower has received prior commercial loans from
Lander or has applied to Lender for a commercial loan or loans and other financial accommodations, Including those which may be described
on any exhibit or schedule attached to this Agreement. All such loans and financial accommodations, together with all future loans and
Snanclel accommodations from Lander to Borrower, are referred to In this Agreement Individually as the "Loan" and collecilvely as the
"Loans." Borrower understands and agrees that: (a) In granting, renewing, or extending any Loan, Lender Is relying upon Borrower's
representations, warranties, and agreements, as set forth In this Agreement; (b) the granting, renewing, or extending of any Loan by Lender
at all times shelf be subject to Lender's Sole judgment and discretion; and (c) all such Loans shall be and shall remain subject to the following
terms and conditions of this Agreement.
TERM. This Agreement shah be ehocilve as of November 13, 1907, and shall continue thereafter until all Indebtedness of Borrower to Lander has
been performed In run and the parties termlnale this Agreement In writing.
DEFINITIONS. The following words shah have the following meanings when used In this Agreement. Terms not otherwise donned In this Agreement
shah have the meanings attributed to such terms In the Uniform Commercial Code. All references to dollar amounts shall mean amounts In lawful
money of the United States of America.
Agreement. The word "Agramenr means this Business Loan Agreement, as this Business Loan Agreement may be amended or modified from
nine to time, together with all exhibits and schedules attached to this Business Loan Agreement from time to time.
Borrower. The word 'Borrower" means osicom Technologies, Inc.. The word 'Borrower' also Includes, as applicable, all subsidiaries and
affteates of Borrower as provided below In the paragraph hbod'Subsidiaries and Affiliates!
CERCLA. The word'CERCLA" means Ins Comprehensive Environmental Response, Compensation, and Liability Act of 1880, as amended.
Collateral. The word "Conaferar means and Includes without limitation all property surd assets granted as collateral security for a Lan, whether
rat or personal property, whether granted directly or Indirectly, whether granted now or In the future, and whether granted In the form of a security
Interest, mortgage, dead of tool, assignment, pledge, chattel mortgage, chattel trust, factor's lion, equipment trust, condifioel sale, bust receipl,
Pon, charge, ben or lilts rslenllon contract, base or consignment intended as a security device, or any other security or ben Interest whatsoever,
whether created by law, contract, or otherwise.
ERISA. The word'ERISA' mans the Employee Retirement Income Security Act of 1974, as amended.
Event of Default. The words "Event of Default' man and Include without 9milellon any of the Events of Default eel forth below In the section filled
"EVENTS OF DEFAULT.*
Grantor. The word 'Grantor* means and Includes without Ilmllallon each and all of the persons or entitles granting a Security Interest In any
Collateral for the Indebtedness, Including without hmllation all Borrowers granting such a socially Interest.
Guarantor. The word *Guarantor" means and Includes without limitation each and an of the guarantors, sureties, and accommodation parties In
connection will%any Indebtedness.
Indebtedness. The word Indeblednese means and Includes without limitation as Loans, logethor with aft other obligations, debts and liabilities
of Borrower to Lender, or any one or more of them, as well as an claims by Lender against Borrower, or any one or more of them; whether now or
hereafter existing, voluntary or involuntary, due or not due, absolute or contingent, liquidated or unllquidaled; whether Borrower may be liable
Individually or jointly with others; whether Borrower may be obligated as a guarantor, surety, a( otherwise; whether recovery upon Stich
Indebtedness may be or haressa may become barred by any statute of limitations; and whether such Indebtedness may be or hereafter may
become otherwise unenforceable.
Lender. The word 'Lander' means PENNSYLVANIA NATIONAL BANK AND TRUST COMPANY, Its successors and assigns.
Loan. The word 'Loan' or 'Loans' means and includes without limitation any and as commercial loans and sandal accommodations from
Lender to Borrower, whether now or hereafter existing, and however evidenced, Including without Imitation those loons and financial
accommodations described herein or described on any exhibit or schedule attached to Ihls Agreement from tine to time.
Nola. The word 'Nola" means and Includes without limitation Borrower's promissory note or notes, if any, "dancing Borrowers Loan obligations
In favor of Lender, as well as any substitute, replacement or refinancing note or notes therefor.
Permitted Liens. The words 'Permitted Liens' mean: (a) flans and security Interests securing Indebtedness owed by Borrower to Lender: (b)
liens lot taxes, assessments, or similar charges either not yet due or being contested In good fallh; (c) lens of malorlalmon, mechanics,
warehousemen, or carriers, or other eke Ilene sulsing In the ordinary course of business and securng obligations which are not yet delinquent; (d)
purchase money hens or purchase money security Interests upon or In any property acquired or hold by Borrower in the ordinary course of
business to secure indebtedness outstanding on the date of this Agreement or parmined to be incurred undor the paragraph of this Agreement
filled Indebtedness and Lions % (a) lions and security Interests which, as of the data of this Agramenl, have been disclosed to and approved by
the Lender In writing; and (1) those liens and security Interests which In Ilia aggregate constitute an Imralertal and Insignificant monetary amount
with respect to the net value of Borrower's assets.
Related Documents. The wads 'Rotated Documents' man and Include without limitation as promissory notes, credit agreements, loan
agreements, environmenlal agreements, guaranties, security agreements, mortgages, deeds of trust, and all other Instruments, agreements and
documents, whether now or hereafter existing, executed in connection with the Indebtedness.
Security Agreement. The words'Socudty Agreement" mean and Include wllhout limitation any agreements, promises, covenants, anargements,
understandings or other agreements, whether crated by law, contract, a( othorwlss, evidencing, governing, representing, or creating a Security
Interest.
Security Interest. The wads "Security Inleresr mean and include without limitation any type of collateral secunly, whether In the form of a bon,
charge, mcrlgage, deod of bust, assignment, pledge, chattel mortgage, chattel Inrsl, factor's lien, equipment trust, conditional sale, final recalpl,
lion or title retention contract, lease or consignment Intended as a security device, or any other security or lien Interest whatsoever, whether
crated by law, contract, on otherwise.
SARA. The word 'SARA* means the Superhard Amendments and Resulhorixahon Act of 1988 at now or hereafter amended.
CONDITIONS PRECEDENT TO EACH ADVANCE. I onde, a obbgallon to mesa Wo initial Ludn Advance and each subwqumd I.odn Advance under
this Agreemenl shall be subject to the fwullmont to Lender's solisleehon of all of Ilia conditions set forth In this Agreement and in the Related
Documents.
Loan Documents. Borrower shall provide to Londe( In form sulisfdctmy to Lender Iho following documents for Ilia Loan: (a) Ira Note, (b)
Security Agreements granting to Lender security inturesls In Ilia Collateral, (c) Financing Statements perfecting Lenders Security Inlwusts; (d)
evidence of Insurance as required below; and (o) any other documents required under this Agreement or by Lander or its counsel, Including
without limitation any guaranties described below,
Borrower's Authorization. Borrower shall have provided in form and substance satisfactory to Londer property certified resolutions, duty
authorizing Ilia execution and delivery of this Agreement, Ilia Note and Ilia Rulated Du Iunanls, and such other aulluxild Ions end otter
documents and Instruments as Lender or Its counsel, in their solo discretion, may require.
Payment of Fees and Expenses. Borrower shall have paid to Lander all foes, charges, and other expenses which are than die and payable as
specified in INs Agreement or any Related Document.
Representations and Warranties. The rreprosonlatlons and wananhos set loth In This Aoramunl, in Ilia Related Documents, and In arty
document or certificate delivered to Lender under this Agreement are hue and cumreet.
No Event of Defaull. There shall not exist at the time of any advance a condition which would constitute an Evan) of Delaidt under INS
Agreement,
REPRESENTATIONS AND WARRANTIES. Borrower reprosunis and warrants to tender, as of Ilia data of Ibis Agreement, as of Ilia data of each
disbursement of Loan prrcreds, as of it* data of any renewal, extrusion or nmdification of any I udn, and of all tunes any Indebtedness exists:
11-13-1997 BUSINESS LOAN AGREEMENT Page 2
Loan No 801-30015 (Continued)
Organization. Borrower Is a corporation which Is duty organized, validly exlsling, and In good standing under the laws of the Stale of New
Hampshire and Is validly existing and In good standing In all stales In which Borrower Is doing buslness. Borrower lies the lug 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 qualified as a loiolgn corporation and Is in good standing in all stales In which the fanura to so qualify would have a malarial adverse effect on
Its businesses or financial condition.
Authorization. The execution, delivery, and performance of this Agreement and all Related Documents by Borrower, to the extent to be executed, r
delivered or performed by Borrower, have been duly authorized by all necessary action by Borrower; do not require the consent or approval of
any other poison, regulatory authority or governmental body; and do not conflict with, result In a violation of, or constitute a default under (a) any
provision of Its ankles of Incorporation or organization, or bylaws, or any agreement or other instrument binding upon Borrower or (b) any law,
governmental regulation, court decree, or order applicable to Borrower.
Financial Information. Each financial statement of Borrower Supplied to Lender truly and completely disclosed Borrower's financial condition as 1
of the dale of the statement, and there has been no material adverse change in Borrower's financial condition subsequent to the dote of the most IIIS
recent financial statement supplied to lender. Borrower has no material contingent obligations except as disclosed In such financial statements.
Legal Effect. This Agreement constitutes, and any Instrument or agreement required hereunder to be given by Borrower when delivered will
constitute, legal, valid and binding obligations of Borrower enforceable against Borrower In accordance with their respective terms.
Properties. Except as contemplated by this Agreement or as previously disclosed In Borrower's financial statements or In writing to Lender and as
accepted by Lender, and except for property tax hens for taxes not presently due and payable, Borrower owns and ties good tills to all of
Borrower's properties free and clear of all Security Interests, and has not executed any security documents or financing statements relating to such
Pfopscties. All of Borrower's properties are tilled In Borrowers legal name, and Borrower has not used, or hied a financing statement under, any
otter name for at least the last five (S) years.
Hazardous Substances. The forms 'hazardous waste; 'hazardous substance; 'disposal; 'release; and "threatened release,' as used In INS
Agreement, shag have the same meanings as Sol forth In The'CERCLA; 'SARA; the Hazardous Materials Transportation Act, 49 U.S.C. Section
1801, at seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 8901, at seq., or other applicable stale or Federal laws, rues, or
regulations adopted pursuant to any of the foregoing. Except as disclosed to and acknowledged by Lender In writing, Borrower represents and
warrants that: ¦ During the period of Borrower's ownership of the ro ernes, there has been no use, 9oaerallon, manufacture, stora
n9 P P P 9e• i
treatment, disposal, release or threatened release of any hazardous waste or substance by any person on, under, about or from any of the l
properties. (b) Borrower has no knowledge of, or reason to believe that there lies been (1) any use, generation, manufacture, storage, treatment, if
disposal, release, or threatened release of any hazardous waste or substance on, under, about or from the properties by any prior owners or i
occupants of any of the properties, or (I) any actual or Ihreatened litigation or ciatms of any kind by any person relating to such matters. (c) ;
Neither Borrower nor any rend 1, contractor , agent or other authorized user of any of the properties shag use, generals, manufacture, store, treat,
dispose ol, or release any hazardous waste or substance on, under , about or from any of Ilia proportion; and any such activity shah be conducted
In compliance with an applicable federal, slate, and local laws, fag Utahans, and ordinances, luchuding without limitation those laws, regulations and
adinaraas described above Borrower authorizes Lender end Its agents 10 enlot upon the propeNw to make such Inspections and lasts as
Land ax mey daem appropit i s Io determine compliance of the properties Win this Section of it's Agreement. Any Inspections or tails made by
Lander shall be at Borrower's expense and for Lender's purposes only and shall nol be construed to crania any responsibility ar liability on the part
Investlpatinp the propones for hazardous wells and hazardous substances. Borrower hereby (a) releases
of Lender to Banower or to any other person. The representations and warranties contained herein are based on Borrower's due diligence In
and wolves any future claims eBAlnsl
Lender for Indemnity or contributIon In the event Borrower becomes liable for cleanup or older Coils under any such laws, and (b) agrees io
Indemniy and hold harmless Lender against any and all cielms• losses, liabilities, damages, penalties, and expenses which Lander may directly er
Indiractly sustain or suffer resulting from a breach of this section of the Agreement or as • consequence of any use, generation, manufacture, I
storsoe, disposal, release or threatened release occurring prior to Borrower's ownership or interest In the properties, whether or not the same was
or should have boon known to Borrower. The ptWslons of this section of the Agreement, including the obligation to Indemnity, shall stavive the
payment of the Indebtedness and the termination or expiration of this Agreement and shall not be affected by Lender's acquisition of any Inlsesl
In any of tie properties, whether by foreclosure or otherwise. )
LUtgatlon 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 maternally adversely affect Borrower's Imancial condition of
properties, other than litigation, claims, or other events. If any, that have been disclosed to and acknowledged by Lender In writing.
Taxes. To Ilia best of Borrower's knowledge, all tax returns and repels of Borrower thal are or were required to be hied, have been filed, and all '
taxes, assessments and other governmental charges have been Palo In full, except those presently being or to be contested by Borrower In good
faith in the cidinary course of business and for which adequate reserves have been provided. I
Lien Priority. Unless otherwise previously disclosed to Lender In writing, Borrower has not entered Into of granted any Security Agreements, er f
permitted the littng or attachment of any Security Interests on or affecting any of the Collateral daectly or Indirectly securing repayment of
Borrower's Loan and Note, that would be prior or that may In any way be superior to Lmndor's Security Interests and rights in and to such
Collateral.
Binding Effect. This Agreement, the Note, all Security Agreements directly or Indirectly securing repayment of Borrower's Loan and Note and am
of the Related Documents are binding upon Borrower as well as upon Borrower's successors, representatives and assigns, and arm legally
enforceable In accordance with their respective terms.
Commercial Purposes. Borrower Intends to use the Loan proceeds solely for business or commercial totaled purposes.
Employee Benefit Plans. Each employee benshl plan as to which Borrower may have any liability complies In all malerlal respects with ell
applicable regwiremenls of law and regulations, and O no Reportable Event nor Prohibited Transaction (as defined In ERISA) has occurred with
respect to any such plan, (h) Borrower has not wllhdrawn from any such plan or Initialed slops to do so, (a) no steps have boon taken to
loxminale any such plan, and (Iv) there are no unfunded liabilities other than those previously disclosed to Lander in willing.
Location of Borrower's Offices and Records. Borrower's place of business, or Borfower's Chief executive office, if Borrower has more than one
place of business, Is located at 77 Northeastern Boulevard, Nashua, NH 03062. Unless Borrower has designated otherwise In writing this location
Is also the office or offices where Borrower keeps Its records concerning the Collateral.
Information. An Information heretofore or contemporaneously herewith furnished by Borrower to Lender lor the purposes of o: In connecton with
this Agreement or any transaction contemplated hereby Is, and all Information hereafter furnished by or on behall of Borrower to Lender will be,
true and accurate in every malarial respect on the dale as of which such Information Is dated or codihod; and none of such Information is or will be
Incomplete by omitting to state any materiel fact necessary to make such information not misleading.
Survival of Representations and Warranties. Borrower understands and agrees that Lender, without Independent Investigation, ts tolying upon
the above representations and warranties In extending Lan Advances to Borrower. Borrower further agrees that the foregoing representations
and warranties shah be continuing lit nature and shall remain in full force and effect unlit such time as Borrower's Indebtedness shell be paid in
full, or until this Agreement chap be tormlalad In the manner provided above, whichever Is the last to occur.
AFFIRMATIVE COVENANTS. Borrower covenams and agrees with 1-ender trial, while this Agreement Is In affect, Borrows will;
Litigation. Promptly Inlorm Lender In writing of (a) all material adverse changes in Borrower's financial condition, end (b) an exising and all
threatened litigation, claims, investigations, adminlstialroo proceedings of simlar actions affecting Bofrowoc or any Guarantor which could
neleflally affect the financial condition of Uonuwur of Ilia financial condition of any Guaianloc.
Financial Records. Maintain Its books and records In accordance with genmaily accepted aeeouning pilowiples, applied on a consislent basis,
and permit Lender to examine and audit Borrower's books and records at all reasonable limes.
Additional Informatlon. Furnish such additional Information and statements, Ilsls of assuts and liabilities, egi gs of receivables end payabfes,
Inventory schedules, budgets, forecasts, lax returns, and other ropods Willi respect to Banower's tinduClal condition end business npofelrons as
Lander may mquost from time to time.
Insurance. Maintain fire and other risk insurance, public liability In5unarice, and such other Insurance as Lender may require with respect to
Borrower's properties and operations. In form, amounts, coverages and Willi insurance companies reasonably acceptable to Lander. Borrower,
upon request of Lander, will deliver to Lender from time to time the policies of codikcales of Insurance In loran satisfactory to Lender, InclUdhlg
Stipulations Ihat coverages will not be cancelled or diminished without at least tali (10) days' pis written notice to Landor. Each insurance policy
also shag Include an endorsement providing that coverage in favor of Lander will riot be Impelled In any way by any act, omission or dulaull of
Doirowet of any other poison. In connection with all policies covering assets In which Lender holds or Is offered a security Inlufest Fix Ilia Loans,
Bornowef will provide Lander with such loss payable at other endorsements as Lendoi may require.
Insurance Reports. Furnish to Lender, upon request of I under, reports on each existing Insurance policy showing such Information as Lander
may reasonably request, Including without mmifalion the following: (a) Ilia name at Ilia Insurer; (q the risks Insuied; (c) Ilia mmounl of Ilia policy;
(d) the propedes Insured; (e) Ilia then eunheid piopody values an Ilia basis of which msurafice has been obtained, and Ilia manner of
dotormtnlnu those values; and (1) Ilia exphatton dalu of Ilia policy. In addition, upon request of I ender (however nut Olio often Ifan annually),
11-13-1997 BUSINESS LOAN AGREEMENT Page 3
Loan No 801-30015 (Continued)
Borrower win have an Independent appraiser satisfactory to Lander determine, as applicable, the actual cash value or replacement coal of any
Collateral, The cal of such appraisal shall be paid by Borrower.
Ouarsnlles. Prior to disbursement of any Lan proceeds, furnleh executed guaranties of Ihe Loans In favor of Lander, executed by the guaralors
named below, on Landar's forms, and In the amounts and under the conditions spelled out In those guarsnhes.
tdtlllUBtina
D. Scott Owdlck
Steven M. Dardlck
Thomas M. Dardlck
Amount4
sw0,000.00
$IIoc,000.00
$600,000.00
Other Agreements, Comply with all terms and conditions of all other agreements, whether now or hereafter existing, between Borrower and any
other party and notify Lender Immediately in wrung of any default In connection with any other such agreements.
Loan Proceeds. (he AN Lan proceeds solely for Borrower's business operations, unless spocificaYy consented to the contrary by Lender In
writing.
Taxes. Charges and Liens. Pay and discharge when due all of its Indebtedness and obligations, Including without limitation all assessments,
taxes, governmental charges, levies and hens, of every kind and nature, Imposed upon Borrower or Its properties, Income, or profits, prior to the
date on which penalties would sttach, and all lawful claims that, II unpaid, might become a lien or charge upon any of Borrower's properties,
Income, or profits. Provided however, Borrower will not be required to pay and discharge any such assessment, tax, charge, levy, Ben or claim so
long as (a) The legally of the some shall be contested In good faith by appropriate proceedings, and (b) Borrower shall have established on Its
books adequate reserves wilh respect to such contested assessment, tax, charge, levy, Ban, or claim In accordance with generaoy accepled
accounting practices. Borrower, upon demand of Lender, win furnish to Lander evidence of payment of the assessmanls, taxes, charges, levies,
Ions and claims and win authorize the appropriate governmental offidal to deliver to Lander at any lime a wdllen statement of any assessments,
taxes, charges, levies, lions and claims against Borrower's properties, Income, or profits.
Performance. Perform and comply with al terms, conditions, And provisions set forth In this Agreement end In the Related Documents in a limey
manner, and promptly notify Lander if Borrower learns of the occurrence of any event which constitutes an Event of Default under Ihts Agreement
or under any of the Related Documents.
Operations. Maintain executive and management personnel with Substantially the some qualifications and experience as the present exacuove
and management personnel; provide written notice to Lender of any charge In executive and management personnel; conduct Its business offs"
In a reasonable and prudent manner and In compliance with all applicable federal, slate and municipal Laws, ordinances, rules and regulations
respect! rq Its properties, charters, businesses and operations, Including without limitation, compliance with the Americans With Disabilities Act and
with all minhmum funding standards and other requirements of ERISA and other laws applicable to Borrower's employee benefit plans.
Inspection. Permit employees or agents of Lander at any reasonable lime to Inspect any and all Collateral for the Lan or Loans and Borrower's
other properties and to examine of audit Borrower's books, accounts, and records and to make copies and memoranda of Borrower's books,
accounts, and records, If Borrower now or at any time hereafter maintains any records (Including without IlmdLallon computer genwaled records
and computer software programs for the generation of such records) In the possession of a thud party, Borrower, upon request of Lander, shall
notify such party to permit Lander tee access to such records at all reasonable times and to provide Lender wnlh copies of any records It may
request, all of Borrower's expense.
Compliance Certificate. Unless waived In willing by Lender, provide Lender at least annually antl at the time of each disbursement of Loan
proceeds with a cergOCala executed by Borrower's chief financial officer, or other officer or person acceptable to Lender, cwbtylrg that the
representations and warranties eel lain In this Agreement are true and correct as of the ale of the cwlificale and furlhw certifying that, as of the
ate of the cerlificals, no Event of Default exists under this Agreement.
Environmental Compliance and Reports. Borrower shall comply In fib respects with all environmental protection lodwal, state and local laws,
statutes, regulations and ordinances; not cause or permit to exist, as a result of an Intentional or unintentional action or omission on Its part or on
the part of any third party, on property owned and/or occupied by Borrower, any environmental activity where damage may result to the
environment, unless such environmental activity Is pursuant to and In compliance with the conditions of a pwmll Issued by the appropriate federal,
slate or local governmental authorities; shall furnish to Lander promptly and In any event within thirty (30) days after receipt thereof a copy of any
not", summons, lien, citation, directive, teller of other communication from any governmental agency or Instrumentality concerning any Intentional
oar unintentional action or omission on Borrower's part in connection with any environmental activity whether or not there is damage to the
environment and/or other natural resources.
Additional Assurances. Make, execute and deliver to Lender such promissory notes, mortgagos, deeds of trust, security agreements, financing
statements. Instruments, documents and other agreements as Lander or its attorneys may reasonably request to evidence and seauo the Loans
and to perfect an Security Interests.
NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this Agreement Is In effect, Borrower shell not, without the pilot
written consent of Lander;
Indebtedness and Liens. (a) Except for trade debt Incurred In the normal course of business and Indebtedness to Lender contemplated by this
Agreement, crate, Incur or assume Indebtedness for borrowed money, including capital leases, (b) except as allowed as a Pormlllod Lien, sell,
transfer, mortgage, assign, pledge, lase, grant a security Inle est In, or encumbor any of Borrower's Assets, or (c) sob with recourse any of
Borrower's accounts, except to Lander.
Continuity of Operations. (a) Engage In any business activities substantially different than Those in which Borrower Is presently engaged, (b)
cease operations, liquidate, merge, transfer, acquits or consolidate with any other entity, change ownership, charge Its name, dissolve or transfer
or San Collateral out of the ordinary course of business, (c) pay any dividends on Borrower's stock (other than dividends payable In Its stock),
provided, howeve( that noWthslandlrg the foregoing, but only so long as no lvenl of Default has occurred and Is continuing or would result from
the payment of dividends, II Borrower Is a'Subchapler S Corporation' (as defined In the Internal Revenue Code of 1908, as amended), Borrower
may pay cash dividends on its clock to Its shareholders from lime to time In amounts necessary to enable the sharoholdws to pay Income taxes
and make estimated Income tax payments to satisfy [heir habllities under ledersl end stale law which arlse solely from their status as Shareholders
of a Subchapler S Corporation because of their ownership of shares of stock of Borrower, or (d) purchase or talks any of Borrower's outstanding
shares or alter or amend Borrower's capital structure.
Loans, Acqulslllons and Guaranlles. (a) Loan, Invest In or advance money or Assets, (b) purchase, create or acquire any interest in any other
entorprise orenldy, or (c) Incur any obligation as surely or guarentor other than in The erdinary course of business.
CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to Borrower, whether under this Agreement of undo( any other
agreement. Lender shag have no obligation to make Loan Advances or to disburse loan proceeds It; (a) uorroww warty Guarantor is in default under
the twins of this Agreement or any of the Related Documents or any other agreement that Borrower or any Guarantor has with Lender; (b) Borrower or
any Guarantor becomes Insolvent, trios a petition In bankruptcy or similar proceedings, or Is adjudged a bankrupt; (c) Berg occurs a malwLal adverse
charge In Borrower's financial condition, In Ihe financial condition of any Guarantor, or In Ina value of any Coaalwsl securing any Loan; (d) any
Guarantor seeks, claims or ofhwwhs attempts to lirml, modify or revoke such Guarantor's guaranty of the Loan or any other loan with Lender; or (a)
Lender In good faith deems Itself Insocuxe, even though no Event of default shall have occurred.
COVENANTS. narrower will maintain quarledy financial statements.
Borroww will provide monthly accounts payable aging.
RIGIIT OF SETOFF. Borrower grants to Lender a contractual possessory security Inlwesl In, and hereby assigns, convoys, delivers, pledges, and
hansfws to Lander all Borroww's right, title and Inle•asl in and to, Borrower's accounts with tender (whetter chocking, savings, or soma olhar
account), Including without houlation all accounts hold jointly with someone else and all accounts Borrower may open in lies future, exdut ing however
all IRA and Keogh accounts, and ail trust accounts for which the grant of a wooly Interest would be prohibited by law. Borrower aulhodzas Lender, to
the extent permitted by applicable low, to charge or setoff all sums owing on Ina Indebtedness against any and all such accounts.
EVENTS OF DEFAULT. Each of the following shall conslduto an Event of Default under this Agroomont
Default on Indebtedness. Failure of Borrowor to make any payment when due on the Loans.
Other Defaults. Failure of Borrower or any Gianlor to comply with or to portorm when due any other term, oblgshon, covenant of condition
contained In this Agreomont or In any of the nolatod Documents, or failure of Borrower to comply with or to perlonm any otter farm, obligation,
covenant or condition contained In any other agreement between Lender and Barowor.
Default In Favor of Third Parties. Should Borrower or any Grantor default under any loan, extension of credit, wanly agreeniont, purchase or
sales agreement. or any other agreement. In favor of any other creditor or person that may materially affect any of Borrower's property or
Boomor's or any Granlor's ability to repay the Loans or poilorm hair respochvu obligations under this Agreement or any of the Related
Documents.
False Statement. Any warranty, reprosentation or slelemanl made or fwnuhod to tender by or on behalf of Borrower or tiny Ononlor under this
11-13-1997 BUSINESS LOAN AGREEMENT Page 4
Loan No 801-30016 (Continued)
Agreement or the Related Documents Is false or misleading In any material respect at the lime nude or furnished, or becomes Iabo a misleading
at any ume thereafter.
Defective Conaterall:vilon. This Agreement or any of the Related Documents ceases to be In lull lace and effect (Including lanao of any
Security Agreement to create a valid and perfected Security Interest) at any lime and for any reason.
Insolvency. The dissolution or termination of Borrower's existence as a going business, the Insolvency of Borrower, the appointment of a receiver
for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, of the commencement of any
proceeding under any bankruptcy of Insolvency laws by or against Borrower.
Creditor or Forfeiture Proceadings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, sell-hop,
repossession or any other method, by any credifor of Borrower, any creditor of any Grantor against any collateral securing the Indebtedness, or by
any governmental agency. This includes a gamishmenl, attachment, or levy on or of any of Borrower's deposit accounts with Lender. However,
this Event of Dafault shall not apply It Ihoro is e good faith dispute by Borrower or Grantor, as the case may be, as to the validity or reasonableness
of the claim which is the basis of the creditor or forfeiture proceeding, and If Borrower or Grantor gives Lender written notice of the creddor of
lorfellure proceeding and furnishes reserves or a surety bond for the creditor or faleiturs proceeding satisfactory to Lender.
Events Affecting Guarantor. Any of fire preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies
or becomes Incompetent, or rovokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness. Lander, st Its ophon, may, but
"It not be requited to, permit Ile Guarantor's estate to assume unconditionally the obligations arising under the guaranty In a manner satisfactory
to lender, and, In doing so, cure the Event of Default.
Change In Ownership. Any change In ownership of twonly-five percent (25%) or more of the common dock of Barowor.
Adverse Change. A material adverse change occurs In Borrower's financial condition, or Lender believes the prospect of payment or
performance of the Indobltdness Is Impelled.
Insecurity, Lander, In good faith, tlsems Itself Insecure.
Right to Cure. It any default, other than a Default on Indebtedness, Is curable and If Borrower a Grantor, as the case may be, has not been
given a notice of a similar dehull within the preceding twelve (12) months, II may be cured (and no Event of Default win have occurred) It Borrower
or ()rental, as the case may be, allot i"if ng written notice train lender demanding cure of such default; (a) cures the default within Afiean (I5)
days; or (b) If the cure requires more than finean (15) days, Immodialely Initiates steps which Lander deems In Lender's sole discretion to be
sufficient to cure the default and thereafter continues and completes all reasonable and necessary slops sufficient to produce compliance as soon
as reasonably practical.
EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except where otherwise provided in this Agreement of the Rotated
Documents, are commitments and obligations of Lender under this Agreement of the Related Documents or any other agreement Immediately will
terminate (Including any obligation to make Loan Advances or disbursements), and, at Lenders option, are Indebtedness immediately WN become due
and payable, an withoul notice of any kind to Borrower, except that In the case of an Event of Default of the type described In the 'Insolvency"
subsection above, such accetarallon shall be automatic and not optional. In addition, Lender shall have are the lights and remedies provided in the
Related Documents of avaNable at taw, In equity, or otherwise. Except as may be prohlblted by applicable law, all of Lender's rights and remedies shall
be cumulative and may be exercised singularly or concurrently. Election by Lender to pursue any remedy shall not exclude pureull of any other
remedy, and an election to make expenditures or to take action to pedorm an obligation of Borrower or of any Grantor she not affect Lender's right to
doclano a default and to axerclso Its rights and remedies.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a pail of this Agreement;
Amendments. This Agreement, together with any Rotated Documents, consbfules the entire understanding and agreement of the parties as to the
matters eel lorlh In this Agreement. No alteration of or amendment to this Agreement shelf be effective unless given In willing and signed by the l
party or pertles sought Io be charged of bound by the alteration or amendment.
Applicable Law. This Agreement has been delivered to Lander and weepled by Lender In the Commonwealth of Pennsylvania. If Thera Is _
a lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of CUMBERLAND County, the Commonwealth
of Pennsylvania. This Agreement shall be governed by and construed In accordance with the laws of the Commonwealth of
Pennsylvania.
Caption Headings. Caption headings In this Agreement are la convenience purposes only and era not to be used to Inforpial or define the
provisions of this Agreement.
Multiple Partler, Corporate Authority. All obligations of Borrower antler this Agreement shall be joint and several, and all tolerances to Borrower
shall mean each and every Borrower. This moans that each of Ilia persons signing below Is responsible for all obligations In this Agreement.
Consent to Loan Participation. Borrower agrees and consents to Lender's sale or transfer, whether now or late(, of one of more participation
interests In the Loans to one at mote purchasers, wholher related or uoralaied to Lander. Lender may provide, without any limitation whatsoever,
to any one or more purchases, or polenNal purchases, any Information or knowledge Lander may have about Borrower or about any other metier
totaling to Iha Lan, and Sonrowor hereby waives any rights to privacy it may have with respect ro such matters. Borrower additionally waives any
and an nolices or sale of participation Interests, as wee as are notices of any repurchase of such patiolpdion Interests. Borrower also aglass that
Iha pumhasa(s of any such pail0pation Interests will be considered as Ilia absolute owners of such Interests In Ilia loans and will have all the
(rgh]s granted under the puticipabon agreement or agreements governing the sale of such partbipahon interests. Borrower further waives IN
rights of offset or counterclaim that I) may have now of later against Lender or against any purchaser of such a participation Interest and
unconditionally agrees that either Lender or such purchaser may enforce Borrowers obligation under the Loans Irrespective of the leilae at
Insolvency of any holder of any Interest In the Loans. Borrower further agrees that the purchaser of any such participation Interests may enforce its
Interests irrespective of any personal claims of delenses that Borrower may have against Lender.
Costs and Expenses. Borrower ogtees to pay upon demand all of Lender's expanses, Including without limitation sllaneys' fees, incurred In
connection with the preparation, execution, enforcement, modification end collection of this Agreement or In connection with Ilia Loans marls Ica
pursuant to this Agreernenl. Lender may pay someone else to help collect the Loans and to enforce this Agreement, and Borrower will pay Half
amount. This Includes, subject to any ]trials under applicable law, Lenders altaneys' fees and Lender's legal expenses, whetter Of not trials Is a
lawsudl. Including ollorneys' loes for bankruptcy proceedings (including &Nati to modify or vacate any automatic stay or Inpuclion), appeal. end
any anticipated post-judgment collection services. Borrower also will pay any court costs, In addition to aN otter sums provided by law.
Notices. AN notices required to be given under this Agreement shit be given In writing, may be sent by Islefaesimtle luntess otltorwfse required
by law), and shall be affective when actually delivered of when deposited with a nationally recognized overnlghl coaWr of deposted in The United
Stales null, first class, postage prepaid, addressed to the party to whom The notice Is to be given at the address shown above. Any patty may
change its address for notices under this Agreement by giving formal written notice to ilia other parties, speciMig that the pwpcee 01 Ins notice n
to change tha pales address To the extent permitted by stipnoabio law, It Ihws is mote than one Borrower, notice to any Borrower will conskfula
notice to all Borrowers. For notice purposes, Borrower will keep Lander Informed at all times at Hollow ell's current address(es).
Sevenbltlty. It a court of cempolsnl jurtsdiclion finds any provision of this Agfeanwnl to be Invalid at unenlaceablo as to any person or
ckcumstance, such bndug shit nut rends that proAston Invalid or imonforcoabla as to any other persons or circumstances. It leasable, any such
offending provision Shen be doomed to be modified to be within the limits of enfaceabilny a validity; however, it Ilia olfandmg provision cannul lid
so modified, II shall be stricken and all olhar provisions of fins Agreement In all other rospocls shall remain valid and enforceable.
Subsidiaries and Affiliates of Borrower. To the extent Ilia eonlat of any provisions of this Agreement makes 11 appropriate, Imcludmlg without
nmildlon any representation, warranty or covenant, the word 11orrowin as used harem shall Include an stibsidarkrs end affiliates of Ilo rowor.
Nolwdhslandiig Ilia IaopOing however, under no circumstances shall this Agreement be conshueJ to require Londur to make any I-rwn a othun
linsfnclal occommodallon to any subsidiary or affiliate of Barowut.
Successors and Assigns. An covenants and agreements contained by or on behall of Borrower shall bind its successors and assigns and sau
inure to Ile benefit of Lander, its successors and assigns. Borrower shall not, however, have pre right to assign its tights under this Agreement or
any Inlerosl Ifarann, without the poor within consent of Lender.
Survival. Ali warranties, representations, and covenants made by Uanuwei In this Agreement a In any cmlrheole of miser Inshumunt delivered by
Harrower to Lander under this Agreement shall be considered to have boon ruled upon by Lender end will survive Ilia making of Ilia Loan atilt
delivery to Londe( of the Related Documents, regardless of any investigation made by Lender at an Lender's behalf.
Time Is of the Essence. Time Is of the essence In Ilia performance of this Agreement.
Waiver. Lamer shall not be deemed to have waived oily rights under this Agreement unless sixh waiver is given eat wntug and signed by
Lender. No delay or omission on the pad of Landon in exercising ally light shall operate as a waiver of such nrghl or oily ollarr nohl. A waiver by
t ardor of a provision of this Agreement shell not pnoludxe of co nsfituld a waives of Landon' s fight otherwiso to demand slrfel compliance will, that
pwvisfon Of any other provision of this Agneemunl. No pilot waiver by 1 ondar, nor any enursu eat dealing bulwoon I ender end Borrower, of
bulwoon t under and any Grams, shall eonstdulu 0 waiver of any of 1 eoda's lights of of oily obegaeonu of Batowat or el oily Grentor as to any
4 ~'.
11-13-1997 BUSINESS LOAN AGREEMENT Pepe 6
Loan No 601-90018 (Continued)
Mure transactions. Whenever the consent of Lander Is required under it" Agreement, the granting of such consent by Lander in any instance
shelf not consttiuta continuing consent In subsequent Instances where such consent Is required, and In ati osm such consent may be granted or
vAlhheid In the sole discretion of Lander.
BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN AGREEMENT, ANO BORROWER AGREES TO
ITS TERMS. THIS AGREEMENT 18 DATED AS OF NOVEMBER 13, 1007.
THIS AGREEMENT HAS BEEN SIGNED AND SEALED BY THE UNDERSIGNED.
BORa0WERt
Dercom Teeh a Ins ?^r
w seutN OMUr (REAL) By: N e(8)
?T Thomas M. Dardklr, Vice President
LENDER:
PENNS NATIONAL 8 K AND TRUST COMPANY -
ur
LAND PRO, R0a UAL Pat. a LM, 011. VA. eN ICI Uq M ProeaYNU, IN. AIIr10hIr Utwid.IPA•C40 DAROOMTE.LN C1.OVL1
?I
EXHIBIT "B"
COMMERCIAL GUARANTY
Prlnc pal Loan Date. Maturity Loan No Cal
BMGR Collateral
SEC Account
140703 Officer
CW86 initlale
References In the shaded area are for Lender's use only and do not limit the applicability of this document to an orticutar loan or Item.
Borrower: Darcom Technologies, Inc. Lander: PENNSYLVANIA NATIONAL BANK AND TRUST COMPANY
77 Northeastern Boulevard CAMP HILL COMMUNITY OFFICE
Nashua, NH 09062 4231 TRINDLE ROAD
CAMP HILL, PA 17011
Guarantor: Sloven M. Dardlck
3505 Bellows Drive
Camp HIII, PA 17011
AMOUNT OF GUARANTY. This Is a guaranty of payment of the Note, Including without limitation the principal Note amount of Six Hundred
Thousand i 001100 Dollars ($600,000.00).
GUARANTY. For good and valuable consideration, Sloven M. Dardlck ("OUaranlor") absolutely and unconditionally guarantees and promises
to pay to PENNSYLVANIA NATIONAL BANK AND TRUST COMPANY ("Lender") or Its order, on demand, in legal lender of the United Slates of
America, the Indebtedness (as that term Is donned below) of Darcom Technologies, Inc. ("Borrower") to Lender on the terms and conditions
sat forth In this Ouaranty.
DEFINITIONS. The following words shall have the following meanings when used in this Guaranty:
Borrower. The word "Borr ower' means Darcom Technologies, Inc..
Guarantor. The word "Guarantor means Steven M. Dardick.
Guaranty. The word 'Guaranty" means this Guaranty made by Guarantor for the benefit of Lender dated November 13, 1997.
Indebtedness. The word "Indebtedness" means the Note, including (a) all principal, (b) all Intent, (e) lee late charges, (d) as loan lees and
loan charges, and (e) all collection cats and expenses relating to the Note or to any collateral for the Note. Collection costs and expenses
include without limitation all of Lender's attorneys' fees and Lender's legal expenses, whether or not suit Is Instituted, and attorneys' ten and legal
expenses for bankruptcy proceedings (Including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated
poal-judgment collection services.
Lender. The wofd'Lender means PENNSYLVANIA NATIONAL BANK AND TRUST COMPANY, Its successors and assigns.
Note. The word "Note means the promissory note or credit agreement dated November 13, 1997, In the original principal amount or
f:eo0poo.oo from Borrower to Lender, together with all renewals of, extensions of, modifications of, refiancIngs of, consolidations of, and
substilutions for the promissory note or agreement. Notice to Guarantor: The Note evidences a revolving line of credit from Lender to
Borrower.
Related Documents. The words "Related Documents mean and Include without limitation all promissory notes, credit agreements, loan
agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, and all other Instruments, agreements and
documents, whether now or hereafter existing, executed In connection with the Indebtedness.
MAXIMUM LIABILITY. The maximum liability of Guarantor under this Guaranty shall not exceed at any one time the amount of the
Indebtedness described above, plus all costs end expenses of (a) enforcement of this Guaranty and (b) collection and We of any Collateral
securing this Guaranty.
The above limitation on lability is not a restriction on the amount of the Indebtedness of Borrower to Lends either in the aggregate or at any one lime.
If Londe presently holds one or more guaranties, or hereafter receives additional guaranties from Guarantor, the rights of Lender under all guaranties
shall be cumuative. This Guaranty shall not (unless specifically provided below to the contrary) affect or Invalidate any such other guaranties. The
lability of Guarantor will be the aggregate lability of Guarantor under the terms of this Guaranty and any such other untormiated guaranties.
NATURE OF GUARANTY. Guarantor Intends to guarantee at a0 limes the performance and prompt payment when die, whether at maturity or earlier
by reason of acceleration or otherwise, of all Indebtedness within the limits set forth In the preceding section of this Guaranty. This Guaranty covers a
revolving nine of credit and guarantor understands and agrees that this guarantee shall be open and continuous until the line of credit Is
terminated and the Indebtedness 1? paid In full, as provided below.
DURATION OF GUARANTY. This Guaranty will lake effect when received by Lender without the necessity of any acceptance by Lender, or any notice
to Guarantor or to Borrows, and will continue In lug fora until all Indebtedness shag have been fully and finally paid and satisfied and all other
obligations of Guarantor under this Guaranty shall have been performed In lull. Release of any other guarantor or terminahon of any other guaranty of
the Indebtedness shall not affect the liability of Guarantor under this Guaranty. A revocation received by Lender from any one or more Guarantors shall
not affect the lability of any remaining Guarantors under this Guaranty. This Guaranty covers a revolving line of credit and It Is specifically
anticipated that fluctuations will occur In the aggregate amount of Indebtedness owing from Borrower to Lender. Guarantor specifically
acknowledges and agrees that fluctuations In the amount of Indebtedness, even to zero dollars ($ 0.00), shall not constitute a termination of
this Guaranty. Guarantor's liability under this Guaranty shall terminate only upon (a) termination In writing by Borrower and Lender of the line
of credit, (b) payment of the Indebtedness In full In legal tender, and (c) payment In full In legal tender of all other obligations of Guarantor
under this Guaranty.
GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, without notice or demand and without teaming Guarantor's
liability under this Guaranty, from time to time: (a) to mace one or more additional secured or unsecured loans to Borrower, to lease
equipment or other goods to Borrower, or otherwise to extend additional credit to Borrower; (b) to alter, compromise, renew, extend,
accelerate, or otherwise change ona or more times the time for payment or other terms of the Indebtedness or any part of the Indebtedness,
Including Increases and decreases of the rate of Interest on the Indebtedness; extensions may be repeated and may be for longer than the
original loan term; (c) to lake and hold security for the payment of this Guaranty or the Indebtedness, and exchange, enforce, waive,
subordinate, fall or decide not to perfect, and release any such security, with or without the substitution of new collateral; (d) to release,
substitute, agree not to sue, or deal with any one or more of Borrower's sureties, endorsers, or other guarantors on any terms or In any
manner Lender may choose; (a) to determine how, when and whet application of payments and credits shall be made on the Indebtedness;
(f) to apply such security and direct the order or manner of sale thereof, Including without limitation. any nonludiclal sale permitted by the
terms of the controlling security agreement or deed of bust, as Lender In Its discretion may determine; Ig) to sell, transfer, assign, or grant
participations In all or any part of the Indebtedness; and (h) to "sign or transfer this Guaranty In whole or In part.
GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guaranis represents and warrants to Lender that (a) no representations or agreements
of any kind have been made to Guarantor which would limit or quality In any way to terms of this Guaranty; (b) this Guaranty is executed at
Borr ower's request and not at the request of Lender; (c) Guarantor has full power, right and authority, to enter Into this Guaranty; (d) the provisions of
this Guaranty do not conflict with or result In a default under any agreement on other Instrument binding upon Guarantor and do not result In a violation
of any law, regulation, court decres or order applicable to Guarantor; (e) Guarantor has not and will not, without the prior written consent of Londe,
half, 10659, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially en of Guaranfor's assets, or any Interest therein; (f) upon
Lendors request, Guarantor will provide to Lender financial and credit Information In form acceptable to Lends, and all such financial Inlorration
which currently has been, and all future financial Information which will be provided to Lender is and will be true and correct In all material respects and
fairly present the financial condition of Guarantor as of the dales the financial Information is provided; (g) no material adverse change has occurred In
Guarantor's financial condition since the date of the most recent financial statements proodod to Lender and no event has occurred which may
materially adversely affect Guarantor's financial condition; (h) no litigation, claim. Investigation, administrative proceeding or similar action (Including
those for unpaid taxes) against Guarantor is pending or threatened; (i) Lender has made no representation to Guarantor as to the creditworthiness of
Borrows; and 0) Guarantor has established adequate means of obtaining from Borrower on a continuing basis information regarding Borrower's
financial condition. Guarantor agrees to keop adequately informed from such mans of any facts, events, or circumstances which might In any way
affect Guarantor's risks undo( this Guaranty, and Guarantor further agrees that Lender shall have no obligation to disclose to Guarantor any Information
or documents acquired by Lender in the course of its relationship with Borrower.
GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor wolves any tight to require Lender (a) to continue lending money or to
extend other credit 10 Borrower; (b) to make any presentment, protest, demand, or notice of any kind, including notice of any nonpayment of the
Indebtedness or of any nonpayment related to any collateral, or notice of any action or nonaction on the part of Borrower, Lender, any surety, andorser,
or other guarantor in connection with the Indebtedness or In connection with the creation of new or additional loans or obligations; (C) to resort for
o to proceed tirrsi, and pace against oany public
colater I held by Lender from Borrower, aagainst any porsono ny other Including Borrower of n other
other person: (a) to give guarantor; nole f tthe forms,
any pubic or
private sale of personal property security held by Lander from Borrower or 10 comply with any other applicable provisions of the Unilorm Commercial
Code; (1) to pursue any other remedy within Lender's power; or (g) to commit any act or omission of any kind, or al any time, with respect to any
matter whatsoever. l, r \,\ v r 1r
? ti. ?)
11-13-1997 COMMERCIAL GUARANTY Page 2
Loan No 801-30016 (Continued)
If now or hereafter (a) Borrower shall be or become insolvent, and (b) the Indebtedness shag not al all times until paid be fully secured by collateral
pledged by Borrower, Guarantor hereby forever waives and relinquishes In lavor of Lender and Borrower, and their respective successors, any clalm or
right to payment Guarantor may now have or hereafter have or acquire against Borrower, by subrogation or otherwise, so that al no time shag
Guarantor be or become a'creditor" of Borrower within the meaning of 11 U.S.C. section 647(b), or any successor provision of the Federal bankruptcy
laws.
Guarantor also waives any and all rights or defenses arising by reason of (a) anyone action' or "anti-deficiency" law or any other law which may
prevent Lender from bringing any action, Including a claim for deficiency, against Guarantor, before or after Lender's commencement or completion of
any foreclosure action, either judicially or by exercise of a power of sale; (b) any election of remedies by Lander which destroys a otherwise adversely
affects Guarantors subrogalion rights or Guarantor's rights to proceed against Borrower for reimbursement, Including without limitation, any loss of
rights Guarantor may suffer by reason of any law limiting, qualifying, or discharging the Indebtedness; (c) any disability or other defense of Borrower, of
any other guarantor, or of any other person, or by reason of the cessation of Borrower's liability from any muse whatsoever, other than payment in lull
In legal tender, of the Indebtedness; (d) any right to claim discharge of the Indebtedness on the basis of unjustified Impairment of any collateral for the
Indebtedness; (e) any statute of limitations, it at any time any action or suit brought by Lender against Guarantor Is commenced there is oulstanolng
Indebtedness of Borrower to Lender which Is not barred by any applicable statute of limitations; or (p any defenses given to guarantors at law or in
equity other than actual payment and performance of the Indebtedness. It payment is made by Borrower, whether voluntarily or otherwise, or by any
Ihud party, on the Indebtedness and thereafter Lender is forced to remit the amount of that payment to Borrower's trustee In bankruptcy or to any
similar person under any federal or stale bankruptcy law or law for the relief of debtors, the Indebtedness shall be considered unpaid for the purpose of
enforcement of this Guaranty.
Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of
setoff, counterclaim, counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower, the
Guarantor, or both.
GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above Is made
with Guarantor's lug knowledge of Its significance and consequences and that, under the circumstances, the waivers are reasonable and not contrary to
public policy or law. If any such waiver Is determined to be contrary to any applicable law or public policy, such waiver shag be effective only to the
extent permitted by law or public policy.
LENDER'S RIGHT OF SETOFF. In addition to all lions upon and rights of setoff against the moneys, securities or other properly of Guarantor given to
Lender by taw, Lender shall have, with respect to Guarantor's obligations to Lender under this Guaranty and to the extent permitted by law, a
contractual possessory security Interest in and a right of setoff against, and Guarantor hereby assigns, conveys, delivers, pledges, and transfers to
Lender an of Guarantors fight, tine and Interest In and to, all deposits, moneys, securities and other property of Guarantor now or hereallor in the
possession of or on deposit with Lander, whether held in a general or special account or deposit, whether held joinhy with someone else, or whether
held for safekeeping or otherwise, excluding however all IRA, Keogh, and trust accounts. Every such security Interest and fight of setoff may be
exercised without demand upon or notice to Guarantor. No security interest or right of setoff shag be doomed to have been waived by any act or
conduct on the part of Lender or by any neglect to exercise such right of setoff of to enforce such security Interest or by any delay In so doing. Every
right of setoff and security Interest shall continue In full force and effect until such right of setoff or security Interest Is specifically waived or released by
an Instrument in writing executed by Lender.
SLA30RDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness of Borrower to Lender, whether now
exlsgng or hereafter created, shag be prior to any claim that Guarantor may now have or hereafter acquire against Borrower, whether or not Borrower
becomes Insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any
Nslm that Lender may now or hereafter have against Borrower. In the event of Insolvency and consequent liquidation of the assets of Borrower,
through bankruptcy, by an assignment for the benefit of creditors, by voluntary liquidation, or otherwise, the assets of Borrower applicable to [be
payment of the claims of both Lander and Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness of Borrower to
Lender. Guarantor does hereby assign to Lender all claims which it may have or acquire against Borrower or against any assignee or trustee In
bankruptcy of Borrower; provided however, that such assignment shall be effective only for the purpose of assuring to Lender fug payment in legal
tender of the Indebtedness. If Lender so requests, any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to
Guarantor shag be marked with a legend that the same are subject to this Guaranty and shag be delivered to Lender. Guarantor agrees, and Lender
hereby is authorized. In the name of Guarantor, from time to time to execute and file financing statements and continuation statements and to execute
such other documents and to take such other actions as Lender deems necessary or appropriate to perfect, preserve and enforce it, rights under this
Guaranty.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a pad of this Guaranty.
Amendments. This Guaranty, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the
matters set forth In this Guaranty. No alteration of or amendment to this Guaranty shall be effective unless given In writing and signed by the party
or parties sought to be charged or bound by the alteration or amendment.
Applicable Lew. This Guaranty has been delivered to Lender and accepted by Lender In the Commonwealth of Pennsylvania. If there is a
lawsuit, Guarantor agrees upon Lender's request to submit to the jurisdiction of the courts of CUMBERLAND County, Commonwealth of
Pennsylvania. This Guaranty shall be governed by and construed In accordance with the laws of the Commonwealth of Pennsylvania.
Attorneys' Fees; Expenses. Guarantor agrees to pay upon demand all of Lender's costs and expenses, Including attorneys' fee and Lenders
legal expenses, Incurred In connection with the enforcement of this Guaranty. Lender may pay someone else to help enforce this Guaranty, and
Guarantor shag pay the costs and expenses of such enforcement. Costs and expenses Include Lender's attorneys' fees and legal expenses
whether or not there Is a lawsuit. Including attorneys' lees and legal expenses for bankruptcy proceadirgs (and Including efforts to modify or
vacate any automatic slay or injunction), appeals, and any anticipated post-judgment collection services. Guarantor also shall pay of court costs
and such additional fees as may be directed by the coud.
Notices. All notices required to be given by either party to the other under this Guaranty shall be In writing, may be sent by telefacslmile (unless
otherwise required by law), and shag be effective when actually delivered or when deposited with a nationality recognized overnight couder, or
when deposited In the United Slates mail, first class postage prepaid, addressed to the party to whom the notice Is to be given at the address
shown above or to such other addresses as either parry may designate to the other In writing. If there is more than one Guarantor, notice to any
Guarantor will constitute notice to all Guarantors. For notice purposes, Guarantor agrees to keep Lender informed W an times of Guarantors
current address.
Interpretation. In all cases where there is more than one Borrower or Guarantor, then all words used in this Guaranty in the singular shag be
deemed to have been used In the plural where the context and construction so require; and where there Is more than one Borrower named In this
Guaranty or when this Guaranty Is executed by more than one Guarantor, the words "Borrower' and "Guarantor' respectivoly shag man fig and
any one or more of them. The words "Guarantor," 'Borrower; and tender" include the heirs, successors, assigns, and transforms of each of
them. Caption headings in this Guaranty are for convenience purposes only and are not to be used to Interpret or define the provisions of this
Guaranty. It a court of competent jurisdiction finds any provision of this Guaranty to be Invalid or unenforceable as to any person or circumstance,
such finding shall not render that provision invalid or unenforceable as to any other persons or circumstances, and all provisions of this Guaranty
In all other respects shall remain valid and enforceable. If any one or more of Borrower or Guarantor are corporations or partnerships, it ls not
necessary for Lender to Inquire into the powers of Rorower or Guarantor or of the officers, directors, partners, or agents acting or purporting to act
on their behalf, and any Indebtedness made or created In (silence upon the professed exercise of such powers shag be guaranteed under this
Guaranty.
Waiver. Lender shall not be doomed to have waived any rights under this Guaranty unless such waiver is given in writing and signed by Lender.
No delay or omission on the part of Lender In exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of
a provision of this Guaranty shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or
any other provision of this Guaranty. No prior waiver by Lender, no( any course of dealing between Lender and Guarantor, shall constitute a
waiver of any of Lender's rights or of any of Guarantor's oblgations as to any future transactions. Whenever the consent of Lender is required
under this Guaranty, the granting of such consent by Lander in any Instance shall not constitute continuing consent to subsequent Instances
where such consent is required and In All cases such consent may be granted or withheld in the sole discretion of Lander.
11-13-1997 COMMERCIAL GUARANTY Pepe 3
Loan No 801-30015 (Continued)
CONFESSION OF JUDGMENT. GUARANTOR 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
GUARANTOR AFTER A DEFAULT UNDER THIS GUARANTY, AND WITH OR WITHOUT COMPLAINT FILED, AS OF ANY TERM, CONFESS OR
ENTER JUDGMENT AGAINST GUARANTOR FOR THE ENTIRE PRINCIPAL BALANCE OF THIS GUARANTY, ALL ACCRUED INTEREST, LATE
CHARGES, AND ANY AND ALL AMOUNTS EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECURING THE
INDEBTEDNESS TOGETHER WTH INTEREST ON SUCH AMOUNTS, TOGETHER WITH COSTS OF SUIT, AND AN ATTORNEY'S COMMISSION OF
TEN PERCENT (10%) OF THE UNPAID PRINCIPAL BALANCE AND ACCRUED INTEREST FOR COLLECTION, BUT IN ANY EVENT NOT LESS THAN
FIVE HUNDRED DOLLARS (9600) ON WHICH JUDGMENT OR JUDGMENTS ONE OR MORE EXECUTIONS MAY ISSUE IMMEDIATELY, AND FOR
SO DOING, THIS GUARANTY OR A COPY OF THIS GUARANTY VERIFIED BY AFFIDAVIT SHALL BE SUFFICIENT WARRANT. THE AUTHORITY
GRANTED IN THIS GUARANTY TO CONFESS JUDGMENT AGAINST GUARANTOR SHALL NOT BE EXHAUSTED BY ANY EXERCISE OF THAT
AUTHORITY, BUT SHALL CONTINUE FROM TIME TO TIME AND AT ALL TIMES UNTIL PAYMENT IN FULL OF ALL AMOUNTS DUE UNDER THIS
GUARANTY. GUARANTOR HEREBY WAIVES ANY RIGHT GUARANTOR MAY HAVE TO NOTICE OR TO A HEARING IN CONNECTION WITH ANY
SUCH CONFESSION OF JUDGMENT, EXCEPT ANY NOTICE AND/OR HEARING REQUIRED UNDER APPLICABLE LAW WITH RESPECT TO
EXECUTION OF THE JUDGMENT, AND STATES THAT EITHER A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THIS CONFESSION OF
JUDGMENT PROVISION TO GUARANTOR'S ATTENTION OR GUARANTOR HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL
EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS
TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND
DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH
IN THE SECTION TITLED "DURATION OF GUARANTY." NO FORMAL ACCEPTANCE BY LENDER 16 NECESSARY TO MAKE THIS GUARANTY
EFFECTIVE. THIS GUARANTY IS DATED MBER 13,1997.
THIS GUAR S BEEN SI AN ALED BY THE UNDERSIGNED.
GUARANT
(SEAL)
sv . Ux01dc
LAYER PRO. ROO, U.& Pat. & T.M. OIL.. VM. aO11cl I W / CFI Prot:W ICU, IN. Allrpntsroomsa. IPA.ERO DARCOMTE.LN CI.OVLI
DISCLOSURE FOR CONFESSION OF JUDGMENT
Principal
600000.00 Loan Date
11-13-1997 Maturity Loan No Cell
801-30016 BMGR Collateral
SEC Account
140703 Officer
CW86 Initials
References In the shaded area are for Lender's use only and do not limit the app licability of this document to an articular loan or Item.
Borrower: Darcom Technolo0les, Inc. Lender: PENNSYLVANIA NATIONAL BANK AND TRUST COMPANY
77 Northeastern Boulevard CAMP HILL COMMUNITY OFFICE
Naahus, NH 03062 4231 TRINDLE ROAD
CAMP HILL, PA 17011
Guarantor: Steven M. Dardldc
9905 Bellows Drive
Camp HIII, PA 17011
DISCLOSURE FOR CONFESSION OF JUDGMENT
1 AM EXECUTING, THIS _J?t DAY OF ?OVtLMBtCP , 19?, A GUARANTY OF A PROMISSORY NOTE FOR
1900,000.00 OBLIGATING ME TO REPAY THAT AMOUNT. Z 1
A. I UNDERSTAND THAT THE GUARANTY CONTAINS A CONFESSION OF JUDGMENT PROVISION THAT WOULD PERMIT LENDER TO
ENTER JUDGMENT AGAINST ME IN COURT, AFTER A DEFAULT ON THE GUARANTY, WITHOUT ADVANCE NOTICE TO ME AND WITHOUT
OFFERING ME AN OPPORTUNITY TO DEFEND AGAINST THE ENTRY OF JUDGMENT. IN EXECUTING THE GUARANTY, BEING FULLY
AWARE OF MY RIGHTS TO ADVANCE NOTICE AND TO A HEARING TO CONTEST THE VALIDITY OF ANY JUDGMENT OR OTHER CLAIMS
THAT LENDER MAY ASSERT AGAINST ME UNDER THE GUARANTY, I AM KNOWINGLY, INTELLIGENTLY, AND VOLUNTARILY WAIVING
THESE RIGHTS, INCLUDING ANY RIGHT TO ADVANCE NOTICE OF THE ENTRY OF JUDGMENT, AND 1 EXPRESSLY AGREE AND CONSENT
TO LENDER'S ENTERING JUDGMENT AGAINST ME BY CONFESSION AS PROVIDED FOR IN THE CONFESSION OF JUDGMENT
PROVISION. INITIALS: ! +mo .
0. 1 FURTHER UNDERSTAND THAT IN ADDITION TO GIVING LENDER THE RIGHT TO ENTER JUDGMENT AGAINST ME WITHOUT
ADVANCE NOTICE OR A HEARING, THE CONFESSION OF JUDGMENT PROVISION IN THE GUARANTY ALSO CONTAINS LANGUAGE THAT
WOULD PERMIT LENDER, AFTER ENTRY OF JUDGMENT, TO EXECUTE ON THE JUDGMENT BY FORECLOSING UPON, ATTACHING,
LEVYING ON, TAKING POSSESSION OF OR OTHERWISE SEIZING MY PROPERTY, IN FILL OR PARTIAL PAYMENT OF THE JUDGMENT.
HOWEVER, LENDER MUST PROVIDE NOTICE TO ME UNDER APPLICABLE LAW IN EXECUTING ANY CONFESSED JUDGMENT. IN
EXECUTING THE GUARANTY, BEING FULLY AWARE OF MY RIGHTS TO ADVANCE NOTICE AND A HEARING AFTER JUDGMENT IS
ENTERED AND BEFORE EXECUTION ON THE JUDGMENT, I AM KNOWINGLY, INTELLIGENTLY AND VOLUNTARILY WAIVING THESE
RIGHTS, AND I EXPRESSLY AGREE AND CONSENT TO LENDER'S EXECUTING ON THE JUDGMENT, IN ANY MANNER PERMITTED BY
APPLICABLE STATE AND FEDERAL LAW. INITIALS: -
C. AFTER HAVING READ AND DETERMINED WHICH OF THE FOLLOWING STATEMENTS ARE APPLICABLE, AND BY PLACING MY
INITIALS NEXT TO EACH STATEMENT WHICH APPLIES, I REPRESENT THAT:
INITIALS
1. 1 WAS REPRESENTED BY MY OWN INDEPENDENT LEGAL COUNSEL IN CONNECTION WITH THE GUARANTY.
A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THE CONFESSION OF JUDGMENT PROVISION IN THE
2.
GUARANTY TO MY ATTENTION.
D. 1 CERTIFY THAT MY ANNUAL INCOME EXCEEDS $10,000; THAT THE BLANKS IN THIS DISCLOSURE WERE FILLED IN WHEN I
INITIALED AND SIGNED IT; AND THAT I RECEIVED A COPY AT THE TIME OF SIGNING.
THIS DISCLOS / HAS BEEN D AND SEALED BY THE UNDERSIGNED.
AFFIANT:
X L'//„ l r (SEAL)
S wen M. Dardldc
LASERPRO,Rrp U.S. PAI. AT.M. OIL.VV. 314tC11Y2?CFI ROSVntO. Ift AU1.gM1SrOCV1C IPA-030 0ARCCMTE LN a1.dvL1 -
i
EXHIBIT "C"
WHEN RECORDED MAIL TO:
Financial Trust Company
Go Keystone Lan Operations ATTN: Collateral Dept.
130 Court Street, PO Box 31117
Williamsport, PA 17701
,
98 DEC Rn 35
SPACE ABOVE THIS LINE IS FOR RECORDER'S USE ONLY
MORTGAGE
THIS MORTGAGE IS DATED NOVEMBER 20, 1998, between Steven M. Dardick and Necla Dardlck, whose
address Is 3805 Bellows Drive, Camp Hill, PA 17011 (referred to below as "Grantor"); and Financial Trust
Company, whose address Is 4231 Trindle Road, Camp Hill, PA 17011 (referred to below as "Lender").
GRANT OF MORTGAGE. For valuable consideration, Grantor grants, bargains, sells, conveys, assigns, transfers, releases, conftrms and
mortgages to Lender all of Grantor's right, fide, and Interest In and to the following described real property, together with all existing or subsequently
erected or affixed buildings, improvements and fixtures; an streets, lanes, alleys, passages, and ways; all easements, rights of way, all liberties,
privileges, tenements, hereditaments, and appurtenances thereunto belonging or anywise made appurtenant hereafter, and the reversions and
remainders with respect thereto; all water, water rights, watercourses and ditch rights (including stock In utilities with ditch or irrigation rights); and at
other rights, royalties, and profits relating to the real property, including without limitation an minerals, oil, gas, geothermal and similar matters, located
in Cumberland County, Commonwealth of Pennsylvania (the "Real Property"):
SEE EXHIBIT "A" ATTACHED HERETO AND INCORPORATED HEREIN BY REFERENCE.
The Real Property or Its address Is commonly known as 3805 Bellows Drive, Camp Hill, PA 17011.
Grantor presently assigns to Lender an of Grantor's right, title, and interest In and to an leases of the Property and all Rents from the Property. In
addition, Grantor grants to Lender a Uniform Commercial Code security interest In the Personal Property and Rents.
DEFINITIONS. The folowing words shall have thi following meanings when used in this Mortgage. Terms not otherwise defined In this Mortgage shall
have the meanings attributed to such terms In the Uniform Commercial Code. All references to dollar amounts shall man amounts In lawful money of
the United States of America.
Borrower. The word 'Son owe' means each and every person or entity signing the Note, including without limitation Darcom Technologies, Inc.
Existing Indebtedness. The words "Existing Indebtedness" man the Indebtedness described below in the Existng Indebtedness section of this
Mortgage.
Grantor. The word 'Grantor means any and all persons and entities executing this Mortgage, including without limitation all Grantors named
above. The Grantor is the mortgagor under this Mortgage. Any Grantor who signs this Mortgage, but does not sign the Nots, is signing this
Mortgage only to grant and convey that Grantor's interest In the Real Property and to grant a security interest in Grantor's Interest In the Rents and
Personal Property to Lender and is not personally liable under the Note except as otherwise provided by contract or law.
Guarantor. The word "Guarantor means and includes without limitation each and W of the guarantors, sureties, and accommodation parties in
connection with the Indebtedness.
Improvements. The word'Improverri mans and includes without limilahon all existing and future improvements, buildings, structures,
mobile homes affixed on the Real Property, facilities, additions, roplacements and other construction on the Rat Property.
Indebtedness. The word 'Indebtedness' mans as principal and interest payable under the Note and any amounts expanded or advanced by
Lender 10 discharge obligations of Grantor or expenses incurred by Lender to enforce obligations of Grantor under this Mortgage, together with
interest on such amounts as provided in this Mortgage. In add.hon to the Note, the word 'Indebtedness' inoiudes all obligations, debts and
liabilities, plus interest thereon, of Borrower to Lender, or any one or more of imam, as well as all claims by Lender against Borrower, or any one or
more of them, whether now existing or hereafter arising, whether Walled or unrelated to Ins purpose of the Note, whether voluntary or otherwise,
whether due or not due, absolute or contingent. liquidated or unligmdated and whether Borrower may be liable Individually or jointly with others,
whether obligated as guarantor or otherwise, and whether recovery upon such Indebtedness may be or hereafter may becio b?$d by any
statute of finutations, and whether such Indebtedness may be or hereafter may become otherwise unenforceable. (Initial Hera 2?" 1
Lender. The word 'Lender' mans Financial Trust Company, its successors and assigns. The Lender is the mortgage under this Mortgage.
Mortgage. The word 'Mortgage' means this Mortgage between Grantor and Lender, and includes without limitation an assignments and security
Interest provisions relating to the Personal Property and Rents.
Note. The word'Nots' means the promissory note or rredit agreement dated November 20, 1999. In the original principal amount of
$600,000,00 from Bdrrower to Lender, together with all renewals of, extensions of modifications of, refinancings of, consolidations of, and
substitutions for the promissory note or agreement. NOTICE TO GRANTOR: THE NOTE CONTAINS A VARIABLE INTEREST RATE.
Personal Property. The words 'Personal Property' mean all equipment, fixtures, and other articles of personal property now or hereafter owned
by Grantor, and now or horeafler attached or affixed to the Real Property: together with all accessions, parts, and additions to, an replacements of,
and all subshlutions for, any of such property; and togelner with all proceeds (including without hmilation all insurance proceeds and refunds of
premiums) hom any ale or other disposition of the Property.
Property. The word "Property' means collectively the Real Property and the Personal Property.
UOK 1502 FACt ?653
11-2D-1998 MORTGAGE Page 2
(Continued)
Real Property. The words "Real Property" mean the property, interests and rights described above in the "Grant of Mortgage' section.
Related Documents. The words 'Related Documents' mean and include without limitation all promissory notes, credit agreements, loan
agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, and all other instruments, agreements and
documents, whether now or hereafter existing, executed in connection with the Indebtedness.
Rents. The word "Rents' means all present and future rents, revenues, income, issues, royalties, profits, and other benefits derived from the
Property.
THIS MORTGAGE, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN THE RENTS AND PERSONAL PROPERTY, IS
GIVEN TO SECURE (1) PAYMENT OF THE INDEBTEDNESS AND (2) PERFORMANCE OF ALL OBLIGATIONS OF GRANTOR UNDER THIS
MORTGAGE AND THE RELATED DOCUMENTS. THIS MORTGAGE IS GIVEN AND ACCEPTED ON THE FOLLOWING TERMS:
GRANTOR'S WAIVERS. Grantor waives all rights or defenses ansing by reason of anyone action' or 'anti-deficiency" taw, or any other low which
may prevent Lender from bringing any action against Grantor, including a claim for deficiency to the extent Lender is otherwise entitled to a claim for
deficiency, before or after Lender's commencement or completion of any foreclosure action, either judicially or by exercise of a power of sale.
GRANTOR'S REPRESENTATIONS AND WARRANTIES. Grantor warrants that: (a) this Mortgage is executed at Borrower's request and not at the
request of Lender; (b) Grantor has the full power, right, and authority to enter into this Mortgage and to hypothecate the Property; (C) the provisions of
this Mortgage do not conflict with, or result In a default under any agreement or other instrument binding upon Grantor and do not resull in a violation
of any law, regulation, court decree or order applicable to Grantor; (d) Grantor has established adequate means of obtaining from Borrower on a
continuing basis information about Borrower's financial condition; and (e) Lender has made no representation 10 Grantor about Borrower (Including
without limitation the creditworthiness of Borrower).
PAYMENT AND PERFORMANCE. Except as otherwise provided in this Mortgage, Borrower shall pay to Lender all Indebtedness secured by this
Mortgage as It becomes due, and Borrower and Grantor shall strictly perform all their respective obligations under this Mortgage.
POSSESSION AND MAINTENANCE OF THE PROPERTY. Grantor and Borrower agree that Grantor's possession and use of the Property shall be
governed by the following provisions:
Possession and Use. Until in default, Grantor may remain in possession and control of and operate and manage the Property and collect the
Rants from the Property.
Duty to Maintain. Grantor shall maintain the Property in tenantable condition and promptly perform all repairs, replacements, and maintenance
necessary to preserve its value.
Hazardous Substances. The terms *hazardous waste; 'hazardous substance; 'disposal; "release; and "threatened release; as used In this
Mortgage, shall have the same meanings as set forth in the Comprehensive Environmental Response, Compensation, and Liability Ac: of 1980, as
amended, 42 U.S.C. Section 9601, at seq. ("CERCLA'), the Supedund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499
('SARA'), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, at seq., the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901, at saq., or other applicable slate or Federal laws, rules, or regulations adopted pursuant to any of the foregoing. The terms
'hazardous waste and "hazardous substance* shall also include, without limitation, petroleum and petroleum by-products or any fraction thereof
and asbestos. Grantor represents and warrants to Lender that: (a) During the period of Grantor's ownership of the Property, there has been no
use, generation, manufacture, storage, treatment. disposal, release or threatened release of any hazardous waste or substance by any person on,
under, about or from the Property; (b) Grantor has no knowledge of. or reason to believe that there has been, except as previously disclosed to
and acknowledged by Lender in writing, (p any use, generation, manufacture, storage, treatment, disposal, release, or threatened release of any
hazardous waste or substance on, under, about or from the Property by any prior owners or occupants of the Property or (it) any actual or
threatened litigation or claims of any kind by any person totaling to such matters; and (c) Except as previously disclosed to and acknowledged by
Lender in writing, (I) neither Grantor nor any tenant, contractor, agent or other authorized User Of the Property shall use, generate, manufacture,
store, treat, dispose of, or release any hazardous waste or substance on, under, about or from the Property and (Ii) any such activity shall be
conducted in compliance with all applicable federal, stale, and local laws, regulations and ordinances, including without limitation those laws,
regulations, and ordinances described above. Grantor authorizes Lender and its agents to enter upon the Property to make such Inspections and
tests, at Grantor's expense, as Lender may deem appropriate to determine compliance of the Property with this section of the Mortgage. Any
Inspections or tests made by Lender shall be for Lender's purposes only and shall not be construed to create any responsibility or liability on the
part of Lender to Grantor or to any other poison. The representations and warranties contained heroin are based on Grantor's due diligence In
investigating the Property for hazardous waste and hazardous substances. Grantor hereby (a) releases and waives any future claims against
Lender for indemnity or contribution in the event Grantor becomes liable for cleanup or other costs under any such laws, and (b) agrees to
Indemnity and hold harmless Lender against any and all claims, losses, liabilities, damages, penalties, and expenses which Lender may directly or
indirectly sustain or suffer resulting from a breach of this Section of the Mortgage or as a con.oquonce of any use, generation, manufacture.
storage, disposal, release or threatened release of a hazArdous waste of substance on the properties. The provisions of this section of the
Mortgage, including the obligation to indemnity. shall Surwve the payment of the Indebtedness and the satisfaction and reconveyance of the hen of
this Mortgage and shall not be affected by Lender's acquisition of any interest in the Property, whether by foreclosure or otherwise.
Nuisance, Waste. Grantor shag not cause, conduct or permit any nuisance nor commit, permit, of suffer any stripping of of waste on or to the
Property or any portion of the Property. Without limiting the generality Of the foregoing. Grantor will not remove, or grant to any other party the
right to remove, any timber, minerals (including oil and gas), sod, gravel or rock products without the prior written consent of Lender.
Removal of Improvements. Grantor shall not demolish or remove any Improvements from the Real Property without the pnor written consent of
Lender. As a Condition to the removal of any Improvements. Lender may require Grantor to make arrangements satisfactory to Lender to replace
such Improvements with Improvements of at least equal value.
Lender's Right to Enter. Lender and its agents and representatives may enter upon the Real Property at all reasonable times to ahend to
Lender's interests and to inspect the Property for purposes of Grantor's compliance with the terms and conditions of this Mortgage.
Compliance with Governmental Requirements. Grantor shall promptly Comply with all laws, ordinances, and regulations, now or hereafter In
effect, of all governmental authorities applicable 10 the use or occupancy 01 the Property, including without limitation, the Americans With
Disabilities Act. Grantor may contest in good faith any such law. ordinance, or regulation and withhold compliance during any proceeding,
including appropriate appeals, so long as Grantor has nohfod Lender in writing prior to doing so and so long as, in Lender's solo opinion,
Lender's interests in the Property are not jeopardized. Lender may require Grantor 10 post adoquate security or a surety bond, reasonably
satisfactory to Lender, to protect Lender's interest.
Duty to Protect. Grantor agrees noiln0r to abandon nor leave unattended the Property. Grantor shall do all other acts, in addition to those &CIS
set forth above in this section, which from the character and use of the Properly are reasonably necessary to protect and preserve the Property.
DUE ON SALE - CONSENT BY LENDER. Lender may, at its Cohn, declare immedately due and payable all sums secured by this Mortgage upon the
sale or transfer, without the Lender's prior written consent, of all or any part of the Real Property, or any interest in the Real Properly. A'sale or
90A50211"acE 4654
11-20-1998 MORTGAGE Page 3
(Continued)
transfer' means the conveyance of Real Property or any right, title or interest therein; whether legal, beneficial or equitable; whether voluntary or
Involuntary; whether by outright sale, deed, installment sale contract, land contract, contract for dead, leasehold Interest with a term greater than three
(3) years, lease-option contract, or by sale, assignment, or transfer of any beneficial interest in or to any land trust holding title to the Real Property, or
by any other method of convoyance of Real Property Interest. If any Grantor is a corporation, partnership or limited liability company, transfer also
Includes any change in ownership of more than twenty-live percent (25%) of the voting stock, partnership interests or limited liability company interests.
as the use may be, of Grantor. However, this option shall not be exercised by Lender it such exercise Is prohibited by federal law or by Pennsylvania
law.
TAXES AND LIENS. The following provisions relating to the taxes and liens on the Property are a part of this Mortgage.
Payment. Grantor shall pay when due (and in all events prior to delinquency) all taxes, payroll taxes, special taxes, assessments, water charges
and sewer service charges levied against or on account of the Property, and shall pay when due all claims for work done on or for services
rendered or material furnished to the Property. Grantor shall maintain the Property free of all hens having priority over or equal to the Interest of
Lender under this Mortgage, except for the lien of taxes and assessments not due, except for the Existing Indebtedness referred to below, and
except as otherwise provided in the following paragraph.
Right To Contest. Grantor may withhold payment of any tax, assessment, or claim In connection with a good faith dispute over the obligation to
pay, so long as Lenders interest In the Property is not jeopardized. If a lien arises or is fled as a result of nonpayment, Grantor shall within fifteen
(16) days after the lien arises or, if a lien is filed, within fifteen (15) days after Grantor has notice of the fling, secure the discharge of the lien, or If
requested by Lender, deposit with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender In an amount sufficient
to discharge the lien plus any costs and attorneys' fees or other charges that could accrue as a result of a foreclosure or sale under the lien. In
any contest, Grantor shall defend itself and Lender and shall satisfy any adverse judgment before enforcement against the Property. Grantor shall
name Lender as an additional obligee under any surety bond furnished in the contest proceedings.
Evidence of Payment. Grantor shall upon demand furnish to Lender satisfactory evidence of payment of the taxes or assessments and shall
authorize the appropriate governmental official to deliver to Lender at any time a written statement of the taxes and assessments against the
Property.
Notice of Construction. Grantor shall notify Lender at least fifteen (15) days before any work Is commenced, any services are furnished, or any
materials are supplied to the Property, If any mechanic's lien, matenalmon's lien, or other lion could be asserted on account of the work, services,
or materials and the cost exceeds $5,000.00. Grantor will upon request of Lender furnish to Lender advance assurances satisfactory to Lender
that Grantor can and will pay the cost of such Improvements.
PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring the Property are a part of this Mortgage.
Maintenance of Insurance. Grantor shall procure and maintain policies of fire insurance with standard extended coverage endorsements on a
replacement basis for the full insurable value covering all Improvements on the Real Property In an amount sufficient to avoid application of any
coinsurance clause, and with a standard mortgagee clause in favor of Lender. Grantor shall also procure and maintain comprehensive general
liability Insurance in such coverage amounts as Lender may request with Lender being named as additional insureds In such liability insurance
policies. Additionally, Grantor shall maintain such other insurance, including but not limited to hazard, business interruption and boiler insurance
as Lender may require. Policies shall be written by such Insurance companies and in such form as may be reasonably acceptable to Lender.
Grantor shalt deliver to Lender certificates of coverage from each Insurer containing a stipulation that coverage will not be uncalled or diminished
without a minimum of ten (10) days' pnor written notice to Lender and not containing any disclaimer of the insurer's liability for failure to give such
notice. Each Insurance policy also shall include an endorsement providing that coverage In favor of Lender will not be impaired In any way by any
act, omission or default of Grantor or any other person. Should the Real Property at any time become located in an area designated by the
Director of the Federal Emergency Management Agency as a special flood hazard area. Grantor agrees to obtain and maintain Federal Flood
Insurance for the full unpaid principal balance of the loan, up to the maximum policy limits set under the National Flood Insurance Program, or as
otherwise required by Lender, and to maintain such Insurance for the term of the loan.
Application of Proceeds. Grantor shall promptly notify Lender of any loss or damage to the Property if the estimated cost of repair or
replacement exceeds $500.00. Lender may make proof of loss If Grantor falls to do so within fifteon (15) days of the casualty. Whether or not
Lender's security is Impaired, Lender may, at its election, apply the proceeds to the reduction of the Indebtedness, payment of any lien affecting
the Property, or the restoration and repair of the Property. If Lender elects to apply the proceeds to restoration and repair, Grantor shall repair or
replace the damaged or destroyed Improvements in a manner satisfactory to Londor. Lender shall, upon satisfactory proof of such expenditure,
pay or reimburse Grantor from the proceeds for the reasonable cost of repair or restoration if Grantor is not in default under this Mortgage. Any
proceeds which have not boon disbursed within 180 days after their receipt and which Lender has not committed to the repair or restoration of the
Property shall be used first to pay any amount owing to Lender under this Mortgage, then to pay accrued Interest, and the remainder, If any, shall
be applied to the principal balance of the Indebtedness. If Lender holds any proceeds after payment In full of the Indebtedness, such proceeds
shall be paid to Grantor.
Unexpired Insurance at Sala. Any unexpired insurance shall inure to the benefit of, and pass to, the purchaser of the Property covered by this
Mortgage at any truslee's sale or other sale held under the provisions of this Mortgage, or at any foreclosure sale of such Property.
Compliance with Existing Indebtedness. During the period In which any Existing Indebtedness described below is In effect, compliance with the
insurance provisions contained in the instrument evidencing such Existing Indebtedness shall constitute compliance with the Insurance provisions
under this Mortgage, to the extent compliance with the terms of this Mortgage would constitute a duplication of insurance requirement. If any
proceeds from the insurance become payable on loss, the provisions in this Mortgage for division of proceeds shall apply only to that portion of
the proceeds not payable to the holder of the Existing Indebtedness.
Grantor's Report on Insurance. Upon request of Lender, however not more than once a year, Grantor shall furnish to Lender a report on each
existing policy of Insurance showing: (a) the name of the insurer; (b) the risks insured; (c) the amount of the policy; (d) the property Insured, the
then current replacement value of such property, and the manner of determining that value; and (e) the expiration date of the policy. Grantor
shall, upon request of Lender, have an independent appraiser satisfactory to Lender determine the cash value replacement cost of the Property.
EXPENDITURES BY LENDER. If Grantor falls to comply with any provision of this Mortgage, including any obligation to maintain Existing Indebtedness
in good standing as required below, or if any action or proceeding is commenced that would materially affect Lender's interests in the Property, Lender
on Grantor's behalf may, but shall not be required to, take any action that Lender deems appropriate. Any amount that Lender expends in so doing will
bear interest at the rata provided for in the Note from the date incurred or paid by Lender to the date of repayment by Grantor. All such expenses, at
Lender's option, will (a) be payable on demand, (b) be added 10 the balance of the Note and be apportioned among and be payable with any
installment payments to become due during oilhor (i) the term of any applicable insurance policy or (n) the remaining term of the Nola, or (c) be
healed as a balloon payment which will be due and payable at the Note's maturity. This Mortgage also will secure payment of these amounts. The
rights provided for in this paragraph shall be in addition to any other rights or any remedies to which Lender may be entitled on account of the default.
Any such action by Lender shall not be construed as curing the default so as to bar Lender from any remedy Thal it otherwise would have had.
Grantors obligation to Lender for all such expenses shall survive the entry of any mortgage foreclosure judgment.
860111502 PAGE .655
1+-20-1998 MORTGAGE Page a
(Continued)
WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of the Property are a part of this Mortgage.
Title. Grantor warrants that (a) Grantor holds good and marketable title of record to Ina Property in fee simple, free and clear of all liens and
encumbrances other than those set forts in the Real Property description or In the Existing Indebtedness section below or in any title Insurance
policy, title report, or final title opinion issued In favor of, and accepted by, Lender In connection with this Mortgage, and (b) Grantor has the full
right, power, and authority to execute and deliver Iris Mortgage to Lender.
Defense of Title. Subject to the exception in the paragraph above, Grantor warrants and will lorever defend the title to the Properly Against the
lawful claims of all persons. In the event any action or proceeding is commenced that questions Grantor's title or the interest of Lender under this
Mortgage, Grantor shall defend the action at Grantor's expense. Grantor may be the nominal party In such proceeding, but Lender shall be
entitled to participate in the proceeding and to be represented in the proceeding by counsel of Lenders own choice, and Grantor will deliver, or
cause to be delivered, to Lender such Instruments as Lender may request from time to time to permit such participation.
Compliance With Laws. Grantor warrants that the Property and Grantor's use of the Property complies with all existing applicable laws,
ordinances, and regulations of governmental authorities.
EXISTING INDEBTEDNESS. The following provisions concerning existing indebtedness (the "Existing Indebtedness") are a part of this Mortgage.
Existing Usn. The lien of this Mortgage securing the Indebtedness may be secondary and Interior to an existing lien. Grantor expressly,
covenants and agrees to pay, or see to the payment of, the Existing Indebtedness and to prevent any default on such Indebtedness, any default
under the Instruments evidencing such Indebtedness, or any default under any security documents for such indebtedness.
Default. It the payment of any installment of principal or any Interest on the Existing Indebtedness Is not made within the time required by the note
rwldencing such indebtedness, of should a default occur under the Instrument securing such Indebtedness and not be cured during any
applicable grace period therein, then, at the option of Lender, the Indebtedness secured by this Mortgage shall become immediately due and
payable, and this Mortgage shall be in default.
No Modification. Grantor shall not enter into any agreement with the holder of any mortgage or other security agreement which has priority over
this Mortgage by which that agreement is modified, amended, extended, or renewed without the prior written consent of Lender. Grantor shall
neither request nor accept any future advances under any such security agreement without the prior written consent of Lender.
CONDEMNATION. The following provisions relating to condemnation of the Property are a part of this Mortgage.
Application of Net Proceeds. If all or any part of the Property is condemned by eminent domain proceedings or by any proceeding or purchase
In lieu of condemnation, Lender may at its election require that all or any portion of the net proceeds or the award be applied to the Indebtedness
or the repair or restoration of the Property. The net proceeds of the award shall mean the award shot payment of all actual costs, expenses, and
anornays' fees Incurred by Lender In connection with the condemnation.
Proceedings. If any proceeding In condemnation is filed, Grantor shall promptly notify Lender in writing, and Grantor shall promptly take such
stops as may be necessary to defend the action and obtain the award. Grantor may be the nominal party in such proceeding, but Lender shah be
entitled to participate in the proceeding and to be represented in the proceeding by counsel of Its own choice, and Grantor will deliver or cause to
be delivered to Lender such instruments as may be requested by it from time to time to permit such participation.
IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following provisions relating to governmi taxes, lees
and charges are a part of this Mortgage:
Current Taxes, Fees and Charges. Upon request by Lender, Grantor shall execute such documents in addition to this Mortgage and take
whatever other action is requested by Lender to perfect and continue Lender's lien on the Real Property. Grantor shall reimburse Lender for all
taxes, as described below, together with all expenses incurred to recording, perfecting or continuing this Mortgage, Including without timilabon all
taxes, tea, documentary stamps, and other charges for recording or registering this Mortgage.
Taxes. The following shall constitute taxes to which this section apples: (a) a specific tax upon this type of Mortgage or upon all or any part of
the Indebtedness secured by this Mortgage; (b) a specific tax on Borrower which Borrower is authorized of required to deduct from payments on
the Indebtedness secured by this type of Mortgage; (c) a tax on this type of Mortgage chargeable against the Lender or the holder of the Note;
and (d) a specific tax on ail or any portion of the Indebtedness or on payments of principal and Interest made by Borrower.
Subsequent Taxes. If any tax to which this section applies is enacted subsequent to the date of this Mortgage, this event shall have the same
effect as an Event of Default (as defined below), and Lender may exercise any or all of its available remedies for an Event of Default as provided
below unless Grantor either (a) pays the tax before it becomes delinquent, or (b) contests the tax as provided above in the Taxes and Liens
section and deposits with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender.
SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relating to this Mortgage as a security agreement are a part of this
Mortgage.
Security Agreement, This instrument shall constitute a security agreement to the extent any of the Property constitutes futures or other personal
property, and Lender shall have all of the rights of a secured party under the Uniform Commercial Code as amended from time to time.
Security Interest. Upon request by Lender, Grantor shall execute financing statements and take whatever other action is requested by Lender to
perfect and continue Lender's security interest to the Rants and Personal Property. In addition to recording this Mortgage In the real property
records, Lender may, at any Irma and without further authorization from Grantor, foe executed counterparts, copies or reproductions of this
Mortgage as a financing statement. Grantor shall reimburse Lender for all expenses incurred in perfecting or continuing this security interest.
Upon default, Grantor shall assemble the Personal Property in a manner and at a place reasonably convenient to Grantor and Lender and make It
available to Lender within three (3) days shot receipt of written demand from Lender.
Addresses. The mailing addresses of Grantor (debtor) and Lender (sawed party), from which information concerning the saounty interest
granted by this Mortgage may be obtained (each as required by the Uniform Commercial Code), are as stated on the first page of this Mortgage.
FURTHER ASSURANCES; ATTORNEYAN-FACT. The following provisions relating to further assurances and attorney-an-fact are a part of this
Mortgage.
Further Assurances. At any time, and from time to time, upon request of Lender, Grantor will make, execute and deliver, of will cause to be
made, executed or delivered, to Lender or to Lender's designee, and when requested by Lender, cause to be filed, recorded, refiled, or
rerecorded, as the case may be, at such times and in such offices and places as Lender may deem appropnate, any and all such mortgages,
deeds of trust, security deeds, security agreements, financing statements, continuation statements, instruments of further assurance, certificates,
and other documents es may, in the sole opinion of Lender, be necessary or desirable in order to effectuate, complete, perfect, continue, or
preserve (a) the obligations of Grantor and Borrower under the Note, this Mortgage, and the Related Documents, and (b) the hens and security
interests created by this Mortgage on the Property, whether now owned or hereafter acquired by Grantor. Unless prohibited by law of agreed to
the contrary by Lender in writing, Grantor shall reimburse Lender for all costs and expenses incurred in rconnection with the matters referred to in
this paragraph.
EuuM15O,2/ACE .6vp
17_20-1998 MORTGAGE Pape 5
(Continued)
Attorney-In-Fact. It Grantor falls to do any of the things referred to in the preceding paragraph, Lender may do 0o for and In the name of
Grantor and at Grantor's expense. For such purposes, Grantor hereby irrevocably appoints Lender as Grantor's attorney-In-fact for the purpose
of making, executing, delivering, filing, recording, and doing all other things as may be necessary or desirable, in Lender's sole opinion, to
accomplish the matters retorted to in the preceding paragraph.
FULL PERFORMANCE. If Borrower pays all the Indebtedness when due, and otherwise performs all the obligations Imposed upon Grantor under this
Mortgage, Lender shall execute and deliver to Grantor a suitable satisfaction of this Mortgage and suitable statements of termination of any financing
statement on file evidencing Lender's security Interest in the Rents and the Personal Property. Grantor will pay, if permitted by applicable taw, any
reasonable termination fee as determined by Lender from time to time.
DEFAULT. Each of the following, at the option of Lender, shall constitute an event of default ('Event of Default) under this Mortgage:
Default on Indebtedness. Failure of Borrower to make any payment when due on the Indebtedness.
Default on Other Payments. Failure of Grantor within the time required by this Mortgage to make any payment for taxes or Insurance, or any
other payment necessary to prevent filing of or to effect discharge of any Iran.
Compliance Default. Failure of Grantor or Borrower to comply with any other term, obligation, covenant or condition contained in this Mortgage,
the Note or in any of the Related Documents.
Default In Favor of Third Parties. Should Borrower or any Grantor default under any loan, extension of credit, security agreement, purchase or
sales agreement, or any other agreement, In favor of any other creditor or person that may materially affect any of Borrower's or any Grantor's
property or Borrower's ability to repay the Note or Borrower's or Grantor's ability to perform their respective obligations under this Mortgage or any
of the Rotated Documents.
False Statements. Any warranty, representation or statement made or furnished to Lender by or on behalf of Grantor or Borrower under this
Mortgage, the Note or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished.
Defective Consteralimllon. This Mortgage or any of the Related Documents ceases to be In full force and effect (inciuding failure of any collateral
documents to create a valid and perfected security interest or lion) at any time and for any reason.
Insolvency. The dissolution or termination of Grantor or Borrower's existence as a going business, the insolvency of Grantor or Borrower, the
appointment of a receiver for any pan of Grantor or Borrowers property, any assignment for the benefit of creditors, any type of creditor workout,
or the commencement of any proceeding under any bankruptcy or insolvency taws by or against Grantor or Borrower.
Foreclosure, Forfeiture, etc. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or
any other method, by any creditor of Grantor or by any governmental agency against any of the Property. However, this subsection shelf not apply
in the event of a good faith dispute by Grantor as to the validity or reasonableness of the claim which is the basis of the foreclosure or forefedure
proceeding, provided that Grantor gives Lender written notice of such claim and furnishes reserves or a surety bond for the claim satisfactory to
Lander.
Breach of Other Agreement. Any breach by Grantor or Borrower under the terms of any other agreement between Grantor or Borrower and
Lender that is not remedied within any grace period provided therein, Including without Imitation any agreement concerning any Indebtedness or
other obligation of Grantor or Borrower to Lender, whether existing now or later.
Existing Indebtedness. A default shall occur under any Existing Indebtedness or under any instrument on the Property securing any Existing
Indebtedness, or commencement of any suit or other action to foreclose any existing lien on the Property.
Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies
or becomes incompetent, or revokes or disputus the validity of, or liability under, any Guaranty of the Indebtedness.
Adverse Change. A material adverse charge occurs in Borrower's financial condition, or Lender believes the prospect of payment or
performance of the Indebtedness i Impaired.
Insecurity, Lender In good faith deems Itself insecure.
RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of any Event of Default and at any time thereafter, Lander, at Its option, may exercise
any one or more of the fortowing rights and remedies, in addition to any other rights or remedies provided by taw:
Accelerate Indebtedness. Subje:t to applicable law, Lender shell have the right at its option without notice to Borrower to declare the entire
Indebtedness Immediately due and payable.
UCC Remedies. With respect to all or any part of the Personal Property, Lender shall have all the rights and remedies of A secured party under
the Uniform Commercial Code.
Collect Rents. Lander shall have the right, without notice to Grantor or Borrower, to take possession of the Properly and collect the Rents,
Inducting amounts past due and unpaid, and apply the net proceeds, over and above Lender's costs, against the Indebtedness. In furtherance of
this right, Lander may require any tonant or other user of the Property to make payments of rent or use fees directly to Lender. If the Rents are
collected by Lender, then Grantor irrevocably designates Lender as Grantor's shorney-in-fact to endorse instruments received in payment thereof
In the name of Grantor and to negotiate the same and collect the proceeds. Payments by tenants or other users to Lender in response to Lender's
demand shall satisfy the obligations for which the payments are made, whether or not any proper grounds for the demand existed. Lander may
exercise its tights under this subparagraph either in person, by agent, or through a receiver.
Appoint Receiver. Lender shag have the right to have a receiver appointed to take possession of sit or any pan of the Property, with the power to
protect and preserve the Property, to operate the Property preceding foreclosure or sale, and to collect the Rents from the Property and Apply the
proceeds, over and above the cost of the receivership, against Iho Indebtedness. The receiver may serve without bond it permitted by law.
Lender's right to the appointment of a receiver shall exist whether or not the apparent value of the Property exceeds the Indebtedness by a
substantial amount. Employment by Lender than not disqualify a Person from serving as a receiver.
Judicial Foreclosure. Lender may obtain a judicial decree foreclosing Grantor's interest in all or any part of the Property.
Possession of the Property. For the purpose of procuring possession of the Property, Grantor hereby AUIh0n7es and empowers any attorney of
any court of record in the Commonwealth of Pennsylvania or a,sewnare, as attorney for Lender and all persons claiming under or through Lander,
to sign an agreement for entering in any competent court an amicable action in ejectment for possession of the Property and to appear for and
confess judgment against Grantor, and against all persons claiming under or through Grantor, for the recovery by Lander of possession of the
Property, without any stay of execution, for which this Mortgage, or a copy of this Mortgage verified by affidavit. Shall be A Sufficient warrant; and
thereupon a writ of possession may be issued forthwith, without any prior writ or proceeding whatsoever.
Non)udlcial Sale, if permitted by applicable law, Lender may foreclose Grantor's interest in an or in any part of the Personal Property or the Real
8001502 ma x657
11_20-1998 MORTGAGE Pepe e
(Continued)
Property by nonjudicial sale.
Deficiency Judgment. Lender may obtain a judgment for any deficiency remaining in the Indebtedness due to Lender after application of all
amounts received from the exercise of the rights provided in this section.
Tenancy at Sufferance. If Grantor remains In possession of the Property after the Property is sold as provided above or Lender otherwise
becomes entitled to possession of the Property upon default of Grantor, Grantor shall become a tenanl at sufferance of Lander or the purchaser of
the Property and shall, at Lender's option, either (a) pay a reasonable rental for the use of the Property, or (b) vacate the Property immediately
upon the demand of Lender.
Other Remedies. Lender Shan have all other rights and remedies provided In this Mortgage or the Note or available at law or in equity.
Sale of the Property. To the extent permitted by applicable law, Grantor or Borrower hereby waive any and all right to have the property
marshalled. In exercising its rights and remedies, Lender Shan be free to sell all or any part of the Property together or separately, In one Sale or by
separate sales. Lender shall be entitled to bid at any public sale on all or any portion of the Property.
Notice of Sale. Lander shall give Grantor reasonable notice of the time and place of any public sale of the Personal Property or of the time after
which any private sale or other Intendod disposition of the Personal Property is to be made. Unless otherwise required by applicable law,
reasonable notice shall mean notice given at least ten (10) days before the time of the sale or disposition.
Waiver, Election of Remedies. A waiver by any party of a breach of a provision of this Mortgage shall not constitute a waiver of or prejudice the
party's rights otherwise to demand strict compliance with that provision or any other provision. Election by Lender to pursue any remedy shad not
exclude pursuit of any other remedy, and an election to make expenditures or take action to perform an obligation of Grantor or Borrower under
this Mortgage after failure of Grantor or Borrower to perform shall not effect Lender's right to declare a default and exercise Its remedies under this
Mortgage.
Attorneys' Fees; Expenses. If Lender Institutes any suit or action to enforce any of the terms of this Mortgage, Lender shall be enttled to recover
such sum as the court may adjudge reasonable as attorneys' fees at trial and on any appeal. Whether or not any court action Is Involved, all
reasonable expenses Incurred by Lander that In Lender's opinion are necessary at any time for the protection of Its interest or the enforcerrent of
its rights shall become a part of the Indebtedness payable on demand and shall bear interest from the dale of expenditure until repaid at the rate
provided for In the Note. Expenses covered by this paragraph Include, without Ilmitauon, however subject to any limits under applicable law,
Lender's attorneys' fees and Lender's legal expenses whether or not there Is a lawsuit, Including attorneys' fees for bankruptcy proceedings
(including efforts To modify of vacate any automatic stay or injunction). appeals and any anticipated poll-judgment collection services, the cost of
searching records, obtaining title reports (Including foreclosure reports), surveyors' reports, and appraisal fees, and title Insurance, to the extent
permitted by applicable law. Borrower also will pay any court costs, In addition to all other sums provided by law.
NOTICES TO GRANTOR AND OTHER PARTIES. Unless otherwise provided by applicable taw. any notice under this Mortgage shall be In writing,
may be sent by telefacslmile (unless otherwise required by law), and shall be effective when actually delivered, or when deposited with a nationally
recognized overnight courier, or, If mailed, shall be deemed effective when deposited In the United States mall first cuss, certified or registered mail,
postage prepaid, directed to the addresses shown near the beginning of this Mortgage. Any party may change its address for notices under this
Mortgage by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the partys address. All copies of
notices of foreclosure from the holder of any lien which has priority over this Mortgage shad be sent to Lender's address, as shown near the beginning
of this Mortgage. For notice purposes, Grantor agrees to keep Lender informed at all times of Grantor's current address.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Mortgage:
Amendments. This Mortgage, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the
matters set forth in this Mortgage. No alteration of or amendment to this Mortgage shall be effective unless given in writing and signed by The
party or parties sought to be charged or bound by the alteration or amendment.
Annual Reports. If the Property is used for purposes other than Grantor's residence, Grantor shall furnish to Lender, upon request, a certified
statement of net operating Income received from The Property during Grantor's previous fiscal year in such form and dean as Lender shall require.
"Net operating Income" shall mean all cash receipts from the Property less all cash expenditures made In connection with the operation of the
Property.
Applicable Lew, This Mortgage has been delivered to Lender and accepted by Lender In the Commonwealth of Pennsylvania. This
Mortgage shall be governed by and construed In accordance with the laws of the Commonwealth of Pennsylvania.
Caption Headings. Caption headings In this Mortgage are for convenience purposes only and are not to be used to interpret or define the
provisions of this Mortgage.
Merger. There shall be no merger of the Interest or estate created by this Mortgage with any olhor interest or estate In the Property at any time
held by or for the benefit of Lender in any capacity, without the wntten consent of Lender.
Multiple Parties; Corporate Authority. All obligations of Grantor and Borrower under this Mortgage shall be joint and several, and all references
to Grantor shall mean each and every Grantor, and all references to Borrower shall mean each and every Borrower. This means that each of the
persons signing below is responsible for all obligations In this Mortgage.
Severablllty. It a court of competent jurisdiction finds any provision of this Mortgage to be Invalid or unenforceable as to any parson or
circumstance, such finding shall not render that provision invalid or unenforceable as to any other persons or circumstances. It feasible, any such
offending provision shall be deemed to be modified to be Wnthm the limits of enforceability or validity: however, If the offending provision cannot be
so modified, It shall be stricken and all other provisions of this Mortgage In all other respects shall remain valid and enforceable.
Successors and Assigns. Subject to the limitations stated in this Mortgage on transfer of Grantor's interest, this Mortgage shall be binding upon
and Inure to the benefit of the parties, their heirs, personal representatives, successors and assigns. If ownership of the Property becomes vested
In a person other than Grantor, Lander, without notice to Grantor, may deal with Grantor's successors w,th reference to this Mortgage and the
Indebtedness by way of forbearance or extension without releasing Grantor from the obligations of this Mortgage or lubdity, under the
Indebtedness.
Time Is of the Essence. Time is of the essence in the performance of this Mortgage.
Waivers and Consents. Lender Shall not be deemed to have waived any rights under this Mortgage (or under the Related Documents) unless
such waiver is in writing and signed by Lander. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of
such fight or any other right. A waiver by any party of a provision of this Mortgage shall not constitute a waiver of or prejudice the party's right
otherwise to demand strict compliance with that provision or any tithe, provision. No prior waiver by Lender, nor any course of dealing between
Lender and Grantor or Borrower, shall constitute a waiver of any of Lender's fights or any of Grantor or Borrower's obligations as to any future
transactions. Whenever consent by Lender is required in this Mortgage, the granting of such consent by Londe( In any instance shall not
constitute continuing consent to subsequent instances Where such consent is required.
eook1502FACE k658
11-20-1998 MORTGAGE Page 7
(Continued)
EACH GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MORTGAGE, AND EACH GRANTOR AGREES TO ITS
TERMS.
THIS FIT AD BEEN SIGN D SEALED Y THE UNDERSIGNED.
GRANTOR:
X (SEAL) x
SIWS dldt Necla Dardlat
Signed, acknowledged and dell ) nca of:
X I Al. wltnsu / y
Wltne
CERTIFICATE OF RESIDENCE
I hereby comity, that the precise address of the mortgagee, Financial Trust Company, herein Is as follows:
1271 Trlndle Road, Camp WII, PA 17011
Attan.y wAgent la MCrlpew
INDIVIDUAL ACKNOWLEDGMENT
STATE OF F?? ?1A1 d/ (1, 1
)GS
COUNTY OF (?? l 1
On this, the .10 day of 1g! U , before me r"
undersigned Notary Public, personally appeared Sloven M. Daralcx and Necla Dardick, known to me (or saost or t
names are subscribed to the within Instrument, and acknowledged that they executed the same for the purposes srN F i
in witneu whereof, I hereunto let my hand and official seal.
Notary Public In and for the State
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EXHIBIT "D"
PROMISSORY NOTE
Principal 1
S188,000.00 00
Loan _29-1998 ity
02-28 r1 99I L30038D
COCall MM I CoSECra' I 3Accoun 057001 I C?NI60 Inltlels
r References m the shelled area are for Lender's use only and do not IMI' the applicability of this document to any particular loan or item.
Borrower: Darcom Technologies, Inc. Lender: Financial Trust Company
77 Northeastern Boulevard Camp HIII
Nashua, NH 03062 4231 Trindle Road
Camp Hill, PA 17011
Principal Amount: $188,000.00 Initial Rate: 9.250% Date of Note: September 29, 1998
PROMISE TO PAY. Darcom Technologies, Inc. ("Borrower") proill to pay to Financial Trust Company ("Lender"), or order, In lawful money
of the United States of America, the principal amount of One Hundred Eighty Eight Thousand 8 001100 Dollars ($188,000.00), together with
Interest on the unpaid principal balance from September 29, 1998, until paid In full.
PAYMENT. Borrower will pay this loan In one principal payment of $188,000.00 plus Interest on February 28, 1999. This payment due February
28, 1999, will be for all principal and accrued Interest not yet paid, The annual interest rate for this Note is computed on a 3651360 basis; that is, by
applying the ratio of the annual Interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of
days the principal balance Is outstanding, Borrower will pay Lender at Lenders address shown above or at such other place as Lender may designate
In writing. Unless otherwise agreed or required by applicable law, payments will be applied first to accrued unpaid interest, then to principal, and any
remaining amount to any unpaid collection costs and late charges.
VARIABLE INTEREST RATE. The Interest rate on this Note is subject to change from time to time based on changes in an index which Is Lenders
Prime Rate (the "Index'. This is the rate Lender charges, or would charge, an 90-dey unsecured loans to the most creditworthy corporate customers.
This rate may or may not be the lowest rate available from Lender at any given time. Lender will tell Borrower the current Index rate upon Borrower's
request. Borrower understands that Lender may make loans based on other rates as well. The interest rate change will not occur more Orion than
each DAY. The Index currently Is 8250% per annum. The Interest rata to be applied to the unpaid principal balance of this Note will be at a
rate of 1400 percentage point over the Index, resulting In an Initial rate of 9.250% per annum. NOTICE: Under no circumstances will the interest
rate on this Note be more than the maximum rate allowed by applicable law.
PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not, unless agreed to
by Lender In writing, relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, they will reduce the
principal balance due.
LATE CHARGE. If a payment is 16 days or more late, Borrower will be charged 5.000% of the regularly scheduled payment.
DEFAULT. Borrower will be in default If any of the following happens: (a) Borrower fails to make any payment when due. (b) Borrower breaks any
promise Borrower has made to Lender, or Borrower fails to comply with or to perform when due any other term, obligation, covenant, or condition
contained in this Note or any agreement related to this Note, or in any other agreement or loan Borrower has with Lender. 0) Borrower defaults under
any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that
may materially affect any of Borrower's property or Borrower's ability to repay this Note or perform Borrower's coligations under this Note or any of the
Related Documents. (d) Any representation or statement made or furnished to Lender by Borrower or on Borrower's behalf is false or misleading in any
material respect either now or at the time made or furnished. (e) Borrower becomes insolvent, a receiver is appointed for any part of Borrowers
property, Borrower makes an assignment for the benefit of creditors, or any proceeding is commenced either by Borrower or against Borrower under
any bankruptcy or insolvency laws. (f) Any creditor tries to take any of Borrower's property on or in which Lender has a lion or security Interest. This
Includes a garnishment of any of Borrower's accounts with Lender. (g) Any guarantor dies or any of the other events described in this default section
occurs with respect to any guarantor of this Note. (h) A material adverse change occurs in Borrowers financial condition, or Lender believes the
prospect of payment or performance at the Indooledness is imparted. (1) Lender in good faith deems itself insecure.
LENDER'S RIGHTS. Upon default, Lender may, shat giving such notices as required by applicable law, declare the entire unpaid principal balance an
this Note and all accrued unpaid interest immediately due, antl then Borrower will pay that amount. Lender may hire or pay someone 9150 to help
collect this Note if Borrower does not pay. Borrower also will pay Lender that amount. This includes, subject to any limits under applicable law,
Lender's attorneys' fees and Lender's legal expenses whether or not there is a lawsuit, including attorneys fees and legal expenses for bankruptcy
proceedings (Including efforts to modify or vacate any automatic stay at injunction), appeals, and any anbrpated post-judgment collection services. II
not prohibited by applicable law, Borrower also will pay any court costs, in addition to all other sums provided by law. If judgment is entered in
connection win this Note, interest will continue to accrue on this Note after judgment at the interest rate applicable to this Note at the time judgment is
entered. This Nola has been delivered to Lender and accepted by Lender in the Commonwealth of Pennsylvania. If there Is a lawsuit,
Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Cumberland County, the Commonwealth of Pennsylvania.
This Note shall be governed by and construed In accordance with the laws of the Commonwealth of Pennsylvania.
RIGHT OF SETOFF. Borrower grants to Lender a contractual security interest in, and hereby assigns, conveys, delivers, piedgeS, and transfers to
Lender all Borrower's right. title and interest in and to Borrower's accounts with Lender (whether checking, savings, or some other account), Including
without limitation all accounts held jointly with someone else and all accounts Borrower may coon in the future, excluding however all IRA and Keogh
accounts, and all bust accounts for which the grant of a security interest would be Prohibited by law. Borrower authorizes Lancer, to the extent
permitted by applicable law, to charge or se!otl all sums owing on this Note against any and all sucn accounts, and, at Lender's option, to
administratively freeze all sucn accounts to allow Lentler to project Lenders charge and setoff ri provided on this paragraph.
COLLATERAL. This Note is secured by, in ACOltian to any other collateral, a Mortgage oatetl September 29. 1999. to Lender an real property located
in Cumberland County, Commonwealth of Pennsylvania, a Mortgage oatetl Sectember 29, 1998, to Lender on real property located in Cumoonand
County, Commonwealth of Pennsylvania, and a Mortgage elated September 29, 1999, to Lender an real property located in Cumberland County,
Commonwealth of Pennsylvania, all the terms and conditions of which are retacy.ncorporalad and made a part of this Note.
YEAR 2000 PROVISIONS. Year 2000 Issues nave not resulted in, and will not result m, a material adverse change to the business, properties, assets.
financial condition, results of operations or prosoacts of the Borrower, and have not ano will not impair materially the ability of the Borrower to Serve
and punctually pay or perform any of its Obligations owed to the Lancer. From time !o time, within twenty 1201 days after any request by the Lender, rte
Borrower Shall Cedver to the Lancer a written report as to its compbamce ehans in cdnneci!oP with Year 2000 -:slues, the costs incurred to Data and Ine
anticipalatl future costs thereof, and mformalon as to any liability the Borrower expects to incur in cgnnectidn A!tn Year 2000 issues, all in such dated
as the Lender may •e SOnediy T00051, In addition, the Screws, sPad, upon reauest of Ire Lerce,, permit the Londe', upon foasonable Police and
during normal business hours. to meet with the Borrowers information sysiams and 'echno!ogiss employees and/or culsids providers to discuss It's
status of the Borrower's con iance oftons in connection with Year 2700 slues and Ire actual antic cargo :oft !cored. Tne Borrower shall take all
action necessary to ensure tat d will be year 2000 Compliant to, &A m ssion critca! syslams on cr prior to 09cemce, 3'. 1998 and to ensure 11191 it wA
De Year 2000 Compliant for all diner major systems on a, prior to Cecemce' 1. !999 sack !Pal no materiaa! acve'se orange 10 the Borrowers business.
09-29.1998
PROMISSORY NOTE
(Continued)
Page 2
properties, assets, financial condition, results of operations, or prospects will result. For purposes of this provision, "Year 2000 Issues" means the risk
that computer applications, (including all Software, embedded micro-cnips ano other processing C30011111e5) used by or for the benefit of the Borrower
may be unable to recognize of property perform date-sensitive functions involving certain dales prior to. ano any Oslo after, December 31, 1999, and
Year 2000 Compliant' means that all software, embedded micro-Chips and other processing Capabilities utilized by and material to the Borrower are
able to effectively and correctly process data and perform functions for as calendar dates, including Cates in and after the Year 2000.
YEAR 2000 DEFAULT. In odditidn to the other Events of Default described in this Agreement. each of the following shall constitute an Event of Default
under this Agreement: (a) any representation or statement made or furnished to the Lender by or on benall of the Borrower with respect to year 2000
Issues is false or misleading In any material respect either now or at the films made or furnished, (b) the Borrower fads to most the deadlines required in
this Agreement to be Year 2000 Compliant. (C) the Borrower fads to Comply with any other provision of this Agreement relating to Year 2000 Issues, or
(d) the Lander determines, in its sole discretion, that there is a reasonable likelihood that the Borrower cannot be Year 2000 Compliant on or berfore
December 1, 1999.
BORROWER'S WAIVER AND INDEMNIFICATION. Borrower hereby indemnifies antl holes harmless Lender and Lender's affiliates and controlling
entities, their respective successor and assigns, and au of their officers, directors, employees and agents (each as "Indemnified Person" and
collectively the "Indemnified Persona") against any and all claims, demands, losses, costs, and expenses (Including without limitation attorneys fees
and costs whether at fired or otherwise, and on any ap0eal or petition for review) incurred by any Indemnified Person arising out of or relating to any
Investigatory or remedial action involving the Year 2000 Issues, or on account of the breach of any Indemnified Person pursuant to this Agreement. In
addition to this indemnity, the Borrower hereby releases and waives all present and future Claims against the Lander or any Indemnified Person for
indemnity or contribution In the event the Borrower becomes liable for any failure W default under the Year 2000 Provisions of this Agreement. The
Indemnity and waiver provisions set forth this Section shall survive the payment by the Borrower of the obligations owed to the Lender under this
Agreement or any other agreement.
CESSATION OF ADVANCES. In addition to the other remedies set forth in this Agreement, if the Lender has made any commitment to make any loan,
advance or other extension of credit to the Borrower, whether under this Agreement or under any other agreement or instrument, the Lender shall have
no obligation Id make any load, advance or other extension of credit to the Borrower, or to extend credit accommodations to the Borrower of any kind,
if, as a result of the Borrowees failure to comply with the provision of this Agreement relating 10 the Year 2000, a material adverse change in the
Borrower's financial condition, properties, business or operations occurs or is Ilkety to result, or if any other event or circumstances has Occurred or
arisen which is reasonably likely to result In a compliance failure or default under trio Year 2000 provision of this Agreement.
GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower and any
other person who signs, guarantees or endorses this Note, to trio extent allowed by law, waive presentment, demand for payment, protest and notice of
dishonor. Upon any change in the terms of this Note, and unless Otherwise expressly stated in writing, no party who signs this Note, whether as maker,
guarantor, accommodation raker or endorser, shall be released from liaoddy. Ali such part.as agree that Lender may renew or extend (repeatedly and
for any length of time) this loan, or release any party or guarantor or collateral; or impair, fad to realize upon or perfect Lender's security interest In the
collateral; and take any other action deemed necessary by Lender without trio consent of or notice to anyone. An such parties also agree that Lander
may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. If any portion of this Nots is
for any reason determined to be unenforceable, it will not affect the enforceability of any 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 DEFAULT UNDER THIS NOTE, AND WITH OR WITHOUT COMPLAINT FILED, AS OF ANY TERM, CONFESS OR ENTER JUDGMENT AGAINST
BORROWER FOR THE ENTIRE PRINCIPAL BALANCE OF THIS NOTE, ALL ACCRUED INTEREST, LATE CHARGES, AND ANY AND ALL AMOUNTS
EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECURING THIS NOTE TOGETHER WITH INTEREST ON SUCH
AMOUNTS, TOGETHER WITH COSTS OF SUIT, AND AN ATTORNEY'S COMMISSION OF TEN PERCENT (10%) OF THE UNPAID PRINCIPAL
BALANCE AND ACCRUED INTEREST FOR COLLECTION, BUT IN ANY EVENT NOT LESS THAN FIVE HUNDRED DOLLARS (M) ON WHICH
JUDGMENT OR JUDGMENTS ONE OR MORE EXECUTIONS MAY ISSUE IMMEDIATELY; AND FOR SO DOING, THIS NOTE OR A COPY OF THIS
NOTE VERIFIED BY AFFIDAVIT SHALL BE SUFFICIENT WARRANT. THE AUTHORITY GRANTED IN THIS NOTE TO CONFESS JUDGMENT
AGAINST BORROWER SHALL NOT BE EXHAUSTED BY ANY EXERCISE OF THAT AUTHORITY, BUT SHALL CONTINUE FROM TIME TO TIME AND
AT ALL TIMES UNTIL PAYMENT IN FULL OF ALL AMOUNTS DUE UNDER THIS NOTE. BORROWER HEREBY WAIVES ANY RIGHT BORROWER
MAY HAVE TO NOTICE OR TO A HEARING IN CONNECTION WITH ANY SUCH CONFESSION OF JUDGMENT, EXCEPT ANY NOTICE AND/OR
HEARING REQUIRED UNDER APPLICABLE LAW WITH RESPECT TO EXECUTION OF THE JUDGMENT, AND STATES THAT EITHER A
REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THIS CONFESSION OF JUDGMENT PROVISION TO BORROWER'S ATTENTION OR
BORROWER HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL.
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE. INCLUDING THE VARIABLE
INTEREST RATE PROVISIONS. BORROWER AGREES TO THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED
COPY OF THE NOTE.
THIS NOTE HAS BEEN SIGNED AND SEALED BY THE UNDERSIGNED.
BORROWER:
Darcom Tech
By:S CI- (SEAL)
D. Scot ardick, resident
vu,&t,ARAlA. SNpNPAy. .ASEAPAO.Arg US PA! ATm p!L. lP• 7ia lti'aYI ?A A•cSancrA tic A.va^.!1 rA1PVAa ;PA•p7C pAACC,A:Y d7 plLi
CHANGE IN TERMS AGREEMENT
Prin pal.
S18 000:00 ` LoemDate ;-Maturity
060
1999 Loe1 1110 Call•
0 Collateral Ac
count
Ofllcer
initials.
References in t
he sha0atl area era
-
for Lenn ?
30
38 C
OMM SEC
305700
CMV
- -- -------°•• ?•...?wmem m an panoular IDan or item.
Borrower: Dercom Technologies, Inc. Lender: KEYSTONE FINANCIAL BANK N.A.
77 Northeastern Boulevard Camp Hill
'
Nashua, NH 03062 p
4231 Trindle Road
Camp HIII, PA 17011
Principal Amount: $788,000.00 Date of Agreement: May 27, 1999
DESCRIPTION OF EXISTING INDEBTEDNESS, A $188,000.00 Promissory Note to Keystone Financial Bank, NA., (formerly Financial Trust Company)
dated September 29, 1998 with & current principal balance of $188,000.00 and accrued unpaid interest clue hem the 291h day of September, 1998.
DESCRIPTION OF CHANGE IN TERMS.
Effective February 28, 1999, Keystone Financial Bank, NA., (formerly Financial Trust Company) and the undersigned hereby agree to extend the
maturity (Jets from February 28, 1999 to June 30, 1999, when all outstanding principal and accrued interest shall be cue and payable in full.
AMENDMENT TO CREDIT DOCUMENTS
THIS AMENDMENT TO CREDIT DOCUMENTS dated as of May 27. 1999, (this 'Amendment") is entered into by and between Darcom Technologies,
Inc., a Corporation organized and existing under laws of the State of Pennsylvania ('Borrower') and Keystone Financial Bank, N.A., (formerly Financial
Trust Company), a national banking association (the "Bank)
RECITALS:
1. The Bank has previously made, or is concumentty with the signing of five Amendment making, loans or other extensions of credit to the Borrower,
which are or may be evidenced by certain loan or credit agreements, promissory notes, security documents, and all other agreements, contracts and
Instruments (all of such loan or credit agreements, promissory notes made by the Borrower in favor of the Bank, or entered into by and between the
Borrower and the Bank, whether previously entered into, entered into simultaneously with the execution of this Amendment, or entered Into after the
date of this Amendment, collectively the "Credit Documenr).
2. The Bank has requested, and the Borrower has agreed, to amend the Credit Documents as set forth below, in order 10 add additional provisions to
the Credit Documents In connection with the Year 2000 Issues (as defined below).
NOW THEREFORE, In consideration of the promises, the mutual covenants and agreements contained herein, the Bank's continuing agreement to
extend credit under the Credit Documents to the Borrower and other valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and with the intent to be legally bound hereby, the parties hereto agree as follows:
Section 1. Amendments to Credit Documents The following defined terms, representations and warranties and covenants are hereby added to and
deemed Incorporated into the Crean Documents.
it. Defined Terms.
Year 2000 Compliant- means, Win respect to any person or entity, all software, embedded micro-chips and other processing capabilities utilized by
and material to the business operations or financial condition of such person or entity are able to Interpret and manipulate data on and Involving all
calendar dates correctly and without causing any abnormal ending scenario, including in rotation to certain dates prior to, and any date after, December
31, 1999.
Year 2000 issues" means the risk that computer applications used by or for the benefit of the Borrower may be unable to recognize or properly
perform date-eensifive functions Involving certain dates pror to, and any date after, December 31, 1999,
b, Representations Regarding Year 2000 Issues,
On the basis of a comprehensive inventory, review and assessment of Xhe Borrower's computer applications ono hardware containing micro-chips and
all software and other processing capabilities of the Borrower, upon inquiry made the Borrower's material suppliers antl vendors. In the opinion of the
Borrower's Senior Management, the Borrower and all such vendors and suppliers will be Year 2000 Compliant before December 1, 1999.
c. Covenants.
1. Information Concerning Year 2000 Issues.
Within twenty (20) days after any request by the Bank, the Borrower shall deliver to the Bank (A) a written report as to its compliance efforts in
connection with the Year 2000 Issues, in such detail as the Bank may reasonably request, (B) a report as to the costs incurred by the Borrower to data,
and the additional costs the Borrower expects to Incur in connsction with the Year 2000 Issues, and (C) a report as to any liability which the Borrower
expects to Incur In connection with Year 2000 Issues. Promptly upon receipt by the Borrower thereof, the Borrower shall, upon request of the Bank,
permit the Bak upon reasonable notice and during normal business hours, to most with the Borrowers information systems and technologies
emplCyaes, outside providers and consultants, accountants and other persons to discuss the status of the Borrower's compliance efforts In connection
with the Year 2000 Issues.
It Year 2000 Compliance.
The Borrower shall take all action necessary to insure that all of the material computer-based systems including all software, embedded m1cro-chip3
and other processing capabilities) utilized by or for the benefit of the Borrower are Year 2000 Compliant on or prior to Decemeer 1, 1999.
Section 2. No Other Amendments or Waivers. The Amendments to the Credit Documents set forth above do net either implicitly or explicitly alter,
waive or amend, except a expressly Provided in this Amendment, the provisions of the Credit Documerts. The amendments sat forth above do not
waiver, now or in the future, compliance with any other covenant, term or Condition to be podOrmed or Compiled with nor do they impair any rights Or
remedies of the Bank under any of the Credit Documents with respect to any such violation. Nothing m this Amentlment Shan be deemed or construed
to be a waiver or release of, or a limitation upon, the Bank's exercise of any of its rights and smedes under any OI the Credit Cocuments, whether
ansing as a consequence of any defaults or events of default which may now exist or ciherwise, ono all such rights and remedies are hereby expressly
reserved.
Section 3, Ratification of Terms, Except as expressly amended by this Amendment, the Crops Ddcuments and each and every representation,
warranty, covenant, term and condition contained therein are specificity ralif ed and confirmed. Secti
nto
red of proV is onl of th saAmlendlment is Orl may be doomed expr ssly mcons Stang with any term ordp into the ovis on of anty of %--uments. To the he Crept Documents, ttheeterS term
05-27_1999 CHANGE IN TERMS AGREEMENT Page 2
(Continued)
provisions mareof Small control.
Section S. Counterparts. This Amendment may be executed in different Counterparts, each or which when executed by the Borrower and Ins Bank
shall be regarded as an anginal. and all such counterparts small constitute one Amendment.
Section e. Governing Law, This Amendment shall be construed In accordance with and governed by the laws of the State of Pennsylvania,
without regard to the provisions thereof regarding conflicts of law.
IN WITNESS WHEREOF, the parties hereto, with the intend to be legally bound hereby, have caused this Amendment to Credit Documents to be duty
executed by their respective duty authorized representatives as a document under seal, as of the day and year first above written.
CONTINUING VALIDITY, Except as expressly changed by this Agreement, the terms of the oNinal obligation or obligations, including all agreements
evidenced of securing the obligation(s), remain unchanged and in full force and effect. Consent by Lander to this Agreement does not waive Landers
right to striCt performance of the obligation(s) as changed, not obligate Lander to make Any future change in terms. Nothing in this Agreement will
constitute a satisfaction of the abiigatien(e). It is the intention of Lender to retain as liable parties all Makers and endorsers of the anginal obllgation(s),
Including accommodation parties, unless a party is expressly released by Lander in'wnting. Any maker or endorser, including accommodation makers,
will not be released by virtue of this Agreement. If any person who signed the original obligation does not sign this Agreement below, than All persons
signing below acknowledge that this Agreement is given conditionally, based on the representation to lender that the non-signing party consents to the
changes and provisions of this Agreement or otherwise will not be released by it. This waiver applies not druy to any inNal extension, modification or
release, but also to all such subsequent actions.
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 DEFAULT UNDER THIS AGREEMENT, AND WITH OR WITHOUT COMPLAINT FILED, AS OF ANY TERM, CONFESS OR ENTER JUDGMENT
AGAINST BORROWER FOR THE ENTIRE PRINCIPAL BALANCE OF THIS AGREEMENT, ALI. ACCRUED INTEREST, LATE CHARGES, AND ANY AND
ALL AMOUNTS EXPENDED OR ADVANCED BY ENDER RELATING TO ANY COLLATERAL SECURING THIS NOTE TOGETHER WITH INTEREST
ON SUCH AMOUNTS. TOGETHER WITH COSTS OF SUIT, AND AN ATTORNEY'S COMMISSION CF TEN PERCENT (10%) OF THE UNPAID
PRINCIPAL BALANCE AND ACCRUED INTEREST FOR COLLECTION, BUT IN ANY EVENT NOT LESS THAN FIVE HUNDRED DOLLARS ($500) ON
WHICH JUDGMENT OR JUDGMENTS ONE OR MORE EXECUTIONS MAY ISSUE IMMEDIATELY; AND FOR SO DOING, THIS AGREEMENT OR A
COPY OF THIS AGREEMENT VERIFIED BY AFFIDAVIT SHALL BE SUFFICIENT WARRANT. THE AUTHORITY GRANTED IN THIS AGREEMENT TO
CONFESS JUDGMENT AGAINST BORROWER SHALL NOT BE EXHAUSTED BY ANY EXERCISE OF THAT AUTHORITY, BUT SHALL CONTINUE
FROM TIME TO TIME AND AT ALL TIMES UNTIL PAYMENT IN FULL OF ALL AMOUNTS DUE UNDER THIS AGREEMENT. BORROWER HEREBY
WAIVES ANY RIGHT BORROWER MAY HAVE TO NOTICE OR TO A HEARING IN CONNECTION WITH ANY SUCH CONFESSION OF JUDGMENT,
JUDGMENT,
CON EXECUTION OF THE
PROVISION AND TO
EXCEPT ANY NOTICE STATES THAT EITHER DIRE RESENTATIVE OF REQUIRED LENDER UNDER SPAPPLICABIZ ECI SPECIFICALLY H THIS RESPECT
BORROWER'S ATTENTION OR BORROWER HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL.
PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT. BORROWER
AGREES TO THE TERMS OF THE AGREEMENT AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE AGREEMENT.
THIS AGREEMENT HAS BEEN SIGNED AND SEALED BY THE UNDERSIGNED.
BORROWER:
SEORRO Tech p61es, Inc.
? EAL) By: Az-(SEAL)
e.?..?w n.MINr. thief Fxeeulive Meer D. Scott Dardlek, Pfeeldenl
VY,aDiU 9010. a-910 Pay, L-bCM PpC.-89'JS'iTM.Oil.. Vol. 72e41tl 1971 CF,ProSrv,C U, K All, ania rn0 r10.IPA D70i770a DARGOM L 1
EXHIBIT "E"
COMMERCIAL GUARANTY
Principal Loan Date Meturtty Loen No Call Collateral Account Officer InlUals
COMM SEC 305700 CW50
Relarencef In Ina shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item.
Borrower: Darcom Technologies, Inc.
77 Northeastern Boulevard
Neshue, NH 03062
Guarantor: Steven M. Derdlck and Necla Derdlck
Lender: Financial Trust Company
Camp HIII
4271 Trlndle Road
Camp Hill, PA 17011
9605 Bellows Drive
Camp Hill, PA 17011
AMOUNT OF GUARANTY. This Is a guaranty of payment of the Note, Including without limitation the principal Note amount of One Hundred
Eighty Eight Thousand 6 00/100 Dollars ($1111111,000-00).
GUARANTY. For good and valuable consideration, Steven M. Derdlck and Necla Dardlck ("Guarantor") absolutely and unconditionally
guarantee and promise to pay, Jointly and severally, to Financial Trust Company ("Lender") or Its order, In legal tender of the United States of
America, the Indebtedness (a that term Is defined below) of Darcom Technologies, Inc. (Borrower") to Lender on the terms and conditions
set forth In this Guaranty.
DEFINITIONS. The following words shall have the following meanings when used in this Guaranty:
Borrower. The word "Borrower' means Darcom Technologies, Inc..
Guarantor, The word "Guarantor" means Steven M. Derdlck and Neca Dardtck, who are signing this Guaranty jointly and severally.
Guaranty. The word "Guaranty" means this Guaranty made by Guarantor for the benefit of Lender dated September 29, 19%.
Indebtedness. The word Indebtedness" means the Note, including (a) all principal, (b) all Intoresl, (c) an late charges, (d) all loan fees and
loan charges, and (e) all collection costs and expenses relating to the Note or to any collateral for the Note. Collection costs and expenses
include Without limitation all of Lender's attorneys' fees and Lender's legal expenses, whether or not suit Is instituted, and allorneys' fees and legal
expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or Injunction), appeals, and any anticipated
post-judgment collection services.
Lender. The word "Lender' eans Financial Trust Company, its successors and assigns.
Note. The word 'Note means the promissory note or credit agreement dated September 29, 1995, In the original principal amount of
$188,000.00 from Borrower to Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and
substitutions for the promissory note or agreement.
Related Documents. The words 'Related Documents' mean and include without limitation all promissory notes, credit agreements, loan
agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, and all other Instruments, agreements and
documents, whether now or hereafter existing, executed In connection with the Indebtedness.
MAXIMUM LIABILITY. The maximum liability of Guarantor under this Guaranty shall not exceed et any one time the amount of the
Indebtedness described above, plus all costs and expenses of (a) enforcement of this Guaranty and (b) collection and sale of any collateral
securing this Guaranty.
The above limitation on liability is not a restriction on the amount of the Indebtedness of SonOwef to Lender either In the aggregate or at any one time.
If Lender presently holds one or more guaranties, or hereafter receives additional guaranties from Guarantor, the rights of Lender under all guaranties
shall be cumulative. This Guaranty shall not (unless specifically provided below to the contrary) affect or invalidate any such other guaranties. The
liability of Guarantor will be the aggregate liability of Guarantor under the forms of Iris Guaranty and any such Other untermmaled guaranties.
NATURE OF GUARANTY. Guarantor intends to guarantee at all times the performance and prompt payment when due, whether at maturity or earlier
by reason of acceleration or otherwise, of all Indebtedness within the limits set forth in the preceding section of this Guaranty. The obligations of
Guarantors shall be joint and several. Lender may proceed against any of the Guarantors individually, against any group of Guarantors, or against all
the Guarantors In one action, without affecting the right of Lender to proceed against Other Guarantors for amounts that are covered by this Guaranty.
Any Inability of Lender to proceed against any Guarantor (whether caused by actions of a Guarantor or of Lender) will not affect Lender's right to
proceed against any or all remaining Guarantors for all or part of the amounts covered by this Guaranty,
DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender, or any notice
to Guarantor or to Borrower, and will continue In lull force until all Indebtedness Sall have been fully and finally paid and satisfied and aft other
obligations of Guarantor under this Guaranty shall have been performed in lull. Release of any other guarantor or termination of any other guarantyof
the Indebtedness shall not affect the liability of Guarantor under this Guaranty. A revocation received by Lender from any one or more Guarantors shall
not affect the liability of any remaining Guarantors under this Guaranty.
GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, without notice or demand and without lessening Guarantor's
liability under this Guaranty, from time to time: (a) to make one or more additional secured or unsecured loans to Borrower, to lease
equipment or other goods to Borrower, or otherwise to extend additional credit to Borrower; (b) to slier, compromise, renew, extend, `
accelerate, or otherwise change ona or more times the time for payment or other terms of the Indebtedness or any part of the Indebtedness,
Including Increases and decreases of the rate of Interest on the Indebtedness; extensions may be repeated and may be for longer than the
original loan term; (c) to take and hold security for the payment of this Guaranty or the Indebtedness, and exchange, enforce, waive,
subordinate, fail or decide not to perfect, and release any such security, with or without the substitution of new collateral; (d) to release,
substitute, agree not to sue, or deal with any one or more of Borrower's sureties, endorsers, or other guarantors on any terms or In any
manner Lender may choose; (a) to determine how, when and what application of payments and credits shall be made on the Indebtedness;
(t) to apply such security and direct the order or manner of sale thereof, Including without limitation, any nonjudlclal sale permitted by the
terms of the controlling security agreement or deed of trust, as Lender In Its discretion may determine; (g) to sell, transfer, assign, or grant
participations In all or any part of the Indebtedness; end (h) to assign or transfer this Guaranty In whole or In part.
GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to Lender that (a) no'epresenlalions or agreements
of any kind have been made to Guarantor which would limit or qualify in any way the terms Of this Guaranty; (b) this Guaranty is executed al
Borrowers request and not at the request of Lender; (c) Guarantor has full power, right and authority to enter into this Guaranty; (d) the provisions of
this Guaranty do not conflict with or result in a default under any agreement or other instrument bmtling upon Guarantor and do not result in a violation
of any aw, regulation, court decree or order applicable to Guarantor; (e) Guarantor has not and will not, without tae prior written consent of Lender,
09-29-1998 COMMERCIAL GUARANTY Page 2
(Continued)
sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially all of Guarantor's assets, or any Interest therein; (f) upon
Lender's request, Guarantor will provide to Lender financial and credit information in form acceptable to Lender, and all such financial information
which currently has been, and all future financial information which will be provided to Lender is and will be true and correct In all materiel respects and
fairly present the financial condition of Guarantor as of the dates the financial Information is provided; (g) no material adverse change has occurred In
Guarantor's financial condition since the date of the most recent financial statements provided to Lender and no event has occurred which may
materially adversely affect Guarantor's financial condition; (h) no litigation, claim, investigation, administrative proceeding or similar action (including
those for unpaid taxes) against Guarantor is pending or threatened; (I) Lender has made no representation to Guarantor as to the creditworthiness of
Borrower, and Q) Guarantor has established adequate means Of obtaining from Borrower on a continuing basis Information regarding Borrower's
financial condition. Guarantor agrees to keep adequately Informed from such means of any facts, events, or circumstances which might In any way
affect Guarantor's risks under this Guaranty, and Guarantor further agrees that Lender shall have no obligation to disclose to Guarantor any Information
or documents acquired by Lender in the course of its relationship with Borrower.
GUARANTOR'S WAIVERS. Except as prohibited by applicable law. Guarantor waives any right to require Lender (a) to continue lending money or to
extend other credit to Borrower; (b) to make any presentment, protest, demand, or notice of any kind, Including notice of any nonpayment of the
Indebtedness or of any nonpayment related to any collateral, or notice of any action or nonfiction on the part of Borrower, Lender, any surety, endorser,
or other guarantor in connection with the Indebtedness or in connection with the creation of new or additional loans or obligations; (c) to resort for
payment or to proceed directly or at once against any person, including Borrower or any other guarantor; (d) to proceed directly against or exhaust any
collateral held by Lender from Borrower, any other guarantor, or any other person; (e) to give notice of the terms, time, and place of any public or
private sale of personal property security held by Lender from Borrower or to comply with any other applicable provisions of the Uniform Commercial
Code; (1) to pursue any other remedy within Lender's power; or (g) to commit any act or omission of any kind, or at any time, with respect to any
matter whatsoever.
Guarantor also waives any and all rights or defenses arising by reason of (a) anyone action' or 'anti-deficiency" law or any other taw which may
prevent Lender from bringing any action, including a claim for deficiency, against Guarantor, before or alter Lender's commencement or completion of
any foreclosure action, either judicially or by exercise of a power of sale; (b) any election of remedies by Lender which destroys or otherwise adversely
affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement, Including without limitation, any loss of
rights Guarantor may suffer by reason of any law limiting, qualifying, or discharging the Indebtedness; (c) any disability or other defense of Borrower, of
any other guarantor, or of any other person, or by reason of the cessation of Borrower's liability from any cause whatsoever, other than payment In full
In legal lender, of the Indebtedness; (d) any right to claim discharge of the Indebtedness on the basis of unjustified Impairment of any collateral for the
Indebtedness; (e) any statute of limitations, If at any time any action or suit brought by Lender against Guarantor is commenced there is outstanding
Indebtedness of Borrower to Lender which is not barred by any applicable statute of limitations; or (f) any defenses given to guarantors at law or In
equity other than actual payment and performance of the Indebtedness. If payment is made by Borrower, whether voluntarily or otherwise, or by any
third party, on the Indebtedness and thereafter Lender is forced to romit the amount Of that payment to Borrower's trustee in bankruptcy or to any
similar person under any federal or state bankruptcy law or law for the relief of debtors. the Indebtedness shall be considered unpaid for the purpose of
enforcement of this Guaranty.
Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of
setoff, counterclaim, counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower, the
Guarantor, or both.
GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above is made
with Guarantor's full knowledge of its significance and consequences and that, under the circumstances, the waivers are reasonable and not contrary to
public policy or law. If any such waiver is determined to be contrary to any applicable law or public policy, such waiver shall be effective only to the
extent permitted by law or public policy.
LENDER'S RIGHT OF SETOFF. In addition to all liens upon and rights 01 setoff against the moneys, securities or other property of Guarantor given to
Lender by taw, Lender shall have, with respect to Guarantor's obligations to Lender under this Guaranty and to the extent permitted by law, a
contractual security Interest in and a right of setoff against, and Guarantor hereby assigns, conveys, delivers, pledges, and transfers to Lender all of
Guarantor's right, title and interest in and to, all deposits, moneys, securities and other property of Guarantor now or hereafter in the possession of or
on deposit with Lender, whether held in a general or special account or deposit, whether hold jointly with someone else, or whether hold for
safekeeping or otherwise, excluding however all IRA, Keogh, and trust accounts. Every such security Interest and right of setoff may be exercised
without demand upon or notice to Guarantor. No security interest or right of setoff shall be deemed to have been waived by any act or conduct on the
pad of Lender or by any neglect to exercise such fight of setoff or to enforce such security interest or by any delay In se doing. Every right of setoff and
security Interest shall continue in lull force and effect until such right of setoff or security interest is specifically waived or released by an Instrument In
writing executed by Lender.
SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness of Borrower to Lender, whether now
existing or hereafter created, shall be prior to any claim that Guarantor may now have or hereafter acquire against Borrower, whether or not Borrower
becomes Insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any
claim that Lender may now or hereafter have against Borrower. In the event of Insolvency and consequent liquidation of the assets of Borrower,
through bankruptcy, by an assignment for the benefit of creditors, by voluntary liquidation, or otherwise, the assets of Borrower applicable to the
payment of the claims of both Lender and Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness of Borrower to
Lender. Guarantor does hereby assign to Lender as claims which it may have or acquire against Borrower or against any assignee or trustee in
bankruptcy of Borrower; provided however, that such assignment shall be effective only for the purpose of assuring to Lender full payment in legal
tender of the Indebtedness. II Lender so requests, any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to
Guarantor shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor agrees, and Lander
hereby is authorized. in the name of Guarantor, from time to time to execute and file financing statements and continuation statements and to execute
such other documents and to take such other actions as Lender deems necessary or appropriate to perfect, preserve and enforce its rights under this
Guaranty.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Guaranty:
Amendments. This Guaranty, together with any Related Documents, constitutes Ire entire understanding and agreement of the parties as to the
matters set forth in this Guaranty. No alteration of or amendment to this Guaranty shall be effective unless given in writing and signed by the party
or parties sought to be charged or bound by the alteration or amendment.
Applicable Law. This Guaranty has been delivered to Lender and accepted by Lender in the Commonwealth of Pennsylvania. If there Is a
lawsuit, Guarantor agrees upon Lender's request to submit to the jurisdiction of the courts of Cumberland County, Commonwealth of
Pennsylvania. This Guaranty shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania.
Attorneys' Fees; Expenses. Guarantor agrees to pay upon demand all of Lender's Costs and expenses, including attorneys' lees and Lender's
legal expenses, incurred in connection with the enforcement of this Guaranty. Lender may pay someone else to help enforce this Guaranty, and
Guarantor shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal expenses
whether or not there is a lawsuit, Including attorneys' fees and legal expenses for bankruptcy proceedings (and including efforts to modify or
09-29-1998 COMMERCIAL GUARANTY Page 3
(Continued)
vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services. Guarantor also shall pay as court costs
and such additional fees as may be directed by the court.
Notices. All notices required to be given by either party to the other under this Guaranty Shall be in venting, may be sent by telelacslmile (unless
otherwise required by law), and Shall be effective when actually delivered or when deposited with A nationally recognized overnight courier, or
when deposited In the United Slates mail, first class postage prepaid, addressed to the party to whom the notice is to be given at the address
shown above or to such other addresses as either party may designate to the other in writing. It there is more than one Guarantor, notice to any
Guarantor will constitute notice to all Guarantors. For notice purposes, Guarantor agrees to keep Lender Informed at all times of Guarantor's
current address.
Interpretation. In all Cases where there is more than one Borrower or Guarantor, then all words used in this Guaranty In the singular shad be
deemed to have been used In the plural where the context and construction so require; and where there Is more than one Borrower named In this
Guaranty or when this Guaranty is executed by more than one Guarantor, the words "Borrower' and "Guarantor' respectively shall mean all and
any one or more of them. The words *Guarantor,* "Borrower," and 'Lender' include the heirs, successors, assigns, and transferees of each of
them. Caption headings in this Guaranty are for convenience puwyoses only and are not to be used to Interpret or define the provisions of this
Guaranty. If a court of competent jurisdiction finds any provision of this Guaranty to be invalid or unenforceable as to any person or circumstance,
such finding shall not render that provision invalid or unenforceable as to any other persons or circumstances, and all provisions of this Guaranty
In all other respects shall remain valid and enforceable. If any one or more of Borrower or Guarantor are corporations or par narshlps, 8 Is not
necessary for Lender to Inquire into the powers of Borrower or Guarantor or of the officers, directors, partners, or agents acting or purporting to act
on their behalf, and any Indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed under this
Guaranty.
Waiver. Lender shall not be deemed to have waived any rights under this Guaranty unless such waiver b given In writing and signed by Under.
NO delay or omission on the part of Lender In exercising any right shall operate as a waiver of such light or any other right. A waiver by Lender of
a provision of this Guaranty shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or
any other provision of this Guaranty. No prior waiver by Lentler, nor any course of dealing between Lender and Guarantor, shall constitute a
waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lender Is required
under this Guaranty, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent Instancm
where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender.
CONFESSION OF JUDGMENT. GUARANTOR 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
GUARANTOR AFTER A DEFAULT UNDER THIS GUARANTY, AND WITH OR WITHOUT COMPLAINT FILED, AS OF ANY TERM. CONFESS OR
ENTER JUDGMENT AGAINST GUARANTOR FOR THE ENTIRE PRINCIPAL BALANCE OF THIS GUARANTY, ALL ACCRUED INTEREST, LATE
CHARGES, AND ANY AND ALL AMOUNTS EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECURING THE
INDEBTEDNESS TOGETHER WITH INTEREST ON SUCH AMOUNTS. TOGETHER WITH COSTS OF SUIT, AND AN ATTORNEYS COMMISSION OF
TEN PERCENT (10%) OF THE UNPAID PRINCIPAL BALANCE AND ACCRUED INTEREST FOR COLLECTION, BUT IN ANY EVENT NOT LESS THAN
FIVE HUNDRED DOLLARS (SSW) ON WHICH JUDGMENT OR JUDGMENTS ONE OR MORE EXECUTIONS MAY ISSUE IMMEDIATELY; AND FOR
SO DOING, THIS GUARANTY OR A COPY OF THIS GUARANTY VERIFIED BY AFFIDAVIT SHALL BE SUFFICIENT WARRANT. THE AUTHORITY
GRANTED IN THIS GUARANTY TO CONFESS JUDGMENT AGAINST GUARANTOR SHALL NOT BE EXHAUSTED BY ANY EXERCISE OF THAT
AUTHORITY, BUT SHALL CONTINUE FROM TIME TO TIME AND AT ALL TIMES UNTIL PAYMENT IN FULL OF ALL AMOUNTS DUE UNDER THIS
GUARANTY. GUARANTOR HEREBY WAIVES ANY RIGHT GUARANTOR MAY HAVE TO NOTICE OR TO A HEARING IN CONNECTION WITH ANY
SUCH CONFESSION OF JUDGMENT, EXCEPT ANY NOTICE AND/OR HEARING REQUIRED UNDER APPLICABLE LAW WITH RESPECT TO
EXECUTION OF THE JUDGMENT, AND STATES THAT EITHER A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THIS CONFESSION OF
JUDGMENT PROVISION TO GUARANTOR'S ATTENTION OR GUARANTOR HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL.
EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS
TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND
DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH
IN THE SECTION TITLED "DURATION OF GUARANTY." NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY
EFFECTIVE. THIS /GG?UARANTY IS DATED SEPTEMBER 20, 1998.
THIS GUARANTYit}AS BEEN S19QD AND SEALED BY THE UNDERSIGNED.
(SEAL) X LJ (SEAL)
Steven M. Derdl L ecla Derdick
LASER PRO, 1119 US Pat. ATM. Olt„ Vrr, 3 20iC119211CFI PrOSVr cos, 1M. Anna"n 411FV19 IPA.ElO OAACO V LN G OVLI
DISCLOSURE FOR CONFESSION OF JUDGMENT
Principal
$188 000.00 Loan Date
09-29-1998 Maturity
02-28-1999 Loan No
30038 Call
COMM Collateral
SEC Account
WUXI Officer
CW60 InlGele
References in the shaded area are for Lender's use only and do not limit the ap bcabili of this document to any articular loan or Item.
Borrower: Darcom Technologies, Inc. Lender: Financial Trust Company
77 Northeastern Boulevard Camp HIII
Nashua, NH 03062 4231 Trlndle Road
Camp Hill, PA 17011
Guarantor: Steven M. Dardlck and Necla Dardlck
3606 Bellows Drive
Camp Hit, PA 17011
DISCLOSURE FOR CONFESSION OF JUDGMENT
1 AM EXECUTING, THIS -_P? DAY OF !&e O e M4J?- 19-11 A GUARANTY OF A PROMISSORY NOTE FOR
$1es,omoo OBLIGATING ME TO REPAY THAT AMOUNT.
A. I UNDERSTAND THAT THE GUARANTY CONTAINS A CONFESSION OF JUDGMENT PROVISION THAT WOULD PERMIT LENDER TO
ENTER JUDGMENT AGAINST ME IN COURT, AFTER A DEFAULT ON THE GUARANTY, WITHOUT ADVANCE NOTICE TO ME AND WITHOUT
OFFERING ME AN OPPORTUNITY TO DEFEND AGAINST THE ENTRY OF JUDGMENT. IN EXECUTING THE GUARANTY, BEING FULLY
AWARE OF MY RIGHTS TO ADVANCE NOTICE AND TO A HEARING TO CONTEST THE VALIDITY OF ANY JUDGMENT OR OTHER CLAIMS
THAT LENDER MAY ASSERT AGAINST ME UNDER THE GUARANTY, I AM KNOWINGLY, INTELLIGENTLY, AND VOLUNTARILY WAIVING
THESE RIGHTS, INCLUDING ANY RIGHT TO ADVANCE NOTICE OF THE ENTRY OF JUDGMENT, AND I EXPRESSLY AGREE AND CONSENT
TO LENDER'S ENTERING JUDGMEN'T' RGAINST ME BY CONFESSION AS PROVIDED FOR IN THE CONFESSION OF JUDGMENT
PROVISION. INITIALS: 'SY)l . A0
S. 1 FURTHER UNDERSTAND THAT IN ADDITION TO GIVING LENDER THE RIGHT TO ENTER JUDGMENT AGAINST ME WITHOUT
ADVANCE NOTICE OR A HEARING, THE CONFESSION OF JUDGMENT PROVISION IN THE GUARANTY ALSO CONTAINS LANGUAGE THAT
WOULD PERMIT LENDER, AFTER ENTRY OF JUDGMENT, TO EXECUTE ON THE JUDGMENT BY FORECLOSING UPON, ATTACHING,
LEVYING ON, TAKING POSSESSION OF OR OTHERWISE SEIZING MY PROPERTY, IN FULL OR PARTIAL PAYMENT OF THE JUDGMENT.
HOWEVER, LENDER MUST PROVIDE NOTICE TO ME UNDER APPLICABLE LAW IN EXECUTING ANY CONFESSED JUDGMENT. IN
EXECUTING THE GUARANTY, BEING FILLY AWARE OF MY RIGHTS TO ADVANCE NOTICE AND A HEARING AFTER JUDGMENT IS
ENTERED AND BEFORE EXECUTION ON THE JUDGMENT, I AM KNOWINGLY, INTELLIGENTLY AND VOLUNTARILY WAIVING THESE
RIGHTS, AND i EXPRESSLY AGREE AND CONSENT TO JENDER'SIIE'XECUTING ON THE JUDGMENT, IN ANY MANNER PERMITTED BY
APPLICABLE STATE AND FEDERAL LAW. INITIALS: •'K
C. AFTER HAVING READ AND DETERMINED WHICH OF THE FOLLOWING STATEMENTS ARE APPLICABLE, AND BY PLACING MY
INITIALS NEXT TO EACH STATEMENT WHICH APPLIES, I REPRESENT THAT:
INITIALS
1. 1 WAS REPRESENTED BY MY OWN INDEPENDENT LEGAL COUNSEL IN CONNECTION WITH THE GUARANTY.
2. A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THE CONFESSION OF JUDGMENT PROVISION IN THE
GUARANTY TO MY ATTENTION.
D. I CERTIFY THAT MY ANNUAL INCOME EXCEEDS $10,000; THAT THE BLANKS IN THIS DISCLOSURE WERE FILLED IN WHEN I
INITIALED AND SIGNED IT; AND THAT I RECEIVED A COPY AT THE TIME OF SIGNING.
IS DISCLOSUR AS BEEN 5 N D AND BE D BY THE UNDERSIGNED.
/
:AFFIANT:
SEAL)
(
St en M. Dardick
% CP.C?i / r `ir?L?? (SEAL)
Necia Dardick
LASERPRO, Rea US P't ATM 00I,V!•]7l1=1?i9l G„RCSPe:ee m[ A,f.g"llese• nC;PA-03S0A400VL%C20VLI
V//rr7
WHEN RECORDED MAIL T0;
Financial Trust Company
We Keystone Leon Operations ATTN: Collateral Dept.
100 Court al @at, Po Box 3167
Wllllamsporl, PA I7Ml
'98 OEC 2 R19 11 35
SPACE ABOVE THIS LINE IS FOR RECORDER'S USE ONLY
MORTGAGE
THIS MORTGAGE IS DATED NOVEMBER 20, 1998, between Steven M. Dardick and Necla Dardick, whose
address Is 3805 Bellows Drive, Camp Hill, PA 17011 (referred to below as "Grantor"); and Financial Trust
Company, whose address Is 4231 Trindle Road, Camp Hill, PA 17011 (referred to below as "Lender").
GRANT OF MORTGAGE. For valuable consideration, Grantor grants, bargains, sells, conveys, assigns, transfers, releases, confirms and
mortgages to Lender all of Gantor's right, bile, and interest In and to the following described real property, together with all existing or subsequently
erected or affixed buildings, Improvements and fixtures; all streets, lanes, alleys, passages, and ways; all easements, rights of way, all liberties,
privileges, tenements, hereditamen s, and appurtenances thereunto belonging or anywise made appurtenant hereafter, and the reversions and
rsmalnders with respect thereto; all water, water rights, watercourses and ditch rights (including stock In utilities with ditch or Irrigation fights); and an
olhw tghb, royalties, and profits relating to ins real property, including without limitation all minerals, oil, gas, geothermal and similar matters, located
In Cumberland County, Commonwealth of Pennsylvania (the "Real Property");
SEE EXHIBIT "A" ATTACHED HERETO AND INCORPORATED HEREIN BY REFERENCE.
The Real Property or Its address Is commonly known as 3805 Bellows Drive, Camp Hill, PA 17011.
Granlor presently sssigns to Lender all of Grantor's right, line, and interest in and to an lasses of the Property and an Rents from the Prop". In
addition, Grantor grants to Lender a Uniform Commercial Code security Interest in the Personal Property and Rents.
DEFINITIONS. The following wads shall have the following meanings when used In this Mortgage. Terms not otherwise defined in [his Mortgage shad
have the meanings attributed to Such terms In the Uniform Commercial Code. All references to dollar amounts shall mean amounts in lawful money of
the United Stales of America.
Borrower, The word'13arower' means each and every person or entity signing the Note, including without limitation Darcom Technologies, Inc.
Existing Indebtedness. The words 'Existing Indebtedness" mean the indebtedness described below in the Existing Indebtedness section of this
Mortgage.
Grantor. The wad 'Grantor means any and all persons and entities executing this Mortgage, including without limitation all Grantors named
above, The Grantor Is the mortgagor under this Mortgage. Any Grantor who signs this Mortgage, but does not sign the Note, is signing this
Mortgage only to grant and convey that Grantor's interest in the Real Property and to grant a security interest in Grantor's Interest In the Rents and
Personal Property to Lender and is not personally liable under the Note except as otherwise provided by contract or taw.
Guarantor, The word "Guaranto' means and includes without limitation each and all of the guarantors, sureties, and accommodation parties In
connection with the Indebtedness.
Improvements. The wad 'Improvements' means and Includes without limitation all existing and future improvements, buildings, structures,
mobile homes affixed on the Real Property, facilities, additions, replacements and other construction on the Real Property.
Indebtedness. The word 'Indebtedness" means all principal and interest payable under the Note and any amounts expended or advanced by
Lender to discharge obligations or Grantor or expenses incurred by Lender to enforce obligations of Grantor under this Mortgage, together with
lnbrest on such amounts as provided in this Mortgage. In addition to the Note, the word 'Indebtedness' includes all obligations, debts and
Wbilities, plus interest thereon, of Borrower to Lender, or any one or more of them, as well as all claims by Lender against Borrower, or any one or
more of them, whether now existing or hereafter Arising, whether related or unrelated to the purpose of the Note, whether voluntary or otherwise,
whether duo or not duo, absolute or contingent, liquidated or unliquidaled and whether Borrower may be liable individually or jointly with others,
whether obligated as guarantor or otherwise, and whether recovery upon such Indebtedness may be or hereafter may become bared by any
statute of limitations, and whether Such Indebtedness may be or hereafter may become otherwse unenforceable. (Initial Here `.?.:... )
Lender. The wad lender" means Financial Trust Company, Its successors and assigns. The Lender Is the mortgagee under this ape.
Mortgage. The word 'Mortgage means this Mortgage between Grantor and Lender, and includes without limitation all assignments and security
Interest provisions relating to the Personal Property and Rents.
Note. The word *Note" means the promissory note or credit agreement dated November 20, toga, in the original principal amount of
$155,000.00 from Borrower to Lender, together with all renewals of, extensions of, modifications of, refinancings ol, consolidations of, and
substitutions for the promissory note or agreement. NOTICE TO GRANTOR: THE NOTE CONTAINS A VARIABLE INTEREST RATE.
Personal Property. The words *Personal Property' mean all equipment, fixtures, and other articles of personal property now or hereafter owned
by Grantor, and now or hereafter attached or affixed to the Real Property; together with all accessions, parts, and additions to, all replacements of,
and all substitutions for, any of such property; and together with all proceeds (including without limitation all insurance proceeds and refunds of
premiums) from any sale or other disposition of the Property.
Property. The wall "Proporl' means collectively the Real Property and the Personal Property.
Soud502PAGE S46
11-20-1998 MORTGAGE Pape 2
(Continued)
Real Property. The words "Real Property mean the property, interests and rights described above In the *Grant of Mortgage section.
Related Documents. The words "Related Documents" mean and Include without limitation all promissory notes, credit agreements, loan
agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, and all other instruments, agreements and
documents, whether now or hereafter existing, executed in connection with the Indebtedness.
Rents. The word "Rents" means all present and future rents, revenues, income, Issues, royalties, profits, and other benefits derived from the
Property.
THIS MORTGAGE, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN THE RENTS AND PERSONAL PROPERTY, IS
GIVEN TO SECURE (1) PAYMENT OF THE INDEBTEDNESS AND (2) PERFORMANCE OF ALL OBLIGATIONS OF GRANTOR UNDER THIS
MORTGAGE AND THE RELATED DOCUMENTS. THIS MORTGAGE IS GIVEN AND ACCEPTED ON THE FOLLOWING TERMS:
GRANTOR'S WAIVERS. Grantor waives all rights or defenses arising by reason of any "one action" or'antWeficiency law, of any other law which
may prevent Lender from bringing any action against Grantor, including a claim few deficiency to the extent Lender is otherwise entitled to a claim for
deficiency, before or affor Lender's commencement or completion of any foreclosure action, either judicially or by exercise of a power of sale.
GRANTOR'S REPRESENTATIONS AND WARRANTIES. Grantor warrants that: (a) this Mortgage is executed at Borrower's request and not at the
request of Lender; (b) Grantor has the fun power, right, and authority to enter Into this Mortgage and to hypothecate the Property; (c) the provisions of
this Mortgage do not conflict with, or result in a default under any agreement or other instrument binding upon Grantor and do not result in a violation
of any law, regulation, court decree or order applicable to Grantor; (d) Grantor has established adequate means of obtaining from Borrower on a
continuing basis Information about Borrowers financial condition; and (e) Lender has made no representation to Grantor about Borrower (Including
without limitation the creditworthiness of Borrower).
PAYMENT AND PERFORMANCE. Except as otherwise provided In this Mortgage. Borrower shall pay to Lender all Indebtedness secured by this
Mortgage as It becomes due, and Borrower and Grantor shall strictly perform a2 their respective obligations under this Mortgage.
POSSESSION AND MAINTENANCE OF THE PROPERTY. Grantor and Borrower agree that Grantor's possession and use of the Property shall be
governed by the following provisions:
Possession and Use. Until In default, Grantor may remain In possession and control of and operate and manage the Property and collect the
Rents from the Property.
Duty to Maintain. Grantor shall maintain the Property in tenantable condition and promptly perform all ropairs, replacements, and maintenance
necessary to preserve its value.
Hazardous Substances. The terms "hazardous waste; 'hazardous substance; "disposal.* 'release," and "threatened release; as used in this
Mortgage, shall have the same meanings as set forth in the Comprehensive Environmental Response, Compensation, and Liability Act of 1990. as
amended, 42 U.S.C. Section 9601, at seq. CCERCLA'), the Superfund Amendments and Reauthorization Act of 1996, Pub. L. No. 99-499
('SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1901, at seq., the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901, at seq., or other applicable state or Federal laws, rules, or regulations adopted pursuant to any of the foregoing. The terms
'hazardous waste and "hazardous Substance" shall also include, without limitation, petroleum and petroleum by-products or any traction thereof
and asbestos. Grantor represents and warrants to Lender that: (a) During the penod of Grantor's ownership of the Property, there has bean no
use, generation, manufacture, storage, treatment, disposal, release or threatened release of any hazardous waste or substance by any person on,
under, about or from the Property; (b) Grantor has no knowledge of, or reason to believe that there has boon, except as previously disclosed to
and acknowledged by Lender In writing, (i) any use, generation, manufacture, storage, treatment, disposal, release, or threatened release of any
hazardous waste or substance on, under, about or from the Property by any prior owners or occupants of the Property or (it) any actual or
threatened litigation or claims of any kind by any person relating to such matters; and (c) Except as previously disclosed Io and acknowledged by
Lender in willing, (I) neither Grantor nor any tenant, contractor, agent or other authorized user of the Property shall use, generate, manufacture,
store, treat, dispose of, or release any hazardous waste or substance on, under, about or from the Property and (ii) any such activity shall be
conducted in compliance with all applicable federal. state, and local taws, regulations and ordinances, including without limitation those lam,
regulations, and ordinances described above. Grantor authorizes Lender and its agents to enter upon the Property to make such inspections and
tests, at Grantors expense, as Lender may doom appropriate to determine compliance of the Property with this section of the Mortgage. Any
Inspections or tests made by Lender shall be for Lender's purposes only and shall not be construed to create any responsibility or liability on the
part of Lender to Grantor or to any other poison. The representations and warranties contained herein are based on Grantor's duo diligence In
Investigating the Property for hazardous waste and hazardous substances. Grantor hereby (a) releases and waives any future claims against
Lender for Indemnity or contribution in the event Grantor becomes liable for cleanup or other costs under any such laws, and (b) agrees to
Indemnity and hold harmless Lender against any and all claims, losses, liabilities, damages, penalties, and expenses which Lender may directly or
Indirectly sustain or suffer resulting from a breach of this section of the Mortgage 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 section of the
Mortgage. Including the obligation to indemnity, shall survive the payment of the Indebtedness and the satisfaction and reconveyance of the lien of
this Mortgage and shall not be affected by Lender's acquisition of any Interest in the Property, whether by foreclosure or otherwise.
Nuisance, Waste. Grantor shall not cause, conduct or permit any nuisance nor commit, permit, or suffer any stripping of or waste on or to IM
Property or any portion of the Property. Without limiting the generality of the foregoing, Grantor will not remove, or grant to any other party the
right to remove, any timber, minerals (including oil and gas), soil, gravel or rock products without the prior written consent of Lender.
Removal of Improvements. Grantor shall not demolish or remove any Improvements from the Real Property without the prior written consent of
Lender. As a condition to the removal of any Improvements, Lender may require Grantor to make arrangements satisfactory to Lender to replace
such Improvements with Improvements 01 at least equal value.
Lender's Right to Enter. Lender and its agents and representatives may enter upon the Real Property at all reasonable times to attend to
Lender's interests and to inspect the Property for purposes of Grantor's compliance with the terms and conditions of this Mortgage.
Compliance with Governmental Requirements. Grantor shall promptly comply with all laws, ordinances, and regulations, now or hereafter in
effect, of all governmental authorities applicable to the use or occupancy of the Property, including without limitation, the Americans With
Disabilities Act. Grantor may contest in good faith any such law, Ordinance, or regulation and withhold compliance during any proceeding,
including appropriate appeals, so long as Grantor has notified Lender in writing prior to doing so and so long as, in Lender's sole opinion,
Lender's interests in the Property are not jeopardized. Lender may require Grantor to post adequate security or a surety bond, reasonably
satisfactory to Lentler, to protect Lender's interest.
Duty to Protect. Grantor agrees neither to abandon nor leave unattended the Property. Grantor shall do all other acts, in addition to those acts
Sol forth above in this section, which from the character and use of the Property are reasonably necessary to protect and preserve the Property.
DUE ON SALE - CONSENT BY LENDER. Lender may, at its option, declare immediately due and payable all sums secured by this Mortgage upon the
sale or transfer, without the Lender's prior written consent, of all or any part of ln0 Real Property, or any interest in the Real Property. A'sale or
eo0Ki5n.2?AGE S47
11-20-1age MORTGAGE
(Continued) Page 3
Ira nsf9r' means the convo
Real
any
inte
her l involuntary; whit her by outright sale, dead, installment sae conttra to land con Sacs, co tracth for deed eeasehold Inlterestgwith uitabl
to mhgreeler/hen IRree
(0) years, lease-option contract, or by sale, assignment, or transfer of any beneficial Interest In or to any land trust holding title to the Real Property, or
by any other method of conveyance of Real Property Interest. If any Grantor Is a corporation, partnership or limited liability company, transfer also
Includes any change In ownership of more than twenty-five percent (25%) of the voting stock, partnership Interests or limited liability company Interests,
as the case may be, of Grantor. However, this option shall not be exercised by Lender if such exercise Is prohibited by federal law or by Pennsylvania
law.
TAXES AND LIENS. The following provisions relating to the taxes and liens on the Property are a part of this Mortgage.
Payment. Grantor shall pay when due (and in all events prior to delinquency) all taxes, payroll taxes, special taxes, assessments, water charges
and sewer service charges levied against or on account of the Property, and shall pay when due all claims for work done on or for services
rendered of material furnished to the Property. Grantor shall maintain the Property free of all liens having priority over or equal to the interest of
Lender under this Mortgage, except for the lien of taxes and assessments not due, except for the Existing Indebtedness referred to below, and
except as otherwise provided in the following paragraph.
Right To Contest. Grantor may withhold payment of any lax, assessment, or claim In connection with a good faith dispute over the obligation to
pay, so long as Lender's Interest in the Property Is not jeopardized. If a lien arises or Is filed as a result of nonpayment, Grantor shall within fifteen
(15) days after the lien arises or, If a lien is filed, within fifteen (15) days after Grantor has notice of the filing, secure the discharge of the lien, or If
requested by Lender, deposit with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender in an amount sufficient
to discharge the lien plus any costs and attorneys' fees or other charges that could accrue as a result of a foreclosure or sale under the lien. In
any contest, Grantor shall defend Itself and Lender and shall satisfy any adverse judgment before enforcement against the Property. Grantor shall
name Lender as an additional obligee under any surety bond furnished In the contest proceedings.
Evidence of Payment. Grantor shall upon demand furnish to Lender satisfactory evidence of payment or the taxes or assessments and shall
authorize the appropriate governmental official to deliver to Lender at any time a written statement of the taxes and assessments against the
Property.
Notice of Construction. Grantor shall notify Lender at least fifteen (16) days before any work is commenced, any services are furnished, or any
materials are supplied to the Property. If any mechanic's lien, materialmen's lien, or other lien could be asserted on account of the work, services,
or materials and the cost exceeds $5,000.00. Grantor will upon request of Lender furnish to Lender advance assurances satisfactory to Lender
that Grantor an and will pay the cost of such improvements.
PROPERTY DAMAGE INSURANCE. The following provisions relating to Insuring the Property are a part of this Mortgage.
Maintenance of Insurance. Grantor shall procure and maintain policies of fire Insurance with standard extended coverage endorsements on a
replacement basis for the full insurable value covering all Improvements on the Real Property in an amount sufficient to avoid application of any
coinsurance clause, and with a standard mortgagee clause In favor of Lender. Grantor shall also procure and maintain comprehensive general
liability Insurance In such coverage amounts as Lender may request with Lender being named as additional insureds In such liability Insurance
policies, Additionally, Grantor shall maintain such other insurance, Including but not limited to hazard, business Interruption and boiler Insurance
as Lander may require. Policies shall be written by such Insurance companies and In such form as may be reasonably acceptable to Lender.
Grantor shall deliver to Lender certificates of coverage from each insurer containing a stipulation that coverage will not be cancelled or diminished
without a minimum of ton (10) days' prior written notice to Lender and not containing any disclaimer of the insurer's liability for failure to give such
notice. Each Insurance policy also shall Include an endorsement providing that coverage In favor of Lender will not be Impaired in any way by any
at, omission or default of Grantor or any other person. Should the Real Property at any time become located In an area designated by the
Director of the Federal Emergency Management Agency as a special flood hazard area, Grantor agrees to obtain and maintain Federal Flood
Insurance for the full unpaid principal balance of the loan, up to the maximum policy limits set under the National Flood Insurance Program, or as
otherwise required by Lender, and to maintain such insurance for the term of the loan.
Application of Proceeds. Grantor shall promptly notify Lender of any loss or damage to the Property if the estimated cost of repair or
replacement exceeds $500.00. Lender may make proof of loss it Grantor fails to do so within fifteen (15) days of the casualty. Whether or not
Lender's security Is Impaired, Lender may, at its election, apply the proceeds to the reduction of the Indebtedness, payment of any lien affecting
the Property, or the restoration and repair of the Property. If Lender elects to apply the proceeds to restoration and repair, Grantor shall repair or
replace the damaged or destroyed Improvements in a manner satisfactory to Lender. Lender shall, upon satisfactory proof of such expenditure,
pay or reimburse Grantor from the proceeds for the reasonable cost of repair or restoration if Grantor is not in default under this Mortgage. Any
proceeds which have not been disbursed within 180 days after their receipt and which Lender has not committed to the repair or restoration of the
Property shall be used first to pay any amount owing to Lender under this Mortgage, then to pay accrued interest, and the remainder, If any, shall
be applied to the principal balance of the Indebtedness. It Lender holds any proceeds after payment ir, full of the Indebtedness, such proceeds
shall be paid to Grantor.
Unexpired Insurance at Sale. Any unexpired Insurance shall inure to the benefit of, and pass to, the purchaser of the Property covered by this
Mortgage al any trustee's sale or other sale hold under the provisions of this Mortgage, or at any foreclosure sale of such Property.
Compliance with Existing Indebtedness. During the period In which any Existing Indebtedness described below Is in effect, compliance with the
Insurance provisions contained in the Instrument evidencing such Existing Indebtedness shall constitute compliance with the insurance provisions
under this Mortgage, to the extent compliance with the terms of this Mortgage would constitute a duplication of insurance requirement. If any
proceeds from the insurance become payable on loss, he provisions In this Mortgage for division of proceeds shall apply only to that portion of
the proceeds not payable to the holder of the Existing Indebtedness.
Grantor's Report on Insurance. Upon request of Lender, however not more than once a year, Grantor shall furnish to Lender a report on each
existing policy of insurance showing: (e) the name of the Insurer; (b) the risks insured; (c) the amount of the policy; (d) the property insured, the
then current replacement value of such property, and the manner of determining that value; and (e) the expiration date of the policy. Grantor
shall, upon request of Lender, have an independent appraiser satisfactory to Lender determine the cash value replacement cost of the Property.
EXPENDITURES BY LENDER. If Grantor fails to comply with any provision of this Mortgage, including any obligation to maintain Existing Indebtedness
in good standing as required below, or if any action or proceeding is commenced that would materially affect Lender's interests in the Property, Lender
on Grantor's behalf may, but shall not be required to, take any action that Lender deems appropriate. Any amount that Lender expends in so doing win
bear interest at the rate provided for in the Note from the date incurred or paid by Lander to he date of repayment by Grantor. All such expenses, al
Lender's option, will (a) be payable on demand, (b) be added to the balance of the Nola and be apportioned among and be payable with any
installment payments to become due during either (1) the form of any applicable insurance policy or (ii) the remaining term of the Note, or (c) be
treated as a balloon payment which will be due and payable at the Nola's matunly. This Mortgage also will secure payment of these amounts. The
rights provided for In this paragraph shell be In addition to any other rights or any remedies to which Lender may be entitled on account of the default.
Any such action by Lender shall not be construed as curing the default so AS to bar Lender from any remedy that It otherwise would have had.
Grantor's obligation to Lender for all such expenses shall survive the entry of any mortgage foreclosure judgment.
11 ?
nod502PAGE ,648
11-20-1998 MORTGAGE Page 4
(Continued)
WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of the Property are a part of this Mortgage.
Title. Grantor warrants that: (a) Grantor holds good and marketable title of record to the Property in fee simple, free and clear of fill liens and
encumbrances other than those sal forth in the Real Fioperty description or in the Existing Indebtedness section below or in any fitter insurance
policy, title report, or final tilts opinion Issued in favor of, and accepted by, Lender in connection with this Mortgage, and (b) Grantor has the full
right, power, and authority to execute and deliver this Mortgage to Lander.
Defense of Title. Subject to the exception in the paragraph above. Grantor warrants and will forever defend the title to the Property against the
lawful claims of all persons. In the event any action or proceeding is commenced that questions Grantor's title or the interest of Lender under this
Mortgage, Grantor shall defend the action at Grantees expense. Grantor may be the nominal party in such proceeding, but Lender shag be
entitled to participate in the proceeding and to be represented In the proceeding by counsel of Lenders own choice, and Grantor will deliver, of
cause to be delivered, to Lender such Instruments as Lender may request from time to time to permit such participation.
Compliance With Laws. Grantor warrants that the Property and Grantor's use of the Property complies with all existing applicable laws,
ordinances, and regulations of governmental authorities.
EXISTING INDEBTEDNESS. The following provisions concerning existing Indebtedness (the "Existing Indebtedness) are a part of this Mortgage.
Existing Lien. The Ilen of this Mortgage securing the Indebtedness may be secondary and Inferior to an existing lien. Grantor expressly
covenants and agrees to pay, or see to the payment of, the Existing Indebtedness and to prevent any default on such Indebtedness. any dafaull
under the Instruments evidencing such Indebtedness, or any default under any security documents for such indebtedness.
Default. If the payment of any installment of principal or any Interest on the Existing Indebtedness Is net made within the time required by the note
evidencing such Indebtedness, or should a default occur under the instrument securing such Indebtedness and not be cured during any
applicable grace period therein, then, at the option of Lender, the Indebtedness secured by this Mortgage shall become Immediately due and
payable, and this Mortgage shall be In default.
No Modification. Grantor shall not enter Into any agreement with the holder of any mortgage or other security agreement which has priority over
this Mortgage by which that agreement is modified, amended, extended, or renewed without the pnor written consent of Lender. Grantor shalt
neither request nor accept any future advances under any such security agreement without the prior written consent of Lender.
CONDEMNATION. The following provisions relating to condemnation of the Property are a part of this Mortgage.
Application of Net Proceeds. If all or any part of the Property Is condemned by eminent domain proceedings or by any proceeding or purchase
in lieu of condemnation, Lender may at its election require that all or any portion of the not proceeds of the award be Applied to the Indebtedness
or the repair or restoration of the Property. The net proceeds of the award shall mean the award after payment of all actual costs, expenses, and
attorneys' fees Incurred by Lender In connection with the condemnation.
Proceedings. It any proceeding in condemnation Is filed, Grantor shall promptly notify Lender in writing, and Grantor shall promptly take such
steps as may be necessary to defend the action and obtain the award. Grantor may be the nominal party in such proceeding, but Lender shag be
entitled to participate in the proceeding and to be represented in the proceeding by counsel of its own choice, and Grantor will deliver or cause to
be delivered 10 Lander such instruments as may be requested by it from time to time to permit such participation.
IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following provisions relating to governmental taxes, fees
and charges are a pad of this Mortgage:
Current Taxes, Fees and Charges. Upon request by Lender, Grantor shall execute such documents In addition to this Mortgage and take
whatever other action is requested by Lander to perfect and continue Lenders hen on the Real Property. Grantor shag reimburse Lender for AS
taxes, as described below, together with all expenses incurred in recording, pordechng or continuing this Mortgage, including without limitation all
taxes, fees, documentary stamps, and other charges for recording or registering this Mortgage.
Taxes. The following shall constitute lazes to which this section applies: (a) a specific lax upon this type of Mortgage of upon all or any pert of
the Indebtedness secured by this Mortgage; (b) a specific tax on Borrower which Borrower is authorized of required to deduct from payments on
the Indebtedness secured by this type of Mortgage; (c) a tax on this type of Mortgage chargeable against the Lender or the holder of the Note;
and (d) a specific tax on all or any portion of the Indebtedness or on payments of principal and interest made by Borrower.
Subsequent Taxes. If any tax to which this section applies is enacted subsequent to the date of this Mortgage, this event shall have the same
effect as an Event of Default (as defined below), and Lender may exercise any or all of its available remedies for an Event of Default as provided
below unless Grantor either (a) pays the lax before it becomes delinquent, or (b) contests the lax as provided above in the Taxes and Lions
section and deposits with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender.
SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relating to this Mortgage as a security agreement are a part of this
Mortgage.
Security Agreement. This Instrument shalt constitute a security agreement to the extent any of the Property constitutors fixtures or other personal
property, and Lender shell have all of the rights of a secured party under the Uniform Commercial Code as amended from time to time.
Security Interest. Upon request by Lender, Grantor shall execute financing statements and take whatever other action is requested by Lender to
perfect and continue Lenders security interest In the Rents and Personal Property. In addition to receding this Mortgage In the real property
records, Lender may, at any time and without further authorization from Grantor, file executed counterparts, copies or reproductions of this
Mortgage as a financing statement. Grantor shall reimburse Lender for all expenses incurred in perfecting or continuing this security Interest.
Upon defaull, Grantor shall assemble the Personal Property in a manner and at a place reasonably convenient to Grantor and Lender and nuke it
available to Lender within three (3) days aher receipt of written demand from Lander.
Addresses. The mailing addresses of Grantor (debtor) and Lender (secured party), from which information concerning the security interest
granted by this Mortgage may be obtained (each as required by the Uniform Commercial Code), are as stated on the first page of this Mortgage.
FURTHER ASSURANCES; ATTORNEY-IN-FACT. The following provisions relating to further assurances and attorney-iri-fact are a part of this
Mortgage.
Further Assurances. At any time, and from time to time, upon request of Lender, Grantor will make, execute and deliver, or will cause to be
made, executed or delivered, to Lender or to Lender's designee, and when requested by Lender, cause to be filed, recorded, retied, or
rerecorded, as the case may be, at Such times and in such offices and places as Lender may doom appnopnate, any and all such mortgages,
deeds of trust, security deeds, security agreements, financing statements, continuation statements, instruments of further assurance, certificates,
and other documents as may, in the sole opinion of Lender, be necessary or desirable in order to effectuate, complete, perfect, continue, or
preserve (a) the obligations of Grantor and Borrower under the Note, Iris Mortgage, and the Related Documents, and (b) the liens and security
interests created by this Mortgage on the Property, whether now owned or hereafter acquired by Grantor. Unless prohibited by law or agreed to
the contrary by Lender in writing. Grantor shall reimburse Lender for all costs and expenses incurred in connection with the matters referred 10 in
this paragraph.
eoo«15Q2lii 4649
11-20-1998 MORTGAGE
(Contlnued) Page 6
Attorney-In-Fact. If Grantor fails to do any of the things referred to to the preceding paragraph, Lender may do so for and In the name of
Grantor and at Grantor's expanse. For such purposes, Grantor hereby irrevocably appoints Lender as Grantor's attorney-In-fact fa the purpose
of making, executing, delivering, filing, recording, and doing all other things as may be necessary or desirable, In Lender's sole opinion, to
accomplish the matters referred to In the preceding paragraph.
FULL PERFORMANCE. If Borrower pays all the Indebtedness when due, and otherwise performs all the obligations Imposed upon Grantor under this
Mortgage, Lender shall execute and deliver to Grantor a suitable satisfaction of this Mortgage and suitable statements of lerminatlon of any financing
statement on file evidencing Lender's security Interest In the Rents and the Personal Property. Grantor will pay, if permitted by applicable law, any
reasonable termination fee as determined by Lender from time to time.
DEFAULT. Each of the following, at the option of Lender, shall constitute an event of default ('Event of Default) under this Mortgage:
Default on Indebtedness. Failure of Borrower to make any payment when due on the Indebtedness.
Default on Other Payments. Failure of Grantor within the time required by this Mortgage to make any payment for taxes or Insurance, or any
other payment necessary to pi event filing of or to effect discharge of any lion.
Compliance Default. Failure of Grantor or Borrower to comply with any other farm, obligation, covenant or condition contained In this Mortgage,
the Note or In any of the Related Documents.
Default In Favor or Third Parties. Should Borrower or any Grantor default under any loan, extension of credit. security agreement, purchase or
sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Borrowers or any Grantor's
property or Borrower's ability to repay the Note or Borrower's or Grantor's ability to perform their respective obligations under this Mortgage or any
of the Related Documents.
False Statements. Any warranty, representation or statement made or furnished to Lender by or on behalf of Grantor or Borrower under this
Mortgage, the Note or the Related Documents is false or misleading In any material respect, either now or at the time made or furnished.
Detective Collolerallzatlon. This Mortgage or any of the Related Documents ceases to be in full force and effect (including failure of any collateral
documents to create a valid and perfected security Interest or lien) at any time and for any reason.
Insolvency. The dissolution or termination of Grantor or Borrower's existence as a going business, the Insolvency of Grantor or Borrower, the
appointment of a receiver for any part of Grantor or Borrower's property, any assignment for the benefit of creditors, any type of creditor workout,
or ins commencement of any proceeding under any bankruptcy or Insolvency laws by or against Grantor or Borrower.
Foreclosure, Forfeiture, etc. Commencement of foreclosure or forfeiture proceodirgs, whether by judicial proceeding, sell-help, repossession or
any other method, by any creditor of Grantor or by any governmental agency against any of the Property. However, this subsection shall not apply
In the event of a good faith dispute by Grantor as to the validity or reasonableness of the claim which is the basis of the foreclosure or forelelture
proceeding, provided that Grantor gives Lender written notice of such claim and furnishes reserves or a surety bond for the claim satisfactory to
Lender.
Breach of Other Agreement. Any breach by Grantor or Borrower under the terms of any other agreement between Grantor or Borrower and
Lander that Is not remedied within any grace period provided therein, Including without limitation any agreement concerning any indebtedness or
other obligation of Grantor or Borrower to Lender, whether existing now or later.
Existing Indebtedness. A default shall occur under any Existing Indebtedness or under any Instrument on the Property securing any Existing
Indebtedness, or commencement of any suit or other action to foreclose any existing lien on the Property.
Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies
or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness.
Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or
performance of the Indebtedness is impaired.
Insecurity. Lender In good faith deems Itself Insecure.
RIGHTS AND REMEDIES ON DEFAULT, Upon the occurrence of any Event of Default and at any time thereafter, Lender, at its option, may exercise
any one of more of the following rights and remedies, In addition to any other rights or remedies provided by law:
Accelerate Indebtedness. Subject to applicable law, Lender shall have the right at its option without notice to Borrower to declare the entire
Indebtedness Immediately due and payable.
UCC Remedies. With respect to all or any part of the Personal Property, Lender shall have all the rights and remedies of a secured party under '
the Uniform Commercial Code.
Collect Rents. Lender shall have the right, without notice to Grantor or Borrower, to take possession of the Property and coiled the Rents, l
Including amounts past due and unpaid, and apply the not proceeds, over and above Lender's costs, against the Indebtedness. In furtherance of
this right. Lender may require any tenant a other user of the Property to make payments of rent or use fees directly to Lender. If the Rents are
collected by Lander, then Grantor Irrevocably designates Lender as Grantor's attorney-4n-fact to endorse instruments received In payment thereof
in the name of Grantor and to negotiate the same and collect the proceeds. Payments by tenants or other users to Lender in response to Lenders
demand shall sabsty the obligations for which the payments are made, whether or not any proper grounds for the demand existed. Lender may
exercise Its rights under this subparagraph either in person, by agent, or through a receiver.
Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the Property, wllh the power to
protect and preserve the Property, to operate the Property preceding foreclosure or sale, and to collect the Rents from the Property and apply tiro
proceeds, over and above the cost of the receivership, against the Indebtedness. The receiver may a" without bond it permitted by taw,
Lender's right to the appointment of a receiver shall exist whether or not the apparent value of the Property exceeds the Indebtedness by a
substantial amount. Employment by lender shall not disqualify a person from serving as a receiver.
e001502?acc +650 '
Judicial Foreclosure. Lender may obtain a judicial decree foreclosing Grantor's interest in all or any part of the Property.
Possession of the Property. For the purpose of procuring possession of the Property, Grantor hereby authorizes and empowers any attorney of I,
any court of record in the Commonwealth of Pennsylvania or elsewhere, as attorney for Lender and all persons claiming under or through Lender,
to sign an agreement for entering in any competent court an amicable action in ejectment for possession of the Property and to appear for and
confess judgment against Grantor, and against all persons claiming under or Ihrough Grantor, for the recovery by Lender of possession of 1h0
Property, without any stay of execution, for which this Mortgage, or a copy of this Mortgage verified by affidavit. shall be a sufficient warrant. antl
thereupon a writ of possession may be issued forthwith, without any prior writ or proceeding whatsoever.
Nonjudlclal Sole. If permitted by applicable law, Lender may foreclose Grantors interest in all or in any part of the Personal Properly a one Real
11-20-1998 MORTGAGE Page 6
(Continued)
Property by nonjud¢ial sale.
Deficiency Judgment. Lender may obtain a judgment for any deficiency remaining in the Indebtedness due to Lender after application of all
amounts received from the exercise of the rights provided in this section.
Tenancy at Sufferance. If Grantor remains in possession of the Property after the Property is sold as provided above or Lender otherwise
becomes entitled to possession of the Property upon default of Grantor, Grantor shalt become a tenant at sufferance of Lender or the purchaser of
the Property and shall, at Lender's option, either (a) pay a reasonable rental for the use of the Property, or (b) vacate the Property immediately
upon the demand of Lender,
Other Remedies. Lander shall have all other rights and remedies provided in this Mortgage or the Note or available at law or in equity.
Sale of the Property. To the extent permuted by applicable law, Grantor or Borrower hereby waive any and all right to have the property
marshalled. In exercising no rights and remedies, Lender shall be free to sell all or any pan of the Property together or separately, In one sale or by
separate sales. Lender shell be entitled to bid at any public sale on alt or any portion of the Property.
Notice of Sale. Lender shall give Grantor reasonable nonce of the time and place of any public Salo of the Personal Property or of the time after
which any private sale or other Intended disposition of the Personal Property is to be made. Unless otherwise required by applicable taw,
reasonable notice shall mean notes given at bast ten (10) days before the time of the sale or disposition.
Waiver; Election of Remedies. A waiver by any party of a breach of a provision of this Mortgage shall not constitute a waiver of or prejudice the
party's rights otherwise to demand Strict compliance with that provision or any other provision. Election by Lender to pursue any remedy shag not
exclude pursuit of any other remedy, and an election to make expenditures or take action to perform an obligation of Grantor or Borrower under
this Mortgage after failure of Grantor or Borrower to perform shall not affect Lender's right to declare a default and exercise Its remedies under this
Mortgage.
Attorneys' Fees; Expanses. If Lender Institutes any suit or action to enforce any of the forms of this Mortgage, Lender shag be entitled to recover
such sum as the court may adjudge reasonable as attorneys' fees at trial and on any appeal. Whether or not any court action Is involved, an
reasonable expenses Incurred by Lender that in Lender's opinion are necessary at any time lot the protection of its Interest or the enforcement of
its rights shag become a part of the Indebtedness payable on demand and shall beer interest from the data of expenditure until repaid at the rate
provided for in the Note. Expenses covered by this paragraph include, without limitation, however subject to any limits under applicable low,
Lender's attorneys' tees and Lender's legal expenses whether or not there is a lawsuit, Including attorneys' fees for bankruptcy proceedings
(Including efforts to modify or vocals any automate stay or injunction), appeals and any anticipated post-judgment crcection services, the cost of
searching records, obtaining title reports (including foreclosure reports), surveyor' reports, and appraisal fees, and title insurance, to the extent
permitted by appliable taw. Borrower also will pay any court costs, in addition to all other sums provided bylaw.
NOTICES TO GRANTOR AND OTHER PARTIES. Unless otherwise provided by applicable law, any notice under this Mortgage shall be In writing,
may be sent by lelefacsimile (unless otherwise required by taw), and shalt be effective when actually delivered, or when deposited with a nationally
recognized overnight courier, or, If mailed, shall be deemed effective when deposited in the United States mail first class, certified or registered mall,
postage prepaid, directed to the addresses shown near the beginning of this Mortgage. Any party may change Its address for notices under this
Mortgage by giving formal written nobs to the other parties, specifying that the purpose of the notice Is to change the party's address. At$ copies of
notices of foreclosure from the holder of any lion which has priority over this Mortgage shall be sent to Lender's address, as shown near the beginning
of this Mortgage. For notice purposes, Grantor agrees to keep Lender informed at all times of Grantor's current address.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a pan of this Mortgage:
Amendments. This Mortgage, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the
matters sat forth in this Mortgage. No alteration of or amendment to this Mortgage shag be effective unless given in writing and signed by the
party or parties sought to be charged or bound by the alteration or amendment.
Annual Reports. If the Property is used for purposes other than Grantor's residence, Grantor shall furnish to Lender, upon request, a cerbfied
statement of net operating income received from the Property during Grantor's previous fiscal year in such form and detail as Lender shall require.
'Net operating income' shall moan all ash receipts from the Property less all cash expenditures made in connection with the operation of the
Property.
Applicable Law. This Mortgage has been delivered to Lender and accepted by Lender In the Commonwealth of Pennsylvania. This
Mortgage shall be governed by and construed In accordance with the laws of the Commonwealth of Pennsylvania.
Caption Headings. Caption headings In this Mortgage are for convenience purposes only and are not to be used to Interpret or define the
provisions of this Mortgage.
Merger. There shall be no merger of the interest or estate created by this Mortgage with any other interest or estate in the Property al any time
hold by or for the benefit of Lender In any capacity, without the written consent of Lender.
Multiple Parties; Corporate Authority. All obligations of Grantor and Borrower under this Mortgage shall be joint and several, and a. •afere.-ft
to Grantor shell mean each and every Grantor, and all references to Borrower shall mean each and every Borrower. This means that each ;r ,he
persons signing below is responsible for all obligations in this Mortgage.
Severablllty, If a court of competent jurisdiction finds any provision of this Mortgage to be invalid or unenforceable as to any person Or
circumstance, such finding shall not render that provision invalid or unenforceable as to any other persons or circumstances. If feasible, any such
ohendintg provision shag be deemed to be modified to be within the limits of enforceability or validity; however, of the offending provision cannot be
so modified, It shall be stnbken and all other provisions of this Mortgage in all other respects shall remain valid and enforceable.
Successors and Asalgns. Subject to the limitations stated in this Mortgage on transfer of Grantor's interest, this Mortgage shall be binding upon
and inure to the benefit of the panes, their heirs, personal representatives, successors and assigns. If ownership of the Property becomes vested
in a person other than Grantor, Lender, without notice to Grantor, may (Joel with Grantor's successors with referonce to this Mortgage and the
Indebtedness by way of forbearance or extension without releasing Grantor from the obligations of this Mortgage or liability under the
Indebtedness.
Time Is of the Essence. Time is of the essence in the performance of this Mortgage.
Waivers and Consents. Lander shall not be deemed to have waived any rights under this Mortgage (or under the Related Documents) unless
such waiver is in writing and Signed by Lender. No delay or omission on the pert of Lander in exercising any right Shall operate as a waiver of
such right or any other fight. A waiver by any party of a provision of this Mortgage shall not constitute a waiver of or prejudice the party's right
otherwise to demand strict compliance with that provision or any other provision. No prior waiver by Lender, not any course of dealing between •r'
Under and Grantor or Borrower, shall constitute a waiver of any of Lender's tights or any of Grantor or Borrower's obligations as to any future
transactions. Whenever consent by Lander is required in this Mortgage, the granting of such consent by Lender in any instance shag not
constitute continuing consent to subsequent instances where such consent is required. )
eoA502race .651
11-20-1998 MORTGAGE Pape 7
(Continued)
EACH GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MORTGAGE, AND EACH GRANTOR AGREES TO ITS
TERMS.
THIS MORTGA S BEEN 81 E AND 8 BY THE UNDERSIGNED.
O
GRANTOR: r
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even • Ids N eta Dardlck
Signed, acknowledged and deliver 1 the presence of:
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Wltnea
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W Itnese
CERTIFICATE OF RESIDENCE
I hereby cerefy, that the precise address of the mortgagee, Financial Trust Company, heroln Is as follows:
4231 Trlndle Road, Camp Hill, PA 17011 ?'/?"'W?`' ',c x
AtImey mAgont fa MVtaapsit
INDIVIDUAL ACKNOWLEDGMENT
STATE OF ?y LYt?I?A?f A/C?11 C2. 1
COUNTY OF n?R? 1
On this, the 010 day of Wa?ldttt 1S_, before mo OIL
undersigned Notary Public, personally appeared Steven M, Dardlck and Necla Dardlck, known to me (w satgh
names are subscribed to the within instrument, and acknowledged that they executed the same for the purposes
In witness whereof, I hereunto set my hand and official seal.
"IL
Notary Public In and for the
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EXHIBIT "G"
MCNEES, WALLACE 6 NURICK
ATTORNEYS AT LAW
100 PINE STREET
P. O. Box Ilea
HARRISBURG. PA 17106.1166
TELEPHONC 17171232.5000
FAX 17171277.5700
httpJtw; mwn.com
CHAD P. PHIPPS
DIRECT DIAL, (717) 237.5410
H-MAIL ADDIM: WITMOIKIM.COM
September 3, 1999
Steven M. Dardick, Chief Executive Officer
Darcom Technologies, Inc.
3 Bud Way, Suite 25
Nashua, NH 03062
Re: Keystone Financial Bank, N.A.
Darcom Technologies, Inc.
Our File No. 19128-0016
Dear Mr. Dardick:
FILE COPY
VIA FACSIMILE [603-886-58881
and FIRST CLASS U.S. MAIL
Please be advised that this office serves as legal counsel to Keystone Financial Bank, N.A.,
successor by merger to Financial Trust Company and Pennsylvania National Bank and Trust
Company (the "Bank'). As you know, Darcom Technologies, Inc. (" Darcom") presently has three
outstanding loans with the Bank. The outstanding indebtedness with respect to these three loans,
as of August 18, 1999, is as follows:
Date of the Loan
1.) 12/17/96
2.) 11/13/97
3.) 9/29/98
Original Amount of the Loan
S 250,000 Line of Credit
S 600,000 Line of Credit
S 188,000 Tenn Note
Doff Amount as of 8/18/99
S 252,222.74
S 593,540.71
S 213,321.84
The aforementioned loan payoff figures include accrued interest and late charges only through
August 18, 1999. Darcom also owes the Bank additional interest and late charges which accrue
subsequent to August 18, 1999, as well as the Bank's attorneys' fees and other costs incurred both
prior hereto and hereafter in attempting to collect the indebtedness. In addition, Darcom shall
continue to be obligated to pay to Bank any other amounts as provided in the documentation
executed in association with the aforementioned loans. The total amount outstanding under the three
Darcom loans, as well as any and all other attorneys' fees, costs, charges, etc., which Bank is entitled
to recover from Darcom pursuant to the loan documentation, is hereinafter collectively referred to
as the "Darcom Indebtedness.
• COLUMBUS. OH WASHINGTON. D.C. ,
Mr. Steven M. Dardick, Chief Executive Officer
September 3, 1999
Page 2
The $250,000 line of credit is evidenced by the Business Loan Agreement and the Promissory
Note (the "1996 Note"), each dated December 17, 1996, executed by Darcom in favor of the Bank.
Under the 1996 Note, the Bank may demand payment in full at any time, whether or not there has
been a default by Darcom. The 1996 Note is secured by a Commercial Security Agreement, dated
December 17, 1996, whereby Darcom granted to Bank a first lien in its accounts and inventory, as
well as a lien subject to the lien of U.S. Computer Systems, Inc. d/b/a Dynatech Wireless
Technologies, Inc. ("Dynatech") with respect to Darcom's other assets. The 1996 Note is further
secured by the Commercial Guaranty of David Scott Dardick and Janet M. Dardick and the
Commercial Guaranty of Dardick Technical Services, Inc., each dated December 17, 1996.
The $600,000 Business Manager line of credit is evidenced by the loan commitment letter
and the Business Loan Agreement, each dated November 13, 1997 (the "1997 Business Manager
Line"). As you know, the 1997 Business Manager Line documentation governs the relationship
between the Bank and Darcom regarding the Bank's funding and purchase of Darcom's receivables.
The 1997 Business Manager Line is secured by a Commercial Security Agreement, dated November
13, 1997, whereby Darcom granted to Bank a first lien security interest in all of its accounts
receivable and proceeds therefrom. In addition, the 1997 Business Manager Line is secured by the
Commercial Guaranty of Thomas Dardick, and an accompanying Open-End Mortgage from Thomas
Dardick and Kathleen Vickroy to Bank, each executed on November 13, 1997. The 1997 Business
Manager Line is further secured by the Commercial Guaranty of Steven Dardick, and an
accompanying Open-End Mortgage from Steven and Necia Dardick to Bank, each executed on
November 13, 1997. Furthermore, the 1997 Business Manager Line is secured by the Commercial
Guaranty of David Scott Dardick, and an accompanying Open-End Mortgage from Janet Russavage
a/k/a Janet Dardick to Bank, each dated November 13, 1997.
The $188,000 term loan is evidenced by the Promissory Note from Darcom to Bank dated
September 29, 1998 (the "1998 Note'7. The 1998 Note matured on February 28, 1999. Despite the
Bank's April 29, 1999 letter to Darcom and the guarantors of the 1998 Note demanding immediate
full payment of the 1998 Note, Darcom and the guarantors of the 1998 Note have not tendered
payment to Bank to date. The 1998 Note is secured by a Commercial Security Agreement, dated
September 29, 1998, whereby Darcom granted to Bank a security interest in its inventory, chattel
paper, accounts, equipment, general intangibles and fixtures. The 1998 Note is further secured by
the Commercial Guaranty of Thomas Dardick and Kathleen Vickroy, dated September 29, 1998.
Moreover, the 1998 Note is secured by the Commercial Guaranty of David Scott and Janet Dardick,
and the accompanying Mortgage from Janet Russavage a/k/a Janet Dardick to Bank, each dated
September 29, 1998. In addition, the 1998 Note is also secured by the Commercial Guaranty of
Steven and Necia Dardick, and the accompanying ivlortgage from Steven and Nccia Dardick to Bank,
each dated September 29, 1998.
All of the loan documentation executed in association with the 1996 Note, the 1997 Business
Manager Line and the 1998 Note are hereinafter sometimes collectively referred to as the "Darcom
Mr. Steven M. Dardick, Chief Executive Officer
September 3, 1999
Page 3
Loan Documents." In addition, Thomas Dardick, Kathleen Vickroy, David Scott Dardick, Janet
Russavage wWa Janet Dardick, Steven Dardick, Necia Dardick and Dardick Technical Services, Inc.
are sometimes hereinafter collectively referred to as the "Guarantors."
Due to Darcom's failure to make timely payments to Bank and to otherwise comply with its
obligations under the Darcom Loan Documents, Darcom is in default under the Darcom Loan
Documents. Due to Darcom's defaults under the Darcom Loan Documents and Darcom's failure
to remedy such defaults, the Bank hereby declares the entire Darcom indebtedness to be immediately
due and payable, as authorized under the Darcom Loan Documents. (Even absent a default, the 1996
Note is a demand obligation and Bank hereby demands full payment thereof, and the 1998 Note has
already matured and is past-due). As set forth above, as of August 18, 1999, the aggregate Darcom
Indebtedness is $1,059,085.29, exclusive of attorneys' fees and other amounts which may be
recoverable by Bank upon a default by Darcom under the Darcom Loan Documents. As a result of
Darcom's continuing defaults under the Darcom Loan Documents, the Bank hereby demands that
Darcom pay to Bank the sum of S1,059,085.29 within ten (10) days from the date of this letter. If
Darcom fails to pay said sum within ten (10) days, the Bank intends to pursue its available legal
rights and remedies against Darcom, including entering judgment by confession and exercising its
rights as a secured party.
In addition to Darcom being in default under the Darcom Loan Documents, the Guarantors
are also presently in default under their obligations to the Bank for having failed to tender payment
to the Bank pursuant to their respective guaranty agreements. In particular, Dardick Technical
Services, Inc. is obligated to the Bank for all of Darcom's obligations under the 1996 Note. David
Scott Dardick, as a guarantor under the 1996 Note, the 1997 Business Manager Line and the 1998
Note, is personally obligated to Bank for the entire Darcom Indebtedness. Janet Dardick is
personally obligated to Bank for all of Darcom's obligations under the 1996 Note and the 1998 Note.
Thomas Dardick is personally obligated to the Bank as a guarantor of the 1997 Business Manager
Line and the 1998 Note. Kathleen Vickroy is personally obligated to the Bank as a guarantor of the
1998 Note. Steven Dardick is personally obligated to the Bank as a guarantor of the 1997 Business
Manager Line and the 1998 Note. Necia Dardick is personally obligated to the Bank as a guarantor
of the 1998 Note. -
As the aforementioned Guarantors are presently in default of their obligations to the Bank
as guarantors of certain of the Darcom Indebtedness, the Bank hereby demands that the Guarantors
make full payment to Bank under their obligations set forth in the respective guaranty agreements
within ten (10) days from the date of this letter. By copy of this letter, the respective Guarantors arc
receiving proper notice from Bank under the Darcom Loan Documents. If Darcom and the
Guarantors fail to make the necessary payments to Barak within ten (10) days, the Bank intends to
also exercise its rights against the Guarantors, including its right to enter judgments by confession,
as well as its rights trader the respective mortgage documents executed by some of the Guarantors.
Mr. Steven M. Dardick, Chief Executive Officer
September 3, 1999
Page 4
It is important that Darcom and the Guarantors take immediate action in response to this
letter. The Bank can no longer sit idly by and allow the indebtedness to increase. As you are aware,
the largest component of the Darcom Indebtedness is the 1997 Business Manager Line. Based on
your letter of August 26, 1999 to the Bank, it appears as though the majority of outstanding
receivables will not be collected. Naturally, this causes great concern from the Bank's perspective.
Assuming that Darcom and/or the Guarantors do not make payment to the Bank as demanded above,
the Bank is left with no choice but to aggressively pursue collection of the loans from Darcom and
the Guarantors by exercising its available legal rights and remedies under the loan documentation.
So that we may work together in attempt to recover payment on as many receivables as
possible and so that the Bank has a better understanding of Darcom's present situation, within ten
(10) days from the date of this letter, you must provide the Bank with the following information:
¦ copies of the underlying sales contracts that Darcom executed with its larger account
debtors;
¦ the status, quantity, estimated value and location of all of the Bank's collateral;
¦ the status of any efforts Darcom or the Guarantors are making to pay the debts owed
to the Bank; and
¦ the status of Darcom's indebtedness to Dynatech and Dynatech's present
involvement with Darcom, including the lease of the New Hampshire premises.
If you have any questions or comments regarding anything stated above, please contact Jack
Hutchison or the undersigned. Also, if Darcom and/or the Guarantors are represented by legal
counsel regarding this matter, please have your counsel contact Mike Doctrow at (717) 237-5311
or the undersigned at (717) 237-5410.
Very truly yours,
McNEES, WALLACE & NURICK
B
Y
Chad F. Phipps
cc: Dardick Technical Services, Inc.
David Scott Dardick and Janet M. Russavage a/k/a Janet M. Dardick
Thomas M. Dardick and Kathleen Vickroy
Steven M. and Necia Dardick
Jack V. Hutchison
ioc: Michael A. Doctrow, Esq.
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KEYSTONE FINANCIAL BANK, N.A., : IN THE COURT OF COMMON PLEAS
successor by merger to PENNSYLVANIA : CUMBERLAND COUNTY, PENNSYLVANIA
NATIONAL BANK & TRUST COMPANY :
and FINANCIAL TRUST COMPANY,
Plaintiff
V.
NO. 99-6118
STEVEN M. DARDICK and
NECIA N. DARDICK,
Defendants CIVIL ACTION - LAW
NOTICE UNDER RULE 2958.1 OF JUDGMENT
THEREON AND EXECUTION
NOTICE OF DEFENDANT'S RIGHTS
TO: Necia N. Dardick
3805 Bellows Drive
Camp Hill, Pennsylvania 17011
A judgment in the amount of S215,366.08 has been entered against you and in favor of
the plaintiff without any prior notice or hearing based on a confession of judgment contained in a
written agreement or other paper allegedly signed by you. The sheriff may take your money or
other property to pay the judgment at any time after thirty (30) days after the date on which this
notice is served on you.
You may have legal rights to defeat the judgment or to prevent your money or property
from being taken. YOU MUST FILE A PETITION SEEKING RELIEF FROM THE
JUDGMENT AND PRESENT IT TO A JUDGE WITHIN THIRTY (30) DAYS AFTER THE
DATE ON WHICH THIS NOTICE 1S SERVED ON YOU OR YOU MAY LOSE YOUR
RIGHTS.
YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO
NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEP14ONE THE
OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP:
Cumberland County Lawyer Referral Service
Court Administrator
Cumberland County Courthouse
Carlisle, Pennsylvania 17013
(717) 140-6100
Respectfully submitted,
McNEES, WALLACE & NURICK
By _///^' r
Michael A. Doctrow
Attorney I.D. No. 36805
Chad F. Phipps
Attorney I.D. No. 78055
P. 0. Box 1166
100 Pine Street
Harrisburg, Pennsylvania 17108-1166
(717) 232-8000
Attorneys for Keystone Financial Bank, N.A.,
successor by merger to Pennsylvania National Bank
& Trust Company and Financial Trust Company
Date: October 27,1999
-2.
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KEYSTONE FINANCIAL BANK, N.A., : IN THE COURT OF COMMON PLEAS
successor by merger to PENNSYLVANIA : CUMBERLAND COUNTY, PENNSYLVANIA
NATIONAL BANK & TRUST COMPANY :
and FINANCIAL TRUST COMPANY,
Plaintiff
V.
NO. 99-6118
STEVEN M. DARDICK and
NECIA N. DARDICK,
Defendants CIVIL ACTION - LAW
NOTICE UNDER RULE 2958.1 OF JUDGMENT
THEREONAND EXECUTION
NOTICE OF DEFENDANT'S RIGHTS
TO: Steven M. Dardick
3805 Bellows Drive
Camp Hill, Pennsylvania 17011
A judgment in the amount of $797,680.66 has been entered against you and in favor of
the plaintiff without any prior notice or hearing based on confession of judgment provisions
contained in written agreements or other paper allegedly signed by you. The sheriff may take
your money or other property to pay thejudgment at any time after thirty (30) days after the date
on which this notice is served on you.
You may have legal rights to defeat the judgment or to prevent your money or property
from being taken. YOU MUST FILE A PETITION SEEKING RELIEF FROM THE
JUDGMENT AND PRESENT IT TO A JUDGE WITHIN THIRTY (30) DAYS AFTER THE
DATE ON WHICH THIS NOTICE IS SERVED ON YOU OR YOU MAY LOSE YOUR
RIGHTS.
YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO
NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE
OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP:
Cumberland County LaRyer Referral Service
Court Administrator
Cumberland County Courthouse
Carlisle, Pennsylvania 17013
(717) 240-6200
I
Date: October 27, 1999
McNEES, WALLACE & NURICK
Respectfully submitted,
F' p
By #
Michael A. octrow
Attorney I.D. No. 36805
Chad F. Phipps
Attorney I.D. No. 78055
P. 0. Box 1166
100 Pine Street
Harrisburg, Pennsylvania 17108-1166
(717) 232-8000
Attorneys for Keystone Financial Bank, N.A.,
successor by merger to Pennsylvania National Bank
& Trust Company and Financial Trust Company
%:
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APP. 6.20rtc, 4:56PII V r1Ur'P KODAK 2. Tr1BLL01
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tID.37C+ P.13
OPY G^ F
IN THE UNITED STATES HANKRUPTCY COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
IN REt .
STEVEN M. DARDICA I
NECIA N. DARDICK t
Debtors t
s
STEVEN M. DARDICK
NECIA N. DARDICK s
Plaintiffn s
v. t
KEYSTO1TE FINANCIAL BANK, N.A. t
SUCCESSOR BY. MERGER TO t
PENNSYLVANLA NATIONAL, BANK t
AND TRUST COMPANY AND s
FINANCIAL TRUST COMPANY s
Defendant t
FILED HARRPAURG
JUL 1 7 2002 ?L
Clark, U.S. Bankruptcy Court
AND NOW, this ALDI to day of 3 %-L. I ?,. 1_ , 2002,
upon consideration of Debtor's Motion for Default Judgment,
IT IS HEREBY ORDERED AND DECREED that a Default Judgment is
entered against the Defendant, Keystone Financial in the above-
captioned matter in that Keystone Financial's mortgages and
Judgment Lien against the real estate at 3805 Bellows Drive, Camp
Hill, Cumberland County, Pennsylvania are hereby avoided and are of
no further legal of fact to the extent that same collectively exceed
S13,SOC.00.
CERTIFIED FROM THE RECORD Ihls=
f
?/ , 20
day of
Clork, U.S. Eankruptcy ' u
Par. ?-
Deputy Cork
CASE NO. 1-99-04663
CHAPTER 13
ADVERSARY NO. 1-00-00277A
APP.. 6.24106 4356P11 K"-PP KODAK Co IMBLUM 110.374. P.14
t
A copy of thin order may be recorded in the Cumberland County
Recorder of Deeds office to evidence the avoidance of the mortgages
and recorded in the Cumberland County Prothonotary's Office to
evidence the avoidance of the Judgment Lien filed to No. 99-6118
Civil, Cumberland County, Pennsylvania.
x Rown j. wovumuu
ROBERT J. WOODSIDE
Chief Bankruptcy Judge
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