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HomeMy WebLinkAbout07-6281v I J ORRSTOWN BANK, Plaintiff V. VIP HAIR STUDIO AND DAY SPA, INC., STACEY E. KENNEDY AND GREGORY A. KENNEDY, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 2007- 6,-W CIVIL TERM CONFESSION OF JUDGMENT Pursuant to the authority contained in the warrant of attorney, the original or a copy of which is attached to the complaint filed in this action, I appear for the defendant and confess judgment in favor of the plaintiff and against defendant as follows: Principal $19,544.11 Interest to 10/24/07 $ 19.23 (per diem $4.75.) Attorney Fees $ 1,954.41 Costs 227.50 TOTAL: $21,745.25 David A. Baric, Esquire Attorney for Orrstown Bank `rr VERIFICATION The statements in the foregoing Confession Of Judgment are based upon information which has been assembled by my attorney in this litigation. The language of the statements is not my own. I have read the statements; and to the extent that they are based upon information which I have given to my counsel, they are true and correct to the best of my knowledge, information and belief. I understand that false statements herein are made subject to the penalties of 18 Pa.C.S. § 4904 relating to unsworn falsifications to authorities. DATE: O(-4*J s? )-? Zoo? O-z--7 Jeff Gayman Vice President of Commercial Lending rv ?tD ORRSTOWN BANK, IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA V. NO. 2007- G -) S r CIVIL TERM VIP HAIR STUDIO AND DAY SPA, INC., STACEY E. KENNEDY AND GREGORY A. KENNEDY, Defendants NOTICE You have been sued in court. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this complaint and notice are served, by entering a written appearance personally or by an attorney and filing in writing with the court, your defenses or objections to the claims set forth against you. You are warned that if you fail to do so, the case may proceed without you and a judgment may be entered against you by the court without further notice for any money claimed in the complaint or for any other claim or relief requested by the plaintiff. You may lose money or property or other rights important to you. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW. THIS OFFICE CAN PROVIDE YOU WITH INFORMATION ABOUT HIRING A LAWYER. IF YOU CANNOT AFFORD TO HIRE A LAWYER, THIS OFFICE MAY BE ABLE TO PROVIDE YOU WITH INFORMATION ABOUT AGENCIES THAT MAY OFFER LEGAL SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE OR NO FEE. Cumberland County Bar Association 32 South Bedford Street Carlisle, Pennsylvania 17013 (717) 249-3166 ORRSTOWN BANK, Plaintiff V. VIP HAIR STUDIO AND DAY SPA, INC., STACEY E. KENNEDY AND GREGORY A. KENNEDY, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 2007- CIVIL TERM COMPLAINT IN CONFESSION OF JUDGMENT NOW, comes Plaintiff, Orrstown Bank, by and through its attorneys, O'BRIEN, BARIC & SCHERER, and files the within Complaint and, in support thereof, sets forth the following: 1. The principal business address of Orrstown Bank is 77 East King Street, Shippensburg, Cumberland County, Pennsylvania 17257 2. Defendant, Stacey E. Kennedy is an adult individual with a last known address of 213 Shirley Lane, Boiling Springs, Cumberland County, Pennsylvania 17007. 3. Defendant, Gregory A. Kennedy is an adult individual with a last known address of 232 South Allison Street, Greencastle, Franklin County, Pennsylvania 17225. 3. The last known address for Defendant, VIP Hair Studio and Day Spa, Inc. ("VIP Hair Studio") is 242 York Road, Carlisle, Cumberland County, Pennsylvania 17103. VIP Hair Studio is averred to be a Pennsylvania corporation. 4. On or about July 20, 2001, Defendant, VIP Hair Studio, executed a Note payable to Orrstown Bank. A true and correct copy of the Note is attached as Exhibit "A" and is incorporated by reference. 5. On or about July 20, 2001, Defendant, Gregory A. Kennedy, executed a Commercial Guaranty to secure payment of the Note. A true and correct copy of the Commercial Guaranty executed by Gregory A. Kennedy is attached as Exhibit "B" and is incorporated by reference. 6. On or about July 20, 2001, Defendant, Stacey E. Kennedy, executed a Commercial Guaranty to secure payment of the Note. A true and correct copy of the Commercial Guaranty executed by Stacey E. Kennedy is attached as Exhibit "C" and is incorporated by reference. 7. Judgment is not being entered by confession against natural persons in connection with a consumer transaction. 8. VIP Hair Studio has repeatedly overdrawn its deposit account at Orrstown Bank in violation of the terms and conditions of said Account Agreement. 9. Orrstown Bank reasonably believes the prospect of payment or performance under the Note is impaired. 10. Orrstown Bank in good faith believes itself to be insecure. 11. Judgment has not been entered on the Note or Commercial Guaranty documents in any other jurisdiction. 12. The amount due and owing is calculated as follows: Principal $19,544.11 Interest to 10/24/07 $ 19.23 (per diem $4.75) Attorney Fees $ 1,954.41 TOTAL: $21,745.25 13. The Note and Commercial Guaranty documents as appended, provide for the recovery of costs, including reasonable attorney fees, incurred by Orrstown Bank to collect the debt due and owing. WHEREFORE, Plaintiff requests judgment as authorized by the warrant in the amount of $19,563.34 plus costs and expenses, attorney fees and interest accruing to the date of payment. Respectfully submitted, ' EN, BARI SC E David A. Baric, Esquire I.D. 44853 19 West South Street Carlisle, Pennsylvania 17013 (717) 249-6873 Attorney for Orrstown Bank dab.dir/orrstownbank/kennedy/Confessjudgment.com VERIFICATION The statements in the foregoing Complaint In Confession Of Judgment are based upon information which has been assembled by my attorney in this litigation. The language of the statements is not my own. I have read the statements; and to the extent that they are based upon information which I have given to my counsel, they are true and correct to the best of my knowledge, information and belief. I understand that false statements herein are made subject to the penalties of 18 Pa.C.S. § 4904 relating to unsworn falsifications to authorities. /," -74 ?? Zoo 1 DATE: 6c_f o J Jeff Gayman Vice President of Commercial Lending v. _ _., .. ???_' ?_ .'? FM UVWllfxti.??:. ¦,.,a,.'???V?Y ? oOV PROMISSORY NOTE References In the shaded area are for Lender's use only and do not limit the so -- AAY Item above containing "44" has been omitted 90" Borrower: VIP HAIR STUDIO s DAY SPA, INC. (TIN: Lender: 25-1675441) 1312 HOLLY PIKE CARLISLE, PA 17013 this document to any particular loan or horn, ORRSTOWN SANK STONEHEDGE OFFICE 427 STONEHEDGE DR. CARLISLE, PA 17013 Principal Amount: $20,000.00 initial Rate: 7.750% Date of Note: July 20, 2001 PROMISE TO PAY. VIP HAIR STUDIO & DAY SPA, INC. ("Borrower") promises to pay to ORRSTOWN BANK ("Lender"), or order, in lawful money of the United States of America, on demand, the principal amount of Twenty Thousand & 00/10D Dollars ($20,000.00) or so much as may be outstanding, together with interest on the unpaid outstanding principal balance of each advance. Interest shall be calculated from the data of each advance until repayment of each advance. PAYMENT. Borrower will pay this loan Immediately upon Lender's demand. Payment In full is due immediately upon Lender's demand. Borrower will pay regular monthly payments of all accrued unpaid Interest due as of each payment date, beginning August 20, 2001, with an subsequent interest payments to be due on the same day of each month after that. Unless otherwise agreed or requked by q*11 cable leer, payments will be applied first to accrued unpaid Interest, then to principal, and any remaining amount to any unpaid collection costs and late charges. The annual Interest rate for this Note is computed on a 366/ma basis; that is, by applying the ratio of the anmal interest rate over e year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the prMelpal balance is outstanding. Borrower will pay Lender at lender's address shown above or at such other place as Lander may designate In writing. VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from time to time based on changes In an Independent index which is the Wall Street Prime (the "Index"). The Index Is not necessarily the lowest rate charged by Lender on Its loans. if the Index becomes unavailable during the term of this loan, Lender may designate a substitute index after notice to Borrower. Lender will tell Borrower the current Index rate upon Borrower's request. The interest rate change will not occur more often than each day. Borrower understands that Lander may make loans based on other rates as well. The Index currently is 6.750% per annum. The interest rate to be applied to the unpaid principal balance of this Note win be at a rate of 1.000 percentage point over the Index, resulting In an Initial rate of 7.760% per annum. NOTICE: Under no circumstances Y41 the interest rate on this Note be more than the maximum rate allowed by applicable law. PREPAYMENT. Borrower may pay without penalty of or it portion of the amount owed earlier than it Is due. Early payments wig not, unfess agreed to by Lender In writing, relieve Borrower of Borrower's obligation to continue to make payments of accrued unpaid interest. Rather, early payments wig reduce the principal balance due. Borrower agrees not to send Lender payments marked "paid In full", "without recourse", or similar language. If Borrower sends such a paymerd, Lender may accept it without losing any of Lender's rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts, including any check or other payment Instrument that Indlcates that the payment constitutes 'payment in fur of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: OfiaSTOWN BANK, P.O. BOX 250 SHIPPENSBURG, PA 17267. LATE CHARGE. If at regularly scheduled Interest payment Is 16 days or more late, Borrower will be charged 5.00096 of the regularly scheduled payment or $60.00, whichever is greater. If Lender demands payment of this loan, and Borrower does not pay the loan In full within 16 days after Lender's demand, Borrower also will be charged either 5.000% of the sum of the unpaid principal plus accrued unpaid Interest or $50.00, whichever is greater. INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final maturity, the total sum due under this Note will bear interest from the date of acceleration or maturity at the variable interest rate on this Note. The Interest rate will not exceed the maximum rate permitted by applicable law. DEFAULT. Each of the following shall constitute an event of default ("Event of Default") under this Note: Payment Default. Borrower falls to make any payment when due under this Note. Other Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained In this Note or in any of the related documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower. False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Note or the related documents Is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter. Insolvency. The dissolution or termination of Borrower's existence as a going business, the Insolvency of Barr ower, the appointment of a receiver for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or Insolvency laws by or against Borrower. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the loan. This Includes a garnishment of any of Borrower's accounts, Including deposit accounts, with Lender. However, this Event of Default shall not apply it there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and 0 Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, In its sole discretion, as being an adequate reserve or bond for the dispute. 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 evidenced by this Note. In the event of it death, Lander, at its option, may, but shell not be required to, permit the Guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender, and, in doing so, ours any Event of Default. Change In Ownership. Any change In ownership of twenty-five percent (26;b) or more of the common stock of Borrower. Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lander believes the prospect of payment or performance of this Note is impaired. Insecurity. Lender in good faith believes itself Insecure. Cure Provisions. If any default, other than a default In payment is curable and If Borrower has not been given a notice of a breach of the same provlslon of this Note within the preceding twelve (12) months, it may be cured (and no event of default wll have occurred) if Borrower, after Exhibit "A" J,t '. 111 ?. ? . "el??300?3?? 009 PROMISSORY NOTE (Continued) Page Z receiving written notice from Lender demanding cure of such default; (1) cures the default within fifteen (is) clays. or (2) If the cure reQ more than fifteen (16) days, Immediately initiates steps which Lender deems In Landers sole discretion to be sufficient to cure ft detauuk nd thereafter continues and completes all reasonable and necessary stops sufficient to produce compliance as soon as reasonably pracIi, LENDER'S RIGHTS. Upon default, Lender may, after giving such notices as requited by applicable taw, declare the entire unpaid principal balance on this Note and all accrued unpaid interest immediately due, and then Borrower will pay that amount. ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone else to help collect this Nois If Borrower does not pay. Borrower will pay Lender that amount. This Includes, subject to any limits under applicable law, Lender's atlomeys' fees and Lenders legal expenses, whether or not tore is a lawsuit, Including attorneys' fees, expenses for bankruptcy proceedings pncludlng efforts to modify or Vacala any auilwAtlo stay or Incusion), and appeals. If not prohibited by applicable law, Borrower also w l pay any court costs, In addition to ell other sums provided by law. RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Borrower's accounts with Lander (whether checking, savings, or some other account). This includes all accounts Borrower holds jointly with someone else and aA accounts Borrower may open in the future. However, this does not Include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohlbited by law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the debt against any and all such accounts, and, at Lender's option, to administratively freeze all such accounts to allow Lender to protect Landers charge and setoff rights provided In this paragraph, LINE OF CREDIT. This Note evidences a revolving line of credit. Advances under this Note, as well as directions for payment from Borrowers accounts, may be requested orally or In writing by Borrower or by an authorized person. Lender may, but need not, require that all oral requests be confirmed in writing. Borrower agrees to be liable for all sums either: (A) advanced in accordance with the instructions of an authorized person or (H) credited to any of Borrower's accounts with Lender. The unpaid principal balance owing on this Note at any time may be evidenced by endorsements on this Note or by Lenders internal records, Including daily computer print-outs. SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal representatives, successors and assigns, and shall inure to the benefit of Lender and Its successors and assigns. NOTIFY US OF INACCURATE- INFORMATION WE REPORT TO CONSUMER REPORTING AGENCIES. Please notify us if we report any Inaccurate information about your account(s) to a Consumer reporting agency. Your written notice describing the specific Inaccuracy(ies) should be sent to us at the following address: ORRSTOWN BANK P.O. BOX 250 SHIPPENSBURG, PA 17257 GENERAL. PROVISIONS. This Note is payable on demand. The Inclusion of specific default provisions or rights of Lender shall not preclude Lenders right to declare payment of this Note on Its demand. 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 the extent allowed by law, waive presentment, demand for payment, 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 maker or endorser, shalt be released from liability..AII such parties agree that Lender may renew or extend (repeatedly and for any length of lime) this loan or release any party or guarantor or collateral: or Impair, fan to realize upon or perfect: Lenders security Interest In the collateral; and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parttas also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification Is made, The obligations under this Note are joint and several. If any portion of this Note 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 APTER A DEFAULT UNDER THIS NOTE AND WITH OR WITHOUT COMPLAINT FILED, CONFESS OR ENTER JUDGMENT AGAINST BORROWER FOR THE ENTIRE PRINCIPAL BALANCE OF THIS NOTE AND ALL ACCRUED INTEREST, LATE CHARGES AND ANY AND ALL AMOUNTS EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECURING THIS NOTE, 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 ($500) 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 IRE EXHAUSTED BY ANY EXERCISE OF THAT AUTHORITY, BUT SHALL CONTINUE FROM 71ME 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 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. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE. THIS NOTE IS GIVEN UNDER SEAL AND IT 13 INTENDED THAT THIS NOTE IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. BORROWER: VIP HAaaII!R?? STUDIO & DAY SPA, INC. a y 8 ,?ie6°q?.j •i3 ,... :' ' R ; ?Y.,f? Vin, P'.?iF.:£,; ;'..' R';wc?.-riy .ny,°o:. y Seal} STACEY E. KENNE , P esldent of IP? HAIR STUDIO & DAY SPA, INC. LADEA PRO La,l00q, Var. 6.17.01.04 000. RarYM 71na0:bl s•wlw.. Ilia. 1997, 1001. All RlpRn Ruarv00. • PA 4kjGPIYAL1Di0IG TI jog tR4j COMMERCIAL GUARANTY References in the shaded area are for Lender's use only and do not limit the Appllcabilty of this document to any particular loan or Item. Any Item above containing -- `" has been oml8ed due to text length imitations. Bot't'oWer: VIP HAIR STUDIO & DAY SPA, INC. (TIN: Lender: OARSTOWN BANK 25-1876441) STONEMEDGE OFFICE 1312 HOLLY PIKE 417 STONEMEDGE DR. CARLISLE, PA 17013 CARLISLE, PA 17013 Guarantor: GREGORY A. KENNEDY (SSN: 203-527648) 4 FORGEDALE DR. CARLISLE, PA 17013 AMOUNT OF GUARANTY. This Is a guaranty of payment of the Note, Including without limitation the principal Note amount of Twenty Thousand do 001100 Dollars ($20,000.00). GUARANTY, For good and valuable consideration, GREGORY A. KENNEDY ("Guarantor") absolutely and unconditionally guarantees and promises to pay to ORRSTOWN BANK ("Lender") or its order, on demand, in legal tender of the United States of America, the Indebtedness (as that term is defined below) of VIP HAIR STUDIO A DAY SPA, INC. ("elorrower") to Lender on the terms and conditions set forth In this Guaranty. MAXIMUM LIABILITY. The maximum liability of Guarantor under this Guaranty shall not exceed at any one time the amount of the Indebtedness described herein, plus all costs and expenses of (A) enforcement of this Guaranty and (B) collection and sale of any collateral securing this Guaranty. The above Ilmitation on liability is not a restriction on the amount of the Indebtedness of Borrower 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, Lender's rights under all guaranties shall be cumulative. This Guaranty shall not (unless specifically provided below to the contrary) affect or Invalidate any such other guaranties. Guarantor's Ilabli ty will be Guarantor's aggregate liability under the terms of this Guaranty and any such other unterminated guaranties. INDEBTEDNESS GUARANTEED. The Indebtedness guaranteed by this Guaranty Includes the Note, Including (a) all principal, (b) all Interest, (c) all late charges, (d) ell 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. 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 full force until all Indebtedness shah have been fully and finally paid and satisfied and all of Guarantor's other obligations under this Guaranty shall have been performed In full. Release of any other guarantor or termination of any other guaranty of the Indebtedness shall not affect the liability of Guarantor under this Guaranty. A revocation Lender receives from any one or more Guarantors shag not affect the liability of any remaining Guarantors under this Guaranty. This Guaranty covers a revolving line of credit and It Is specifically antlelpated 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) termlriallon In writing by Borrower and Lender of the line of credit, (a) payment of the Indebtedness In full in legal tender, and (C) payment In full lit legal tender of all of Guarantor's other obligations under thte 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 alter, compromise, renew, extend, accelerate, or otherwise change one 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, 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; (E) to determine how, when and what 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 nonjudldal sate 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; and (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 representations 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 at Borrower'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 or other Instrument binding upon Guarantor and do not result in a violation of any law, regulation, court decree or order applicable to Guarantor; (E) Guarantor has not and will not, without the prior written consent of Lender, 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 ail material respects and fairly present Guarantor's financial condition 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 Lander 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; (1) Lender has made no representation to Guarantor as to the creditworthiness of Borrower, and (J) 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 shag 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. Exoept as prohibited by applicable law, Guarantor wolves 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 nonactlon 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, lima, 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; (F) to pursue any other remedy within Lender's power; or (G) to commit any act or omisslon of any kind, or at any time, with respect to any Exhibit "B" Ph,l 5Q i ?l 003 J COMMERCIAL GUARANTY (Continued) Pap Z mm? matter whatsoever. In addition to the waivers set forth above, It now or hereafter Borrower is or shall become insolvent and the Indebtedness shall not at aY antes unq paid be fully secured by collateral pledged by Borrower, Guarantor hereby forever waves and gives up in favor of Lender and Borrower, and Lenders and Borrower's respective successors, any claim or right to payment Guarantor may now have or hereafter have or acquire against Borrower, by subrogation or otherwise, so that at no time shall 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) any "one action" or "anti-dencianey" law or any other law which may prevent Lender from bringing any action, Including a claim for deficiency, against Guarantor, before or after landers commencement or completion of any foreclosure action, either judioiatiy or by exercise of a power of safe; (B) any election of remadles by Lander watch destroys or otherwise advamoty affects Guarantors subrogation rights or Guarantors rights to proceed against Borrower for relmbursemeriL Including without Wnitation, any bee of rights Guarantor may suffer by reason of any law limiting, qualifying, or discharging the Indebtedness; (C) any dleabillty 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 tender, of the Indebtedness; (0) 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 remit the amount of that payment to Borrowers 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 the onforcament 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. SU90RDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness of Borrower to Lender, whether now existing or hereafter created, shall be superior 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 shalt 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 full 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 shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lander. Guarantor agrees, and Lender Is hereby authorized, In the name of Guarantor, from time to time to execute and file financing statements and conflnualion 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. CONFESSION OF JUDGMENT. Guarantor hereby Irrevocably authorizes and empowers any attomey-alaw to appear in any court of record and to confess judgment against Guarantor for the unpaid amount of this Guaranty as evidenced by an affidavit signed by an officer of Lender selling forth the amount then due, attorneys' fees plus costs of suit, and to release all errors, and waive all rights of appeal. If a copy of this Guaranty, verified by an affidavit, shall have been filed In the proceeding, It wit not be necessary to file the original as a warrant of attorney. Guarantor waves the right to any stay of execution and the benefit of all exemption laws now or hereafter In effect. No single exercise of the foregoing warrant and power to confess judgment will be deemed to exhaust the power, whether or not any such exercise shall be held by any court to be Invalid, voidable, or void; but the power will continue undiminished and may be exercised from time to time as Lender may elect until all amounts owing on this Guaranty have been paid in full. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part 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. Attorneys' Fees; Expenses. Guarantor agrees to pay upon demand all of Lender's costs and expenses, including Lender's attorneys' fees and Lender's legal expenses, Incurred In connection with the enforcement of this Guaranty. Lender may hire or pay someone else to help enforce this Guaranty, and Guarantor shall pay the costs and expenses of such enforcement. Costs and expenses Include Lenders attorneys' fees and 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 or injunction), appoais, and any anticipated post-judgment collection services. Guarantor also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings. 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. Integration. Guarantor further agrees that Guarantor has read and fully understands the terms of this Guaranty; Guarantor has had the opportunity to be advised by Guarantors attorney with respect to this Guaranty; the Guaranty fully reflects Guarantors intentions and parol evidence Is not required to interpret the terms of this Guaranty. Guarantor hereby indemnities and holds Lender harmless from all losses, claims, damages, and costs (Including Lenders attorneys' fees) suffered or Incurred by Lender as a result of any breach by Guarantor of the warranties, represantatlons and agreements of this paragraph. Interpretation. In all cases where there is more than one Borrower or Guarantor, then all words used in this Guaranty In the singular shall 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. If a court finds that any provision of this Guaranty Is not valid or should not be enforced, that fact by itself will not mean that the rest of this Guaranty will not be valid or enforced. Therefore, a court will enforce the rest of the provisions of this Guaranty even If a provision of this Guaranty may be found to be Invalid or unenforceable. If any one or more of Borrower or Guarantor are corporations, partnerships, limited liability companies, or similar entities, it Is not necessary for Lender to Inquire Into the powers of Borrower or Guarantor or of the officers, directors, L! 004 COMMERCIAL. GUARANTY (Continued) Page 3 partners, managers, or other agents acting or purporting to act on their behalf, and any Loan indebtedness made or created in reliance upon the professed axwelse of such powers shall be guaranteed under this Guaranty. Notlces. Unless otherwise provided by applicable law, any notice required to be given under this Guaranty shaft be given in wand Md be effective when actually delivered, when actually received by telefacsimle (unless otherwise required by law), when deposited a natbna8y recognized overnight courier, or, if malted, when deposited in the United States mall, as first class, certified or registered mall postage directed to the addresses shown near the beginning of this Guaranty. Any party may change its address for notices under this Guaranty by prepaK giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address. For notice pu?p0ee?? Guarantor agrees to keep Lender Wormed at all times of Guarantor's current address. Unless otherwise provided by applicable law, M there k more than one Guarantor, any none given by Lender to any Guarantor is deemed to be notice given to all Guarantors. No Waiver by Lender. Lander shall not be deemed to have waived any rights under this Guaranty unless such waiver Is given in writing and signed by Lander. No delay or omission on the part of Lender in exercising any right shag 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 complIan" with that provision or any other provision of this Guaranty. No prior waiver by Lender, nor any course of dealing between lender and Guarantors 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 Instances where such consent Is required and In all cases such consent may be granted or withhold In the sole discretion of Lender. Successors and Assigns. The terms of this Guaranty shall be binding upon Guarantor, and upon Guarantor's heirs, personal representatives, successors, and assigns, and shall be enforceable by Lender and Its successors and assigns. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used In this Guaranty. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used In the singular shall Include the plural, and the plural shag Include the singular, as the context may require. Words and terms not otherwise defined in this Guaranty shall have the meanings attributed to such terms In the Uniform Commercial Code: Borrower, The word "Borrower" means VIP HAIR STUDIO & DAY SPA, INC., and all other persons and entities signing the Note in whatever capacity. Guarantor. The word "Guarantor" means each and every person or entity signing this Guaranty, Including wthout limitation GREGORY A. KENNEDY. Guaranty. The word "Guaranty" means the guaranty from Guarantor to Lender, including without ilmitation a guaranty of all or part of the Note, Indebtedness. The word "Indebtedness" means Borrower's indebtedness to Lender as more particularly described In this Guaranty. Lender. The word "Lender" means ORRSTOWN BANK, Its successors and assigns. Note. The word "Note" means the promissory note dated July 20, 2001, In the original principal amount of $20,000.00 from Borrower to Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the promissory note or agreement. Related Documents, The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other Instruments, agreements and documents, whether now or hereafter existing, executed In connection with the Indebtedness. CONFESSION OF JUDGMENT. GUARANTOR HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR THE PROTHONOTARY OR CLERK OF ANY COURT IN THE COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE, TO APPEAR AT ANY TIME FOR GUARANTOR AFTER THE AMOUNTS HEREUNDER BECOME DUE AND WITH OR WITHOUT COMPLAINT FILED, CONFESS OR ENTER JUDGMENT AGAINST GUARANTOR FOR THE ENTIRE PRINCIPAL BALANCE OF THIS GUARANTY AND ALL ACCRUED INTEREST, LATE CHARGES AND ANY AND ALL AMOUNTS EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECURING THE INDEBTEDNESS, TOGETHER WITH COSTS OF SUIT, AND AN ATTORNEY'S COMMISSION OF TEN PERCENT (10%) OF THE UNPAID PRINCIPAL BALANCE AND ACCRUED INTEREST FOR COLLECTION, BUT IN ANY EVENT NOT LESS THAN FIVE HUNDRED DOLLARS ($MD) 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 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. The lien arising from any judgment confessed or entered pursuant to the foregoing authority shall not extend to any of Guarantor's residential real property as that term is defined in the Pennsylvania Act of January 30, 1974 (Pa, laws 13, No. 8), referred to as the Loan Interest and Protection Law, as amended, and the holder of any judgment confessed or entered pursuant to the forgoing authority shall not, in enforcement of any such judgment, execute, levy or otherwise proceed against any such residential real property; provided, however, that the lien of such judgment shall extend to such residential real property and that the holder thereof shall be permitted to execute, levy or proceed against such residential real property from and after the entry of a judgment as contemplated by Section 407 of such Loan Interest and Protection Law and Rules 2981 to 2986 of the Pennsylvania Rules of Civil Procedure, or successor or similar statutes and rules. No limitation of Ilan or any execution, levy or other enforcement contained in the Immediately preceding sentence shall apply with respect to any judgment obtained other than by the foregoing authority to confess or enter judgment. GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS COMMERCIAL GUARANTY AND GUARANTOR AGREES TO ITS TERMS. THIS COMMERCIAL GUARANTY IS DATED JULY 20, 2001. THIS GUARANTY IS GIVEN UNDER BEAL AND IT IS INTENDED THAT THIS GUARANTY IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. GUARANTOR: OW, d Seal ..>-.,. ) GR GOR . KE EDY, Individually USER PRO L#oWnq. var. {.N,OtAS Gqr. ",r4ne Y4un,Yt ONYlwnl. Inv. tin, i00I. AN AI{An Reserved. • PA OnOHtLPL1ltSFO TA-16M PII-17 COMMERCIAL GUARANTY 0 .,.. I r U05 References in the shaded area are for Lenders use only and do not limit the applicability of this document to any particular loan or Iten1 Any Item above containing "" has been omitted due to taut Iwmth limitations. Borrower: VIP HAIR STUDIO & DAY SPA, INC. (TIN: Lender: OARSTOWN BANK 25-1875441) STONEHEDGE OFFICE 1312 HOLLY PIKE 427 STON11MDGE DR. CARLISLE, PA 17013 CARLISLE, PA 17013 Guarantor: STACEY E. KENNEDY (SSN: 217-92-0017) 4 FORGEDALE OR. CARLISLE, PA 17013 AMOUNT OF GUARANTY. This is a guaranty of payment of the Note, Including without limitation the principal Note amount of Twenty Thousand A 001100 Dollars ($20,000.00). GUARANTY. For good and valuable consideration, STACEY E. KENNEDY ("Guarantor") absolutely and unconditionally guarantees and promises to pay to ORRSTOWN BANK ("Lender") or its order, on demand, In legal tender of the United States of America, the Indebtedness (as that term Is daflned below) of VIP HAIR STUDIO & DAY SPA, INC. ("Borrower") to Lender on the lwma and conditions set forth in INS Guaranty. MAXIMUM LIABILITY. The maximum liability of Guarantor under this Guaranty shall not exceed at any one time the amount of the Indebtedness described herein, 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 Borrower 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, Lenders rights under all guaranties shall be cumulative. This Guaranty shall not (unless specifically provided below to the contrary) affect or Invalidate any such other guaranties. Guarantor's liability will be Guarantor's aggregate Ilablilly under the forms of this Guaranty and any such other unterminated guaranties. INDEBTEDNESS GUARANTEED. The Indebtedness guaranteed by this Guaranty Includes the Note, Including (a) all principal, (b) all Interest, (c) all 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 expanses Include without limitation all of Lenders attorneys' fees. DURATION OF GUARANTY. This Guaranty will take effect when received by Lander without the necessity of arty acceptance by Lender, or any notice to Guarantor or to Borrower, and will continue in full force until all indebtedness shall have been fully and finally paid and satisfied and all of Guarantor's other obligations under this Guaranty shall have been performed In full. Release of any other guarantor or termination of any other guaranty of the Indebtedness shall not affect the liability of Guarantor under this Guaranty. A revocation Lender receives from any one or more Guarantors shall not affect the liability of any remaining Guarantors under this Guaranty. This Guaranty covers a revolving tine 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 to the amount of Indebtedness, even to zero dollars (ti 0.00), shall not constitute a termination of this Guam Guarantor's uabittty under this Guaranty shalt terminate only upon (A) termination to writing by Borrower and Lender of the line of credit, ;. payment of the Indebtedness in full In legal tender, and (C) payment In full In legal tender of all of Guarantor's other obligations 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 goads to Borrower, or otherwise to extend additional credit to Borrower, (B) to alter, compromise, renew, extend, accelerate, or otherwise change one 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 Borrowers sureties, endorsers, or other guarantors on any terms or in any manner Lender may choose; (E) to determine how, when and what 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 nonjudiclal sale permitted by the terms of the controlling seourity+ agreement or dead of trust, as Lender In Us discretlon may determine; (G) to sail, transfer, assign or grant participations in all or any part of the Indebtedness; and (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 representations 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 at Borrower'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 or other Instrument binding upon Guarantor and do not result In a violation of any law, regulation, court decree or order applicable to Guarantor; (E) Guarantor has not and will not, without the prior written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially all of Guarantors assets, or any Interest therein; (F) upon Lender's request, Guarantor will provide to Lender financial and credit information in form acceptable to Lander, 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 material respects and fairly present Guarantor's financial condition 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 Guarantors financial condition; (H) no litigation, claim, Investigation, administrative proceeding or similar action oncluding those for unpaid taxes) against Guarantor Is pending or threatened; (1) Lender has made no representation to Guarantor as to the creditworthiness of Borrower; and (J) Guarantor has established adequate means of obtaining from Borrower on a contlouing 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 notlee 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, 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 Lander 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; (F) to pursue any other remedy within Lender's power; or (G) to commit any act or omisslon of any kind, or at any time, with respect to any Exhibit "C" 006 COMMERCIAL GUARANTY (Continued) Page 2 matter whatsoever, In addition to the waivers set forth above, if now or hereafter Borrower is or shall become Insolvent and the Indebtedness shall not at all times ur191 pW be fully secured by collateral pledged by Borrower, Guarantor hereby forever waives and gives up in favor of Lander and Borrower, and Londer'h and Borrower's respective successors, any claim or right to payment Guarantor may now have or hereafter have or acquire against Borrower, by subrogallon or otherwise, so that at no time shell Guarantor be or become a creditor" of Borrower within the meaning of 11 U.S.C. Section 547(b), or any successor provision of the Federal bankruptcy laws. Guarantor also waives any and ati rights or defenses arising by reason of (A) any "one action" or "ant-defidency" law or any other taw wtrlah may prevent Lander from bringing any action, including a claim for deficiency, against Guarantor, before or after Lender's comrtwncomart or completion Of any foreclosure action, either judidelly or by exercise of a power of sale; (B) any election of remedies by Lender which destroys or otharwip advws y affects Guarantor's subrogation rights a Guarantor's dots to proud against Borrower for reimbursement, Including Without imitation, any loss of rights Guarantor may suffer by reason of any law lirniting, qualiying, 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 lability from any cause whatsoever, other than payment in full 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, 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 Ilmitaticns; or IF) any defenses given to guarantors at law or In equity other then 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 remit 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 the enforcement of this Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under tttis Guaranty for any claim of setoff, counterclaim, counter demand, reeoupment 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 elective only to the extent permitted by law or public policy. SUBORDINATION OF BORROWER'S DE13TS TO GUARANTOR. Guarantor agrees that the Indebtedness of Borrower to Lender, whether now existing or hereafter created, shall be superior 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 liquldatlon 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 Lander to the Indebtedness of Borrower to Lender- Guarantor does hereby assign to Lander all claims which ft 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 under full 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 shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor agrees, and Lender Is hereby authorized, In the name of Guarantor, from time to time to execute and file financing statements and contlnuation 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. CONFESSION OF JUDGMENT. Guarantor hereby Irrevocably authorizes and empowers any attorney-at-law to appear in any court of record and to confess judgment against Guarantor for the unpaid amount of this Guaranty as evidenced by an affidavit signed by an officer of Lender setting forth the amount than due, attorneys' fees plus Costs of suit, and to release all errors, and waive all rights of appeal. If a ropy of this Guaranty, verified by an affidavit, shall have been filed in the proceeding. It will not be necessary to file the original as a warrant of attorney. Guarantor waives the right to any stay of execution and the benefit of all exemption laws now or hereafter In effect, No single exercise of the foregoing warrant and power to confess judgment will be deemed to exhaust the power, whether or not any such exercise shall be held by any court to be invalid, voidable, or Vold; but the power will continue undiminished and may be exercised from time to time as Lender may elect until all amounts owing on this Guaranty have been paid in full. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part 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. Attorneys' Fees; Expenses. Guarantor agrees to pay upon demand all of Lender's costs and expenses, including Lender's attorneys' fees and Lender's legal expenses, incurred in connection with the enforcement of this Guaranty. Lander may hire or pay someone also 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 (Including efforts to modify or vacate any automatic stay or Injunction), appeals, and any anticipated post-Judgment collection services. Guarantor also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings. 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. Integration. Guarantor further agrees that Guarantor has read and fully understands the terms of this Guaranty; Guarantor has had the opportunity to be advised by Guarantors attorney with respect to this Guaranty; the Guaranty fully reflects Guarantor's Intentions and parol evidence is not required to Interpret the terms of this Guaranty. Guarantor hereby indemnifles and holds Lender harmless from all losses, claims, damages, and costs (Including Lender's attorneys' fees) suffered or Incurred by Lender as a result of any breach by Guarantor of the warrantles, representations and agreements of this paragraph. Interpretation. in an cases where there Is more than one Borrower or Guarantor, then all words used in this Guaranty In the singular shall 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. It a court finds that any provision of this Guaranty Is not valid or should not be enforced, that fact by Itself will not mean that the nest of this Guaranty will not be valid or enforced. Therefore, a court will enforce the rest of the provisions of this Guaranty even if it provision of this Guaranty may be found to be invalid or unenforceable. If any one or more of Borrower or Guarantor are corporations, partnerships, Ilmlled Ilablilty companies, or similar entities, it Is not necessary for Lender to Inquire into the powers of Borrower or Guarantor or of the officers, directors, •, i l?7 + n 007 COMMERCIAL GUARANTY (Continued) PSP 3 partners, managers, or other agents acting or purporting to act on their behalf, and any Loan Indebtedness made or created In reliance upon tits professed exercise of such powers stall be guaranteed under this Guaranty. Notleft Unless otherwise provided by applicable law, any notice required to be given under this Guaranty shall be given in wrlYnp, &W etfaefve when actually delivered, when actually received by Wefacsimile (urdess otherwise required by law), when deposited WMh a 1111110 bs reCogntmd overnight courier, or, if mailed, when deposited In the United States mail, as first class, certtiled or registered man postq? Dr?ld. directed to the addresses shown near the beginning of this Guaranty. Any party may change Its address for notices under this Guarar[y by gMq formal written notice to the other parties, specifying that the purpose of the notice is to charge the party's address. For notice purpom% Guarantor agrees to keep Lender informed at all times of Guarantor's current address. Unless otherwise provided by applicable law, if theme b more than one Guarantor, any notice given by Lender to any Guarantor Is deemed to be notice given to all Guarantors. No Welver by Lender. Lender shall not be deemed to have waived any rights under this Guaranty unless such waiver Is given in wff" 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 oompknoe with that provision or any other provision of this Guaranty. No prior waiver by Lender, 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 transedlons. Wherever the consent of Lender is required under this Guaranty, the granting of such consent by Lender in any Instance shall not constitute oontlnuing 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 Lender, successors and Assigns. The terms of this Guaranty shall be binding upon Guarantor, and upon Guarantor's heirs, personal representatives, successors, and assigns, and shall be enforceable by Lender and its successors and assigns. DEFINITIONS. The following CapRWftd words and terms shall have the following meanings when used in this Guaranty. Unless spedticalty stated to the contrary, all references to dollar amounts shall mean amounts In lawful money of the United States of America. Words and terms used in the singular shall Include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined In this Guaranty shall have the meanings attributed to such terms In the Uniform Commercial Code: Borrower. The word "Borrower" means VIP HAIR STUDIO & DAY SPA, INC., and all other persons and entities signing the Note In whatever capacity. Guarantor. The word "Guarantor" means each and every person or enttty signing this Guaranty, Including without limitation STACEY E. KENNEDY. Guaranty, The word "Guaranty" means the guaranty from Guarantor to Lender, Including without limitation a guaranty of all or part of the Note. Indebtedness. The word "Indebtedness" means Borrowers Indebtedness to Lender as more particularly described In this Guaranty. Lender. The word "Lender" means ORRSTOWN BANK, its successors and assigns. Note. The word "Note" means the promissory note dated July 20, 2001, in the original principal amount of :20,1100.00 from Borrower to lender, together with all renewals of, extensions of, modifications of, rennaneings of, consolidations of, and substitutions for the promissory nob or agreement. Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter existing, executed in connection with the Indebtedness. CONFESSION OF JUDGMENT. GUARANTOR HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR THE PROTHONOTARY OR CLERK OF ANY COUNT IN THE COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE, TO APPEAR AT ANY TIME FOR GUARANTOR AFTER THE AMOUNTS HEREUNDER BECOME DUE AND WITH OR WITHOUT COMPLAINT FILED, CONFESS OR ENTER JUDGMENT AGAINST GUARANTOR FOR THE ENTIRE PRINCIPAL BALANCE OF THiS GUARANTY AND ALL ACCRUED INTEREST, LATE CHARGES AND ANY AND ALL AMOUNTS EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECURING THE INDEBTEDNESS, 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 ($500) 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 AND STATES THAT EITHER A F15PRESENTATIVE OF LENDER SPECIFICALLY CALLED THIS CONFESSION OF JUDGMENT PROVISION TO GUARANTOR'S ATTENTION OR GUARANTOR HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL. The lion arising from any judgment confessed or entered pursuant to the foregoing authority shall not extend to any of Guarantor's residential real property as that term is defined in the Pennsylvania Act of January 30, 1974 (Pa. Laws 13, No. 8), referred to as the Loan Interest and Protection Law, as amended, and the holder of any judgment confessed or entered pursuant to the forgoing authority shall not, in enforcement of any such judgment, execute, levy or otherwise proceed against any such residential real property; provided, however, that the lion of such judgment shall extend to such residential real property and that the holder thereof shall be permitted to execute, levy or proceed against such residential real property from and after the entry of s judgment as contemplated by Section 407 of such Loan Interest and Protection Law and Rules 2981 to 2988 of the Pennsylvania Rules of Civil Procedure, or successor or similar statutes and rules. No Ilmltatlon of Ilan or any execution, levy or other enforcement contained In the Immediately preceding sentence shall apply with respect to any judgment obtained other than by the foregoing authority to confess or enter judgment. GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS COMMERCIAL GUARANTY AND GUARANTOR AGREES TO ITS TERMS. THIS COMMERCIAL GUARANTY IS DATED JULY 20, 2001. THIS GUARANTY IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS GUARANTY IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. GUARANTOR: S A Indivld ly LAM PRO L6nlin0. VW. 6.,7 01.06 Derr. "an„u nn,nori sduNrnr, Ma tnt, toot. At P)ibu MNrVM, - PA 0;\PFOVL1t66.K, in-JSH rn-q ha 4.a ORRSTOWN BANK, Plaintiff V. VIP HAIR STUDIO AND DAY SPA, INC., STACEY E. KENNEDY AND GREGORY A. KENNEDY, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 2007- G ) tl CIVIL TERM NOTICE UNDER RULE 2958.2 OF JUDGMENT AND EXECUTION THEREON TO: VIP Hair Studio and Day Spa, Inc. 242 York Road Carlisle, Pennsylvania 17013 A judgment in the amount of $21,745.25 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 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, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW. THIS OFFICE CAN PROVIDE YOU WITH INFORMATION ABOUT HIRING A LAWYER. IF YOU CANNOT AFFORD TO HIRE A LAWYER, THIS OFFICE MAY BE ABLE TO PROVIDE YOU WITH INFORMATION ABOUT AGENCIES THAT MAY OFFER LEGAL SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE OR NO FEE. Cumberland County Bar Association 32 South Bedford Street Carlisle, Pennsylvania 17013 (717) 249-3166 David A. Baric, Esquire Attorney for Plaintiff 19 West South Street Carlisle, Pennsylvania 17013 (717) 249-6873 {?_?' ? -?., ? -n ?,-, ?- °, c-i=i c-? --t ° _ -?? ?. . ? ? ? .eb '? !' _ « • --E f .. .. ?,y .. 4 ORRSTOWN BANK, IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA V. NO. 2007- L -Z 81 CIVIL TERM VIP HAIR STUDIO AND DAY SPA, INC., STACEY E. KENNEDY AND GREGORY A. KENNEDY, Defendants NOTICE UNDER RULE 2958.2 OF JUDGMENT AND EXECUTION THEREON TO: Stacey E. Kennedy 213 Shirley Lane Boiling Springs, Pennsylvania 17007 A judgment in the amount of $21,745.25 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 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, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW. THIS OFFICE CAN PROVIDE YOU WITH INFORMATION ABOUT HIRING A LAWYER. IF YOU CANNOT AFFORD TO HIRE A LAWYER, THIS OFFICE MAY BE ABLE TO PROVIDE YOU WITH INFORMATION ABOUT AGENCIES THAT MAY OFFER LEGAL SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE OR NO FEE. Cumberland County Bar Association 32 South Bedford Street Carlisle, Pennsylvania 17013 (717) 249-3166 David A. Baric, Esquire Attorney for Plaintiff 19 West South Street Carlisle, Pennsylvania 17013 (717) 249-6873 _ cn Ui "? ORRSTOWN BANK, IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA V. NO. 2007- G -?F( CIVIL TERM VIP HAIR STUDIO AND DAY SPA, INC., STACEY E. KENNEDY AND GREGORY A. KENNEDY, Defendants NOTICE UNDER RULE 2958.2 OF JUDGMENT AND EXECUTION THEREON TO: Gregory A. Kennedy 232 South Allison Street Greencastle, Pennsylvania 17225 A judgment in the amount of $21,745.25 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 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, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW. THIS OFFICE CAN PROVIDE YOU WITH INFORMATION ABOUT HIRING A LAWYER. IF YOU CANNOT AFFORD TO HIRE A LAWYER, THIS OFFICE MAY BE ABLE TO PROVIDE YOU WITH INFORMATION ABOUT AGENCIES THAT MAY OFFER LEGAL SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE OR NO FEE. Cumberland County Bar Association 32 South Bedford Street Carlisle, Pennsylvania 17013 (717) 249-3166 David A. Baric, Esquire Attorney for Plaintiff 19 West South Street Carlisle, Pennsylvania 17013 (717) 249-6873 „ C7? r . Y` ORRSTOWN BANK, Plaintiff V. VIP HAIR STUDIO AND DAY SPA, INC., STACEY E. KENNEDY AND GREGORY A. KENNEDY, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 2007- CIVIL TERM CERTIFICATION OF ADDRESSES COMMONWEALTH OF PENNSYLVANIA COUNTY OF CUMBERLAND SS. David A. Baric, Esquire, being duly sworn according to law, deposes and says that to the best of his knowledge, information and belief, the addresses of the judgment creditor and the judgment debtor in the above-captioned case are as follows: Plaintiff: Orrstown Bank 77 East King Street Shippensburg, Pennsylvania 17257 Defendants: VIP Hair Studio & Day Spa, Inc. 242 York Road Carlisle, Pennsylvania 17013 Gregory A. Kennedy 232 South Allison Street Greencastle, Pennsylvania 17225 Stacey E. Kennedy 213 Shirley Lane ng Springs, Pennsylvania 7 a David A. Baric, Esquire Sworn to and subscribed before me this day of October, 2007. &*oq A?J? N COMMONWEALTH OF NNSYLVANIA F Notarial Seal Jennifer S. Lindsay, Notary Public Carlisle Boro, Cumberland County My Commission Expires Nov. 29, 2007 Member. Pennsylvania Association Of Notaries C"t ^' ?a 0 ' kj l c • ^';.. Imo. CO ORRSTOWN BANK, Plaintiff V. VIP HAIR STUDIO AND DAY SPA, INC., STACEY E. KENNEDY AND GREGORY A. KENNEDY, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 2007- CIVIL TERM AFFIDAVIT OF NON-MILITARY SERVICE COMMONWEALTH OF PENNSYLVANIA COUNTY OF CUMBERLAND ss. David A. Baric, Esquire, being duly sworn according to law, deposes and says that he is counsel to the Plaintiff herein, and as such states the following: 1. The Defendants, are not in the military or naval service of the United States or its allies, or otherwise within the provisions of the Soldiers' and Sailors' Civil Relief Act of 1940, as amended. 2. The Defendant, Gregory A. Kennedy, is more than 21 years of age and has a current address of 232 South Allison Street, Greencastle, Franklin County, Pennsylvania 17225. 3. The Defendant, Stacey E. Kennedy, is more than 21 years of age and has a current address of 213 Shirley Lane, Boiling Springs, Cumberland County, Pennsylvania 17007. 3. He has ascertained the above i rmation by personal investigat' and makes this Affidavit with due authority. David A. Baric, Esquire Of Association Notaries Member, Pennsylvania Sworn to and subscribed before me this day of October, 2007. C+ ' TI ORRSTOWN BANK, IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA V. NO. 2007- CIVIL TERM VIP HAIR STUDIO AND DAY SPA, INC., STACEY E. KENNEDY AND GREGORY A. KENNEDY, Defendants AFFIDAVIT OF COMMERCIAL TRANSACTION I hereby certify that I am counsel for Orrstown Bank, the Plaintiff herein, and hereby certify that judgment is not being entered against a natural person in a consumer transaction. ' RIEN, BARK SCHE David A. Baric, Esquire J b ? d9 y t ? co SHERIFF'S RETURN - REGULAR CASE NO: 2007-06281 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND ORRSTOWN BANK VS VIP HAIR STUDIO AND DAY SPA ET STEPEN BENDER Sheriff or Deputy Sheriff of Cumberland County,Pennsylvania, who being duly sworn according to law, says, the within COMPLT-CONFES JUDGMENT KENNEDY STACEY E was served upon the DEFENDANT , at 0830:00 HOURS, on the 14th day of November-, 2007 at 242 YORK ROAD CARLISLE, PA 17013 by handing to KIM RUTZ, OFFICE MANAGER OF VIP HAIR STUDIO a true and attested copy of COMPLT-CONFES JUDGMENT together with NOTICE-2958.2, CONF JUDGMENT and at the same time directing Her attention to the contents thereof. Sheriff's Costs: Docketing 18.00 Service 9.60 Affidavit .00 Surcharge 10.00 .00 37.60- Sworn and Subscibed to before me this day of , So Answers: R. Thomas Kline 12/12/2007 OBRIEN BARIC SCHERER By: Deputy Sheriff A. D. SHERIFF'S RETURN - REGULAR CASE NO: 2007-06281 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND ORRSTOWN BANK VS VIP HAIR STUDIO AND DAY SPA ET at 242 YORK RD WILLIAM CLINE , Sheriff or Deputy Sheriff of Cumberland County,Pennsylvania, who being duly sworn according to law, says, the within COMPLT-CONFES JUDGMENT was served upon VIP HAIR STUDIO AND DAY SPA INC the DEFENDANT , at 1600:00 HOURS, on the 6th day of November-, 2007 CARLISLE. PA 17013 KIM RUTZ, MANAGER by handing to a true and attested copy of COMPLT-CONFES JUDGMENT together with and at the same time directing Her attention to the contents thereof. Sheriff's Costs: Docketing Service Affidavit Surcharge 1 /d 3)47 C... 6.00 4.80 .00 10.00 .00 20.80 Sworn and Subscibed to before me this day of , So Answers: R. Thomas Kline 12/12/2007 OBRIEN BARIC SCHERER By. Deputy Sheriff A. D. SHERIFF'S RETURN - OUT OF COUNTY CASE NO: 2007-06281 P COMMONWEAI;TH OF PENNSYLVANIA : COUNTY OF CUMBERLAND s ORRSTOWN BANK VS VIP HAIR STUDIO AND DAY SPA ET R. Thomas Kline Sheriff or Deputy Sheriff who being duly sworn according to law, says, that he made a diligent search and and inquiry for the within named DEFENDANT , to wit: KENNEDY GREGORY A but was unable to locate Him deputized the sheriff of FRANKLIN in his bailiwick. He therefore serve the within COMPLT-CONFES JUDGMENT County, Pennsylvania, to On December 12th , 2007 , this office was in receipt of the attached return from FRANKLIN Sheriff's Costs: So answer•, d` Docketing 6.00 ,7?j°''" Out of County 9.00 Surcharge 10.00 R. Thomas Kline Dep Franklin Co 28.10 Sheriff of Cumberland County Postage 1.33 54.43 ? 1/0-5jbP 12/12/2007 OBRIEN BARIC SCHERER Sworn and subscribe to before me this day of A. D. In The Court of Common Pleas of Cumberland County, Pennsylvania Orrstown Bank VS. VIP Hari Studio et al SERVE: Gregory A. Kennedy No. 07-6281 civil Now, October 31, 2007 , I, SHERIFF OF CUMBERLAND COUNTY, PA, do hereby deputize the Sheriff of Franklin County to execute this Writ, this deputation being made at the request and risk of the Plaintiff. 00, 1? Sheriff of Cumberland County, PA Please mail return of service to Cumberland County Sheriff. Thank you. Affidavit of Service Now, within upon at by handing to a and made known to So answers, the contents thereof. Sheriff of Sworn and subscribed before me this day of , 20 copy of the original COSTS SERVICE _ MILEAGE _ AFFIDAVIT 20 , at o'clock M. served the County, PA SHERIFF'S RETURN - NOT FOUND CASE NO: 2007-00225 T COMMONTWEALTH OF PENNSYLVANIA COUNTY OF FRANKLIN ORRSTOWN BANK VS VIP HAIR STUDIO ET AL L) MICHAEL L COX Deputy Sheriff, who being duly sworn according to law, says, that he made a diligent search and inquiry for the within named DEFENDANT , to wit: KENNEDY GREGORY A unable to locate Him in his bailiwick. NOTICE , the within named DEFENDANT 232 SOUTH ALLISON STREET but was He therefore returns the NOT FOUND , as to KENNEDY GREGORY A GREENCASTLE, PA 17225 DEFENDANT MOVED TO HANOVER, PA AREA Sheriff's Costs: So answers: Docketing .00 Service .00 `N T Affidavit .00 MICHAEL L COX Surcharge .00 ROBERT WOLLYUNG, Sheriff .00 .00 DAVID A BARIC ESQ 11/30/2007 Sworn and subscribed to before me this D day of A. D. u n In-. c v .. . NQTaftT%ar V Richard D. McCan Not : PuJ is ChambersLirG Boro, Franklin County My Commission Expires Jan. 29, 2011 ORRSTOWN BANK, IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA V. NO. 2007- CIVIL TERM VIP HAIR STUDIO AND DAY SPA, INC., STACEY E. KENNEDY AND GREGORY A. KENNEDY, Defendants NOTICE UNDER RULE 2958.2 OF JUDGMENT AND EXECUTION THEREON TO: VIP Hair Studio and Day Spa, Inc. 242 York Road Carlisle, Pennsylvania 17013 A judgment in the amount of $21,745.25 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 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, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW. THIS OFFICE CAN PROVIDE YOU WITH INFORMATION ABOUT HIRING A LAWYER. IF YOU CANNOT AFFORD TO HIRE A LAWYER, THIS OFFICE MAY BE ABLE TO PROVIDE YOU WITH INFORMATION ABOUT AGENCIES THAT MAY OFFER LEGAL SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE OR NO FEE. Cumberland County Bar Association 32 South Bedford Street Carlisle, Pennsylvania 17013 (717) 249-3166 David A. Baric, Esquire Attorney for Plaintiff 19 West South Street Carlisle, Pennsylvania 17013 (717) 249-6873 E L U:, ORRSTOWN BANK, IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA V. NO. 2007- CIVIL TERM VIP HAIR STUDIO AND DAY SPA, IN C., STACEY E. KENNEDY AND GREGORY A. KENNEDY, -' " o Defendants ? ;Vi -r, ;cw CONFESSION OF JUDGMENT x t Pursuant to the authority contained in the warrant of attorney, the original or a campy which is attached to the complaint filed in this action, I appear for the defendant and confess judgment in favor of the plaintiff and against defendant as follows: Principal $19,544.11 Interest to 10/24/07 $ 19.23 (per diem $4.75.) Attorney Fees $ 1,954.41 Costs 227.50 TOTAL: $21,745.25 David A. Baric, Esquire Attorney for Orrstown Bank :,?d d1?111 c CW FWM FWCO' ;11"Wasamy hens. oa 0e. Pay fit' /d 6 ???° L VERIFICATION The statements in the foregoing Confession Of Judgment are based upon information which has been assembled by my attorney in this litigation. The language of the statements is not my own. I have read the statements; and to the extent that they are based upon information which I have given to my counsel, they are true and correct to the best of my knowledge, information and belief. I understand that false statements herein are made subject to the penalties of 18 Pa.C.S. § 4904 relating to unworn falsifications to authorities. DATE: Jeff Gayman Vice President of Commercial Lending i CERTIFICATE OF SERVICE I hereby certify that on October XD , 2007, 1, David A. Baric, Esquire of O'Brien, Baric & Scherer, did serve a copy of the Confession Of Judgment, by first class U.S. mail, postage prepaid, to the party listed below, as follows: Gregory A. Kennedy Stacey E. Kennedy 232 South Allison Street 213 Shirley Lane Greencastle, Pennsylvania Boiling Springs, Pennsylvania 17007 VIP Hair Studio and Day Spa, Inc. 242 York Road Carlisle, Pennsylvania 17013 David A. Baric, Esquire 3 ORRSTOWN BANK, IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA V. NO. 2007- CIVIL TERM VIP HAIR STUDIO AND DAY SPA, INC., STACEY E. KENNEDY AND GREGORY A. KENNEDY, Defendants NOTICE You have been sued in court. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this complaint and notice are served, by entering a written appearance personally or by an attorney and filing in writing with the court, your defenses or objections to the claims set forth against you. You are warned that if you fail to do so, the case may proceed without you and a judgment may be entered against you by the court without further notice for any money claimed in the complaint or for any other claim or relief requested by the plaintiff. You may lose money or propertyor-other rights important to you. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW. THIS OFFICE CAN PROVIDE YOU WITH INFORMATION ABOUT HIRING A LAWYER. IF YOU CANNOT AFFORD TO HIRE A LAWYER, THIS OFFICE MAY BE ABLE TO PROVIDE YOU WITH INFORMATION ABOUT AGENCIES THAT MAY OFFER LEGAL SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE OR NO FEE. Cumberland County Bar Association 32 South Bedford Street Carlisle, Pennsylvania 17013 (717) 249-3166 ORRSTOWN BANK, Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA V. VIP HAIR STUDIO AND DAY SPA, INC., STACEY E. KENNEDY AND GREGORY A. KENNEDY, Defendants NO. 2007- CIVIL TERM COMPLAINT IN CONFESSION OF JUDGMENT NOW, comes Plaintiff, Orrstown Bank, by and through its attorneys, O'BRIEN, BARIC & SCHERER, and files the within Complaint and, in support thereof, sets forth the following: 1. The principal business address of Orrstown Bank is 77 East King Street, Shippensburg, Cumberland County, Pennsylvania 17257 2. Defendant, Stacey E. Kennedy is an adult individual with a last known address of 213 Shirley Lane, Boiling Springs, Cumberland County, Pennsylvania 17007. 3. Defendant, Gregory A. Kennedy is an adult individual with a last known address of 232 South Allison Street, Greencastle, Franklin County, Pennsylvania 17225. 3. The last known address for Defendant, VIP Hair Studio and Day Spa, Inc. ("VIP Hair Studio") is 242 York Road, Carlisle, Cumberland County, Pennsylvania 17103. VIP Hair Studio is averred to be a Pennsylvania corporation. 4. On or about July 20, 2001, Defendant, VIP Hair Studio, executed a Note payable to Orrstown Bank. A true and correct copy of the Note is attached as Exhibit "A" and is incorporated by reference. 5. On or about July 20, 2001, Defendant, Gregory A. Kennedy, executed a Commercial Guaranty to secure payment of the Note. A true and correct copy of the Commercial Guaranty executed by Gregory A. Kennedy is attached as Exhibit "B" and is incorporated by reference. 6. On or about July 20, 2001, Defendant, Stacey E. Kennedy, executed a Commercial Guaranty to secure payment of the Note. A true and correct copy of the Commercial Guaranty executed by Stacey E. Kennedy is attached as Exhibit "C" and is incorporated by reference. 7. Judgment is not being entered by confession against natural persons in connection with a consumer transaction. 8. VIP Hair Studio has repeatedly overdrawn its deposit account at Orrstown Bank in violation of the terms and conditions of said Account Agreement. 9. Orrstown Bank reasonably believes the prospect of payment or performance under the Note is impaired. 10. Orrstown Bank in good faith believes itself to be insecure. 11. Judgment has not been entered on the Note or Commercial Guaranty documents in any other jurisdiction. 12. The amount due and owing is calculated as follows: Principal Interest to 10/24/07 (per diem $4.75) Attorney Fees $19,544.11 $ 19.23 $ 1,954.41 TOTAL: $21,745.25 13. The Note and Commercial Guaranty documents as appended, provide for the recovery of costs, including reasonable attorney fees, incurred by Orrstown Bank to collect the . debt due and owing. WHEREFORE, Plaintiff requests judgment as authorized by the warrant in the amount of $19,563.34 plus costs and expenses, attorney fees and interest accruing to the date of payment. Respectfully submitted, BARI S David A. Baric, Esquire I.D. 44853 19 West South Street Carlisle, Pennsylvania 17013 (717) 249-6873..,.-.- Attorney for Orrstown Bank dab.dir/orrstownbank/kennedy/confessjudgment.com VERIFICATION The statements in the foregoing Complaint In Confession Of Judgment are based upon information which has been assembled by my attorney in this litigation. The language of the statements is not my own. I have read the statements; and to the extent that they are based upon information which I have given to my counsel, they are true and correct to the best of my knowledge, information and belief. I understand that false statements herein are made subject to the penalties of 18 Pa.C.S. § 4904 relating to unworn falsifications to authorities. DATE: 64-fof e.- i 20 o 7 Jeff Gayman Vice President of Commercial Lending U::-008 PROMISSORY NOTE I References In the shaded area are for Lenders use only and do not Unit the epp? of this document to any particular loan or t My item above containing "••," hav been omltbd title to *4 length kallatlons. Borrower: VIP HAIR STUDIO A DAY SPA, INC. (TIN: Lender: ORRSTOWN BANK 25-1975441) STONEFEDGE OFFICE 1312 HOLLY PIKE 427 8TONEHEDGE OR. CARLISLE, PA 17013 CARLISLE, PA 17013 Prtncipel Amount: $20,00040 Initiei Rate: 7.750% Date of NOW July 20, 2001 PROMISE TO PAY. VIP HAIR STUDIO & DAY SPA, INC. ("Borrower") promises to pay to ORRSTOWN 801K. ("Lender"), or order, In W*IW money of the United States of America, on demand, the principal amount of Twenty Thousand & oofloe Dollars ($20,00000) or so much as may be outstanding, together with interest on the unpaid outstanding principal balance of each advance. lnterW shall be calculated from the dots of each advance until repayment of each advance. PAYMENT. Borrower will pay this loan immediately upon Lender's demand. Payment In full is due Immediately upon Lender's demand. Borrower will pay regular monthly payments of all accrued unpaid Interest due as of each payment date, beginning August 20, 2001, with an subsequent Interest payments to be due on the same day of each month after that. Unless otherwise @goood or required by appo abls law, payments will be applied flrot to accrued unpaid interest, then to principal, and any remaining amount to arl unpaid coneclton costs and IaN charges. The annual interest rate for this Note is computed on a 361513150 basis; that is, by applying the raft, of the annual interest rate over a year of 860 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance Is outstanding. Borrower will pay Lender at Lender's address shown above or at such outer place as Lender may designate In writing. VARIABLE INTEREST RATE. The Interest rate on this Note is subject to change from time to time based on changes In an Independent index which Is the Will Street Prime (the "Index"). The Index Is not necessarily the lowest rate charged by Lender on Its loans. If the Index becomes unavailable during the term of this loan, Lender may designate a substitute index after notice to Borrower. Lender will tell Borrower the current Index rate upon Borrower's request. The interest rate change will not occur more often than each day. Borrower understands that Lender may make loans based on other rates as well. The Index currently m 6.750% per annum. The Interest rate to be applied to the unpaid principal balance of this Note will be at a rate of t.ooo percentage point over the Index, resulting in an Initial rate of 7.7150% per annum. NOTICIE: Under no circumstances wit the interest rate on this Note be more then the maximum rate allowed by applicable law. PREPAYMENT. Borrower may pay without penally ail 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 of accrued unpaid interest. Rather, early payments will reduce the principal balance due. Borrower agrees not to send tender payments marked "paid In full", %ithotd recourse", or elmlar language. If Borrower sands such a payment, Lender may accept It without losing any of Lender's rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. Ail written communications concerning disputed amounts, Including any chock or other payment Instrument that Indicates that the payment constitutes 'payment In fur of the amount owed or that is tendered with other conditions or limitations or as full sattsfaction of a disputed amount must be mailed or delivered to: ORRSTOWN BANK, P.O. BOX 250 SHIPPENSBURG, PA 17267. LATE CHARGE. If a regularly scheduled Interest payment is 16 days or more late, Borrower will be charged 5.0009E of the regularly scheduled payment or $50.00, whichever is greater. If Lender demands payment of this loan, and Borrower does not pay!, the ban In full wtttun 16 days after Lender's demand, Borrower also will be charged either 5.0009E of the sum of the unpaid principal plus accrued unpaid Interest or $50.00, whichever Is greater. INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final maturity, the total sum due under this Note will bear interest from the date of acceleration or maturity at the variable Interest rate on this Note. The Interest rate will not exceed the maximum rate permitted by applicable law. DEFAULT. Each of the following shall constitute an event of default ("Event of Default") under this Note: Payment Default. Borrower falls to make any payment when due under this Note. Other Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Note or in any of the related documents or to comply with or to perform any term, obligation, covenant or condition contained In any other agreement between Lender and Borrower. False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Note or the related documents Is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter. insolvency. The dissolution or termination of Borrower's existence as a going business, the Insolvency of Borrower, the appointment of a recelver for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the loan. This Includes a garnishment of any of Borrowers accounts, Including deposit accounts, With Lender. However, !fhts Event of Default shall not apply It there is a good faith dispute by Borrower as to the validity or reasonableness of The claim which is the basis of the creditor or forfeiture proceeding and tt Borrower gives Lander written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surely bond for the creditor or forfeiture proceeding, in an amount determined by Lender, In its sole dlscretlon, as being an adequate reserve or bond for the dispute. 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 evidenced by this Note. In the event of a death, Lender, at its option, may, but shall not be required to, permit the Guarantor's estate to Mums unconoftionally the obligations arising under the guaranty in a manner satisfactory to Lender, and, In doing so, cure any Event of Default. Change In Ownership. Any change In ownership of twenty-five percent (26%) or more of the common stock of Borrower. Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of this Note Is Impaired. Insecurity. Lender In good faith believes itself insecure. Cure Provisions. If any default, other than a default in payment is curable and if Sorrower has not been given a notice of a breach of the same provision of this Note within the preceding twelve (12) months, it may be oured (and no event of default will have occurred) if Borrower, after Exhibit "A" PMT 1117530933 049 PROMISSORY NOTE (Continued) Page Z receiving written notice from Lender demanding cure of such delAUll: (1) cures the default within fifteen (15) days; or (2) If the Cure mqukn more than fifteen (16) days, immediately initiates steps which Lender deems In Lender's sob discretion to be sufficient to curate do" and thervaftar continues and completes all raosonabb and necessary slaps sufficient to produce comp8ance as soon as nasow* prociaeL LENDER'S RIGHTS. Upon default, Lender may, &I* Oft such nop0911 as required by applicable law, declare the entire unpaid Wu*W balance an this Note and all accrued unpaid interest immediately due, and then Borrower wdi pay that amount. ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone dse to help collect this Note If Borrower does not pay, Borrower will pay L.enlfer that amount. This Includes, subject to any Umtta under applicable law, LandWs attorneys' fees and Lenders legal iaq mee, whether or not VW9 IS a lawsuit, Including attorneys' fees, expense for bankruptcy proceedings (Inducing efforts to MOdffy or VVAIG ON autonrac stay or Inprnotlon), and appeals. It not prohibited by applicable law, Borrower also wit pay any court costs, In addillon to all other sums prdvWed by law. RIGHT OF SETOFF. To the extent permitted by appkabb law, Lender reserves a right of setoff In all Borrower's accounts with Lander (wheCthei, checking, savings, or some other account). This Includes all accounts Borrower holds jointly with someone see and ai accounts Borrower may open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff world be prohibited by law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the debt = any and all such accounts, and, at Lender's option, to adminlstrathrely freeze all such accounts to allow lender to protect lenders charge and setoff his provided In this paragraph. LINE OF CREDIT. This Note evidences a revolving line of credit. Advances under this Note, as well as directions for payment from Borrowers accounts, may be requested orally or In writing by Borrower or by an authorized person. Lender may, but need not, require that all oral requests be confirmed to any of earrower's Borrower agrees with I L.enderr. The unnppa d principal advanced owing accordance with the Inatniclons of an on this Note at any time may be evidenced by Edorsements ) on this Note or by Lender's internal records, including defy computer print-outs. SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal representatives, successors and assigns, and shall inure to the benefit of Lender and Its successors and assigns. NOTIFY US OF INACCURATE-INFORMATION WE REPORT TO CONSUMER REPORTING AGENCIES. Please notify us if we report any Inaccurate Information about your account(s) to a consumer reporting agency. Your written notice describing the specilc Inaccuracy(es) should be sent to us at the following address: ORRSTOWN BANK P.O. BOX 250 SHIPPENSBURG, PA 17257 GENERAL PROVISIONS. This Note is payable on demand. The Inclusion of specific default provisions or rights of L.end?r shall not preclude Lenders right to declare payment of this Note on Its demand. 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 the extent allowed by law, waive presentment, demand for payment, and notice of dishonor. Upon any change In the terms of this Note, and unless otherwise expressly stated In wrtting, no party who signs this Note, whether as maker, guarantor, accommodation maker or endorser, shall be released from liability. An such parties 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 Imp*, fall to to" upon or perfect Lenders security interest in the collateral; and take any other action doomed necessary by Lender without the consent of or notice to anyone. All Stich parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with wham the modlAcalfon is made. The obligations under this Note are joint and several. If any portion of this Note Is for any reason determinsd 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 AFT'f=R A DEFAULT UNDER THIS NOTE AND WITH OR WITHOUT COMPLAIN' FILED, CONFESS OR ENTER JUDGMENT AGAINST BORROWER FOR THE ENTIRE PRINCIPAL BALANCE OF THIS NOTE AND ALL ACCRUED INTEREST, LATE CHARGES AND ANY AND ALL AMOUNTS EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECURING THIS NOTE, 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 EXHA STED BY ANY EXERCISE OF THAT AUTHORITY, BUT SMALL 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 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 TIME VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO THE TERMS OF THE NOTE. BORROWER ACKNOWLEDGES RECEIPT OP A COMPLETED COPY OF THIS PROMISSORY NOTE. THIS NOTE IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS NOTE IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. BORROWER: VIP HAIR STUDIO & DAY SPA, INC. ey Seat) STA EY K DY, P esident of fl" HAIR STUDIO & DAY SPA, INC. WU PAID Lwil ft vv. A.+7.O,.es cm. x,rrM I'Mauh, 10-1107.:001. All a,aht$ 11001rv0A . PA IDAOMAALMUC TA-Pn P,wA COMMERCIAL GUARANTY References in the shaded area are for Lenders use only end do not timlt the appllca? of this document to Any particular loan or Item. Any Item above containing "'" has been amlMed due to taid Isngth IimilaYOru. Borrower: VIP HAIR STUDIO & DAY SPA, INC. (TIN: Lender: OARSTOWN BANK 25-1876441) STONEM EDGE OFFICE 1312 HOLLY PIKE 417 STONI:HEDGE DR. CARLISLE, PA 17013 CARLISLE, PA 17013 Guarantor: GREGORY A. KENNEDY (SSN: 203-52-7648) 4 FORGEDALE DR. CARLISLE, PA 17013 AMOUNT OF GUARANTY. This Is a guaranty of payment of the Note, Including without limitation the principal Note amount of Twenty Thousand do 001100 Dollars ($20,000.00). GUARANTY. For good and valuable consideration, GREGORY A. KENNEDY ("Guarantor") absolutely and Unconditionally guarantees and promises to pay to ORRSTOWN BANK ("Lender") or its order, on demand, in legal tender of the United States of America, the Indebtedness (as that term is defined below) of VIP HAIR STUDIO & DAY SPA, INC. ("borrower") to Lender on the terms and conditions set forth In this Guaranty. MAXIMUM LIABILITY. The maximum Ilability of Guarantor under this Guaranty shall not exceed at any one time the amount of the Indebtedness described herein, plus all costs and expenses of (A) enforcement of this Guaranty and (B) collection and sale of any collateral securing this Guaranty. The above imitation on liability is not a restriction on the amount of the Indebtedness of Borrower 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, Lendler's rights under all guaranties shall be cumulative. This Guaranty shall not (unless specifically provided below to the contrary) affect or Invaildate any such other guaranties. Guarantors liability will be Guarantors aggregate liability under the terms of this Guaranty and any such other unterminated guaranties. IND90TEDNESS GUARANTEED. The Indebtedness guaranteed by this Guaranty Includes the Note, Including (iii) all principal, (b) all interest, (c) an late charges, (d) all loan fees and loan charges, and (s) 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 Lenders attorneys' fees. 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 MR continue In full force until all Indebtedness shall have bean fully and finally paid and satisfied and all of Guarantors other obligations under this Guaranty shall have been performed In full. Release of any other guarantor or tenMnatlon of any other guaranty of the Indebtedness shall not affect the liability of Guarantor under this Guaranty. A revocation Lender receives from any one or more Guarantors shall not affect the tiabdtiy 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. GyarantaT spacificelly aeknowledgee and agrees that fluctuations In the amount of Indebtedness, even to zero dollars ($ 0.00), shall not conetitpte a termination of this Guaranty. Guarantor's liability under this Guaranty shall terminate only upon (A) terminatlon 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 of Guarantor's other obligations under this Guaranty. GUARANTOR'S AUTHORIZATION TO L15NDER. Guarantor authorizes Lender, without notice or demand and without lessoning Guarantors 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; (8) to alter, compromise, renew, extend, accelerate, or oth y4e change one or more times the time for payment or other terms of the Indebledrless 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 seourfiy 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; (E) to determine how, when and what 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 limitaton, any nonJudlclal rate 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; and (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 representations or agreements of any kind have been made to Guarantor which would limit or quality in any way the terms of this Guaranty; (B) this Guaranty is executed at Borrower'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 a( result in a default under any agreement or other Instrument binding upon Guarantor and do not result In a violation of any law, regulation, court decree or order applicable to Guarantor: (E) Guarantor has not and will not, without the prior written consent of Lender, sail, 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 15 and' will be true and correct In all material respects and fairly present Guarantor's financial condition as of the dates the financial information is provided; '(G) no material adverse change has occurred in Guarantors financial condition since the date of the mast recent financial statements provided to Lender and no avant 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) agaln,t Guarantor is pending or threatened; (1) Lender has made no representation to Guarantor as to the creditworthiness of Borrower, and (J) 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 Guarantors 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 nonnction 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 obligattons; (C) to restart 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 safe of personal property security held by Lender from Borrower or to comply with any other applicable provisions of the Uniform Commercial Code; (F) to pursue any other remedy within Lenders power; or (G) to commit any act or omission of any kind, or at any time, with respect to any Exhibit "B" COMMERCIAL GUARANTY (Continued) 003 Pqp Z matter whatsoever. In addition to the waivers set forth above, If now or hereafter Borrower Is or shall become Insolvent and the Indebtedness shall not at all times ttnr 00 be fully secured by collateral pledged by Borrower, Guarantor hereby forever walves and gtvoa up in favor of Lender and Borrower Lgrdeft and Borrower's respective successors, any claim or right to payment Guarantor may now have or homafter have or acquire a by subrogation or otherwise, so that at no time shell Guarantor be or become a creditor" of Borrower within the meaning of t t U.S.C. sodon 6 7 ft or any successor provision of the Federal bankruptcy laws. Guarantor also waives any and all rights or defenses arising by reason of (A) any lone action" or "anti-defi lancy" low or any other law which flay prevent tender from bringing any action. Including a dam for defklency, against Guarantor, before or after Lender's cOMM&- ement of WnPglion ce any foreclosure action, either judicially or by exercise of a power of sale; (8) any election of remedlea by Lender which destroys or otherwise adversely effects Guarantors subrogation rights or Guarantors rights to proceed against Borrower for rolmbunsemenL Indtrdklg without limitation, any leas of rights Guarantor may suffer by reason of any law limiting, qualifying, or discharging the Indebtedness; (C) any disability or otter defense of Borrower, of any other guarantor, or of any other person, or by reason of the cessation of Borrower's Ilabslty from any cause Iwhatsoever, other than payment in full in legal tender, of the Indebtedness; (D) any right to claim discharge of the indebtedness on the bests of unjusl?lad impairment of any collateral for the Indebtedness; (E) any statute of limitations, ti at any time any action or suit brought by Lender against Ruarantor Is commenced, there le 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 remit 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 shelf be considered unpaid for the purpose of the enforcement of this Guaranty. Guarantor further waives and agrees not to assert or clam 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 wavers are reasonable and not contrary to public policy or law. If any such waver Is determined to be contrary to any applicable law or public polloy, such waiver stall be effective only to the extent permitted by law or public policy. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness of'Borrower to Lender, whether now existing or hereafter created, shall be superior 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 Swower, 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 oth , the assets of Borrower applicable to the payment of the claims of both Lender and Guarantor shall be paid to Lender and shelf be first applied by Len 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 full payment in legal tender of the Indebtedness. If lender so requests, any notes or credit agreements now or hereafter evidencing any debts or ottigatlpns of Borrower to Guarantor shall be marked with a legend that the Lame are subject to this Guaranty and shall be delivered to Londmr. Guarantor agrees, and Lender is hereby 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, presdrve and enforce its rights under this Guaranty. CONFESSION OF JUDGMENT. Guarantor hereby Irrevocably authorizes and empowers any attorney-st-law to appear in any court of record and to confess judgment against Guarantor for the unpaid amount of this Guaranty as evidenced by an affidavit signed by!: an officer of Londer setting forth the amount then due, attorneys' fees plus costs of suit, and to release all errors, and wawa all rights of appeal. ff a copy of this Guaranty, verified by an affidavit, shall have been filed In the proceeding, it will not be necessary to file the original as a warrant of affome . Guarantor walvas the right to any stay of execution and the benefit of All exemption laws now or hereafter In offset. No single exercise of the ing warrant and power to confess judgment will be deemed to exhaust the power, whether or not any such exercise shall be held by any court to YY???Y???pppe Invalid, voidable, or Vold; but the power will continue undiminished and may be exercised from time to time as Lender may elect until all amounts owing on this Guaranty have been paid In full MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part 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 padles sought to be charged or bound by the amerallon or amendment. Attorneys' Fees; Expenses. Guarantor agrees to pay upon demand all of Lenders casts and expenses, including Lender's attorneys' fees and Lender's legal expenses, Incurred In connection with the enforcement of this Guaranty. Lender may hire or papy someone else to help enforce this Guaranty, and Guarantor shall pay the costs and expenses of such enforcement. Costs and expenses Include Lenders attorneys' fees and 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 or Injunction), appeals, and any anticipated post-judgment collection services. Guarantor also shall pay all court costs and such additional tees as may be directed by the court. Caption Headings. 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. Integration. Guarantor further agrees that Guarantor has read and fully understands the terms of this Guaranty; Guarantor has had the opportunity to be advised by Guarantors attorney with respect to this Guaranty; the Guaranty fully reflq* Guarantors Intentions and part evidence Is not required to Interpret the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmless from all losses, claims, damages, and costs (Including Lenders attorneys' fees) suffered or Incurred by Lender as a result of any breach by Guarantor of the warranties, representations and agreements of this paragraph. interpretation. In all cases where there is more than one Borrower or Guarantor, then ell words used in this Guaranty In the singular shell 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 "GuarnnlW respacWey shall mean AN and any one or more of them. The words "Guarantor" "Borrower," and "Lender" Include the heirs, successors,, assigns, and transferees of each Of them. If a court ands [het any provision of this Guaranty Is not valid or should not be enforced, that fact by itself will not mean that the nest of this Guaranty will not be valid or enforced. Therefore, a court will enforoa the rest of the provisions of this Guaranty even ff a provision of this Guaranty may be found to be Invalid or unenforceable. If any one or more of Borrower or Guarantor are corporations, partnerships, limited flablity companies, or similar entities, it is not necessary for Lander to Inquire Into the Powers of Borrower or Guarantor or of the officers, directors, COMMERCIAL GUARANTY F. 004 (Continued) PW g partners, managers, or other agents acting or purporting to act on their behalf, and any Loan Indebtedness made or created in reliance upon tm professed exercise of such powers shall be guaranteed under this Guaranty. Notices. Unless otherwise provided by applicable taw, any notice requited to be given under this Guaranty shed be given in Ad eti effective when actually delivered, when actually recolvod by telafaosimle (unless otherwise required by law), wtwn deposl odw5h and a nakaw recognized overnight courier, or, if malted, when deposited in the United Slates mall, as first class, certilled or registered mail postew ; Ip * directed to the addresses shown near the beginning of this Guaranty. Any party may change its address for notices larder this &=a* by ONQ formal written notice to the other parties, specifying that the purpose of the notice is to change ttm partyrs address. For notfo9 pUrDOM Guarantor agrees to keep Lender informed at all times of Guarantors current address. Unless otherwise proAdsd by applicable 11111W.N ( k more than one Guarantor, any notice "n by Lender to any Guarantor Is deemed to be notice given to all Gusfiant ". No W*dver by Lender. Lender shall not be deemed to have waived any rights under this Guaranty unless ouch waiver Is given in wd" end signed by Lender. No delay or omission on the part of Lander in exercising any right shad operate as a waiver of such right or any other dghL A waiver by Lender of a provision of this Guaranty shad not prejudice or constitute a waiver of Lender's right otherwise to demand Strict compynpe with that provision or any other provision of this Guaranty. No prior waiver by Lender, nor any course of dealing between tender and Guanlig t s shaft constitute a waiver of any of Lender's rights or of any of Guarantors obligations as to any future transactions. Whenever the consent at Lender is required under this Guaranty, the granting of such consent by Lender 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 withhold In the sole discretion of Lender. Successors and Assigns. The terms of this Guaranty shall be binding upon Guarantor, and upon Guarantor's heirs, personal representatives, successors, and assigns, and shall be enforceable by Lander and Its successors and assigns. DEFINMONS. The following capitalized words and terms shall have the following meanings when used In this Guaranty. Unless speaftaily, stated to the contrary, all references to doper amounts shad mean amounts in lawful money of the United States of Amed¢a. Words and terms used in the singular shall Include the plural, and the plural shad Include the singular, as the context may require. Words and terms not otherwise doff nod In this Guaranty shaft have the mesnIngs attributed to such terms to the Uniform Commercial Code: Borrower. The word "Borrower" means VIP HAIR STUDIO & DAY SPA, INC., and all other persons and entities signing the Note in whatever oapaotiy. Guarantor. The word "Guarantor" means each and every person or entity signing this Guaranty, Including without limitation GREGORY A. KENNEDY. Guarenty. The word "Guaranty" means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part of the Note. Indebtedness. The word "Indebtedness means Borrower's Indebtedness to Lender as more padlcularty described In this Guaranty. Lender. The word "Lender" means ORRSTOWN BANK, Its successors and assigns. Note. The word "Nate" means the promissory note dated July 20, 2001, In the original prlnclpal amount of (0,000.00 from Borrower to Lender, together with all renewals of, extenslons of, modifications of, rednancings of, consotidatlons of, and substitutions for the promissory note or agreement. Related Dooumenls, The words "Related Documents" mean all promissory notes, credit agreements,; loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other Instruments, agreements and documents, whether now or hereafter existing, executed In connection with the Indebtedness. 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 THE AMOUNTS HEREUNDER BECOME DUE AND WITH OR WITHOUT COMPLAINT FILED. ESS OR ENTER JUDGMENT AGAINST GUARANTOR FOR THE ENTIRE PRINCIPAL BALANCE OF THIS GUARANTY AND ALL ACCRUED I "NTE LATE CHARGES AND ANY AND ALL AMOUNTS EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECURING THE INDEBTEDNESS, 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 (SSDD) ON WHICH JUDGMENT OR JUDGMENTS ONE OR MORE MCUTIONS 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 AND STATES THAT EITHER A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THIS CONFESSION OF JUDGMENT PROVISION TO GUARAN'TOR'S ATTENTION OR GUARANTOR HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL. The lien arising from any judgment confessed or entered pursuant to the foregoing authority shalt not extend to any of Guarantor's residential real property as that term is defined in the Pennsylvania Act Of January 30,1974 (Pa. Laws 13, No. 8), referred to as the Loan Interest and Protection Law, as amended, and the holder of any judgment confessed or entered pursuant to the forgoing authority shall not, in enforcement of any such judgment, execute, levy or otherwise proceed against any such residential real property; provided, however, that the den of such judgment shall extend to such rosidsnflal real property and that the holder thereof sod be permitted to execute, levy or proceed against such residential real property from and after the entry of a judgment as contemplated by Section 407 of such Loan Interest and Prolection Law and Rules 2981 to 2986 of the Pennsylvania Rules of Civil Procedure, or successor or similar statutes and rules. No Imitation of Ilan or any execution, levy or other enforcement contained in the immediately preceding sentence shall apply with respect to any judgment obtained other than by the foregoing authority to confess or enter judgment. GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS COMMERCIAL GUARANTY AND GUARANTOR AGREES TO ITS TERMS. THIS COMMERCIAL GUARANTY IS DATED JULY 20, 2001. THIS GUARANTY 113 GIVEN UNDER SEAL AND IT Is INTENDED THAT THIS GUARANTY IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. GUARANTOR: ?ox»,eox sx;;; iii I .r ov ??p xSKR? `.E? a. Seal) Y GO , n uauy UOEtt?M Lenanp.YN-1.,7A1.9s hM "erMn"RNnIYt"N""M;Ire. t"tl•"i01. A11111"LINAUSrw". -PA OnON PLMIt>fO U-b" MI-ti COMMERCIAL GUARANTY References In the shaded area are for Lender's use only and do not limit the applicability of this document to any panic" loan Or Item. Any Rent above containing' has been Omitted due to text length limitations. Borrower: VIP HAIR STUDIO & DAY SPA, INC. (TIN: Lender: OARSTOWN BANK 25-1875441) STONEHEDGE OFFICE 1312 HOLLY PIKE 427 STONEMOGE DR. CARLISLE, PA 17013 CARLISLE, PA 17013 Guarantor: STACEY E. KENNEDY (SSN. 217-92-6017) 4 FORGEDALE DR. CARLISLE, PA 17013 AMOUNT OF GUARANTY. This Is a guaranty of payment of the Note, Including without limitation the principal Note amount of Twenty Thousand & 001100 Dollars (S20,000.00). GUARANTY. For good and valuable consideration, STACEY E. KENNEDY ("Guarantor") absolutely and unconditionally guarantees and promises to pay to ORRSTOWN DANK ("Lender") or Its order, on demand, In legal tender of the United States of America, the Indebtedness (as that term Is defined below) of VIP HAIR STUDIO & DAY SPA, INC. ("Borrower") to Lender on the terms and conditions set forth in this Guaranty. MAXIMUM LIABILITY. The maximum tiabllity of Guarantor under this Guaranty shad not exceed at any one time the amount of the Indebtedness described herein, plus all costs and expenses of (A) enforcement of this Guaranty and (B) Collection and sale of any collateral securing this Guarartly. The above limitation on liability Is not a restriction on the amount of the Indebtedness of Borrower to Lender either In the aggregate or at any one time. If Lender presently holds one or more guaranties, or hereafter receives additional guaranees from Guarantor, Lender's rights under all guarantles shall be cumulative. This Guaranty shall not (unless specifically provided below to the contrary) affect or Invalidate any such other guaranties. Guarantors Ilabltity will be Guarantor's aggregate Ilablilty under the terms of this Guaranty and any such other unterminated guaranties. INDEBTEDNESS GUARANTEED. The Indebtedness guaranteed by this Guaranty Includes the Note, Including (a) all principal, (b) all Interest, (o) all 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 Lenders attorneys' fees. DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender, or any note to Guarantor or to Borrower, and will continue In full force until all Indebtedness shall have been fully and,8nally paid and satisfied and ati of Guantntors other obligations under this Guaranty shall have been performed In full. Release of any other guarantor or termination of any other guaranty of the Indebtedness shall not affect the liability of Guarantor under this Guaranty. A revocation Lender receives from any one or more Guarantors shall not affect the liability of any remaining Guarsntors under this Guaranty. This Guaranty covers a revolving line of credit and It is speclfledw anticipated that fluctuations will occur in the aggregate amount of Indebtedness owing from Borrower to Lender. Guarantor epsotfloally saknowledges and agrees that fluctuations in the amount of Indebtedness, even to zero dollars (! 0.00), shad not constitute a termination of this Guaranty. Guarantor's liability under this Guaranty shad terminate only upon (A) termination In writing by Borrower and Lander of the line of Credit, (6payment of the Indebtedness in full In legal tender, and (C) payment In full In legal tender of all of Guarantor's other obligations under this Guaranty. GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, without notice or demand and without leeeentng Guarantor's liability under this Guaranty, from time 10 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 alter, compromise, renew, extend, aeeeierale, or otherwise change one 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, walve, subordinate, fall or decide not to perfect, and release any such security, with or without the substitution of now collateral; (D) to release, substitute, agree not to sus, or deal with any one or more of Borrower's sureties, endorsers, or other guarantors on any terms or in any manner Lander may choose; (E) to determine how, when and what application of payments and credits shad be made on the Indebtedness (F) to apply such security and direct the order or manner of sale thereof, Including without lirnitation, any nonjudlelal sale permitted by the tonne of the controlling security agreement or deed of trust, as Lender In its dimetlon may determine; (G) to no, transfer, assign or grant participations in all or any part of the Indebtedness; and (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 representations 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 to executed at Borrowers request and not at the request of Lander; (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 binding upon Guarantor find do not result in a violation of any law, regulation, court decree or order applicable to Guarantor; (E) Guarantor has not and will not, without the prior written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantlady all of Guarantor's assets, or any Interest therein: (F) upon Lenders 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 material respects and fairly present Guarantor's financial condition as of the dates the financial tnformatlon is provided; (G) no material adverse change has occurred in Guarantors 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 II119ation, claim, investigation, administrative proceeding or similar action (Including those for unpaid taxes) against Guarantor b pending or threatened; (1) Lender has made no representation to Guarantor as to the creditworthiness of Borrower, and (J) Guarantor has established adequate means of obtaining from Borrower on a continuing basis Infartnation regarding Borrowers 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 nonaction 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 Lander 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; (F) 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 Exhibit "C" COMMERCIAL GiuARANTY (Continued) • , • ' 1 F. 006 PAP Z matter whatsoever, in addition to the waivers set forth above, it now or hereafter Borrower Is or shag become lnscivent and the tndebt Hess shat not at am >? uM be fully secured by collateral pledged by Borrower, GuarentOr hereby forever wakes and gives up in favor d>< Lan and Bcrrower, and Lord*% W ` Borrower's respective successors, any oleic of tight to paynteM Gtaaranta may new have or hereafler ha ox acquire against Botrowar, by subrogation or otherwise, so that at no gme shall Guarantor be or become a "creditor" of Borrower within the meaning of 11 U.S.C, section 54.14 or any successor provision of the Federal bankruptcy laws. Guarantor also waives any and all rights or defenses arising by reason of (A) any "one action" or "ant Oride rw?Y Isw or any other law witch prevent Lander from bringing any action, including a claim for defldency, against Guarantor, before or attar Land oommancoment or ccmpi" of any foreclosure action, either judicially or by exarraso of a power of sale; (8) any election of remedies by Lender w destroys or Oemy se ad, ws* affects Guaranto es subrogation rights or Guarantor's fights to proceed against Borrower for faimbtrrsernent, including without Imilmon, any I-M oaf rights Guarantor may suffer by reason of any law limiting, qualifying, or discharging the Indebtedness; (C) any d1sabifity or other defense of Bef aMe of any other guarantor, or of any other person, or by reason of the cessation of Borrower's labli ty from any cause whatsoever, other than pay"" In full in legal tender, of the Indebtedness; (D) any right to claim discharge of the Indebtedness on the basis of unjtrs. d impairment of any cok*W 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 Itmitatlons; or ?i 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 otherwUs. or by any third party, on the Indebtedness and thereafter Lender Is forced to remit the amount of that payment to BOrrowees trustee In bankruptcy or to any similar person under any federal or state bankruptcy law or law for the racist of debtors, the Indebtedness shall be considered unpaid fox the purpose of the 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, reeoupment 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 taw. If by law or drill such pawed Is determined to be contrary to any applicable law or public policy, such waiver shall be effective only to the Went SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness of 'Borrower to Lender, whether now existing or hereafter created, shell be superior 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 ago Borrower, upon any account whatsoever, to any claim that Lander may now or hereafter have against Borrower. In the event of insolvency and ssguent liquidation of the assess of Borrower, through bankruptcy, by an assignment for the benefit of creditors, by voluntary liquidation, or othoarwia 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 all claims which it may have or acquire against Borrower o(agafrct arty aoftnee or trustee in bankruptcy Of 80rrOwoir; provided however, that such assignment shall be effective only for the purpose of assuring to Lender full payment in legal tender of fire Indebtedness, If Lender so requests, any notes or credit agreements now or hereafter evidenotng 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 d Lend Guarantor agrees, and Lender la hereby authorized, in the fame of Guarantor, from time to time to execute and file financing statelivered to ements and 00 Inuatlon statements and to execute such other documents and to take such other actlon5 as Lender deems necessary or appropriate to perfect, p and enforce its rights under this Guaranty. CONFESSION OF JUDGMENT. Guarantor hereby irrevocably authorizes and empowers any attorney-et-iaw to pear in any court of record and to confess judgment against Guarantor for the unpaid amount of this Guaranty as evidenced by an affidavit signed by an ofikw of Lender setting forth the amount then dug, attorneys' fees plus costs of suit, and to release all errors, and waive all rights of appeal. Hit y of this Guaranty, verified by an affidavit, shall have been flied In the proceeding, it will not be necessary to Rte the original as a warrant of attome . Guarantor waives the right to any stay of execution and the benefit of all exemption taws now or hereafter In effect. No single exercise of the forg warrant and power to confess judgment will be deemed to exhaust the power, whether or not any such exercise shall behold by any court tinvalid, voldable, or void; but the power will continue undiminished and may be exercised from time to time as Lender may elect until all amounts Olt on this Guaranty have been paid in full. MISCE=LLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Guaranty. Amendments. This Guaranty, together with any Related Documents, constitutes the engre 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. Attorneys' Fees; Expenses. Guarantor agrees to pay upon demand all of Lender's costs and expenses, Including Lender's attorneys' fees and Lender's legal expenses, Incurred in connection with the enforcement of this Guaranty. Lender may hire or p y someone also to help enforce this Guaranty, and Guarantor shall pay the costs and expenses of such enforcement. Costs and expenses Inol a Lenders attorneys' tees and legal expenses whether or not there Is a lawsuit, Including attorneys' fees and legal expenses for bankruptcy peace dings (Including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-)udgment collection services. G rancor also shall pay all court casts and such additional fees as may be directed by the court. Ceptlon Headings. Caption headings in ihls Guaranty are for convenience purposes only and are not to be used to interpret or define the provisions of this Guaranty. Integration. Guarantor further agrees, that Guarantor has read and fully understands the terms of this Guaranty; Guarantor has had the opportunity to be advised by Guarantors attorney with respect to this Guaranty; the Guaranty fully reflects Guarantor's Intentions and p9r01 evidence is not required to Interpret the terms of this Guaranty. Guarantor hereby indemnifles and holds Leader harmless from all losses, claims, damages, and costs (Including Lenders attorneys' fees) suffered or incurred by Lander as a result of any breach by Guarantor of the warranties. representations and agreements of this paragraph. Interpretation. In all cases where there Is more than one Borrower or Guarantor, then all words used in this Guaranty In the singular shall be deemed to have been used in the plural where the contoed and construction so require; and where there ism than one Borrower named In this Guaranty or when this Guaranty Is ftxeovied 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. If a court finds that any provision of this Guaranty Is not valid or should not be enforced, that fact by R will not rneon that the rest of this Guaranty will not be valid or enforced. Therefore, a court wig enforce the rest of the provisions of this Guaran re ven If a provision of this Guaranty may be found to be invgtid or unenforceable. if any one or more of Borrower or Guarantor are corpo ons, partnerships, gmated liability companies, or similar entities, it 15 not necessary for Lender to inquire into the powers of Borrower or Guarantor or of the officers, directors, - _ ' - _ - I r. l . r 007 COMMERCIAL GUARANTY (Continued) pW S partners, managers, or other agents acting or purporting to act on their behalf, and any Loan Indebtedness made or created In reliance upon Mta professed exercise of such powers shall be guaranteed under this Guaranty. Notices. Unless otherwise provided by aPPIcable law, any notice required to be given under this Guaranty shall be given In WAInp; a aftaeM when actually delivered, when neurally received by telefacsirn9e (urden otherwise required by lawl), when depoeBed N reeogntmd overnight courier, or, tf matted, when deposited In the United States mall, as first class, certified or registered Mali p a ormalm directed to the addresses shown near the beginning of this Guaranty. Any parry may change Its address for notices under title Gt?pr iirv formal wdtten notice to the other parties, specifying that the purpose of the nonce is to change the parWs address. For notice PWPGmk Guarantor agrees to keep Lender Informed at all times of Guarantor's current address. Unless otherwise provided by applicable law, If then d more than one Guarantor, any notice given by Lender to any Guarantor Is deemed to be notice given to erg Guaarantor$. No Waiver by Lender. Lender shag not be deemed to have waived any rights under this Guaranty unless such waiver is given In wr tp and signed by Lander. No delay or omission on the part of Lender in exercising any right shag operate as a wolvpr of such rlphF or any other rW A waiver by Lender of a provision of This Guaranty shag not prejudice or constitute a waiver of Lender's right otherwise to demand strict complance with that provision or any other provision of this Guaranty. No prior waiver by Lender, nor any course of dealing between Lender and Qusrantor, shag constitute a waiver of any of tinder's rights or of any of Guarantor's obligations as to any future transactions. Whenever the oonant d Lender is required under this Guaranty, the granting of such consent by Lender 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 discrotion of Lender. Successors and Assigns. The terms of this Guaranty shag be binding upon Guarantor, and upon Guarantor's heirs, personal reprssontativae, successors, and assigns, and shag be enforceable by Lender and its successors and assigns. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Guaranty. Unless spedflcany stated to the contrary, all references to dollar amounts shalt mean amounts In lawful money of the United States of Amdrice. Words and terms used in the singular shag Include the plural, and the plural shag include the singular, as the context may require. Words and terms not otherwise defined in this Guaranty shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word "Borrower" means VIP HAIR STUDIO & DAY SPA, INC., and all other persons and entilias signing the Note In whatever capacity. Guarantor. The word "Guarantor" means each and every person or entity signing this Guaranty, including without limitation STACEY E. KENNEDY. Guaranty. The word "Guaranty" means the guaranty from Guarantor to Lender, Including without limitillion a guaranty of all or part of the Note. Indebtedness. The word "Indebtedness" means Borrower's indebtedness to Lender as more particularly described In this Guaranty. Lender. The word "Lender" means ORRSTOWN BANK, its successors and assigns. Note. The word "Note" means the promissory note dated July 20, 2001, in the original principal amount of 32o,0oo.oo from Borrower to Lerida, 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 as promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter existing, executed In connection with the Indebtedness. 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 THE AMOUNTS HEREUNDER BECOME DUE AND WITH OR WITHOUT COMPLAINT FILED, CONFESS OR ENTER JUDGMENT AGAINST GUARANTOR FOR THE ENTIRE PRINCIPAL BALANCE OF THIS GUARANTY AND ALL ACCRUED INTEREST, LATE CHARGES AND ANY AND ALL AMOUNTS EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECURING THE INDEBTEDNESS, 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 (3500) ON WHICH JUDGMENT OR JUDGMENTS ONE OR MORE EXECUTIONS MAY ISSUE IMMEDIATELY; AND FOR SO DOING, THIS GUARANTY OR A COPY OF INS 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 FEARING IN CONNECTION WITH ANY SUCH CONFESSION OF 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. The lien arising from any judgment confessed or entered pursuant to the foregoing authority shall not extend to any of Guarantor's residential real property as that term is defined In the Pennsylvania Act of January 30, 1974 (Pa. Laws 13, No. 8), referred to as the Loan Interest and Protection Law, as amended, and the holder of any judgment confessed or entered pursuant to the torgoing authority, shall not, in enforcement of any such judgment, execute, levy or otherwise proceed against any such residential real property; provided, however, that the lion of such judgment shag extend to such residential reel property and that the holder thereof shag be permitted to execute, levy or proceed against such residential real property from and after the entry of a judgment as contemplated by Section 407 of such Loan Interest and Protection Law and Rulip 2981, to ?,886 d4he Pennsylvania Rules of Civil Procedure, or successor or similar statlAas and rules. No limitation of lien or any execution, levy 'r other enforeBB??nt contained In the immediately preceding sentence shall apply with respect to any judgment obtained other than by the foregoing at4horto to doiitest;br other judgment. GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS COMMERCIAL GUARANTY AND GUARANTOR AGREES TO ITS TERMS. THIS COMMERCIAL GUARANTY' iS DATED JULY 20, 2001. THIS GUARANTY 18 GIVEN UNDER SEAL AND IT 19 INTENDED THAT THIS GUARANTY IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. GUARANTOR: ? C VE Nov - 1 2007 FRANKLIN COUNTY SHERIFF'S OFFICE ORRSTOWN BANK, IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA V. NO. 2007- 6281 CIVIL TERM VIP HAIR STUDIO AND : DAY SPA, INC., STACEY E. KENNEDY AND GREGORY A. KENNEDY, Defendants c v c.. i I rn fTl r?-- <.. O ) !?? PRAECIPE TO REINSTATE - - ` ' n TO THE PROTHONOTARY: Y1 ?`? }? .s- Please reinstate the Complaint In Confession Of Judgment filed in the above matter on October 26, 2007. Respectfully submitted, Date: February 13, 2008 dab. d it/orrstown bank/kennedy/reinstatecom plaint.pra David'A. Baric, Esquire I.D. 44853 19 West South Street Carlisle, Pennsylvania 17013 (717) 249-6873 ORRSTOWN BANK, Plaintiff V. VIP HAIR STUDIO AND DAY SPA, INC., STACEY E. KENNEDY AND GREGORY A. KENNEDY, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 2007- 6281 CIVIL TERM PRAECIPE TO REINSTATE TO THE PROTHONOTARY: Please reinstate the Notice Under Rule 2958.2 Of Judgment And Execution Thereon filed in the above matter on October 26, 2007. Respectfully submitted, O' EN, BARIC CHE Date: February 13, 2008 David A. Baric, Esquire I.D. 44853 19 West South Street Carlisle, Pennsylvania 17013 (717) 249-6873 dab.d i r/o rrstownba n k/ken nedy/reinstateexecutionnotice. pra 1 r-a -73 14 IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL DIVISION PRAECIPE FOR WRIT OF EXECUTION Caption: ORRSTOWN BANK, Plaintiff V. VIP HAIR STUDIO AND DAY SPA, INC. STACEY E. KENNEDY AND GREGORY A. KENNEDY, Defendants ® Confessed Judgment ? Other File No. 2007-6281 Amount Due $19,544.11 Interest $2,288.37 Atty,s Comm $1,954.41 Costs $150.33 TO THE PROTHONOTARY OF THE SAID COURT: The undersigned hereby certifies that the below does not arise out of a retail installment sale, contract, or account based on a confession of judgment, but if it does, it is based on the appropriate original proceeding filed pursuant to act 7 of 1966 as amended; and for real property pursuant to Act 6 of 1974 as amended. Issue writ of execution in the above matter to the Sheriff of Cumberland County, for debt, interest and costs, upon the following described property of the defendant VIP Hair Studio and Day Spa, Inc., only at 242 York Road Carlisle, PA 17013. Any and all personalty located at 242 York Road, Carlisle, PA 17013. PRAECIPE FOR ATTACHMENT EXECUTION Issue writ of attachment to the Sheriff of County, for debt, interest and costs, as above, directing attachment against the above-named garnishee(s) for the following property (if real estate, supply six copies of the description; supply four copies of lengthy personalty list) and all other property of the defendant(s) in the possession, custody or co 1 of the said garnishee( s). ? (Indicate) Index this writ against the garnishee (s) as a lis pe a amst re es the defendant(s) described in the attached exhibit. Date February 21, 2008 Signature: Print Name: David A. Baric, Esquire Address: 19 West South Street Carlisle, Pennsylvania 17013 Attorney for: Plaintiff Telephone: (717) 249-6873 Supreme Court ID No: 4 4 8 5 3 oo W o'g W Q(j) Ln 0 -C OO WO G. Cil ?r , W ? O 'Dtfi ' - ORRSTOWN BANK, IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA V. NO. 2007- G ;1?t CIVIL TERM VIP HAIR STUDIO AND DAY SPA, INC., STACEY E. KENNEDY AND GREGORY A. KENNEDY, Defendants F nmGWM AND EXECUTION THEREON TO: Gregory A. Kennedy 232 South Allison Street Greencastle, Pennsylvania 17225 A judgment in the amount of $21,745.25 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 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, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW. THIS OFFICE CAN PROVIDE YOU WITH INFORMATION ABOUT HIRING A LAWYER. IF YOU CANNOT AFFORD TO HIRE A LAWYER, THIS OFFICE MAY BE ABLE TO PROVIDE YOU WITH INFORMATION ABOUT AGENCIES THAT MAY OFFER LEGAL SERVICES TO ELIGIBLE PERSONS AT A. REDUCED FEE OR NO FEE. Cumberland County Bar Association 32 South Bedford Street Carlisle, Pennsylvania 17013 (717) 249-3166 David A. Baric, Esquire Attorney for Plaintiff 19 West South Street Carlisle, Pennsylvania 17013 (717) 249-6873 V -- C'? o p C" -n i? •. cr% Lri WRIT OF EXECUTION and/or ATTACHMENT COMMONWEALTH OF PENNSYLVANIA) COUNTY OF CUMBERLAND) NO 07-6281 Civil CIVIL ACTION - LAW TO THE SHERIFF OF CUMBERLAND COUNTY: To satisfy the debt, interest and costs due ORRSTOWN BANK, Plaintiff (s) From VIP HAIR SUTDIO AND DAY SPA, INC., STACEY E. KENNEDY & GREGORY A. KENNEDY, 242 York Road, Carlisle, PA 17013 (1) You are directed to levy upon the property of the defendant (s)and to sell any and all personalty located at 242 York Road, Carlisle, PA 17013. (2) You are also directed to attach the property of the defendant(s) not levied upon in the possession of GARNISHEE(S) as follows: and to notify the garnishee(s) that: (a) an attachment has been issued; (b) the garnishee(s) is enjoined from paying any debt to or for the account of the defendant (s) and from delivering any property of the defendant (s) or otherwise disposing thereof, (3) If property of the defendant(s) not levied upon an subject to attachment is found in the possession of anyone other than a named garnishee, you are directed to notify him/her that he/she has been added as a garnishee and is enjoined as above stated. Amount Due $19,544.11 L.L. $.50 Interest -- $2,288.37 Atty's Comm $1,954.41 % Atty Paid $176.83 Plaintiff Paid Due Prothy $2.00 Other Costs $150.33 Date: 2/25/08 (Seal) REQUESTING PARTY: Name DAVID A. BARIC, ESQUIRE Address: O'BRIEN, BARIC & SCHERER 19 WEST SOUTH STREET CARLISLE, PA 17013 Curtis R .. ong, Protllort' iary By: // Deputy Attorney for: PLAINTIFF Telephone: 717-249-6873 Supreme Court ID No. 44853 R. Thomas Kline, Sheriff, who being duly sworn according to law, states this writ is returned STAYED. OFFICE 0; H E SHERIFF Sheriff's Costs: Ad`vantC Cp&ts: 150.00 1008 FEB 2-ftif6sftsts: 66.81 Docketing 18.00 83.19 Poundage 1.31 Advertising Law Library .50 Prothonotary 2.00 Refunded to Atty on 04/04/08 Mileage 40.00 Surcharge 5.00 Levy Certified Mail Post Pone Sale Garnishee Postage ? ?7 l y TOTAL $ 66.81 So Answers; R. Thomas Kline, Sheriff c' v By Claudia A. Brewbaker £S8bb ON (1I lznoo ouzazdnS £L89-6t,Z-LIL :ouogd;)Io 1, 33I.LNIV'Id :.zol ,CaujOUv £iOLT dd `II ISI12 vd ) .LHaH LS H.LIIOS ,LSIIM 61 ClndaQ .?Cg uoglo.zd `$uo7;-I siHnD ££'OST$ siso0 z3gl0 00'Z$ &pozd anQ os*s "I"i HaH3H3S 78 aRIdg `NdIH ff,0 :ssa.iPPV IIHIIlOSA `alU O "V (IIAFQ auzPN Asxdd JNIJ Sdnaax Gras) 80/SZ/Z :31LIG Pitd 33iIuitld £8'9L IS P1ed XTIV % lFVS6`1$ uzuto0 S,XUV L£'88Z`Z$ -- isojolul T TTVS`61$ anQ lunouzb 'POIBIs anogt se pouiofuo st put aagsiuzt5 e st poppt uaaq stq ags/ag itgi joi uzig X3i;ou 01 paIDARP azt noX `aagsiuzPB pauztu t utgj zagpo ouoXut 3o uoissassod agl ui punol si luauulout of loafgns ut uodn painal lou (s)lutpualap agl3o Xl-iadoid3I (£) `.3oo.i3gl 2uisodsip osiNuagjo io (s) ;utpualap agl3o kpadozd Cut 2uijaAtlap uIO.j put (s) jutpualap oqj jo junooat aqj jol zo ol;gop Xut OuiXrd uzo.rl pauiofua si (s)aagsiuztF agj (q) `ponssi uaaq stg luauuotilt ut (t) :IugI (s)3agsiuzt5 agl Xjllou of put :SmOIIo3 st (S)IIIIHSIN-dVD jo uoissassod oql ui uodn painal IOU (s)Jutpua3ap agj3o fvadozd agj gout of pajoagp oslt zm noA (Z) £TOLT dd `alsll.Ie0 'peog 110A ZbZ ae pa;eool Slieuos.iad Ile pue Cue Ilos of put(s) luepuajap ag; 3o Slzadozd age uodn ,CAzl of paloazip azt noA (1) £IOLT 'Vd `aisli-1e3'PEO-d K-IOA ZbZ `AQIINNaN 'V AHO'DHH9 78 AQIINN13M 'II AHJV LS '*3NI `ddS AV([ (INV OIQ.LIIS 2HdH dIA uzoz,I (s) 33ITu1eid `XKVfj NMO,LSHHo anp sisoo put Isaialui 'lgap agj ijsijvs o,l, :A,LN(10D QNd-IWIIgWfI3 30 ddRIIIHS IIHL O.I. Mb I - NOLLOd 'IIAIO (QNd'I-dalwflO 30 AINnOD liA?O i8Z9-L0 ON (VINVA-IASNNIId 30 Hl-lVgMNOWWOJ ' SHERIFF'S RETURN - OUT OF COUNTY CASE NO: 2007-06281 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND ORRSTOWN BANK VS VIP HAIR STUDIO AND DAY SPA ET R. Thomas Kline Sheriff or Deputy Sheriff who being duly sworn according to law, says, that he made a diligent search and and inquiry for the within named DEFENDANT to wit: KENNEDY GREGORY A but was unable to locate Him deputized the sheriff of YORK in his bailiwick. He therefore serve the within COMPLT-CONFES JUDGMENT County, Pennsylvania, to On April 30th , 2008 , this office was in receipt of the attached return from YORK Sheriff's Costs: So answers; -° Docketing 18.00 - -"J' Out of County 9.00 Surcharge 10.00 R. Thomas Kline Dep York County 100.00 Sheriff of Cumberland County Postage 1.89 138.89 JO I JO P - 04/30/2008 OBRIEN BARIC SCHERER Sworn and subscribe to before me this day of A. D. PENNY PRESS OF YORK, INC. Ph (717) 843-4078 Fax (717) 848-1360 COUNTY OF YORK OFFICE OF THE SHERIFF 45 N. GEORGE ST., YORK, PA 17401 3 SERVICE CALL (717) 771-9601 SHERIFF SERVICE WSTF=TIONS PROCESS RECEIPT and AFFIDAVIT OF RETURN SAS TYPE ONLY PIPE 1 THRU 12 DO NOT DETACH ANY COPES 1. PLAINTIFF/S/ 3 DEFENDANT/SI VIP Hair Studio and Day Spa Inc et al 2 COURT NUMBER 07-6281 civil 4 I YPE OF WRIT OR COMPLAINT R U I Conf of Judg, Notc rule SERVE nhmc ur murvluuAl , L umraNr, cORPURAIION, ETG TO SERVE OR DESCRIPTION OF PROPERTY TO BE LEVIED, ATTACHED, OR SOLD Gregory A. Kennedy 6. ADDRESS (STREET OR RFO WITH BOX NUMBER. APT NO , CITY, BORO, TWP. STATE AND ZIP CODE) AT 1564 Baltimore Pike HancvA PA 17331 7 INDICATE SERVICE' U PERSONAL O PERSON IN CHARGE DEPUTIZE U CERT MAIL ? 1 ST CLASS MAIL U POSTED 0 OTHER NOW March 4 20 I, SHERIFF P"MNTY, PA, do hereby deputize the sheriff of °r COUNTY to execute this 9'e return th cording to law. This deputization being made at the request and risk of the plaintiff., sC/???--. SHERIFF OF AM OUNTY 8. SPECIAL INSTRUCTIONS OR OTHER INFORMATION THAT WILL ASSIST IN EXPEDITING SERVIM T OF COUNTY er an ADV FEE PAID BY CUMBERLAND CO SHERIFF Please mail return of service to Cumberland County Sheriff. Thank you. NOTE: ONLY APPLICABLE ON WRIT OF EXECUTION: N.B. WAIVER OF WATCHMAN - Any deputy sheriff levying upon or attaching any property under within writ may leave same without a watchman, in custody of whomever is found in possession, after notifying person of levy or attachment, without liability on the part of such deputy or the sheriff to any plaintiff herein for any loss, destruction, or removal of any property before sheriffs sale thereof. 9. TYPE NAME and ADDRESS of ATTORNEY / ORIGINATOR and SIGNATURE DAVID A. B A R I C , ESQ. 10. TELEPHONE NUMBER 11 DATE FILED 19 WEST SOUTH STREET, CARLISLE, PA 17013 717-249-6R71 2-20-2008 12. SEND NOTICE OF SERVICE COPY TO NAME AND ADDRESS BELOW: (This area must be completed if notice is to be mailed) CUMBERLAND CO SHERIFF SPACE BELOW FOR USE OF THE SHERFF - DO NOT WWtE BELOW TM LM F 13 . 1 acknowledge receipt of the writ 14. DATE RECEIVED 5 Expiration/Hearing Oate or complaint as indicated above. M J M C G I L L Y C S O 3- 7- 2 0 0 8 ?-21-2008 16. HOW SERVED: PERSONAL ( ) RESIDENCE POSTED( ) POE ( ) SHERIFF'S OFFICE ( ) OTHER ( ) SEE REMARKS BELOW 17. O 1 here certify and return a NOT FOUND because I am unable to loca the individual, company, etc. named above. (See remarks below.) 18. NAIA TITL O INDIVIDU VIED / LIST ADDRESS HE I NOT SHOWN ABOVE R tionship to Defendant) 19. Date of Service 20 Time of Service 21. ATTEMPTS Date Time M iles I Date Time Miles Int Date Time Miles Int. Date Time Miles Int. Dale Time Miles Int Dale Time Miles Int r F . 22 . REMARKS: 23. Advance Costs 24 Service Costs 25 N/F 26 Mileage 2 100-00 IN - Q 1 c6 -13 34. For*ign County Costs 35. Advance Costs 36 Service Costs 41. AFFIRMFO and nUbscrit-d ?q betor me this 1 1st 42. day of -%Mo?LT+ Or rEj!kjy-jjk,!:fj NOTARIAL SEAL LISA L. >><101.%;" NOTARY PUBLIC CITY OF YORK, YORK COUNTY •?•. ??<.?<ero?,.-ea, ?. ewee??e? <e e? ?.s A'h.AA ostage 28 Sub Total 29. Pound 30 Notary 37 Notary Cert . 38. Mileage/Postage/Not Fd t4. ^S?ig?nature of 1 ?. Sheriff 46. Signature of York County Sheriff RICHARD P. KEU 48 Signature of Foreign LL- c.%v 1 3600 Surchg. 32 Tot. Costs 3 Cods Due Refund I/ L/ C7 Lei* -,71 14 1 39. Total Costs 40 Costs D de or Refund ER, SHMFF 49. DATE No. 4- 4 - 2 1 - 2 0 08