Loading...
HomeMy WebLinkAbout09-4629I °r ATLANTIC CENTRAL BANKERS BANK, Plaintiff V. EDWIN F. HALE, SR., Defendant IN THE COURT OF COMMON PLEAS, CUMBERLAND COUNTY No. o9 - y(aq 0,1vi l (erm CONFESSION OF JUDGMENT FOR MONEY CONFESSION OF JUDGMENT Pursuant to the authority contained in the warrant of attorney, the original or a copy of Kathryn D. Sallie, Esquire PA I.D. No. 208116 Rhoads & Sinon LLP PO Box 1146 Harrisburg, PA 17108-1146 Phone: 717.233.5731/Fax: 717.23 7.6790 Attorney for Plaintiff Atlantic Central Bankers Bank which is attached to the Complaint in Confession of Judgment filed in this action, I appear for the Defendant and confess judgment in favor of the Plaintiff, Atlantic Central Bankers Bank, and against the Defendant, Edwin F. Hale, Sr., as follows, plus interest at the default rate and costs from the date of judgment, attorneys' fees, and costs of collection as follows: Account# Note Date Unpaid Principal Unpaid Interest Unpaid Late Fees Total Due Maturity Date 123200 8/26/05 $292,014.44 $4,708.88 $1,481.00 $298,204.32 8/31/2009 123283 12/14/05 $4,300,000.00 $69,038.88 $4,526.52 $4,373,565.40 8/31/2009 123408 9/18/06 $910,000.00 $11,833.30 $4,028.19 $925,861.49 8/31/2009 Total Amount Due $5,597,631.21 745966.2 Respectfully submitted, Dated: July 9, 2009 RHOADS & SINON LLP By: Am&- KatW D. Sallie, Esquire One South Market Square P.O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for the Defendant, Edwin F. Hale, Sr., for the purpose of confessing judgment; Attorneys for the Plaintiff, Atlantic Central Bankers Bank, for all other purposes 745966.2 Kathryn D. Sallie, Esquire PA I.D. No. 208116 Rhoads & Sinon LLP PO Box 1146 Harrisburg, PA 17108-1146 Phone: 717.233.5731 /Fax: 717.237.6790 Attorney for Plaintiff Atlantic Central Bankers Bank ATLANTIC CENTRAL BANKERS BANK, IN THE COURT OF COMMON PLEAS, Plaintiff CUMBERLAND COUNTY V. No. EDWIN F. HALE, SR., CONFESSION OF JUDGMENT Defendant FOR MONEY COMPLAINT IN CONFESSION OF JUDGMENT NOW COMES Plaintiff, Atlantic Central Bankers Bank, by its undersigned attorneys, Rhoads & Sinon LLP, and files the within Complaint in Confession of Judgment, stating as follows: 1. Plaintiff, Atlantic Central Bankers Bank ("Plaintiff' or "Bank"), is a state banking institution chartered in the Commonwealth of Pennsylvania having its principal office at 1400 Market Street, P.O. Box 1109, Camp Hill, Cumberland County, Pennsylvania 17011. 2. Defendant, Edwin F. Hale, Sr. ("Defendant"), is an adult individual currently residing at 1501 South Clinton Street, Baltimore, Maryland, 21224. COUNTI CONFESSION OF JUDGMENT ATLANTIC CENTRAL BANKERS BANK V. EDWIN F. HALE SR. 3. The averments set forth in Paragraphs 1 through 2 are incorporated herein by reference. 4. On August 25, 2005, Defendant made, executed and delivered to Plaintiff a promissory note and security agreement in the original principal amount of Four Hundred Sixty Thousand and No/100 Dollars ($460,000.00), which funds were received by Defendant 745966.2 (hereinafter the "460,000 Note"). A true and correct copy of the 460,000 Note is attached hereto as Exhibit "A" and is incorporated herein by reference. 5. On December 14, 2005, Defendant made, executed and delivered to Plaintiff a promissory note and security agreement in the original principal amount of Four Million Three Hundred Thousand and No/100 Dollars ($4,300,000.00), which funds were received by Defendant (hereinafter the "4,300,000 Note"). A true and correct copy of the 4,300,000 Note is attached hereto as Exhibit "B" and is incorporated herein by reference. 6. On September 18, 2006, Defendant made, executed and delivered to Plaintiff a promissory note and security agreement in the original principal amount of One Million Two Hundred Thousand and No/100 Dollars ($1,200,000.00), which funds were received by Defendant (hereinafter the "1,200,000 Note"). A true and correct copy of the 1,200,000 Note is attached hereto as Exhibit "C" and is incorporated herein by reference. 7. On November 28, 2008, the Bank and Defendant entered into an Agreement (the "Agreement") modifying certain terms of the $460,000 Note, $4,300,000 Note and $1,200,000 Note (collectively, the "Notes") and all other documents evidencing, securing, guaranteeing, or otherwise documenting the indebtedness and obligations of the Defendant owed to the Bank related to the Notes (the "Loan Documents"). A true and correct copy of the Agreement is attached hereto as Exhibit "D" and is incorporated herein by reference. 8. The Loan Documents and the Agreement contain cross-default provisions. 9. The Loan Documents and the Agreement contain jurisdiction and venue provisions which explicitly state that jurisdiction and venue for any legal proceeding involving, directly or indirectly, any matter arising out of or related to the Agreement or the Loan Documents shall reside either in the Court of Common Pleas of Cumberland County, 745966.2 Pennsylvania or the United States District Court for the Middle District of Pennsylvania. See Agreement at ¶34. 10. Pursuant to the terms of the Agreement, Defendant was to make (i) monthly payments sufficient to cover the interest-only portion of the indebtedness evidenced by the $4,300,000 Note, and (ii) all scheduled monthly payments of principal plus interest as they became due under the $460,000 Note and the $1,200,000 Note, respectively. Such payments commenced on December 1, 2008 and were to continue on the first day of each month thereafter. 11. Defendant has been in default under the terms of the Agreement and the Loan Documents since February 1, 2009, by reason of the failure to make the payments required by the Agreement as and when due. 12. Despite repeated requests by Plaintiff for payment, Defendant has failed to cure his default. Defendant remains in default under the Agreement and the Loan Documents. 13. In addition to being payable on demand, the Agreement and the Loan Documents grant the Plaintiff the right, upon an event of default, to (i) accelerate the entire unpaid principal balance of the Notes, as well as any accrued unpaid interest and late fees, and (ii) impose the default rate of interest of the Wall Street Journal Prime Rate plus 4.000 percentage points (the "Default Rate") to the unpaid principal balance going forward; with respect to which Plaintiff has provided Defendant notice by letter dated June 26, 2009. A true and correct copy of the acceleration and demand letter is attached hereto as Exhibit "B" and is incorporated herein by reference. 14. The Agreement and Loan Documents contain confession of judgment and warrant of attorney provisions which empower any attorney of any court of record to appear for and enter judgment against Defendant and in favor of the Bank upon default by the Defendant. 745966.2 15. The confession of judgment and warrant of attorney provisions contained in the Agreement and the Loan Documents permit confession of judgment in an amount equal to the then unpaid principal sums due, together with all accrued unpaid interest, unpaid late fees, any and all costs of suit and collection and reasonable attorneys fees. 16. Judgment by confession is not being entered in connection with a consumer credit transaction. 17. The Agreement and the Notes have not been assigned by the Bank. 18. Judgment has not been entered previously on the Agreement or the Notes in any jurisdiction. 19. The actual amounts presently due and payable to the Bank under the Agreement and the Notes are itemized as follows: Account# Note Date Unpaid Principal Unpaid Interest Unpaid Late Fees Total Due Maturity Date 123200 8/26/05 $292,014.44 $4,708.88 $1,481.00 $298,204.32 8/31/2009 123283 12/14/05 $4,300,000.00 $69,038.88 $4,526.52 $4,373,565.40 8/31/2009 123408 9/18/06 $910,000.00 $11,833.30 $4,028.19 $925,861.49 8/31/2009 Total Amount Due $5,597,631.21 745966.2 WHEREFORE, Plaintiff, Atlantic Central Bankers Bank, demands judgment in its favor and against Defendant, Edwin F. Hale, Sr., in the amount of $5,597,631.21 plus accruing interest at the Default Rate, costs of suit, attorneys' fees, and such other charges as authorized by the warrants contained in the Agreement and the Notes. Dated: July 9, 2009 Respectfully submitted, RHOADS & SINON LLP By: Kat . Sallie, Esquire One South Market Square P.O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for the Defendant, Edwin F. Hale, Sr., for the purpose of confessing judgment; Attorneys for the Plaintiff, Atlantic Central Bankers Bank, for all other purposes 745966.2 VERIFICATION William H. Sayre, Senior Vice President and Chief Credit Officer of Atlantic Central Bankers Bank, deposes and says, subject to the penalties of 18 Pa. C.S. §4904 relating to unsworn falsification to authorities, that he makes this verification by his authority as such officer and that the facts set forth in the Complaint in Confession of Judgment are true and correct to the best of his knowledge, information and belief. Date William . Sayre, Senior Vice President and Chief Credit Officer, Atlantic Central Bankers Bank 745966.2 Kathryn D. Sallie, Esquire PA I.D. No. 208116 Rhoads & Sinon LLP PO Box 1146 Harrisburg, PA 17108-1146 Phone: 717.233.5731/Fax: 717.237.6790 Attorney for Plaintiff Atlantic Central Bankers Bank ATLANTIC CENTRAL BANKERS BANK, IN THE COURT OF COMMON PLEAS, Plaintiff CUMBERLAND COUNTY V. EDWIN F. HALE, SR., Defendant No. CONFESSION OF JUDGMENT FOR MONEY PRAECIPE FOR ENTRY OF JUDGMENT To: The Prothonotary Pursuant to the attached Confession of Judgment, please enter judgment in favor of the Plaintiff, Atlantic Central Bankers Bank, and against the Defendant, Edwin F. Hale, Sr., and damages are assessed in the amount of $5,597,631.21 plus interest at the default rate from the date of judgment, attorneys' fees and costs of collection. A form Entry of Judgment is attached hereto. RHOADS & SINON LLP Dated: July 9, 2009 By: _ *& ff? KKaihr?n . Sallie, Esquire One South Market Square P.O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for the Defendant, Edwin F. Hale, Sr., for the purpose of confessing judgment; Attorneys for the Plaintiff, Atlantic Central Bankers Bank, for all other purposes 745966.2 Kathryn D. Sallie, Esquire PA I.D. No. 208116 Rhoads & Sinon LLP PO Box 1146 Harrisburg, PA 17108-1146 Phone: 717.233.5731 /Fax: 717.237.6790 Attorney for Plaintiff Atlantic Central Bankers Bank ATLANTIC CENTRAL BANKERS BANK, Plaintiff V. EDWIN F. HALE, SR., Defendant IN THE COURT OF COMMON PLEAS, CUMBERLAND COUNTY No. CONFESSION OF JUDGMENT FOR MONEY ENTRY OF JUDGMENT AND NOW, this 0 day of, 2009, Judgment is hereby entered in favor of the Plaintiff, Atlantic Central Bankers Bank, and against the Defendant, Edwin F. Hale, Sr., and damages are assessed in the amount of $5,597,631.21, plus accruing interest at the default rate from the date of judgment, attorneys' fees and costs of collection. rothono 745966.2 Kathryn D. Sallie, Esquire PA I.D. No. 208116 Rhoads & Sinon LLP PO Box 1146 Harrisburg, PA 17108-1146 Phone: 717.233.5731/Fax: 717.237.6790 Attorney for Plaintiff Atlantic Central Bankers Bank ATLANTIC CENTRAL BANKERS BANK, IN THE COURT OF COMMON PLEAS, Plaintiff CUMBERLAND COUNTY V. No. EDWIN F. HALE, SR., CONFESSION OF JUDGMENT Defendant FOR MONEY NOTICE UNDER RULE 2958.1 OF JUDGMENT AND EXECUTION THERETO Notice of Defendant's Rights To: Edwin F. Hale, Sr. 1501 South Clinton Street Baltimore, MD 21224 A judgment in the amount of Five Million, Five Hundred Ninety-Seven Thousand, Six Hundred Thirty-One and 21/100 Dollars ($5,597,631.21), plus accruing interest at the default rate from the date of judgment, attorneys' fees and costs of collection, 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. 745966.2 CUMBERLAND COUNTY BAR ASSOCIATION 32 South Bedford Street Carlisle, Pennsylvania (717) 249-3166 Respectfully submitted, Dated: July 9, 2009 RHOADS & SINON LLP By: 4"4k Kat D. Sallie, Esquire One South Market Square P.O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for the Defendant, Edwin F. Hale, Sr., for the purpose of confessing judgment; Attorneys for the Plaintiff, Atlantic Central Bankers Bank, for all other purposes 745966.2 Kathryn D. Sallie, Esquire PA I.D. No. 208116 Rhoads & Sinon LLP PO Box 1146 Harrisburg, PA 17108-1146 Phone: 717.233.5731/Fax: 717.237.6790 Attorney for Plaintiff Atlantic Central Bankers Bank ATLANTIC CENTRAL BANKERS BANK, IN THE COURT OF COMMON PLEAS, Plaintiff CUMBERLAND COUNTY V. No. EDWIN F. HALE, SR., CONFESSION OF JUDGMENT Defendant FOR MONEY CERTIFICATION I hereby certify the precise address of the Plaintiff is: Atlantic Central Bankers Bank 1400 Market Street P.O. Box 1109 Camp Hill, Pennsylvania 17011 and the precise residence of the Defendant is: Edwin F. Hale, Sr. 1501 South Clinton Street Baltimore, Maryland, 21224 RHOADS & SINON LLP Dated: July 9, 2009 By: 4 &c Kat . Sallie, Esquire One South Market Square P.O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for the Defendant, Edwin F. Hale, Sr., for the purpose of confessing judgment; Attorneys for the Plaintiff, Atlantic Central Bankers Bank, for all other purposes 745966.2 Kathryn D. Sallie, Esquire PA I.D. No. 208116 Rhoads & Sinon LLP PO Box 1146 Harrisburg, PA 17108-1146 Phone: 717.233.5731/Fax: 717.237.6790 Attorney for Plaintiff Atlantic Central Bankers Bank ATLANTIC CENTRAL BANKERS BANK, IN THE COURT OF COMMON PLEAS, Plaintiff CUMBERLAND COUNTY V. No. EDWIN F. HALE, SR., CONFESSION OF JUDGMENT Defendant FOR MONEY PLAINTIFF'S AFFIDAVIT JUDGMENT IS NOT BEING ENTERED BY CONFESSION AGAINST A NATURAL PERSON IN CONNECTION WITH A CONSUMER CREDIT TRANSACTION. I further certify the precise address of the Plaintiff is 1400 Market Street, P.O. Box 1109, Camp Hill, Cumberland County, Pennsylvania 17011; and the precise residence of the Defendant is 1501 South Clinton Street, Baltimore, Maryland, 21224. William H. re, Senior Vice President and Chief Credit Officer, Atlantic Central Bankers Bank Sworn to ands bscribed before me this (4 1 day of , 2009: NOTARY PUBLIC MY COMMISSION EXPIRES: (SEAL) WTM K UAL TAMW 4 OM N ft" FAft CAMP lNll •0110.. CMM Nq COwM My C01111lMWO bOn fM % Ma 745966.2 EXHIBIT A PROMISSORY NOTE AND SECURITY AGREEMENT (SINGLE ADVANCE TERM LOAN) References in the shaded area are for Lender's use and convenience only and do not lindt the Applicability of this Borrower: Edwin F. Hale, Sr. Lender: Atlantic Central Bankers Bank 2515 Boston Street 1400 Market Street Baltimore, MD 21224 P.O. Box 1109 Camp Hill, PA 1701-1109 PRINCIPAL AMOUNT: X460,000.00 DATE OF NOTE: August 26, 2005 PROMISE TO PAY. For value received, Edwin F. Hale, Sr., an adult male individual, ("Borrower`) hereby agrees to pay to Atlantic Central Bankers Bank, a state banking institution chartered in the Commonwealth of Pennsylvania, ("Lender") the sum of Four Hundred Sixty Thousand and N01100 Dollars ($460,000.00), together with interest on the outstanding principal balance at the rate set forth in this Promissory Note and Security Agreement ("Note') from the date of this Note until the principal balance is paid in W. 1. INTEREST. The interest rate on the principal of this Note is subject to change from time to time based on changes in the Index set forth in this Note. The interest rate on the Loan may or may not be the lowest rate available at any given time by Lender to its customers. Borrower understands that Lender may make other similar loans to other customers at interest rates different than the interest rate provided for in this Note. The interest rate is a variable interest rate equal to the sum of: (a) New York Wall Street Journal Prime hate (the " lndex'I plus one half of one percent (.50%). Under no circumstances will the interest rate on this Note exceed the maximum interest permitted under the laws of the Commonwealth of Pennsylvania. The interest rate will be computed on a year consisting of 360 days with interest charged and billed based on the actual number of days elapsed. 2. PAYIVI NT-. Borrower will pay fifty-nine (59) monthly payments of principal in the amount of $3,833.33 llus interest as provided for and computed in accordance with Paragraph 1 hereof first monthly payment as set forth above will be due on October 1, 2005 and the remaining payments will be due on the same day of each successive month. Balloon Payment (for the purposes of this Note, tallow Payment is defined as the last payment on the Loan when that payment is substantially larger than other earlier payments) of any unpaid principal and accrued interest, if any, is due on September 1, 2010. In the event the interest rate is a variable interest rate, the amount of the monthly payments will change as the interest rate changes. 3. PREPAYMENT PENALTY. Borrower may at any time prepay any part or the entire principal due under this Note without any premium or penalty. Any prepayments shall first be applied to interest, late charges and costs, if any, and then to principal. 4. LATE CHARGE. If any payment to be made under this Note, including any Balloon Payment, is fifteen (15) or more days late, a late charge will be automatically assessed on the fifteenth day. The late charge will be the greater of $25.00 or 5% of the amount of the payment not made. 5. DEFAULT. A default under this Note shall be defined to include one, several or all of the following ("Events of Default"): 5.1 Payment Default. If the Borrower fails to make any payment of principal and/or interest when due under this Note. 5.2 Other Defaults. If the Borrower fails to: (a) comply with or to perform any other term, obligation, covenant, commitment or condition contained in this Note or in any documents executed by Borrower in connection with this Note or in connection with the Loan evidenced by this Note; or (b) fails to comply with or perform any term, obligation, covenant, commitment or condition contained in any other agreement between Borrower and Lender. 5.3 False Statements. If any warranty, representation or statement made, furnished or extended by Borrower, or on behalf of Borrower, to Lender set forth in this Note or in any documents executed by and/or delivered by Borrower to Lender in connection with this Note or in connection with the Loan evidenced by this Note: (a) is untrue, false and/or misleading in any material respect at the time the warranty, representation or statement is made; or (b) subsequently becomes untrue, false and/or misleading in any material respect. 5.4 Death or Insolvency. If the Borrower is an individual: (a) the death of the Borrower or (b) the filing by or against Borrower of any federal bankruptcy proceeding. If the Borrower is a general, limiter or limited liability partnership, a corporation or a limited liability company: (a) the dissolution, whether voluntary or involuntary, of Borrower, (b) the cessation of Borrower's business, (c) the appointment of a receiver for Borrower or any of Borrower's assets, (d) the assignment by Borrower of Borrower's assets for the benefit of creditors, (e) the filing of any dissolution, whether voluntary or involuntary, receivership, winding up or liquidation proceedings by or against Borrower and/or (f) the filing by or against Borrower of any federal and/or state insolvency and/or bankruptcy proceeding. 5.5 Adverse Change. If there is a material adverse change in the financial condition of Borrower of this Note or a change in the value and/or condition of any assets of Borrower pledged to Lender to secure this Note, which in the sole discretion of Lender, Lender determines to reasonably impair the prospect of payment in full of this Note. 6. LENDERS RIGHTS. Upon a default, and without the need for Lender to issue any notice to or demand upon Borrower, except as may be required by law: (1) the entire amount of unpaid principal and all accrued and unpaid interest, as well as all late charges and costs, if any, shall be immediately due and payable in full, thus abrogating any amortization provisions set forth in Paragraph 2 of this Note; (2) the interest rate on the unpaid principal shall be automatically increased by 3.00 percentage points above the interest rate in effect on the date of default; and (3) Lender may exercise any and all rights and remedies available to Lender under the statutes and Rules of Civil Procedure of the Commonwealth of Pennsylvania and as provided for in this Note. All remedies available to Lender are cumulative. Lender is under no obligation to proceed first against any collateral described in Paragraph 10 of this Note prior to proceeding against Borrower or any assets of Borrower not pledged to Lender. 7. CONFESSION OF JUDGMENT. Borrower hereby Irrevocably authorizes and empowers any attorney of record for any Court in the Commonwealth of Pennsylvania or any Prothonotary of any Court in the Commonwealth of Pennsylvania to appear at any time for Borrower after default, with or without a Complaint filed, as of any term, and to confess judgment In favor of Lender and against Borrower for the entire unpaid principal balance due on this Note, all accrued and unpaid interest and all late charges and costs, if any, together with costs of suit and an attorney's commission equal to the lesser of (a) 20% of the unpaid principal balance and accrued and unpaid Interest or 5750.00, whichever Is greater; or (b) the maximum amount permitted by law, with release of all errors. S. RIGHT OF SET OFF. Borrower grants to Lender a contractual security interest in, and hereby assigns, conveys, delivers, pledges and transfers to Lender all of Borrower's right, title and interest in and to all of Borrower's present and future accounts, funds and assets of Borrower in possession of Lender, except any trust accounts or fiords or assets which Lender holds as a fiduciary, to secure this Note. Borrower hereby authorizes and empowers Lender, to the extent permitted by law and by this Note, to charge or setoff all sums owing on this Note against any and all such accounts, funds and assets, and, at Lender's option, to administratively freeze all such accounts to allow Lender to protect Lender's charge and setoff rights provided for in this paragraph. 9. CROSS DEFAULT. A default under this Note is a default under all present and future obligations, agreements, instruments and commitments of Borrower to Lender. 10. COLLATERAL. X If checked, this Note is secured and collateralized by the collateral described hereinafter. To secure and to collateralize this Note, Borrower hereby pledges, hypothecates and grants to Lender a lien against and security interest in: 10.1 Stock. 46,217 shares of common stock titled in the name of Borrower in First Mariner Bancorp being certificate numbers 156, C 1281, C 1278, C 1279, C 1707, and C 1988 and ; any certificates of shares issued due to a stock dividend or stock split shall be forwarded to ACBB with the appropriate number of Irrevocable Stock Powers; and To perfect the lien and security interest granted to Lender by virtue of this Paragraph 10, Borrower agrees to take any and all action and to execute any and all documents required by Lender in the sole discretion of Lender. Borrower hereby agrees and acknowledges that Lender shall not be required to and shall have no obligation and/or duty: (1) to take any action to preserve the value of the collateral described in this Paragraph 10; and/or (2) to sell and/or dispose of the collateral described in this Paragraph 10 should the collateral decrease in value. 11. CROSS COLLATERAL. Any collateral given to secure the obligations of Borrower under this Note shall also collateralize and secure all present and future obligations, agreements, instruments and commitments of Borrower to Lender. 12. INTEREST RATE ON JUDGMENT. The interest rate on any judgment entered on this Note by confession or otherwise shall be the default rate as defined in Section 6 (2) provided for in this Note, which is in effect as of the date of judgment. 13. JURISDICTION AND VENUE. Borrower acknowledges that this Note was executed and delivered to Lender and accepted by Lender at Lender's offices in Camp Hill, Pennsylvania. If there is a lawsuit arising directly or indirectly out of or based directly or indirectly on this Note or the Loan by Lender to Borrower evidenced by this Note, Borrower agrees that the exclusive and sole jurisdiction and venue for any lawsuit involving Borrower, whether as plaintiff or defendant, shall reside either in the Court of Common Pleas of Cumberland County, Pennsylvania or the United States District Court for the Middle District of Pennsylvania. This Note shall be construed and interpreted under the laws of the Commonwealth of Pennsylvania. 14. WAIVER OF JURY TRIAL. Borrower knowingly and intelligently waives any trial by jury with regards to any lawsuit arising directly or Indirectly out of or based directly or indirectly on this Note or the Loan by Lender to Borrower evidenced by this Note, whether the lawsuit involves Borrower as a defendant or plaintiff. 15. COUNSEL FEES AND COSTS. Borrower agrees to pay upon demand all of Lender's costs and expenses, including attorneys' fees and Lender's legal expenses, incurred in connection with the enforcement of this Note and all documents executed by Borrower in connection with the Loan evidenced by this Note. Lender may pay someone else to help enforce this Note and all documents and instruments executed by Borrower in connection with the Loan evidenced by this Note and Borrower 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, and attorneys' fees and legal expenses for any bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post judgment or post-appeal collection services. Borrower also shall pay all court costs and such additional fees as may be directed by the court. 16. NATURE OF LOAN: The obligation evidenced by this Note does not represent or evidence a "consumer credit transaction" as that term is defined in Rule 2950 of Pennsylvania Rules of Civil Procedure but rather a business lending transaction. 17. WAIVERS. Borrower hereby waives all notices with regards to this Note, including but not limited to presentment, demand for payment, protest, notice of dishonor and/or any notices relating to commercial paper under Article 3 of the Uniform Commercial Code, as enacted in the Commonwealth of Pennsylvania. Additionally, Borrower waives any and all notices required under Article 8 and/or Article 9 of the Uniform Commercial Code with regards to the collateral described in Paragraph 10 hereof, and/or disposition of the collateral described in Paragraph 10 hereof. Borrower hereby waives the equitable and legal doctrines of election of remedies and marshalling of assets. 18. MISCELLANEOUS PROVISIONS. The failure of Lender to enforce any right under this Note or under any documents executed by Borrower in connection with the Loan evidenced by this Note shall not be deemed a waiver of Lender's rights under this Note or otherwise. Caption headings in this Note are for convenience purposes only and are not to be used to interpret or define the provisions of this Note and do not constitute any part of the terms of this Note. This Note shall be binding upon the heirs, successors, personal representatives and assigns of Borrower. This Note shall inure to the benefit of Lender and its successors and assigns. In the event any one or more of the provisions contained in this Note shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Note, but the Note shall be construed as if such invalid, illegal or unenforceable provision had never been contained therein. This Note shall be governed by, construed, interpreted and enforced according to the laws of the Commonwealth of Pennsylvania. 19. STOCK POWER With regards to any stock pledged to Lender described in Paragraph 10 hereof, Borrower shall execute a stock power in favor of Lender, which shall be irrevocable as long as Borrower is obligated to Lender and which shall be in a form and contains provisions as required by Lender. PRIOR TO SIGNING THIS NOTE, EACH BORROWER HAS READ AND UNDERSTOOD ALL OF THE PROVISIONS OF THIS NOTE. EACH BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS NOTE. THIS NOTE IS EXECUTED UNDER SEAL AND IT IS INTENDED THAT THIS NOTE IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. BO WER: (Seal) Edwin F. Hale, Sr. COLLATERAL RECEIPT Atlantic Central Bankers Bank hereby acknowledges receipt of possession of collateral described in Paragraph 10 hereof. A C CENTRAL BANKERS BANK ?,, Dated: ACKNOWLEDGEMENT County of 13u.tKfr we.. State of AA&r je.14rj_ On thisli day of August 2005, before the undersigned officer, personally appeared Edwin F. Hale, Sr., known to me (or satisfactorily proven) to be the person whose name is subscribed to this "Note and Security Agreement" and acknowledged that he executed the same for the purposes herein contained. IN WITNESS WHEREOF, I have hereunto set my hand and official seal. ,.,`n XN+so",%. ' 5b LiL.'I N Public 1 ?Lov?3 ' •• • JO ANN NOAH MY Commission Expires: oTAq . l Z' i O- •? n' 'r w * • NOTARY PUBIC ' z ° " BALTIIOPE COUNTY. MD. E C i A 2 : ? omm. xp res ug. 1. 008 EXHIBIT B PROMISSORY NOTE AND SECURITY AGREEMENT (SINGLE ADVANCE TERM LOAN) PRINCIPAL AMOUNT: $4,300,000.00 DATE OF NOTE: December 14, 2005 PROMISE TO PAY. For value received, Edwin F. Hale, Sr., an adult male individual, ("Borroweel hereby agrees to pay to Atlantic Central Bankers Bank, a state banking institution chartered in the Commonwealth of Pennsylvania, ("Lender") the sum of Four Million Three Hundred Thousand and N01100 Dollars ($4,300,000.00), togethdr with interest on the outstanding principal balance at the rate set forth in this Promissory Note and Security Agreement C Note") from the date of this Note until the principal balance is paid in full. 1. INTEREST. The interest rate on the principal of this Note is subject to change from time to time based on changes in the Index set forth in this Note. The interest rate on the Loan may or may not be the lowest rate available at any given time by Lender to its customers. Borrower understands that Lender may make other similar loans to other customers at interest rates different than the interest rate provided for in this Note. The interest rate is a variable interest rate equal to the sum of: (a) New York Wall Street Journal Prime Rate (the "Index') minus one-quarter of one percent (.250/9). Under no circumstances will the interest rate on this Note exceed the maximum interest permitted under the laws of the Commonwealth of Pennsylvania. The interest rate will be computed on a year consisting of 360 days with interest charged and billed based on the actual number of days elapsed. 2. PAYMENT: Borrower will pay monthly payments of interest only with all then outstanding principal, accrued but unpaid interest and any other sums due and payable under the Loan Documents due and payable in full an June 1, 2007 (the "Maturity Date"). First monthly payment shall begin January 1, 2006 and continue on the first of each month thereafter. 3. PREPAYMENT PENALTY. Borrower may at any time prepay any part or the entire principal due under this Note without any premium or penalty. Any prepayments shall first be applied to interest, late charges and costs, if any, and then to principal. 4. LATE CHARGE. If any payment to be made under this Note, including any Balloon Payment, is fifteen (15) or more days late, a late charge will be automatically assessed on the fifteenth day. The late charge will be the greater of $25.00 or 5% of the amount of the payment not made. Borrower: Edwin F. Hale, Sr. Lender: Atlantic Central Bankers Bank 2515 Boston Street 1400 Market Street Baltimore, MD 21224 P.O. Box 1109 Camp Hill, PA 17001-1109 5. DEFAULT. A default under this Note shall be defined to include one, several or all of the following ("Events of Defaulfl: 5.1 Payment Default. If the Borrower fails to make any payment of principal and/or interest when due under this Note. 5.2 Other Defaults. If the Borrower fails to: (a) comply with or to perform any other term, obligation, covenant, commitment or condition contained in this Note or in any documents executed by Borrower in connection with this Note or in connection with the Loan evidenced by this Note; or (b) fails to comply with or perform any term, obligation, covenant, commitment or condition contained in any other agreement between Borrower and Lender. 5.3 False Statements. If any warranty, representation or statement made, furnished or extended by Borrower, or on behalf of Borrower, to'Lender set forth in this Note or in any documents executed by and/or delivered by Borrower to Lender in connection with this Note or in connection with the Loan evidenced by this Note: (a) is untrue, false and/or misleading in any material respect at the time the warranty, representation or statement is made; or (b) subsequently becomes untrue, false and/or misleading in any material respect. 5.4 Death or Insolvency. If the Borrower is an individual: (a) the death of the Borrower or (b) the filing by or against Borrower of any federal bankruptcy proceeding. If the Borrower is a general, limited or limited liability partnership, a corporation or a limited liability company: (a) the dissolution, whether voluntary or involuntary, of Borrower, (b) the cessation of Borrower's business, (c) the appointment of a receiver for Borrower or any of Borrower's assets, (d) the assignment by Borrower of Borrower's assets for the benefit of creditors, (e) the filing of any dissolution, whether voluntary or involuntary, receivership, winding up or liquidation proceedings by or against Borrower and/or (f) the filing by or against Borrower of any federal and/or state insolvency and/or bankruptcy proceeding. 5.5 Adverse Change. If there is a material adverse change in the financial condition of Borrower of this Note or a change in the value and/or condition of any assets of Borrower pledged to Lender to secure this Note, which in the sole discretion of Lender, Lender determines to reasonably impair the prospect of payment in full of this Note. 6. LENDERS RIGHTS. Upon a default, and without the need for Lender to issue any notice to or demand upon Borrower, except as may be required by law: (1) the entire amount of unpaid principal and all accrued and unpaid interest, as well as all late charges and costs, if any, shall be immediately due and payable in full, thus abrogating any amortization provisions set forth in Paragraph 2 of this Note; (2) the interest rate on the unpaid principal shall be automatically increased by 3.00 percentage points above the interest rate in effect on the date of default and (3) Lender may exercise any and all rights and remedies available to Lender under the statutes and Rules of Civil Procedure of the Commonwealth of Pennsylvania and as provided for in this Note. All remedies available to Lender are cumulative. Lender is under no obligation to proceed first against any collateral described in Paragraph 10 of this Note prior to proceeding against Borrower or any assets of Borrower not pledged to Lender. 7. CONFESSION OF JUDGMENT. Borrower hereby Irrevocably authorizes and empowers any attorney of record for any Court in the Commonwealth of Pennsylvania or any Prothonotary of any Court in the Commonwealth of Pennsylvania to appear at any time for Borrower after default, with or without a Complaint Med, as of any term, and to confess judgment in favor of Lender and against Borrower for the entire unpaid principal balance due on this Note, all accrued and unpaid interest and all late charges and costs, if any, together with costs of suit and an attorney's commission equal to the lesser of (a) 20% of the unpaid principal balance and accrued and unpaid interest or $750.00, whichever is greater; or (b) the maximum amount permitted by law, with release of all errors. 2 8. RIGHT OF SET OFF. Borrower grants to Lender a contractual security interest in, and hereby assigns, conveys, delivers, pledges and transfers to Lender all of Borrower's right, title and interest in and to all of Borrower's present and future accounts, funds and assets of Borrower in possession of Lender, except any trust accounts or funds or assets which Lender holds as a fiduciary, to secure this Note. Borrower hereby authorizes and empowers Lender, to the extent permitted by law and by this Note, to charge or setoff all sums owing on this Note against any and all such accounts, funds and assets, and, at Lender's option, to administratively freeze all such accounts to allow Lender to protect Lender's charge and setoff rights provided for in this paragraph. 9. CROSS DEFAULT. A default under this Note is a default under all present and future obligations, agreements, instruments and commitments of Borrower to Lender. 10. COLLATERAL. X If checked, this Note is secured and collateralized by the collateral described hereinafter. To secure and to eollateralize this Note, Borrower hereby pledges, hypothecates and grants to Lender a lien against and security interest in: 10.1 Stock. 491,895 shares of common stock titled in the name of Borrower in First Mariner Bancorp, being certificate number(s) .; any certificates of shares issued due to a stock dividend or stock split shall be forwarded to ACBB with the appropriate number of Irrevocable Stock Powers; and To perfect the lien and security interest granted to Lender by virtue of this Paragraph 10, Borrower agrees to take any and all action and to execute any and all documents required by Lender in the sole discretion of Lender. Borrower hereby agrees and acknowledges that Lender shall not be required to and shall have no obligation and/or duty: (l) to take any action to preserve the value of the collateral described in this Paragraph 10; and/or (2) to sell and/or dispose of the collateral described in this Paragraph 10 should the collateral decrease in value. 11. CROSS COLLATERAL. Any collateral given to secure the obligations of Borrower under this Note shall also eollateralize and secure all present and future obligations, agreements, instruments and commitments of Borrower to tender. 12. INTEREST RATE ON JUDGMENT. The interest rate on any judgment entered on this Note by confession or otherwise shall be the default rate as defined in Section 6 (2) provided for in this Note, which is in effect as of the date of judgment. 12. JURISDICTION AND VENUE. Borrower acknowledges that this Note was executed and delivered to Lender and accepted by Leader at Lender's offices in Camp Mil, Pennsylvania. If there is a lawsuit arising directly or indirectly out of or based directly or indirectly on this Note or the Loan by Lender to Borrower evidenced by this Note, Borrower agrees that the exclusive and sole jurisdiction and venue for any lawsuit involving Borrower, whether as plaintiff or defendant, shall reside either in the Court of Common Pleas of Cumberland County, Pennsylvania or the United States District Court for the Middle District of Pennsylvania. This Note shall be construed and interpreted under the laws of the Commonwealth of Pennsylvania. 14. WAIVER OF JUICY TRIAL. Borrower knowingly and intelligently waives any trial by jury with regards to any lawsuit arising directly or indirectly out of or based directly or indirectly on this Note or the Loan by Lender to Borrower evidenced by this Note, whether the lawsuit involves Borrower as a defendant or plaintiff. 15. COUNSEL FEES AND COSTS. Borrower agrees to pay upon demand all of Lender's costs and expenses, including attorneys' fees and Lender's legal expenses, incurred in connection with the enforcement of this Note and all documents executed by Borrower in connection with the Loan evidenced by this Note. Lender may pay someone else to help enforce this Note and all documents and instruments executed by Borrower in connection with the Loan evidenced by this Note and Borrower 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, and attorneys' fees and legal expenses for any bankruptcy proceedings (including efforts to modify or vacate any automatic stay or irtjunetion), appeals, and any anticipated post judgment or post-appeal collection services. Borrower also shall pay all court costs and such additional fees as may be directed by the court. 16. NATURE OF LOAN: The obligation evidenced by this Note does not represent or evidence a "consumer credit transaction" as that term is defined in Rule 2950 of Pennsylvania Rules of Civil Procedure but rather a business lending transaction. 17. WAIVERS. Borrower hereby waives all notices with regards to this Note, including but not limited to presentment, demand for payment, protest, notice of dishonor and/or any notices relating to commercial paper under Article 3 of the Uniform Commercial Code, as enacted in the Commonwealth of Pennsylvania. Additionally, Borrower waives any and all notices required under Article 8 and/or Article 9 of the Uniform Commercial Code with regards to the collateral described in Paragraph 10 hereof, and/or disposition of the collateral described in Paragraph 10 hereof. Borrower hereby waives the equitable and legal doctrines of election of remedies and marshalling of assets. 18. MISCELLANEOUS PROVISIONS. The failure of Lender to enforce any right under this Note or under any documents executed by Borrower in connection with the Loan evidenced by this Note shall not be deemed a waiver of Lender's rights under this Note or otherwise. Caption headings in this Note are for convenience purposes only and are not to be used to interpret or define the provisions of this Note and do not constitute any part of the terms of this Note. This Note shall be binding upon the heirs, successors, personal representatives and assigns of Borrower. This Note shall inure to the benefit of Lender and its successors and assigns. In the event any one or more of the provisions contained in this Note shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Note, but the Note shall be construed as if such invalid, illegal or unenforceable provision had never been contained therein. This Note shall be governed by, construed, interpreted and enforced according to the laws of the Commonwealth of Pennsylvania. 19. STOCK POWER. With regards to any stock pledged to Lender described in Paragraph 10 hereof, Borrower shall execute a stock power in favor of Lender, which shall be irrevocable as long as Borrower is obligated to Lender and which shall be in a form and contains provisions as required by Lender. PRIOR TO SIGNING THIS NOTE, EACH BORROWER HAS READ AND UNDERSTOOD ALL OF THE PROVISIONS OF THIS NOTE. EACH BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS NOTE. THIS NOTE IS EXECUTED 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: (Seal) Edwin F. Hale, Sr. COLLATERAL RECEIPT Atlantic Central Bankers Bank hereby acknowledges receipt of possession of collateral described in Paragraph 10 hereof Dated: ?? l ZZTZGvCv A IC CENTRAL BANKERS BANK By; u,a fS'? Ma,e GL(-, cam., C. Za2Cor 4a?B4S-i.a-.ems DISCLOSURE FOR CONFESSION OF JUDGMENT: PROMISSORY NOTE I, the undersigned, am executing on this 14ie day of December 2005 the "Promissory Note and Security Agreement" ("Note"). A. I understand that the Note contains a Confession of Judgment provision that would permit Lender to enter judgment against me in court, after a default on the Note, without advance notice to me and without offering me an opportunity to defend against the entry of judgment. In executing the Note, being fully aware of my rights to advance notice before entrance of judgment and to a hearing to contest the validity of any judgment or other claims that Lender may assert against me under the Note prior to entrance of judgment, I am knowingly, intelligently and voluntarily waiving these rights, including any right to advance notice of the entry of judgment. I expressly agree and consent to Lender entering judgment against me by confession as provided in the Confession of Judgment provision contained in the Note. B. I further understand that in addition to giving Lender the right to confess judgment against me on the Note without advance notice or a hearing, the Confession of Judgment provision in the Note also contains language that would permit Lender, after entry of judgment, to execute on the judgment by foreclosing upon, attaching, levying on, taking possession of or otherwise seizing my property, in &11 or partial payment of the judgment. However, Lender must provide notice to me under applicable law in executing on any confessed judgment. In executing this Note, being fully aware of my rights to advance notice and a hearing after judgment is entered and before execution on the judgment, I am knowingly, intelligently and voluntarily waiving these rights. I expressly agree and consent to Lender's executing on the judgment, in any manner permitted by applicable state and federal law. C. After having read and determined which of the following statements are applicable, and by placing my initials next to each statement which applies, I represent that: INITIALS: 1 I was represented by my own independent legal counsel in connection with this Note. 2. A representative of Lender specially called the Confession of Judgment provision in the Note to my attention. D. I certify that my annual income exceeds $10,000.00; that the blanks in the disclosure were filled in when I initialed and signed the disclosure; that the Note represents a business lending transaction and not a "Consumer Credit Transaction" as defined in Rule 2950 of Pennsylvania Rules of Civil Procedure; and that I received a copy of this disclosure at the time of signing the Note and Disclosure. THIS DISCLOSURE HAS BEEN SIGNED AND SEALED BY THE UNDERSIGNED X X AFFIANT AFFIANT ACKNOWLEDGEMENT County of 6y, ( &Z t State of i rr t/ On this .? day of December 2005, before the undersigned officer, personally appeared Edwin F. Hale, Sr., known to me (or satisfactorily proven) to be the person or persons whose name and/or names are subscribed to this "Note and Security Agreement" and "Disclosure for Confession of Judgment: Promissory Note", and acknowledged that he, she and/or they executed the same for the purposes herein contained. IN WITNESS WFiEREOP, I have hereunto set my hand and official seal. AN ND R70jj? public * _••?? • 1 * JO ANN NOAH NOTARY PUBLIC My Commission Expires: l ! I 2,, ?(181.1C , ? . BALTIMORE COUNTY, MO. Comm Ex ires Au i 2008 , . ? . p g. . EXHIBIT C Borrower: Edwin F. Hale, Sr. 2515 Boston Street Baltimore, MD 21224 PRINCIPAL AMOUNT: $1,200,000.00 Lender: Atlantic Central Bankers Bank 1400 Market Street P.Q. Box 1109 Camp Hill, PA 17001-1109 DATE OF NOTE: September 18, 2006 PROMISE TO PAY. For value received, Edwin F. Hale, Sr., an adult male individual, ("Borrower'l hereby agrees to pay to Atlantic Central Bankers Bank, a state banking institution chartered in the Commonwealth of Pennsylvania, ("Lender") the sum of One Million Two Hundred Thousand and NO/100 Dollars ($1,200,000.00), together with interest on the outstanding principal balance at the rate set forth in this Promissory Note and Security Agreement ("Note") from the date of this Note until the principal balance is paid in full. 1. INTEREST. The interest rate on the principal of this Note is subject to change from time to time based on changes in the Index set forth in this Note. The interest rate on the Loan may or may not be the lowest rate available at any given time by Lender to its customers. Borrower understands that Lender may make other similar loans to other customers at interest rates different than the interest rate provided for in this Note. The interest rate is a variable interest rate equal to the sum o£ (a) New York Wall Street Journal Prime Rate (the "Index") nit one-quarter of one percent (.25%). Under no circumstances will the interest rate on this Note exceed the maximum interest permitted under the laws of the Commonwealth of Pennsylvania. The interest rate will be computed on a year consisting of 360 days with interest charged and billed based on the actual number of days elapsed. 2. PAYMENT: Borrower will pay fifty-nine (59) monthly payments of principal in the amount of $10,000.00 21u interest as provided for and computed in accordance with Paragraph 1 hereof. First monthly payment as set forth above will be due on November 1, 2006 and the remaining payments will be due on the same day of each successive month. Balloon Payment (for the purposes of this Note, Balloon Payment is defined as the last payment on the Loan when that payment is substantially larger than other earlier payments) of any unpaid principal and accrued interest, if any, is due on September 1, 2011. In the event the interest rate is a variable interest rate, the amount of the monthly payments will change as the interest rate changes. 3. PREPAYMENT PENALTY. Borrower may at any time prepay any part or the entire principal due under this Note without any premium or penalty. Any prepayments shall first be applied to interest, late charges and costs, if any, and then to principal. 4. LATE CHARGE. If any payment to be made under this Note, including any Balloon Payment, is fifteen (15) or more days late, a late charge will be automatically assessed on the fifteenth day. The late charge will be the greater of $25.00 or 5% of the amount of the payment not made. PROMISSORY NOTE AND SECURITY AGREEMENT (SINGLE ADVANCE TERM LOAN) 5. DEFAULT. A default under this Note shall be defined to include one, several or all of the following ("Events of Default"): 5.1 Payment Default. If the Borrower fails to make any payment of principal and/or interest when due under this Note. 5.2 Other Defaults. If the Borrower fails to: (a) comply with or to perform any other term, obligation, covenant, commitment or condition contained in this Note or in any documents executed by Borrower in connection with this Note or in connection with the Loan evidenced by this Note; or (b) fails to comply with or perform any term, obligation, covenant, commitment or condition contained in any other agreement between Borrower and Lender. 5.3 False Statements. If any warranty, representation or statement made, furnished or extended by Borrower, or on behalf of Borrower, to Lender set forth in this Note or in any documents executed by and/or delivered by Borrower to Lender in connection with this Note or in connection with the Loan evidenced by this Note: (a) is untrue, false and/or misleading in any material respect at the time the warranty, representation or statement is made; or (b) subsequently becomes untrue, false and/or misleading in any material respect. 5.4 Death or Insolvency. If the Borrower is an individual: (a) the death of the Borrower or (b) the filing by or against Borrower of any federal bankruptcy proceeding. If the Borrower is a general, limited or limited liability partnership, a corporation or a limited liability company: (a) the dissolution, whether voluntary or involuntary, of Borrower, (b) the cessation of Borrower's business, (c) the appointment of a receiver for Borrower or any of Borrower's assets, (d) the assignment by Borrower of Borrower's assets for the benefit of creditors, (e) the filing of any dissolution, whether voluntary or involuntary, receivership, winding up or liquidation proceedings by or against Borrower and/or (f) the filing by or against Borrower of any federal and/or state insolvency and/or bankruptcy proceeding. 5.5 Adverse Change. If there is a material adverse change in the financial condition of Borrower of this Note or a change in the value and/or condition of any assets of Borrower pledged to Lender to secure this Note, which in the sole discretion of Lender, Lender determines to reasonably impair the prospect of payment in full of this Note. 6. LENDERS RIGHTS. Upon a default, and without the need for Lender to issue any notice to or demand upon Borrower, except as may be required by law: (1) the entire amount of unpaid principal and all accrued and unpaid interest, as well as all late charges and costs, if any, shall be immediately due and payable in full, thus abrogating any amortization provisions set forth in Paragraph 2 of this Note; (2) the interest rate on the unpaid principal shall be automatically increased by 3.00 percentage points above the interest rate in effect on the date of default; and (3) Lender may exercise any and all rights and remedies available to Lender under the statutes and Rules of Civil Procedure of the Commonwealth of Pennsylvania and as provided for in this Note. All remedies available to Lender are cumulative. Lender is under no obligation to proceed first against any collateral described in Paragraph 10 of this Note prior to proceeding against Borrower or any assets of Borrower not pledged to Lender. 7. CONFESSION OF JUDGMENT. Borrower hereby irrevocably authorizes and empowers any attorney of record for any Court in the Commonwealth of Pennsylvania or any Prothonotary of any Court In the Commonwealth of Pennsylvania to appear at any time for Borrower after default, with or without a Complaint filed, as of any term, and to confess judgment in favor of Lender and against Borrower for the entire unpaid principal balance due on this Note, all accrued and unpaid interest and all late charges and costs, if any, together with costs of suit and an attorney's commission equal to the lesser of (a) 20% of the unpaid principal balance and accrued and unpaid interest or $750.00, whichever is greater; or (b) the maximum amount permitted by law, with release of all errors. 8. RIGHT OF SET OFF. Borrower grants to Lender a contractual security interest in, and hereby assigns, conveys, delivers, pledges and transfers to Lender all of Borrower's right, title and interest in and to all of Borrower's present and future accounts, fiords and assets of Borrower in possession of Lender, except any trust accounts or 8mds or assets which Lender holds as a fiduciary, to secure this Note. Borrower hereby authorizes and empowers Lender, to the extent permitted by law and by this Note, to charge or setoff all sums owing on this Note against any and all such accounts, funds and assets, and, at Lender's option, to administratively freeze all such accounts to allow Lender to protect Lender's charge and setoff rights provided for in this paragraph. 9. CROSS DEFAULT. A default under this Note is a default under all present and future obligations, agreements, instruments and commitments of Borrower to Lender. 10. COLLATERAL. X If checked, this Note is secured and collateralized by the collateral described hereinafter. To secure and to collatemlize this Note, Borrower hereby pledges, hypothecates and grants to Lender a lien against and security interest in: 10.1 Stock. 132,000 shares of common stock titled in the name of Borrower in First Mariner Bancorp, being certificate number(s) (_- .2-10.3 ; any certificates of shares issued due to a stock dividend or stock split shall be forwarded to ACBB with the appropriate number of Irrevocable Stock Powers; and To perfect the lien and security interest granted to Lender by virtue of this Paragraph 10, Borrower agrees to take any and all action and to execute any and all documents required by Lender in the sole discretion of Lender. Borrower hereby agrees and acknowledges that Lender shall not be required to and shall have no obligation and/or duty: (1) to take any action to preserve the -value of the collateral described in this Paragraph 10; and/or (2) to sell and/or dispose of the collateral described in this Paragraph 10 should the collateral decrease in value. 11. CROSS COLLATERAL. Any collateral given to secure the obligations of Borrower under this Note shall also collateralize and secure all present and future obligations, agreements, instruments and commitments of Borrower to Lender. 12. INTEREST RATE ON JUDGMENT. The interest rate on any judgment entered on this Note by confession or otherwise shall be the default rate as defined in Section 6 (2) provided for in this Note, which is in effect as of the date of j udgment_ 13. JURISDICTION AND VENUE. Borrower acknowledges that this Note was executed and delivered to Lender and accepted by Lender at Lender's offices in Camp Hill, Pennsylvania. If there is a lawsuit arising directly or indirectly out of or based directly or indirectly on this Note or the Loan by Lender to Borrower evidenced by this Note, Borrower agrees that the exclusive and sole jurisdiction and venue for any lawsuit involving Borrower, whether as plaintiff or defendant, shall reside either in the Court of Common Pleas of Cumberland County, Pennsylvania or the United States District Court for the Middle District of Pennsylvania. This Note shall be construed and interpreted under the laws of the Commonwealth of Pennsylvania. 14. WAIVER OF JURY TRIAL. Borrower knowingly and intelligently waives any trial by jury with regards to any lawsuit arising directly or indirectly out of or based directly or Indirectly on this Note or the Loan by Lender to Borrower evidenced by this Note, whether the lawsuit involves Borrower as a defendant or plaintiff. 15. COUNSEL FEES AND COSTS. Borrower agrees to pay upon demand all of Lender's costs and expenses, including attorneys' fees and Lender's legal expenses, incurred in connection with the enforcement of this Note and all documents executed by Borrower in connection with the Loan evidenced by this Note. Lender may pay someone else to help enforce this Note and all documents and instruments executed by Borrower in connection with the Loan evidenced by this Note and Borrower 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, and attorneys' fees and legal expenses for any bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post judgment or post-appeal collection services. Borrower also shall pay all court costs and such additional fees as may be directed by the court. 16. NATURE OF LOAN: The obligation evidenced by this Note does not represent or evidence a "consumer credit transaction" as that term is defined in Rule 2950 of Pennsylvania Rules of Civil Procedure but rather a business lending transaction. 17. WAIVERS. Borrower hereby waives all notices with regards to this Note, including but not limited to presentment, demand for payment, protest, notice of dishonor and/or any notices relating to commercial paper under Article 3 of the Uniform Commercial Code, as enacted in the Commonwealth of Pennsylvania. Additionally, Borrower waives any and all notices required under Article 8 and/or Article 9 of the Uniform Commercial Code with regards to the collateral described in Paragraph 10 hereof, and/or disposition of the collateral described in Paragraph 10 hereof. Borrower hereby waives the equitable and legal doctrines of election of remedies and marshalling of assets. 18. MISCELLANEOUS PROVISIONS. The failure of Lender to enforce any right under this Note or under any documents executed by Borrower in connection with the Loan evidenced by this Note shall not be deemed a waiver of Lender's rights under this Note or otherwise. Caption headings in this Note are for convenience purposes only and are not to be used to interpret or define the provisions of this Note and do not constitute any part of the terms of this Note. This Note shall be binding upon the heirs, successors, personal representatives and assigns of Borrower. This Note shall inure to the benefit of Lender and its successors and assigns. In the event any one or more of the provisions contained in this Note shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Note, but the Note shall be construed as if such invalid, illegal or unenforceable provision had never been contained therein. This Note shall be governed by, construed, interpreted and enforced according to the laws of the Commonwealth of Pennsylvania. 19. STOCK POWER. With regards to any stock pledged to Lender described in Paragraph 10 hereof, Borrower shall execute a stock power in favor of Lender, which shall be irrevocable as long as Borrower is obligated to Lender and which shall be in a form and contains provisions as required by Lender. PRIOR TO SIGNING THIS NOTE, EACH BORROWER HAS READ AND UNDERSTOOD ALL OF THE PROVISIONS OF THIS NOTE. EACH BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS NOTE. THIS NOTE IS EXECUTED UNDER SEAL AND IT IS INTENDED THAT THIS NOTE IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. BO W ier-? ER: (Seal) Edwin . Hale, Sr. COLLATERAL RECEIPT Atlantic Central Bankers Bank hereby acknowledges receipt of possession of collateral described in Paragraph 10 hereof. ATLANTIC CENTRAL BANKERS BANK Dated: ??C 0 LW ? , 0 (n By, 1'-VN - , DISCLOSURE FOR CONFESSION OF JUDGMENT: PROMISSORY NOTE I, the undersigned, am executing on this 18'' day of September 2006 the "Promissory Note and Security Agreement" ("Note"). A. I understand that the Note contains a Confession of Judgment provision that would permit Lender to enter judgment against me in court, after a default on the Note, without advance notice to me and without offering me an opportunity to defend against the entry of judgment. In executing the Note, being fully aware of my rights to advance notice before entrance of judgment and to a hearing to contest the validity of any judgment or other claims that Lender may assert against me under the Note prior to entrance of judgment, I am knowingly, intelligently and voluntarily waiving these rights, including any right to advance notice of the entry of judgment. I expressly agree and consent to Lender entering judgment against me by confession as provided in the Confession of Judgment provision contained in the Note. B. I further understand that in addition to giving Lender the right to confess judgment against me on the Note without advance notice or a hearing, the Confession of Judgment provision in the Note also contains language that would permit Lender, after entry of judgment, to execute on the judgment by foreclosing upon, attaching, levying on, taking possession of or otherwise seizing my property, in full or partial payment of the judgment. However, Lender must provide notice to me under applicable law in executing on any confessed judgment. In executing this Note, being fully aware of my rights to advance notice and a hearing after judgment is entered and before execution on the judgment, I am knowingly, intelligently and voluntarily waiving these rights. I expressly agree and consent to Lender's executing on the judgment, in any manner permitted by applicable state and federal law. C. After having read and determined which of the following statements are applicable, and by placing my initials next to each statement which applies, I represent that: INITIALS: 1 I was represented by my own independent legal counsel in connection with this Note. :?E2. A representative of Lenderspecially called the Confession of Judgment provision in the Note to my attention. D. I certify that my annual income exceeds $10,000.00; that the blanks in the disclosure were filled in when I initialed and signed the disclosure; that the Note represents a business lending transaction and not a "Consumer Credit Transaction" as defined in Rule 2950 of Pennsylvania Rules of Civil Procedure; and that I received a copy of this disclosure at the time of signing the Note and Disclosure. THIS DISCLOSURE HAS BEEN SIGNED AND SEAT.RD RY TNR TnhmFizcTnmvn X X AFFIANT AFFIA.NT ACKNOWLEDGEMENT County of /t.., t -k-M,2tie,. State of? On this otli-Lday of September 2006, before the undersigned officer, personally appeared Edwin F. Hale, Sr., known to me (or satisfactorily proven) to be the person or persons whose name and/or names are subscribed to this "Note and Security Agreement" and "Disclosure for Confession of Judgment: Promissory Note", and acknowledged that he, she and/or they executed the same for the purposes herein contained. IN WrI NESS WHEREOF, I have hereunto set my hand and official seal. L::??- No4ky Public "0p,NN My Commission Expires: 91, o b ti,,• ?a ,,......JO ANN NOAH TAR % NOTARYOtIRLIC IMORE COUNTY. Mo. BALT li? Comm. Expires Aug. 1.200$ rl?f?? ?j lf?^a EXHIBIT D • AGREEMENT This AGREEMENT (the "Agreement") is effective as of the 2191w. day of November, 2008 by and among ATLANTIC CENTRAL BANKERS BANK ("Lender" or `Bank'), and EDWIN F. HALE, SR., an adult individual ("Borrower"). RECITALS: 1. The Bank has extended a $460,000 loan to Borrower (the "$460,000 Loan"), as evidenced by, among other things, a $460,000 Promissory Note and Security Agreement, dated August 26, 2005, as amended (the 1460,000 Note"). 2. The Bank has extended a $4,300,000 loan to Borrower (the "$4,300,000 Loan"), as evidenced by, among other things, a $4,300,000 Promissory Note and Security Agreement, dated December 14, 2005, as amended (the "$4,300,000 Note"). 3. The $4,300,000 Note was subsequently modified pursuant to an Amendment to Note dated June 15, 2007, which, among other things, extended the maturity date of the $4,300,000 Loan to June 1, 2008. 4. The Bank has extended a $1,200,000 loan to Borrower (the "$1,200,000 Loan'), as evidenced by, among other things, a $1,200,000 Promissory Note and Security Agreement, dated September 18, 2006, as amended (the 11,200,000 Note"). 5. Each of the Notes is secured and collateralized by shares of I" Mariner Bancorp common stock (the "Stock Collateral"). 6. The Notes and all other documents evidencing, securing, guaranteeing, or otherwise documenting the indebtedness and obligations of Borrower owed to the Bank, including the ACBB First Lien Documents (defined herein) and the ACBB Second Lien Documents (defined herein), and the Consent Documents (defined herein), are hereafter collectively referred to as the "Loan Documents". 7. The Borrower has requested the Bank to: (a) provide certain credit accommodations including, inter alia, modification of certain terms in the Loan Documents; (b) accept payment of all indebtedness and obligations that are owed to the Bank under the Loan Documents; and (c) agree to other terms and conditions; all as set forth herein. The Bank has had an opportunity to review the Borrower's request and In connection therewith is willing to agree, subject to the terms and conditions set forth herein. NOW, THEREFORE, the parties agree that the above premises are correct and in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, with intent to be legally bound hereby, agree as follows: 903010.13 • • 1. Recitals. The Recitals set forth above are hereby incorporated herein by reference. 2. Documents. The Borrower agrees and represents that the Loan Documents are valid and have been duly executed by the Borrower and remain in full force and effect in all respects, enforceable against the Borrower in accordance with their respective terms, as modified herein, and nothing contained herein shall affect or impair any rights or powers which the Bank may have under the Loan Documents. The Borrower agrees to be bound by all of the terms and conditions of the Loan Documents as the same may be modified by this Agreement, and nothing contained herein shall reduce or limit the Borrower's obligations under the Loan Documents. The Borrower hereby restates, as of the date hereof, all of the covenants, representations and warranties contained in the Loan Documents as though the same were fully set forth herein. Except as expressly set forth herein, all covenants, agreements, representations and warranties made herein and in the Loan Documents shall remain in full force and effect and shall survive the execution and delivery hereof. The Borrower agrees and represents that the liens created and perfected, or to be created and perfected, under and pursuant to the Loan Documents are valid, shall remain in full force and effect, and shall secure and continue to secure the obligations of the Borrower under the Loan Documents and herein. 3. Fiwwt Balances Owed Under the Loan Documents. The Borrower acknowledges and agrees that as of the date hereof, the outstanding principal balances owing to the Bank under the Loan Documents are as follows: (a) Principal Balance Ogg Under the $460,000 Note: $307,347.76 (b) Principal Balance Owing Under the $4,300.000 Note: $4,300,000.00 (c) Principal Balance Owing, U der the $1.200,000 Note: $960,000.00 TOTAL PRINCIPAL OWING UNDER THE NOTES AS OF THE DATE HEREOF: $5,567,347.76 4. Costs. Expenses. and Attorneys' fees. In addition to the principal balances set forth in Section 3 above, there is also due and owing from the Borrower to the Bank, under the Loan Documents, all actual costs, expenses and reasonable attorneys' fees which the Bank has incurred and may incur in the future, in connection with preparing, negotiating, consummating and enforcing this Agreement and in preparing, negotiating, consummating, recording and enforcing any and all other documents called for in and/or contemplated by this Agreement. All such costs, expenses and reasonable attorneys' fees, including, but not limited to, the reasonable attorneys' fees and expenses of the Bank, record search charges, appraisal fees, title insurance -2- 9 • premiums, documentary stamps and recording costs, shall be the sole and absolute responsibility of the Borrower and shall be paid for by the Borrower to the Bank as provided in Section 15(a) below or upon demand, so that this entire matter shall be totally cost-free to the Bank. In addition, all costs, expenses and reasonable attorneys' fees incurred by the Bank in connection with the Loan Documents after the date hereof shall also be the responsibility and obligation of the Borrower and shall be paid for by the Borrower to the Bank upon demand. 5. Confirmation of Obligations . As an additional part of this Agreement, the Borrower acknowledges, ratifies and confirms his obligations to the Bank under the Loan Documents and further acknowledges, ratifies and confirms that the Borrower is and shall remain absolutely and unconditionally obligated to pay the Bank all present and future indebtedness that is owed to the Bank under the Loan Documents, notwithstanding the Bank's execution of this Agreement and the various agreements of the Bank as set forth herein. 6. Subdivision of Property. The Borrower shall diligently pursue, and use his best efforts to obtain as soon as possible, approval of a subdivision plan (the "Subdivision Plan") on that certain 10.1 acres of waterfront property (including the "Dock Parcel" as defined below) located in the Canton Crossing PUD in Baltimore, Maryland (the "Property") in order to subdivide the Property and create 1) that certain 3.315 acres, more or less, to be known as the "Waterfront Pavilion Site", 2) that certain 3.95 acres, more or less, comprised of Lot I FMC 75421395 (3.0 acres) and Lot 2 FMC 7542/388 (.95 acres) on the preliminary plan dated February 15, 2008 attached hereto as Exhibit A, to be known as the "Hotel Site", and 3) that certain 2.465 acres, more or less, to be known as the "Dock Parcel". The Borrower shall promptly provide the Bank with copies of all documents related to or correspondence delivered to, or received from the Planning Commission for Baltimore, Maryland, or any third parry in connection with the application for approval of the Subdivision Plan (collectively, the "Subdivision Documents') and shall keep the Bank fully informed as to the status of the subdivision. 7. Collateral and ReprpsenWtigns Relating Thereto. As of the date hereof, all present and future indebtedness that is owed by the Borrower to the Bank under the Loan Documents is secured by the Stock Collateral. As an additional part of this Agreement, the Borrower acknowledges and confirms that: (a) All present and future indebtedness that is owed by the Borrower to the Bank under the Loan Documents shall hereafter continue to be secured by the Stock Collateral; and (b) The Borrower shall make every effort to cause all present and future indebtedness that is owed by the Borrower to the Bank under the Loan Documents to be secured by a second priority deed of trust (the "ACBB Second Lien') on the Hotel Site and shall make every effort to obtain the written consent thereto of Ixis/Natixis and the written consent and subordination thereto of any and all other entities holding liens against the Property that otherwise would be senior in priority to the ACBB Second Lien or whose consent is a necessary precondition to the priority and/or enforceability of the ACBB Second Lien against them (such consent and subordination documents are hereinafter referred to as "Consent Documents" and -3- shall be in form and substance acceptable to the Bank and the other party or parties thereto) and the Borrower shall take such steps and execute and record such documents as are deemed necessary by the Bank to effectuate the ACBB Second Lien (the "ACBB Second Lien Documents"). The Bank agrees to share its second priority lien position pari passu with a deed of trust encumbering the Hotel Site for the benefit of Cecil Federal Bank securing indebtedness of the Borrower owing to Cecil Federal Bank of approximately $2,100,000, subject to an intercreditor agreement between the Bank and Cecil Federal Bank in form and substance acceptable to'the Bank and Cecil Federal Bank. The Borrower shall promptly deliver to the Bank executed and recorded copies of the ACBB Second Lien Documents and the Consent Documents. Upon subdivision of the Property as contemplated by Section 6 hereof, the ACBB Second Lien shall continue to remain in full force and effect with respect to the Hotel Site, notwithstanding any other provision in this Agreement or the Loan Documents. (c) In the event the Ixis/Natixis indebtedness currently secured by a first priority lien deed of trust (the "Ixis/Natixis Lien") encumbering the Property shall be refinanced, the Borrower shall make every effort to cause the Ixis/Natixis Lien, to the extent that it encumbers the Hotel Site, either to be satisfied or subordinated to the ACBB Second Lien, such that, thereafter, the ACBB Second Lien shall constitute a first priority lien as to the Hotel Site; provided, however, that if at the time of the refinancing of the Ixis/Natixis indebtedness the Bank shall not have received the ACBB Second Lien, then in such event the Borrower shall make every effort to cause all present and future indebtedness that is owed by the Borrower to the Bank to be secured by a first priority deed of trust (the "ACBB First Lien") on the Hotel Site. Contemporaneously with the refinancing of the Ixis/Natixis indebtedness, the Borrower shall take such steps and execute, record and deliver to the Bank such documents (the "ACBB First Lien Documents') as may be deemed necessary by the Bank to effectuate the ACBB First Lien. The Bank agrees to share its first priority lien position pari passu with a deed of trust encumbering the Hotel Site for the benefit of Cecil Federal Bank securing indebtedness of the Borrower owing to Cecil Federal Bank of approximately $2,100,000, subject to an intercreditor agreement between the Bank and Cecil Federal Bank in form and substance acceptable to the Bank and Cecil Federal Bank. The Borrower shall promptly deliver to the Bank executed and recorded copies of the ACBB First Lien Documents. Upon subdivision of the Property and creation of the Hotel Site, the ACBB First Lien shall continue to remain in full force and effect with respect to the Hotel Site, notwithstanding any other provision in this Agreement or the Loan Documents. 8. Modification of the $460,000 Loan. The $460,000 Loan and the Loan Documents related thereto are hereby amended and modified such that the maturity date for the $460,000 Note shall be modified to August 31, 2009. Payments on the balance owed under the $460,000 Note shall be made as set forth in Section 15. 9. Modification of $4,3QQ000 Loan. The $4,300,000 Loan and the Loan Documents related thereto are hereby amended and modified such that the maturity date for the $4,300,000 Note shall be extended to August 31, 2009. Payments on the balance owed under the $4,300,000 Note shall be made as set forth in Section 15. -4- 10. Modification of $1.200.000 Loan. The $1,200,000 Loan and the Loan Documents related thereto are hereby amended and modified such that the maturity date for the $1,200,000 Note shall be modified to August 31, 2009. Payments on the balance owed under the $1,200,000 Note shall be made as set forth in Section IS. 11. Assignment of Letter of Intent, Sales Agreement and Proceeds of Sale of Waterfront Pavilion Site. The Borrower has executed a letter of intent with Greenberg Gibbons (the "Waterfront Pavilion LOI") for the sale of the Waterfront Pavilion Site (the "Waterfront Pavilion Sale"). Pursuant to the Waterfront Pavilion LOI, proceeds from the sale are anticipated to be $9,000,000 if the Waterfront Pavilion Site is developed into single story retail shops and $12,000,000 if the Waterfront Pavilion Site is developed into a two story facility with retail on the ground floor and office space on the second floor. By no later than December 31, 2008, the Borrower shall have taken such steps and executed and recorded such documents as are deemed necessary by the Bank to collaterally assign-(the "Waterfront Pavilion Assignment") to the Bank, $3,000,000 out of the proceeds from any sale of any portion of the Waterfront Pavilion Site (collectively, the "Waterfront Pavilion Assignment Documents"), whether pursuant to the Waterfront Pavilion LOI, or written sales agreements with one or more parties including, without limitation, Greenburg Gibbons. The Borrower shall promptly deliver to the Bank executed and recorded copies of the Waterfront Pavilion Assignment Documents. By no later than June 30, 2009, a portion of the proceeds from the Waterfront Pavilion Sale in the amount of $3,000,000 shall be applied to pay down the Notes. Failure to effectuate the Waterfront Pavilion Assignment and apply the proceeds of the Waterfront Pavilion Sale to pay down the Notes as set forth herein will constitute an Event of Default under this Agreement. The Borrower shall promptly provide the Bank with copies of all documents related to and correspondence delivered to, or received from Greenberg Gibbons or any third party in connection with the Waterfront Pavilion Sale (the "Waterfront Pavilion Sale Documents"), and shall keep the Bank fully informed as to the status of the Waterfront Pavilion Sale. Borrower hereby represents, warrants and covenants to and with the Bank that the Borrower has not and will not assign, as collateral or otherwise, any portion of its interest in the Waterfront Pavilion LOI or in any other agreement with any party including, without limitation, Greenburg Gibbons, providing for the sale of any portion of the Waterfront Pavilion Site. Borrower hereby further represents, warrants and covenants to and with the Bank that the Borrower has not and will assign any portion of the proceeds of any Waterfront Pavilion Sale to any person or entity that would cause the aggregate amount of such proceeds that have been so assigned to exceed the aggregate amount of the net proceeds of sale (after payment of customary costs of sale and apportionments); provided, however, that the Bank hereby acknowledges and consents to the Borrower's assignment of proceeds of sale of the Waterfront Pavilion Site of $4,000,000 to Silverton Bank and $1,000,000 to Cecil Federal Bank on a pari passu basis with the $3,000,000 assignment to the Bank. Upon receipt of payment of $3,000,000 out of the proceeds of sale of the Waterfront Pavilion Site, the Bank agrees to release and terminate the Waterfront Pavilion Assignment. 12. E,.g own from Proceeds of Sale of Exxon Site. The Borrower has executed a Joint Venture Agreement with Greenberg Gibbons for the sale of that certain 32.9 acres of land known as the "Exxon Site" located in Baltimore, Maryland to the Joint Venture (the "Exxon Sale"), which calls for the Exxon Site to be developed by the Joint Venture for retail development anchored by Target and Harris Teeter. In connection with the Joint Venture -5- • w Agreement, Greenberg Gibbons obtained letters of intent from Target (the "Target Exxon Site LOI") and Harris Teeter (the "Harris Teeter Exxon Site L01"). The sale of the Exxon Site to the Joint Venture is anticipated to result in proceeds of approximately $10,000,000. The Borrower shall promptly deliver a copy of the Harris Teeter Exxon Site LOI to the Bank. By no later than December 31, 2008, the Borrower shall have taken such steps and executed such documents as are deemed necessary by the Bank to collaterally assign (the "Exxon Sale Assignment") to the Bank $1,750,000 out of the proceeds of any sale of any portion of the Exxon Site. The Borrower shall promptly deliver to the Bank executed and recorded copies of the Exxon Sale Assignment Documents. By July 31, 2009, a portion of the proceeds from the Exxon Sale in the amount of $1,750,000 shall be applied to pay down the Notes, Failure to apply the proceeds of the Exxon Sale to pay down the Notes as set forth herein will constitute an Event of Default under this Agreement. The Borrower shall promptly provide the Bank with copies of all documents related to and correspondence delivered to, or received from Greenberg Gibbons, Target, Harris Teeter or any third party in connection with the Exxon Sale (the "Exxon Sale Documents"), and shall keep the Bank fully informed as to the status of the Exxon Sale. Borrower hereby represents, warrants and covenants to and with the Bank that the Borrower has not and will not assign, as collateral or otherwise, any portion of its interest in the Joint Venture or in any other agreement with any party including, without limitation, Greenburg Gibbons, Target and Harris Teeter, providing for the sale of any portion of the Exxon Site. Borrower hereby further represents, warrants and covenants to and with the Bank that the Borrower has not and will not assign any portion of the proceeds of any Exxon Sale to any person or entity that would cause the aggregate amount of such proceeds that have been so assigned to exceed the aggregate amount of the net proceeds of sale (after payment of customary costs of sale and apportionments); provided, however, that the Bank hereby acknowledges and consents to the Borrower's assignment of proceeds of the Exxon Sale of $4,000,000 to Susquehanna Bank, $2,000,000 to American Bank, $500,000 to Cecil Federal Bank and $1,000,000 to Silverton Bank on a pari passu basis with the $1,750,000 assignment to the Bank. Upon receipt of payment of $1,750,000 out of the proceeds of the Exxon Sale, the Bank agrees to release and terminate the Exxon Sale Assignment. 13. Miscellaneous Covenants of the Borrower. For the term of this Agreement, the Borrower shall, upon the execution of this Agreement and upon demand at any time thereafter: (a) Provide the Bank with copies of all permits obtained in connection with that certain office building known as the "Canton Crossing Tower" (the "Building") or the Property; (b) Provide the Bank with copies of all contracts entered into by the Borrower with respect to the Building or the Property, including, but not limited to, contracts with any contractors, subcontractors or materialmen; (c) Provide the Bank with proof that any person or entity that has contributed services and/or material to the Building or the Property has been paid in full, and no such person or entity has any rights, claims or liens against or affecting the Building or Property for any unpaid work or materials; -6- (d) Allow the Bank to obtain one new appraisal of the Hotel Site, upon Bank's receipt of either the ACBB Second Lien or the ACBB First Lien, as determined in the Bank's discretion, with the costs for such appraisal to be incurred by the Borrower; (e) By no later than December 31, 2008, effectuate the Waterfront Pavilion Assignment. (f) Pursue and use his best efforts to enter into a Sales Agreement for the Waterfront Pavilion Site as soon as possible; (g) Deliver copies of the Joint Venture Agreement with Greenburg Gibbons for the sale of the Exxon Site, the Target Exxon Site LOI and the Harris Teeter Exxon Site LOI, to the Bank; (h) Pursue and use his best efforts to obtain approval of the Subdivision Plan; (i) Use his best efforts to consummate the Waterfront Pavilion Sale and the Exxon Sale as soon as possible; (j) Make every effort to obtain the necessary consents to the ACBB Second Lien on the Property (excluding the Dock Parcel); (k) Provide the Bank with copies of all contracts relating to the sale of any parcel within the Property, including the Sales Agreement contemplated by paragraph (f) above and any and all other documents or correspondence related to the Waterfront Pavilion Sale; (1) Provide the Bank with copies of all documents or correspondence related to the Exxon Sale; (m) Provide the Bank with copies of all documents or correspondence related to the Borrower's efforts to obtain approval of the Subdivision Plan and the subsequent subdivision of the Property; (n) Provide the Bank with current information regarding the status of the Subdivision Plan, the Waterfront Pavilion Sale, and the Exxon Sale; (o) Provide the Bank with copies of all marketing materials and any broker contracts related to the Property or the sale of the Waterfront Pavilion Site; (p) Provide the Bank with current financial information for the Borrower, in form and substance satisfactory to the Bank, including, but not limited to: (i) an itemized list of accounts payable with respect to the Borrower; (ii) a current accounting of any and all other financial arrangements or covenants between the Borrower and any and all other financial institutions relating to the Building, the Property, the Exxon Site or any other indebtedness or obligations of the Borrower; -7- 0 r (iii) disclosure of any forbearance agreement or other arrangement between the Borrower and any and all other financial institutions relating to the Building, the Property, the Exxon Site or any other indebtedness or obligations of the Borrower; (iv) any and all notices received by the Borrower related to any and all financial arrangements or covenants between the Borrower and any and all other financial institutions relating to the Building, the Property, the Exxon Site or any other indebtedness or obligations of the Borrower; (q) Provide the Bank with copies of all documents evidencing any agreements or settlements related to the Building or Property, including, but not limited to: (i) agreements related to any mechanics' liens on the Building or Property; (ii) any agreements related to a reserve for tenant improvements to the Building or Property; (iii) any agreements related to any lawsuits brought against the Borrower regarding the Building or Property; and (r) Provide the Bank with copies of- (i) the Subdivision Documents, as referenced in Section 6 above; (ii) subject to receipt of such consents as may be necessary, the ACBB First Lien Documents, as referenced in Section 7(c) above; (iii) subject to receipt of such consents as may be necessary, the ACBB Second Lien Documents, as referenced in Section 7(b) above; (iv) all documents or commitments related to or evidencing any refinancing of the Building; (v) the Waterfront Pavilion Assignment Documents and the Waterfront Pavilion Sale Documents, as referenced in Section 11 above; and (vi) the Exxon Sale Documents, as referenced in Section 12 above. 14. Interest Rate. So long as no Event of Default shall have occurred under this Agreement, for the period beginning from the date of this Agreement to and until all indebtedness and obligations that are owed by the Borrower to the Bank under the Loan Documents have been satisfied, interest shall continue to accrue on the unpaid principal balance that is owed from time to time to the Bank under each of the Notes at the interest rate obtained by adding 1.000 percentage points to the Prime Rate as published in the Wall Street Journal (the "Wall Street Journal Prime Rate'), floating, The interest rate will automatically adjust without notice when the Wall Street Journal Prime Rate changes. Upon the effectuation of the ACBB -8- 0 0 First Lien or upon timely payment of the $3,000,000 pay down on the Notes required under Section 15(b)(iii) of this Agreement, whichever shall first occur, interest thereafter shall accrue on the unpaid principal balance that is owed from time to time to the Bank under each of the Notes at the interest rate obtained by adding .500 percentage points to the Wall Street Journal Prime Rate; provided, however, that if, after timely payment of the $3,000,000 pay down on the Notes, the loan to value ratio of the aggregate outstanding balance under the Notes to the value of the Stock Collateral, together with the appraised value (as evidenced by an appraisal acceptable to the Bank) of the Hotel Site (if the Hotel Site is subject to the ACBB First Lien), net of the amount of indebtedness secured by Cecil Federal Bank's deed of trust, is less than 70%, or upon timely payment of the $1,750,000 pay down of the Notes required under Section 15(bxiv) of this Agreement (provided that Borrower also has made timely payment as required by Section 15(b)(iii)), whichever shall first occur, interest thereafter shall accrue on the unpaid principal balance that is owed from time to time to the Bank under each of the Notes at the Wall Street Journal Prime Rate. Upon the occurrence of an Event of Default hereunder, interest thereafter shall accrue on the unpaid principal balance that is owed from time to time to the Bank under each of the Notes at the interest rate obtained by adding 4.000 percentage points to the Wall Street Journal Prime Rate. In no event shall the applicable interest rate exceed the maximum interest rate permitted by applicable law. Payments shall be made as provided in Section 15. 15. Payments of the Indebtedness Owed to the Bank Under the Loan Documents. The indebtedness and obligations that are owed to the Bank under the Loan Documents, including, without limitation, all principal, accrued and unpaid interest, late charges, forbearance fees, costs, expenses and attorneys' fees owed thereunder, shall be paid to the Bank in the following manner: (a) Initial Payment. Simultaneously with the execution of this Agreement by the parties hereto, the Borrower shall tender or cause to be tendered to the Bank, in immediately available funds, a payment sufficient to cover (i) the November 1, 2008 monthly interest only payment on the $4,300,000 Note, (ii) the November 1, 2008 scheduled monthly payments of principal plus interest due on the $460,000 Note and the $1,200,000 Note, respectively, and (iii) the Bank's costs, expenses and attorneys' fees incurred to date, as provided in Section 4. (b) Interim Payments. The Borrower shall: (1) Make monthly payments sufficient to cover the interest-only portion of the indebtedness evidenced by the $4,300,000 Note commencing on December 1, 2008, and continuing on the first day of each month thereafter; (ii) Make all scheduled monthly payments of principal plus interest as they become due under the $460,000 Note and the $1,200,000 Note, respectively, Commencing December 1, 2008 and continuing on the first day of each month thereafter; (iii) Make a payment of $3,000,000 to the Bank to pay down the Notes by no later than June 30, 2009; -9- 0 0 (iv) Make a payment of $1,750,000 to the Bank to pay down the Notes by no later than July 31, 2009. Each of the payments provided for in subparagraphs (iii) and (iv) of this Section 15(b) shall be paid by Borrower as and when herein stated, notwithstanding any other provision of this Agreement to the contrary, notwithstanding that the Waterfront Pavilion Sale and/or the Exxon Sale shall not have occurred by such payment date, and notwithstanding that, if either such sale has occurred, the proceeds of such sale are less than the specified anticipated amounts therefor. (c) Final Payment. On or before 3:00 p.m. on August 31, 2009, the Borrower shall tender to the Bank, in immediately available funds, a payment sufficient to satisfy all indebtedness and obligations that are owed to the Bank under the Loan Documents. August 31, 2009 shall be the final maturity date for the Notes and the final termination date of this Agreement. 16. Alternative financing. During the term of this Agreement, the Borrower shall use his best efforts to obtain financing from sources other than the Bank ("Alternative Financing Sources") in an amount that is sufficient to satisfy all indebtedness and obligations that are owed by the Borrower to the Bank under the Loan Documents and, in the event that the Borrower is successful in his efforts in that regard, the Borrower shall use all loan proceeds arising from such financing to pay the Bank all indebtedness and obligations that are owed to the Bank under the Loan Documents on or before 3:00 p.m. on August 31, 2009. During the term of this Agreement, the Borrower shall keep the Bank apprised of his progress in obtaining the above described alternative financing and shall provide the Bank with copies of all letters of intent, commitment letters and other documents which are submitted, prepared and/or executed in connection with the Borrower's efforts at obtaining the financing referenced above. It is understood and agreed, however, that Borrower's obligations to make the payments called for in Section 15 above shall not be contingent upon the Borrower's ability to obtain the alternative financing referenced in this Section. 17. Taxes. The Borrower represents and warrants to the Bank that: (a) as of the date hereof, the Borrower is current in his tax payments to the internal Revenue Service, the State of Mayland, and all other taxing authorities ("Taxing Authorities') with respect to all forms of taxes, including, without limitation, federal and state income taxes, real estate property taxes, withholding taxes, personal property taxes and sales taxes; and (b) that during the term of this Agreement, the Borrower will make all payments which the Borrower is required to make to the Taxing Authorities with respect to all forms of taxes, before the end of any applicable grace period. Further, on or prior to the execution of this Agreement, the Borrower shall provide the Bank with evidence of the payment of all county, township and school district real estate property taxes currently owed and outstanding in connection with the Building and the Property (the "2008 Property Taxes"). 18. Representations and Warranties. The Borrower represents and warrants to the Bank as follows: (a) To the best of his knowledge, all information, documents, reports, statements, financial statements and data submitted by or on behalf of the Borrower in -10- connection with this Agreement are true, accurate and complete in all material respects as of the date made and contain no knowingly false, incomplete or misleading statement; (b) To the best of his knowledge, information and belief, the making and performance of this Agreement will not immediately, or with the passage of time, the giving of notice or both: (i) violate any laws or result in a default under any contract, agreement or instrument to which the Borrower is a party or by which the Borrower or any of his property is bound; or (ii) result in the creation or imposition of any security interest in, or lien or encumbrance upon, any assets of any of the Borrower except in favor of the Bank. (c) This Agreement, the Loan Documents as modified by this Agreement, and all other documents and instruments executed by the Borrower as called for in or contemplated by this Agreement, are valid and binding obligations, fully enforceable against the Borrower in accordance with their respective terms, and as to which the Borrower has no setoff, defenses, or counterclaims; (d) The Borrower is not in violation of any applicable law; (e) There is no action, suit or proceeding pending against the Borrower; (f) The Borrower does not expect any material adverse change in his assets, liabilities, properties, businesses or conditions, financial or otherwise; and (g) There are no environmental issues related to the Building or Property that would subject the Borrower or the Bank to any liability under either Federal or state environmental laws, including, but not limited to, the disposal of any foreign objects or materials upon or in the Building or Property, lawful or otherwise. 19. Events of Default. The following shall constitute events of default under this Agreement and additional events of default under the Loan Documents (individually, an "Event of Default" and collectively, the "Events of Default"): . (a) The failure of the Borrower to make any of the payments which he is required to tender to the Bank or any third party pursuant to this Agreement or any other Loan Document when due, including, without limitation, the payment of the 2008 Property Taxes referenced in Section 19 above; (b) The failure of the Borrower to do anything he is required to do under this Agreement or under any other Loan Document, as modified by this Agreement; (c) Any action by the Borrower that is prohibited under this Agreement or under any of the Loan Documents, as modified by this Agreement; (d) Any violation or breach by the Borrower of any representation, covenant, warranty or obligation contained in this Agreement or in any other Loan Document, as modified by this Agreement; -11- (e) The occurrence of a material default under any material agreement (other than a Loan Document) under which the Borrower is a party; (f) The Borrower providing the Bank with any information that is not true, accurate and complete to the best of the Borrower's knowledge, information and belief; (g) The entry of a judgment or lien against the Borrower or the Building or Property, other than those provided for in this Agreement; (h) The attachment of any asset of the Borrower; (i) The commencement of a voluntary or involuntary federal bankruptcy proceeding, state insolvency proceeding or other similar type of proceeding by or against the Borrower; (j) The death of the Borrower; (k) The occurrence of any event which the Bank deems to impair any of the collateral securing the indebtedness and obligations owed to the Bank in any respect, including, without limitation, the value thereof; (1) The recordation of any federal, state or local tax lien against the Borrower, the Building or the Property; (m) The occurrence of a material adverse change in the financial condition of the Borrower after the date of the execution of this Agreement; (n) The failure to effectuate the Waterfront Pavilion Assignment as set forth in Section 13 above; (o) The failure to make the $3,000,000 payment to the Bank to pay down the Notes by June 30,2009; and (p) The failure to make the $1,750,000 payment to the Bank to pay down the Notes by July 31, 2009. 20, Affiliates of Borrower. The Borrower hereby agrees that all references to "Borrower" set forth in Section b, paragraphs (b) and (c) of Section 7, Section 11, Section 12, Section 13, Section 17, paragraphs (b), (e) and (f) of Section 18, and paragraphs (a), (b), (c), (g), (i) and (1) of Section 19 of this Agreement shall mean the Borrower and/or one or more affiliates of the Borrower, as applicable and as the context shall require, and that the term "affiliate" shall have the meaning attributed thereto by Rule 405 of Regulation C, promulgated by the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended. Borrower hereby covenants and agrees to cause each applicable affiliate to perform its respective covenants and obligations hereunder. 21. Incorporation, Limited Modifi ation; No Curg or Grace Periods. The terms and conditions of the Loan Documents are incorporated herein by reference and made a part hereof -12- 0 9 as if fully set forth herein. ALL CURE PERIODS OR GRACE PERIODS PROVIDED FOR IN THE ORIGINAL LOAN DOCUMENTS, AND ALL PROVISIONS IN THE ORIGINAL LOAN DOCUMENTS WHICH REQUIRED THE BANK TO PROVIDE NOTICE TO THE BORROWER UPON THE OCCURRENCE OF A DEFAULT THEREUNDER, ARE HEREBY DELETED AND SHALL NO LONGER HAVE ANY FORCE OR EFFECT. Except as modified by this Agreement, the parties hereto acknowledge and agree that all other terms and conditions of the original Loan Documents shall remain unchanged, in full force and effect, and are hereby ratified and confirmed by the Borrower and the Bank in all respects. In the event of any inconsistencies between the terms and conditions of this Agreement and the terms and conditions of any other Loan Document, the terms and conditions of this Agreement shall govern and control. 22. No NQvation• No Refinance-, No Adverse Effect on Liens. The parties hereby do not intend that a novation of any of the Loan Documents or the indebtedness shall be created or affected by virtue of this Agreement. The parties do not intend that the execution of this Agreement or any of the documents or instruments contemplated hereby, shall (i) constitute a refinance of the indebtedness, or (ii) affect or impair the validity; enforceability or priority of the liens or security interests imposed by or granted in the Loan Documents, other than as provided in Section 8 above. 23. Rights and Remedies. Upon the earlier to occur of an Event of Default or 3:00 p.m. on August 31, 2009, the Bank shall be entitled to exercise and enforce any and all rights and remedies the Bank may be entitled to assert under this Agreement, the other Loan Documents and applicable law including, without limitation: (a) Accelerate and/or demand immediate payment of all indebtedness that is owed by the Borrower to the Bank under the Loan Documents and this Agreement; (b) Confess judgment against the Borrower pursuant to Section 30 below and the Loan Documents; (c) Foreclose, liquidate, collect and otherwise enforce the Bank's rights and remedies with respect to the Collateral; and/or (d) Assert and enforce all other rights and remedies which are available to the Bank under this Agreement, the Loan Documents, as modified by this Agreement, and applicable law with respect to the Borrower or the Collateral. By entering into this Agreement, but subject to the terms and conditions hereof, the Bank is not waiving and has specifically reserved all of its rights, remedies and recourse under this Agreement, the other Loan Documents and applicable law. 24. Severability. In the event any provision of this Agreement is held by any court of competent jurisdiction to be unlawful or unenforceable, the other provisions of this Agreement shall be unaffected thereby, shall continue to be in full force and effect, and this Agreement shall be construed as if such unlawful or unenforceable provisions were not a part hereof. -13- 0 0 25. Waiver of Enforcement. No delay or failure by the Bank in the exercise of any right shall be deemed to be a waiver of any of the terms or provisions of this Agreement or a waiver of the exercise of such right or any other right, and the Bank shall have the right thereafter to insist upon strict performance by the Borrower of any and all such terms and provisions, and to exercise any right or remedy provided herein. All rights and remedies of the Bank under this Agreement shall be cumulative and may be exercised separately or concurrently. 26. Release. The Borrower, for himself and for his successors and assigns, hereby releases and forever discharges the Bank and its officers, directors, employees, agents, attorneys and assigns of and from any and all actions, causes of action, claims, attorneys' fees, damages or demands rising from or any way relating to the Loan Documents, this Agreement, or any other agreement or document referred to herein, or any action or conduct taken or omitted from being taken by the Bank and its officers, directors, employees, agents, attorneys and assigns arising from or relating to the Loan Documents, this Agreement or any other agreement or document referred to herein, from the beginning of time to the day and year of these presents, whether known or unknown, contingent or liquidated. 27. No Defenses. The Borrower acknowledges and represents that it presently has no defenses or claims available to it with respect to the Bank's collection of the indebtedness or enforcement of the Loan Documents, or the liens created thereby, and hereby waives any such claims or defenses to the extent they might be found to exist. The Borrower hereby waives any right to defenses under the doctrine of election of remedies and under the doctrine of marshalling of assets. 28. Waiver of the Automatic Stay. In the event that a petition in bankruptcy is hereafter filed by or against the Borrower, the Borrower specifically agrees that the automatic stay provisions of Section 362 of the United States Bankruptcy Code applicable as a result of any such bankruptcy proceeding shall be immediately terminated as to the Bank and all collateral which secures the Borrower's indebtedness to the Bank and which constitutes property of the bankruptcy estate created thereby, so that the Bank may immediately assert all of its rights and remedies under the Loan Documents and applicable law with respect to any such collateral including, without limitation, the Property. The Borrower further agrees not to contest any motion to terminate or modify the automatic stay filed by the Bank in any such bankruptcy proceeding and to immediately execute and deliver to the Bank and to file with the Bankruptcy Court such documents, pleadings and papers as are necessary for the Bank, as determined by the Bank in its sole and absolute discretion, to obtain such an immediate termination of the automatic stay. It is expressly acknowledged that such documents, pleadings and papers may include a stipulation between the Borrower and the Bank that adequate cause exists for termination of the automatic stay. 29. Waiver of Jurv Trial. THE BORROWER HEREBY KNOWINGLY VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT EITHER HE OR HIS SUCCESSORS OR ASSIGNS MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT AND ANY AGREEMENTS CONTEMPLATED HEREBY, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER -14- VERBAL OR WRITTEN) OR ACTIONS OF THE PARTIES RELATED HERETO. THIS PROVISION JS A MATERIAL INDUCEMENT FOR THE BANK TO ENTER INTO SAID AGREEMENT. 30. Confmion of Judgment. THE FOLLOWING PARAGRAPH CONTAINS A WARRANT OF ATTORNEY TO CONFESS JUDGMENT AGAINST THE BORROWER. THE BORROWER IS GRANTING THIS WARRANT OF ATTORNEY TO CONFESS JUDGMENT AGAINST HIM AND HEREBY KNOWINGLY, INTENTIONALLY, VOLUNTARILY, AND UNCONDITIONALLY WAIVES ANY AND ALL RIGHTS THAT HE HAS TO PRIOR NOTICE AND AN OPPORTUNITY FOR A HEARING UNDER THE CONSTITUTION AND LAWS OF THE UNITED STATES OF AMERICA, THE COMMONWEALTH OF PENNSYLVANIA AND THE STATE OF MARYLAND. THE BORROWER HEREBY KNOWINGLY, INTENTIONALLY, VOLUNTARILY, AND UNCONDITIONALLY WAIVES ANY AND ALL RIGHTS THAT HE HAS TO OBJECT TO THE TRANSFER OF A CONFESSED JUDGMENT GRANTED IN THE COMMONWEALTH OF PENNSYLVANIA TO THE STATE OF MARYLAND. THE BORROWER, IN GRANTING THIS WARRANT OF ATTORNEY TO CONFESS JUDGMENT AGAINST HIM AND IN ACKNOWLEDGING THIS WAIVER OF RIGHT ALSO ACKNOWLEDGES HIS RECEIPT OF ADVICE OF SEPARATE COUNSEL OR HIS RIGHT TO HAVE SEPARATE COUNSEL IF HE HAS NOT SOUGHT SUCH ADVICE. THE BORROWER HEREBY AUTHORIZES AND EMPOWERS ANY ATTORNEY OF ANY COURT OF RECORD OF PENNSYLVANIA OR ELSEWHERE TO APPEAR FOR AND ENTER JUDGMENT AGAINST HIM FOR THE THEN UNPAID PRINCIPAL SUMS DUE HEREUNDER, TOGETHER WITH ALL ACCRUED, UNPAID INTEREST, COSTS OF SUIT AND COLLECTION AND REASONABLE ATTORNEYS' FEES, WITH OR WITHOUT DECLARATION OR STAY OF EXECUTION, AND WITH RELEASE OF ERRORS, FOR WHICH THIS AGREEMENT OR A COPY HEREOF SHALL SERVE AS A SUFFICIENT WARRANT. THIS POWER TO ENTER JUDGMENT SHALL NOT BE EXHAUSTED BY ANY EXERCISE OF THIS POWER AND SHALL CONTINUE FROM TIME TO TIME AND AT ALL TIMES UNTIL FULL PAYMENT OF ALL AMOUNTS DUE UNDER THIS AGREEMENT. 31. Entire Agreement and Amendments. It is expressly agreed by the parties that this Agreement and all other agreements and documents referred to herein set forth in all of the agreements, conditions and understandings among the parties relating to its subject matter. No subsequent alteration, amendment, change or addition to this agreement shall be binding upon any party unless reduced to writing and signed by each party. 32. Binding Effect. All provisions of this Agreement shall be binding upon and inure to the benefit of the respective successors and permitted assigns of the parties. 33. Headings. The headings to the sections and subsections of this Agreement are inserted only for convenience of reference and are not intended nor shall they be construed, to modify, define, limit or expand the intent of the parties as expressed herein. -IS- 0 0 34. Controlling Law Jurisdiction and Venue. The parties agree that this Agreement shall be construed and enforced in accordance with the laws of the Commonwealth of Pennsylvania. In any legal proceeding involving, directly or indirectly, any matter arising out of or related to this Agreement or any of the Loan Documents, the parties hereto consent to the jurisdiction and venue of the Court of Common Pleas sitting in Cumberland County, Pennsylvania, or the United States District Court for the Middle District of Pennsylvania, unless it is determined that any of the Loan Documents may only be construed and enforced in accordance with the laws of the State of Maryland, upon which the parties hereto consent to the jurisdiction and venue of the State Courts of the State of Maryland, or the United States District Court for the District of Maryland. 35. Successors and Assigns-, No Third Party Beneficiarv. This Agreement shall be binding upon Borrower and Lender and their respective successor and assigns, and shall inure to the benefit of Borrower and Lender and the successors and assigns of Lender; no other person is intended to be or shall be deemed to be a third-party beneficiary or to have any claim, interest or right of action under this Agreement or with respect to the Loans. This Agreement may not be assigned by Borrower without the prior written consent of Lender. 36. o ices. All notices to the respective parties to this Agreement shall be deemed given or made when deposited in the United States Mail, postage pre-paid, registered or certified mail, return receipt requested, or when sent by reputable courier system providing for receipt of delivery, addressed as follows or to such other address as may be hereafter designated in writing by the respective parties: Bank: Atlantic Central Bankers Bank 1400 Market Street Camp Hill, Pennsylvania 17011 Attn: William H. Sayre, Senior Vice President and Chief Credit Officer with a copy to: Rhoads & Sinon LLP One South Market Square, 12th Floor P.O. Box 1146 Harrisburg, Pennsylvania 17108-1146 Attn: Dean H. Dusinberre, Esquire Borrower: Edwin F. Hale, Sr. 1501 South Clinton Street Baltimore, Maryland 21224 37. Further Assurances. The Borrower shall, from time to time, execute and deliver to the Bank such other instruments of conveyance and transfer and take such other actions as the Bank shall reasonably request in order to more effectively consummate the transactions contemplated hereby. -16- 9 38. Counterparts. This Agreement may be executed in separate counterparts by the parties, all of which together shall constitute one and the same instrument. IN WITNESS WHEREOF and intending to be legally bound, the parties have executed this Agreement the day and year first written above. WITNESS: ?tn,b R. 1 Bank: ATLANTIC CENTRAL BANKERS BANK: By: Name: ?e?:?\: w s_.?re Title: s •n .? .? Zmidr.` Borrower: EDWIN F LE, SR.: By: Edwin F. Ha e, . ? -17- 0 • DISCLOSURE FOR CONFESSION OF JUDGMENT THE UNDERSIGNED BORROWER IS EXECUTING THIS 21?'-.DAY OF NOVEMBER, 2008, AN AGREEMENT OBLIGATING BORROWER TO REPAY THE PRINCIPAL SUM OF $5,567,347.76, TOGETHER WITH INTEREST AND COSTS AS SET FORTH THEREIN. A. THE BORROWER UNDERSTANDS THAT THE AGREEMENT CONTAINS A CONFESSION OF JUDGMENT PROVISION THAT WOULD PERMIT BANK TO ENTER JUDGMENT AGAINST BORROWER IN COURT, AFTER A DEFAULT UNDER THE AGREEMENT, WITHOUT ADVANCE NOTICE TO BORROWER AND WITHOUT OFFERING BORROWER AN OPPORTUNITY TO DEFEND AGAINST THE ENTRY OF JUDGMENT. IN EXECUTING THE AGREEMENT, BEING FULLY AWARE OF BORROWER'S RIGHTS TO ADVANCE NOTICE AND TO A HEARING TO CONTEST THE VALIDITY OF ANY JUDGMENT OR OTHER CLAIMS THAT BANK MAY ASSERT AGAINST BORROWER UNDER THE AGREEMENT, BORROWER IS KNOWINGLY, INTELLIGENTLY, AND VOLUNTARILY WAIVING THESE RIGHTS, INCLUDING ANY RIGHT TO ADVANCE NOTICE OF THE ENTRY OF JUDGMENT, AND THE BORROWER EXPRESSLY AGREES AND CONSENTS TO BANK'S ENTERING JUDGMENT AGAINST BORROWER BY CONFESSION AS PROVIDED FOR IN THE CONFESSION OF JUDGMENT PROVISION. B. THE BORROWER FURTHER UNDERSTANDS THAT IN ADDITION TO GIVING BANK THE RIGHT TO ENTER JUDGMENT AGAINST BORROWER WITHOUT ADVANCE NOTICE OR A HEARING, THE CONFESSION OF JUDGMENT PROVISION IN THE AGREEMENT ALSO CONTAINS LANGUAGE THAT WOULD PERMIT BANK, AFTER ENTRY OF JUDGMENT, AGAIN WITHOUT EITHER ADVANCE NOTICE OR A HEARING, TO EXECUTE ON THE JUDGMENT BY FORECLOSING UPON, ATTACHING, LEVYING ON, TAKING POSSESSION OF OR OTHERWISE SEIZING BORROWER'S PROPERTY, IN FULL OR PARTIAL PAYMENT OF THE JUDGMENT. IN EXECUTING THE JUDGMENT, BEING FULLY AWARE OF BORROWER'S RIGHTS TO ADVANCE NOTICE AND A HEARING AFTER JUDGMENT IS ENTERED AND BEFORE EXECUTION ON THE JUDGMENT, THE BORROWER IS KNOWINGLY, INTELLIGENTLY AND VOLUNTARILY WAIVING THESE RIGHTS, AND THE BORROWER EXPRESSLY AGREES AND CONSENTS TO BANK'S IMMEDIATELY EXECUTING ON THE JUDGMENT IN ANY MANNER PERMITTED BY APPLICABLE STATE AND FEDERAL LAW, WITHOUT GIVING BORROWER ANY ADVANCE NOTICE. C. AFTER HAVING READ AND DETERMINED WHICH OF THE FOLLOWING STATEMENTS ARE APPLICABLE, BY INITIALING EACH STATEMENT THAT APPLIES, THE BORROWER REPRESENTS THAT: -18- INITIALS 1. BORROWER WAS REPRESENTED BY BORROWER'S OWN IN EPENDENT LEGAL COUNSEL IN CONNECTION WITH THE AGREEMENT. 01- 2. A REPRESENTATIVE OF BANK SPECIFICALLY CALLED THE C FESSION OF JUDGMENT PROVISION IN THE AGREEMENT TO BORROWER'S ATTENTION. THIS DISCLOSURE IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS DISCLOSURE IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. BORROWER: Edwin F. Hale, -19- EXHIBIT E 11ULL ATLANTIC CENTRAL BANKERS BANK June 26, 2009 Edwin F. Hale, Sr. 1501 South Clinton Street Baltimore, MD 21224 RE: DEFAULT NOTICE Dear Mr. Hale: Loan Department 1400 Market Street Camp Hill, PA 17011 Tel. 717.441.4700 Fax 717.737.1628 www.atlanticcentral.com You are hereby notified that your loan accounts with Atlantic Central Bankers Bank (`Bank") are more than ninety (90) days past due. Accordingly, the Bank hereby declares an Event of Default under Section 19(a) of the Agreement dated November 28, 2008 by reason that you are in default for non-payment. In addition, other defaults exist under Section 19 of the Agreement, including, without limitation, your failure to effectuate the Waterfront Pavillion Assignment and the Exxon Sale Assignment (the "Assignments"), the default and subsequent judgment against you with respect to your loan with Silverton Bank, and your non-payment of other loan obligations due under material agreements (other than the Loan Documents). As a result of the Event of Default, the Bank is entitled to pursue various rights and remedies under the Agreement and the other Loan Documents (as defined in the Agreement), including, without limitation, the acceleration of all of the indebtedness that is owed by you to the Bank under the Loan Documents and the Agreement, the imposition of the default rate of interest ("Default Rate") authorized by Section 14 of the Agreement, confession of judgment against you, and the foreclosure, liquidation, collection or other enforcement of the Bank's security interests and liens in any or all of the collateral ("Collateral") securing the indebtedness and obligations under the Agreement and Loan Documents. Accordingly, you are hereby further notified that: • interest henceforth shall accrue on the unpaid principal balance at the default interest rate of the Wall Street Journal Prime Rate plus 4.000 percentage points; • all indebtedness owed by you to the Bank is hereby accelerated and the Bank hereby demands immediate payment thereof, to wit: Account# Note Date Principal Balance Unpaid Interest Unpaid Late Fees Total Due 123200 8/26/05 $295,847.77 $4,890.45 $1,481.00 $302,219.22 123283 12/14/05 $4,300,000.00 $71,039.57 $4,526.52 $4,375,566.09 123408 9/18/06 $920,000.00 $15,172.50 $4,028.19 $939,200.69 Total Amount Due $5,616,985.90 745878.6 The Bank's election not to exercise any of its other rights and remedies at the present time, and any financial accommodations the Bank may have made to date, shall not be construed as a waiver of any rights or remedies of the Bank. Nothing contained herein or in any other communication or in any ongoing discussions or negotiations which have or may take place between you and the Bank shall directly or indirectly (i) create any obligation upon the Bank to defer any enforcement action or make any further financial accommodations, (ii) constitute a consent or waiver of any past, present or future Event of Default or other violation of any provisions of the Agreement or any Loan Document, (iii) amend, modify or operate as a waiver of any provision of the Agreement or any Loan Document or any right, power, privilege or remedy of the Bank thereunder, or (iv) constitute a course of dealing or other basis for altering any duty or obligation owed by you to the Bank. Nothing contained in this letter shall confer on you or any other person or entity any right to other or further notice or cure periods with respect to any Event of Default. The Bank expressly reserves all of its rights, powers, privileges and remedies under the Agreement and the other Loan Documents and/or applicable laws, including, without limitation, the Bank's right at any time, as applicable, (i) to accelerate any or all of the indebtedness and obligations under the Loan Documents and the Agreement, (ii) to apply the Default Rate to the obligations under the Agreement and Loan Documents since the date of inception of the Event of Default, (iii) to commence any legal or other action to collect any or all of the indebtedness and obligations under the Loan Documents and the Agreement and/or any Collateral or any property pledged by any other person or entity as security for any or all of the indebtedness and obligations under the Loan Documents and the Agreement, (iv) to foreclose or otherwise realize on any or all of the Collateral and/or set-off or apply to the payment of any or all of the indebtedness or obligations under the Loan Documents and the Agreement any or all of the Collateral, and (v) to take any other enforcement action or otherwise exercise any or all rights and remedies provided by the Agreement, any Loan Document or by applicable laws. If you have any questions or comments, please call me at (717) 441-4714. Sincerely` William H. Sayre Senior Vice President Chief Credit Officer cc: Michael G. Gallerizzo, Esquire Gebhardt & Smith LLP One South Street, Suite 2200 Baltimore, MD 21202 Dean H. Dusinberre, Esquire, Rhoads & Sinon LLP ^r FIJI -' 1F , r 1 0 GVr}, 1y 4 a-7. 5b Po ATTY cr?? ?f4s8r9 e?'` ?a7a5?f Kathryn D. Sallie, Esquire PA I.D. No. 208116 Rhoads & Sinon LLP PO Box 1146 Harrisburg, PA 17108-1146 Phone: 717.233.5731 /Fax: 717.237.6790 Attorney for Plaintiff Atlantic Central Bankers Bank ATLANTIC CENTRAL BANKERS BANK, Plaintiff V. EDWIN F. HALE, SR., Defendant IN THE COURT OF COMMON PLEAS, CUMBERLAND COUNTY No. CONFESSION OF JUDGMENT FOR MONEY RULE 236 NOTICE OF ENTRY OF CONFESSED JUDGMENT To: Edwin F. Hale, Sr. 1501 South Clinton Street Baltimore, MD 21224 You are hereby notified that on , 2009, judgment by confession was entered against you in the amount of $5,597,631.21, plus accruing interest at the default rate from the date of judgment, attorneys' fees and costs of collection. Attached hereto are copies of all documents filed with the Prothonotary in support of the confession of judgment. Date: rothonot YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP. CUMBERLAND COUNTY BAR ASSOCIATION 32 South Bedford Street Carlisle, Pennsylvania (717) 249-3166 745966.2 I hereby certify that the following is the address of the Defendant: Edwin F. Hale, Sr. 1501 South Clinton Street xore, MD 21224 Kat Sallie, Esquire Attorney for Plaintiff A Edwin F. Hale, Sr., Defendido Usted esta siendo notificado que el de del 2009, se anoto en contra suya un fallo por confesion en la suma de $5,597,631.21 en el caso mencionado en el epigrafe. FECHA: '2009 Protonotario USTED DEBE LLEVAR ESTE DOCUMENTO A SU ABOGADO INMEDIATAMENTE. SI USTED NO TIENE UN ABOGADO O NO PUEDE PAGARLE A UNO, LLAME O VAYA A LA SIGUIENTE OFICINA PARA AVERIGUAR DONDE PUEDE ENCONTRAR ASISTENCIA LEGAL. CUMBERLAND COUNTY BAR ASSOCIATION 32 South Bedford Street Carlisle, Pennsylvania (717) 249-3166 Certifico que la siguiente direccion es la del defendido/a: Edwin F. Hale, Sr. 1501 South Clinton Street Baltim e, MD 21224 _ Kathr?h If Sallie, Esq. Attorney for Plaintiff 745966.2 Sheriffs Office of Cumberland flC?otunty R Thomas Kline OF THE 0 Qv Sheri artitn atrr+nbrtl$ Ronny R Anderson G09 JUL 22 ; Chief Deputy Jody S Smith CUMBIE Ruth ,` Civil Process Sergeant Cq*iCE {'' '"E SMI RIFF PENNS1T Edward L Schorpp Solicitor Atlantic Central Bankers Bank vs. Edwin F. Hale, Sr. SHERIFF'S RETURN OF SERVICE Case Number 2009-4629 07/13/2009 On this date R. Thomas Kline, Sheriff mailed the within complaint and notice by certified mail, return receipt requested to Edwin F. Hale, Sr. 07/20/2009 Certified Mail Return: And now July 20, 2009 I, R. Thomas Kline, Sheriff of Cumberland County, Pennsylvania, do herby certify and return that I served a true copy of the within Complaint in Confession o- Money Judgment, Confession of Judgment, Entry of Judgment, Rule 236 Notice of Entry of Confessed Judgment, and Notice Under Rule 2958.1 of Judgment and Execution thereto, upon the within named defendant, to wit: Edwin F. Hale, Sr. by making known unto F. Berry, adult in charge at 1501 South Clinton Street Baltimore, MD 21224 its contents and at the same time handing to them personally the said true and correct copy of the same. SHERIFF COST: $35.68 SO ANSWERS, _ July 20, 2009 R THOMAS KLINE, SHERIFF SENDER: COMPLETE THIS SECTION COMPLETE THIS SECTION ON DELIVERY ¦ Complete items 1, 2, and 3. Also complete A. Sign item 4.if Restricted Delivery is desired. ? Agent ¦ Print your name and address on the reverse X ? Addressee so that we can return the card to you. B ( ) C. Date of Delivery ¦ Attach this card to the back of the mailpiece, or on the front if space permits. 1. Article Addressed to: D. Is delivery address differ4d from Rem 1? ? Yes If YES, enter delivery address below: ? No EDWIN F. HALE, SR. 1501 SOUTH CLINTM STREET BALTIMORE, MD 21224 3. Service Type JO Certified Mail ? Express Mail ? Registered ? Return Receipt for Merchandise ? Insured Mail ? C.O.D. 2009-4629 4. Restricted Delivery? (Extra Fee) ? Yes 2. Article Number 7004 1350 0003 7145 8220 (Transfer from service label) PS Form 3811, February 2004 Domestic Return Receipt 102595-02-M-1540 Timothy J. Nieman, Esquire PA I.D. No. 66024 Kathryn D. Sallie, Esquire PA I.D. No. 208116 Rhoads & Sinon LLP PO Box 1146 Harrisburg, PA 17108-1146 Phone: 717.233.5731/Fax: 717237.6790 Attorney for Plaintiff Atlantic Central Bankers Bank ATLANTIC CENTRAL BANKERS BANK, IN THE COURT OF COMMON PLEAS, Plaintiff CUMBERLAND COUNTY V. EDWIN F. HALE, SR., Defendant No. 09-4629 Civil Term CONFESSION OF JUDGMENT FOR MONEY PRAECIPE TO REINSTATE COMPLAINT Kindly reinstate the Complaint that was originally filed in the above-captioned matter on July 10, 2009. Respectfully submitted, RHOADS & S1NON LLP Date: October 13, 2009 Y Timothy J. Nieman Kathryn D. Sallie One South Market Square P. O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Plaintiff 757894.1 IL ?.iD SCE Gr r, 2004 OCT 13 AM 1 l : 36 ?ly 0. P lG OG PK# a-Ao3? Ao* a3/yak Timothy J. Nieman, Esquire PA I.D. No. 66024 Kathryn D. Sallie, Esquire PA I.D. No. 208116 Rhoads & Sinon LLP PO Box 1146 Harrisburg, PA 17108-1146 Phone: 717.233.5731/Fax: 717.237.6790 Attorney for Plaintiff Atlantic Central Bankers Bank ATLANTIC CENTRAL BANKERS BANK, Plaintiff V. EDWIN F. HALE, SR., Defendant IN THE COURT OF COMMON PLEAS, CUMBERLAND COUNTY No. 09-4629 Civil Term CONFESSION OF JUDGMENT FOR MONEY RETURN OF SERVICE Pursuant to the Affidavit - Return of Private Process enclosed as Exhibit "A," Defendant, Edwin F. Hale, Sr. was served on October 1, 2009 via the method outlined within. Respectfully submitted, RHOADS & SINON LLP G? ?/L ?----- By: Timothy J. ieman Kathryn D. Sallie One South Market Square P. O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Plaintiff Date: October L5t2009 758123.1 EXHIBIT A Priority+ Legal Services, Inc. PO Box 540, Reisterstown, Maryland 21136 (410) 282-7000 Fax (410) 823-3299 Affidavit - Return of Private Process In The Court Of Common Pleas, Cumberland County Case # 09-4692 Case Atlantic Central Bankers Bank VS. Edwin F. Hale, Sr. The undersigned certifies to be a competent person over 18 years old and is not a party to the aforsaid action. That on 10/1/2009 at 12:40:00 PM at 1501 S. Clinton St, Baltimore, MD 21224 Edwin F. Hale, Sr. was served with: Accepted by: Jason Needer, Security Supervisor E Writ of Summons El Complaint ? Injunction El Interrogatories ? Subpoena Notice to Take Deposition Order to Appear for Oral Exam ? Supporting Documents ? Confessed Judgement ? Show Cause Order Replevin Writ of Garnishment on Property Writ of Garnishment on Wages Civil Non-Domestic Case Information Report Civil Domestic Case Information Report El Request for Production of Documents Other: Complaint in Confession of Judgment (Money Judgment); Confession of Judgment, in the amount of $5,616,986.00; Entry of Judgment, in the amount of $5,616,986.00; Rule 236 Notice of Entry of Confessed Judgment, in the amount of $5,616,986.00; Notice Under Rule 2958.1 of Judgment and Execution Thereto, in the Additional information: Race: White Height 5111" Hair: Black Age: 30-35 Sex Male Weight: 200 Other: The undersigned further solemnly declares and affirms under the penalty of perjury that the matter and facts set forth herein are true and correct to the f my knowledge, information and belief. Date: 101112009 Private Process Se r Sworn and Subscribed to before me thi day of , in the year lviicb><el F. Stern Notary Public County, lilarylead f . ," ,;.,inission ExpiFeill 02/01/2011 IRY 2009 OC f 16 i'i`i 1: 3'4 'C.J ?a?Lav Timothy J. Nieman, Esquire PA I.D. No. 66024 Kathryn D. Sallie, Esquire PA I.D. No. 208116 Rhoads & Sinon LLP PO Box 1146 Harrisburg, PA 17108-1146 Phone: 717.233.5731/Fax: 717.237.6790 Attorney for Plaintiff Atlantic Central Bankers Bank ATLANTIC CENTRAL BANKERS BANK, PLEAS, Plaintiff V. EDWIN F. HALE, SR., Defendant PRAECIPE TO THE PROTHONOTARY: Please mark the within judgment satisfied. IN THE COURT OF COMMON CUMBERLAND COUNTY No. 09-4629 Civil Term CONFESSION OF JUDGMENT FOR MONEY Respectfully submitted, Date: November 3 , 2009 RHOADS & SINON LLP By: Timothy J. Nieman Kathryn D. Sallie One South Market Square P. O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Plaintiff - • 1% CERTIFICATE OF SERVICE I hereby certify that on this 340 day of November, 2009, a true and correct copy of the foregoing document was served by means of United States mail, first class, postage prepaid, upon the following: Edwin F. Hale, Sr. 1501 South Clinton Street Baltimore, MD 21224 1 1 fiC„? 760099.1 FIED--OF ICE 2009 NOV -3 FM 12= 53 CUi'vA