HomeMy WebLinkAbout09-8212SUSQUEHANNA BANK, IN THE COURT OF COMMON PLEAS
Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA
V. CASE NO.
INSITE DEVELOPMENT, LLC,
Defendant
CIVIL ACTION -LAW
CONFESSION OF JUDGMENT
Pursuant to the authority contained in the Note, as defined in the Complaint filed in the
above captioned case and evidenced by Exhibit A to said Complaint, we appear for Defendant,
Insite Development, LLC and confess judgment against them in favor of Plaintiff, Susquehanna
Bank, as follows:
Principal: $549,843.33
Accrued Interest: $ 572.14
Costs $ 100.00
Total: $550,515.47*
*along with interest accruing at the current per diem rate of $40.93, costs and
reasonable attorney's fees until paid in full (the "Indebtedness").
Date: November 25, 2009
McNEES WALLACE & NURICK LLC
By
Clayton W. D idson
PA Attorney I.D. No. 79139
McNees Wallace & Nurick LLC
100 Pine Street - P.O. Box 1166
Harrisburg, PA 17108-1166
(717) 260-1678 (Direct Fax)
(717) 232-8000 (Phone)
cdavidson(ab,mwn.com
Attorneys for Susquehanna Bank
Clayton W. Davidson
PA Attorney I.D. No. 79139
McNees Wallace & Nurick LLC
100 Pine Street - P.O. Box 1166
Harrisburg, PA 17108-1166
(717) 260-1678 (Direct Fax)
(717) 232-8000 (Phone)
cdavidson(&,mwn.com
Attorneys for Plaintiff, Susquehanna Bank
SUSQUEHANNA BANK, IN THE COURT OF COMMON PLEAS
Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA
V. CASE NO. l ? C J v, ? .?Lt?
INSITE DEVELOPMENT, LLC,
Defendant
CIVIL ACTION -LAW
COMPLAINT FOR CONFESSION OF JUDGMENT
($550,000.00 LOAN)
Plaintiff, Susquehanna Bank, by and through its undersigned counsel, hereby files this
Complaint for Confession of Judgment pursuant to Pa.R.C.P. No. 2951(b) and in support thereof
avers the following:
1. Plaintiff, Susquehanna Bank (the "Bank"), successor in interest to Susquehanna Bank
PA (the `Bank"), is a Pennsylvania banking institution doing business at 1570 Manheim Pike,
Lancaster, Pennsylvania 17601.
2. Defendant, Insite Development, LLC ("Insite"), is a Pennsylvania limited liability
company doing business at 1943 Monterey Drive, Mechanicsburg, Pennsylvania 17050.
3. On April 9, 2008, the Bank loaned Insite the sum of $550,000.00 (the "Loan") for a
business purpose as evidenced by a note (the "Note") to add furniture, fixtures and equipment for a
hotel being constructed on the real property known and numbered as 4569 & 4535 Mount Zion
Drive, Hampden Township, Cumberland County, Pennsylvania, tax parcel number 10-14-0839-023
(the "Real Property"). Attached hereto as Exhibit A and incorporated herein by reference is a true
and correct copy of the Note (less any applicable tax identification numbers).
4. The Loan was also evidenced by a loan agreement (the "Loan Agreement") dated
April 9, 2008 detailing the rights and responsibilities of the parties. Attached hereto as Exhibit B
and incorporated herein by reference is a true and correct copy of the Loan Agreement (less any
applicable tax identification numbers).
5. The Loan Agreement is a "Loan Document" under the Note.
6. From March 26, 2009 through August 19, 2009, over $1.4 million in mechanics liens
were filed against the Real Property with this Court.
7. On September 9, 2009, the Bank provided written notice (the "Notice") to Insite of its
defaults under the Loan Agreement by allowing over $1.4 million in mechanics liens (the "Defaults")
to be filed against the Real Property and thirty (30) days to cure the Defaults. Attached hereto as
Exhibit C and incorporated herein by reference is a true and correct copy of the Notice.
8. Insite failed to cure the Defaults within thirty (30) days and the mechanics lien still
remain against the Real Property.
9. Insite has defaulted under the Note as a result of the Defaults under the Loan
Agreement.
10. There is no further right to cure the Defaults under the Note and/or Loan Agreement.
11. The Bank has accelerated the entire indebtedness due and owing regarding the Loan
as a result of the Defaults.
12. The Note provides that upon a default thereunder the Bank may confess judgment
against Insite for the entire principal balance due and owing thereunder along with accrued interest,
costs of collection and suit, and reasonable attorney's fees for collection.
13. The total sums due and owing under the Note as of November 23, 2009 are itemized
as follows:
Principal: $549,843.33
Accrued Interest: $ 572.14
Costs $ 100.00
Total: $550,515.47*
*along with interest accruing at the current per diem rate of $40.93, costs and
reasonable attorney's fees until paid in full (the "Indebtedness").
14. All conditions precedent have been satisfied to allow the Bank to confess judgment
for the Indebtedness against Insite under the Note.
15. The Bank is the holder of the Note.
16. The Note was executed and delivered in connection with a business transaction and
judgment is not being entered by confession against a natural person in connection with a consumer
credit transaction.
17. Judgment has not been confessed or entered under the Note in any other jurisdiction.
WHEREFORE, Plaintiff, Susquehanna Bank requests this Court to enter judgment by
confession against Defendant, Insite Development, LLC, in the amount of $550,515.47 along with
interest accruing at the per diem rate of $40.93 after November 23, 2009, costs and reasonable
attorney's fees until paid in full.
Date: November 25, 2009
McNEES WALLACE & NURICK LLC
PA Attorney IV No. 79139
McNees Wallace & Nurick LLC
100 Pine Street - P.O. Box 1166
Harrisburg, PA 17108-1166
(717) 260-1678 (Direct Fax)
(717) 232-8000 (Phone)
cdavidsonAmwn.com
/i
BY vy
Clayto W. Davison
Attorneys for Plaintiff, Susquehanna Bank
VERIFICATION
1,+St?.C,?14?, of Susquehanna Bank, verify that I am authorized to
make this verification on behalf of Susquehanna Bank, and that the facts contained in the
foregoing Complaint for Confession of Judgment are true and correct to the best of my
knowledge, information and belief and that the same are made subject to the penalties of 18 Pa.
C.S.A. § 4904 relating to unsworn falsification to authorities.
( xu 4 A
Mad ME POPA328 %OU
FAX
AIIG-2'-2009 FRI 01.67 PM SBI LOAN CENTER NO. 240 313 1665
R
PROMISSORY NOTE
,$550,000.00
P. 19
Lancaster, Pennsylvania
April ?? , 2008
INSITE DEVELOPMENT, LLC, a Peruisylvania limited liability company
maintaining a place of business at 1943 Monterey Drive, Mechanicsburg, Pennsylvania 17050-8510,
for value received, without defalcation or deduction, INTENDING TO BE LEGALLY BOUND,
irrevocably promises to pay to the order of SUSQUEHANNA BANK PA, a Pennsylvania state
chartered banking institution maintaining a principal place of business at 1570 Manheim Pike, P.O.
Box 3300, Lancaster, Pennsylvania 17604-3330, on or before the Maturity Date (as hereinafter
defined) the principal sum of Five Hundred Fifty Thousand Dollars ($550,000.00), together with
interest on the outstanding principal balance as set forth below.
I. INTERPRETATION
1.1 Defined Terms. The following terms shall have the following meanings.
101 et seq (a) "Bankruptcy Code" means the Federal Bankruptcy Code 1 I U.S.C.
.
(b) "Beginning Date" means the date set forth above.
(c) "Business Day" means any day other than a Saturday or Sunday on
which the Payee is open for the regular transaction of business.
(d) "Collateral" means the security for the Loan as set forth in the Loan
Agreement and the other Loan Documents.
(e) "Contractual state of interest" means the Interest Rate applicable to
the Loan as set forth in Section 2.2 hereof.
(f) "Dollars and ($)" means lawful currency of the United States of
America which, at the time of payment, shall be legal tender for the payment of all debts, public and
private, and immediately available to the Payee, without offset, deduction or delay in collection of
any kind.
Note (g) "Event of Default" means that term as defined in Section 'V of this
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(h) "Fixed Rate of Interest" shall mean that rate of interest selected by
Maker equal to either the three (3) year United States Treasury Rate plus three percent (3%) (the
Three (3) Year United States Treasury Rate") or the five (5) year United States Treasury Rate plus
three percent (3%) (the "Five (5) Year United States Treasury Rate").
6) "Interest Only Rate" ?neans the Ninety (90) Day LIBOR Rate plus
two and four-tenths percent (2.4%).
0) "Interest Only Period" means a period of twenty-four (24)
consecutive months commencing on the date this Note is executed and delivered.
(k) "Loan" means the Loan in the principal amount of Five Hundred Fifty
Thousand Dollars ($550,000.00) from Payee to Maker evidenced by this Note and more fi?Ily
described in the Loan Agreement and Loan Documents.
(1) "Loan Agreement" means the Loan Agreement dated the date hereof
between the Maker and the Payee.
Agon which Maker reement, Note, satisfies all
(m) "Loan preconditions to closing and delivers to l Payee an executed Loan A date
such other Loan Documents as Payee deems appropriate in a form acceptable to Payee and Payee s
counsel.
(n) "Loan Documents" shall have the same meaning as set forth in the
Loan Agreement bearing even date herewith, together with all other existing and future agreements,
promissory notes, guaranties, mortgages, security agreements, assignments, pledges, leases,
instruments and other document relating to the Loan.
(o) "Maker" means Insite Development, LLC, a Pennsylvania limited
liability company.
(p) "Maturity Date" means the earlier to occur of (i) acceleration by
Payee upon the occurrence of an Event of Default or (ii) eighty-four (84) months from the date of the
Loan closing.
(q) "Ninety (90) Day LIBOR Rate" means the floating rate of interest to
be adjusted on the second business day of every week during the term of the Loan which is based
upon the ninety (90) day London Interbank Offered Rate as published from time to time in the Wall
Street Journal as of the first business day of each week, or . ucl1 other rate as Payee may determine
in accordance with the exercise of its reasonable judgment to approximate that ninety (90) day
London Interbank Offered Rate if the sane is no longer maintained or published.
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(r) "Note" means this Promissory Note and all future amendments to it
that are in writing and that are signed by or on behalf of the Maker.
(s) "Payee" means Susquehanna Bank PA, or any holder of this Note.
1.2 Other Definitions. Capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the Loan Agreement.
IT. ADVANCES INTEREST AND PAYMENT
2.1 Advances. Advances under this Note shall be made on the Loan Closing Date
in accordance with the Loan Agreement.
2.2 Interest Rate. Outstanding balances under this Note shall bear interest,
during the Interest Only Period, at the Interest Only Rate and, thereafter, the rate shall be based on an
election to be made by Maker thirty (30) days prior to the expiration of the Interest Only Period and
shall be either the Interest Only Rate, the Three (3) Year United States Treasury Rate plus three
percent (3%) or the Five (5) Year United States Treasury hate plus three percent (3%).
2.3 Payment. Commencing one (1) month from the date of this Note and
continuing during the Interest Only Period, Maker shall make regular monthly payments of interest
as it accrues on the outstanding balances under this Note. Thereafter, and until the Maturity Date,
Maker shall pay the applicable rate of interest as has been selected by Maker. Starting with the
twenty-fifth (25`") month from the date of the execution and delivery of this Note, regular payments
of principal and interest shall be made based on a five (5) year amortization with the interest rate
being that interest rate selected by Maker.
2.4 Interest Calculations. All advances made pursuant to this Note shall bear
interest at the Contractual Rate of Interest from the date of such advance, calculated by applying a.
daily factor, which assumes the actual number of days per year divided by three hundred sixty (360)
days, to the outstanding loan balance on a daily basis for each day of the year during which there is
an outstanding loan balance under this Note. All outstanding principal balances under this Note,
including all collection costs, shall bear interest at the contract rate until paid in full, the entry of
judgment based upon this Note notwithstanding.
2.5 Place of Payment. All payments of principal., interest, late charges and
collection expenses with regard to this Note shall be made in lawful money of the United States of
America in Dollars immediately available to the Payee at the offices of the Payee in Lancaster,
Pennsylvania.
2.6 Due Dates. If the due date of any payment under this Note is not a Business
Day, that payment shall be due on the next succeeding Business Day. However, any amount upon
which interest accrues shall continue to accrue interest until actually paid.
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2.7 Payments; Late Charges. In the event any installment or part of an
installment of interest, principal or principal and interest shall become overdue for a period in excess
of ten (10) days, a late charge in the amount of ten percent (10%) of such overdue installment
(regardless of whether part of the payment due has been made) will be paid by Maker to Payee. In
no event will the late charge be less than Twenty Dollars ($20.00).
2.8 Method of Payment. Payment of any installment of interest and/or principal
of this Note or any other sum due to the Payee under this Note or the Loan Documents shall be
deemed to be made only if and when the Payee receives such installment or other sum in cash or
federal or other immediately available funds constituting Dollars. If payment is made by check,
payment shall be deemed to be made if and when the check is collected and the Payee is credited
with immediately available funds. If any check is returned for insufficient funds in the account on
which it is drawn, or if it is not collected for any other reason that is the fault of Maker, a late charge
(as provided in Section 6.3 of this Note) shall be due on the full amount of the payment represented
by the check,
2.9 APPItcation of Payments. All payments with regard to this Note shall be
applied to the payment in full of the following amounts in the following order:
(a) All accrued, unpaid interest with regard to this Note; and
(b) The unpaid principal amount of this Note; and
(c) All accrued, unpaid late charges with regard to this Note; and
(d) All expenses incurred by the Payee in connection with the collection of
any sum due under this Note (including but not limited to reasonable attorneys, fees and court costs),
whether incurred during the pendency of an Event of Default, after acceleration of the indebtedness
evidenced by this Note and on or after the maturity of this Note.
Ill(. EXCESS INTEREST
3.1 Maximum Rate The Maker shall not be obligated to pay, and the Payee
shall not collect, interest at a rate that at any time or from time to time is in excess of the maximum
rate of interest permitted by applicable law or the maximum rate of interest that will not subject the
Payee to civil or criminal penalties. If, because of prepayment of this Note, or because of the
acceleration of the maturity of this Note, or the payment of interest on this Note in advance, or for
any other reason, the Maker is required to pay interest at a rate in excess of such maximum rate, the
rate of interest under such provisions shall immediately aid automatically be reduced to such
maximum rate, and eny payment in excess of such maximum rate together with interest thereon at
the rate provided herein fi-om the date of such payment, shall be immediately and automatically
applied to the reduction of the unpaid balance of principal of this Note as of the date on which such
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excess payment was made. If the amount so applied to reduction of the unpaid balance of principal
of this Notre exceeds the unpaid balance of principal, the amount of such excess shall be returned by
the Payee to the Maker.
W. PREPAYMENT
4.1 Prepayment. In planning for the advancing of the proceeds of the Loan, and
in planning its investment portfolio, Payee is relying upon this Loan and the interest to be derived
therefrom and some assured period of interest accrual is a bargained-for-consideration in this
transaction. In the event that the entire principal balance of the Loan is paid prior to the Maturity
Date, such payment shall be accompanied by all accrued interest and all costs and, in addition, a
prepayment premium equal to two percent (2%) of the then outstanding principal balance of this
Loan. The prepayment premium is a bargained-for-consideration and not a liquidated damage
provision. No partial prepayment shall postpone or interrupt payments of future installments of
principal and interest, but shall continue to be due and payable at the time and in the amount set forth
herein until payment in full. Notwithstanding the foregoing, the prepayment premium shall not be
applicable in the event the Loan is refinanced by Payee or is prepaid with internally generated funds
of Maker.
W. EVENTS OF DEFAUET
5.1 Events of Default. Each of the following events shall constitute a Default
under this Note;
(a) The failure by the Maker to make in full and in Dollars any required
payment under this Note within fifteen (15) days of when due, or any of the other Loan Documents,
or any other instrument or obligation of the Maker to the Payee on or before the last day of any grace
period provided with regard to such payment;
(b) The failure by the Maker to make in full and in Dollars any required
payment under any instrument for money advanced by the Payee (other than under this Note) on or
before the last day of any grace period provided with regard to such payment, if such failure allows
the holder of such instrument to accelerate the maturity thereof,
(c) "the failure by the Maker to observe and perform in full any covenant,
condition or provision contained in any of the Loan Documents (other than those described in
clauses (a) and (b) of this section), provided that Payee has given Maker a written notice of default
and Maker has failed to cure such default within thirty (30) days after the date of said notice, or in
the case of any default which cannot be cured within thirty (30) days, Borrower's failure to diligently
commence and proceed to cure such default within thirty (30) days after written notice of default;
and
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(d) The occurrence of an Event of Default by the Maker under any tenn of
any of the Loan Documents, which continues beyond the application notice and cure period.
5.2 Cross-Default. This Note is cross-defaulted with all other Notes and
obligations from Maker to Payee which may now or hereafter exist. Any default by Maker under the
terms of this Note shall constitute a default by Maker under the terms of any other Note or obligation
from Maker to Payee, and default by Maker under the tercus of any other Note or obligation from
Maker to Payee shall constitute a default under this Note.
V1, RIGHTS AND REMEDIES
6.1 Acceleration. Upon the oecturenee of an Event of Default which continues
beyond the applicable notice and cure period and upon any required notice provided by Section 5. 1,
this Note shall, at the option of Payee, be automatically and immediately due and payable.
6.2 Subsequent Rights, Remedies. On and after any date on which this Note
becomes due and payable by its terms, whether by acceleration, or on the occurrence of an Event of
Default, or because of the Maturity Date:
(a) The Payee may exercise any and all of its rights and remedies for the
collection of this Note, whether set forth in this Note, in the Loan Documents, or otherwise available
under the laws of the Commonwealth of Pennsylvania, or any other jurisdiction.
(b) THE FOLLOWING PARAGRAPH SETS FORTH A WARRANT OF
AUTHORITY FOR AN ATTORNEY TO CONFESS JUDGMENT AGAINST THE MAILER.
THE MAKER ACKNOWLEDGES THAT THE MAKER HAS, AT THE SUGGESTION OF THE
PAYEE, REVIEWED THIS NOTE WITH SEPARATE COUNSEL FOR THE MAKER PRIOR TO
SIGNING THIS NOTE AND THIS CONFESSION OF JUDGMENT PROVISION. IN
GRANTING THIS WARRANT OF ATTORNEY TO CONFESS JUDGMENT AGAINST THE
MAKER, THE MAKER HEREBY KNOWINGLY, INTENTIONALLY, VOLUNTARILY AND
UNCONDITIONALLY WAIVES ANY AND ALL RIGHTS THE MAKER HAS OR MAY HAVE
TO PRIOR NOTICE AND AN OPPORTUNITY FOR HEARING UNDER THE RESPECTIVE
CONSTITUTIONS AND LAWS OF THE UNITED STATES, OF ANY STATE, AND THE
COMMONWEALTH OF PENNSYLVANIA. THE MAKER ACKNOWLEDGES THAT THE
MAKER HAS REVIEWED THIS WARRANT OF AUTHORITY TO CONFESS JUDGMENT
WITH LEGAL COUNSEL FOR THE MAKER, PURSUANT TO THE SUGGESTION OF THE
PAYEE, THAT THE MAKER HAS HAD THIS NOTE REVIEWED BY COUNSEL AND THAT
THE MAKER HAS READ AND THAT THE MAKER COMPREHENDS FULLY THE EFFECT
OF THIS CONFESSION OF JUDGMENT PROVISION:
UPON THE OCCURRENCE OF AN EVENT OF DEFAULT AND THE
EXPIRATION OF ANY NOTICE OR CURE PERIOD, THE MAKER HEREBY IRREVOCABLY
AUTHORIZES AND EMPOWERS ANY ATTORNEY 01 ANY COURT OF RECORD IN THE
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COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE, TO APPEAR FOR AND TO
ENTER AND CONFESS JUDGMENT AGAINST THE MAKER, AT ANY TIME OR TIMES
AND AS OF ANY TERM, FOR THE PRINCIPAL SUM OF THIS NOTE, WITH OR WITHOUT
DECLARATION, WITH INTEREST AND COSTS OF COLLECTION AND SUIT, WITHOUT
STAY OF EXECUTION, AND WITH A REASONABLE ATTORNEY'S FEE FOR
COLLECTION (BUT IN NO EVENT LESS THAN TWO THOUSAND FIVE HUNDRED
DOLLARS ($2,500.00)) THE MAKER HEREBY IRREVOCABLY RELEASES THE PAYEE
FROM ALL PROCEDURAL ERRORS AND DEFECTS W14ATSOEVER IN ENTERING ANY
SUCH JUDGMENT. THE MAKER AGREES THAT ANY OF ITS PROPERTY MAY BE
LEVIED UPON TO COLLECT SUCH JUDGMENT AND MAY BE SOLD UPON A WRIT OF
EXECUTION, AND HEREBY WAIVES AND RELEASES ALL LAWS, NOW OR HEREAFTER
IN FORCE, RELATING TO EXEMPTION, APPRAISEMENT OR STAY OF EXECUTION. THE
AUTHORITY HEREBY GRANTED TO CONFESS JUDGMENT SHALL NOT BE
EXHAUSTED BY ANY SINGLE OR PARTIAL EXERCISE THEREOF, BUT SHALL
CONTINUE FROM TIME TO TIME AND AT ALL TIMES UNTIL THE MAKER HAS PAID
AND SATISFIED ALL SUMS REQUIRED UNDER THIS NOTE AND THE LOAN
AGREEMENT AND UNTIL THE MAKER HAS PERFORMED ALL OF THE OTHER
PROVISIONS HEREOF OR THEREOF TO BE PERFORMED BY THE MAKER.
6.3 Default Interest; Judgment and Interest.
(a) Upon the occurrence of an Event of Default and the expiration of any
notice and cure period provided for in the Loan Agreement, Maker agrees that the Default Rate of
Interest shall apply. The Default Rate of Interest shall be the Contractual Rate of Interest plus five
(5) percentage points.
(b) The interest rate provided in Section 6.3(a) of this Note shall apply to
the indebtedness evidenced by this Note before, on and after the date or dates on which the Payee
enters judgment on this Note. Upon and after the entry of any judgment, interest shall accrue at the
interest rate provided in Section 6.3(a) of this Note on the judgment amount from the date of
judgment until receipt by the Payee of all si ms due under this Note, including any period after a
sheriffs sale of the Premises.
6.4 Waivers. The Payee's failure to exercise, or delay in exercising, any right or
remedy set forth in this Note or in the Loan Documents shall not operate as a waiver of any right or
remedy, except as and to the extent that the exercise of such right or remedy shall be barred by an
applicable statute of limitations. The Payee may waive its rights and remedies set forth in this Note
or in the Loan Documents only by written communication executed and delivered by the Payee to
the Maker. No single or partial exercise of, or abandonment or discontinuance of exercise of, any
right or remedy set forth in this Note or in the Loan Documents shall preclude any other or further
exercise of such right or remedy, or the exercise of any other right or remedy.
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6 5 Sever bil The terms and provisions of this Note are severable. In the
event of the unenforceability or invalidity of any one or more of the terms, covenants, conditions or
provisions of this Note under federal, state or other applicable law, such unenforceability or
invalidity shall not render any other tern, covenant, condition or provision herewider unenforceable
or invalid.
6.6 Notices. All notices and communication under or in respect of this Note shall
be provided in strict accordance with the Loan Documents.
6.7 Cumulative Remedies. The Payee's rights and remedies under this Note and
under the Loan Documents, including any provisions for confession of judgment and all warrants of
attorney:
(a) Shall be cumulative and concurrent; and
(b) May be exercised singly, successively or together against the Maker,
or the Premises, or any other security in the Payee's sole discretion; and
(c) May be exercised as often as the Payee considers necessary in its sole
discretion; and
(d) Are not exclusive and are in addition to any other rights and remedies
the Payee has or may have, whether at law, in equity or under applicable law.
6,8 Security Interest Loan Documents and Additional Remedies. Payment of
this Note is secured by, among other things, the mortgage, Guaranty and Suretyship Agreements,
and all other Loan Documents as defined herein and in the Loan Agreement, and in addition, all of
the security and collateral which secure any other credit facility now or hereafter extended by Payee
to Maker. All of the terms, conditions, covenants, agreements, representations, warranties, and
provisions contained in each and all of the Loan Documents are hereby incorporated into this Note to
the same extent and with the same force and effect as if they were fully set forth herein, except,
however, that nothing contained in any of the Loan Documents shall be construed to permit or
require the recording or filing of this Note in any public record other than in connection with any
litigation or any action or proceeding bythe Payee to enforce the led to all the rightsnr remedies and benefits of the
or any of the Loan Documents. This Note is entitled security documents described in this section, as those documents may be amended from time to time
in the future, and all other existing and future security documents which expressly by reference to
this Note, or implicitly by reference to all existing and future obligations of Maker to the Payee,
secure payment of this Note.
VII. MAILER'S WAIVERS
7.1 Waivers.
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rAX NO. 240 3,2 '.-155
(a) The Maker hereby waives and releases the Payee and its attorneys
from all procedural errors, defects acid imperfections in any proceeding instituted or maintained by
the Payee under this Note or the Loan Documents. The Maker hereby waives all benefit of any and
all present and future laws which. (1) exempt all or any part of the interest of the Maker in or over
any real or personal property or any part of the proceeds of any sale of any such property from
attachment, levy, foreclosure or sale under execution; (ii) provide for any stay of execution,
marshaling of assets, exemption from civil process, redemption, extension of time for payment, or
valuation or appraisement of all or any part of any real or personal property; or (iii) conflict with any
provision of this Note or the Loan Documents.
(b) The Maker agrees that any real or personal property may be sold to
satisfy any judgment entered under this Note or the Loan Documents in whole or in part and in any
order as may be desired by the Payee.
(c) The Maker: (i) waives presentment for payment, demand, notice of
demand, notice of nonpayment or dishonor, protest and notice of protest of this Note, and all other
notices (not expressly provided for in the Loan Documents) in connection with the delivery,
acceptance, performance, default, or enforcement of the payment of this Note; (ii) agrees that its
liability hereunder shall be unconditional without regard to the liability of any other party and shall
not be affected in any manner by any indulgence, extension. of time, renewal, waiver or modification
granted or consented to by the Payee at any time; (iii) consent's to the release of all or any part of, or
any interest it has in the Premises, with or without substitution; (iv) consents to any and all
indulgences, extensions of time, renewals, waivers or modifications granted or consented to by the
Payee at any time; and (v) agrees that additional Makers, endorsers, guarantors or sureties may
become parties to this Note or any of the Loan Documents, without notice to the Maker and without
affecting its liability under this Note or the Loan Documents.
VIII. CONSTRUCTION, JURISDICTION
P. 27
S, l Construction. This Note shall be construed in accordance with the domestic
internal laws of the Commonwealth of Pennsylvania, without reference to any conflict of laws
provisions, as a Note made, delivered and to be wholly performed within the Commonwealth of
Pennsylvania.
8.2 Jurisdiction. The Maker agrees that any suit, action or proceeding arising
under or with respect to this Note will be instituted in the Court of Common Pleas of Lancaster
County, Pennsylvania, or the United States District Court for the Eastern District of Pennsylvania,
and irrevocably and unconditionally submits to the jurisdiction of each such Court for such purpose.
IX. MISCELLANEOUS
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this foroanynpyurpose to be a
9.1 No Joint Venture. The Payee shall be
Loan
partner, associate or joint venturer of the Maker y
Documents or of any action or failure of action or delay of action by the Payee pursuant to any
provision of this Note or any of the Loan Documents.
9.2 Time of Essence. Time is strictly of the essence of each and every provision
of this Note.
Witness:
Insite Development, LLC
i
13
D twin, President
16D(177.1
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Mid ME POPADO i %001
9UG-2'-20119 FRI 02:19 PM S61 LOAN CENTER
FAX NC. 240 ?1? 15'5
LOAN AGREEMENT
P, X0,1
THIS LOAN AGREEMENT is executed and delivered this day of April, 2008, by
and among:
SUSQUEHANNA BAND PA, a Pennsylvania state chartered banking institution,
maintaining a principal place of business at 1570 Manheim Pike, P 0. Box 3300, Lancaster,
Pennsylvania 17604-3300 (hereinafter referred to as "Lender"); and
INSITE DEVELOPMENT, LLC, a Pennsylvania limited liability company maintaining a
place of business at 1943 Monterey Drive, Mechanicsburg, Pennsylvania 7050-8510 (hereinafter
referred to as "Borrower").
The background of this Agreement is as follows:
Borrower is the owner of certain tracts of land known and numbered as 4569 and 4535
Mount Zion Drive, Hampden Township, Cumberland County, Pennsylvania (the 'Real Property"),
on which Borrower intends to perform certain work and engage in construction in accordance with
certain Plans and Specifications for the completion of a new one hundred three (103) room Comfort
Suites Hotel (the "Improvements"), which Plans and Specifications have been or will be submitted to
and approved by Lender. When approved, such Plans and Specifications shall, in each instance,
become the "Plans and Specifications". Borrower has applied to Lender for a Seven Million Nine
Hundred Thousand Dollar ($7,900,000.00) Construction Permanent Loan to complete the
Improvements in accordance with the Plans and Specifications. This Loan shall hereinafter be
referred to as the "Construction Permanent Loan".
Borrower has also applied to Lender for a Five Hundred Fifty Thousand Dollar
($550,000.00) Term Loan to provide financing for furniture, fixtures and equipment for the hotel.
This Loan shall hereinafter be referred to as the "Term Loan".
Lender has agreed to make the Construction Permanent Loan and the Term Loan upon the
conditions set forth in Lender's Commitment Letter dated January. 8, 2008 (the "Commitment
Letter"), all as more fully set forth in this Loan Agreement and in the other documents which
evidence the Loans.
NOW, THEREFORE, in consideration of the mutual promises and undertakings of the
parties as set forth herein, and with the intention of being legally bound hereby, the parties agree as
follows,
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FAX NO. 240 313 1666
SECTION 1 - DEFINITIONS
P. 82
The following definitions, when used in the background section above, and when used in this
Loan Agreement, shall have the meaning set forth below:
1.1. "Affiliate" meads any corporation, partnership, association, trust or other Person or
business entity which is controlled by Borrower, for which purpose "controlled by" signifies the
power to direct, or cacrse the direction of, management, investments, business practices and policies,
whether through ownership of voting securities, by contract or otherwise.
1.2. "Bankruptcy Code" means the Federal Bankruptcy Code, 11 U.S.C. § 101 et, seq.,
as amended from time to time.
1.3. "Borrower" means Insite Development, LLC, a Pennsylvania limited liability
company (the "Borrower"), its successors and assigns.
1.4. "Collateral Assignment of Agreements Affecting Real Estate" means the
Collateral Assignment of Agreements Affecting Real Estate executed as of the date hereof between
Borrower and Lender, together with consents executed by the contractors identified in Section l .5
hereof.
1.5. "Construction Contracts" means those agreements between Borrower and the
following prime contractors, for the construction of a new one hundred three (103) room Comfort
Suites Hotel on land of Borrower located at 4569 and 4535 Mount Zion Drive, Mechanicsburg,
Hampden Township, Cumberland County, Pennsylvania. The prime contractors are listed on Exhibit
"A" attached hereto and made a part hereof.
1.6. "Contamination" means the uncontained presence of Hazardous Substances at the
Premises, or arising from the Premises, including:
(a) Hazardous Substances refined, produced, stored, handled, transferred,
processed, transported, generated, manufactured, treated or disposed of in, on or about the Premises
by Borrower or any predecessor in title to the Premises or prior owner of the Premises, by any
present or prior lessee or sublessee of the Premises or by any transferee of or from Borrower,
whether voluntarily or involuntarily, whether or not permitted pursuant to the temis of this Loan
Agreement.
(b) Any regulated substance (as that term is defined in any Environmental Laws)
at the Premises at any time and as described in. Subparagraph (a) of this section.
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(c) Any "Hazardous Waste" (as that term is defined in any Environmental Laws
and in the Solid Waste Management Act, 35 P.S. § 6018.103 (Purdon's Supplement 1987)), at the
Premises at any time and as described in Subparagraph (a) of this section.
1.7. "Debt Service" means the sum of all scheduled payments of :principal and/or interest
coming due on all borrowed debt within the period tested.
1.8. "Debt Service Coverage Ratio" means net income plus depreciation aald
amortization and interest divided by all Debt Service.
1.9. "Dollars and S" means lawful money of the United States of America in funds that
are immediately available to, or for the account of, Lender.
1.10. "Environmental Yaws" means all existing and future federal, state and local
statutory and regulatory provisions concerning environmental compliance, environmental
enforcement actions, regulatory approvals and compliance plans, permits and licenses for
environmental, toxic, hazardous or waste substances including, but not limited to, the Solid Waste
Management Act, 35 P.S. § 6018.101 et seq. (Pardon's Cumulative Supplement 1983-1984); the
Pennsylvania Sewage Facilities Act, 35 P.S. § 750.1 et seq. (Purdon's 1977); the Comprehensive
Environmental Response Compensation and Liability Act of 1990, 32 U.S.C. § 9601 et seq., as
amended by the Superfund Amendments and the Reauthorization Act of 1986, the Resource
Conservation and Recovery Act of 1976, 32 U.S.C. § 6901 et seq., as amended by the Hazardous and
Solid Waste Amendments of 1984, and including Subtitle I thereto with respect to regulation of
underground storage tanks, 42 U.S.C. § 6991 et seq., the Federal Water Pollution Control Act, 33
U.S.C. § 1251 et seq., the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq., the Hazardous
Materials Transportation Act, 49 U.S.C. § 1801 et seq., the Storage Tank and Spill Prevention Act,
Act of July 6,1989, 1989,35 P.S. § 6021.101 et seq., the Hazardous Sites Cleanup Act, Act of October 18,
1988, 35 P.S. § 6020.101 et seq. and the Clean Streams Law, 35 P.S. § 691.1 et seq. Environmental
Laws also means and includes all regulations, orders, directives, ordinances, rules, guidelines and
investigations promulgated pursuant to any of the laws or statutes referred to in this paragraph, and
any other similar or successor federal, state or local law, to the extent not determined as invalid
pursuant to a final, unappealable determination by a court of competent jurisdiction.
Loan Agreement.
1.12. "GAAP" means generally accepted accounting principles and practices applied on a
consistent basis in accordance with, among other standards, applicable Statements of Financial
Accounting Standards promulgated by the Financial Accounting Standards Board, other than
changes in application jr) which Lender and Borrower's independent certified public aec:ountant
concur.
"Event of Default" means each occurrence or event specified in Section 10 of this
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1,13. "Hazardous Substances" means any asbestos or any material containing asbestos,
any hazardous materials, hazardous wastes, hazardous or toxic pollutants or effluent, any hazardous
materials, any flammable substance, any flammable explosive, waste oil, any sludge (whether or not
in solid form), any radioactive material, and any other hazardous substances defined by any
Environmental Laws. Hazardous Substances also means and includes leaching of pollutants from
any garbage dump, landfill or other waste site (whether or not into underground soil, rock strata or
water supplies), any leak, release or dispersal of petroleum or a Hazardous Substance from any
underground storage tank, whether defined within the scope of any Environmental Law as a
"regulated substance".
1.14 "Individual Surety" means Donald H. Erwin, his heirs and assigns.
1.15. "Lender" means Susquehanna Bank PA, a Pennsylvania state chartered banking
institution, maintaining a mailing address of 1570 Manheim Pike, P.O. Box 3300, Lancaster,
Pennsylvania 17604-3300.
1.16. "Loan Agreement" means this Loan Agreement, and any future written amendments
to this Loan Agreement that are signed by Borrower and Lender.
1.17. "Loan Documents" means, individually and collectively, this Loan Agreement, the
Notes, Mortgages, Suretyship Agreements from the Sureties, Security Agreement, Collateral
Assignment of Agreements Affecting Real Estate and all other existing and future agreements,
pledges, instruments, documents, assignments, leases and guarantees and contracts (including
amendments to such documents) delivered by or on behalf of Borrower to Lender in connection with
the Loan described herein, or in connection with this Loan Agreement.
1.18. "Loans" mean the two (2) credit facilities described herein being the Construction
Permanent Loan and the Term Loan.
1.19. "Management Company" means Vista Host, Inc., who shall manage the hotel under
a contract between Borrower, or Borrower's Operating Entity, in connection with the management of
the hotel on the Project.
1.20. "Mortgages" mean the Mortgages dated the date hereof and described in Section 2.3
hereof encumbering the Premises.
1.21. "Ninety (90) Day LIBOR Rate" means the floating rate of interest to be adjusted on
the second business day of every week during the term of the Load which is based upon the ninety
(90) day London Interbank Offered Rate as published from time to time in the Wall Street .louinal
as of the first business day of each week, or such other rate as Lender may determine in accordance
with the exercise of its reasonable judgment to approximate that ninety (90) day London Interbank
Offered Rate if the same is no longer maintained or published.
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trust or any other entity or organization, including a government or political subdivision or an
agency or instrumentality thereof.
1.27. "Premises" means the Real Property situate at 4569 and 4535 Mount Zion Drive,
Mechanicsburg, Hampden Township, Cumberland County, Pennsylvania.
1.28. "Project" means the development and construction of a one hundred three (I03)
room Comfort Suites Hotel and all related improvements on the Premises.
1.29. "Sureties" means the Individual Surety and the Operating Entity Surety.
Lender. "Suretyship" means the Suretyship Agreements dated hereof from the Sureties to
1.31. "United States Treasury Rate" means the rate of interest that is designated from
time to time and published by the Wall Street Journal as either the three (3) month or nine (9) month
United States Treasury Rate and shall be used by Lender as a reference rate with respect to the
different interest rates charged to boy-rowers.
SECTION 2 - AMOUNT AND TERMS OF LOANS; LOAN PROCEEDS
The Loans consist of the following:
2.1. Construction/Permanent Lostn. Lender has agreed to make available a Seven
Million Nine Hundred Thousand Dollar ($7,900,000.00) Open-End Construction/Permanent
Mortgage Loan to be used to construct the Project and its appurtenances. Advances shall be made in
accordance with the terms of this Loan Agreement.
(a) Interest Rate. For the first twenty-four (24) months of the term, the interest
Rate shall be the Ninety (90) Day LIBOR Rate plus two and two-tenths percent (2.2%). For the
balance of the term of the Loan, until the Maturity Date, the Interest Rate shall be either the three (3)
year United States Treasury Rate plus three percent (3%) or the five (5) year United States Treasury
Rate plus three percent (3%) as Borrower may elect. In the event that Borrower selects the three (3)
year United States Treasury Rate at the expiration of the three (3) years of fixed rate interest, the rate
shall revert to the Ninety (90) Day LIBOR Rate plus two and two-tenths percent (2.2%).
(b) Payments. Payments of principal and interest shall be made as follows
(i) During the first twenty-four (24) months of the term of this Loan,
monthly payments of interest only shall be made on the outstanding principal balance of the Loan.
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(ii) Thereafter, and for the next thirty-six (36) or sixty (60) months,
depending on the interest rate selected by Borrower, consecutive monthly payments of principal and
interest at the above-referenced fined rate shall be paid to amortize the Loan over a term of three
hundred (300) months. Commencing with the thirty-seventh (37"') or sixty-first (61 ") month of the
term of this Loan, as the case may be, and thereafter, the payments of principal and interest shall be
recalculated based on the new rate of interest then in effect to amortize the remaining balance over
the remaining amortization term of the Loan. The entire principal and unpaid balance shall be paid
at the Maturity Date.
(c) Commitment Fee. A commitment fee of Thirty-Nine Thousand Five
Hundred Dollars ($39,500.00) shall be paid by Borrower to Lender.
(d) Term. The term of the Loan will be for a tenn of seven (7) years from the
date hereof (the "Maturity Date").
(e) Inspection Fees. All inspection fees and costs or survey fees and costs
required under the terms of the Loan Documents or required by any environmental law shall be paid
by Borrower.
(f) Completion of Construction. Lender shall not be obligated to pay any final
request for draw under the terms of this Loan Agreement until Lender is provided with a Certificate
of Use and Occupancy permit issued by Hampden Township, Cumberland County, Pemzsylvaitia.
(g) Advances under the Construction Permanent Loan shall be made in
accordance with the provisions of Section 6.3 of this Agreement.
2.2. Term Loan. Lender has agreed to make available a Five Hundred Fifty Thousand
Dollar ($550,000.00) Term Loan to be used to acquire furniture, fixtures and equipment for the
hotel. Advances under this Term Loan shall be made in accordance with the terms of this Loan
Agreement.
(a) Interest Rate. For the first twenty-four (24) months of the term, the Interest
Rate shall be the Ninety (90) Day LIBOR Rate plus two and four-tenths percent (2.4%). For the
balance of the term of the Loan, until the Term Loan Maturity Date, the Interest Rate shall be either
the three (3) year United States Treasury Rate plus three percent (3%) or the five (5) year United
States Treasury Rate plus three percent (3%) as Borrower may elect. In the event that Borrower
selects the three (3) year United States Treasury Rate at the expiration of the three (3) years of fixed
rate interest, the rate shall revert to the Ninety (90) Day LIBOR Rate plus two and two-tenths
percent (2.2%).
(b) Payments. Payments of principal and interest shall be made as follows:
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(i) During the first twenty-four (24) months of the term of this Loan,
monthly payments of interest only shall be made on the outstanding principal balance of the Loan.
(ii) Thereafter, and for the next thirty-six (36) or sixty (60) months,
depending on the interest rate selected by Borrower, consecutive monthly payments of principal and
interest at the above-referenced fixed rate shall be paid to amortize the Loan over a term of three
hundred (300) months. Commencing with the thirty-seventh (37'") or sixty-first (61 ") month of the
term of this Loan, as the case may be, and thereafter, the payments of principal and interest shall be
recalculated based on the new rate of interest then in effect to amortize the remaining balance over
the remaining amortization term of the Loan. At the Term Loan Maturity Date, the entire unpaid
principal balance and any accrued interest shall be paid in full without demand.
(c) Commitment Fee. A commitment fee of Two Thousand Seven Hundred
Fifty Dollars ($2,750.00) shall be paid by Borrower to Lender.
(d) Telrlnn. The term of the Loan will be for a term of seven (7) years from the
date hereof (the "Term Loan Maturity Date"),
2.3. Collateral. The collateral for the Permanent Construction Loan described in Section
2.1 shall consist of the following:
(a) A Suretyship Agreement from the Individual Surety and the Operating Entity
Surety.
(b) From Borrower, a comprehensive Security Agreement covering all business
assets of Borrower used in connection with the Project including all proceeds therefrom and
replacements therefor including, but not limited to, equipment, fixtures, cash, accounts receivable,
contract rights and general intangibles, assignment of the Management Agreement under which the
hotel shall be operated and all proceeds thereof and substitutions therefor.
(c) From Borrower, a first lien open-end mortgage in an original principal amount
of Seven Million Nine Hundred Thousand Dollars ($7,900,000.00) to constitute a first mortgage
against the Premises.
(d) The Assignment of Leases and bents.
(e) The Collateral Assignment of Agreements Affecting Real Estate.
(-0 All other security interests and collateral described herein or in the Loan
Documents.
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the following:
Collateral. The collateral for the Term Loan described in Section 2.2 shall consist of
(a) A Suretyship Agreement from the Individual Surety and the Operating Entity
Surety.
(b) From Borrower, a comprehensive Security Agreement covering all business
assets of Borrower used in connection with the Project including all proceeds therefrom and
replacements therefor including, but not limited to, equipment, fixtures, cash, accounts receivable,
contract rights and general intangibles, assigment of the Management Agreement under which the
hotel shall be operated and all proceeds thereof and substitutions therefor.
(c) From Borrower, a second lien open-end mortgage in an original principal
amount of Five Hundred Fifty Thousand Dollars ($550,000.00) to constitute a second mortgage
against the Premises.
(d) The Assignment of Leases and Rents.
Documents.
(e) The Collateral Assignment of Agreements Affecting Real Estate.
(f) All other security interests and collateral described herein or in the Loan
(g) Advances under the Term Loan shall be made in accordance with the
provisions of Section 7 hereof.
2.4. Proayment Premiums. The Construction/Permanent Loan and the Tenn Loan shall
be subject to a Prepayment Premium. In planning for the advancing of the proceeds of the
Construction/Permanent Loan, and in planning its investment portfolio, Lender is relying upon this
Loan and the interest to be derived therefrom and some assured period of interest accrued as a
bargained-for-consideration in this transaction. In the event any portion of the principal in excess of
the regularly scheduled amortization payments, or the entire balance of the Loan is paid prior to the
Maturity Date or the Term Loan Maturity Date, as the case may be, such payments shall be
accompanied by all accrued interest and costs and, in addition, a Prepayment Premium of two
percent (2%) of the then outstanding principal balance of the Loan. The Prepayment .Premiums is a
bargained-for-consideration and not a ligiddated damage provision. For the purpose hereof, the
Premium Period shall commence on the date of the Loan closing and shall continue for a period of
seventy-two (72) successive months thereafter. No partial prepayment shall postpone or intemipt
payments of future installments of principal and interest, which shall continue to be due and payable
at the time and in the amount set forth herein until payment in full. Notwithstanding the foregoing,
the Prepayment Premium described herein shall not be applicable in the event the Loan is refinanced
by Lender or is prepaid with internally generated funds of Borrower.
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SECTION 3 - NECESSARY ACTIONS; PRE-CONDITIONS TO LOAN
3.1. Additional Documents. Borrower and Surety shall promptly, upon request of
Lender, deliver to Lender, or cause to be delivered to Lender, the following:
(a) Subject to reasonable advance notice and requirement for such disclosure, at
such times during the term of the Loan described herein as Lender may request, Borrower shall
execute and deliver to Lender a certificate, in form and substance satisfactory to Lender, executed by
Borrower and dated the date of execution of such certification, certifying that the representations and
warranties contained in this Loan Agreement and any representations and warranties contained in the
Loan Documents are true and correct as of the date of this Loan Agreement and the date of such
certification, as though made on and as of such date, and no event has occun-ed, nor is any event
continuing, which would result from the execution and delivery of this Loan Agreement and the
Loan ,Documents, which constitutes an event of default.
(b) Evidence acceptable to Lender demonstrating the existence of the various
types of insurance coverage required under the Mortgage.
(c) Lender shall have received from Borrower all of the documents, warranties
and requirements set forth in this Loan Agreement including, but not limited to, the following:
(i) A true and correct copy of the Construction Contract, the construction
to be .for a contract price and not on a time and material basis;
(ii) A fully executed Stipulation against the filing of mechanics' liens and
accompanying bond, in a form satisfactory to Lender, which Stipulation shall be recorded prior to
the commencement of any construction on the Project;
(iii) Proof of adequate builders' risk, workers' compensation and general
liability insurance coverage for the Contractor;
(iv) An Assignment of the Construction Contract and all permits and
authorizations in a form satisfactory to Lender;
(v) Copies of all issued building, sewer, highway occupancy, construction,
earth disturbance, environmental and other permits, including zoning permits and authorizations
needed or required to construct and complete the project;
(vi) An Assignment of all such building, sewer, construction, earth
disturbance and environmental permits and all other zoning permits and authorizations needed or
required to construct the Project;
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(vii) An Assignruent of the Management Agreement with the Operating
Company under which the hotel will be operated as part of the Project;
operate the Project;
Project;
(viii) Proof of the availability of all utilities necessary to construct mid
(ix) Copies of all recorded land development and subdivision plans for the
(x) Copies of all specifications for construction of the Project; and
(xi) Copies of the fully executed and Lender approved Lease for the
Project and the Management Agreement for the Project.
(d) A policy of mortgage title insurance from Susquehanna Real Estate Settlement
Services, agent for Land America Lawyers Title, insuring the lien of the Mortgage described herein
on the Premises and all improvements, free and clear of all liens and other objections of title
(including possible unfiled mechanics' Liens). Such title insurance shall contain endorsements 100,
300 and 710, at Borrower's sole cost, together with such other endorsements as Lender may
reasonably require in order to assure that the Mortgage is a fully insured lien upon the Premises.
(e) Lender shall have received from Borrower all of the documents, warranties
and requirements set forth in this Loan Agreement.
(f) An opinion from Borrower's and Surety's Counsel, in a form satisfactory to
Lender and its counsel, that Borrower is a Pennsylvania limited liability company validly existing
and in good standing under the laws of the Commonwealth of Pennsylvania; that Borrower has the
requisite power and authority to: (i) own its own property and assets and to carry out its business;
(ii) to execute and deliver the Loan Documents to which Borrower is a party; and (iii) to perform its
obligations under those agreements and documents; that the execution, delivery and performance by
Borrower and Surety, as the case may be, of the Loan Documents to which Borrower or Surety is a
party have been duly authorized by all appropriate action or other action required on behalf of
Borrower; that the execution and delivery of the Loan Documents to which Borrower is a party and
the performance by Borrower of its obligations under the Loan Documents do not conflict with or
violate any provision of Borrower's Certificate of Organization or Operating Agreement and, to
counsel's knowledge, do not conflict with or result in any breach of any law, rule or regulation of any
order of any court or administrative agency applicable to Borrower; that each of the Loan
Documents to which Borrower or Surety is a party constitutes the legal, valid and binding
obligations of Borrower or Surety, as the case may be, enforceable in accordance with its terms; that
the Loan Agreement, upon the due execution and filing of appropriate financing statements in the
Office of the Secretary of the Commonwealth and creates in favor of Lender a valid, perfected
°UJ-2:-2CC9 FRI C2:22 PM SB1 LOAN CENTER FAX NC. 24P, 212 1555 P.
security interest (to the extent Division 9 of the Uniform Commercial Code is applicable thereto) in
the personal property, intangibles, permits and franchise agreements as collateral security for the
payment, in the case of proceeds (or expressly included within) such collateral, to the limitations set
forth in Division 9; and that the Suretyship Agreement executed by Surety has been validly executed
and delivered on behalf of the Surety.
(g) Lender shall have received from Borrower all of the collateral described in
Section 2.3 hereof or the Loan Documents.
(h) Borrower shall have established with Lender a reserve account for
replacement of furniture, fixtures and equipment to be funded on a monthly basis with three percent
(3%) of Borrower's gross monthly receipts.
(i) Borrower shall have established with Lender its primary depository account.
0) Lender shall have received from Borrower, and approved, an independent plan
and cost review of the hotel operation.
(lc) Borrower shall have submitted to Lender and secured Lender's approval of the
Hotel Management Agreement with Vista Host, Inc.
(1) Borrower shall have received and Lender shall have approved an appraisal of
the Project performed by an appraiser satisfactory to Lender indicating that the Project has appraised
at a Loan to value ratio not to exceed seventy percent (70%) of the as completed value or sixty-three
percent (63%) of the as stabilized value.
(m) Borrower having obtained a certification that the Real Property is not located
in a flood hazard zone.
(n) Borrower having submitted and Lender having approved a Phase I
Environmental Site Assessment of the Real Property.
SECTION 4 - REPRESENTATIONS AND WARRANTIES
As a material and integral inducement to Lender to advance the Loan and to execute the Loan
Agreement and Loan Documents, Borrower represents to Lender and warrants to Lender as follows:
4.1. Compliance With Laws and Other Atrreements. Borrower is in material
compliance with all laws, rules, regulations, judgments, decrees, orders, agreements and
requirements which affect in any material way any Borrower, or its assets, or the operation of
Borrower's business and that Borrower has not received and has no luiowledge of any order, notice
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of governmental investigation or of any violation or claim of violation of any law, regulation,
judgment, decree, order, agreement or other governmental requirement.
4.2. No Conflict; Governmental Approvals. The execution, delivery and performance
of this Loan Agreement and the Loan described herein will not conflict with, violate, constitute a
default under nor result in a breach of any provision of any applicable law, rule, regulation,
judgment, decree, order, instrument or other agreement to which Borrower is a party. No
authorization, permit, consent or approval of or any other action by, and no filing, registration or
declaration with any governmental authority or regulatory body is required to be obtained or made
by Borrower from the due execution, delivery and performance of this Loan Agreement or the Loan
described herein or any of the Loan Documents, except such as have been duly obtained or made
prior to the date hereof and which are in full force and effect as of the date hereof. Borrower has the
full and lawful power to:
(a) Enter into this Loan Agreement, to execute and deliver all of the Loan
Documents and to perform all of its obligations in accordance with the terms thereof;
(b) Create the security interest and grant to Lender the Mortgage on the Premises
described herein; and
(c) Take all actions necessary for the Loan Documents to constitute the valid
obligations of each of the parties thereto, legally binding against Borrower and the property of
Borrower and enforceable against Borrower in accordance with the respective terms of the Loan
Documents.
4.3. Financial Statements.
(a) All financial statements, statements of profit and loss and other financial
information of Surety, and for Borrower, and the schedules of and notes to such statements
(collectively the "Financial Statements") which have been provided to Lender by Borrower in
connection with the application for the Loan and the Commitment Letter, fully, completely and
accurately represent the business and financial condition of the Surety and Borrower as of the dates
thereof.
(b) There have been no material changes (adverse or otherwise) in the financial
condition of Surety or Borrower from the date of the financial statements to the date hereof.
(c) All potential losses or contingent losses are accrued, reflected or reserved
against or otherwise frilly disclosed its the Financial Statements or schedules thereto.
(d) The financial information provided to Lender (whether by Surety or by
persons acting for or on behalf of the Surety) in connection with the application for the Loan are
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accurate, complete and correct and fairly reflect the financial condition of borrower and Surety, as
the case may be, giving effect to the transactions contemplated by the Loan Documents.
(e) That those portions of the Financial Statements consisting of projected
statements of income have been prepared on the basis of the assumptions stated therein (which
assumptions are believed by Borrower and Surety to be fair in light of the current business
conditions) are reasonable and represent Borrower's and Surety's best estimate as of the date hereof
of Borrower's future financial performance.
(f) Surety has no indebtedness other than as shown on the financial statements.
(g) Surety has no material investment (as such term is defined under GAAP),
whether by stock purchase, capital contribution, loan, advance, purchase of property or otherwise, in
any Person other than as shown in the Financial Statements.
4.4. Tax Returns. Surety and Borrower has filed all federal, state and local tax returns
and other tax reports that Surety or Borrower is required by law to file and have paid or made
adequate provision for the payment of all income, property and other taxes, including taxes of all
employees, withheld or which have been accrued or which have become due pursuant to such returns
or otherwise. Borrower has made adequate provision for all current taxes. No objection to any
return or claim for additional taxes is being asserted which, if sustained or allowed, would have a
material adverse effect on the financial condition or the business of Borrower or Surety.
4.5. Litigation. There are no legal, equitable or administrative proceedings before any
federal, state, county or municipal court or board or other governmental or administrative agency
pending, or to the knowledge of Borrower threatened, which involve or which may involve any
material risk or any material judgment or liability not fully covered by insurance, or which may
otherwise result in any material adverse change or impairment of the business or the assets of
Borrower or Surety, or in the condition, financial or otherwise, of Borrower or Surety.
4.6. No Legal Bar. Borrower is not bound by any contract, indenture, agreement or other
instrument nor is Borrower subject to any provision or restriction which adversely affects the
respective business or conditions, financial or otherwise, of Borrower nor is Borrower in default
under any provision of any material contract, indenture, lease, loan agreement or other instrument by
which Borrower is a party or is bound nor is Borrower in default under any provision of any federal
or state law, ordinance, governmental order, rule or regulation.
'rhe representations and warranties of Borrower shall survive the Loan closing and shall
continue in full force and effect until payment and satisfaction in full of all obligations owed to
Lender under each of the Loan Documents.
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4.7. Authorizations and Permits. Borrower has obtained all permits and authorizations
required to construct the Project.
SECTION S - AFFIRMATIVE COVENANTS
Borrower agrees with Lender that, until the satisfaction and discharge in full of all
Obligations:
5.1. Representations, Warranties. The representations and warranties contained in
Section 4 ofthis Loan Agreement shall be true, complete and accurate except to the extent that !:acts
upon which such representations and warranties are based may change in the ordinary course of
business by transactions permitted or contemplated by this Loan Agreement.
5.2. Environmental Law Compliance.
(a) Borrower represents and warrants that it has not and other than as disclosed
by Borrower to Lender prior to the date hereof (with respect to any condition disclosed by Borrower
and accepted by Lender in any environmental assessment of the Premises), to the best of its
knowledge after investigation by Borrower, no prior operator, owner, tenant or party in possession of
the Premises has:
(1) Used the Premises to refine, produce, store, handle, transfer, process,
transport, generate, manufacture, treat or dispose of Hazardous Substances in violation of any
Environmental Laws;
(ii) Used the Premises in such a manner as to produce or cause
Contamination; and
(iii) Received any administrative order, summons, notice of investigation
(whether or not in the form of an "on-site" notice), administrative consent order, notice of imposition
of any Environmental Law lien, citation or other oral or written communication from any agency
having jurisdiction over the administration of Environmental Laws concerning any violations of,
action proposed under or proceedings pursuant to any Environmental Laws (including, without
limitation, any notice as to the presence of any Hazardous Substances on the Premises), the terms of
which order, notice, citation or communication have not been fully satisfied.
(b) Borrower covenants that it will, at all times, keep the Premises free of all
Hazardous Substances which might or which will cause Contamination and that it will use the
Premises at all times in such manner as to prevent the release of any Hazardous Substance from the
Premises, whether or not such release might or will cause Contamination.
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(c) Borrower covenants that it will at all times keep the Premises free of and will
cause the Premises to be released from all orders, notices, citations, notice letters and any liens
imposed against the Premises and any other Person pursuant to any Environmental Laws.
(d) Borrower specifically represents, warrants and covenants that it will:
(i) Inurrediately notify Lender in writing of any actual or threatened
Environmental Investigation, notice;letter, inquiry, search, enforcement action or cleanup proceeding
instituted by any Person with respect to any Environmental Law;
(ii) Immediately in writing cause Lender and each Person that is entitled to
notice under any Environmental La' of any release, potential release, probable release or asserted
release of any Hazardous Substanc? or any Contamination affecting Borrower or the Premises;
(iii) Comply with and cause compliance with any envirorunental
investigation, inquiry, notice letter; search, enforcement action or cleanup proceeding instituted
pursuant to any Environmental Lawiagainst Borrower, the Premises or naming Borrower as a party;
and
(iv) If req?&ed under the terms of the Mortgages, immediately and without
delay after a written request from; Lender, commence an environmental records analysis, site
investigation and due diligence search of federal, state and local records to detenn.ine compliance by
Borrower and the Premises with all trivironmental Laws.
5.3. Compliance With Applicable Laws. Borrower shall comply, at all times and in all
material respects, with the requirements of all Environmental Laws and with all other applicable
laws, rules, regulations and orders of any governmental authority, a breach of which would
materially or adversely affect the business or credit of Borrower, except where contested in good
faith and by proper proceedings.
5.4. Maintenance of Existence; Conduct of Business. Borrower will preserve and
maintain all of its material operating: license rights, privileges and franchises necessary in the nonnal
conduct of its business and/or for the operation of the Premises.
5.5. )Financial and Oth& Statements. Borrower and Surety shall:
(a) Within one hundred twenty (120) days after the close of each fiscal year,
furnish Lender with a financial statement of Borrower, prepared by a certified public accountant
acceptable to Lender, and in accordance with GrAAP, containing a balance sheet, income statement,
statement of profit and loss, a statement of changes in financial condition and schedules and notes
applicable thereto and containing a compiled opinion of the certified public accountant having
prepared such statement.
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(b) Provide Lender with copies of their state, federal and local income tax returns
including all supporting schedules no later than April 1.5th of each year during the term of the Loans
provided that in any year in which an extension to the filing of such income tax returns has been
timely tiled, the returns shall be submitted to Lender within thirty (30) days of the filing of the
extended returns.
(c) . Provide Lender with. monthly internally generated operating reports of the
hotel operation commencing with the first month following the issuance of a Certificate oi'Use and
Occupancy to Borrower.
5.6. Financial Covenants. During the term of the Loan described in this Loan
Agreement, Borrower agrees that it shall maintain the following financial covenants and ratios:
(a) Maintain its primary time, investment and demand deposit accounts with
Lender; and
(b) Commencing with the first month following the issuance of a Certificate of
Use and Occupancy to Borrower, Borrower shall maintain a debt service coverage ratio, to be
measured at the end of each twelve (12) month period thereafter, as follows
(i) for the first twelve (12) months, the ratio shall be 1.15 to 1.00;
(ii) For the second twelve (12) months, the ratio shall be 1.25 to 1.00; and
(iii) For the remaining term of the Loan, the ratio shall be 1.30 to 1.00.
5.7. Compliance. Borrower will:
(a) Comply in all material respects with the regulations and orders of all
governmental authorities with regard to the ownership and occupancy of the Premises by Borrower
and the construction of improvements to the Premises as described herein.
(b) Give immediate notice to Lender if Borrower becomes aware of the
occurrence of any Event of Default or of any fact, condition or event which (with the giving of
notice or the passage or lapse of time, or both) would be an Event of Default or of the failure of
Borrower to observe or perform any of the conditions or covenants to be observed or performed by
Borrower under this Loan Agreement or any of the other Loan Documents.
5.8. Litigation. Borrower will promptly and without delay provide directly to Lender
notice, in writing, of all material litigation and of all material proceedings before ally governmental
or regulatory agencies affecting Borrower or the Premises. Borrower will give notice of all litigation
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or proceedings instituted by any bank, lending institution or party extending credit against Borrower
or the Premises.
5.9. Violations. Borrower will give notice in writing to Lender of the occurrence of any
reported violation of any permit to construct or operate the Project or of Environmental Law and/or
of any litigation, labor dispute or governmental proceeding or investigation affecting Borrower
and/or the Premises which, if resolved other than in favor of any such party and not adequately
covered by insurance, would have a material adverse affect on the financial condition, business or
operations of Borrower and/or the Premises.
5.10. Liabilities. Borrower will pay, when due, all taxes, assessments and charges assessed
upon the Premises or against Borrower or of any property of Borrower which Borrower is required
to withhold and pay over, except where contested in proper proceedings instituted in good faith and
where adequate reserves have been set aside.
5.11. Access to Books and Inspection.
(a) Upon reasonable request by Lender, Borrower shall give any reasonable
representative of Lender access at the Premises or any other place of business of Borrower during
normal business hours and permit such representative to examine, copy or make excerpts from any
and all books, records and documents in the possession of Borrower or relating to its affairs and to
inspect the Premises and any of the properties of Borrower.
(b) Borrower authorizes Lender to contact all governmental authorities with
jurisdiction over the Premises to inquire as to and determine the status of building, occupancy, fire,
zoning and Safety Code Compliance of the Premises and to investigate any pending or threatened
building, occupancy, safety, health, fire, zoning or other similar code violation of or pertaining to the
Premises.
5.12. Taxes and Claims. Borrower shall pay and discharge all taxes, assessments and
govennmental charges or levies imposed upon any of its tangible or intangible assets (including,
without limitation, the Premises) upon Borrower or the Premises or upon its income or profits or
upon any property belonging to it before failure to do so results in civil or criminal penalties or
promptly, upon receipt of any notice of deficiency in respect of any of the foregoing and all material
claims which, if unpaid, might become a later charge upon the Premises or other property of
Borrower; provided, however, that Borrower shall not be required to pay any tax, assessment,
charge, levy or claim, the payment of which is being contested in good faith and by proper
proceedings.
5.13. Indemnification. Borrower shall protect, defend, indemnify and save harmless
Lender from and against any and all liabilities, damages, claims, suits, liens and judgments of
whatever nature including, but not limited to, claims under any Environmental Law, claims for
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contribution and/or indemnification for injuries to or death of any Person or Persons and for damage.
to the property of any Person or Persons caused by, in connection with or arising out of any activities
undertaken pursuant to the Loan and the Loan Documents, other than the willful misconduct or gross
negligence of Lender. The obligation of Borrower to protect, defend, indemnify and save harmless
as set forth in this subsection shall include any and all attorneys' fees incurred by Lender in the
defense and handling of such suit, demand, judgment, lien and claim and shall include all reasonable
attomeys' fees and investigation expenses incurred by Lender in enforcing or obtaining compliance
with the provisions of this Agreement. Borrower further agrees to protect, defend, indemnify and
save harmless Lender from and against any claims or liabilities for compensation arising under the
Workmens' Compensation Act of the Commonwealth of Pennsylvania arising out of injuries
sustained by any employees of Borrower or of any licensee or subcontractor of Borrower. The
obligations of this subsection shall continue in full force, effect and application, notwithstanding
prepayment or payment of the Loan, until the expiration of all applicable statutes of limitations in
respect of indemnification.
SECTION 6 - PROVISIONS RELATING TO CONSTRUCTION
6.1. Within thirty (30) days of the closing of the Loan, Borrower shall commence the
construction, or cause the same to be commenced, according to the Plans and Specifications,
promptly after signing this Agreement and shall thereafter proceed diligently, employing sufficient
workmen and supplying sufficient materials so that the Improvements shall be fully completed and
ready for their intended use and occupancy no later than April 1, 2009 (the "Completion Date").
6.2. Borrower further agrees that:
(a) The construction shall be performed materially in accordance with the Plans
and Specifications, all applicable statutes, laws and ordinances and the requirements of all
governmental and quasi -govenunental authorities having jurisdiction over the construction and/or
the Real Property in and for the locality in which the Real Property is situate.
(b) The Improvements, when erected, will be wholly on the Real Property within
applicable building restriction lines and will not violate applicable use or other restrictions, whether
established in prior conveyances, zoning ordinances, regulations or elsewhere. If requested by
Lender, Borrower will furnish. to Lender a foundation survey by a licensed surveyor or engineer
showing that the construction of such foundation for the Improvements is within the Real Property
encumbered by the Mortgage and free from any such violations, as aforesaid, and that there are no
encroachments by or on said Real Property. If any such foundation is not entirely within the
boundaries of the Real Property encumbered by the Mortgage, Borrower shall promptly:
(i) Obtain such executed deed or corrective deed as is necessary in order
to convey to Borrower such land as will result in the foundation being completely located on land
owned by Borrower;
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PUJ-2'-20C2 FRI '32:26 PM SBI LOAN CENTER FAX NO. 240 212 1565 P. 910
(ii) Execute, acknowledge and deliver to Lender a ?.ecordable modification
of the Mortgage which results in the foundation being completely encumbered by the MosTgage; and
(iii) Cause Borrower's title insurer to endorse Lender's policy of title
insurance insuring the Mortgage as a first lien on all of the Land on which the foundation lies.
(c) No material amendment shall be made to any Plans and Specifications without
the written approval of Lender or any governmental authority having jurisdiction.
(d) Immediately after receiving notice to do so from Lender or any governmental
authority having jurisdiction and authority over the Real Property, Borrower will remove from the
heal Property all materials on all portions of such Real Property which Lender and the governmental
authority may condemn as failing in any substantial way to conform to the Plans and Specifications
or applicable laws and will make good all portions of the construction damage by any such removal.
(e) Borrower will provide to Lender such facilities as are commonly made
available by responsible general contractors for the inspection of the Real Property and the
construction of the Improvements thereon and shall afford full and free access to all plans, drawings
and records with respect to construction.
(f) Lender shall retain the services of an engineer or inspector (the "Lender's
Inspector") for the property whose duties shall be to require that the Improvements are constructed in
accordance with the Plans and Specifications. Although Lender and/or Lender's Inspector may
inspect and approve the Plans and Specifications, cost estimates, actual construction and other
matters pertaining to the construction of Improvements or the exercise of its rights hereunder, such
inspections or exercise of its rights are solely for the protection of Lender and Borrower understands
and agrees that Lender is not snaking and will not matte any warranties or representations as to any
matters pertaining to the Improvements including, without limiting the generality of the foregoing,
the sufficiency of the construction funds, the adequacy of the Plans and Specifications or the proper
performance by any contractor or subcontractor. Borrower shall pay all costs and expenses due
Lender's Inspector which are incurred in connection with the Loan whether prior to or after the
occurrence of an Event of Default.
6.3. Advances.
(a) Letter of Credit. The principal amount available to be advanced for costs
under the Seven Million Nine Hundred Thousand Dollar ($7,900,000.00) Construction Permanent
Loan shall be reduced by the amount of that certain Letter of Credit issued by Lender on behalf of
Borrower in favor of Hampden Township in the amount of Five Hundred Ninety Thousand One
Hundred Ninety-Six Dollars ($590,196.00). Any amounts by which Lender's obligation wider the
aforesaid Letter of Credit are reduced, as set forth in written communications from Lender from
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Harnpden 'rownsliip, shall thereafter become available for advances as otherwise provided herein.
An additional fee of one percent (1%) of the amount of the Letter of Credit shall be payable by
Borrower to Lender when the Letter of Credit is issued and an annual fee of one percent (1%) of the
amount then outstanding shall be payable by Borrower to Lender on each anniversary date of the
Letter of Credit.
(b) Disbursements under the Loan for costs of constn?ction shall be for such
amounts as are set forth in disbursement requests which are approved in accordance with the terms
hereof, provided, however, that the maximum amount of draws for such costs shall be Seven Million
Nine Hundred Thousand Dollars ($7,900,000.00). Borrower may request advances periodically for
the cost of construction, and with respect to advances for hard construction costs, shall be in an
amount not exceeding ninety percent (90%) of the cost of the completed construction and materials
incorporated into the Improvements for which payments are being requested. Such requests shall be
on Lender's customary forms and shall not be made more frequently than monthly. Each such
request or requisition shall be approved by Borrower, the general contractor, the architect, Lender's
Inspector and, if applicable, the municipal officials or authorities of the township in which the
Improvements are located and each such request or requisition shall detail the work done and the
materials delivered to the project. At Lender's election, such disbursements may be made through
the title company issuing interim certifications and/or to Borrower and general contractor jointly.
Advances shall be made in accordance with the construction budget attached hereto and identified as
Exhibit "B". Any shifting of amounts from categories outlined in the budget shall be made only with
Lender's prior written consent-
6.4. Retainare. Notwithstanding anything to the contrary contained herein or in the Note,
the Mortgage or any other document evidencing the Loan, ten percent (10%) of each advance for
hard construction costs which shall be disbursed hereunder shall be withheld pending a final
disbursement which shall be made only after the Improvements have been completed in accordance
with the Plans and Specifications and in compliance with all governmental or quasi-governmental
authorities having jurisdiction over the construction and in accordance with this Agreement.
6.5. Borrower's Equity Contributions. Notwithstanding any other provision for
advances or disbursements under this Agreement, the amount remaining undisbursed under the Loan
shall at all times be an amount which is sufficient to complete the construction of the Improvements
in accordance with the Plans and Specifications and to pay all labor and material required in
connection therewith. In the event the amount remaining undisbursed under the Loan shall at any
time be insufficient to complete the construction of the Improvements as aforesaid, Borrower shall
have to contribute its own funds for payment of construction of the Improvements until this
requirement is fully satisfied. No amounts paid to Lender pursuant to this Section 6.5 shall be
deemed to be trust funds and no interest shall be payable to Lender thereon.. Any such amount may
be co-mingled with Lender's other funds and shall be disbursed for the purposes set forth herein
before any disbursements are made out of the undisbursed portion of the Loan.
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P. 101
6.6 Certification of Requisitions. Prior to each advance or disbursement made
hereunder, an inspection or review shall be made by Lender's Inspector and Lender shall not be
obligated to disburse such requested advance until:
(a) Lender's Inspector certifies the requisition/request is in proper order;
(b) The work covered in the requisition/request has been completed;
(c) The requisition/request has been approved by Borrower, the general contractor
and the architect; and
(d) The general contractor and all subcontractors and materialmen have provided
partial releases of mechanics' liens.
6.7. Loan Proceeds for Construction of Improvements. Notwithstanding anything else
set forth herein, Lender shall have the right to apply any funds which it has agreed to advance
hereunder for the purpose of bringing about the completion of the Improvements and/or for the
payment of any settlement costs, taxes or special assessments or other charges which could become a
lien on the Real Property and/or any interest on the Loan and/or any premium on any insurance
policy affecting the Real Property and Improvements.
6.8. Future Advances. If Lender shall receive any notice pursuant to Section 42 Pa. C.S.
Section 8143(b) from any person or entity having or claiming to have a lien or encumbrance on the
Real Property and/or the Improvements, even if the same is subordinate to the lien of the Mortgage,
Lender shall not be liable to Borrower if Lender shall, thereafter, fail or refuse to make any future
advances requested by Borrower to be made pursuant to this section unless Borrower's title insurer
shall have agreed to endorse the policy of mortgagee's title insurance to insure the liens of the
Mortgages in the full amount of all advances theretofore made by Lender as well as the one being
requested by Borrower as a first or second lien on the Real Property and Improvements.
6.9. Submission of Requisition Vouchers; Additional Representations. Advances on
the Construction Permanent Loan shall be made on the basis of a construction draw schedule and
cost breakdown satisfactory to Lender and established for the Improvements on the Real Property,
each of which shall be incorporated herein by reference. All requests for construction advances shall
be on an AIA Standard Form G-742, or its equivalent, and shall be supported by invoices or paid
receipts of such persons or entities for whom labor or material payment is being sought. Each
submitted application:
(a) Shall automatically constitute a representation and certification by Borrower
acid the general contractor that:
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(i) The work has been done and the materials have been supplied prior to
submission of the requisitiordvoueher and they are in. strict accordance with the Plans and
Specifications;
(ii) The work and materials for which payment is requested have been
physically incorporated into the Improvements or suitably stored on the Real Property with Lender's
prior approval;
(iii) The value is as stated;
(iv) With respect to each category for work for which payment is being
sought, the amount of such payment, together with all prior payments for such category, represents
the percentage of the total payments to be made for such category as shown on the construction cost
breakdown and which is no greater than the percentage of the total work for such category which has
been performed as of the date of the application; and
(v) The work and materials conform with all applicable rules and
regulations of governmental authorities having jurisdiction over the Real Property.
(b) Shall automatically constitute a further representation and certification by
Borrower that the payment for the work and materials described in such application has been made
or will be made with the disbursements or advances for which the application was submitted but no
event has occurred which is or with the passage of tirpe or the giving of notice or both would become
an Event of Default under any of the Loan Documents.
(c) Each and all of the representations and warranties set forth in this Agreement
continue to be true. Lender reserves the right to approve the form and content of each application
and to verify the representations therein by an inspection of the Real Property and Improvements.
6.10. Mechanics' Lien Protection. At Lender's sole option, Lender may withhold any
advance under the Loan until:
(a) The title company has endorsed Lender's title policy to insure its lien as a first
lien on the Real Property and improvements in the aggregate amount of such advance and all prior
advances hereunder; or
(b) Lender shall have obtained an updated lien search evidencing that the
Mortgage remains in first lien position against the Real Property and Improvements in the aggregate
amount of such advance and all prior advances and that no other liens have been recorded; and/or
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(c) Borrower shall have delivered to Lender a valid and updated Waive of
Mechanics' Liens for materials previously provided on Pe
the requirements of Act 52 of 2006.
6.11. Penns ivanis Contractor and Subcontractor Pa ment Act. Borrower will, or will
cause the general contractor to, comply with the provisions of the Pennsylvania Contractor and
Subcontractor Payment Act, Act No. 1994-7 as applicable.
SECTION 7 - PROVISIONS RELATING TO ADVANCEMENT OF TERM LOAN
7.1. Prior to any advance being made under the Term Loan, Borrower shall submit to
Lender, for Lender's approval, a detailed listing of all furniture, fixtures and equipment necessary to
equip the hotel on the Project. Thereafter, Borrower shall provide to Lender invoices, bills of lading
and other documentation necessary to support the acquisition of the furniture, fixtures and equipment
which shall be submitted to Lender together with a requisition for payment. Lender shall not be
required to disburse or make an advance for any furniture, fixtures and equipment which have not
been delivered to the Project site and inspected by Borrower for compliance with the purchase
orders. Written certification from Borrower of the delivery and acceptance of the furniture, fixtures
and equipment shall be a pre-condition to any advance hereunder. In no event shall Lender be for required to advance more than Five Hundred Fifty Thousand
advance ollars 0 excess 000 Oof any category
fixtures and equipment nor shall Lender be required to
breakdown description provided by Borrower to Lender.
SECTION 8, NEGATIVE COVENANTS
Borrower agrees with Lender that without the prior express written consent of Lender and
until the satisfaction and discharge in full of all Obligations:
8.1. Liens. Borrower will not, without providing to Lender fifteen (15) days advance
written notice, create, incur, assume or suffer to exist any material lien (including, by y of
illustration but not of limitation, any lien, citation, proceeding or notice by any Person under any
Environmental Laws) upon or security interest in or upon the Premises. except:
(a) Existin L?en9. The Mortgage liens and security interests existing on the date
hereof in favor of Lender.
(b) Statutory, Good Faith Denosits.
(i) Pledges or deposits under Workmens' Compensation Laws,
unemployment compensation laws or other similar laws.
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(ii) Good faith deposits in connection with bids, tenders, contracts (other
than for the purpose of borrowing money or obtaining credit) and leases to which Borrower is a party
including rent security deposits; and
(iii) Deposits to secure public or statutory obligations of Borrower, surety
or appeal bonds to which Borrower is a party, payment of contested taxes of Borrower or payment of
import duties of Borrower.
(c) Statutory Jud pent Liens.
(i) Any lien which is imposed by law, including, by way of illustration
materialmen., mechanics and warehousemen, if
but not by way of limitation: those of carriers,
payment secured by that lien is not yet due and payable, or if the validity and amount of all such
liens are being contested in good faith by appropriate proceedings for which adequate reserves have
been established;
(ii) Any lien arising from a judgment or award against Borrower with
respect to which Borrower is currently prosecuting an appeal or proceeding for review and has
obtained a stay of execution pending such appeal or proceeding or for review; and
(iii) Any lien for taxes, assessments and other governmental charges or
levies not yet subject to penalties for non-payment, or the validity or amount of which is being
contested by appropriate proceedings, and with regard to which adequate reserves have been
established.
(d) Purchase Money Y,iens. Any lien or security interest created to secure the
payment of a portion of the purchase price with regard to equipment as permitted under the'Loain
Documents, if the lien or security interest does not affect, attach or cover any other existing or future
property of Borrower.
(e) Renewal Liens. Any lien or security interest created for the sole purpose of
extending, renewing or refunding any lien or security interest permitted under Subparagraphs (a)
through (d) of this section, if such lien or security interest is limited to all or any part of the same
property covered by the original lien or security interest, and if the amount of the indebtedness
secured by the lien or security interest does noexceed the amount refundi indebtedness secured by the
lien or security interest at the time of the extension,
8.2. Tax Consolidation. Borrower will not file or consent to the 'filing of any
consolidated income tax return, with any person other than an Affiliate.
bytransfer
alease, ssets orpledge
8.3. Stile of Property. Borrower irllaza of thesell,
property ownedotherwise
Borrowerr
dispose of the Premises, or all or any substan p
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PUG-2' -20"33 FR I IJ2 : 28 Phi SB I LOAN CENTER FAX N0. 24`1 313 1565 P. 105
or suffer any liquidation or dissolution, nor sell, discount or otherwise dispose of its notes, accounts
or chattel papers other than in the ordinary course of Borrower's business
8.4. Assumption of Liabilities. Borrower will not become or remain liable, directly or
indirectly, in connection with the Obligations, liabilities or duties of any Person, firm, corporation or
other entity, whether by guarantee, endorsement, agreement to supply or advance funds, agreement
to maintain working capital or net worth, agreement to purchase or re-purchase goods or services
(whether or not such goods or services are actually acquired or otherwise) except that Borrower may
endorse negotiable instruments for collection in the ordinary course of its business.
8.5. guaranties. Borrower will not directly or indirectly make any guarantee of any
obligation of any Person or assume an Obligation as a surety of obligations of any Person.
8.6. Sales and Lease-Backs. Borrower will not sell, transfer or otherwise dispose of any
property, real or personal, now owned or hereafter acquired, with the intention of directly or
indirectly taking back a lease of such property.
8.7. Change In Business. Borrower will not discontinue any substantial part, or change
the nature of, the business of Borrower, or enter into any new business unrelated to the present
business conducted by Borrower.
8.8. Change In Franchisor. Borrower will not discontinue its franchise relationship with
its existing franchisor in the operation of its motel business.
SECTION 9 - WAIVERS
9.1. No Course of Dealing. No course of dealing between Lender and Borrower nor any
delay or omission on the part of Lender in exercising any rights under the Loan Documents shall
operate as a waiver of any rights. The waiver by Lender- on any one occasion shall not be construed
as a waiver by Lender of any right on any future occasion.
SECTION 10 - DEFAULTS
The occurrence of any one of the following shall constitute an Event of Default:
10.1. Failure to Make Payments. Failure by Borrower to make any principal or interest
payment under the Loans before the expiration of any payment grace period set forth in the Notes,
whether at the maturity or acceleration of the Notes, or otherwise.
10.2. Loan Agreement, Loan Document Default. The default by Borrower or Surety
under- any of the requirements, covenants, terms and conditions of this Loan Agreement or any of the
Loan Documents, or the occurrence or accrual of an event of default under any of the Loan
-26-
°Uv-21-2009 FRI 02:28 PM SBI 0AN CENTER FAX NC. 240 2113 1565 P. 106
Documents, if such default in performance continues uncured for more than the applicable grace
period specified in the Loan Documents.
10.3. Failure to Perform. Failure by Borrower or Surety to comply with or observe any
covenant, condition, provision, representation or warranty set forth in this Loan Agreement or any of
the Loan Document's for thirty (30) days or more after written notice from Lender; or if any
certificate or other financial statement fumished by Borrower or Surety pursuant to this Loan
Agreement or as part of the Commitment Letter was false or misleading in any material respect as of
the time made or furnished or shall have become materially incorrect or misleading by the passage or
running of time and Borrower fails to inform Lender in writing of such change.
10.4. Financial Difficulty, If Borrower or Surety shall suffer any material business or
financial impairment or material financial difficulty as evidenced by:
(a) Failure by Borrower to make any payment of principal of or accrued interest
on any obligation for borrowed money or for the deferred purchase price of property beyond the
on obligation
grace period provided with regard to such
behalf of the effect of
such holder Or holders) to holerateder
u 1?
holders of such obligation (or a trustee
obligation prior to its stated maturity; or
(b) The filing of any voluntary petition under any section of the Bankruptcy
Code; or
(c) Borrower or Surety shall incur the entry of a court order which is not vacated
or stayed within ninety (90) days:
(i) Appointing a receiver or trustee for all or a material part of its assets or
property, or
(ii) Approving a petition filed against it under any section of the
Bankruptcy Code.
10.5. Sale or Lease by Borrower of Substantially All Assets. Except as permitted by
Lender, if Borrower transfers, pledges, sells, agrees to sell, leases or agrees to lease to a Person
(whether an Affiliate, a Subsidiary or an unrelated Person) all or substantially all of its tangible or
intangible real or personal property and assets of Borrower.
Immediately upon an Event of Default, Lender may, at its sole option, at the time of
acceleration notify Borrower that Lender is accelerating all obligations of Borrower under the Loan
Documents and all obligations of Surety under the Suretyship and all interest, costs and. other
charges accrued thereon. All liabilities of Borrower and Surety thereunder shall be inunediately due
-27-
AJG-2FR1 02:2Q PM SBI _OAN CENTER FAX NO. 240 313 1565
P. 107
and payable, without presentment, demand, protest or notice of any kind whatsoever to Borrower
and Surety, all of which are hereby expressly waived.
In the event of any Event of Default under any of the Loan Documents, Borrower and Surety,
jointly and severally, unconditionally agree to pay all costs of Lender in enforcing the rights of
Lender hereunder.
10.6. Acceleration; Setoff.
(a) Automatically upon the occurrence of an Event of Default and in the sole
discretion of Lender upon the occurrence of an Event of Default, the unpaid principal balance of the
Loan described herein, all interest and fees accrued and unpaid thereon, and all other amounts and
Obligations payable by Borrower under this Loan Agreement and the other Loan Documents shall
immediately become due and payable in full, all without protest, presentment, demand or further
notice of any kind to Borrower, or to Surety, all of which are expressly waived by Borrower and
Surety.
(b) If any of the Obligations shall be due and payable or any one or more Events
of Default shall have occurred, Lender shall have the right, in addition to all other rights and
remedies available to it, without notice to Borrower, to apply toward and setoff against and apply to
the then unpaid balance of the Notes and the other Obligations any item or funds held by Lender any
and all deposits (whether general or special, time or demand, matured or unmatured, fixed or
contingent, liquidated or unliquidated but excluding any retirement plan, trust or agency accounts)
now or hereafter maintained by Borrower for its own account with Lender and any other
indebtedness at any time held or owing by Lender to or for the credit or the account of Borrower.
For such purpose, Lender shall have, and Borrower hereby grants to Lender, a first lien on all of such
deposits. Lender is hereby authorized to charge any such account or indebtedness for any amounts
due to Lender. Such right of set-off shall exist whether or not Lender shall have made any demand
under this Loan Agreement, the Notes of any other Loan Document and whether or not the Notes
and the other Obligations are matured or unmatured. Borrower hereby confirms the lien of Lender
or such accounts and the right of set-off and nothing in this Loan Agreement shall be deemed to be a
waiver or prohibition of such lien and right of set-off.
10.7. Further Remedies; Confession of ?ud?mcnt.
(a) Upon the occurrence of a Default, Lender may proceed to protect and enforce
its rights under this Loan Agreement and the other Loan Documents by exercising such remedies as
are available to Lender in respect thereof under applicable law, either by suit in equity or by action at
law, or both., whether for specific performance of any provision contained in this Loan Agreement or
any of the other Loan Documents.
-28-
PUJ-21-2U0° F R I 02: 210 PM SB I '-OAN CENTER FAX NO. 2V 31.3 1506 P. 108
(b) BORROWER HEREBY IRREVOCABLY AUTHORIZES AND
EMPOWERS LENDER, BY ITS ATTORNEY, OR BY THE PROTHONOTARY OR CLERK OF
ANY COURT OF RECORD IN THE COMMONWEALTH OF PENNSYLVANIA OR IN ANY
JURISDICTION WHERE PERMITTED BY LAW, UPON THE OCCURRENCE OF A
DEFAULT, OR AT ANY TIME THEREAFTER THAT SUCH DEFAULT IS CONTINUING, TO JUDGMENT
AGAINST APPEAR FOR BORROWER, AND CONFTSOSN AND ENTER CH BORROWER OR ANY OF ITS
FAVOR OF LENDER IN ANY JURISDIC
PROPERTY IS LOCATED FOR THE AMOUNT OF ALL OBLIGATIONS, TOGETHER WITH
COSTS OF SUIT AND WITH ACTUAL COLLECTION COSTS (INCLUDING REASONABLE
ATTORNEYS' FEES), WITH OR WITHOUT DECLARATION, WITHOUT STAY OF
EXECUTION AND WITH RELEASE OF ALL PROCEDURAL ERRORS AND T14E RIGHT TO
ISSUE EXECUTION FORTHWITH, AND FOR DOING SO THIS LOAN AGREEMENT OR A
COPY VERIFIED BY AFFIDAVIT SHALL BE A SUFFICIENT WARRANT. BORROWER
HEREBY WAIVES AND RELEASES ALL LNOW IN FORCE OR HEREAFTER INACTED?
STAY OR EXEMPTION LAW OF ANY STATE
THIS AUTHORI'T'Y AND POWER SHALL UNTIL THE OBLIGDATIOBY THE SINGLE
NS ARE FULLY
EXERCISE THEREOF, AND SHALL CONTINUE
PAID, PERFORMED, DISCHARGED AND SATISFIED.
BORROWER ACKNOWLEDGES THAT LENDER HAS URGED
BORROWER TO SEEK THE ASSISTANCE OF LEGAL COUNSEL IN THE REVIEW AND
EXECUTION OF THIS LOAN AGREEMENT AND FURTHER ACKNOWLEDGE THAT
BORROWER IS AWARE OF THE CONFESSION OF JUDGMENT AND THAT SUCHFOREGOING
TERMS
PROVISIONS CONCERNING WERE PREVIOUSLY FULLY EXPLAINED TO BORROWER BY ITS COUNSEL.
SECTION 11- MISCELLANEOUS
11.1. Survival. All covenants, agreements, representations and warranties contained in the
Loan Agreement are material to the advance of the Loan and have been expressly relied upon by
Lender and, as such, shall continue in full force and effect until the payment and satisfaction in full
of all obligations of Borrower and Surety under the Loan Documents.
11.2. Sealed InstruMent9; Controlling Law; Severability. This Loan Agreement shall
constitute an instrument under seal and shall be construed and enforced in accordance with the
domestic internal laws, but not the law of conflicts of law of the Commonwealth of Pennsylvania, as
an agreement made and to be wholly performed. within the Commonwealth of Pennsylvania.
Borrower and Surety agree that any suit, action or proceeding arising under or with respect to the
Loan Documents will be instituted in the Cowt of Common Pleas of Lancaster County,
Pennsylvania, or the United States District Court for the Eastern District of Pennsylvania, and
irrevocably and unconditionally submits to the jurisdiction and venue of each such Court for such
purpose.
-29-
PUJ-2'-2^^9 FR1 C2:29 PM SEI LOAN CENTER FAX NO. 240 212 1555 P. 109
11.3. Notices. Any notice or demand required by the Loan Documents shall be deemed to
have been given if sent by certified or registered mail, postage prepaid, in the United States mail to
the addresses as specified in the Commitment Letter, or to such other address as shall at any time be
designated, in writing, by one party given to the other.
11.4. Reimbursement. Borrower agrees to reimburse Lender, within fifteen (15) days
after notice from Lender, for all fees, costs, disbursements and expenses, including filing and
reasonable counsel fees, incurred by Lender in connection with all costs of Lender for compliance,
monitoring and enforcing this Loan Agreement and the Loan Documents.
11.5. Section Readines and e° and . The shall titles
the construction hereof. an
Agreement appear as a matter of convene nce only
11.6, InIqgrationn. This Loan Agreement constitutes the entire agreement of the parties
with respect to the terms and conditions set forth herein the Loan shall be
Noinamendme Zt odi-
integrate all of the terms and conditions of each of
modification changing the scope or the terms and conditions of this Loan Agreement shall have any
force or effect unless it is in writing and signed by both parties.
11.7. Conies and Or j inals. This Loan Agreement is being executed in counterparts, each
of which shall be deemed to be an original, but all of which together shall constitute but one
instrument.
.11.8. Successors and Assi ns. This Loan Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors, transferees and assigns. Borrower
and Surety acknowledge and agree that all of their respective duties and obligations under this Loan
Agreement and under the Loan Documents may not be transferred or assigned without the express
prior written consent of Lender.
11.9. Judicial Proceedings. Each party to this Loan Agreement agrees that any suit, action
or proceeding, whether claim or counterclaim, bought or instituted by any party hereto or any
successor or assign of any party, on or with respect to this Loan Agreement or the dealings of the
parties with respect hereto, shall be tried only by a court and not by a jury. EACH PARTY
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT TO
A TRIAL BY JURY IN ANY SUCH SUIT, ACTION OR PROCEEDING. Further, each party
waives any right it may have to claim or recover, in any such suit, action or proceeding, any special,
exemplary, punitive or consequential dainages or any other damages other than, or in addition to,
actual damages. BORROWER AND SURETY, AND EACH OF THEM., ACKNOWLEDGE AND
AGREE THAT THIS SECTION IS A SPECIFIC AND MATERIAL ASPECT OF THIS LOAN
AGREEMENT AND THAT LENDER WOULD NOT HAVE EXTENDED CREDIT TO
-30-
PUG-2 -20^P FRI 02:20 PM SBI LOAN CENTER FAX NO, 240 212 155 P. 110
BORROWER IF THE WAIVERS SET FORTH IN THIS SECTION WERE, NOT A PART OF
THIS AGREEMENT.
11.10. PArtiei at ion. Lender may from time to time sell or otherwise grant participation in
the Loan and the Notes described in this Loan Agreement and the holder of any such rtici tiro all
the participation agreement so provides: (i) shall, with respect to its participation, be
of the rights of Lender, and (ii) may exercise any and all rights of setoff or banker's lien with respect
thereto, in each case as fully as though Borrower were directly indebted to the holder of such
participation in the amount of such participation. Lender shall give notice to Borrower of the grant
of such participation; however, the failure to give such notice shall not affect any of Lender's rights
hereunder. No expenses incurred in connection with such participation shall be borne by Borrower.
11.11. Severabili of Provisions. Any provision in this Loan Agreement that is held to be
inoperative, unenforceable, voidable or invalid in any jurisdiction shall, as to that jurisdiction, be
ineffective, unenforceable, void or invalid without affecting the remaining provisions of this Loan
Agreement in that jurisdiction or in any other jurisdiction, and the provisions of this Loan
Agreement are declared to be severable.
11.12. Consent to Jurisdiction and Service of Process, Borrower irrevocably appoints
each member of Borrower as its attorney upon whom may be served any notice, process or pleading
in any action or proceeding against it arising out of or in connection with any of the Loan
Documents. Borrower hereby consents that any action or proceeding either by or against it will be
commenced and maintained in the Coun of Common Pleas of Lancaster County, Pennsylvania or in
the United States District Court for the Eastern District of Pennsylvania by service of process on any
such individual member. Borrower agrees that the Court of Common Pleas of Lancaster County,
Pennsylvania and the United States District Court for the Eastern District of Pennsylvania shall have
jurisdiction with respect to the subject matter hereof and the person of Borrower. Notwithstanding
the foregoing, Lender, in its absolute discretion, may also initiate proceedings in the courts of any
other jurisdiction in which Borrower may be found or in which any of its properties may be located.
11.13. Indemnification.
(a) If, after receipt of any payment of all or any part of the Obligations, Lender is
compelled to surrender such payment to any Person or entity for any reason (including, without
limitation, a determination that such payment is void or voidable as a preference or fraudulent
conveyance, an impermissible setoff, or a diversion of ?? then tis Lan
shall be liable ford,
force
the other Loan Documents shall continue in full
and shall indemnify, defend and hold harmless Lender with respect to the full amount so
surrendered. respect (b) Borrower sh alndsdlossesy, codefend sts, firs or l?abilit es of anyek nd 1( nc uding,
any and all claims, expenses, dem ,
-31 -
PU1-21-2CCO FRI C2:210 PM SBI LOAN CENTER
FAX NC. 24? 213 1565
P. ; 11.
without limitation, those involving death, personal injury or property damage and including
reasonable attorneys' fees and costs) arising from or in any way related to any hazardous material or
dangerous environmental condition within, on, from, related to or affecting any Real Property owned
or occupied by Borrower.
(c) The provisions of this section shall survive the termination of this Loan
Agreement and the other Loan Documents and shall be and remain effective notwithstanding the
payment of the Obligations, the cancellation of the Notes, the release of any encumbrance securing
the Obligations or any other action which Lender may have taken in reliance upon its receipt of such
payment. Any cancellation of any of the Notes. release of any encumbrance or other such action
shall be deemed to have been conditioned upon any payment of the Obligations having become final
and irrevocable.
IN WITNESS WHEREOF, Lender and Borrower have caused this Loan Agreement to be
duly executed and delivered by themselves or by their proper and duly authorized officers or
members as of the day and year first above written.
LENDER;
Witness: SUSQUEHANNA BANK PA
Christopher D. Marschka,
Assistant Vice President
BORROWER
Witness: Insite Development, LLC
B -
Donald resident
-32-
BUG-21-2009 FRI 02:30 PM SBI LOAN CENTER
FAX NO. 240 333 1585
P. 112
T e Individual $. ety hereby acknowledges that he has received a copy of this Loan
Agreemen , . ieviewed the terms hereof and agrees to be bound by the terms hereof.
Witness:
Donal rwin
The undersigned Operating Entity Surety hereby acknowledges that it has received a copy of
this Loan Agreement, has reviewed the terms hereof and agrees to be bound by the terms hereof.
Witness:
e
Insite Hospitality LLC
-33-
AUG-21-2009 FRI 02:31 PM SBI !CAN CENTER FAX NO. 24n 313 1555 P. 113
Exhibit "A"
List of Prime Contractors
(a) Abeco, Inc. - construction management and general conditions;
(b) Robert H. Kepler Masonry Contractor, Inc. - masonry;
(c) Schindler Elevator Corporation - elevator;
(d) Total Heating & Cooling, Inc. - H'VAC;
(e) Rodney B. Smith Plbg. & Htg. A/C, Inc. - plumbing;
(f) Neiswonger Construction, Inc. - site work;
(g) R&R Plaster & Drywall Co., Inc. - daffiwil/EIF
(h) H.H.H., Inc. - GYP/CEM/FRM/ROOF
(i) Conewago Enterprises, inc. - STUPLANK/STDS
0) Lezzer Lumber, Inc. - LMBR/TRUSS/FRM
(k) BBEC, Inc. - electric;
(1) Rowe Sprinkler Systems, Inc. - sprinkler; and
(m) JW Sons Drywall, LLC - drywall
AJG-2'-2? FR1 C2:?1 P°1 SB1 LOAN CENTER FAX NO. 240 ?'3 1565 P. 114
Exhibit "B"
Construction Budget
159.145.1
PUJ-21-2C^9 FRI 02:31 PM SB1 _0AN CENTER FAX NC. 240 313 1565 P. 115
CowORT SUITES
MECHAN.?CSBURG. PA
4/1108
SUBCONTRACTORS: SCOPE: COST:
MGMT $ 150,000
CONSTR
ABECO,INC.
TNC
ABECO .
GEN. CONDITIONS 50,000
J
KEPLER MASONRY 247,115
750
133
SCHMLER ELEVATOR
TOTAL HEADING & COOLING 1HTV AC ,
314,208
RODNEY SMITH PLUMBING 487,595
082
833
NEISWONGER SITE WORK
EIFS ,
356,950
R&R
LAPORT VLNYIJPATNTING 116,000
KABA ILCO CARD READERS 25,000
GLASS ERECTORS ALUMINUMIWDS 150,000
INC
1411&H GYP/CEMIFRM/ROOF/ETC 1,079,593
,
CONEWAGO STUPLANKISTDS 1,857,661
LEZZI?R LMBR/ 'RUSS/FRM 185,880
SPECIALTY ACCES. SS.
BATHROOM ST
CF
C 25,000
DEGOL L
A
I. 3,000
4
BUDGET
MISC, STEEL
CERAMIC TILE 88,000
28,000
DIALTILE BUDGET ELECTRIC 610,000
BB£C
GEORGE CHURCH SPRY-ER 250,000
000 DON
40
BUDGET
ABECO/ CONEWACGO POOL
PLANK BORING ,
40,000
INSPECTIONS BUDGET TESTING
DESK/MIRRORS/ETC 25,000
50,000 DON
MISC
GLASS ERECTORS INT. DOORIHDWR 366,975
LAUNDRY CHUTE PROPOSAL 7,000
DRYWALUINSULATION J&l AND SONS DRYWALL 4557,
METER PIT/VALVES BUDGET $7,839,530
TOTAL
OT
.TUB SURROUNDS ARE FIBERGLASS
:STAIR TOWERS REVISED TO REFLECT CENTER WALL- AND NO PICKET
:RATE.
-TENANT BUILDOUT EXCEPT 1NS.ITE SPACE NO HEATLNGIDUCTWORK OR
:DRYWALL-
:CARPET/PAD/BASE LABOR ALLOWANCE OF $5.00 SQUARE YARD.
'CERAMIC TILE AND MATERIAL ALLOWANCE OF $5.00 SQUARE FOl7T-
1:5)c b-I
A V/V
_
McNees
Wallace & Nurick LLC
attorneys at law
CLAYTON W. DAVIDSON
DIRECT DIAL: (717) 237-5496
DIRECT FAx: (717) 260-1678
E-MAIL ADDRESS: CDAVIDSON@MWN.COM
September 9, 2009
Insite Development, LLC
Attn: Donald H. Erwin
1943 Monterey Drive
Mechanicsburg, PA 17050
Re: Notice of Default
Dear Mr. Irwin:
Donald H. Erwin
1943 Monterey Drive
Mechanicsburg, PA 17050
This letter is to advise Insite Development, LLC ("Insite") and you individually that a
default has occurred under the loan documents (the "Loan Documents") evidencing
Susquehanna Bank's two loans to Insite in the principal amount of $7,900,000.00 and
$555,000.00 (collectively the "Loans"). Specifically, Insite has allowed the following mechanics
lien claims to be filed against its real property known and numbered as 4569 & 4533 Mount Zion
Drive, Cumberland County, Pennsylvania:
(a) R&R Plaster & Drywall Col, Inc. - Case No. 09-2949 - $107,429.00
(b) H.H.H., Inc. - Case No. 09-3138 - $203,984.07
(c) BBEC, Inc. - Case No. 09-3538 - $188,825.70
(d) Laporte Painting, Inc. - Case No. 09-3806 - $71,715.00
(e) Total Heating & Cooling, Inc. - Case No. 09-4276 - $107,018.51
(f) Glass Erectors, Inc. - Case No. 09-4308 - $274,325.96
(g) Rodney B. Smith Plumbing, Heating and Cooling, Inc. - Case No. 09-5700-
$200,355.64
These mechanics liens must be removed from the above referenced property within
thirty (30) days from the date of this letter to cure this default.
Sincerely,
McNEES WALLACE & NURICK LLC
By
Clayt W. Davids
CWD/emp
c: Jeffrey Aleshire, Executive Vice Pres.
P.O. Box 1166.100 PINE STREET - HARRISBURG, PA 17108-1166 - TEL: 717.232.8000 - FAx: 717.237.5300 - WWW.MWN.COM
COLUMBUS, OH - STATE COLLEGE, PA - LANCASTER, PA - HAZLETON, PA - WASHINGTON, DC
I , 1 Js
2009 NOV 25 P 2: 2 7
•+rr.
i01?
s a-:7. 56 Pj- a4r
rgc- Alms wQ/l6-cC
a i??t
e- e
SUSQUEHANNA BANK,
Plaintiff
V.
INSITE DEVELOPMENT, LLC,
Defendant
IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY, PENNSYLVANIA
CASE NO.
CIVIL ACTION - LAW
NOTICE UNDER PA.R.C.P. NO. 2958.1 OF JUDGMENT
AND EXECUTION THEREON
TO: Insite Development, LLC
1943 Monterey Drive
Mechanicsburg, PA 17050
A judgment in the amount of $550,515.47 has been entered against you and in favor of
Susquehanna Bank, in the above captioned case 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 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, PA 17013
(717) 249-3166 or (800) 990-9108
Date: November 25, 2009
McNEES WALLACE & NURICK LLC
By: ?a// l
Clayton W. D idson
Attorney I.D. 9139
100 Pine Street-P.O. Box 1166
Harrisburg, PA 17108-1166
Direct Fax: 717-260-1678
Phone: 717-232-8000
cdavidson(&mwn.com
Attorneys for Plaintiff, Susquehanna Bank
SUSQUEHANNA BANK,
Plaintiff
V.
INSITE DEVELOPMENT, LLC,
Defendant
IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY, PENNSYLVANIA
CASE NO. U q _ F?- /a r-,
: CIVIL ACTION -LAW
CERTIFICATION OF ADDRESSES
I, Clayton W. Davidson, hereby certify that the Defendant, Insite Development, LLC, is a
Pennsylvania limited liability company doing business at 1943 Monterey Drive, Mechanicsburg,
Pennsylvania 17050 and that the address of the Plaintiff, Susquehanna Bank, successor in interest
to CommunityBanks, is a Pennsylvania banking institution with its principal place of business
located at 1570 Manheim Pike, P.O. Box 3300, Lancaster, Lancaster County, Pennsylvania,
17604-3300.
Date: November 25, 2009
McNEES WALLACE & NURICK LLC
By Z/,
.?.-?
Clayto . Davids
PA Attorney I.D. o. 79139
McNees Wallace & Nurick LLC
100 Pine Street - P.O. Box 1166
Harrisburg, PA 17108-1166
(717) 260-1678 (Direct Fax)
(717) 232-8000 (Phone)
cdavidson@mwn.com
Attorneys for Susquehanna Bank
Fi?CJ--=;??rivL
OF THE F^'"TON-OTARY
20G4NOV 25 FN c: 28
SUSQUEHANNA BANK,
Plaintiff
V.
INSITE DEVELOPMENT, LLC,
Defendant
IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY, PENNSYLVANIA
CASE NO. 6 - g'?? ch !
CIVIL ACTION -LAW
NOTICE OF ENTRY OF JUDGMENT
TO: Insite Development, LLC
1943 Monterey Drive
Mechanicsburg, PA 17050
You are hereby notified that on )/-,72-5 , 2009 a judgment by confession was
entered against each of you in the above-captioned case in favor of Susquehanna Bank as
follows:
Principal: $549,843.33
Accrued Interest: $ 572.14
Costs $ 100.00
Total: $550,515.47*
*along with interest accruing at the current per diem rate of $40.93, costs and
reasonable attorney's fees until paid in full (the "Indebtedness").
DATE: or ? .
/s/ A'a"i PRO HONOTARY A
.~
Tax Parcel No. 10-14-0844-049
RELEASE OF JUDGMENT LIEN AGAINST
6275 Peregrine Way, Mechanicsburg, Cumberland County, Pennsylvania, 17050
Lienholder: Judgment dated November 25, 2009
Cumberland County, Pennsylvania
SUSQUEHANNA BANK
Upon premises located in
Hampden Township, Cumberla~ C ~ ty,~
to Pennsylvania ~ ~
Zri~'v ~ ~
Debtor: v ~ -'
t ?
~, ..
INSITE DEVELOPMENT, LLC
C3 ~
~?
Judgment Liens Docket No. Amount of d rwent
Susquehanna Bank. v. Insite Development, LLC No. 09-8212 $550,515.47
FOR VALUE RECEIVED, and intending to be legally bound, SUSQUEHANNA BANK,
hereby remises, releases, exonerates and discharges the following tract or parcel of land
and any improvements therein or thereon from the lien above:
ALL THAT CERTAIN tract or parcel of land known as 6275 Peregrine Way,
Mechanicsburg, Pennsylvania, Hampden Township, Cumberland County,
Pennsylvania, more particularly described as Lot 53 in Plan Book 93, Page 107
recorded in the Cumberland County Recorder of Deeds Office.
PROVIDED, always, nevertheless, that neither this Release nor anything contained
herein shall in any way or at any time be or be construed to be evidence of payment, satisfaction
or discharge of the debt secured by said judgments, or to affect, alter or diminish the remedies
at law for recovering the principal sum and interest and other charges secured by said
judgments from any person or entity who or which has not been expressly released from liability
therefor.
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{A2105397:1}
WITNESS the due execution hereof thisZ~ day of u~ ~ v~s~' , 2010
LIENHOLDER:
By
COMMONWEALTH OF PENNSYLVANIA
SUSQUEHANNA BANK
James Os ald
Senior Vi r~
SS:
COUNTY OF ~G~.InCAyS~
On this, the a-~~day of TT us~ , 2010, before me, a Notary Public in and for the
above-named Commonwealth and County, the undersigned officer, personallyappeared James
Oswald, who acknowledged himself to be the Senior Vice President of SUSQUEHANNA BANK,
a corporation, and that he as such officer, being authorized to do so, executed the foregoing
instrument for the purpose therein contained by signing the name of the corporation by himself
as such officer.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
_.....
NOTARIAL SEAL
FREDERICK T BURKETT NI
Notary Public
EAST EARL TWP, LANCASTER CNTY
My Commission Expires Aup 25, 2012
{A2105397:1}
SUSQUEHANNA BANK,
Plaintiff
v.
INSITE DEVELOPMENT, LLC,
Defendant
IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY, PENNSYLVANIA
c p
CASE NO. 09-8212
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CIV{LACTION -LAW =~c~
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ASSIGNMENT OF JUDGMENT --+ ~'
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AND NOW, this 1st day of October, 2010, Susquehanna Bank, located at 1570
Manheim Pike, Lancaster, PA 17604, for good and valuable consideration, the receipt of
which is hereby acknowledged, hereby assigns all rights, title and interest in the judgment
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obtained against Insite Development, LLC docketed at case number 09-8212 in the Court of
Common Pleas of Cumberland County to Lititz Properties, LLC, located at 1570 Manheim
Pike, Lancaster, PA 17604.
Susquehanna Bank
By:
N e: ymon ranger
Title: for V' President
Lititz Properties, LLC
By: _
Na e: and ranger
Title: Vi Pre ' ent
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