HomeMy WebLinkAbout09-8523BLANK ROME LLP
Francis X. Crowley, Esquire
Atty. No. 41539
Lev Kalman, Esquire
Atty. No. 89844
One Logan Square
Philadelphia, PA 19103-6998
(215) 569-5500
Attorneys for Plaintiff,
PNC Bank, National Association
as successor to National City Bank
PNC BANK, NATIONAL ASSOCIATION,
AS SUCCESSOR TO NATIONAL CITY BANK
1900 E. 9th Street (B7-YB13-22-1)
Cleveland, OH 44114
Plaintiff,
V.
GRAY DRIVE, LP
76 Emlyn Drive
Mechanicsburg, Pennsylvania 17055
COURT OF COMMON PLEAS
CUMBERLAND COUNTY
No: _OR- ot-vil-Ferk
And
HUGH J.T. SIMPSON and DIANE H
SIMPSON, h/w,
76 Emlyn Drive
Mechanicsburg, Pennsylvania 17055
Defendants.
CONFESSION OF JUDGMENT
FOR MONEY
CONFESSION OF JUDGMENT
Pursuant to the authority contained in the warrant of attorney, the original or a copy of
which is attached to the Complaint filed in this action, the undersigned attorneys appear for the;
Defendants and confess judgment in favor of the Plaintiff, PNC Bank, National Association, as
successor to National City Bank, and against the Defendants, jointly and severally, as follows:
(1) The unpaid principal due under $18,961,344.62
the Note, its Amendments and the
Is
Guaranties attached to the Plaintiff s
Complaint;
(2) Interest due under the $ 224,384.04
Note, its Amendments and the
Guaranties attached to the Plaintiff s
Complaint as of October 15, 2009;
(3) Reasonable attorneys' commission in the $ 200,000.00
amount provided by the Note, its
Amendments and the Guaranties attached
to the Plaintiffs Complaint.
Total $19,385,728.66
plus costs of suit, plus interest
thereon at the per diem rate of
$3,555.25 from October 15, 2009 to
the date of payment as provided in
the Note and its Amendments.
BLANK ROME LLP
By:
Fran ' . Crowley, Esquire
Lev Kalman, Esquire
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BLANK ROME LLP
Francis X. Crowley, Esquire
Atty. No. 41539
Lev Kalman, Esquire
Atty. No. 89844
One Logan Square
Philadelphia, PA 19103-6998
(215) 569-5500
Attorneys for Plaintiff,
PNC Bank, National Association
as successor to National City Bank
PNC BANK, NATIONAL ASSOCIATION,
AS SUCCESSOR TO NATIONAL CITY BANK COURT OF COMMON PLEAS
1900 E. 9th Street (B7-YB13-22-1) CUMBERLAND COUNTY
Cleveland, OH 44114
Plaintiff,
V.
GRAY DRIVE, LP
76 Emlyn Drive
Mechanicsburg, Pennsylvania 17055
No:
And
HUGH J.T. SIMPSON and DIANE H
SIMPSON, h/w,
76 Emlyn Drive
Mechanicsburg, Pennsylvania 17055
Defendants.
CONFESSION OF JUDGMENT
FOR MONEY
COMPLAINT FOR CONFESSION OF JUDGMENT FOR MONEY
Plaintiff, PNC Bank, National Association, as successor to National City Bank ("National
City") by and through its attorneys, Blank Rome LLP, hereby files this Complaint for Confession
of Judgment for Money pursuant to Pennsylvania Rules of Civil Procedure Nos. 2950-2967 and
sets forth the following:
I . The Plaintiff is PNC Bank, National Association, as successor to National City
Bank, a federally chartered banking institution with offices at 1900 E. 9th Street (B7-YB13-22-
1), Cleveland, OH 44114.
2. The Defendant, Gray Drive, LP ("Gray Drive"), is a Pennsylvania limited
partnership located at 76 Emlyn Drive, Mechanicsburg, Pennsylvania 17055.
3. The Defendants, Hugh J.T. Simpson and Diane Simpson are adult residents of the
Commonwealth of Pennsylvania and reside at 76 Emlyn Drive, Mechanicsburg, Pennsylvania
17055.
4. The Defendant Gray Drive first executed a Mortgage Note in favor of National
City dated October 28, 2004 (the "Mortgage Note"), and by that instrument agreed to repay a
$19,200,000.00 Construction Loan to Plaintiff. The Mortgage Note, which is attached hereto as
Exhibit "A," required payment of monthly interest beginning on December 1, 2004, and required
repayment of the full balance of the loan upon a maturity date of October 31, 2007.
5. The Note was signed by Gray Griffin LLC (by Hugh J.T. Simpson, its Managing
Member), as General Partner of Gray Drive.
6. The Note contained a confession of judgment clause permitting National City to
confess judgment upon the Mortgage Note against Gray Drive and stating as follows:
Power to Confess Judgment. UPON THE OCCURRENCE
OF AN "EVENT OF DEFAULT" (AS HEREIN
DEFINED), THE BORROWER HEREBY EMPOWERS
ANY ATTORNEY OF ANY COURT OF RECORD
WITHIN THE COMMONWEALTH OF
PENNSYLVANIA, AFTER DEMAND IS MADE
HEREUNDER, TO APPEAR FOR THE BORROWER
AND, WITH OR WITHOUT COMPLAINT FILED,
CONFESS JUDGMENT, OR A SERIES OF
JUDGMENTS, AGAINST THE BORROWER IN FAVOR
OF THE BANK OR ANY HOLDER HEREOF FOR THE
ENTIRE PRINCIPAL BALANCE OF THIS NOTE AND
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ALL ACCRUED INTEREST, TOGETHER WITH COSTS
OF SUIT AND AN ATTORNEY'S COMMISSION OF
THE GREATER OF 10% OF SUCH PRINCIPAL AND
INTEREST OR $5,000.00 ADDED AS A REASONABLE
ATTORNEY'S FEE, AND FOR DOING SO THIS NOTE
OR A COPY VERIFIED BY AFFIDAVIT SHALL BE A
SUFFICIENT WARRANT. THE BORROWER HEREBY
FOREVER WAIVES AND RELEASES ALL ERRORS IN
SAID PROCEEDINGS AND ALL RIGHTS OF APPEAL
AND ALL RELIEF FROM ANY AND ALL
APPRAISEMENT, STAY OR EXEMPTION LAWS OF
ANY STATE NOW IN FORCE OR HEREAFTER
ENACTED. INTEREST ON ANY SUCH JUDGMENT
SHALL ACCRUE AT THE DEFAULT RATE.
NOTWITHSTANDING THE ATTORNEY'S
COMMISSION PROVIDED FOR IN THIS PARAGRAPH
(WHICH IS INCLUDED IN THE WARRANT FOR
PURPOSES OF ESTABLISHING A SUM CERTAIN),
THE AMOUNT OF ATTORNEY'S FEES THAT THE
BANK MAY RECOVER FROM THE BORROWER
SHALL NOT EXCEED THE ACTUAL ATTORNEY'S
FEES INCURRED BY THE BANK.
NO SINGLE EXERCISE OF THE FOREGOING POWER
TO CONFESS JUDGMENT, OR A SERIES OF
JUDGMENTS, SHALL BE DEEMED TO EXHAUST
THE POWER, WHETHER OR NOT ANY SUCH
EXERCISE SHALL BE HELD BY ANY COURT TO BE
INVALID, VOIDABLE, OR VOID, BUT THE POWER
SHALL CONTINUE UNDIMINISHED AND IT MAY BE
EXERCISED FROM TIME TO TIME AS OFTEN AS
THE BANK SHALL ELECT UNTIL SUCH TIME AS
THE BANK SHALL HAVE RECEIVED PAYMENT IN
FULL OF THE DEBT, INTEREST AND COSTS.
7. Gray Drive executed a document entitled Disclosure for Confession of Judgment
acknowledging the indebtedness of $19,200,000, in which it also acknowledged that the
Mortgage Note and related Mortgage contained clauses authorizing the confession of judgment
against Gray Drive. The Disclosure for Confession of Judgment was signed by Gray Griffin
LLC (by Hugh J.T. Simpson, its Managing Member) as General Partner of Gray Drive. The
Disclosure for Confession of Judgment is attached hereto as Exhibit "B."
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8. On October 28, 2004, Defendants Hugh J.T. Simpson and Diane H. Simpson
entered in to a Guaranty and Suretyship Agreement (the "Guaranty") whereby they became
unconditional guarantors of all obligations of Gray Drive pursuant to the Mortgage Note. The
Guaranty is attached hereto as Exhibit "C."
9. The Guaranty contained a clause entitled "Power to Confess Judgment" which
authorized National City to confess judgment against Hugh J.T. Simpson and Diane H. Simpson
as follows:
Power to Confess Jud ent. After an Event of Default, the
Guarantor hereby empowers any attorney of any court of
record within the Commonwealth of Pennsylvania, after
demand is made hereunder, to appear for the Guarantor
and, with or without complaint filed, confess judgment, or a
series of Guaranty Obligations, together with costs of suit
and an attorney's commission of the grater of two percent
(2%) of such principal and interest or $5,000.00 added as a
reasonable attorney's fee, and for doing so this Guaranty or
a copy verified by affidavit shall be a sufficient warrant.
The Guarantor hereby forever waives and releases all errors
in said proceedings and all rights of appeal and all relief
from any and all appraisement, stay or exemption laws of
any state now in force or hereafter enacted.
Notwithstanding the attorney's commission provided for in
this paragraph (which is included in the warrant for
purposes of establishing a sum certain), the amount of the
attorney's fees that the Lender may recover from the
Guarantor shall not exceed the actual attorney's fees
incurred by the Bank.
10. Hugh J.T. Simpson and Diane Simpson executed a document entitled Disclosure
for Confession of Judgment which acknowledged the indebtedness of $19,200,000 in which it
acknowledged that the Note, Mortgage and Guaranty contained clauses authorizing the
confession of judgment against them individually. The Disclosure for Confession of Judgment
was signed by Mr. and Mrs. Simpson. The Disclosure for Confession of Judgment is attached
hereto as Exhibit "D."
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11. On January 24, 2008, Gray Drive entered into a First Amendment to Mortgage
Note (the "First Amendment") which affirmed the terms of the Mortgage Note and extended the
original Maturity Date set forth in the Note to August 31, 2008. The First Amendment is
attached hereto as Exhibit "E."
12. Gray Drive explicitly acknowledged that the Mortgage Note and related Mortgage
contained confession of judgment clauses by which it was bound pursuant to those documents
and pursuant to the First Amendment.
13. On January 24, 2008, Gray Drive and Hugh and Diane Simpson, individually,
executed a document entitled Notice of Waiver of Rights Regarding Warrants of Attorney,
Execution Rights, and Waiver of Rights to Prior Notice and Judicial Hearing (the "Waiver").
The Waiver is attached hereto as Exhibit "F" and acknowledged National City's then-existing
right to confess judgment against Gray Drive and Mr. and Mrs. Simpson individually.
14. On January 24, 2008, Defendants Hugh and Diane Simpson executed a "Consent
of Guarantors" which reaffirmed their liability to National City in the amount of $19,200,000
and which contained a clause entitled "Warrant of Attorney to Confess Judgment." The Consent
of Guarantors is attached hereto as Exhibit "G."
15. The Warrant of Attorney to Confess Judgment in the Consent of Guarantors
reaffirmed National City's right to confess judgment against Hugh and Diane Simpson and stated
as follows:
WARRANT OF ATTORNEY TO CONFESS
JUDGMENT. EACH GUARANTOR HEREBY
IRREVOCABLY AUTHORIZES AND EMPOWERS
THE PROTHONOTARY, ANY ATTORNEY OR ANY
CLERK OF ANY COURT OF RECORD, AFTER THE
OCCURRENCE OF AN EVENT OF DEFAULT, TO
APPEAR FOR AND CONFESS JUDGMENT AGAINST
SUCH GUARANTOR FOR SUCH SUMS AS ARE DUE
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AND/OR MAY BECOME DUE UNDER THE
GUARANTY AGREEMENT, WITH OR WITHOUT
DECLARATION WITH COSTS OF SUIT, WITHOUT
STAY OF EXECUTION AND WITH AN AMOUNT
EQUAL TO TEN PERCENT (10%) OF THE AMOUNT
OF SUCH JUDGMENT BUT NOT LESS THAN FIVE
THOUSAND AND 00/100 DOLLARS ($5,000.00)
ADDED FOR ATTORNEYS' COLLECTION FEES. TO
THE EXTENT PERMITTED BY LAW, OTHER THAN
MANIFEST ERROR, EACH GUARANTOR RELEASES
ALL ERRORS IN SUCH PROCEEDINGS. IF A COPY
OF THE GUARANTY, VERIFIED BY AFFIDAVIT BY
OR ON BEHALF OF THE HOLDER OF THE
GUARANTY SHALL HAVE BEEN FILED IN SUCH
ACTION, IT SHALL NOT BE NECESSARY TO FILE
SUCH ORIGINAL GUARANTY AS A WARRANT OF
ATTORNEY. THE AUTHORITY AND POWER TO
APPEAR FOR AND CONFESS JUDGMENT AGAINST
ANY GUARANTOR SHALL NOT BE EXHAUSTED BY
THE INITIAL EXERCISE THEREOF AND MAY BE
EXERCISED AS OFTEN AS THE HOLDER SHALL
FIND IT NECESSARY AND DESIRABLE AND SUCH
GUARANTY OR A COPY THEREOF SHALL BE A
SUFFICIENT WARRANT THEREFORE. THE HOLDER
HEREOF MAY CONFESS ONE OR MORE
JUDGMENTS IN THE SAME OR DIFFERENT
JURISDICTIONS FOR ALL OR ANY PART OF THE
AMOUNT OWING HEREUNDER, WITHOUT REGARD
TO WHETHER JUDGMENT HAS THERETOFORE
BEEN CONFESSED ON MORE THAN ONE
OCCASION FOR THE SAME AMOUNT. IN THE
EVENT ANY JUDGMENT CONFESSED AGAINST
ANY GUARANTOR HEREUNDER IS STRICKEN OR
OPENED UPON APPLICATION BY OR ON SUCH
GUARANTOR'S BEHALF FOR ANY REASON,
HOLDER IS HEREBY AUTHORIZED AND
EMPOWERED TO AGAIN APPEAR FOR AND
CONFESS JUDGMENT AGAINST SUCH
GUARANTOR FOR ANY PART OR ALL OF THE
AMOUNTS OWING THEREUNDER, AS PROVIDED
FOR THEREIN, IF DOING SO WILL CURE ANY
ERRORS OR DEFECTS IN SUCH PRIOR
PROCEEDINGS.
16. On August 28, 2008, Gray Drive entered into a Second Amendment to Mortgage
Note (the "Second Amendment") which affirmed the terms of the original Note and extended the
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original Maturity Date set forth in the Mortgage Note. The Second Amendment is attached
hereto as Exhibit "H."
17. Gray Drive explicitly acknowledged that the Mortgage Note and Mortgage
contained confession of judgment clauses by which it was bound pursuant to those documents
and pursuant to the Second Amendment.
18. On August 28, 2008, Gray Drive and Hugh and Diane Simpson, individually,
executed a document entitled Notice of Waiver of Rights Regarding Warrants of Attorney,
Execution Rights, and Waiver of Rights to Prior Notice and Judicial Hearing (the "Second
Waiver"). The Second Waiver is attached hereto as Exhibit "I" and acknowledged National
City's then-existing (and continuing) right to confess judgment against Gray Drive and Mr. and
Mrs. Simpson individually.
19. On August 28, 2008, Defendants Hugh and Diane Simpson executed a "Consent
of Guarantors" which reaffirmed their liability to National City in the amount of $19,200,000
and which contained a clause entitled "Warrant of Attorney to Confess Judgment." The August
28, 2008 Consent of Guarantors is attached hereto as Exhibit "J."
20. The Warrant of Attorney to Confess Judgment in the Consent of Guarantors
reaffirmed National City's right to confess judgment against Hugh and Diane Simpson and was
substantially the same as the Warrant of Attorney to Confess Judgment contained in the January
25, 2008 Consent of Guarantors.
21. On March 27, 2009, Gray Drive and Hugh and Diane Simpson executed an
"Extension of Second Amendment to Mortgage Note, With Consent Of Guarantors" (the
"Extension Agreement"). The Extension Agreement is attached hereto as Exhibit "K."
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22. The Extension Agreement acknowledged that all terms of the Second Amendment
and the August 28, 2008 Consent of Guarantors remained in full force and effect, and extended
the maturity date of the Mortgage Note until July 31, 2009, at which time all principal and
interest under the Mortgage Note, as amended, became due and owing.
23. Gray Drive failed to pay the scheduled payments as they became due on July 31,
2009 under the Note, its Amendments and the Extension Agreement, and has continued to refuse
or fail to pay such sums.
24. On August 24, 2009, a Default Letter was sent to Gray Drive addressed to Hugh
Simpson's attention. The Notice contained in the Default Letter complied with the notice
requirements under the Mortgage Note. The Default letter, which is attached hereto as Exhibit
"L," affirmed that the Extension Period, as defined in the Extension Agreement, expired by its
terms on July 31, 2009 and the principal balance of $18,961,344.62 plus accrued interest and
other charges, was due and owing.
25. Gray Drive's failure to pay the indebtedness when it became due constitutes an
Event of Default pursuant to Section 6(i) of the Mortgage Note.
26. The Mortgage Note and its amendments contain and show the Defendant Gray
Drive's signature in execution of the same by its duly authorized representatives or
representative.
27. The Guaranties attached hereto contain and show the Defendants Hugh and Diane
Simpson's signature in execution of the same.
28. None of the Mortgage Note and its amendments, the Guaranties, and other
relevant construction loan agreements have been assigned by the Plaintiff, the Plaintiff remains
the original holder of the same, and each of the same remains in full force and effect.
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29. There is due and owing to the Plaintiff by the Defendants $18,961,344.62 in
unpaid principal and $224,384.04 in interest from the date of default of July 31, 2009 to October
15, 2009 at an interest rate of 6.75% as provided for in the Mortgage Note and the amendments
thereto; as well as a reasonable attorneys' commission as provided for in the Note and its
amendments of $200,000 (the confessions of judgments provide that the judgment may include
attorneys' fees of up to 10% of the amounts due and owing under the Mortgage Note). There is
this due and owing to Plaintiff National City by Defendants the amount of $19,385,725.66 as of
October 15, 2009. Interest continues to accrue on that amount at the rate of $3,555.25 per diem.
30. The Note provides that the Defendant Gray Drive's failure to make any payment
when due thereunder constitutes an Event of Default.
31. Pursuant to the provisions of the Guaranties and its Amendments, the Defendants,
Hugh and Diane Simpson, agreed to pay the Plaintiff all indebtedness due under the Note.
32. The Mortgage Note, its amendments and Guaranties were not executed in
connection with a consumer credit transaction (but were executed in connection with a business
and commercial transaction). The Mortgage Note, its Amendments and Guaranties were
executed in connection with a business and commercial loan extended by the Plaintiff to the
corporate Defendant. Thus judgment is not being entered by confession in this action against a
natural person in connection with a consumer credit transaction, nor does the transaction involve
the retail installment sale of goods or services subject to the Goods and Services Installment
Sales Act, 69 P. S. §1101 et seq.
33. Judgment has not been entered on the Mortgage Note or its amendments in any
jurisdiction.
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34. The Mortgage Note, its amendments and Guaranties authorize confession of
judgment against the Defendant Gray Drive, Hugh J.T. Simpson and Diane Simpson, jointly and
severally, after an Event of Default under the Mortgage Note and its amendments, or after the
amounts thereunder come due, for the entire principal balance, all accrued interest and late
charges owed to the Plaintiff under the Mortgage Note and its Amendments, together with costs
of suit and an attorneys' commission in an amount equal to ten percent (10%) of such unpaid
principal balance and accrued interest for collection; in this case, National City Bank demands
$200,000 in attorneys fees, being less than the permitted ten percent (10%) of the
$19,185,728.66 in principal and interest owed as of October 15, 2009, and reserves the right to
modify the judgment to request additional attorneys' commission if they exceed $200,000.
35. In agreeing to the aforesaid confession of judgment provisions, the Defendant
Gray Drive acknowledged, through its authorized signature, in the Mortgage Note, its
amendments and the other loan agreements referenced herein that it read and understood all the
provisions thereof, and agreed that it waived any right it may have to notice or to a hearing in
connection with any confession of judgment thereunder. The Defendant Gray Drive thus
knowingly, intentionally, voluntarily and unconditionally waived any and all rights it has to prior
notice and an opportunity for hearing under the Constitutions of the United States of America
and the Commonwealth of Pennsylvania with respect to such confession of judgment.
36. In agreeing to the aforesaid confession of judgment provisions in the Guaranties,
the Defendants Hugh Simpson and Diane Simpson, by their signatures in their individual
capacities, acknowledged that they read and understood all the provisions of the Note, its
amendments, the Guaranty and the confession of judgment provisions, and agreed and
understood that they waived any right they may have to notice or to a hearing in connection with
10
any confession of judgment thereunder. The Defendants Hugh and Diane Simpson thus
knowingly, intentionally, voluntarily and unconditionally waived any and all rights they have to
prior notice and an opportunity for hearing under the Constitutions of the United States of
America and the Commonwealth of Pennsylvania with respect to such confession of judgment.
37. The Mortgage Note and its amendments are not more than twenty years old.
38. The Guaranties are not more than twenty years old.
WHEREFORE, the Plaintiff, PNC Bank, National Association, as successor to National
City Bank demands that judgment by confession be entered in its favor and against the
Defendants, Gray Drive LP, Hugh Simpson and Diane Simpson, jointly and severally, in a total
amount of $19,185,728.66 (in unpaid principal and interest as of October 15, 2009, and
attorneys' commission of $200,000) plus $3,555.25 in interest each day thereafter from October
15, 2009 to date of payment, together with reasonable attorneys' commission of $200,000 and
costs of suit.
BLANK E LLP
By:
F eiC4ro(vley, Esquire
Atty. No. 41539
Lev Kalman, Esquire
Atty. No. 89844
BLANK ROME LLP
One Logan Square
Philadelphia, PA 19103-6998
(215) 569-5500
11
VERIFICATION
I, David W. Olenik, subject to the penalties of 18 Pa.C.S. §4904 relating to unsworn
falsification to authorities, hereby state the following: (1) I am a Senior Vice President of the
Plaintiff, PNC Bank, National Association, as successor to National City Bank, and I am
authorized in that capacity to make this Verification on behalf of the Plaintiff, and (2) the facts
set forth in the foregoing Complaint for Confession of Judgment for Money are true and correct
to the best of my personal knowledge to the extent that I have personal knowledge and are
otherwise true and correct to the best of my information anlief.
Date: Z 7 oq
David D.1enik
MORTGAGE NOTE
$19,200,000,00 October 28, 2004 Pittsburgh, Pennsylvania
FOR VALUE RECEIVED, GRAY DRIVE, LP, a Pennsylvania limited partnership, with
an address at 76 Emlyn Drive, Mechanicsburg, Pennsylvania 17055 ("Borrower"), hereby
promises to pay to the order of NATIONAL CITY BANK OF PENNSYLVANIA, a national
banking association ("Bank'), in lawful money of the United States of America, in immediately
available funds, at its offices located at 20 Stanwix Street, Pittsburgh, Pennsylvania 15222, or at
such other location as the Bank may from time to time designate, the principal sum of
NINETEEN MILLION TWO HUNDRED THOUSAND DOLLARS ($19,200,000.00) or so much of
the principal sum as shall have been advanced to or for the account of the Borrower under the
terms of this Mortgage Note and the Construction Loan Agreement (as herein defined), together
with interest accruing on the outstanding principal balance from the date or dates of
disbursement thereof, as provided below. This Mortgage Note is hereinafter referred to as the
"Note" and the loan evidenced by this Note is hereinafter referred to as the "Loan". Subject to
the terms and conditions hereof, in the Construction Loan Agreement and in the Loan
Documents (as herein defined), the Bank agrees to make advances to the Borrower from time
to time (not more frequently than once a month) as set forth in the Construction Loan
Agreement and only for the uses set forth in the Construction Loan Agreement.
1. Rate of Interest and Payment Terms. The principal amount from time to time
outstanding hereunder shall bear interest from the date hereof until all amounts under this Note
are indefeasibly paid in full at the following interest rates (hereinafter collectively referred to as
the "Applicable Interest Rate") which Applicable Interest Rate shall be calculated in
accordance with one of the following options, to be selected by the Borrower in writing no later
than two (2) business days prior to the first advance (as herein defined) and each advance
thereafter under this Note and the Construction Loan Agreement:
A. Construction/Lease-Up Period: From the date of this Note through October 31,
2007, the Interest Rate Options (as herein defined) shall be:
(a) Construction LIBOR Flex Option: If Borrower selects the Construction LIBOR
Flex Option, the Applicable Interest Rate shall equal the LIBOR Flex Rate. As
used herein the term "LIBOR Flex Rate" shall at all times mean the daily
fluctuating rate per annum which is equal to the sum of the LIBOR Rate for a
Contract Period of one (1) month plus two hundred fifty basis points (2.5096),
calculated on each calendar day, with each change in such LIBOR Rate
automatically, immediately and without notice changing the LIBOR Flex Rate.
The LIBOR Flex Rate shall be adjusted by the Bank, as necessary, at the end of
each banking day during the term hereof. The Bank shall not be required to
notify the Borrower of any adjustments to the LIBOR Flex Rate; however, the
Borrower may request a quote of the prevailing LIBOR Flex Rate on any banking
day.
(b) Prime Rate Option: If Borrower selects the Prime Rate Option, the Applicable
Interest Rate shall equal the Prime Rate. As used herein the term "Prime Rate"
shall mean the fluctuating rate per annum which is announced from time to time
by Bank as being its so-called "Prime Rate", with each change in the Prime Rate
BAN FIN:233732.4 012150.120748
automatically, immediately and without notice changing the Applicable Interest
Rate. The Prime Rate is not necessarily the lowest rate of interest then available
from Bank on fluctuating rate loans.
As used herein, the term "LIBOR Rate" shall be the fixed rate per annum (rounded
upwards, if Bank deems necessary, to the next higher 1116 of 1.00%) determined by Bank by
dividing (a) the rate per annum determined by Bank to equal the average rate per annum at
which deposits (denominated in United States dollars) in an amount similar to the LIBOR Unit
and with a maturity similar to the Contract Period for that LIBOR Unit are offered to Bank at
11:00 a.m. London time (or as soon thereafter as practicable) two (2) Eurodollar Banking Days
prior to the first day of the Contract Period by banking institutions in any Eurodollar market
selected by Bank by (b) the deference of one (1) less the Reserve Percentage. "LIBOR Unit' is
the portion of the Loan to which the LIBOR Option is to apply. "Eurodollar Banking Day" means
a day on which banks in the London Interbank Market deal in United States dollar deposits and
on which banking institutions are generally open for domestic and international business at the
place where Bank's banking office is located and in New York City. "Contract Period" means
one (1) month. "Reserve Percentage" means the percentage (expressed as a decimal) which
Bank determines to be the maximum (but in any case less than 1.00) reserve requirement
(including, without limitation, any emergency, marginal, special, or supplemental reserve
requirement) prescribed for so-called "Eurocurrency liabilities" (or any other category of
liabilities that includes deposits by reference to which the Interest rate applicable to LiBOR Units
is determined) under Regulation D (as amended from time to time) of the Board of Governors of
the Federal Reserve System or any successor regulation which Bank determines to be
applicable, with each change in such maximum reserve requirement automatically, immediately
and without notice changing the interest rate thereafter applicable to such LIBOR Unit, it being
agreed that LIBOR Units shall be deemed Eurocurrency liabilities subject to such reserve
requirements without the benefit of any credit for proration, exceptions or offsets. In no event
shall any Contract Period end on a date after the Maturity Date.
Each advance under this Note is an "Advance". The Construction LIBOR Flex Option,
the Tenn LIBOR Flex Option (as herein defined), the Prime Rate Option and the Fixed Rate
Option (as herein defined) are sometimes hereinafter collectively referred to as the "Interest
Rate Options". It Is understood that the Borrower may select different Advances under this
Note and the Borrower may elect up to two (2) different interest Rate Options to apply
simultaneously to portions of the Advances. The Borrower shall have no more than two (2)
borrowing tranches (each a "Tranche") at any point in time avid each tranch shall initially be
greater than or equal to Two Hundred Fifty Thousand Dollars ($250,000.00). Subject to the
terms and conditions of this Note and the other Loan Documents, the Borrower may renew the
Interest Rate Option applicable to such Advances or convert such Advances to a different
Interest Rate Option. The Borrower shall notify the Bank in writing of each election of an
Interest Rate Option, each conversion from one Interest Rate Option to another, the amount of
the Advances then outstanding to be allocated to each Interest Rate Option and, where
applicable, the length of the interest rate period of each Interest Rate Option. Such written
notice must be received by the Bank at least two (2) business days prior to the commencement
of any Interest Rate Option.
B. Term Period: The Borrower shall have the option to extend (the "Extension
Option') the Construction/Lease-Up Period of this Note for an additional period of three (3)
years from November 1, 2007 to October 31, 2010 (the "Tenn Period'), provided that each and
every one of the following conditions and requirements has been satisfied:
BANK FW:233732-4012150.120748 -2-
(a) No Event of Default has occurred and is continuing;
(b) Not less than thirty (30) days and not more sixty (60) days prior to the
commencement of the Term Period, the Bank shall have received (1) written
notice of the Borrower's irrevocable election to extend the Construction/Lease-Up
Period of this Note and (H) a Twenty-Four Thousand Dollars ($24,000.00) note
extension fee ('Extension Request);
(c) The Debt Service Coverage Ratio (as defined In the Construction Loan
Agreement) on an amortizing basis based on permanent term loan market
standards is equal to or greater than 1.2 to 1.0 as calculated by the Bank based
on written Leases in place and paying rent delivered to and approved by the
Bank as of the date of the Extension Request;
(d) No Material Adverse Change (as defined in the Construction Loan Agreement)
has occurred with regard to the Borrower, the Guarantors (as defined in the Loan
Documents as defined herein), the Property or the Project; and
(e) The Bank shall have received, at the Borrower's sole expense, a title search and
search of Uniform Commercial Code filings which reveal no additional liens or
encumbrances against the Property.
If the Borrower elects to exercise the Extension Option and satisfies the conditions set
forth in Paragraphs (a) through (e) above, then on and after November 1, 2007, the Interest
Rate options shall be:
(a) Term LIBOR Flex tion: If Borrower selects the Term LIBOR Flex Option,
the Applicable Interest Rate shall equal the LIBOR Flex Rate. As used herein
the term "USSR Flex Rate" shall at all times mean the daily fluctuating rate per
annum which is equal to the sum of the LIBOR Rate for a Contract Period of one
(1) month plus two hundred twenty-five basis points (2.25%), calculated on each
calendar day, with each change In such LIBOR Rate automatically, immediately
and without notice changing the LIBOR Flex Rate. The LIBOR Flex Rate shall
be adjusted by the Bank, as necessary, at the end of each banking day during
the term hereof. The Bank shall not be required to notify the Borrower of any
adjustments to the LIBOR Flex Rate; however, the Borrower may request a
quote of the prevailing LIBOR Flex Rate on any banking day.
(b) Prime Rate Option: If Borrower selects the Prime Rate Option, the Applicable
Interest Rate shall equal the Prime Rate.
(c) Fixed Rate Ootion: If the Borrower irrevocably selects in writing within ten (10)
days of the beginning of the Tenn Period the Foxed Rate Option, the Applicable
Interest Rate shall equal the Term Fixed Rate. As used herein, the'Tenm Fixed
Rate' shall at all times mean the fixed interest rate per annum equal to the
Bank's then current cost of funds Pius two hundred twenty-five basis points
(2.25%) for the entire Term Period. If the Borrower elects the Fixed Rate Option,
the Borrower may not elect to convert to another interest Rate Option,
The Construction LIBOR Flex Option and the Term L160R Flex Option are sometimes
hereinafter collectively referred to as the "LIBOR Options."
`'" BANKFIN:233732-4 012150-120748 _ 3 _
If Borrower fails to select an Interest Rate Option, the Applicable Interest Rate shall be
the Prime Rate Option.
If the Bank determines (which determination shall be final and conclusive) that, by
reason of circumstances affecting the eurodollar market generally, deposits in dollars (in the
applicable amounts) are not being offered to banks in the eurodollar market for the selected
term, or adequate means do not exist for ascertaining the LIBOR Rate, then the Bank shall give
notice thereof to the Borrower. Thereafter, until the Bank notifies the Borrower that the
circumstances giving rise to such suspension no longer exist, (a) the availability of the LIBOR
Options shall be suspended, and (b) the interest rate for all advances then bearing interest
under the LIBOR Options shall be converted to another borrowing index similar to the LIBOR
Rate as selected by the Bank.
In addition, if, after the date of this Note, the Bank shall determine (which determination
shall be final and conclusive) that any enactment, promulgation or adoption of or any change in
any applicable law, rule or regulation, or any change in the interpretation or administration
thereof by a governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by the Bank with any guideline, request or
directive (whether or not having the force of law) of any such authority, central bank or
comparable agency shall make it unlawful or impossible for the Bank to make or maintain or
fund loans under the LIBOR Options, the Bank shall notify the Borrower. Upon receipt of such
notice, until the Bank notifies the Borrower that the circumstances giving rise to such
determination no longer apply, (a) the availability of the LIBOR Options shall be suspended, and
(b) the interest rate on all advances then bearing interest under the UBOR Options shall be
converted to another borrowing index similar to the LIBOR Rate as selected by the Bank.
In no event will the rate of Interest hereunder exceed the maximum rate allowed by law.
The Applicable Interest Rate shall be (i) calculated on the basis of a 360 day year and (ii)
charged on the actual number of days elapsed in any calendar year or part thereof.
Monthly payments of accrued interest shall be due and payable starting on December 1,
2004, and on the first (1st) day of each month thereafter, through and including the monthly
payment due on October 1, 2007. The entire principal balance outstanding hereunder, and all
accrued and unpaid interest hereunder, and any and all costs or expenses relating thereto, shall
be due and payable in full, without demand, on October 31, 2007 unless extended as set forth in
the next paragraph (the "Maturity Date"),
If the Borrower exercises the Extension Option, satisfies each of the conditions
precedent and extends the Note for the Term Period, the Maturity Date shall automatically be
extended to October 31, 2010 and the payment due on October 31, 2007 shall be a payment of
accrued interest at the Applicable Interest Rate. Beginning on November 1, 2007 for the
monthly payment due December 1, 2007, and on the first (1st) day of each calendar month
thereafter, in addition to monthly payments of interest at the Applicable Interest Rate, the
Borrower shall make monthly payments of principal in an amount sufficient to amortize the
outstanding principal balance of this Note over a term of twenty-five (25) years, and the entire
principal balance outstanding hereunder, and all accrued and unpaid interest hereunder, and
any and all costs or expenses relating thereto, shall be due and payable in full, without demand,
on October 31, 2010.
BANK-FIN-.233732-4 012150-120748 -4-
Accrued interest will be due and payable monthly In arrears on the principal amount
outstanding hereunder through and including the day of payment of this Note in full whether or
not judgment has been entered on this Note. The Applicable Interest Rate will be adjusted,
when necessary and if appropriate, in accordance with the terms of this Note.
If any payment under this Note shall become due on a Saturday, Sunday or public
holiday under the laws of the Commonwealth of Pennsylvania, such payment shall be made on
the next succeeding business day and such extension of time shall be included in computing
interest in connection with such payment, The Borrower hereby authorizes the Bank to charge
the Borrower's deposit account at the Bank for any monthly payment of principal and/or interest
and/or applicable late charges when due hereunder after the expiration of any grace period.
Payments received will be applied by the Bank in the following order, accrued interest, charges,
fees and expenses (including attomeys' fees) and principal.
2. Late Payments: Default Rate, If the Borrower fails to make any payment of
principal, interest or other amount becoming due pursuant to the provisions of this Note within
ten (10) calendar days of the date due and payable, the Borrower also shall. pay to the Bank a
late charge equal to five percent (5%) of the amount of such payment. Such ten (10) day period
shall not be construed in any way to extend the due date of any such payment. The late charge
is imposed for the purpose of defraying the Bank's expenses Incident to the handling of
delinquent payments and is in addition to, and not in lieu of, the exercise by the Bank of any
rights and remedies hereunder, under the other Loan Documents (as defined herein) or under
applicable laws, and any fees and expenses of any agents or attorneys which the Bank may
employ. From and after maturity of this Note, whether by acceleration or otherwise, this Note
shall bear interest at a fluctuating rate per annum (based on a year of 360 days and actual days
elapsed) which shall be three percentage points (3%) in excess of the Applicable Interest Rate
in effect from time to time under this Note but not more than the maximum rate allowed by law
(the "Default Rate"). The Default Rate shall continue to apply and be payable monthly whether
or not judgment shall be entered on this Note. The Borrower agrees that the late charge and
the Default Rate are reasonable forecasts of just compensation for anticipated and actual harm
incurred by the Bank, and that the actual harm incurred by the Bank cannot be estimated with
certainty and without difficulty.
3. Prepaymentr (a) Borrower shall have the right to prepay the principal of this
Note in whole or in part, provided, that (i) each such prepayment shall be in the principal sum of
One Hundred Thousand Dollars ($100,000.00) or any integral multiple thereof or an amount
equal to the then aggregate unpaid principal balance of this Note, (11) each such prepayment
shall be applied to the installments of this Note in the inverse order of their respective due
dates, and (iii) concurrently with the prepayment of the entire unpaid principal balance of this
Note, Borrower shall prepay the accrued Interest on the principal being prepaid.
(b) If this Note is:
(i) prepaid, in whole or in part, during a period when the unpaid principal
balance bears interest, or is scheduled to bear interest, at the Fixed Rate Option, or
(ii) accelerated after the occurrence of an Event of Default hereunder, during
a period when the unpaid principal balance bears Interest, or is scheduled to bear interest, at
the Fixed Rate Option,
&1NK_,FIN:233732-4 012150-120748 -5-
and, if, on the date of the occurrence of either (i) or (ii) above, or with respect to any partial
prepayment for which a Prepayment Charge was not determined on the date of occurrence, on
the date of any subsequent prepayment for which a Prepayment Charge is determined (each a
"Determination Date'), the Reinvestment Rate Is less than the fixed rate specified in this Note,
then a "Prepayment Charge," computed in accordance with the terms of the Prepayment
Charge Addendum, shall be payable by Borrower to Bank at the time of prepayment or
acceleration, as applicable. Bank's right to collect any Prepayment Charge shall accrue as of
each Determination Date, and any delay on Banks part to determine, or to notify Borrower as
to, the amount of any Prepayment Charge shall not constitute a waiver of, or otherwise limit,
Bank's right to recover a Prepayment Charge otherwise payable pursuant to the terms hereof.
The term "Reinvestment Rate" is defined in the Prepayment Charge Addendum.
Borrower's execution of this Note shall constitute acknowledgment that Borrower has received a
complete copy of the Prepayment Charge Addendum.
4. Loan Documents. This Note is issued in connection with the Construction Loan
Agreement dated as of even date herewith entered Into by and between the Bank and the
Borrower (the "Construction Loan Agreement"), the Open-End Mortgage and Security
Agreement dated as of even date herewith entered into by and between the Bank and the
Borrower ("Mortgage'), an Assignment of Leases and Rents dated as of even date herewith, a
Security Agreement dated as of even date herewith (and two (2) UCC-1 Financing Statements),
the Guaranty and Suretyship Agreement dated on or about the date hereof, the Environmental
Indemnity Agreement dated on or about the date hereof, and any other security agreements,
mortgages, assignments and other documents and instruments entered into.from time to time in
connection with this Note, the terms of which are Incorporated herein by reference (collectively
the "Loan Documents"), and is secured by the property described in the Loan Documents and
by such other collateral as previously may have been or may in the future be granted to the
Bank to secure this Note. The terms, covenants, conditions, provisions, stipulations, promises
and agreements of the Loan Documents are hereby made a part of this Note, to the same
extent and with the same effect as if they were fully set forth herein, and Borrower does hereby
covenant to abide by and to strictly comply with each and every term, covenant, condition,
provision, stipulation, promise and agreement set forth In the Loan Documents.
b. Power to Confess Judgment: UPON THE OCCURRENCE OF AN "EVENT OF
DEFAULT" (AS HEREIN DEFINED), THE BORROWER HEREBY EMPOWERS ANY
ATTORNEY OF ANY COURT OF RECORD WITHIN THE COMMONWEALTH OF
PENNSYLVANIA, AFTER DEMAND IS MADE HEREUNDER, TO APPEAR FOR THE
BORROWER AND, WITH OR WITHOUT COMPLAINT FILED, CONFESS JUDGMENT, OR A
SERIES OF JUDGMENTS, AGAINST THE BORROWER IN FAVOR OF THE BANK OR ANY
HOLDER HEREOF FOR THE ENTIRE PRINCIPAL BALANCE OF THIS NOTE AND ALL
ACCRUED INTEREST, TOGETHER WITH COSTS OF SUIT AND AN ATTORNEY'S
COMMISSION OF THE GREATER OF 10% OF SUCH PRINCIPAL AND INTEREST OR
$5,000.00 ADDED AS A REASONABLE ATTORNEY'S FEE, AND FOR DOING SO THIS
NOTE OR A COPY VERIFIED BY AFFIDAVIT SHALL BE A SUFFICIENT WARRANT. THE
BORROWER HEREBY FOREVER WAIVES AND RELEASES ALL ERRORS IN SAID
PROCEEDINGS AND ALL RIGHTS OF APPEAL AND ALL RELIEF FROM ANY AND ALL
APPRAISEMENT, STAY OR EXEMPTION LAWS OF ANY STATE NpW IN FORCE OR
HEREAFTER ENACTED. INTEREST ON ANY SUCH JUDGMENT SHALL ACCRUE AT THE
DEFAULT RATE. NOTWITHSTANDING THE ATTORNEY'S COMMISSION PROVIDED FOR
IN THIS PARAGRAPH (WHICH IS INCLUDED IN THE WARRANT FOR PURPOSES OF
ESTABLISHING A SUM CERTAIN), THE AMOUNT OF ATTORNEY'S FEES THAT THE BANK
BANK_FIN'233732.4 012150-120748 - 6
MAY RECOVER FROM THE BORROWER SHALL NOT EXCEED THE ACTUAL ATTORNEI^S
FEES INCURRED BY THE BANK.
NO SINGLE EXERCISE OF THE FOREGOING POWER TO CONFESS JUDGMENT,
OR A SERIES OF JUDGMENTS, SHALL BE DEEMED TO EXHAUST THE POWER,
WHETHER OR NOT ANY SUCH EXERCISE SHALL BE HELD BY ANY COURT TO BE
INVALID, VOIDABLE, OR VOID, BUT THE POWER SHALL CONTINUE UNDIMINISHED AND
IT MAY BE EXERCISED FROM TIME TO TIME AS OFTEN AS THE BANK SHALL ELECT
UNTIL SUCH TIME AS THE BANK SHALL HAVE RECEIVED PAYMENT IN FULL OF THE
DEBT, INTEREST AND COSTS.
THE FOREGOING RIGHTS AND REMEDIES ARE IN ADDITION TO AND NOT IN LIEU
OF ANY OTHER RIGHT OR REMEDY AVAILABLE TO BANK UNDER THIS REVOLVING
NOTE OR THE OTHER LOAN DOCUMENTS OR OTHERWISE.
6. Events of Default and Remedies. The occurrence of any of the following
events will be deemed to be an "Event of Default" under this Note:
ti) the nonpayment of any principal, interest or other indebtedness under this
Note or any of the other Loan Documents when due and such non-payment shall have
continued for a period of five (5) days after the date on which such payment was due;
(ii) the occurrence of any event of default or default and the lapse of any
notice or cure period under any Loan Document or any other debt, liability or obligation to the
Bank of any Obligor;
(iii) the filing by any Obligor of any proceeding in bankruptcy, receivership,
insolvency, reorganization, liquidation, conservatorship or similar proceeding, or any assignment
by any Obligor for the benefit of creditors;
(iv) the filing against any Obligor of any proceeding in bankruptcy,
recovership, insolvency, reorganization, liquidation, conservatorship of similar proceeding which
is not dismissed or stayed within sixty (60) days of such filing;
(v) if any levy, garnishment, attachment, or similar proceeding is instituted
against the property of any Obligor held or deposited with the Bank and such action is not
promptly contested by appropriate proceedings and a bond is not posted for the amount in
controversy;
(vi) a default with respect to any other indebtedness of any Obligor for
borrowed money, if the effect of such default is to cause or permit the acceleration of such debt;
(vii) the commencement of any foreclosure proceeding, execution or
attachment against any collateral securing the obligations of any Obligor to the Bank;
(viii) the entry of a final judgment In excess of $50,000.00 against any Obligor
and the failure of such Obligor to discharge or bond the judgment within thirty (30) days of the
entry thereof;
(ix) the revocation or attempted revocation, in whole or in part, of any
guarantee to Bank by any Guarantor,
OANILFIN:233732-4 012150-120748 .7-
(x) any representation or warranty made by any Obligor to the Bank in any
Loan Document, or any other documents now or in the future securing the obligations of any
Obligor to the Bank, is false, erroneous or misleading in any materi4l respect; or
(xi) the failure of any Obligor to observe or perform any other covenant or
other agreement with the Bank contained in any Loan Document or any other documents now
or in the future securing the obligations of any Obligor to the Bank and such failure to observe or
perform shall have continued for a period beyond the grace period, if any, or if no grace period
is specified, beyond thirty days after such failure to observe or perform.
As used herein, the term "Obligoe' means any Borrower and any Guarantor, and the
term "Guarantor" means any guarantor of the obligations of the Borrower to the Bank existing
on the date of this Revolving Note or arising in the future.
Upon the occurrence of an Event of Default: (a) the Bank shall be under no further
obligation to make Advances hereunder, (b) if an Event of Default specified in clauses (iii), (iv)
or (v) above shall occur, the outstanding principal balance and accrued interest hereunder
together with any additional amounts payable hereunder shall be immediately due and payable
without demand or notice of any kind; (c) if any other Event of Default shall occur, the
outstanding principal balance and accrued interest hereunder, together with any additional
amounts payable hereunder, at the sole option of the Bank and without demand or notice of any
kind, may be accelerated and become immediately due and payable; (d) at the sole option of
the Bank, this Note will bear interest at the Default Rate from the date of the occurrence of the
Event of Default; and (e) the Bank may exercise from time to time any of the rights and
remedies available to the Bank under the Loan Documents or under applicable law, all such
rights and remedies being cumulative and not exclusive of each other and such rights and
remedies may be exercised concurrently or consecutively at Banks sole option; and such rights
and remedies shall not be exhausted by any exercise thereof, but may be exercised as often as
occasion therefor shall occur, and the failure to exercise any such right or remedy shall not be
construed as a waiver or release of same.
7. Interest Limitation. In no event whatsoever, whether by acceleration of maturity
of the debt evidenced hereby or otherwise, shall the amount paid or agreed to be paid to Bank
for the use, forbearance or detention of the money advanced or to be advanced hereunder
exceed the highest lawful rate permissible under the laws of the Commonwealth of
Pennsylvania or the United States of America as applicable to Borrower. If, from any
circumstances whatsoever, fulfillment of any provision hereof or of any other agreement
evidencing or securing the debt, at the time performance of such provisions shall be due, shall
involve the payment of interest in excess of that authorized by law, the obligation to be fulfilled
shall be reduced to the limit so authorized by law, and if from any circumstances, Bank shall
ever receive as interest an amount which would exceed the highest lawful rate applicable to
Borrower, such amount which would be excessive interest shall be applied to the reduction of
the unpaid principal balance of the debt evidenced hereby and not to the payment of interest.
All sums paid to Bank for the use, forbearance or detention of the money advanced or to be
advanced hereunder shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full stated term of this Note, so that the rate of interest on
account of this Note is uniform throughout the term hereof. The provisions of this paragraph
shall control all of the provision of the Loan Documents.
BANK-FIN:=732-4 012160.120748 -a-
B. Right of Setoff. In addition to all liens upon and rights of setoff against the
money, securities or other property of the Borrower given to the Bank by law, the Bank shall
have, with respect to the Borrower's obligations to the Bank under this Note and to the extent
permitted by law, a contractual possessory security interest in and a right of setoff against, and
the Borrower hereby assigns, conveys, delivers, pledges and transfers to the Bank all of the
Borrower's right, title and interest in and to, all deposits, moneys, securities and other property
of the Borrower now or hereafter in the possession of or on deposit with the Bank whether held
in a general or special account or deposit, whether held jointly with someone else, or whether
held for safekeeping or otherwise, excluding, however, all IRA, Keogh, and trust accounts
specifically designated as payroll tax withholding accounts. Every such security interest and
right of setoff may be exercised without demand upon or notice to the Borrower. Every such
right of setoff shall be deemed to have been exercised Immediately upon the occurrence of an
Event of Default hereunder without any action of the bank, although the Bank may enter such
setoff on its books and records at a later date,
9. Transfer of Interest_ Borrower covenants and agrees that it shall not permit the
sale, pledge, encumbrance, assignment or other transfer of any ownership interest in the
Property or the Borrower or any member of the Borrower.
Notwithstanding the above, the limited partners In the Borrower and the members in the
General Partner (as defined in the Construction Loan Agreement) of the Borrower may transfer
certain limited partnership interests and membership units, respectively, to immediate family
members for estate planning purposes; provided, however, that, the Borrower shall notify the
Bank in writing within Meen (15) days of any such transfer, further, provided, however, that at
all times Hugh J. T. and Diane H. Simpson shall own, in the aggregate, at least fifty-one percent
(51 %) of the membership units in the General Partner of the Borrower.
10. Misce- i s, No delay or omission of the Bank to exercise 'any right or power
arising hereunder shall Impair any such right or power or be considered to be a waiver of any
such right or power or any acquiescence therein nor shall the action or inaction of the Bank
impair any right or power resulting therefrom.
The Bank shall not be deemed, by any act of omission or commission, to have waived
any of its rights or remedies hereunder unless such waiver is in writing and signed by the Bank,
and then only to the extent specifically set forth in writing. A waiver as to one event shall not be
construed as continuing or as a bar to or waiver of any right or remedy as to a subsequent
event. -
The invalidity or unenforceability of any provisions of this Note shall not affect the other
provisions hereof. If any provision of this Note is found to be invalid by a court, all the other
provisions of this Note will remain in full force and effect,
No modification, amendment or waiver of any provision of this Note nor consent to any
departure by the Borrower therefrom will be effective unless made in writing and signed by the
Bank.
The Borrower agrees to pay on demand, to the extent permitted by law; all fees, costs
and expenses (including reasonable inside and outside legal counsel fees and expenses)
Incurred by the Bank in preparing the Loan Documents or any amendments, modifications,
extensions, supplements or renewals thereof and in the protection and enforcement of its rights
in this Note and any security therefor and in the Loan Documents. ..
BANK FIN:233732.4 012160-120748 . 9 _
The Borrower hereby forever waives presentment, demand, protest, notice of dishonor,
notice of nonpayment or default and any other notices of any kind. The Borrower also waives
all defenses based on suretyship or impairment of collateral.
In any action brought with respect to this Note, the holder hereof need not produce or file
the original of this Note, but only need produce or file a photocopy of this Note, certified by the
holder to be a true and correct copy of this Note,
The Bank shall have the right to fumish to its affiliates, and to such other persons or
entities as the Bank may deem advisable for the conduct of its business, information conceming
the business, financial condition, and property of the Borrower and the Guarantor, the amount of
the debt of the Borrower to Bank, and the terms, conditions and other provisions applicable to
the respective parts thereof. The Bank reserves the right to participate or sell interests in the
Revolving Loan, this Note and the other Loan Documents and otherwise dispose of the same in
the Bank's normal course of business.
IF THIS NOTE IS EXECUTED BY MORE THAN ONE BORROWER, THE
OBLIGATIONS OF SUCH PERSONS OR ENTITIES HEREUNDER WILL BE JOINT AND
SEVERAL. This Note shall bind the Borrower and the heirs, executor;, administrators,
successors and assigns of the Borrower, and the benefits hereof shall inure to the benefit of
Bank and its successors and assigns; provided, however, that Borrower shall not assign its
obligations under this Note or any of the Loan Documents without the express written consent of
Bank, which consent may be withheld by Bank in its sole and absolute discretion. All references
herein to the "Borrower" and "Bank" shall be deemed to apply to the Borrower and Bank and
their respective heirs, executors, administrators, successors and assigns.
All notices required to be delivered pursuant to this Note shall be in writing and shall be
sent to the following addresses by hand delivery, by recognized national overnight delivery
service (receipt with signature of addressee required), by facsimile transmission with
confirmation of delivery (with a copy sent the same day by United States Mail) or by United
States certified mail (return receipt requested), postage prepaid:
BArIK:
o we.
National City Bank of Pennsylvania Gray Drive, LP
20 Stanwix Street -18th Floor 76 Emlyn Drive
Pittsburgh, PA 15222 Mechanicsburg, PA 17055
Attn: Vice President Attn: Hugh J. T. Simpson
Investment Real Estate Division Fax: (717) 795-5490
Fax: (412) 644-6095
With a copy to:
Stephen C. Nudel, Esquire
219 Pine Street
Harrisburg, PA 17101
Fax: (717) 236-5080
Notice so given by hand delivery or facsimile shall be effective on the day notice is
given. Notice so given by recognized national overnight delivery service or United States
BANK-FIN:2337324 012150-12074a _ 0
certified mail shall be effective on the day received by the addressee. The Bank and the
Borrower may each change the address for service of notice upon it by a notice In writing to the
other party hereto.
rime is of the essence with respect to an of Borrower's obligations and agreements
evidenced by this Note and the other Loan Documents.
This Note has been delivered to and accepted by the Bank and will be deemed to be
made in the Commonwealth of Pennsylvania. This Note will be interpreted and the rights and
liabilities of the parties hereto determined in accordance with the laws of the Commonwealth of
Pennsylvania, excluding its conflict of laws rules. The Borrower hereby agrees to the
jurisdiction of any state or federal court located within Allegheny County, Pennsylvania, and
consents that all service of process be sent by nationally recognized overnight courier service
directed to the Borrower at the Borrower's address set forth herein and service so made will be
deemed to be completed on the business day after deposit with such courier, postage prepaid;
provided that nothing contained herein will prevent the Bank from bringing any action or
exercising any rights against any security or against the Borrower Individually, or against any
property of the Borrower within any other state or nation to enforce any award or judgment
obtained in the venue specified above or such other venue as the Bank chooses. The Borrower
waives any objection to venue and any objection based on a more convenient forum in any
action instituted hereunder.
This Note, together with the other loan Documents, constitutes the entire agreement
between the parties hereto relating to this financing transaction and it supersedes all prior
understandings and agreements, whether written or oral, between the parties hereto relating to
the transactions provided for hereln.
17• WAIVER OF JURY TRIAL. THE BORROWER AND THE BANK
IRREVOCABLY WAIVE ANY AND ALL RIGHTS EACH MAY HAVE TO A TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR CLAIM OF ANY NATURE RELATING TO THIS NOTE,
ANY DOCUMENTS EXECUTED IN CONNECTION WITH THIS NOTE OR ANY
TRANSACTION CONTEMPLATED IN ANY OF SUCH DOCUMENTS. THE BORROWER
ACKNOWLEDGES THAT THE FOREGOING WAIVER HAS BEEN NEGOTIATED AND 13
KNOWING AND VOLUNTARY.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
BANK FIN:233732-4 012150.120748
The Borrower acknowledges that it has read and understood all the provisions of
this Note, Including the confession of judgment and waiver of jury trial, and has been
advised by counsel as necessary or appropriate.
IN WITNESS WHEREOF, the Borrower, intending to be legally bound hereby, has
caused this Mortgage Note to be duly executed as a document under seal as of the date first
written above.
WITNESS: GRAY DRIVE, LP,
a Pennsylvania limited partnership
By: GRAY GRIFFIN, LLC,
a Pennsylvania limited liability company
Its: General Partner
a e: Wafter D. Erick By. (SEAL)
Na J. T. Simpson
Title: raging Member
BANK FIN233732-4 012150-12074a -12-
Am
YM
City,
PA
UM
Date
October
FOR BANK U_SE ON
Obligor #
Tax I, D. #
Obligation #
This Prepayment Charge Addendum (this "Addendum") is made by GRAY DRIVE, LP, a
Pennsylvania limited partnership C'Borrower) at the place and effective as of the date first set
forth above.
Borrower has executed and delivered to NATIONAL CITY BANK OF PENNSYLVANIA
("Bank') a mortgage note (the "Note") dated October 28, 2004, in the face amount set forth
above and captioned Mortgage Note.
This Addendum is hereby made a part of the Note and the Note is hereby supplemented by
adding the following provisions thereto:
"Reinvestment Rate" means, on the Determination Date, the "bond equivalent yield',
interpolated from the most actively traded U.S. Treasury Bills, U.S. Treasury Notes and/or U.S.
Treasury Bonds to a term equal to the principal weighted averse time (as measured in years
from the date of calculation and rounded to the nearest 1/10 % of a year) that all principal
payments subject to early repayment are scheduled to be outstanding an bear Interest at a
fixed rate under the Note.
"Prepayment Charge" is calculated as follows:
Step 1. For each period that bears Interest, or is scheduled to bear interest, at a
fixed rate, multiply the difference between the fixed rate and the Reinvestment Rate by
the principal amount originally scheduled to be outstanding in each
to any change thereto as a result of an period (giving effect
Charge has been determined pursuant to th tprior prepayment for which a erms of his Addendum), ut ei hr Prepayment
awill
not be outstanding due to early repayment, In the case of a prepayment, or (b) has been
accelerated so that such amount scheduled to be outstandin
multiply the result by the number of days In that 9 is already due, and
however, that In no event shall any Prepayment Chargehere nderbebcalcu a?tedrfor any
period for which the fixed rate has not yet been determined.
Step 2. Sum all the numbers obtained in Step1 to arrive at the Prepayment Charge.
The calculation is detailed mathematically as follows:
Prepayment Charge = (FR - RR) x Prim x (Day3d360)
Where:
BANK FIN:233732-4 0121WJ2U748 -13-
E = Sigma. The sum from 1= 1 to i = n, For each payment date 1, perform the
operations to the right of the sigma sign until i=n. Then sum the results,
= 1,2,3 ... n where each number represents a scheduled future
which the principal bears interest, or is scheduled to bear interest, at a fixepayment ate for
d rate. The first
scheduled payment date subsequent to the early prepayment date or the acceleration date,
as applicable, is designated i =1, the following payment date i = 2 and so on until I = n.
n = Number of remaining payment dates relating to periods bearing interest, or scheduled
to bear interest, at a fixed rate,
FR = Fixed rate of interest as specified in the Note,
RR = Reinvestment Rate
Prins = Principal amount originally scheduled to be outstanding on given date i but will
not be outstanding due to early repayment or acceleration. When I = 1 then PrfnF.1 is equal
to the principal amount subject to early repayment on the date of prepayment or
acceleration, as applicable.
Days= Number of days from payment date (i - 1) to payment date I. When 1 = 1, Days, is
equal to the number of days from the later of the date of prepayment, acceleration, or the
fixed rate start date, as applicable to payment date i = 1.
Bank's determination of the Prepayment Charge shall be conclusive absent obvious error. Any
prepayment shall be applied to any installments due on the Note in the inverse order of their
respective due dates. Borrower acknowledges and agrees that the Prepayment Charge (a)
constitutes liquidated damages, (b) is a reasonable method of determining Bank's loss in the
event all or any part of any principal of the Note Is paid In whole or in part or accelerated before
its original due date, and (c) is not a penalty.
BORROWER, BY SIGNING BELOW, HEREBY ACKNOWLEDGES THAT BORROWER HAS
BEEN GIVEN A FULL OPPORTUNITY TO REVIEW THIS ADDENDUM AND CONSULT WITH
BORROWER'S LEGAL COUNSEL, ACCOUNTANTS AND/OR FINANCIAL PROFESSIONALS
AS TO THE EFFECT AND CONSEQUENCES OF THIS ADDENDUM AND, HAVING HAD AN
OPPORTUNITY TO DO SO, HEREBY AGREES TO BE BOUND BY ITS TERMS.
BORROWER:
WITNESS: GRAY DRIVE, LP,
a Pennsylvania limited partnership
By: GRAY GRIFFIN, LLC,
a Pennsylvania limited liability company
Its: Gen al partner
N e: Walter ?DEnick B (SEAL)
Na kagging .Simpson
Title: Member
BMK,-FIN:233732-4 012150-120748 -14-
DISCLOSURE FOR CONFESSION OF JUDGMENT
Borrower; GRAY DRIVE, LP
76 Emlyn Drive
Mechanicsburg PA 17055
Bank: National City Bank of Pennsylvania
20 Stanwix Street
Pittsburgh, PA 15222
The Borrower has executed on the date set forth below the mortgage note
("Note") and mortgage ("Mortgage") described below:
1. $19,200,000.00 Mortgage Note executed and delivered by Borrower to the Bank
2. Open-End Mortgage and Security Agreement executed and delivered by the
Borrower to the Bank
A. THE BORROWER ACKNOWLEDGES AND AGREES THAT THE NOTE
AND MORTGAGE CONTAIN PROVISIONS UNDER WHICH THE BANK MAY ENTER
JUDGMENT BY CONFESSION AGAINST THE BORROWER. BEING FULLY AWARE OF ITS
RIGHTS TO PRIOR NOTICE AND A HEARING ON THE VALIDITY OF ANY JUDGMENT OR
OTHER CLAIMS THAT MAY BE ASSERTED AGAINST IT BY THE BANK HEREUNDER
BEFORE JUDGMENT IS ENTERED, THE BORROWER HEREBY FREELY AND KNOWINGLY
WAIVES THESE RIGHTS AND EXPRESSLY AGREES AND CONSENTS TO THE BANK
ENTERING JUDGMENT AGAINST IT BY CONFESSION PURSUANT TO THE TERMS
THEREOF.
B. THE BORROWER ALSO ACKNOWLEDGES AND AGREES THAT THE
NOTE AND MORTGAGE CONTAIN PROVISIONS UNDER WHICH THE BANK MAY, AFTER
ENTRY OF JUDGMENT AND WITHOUT EITHER NOTICE OR A HEARING, FORECLOSE
UPON, ATTACH, LEVY OR OTHERWISE SEIZE PROPERTY OF THE UNDERSIGNED IN
FULL OR PARTIAL PAYMENT OF THE JUDGMENT. BEING FULLY AWARE OF ITS RIGHTS
AFTER JUDGMENT IS ENTERED, THE BORROWER HEREBY FREELY AND KNOWINGLY
WAIVES THESE RIGHTS AND EXPRESSLY AGREES AND CONSENTS TO THE BANK'S
TAKING SUCH ACTIONS AS MAY BE PERMITTED UNDER APPLICABLE STATE AND
FEDERAL LAW WITHOUT PRIOR NOTICE TO THE BORROWER.
WITNESS: GRAY DRIVE, L.P.,
a Pennsylvania limited partnership
By: GRAY GRIFFIN, LLC,
a Pennsylvania limited liability company
Its: General Partner
A ;will
Name: Walter D. Snick
By: (SEAL)
Na J. T. Simpson
Tit[ :6 ganaging Member
BANK FIN:233688-4 012150-120748
DISCLOSURE FOR CONFESSION OF JUDGMENT
Guarantor: Hugh J. T. and Diane H. Simpson
76 Emlyn Drive
Mechanicsburg, PA 17055
Bank: National City Bank of Pennsylvania
20 Stanwix Street
Pittsburgh, Pennsylvania 15222
The Guarantor has executed on the date set forth below the following document-
The Guaranty and Suretyship Agreement dated October 49Z, 2004.
A. THE GUARANTOR ACKNOWLEDGES AND AGREES THAT THE
GUARANTY CONTAINS PROVISIONS UNDER WHICH THE BANK MAY ENTER JUDGMENT
BY CONFESSION AGAINST THE GUARANTOR. BEING FULLY AWARE OF ITS RIGHTS TO
PRIOR NOTICE AND A HEARING ON THE VALIDITY OF ANY JUDGMENT OR OTHER
CLAIMS THAT MAY BE ASSERTED AGAINST IT BY THE BANK HEREUNDER BEFORE
JUDGMENT IS ENTERED, THE GUARANTOR HEREBY FREELY AND KNOWINGLY
WAIVES THESE RIGHTS AND EXPRESSLY AGREES AND CONSENTS TO THE BANK
ENTERING JUDGMENT AGAINST IT BY CONFESSION PURSUANT TO THE TERMS
THEREOF.
B. THE GUARANTOR ALSO ACKNOWLEDGES AND AGREES THAT THE
GUARANTY CONTAINS PROVISIONS UNDER WHICH THE BANK MAY, AFTER ENTRY OF
JUDGMENT AND WITHOUT EITHER NOTICE OR A HEARING, FORECLOSE UPON,
ATTACH, LEVY OR OTHERWISE SEIZE PROPERTY OF THE UNDERSIGNED IN FULL OR
PARTIAL PAYMENT OF THE JUDGMENT. BEING FULLY AWARE OF ITS RIGHTS AFTER
JUDGMENT IS ENTERED, THE GUARANTOR HEREBY FREELY AND KNOWINGLY
WAIVES THESE RIGHTS AND EXPRESSLY AGREES AND CONSENTS TO THE BANK'S
TAKING SUCH ACTIONS AS MAY BE PERMITTED UNDER APPLICABLE STATE AND
FEDERAL LAW WITHOUT PRIOR NOTICE TO THE GUARANTOR.
WITNESS:
_ZfA? J?i
Name: Walter DIE-73k
By:
Nar01V I?Gf 914 J Impson,
an i vidual
Dated: ctober 28, 2004
By:
Name: Diane H. Simpson,
an individual
Dated: October 28, 2004
BANK FIN:233717-4 012150-120740
ACKNOWLEDGMENT
COMMONWEALTH OF PENNSYLVANIA )
) SS:
COUNTY OF.QLLEGHENY )
On this, the 28th day of October, 2004, before me, a Notary Public, personally appeared
HUGH J. T. SIMPSON, known to me or proven to be the person who executed the foregoing
instrument for the purpose therein contained,
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
otary Public
My Commission -
NOT
o ARM SEAL
KELUE M S"ART
Nottaary PutAc
IT PITTS%
7
? Expfre>s Oct 6, 2007
COMMONWEALTH OF PENNSYLVANIA
COUNTY OF DAUPHIN
SS:
On this, the day of October, 2004, before me, a Notary Public, personally appeared
DIANE H. SIMPSO, known to me or proven to be the person who executed the foregoing
instrument for the purpose therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
Notary P Ic
My Commission Expires:
NOIARIAL SEAL
JUDY A. SOSTAR, NOTAP.1' PUBLIC
CITY OF HARRISBURG. DAUPHIN CO.
MY COMfAISSION EXPIRES MARCH 21, 2005
BANK FIN:233717-4 012150-120748
CONSTRUCTION LOAN AGREEMENT
This CONSTRUCTION LOAN AGREEMENT, dated as of October 28, 2004, is
entered into by and between GRAY DRIVE, LP, a Pennsylvania limited partnership (the
"Borrower"), and NATIONAL CITY BANk OF PENNSYLVANIA (the "Bank").
RECITALS:
WHEREAS, the Borrower holds fee simple title to a certain parcel of land located
in Upper Allen Township, Cumberland County, Pennsylvania, and is in the process of (i)
constructing a 188 unit upscale, garden style apartment complex consisting of 11 apartment
buildings and one clubhouse (the twelve (12) buildings are referred to in this Agreement
collectively as the "Buildings", and together with the Land (as hereinafter defined), collectively,
the "Property"), (ii) developing and constructing roads and public improvements In connection
with the Property, and (ii) operating, leasing and managing the Property for use as a for-rent
apartment complex and ancillary uses (all of the foregoing collectively the "Project"); and
WHEREAS, the Borrower has applied to the Bank for a construction/term loan in
a principal amount not to exceed the lesser of (i) NINETEEN MILLION TWO HUNDRED
THOUSAND DOLLARS ($19,200,000.00) or (ii) an amount determined based on an eighty
percent (80%) Loan to Value Ratio (as hereinafter defined), and the Bank is willing to make the
construction/term loan upon the terms and conditions set forth in this Agreement and the other
Loan Documents.
NOW, THEREFORE, in consideration of the foregoing recitals (each of which is
incorporated herein by reference) and the mutual promises contained herein and other valuable
consideration, the receipt and adequacy of which are hereby acknowledged, and with the intent
to be legally bound hereby; the parties hereto agree as follows:
ARTICLE 1. DEFINITIONS AND OTHER CONVENTIONS
1.1 Defined Terms. As used in this Agreement, the following terms shall have the
meanings set forth below or in the Section or Subsection of this Agreement referred to, unless
the context otherwise requires:
Advance: Each funding of a disbursement of Loan proceeds to the Borrower
pursuant to the Note and this Agreement.
Affiliate: As to any Person, any other Person which directly or indirectly through
one or more intermediaries Controls, is Controlled by, or is under common Control with, such
Person.
Agreement: This Construction Loan Agreement and all exhibits, schedules,
extensions, renewals, amendments, substitutions and replacements hereto and hereof.
Anti-Terrorism Laws: Shall mean any Governmental Rule relating to terrorism
or money laundering, Including Executive Order No. 13224, the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
BF 233707.10:012150-120748
2001, Public Law 107-56, the laws comprising or implementing the Bank Secrecy Act, and the
laws administered by the United States Treasury Department's Office of Foreign Asset Control
(as any of the foregoing laws may from time to time be amended, renewed, extended, or
replaced).
Apartment Unit: One of the one hundred eighty-eight (188) apartment units to
be constructed on the Land pursuant to the Plans and Specifications.
Appraisal: A USPAP appraisal of the Property addressed to the Bank and
furnished by an independent appraiser satisfactory to the Bank.
Architect: Tippets Weaver Architects Inc., or any other architect retained by the
Borrower in connection with the design and construction of the Project.
Architect's Agreement: The Standard Form of Agreement between Owner and
Architect entered into by and between the Contractor and the Architect, and any other
agreement entered into by the Contractor and/or the Borrower with any Architect in connection
with the Project, together with all exhibits, schedules, amendments, supplements and
extensions thereto and thereof.
Assignment of Leases and Rents: The Assignment of Leases and Rents
executed by the Borrower in connection herewith, and all exhibits, schedules, extensions,
renewals, amendments, substitutions and replacements thereto and thereof.
Ban : National City Bank of Pennsylvania, and its successors and assigns.
Bank's Lien: The first and prior perfected liens and security interests granted by
the Borrower to the Bank pursuant to the Security Documents.
Blocked Person: Shall mean a Person that is listed in the annex to, or is
otherwise subject to the provisions of, Executive Order No. 13224; (2) a Person owned or
controlled by, or acting for or on behalf of, any Person that is listed in the annex to, or Is
otherwise subject to the provisions of, Executive Order No. 13224; (3) a Person with which any
financial institution is prohibited from dealing or otherwise engaging in any transaction by any
Anti-Terrorism Law; (4) a Person that commits, threatens or conspires to commit or supports
"terrorism" as defined in Executive Order No. 13224; (5) a Person that is named as a "specially
designated national" on the most current list published by the U.S. Treasury Department Offce
of Foreign Asset Control at its official website or any replacement website or other replacement
official publication of such list, or (6) a Person who is affiliated or associated with any of the
foregoing.
Borrower: Gray Drive, LP, a Pennsylvania limited partnership.
Borrower's Equity: The Borrower's investment of equity in the Project in
accordance with Section 6.2b (xxii).
. Bullcli!Ms: This term shall have the meaning given it in the first recital to this
Agreement, and shall include all related Improvements.
Business Day: A day other than a Saturday or a Sunday on which the Bank is
open for business at its main office in Pittsburgh, Pennsylvania.
BF 233707.10:012150-120748 -2-
Chancre of Ownership: Any event or series of events which results In (i) any
change of ownership of any equity interests of the Borrower, or (ii) any change of ownership of
any equity interests of the General Partner, or (iii) the General Partner no longer being the
general partner of the Borrower.
Closing Date: October 28, 2004, or such other date as is mutually agreeable to
the parties hereto.
Collateral: Collectively, all of the Borrower's right, title and interest in and to all of
the assets of the Borrower described in the Security Documents.
Commencement Date: The date of commencement of construction of the
Project, which shall not be later than thirty (30) days following the dosing Date.
Completion Date: The earlier of May 30, 2007 or the date on which the
inspecting Architect certifies to the Bank in writing that the construction of the Project has been
completed according to the Plans and Specifications.
Construction Account: The account described in Section 2.1 b.
Construction Contract: Collectively shall mean each an AIA maximum fixed
price construction contract for each Building or certain Buildings and the Project acceptable in
all respects to the Bank in its sole discretion, entered into by and between the Borrower and the
Contractor for each Building or certain Buildings and the Project, together with all exhibits,
schedules, amendments, supplements and extensions thereto and thereof.
Construction Period: The period beginning on the Commencement Date and
ending on the Completion Date.
Contractor: E.G. Stoltzfus Construction, LLC, or another contractor or
contractors satisfactory to the Bank.
Control: The possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through the ownership of
voting securities, partnership interests, other equity interests, by contract or otherwise, including
the power to elect a majority of the directors of a corporation or trustees of a trust, as the case
may be.
Debt Service Coverage Ratio: The ratio of the sum of (i) the Borrower's net
income, pLus depreciation, pLus interest, ius amortization, pj_qs other non-cash expenses minus
distributions and dividends, to (ii) the Borrower's scheduled payments of principal and interest
on Its Indebtedness, all determined in accordance with GAAP consistently applied.
Default: Any condition, event, omission or act which with the giving of notice, the
passage of time or both would constitute an Event of Default.
Default Rate: The rate of interest in effect during an Event of Default, as
described in the Note.
Developer's Agreement: Shall mean the agreement, if any, entered into
between the Borrower and Upper Allen Township, relating to the Project, such agreement to be
BF 233707.10:012150-120748 -3-
reasonably acceptable to the Bank, and Bank's approval of the same shall not be unreasonably
withheld, conditioned or delayed.
Development Documents: Collectively, all Construction Contracts, the
Architect's Agreement, any agreements entered into by the Borrower and any other contractor
or subcontractor in connection with the Project, the Plans and Specifications, all Governmental
Approvals, and all other documents, instruments, agreements, and rights acquired, required,
entered into, granted, or in any way relating to the design, construction, renovation, use,
occupancy, leasing, management or ownership of the Property, including without limitation any
development agreements and financial security agreements entered into by the Borrower with
any Governmental Authority, whether now existing or hereafter arising, created or issued; and
all extensions, renewals, amendments, substitutions and replacements thereto and thereof.
Dollars or $: The legal tender of the United States of America.
Encumbrance: Any security interest, mortgage, charge, pledge, hypothecation,
security assignment, deposit arrangement, encumbrance, lien (statutory or other), preference,
priority or other security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title retention agreement,
and the filing of any financing statement under the Uniform Commercial Code), whether or not
voluntarily given.
Environmental indemnity Agreement: The Environmental Indemnity
Agreement executed by the Borrower and the Guarantor on or about the Closing Date in
connection herewith, and all extensions, renewals, amendments, substitutions and
replacements thereto and thereof.
Environmental Law: This term shall have the meaning given it in the
Environmental Indemnity Agreement.
Equity Account: This term shall have the meaning given it in Section 4.7.
Event of Default: Any of the events specified in Section 7.1.
Facility Fee: The fee described in Sectlon 2.1c.
Force Ma - Jeure Event: With respect to the Property or the Project, any
impossibility of completing the construction of the Project prior to the Completion Date due to
fire, explosion, accident, labor disturbance, flood, drought, embargo, war (whether or not
declared), civil commotion, act of God or the public enemy, or any action of any Governmental
Authority which is beyond the control of the Borrower.
General Partner: Gray Griffin, LLC, the general partner of the Borrower, and
any permitted successor general partner of the Borrower.
Governmental Approval: Any order, consent, authorization, right, license,
validation, approval or permit issued by a Governmental Authority required to be obtained by the
Borrower or issued by a Governmental Authority in connection with the ownership, construction,
completion, renovation, operation, maintenance, use, leasing, occupancy and management of
the Property and the Improvements, and all extensions, renewals; amendments, substitutions
and replacements thereto and thereof.
BF 233707.10:012150-120748 -4-
Governmental Authority: The government of the United States or the
government of any state or locality therein, any political subdivision or any governmental,
quasi-governmental, judicial, public or statutory instrumentality, authority, body or entity or other
regulatory bureau, authority, body or entity of the United States or any state or locality therein,
including but not limited to any environmental agency, zoning board, planning commission or
any comparable authority.
Governmental Rule: Any present or future law, statute, rule, regulation, permit,
license, treaty, ordinance, order, writ, injunction, decree, judgment, guideline, award, standard,
directive, decision, code, or other legal requirement of any Governmental Authority, and all
amendments thereto.
Guarantor: Shall mean jointly, severally and collectively, Hugh J.T. Simpson and
Diane H. Simpson.
Guaranty Agreement: The Guaranty and Suretyship Agreement (Payment and
Completion) executed by the Guarantor in connection herewith, together with all extensions,
renewals, amendments, substitutions and replacements thereto and thereof.
Improvements: Collectively, the Buildings and all additions, replacements,
renovations, modifications, substitutions and other improvements to or of the Buildings and the
Collateral at any time.
Indebtedness: Individually and collectively, (1) all obligations and Indebtedness
for borrowed money, including without limitation all Subordinated Indebtedness, (ii) all
obligations evidenced by bonds, debentures, notes or similar instruments, (iii) all obligations
under conditional sale or other title retention agreements, (iv) all obligations issued or assumed
as the deferred purchase price of property or services, (v) all capitalized lease obligations, (vi)
the face amount of all letters of credit, (vii) all obligations of others secured by any
Encumbrance on property or assets of the Borrower, whether or not the obligations secured
thereby have been assumed and (viii) all guarantees and other obligations to guaranty, assume
or remain liable for the payment of another Person's obligations.
Indemnified Person: Any of the Bank, any entity controlling the Bank, their
respective successors and assigns, and any of their respective officers, directors, employees
and agents.
Inspecting Architect: Such Person as the Bank may designate from time to
time to inspect the construction of the Improvements and perform other services In connection
with the Project on behalf of the Bank.
Agreement.
Interest Reserve: Shall have the meaning set forth in Section 6.7 of this
Internal Revenue Code: The Internal Revenue Code of 1986 or any successor
legislation thereto, and the rules and regulations issued or promulgated thereunder, including
any amendments to any of the foregoing.
Land: The land described in Exhibit "A" to the Mortgage.
BF 233707.10:012150-120748 -5-
Lease: Any lease or sublease for any portion of the Property, or any other
agreement creating a right to use any portion of the Property, entered into from time to time, and
all exhibits, schedules, extensions, renewals, amendments, substitutions and replacements to
and of any of the foregoing.
Loan: The construction/term loan in the Loan Amount made by the Bank to the
Borrower hereunder, including any extensions or renewals thereof.
Loan Account: The loan account referred to In Section 2.4.
Loan Amount: The lesser of (i) NINETEEN MILLION TWO HUNDRED
THOUSAND DOLLARS ($19,200,000,00) or (ii) the amount determined based on an eighty
percent (80%) Loan to Value Ratio.
Loan Documents: Any of this Agreement, the Note, all Security Documents, the
Environmental indemnity Agreement, the Guaranty Agreement, the Subordination Agreement,
any written authorization to transfer funds, and all other documents and instruments executed
and delivered from time to time by any Loan Party to govern, evidence, perform or secure the
Obligations, and all extensions, renewals, amendments, substitutions and replacements thereto
and thereof.
Loan Party: The Borrower and each Guarantor; Loan Partles shall mean
collectively the Borrower and the Guarantor.
Loan-to-Value Ratio: The ratio of the maximum amount of the Loan to the
appraised value of the completed Project, as shown in the Appraisal.
Managing Member: Hugh J. T. Simpson, an individual and the Managing
Member of the General Partner, and any successor Managing Member of the General Partner.
Material Adverse Change: Any set of circumstances or events which (1) has or
could reasonably be expected to have any material adverse effect whatsoever upon the validity
or enforceability of any of the Loan Documents, (ii) is or could reasonably be expected to be
material and adverse to the business, properties, assets, financial condition, results of
operations or prospects of any Loan Party or the Project, (ill) impairs materially or could
reasonably be expected to impair materially the ability of any Loan Party to duly and punctually
pay or perform the Obligations or any of its obligations pursuant to any Loan Documents to
which it is a party, or (iv) impairs materially or could reasonably be expected to impair materially
the ability of the Bank to enforce the Bank's legal remedies pursuant to the Loan Documents.
Material Adverse Effect: An effect that results In or causes or has a reasonable
likelihood of resulting in or causing a Material Adverse Change.
Maturity Date: October 31, 2007, or if such date is not a Business Day, the next
preceding Business Day; provided, however, that the Maturity Date may be extended to October
31, 2010 as more fully set forth in the Note.
Mortgage: The Open-End Mortgage and Security Agreement executed by the
Borrower in connection herewith, together with all extensions, renewals, amendments,
substitutions and replacements thereto and thereof.
BF 233707.10:012150-120748 -6-
Note: The Mortgage Note executed by the Borrower in connection herewith and
delivered to the Bank to evidence the Loan, together with all extensions, renewals,
amendments, substitutions and replacements thereto and thereof.
Obligations: Collectively, (i) all unpaid principal and accrued and unpaid interest
(including interest calculated at-the Default Rate and interest accruing after the date of
commencement of any case or proceeding of the type described in Section 7.1c, whether or not
the Bank's claim for such interest is allowed in such case or proceeding) under the Loan and the
Note, (ii) all accrued and unpaid fees hereunder or any of the other Loan Documents, (lit) any
other amounts due hereunder and under any of the other Loan Documents, including all
reimbursements, indemnities, fees, costs, expenses, prepayment premiums (if any) and other
obligations of the Borrower to the Bank or any Indemnified Person hereunder or under any of
the other Loan Documents, and (iv) all reasonable out-of-pocket costs and expenses incurred
by the Bank in connection with this Agreement and the other Loan Documents, including but not
limited to the reasonable fees and expenses of the Bank's counsel.
Permitted Encumbrance: Any of the following:
(i) As of the Closing Date:
(A) the Bank's Lien;
(B) Matters shown on Schedule B to the Title Policy which have been
determined by the Bank to be acceptable; and
(C) Matters shown on Schedule 3.10a hereto.
(ii) After the Closing Date:
(A) The matters listed in item (i) above;
(B) Security interests in favor of lessors of personal property, which
property is the subject of a true lease between such lessor and the Borrower;
(C) Purchase money security interests in equipment and vehicles; and
consent; (D) Other Encumbrances to which the Bank has given its prior written
provided, however, that no Encumbrance described in Items (ii) (B) and (C), inclusive; above
shall be permitted to exist if in the Bank's reasonable judgment such Encumbrance materially
adversely affects or threatens to materially adversely affect the Bank's Lien or the value of the
Property.
Person: Any individual, partnership, corporation, trust, joint venture,
unincorporated organization, limited liability company, Governmental Authority or other entity.
Plans and Specifications: The complete and final plans and specifications with
respect to the Project, including without limitation all schematic and working drawings and
designations of all manufacturers and model numbers of all equipment, as well as any
Improvements on the Land, and all other plans and specifications relating to architectural,
BF 233707.10:012150-120748 -7-
structural, mechanical, plumbing, electrical and landscaping matters in connection with the
Project, all of the foregoing in form and substance satisfactory to the Bank.
"Phases."
Phase: Individually Phase I, Phase 11, Phase III and Phase IV, and collectively
Phase 1: The construction of certain Improvements including 48 for-rent
Apartment Units and all related roads, utilities and other infrastructure to be built on the Land
known as Phase I (as identified on the Survey) pursuant to the Plans and Specifications, all of
which are subject to Bank's prior written approval
Phase II: The construction of certain Improvements including 54 for-rent
Apartment Units, a clubhouse, pool and all related roads, utilities and other infrastructure to be
built on the Land known as Phase 11 (as identified on the Survey) pursuant to the Plans and
Specifications, all of which are subject to Bank's prior written approval.
Phase III: The construction of certain Improvements including 50 for-rent
Apartment Units, and all related roads, utilities and other infrastructure to be built on the Land
known as Phase III (as identified on the Survey) pursuant to the Plans and Specifications, all of
which are subject to Bank's prior written approval.
Phase IV: The construction of certain Improvements including 36 for-rent
Apartment Units, and all related roads, utilities and other Infrastructure to be built on the Land
known as Phase IV (as identified on the Survey) pursuant to the Plans and Specifications, all of
which are subject to Bank's prior written approval.
hereto.
Project: This term shall have the meaning given to such term in the first recital
Project Budget: The project budget attached hereto as Schedule 2.1a, as it
may be amended in accordance with the terms of this Agreement.
Agreement.
Propertt : This tern shall have the meaning given it in the first recital to this
Property Restriction: Any right-of-way, easement, deed restriction or other
restriction, whether contractual or otherwise, relating to or affecting the ownership, operation or
leasing of the Property (other than Permitted Encumbrances).
Retainage: This term shall have the meaning given it in Section 6.5.
Security Agreement: The Security Agreement executed by the Borrower In
connection herewith, together with all extensions, renewals, amendments, substitutions and
replacements thereto and thereof.
Security-Document: Any of (i) the Mortgage, (it) the Assignment of Leases and
Rents, (iii) the Security Agreement, (iv) the consents of the Contractor and the Architect to the
assignment of the Construction Contracts, the Architect's Agreement and the Plans and
Specifications, (v) all additional documents and instruments entered into from time to time for
the purpose of securing the Obligations, (vi) any and all ancillary documents and instruments
relating to any of the foregoing, such as Uniform Commercial Code financing statements, and
BF 233707.10:012150-120748 -8-
(vii) all extensions, renewals, amendments, substitutions and replacements to and of any of the
foregoing.
Settlement Statement: The settlement statement prepared on the Closing Date
by Fidelity National Title Insurance Company of New York in connection with the purchase of
the Property by the Borrower.
Subordinated Indebtedness: Any Indebtedness which is subject to a
Subordination Agreement satisfactory to the Bank.
Subordination Agreement: A Subordination Agreement satisfactory to the
Bank executed by the Borrower, the Bank and a creditor of the Borrower or the Property
Manager pursuant to which such creditor or the Property Manager confirms that any
Indebtedness or management fees owed to such creditor or the Property Manager by the
Borrower is specifically subordinated to the Obligations, as more specifically described therein,
together with all extensions, renewals, amendments, substitutions and replacements thereto
and thereof.
Survey: Collectively, the Final Subdivision and Land Development Plan dated
July 27, 2001 prepared by Dawood Engineering Inc. and recorded in the Office of the
Cumberland County Recorder of Deeds in Plan Book 85 at Page 5 and the ALTA Survey to be
delivered by the Borrower to the Bank pursuant to Section 6.2b(vii) herein.
Tax and Insurance Escrow Account: The non-interest bearing deposit account
maintained with the Bank and funded by the Borrower in accordance with Section 4.7(1) hereof,
and the Mortgage.
Title Policy: The title insurance policy issued by Fidelity National Title Insurance
Company of New York, meeting the requirements of Section 6.2b(v) hereof.
UCC or Uniform Commercial Code: The Uniform Commercial Code as
enacted in the applicable jurisdiction, in effect on the Closing Date and as amended from time to
time.
1.2 Rules of Construction. In this Agreement and the other Loan Documents
(except as otherwise expressly provided or unless the context otherwise requires) (1) terms
defined in the singular shall have comparable meanings when used in the plural, and vice versa,
(ii) any pronoun used shall be deemed to cover all genders, (iii) the words "hereof", "herein" and
"hereunder" and words of similar import shall refer to this Agreement or such other Loan
Document as a whole and not to any particular provision of this Agreement or such other Loan
Document, (iv) all references to particular Articles, Sections, items, clauses, exhiblts and
schedules are references to the Articles, Sections, items, exhibits and schedules of and to this
Agreement or such other Loan Document, (v) all references to any Person shall include such
Person's heirs, executors, administrators, successors and assigns, (vi) any references to any
Governmental Rule shall be deemed to be a reference to such Governmental Rule as it may
have been or may be amended, supplemented or replaced from time to time, (vii) all references
to any Loan Document or any other agreement, contract or instrument shall be deemed to
include references to any amendments, supplements, extensions, waivers, modifications and
replacements thereto and thereof, (viii) the word "including" shall mean "including without
limitation," (ix) accounting terms not defined shall have the meanings given them under GAAP,
and (x) Article, Section and other headings used in this Agreement and the other Loan
BF 233707.10:012150-120748 -9-
Documents are intended for convenience only and shall not affect the meaning or construction
of this Agreement or such other Loan Document.
ARTICLE 2. THE LOAN
2.1 The Loan.
2.1 a Disbursements During Construction Period. The Bank agrees, subject to the
terms and conditions hereof and relying on the representations and'warranties herein set forth,
to advance amounts not to exceed the Loan Amount to the Borrower, as follows:
(i) That certain principal amount shall be advanced on the Closing Date to
refinance certain indebtedness incurred to finance (i) a portion of the costs relating to the
purchase of the Property, (ii) the construction of the Apartment Units and other Improvements
included in Phase I, all as more fully set forth in the Plans and Specifications; and (Ili) various
costs incurred in connection with the Closing, all as shown on the Settlement Statement; and
(ii) That certain remaining principal amount for the development of Phases II
through IV of the Project and for the roads, utilities, site work and related infrastructure upon
which the remaining one hundred forty (140) Apartment Units, clubhouse and pool will be
constructed as more fully described in this Agreement, the other Loan Documents, the Plans
and Specifications and the other Development Documents and soft costs related to the
foregoing; and
(iii) THE BANK SHALL NOT BE OBLIGATED TO FUND ANY ADVANCES
FOR THE DEVELOPMENT OF THE BUILDINGS, THE IMPROVEMENTS AND THE PROJECT
IN PHASE 11, PHASE III AND PHASE IV UNTIL SUCH TIME AS THE BORROWER HAS
DELIVERED TO THE BANK, AND THE BANK HAS APPROVED, THE CONSTRUCTION
CONTRACT, THE CONTRACTOR, THE PLANS AND SPECIFICATIONS, AND THE PROJECT
BUDGET FOR SUCH BUILDINGS, IMPROVEMENTS AND PORTIONS OF THE PROJECT;
AND
(iv) During the Construction Period, advances will be made by the Bank to be
used by the Borrower for the payment or reimbursement of the costs of constructing the
Improvements, all as set forth in this Agreement and the Project Budget. Advances will be
made as such costs are incurred, as determined by the Bank or the Inspecting Architect. The
Bank's obligation to make each disbursement during the Construption Period is subject to the
satisfaction of all of the conditions precedent to such disbursement as set forth in Article 6.
2.1b Construction Account: Disbursements. The Borrower shall maintain with the
Bank during the Construction Period a commercial operating account, from which all costs of
the Project will be disbursed by the Bank (the "Construction Account"). The Borrower hereby
authorizes the Bank to make disbursements of the Loan proceeds by crediting such
disbursements directly Into the Construction Account, and the Borrower agrees that such
disbursements shall constitute advances under the Note.
2.1c Facility Fee. On the Closing Date, the Borrower shall pay to the Bank a Facility
Fee in an amount equal to Ninety-Six Thousand Dollars ($96,000.00), which is one-half of one
percent (1/2 %) of the maximum Loan Amount, or the portion of such fee not previously paid to
BF 233707.10:012150-120748 _10-
the Bank. The Facility Fee shall be fully earned when paid and shall be nonrefundable,
regardless of the amount of the Loan advanced.
2.2 Payments and Prepayments.
2.2a Payments of Principal and Interest. Payments of principal and interest
hereunder shall be calculated and made in accordance with the Note.
2.2b Prepayments. The principal amount of the Loan may be prepaid in whole or in
part from time to time, as set forth in the Note. All prepayments shall be applied to the unpaid
installments of the Loan in the inverse order of their scheduled maturities. All prepayment fees
shall be paid simultaneously with the prepayment for which it is being made, and all prepayment
fees will be fully earned when paid and nonrefundable.
2.3 Method of Payments. All payments of principal, interest, fees, costs and other
amounts due hereunder and under the other Loan Documents shall be made by the Borrower to
the Bank at the Bank's office at 20 Stanwix Street, Pittsburgh, Pennsylvania 15222, or at such
other address as is provided by the Bank to the Borrower, not later than 1:00 p.m. (Eastem
time) on the due date.
2,4 Loan Account. The Bank shall open and maintain on its books a Loan Account
in the Borrower's name with respect to disbursements made, repayments, prepayments, the
computation and payment of interest, the Facility Fee, any other fees and other amounts due
and sums paid to the Bank hereunder and under the other Loan Documents. Such Loan
Account shall be conclusive and binding on the Borrower as to the amount at any time due to
the Bank from the Borrower except in the case of manifest error in computation.
2.5 LIMITATION ON CONSTRUCTION OF UNITS. NO MORE THAN THE LESSER
OF: (1) TWO BUILDINGS, OR (II) FORTY (40) APARTMENT UNITS MAY BE UNDER
CONSTRUCTION AT ANY ONE TIME DURING THE TERM HEREOF.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES
To induce the Bank to enter into the Loan Documents and to make
disbursements of the Loan, the Borrower makes the following representations and warranties to
the Bank:
311 Existence. The Borrower is a limited partnership duly organized and validly
existing under the laws of the Commonwealth of Pennsylvania. The Borrower is duly qualified
or licensed and in good standing in each jurisdiction where it was formed or incorporated and in
each jurisdiction where the nature of its activities or the ownership of its properties makes such
qualification or licensing necessary. The General Partner is a limited liability company duly
organized and validly existing under the laws of the Commonwealth of Pennsylvania.
3.2 Authorized Capital: Ownership of Interests. The General Partner is the
general partner of the Borrower and owns a 1 % partnership Interest in the Borrower. The other
limited partnership interests in the Borrower are owned as follows: 99% by Hugh J. T. Simpson
an Diane H. Simpson. All of such partnership interests are fully paid and nonassessable. There
are no options, warrants or other rights outstanding to purchase any equity Interests of the
Borrower, and no equity interests in the Borrower have been pledged or assigned to any
BF 233707.10:012150-120748 - 11 -
Person, as collateral or otherwise.
3.3 Power and Authority. The Borrower has the full and lawful power and authority
to, and is duly authorized to, (1) enter into, execute, deliver and perform in accordance with the
terms of the Loan Documents to which it is a party, (ii) to incur the Obligations and perform all of
Its obligations under the Loan Documents to which it is a party, (iii) acquire, own, lease, occupy
and manage its properties, including the Property, and (iv) engage in the business it now
conducts or proposes to conduct. All necessary action required to authorize the execution,
delivery and performance of the Loan Documents to which the Borrower is a party and the
incurrence of the Obligations has been properly taken by the Borrower. The General Partner
has the full and lawful power and authority to, and is duly authorized to, enter into, execute,
deliver and perform in accordance with the terms of the Loan Documents to which the Borrower
is a party, on behalf of the Borrower.
3.4 Validity and Binding Effect. The Loan Documents to which the Borrower is a
party have been duly executed and delivered by the Borrower, and constitute legal, valid and
binding obligations of the Borrower, enforceable against the Borrower in accordance with their
respective terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws affecting
the enforcement of creditors' rights generally and except as such enforceability may be limited
by the availability of equitable remedies.
3.5 No Conflict or Violation. Neither the execution and delivery of the Loan
Documents to which the Borrower is a party, nor the incurrence of the Obligations, the
consummation of the transactions contemplated by the Loan Documents or compliance with the
terms and provisions of the Loan Documents will conflict with, constitute a default under or
result in any breach of (i) the terms and conditions of the Borrower's limited partnership
agreement, certificate of limited partnership or other organizational, formation or charter
documents, (ii) any Governmental Rule, Governmental Approval or Property Restriction, or (iii)
any indenture, mortgage, deed of trust, franchise, contract, permit, agreement, Instrument,
order, writ, judgment, injunction or decree to which the Borrower is a party or by which it is
bound or is subject, or will result in the creation or enforcement of any Encumbrance
whatsoever upon any of the Borrower's properties, including the Collateral, whether now owned
or hereafter acquired, except for Permitted Encumbrances, nor are there any defaults or
violations by the Borrower or, to the knowledge of the Borrower, any other Person, of or under
any of the foregoing.
3.6 Liabilities . The Borrower has no material liabilities, whether direct or indirect,
fixed or contingent, or any liabilities for taxes, long-term leases or unusual forward or long-term
commitments, which have not been disclosed to the Bank In writing.
3.7 Material Adverse Chancre: Events of Default- Violations. Since
December 31, 2003, there has been no Material Adverse Change and there have been no
events or developments that individually or in the aggregate have had a Material Adverse Effect.
No event has occurred and is continuing and no condition exists or will exist after giving effect to
the Loan which constitutes a Default or an Event of Default.
3.8 Litigation. There are no actions, suits, proceedings or investigations, at law or
in equity, before any Governmental Authority, court or arbitrator, pending or, to the best of the
Borrower's knowledge, threatened (i) against or with respect to the Borrower, the General
Partner, the Manager, the Property or the Project, (ii) which purport to affect the rights and
BF 233707.10:012150-120748 -12-
remedies of the Bank pursuant to the Loan Documents or which purport to restrain or enjoin
(either temporarily, preliminarily or permanently) the performance by any Loan Party of any
action contemplated by any of the Loan Documents, or (Iii) against any Loan Party. All pending,
or, to the Borrower's knowledge, threatened, litigation is listed in Schedule 3.8.
3.9 Compliance with Laws. The Borrower has duly complied with, and its
properties, including the Property, business operations and leaseholds are in compliance in all
material respects with the provisions of all Governmental Rules, Governmental Approvals and
Property Restrictions applicable to the Borrower and its properties (including the Property) and
the conduct of its businesses.
3.10 Matters Relating to Property and Collateral.
3.10a Title. The Borrower owns good and indefeasible fee simple title to the Collateral.
None of the Collateral is subject to any Encumbrance, except for Permitted Encumbrances,
including those listed on Schedule 3.10a. The Borrower has received all deeds, assignments,
waivers, consents, non-disturbance and recognition or similar agreements, bills of sale and
other documents and instruments, has been granted all easements and rights-of-way, and has
duly effected all recordings, filings and other actions necessary to establish, protect and perfect
the Borrower's right, title and interest in and to all of the Collateral.
3.10b No Options. Etc. Except for Leases of the Property in the ordinary course of
business, and except as set forth in Section 6.5j herein, the Borrower is not obligated under or a
party to any option, right of first refusal or other contractual obligation to sell, assign, lease or
dispose of any of the Property or the Collateral.
3.10c Condemnation Proceedings. The Borrower has not received any notice of and
has no knowledge of any pending, threatened or contemplated condemnation proceeding
affecting the Property or any part thereof.
3.104 Casualty Loss. No portion of the Property has suffered any material damage by
fire or other casualty loss except for those (i) of which the Borrower has given the Bank notice
and (ii) as to which the Property has been completely repaired and restored to its original
condition.
3.10e Use of Property. The present and anticipated use of the Property complies with
all applicable zoning ordinances, regulations and restrictive covenants affecting the Land, and
all other Governmental Rules, Governmental Approvals and Property Restrictions with respect
to such current and anticipated use have been satisfied.
3.10f Utilities and Municipal Services. All utility and municipal services necessary
for the construction, operation and leasing of the Buildings and the Improvements and the use
and operation thereof for their present and intended purpose are available at the Property,
including water, sanitary and storm sewer, electric, gas and telephone facilities, and shall, by
the Completion Date, be installed and operating. All such utilities enter the Land through
adjoining public streets or, if any pass through adjoining private lands, they do so in accordance
with valid easements. The Land has direct, unfettered access to sewer rights-of-way.
3.10g Streets and Access. All streets and rights-of-way necessary for the full
utilization of the Property for its intended purpose have been completed or shall be completed
by the Completion Date.
BF 233707.10:012150-120748 -13-
3.10h Subdivision: Development. The Land is a separately subdivided parcel or
parcels in accordance with all Governmental Rules and Governmental Approvals regulating
subdivision and land development. The development of the Land has been or will be completed
in accordance with all requirements of all applicable Governmental Authorities having
jurisdiction to regulate or control subdivision and/or development.
3.101 Flood Area. Except as shown on the Survey, none of the Improvements is in an
"area of special flood hazard", as defined in the Flood Insurance Act of 1968.
3.10j Governmental Rules: Governmental Approvals. To the extent required by
applicable Governmental Rules, the Plans and Specifications have been, or will be prior to the
first advance being made hereunder for construction, approved by all Governmental Authorities.
The development, construction and/or renovation of the Buildings and Improvements and the
present and intended use, leasing and occupancy of the Buildings and Improvements will
comply with all applicable Governmental Rules and restrictive covenants and all Governmental
Approvals. All Governmental Approvals (except those which are not obtainable until a later
stage of construction or completion of the Improvements) required to have been issued to
enable the Project to be constructed in accordance with the Plans and Specifications, and in
connection with the use, leasing and occupancy of the Property, have been obtained or issued
and are in full force and effect, and all of such Governmental Approvals have been issued
without condition.
3.10k Bank's Lien. The Bank's Lien in the Collateral will be, after the recordation of all
Security Documents in the appropriate filing offices, a first priority perfected lien upon the
Collateral, subject only to Permitted Encumbrances.
3.101 Information. The Borrower has delivered to the Bank, or will deliver to the Bank
prior to the first construction advance being made hereunder, a true and correct copy of all
Development Documents, all Governmental Approvals, and any certificates, consents,
amendments, extensions, waivers and other documents In connection with any of the foregoing.
There are no other agreements or contracts affecting or relating to the use, management,
leasing or construction of the Project. All surveys, plot plans and similar documents furnished
by the Borrower to the Bank in connection with the Project are, to the best of the Borrower's
knowledge, accurate and complete in all material respects as of their respective dates.
3.10m Tax Returns and Payments. The Borrower has filed all Federal, state, local and
other tax returns required by law to be filed. The Borrower has paid all taxes, assessments and
other governmental charges levied upon the Borrower or any of its properties, assets, income or
franchises which are due and payable, other than (i) those presently payable without penalty or
interest, (ii) those which are being contested in good faith by appropriate proceedings and (iii)
those which, if not paid, would not, in the aggregate, have a Material Adverse Effect; and as to
each of items (1), (ii) and (iii), the Borrower has set aside on its books reserves for such claim as
are determined to be adequate by application of GAAP consistently applied. The charges,
accruals, and reserves on the books of the Borrower in respect of Federal, state and local taxes
for all fiscal periods to date are adequate, and the Borrower does not know of any unpaid
assessments for additional Federal, state, local or other taxes for any such fiscal period or any
basis therefor. Except as set forth in the Title Insurance Policy, there are no pending or, to the
Borrower's knowledge, proposed, special or other assessments for public improvements or
otherwise affecting the Property, nor are there any contemplated 'Improvements to the Property
that may result in such special or other assessments.
BF 233707.10:012150-120748 -14-
3.1 On Use of Property. The Property is and will be used only as for-rent Apartment
Units and for other appurtenant and related uses.
3.100 Physical Condition. Except as disclosed in any physical conditions reports
delivered to the Bank in connection with the Loan, the Property, including all Buildings,
Improvements, parking facilities, sidewalks, storm drainage systems, roofs, plumbing systems,
HVAC systems, fire protection systems, electrical systems, equipment, elevators, exterior
sidings and doors, landscaping, irrigation systems and all structural components, are in good
working condition, order and repair in all material respects; there exists no structural or other
material defects or damages in any of the Property, whether latent or otherwise, and the
Borrower has not received notice from any insurance or bonding company of any defects or
inadequacies in any of the Property or any part thereof, that would adversely affect the
insurability of the same or cause the imposition of extraordinary premiums or charges thereon or
of any termination or threatened termination of any policy of insurance or bond.
3.10p Boundaries. All of the Improvements, if any, which were included in determining
the appraised value of the Property lie wholly within the boundaries and building restriction lines
of each such individual portion of the Property, and no Improvements on adjoining properties
encroach upon any such individual portion of the Property, and no Encumbrances or Property
Restrictions upon any individual portion of the Property encroach upon any of the
Improvements, so as to affect the value or marketability of the applicable individual portion of
the Property, except for those which are insured against under the Title Policy.
3.10q Survey. To the Borrower's knowledge, the Survey or Surveys of the Property
delivered to the Bank in connection with this Agreement do not fail to reflect any material survey
matter affecting the Property or title thereto.
3.11 Insurance. The Borrower currently maintains insurance which meets or exceeds
the requirements of Section 4.8 hereof and the applicable Insurance requirements set forth in
the other Loan Documents, and such insurance is provided by reputable and financially sound
insurers and is of such types and at least in such amounts as are customarily carried by, and
insures against such risks as are customarily insured.against by similar businesses similarly
situated and owning, leasing and operating similar properties to those owned, leased and
operated by the Borrower. All of such insurance policies are valid and in full force and effect.
No notice has been given or claim made and no grounds exist to cancel or avoid any of such
policies or to reduce the coverage provided thereby.
3.12 Consents and Approvals. Except for the filing of the Security Documents with
the appropriate filing office, no order, authorization, consent, license, validation or approval of,
or notice to, filing, recording, or registration with any Governmental Authority, or the exemption
by any such Governmental Authority, is required to authorize, or is required In connection with,
(i) the execution, delivery and performance of any of the Loan Documents or (ii) the legality,
binding effect or enforceability of any of the Loan Documents.
3.13 Federal Reserve Regulations. No part of the proceeds of the Loan will be used
for the purpose of purchasing or acquiring any "margin stock" within the meaning of Regulation
U of the Board of Governors of the Federal Reserve System or for any other purpose which
would be inconsistent with such Regulation U or any other regulations of such Board of
Governors, or for any purposes prohibited by Governmental Rules or by the terms and
conditions of this Agreement or any other Loan Document.
BF 233707.1.0:012150-120748 -15-
3.14 Investment Company Act: Other Regulations. No Loan Party is an
"investment company", within the meaning of, or that Is required to register under, the
Investment Company Act of 1904, as amended, nor is the Borrower a company "controlled" by
an "investment company" under such act, as amended.
3.15 Single Asset Entity. The Borrower owns no material assets other than the
Property and the other Collateral.
3.16 Full Disclosure. No Loan Document and no other document, certificate or
statement furnished to the Bank by or on behalf of any Loan Party pursuant to this Agreement
contains any untrue statement of a material fact or omits to state a material fact necessary in
order to make the statements contained herein and therein, in light of the circumstances under
which they were made, not misleading. There is no fact known to the Borrower which materially
and adversely affects the business, property, assets, financial condition, results of operations or
prospects of the Borrower or the Property which has not been set forth in the Loan Documents,
or any other documents, certificates and statements (financial or otherwise) furnished to the
Bank by or on behalf of the Borrower prior to or on the date hereof in connection with the
transactions contemplated hereby.
3.17 Violations of Antl-Terrorism Laws. The Borrower is neither in violation of any
Anti-Terrorism Law nor has it engaged in or conspired to engage in any transaction that evades
or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the
prohibitions set forth in any Anti-Terrorism Law. The proceeds from the Loan will not benefit a
Blocked Person.
3.18. Blocked Person. To the knowledge of the Borrower, the proceeds of the Loan
will not benefit a Blocked Person.
ARTICLE 4. AFFIRMATIVE COVENANTS
From the date hereof and thereafter until the Loan and all other Obligations of the
Borrower hereunder are paid in full and the Bank has no further obligation to make
disbursements hereunder, the Borrower agrees, for the benefit of the Bank, that it will comply
with each of the following covenants:
4.1 Use of Proceeds. The Borrower shall use proceeds of the Loan only to
refinance; certain costs previously incurred in connection with the acquisition of the Land and
the development of Phase I; the construction of site improvements and the Buildings and the
Improvements in accordance with the Plans and Specifications; and the payment of loan closing
costs and fees in connection therewith, all as shown on the Project Budget and on the
Settlement Statement.
4.2 Delivery of Financial Statements and Other Information. The Borrower shall
deliver or cause to be delivered to the Bank the following financial statements and other
information:
4.2a Financial Statements and Tax Returns. As soon as available and in any event
(i) within 120 days after the end of each fiscal year of the Borrower, a balance sheet as of the
end of such fiscal year and the related statements of operations and cash flows, prepared in
accordance with the Borrower's usual and standard accounting principles consistently applied
BF 233707.10:012150-120748 -16-
and setting forth in each case in comparative form the figures for the previous fiscal year, all
presenting fairly the financial condition of the Borrower, in such reasonable detail as the Bank
may request from time to time, and which shall be prepared .and audited on an unqualified basis
by a certified public accounting firm reasonably acceptable to the Bank; and (ii) within 15 days
after filing, a copy of the Borrower's federal income tax return and all schedules thereto. As
soon as available and in any event (i) within 120 days after the end of each calendar y6ar for
each Guarantor, a personal financial statement presenting fairly the financial condition of each
Guarantor, in such reasonable detail as the Bank may request from time to time; and (ii) within
15 days after filing, a copy of each Guarantor's Federal income tax return and all schedules
thereto.
4.2b Quarterly Reports. As soon as available and in any event within 30 days after
the end of each fiscal quarter of the Borrower, a balance sheet as of the end of such fiscal
quarter and the related statements of operations and cash flows, prepared in accordance with
GAAP and setting forth in each case in comparative form the figures for the previous fiscal year
and fiscal quarter, all presenting fairly the financial condition of the Borrower in such reasonable
detail as the Bank may request from time to time, and which shall be internally prepared and
unaudited but certified by an authorized executive officer of the Borrower having firsthand
knowledge of the Borrower's finances.
4.2c Annual Budgets and Forecasts. As soon as available and in any event within
45 days after the end of each fiscal year of the Borrower during the construction of the Project,
the Borrower shall deliver to the Bank updated (1) annual budget and (ii) forecasts for the
Project.
4.2d Semi-Annual Rent Rolls. As soon as available and in any event within 30 days
after the end of each second fiscal quarter of the Borrower and the end of each fiscal year of the
Borrower, the Borrower shall deliver to the Bank rent rolls for the Project.
4.2e Other Reports. Information and Notices. The Borrower will deliver to the
Bank, within the time periods set forth below, the following other reports, information and
notices:
(i) Notice of Defaults and Material Adverse Changes. Promptly after the
Borrower has learned of the occurrence or existence of a Default. Event of Default, an event or
set of circumstances which has had or which in the reasonable judgment of the Borrower may
result in a Material Adverse Effect, or a Material Adverse Change, telephonic notice thereof
specifying the details thereof, the anticipated effect thereof and the action which the Borrower or
the affected Person has taken, is taking or proposes to take with respect thereto, which notice
shall be promptly confirmed in writing within five (5) days by the Borrower.
(ii) Notice of Litigation. (A) Promptly after the commencement thereof,
written notice of any action, suit, proceeding or investigation before any Governmental Authority,
court or arbitrator affecting (1) the Property, (2) the Borrower or (3) any Loan Party, which, if
adversely determined, would reasonably be expected to result in a Material Adverse Change,
and (B) promptly after the Borrower has notice thereof, written notice of any decision, ruling,
judgment, appeal, reversal or other significant action in connection with any such action, suit,
proceeding or investigation.
(iii) Notice of Casualty Loss. Condemnation Prgect Delays or Force
Majeure Event. Immediately upon the occurrence thereof or the receipt by the Borrower of
BF 233707.10:012150-120748 -17-
notice thereof, written notice of any casualty loss affecting any of the Collateral, any
condemnation proceedings affecting any of the Property, any Force Majeure Event, or any
event that would be reasonably likely to result in a delay or cessation of construction of the
Project (including without limitation any "stop work" orders).
4.2f Additional Information: Ins ection. The Borrower shall deliver or cause to be
delivered to the Bank such additional financial statements, reports, financial projections, notices
and other information, whether or not financial in nature, with respect to the Property, the
Project and any Loan Party as the Bank may reasonably request from time to time. The
Borrower will permit the Bank and the Bank's designated employees, agents and
representatives (1) to have access, at any time and from time to time, during normal business
hours to visit and inspect the Property and the construction of the Project, (ii) to examine, audit
and make copies of any of the Borrowers books of record and books, records and accounting
data and other documents of the Borrower, including without limitation those relating to the
Property and the construction of the Project, and the Loan and at any time and from time to
time, during normal business hours, to such reports and returns as the Borrower may file with
any Governmental Authority, and (iii) to discuss the Borrower's affairs and accounts and the
Property and the Project with, and be advised about them by, the Borrower, its officers and
employees, and the Contractor and the Architect.
4.3 Preservation of Existence Qualification. At its own cost and expense, the
Borrower will and will cause the General Partner to do all things necessary to preserve and
keep in full force and effect its existence and qualifications under the laws of its state of its
formation and each state where, due to the nature of its activities or the ownership of its
properties, qualification to do business is required and where the4ailure to be so qualified would
reasonably be expected to have a Material Adverse Effect.
4.4 Compliance with Laws Property Restrictions Contracts and Leases. The
Borrower shall comply in all material respects with all applicable Governmental Rules and
Property Restrictions and the terms and conditions of all Governmental Approvals, with respect
to the Property and Its use, occupancy, operation and rental. The Borrower shall comply with
each material contract and agreement to which the Borrower is a party and which relates to the
Property, including but not limited to each of the Development Documents and all Leases and
other agreements for the use of the Property. The Borrower shall comply with all Anti-Terrorism
Laws.
4.5 Accounting System: Books and Records. The Borrower shall maintain a
system of accounting established and administered in accordance with GAAP consistently
applied and will set aside on its books all such proper reserves as shall be required by GAAP,
Further, the Borrower will maintain proper books of record and account in accordance with
GAAP in which full, true and correct entries shall be made of all of its properties, assets,
dealings and business affairs.
4.6 Payment of Taxes and Other Liabilities. The Borrower shall promptly pay and
discharge all liabilities to which it is subject or which are asserted against it, Including but not
limited to all taxes, assessments and governmental charges and levies upon it or upon any of its
income, profits, or properties, including but not limited to the Property, prior to the date on which
penalties attach thereto; provided, ho a er, that for purposes of this Agreement, the Borrower
shall not be required to pay any tax, assessment, charge or levy (i) the payment of which is
being contested in good faith by appropriate and lawful proceedings diligently conducted and (ii)
as to which the Borrower shall have set aside on its books reserves for such claim as are
BF 233707.10:012150-120748 -18-
determined to be adequate by the application of GAAP, but only to the extent that failure to
discharge any such liabilities would not result in any additional liability which would have a
Material Adverse Effect; and provided, further, that the Borrower shall promptly pay all such
contested liabilities if the failure to do so would result in an Encumbrance on any of the
Collateral which is not a Permitted Encumbrance. The Borrower shall promptly deliver to the
Bank satisfactory evidence of the payment of real estate taxes and assessments relating to the
Property.
4.7 Establishment and Fungi of Certain Accounts
4.7a Tax and Insurance Escrow Account. At the Bank's written request, the
Borrower shall promptly establish, fund and maintain the Tax and Insurance Escrow Account
with the Bank, and the Borrower shall promptly deposit into the Tax and Insurance Escrow
Account an amount which, when added to the amounts to be subsequently deposited as set
forth below, is sufficient to pay all real estate taxes and assessments and insurance premiums
for the Property for one year. In addition to the initial funding of the Tax and Insurance Escrow
Account, the Borrower shall deposit Into such account monthly, no later than the tenth (10th)
day of each month, an amount equal to one-twelfth of the estimated total of such real estate tax,
assessment or insurance premium, as the case may be, for one year. As such real estate taxes
and insurance premiums become due and payable, the Borrower shall request in writing from
the Bank a disbursement from the Tax and Insurance Escrow Account in an amount sufficient to
pay such tax or premium and the Bank shall disburse such requested amount to the Borrower
only for payment of such tax or premium. The Borrower shall promptly pay such tax or premium
and shall promptly deliver to the Bank written evidence of such payment.
4.7b Equity. The Borrower shall either (i) deposit In the Construction Account as a
cash equity contribution a minimum amount of Three Million Dollars ($3,000.000.00) which shall
be advanced by the Bank to the Borrower hereunder as set forth..in Article 6 herein prior to the
disbursement of any Loan proceeds hereunder or (11) provide to the Bank evidence acceptable
to the Bank that the Borrower has contributed and/or has equity In the Property with the
minimum dollar amount of Three Million Dollars ($3,000,000.00).
4.8 Insurance. The Borrower shall maintain at all times, and provide the Bank with
any evidence or information as may be requested by the Bank from time to time with respect to,
adequate insurance to the satisfaction of the Bank with financially sound and reputable insurers
acceptable to the Bank, against (i) such risks of loss as are customarily insured against and in
amounts customarily carried by Persons owning, leasing or operating properties similar to the
Property, including, but not limited to, fire, theft and extended coverage insurance In an amount
at least equal to the full and total replacement cost of the Property (including boiler coverage, if
the Property has a boiler), (ii) interruption of the Borrower's business, (iii) loss of income from
the Borrower's operation of the Property for the period for which such income is lost for the
Property (for twelve (12) months), (iv) liability insurance covering injury and damage to persons
and property in amounts satisfactory to the Bank, (v) flood insurance, if any part of the Land is
located in an "area of special flood hazard", as defined in the Flood Insurance Act of 1968, in an
amount equal to the full and total replacement cost of the Property,'and (vl) such other
insurance as Bank may reasonably request from time to time, all of the foregoing to be
acceptable to the Bank at all times during the term hereof. All such insurance shall name the
Bank as the loss payee of such insurance and shall have a long form mortgagee and lender's
loss payable endorsement in favor of the Bank, providing that such coverage cannot be affected
by the acts or omissions of the Borrower, and providing for at least thirty (30) days' written
notice to the Bank prior to cancellation and, in this regard, the Borrower shalt cause a copy of
BF 233707.10:012150-120748 -19-
each policy and an original "Evidence of Insurance" (ACORD Form 27) as to property insurance,
and an original "Certificate of Insurance" as to liability insurance, to be delivered to the Bank
prior to the Bank making the Loan to the Borrower under this Agreement and no later than thirty
(30) days prior to the expiration of any such insurance coverage. The Borrower shall also be
adequately insured at all times to comply with the insurance provisions of all applicable workers'
compensation and similar laws and will effect all such Insurance under valid and enforceable
policies with insurers satisfactory to the Bank.
4.9 Maintenance of Collateral. The Borrower shall,-at its own expense, maintain,
preserve, protect and keep the Property and the other Collateral in good repair, working order
and condition (ordinary wear and tear excepted), and make all necessary and proper repairs,
renewals and replacements so that the Collateral shall at all times be in good condition and fit
and proper for the respective purposes for which it was originally intended, erected or Installed,
its business carried on in connection therewith may be properly and advantageously conducted
at all times.
4.10 Construction. The Borrower shall cause the construction of the Improvements
to commence no later than the Commencement Date and will cause the construction of the
Improvements to be carried forward with diligence and continuity for completion by the
Completion Date. The Borrower shall cause the Improvements to be constructed in accordance
with the Plans and Specifications, all other Development Documents, all applicable
Governmental Rules, and all applicable Governmental Approvals, agreements, covenants and
restrictions. The Borrower shall utilize only the Contractor and any other contractors and
subcontractors approved by the Bank to complete the Improvements, which approval shall not
be unreasonably withheld or delayed.
4.11 Indemnification. The Borrower shall indemnify and hold each Indemnified
Person harmless from and against all liabilities, claims, damages, costs and expenses
(including but not limited to the reasonable legal fees and disbursements of the Bank's counsel,
and the costs of investigation, all both at trial and on appeal) in any actions or proceedings now
or hereafter pending or threatened against the Bank arising out of, resulting from, or In any
manner relating to the transactions described in the Loan Documents and the Project or
pursuant to any Development Document and any action taken by the Bank which were
reasonably believed by the Bank to be taken pursuant to the Loan Documents, including without
limitation, any violations of any Governmental Approvals, Governmental Rules, Property
Restrictions or any defective workmanship or materials occurring in connection with the Project,
except to the extent the same are caused by the gross negligence or willful misconduct of the
Bank. Immediately upon demand by the Bank, the Borrower shall defend any such action or
proceeding brought against any Indemnified Person, or the Indemnified Person may elect to
conduct its own defense at the expense of the Borrower. Any inspection or approval of the
Plans and Specifications shall not be deemed or construed to limit or impair the Bank's rights
under any of the Loan Documents in any manner whatsoever. The provisions of this Section
4.11 shall survive the termination of this Agreement and the repayment of the Obligations.
4.12 rRESERVED].
4.13 rRESERVEDI.
4.14 Further Assurances: Power of Attorney. At any time and from time to time,
upon the Bank's reasonable request, the Borrower shall make, execute and deliver, and shall
cause any other Person to make, execute and deliver, to the Bank, and where appropriate shall
BF 233707.10:012150-120748 -20-
cause to be recorded or filed, and from time to time thereafter to be re-recorded and refiled at
such time and In such offices and places as shall be deemed desirable by the Bank in its
reasonable discretion, any and all such further security documents, certificates and other
documents and instruments as the Bank may consider necessary or desirable. in its reasonable
discretion in order to effectuate, complete, perfect, continue or preserve the Obligations of the
Borrower hereunder or under the other Loan Documents and the Encumbrances created
thereby. The Borrower hereby appoints the Bank, and any of its officers, directors, employees
and authorized agents, at any time, with full power of substitution, upon any failure by the
Borrower to take or cause to be taken any action described in the preceding sentence, to make,
execute, record, tile, re-record or refile any and each such security document, Instrument,
certificate and document for and in the name of the Borrower. The power of attorney granted
pursuant to this Section 4.14 is coupled with an interest and shall be irrevocable until all of the
Obligations are paid in full and the Bank has no further obligation to make advances hereunder.
4.15 Construction Contracts. Contractors Plans and Specifications and Project
Budget. The Borrower shall deliver to the Bank each Construction Contract for each Contractor
for the Bank's prior written approval before the Borrower executes each Construction Contract.
All Plans and Specifications and Project Budgets for each Building, all Improvements, each
Phase and the Project shall be subject to the Bank's prior written approval.
4.16 Subdivision Land Development Plan and Survey. The Borrower shall obtain
the prior written consent of the Bank (which shall not be unreasonably withheld) prior to
recording any future subdivision or land development plan in the Office of the Recorder of
Cumberland County, Pennsylvania. The proposed draft of the Revised Final Land Development
Plan dated December 3, 2001, last revised March 6, 2002 prepared by Dawood Engineering,
Inc. as Drawing CVR 17601 for the Borrower and the proposed draft of the Final Subdivision
Plan dated March 6, 2002 prepared by Dawood Engineering, Inc. as Drawing CVR 17601 for
the Borrower are each acceptable to the Bank.
ARTICLE 5. NEGATIVE COVENANTS
From the date hereof and thereafter until the Loan and all other Obligations of the
Borrower hereunder are paid in full and the Bank has no further obligation to make
disbursements hereunder, the Borrower agrees, for the benefit of the Bank, that it will comply
with each of the following covenants:
5.1 Indebtedness. The Borrower shall not create, incur, assume or permit to exist
or remain outstanding any Indebtedness, except for (i) Indebtedness owed by the Borrower to
the Bank pursuant to the Loan Documents, (ii) other Indebtedness owed by the Borrower to the
Bank from time to time, (iii) Indebtedness secured by personal property being leased by the
Borrower and by purchase money security interests in equipment and vehicles, and
(iv) Subordinated Indebtedness.
5.2 Encumbrances. The Borrower shall not create, assume, Incur or suffer to exist
any Encumbrance upon the Property or any of the Collateral except for Permitted
Encumbrances.
5.3 Liquidations. Mergers Consolidations Acquisitions Sales of Interests.
The Borrower shall not dissolve, liquidate its assets in whole or in part or wind up its affairs, or
BF 233707.10:012150-120748 -21-
become a party to any merger or consolidation, or acquire by purchase, lease or otherwise all or
substantially all of the assets, capital stock or other equity interests of any other Person.
5.4 Organizational Matters. The Borrower shall not (i) change its name or change
from being a limited partnership without giving the Bank sixty (60) days' prior written notice
thereof, or (ii) amend its partnership agreement or certificate of limited partnership.
5.5 Dispositions of Assets. The Borrower shall not sell, convey, assign, lease,
abandon or otherwise transfer or dispose of, voluntarily or involuntarily, any interest in the
Property or any of the Collateral, except for:
(i) Leases of the Property in the ordinary course of business; and
(11) sales, transfers, leases or dispositions of furniture, fixtures and equipment
in the ordinary course of business which are replaced by substitute assets acquired or leased by
the Borrower; provided, however, that such substitute assets shall be subject to Bank's Lien.
5.6 Use of Property. The Borrower shall not use the Property for any purpose or in
any manner which is in any way inconsistent with or contrary to the use of the Property as
contemplated by and as set forth In any of the Loan Documents or inconsistent with or contrary
to any Property Restriction, Governmental Approval or Governmental Rule.
5.7 Change of Business. The Borrower shall not engage in any business other than
the ownership, construction, operation, leasing and maintenance of the Project and activities
incidental thereto.
5.6 Certain Changes. The Borrower shall not without the prior written consent of
the Bank which consent shall not be unreasonably withheld: (i) cause or make any change in
the Plans and Specifications or any of the other Development Documents, any one of which
involves Ten Thousand Dollars ($10,000.00) or more, or which involve Fifty Thousand Dollars
($50,000.00) in the aggregate, (ii) make any material change to the design, operation, use,
construction or management of the Buildings and Improvements, (III) change any Contractor or
Architect for the Project, (iv) amend or terminate any Development Document, or (v) permit any
Person other than the Property Manager to manage the Property.
5.9 Ownership of Materials and Personal Property. Except for matters identified
in the Project Budget, without the Bank's prior written consent, the Borrower shall not cause or
permit any materials, equipment, personal property or fixtures of any kind to be purchased or
acquired for installation or use in or about the Improvements under any conditional sales
contract or security agreement.
5.10 Publicity The Borrower shall not erect any sign upon the Property or engage in
any other publicity regarding the financing provided by the Bank without the Bank's prior written
approval.
5.11 Ownership or Acquisition of Assets. The Borrower shall not acquire or own
any material assets other than the Project and such incidental personal property related thereto
as may be necessary for the operation of the Project.
5.12 Lease of Project. The Borrower shall not lease any portion of the Property or
the Project unless the Bank approves of the form and rental rates of the proposed lease. In
BF 233707.10:012150-120748 -22-
addition, leases entered into for each Building must provide for a minimum average rental of
$1.13 per square foot, tested upon the stabilization of each individual Building.
5.13 Debt Service Coverage Ratio. (1) During the Construction Period, the Borrower
shall not permit its Debt Service Coverage Ratio to be less than 1.30 to 1.0, (ii) During the Term
Period, the Borrower shall not permit its Debt Service Coverage Ratio to be less than 1.20 to
1.0. For purposes hereof, the Debt Service Coverage Ratio during the Construction Period shall
be calculated based on the interest only payments set forth in the Note, and the Debt Service
Coverage Ratio during the Term Period shall be calculated based on the payments of principal
and interest as set forth in the Note.
5.14 Subdivision. Land Development Plan and Survey. The Borrower shall not
record any subdivision or land development plan in the Recorder's Office of Cumberland
County, Pennsylvania, without first receiving the Bank's prior written consent (which shall not be
unreasonably withheld). The proposed draft of the Revised Final Land Development Plan dated
December 3, 2001, last revised March 6, 2002 prepared by Dawood Engineering, Inc. as
Drawing CVR 17601 for the Borrower and the proposed draft of the Final Subdivision Plan
dated March 6, 2002 prepared by Dawood Engineering, Inc. as Drawing CVR 17601 for the
Borrower are each acceptable to the Bank.
ARTICLE 6. CONDITIONS TO MAKING DISBURSEMENTS
6.1 Conditions to Making Each Disbursement. The obligation of the Bank to
make each disbursement hereunder is subject to the satisfaction of each of the following
conditions precedent:
6.1a No Default or Event of Default Etc The Borrower and the other Loan Parties
shall have performed and complied with all agreements and conditions required in the Loan
Documents to be performed or complied with by it prior to making the disbursement and, at the
time of making the disbursement, or as a result of making the disbursement, no Default or Event
of Default has occurred and is continuing or will be caused by the making of the disbursement.
6.1b No Material Adverse Change. At the time of making the disbursement, no
Material Adverse Change has occurred and is continuing with respect to any Loan Party, and no
circumstances exist which would reasonably be expected to cause a Material Adverse Effect.
6.1c Representations Correct. The representations and warranties contained in
Article 3 hereof and otherwise made in writing by or on behalf of the Borrower or any other Loan
Party in connection with the transactions contemplated by this Agreement and the other Loan
Documents shall be (I) correct when made and (ii) correct in all material respects at the time of
making the disbursement.
6.1d Approval by Governmental Authorities. The Bank has not determined or
received any reliable indication that the construction of the Buildings and Improvements have
not been or will not be approved by all appropriate Governmental Authorities.
6.1 a Leases. The Borrower shall have delivered to the Bank (i) copies of all Leases
for the Project or any portion thereof then in effect.
BF 233707.10:012150-120748 -23-
6.1f Construction Contracts. Contractors Plans and Specifications and Project
Budgets. The Borrower shall have delivered to the Bank each Construction Contract with each
Contractor, all Plans and Specifications and all Project Budgets for each Building, the
Improvements and the Project for the Bank's prior written approval as set forth In this
Agreement including, but not limited to Section 2.1a (iii).
6.1 g Other Conditions to Disbursements. All other applicable conditions to making
disbursements set forth In this Article 6 shall have been satisfied.
6.2 Conditions to Making First Disbursement. In addition to satisfaction of each
of the conditions precedent set forth in Section 6.1, the obligation of the Bank to execute the
Loan Documents and make the first disbursement hereunder is subject to the satisfaction of
each of the following conditions precedent:
6.2a Loan Documents. The Bank shall have received each of the following Loan
Documents, each duly executed by all of the parties thereto and each in form and substance
satisfactory to the Bank:
(i) this Agreement;
(ii) the Note;
(iii) the Mortgage;
(iv) the Assignment of Leases and Rents;
(v) the Security Agreement;
(vi) the Guaranty Agreement;
(vii) the Environmental Indemnity Agreement;
(viii) all UCC-1 financing statements requested by the Bank;
(ix) Consents of the Contractor and the Architect to assignments; and
(x) all schedules to any of the Loan Documents, prepared by the Borrower
and satisfactory to the Bank.
6.2b Other Conditions. The Bank shall have received each of the following or shall
have otherwise determined that each of the following conditions has been satisfied, each duly
executed by all of the parties thereto or Issuers thereof and each in form and substance
satisfactory to the Bank in all respects:
(I) Insurance. Copies of the Borrower's or, if applicable, the Contractor's
insurance policy or policies, certificates and other evidence of insurance required by Section
4.8, containing long-form lender loss payable endorsements satisfactory to the Bank and which
in all other respects comply with the requirements of Section 4.8 and the Insurance
requirements set forth in the other Loan Documents and current evidence of insurance for all
such policies.
(ii) Flood Insurance. If any Buildings or Improvements or any portion is in
an area of special flood hazard, evidence of satisfactory flood insurance.
(iii) Soils Report. A soils report prepared by a firm acceptable to the Bank.
(iv) Environmental Matters. A phase I environmental assessment of the
Property, prepared by a firm satisfactory to the Bank, and a determination by the Bank that the
environmental condition of the Property, as well as any other environmental considerations
affecting the Property, are acceptable to it.
BF 233707.10:012150-120748 -24-
(v) Appraisal. The Appraisal, showing that the fair market value of the
Property, after completion of the Project, is at least Twenty-Four Million Dollars
($24,000,000.00) and that the Loan-to- Value Ratio does not and will not exceed eighty percent
(80%).
(vi) Title Insurance. A marked-up title insurance commitment issued by a
title insurance company satisfactory to the Bank, which title insurance company will, on the
Closing Date, issue an ALTA 1992 loan policy of title insurance to the Bank Insuring the
Mortgage in the principal sum secured thereby as a first and prior lien upon the Borrower's fee
simple title to the Property and all appurtenances thereto (including such easements and
appurtenances as may be required by the Bank), containing a satisfactory pending
disbursements clause and subject only to Permitted Encumbrances and such other exceptions
as may be approved in writing by the Bank, and containing such endorsements (including
without limitation the 100, 300, 710 and 1015 endorsements) and affirmative coverage
(including coverage for mechanic's liens) as are reasonably required by the Bank.
(vii) urve . The Survey, which shall be certified to the Bank and to the title
insurance company issuing the title insurance policy; provided, however, that If the ALTA
Survey is not yet available on the Closing Date, the Borrower shall deliver to the Bank a Survey
which is satisfactory to the Bank and the title insurance company and the Borrower shall then
deliver the ALTA Survey to the Bank as soon as it is available but not later than November 30,
2004.
(viii) Legal Description. A metes and bounds legal description of the Land,
compatible with the survey of the Property described in the preceding item (vil).
(ix) Lien. Judgment and UCC-1 Searches. Satisfactory lien, judgment and
UCC-1 financing statement search results for the Borrower.
(x) Termination Statements Etc Any and all Uniform Commercial Code
termination statements, mortgage satisfactions and other documents and instruments of
termination and release which are necessary so that the Bank's Lien is a first and prior lien and
security interest, subject only to Permitted Encumbrances.
(A) Lists of Contractors and Subcontractors. A true and correct list of all
contractors and subcontractors at any time employed in connection with the Project.
(xii) No Lien Agreement. Fully executed and effective No Lien Agreement
from the Contractor filed in the Office of the Prothonotary of Cumberland County, Pennsylvania,
and properly indexed against the Borrower and the Contractor, both as plaintiff and defendant.
(xiii) Plans and Specifications. A copy of the complete, detailed Plans and
Specifications, approved by the Borrower, the Architect and Contractor for the Project and any
required Governmental Authorities.
(xiv) Governmental Aparovals• Compliance with Governmental Rules. (1)
Evidence of the satisfactory subdivision of the Land and the zoning for the Property; (ii) copies
of all necessary Governmental Approvals required in order to commence and conduct the
construction upon the Property, which Governmental Approvals have been Issued without
condition, including but not limited to permits, licenses and approvals required under federal,
state and local laws, regulations, ordinances and codes regarding subdivision, highway access,
BF 233707.10:012150-120748 -25-
drainage, zoning, safety, building, occupancy, fire protection, environmental, energy and similar
matters, all of which must be unconditional (or, if issued subject to the satisfaction of conditions,
accompanied by evidence that such conditions have been satisfied); (iii) evidence of access to
and from the Property by means of easements benefiting the Property; (iv) copies of all other
licenses, permits and franchises required in order to commence and conduct the construction of
the Improvements; and (v) evidence that all Governmental Rules, Governmental Approvals and
Property Restrictions relating to the Property have been complied with and that the present and
intended use of the Property will not violate any Governmental Rule, Governmental Approval or
Property Restriction.
(xv) Construction Contracts and Architect's Agreements. Fully executed,
final copies of all Construction Contracts and all Architect's Agreements for the Project.
(xvi) Inspecting rchitect's Certificate. A favorable report of the Inspecting
Architect as to the detail set forth in Plans and Specifications, the quality of construction called
for by the Plans and Specifications, the adequacy of the Construction Contract to provide for
completion of the Improvements by the Completion Date, and such other matters as are
required by the Bank.
(xvii) Condition of Property. No portion of the Property shall have been
damaged by fire or any other casualty and not repaired to the condition Immediately prior to
such casualty, and no condemnation or taking of the Property, or any portion thereof, shall be
pending or threatened.
(xviii) Evidence of Utilities and Municipal Services. Evidence that all
required utility, sewer and other necessary municipal services to the Property is available.
{xix} Project Budget A detailed, final Project Budget for the Project and the
Bank's satisfaction that the Project Budget has not changed.
(xx) Project Draw Schedule. A completed draw schedule for the Project.
(xxi) Equity Investment. Evidence that the Borrower has made the cash
equity investment in the Project in a minimum amount of Three Million Dollars ($3,000,000.00).
This requirement shall be satisfied by funding any additional required Equity into the Equity
Account as set forth in Section 4.7b herein.
(xxii) Limited Partnership Documents. A certificate, completed and signed
by the General Partner's Manager, and having attached thereto the following documents for the
Borrower;
(A) Its certificate of limited partnership, certified as true and correct by
the Secretary of State of the state of its formation and dated not more than thirty (30) days prior
to the date hereof;
thereto; and (B) A copy of its limited partnership agreement and all amendments
(C) A good standing or subsistence certificate issued by the Secretary
of State of the state of its formation and dated not more than thirty (30) days prior to the date
hereof.
BF 233707.10:012150.120748 -26-
(xxiii) Limited Liability Company Documents. A certificate, completed and
signed by the Manager, and having attached thereto the following documents for the General
Partner:
(A) Its Certificate of Organization, certified as true, complete, correct.
and in effect by the Secretary of State of the state of Its formation and dated not more than thirty
(36) days prior to the date hereof;
(B) A copy of its Operating Agreement and all amendments thereto;
(C) A good standing or subsistence certificate issued by the Secretary
of State of the state of its formation and dated not more than thirty (30) days prior to the date
hereof; and
(D) Resolutions of its members authorizing the incurrence of the
Obligations and the execution, delivery and performance of the Loan Documents.
(xxiv) List of indebtedness. Receipt by the Bank of a list of all Indebtedness
of the Borrower.
(xxv) Settlement Statement. Receipt by the Bank of a copy of the executed
Settlement Statement.
(xxvi) Opinion of Counsel. Receipt by the Bank of an opinion of counsel to the
Borrower and the Guarantor.
(xxvii) Payment of 1=acility Fee and Other Amounts. The Borrower shall have
paid to the Bank the portion of the Facility Fee not previously paid, and shall have paid any
other costs, fees and expenses owed to the Bank on the Closing Date.
(xxviii) Legal Fees. Receipt by the Bank of the Bank's counsel's, Tucker
Arensberg, P.C., legal fees and all expenses incurred by it in connection with the preparation
and negotiation of the Loan Documents and the closing.
6.3 First Construction Advance. To the extent any of the conditions precedent set
forth in Section 6.2 have not been previously satisfied, all such conditions must be satisfied prior
to the first advance made hereunder for construction; rovided owever, that this Section 6.3
shall not be construed to waive the requirement that all of the conditions set forth in Section 6.2
be met before the Bank is required to execute the Loan Documents. In addition, before the first
construction advance is made hereunder, the Bank shall have first disbursed all amounts
consisting of the Borrower's equity contribution which have been deposited with the Bank. In
addition, all items set forth on the Closing Agreement dated of even date herewith and executed
by the Borrower and the Bank, must be delivered to, and approved by, the Bank.
6.4 Subsequent Disbursements. In addition to satisfaction of each of the
conditions precedent set forth in Sections 6.1 and 6.2, the obligation of the Bank to make
disbursements hereunder after the first disbursement (including without limitation the Retainage
disbursement described in Section 6.5) is subject to the satisfaction of each of the following
conditions precedent in a manner satisfactory to the Bank:
BF 233707.10:012150-120748 -27-
6.4a Title Policy Endorsement. The Bank shall have received an endorsement to
the Title Policy (i) indicating that since the last preceding disbursement there has been no
change in the state of title and no survey exceptions not previously approved by the Bank, (ii)
increasing the coverage of the Title Policy by an amount equal to the disbursement then being
made, so that the total amount insured equals at all times the total aggregate amount of the
disbursements made by the Bank to date, and (iii) changing the effective date of the policy to
the date of disbursement, and if necessary in the reasonable opinion of the Bank, insuring that
no encroachments exist over any building, zoning, right-of-way, property or setback lines. This
requirement shall be waived by the Bank if the Title Policy contains a satisfactory pending
disbursements endorsement.
6.415 Inspecting Architect's Reports. The Bank's obligation to make any advances
after the Closing Date for direct costs of construction may, at the option of the Bank, be
conditioned upon the Bank's continued receipt of reports from the Inspecting Architect similar to
those specified in Section 6.2b.
6.5 Retainage Disbursement. The amount of each disbursement shall be subject
to a retainage (the "Retainage") equal to ten percent (10%) of costs incurred under the
Construction Contract until the Project is fifty percent (50%) completed (as determined by the
Bank in its sole discretion), and equal to five percent (5%) thereafter until the completion of the
Project. In addition to satisfaction of each of the conditions precedent set forth in Sections 6.1,
6.2, 6.3 and 6.4, the obligation of the Bank to release the Retainage is subject to the satisfaction
of each of the following conditions precedent in a manner satisfactory to the Bank in all
respects;
6.5a Completion Certificate. The Bank shall have received a certificate of the
Architect and the Contractor for the Project to the effect that, to their best knowledge, the
Buildings and Improvements have been fully completed in substantial accordance with the
Plans and Specifications, the Development Documents, and all applicable Governmental Rules
and Governmental Approvals, and the Bank may at its option request that the information
contained in these certificates be verified by the Inspecting Architect.
6.5b Certificate of occupancy. A permanent certificate of occupancy for the
Buildings, if required by applicable law, and all other required Governmental Approvals for the
use and occupancy of the Buildings and the Improvements shall have been duly Issued and the
Bank shall have received copies thereof.
6.5c As-Built Survey. The Bank shall have received an as-built survey, showing the
location of all Improvements, easements, rights-of-way and other matters affecting the Property.
6.5d Final Lien Releases. The Bank shall have received lien releases and waivers
from all contractors, subcontractors, suppliers, materialmen and any other Persons having a
right to file a mechanic's lien, materialman's lien or any other Encumbrance on or with respect to
the Collateral or the Property, for, as a result of, in connection with or in any manner relating to
work, materials and services performed or supplied pursuant to, in connection with or in any
manner relating to the Project.
6.5e Tax Receipts. The Bank shall have received tax receipts evidencing the
payment of the current year's real estate taxes and assessments to the extent such taxes and
assessments are due and payable.
BF 233707.10:012150-120748 -28-
6.5f Insurance. The Bank shall have received evidence satisfactory to the Bank that
the insurance with respect to the Property and the Improvements meets the Bank's
requirements and is in full force and effect. -
6.5g Borrower's Acceptance. The Bank shall have received a letter from the
Borrower in which the Borrower represents and warrants to the Bank that the Borrower has
inspected the Improvements and is satisfied that the Improvements have been completed
according to the Plans and Specifications, all Development Documents, and all applicable
Governmental Rules, Governmental Approvals and Property Restrictions.
6.5h Inspection Report. Receipt by the Bank, in such form and substance as the
Bank may require, of a report of the Inspecting Architect, which report shall be addressed to the
Bank, and such other evidence in such form and substance as the Bank may require, certifying
that the Project has been substantially completed In accordance with the Plans and
Specifications, the Development Documents, and ail applicable Governmental Rules and
Governmental Approvals, that all permanent occupancy and other permits with respect thereto
have been issued, and that all utilities have been connected to the Property and are adequate
for the intended use thereof.
6.5i Project Cost. Receipt by the Bank of a certificate, in form and substance
reasonably satisfactory to the Bank and executed by the Borrower, of the total costs to the
Borrower of, in connection with or in any manner relating to, the Project, and that such costs
have been paid and satisfied in full.
6.5j Condition of Property. No portion of the Property shall have been damaged by
fire or any other casualty and not repaired to the condition immediately prior to such casualty,
and no condemnation or taking of the Property, or any portion thereof, shall be pending or
threatened.
6.6 Other Conditions and Procedures for Disbursements. Subject to the terms
and conditions of this Agreement, the Bank shall disburse the proceeds of the Loan from time to
time for payment of construction costs of the Improvements and other development costs, all as
described in the Project Budget, as such construction is completed and as the other
development costs are Incurred, as the Bank or its Inspecting Architect shall determine. The
Bank's obligation to make any such disbursement is conditioned upon a request of the
Borrower, deliveryby the Borrower or satisfaction of, and approval by the Bank of, the items and
matters required pursuant to Sections 6.1, 6.2, 6.3 and 6.4, and, in the case of the Retainage
disbursement, satisfaction of the conditions set forth in Section 6.5, satisfaction of all other
conditions to disbursements set forth herein, delivery of the items specified below, all of which
must be satisfactory to the Bank in all respects, and the performance by the Borrower of all of its
covenants, agreements and obligations under this Agreement and the other Loan Documents:
6.6a Request for Disbursement. At least five (5) Business Days prior to the date on
which the Borrower would like a disbursement to be made, the Borrower shall submit to the
Bank (i) a Request for Disbursement in the form of Exhibit W, signed by the Borrower, the
Contractor and the Architect, (11) a revised Project Budget showing the total project costs to
date, the allocation of the Borrower's equity contribution and the balance of each category of
construction costs; and (iii) a requisition using AIA Form G702/G703 or such other form as the
Bank may request, signed by the Contractor and the Architect and properly notarized,
accompanied by original lien waivers for the prior period and original change orders, and copies
of invoices for indirect construction costs, the accuracy of which may at the Bank's option be
BF 233707.10:012150-120748 -29-
certified by the Inspecting Architect, and such other information and documentation required
hereunder. The Bank shall not be required to disburse funds until five (5) days after the last
required item is received. The Bank shall not be required to disburse any funds for any line item
in excess of the amount allocated to such line item as set forth in the Project Budget. THE
BANK SHALL NOT BE OBLIGATED TO FUND ANY ADVANCES FOR THE DEVELOPMENT
OF THE BUILDINGS, THE IMPROVEMENTS AND THE PROJECT IN PHASE II, PHASE III
AND PHASE IV UNTIL SUCH TIME AS THE BORROWER HAS DELIVERED TO THE BANK,
AND THE BANK HAS APPROVED, THE CONSTRUCTION CONTRACT, THE CONTRACTOR,
THE PLANS AND SPECIFICATIONS, AND THE PROJECT BUDGET FOR SUCH BUILDINGS,
IMPROVEMENTS AND PORTIONS OF THE PROJECT.
6.6b Timing, Retainage. Requests for disbursements shall not be made more often
than once per month, and the Bank shall not be obligated to make disbursements more often
than once per month. Each disbursement shall be subject to the Retainage until the Retainage
disbursement is made. Prior to each disbursement, at the Borrower's expense, the Bank may
request that the Inspecting Architect inspect the Improvements to verify the accuracy of all other
reports, requests or documents submitted by the Borrower, and the Inspecting Architect's report
of such inspection must be satisfactory to.the Bank.
6.6c Lien Waivers. From time to time upon request by the Bank, the Borrower shall
deliver to the Bank a schedule in a form acceptable to the Bank identifying all contractors or
subcontractors who have performed work or furnished materials in connection with the
Improvements, together with lien waivers from the contractors and all subcontractors who have
performed work or furnished materials in connection with the Improvements, current through the
period covered by such request for disbursement, all to be satisfactory to the Bank In form and
substance.
6.6d In Balance. Anything contained in any of the Loan Documents to the contrary
notwithstanding, it is expressly understood and agreed that the Loan shall at all times be "In
balance". The Loan shall be deemed to be "in balance" only at sucti time and from time to time
as the Bank or the Inspecting Architect may determine in its sole discretion that the then
undisbursed portion of the Loan equals or exceeds the amount necessary for the timely and full
payment of (1) all work done and not yet paid for and all work to be done in connection with the
completion of construction of the Improvements in accordance with the Plans and
Specifications, and (ii) all other costs (including interest on the Loan) Incurred and not yet paid
for, and all costs to be incurred in connection with the Property. The Borrower agrees that if the
Loan is deemed not to be "in balance" at any time, the Borrower shall, within five (5) days after
written request by the Bank, deposit the amount of the deficiency with the Bank, which
deficiency deposit shall first be exhausted before any further disbursement of the Loan
proceeds is made. The Bank shall not be obligated to make any disbursements of the Loan if
the Loan is not in balance.
6.6e Material Damage. Notwithstanding any provision of this Agreement or the other
Loan Documents to the contrary, if the Property shall have suffered any material damage or
destruction prior to any disbursement, such damaged or destroyed portion shall be restored or
replaced in a manner acceptable to the Bank at the Borrower's cost, prior to any further
disbursement being made by the Bank.
6.6f Mechanic's Liens. In the event of the filing of any mechanics' or materialmen's
lien, the Borrower shall within ten (10) days after the filing thereof, or if earlier, prior to the next
BF 233707.10:012150-120748 -30-
disbursement of Loan proceeds, cause such lien to be removed by bonding or otherwise, or
insured over by the title company, to the Bank's complete satisfaction.
6.6g Disbursements. The Bank may, at its option, make disbursements into the
Construction Account, directly to the Borrower, or directly to the Person performing the services
or supplying the materials specified in the Request for Disbursement, and the Borrower hereby
authorizes disbursements to be made in this manner.
6.6h Access to Property Correction of Defective Work. The Borrower shall permit
the Bank,.through the Inspecting Architect and the Bank's or any of its affiliates' officers,
employees or agents, at all times, the right of entry and free access to the Property and the right
to inspect all work done, labor performed and materials furnished or to be furnished In
connection with the Improvements. If the Bank determines that any work or material does not
comply with the Plans and Specifications or sound construction practices, or otherwise departs
from the requirements of the Loan Documents or any of the Development Documents or any
Governmental Rule, Governmental Approval or Property Restriction, then the Bank may
withhold disbursements until the matter is corrected to the Bank's satisfaction. The Borrower
shall promptly correct any non-conforming work or materials. No such action by the Bank will
affect the Borrower's obligation to complete the improvements on or before the Completion
Date. The Bank shall be under no duty to examine, supervise or inspect any of the
Development Documents or any Governmental Rules, Governmental Approvals or Property
Restrictions, or the construction of the Improvements. Any inspection or examination by the
Bank or its affiliates, or their respective officers, employees or agents, or the Inspecting
Architect, is for the sole purpose of protecting the Bank's liens and security interests and
preserving its rights hereunder. No default or breach by the Borrower will be waived by any
inspection by the Bank, its affiliates, their respective officers, employees or agent, or the
Inspecting Architect, nor shall any such inspections constitute a representation that there has
been or will be compliance with the Plans and Specifications or that the construction is free from
defective materials or workmanship. The Inspecting Architect's services are for the sole benefit
of the Bank and none of the Bank, its affiliates, or their respective officers, employees or agent
shall be liable in any manner as a result of any inspection.
6.6i Indemnification. The Borrower hereby agrees to defend, indemnify, protect and
hold harmless each indemnified Person, from and against any and all claims, losses, damages,
liabilities, costs and expenses (including reasonable attorneys' fees and claims arising out of the
loss of life, injury to persons, property or business) in connection with any construction,
demolition or renovation activities of the Borrower, any contractor, any subcontractor, or any
other Person, including the construction of the Improvements and the making of the Loan
pursuant to the terms and conditions of the Loan Documents, except for any of the foregoing
resulting from the gross negligence or willful misconduct of the Bank.
6.7 Interest Reserve. The Project Budget which is attached hereto as Schedule
2.1a (as it may be amended in writing by the Borrower and the Bank strictly in accordance with
the terms of this Agreement) has a "Construction Period Interest Reserve" which is broken down
into the four Phases as follows: (A) $150,000 for Phase I plus the site work, (B) $201,711 for
Phase 11 plus the pool and clubhouse, (C) $369,275 for Phase III, and (D) $480,124 for Phase
IV (collectively the "Interest Reserve"). The Borrower shall only be permitted to request, as
part of an Advance under this Agreement, funds from the Interest Reserve which are necessary,
when combined with all of the Borrower's available cash flow and operating income from the
Property, to pay such monthly interest debt service under the Note. In addition, after each
Phase has been constructed, any remaining dollars in the Interest Reserve for such Phase will
BF 233707.10:012150-120748 - 31
be reallocated and be available to the Borrower only as Interest Reserve to be used In
accordance with the immediately preceding sentence under the Note or the Loan.
ARTICLE 7. EVENTS OF DEFAULT; REMEDIES
7.1 Events of Default. Each of the following events shall constitute an Event of
Default:
7.1a Nonpayment of Obligations. The Borrower shall default in any payment of
principal of the Loan when due, or in the payment of interest on the Loan or any of the fees,
costs, expenses, indemnities or other amounts due hereunder or under any of the other Loan
Documents when due, and such default in payment shall have continued for a period of five (5)
days after the due date.
7.1 b Nonpayment of Other Indebtedness, The Borrower shall default in any
payment of principal, interest or other amounts due with respect to any other Indebtedness
(other than the Obligations owed to the Bank hereunder), if such default results in the
acceleration of such Indebtedness or gives the holder of such Indebtedness the right to
accelerate such Indebtedness.
7.1c Insolvency, Etc.
(I) Involuntary Proceedings. A proceeding shall have been Instituted in a
court having jurisdiction seeking a decree or order for relief in respect of any Loan Party in an
involuntary case under the Federal bankruptcy laws, or any other similar applicable Federal or
state law, now or hereafter in effect, or for the appointment of a receiver, liquidator, trustee,
sequestrator or similar official or Governmental Authority for such Loan Party or for a substantial
part of Its property, or for the winding up or liquidation of its affairs, and such proceeding shall
remain undismissed or unstayed and in effect for a period of sixty (60) days.
(ii) Voluntary Proceedings. Any Loan Party shall institute proceedings to be
adjudicated a voluntary bankrupt, or shall consent to the filing of a bankruptcy proceeding
against it, or shall file a petition or answer or consent seeking reorganization under the Federal
bankruptcy laws, or any other similar applicable Federal or state law now or hereinafter in effect,
or shall consent or acquiesce to the filing of any such petition, or shall consent to or acquiesce
in the appointment of a receiver, liquidator, trustee, sequestrator or similar official or
Governmental Authority for such Loan Party or for a substantial part of its property, or shall
make an assignment for the benefit of creditors, or shall admit in writing its Inability to pay its
debts generally as they become due, or action shall be taken by such Loan Party in furtherance
of any of the foregoing.
7.1d Dissolution: Cessation of Business. Any Loan Party shall dissolve, liquidate
its assets, terminate its existence, cease to exist or permanently cease operations, or any Loan
Party who is a natural person shall die.
7.1e Change of Ownership. The occurrence of a Change of Ownership.
7.1f Failure to COMPly with Loan Documents. The occurrence of any of the
following: (I) the borrower shall default in the due performance or observance of any covenant,
condition or provision set forth in this Agreement which is not set forth elsewhere in this Section
BF 23370710:012150-120748 -32-
7.1; or (ii) any Event of Default, as defined in any other Loan Document, shall occur, or (iii) any
Event of Default, as defined in any other agreement or instrument at any time relating to or
evidencing Indebtedness owed by the Borrower to the Bank shall occur; or (iv) the Borrower or
any other Loan Party shall default in the due performance of any covenant, condition or
provision set forth in any other Loan Documents to which such Loan Party Is a party, and such
default described in items (i) and (iv) of this Subsection 7.1f shall not be remedied for a period of
thirty (30) days after such default has occurred.
7.1 g Misrepresentation. Any representation or warranty made by any Loan Party in
any Loan Document to which it is a party is untrue in any material respect as of the date made,
or any schedule, statement, report, notice, certificate or other writing furnished by any Loan
Party to the Bank is untrue in any material respect on the date as of which the facts set forth
therein are stated or certified.
7.1 h Termination. Invalidity. Etc. of Loan Documents. Any.matedal provision of
this Agreement or any of the other Loan Documents shall at any time for any reason cease to
be valid and binding on any Loan Party or any other Person which is a party thereto, or shall be
declared to be null and void, or the validity or enforceability thereof shall be contested by any
Loan Party or other Person which is a party thereto, or any Governmental Authority, court or
arbitrator, or any Loan Party or any other Person which is a party to any of such agreements
shall, or shall purport to, terminate, repudiate, declare voidable or void or otherwise contest any
Loan Document to which he or it Is a party or any obligation of any Loan Party under any of the
Loan Documents.
7.11 Material Adverse Change. The occurrence of any Material Adverse Change
with respect to any Loan Party or the Project.
7.1j Adverse Judgments. Any judgment where the amount not covered by
insurance (or the amount as to which the insurer denies liability) is in excess of Fifty Thousand
Dollars ($50,000.00) shall be rendered against any Loan Party or the Project, or there shall be
any attachment, injunction or execution against any such Person of the Project which is in
excess of f=ifty Thousand Dollars ($50,000.00), and such judgment, attachment, execution or
order shall remain unpaid, unstayed, undismissed or unappealed for a period of thirty (30) days.
7.1 k Collateral. A writ or warrant of attachment, garnishment, execution, distraint or
similar process shall have been issued against the Borrower or any of the Collateral which shall
have become final and non-appealable or remain undischarged and unstayed for a period of
thirty (30) days, or a creditor of the Borrower shall obtain possession of any of the Collateral by
levy, distraint, replevin, self-help or other means of exercising their rights as such a creditor.
7.11 Bank's Lien. The Bank's Lien in any of the Collateral Is or becomes unperfected
or no longer constitutes a first priority perfected lien or security interest in any of such Collateral,
subject only to Permitted Encumbrances.
7.1m Subordination Agreements. Any provision in any Subordination Agreement
shall be revoked or terminated, or shall not be renewed, or shall at any time for any reason
cease to be valid and binding upon any party thereto, or shall be declared to be null and void, or
the validity or enforceability thereof shall be contested by any party thereto, or any
Governmental Authority, court or arbitrator or any party to any Subordination Agreement shall or
shall purport to terminate, repudiate, declare voidable or void or otherwise contest the
Subordination Agreement, or any violation of any Subordination Agreement shall occur.
BF 233707.10:012150-120748 -33-
7.1n Termination Invali 'r or Failure to om I wit Leases and Develo me t
Documents. Either (i) any material provision of any Development Document shall at any time
for any reason cease to be valid and binding on any Person which is a party thereto, or shall be
declared to be null and void, or the validity or enforceability thereof shall be contested by any.
Person which is a party thereto, or any Governmental Authority, court or arbitrator, or any
Person which is a party to any Development Document shall, or shall purport to, terminate,
repudiate, declare voidable or void or otherwise contest any Development Document or any
obligation of such Person under any Development Document, or any material violation of any
Development Document shall occur, or (ii) the Borrower or any tenant shall default in the due
performance or observance of any material covenant, condition or provision set forth in any
Lease and such default shall not be remedied for a period of thirty (30) days after the earlier of
(A) such default becoming known to the Borrower or (B) notice of such default being delivered
by the Bank to the Borrower.
7.1o Defaults Under Other Documents: Stop Work Orders. The receipt by the
Borrower of any "stop-work" or similar order from any Governmental Authority in connection with
the construction of the Project which is not revoked or terminated by such Governmental
Authority within ten (10) days after such order is issued.
7.2 Remedies.
7.2a Events of Default Under Section 71c or 71d or 7 1e. Upon the occurrence of
an Event of Default set forth in Sections 7.1c or 7.1d or 7.1e, the Loan, the Note, interest
accrued thereon and all other Obligations of the Borrower to the Bank shall become immediately
due and payable, without the necessity of demand, presentation* 'protest, notice of dishonor or
notice of default, all of which are hereby expressly waived by the Borrower.
7.2b Remaining Events of Default. Upon the occurrence and during the
continuance of any Event of Default (other than those described in Sections 7.1c and 7.1d and
7.1 e) the Bank may, at its option, declare the Loan, the Note, interest accrued thereon and all
other Obligations of the Borrower to the Bank to be due and payable, without the necessity of
demand, presentation, protest, notice of dishonor or notice of default, all of which are hereby
expressly waived by the Borrower.
7.2c Additional Remedies. In addition to the remedies set forth above, upon the
occurrence and during the continuance of any Event of Default, the Bank shall have all of the
rights and remedies granted to it under this Agreement and the other Loan Documents and all
other rights and remedies granted by law to creditors.
7.2d Exerclse of Remedies, Remedies Cumulative. No delay on the part of the
Bank or failure by the Bank to exercise any power, right or remedy under this Agreement or any
other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise
of any power, right or remedy or any abandonment or discontinuance of steps to enforce such
right, power or remedy preclude other or further exercises thereof, or the exercise of any other
power, right or remedy. The rights and remedies in this Agreement and the other Loan
Documents are cumulative and not exclusive of any rights or remedies (including, without
limitation, the right of specific performance) which the Bank would..otherwise have.
BF 233707.10:012150-120748 -34-
ARTICLE 8. GENERAL PROVISIONS
8.1 Amendments and Waivers. The Bank and the Loan Parties may from time to
time enter into amendments, extensions, supplements and replacements to and of this
Agreement and the other Loan Documents to which they are parties, and the Bank may from
time to time waive compliance with a provision of any of such documents. No amendment,
extension, supplement, replacement or waiver shall be effective unless it is in writing and is
signed by the Bank and the affected Loan Party, All waivers shall be effective only for the
specific instance and for the specific purpose for which it is given.
8.2 axes. The Borrower shall pay any and all stamp, document, transfer and
recording taxes, filing fees and similar impositions payable or hereafter determined by the Bank
to be payable in connection with this Agreement, the other Loan Documents and any other
documents, instruments and transactions pursuant to or in connection with any of the Loan
Documents. The Borrower agrees to save the Bank harmless from and against any and all
present and future claims or liabilities with respect to, or resulting from, any delay in paying or
failure to pay any such taxes or similar impositions. The obligations of the Borrower pursuant to
this Section 8.2 shall survive the termination of this Agreement and the repayment of the
Obligations.
8.3 Expenses and Fees. The Borrower shall pay to the Bank or reimburse the Bank
for the following costs, expenses and fees in addition to any other costs, expenses and fees
required to be paid by any other Loan Party pursuant to any of the Loan Documents, whether or
not the Loan is closed and funded:
(i) All reasonable costs and expenses of the Bank (including without
limitation the reasonable fees and disbursements of the Bank's counsel) actually incurred in
connection with:
(A) the preparation, negotiation, execution and delivery of the Loan
Documents (including without limitation the reasonable fees and disbursements of the Bank's
counsel) and any and all other documents and instruments prepared in connection herewith,
Including but not limited to all amendments, modifications, waivers, consents, forbearances and
other documents and instruments prepared or entered Into from time to time, including after the
Closing Date;
(B) the satisfaction of all of the conditions precedent to the Bank's
making the Loan, as set forth in Article 6; and
(C) and any and all other costs and expenses associated with the
making of the Loan, including without limitation lien and title search costs and fees, title
insurance premiums, architectural fees, environmental assessment and investigation costs,
engineering inspection fees, fees in connection with constructability reviews, feasibility studies
and engineering reports, recording fees, any stamp or recording taxes and any brokerage fees;
(ii) All reasonable costs and expenses of the Bank (including without
limitation the reasonable fees and disbursements of the Bank's counsel actually incurred) in
connection with (A) the collection of the Obligations and the enforcement of this Agreement and
the other Loan Documents, including in connection with any restructuring or workout of the
Obligations arising pursuant to a breach by any Loan Party of any of the terms, conditions,
representations, warranties or covenants of any Loan Document to which he or it is a party; (B)
BF 233707.10:012150-120748 -35-
the protection of the Collateral and Bank's Lien; and (C) defending or prosecuting any actions,
suits or proceedings relating to any of the Loan Documents;
(iii) The Bank's reasonable third-party costs incurred in connection with the
inspections, reviews and audits of the Borrower's books and records and of the Collateral and
the Property; and -
(iv) All reasonable costs and expenses of the Bank (including without
limitation the reasonable fees and disbursements of the Bank's counsel, consultants and
contractors) in connection with environmental investigation, testing or other due diligence (A) in
contemplation of this Agreement, (B) during the term hereof as provided herein and in the other
Loan Documents, and (C) following an Event of Default.
All of such costs and expenses shall be payable by the Borrower to the Bank within ten (10)
days following demand therefor or as otherwise agreed upon by the Bank and the Borrower,
and shall constitute Obligations under this Agreement. The Bank may at its option pay any such
costs and expenses which have not been paid by the Borrower from the undisbursed proceeds
of the Loan. The Borrower's obligation to pay such costs and expenses shall survive the
termination of this Agreement and the repayment of the Obligations.
8.4 Notices.
8.4a Notice to the Borrower. All notices required to be delivered to the Borrower
pursuant to this Agreement shall be in writing and shall be sent to the following address, by
hand delivery, recognized national overnight courier service, telecopier or by the United States
certified mail, return receipt requested:
If by U.S. Mail:
Gray Drive, LP
c/o Hugh J. T. Simpson
74 Emlyn Lane
Mechanicsburg, PA 17055
If by other means:
Gray Drive, LP
c/o Hugh J. T. Simpson
74 Emlyn Lane
Mechanicsburg, PA 17055
Telecopier: (717) 795-5490
With a cogy to:
Stephen C. Nudel, Esquire
219 Pine Street
Harrisburg, PA 17101
With a co to:
Stephen C. Nudel, Esquire
219 Pine Street
Harrisburg, PA 17101
Telecopier: (717) 236-5080
8.4b Notice to the Bank. All notices required to be delivered to the Bank pursuant to
this Agreement shall be in writing and shall be sent to the following address, by hand delivery,
recognized national overnight courier service, telex, telegram, teecopier or by the United States
certified mail, return receipt requested:
BF 233707.10:012150-120748 -36-
If by U.S. mail:
National City Bank of Pennsylvania
20 Stanwix Street, 18th Floor
Pittsburgh, PA 15222
Attention: Vice President
Investment Real Estate
Division
If by other means:
National City Bank of Pennsylvania
20 Stanwix Street, 18th Floor
Pittsburgh, PA 15222
Attention: Vice President
Investment Real Estate
Division
Teiecopier: (412 644-6095
With a copy to:
Tucker Arensberg, P.C.
1500 One PPG Place
Pittsburgh, PA 15222
Attention: Walter D. Enick, Esquire
Tucker Arensberg, P.C.
1500 One PPG Place
Pittsburgh, PA 15222
Attention: Walter D. Enick, Esquire
Telecopler: (412) 594-5619
All such notices shall be effective three (3) days after mailing or sending via overnight delivery
service, the date of telecopy transmission or when received, whichever is earlier. The Borrower
and the Bank may each change the address for service of notice upon it by a notice in writing to
the other party hereto. Any such notices to the Borrower shall be effective whether or not copies
of such notices are mailed or transmitted to the party designated to receive copies of such
notices.
8.5 Set-Off. To secure the repayment of the Obligations, the Borrower hereby gives
to the Bank and any participant in the Loan a lien and security interest upon and in any of the
Borrower's property, credits, securities or money which may at any time be delivered to, or be in
the possession of, or owed by the Bank and any participant to the Borrower In any capacity
whatever, including without limitation all amounts in the Construction Account, the Rental
Account and the Tax and Insurance Escrow Account. The Borrower hereby authorizes the
Bank, at any time and from time to time upon the occurrence and during the continuance of an
Event of Default, at the Bank's or the participant's option, to apply, at the discretion of the Bank
or the participant, to the payment of the Obligations, any and all such property, credits,
securities or money now or hereafter in the hands of the Bank or the participant or belonging. or
owed to the Borrower.
8.6 Interest Limitation. Notwithstanding anything to the contrary contained in any
of the Loan Documents, the obligations of the Borrower to the Bank under the Loan Documents
are subject to the limitation that payments of interest to the Bank shall not be required if and to
the extent that receipt of any such payment by the Bank would be contrary to any Governmental
Rules applicable to the Bank which limit the maximum rate of interest which may be charged or
collected by the Bank. The portion of any such payment received by the Bank which is in
excess of the maximum interest permitted by such Governmental Rules shall be credited to the
principal balance of the Loan.
8.7 No Third Party Rights. Nothing in this Agreement or any other Loan Document,
whether express or implied, shall be construed to give to any Person (other than the parties
hereto or to such other Loan Document) any legal or equitable right, remedy or claim under or in
BF 233707.10:012150-120748 -37-
respect of this Agreement or such other Loan Documents, all of which are intended for the sole
and exclusive benefit of the parties hereto and thereto.
8.8 Participations and Assignments.
8.8a Sale of Participations and Assignments. The Bank may, in accordance with
applicable law, and without the consent of the Borrower, at any time sell participations in, or
make assignments of, all or a portion of the Loan, the Note or any other interest of the Bank
hereunder and other the other Loan Documents, to one or more Persons (which may be
Affiliates of the Bank). The Borrower hereby authorizes and consents to the Bank disclosing to
any such potential participant or assignee any information concerning the Borrower, any
Guarantor or the Project. In the event of any such sale of a participatlon, the Bank's obligations
under this Agreement to the Borrower shall remain unchanged, the Bank shall remain solely
responsible for its performance under this Agreement, the Bank shall remain the holder of the
Note made payable to it for all purposes under this Agreement (including all voting rights
hereunder) and the Borrower shall continue to deal solely and directly with the Bank in
connection with the Bank's rights and obligations under this Agreement and the other Loan
Documents. In the event of any assignment, the Borrower agrees to execute any documents
and instruments, including but not limited to amended Notes, deemed reasonably necessary by
the Bank to accomplish such assignment.
8.81b Right of Setoff, The Borrower agrees that if amounts outstanding under this
Agreement and the Note are due and unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each participant shall be deemed
to have, to the extent permitted by applicable law, the right of setoff in respect of its participation
in amounts owing under this Agreement and the Note to the same extent as If the amount of its
participation were owing directly to it as a tender under this Agreement or the Note.
8.9 Successors and Assigns. This Agreement shall be binding upon the Borrower
and the Bank and their respective successors and assigns, and shall inure to the benefit of the
Borrower, the Bank and their respective successors and assigns; ovi d, b-Qweve r, that the
Borrower shall not assign its rights or duties hereunder or under any of the other Loan
Documents without the prior written consent of the Bank.
8.10 Severability. Any provision of this Agreement or any other Loan Document
which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without Invalidating the remaining
portions hereof or affecting the validity or enforceability of such provision in any other
jurisdiction.
8.11 Survival, Except as otherwise set forth, the representations, warranties,
covenants and agreements of the Borrower contained herein or in the other Loan Documents or
made in writing in connection herewith shall survive the issuance of the Note and shall continue
in full force and effect until payment in full of the Loan and the other Obligations is made and the
Bank has no further obligation to make advances hereunder.
8.12 . Funds Transfer Authorization Indemnification. The Borrower shall pay
all charges which the Bank may impose from time to time for transfers of funds and for following
the instructions relating to transfers of funds. The Borrower shall also reimburse the Bank upon
demand for any out-of-pocket costs incurred by the Bank in carrying out the instructions given
by the Borrower in connection with transfers of funds. In no event shall the Bank be responsible
BF 233707.10:012150-120748 -38-
for any loss, claim, liability, damage or other amount arising in any way, directly or indirectly,
from any error, failure, or delay in the performance of any of the Bank's obligations relating to
transfers of funds caused by natural disaster, fire, war, strike, civil unrest, error in or inoperability
of communication equipment or lines, or any other circumstances beyond the reasonable
control of the Bank. The Borrower agrees to indemnify each Indemnified Person and hold each
Indemnified Person harmless from any and all losses, costs, damages and expenses (Including
reasonable attorneys' fees and costs, and costs of investigation, both at trial and on appeal),
arising directly or indirectly from, or relating in any manner to, any actions taken by the Bank in
connection with transfers of funds which were reasonably believed by the Bank to be taken
pursuant to the Loan Documents, including but not limited to actions taken by the Bank to
amend or cancel any funds transfer instructions or any decision by the Bank to effect or not
effect a transfer as provided, or any other action taken by the Bank in good faith pursuant to its
responsibilities relating to transfers of funds under the Loan Documents.
8.13 GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE COMMONWEALTH OF PENNSYLVANIA, WITHOUT REGARD TO THE
PRINCIPLES THEREOF REGARDING CONFLICT OF LAWS, EXCEPTING APPLICABLE
FEDERAL LAW AND EXCEPT ONLY TO THE EXTENT PRECLUDED BY THE MANDATORY
APPLICATION OF THE LAW OF ANOTHER JURISDICTION.
8.14 FORUM. THE PARTIES HERETO AGREE THAT ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER
LOAN DOCUMENTS.TO WHICH THE BORROWER IS A PARTY MAY BE COMMENCED IN
THE COURT OF COMMON PLEAS OF ALLEGHENY COUNTY, PENNSYLVANIA OR IN THE
UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA,
AND THE PARTIES HERETO AGREE THAT A SUMMONS AND COMPLAINT
COMMENCING AN ACTION OR PROCEEDING IN EITHER OF SUCH COURTS SHALL BE
PROPERLY SERVED AND SHALL CONFER PERSONAL JURISDICTION IF SERVED
PERSONALLY OR BY CERTIFIED MAIL TO THE PARTIES AT THEIR ADDRESSES SET
FORTH IN SECTION 8.4, OR AS OTHERWISE PROVIDED UNDER THE LAWS OF THE
COMMONWEALTH OF PENNSYLVANIA. FURTHER, THE BORROWER HEREBY
SPECIFICALLY CONSENTS TO THE PERSONAL JURISDICTION OF THE COURT OF
COMMON PLEAS OF ALLEGHENY COUNTY, PENNSYLVANIA AND THE UNITED STATES
DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA AND WAIVES AND
HEREBY ACKNOWLEDGES THAT IT IS ESTOPPED FROM RAISING ANY OBJECTION
BASED ON FORUM NON CONVENIENS, ANY CLAIM THAT EITHER SUCH COURT LACKS
PROPER VENUE OR ANY OBJECTION THAT EITHER SUCH COURT LACKS PERSONAL
JURISDICTION OVER THE BORROWER SO AS TO PROHIBIT EITHER SUCH COURT
FROM ADJUDICATING ANY ISSUES RAISED IN A COMPLAINT FILED WITH EITHER
SUCH COURT AGAINST THE BORROWER BY THE BANK CONCERNING THIS
AGREEMENT OR THE OTHER LOAN DOCUMENTS OR PAYMENT TO THE BANK. THE
BORROWER HEREBY ACKNOWLEDGES AND AGREES THAT THE CHOICE OF FORUM
CONTAINED IN THIS SECTION 8.14 SHALL NOT BE DEEMED TO PRECLUDE THE
ENFORCEMENT OF ANY JUDGMENT OBTAINED IN ANY FORUM OR THE TAKING OF
ANY ACTION UNDER THE LOAN DOCUMENTS TO ENFORCE THE SAME IN ANY
APPROPRIATE JURISDICTION.
8.15 DISCLAIMER RE ARDI G POWER OF ATTORNEY. SECTION 4.14 OF THIS
AGREEMENT AND CERTAIN OF THE OTHER LOAN DOCUMENTS CONTAIN POWERS OF
ATTORNEY COUPLED WITH AN INTEREST WHICH ARE FOR THE SOLE BENEFIT OF
BF 233707.10:012150-120748 -39-
THE BANK. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS ARE BEING
EXECUTED IN CONNECTION WITH A LOAN OR OTHER FINANCIAL TRANSACTION FOR
BUSINESS PURPOSES AND NOT PRIMARILY FOR PERSONAL, FAMILY OR HOUSEHOLD
PURPOSES. THE BANK, AS AGENT FOR THE BORROWER UNDER THE POWERS OF
ATTORNEY, IS NOT A FIDUCIARY FOR THE BORROWER. THE BANK, IN EXERCISING
ANY OF ITS RIGHTS OR POWERS PURSUANT TO THE POWERS OF ATTORNEY, MAY
DO SO FOR THE SOLE BENEFIT OF THE BANK AND NOT FOR THE BENEFIT OF THE
BORROWER. THE PARTIES ACKNOWLEDGE AND AGREE THAT THE PROVISIONS OF
TITLE 20, PENNSYLVANIA CONSOLIDATED STATUTES, SECTION 5601 ET SEQ., AS
AMENDED (SPECIFICALLY INCLUDING ACT 39 OF 1999) SHALL NOT BE APPLICABLE
TO THE POWERS OF ATTORNEY.
8.16 Non-Business Days. Whenever any payment hereunder or under any other
Loan Document is due and payable on a day which is not a Business Day, such payment may
be made on the next succeeding Business Day, and such extension of time shall In each such
case be included in computing interest in connection with such payment.
8.17 Integration. This Agreement and the other Loan Documents evidence the entire
agreement between the parties relating to this financing transaction and supersede all prior
understandings and agreements, whether written or oral, between the parties hereto relating to
the transactions provided for herein.
8.18 Counterparts. This Agreement and any amendment hereto may be executed in
several counterparts and by each party on a separate counterpart, each of which, when so
executed and delivered, shall be an original, but all of which together shall constitute but one
and the same instrument. In proving this Agreement, it shall not be necessary to produce or
account for more than one such counterpart signed by the other party against whom
enforcement is sought.
8.19 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR
PROCEEDING OF ANY KIND OR NATURE IN ANY COURT, ARISING OUT OF, UNDER OR
BY REASON OF THIS AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH OF THE PARTIES
HERETO ACKNOWLEDGES THAT THIS WAIVER OF JURY TRIAL HAS BEEN
SPECIFICALLY NEGOTIATED AS A PART OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
BF 233707.10:012150-120748 -40-
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, have
caused this Construction Loan Agreement to be executed as a document under seal as of the
date first written above.
WITNESS: GRAY DRIVE, LP
a Pennsylvania limited partnership
By: Gray Griffin, LLC, a Pennsylvania limited
liability company, its general partner
By:
N e: Walter D. Enick Nam . T. Simpson
Title: ng Member
WITNESS: NATIONAL CITY K OF PENNSYLVANIA
?14 A-
t_.
BY: (SEAL)
Na . Wal er D. Enic Name r ce . Froehlich
Title: is re 'dent
BF 233707.10:012150-120748 -41-
SCHEDULE 2.1a
PROJECT BUDGET
SEE ATTACHED
BF 233707.10:012150-120748 -42-
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RECEIVED TIME OCT,26, 10:55AM PRINT TIME OCT,26. 10:56AM
SCHEDULE 3.8
LITIGATION
NONE
BF. 233707.10:012150-12074B -43-
SCHEDULE 3.10
EXISTING PERMITTED ENCUMBRANCES
AS SET FORTH IN THE FIDELITY NATIONAL TITLE INSURANCE COMPANY
OF NEW YORK TITLE INSURANCE POLICY ISSUED IN CONNECTION WITH
THE LOAN AND THE MORTGAGE,
BF 233707.10:012150-120748 -44-
DISCLOSURE FOR CONFESSION OF JUDGMENT
Borrower: GRAY DRIVE, LP
76 Emlyn Drive
Mechanicsburg PA 17055
Bank: National City Bank of Pennsylvania
20 Stanwix Street
Pittsburgh, PA 15222
The Borrower has executed on the date set forth below the mortgage note
("Note") and mortgage ("Mortgage") described below:
1. $19,200,000.00 Mortgage Note executed and delivered by Borrower to the Bank
2. Open-End Mortgage and Security Agreement executed and delivered by the
Borrower to the Bank
A. THE BORROWER ACKNOWLEDGES AND AGREES THAT THE NOTE
AND MORTGAGE CONTAIN PROVISIONS UNDER WHICH THE BANK MAY ENTER
JUDGMENT BY CONFESSION AGAINST THE BORROWER. BEING FULLY AWARE OF ITS
RIGHTS TO PRIOR NOTICE AND A HEARING ON THE VALIDITY OF ANY JUDGMENT OR
OTHER CLAIMS THAT MAY BE ASSERTED AGAINST IT BY THE BANK HEREUNDER
BEFORE JUDGMENT IS ENTERED, THE BORROWER HEREBY FREELY AND KNOWINGLY
WAIVES THESE RIGHTS AND EXPRESSLY AGREES AND CONSENTS TO THE BANK
ENTERING JUDGMENT AGAINST IT BY CONFESSION PURSUANT TO THE TERMS
THEREOF.
B. THE BORROWER ALSO ACKNOWLEDGES AND AGREES THAT THE
NOTE AND MORTGAGE CONTAIN PROVISIONS UNDER WHICH THE BANK MAY, AFTER
ENTRY OF JUDGMENT AND WITHOUT EITHER NOTICE OR A HEARING, FORECLOSE
UPON, ATTACH, LEVY OR OTHERWISE SEIZE PROPERTY OF THE UNDERSIGNED IN
FULL OR PARTIAL PAYMENT OF THE JUDGMENT. BEING FULLY AWARE OF ITS RIGHTS
AFTER JUDGMENT IS ENTERED, THE BORROWER HEREBY FREELY AND KNOWINGLY
WAIVES THESE RIGHTS AND EXPRESSLY AGREES AND CONSENTS TO THE BANK'S
TAKING SUCH ACTIONS AS MAY BE PERMITTED UNDER APPLICABLE STATE AND
FEDERAL LAW WITHOUT PRIOR NOTICE TO THE BORROWER.
WITNESS: GRAY DRIVE, L.P.,
a Pennsylvania limited partnership
By: GRAY GRIFFIN, LLC,
a Pennsylvania limited liability company
Its: General Partner
Name: Walter D. Enick
By: (SEAL)
Na J. T. Simpson
Titl : Aaannaging Member
BANK FIN:233688.4 012150-120748
DISCLOSURE FOR CONFESSION OF JUDGMENT
,Guarantor: Hugh J. T. and Diane H. Simpson
76 Emiyn Drive
Mechanicsburg, PA 17055
Bank: National City Bank of Pennsylvania
20 Stanwix Street
Pittsburgh, Pennsylvania 15222
The Guarantor has executed on the date set forth below the following document:
The Guaranty and Suretyship Agreement dated October ig.L?
,2004.
A. THE GUARANTOR ACKNOWLEDGES AND AGREES THAT THE
GUARANTY CONTAINS PROVISIONS UNDER WHICH THE BANK MAY ENTER JUDGMENT
BY CONFESSION AGAINST THE GUARANTOR. BEING FULLY AWARE OF ITS RIGHTS TO
PRIOR NOTICE AND A HEARING ON THE VALIDITY OF ANY JUDGMENT OR OTHER
CLAIMS THAT MAY BE ASSERTED AGAINST IT BY THE BANK HEREUNDER BEFORE
JUDGMENT IS ENTERED, THE GUARANTOR HEREBY FREELY AND KNOWINGLY
WAIVES THESE RIGHTS AND EXPRESSLY AGREES AND CONSENTS TO THE BANK
ENTERING JUDGMENT AGAINST IT BY CONFESSION PURSUANT TO THE TERMS
THEREOF.
B. THE GUARANTOR ALSO ACKNOWLEDGES AND AGREES THAT THE
GUARANTY CONTAINS PROVISIONS UNDER WHICH THE BANK MAY, AFTER ENTRY OF
JUDGMENT AND WITHOUT EITHER NOTICE OR A HEARING, FORECLOSE UPON,
ATTACH, LEVY OR OTHERWISE SEIZE PROPERTY OF THE UNDERSIGNED IN FULL OR
PARTIAL PAYMENT OF THE JUDGMENT. BEING FULLY AWARE OF ITS RIGHTS AFTER
JUDGMENT IS ENTERED, THE GUARANTOR HEREBY FREELY AND KNOWINGLY
WAIVES THESE RIGHTS AND EXPRESSLY AGREES AND CONSENTS TO THE BANK'S
TAKING SUCH ACTIONS AS MAY BE PERMITTED UNDER APPLICABLE STATE AND
FEDERAL LAW WITHOUT PRIOR NOTICE TO THE GUARANTOR.
WITNESS:
- Z?fi6 ?;Ai
Name: Walter D. Enlc
By:
NarA #gI4 J Impson,
VanIO(vidual
Dated: ctober 28, 2004
By. ,
Nam Diane H. Simpson,
an individual
Dated: October 28, 2004
BANK FIN:233717.4 012150-1 20746
ACKNOWLEDGMENT
COMMONWEALTH OF PENNSYLVANIA )
) SS:
COUNTY OFALLEGHENY )
On this, the 28th day of October, 2004, before me, a Notary Public, personally appeared
HUGH J. T. SIMPSON, known to me or proven to be the person who executed the foregoing
instrument for the purpose therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
otary Public
My Commission
NOTARIAL SEAL.
KEWE M MVART
N0t0q PutAc
C OF PITT RC
?? EOct 6, 2007
COMMONWEALTH OF PENNSYLVANIA
COUNTY OF DAUPHIN
SS:
On this, the e day of October, 2004, before me, a Notary Public, personally appeared
DIANE H. SIMPSO , known to me or proven to be the person who executed the foregoing
instrument for the purpose therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
Notary P Ic
My Commission Expires:
NOIARIAL SEAL
IUOY A. SOSTAR. NOTARY PUBLIC
CITY Or HARRISBURG, DAUPHIN CO.
MY COMMISSION EXPIRES MARCH 21, 2005
BANK_FIN:233717-4 0121$0-120748
FIRST AMENDMENT TO MORTGAGE NOTE
This First Amendment to Mortgage Note, dated the 24'h day of January, 2008, to
be effective as of October 31, 2007 (the "Effective Date"), by and between Gray Drive, LP, a
Pennsylvania limited partnership (the "Borrower"), and National City Bank, successor by merger
to National City Bank of Pennsylvania, a national banking association (the "Bank") (the
"Amendment").
W iTNESSETH:
WHEREAS, the Borrower and the Bank entered into that Construction Loan
Agreement, dated October 28, 2004 (as may be amended, modified or supplemented from time
to time, the "Loan Agreement"); and
WHEREAS, the Loan (as defined in the Loan Agreement) is evidenced by that
certain Mortgage Note dated October 28, 2004, in the original principal amount of Nineteen
Million Two Hundred Thousand Dollars ($19,200,000.00) made by the Borrower and payable to
the Bank (as may be amended, modified or supplemented from time to time, the "Note"); and
WHEREAS, the Borrower desires to amend certain provisions of the Note and the
other Loan Documents (as defined in the Note) to, among other amendments, extend the
Maturity Date, provide for additional equity from the Borrower, collaterally assign the
partnership interests in the Borrower to the Bank and require a permanent loan take-out
commitment, and the Bank desires to permit such amendments pursuant to the terms and subject
to the conditions set forth herein.
NOW, THEREFORE, in consideration of the premises contained herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
and intending to be legally bound hereby, the parties hereto agree as follows:
1. All capitalized terms used herein that arc defined in the Loan Agreement
or the Note shall have the same meaning herein as in the Loan Agreement or the Note unless the
context clearly indicates otherwise. The foregoing recitals are incorporated herein by reference.
2. The Borrower hereby acknowledges and agrees that as of January 21,
2008, the outstanding principal balance of the Note is Fifteen Million Four Hundred Seventy-
Five Thousand Four Hundred Eighty-One and 00/100 Dollars ('$15,475,481.00) plus accrued and
unpaid interest of Two Hundred Fifty-Four Thousand Nine Hundred Nineteen and 16/100
Dollars ($254,919.60) and other charges. The Borrower waives and releases the Bank from any
and all claims, counterclaims, offsets, defenses or other causes of action the Borrower has with
respect to the indebtedness evidenced by the Tote and the enforceability thereof.
OOE52120.0m
The Note is hereby amended as follows:
3.01 Section 1.A. is partially amended by deleting the date
"October 31, 2007" and in its stead adding the date "August 31,
2008".
3.02 Section I.B. (the "Extension Option") on pages 2 and 3
is hereby amended by deleting this Section I.B. in its entirety.
3.03 The last paragraph on page 3 consisting of one sentence
is hereby amended and restated in its entirety as follows: "The
Construction LIBOR Flex Option is sometimes hereinafter
referred to as the "LIBOR Options"."
3.04 The fifth paragraph on page 4 of the Note consisting of
two sentences is hereby amended and restated in its entirety as
follows: "Monthly payments of accroed interest shall be due
and payable starting on December 1, 2004, and on the first (ln)
day of each month thereafter, through and including the
monthly payment due on August 1, 2008. The entire principal
balance outstanding hereunder, and all accrued and unpaid
interest hereunder, and any and all costs or expenses relating
thereto, shall be due and payable in full, without demand, on
August 31, 2008 (the "Maturity Date")."
3.05 The sixth paragraph on page 4 consisting of two
sentences is hereby amended by deleting this paragraph in its
entirety.
3.06 Section 3.(b) on pages 5 and 6 is hereby amended by
deleting this Section 3.(b) in its entirety.
3.07 Section 4 on page 6 is partially amended by amending
and restating the first sentence of Section 4 in its entirety as
follows: "This !Vote is issued in connection with the
Construction Loan Agreement dated as of even date herewith
entered into by and between the Bank and the Borrower, as
amended by that certain Hirst Amendment to Construction
Loan Agreement dated the 24'h day of January, 2008, to be
effective as of October 31, 2007, by and between the Bank and
the Borrower (as it may be further amended, modified or
supplemented from time to time, the "Construction Loan
Agreement"), the Open-End Mortgage and Security
-2-
0085212o.noC
Agreement dated as of even date herewith entered into by and
between the Bank and the Borrower as amended by that First
Modification to Open-End Mortgage and Security Agreement
dated the 20 day of January, 2008, to be effective as of
October 31, 2007, by and between the Bank and the Borrower
(as it may be further amended, modified or supplemented from
time to time, the "Mortgage"), the Assignment of Leases and
Rents dated as of even date herewith entered into by and
between the Bank and the Borrower as amended by the First
Modification to Assignment of Leases and Rents dated the 24'"
day of January, 2008, to be effective as of October 31, 2007, by
and beMveen the Bank and the Borrower (as it may be further
amended, modified or supplemented from time to time, the
"Assignment of Leases"), the Security Agreement dated as of
even date herewith entered into by and between the Bank and
the Borrower as amended by the First Amendment to Security
Agreement dated the 24'6 day of January, 2008, to be effective
as of October 31, 2007, by and between the Bank and the
Borrower (as it may be amended, modified or supplemented
from time to time, the "Security Agreement") and the two (2)
UCC-1 Financing Statements filed in connection with the
Security Agreement, the Guaranty and Suretyship Agreement
dated as of even date herewith executed by the Guarantors in
favor of the Bank as confirmed by the Consent of Guarantors
dated the 24`h day of January, 2008, to be effective as of
October 31, 2007 (as it may be amended, modified or
supplemented from time to time, the "Guaranty
Agreemen("), the Environmental Indemnity Agreement dated
as of even date herewith by and among the Borrower and the
Guarantors for the benefit of the Bank (as it may be amended,
modified or supplemented from time to time, the
"Environmental Indemnity Agreement"), the Pledge
Agreement dated the 24i6 day of January, 2008, to be effective
as of October 31, 2007, by and among Gray Griffin, LLC, a
Peruuylvania limited liability company (the sole general
partner of the Borrower), and the Guarantors for the benefit of
tf:e Bank (as it may be amended, modified or supplemented
from time to time, the "Pledge Agreement") and the one ())
UCC-1 Financing Statement filed in connection with the
fledge Agreement, and any other security agreements,
mortgages.' assignments and other documents and instruments
entered into from time to time in connection with this Note, the
terms of which are incorporated herein by reference
(collectively, the "Loan Documents"), and is secured by the
property described in the Loan Documents and by such other
-3-
001352120.Doc
collateral as previously may have been or may in the future be
granted to the Bank to secure this Note."
3.08 Section 9 on page 9 is hereby partially amended by
deleting the second paragraph of Section 9 in its entirety,
3.09 The prepayment charge addendum on pages 13 and 14
is hereby amended by deleting the prepayment charge
addendum in its entirety.
4. The Borrower hereby reconfirms and reaffirms all representations and
warranties, agreements and covenants made pursuant to the terms and conditions of the Note, the
Loan Agreement and the other Loan Documents.
5. The Borrower acknowledges and agrees that each and every document,
instrument or agreement which at any time has secured payment of the Obligations including,
but not limited to, (i) the Guaranty Agreement; (ii) the Mortgage; (iii) the Assignment of Leases;
(iv) the Contract Assignment(s); (v) the Environmental lndemnity; (vi) the Security Agreement;
and (vii) all UCC-1 financing statements executed and filed with respect to the Mortgage, the
Security Agreement and the Contract Assignment(s), hereby continues to secure prompt payment
when due of the Obligations.
6. The Borrower hereby represents and warrants to the Bank that (i) the
Borrower has the legal power and authority to execute and deliver this Amendment; (ii) the
officers of the Borrower executing this Amendment have been duly authorized to execute and
deliver the same and bind the Borrower with respect to the provisions hereof; (iii) the execution
and delivery hereof by the Borrower and the performance and observance by the Borrower of the
provisions hereof and of the Note, the Loan Agreement, the other Loan Documents and all
documents executed or to he executed therewith, do not violate or conflict with the
organizational documents of the Borrower or any Law applicable to the Borrower or result in a
breach of any provision of or constitute a default under any other agreement, instrument or
document binding upon or enforceable against the Borrower and (iv) this Amendment, the Note,
the Loan Agreement, the other Loan Documents and the documents executed or to be executed
by the Borrower in connection herewith or therewith constitute valid and binding obligations of
the Borrower in every respect, enforceable in accordance with their respective terms.
7. The Borrower and the Bank each represent and warrant that after giving
effect to this Amendment and the other amendments to other Loan Documents dated of even date
herewith, no Event of Default exists under the Note, Loan Agreement or the other Loan
Documents, nor will any occur as a result of the execution and delivery of this Amendment or
the performance or observance of any provision hereof. After giving effect to this Amendment
and the other amendments to the other Loan Documents dated of even date herewith, he
Borrower presently has no claims, counterclaims, offsets, defenses or any other cause of action
of any kind at Law or in equity against the Bank arising out of or in any way relating to the Note,
Loan Agreement or the Loan Documents.
4.
00.15212o.DOC
8. Each reference to the Note that is made in the Note, the Loan Agreement
or the other Loan Documents shall hereafter be construed as a reference to the Note-as amended
hereby.
9. Except as amended hereby, all of the tenns and conditions of the Note, the
Loan Agreement and the other Loan Documents shall remain in full force and effect. This
Amendment amends the Note and is not a novation or an accord and satisfaction thereof.
10. ']'Iris Amendment may be executed in any number of counterparts and by
the different parties hereto on separate counterparts each of which, when so executed, shall be
deemed an original, but all such counterparts shall constitute but one and the same instrument.
11. TIiL BORROWER HEREBY ACKNOWLEDGES AND AGREES
THAT THE NOTE AND THE MORTGAGE CONTAIN PROVISIONS UNDER WHICH THE
BANK MAY ENTER JUDGMENT BY CONFESSION AGAINST THE BORROWER.
12. If any tern or provision set forth in this Amendment is made as a result of
the Bank having waived a failure by the Borrower to perform any term or provision of the Note
or the other Loan Documents, such waiver granted by the Bank is limited solely to the particular
event from which it arose, and no waiver by the Bank shall (a) extend to any other, event, default
or Event of Default under this Amendment, the Note or any other Loan Document or (b) impair
any right or remedy of the Bank consequent thereto.
13. This Amendment is not intended to be a novation, release or accord and
satisfaction of the Dote anWor the Mortgage.
14. The Borrower shall execute, or cause to be executed, and delivered to the
Bank all other amendments, instruments, agreements, certificates and other documents deemed
necessary or appropriate by the Bank in connection herewith.
15. No Bankruptcy Intent. Borrower does not have the present intent to (i) file
any voluntary petition under any Chapter of Bankruptcy Code, Title I I U.S.C., or to in any
manner, seek relief, protection, reorganization, liquidation or dissolution, or similar relief for
debtors under any other state, local, federal or other insolvency laws, within the next ninety (90)
days, or (ii) directly or indirectly cause any involuntary petition to be filed against Borrower or
directly or indirectly cause Borrower to become the subject of any proceedings pursuant to any
other state, federal or other insolvency law providing for relief of debtors, either at the present
time, or at any time hereafter.
16. No Fraudulent Intent. Neither the execution and delivery of this
Amendment nor the performance of any actions required hereunder or described herein is being
consummated by Borrower with or as a result of any actual intent by Borrower to hinder, delay
or defraud any entity to which Borrower, or any of them, are now or will hereafter become
indebted, including but not limited to Bank.
-5-
(KINS2129.DOC
17. Waiver of Statutes of Limitation Defenses. Borrower by entering into this
Amendment waives any rights to assertdefenses to any lien of the Bank or,any other claim of
Bank based upon statutes of limitation, period of limitation, lathes or any other defense based on
the theory that any lien or any other such claim is time barred.
18. This Amendment shall be binding upon and inure to the benefit of the
Borrower and the Bank and their respective successors and assigns. This Amendment shall not
be binding upon the Bank until accepted by the Bank, as evidenced by its execution below.
[INTENTIONALLY LEFT BLANK]
-G-
0035? 1 2C.DoC
IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties
hereto have caused this Amendment to be effective on the date first above written.
°a
WITNESS:
WITNESS:
Name:
Gray Drive, LP,
a Pennsylvania limited partnership
By: Gray Griffin, LLC,
a Pennsylvania limited liability
company
Its: General Partner
By.
N impson
Title: IVI agi g ember
National City Bank
By:
Name: Kris Volpatti
Title: Vice President
:`:a
IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties
hereto have caused this Amendment to be effective on the date first above written.
WITNESS:
N
Gray Drive, LP,
a Pennsylvania limited partnership
By: Gray Griffin, LLC,
a Pennsvlvania limited liability
company
Its: General Partner
By: _
Name: Hugh J. T. Simpson
Title: Managing Membcr
WITNESS:
National City Sank
Name. Kris Volpatti
Title: Vice President
ACKNOWLEDGEMENT
COMMONWEALTH OF PENNSYLVANIA )
SS:
COUNTY OF • n??r n )
On this, the a5YV% day of January, 2008, before me, a Notary Public, pcrsonally appeared
Hugh J. T. Simpson, who acknowledged himself to be the Managing Member of Gray Griffin,
LLC, a Pennsylvania limited liability company, the General Partner of Gray Drive, LP, a
Pennsylvania limited partnership, and that he as such officer, being authorized to do so, executed
the foregoing instrument for the purposes therein contained, and in the capacity therein stated, by
signing his name as such officer.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
Notary Public
My Commission Expires: COMMONWEALTH Of PENNSYLVANIA
NOTARIAL SEAL
JANICE L. MEADATH, Notary Public
City of Harrisbu% Dauphin County
My Comtdssioo E>q n April 30, 2011
NOTICE OF WAIVER OF RIGHTS REGARDING
WARRANTS OF ATTORNEY, EXECUTION RIGHTS, AND
WAIVER OF RIGHTS TO PRIOR NOTICE AND JUDICIAL HEARING
Borrower: Gray Drive, LP, a Pennsylvania limited partnership
Guarantors: Hugh J. T. and Diane H. Simpson
Transaction: First Amendment to Note dated January 24, 2008, to be
effective as of October 31, 2007 (the "Effective Date"), made
by the Borrower and payable to National City Bank, successor
by merger to National City Bank of Pennsylvania (the "Bank"),
First Modification to Open-End Mortgage and Security
Agreement dated January 24, 2008, to be effective as of the
Effective Date, made by the Borrower to the Bank and the
Consent of Guarantors dated January 24, 2008, to be effective as
of the Effective Date, made by the Guarantors to the Bank
Effective as of The Effective Date
This NOTICE AND WAIVER ("Notice and Waiver") of rights is being given to you by the
Bank, in connection with the above-described credit transaction. IT IS IMPORTANT THAT YOU
CAREFULLY READ AND UNDERSTAND THIS DOCUMENT. WHEN YOU SIGN YOUR
NAME IN THE SPACE PROVIDED BELOW YOU ARE ACKNOWLEDGING AND
REPRESENTING TO THE BANK THAT YOU HAVE READ AND UNDERSTAND THE
CONTENTS OF THIS DOCUMENT.
You will be executing and delivering to the Bank an agreement and/or other loan documents
(collectively, the "Loan Documents") which grant to the Bank, among other things, the power and
authority to enter JUDGMENT BY CONFESSION against you, and to exercise rights of execution,
levy, garnishment, seizure of your property and the like. Other than notices required under the Loan
Documents, these rights and powers may be exercised by the Bank without giving you any prior
notice of its intention to do so. Jn addition, these powers and rights may be-exercised without a
prior hearing of any nature.
By executing and delivering this Notice and Waiver, you knowingly, voluntarily, and
intelligently waive your rights to prior notice (except for notice required under the specific terms of
the Loan Documents) and a hearing or other judicial proceedings to determine your rights and
liabilities in connection with the Loan Documents. By signing this Notice and Waiver, you
acknowledge that you understand that, after the occurrence of an Event of Default (as defined in the
Loan Documents), the Bank may obtain a judgment against any one or more of you, and execute
upon and seize forthwith your property and assets without the opportunity to raise any defense, set-
off, counterclaim, or other claim that you may have. You knowingly, voluntarily, and intelligently
waive your rights to any prior notice (except for notice required under the specific terms of the Loan
008:7190AOC
Documents) or judicial deterrrvnation as a material part of the consideration for this transaction and
in order to induce the Bank to enter into this transaction.
You acknowledge and represent that you have consulted (or have had an opportunity to
consult) with legal counsel of your choice, and with such other experts. and advisors as you deem
necessary, in connection with the execution and delivery of the Loan Documents (including without
limitation the provisions of the Loan Documents authorizing, after the occurrence of an Event of
Default, the confession of judgment and the execution upon and seizure of your property and assets
without the opportunity for prior notice (except for notice required under the specific terms of the
Loan Documents) or judicial determination of any natum).
This Notice and Waiver may be executed in any number of counterparts and by the different
parties hereto on separate counterparts each or which, when so executed, shall be deemed an
original, but all such counterparts shall constitute but one and the same instniment.
jINFrENTIONALLY LEFT BLANK)
-2-
M652!0 Doc
IN WITNESS WHEREOF, and intending to be legally bound, the undersigned have
executed this Notice and Waiver to be effective as of the Effective Date.
WITNESS:
Gray Drive, LP,
a Pennsylvania limited partnership
WITNESS,
am .
WITNESS:
e•
Tay: Gray Gri ffin,LLC,
a Pcnnsylvania limited liability
company
Its: General Partner
By:
N U mpson
Title: mber
N e
: h T. Simpson, an individual
r I ?,, I
me: Diane H, Simpson, an individual
005it90.000
ACKNOWLEDGEMENT
COMMONWEALTH OF PENNSYLVANIA )
COUNTY 0):???„ ) SS:
On this, the PS? day of January, 2008, before me, a Notary Public, personally
appeared Hugh J_ T. Simpson, who acknowledged himself to be the Managing Member of Gray
Griffin, LLC, a Pennsylvania limited liability company, the General Partner of Gray Drive, LP, a
Pennsylvania limited partnership, and that he as such officer, being authorized to do so, executed
the foregoing instrument for the purposes therein contained, and in the capacity therein stated, by
signing his name as such officer.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
My commission Expires:
`
Notary Public
COMMONWEALTH Of PENNSYLVANIA
NOTARIAL SEAL
JANICE L. MIEADATH, Notary Public
City of Kairrisbtsg, Dimphin County
My Commissim Ewes April 30, 2011
OW'71su.DOC
ACKNOWLEDGMENT
COMMONWEALTH OF PENNSYLVANIA )
COUNTY OF ,?.uPh?n ) SS:
On this, the day of January, 2008, before me, a Notary Public, the undersigned,
personally appeared Hugh J. T. Simpson, known to me (or satisfactorily proven) to be the person
whose name is subscribed to the within instrument, and acknowledged that he executed the same
for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
NMy Conunission Expires:
COMMONWEALTH OF PENNSYLVANIA
JANICE L NOTARIAL SEAL
1t;EADATH, Notary public
City of Harrisburg, Daupto County
My Commission Expires April 30, 2011
ACKNOWLEDGMENT
COMMONWEALTH OF PENNSYLVANIA )
COUNTY OF SS:
On this, the 9-1?LN day of January, 2008, before me, a Notary Public, the undersigned,
personally appeared Diane H. Simpson, known to me (or satisfactorily proven) to be the person
whose name is subscribed to the within instrument, and acknowledged that she executed the
same for the purposes therein contained.
IN WITNESS WHEREOF, l hereunto set my hand and official seal.
My Commission Expires:
Notary Public
COMMONWEALTH OF PENNSYLVANIA
NOTARIAL SEAL
JANICE L. MEADATH, Notary Public
City of Harrisburg, Dm*Mn County
My Commission Eviree April 30, 2011
00052790.000
(Simpson)
CONSENT OF GUARANTORS
WHEREAS, pursuant to that certain Construction Loan Agreement dated as of
October 28, 2004, by and between Gray Drive, LP, a Pennsylvania limited partnership (the
"Borrower"), and National City Bank, successor by merger to National City Bank of
Pennsylvania, a national banking association (the "Bank"), (as further amended, modified or
supplemented from time to time, the "Loan Agreement"), the Borrower became indebted to the
Bank and, in connection therewith, the undersigned Elugh J. T. Simpson and Diane H. Simpson,
husband and wife (each a "Guarantor" and collectively, jointly and severally, (he "Guarantors"),
entered into that certain Guaranty and Suretyship Agreement (Payment and Completion), dated
October 28, 2004, in favor of the Bank (the "Guaranty") (all capitalized terms used herein which
are defined in the Guaranty or the Loan Agreement shall have the same meaning herein as
therein unless the context clearly indicates otherwise); and
WHEREAS, the Borrower has requested that the Bank enter into the First
Amendment to Mortgage Note to be effective on the Effective Date (as defined below) by and
between the Borrower and the Bank, the First Amendment to Construction Loan Agreement to
be effective on the Effective Date by and between the Borrower and the Bank, the First
Modification to Open-End Mortgage and Security Agreement to be dated the Effective Date by
and between the Borrower and the and the Bank, the First Modification to Assignment off Leases
and Rents to be effective on the Effective Date by and between the Borrower and the Bank, and
the First Amendment to Security Agreement to be effective on the Effective Date by and
l between the Borrower and the Bank (collectively, the "Amendment"), and the Bank has agreed
to enter into the Amendment subject to, among other things, the condition that the Guarantors
consent to the Amendment and verify, reconfirm and ratify the validity and effect of the
Guaranty.
NOW, THEREFORE, intending to be legally bound hereby, each Guarantor
hereby, on the 24th day of January, 2008 to be effective as of October 31, 2007 (The "Effective
Date"):
(i) acknowledges and consents to the execution and delivery of the
Amendment by the Borrower; and
(ii) verifies, reconfirms and ratifies the liability of such Guarantor
to the Bank pursuant to the Guaranty, including, but not limited to, the Loan Amount of
Nineteen Million Two Hundred Thousand Dollars ($19,200,000.00); and
(iii) acknowledges and agrees that, among other things, he/she
continues to absolutely and unconditionally guarantee (a) payment when due, by acceleration or
otherwise, of all Obligations, whether now owing or hereafter arising, and of any renewal or
renewals, extension or extensions, in whole or in part, together with all interest and penalties
thereon, if any, and (b) prompt performance by (he Borrower of each and all of the Borrower's
covenants, undertakings, obligations and agreements pursuant to the Loan Agreement and the
other Loan Documents, and any other instrument evidencing or pertaining to any such extension
of credit, as any may be amended, replaced, extended or modified from time to time; and
00852276 DOC
(iv) each Guarantor hereby reconfirms and reaffirms all representations
and warranties, agreements and covenants made pursuant to the terms and conditions of the
Guaranty. Each Guarantor hereby further represents and warrants to the Bank that (i) each
Guarantor presently has no claims, counterclaims, offsets, defenses or any other cause of action
of any kind at Law or in equity against the Bank arising out of or in any way relating to the
Guaranty, the Note, the Loan Agreement, or the other Loan Documents and (ii) this Consent of
Guarantors constitutes valid and binding obligations of each Guarantor in every respect,
enforceable in accordance with its terms; and
(v) acknowledges and agrees that a copy of the Amendmcnt has been
made available to him/her.
WARR.MNT OF ATTORNEY TO CONFESS JUDGMENT. EACH
GUARANTOR HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS THE
PROTHONOTARY, ANY ATTORNEY OR ANY CLERK OF ANY COURT OF
RECORD, AFTER THE OCCURRENCE OF AN EVENT OF DEFAULT, TO APPEAR
FOR AND CONFESS JUDGMENT AGAINST SUCH GUARANTOR FOR SUCH SUMS
AS ARE DUE AND/OR MAY BECOME DUE UNDER THE GUARANTY
AGREEMENT, WITH OR WITHOUT DECLARATION, WITH COSTS OF SUIT,
WITHOUT STAY OF EXECUTION AND WITH AN AMOUNT EQUAL TO TEN
PERCENT (I0%) OF THE ANIOUNT OF SUCH JUDGMENT BUT NOT LESS THAN
FIVE THOUSAND AND 00/100 DOLLARS (55,000.00) ADDED FOR ATTORNEYS'
COLLECTION FEES. TO THE EXTENT PERMITTED BY LAW, OTHER THAN
MANIFEST- ERROR, EACH GUARANTOR RELEASES ALL ERRORS IN SUCH
PROCEEDINGS. IF A COPY OF THE GUARANTY, VERIFIED BY AFFIDAVIT BY
OR ON BEHALF OF THE HOLDER OF THE GUARANTY SHALL HAVE BEEN
FILED IN SUCH ACTION, IT SHALL NOT BE NECESSARY TO FILE SUCH
ORIGII\Ai, GUARANTY AS A WARRANTOF ATTORNEY. THE AUTHORITY AND
POWER TO APPEAR FOR AND CONFESS JUDGMENT AGAINST ANY
GUARANTOR SHALL NOT BE EXHAUSTED BY THE INITIAL EXERCISE
THEREOF AND MAY BE EXERCISED AS OFTEN AS THE HOLDER SHALL FIND IT
NECESSARY AND DESIRABLE AND SUCH GUARANTY OR A COPY THEREOF
SHALT. BE A SUFFICIENT WARRANT THEREFOR. THE HOLDER HEREOF MAY
CONFESS ONE OR MORE JUDGMENTS IN THE SAME OR DIFFERENT
JURISDICTIONS FOR ALL OR ANY PART OF THE AMOUNT OWING
HEREUNDER, WITHOUT REGARD TO WHETHER JUDGMENT HAS
THERETOFORE BEEN CONFESSED ON MORE THAN ONE OCCASION FOR THE
SAME AMOUNT. IN THE EVENT ANY JUDGMENT CONFESSED AGAINST ANY
GUARANTOR HEREUNDER IS STRICKEN OR OPENED UPON' APPLICATION BY
OR ON SUCH GUARANTOR'S BEHALF FOR ANY REASON, HOLDER IS HEREBY
AUTHORIZED AND EMPOWERED TO AGAIN APPEAR FOR AND CONFESS
JUDGMENT AGAINST SUCH GUARANTOR FOR ANY PART OR ALL OF THE
AMOUNTS OWING THEREUNDER, AS PROVIDED FOR THEREIN, IF DOING SO
WILL CURE ANY ERRORS OR DEFECTS IN SUCH PRIOR PROCEEDINGS.
WAIVER OF TRIAL BY JURY. THE UNDERSIGNED HEREBY
EXPRESSLY, KNOWINGLY AND VOLUNTARILY WAIVE, ALL BENEFIT AND
-2-
OOUSZ3a.pcc
ADVANTAGE OF ANY SUCH RIGHT TO A TRIAL BY JURY, AND THEY WILL NOT
AT ANY TIME INSIST UPON, OR PLEAD OR IN ANY MANNER WHATSOEVER
CLAIM OR TAKE THE BENEFIT OR ADVANTAGE OF A TRIAL BY JURY IN ANY
ACTION ARISING IN CONNECTION WITH THE GUARANTY OR ANY OF THE
LOAN DOCUMENTS.
All of the terms and conditions of the Guaranty shall remain in full force and effect and
this Consent of Guarantors is not a novation of the Guaranty.
This consent of Guarantors shall be binding upon and inure to the benefit of the
Guarantors and the Bank and their respective successors and assigns.
[INTENTIONALLY LEFT BLANK)
-3-
0085223e.ooc
IN WITNESS WHEREOF, the Guarantors have executed this Consent of
Guarantors to be effective as of the Effective Date.
WITNESS:
GUARANTORS:
1
H i pson, an individual
Ad res
76 Emlyn Drive
et nicsburg, PA/ 17055 _
Diane LH. Simpson, an indivi ua]
Address:
76 Emlyn Drive
Mechanicsburg, PA 17055
00852238.DOC
ACKNOWLEDGMENT
COMMONWEALTH OF PENNSYLVANIA )
SS:
COUNTY OF
On this, the aS?ih day of January, 2008, before me, a Notary Public, the undersigned,
personally appeared Hugh J. '1'. Simpson; known to me (or satisfactorily proven) to be the person
whose name is subscribed to the within instrument, and acknowledged that he executed the same
for the purposes therein contained.
TN WITNESS WHEREOF, I hereunto set my hand and official seal,
o?-
A otary Public
My Commission Expires: COMMONWEALTH OF PENNSYLVANIA
NOTARIAL SEAL
JANICE L. MEAOATH, "ry Public
City of Harrisburg, Dauphin Coupty
My Comnnssim Eh. Ai 30, 2011
c'Uszzas.ooc
ACKNOWLEDGMENT
COMMONWEALTH OF PENNSYLVANIA )
SS:
COUNTY OF
On this, the 2S% day of January, 2008, before me, a Notary Public, the undersigned,
personally appeared Diane H. Simpson, known to me (or satisfactorily proven) to be the person
whose name is subscribed to the within instrument, and acknowledged that she executed the
same for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
Notary 11Public
My Commission .Expires:
COMMONWEALTH Of PENNSYLVANIA
NOTARIAL SEAL
JANICE L. MtfADATH, Notary Public
City of Harrisburg, Dauphin County
My Conmission Fxpincs April 30, 2011
00657236.00C
SECOND AMENDMENT TO MORTGAGE NOTE
This Second Amendment to Mortgage Note, dated August aU, 2008, to be
effective as of August M, 2008 (the "Effective Date'), by and between Gray Drive, LP, a
Pennsylvania limited partnership (the "Borrower"), and National City Bank, successor by merger
to National City Bank of Pennsylvania, a national banking association (the "Bank") (the
"Amendment").
WITNESSETH:
WHEREAS, the Borrower and the Bank entered into that Construction Loan
Agrceemeon4 dated October 28, 2004, as amended by that c=tain First Amendment to
Construction Loan Agreement dated the 24 day of January, 2008, to be effective as of October
31, 2007, by and between the Bank and the Bo=wer (as may be further amended, modified or
supplemented from time to time, the "Loan Agreanent"); and
WHEREAS, the Loan (as defined in rho Loan ABtement) is evidenced by that
certain Mortgage Now dated October 28, 2004, as amended by that certain First Amendment to
Mortgage Note dated the 240i day Of January, 2008, of mtive October 31, 2007 in the original
Principal amount of Nineteen Million Two Hundred Thousand Dolla n ($19,200,000.00) made
by the Borrower and payable to the Bank (as may be amended, modified or supplemcnwd from
time to time, the "Note"); and
and the WHEREAS, the Borrower desires to further amend certain provisions of the Note
other Lora Documents (as defined in the Note) to, among other ameadrnents,
Maturity Date, and to provide for cataju changes in interest rates, extend the
and the Bank desires to
Permit such ameadmenta purs~tan?t to the terms and subject to the conditions set forth herein.,
NOW, THI?FORE, in consideration of the prenises good and valuable consideration, the receipt and suffici= of whiff ?6b herein and other
and intending to be legally bound hereby, the parties hereto agree as follows:
1. AII
or the Note shall have the same reed ter= ? herein that are defined in the Loan Anent
context clearly;¢uiicatcs otherwise. The heroin as in the Loan Agreement or the Note unless the
going recitals are incorporated herein by refaace.
2. The Borrower hereby. aclmowled es
2008, the ou 8 and agrees drat as of August 22,
48 l rh*al balance of the Note is Eighteen Million Six Hundred Eioteeu
Thousand Seven Hundred Sixty Five and 81/100 Dollars ($18,618,765.81) vlas accrued and
unpaid intrsest and other charges, The Borrower waives• and releases the Bank from any and aU
claims, oountcrclairm, offsets, defenses or other causes of action the Borrower has with respect
to the indebtedness evidenced by the Note and the enforceability themf-
oar o"IMM
The Note is hereby amended as wows:
3.01 Section I.A.
e
following i$ PartiapY amended b adding nice: ?' 8 011 September 2 th008,
uscludiug
P?eriod, athe0d Applicable Iata+est Ram Date lid any Extension
Rate, Plus ono-half of one pew {ps) dual to the Prune
3.02 Section Z.H. is am
follows: '?xfrn"ionPen ?xled and restated is its entirtitY as
to Wend "E-_.xtcasio The Borrower shall have the cation
Pun'odof ( on Option") the CoUsaucion/LeaM Up
this Note RW an addtional Period of
from October 31, 2t? to November 30, 2008 (t-Extension
?
period ' P? Cwh and m'QY one of the followin
conditions and requiremerU hu bear satisfied:
(a) No Event of Defi dt has occurred and is
CDU&(b) Not less than ffteea (15) days prior to the
,nmczjoanent of the
sion period,
the Bank 21181.1 ,Se. "ived (i) written
?? ? ?n?ti?vocaibto cloctioa to
this Note and off' Up Ponod of
00/100 Dollar (v? an'Ught Thousand and
fee("Parteo"" (x8,000;00) note extension
Request ),
(c) No
the Meal Adverse Change (as defined is
the e?? 14aa Agrftmew) has regard to the Borrower the
Loan A M (as defined d'c C?ttuctioq
Projoct: andd)? the Ptnpeny or the
(d) The Bank shall have nztived?- the
Borrower's sole ezpenQG, a title suith aw
sosnah of the Uniform, Commercial Code
filingx which reveal no additional liens or
encumbrances agar the Property.
If the Borrower elects to exercise the ExtenSiob won
and satin " the conditions sat forth herein. then oa and
-2-
W91"It.DoC
after Oct0bec 31, 2008, CI) the Applicable Interest Rata
shall be equal to the Prime Rate, plus onahalf of one
Percent (0.50•/.) and (ii) hit, Dat6 shn be
Novmnber 30, 2008.
3.03 The RM P"Mh on Page 4 of aw Note consist Qg of
two fi)U ows: onW1 havby amended and restated in its entirety as
y Paymclts of accrued inter shall be due
and payable starting on December 1, 2004, sad on the tarsi (1
day of cash mouth tj1,mftar, through and in
'M=tWy PaymeW due on 0et6b11:1 1, 2008, The a the
balance outstanding herWa. and all Principal
aid
interest hereunder, and any and all costs or and unp
Mer&o' shall be due and PaYable in full, without on
October 3l, 2008 (the "Maturity )at*,#). uole? mamded as
set forth in the next seatmm- If the Bonvwer enuacia ft the
Extension Option, satistiet each of the coadilhiom Prmah u
end mtcads the Note for the Extension Period, the Maturity
*Date ahan automatica ly be extmdod to Nw=bctr
and the paymat dues on November 1 2008 " be ?' 2008;
Of accrued intwtet mt the Applicable IAshall t, a Payment
November 30, Z m= Rate, On
008, fho entire principal balance ou>stmdin
=Pu?w rdatir? interest h =d my
fnlL" g thuttO, shall be due and payable in
3.04 Section 4 on page 6 is partially anxn4W by
and restating the ftM sentence of Section 4 is its &Mending catirety as
6oIlowa. m7bis Note Conftnxtift
is issued in won with the
entared job b tam AgreceW dated as of event date barawith
y jmd between the Bank and the Bovower
an MAW by that certain Pint Ajnm&lmt . as
Loan Agte=3=1 dated the 2e day Of f Janua Im to ` 10e
effa?ive as of Oct lw 31, 2? ry, 2008. to be the 11* 111, as further ae ' by aQd ?we? the Beak and
ended by that Secor?d Amaathnerot
to won Loan Agrament
ted August
be affedivo as ofAug=
? 2008 dab '
and the Borrower (as it may be further etwem tht Bank
s time to th „wed, modified or
0. tIte Construed" Lou
Agrmumat-), the
AVWae:at dated as of men-End Mortgage and Secamih'
betwam the Hank and the Borrower, " into by and
Modification w ? amended by thm First
dated the 24°' e f? Mortgage amid ?it+ Aunt
October 31 4 h d b Amy' 2008. to be effective as of
, 2007, by and brtwom the 13=k and the Borrower,
-3-
00919611.mm
as further amended by that Socond Modification to Open .End
Mortgage and SOCUrit'y Agreemem, dated August -.U 2008,
to be' effoctire as of August..a 2008, by and betwom the
Bar& and the Borrower (as it may meter am
nxxUod or supplementad front ended,
f?Moge"), the Assignnant of tane to time:, the
even date her;" M? ? L°? ? Reams dated as of
the Boavw". as ceded by thee F? )d the Bank and
?$nmc W of L.cases and Roata dated the 244i day of tio
2008, to be effeCtive.as of October 31, 2007. by
the Bank and the Borrower, as farther and betwom
Modific adon to AsW * amended by that Sid
P"nent of I nerd R
X20 8, to be e?ctive as of August ? 20dated Augw
08, by and g'0 Bank amcadod, modified ? the Borower (era it may be furtb,cr
1
"A?meat of Lesseau the SSOOMai 4roai time to time, the
oven date herewith mterad into by and be AVocan ? dated as of
the Homwer, u amended by the First ?°. the Bank and
A$roanmd dated the 24° day ofJa?y2pp?t°o b,0 sffactive
as of October 31, 2007, by and
13omower (as it may be ?? the Back atsd the
from tiaae to tune, the " ' modified or sUpplemefltod
UCC-1 Fitno im g s Semr'ty moment") and the two (2)
SmIrity Agreesne a, filed 0Onnec6on * with the
dated as of even date herewith y and Surety?p APre=wg
favor of the Back as ooafirmood b th'e bra t o?fuuaators in
dated the 24 day of Jamtery, 2005, to be moots
eirecti
ve as of .
? 31.2? . '4as futtfiet cvn6tmod by
the ° 2k, 2008, to Cons= of
AUBuet ,?, 2008 as be C$OarVe as of
soPPl?attod froth ( it may be ??0d, tnodi$? or
MoGaMranty
nt aced
AgrIcn mt"), the EavunUeatal to
IndefiMa, mnity the
as of even date tterewitM b ti?ement dated
0' even for the by aad among the Borrower and the
"
CuallntOTS
bewfit of the &-k (as it may be
modified
or SUPPICInented
"Eavironmmt Linde fivm tame to time, the mity Ageetncat dated the 20
day of meat"). am Pledge
as of October 31, 2007, by and may' 2008, to be effective
Pennsylvania limited liability among Cagy oriffi, LL.C, a
partner of the Bouvwer), and they ON sole Seaeral
the Bank (as it may ??°? for the beuebt of
froth time to time, the Pte' m0ed or A supplemented
UCC-l F• t;t?eemebt") and the one (1)
P141* A cat, 5t aatand a anyfileod is eacnodion with the
ff.
mortga M "signmcnts end other docu, and
-4-
001%u.noC
enter into from thus to tim° in ctipn with this Notette
of which am - (Collectively, the ',?n mc0?'?od heroin by refaMcc DocannotsR), and is red
Pmpaty dewen'bod m the 14an Do,;=,M ands by the
COIWeral as FrMously may have been or Y 10 by the su firtnr lb other
boated to the Bank to am m this Mts.. e be
4• The Borrower I? .-
warrontics, agrc m" and cove made ypmsuant A r eseatations sad
Loan Agreeimem and the other Loa,, Do...'t moons of dw Note, the
?rumtnt or s• The Borrower aalmowl
agrvetntnt which at any time $ agt+? e8ah ad every doaumen
but not limited to, W the Gun,aaty,? cmred paymem of the obligabom
and v) the CI M430 ?s): (v) gracumat (ii) the
(i
LW=m trC t o fixhuhnp the rm (vii) all UCC clog statearc exec filed ()the Suety Ag ,=,,?
-Secur ity a due of d and the Contract Assig?p?s). with mope 't to the Mortgage, the
whe the Obligations. Y ttatres to r,=,, pmwpt payttrent
801mewcr 6• Tho Borrower hereby its and
offi?s ? the legal power and a'arrauta to the Bank that (i) the exacuting Borrower over a Y to ee execute and detivsr• this M
H) the
deliver the game and beta duly aafhorizod to mce+ra#e and
and dalfv hereofbbindthe Borrower with mp to Pmyisions k r
and owns hereof the Borrower :rd toe pcrforac$act and ob herceg (M) the =ccmaon the
documcggsocas<od and or to emote, the Loan qgt, the ?? The Borrower of the
O'gaziZational docucneats of the Bo t th. do not violate of amni me ? tithrod all
b
a+awer or an applicable to the w the
docurnew each o y PrOvWou of or consftft a dcfaWt under an ro mower or t+esult in a
br
bhuhng upon or ?eable any other agr rr
IN Lam AgramxG4 IV) Alncnftcnk the No
by two omower'a'nOction herd o and t6n d aCEUd ?
or to bo ex
titulo' and _
the Bmrvwcr in cyory respect, co?able m mccorda= their dxP?ve t? b oas of
The Borrower and the B
effect to this Ammdment and the other ameridm
herewim. ,,o Bvvrrt of Dofaalt mss. two o= and warrant that a$a giving
morn exists under the No dW Loan Dock dated of even ate
e+rts, nor will any oocor as a mWt of the execaa or the other Loan
the
arsd the office ors
xhacut
j the Other I'OM Dc.. tom of Provision hereof, After oving efrea to this Anr?art or
Borrower prmmmdy has no clWme, couatercJairus cnta dated of even daft herewith,
of any kind at Law or in equity against the Bank arisin ,defenses or any other cause of action
Lou AgrcemeN or die Loan Documents, 8 out of or in any way relating to the Note.
oos??? i.noc
or the Y other Loan Docc Each
se=ll to a"' MOW that is made in the No
h haeaiier be construed as a rete6.the loan Ag
?• frramca tii the Note as ammded
mended
9. Except as amended hereby,
Loan Arent and the other Lon Documcwsall of t
" remain in he tees and conditions of the Note, the
A nendment amends the Note and is not a n or accord and full ft)=0 aa,d effnet. Thee
satisfaction tltct+eoi;
the lo. This Amendme=nt may be eaomted is an
different patties hardo on y bee of o0
deleted as oreginal, but an such ???a arts 8W ? b of which, when sd exlt4 ahall be
hits but one and the same finuummuL
1 i. THE BORROWp,R EBY A
TIiAT THE NOT$ AND TEE MORTGAGE CONTAIN pCKNOEWES AND AGREES
BANK MAY BNTM n1DQ? BY CO Q NCH TIH+
CONFESSION AGAINST T18 BORROWER.
12. If any term or prvvWcn set forth in this Am
? Bank having waived a Failure by the Borrower to perform any is made as a result of
or the other Lola Doc mmus? aurh waiver y testa or ptvvidon of the Note
event Item which it aro Panted by the Bank is limited solety to the particular
Event or ut R of hich t under thand is no aive by the Bank shall (a) extend to any other evert, default
ant, the Note or
'my right or remedy of the Bank consequent thereto. any °tt Iran Doaim ant or (b) impair
Satis 13. This AmeadMent is not intended to be a uoaati
faction of the Note and/or the Mortgage. ?, release err accord and
14. The Bonvwer shall ax
Bank A' Other amendmeu?, ins6 =enta a ?? or cause to be executed, and delivered to the
4m?Y or appropriate by the B amk in Con as wjdL ficates and other documce ft domed
15.
No Bantrrrm ?.
any vohmtuy petition undo any Chap +,.s .ter of Borrower does. have the present intew to (i 61e
manner, Seek relies; protection, BapY Code, Title 11 U.S.C., or to in ray
reo debtors under any other state, Iocal dafiaa or aq. or similar relief for
days, or (u7 directly or ij"reetly cease any imro nsoWntary laws, Within the nest ninety (90)
dhwdy or indirectly cave Borrower to become the nbjoct ofa to be filed against mower or
od• State„ *dcral or other insoleea OCt of ray p ,0Wv toy
an
time, or at any time hereafter,
sy law providing for relief of debtors either at the pnsart
16.
Amendment nor No Fravd??r rrt Nep??, the rho ac
constmm matod bY> wa mance with =f any as a i? rogWred h ? desriibb delivery herein is ?g
Or* d my qty to Which Borrower, or any any ? new or W Uer to I hereafter b ter b delay BOM
ding but not limited to Bank, will ecome
-ti-
009??? t?
Of Sf i -?n ? ?
Amendment w 1aives my 'Waiver rights to ,hrt of o f 60
---?-? Bomwer by entering iato this
Bank based upon statute of Inmitsh'oUmt n,?p od to any lien of the Back or any other CWm of
the theory that say lien or any other such claim Of a b? or any Other deform based on
l8, 71& Amendment sball
B=Ower and the Dank and their reapec ve a and UPOU and in= to the benefit of the
md?8 uPOU the Bank unW accepted by the Ban{, as evidcnccd by its xutiion?t shall not
RIMTIONALLY LBPT BLANIC1
-7-
0091s6t i.DoC
t
her ,to have caused NNFSS WB pV, aqd intaadi?g to be legally bound b=*y, the parties
Amendment to be effocxivc on ttse data first above written.
wIrmS:
°a u,
lunited
Paztaaahip
BT Gmy Cmffm, LLC
ca ??u` hmrtod habilrty
Its. Crmeral pa inear
By.
N '. Smmpsoa
Title: Member
Q
National city Bank
tee.
xds Title, Vic vpart
AQQM jQcta?„=
COMMONWEALTH OF PENNSYLVANIA I
COUNTY OF SS:
On this, the day of August, 2008 before me, a XQtwy o
qVw-cd
hm J. T. Simpson, who aekrwwiodgW himself to be the Mxaa&g Per of (;ray
LI.C, a PmMylvaaia limited liabili c Motnbe any Cry GcitEn,
PeonsylvWa l mh'd P"t"crahiR and IW he as w? ?? p$aut6uth of Gray Drive, LP, a
the f'mgoing izu t cnt for the catch officer, being ori zed to do no, executed
919mg his nsmc as such ofacer p therei?o contained, atld is the capacity dntin stated, by
"" Wn NESS W"ER F, I hercrmto set my head and oilicial seal.
tart' Pabiic
My Commission Expires:
oMw TM a ?
NOTARML SEAL
i WAOMP ... oktq.?Notrt?/Adit
I
NOTICE OF WAIVER OF RIGHTS REGARDING
WARRANTS OF ATTORNEY, EXECUTION RIGHTS, AND
WAIVER OF RIGHTS TO PRIOR NOTICE AND JUDICIAL, HEARING
Borrower: Gray Drive, LP, a Pennsylvania limited partnership
Guarantors; Hugh J. T. and Diane H. Simpson
Transaction. Second Amendment to Note dated August aL), 2008, to be
effective as of August -2-L 2008 (the "Effective Date"), made
by the Borrower and payable to National City Bank, successor
by merger to National City Bank of Pennsylvania (the "Bank'),
Second Modification to open-FM Mortgage and Security
Agreement August 41L 2008, to be effective as of the Effecti
e
v
Date, made by the Borrower to the Bank and the Consent of
Guarantors dated August 24g., 2008, to be effective as of the
Effective Date, made by the Guarantors to the Bank
Effective as of The Effective Date
This NOTICE AND WAIVER (Notice and Waiver") of rights is being given to you by the
Bank, in connection with the above-described credit transaction. IT IS IMPORTANT THAT YOU
CAREFULLY READ AND UNDERSTAND THIS DOCUMENT. WHEN YOU SIGN YOUR
NAME IN THE SPACE PROVIDED BELOW YOU ARE ACKNOWLEDGING AND
REPRESENTING TO THE BANK THAT YOU HAVE READ AND UNDERSTAND THE
CONTENTS OF THIS DOCUMENT.
You will be executing and delivering to the Bank an agreement and/or other loan documents
(collectively, the "Loan Docurnents,? which grant to the Bank, among other things, the power and
authority to enter JUDGMENT BY CONFESSION against you, and to exercise rights of execution,
levy, garnishment, seizure of your property and the like. Other than notices required under the Loan
Documents, these rights and powers may be exercised by the Bank without giving you any prior
notice of its intention to do so. In addiction, these powers and rights may be exercised without a
prior hearing of any nature.
By executing and delivering this Notice and Waiver, you knowingly, voluntarily, and
intelligently waive your rights to prior notice (except for notice required under the specific terms of
the Loan Documents) and a hearing or other judicial proceedings to determine your rights and
liabilities in connection with the Loan Documents. By signing this Notice and Waiver, you
acknowledge that you understand that, after the occurrence of an Event of Default (as defined in the
Loan Documents), the Bank may obtain a judgment against any one or more of you, and execute
upon and seize forthwith your property and assets without the opportunity to raise any defense, set-
off, counterclaim, or other claim that you may have. You knowingly, voluntarily, and intelligently
waive your rights to any prior notice (except for notice required under the specific terms of the Loan
009 mi.Dm
Documents) or judicial determination as a material part of the consideration for this transaction and
in order to induce the Bank to enter into this transaction.
You acknowledge and represent that you have consulted (or have had an opportunity to
consult) with legal counsel of your choice, and with such other experts and advisors as you deem
necessary, in connection with the execution and delivery of the Loan Documents (including without
limitation the provisions of the Loan Documents authorizing, after the occurrence of an Event of
Default, the confession of judgment and the execution upon and seizure of your property and assets
without the opportunity for prior notice (except for notice required under the specific terms of the
Loan Documents) or judicial determination ofany nature).
This Notice and Waiver may be executed in any number of counterparts and by the different
parties hereto on separate counterparts each of which, when so executed, shall be deemed an
original, but all such counterparts shall constitute but one and the same instrument,
III`1'1` N"nONALLY LEFT BLANK)
W92MOI.DQC .2-
IN WITNESS WHEREOF, and intending to be legally bound, the undersigned have
executed this Notice and Waiver to be effective as of the Effective Date.
WITNESS:
Gray Drive, LP,
a Pennsylvania limited partnership
By: Gray Griffin, LLC,
a Pennsylvania limited liability
company
Its: General Partner
B.
N J Simpson
Title: g Member
N T. Simpson, an individual
ame: Diane H. Simpson, an individual
oo?ooe, hoc
ACKNOWLEDGEMENT
COMMONWEALTH OF PENNSYLVANIA )
COUNTY OF _- l? l i X11 - ) SS:
On this, the a?day of August, 2008, before me, a No Public, pers Hugh J. T. Simpson, who acimowledged himself to be the Mara& orally appeared
LLC, a Pennsylvania limited liability company, ll?g Member of Gray Griffin,
e, LP, a
Pennsylvania limited partnership, and that hs uchh0 iicerebc g autheori? do?so,?executed
the foregoing instrument for the purposes therein contained, and in the capacity therein stated, by
signing his name as such officer.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
Notary public
My Commission Expires:
COMMONWZALTH OF PENNSYLVANIA
NOTARIAL. SEAL
SHANNON P ACHENBACH. Notary Pubk
Harrisburg, Dauphkr Count
rea Juune 19, 2010
00=0eLDOC
AC MM::EDGivt>rr
COMMONWEALTH OF PENNSYLVANIA)
COUNTY OF SS:
On this, the 3--(At--4-day of August, M, before me, a Notary Public, the undersigned,
personally appeared Hugh J. T. Simpson, known to me (or satisfactorily proven) to be the person
whose name is subscribed to the within instrument, and acknowledged that he executed the same
for the purposes therein contained
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
GY?rL?.
? f ctrl T ?, , yviC
Notary Public
My Commission Expires:
(;OMM0MWEAL.T1i OF MMrMYLVAt*A
NOTARIAL SSA
SHANNON P ACHENBACH. Notary Pubhc
City of Hwi". Dauphin County
Carnnission Expires June 19, 2010
0o91ooe,noc
ACKNOWLEDGMENT
COMMONWEALTH OF PENNSYLVANIA)
COUNTY OF hln ) SS:
On this, the r -
On of August, 2008, before me, a Notary Public, the undersigned,
personally appcared Diane H. Simpson, known to me (or satisfactorily proven) to be the person
whose name is subscribed to the within instrument, and acknowledged that she executed the
same for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal,
Notary Public _
My Commission Expires:
c0MMGW4n% L-M OF PIMMYLVANIA
NOTARIAL SEAL
SAN<i0N P ACHENeACH. Notary Ktk
C? SSIM Ftnkne li 19, 2010
OW20m.wc
(Simpson)
CONSENT OF GUARANTORS
WHEREAS, pursuant to that certain Construction Loan Agreement dated as of
October 28, 2004, by and between Gray Drive, LP, a Pennsylvania limited partnership (the
"Borrower"), and National City Bank, successor b
Pennsylvania, a national banking association (the 'Bank"),ease amended by thatlcerWri First
Amendment to Construction Loan Agreement, dated January 24, 2008, effective as of October
31, 2007, by and between the Borrower and the Bank as
supplemented from time to time, the "Loan Agreement"), the Borrower became indebtted to the
Bank and, in connection therewith, the undersigned Hugh J. T. Simpson and Diane H. Simpson,
husband and wife (each a "Guarantor" and collectively, jointly and severally, the "Guarantors"),
entered into that certain Guaranty and Suretyship Agreement Pa
October 28, 2004, in favor of the Bank, as supplemented by that Consanaof Gualra tors dated
January 24, 2008, effective as of October 31, 2007, made by the Guarantors to the Bank (as
further amended, modified or supplemented, the "Guaranty") (all capitalized terms used herein
which are defined in the Guaranty or the Loan Agreement shall have the same meaning herein as
therein unless the context clearly indicates otherwise); and
WHEREAS, the Borrower has requested that the Bank enter into the Second
Amendment to Mortgage Note to be effective on the Effective Date (as defined below) by and
between the Borrower and the Bank, the Second Amendment to Construction Loan Agreement to
be effective on the Effective Date by and between
Modification to Open-End Mortgage and Security the Borrower and the Bank, the Second
and between the Borrower and the and the B Agreement to be dated the Effective Date by
Second Modification to Assignment of
Leases and Rents to be effective on the Effe
ank. and ctfveDat ee by and
Bank, (collectively, the "Amendment"), and the Bank has are between the Borrower and the
subject to, among other things, the condition that the Guarantors ?? to enter into the Amendment
verify, reconfirm and ratify the validity and effect of the y °ent to the Amendment and
NOW, THEREFORE, intending to be legally bound hereby, each Guarantor
hereby, on the 2-lAay of August, 2008 to be effective as of August "
Date"); ?, 2008 (the Effective
G) acknowledges and consents to the execution and delivery of the
Amendment by the Borrower, and
the Bank pursuant to th
(ii) verifis, reconrmns and ratifies e Guarantyeincluding, but not limited oe thebLoanoAmo such Guarantor to
Million Two Hundred Thousand Dollars ($19,200,000.00); and unt of Nineteen
and i)
continues to absolutely(ii
unckno le aj(s and agrees that, among other things, he/she
otherwise, of all Obligations, whether now ow g or (hereafter ar when due, of acceleration or
renewals, extension or extensions, in whole or in part, together withgalll interest nayrud penalties
thereon, if any, and (b) prompt performance by the Borrower of each and all of the Borrower's
covenants, undertakings, obligations and agreements pursuant to the Loan Agreement and the
00919508.DOC
other Loan Documents, and any other instrument evidencing or pertaining to any such extension
of credit, as any may be amended, replaced, extended or modified from time to time; and
(iv) each Guarantor hereby reconfirms and reaffirms all representations
and warranties, agreements and covenants made pursuant to the terms and conditions of the
Guaranty. Each Guarantor hereby further represents and warrants to the Bank that (i) each
Guarantor presently has no claims, counterclaims, offsets, defenses or any other cause of action
of any kind at Law or in equity against the Bank arising out of or in any way relating to the
Guaranty, the Note, the Loan Agreement, or the other Loan Documents and (ii) this Consent of
Guarantors constitutes valid and binding obligations of each Guarantor in every respect,
enforceable in accordance with its terms; and
(v) acknowledges and agrees that a copy of the Amendment has been
made available to him/her.
WARRANT OF ATTORNEY TO CONFESS J , ENT.
EACH
GUARANTOR HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS THE
PROTHONOTARY, ANY ATTORNEY OR ANY CLERK OF ANY COURT OF
RECORD, AFTER THE OCCURRENCE OF AN EVENT OF DEFAULT, TO APPEAR
FOR AND CONFESS JUDGMENT AGAINST SUCH GUARANTOR FOR SUCH SUMS
AS ARE DUE AND/OR MAY BECOME DUE UNDER THE GUARANTY
AGREEMENT, WITH OR WITHOUT DECLARATION, WITH COSTS OF SUIT,
WITHOUT STAY OF EXECUTION AND WITH AN AMOUNT EQUAL TO TEN
PERCENT (10%) OF THE AMOUNT OF SUCH JUDGMENT BUT NOT LESS THAN
FIVE THOUSAND AND 00/100 DOLLARS ($5,000.00) ADDED FOR ATTORNEYS'
COLLECTION FEES. TO THE EXTENT PERMITTED MANIFEST ERROR, EACH GUARANTOR RELEASES ALLLERRORS SIN SUCH
PROCEEDINGS. IF A COPY OF THE GUARANTY, VERIFIED BY AFFIDAVIT BY
OR ON BEHALF OF THE HOLDER OF THE GUARANTY SHALL HAVE BEEN
FILED IN SUCH ACTION, IT SHALT, NOT BE NECESSARY TO FILE SUCH
ORIGINAL GUARANTY AS A WARRANT OF ATTORNEY. THE AUTHORITY AND
POWER TO APPEAR FOR AND CONFESS JUDGMENT AGAINST ANY
GUARANTOR SHALL NOT BE EXHAUSTED BY THE INITIAL EXERCISE
THEREOF AND MAY BE EXERCISED AS OFTEN AS THE HOLDER SHALL FIND IT
NECESSARY AND DESIRABLE AND SUCH GUARANTY OR A COPY THEREOF
SHALL BE A SUFFICIENT WARRANT THEREFOR. THE HOLDER HEREOF MAY
CONFESS ONE OR MORE JUDGMENTS IN THE SAME OR DIFFERENT
JURISDICTIONS FOR ALL OR ANY PART OF THE AMOUNT OWING
HEREUNDER, WITHOUT REGARD TO WHETHER JUDGMENT HAS
THERETOFORE BEEN CONFESSED ON MORE THAN ONE OCCASION FOR THE
SAME AMOUNT. IN THE EVENT ANY JUDGMENT CONFESSED AGAINST ANY
GUARANTOR HEREUNDER IS STRICKEN OR OPENED UPON APPLICATION BY
OR ON SUCH GUARANTOR'S BEHALF FOR ANY REASON, HOLDER IS HEREBY
AUTHORIZED AND EMPOWERED TO AGAIN APPEAR FOR AND CONFESS
JUDGMENT AGAINST SUCH GUARANTOR FOR ANY PART OR ALL OF THE
AMOUNTS OWING THEREUNDER, AS PROVIDED FOR THEREIN, IF DOING SO
WILL CURE ANY ERRORS OR DEFECTS IN SUCH PRIOR PROCEEDINGS.
00 IMS.DOc -2- 1
WAIVER OF TRIAL By JURY. THE UNDERSIGNED HEREBY
EXPRESSLY, KNOWINGLY AND VOLUNTARILY WANE ALL BENEFIT AND
ADVANTAGE OF ANY SUCH RIGHT TO A TRIAL BY JURY, AND THEY WILL NOT
AT ANY TIME INSIST UPON, OR PLEAD OR IN ANY MANNER WHATSOEVER
CLAIM OR TAKE THE BENEFIT OR ADVANTAGE OF A TRIAL BY JURY IN ANY
ACTION ARISING IN CONNECTION WITH THE GUARANTY OR ANY OF THE
LOAN DOCUMENTS.
All of the terms and conditions of the Guaranty shall remain in'full force and effect and
this Consent of Guarantors is not a novation of the Guaranty.
This consent of Guarantors shall be binding upon and inure to the benefit of the
Guarantors and the Bank and their respective successors and assigns.
[INTENTIONALLY LEFT BLANK]
wgmm.ooc -3-
TN WITNESS WHEREOF, the Guarantors have executed this Consent of
Guarantors to be effective as of the Effective Date.
WITNESS: f
GUARANTORS:
"ti"res
*4Pso'n4. an individual
Address:
76 Emlyn Drive
csburg, PA 17055
one
H. Simpson, an individual
Address:
76 Enzlyn Drive
Mechanicsburg, PA 17055
00919508.00'-
ACKNOWLED MENT
COMMONWEALTH OF PENNSYLVANIA )
COUNTY OF Q??ry1 ??._ ) SS.
On this, the day of August, 2008, before me, a Notary Public, the undersigned,
personally appeared Hugh J. T. Simpson, )mown to me (or satisfactorily proven) to be the person
whose name is subscribed to the within instrument, and acknowledged that he executed the same
for the purposes therein contained,
IN WTINESS WHEREOF, I hereunto set my hand and official seal.
Notary Public
My Commission Expires.
`=OMMOlnW-EALTH OR
NOTARIAL SLMRYLVA?
SHANNON CCRy of H ACHENSACH, Notary pL
D" in W*
00819508. WC
ACKNOWLEDGMENT
COMMONWEALTH OF PENNSYLVANIA )
COUNTY OF u )h?? SS:
On this, the -nay of August, 2008, before me, a Notary Public, the undersigned,
Personally appeared Diane H. Simpson, known to me (or satisfactorily proven) to be the person
whose name is subscribed to the within instrument, and acknowledged that she executed the
same for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
Notary Public \
My Commission Expires:
commq"' FAL HOFPENNSYLVANIA
NOTARIAL SEAL
SHANNON P ACHENBACH. Notary Pubic
CR of HarrMurq, Dauphin C0uM?r.O
m.-i ri..^ ..
m1w0amoc
LAW OFFICES
STEPHEN C. NMEL, PC
219 Pine Street
Harrisburg, Pennsylvania 17101
(717) 236-5000
STEPHEN C. NUDEL FAX (717) 236-3080
BRET KEISLINO
VIA OVERNIGHT COURIER
March 27, 2009
Mr. David W. Olenik
National City Bank
629 Euclid Avenue
Suite 635
Cleveland, OH 44114
Re: Gray Drive, LP
Dear David:
Enclosed please find the Extension of Second Amendment to
Mortgage Note, With Consent of Guarantors. In addition, enclosed
is the $15,000 principal payment due by March 31, 2009.
Please return a copy after it has been countersigned.
Thank you for your consideration.
Very truly yours,
S t'ephen :fC. Nude l
SCN/jlm
Enc.
CC: Norman E. Gilkey, Esquire (w/enc. via email)
Mr. & Mrs. Hugh J.T. Simpson (w/enc.)
EXTENSION OF SECOND AMENDMENT TO MORTGAGE NOTE WITH CONSENT
OF GUARANTORS
This Extension of Second Amendment to Mortgage Note, With Consent of Guarantors
("Extension Agreement") is entered into the OVday of March, 2009, by and between Gray
Drive, LP, a Pennsylvania limited partnership (the "Borrower"), National City Bank, successor
by merger to National City Bank of Pennsylvania, a national banking association (the "Bank"),
and Hugh J. T. Simpson an Diane H. Simpson, individuals, as guarantors of the Borrower's
obligations to the Bank (the "Guarantors"), as follows:
PREAMBLES
WHEREAS, on August 26, 2008, the Borrower and the Bank entered into a Second
Amendment to Mortgage Note (the "Second Amendment"), which is incorporated by reference
hereto as if fully set forth herein, including as to its capitalized terms and definitions;
WHEREAS, contemporaneous with the Second Amendment, the Guarantors provided to
the Bank their Consent of Guarantors, which is incorporated by reference hereto as if fully set
forth herein, including as to its capitalized terms and definitions;
WHEREAS, one or more of the Borrower, the Bank and the Guarantors has also entered
into various other documents associated with the Borrower's obligations to the Bank (the "Other
Documents"), each of which is incorporated by reference hereto as if fully set forth herein,
including as to their capitalized terms and definitions; and,
WHEREAS, as a result of ongoing discussions, the Bank and the Borrower (with the
Guarantors' acknowledgment) have determined that it is in their respective best interests to
extend the Second Amendment, retroactive to December 1, 2008, and through July 31, 2009,
under the following terms:
1. The foregoing Preambles are incorporated by reference hereto as if fully set forth herein.
2. The Borrower acknowledges that as of March 24, 2009, the. outstanding principal
balance of the Note is Nineteen Million, Thirty Six Thousand, Three Hundred Forty-Five
Dollars ($19,036,345.00), plus accrued interest and other charges. The Borrower (and
the Guarantors) again waive and release the Bank from any and all claims, counterclaims,
offsets, defenses or other causes of action the Borrower has or may have with respect to
the indebtedness evidenced by the Note and the enforceability thereof.
3. Provided that (a) no Event of Default has occurred and is continuing; and, (b) no Material
Adverse Change has occurred with respect to the Borrower, the Guarantors, the Property
or the Project (all as defined in the Construction Loan Agreement), then the Bank and
the Borrower agree that, retroactive to December 1, 2008, the Borrower shall have the
option to extend the Construction/Lease Up Period of the Note through July 31, 2009 (the
"Extension Period"), provided that not later than March 31, 2009, and not later than the
last business day of each of April, May and June, 2009, the Borrower shall pay the sum
of Fifteen Thousand Dollars ($15,000.00) to, the Bank (the "Extension Payment"), each
of which payments shall constitute the Borrower's exercise of the aforementioned option
to extend for the following month, and each of which Extension Payments will be fully
earned by the Bank upon delivery to the Bank. During the Extension Period, Borrower
shall continue to pay interest when due, in addition to the Extension Payments. The
Extension Payments shall be applied as a reduction of principal.
4. In all other respects (and to the extent not inconsistent with this Extension Agreement),
the Second Amendment, the Consent of Guarantors and the Other Documents are ratified
by each of the parties hereto and shall remain in full and effect.
2
5. This Extension Agreement maybe executed in counterparts and via pdf email, hard copy
or facsimile, with the combined counterparts having the full force and effect of an
original document.
IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties hereto
have caused this Extension Agreement to be executed on the month, day and year first written
above.
WITNESS:
i
ame: ?, r
WITNESS:
Name:
Gray Drive, LP
a Pennsylvania limited partnership
By: Gray Griffin, LLC,
a Pennsylvania limited liability
Company
Its: General Partner
By:
Na+:.T. mpson
Titlmber
National City Bank
By:
Name: • David W. Olenik
Title: Senior Vice President
The Guarantors hereby consent to this Extension Agreement the4ay of March, 2009.
on
MHSimppson
My Commission Expires:
COMMONWEALTH OF PENNSYLVANIA
NOTARIAL SEAL
JWE L. MEADATH, Notary Patio
City of Harrisburg, Dauphin CtImy Commission Expires April 30,-2-oil
BIZ
BABST I CALLAND I CLEMENTS ZOMNiR
A PROCESSIONAL CORPORATION
NORMAN E.'G(LKEY
AUornuy at Low
412394.5626
rts!(kppf9Gcc2.cmn
August 24, 2009
VIA FACSIMILE (717) 795-5490
FEDERAL EXPRESS & IJ.S. IYIA II.
Gray Drive, LP
76 Emlyn Drive
Mechanicsburg, PA 17055
Attn.: Hugh J.T. Simpson
In re: Declaration of Event of Default under Loan Documents as described herein
and Demand for immediate payment of the Obligations due to National City
Bank
Ladies and Gentlemen:
This office is counsel to National City Bank ("National City"). As National City's
counsel, we are sending this letter to Gray Drive, LP (the "Borrower") via the three
methods described above. A copy of this letter is also being directed by fax and pdf email
to Stephen C. Nudel, Esquire, and by regular mail to Hugh J.T. Simpson and Diane H.
Simpson, in their capacities as Guarantors of the obligations due from the Borrower to
National City.
Reference is made to the loan obligations (the "Obligations'D due from the
Borrower to National City, as identified in the Loan Documents, which are incorporated by
reference hereto as if fully set forth herein, including but not necessargy limited to:
1. Construction Loan Agreement, dated October 28, 2004, as amended by a First
Amendment to Construction Loan Agreement, dated January 24, 2008 (the "Loan
Agreement");
2. Mortgage Note, dated October 28, 2004, in the principal face amount of
$19,200,000.00 from the Borrower to National City, as amended by a First
Amendment to Mortgage Note, dated January 24, 2008, and as amended by a
Second Amendment to Mortgage Note dated August 26, 2008 (the "Mortgage
Note") ;
TWO GATEWAY CENTER I PITTSBURGH.PA 15222 IT 412.394.5400 IF 412.394.6576 IWWW.BCCZ.COM
Hugb J.T. Simpson
August 24, 2009
Page 2
3. Open-End Mortgage and Security Agreement dated October 24, 2004, as amended
by a First Modification to Open-End Mortgage and Security Agreement, dated
January 24, 2008, and as.ameiided by a Second Modification to Open-End
Mortgage and Security Agreement, dated August 26, 2008 (the "Mortgage"); and,
4, Extension of Second Amendment to Mortgage Note, With Consent of Guarantors,
dated March 27, 2009 (the "Extension Agreement").
The Extension Period, as defined in the Extension Agreement, expired by its terms
on July 31, 2009; and, the principal balance remaining due on the Mortgage Note is
$18,961,344.62, plus accrued interest and other charges.
Due to the failure of the Borrower to repay the Obligations by July 31, 2009, the
purpose of this letter is to advise the Borrower (and its counsel and the Guarantors) that an
Event of Default has occurred pursuant to, among others, Section 6(i) of the Mortgage
Note. Pursuant to Section 6 of the Mortgage Note, National City hereby declares the entire
Obligations to be immediately due and payable.
Daily interest at the Default rate (commencing after August 28, 2009), late charges
where applicable, and similar charges will continue to accrue under the Mortgage Note
until all balances due are paid in full to National City. National City reserves the right to
collect the entire Obligations from the Borrower or from one or both of the Guarantors.
Additional charges for late fees and such other'pemtissible items shall be calculated and an
accounting thereof provided to you upon payment in full of all other amounts due to
National City..
As a result of the existing and continuing'Event of Default, National City hereby
demands immediate payment in full of the Obligations by cashier's check, wire transfer or
in other immediately available funds, to be received by National City not later than close of
business on Friday, August 28, 2009.
If payment is not made as demanded above, National City intends to commence
legal actions and/or to exercise any and all remedies available.to it under the Loan
Documents; as it deems appropriate.
National City hereby confirms that it has made no agreement or commitment to
amend, supplement or modify the Mortgage Note or any related Loan Documents in any
respect, and National City hereby specifically confirms that it makes no such commitment
and specifically advises that no action or inaction should be taken or omitted by the
Borrower or Guarantor based upon any erroneous perception that such a commitment
exists or any expectation that any such commitment will be made in the future. Unless
Hugh 3.T. Simpson
August 24, 2009
Page 3
specifically agreed to in writing by National City, any action or failure to act, any
acceptance of any payment or any negotiation by National City with the Borrowers and/or
the Guarantors concerning the Mortgage Note or other Loan Documents is. not and shall .
not be construed to be, a de-acceleration of any obligation under the Mortgage Note or a
modification, alteration, release, limitation, waiver or cure of any default, breach, right,
remedy, power or privilege of National City under the Mortgage Note or any related Loans
Documents.
The Mortgage Note and each and every representation, warranty, agreement,
covenant, term and condition contained therein, in the related Loan Documents remain in
full force and effect as therein set forth. None of National City's actions to date, nor . .
anything set forth in this letter, shall be deemed or construed to be a waiver or release of
any Default or Event of Default. now existing or hereafter arising, or a waiver or limitation
of National City's rights, under the Mortgage Note or any other Loan Document.
Accordingly; National City reserves all of its rights, without exception.
Please contact David Olenik of National City or me immediately to arrange for
payrhent.
Thank you for your immediate attention to this matter. Time is of the essence.
Very truly yours,
Norman E. Gilkey
NEG/pas
cc: David Olenik, Senior Vice President (via e-mail only)
Stephen C. Nudel, Esquire (via fax 717-236-5080
and e-mail scnudel&ude P-c,com)
Hugh J.T. Simpson (via regular mail)
Diane H. Simpson (via regular mail)
FILED-A-,-`:-`OE? QTARY
Qc QF4
2009 DEC -9 PM 3' 48
CUtJEE? V?S,? ?
{
* x-7.56 Po
Ce 10aa9}o
2T4 a3y-7g1
BLANK ROME LLP
Francis X. Crowley, Esquire
Atty. No. 41539
Lev Kalman, Esquire
Atty. No. 89844
One Logan Square
Philadelphia, PA 19103-6998
(215) 569-5500
Attorneys for Plaintiff,
PNC Bank, National Association
as successor to National City Bank
PNC BANK, NATIONAL ASSOCIATION,
AS SUCCESSOR TO NATIONAL CITY BANK
1900 E. 9th Street (B7-YB13-22-1)
Cleveland, OH 44114
Plaintiff,
V.
GRAY DRIVE, LP
76 Emlyn Drive
Mechanicsburg, Pennsylvania 17055
COURT OF COMMON PLEAS
CUMBERLAND COUNTY
And
HUGH J.T. SIMPSON and DIANE H.
SIMPSON, h/w,
76 Emlyn Drive
Mechanicsburg, Pennsylvania 17055
Defendants.
CONFESSION OF JUDGMENT
FOR MONEY
PRAECIPE FOR APPEARANCE
To the Prothonotary:
Please enter our appearance for the Plaintiff, PNC Bank, National Association, as
successor to National City Bank, in the above captioned civil action.
B LLP
r . Cro 1 , Esquire
kttj( No. 415
Lev Kalman, Esquire
Atty. No. 89844
One Logan Square, Philadelphia, PA 19103-6998
(215) 569-5500
Attorneys for Plaintiff
THE? iF
Y
2009 DEC _9 P, : 46
e
rvrVs2?r u TY
PE -,ll
VVA
BLANK ROME LLP
Francis X. Crowley, Esquire
Atty. No. 41539
Lev Kalman, Esquire
Atty. No. 89844
One Logan Square
Philadelphia, PA 19103-6998
(215) 569-5500
Attorneys for Plaintiff,
PNC Bank, National Association
as successor to National City Bank
PNC BANK, NATIONAL ASSOCIATION,
AS SUCCESSOR TO NATIONAL CITY BANK COURT OF COMMON PLEAS
1900 E. 9th Street (B7-YB 13-22-1) CUMBERLAND COUNTY
Cleveland, OH 44114
Plaintiff,
V.
GRAY DRIVE, LP
76 Emlyn Drive No:
Mechanicsburg, Pennsylvania 17055
And
HUGH J.T. SIMPSON and DIANE H
SIMPSON, h/w,
76 Emlyn Drive
Mechanicsburg, Pennsylvania 17055
Defendants.
CONFESSION OF JUDGMENT
FOR MONEY
NOTICE UNDER RULE 2958.1
OF JUDGMENT AND EXECUTION THEREON
NOTICE OF DEFENDANT'S RIGHTS
To: Gray Drive LP
76 Emlyn Drive
Mechanicsburg, PA 17055
and
Hugh J.T. Simpson and Diane Simpson
76 Emlyn Drive
Mechanicsburg, PA 17055
A judgment in the amount of $21,104,301.53 has been entered against you and in favor of
the plaintiff without any prior notice or hearing based on a confession of judgment contained in a
written agreement or other paper allegedly signed by you. The sheriff may take your money or
other property to pay the judgment at any time after thirty (30) days after the date on which this
notice is served on you.
You may have legal rights to defeat the judgment or to prevent your money or property
from being taken. YOU MUST FILE A PETITION SEEKING RELIEF FROM THE
JUDGMENT AND PRESENT IT TO A JUDGE WITHIN THIRTY (30) DAYS AFTER THE
DATE ON WHICH THIS NOTICE IS SERVED ON YOU OR YOU MAY LOSE YOUR
RIGHTS.
YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO
NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE
OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP.
2
IF YOU CANNOT AFFORD TO HIRE A LAWYER, THIS OFFICE MAY BE ABLE
TO PROVIDE YOU WITH INFORMATION ABOUT AGENCIES THAT MAY OFFER
LEGAL SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE OR NO FEE.
Cumberland County Bar Association
34 S. Bedford Street
Carlisle, PA 17013
717-249-3166
Franci X wley, Esquire
Atty. No. 41539
Lev Kalman, Esquire
Atty. No. 89844
BLANK ROME LLP
One Logan Square
Philadelphia, PA 19103-6998
(215) 569-5500
3
HLED-Or-RCE
OF THE PIPUTHln - ?CRY
2009 DEC -9 PM 3: 48
f;?
BLANK ROME LLP
Francis X. Crowley, Esquire
Atty. No. 41539
Lev Kalman, Esquire
Atty. No. 89844
One Logan Square
Philadelphia, PA 19103-6998
(215) 569-5500
Attorneys for Plaintiff,
PNC Bank, National Association
as successor to National City Bank
PNC BANK, NATIONAL ASSOCIATION,
AS SUCCESSOR TO NATIONAL CITY BANK COURT OF COMMON PLEAS
1900 E. 9th Street (B7-YB13-22-1) CUMBERLAND COUNTY
Cleveland, OH 44114
Plaintiff,
V.
GRAY DRIVE, LP
76 Emlyn Drive No: Oq- &Sa3 0:?vi l (e,f w
Mechanicsburg, Pennsylvania 17055
And
HUGH J.T. SIMPSON and DIANE H.
SIMPSON, h/w,
76 Emlyn Drive
Mechanicsburg, Pennsylvania 17055
CONFESSION OF JUDGMENT
Defendants. FOR MONEY
AFFIDAVIT OF NO CONSUMER CREDIT TRANSACTION
The undersigned David W. Olenik, being duly sworn according to law, deposes and says
that he is a Senior Vice President of the Plaintiff, PNC Bank, National Association, as successor
to National City Bank, that in such capacity he is authorized to and makes this Affidavit on the
Plaintiff's behalf, and that he further says to the best of his knowledge, information and belief as
follows:
(1) The judgment being sought in this action is not being entered by confession
against a natural person in connection with a consumer credit transaction, the transaction not
being a consumer credit transaction (but being a business and commercial transaction), nor does
the transaction involve the retail installment sale of goods or services subject to the provisions of
the Goods and Services Installment Sales Act, 69 P.S. §1101 et seq.
(2) The Mortgage Note, its Amendments, Guaranties and other construction loan
agreements were not executed by the Defendants in connection with a consumer credit
transaction (but were executed in connection with a business and commercial transaction). The
Mortgage Note, its Amendments, Guaranties and other construction loan agreements were
executed in connection with a business and commercial loan extended by the Plaintiff to the
corporate Defendant.
1P
David W. Olenik
Sworn to and subscribed before
me this-101 day of-I)eC,ec dower, 2009.
Notary Public
My Commission Expires:
* Donau M. V80, Notary pow
* State of Oki% Lob Corm
My 0* Mo. 13, 2011
cfc
2
FILED i ;!= tub
TI, F
t
2009 DEC -9 PM 3: 4 9
F?NNSY{.y,
BLANK ROME LLP
Francis X. Crowley, Esquire
Atty. No. 41539
Lev Kalman, Esquire
Atty. No. 89844
One Logan Square
Philadelphia, PA 19103-6998
(215) 569-5500
PNC BANK, NATIONAL ASSOCIATION,
AS SUCCESSOR TO NATIONAL CITY BANK
1900 E. 9th Street (B7-YB13-22-1)
Cleveland, OH 44114
Plaintiff,
V.
GRAY DRIVE, LP
76 Emlyn Drive :
Mechanicsburg, Pennsylvania 17055
And
Attorneys for Plaintiff,
PNC Bank, National Association
as successor to National City Bank
COURT OF COMMON PLEAS
CUMBERLAND COUNTY
No: Cq- &Sa3 L'ivilTerr.
HUGH J.T. SIMPSON and DIANE H.
SIMPSON, h/w,
76 Emlyn Drive
Mechanicsburg, Pennsylvania 17055
CONFESSION OF JUDGMENT
Defendants. FOR MONEY
AFFIDAVIT THAT DEFENDANTS' ANNUAL INCOME EXCEEDED $10,000
The undersigned David W. Olenik, being duly sworn according to law, deposes and says
that he is a Senior Vice President of the Plaintiff, PNC Bank, National Association, as successor
to National City Bank, that in such capacity he is authorized to and makes this Affidavit on the
Plaintiff's behalf, and that he further says to the best of his knowledge, information and belief as
follows:
Based upon financial information provided to the Plaintiff by the Defendants, Gray
Drive, LP, Hugh J.T. Simpson and Diane Simpson, the Defendant's annual income exceeded
$10,000 at the times it executed the Mortgage Note dated October 28, 2004.
David W. Olenik
Sworn to and subscribed before
me this day of 2009.
Notary Public
My Commission Expires:
em M. V alo, Notary Pdk
We of OW Like Coo*
eom d onn up. Ave. 13.2011
2
FiLED
? ARY
2009 OEC ..9 PN 3: 9
. r
BLANK ROME LLP
Francis X. Crowley, Esquire
Atty. No. 41539
Lev Kalman, Esquire
Atty. No. 89844
One Logan Square
Philadelphia, PA 19103-6998
(215) 569-5500
Attorneys for Plaintiff,
PNC Bank, National Association
as successor to National City Bank
PNC BANK, NATIONAL ASSOCIATION,
AS SUCCESSOR TO NATIONAL CITY BANK COURT OF COMMON PLEAS
1900 E. 9th Street (B7-YB13-22-1) CUMBERLAND COUNTY
Cleveland, OH 44114
Plaintiff,
V.
GRAY DRIVE, LP
76 Emlyn Drive No: Oq - 8 23 0-'1 vi t Tie r ion
Mechanicsburg, Pennsylvania 17055
And
HUGH J.T. SIMPSON and DIANE H.
SIMPSON, h/w, :
76 Emlyn Drive :
Mechanicsburg, Pennsylvania 17055
CONFESSION OF JUDGMENT
Defendants. FOR MONEY
AFFIDAVIT OF NON-MILITARY SERVICE
The undersigned David W. Olenik, being duly sworn according to law, deposes and says
that he is a Senior Vice President of the Plaintiff, PNC Bank, National Association, as successor
to National City Bank, that in such capacity he is authorized to and makes this Affidavit on the
Plaintiff's behalf, and that he further says to the best of his knowledge, information and belief as
follows:
(1) The Defendant, Gray Drive, LP is a Pennsylvania limited partnership with offices
at 76 Emlyn Drive, Mechanicsburg, PA 17055. The Defendants, Hugh J.T. Simpson and Diane
Simpson are adult individuals residing at 76 Emlyn Drive, Mechanicsburg, PA 17055.
(2) The Defendants are not in the active military service of the United States or its
allies and the Defendants are not subject to the provisions of the Soldiers and Sailors Civil Relief
Act of 1940 and its amendments, 50 U.S.C. App. §501 et seq.
- a/ k , -
David .Olenik
Sworn to and subscribed before
me thig-140 day o , 2009.
Notary Public
My Commission Expires:
bons M. Vanio, Notary Pnhitc
State of Ohio, Labe CON*
caeadaba w*. A". 13, 2011
2
77
1009 DEC -9 PH 3: 4 9
CUM?cr;w.:;; rv i.
VLVAW9 'm
c -
BLANK ROME LLP
Francis X. Crowley, Esquire
Atty. No. 41539
Lev Kalman, Esquire
Atty. No. 89844
One Logan Square
Philadelphia, PA 19103-6998
(215) 569-5500
Attorneys for Plaintiff,
PNC Bank, National Association
as successor to National City Bank
PNC BANK, NATIONAL ASSOCIATION,
AS SUCCESSOR TO NATIONAL CITY BANK COURT OF COMMON PLEAS
1900 E. 9th Street (B7-YB13-22-1) CUMBERLAND COUNTY
Cleveland, OH 44114
Plaintiff,
V.
GRAY DRIVE, LP
76 Emlyn Drive No: q- RSoJ3 0-ivll (errk
Mechanicsburg, Pennsylvania 17055
And
HUGH J.T. SIMPSON and DIANE H.
SIMPSON, h/w,
76 Emlyn Drive
Mechanicsburg, Pennsylvania 17055
CONFESSION OF JUDGMENT
Defendants. FOR MONEY
CERTIFICATION OF ADDRESSES
The undersigned David W. Olenik, being duly sworn according to law, deposes and says
that he is a Senior Vice President of the Plaintiff, PNC Bank, National Association, as successor
to National City Bank, that in such capacity he is authorized to and makes this Certification on
the Plaintiff's behalf, and that he further says to the best of his knowledge, information and belief
as follows:
(1) The Plaintiff's business address is 1900 E. 9th Street (B7-YB13-22-1), Cleveland,
OH 44114.
(2) The last known business address of the Defendant, Gray Drive, LP is 76 Emlyn
Drive, Mechanicsburg, PA 17055.
(3) The last known address of the Defendants Hugh J.T. Simpson and Diane Simpson
is 76 Emlyn Drive, Mechanicsburg, PA 17055.
1
David W. Olenik
Sworn to and subscribed before
me this day of 1 , 2009.
A^?
Notary Public
My Commission Expires:
10MIe M. Veeb, Notary P
State of Ohio, Lobe Coootl1
commhOw exp. An& 13, 2011
2
Tt;'E P ? ?+aGT
ARV
2009 DEC - 9 PM 3: 4 9
YLVAVIA
BLANK ROME LLP
Francis X. Crowley, Esquire
Atty. No. 41539
Lev Kalman, Esquire
Atty. No. 89844
One Logan Square
Philadelphia, PA 19103-6998
(215) 569-5500
Attorneys for Plaintiff,
PNC Bank, National Association.
as successor to National City Bank
PNC BANK, NATIONAL ASSOCIATION,
AS SUCCESSOR TO NATIONAL CITY BANK COURT OF COMMON PLEAS
1900 E. 9th Street (B7-YB 13 -22- 1)
Cleveland, OH 44114
CUMBERLAND COUNTY
Plaintiff,
V.
GRAY DRIVE, LP
76 Emlyn Drive
Mechanicsburg, Pennsylvania 17055
No: CQ- 855013 ivi taTer.,
And
HUGH J.T. SIMPSON and DIANE H.
SIMPSON, h/w, :
76 Emlyn Drive
Mechanicsburg, Pennsylvania 17055
CONFESSION OF JUDGMENT
Defendants. FOR MONEY
NOTICE TO DEFENDANT PURSUANT TO 42 Pa.C.S. 42737.1
To: GRAY DRIVE, LP, HUGH J.T. SIMPSON AND DIANE SIMPSON:
Pursuant to 42 Pa.C.S. §2737.1, please take notice that the Plaintiff in this matter has
entered a judgment by confession against you in the amount of $21,104,301.53.
You are entitled to file a petition to "strike" or "open" the judgment. In order to do so,
you must promptly file a petition with the Court of Common Pleas of Cumberland County,
Pennsylvania, as required by Rule 2959 of the Pennsylvania Rules of Civil Procedure. You file a
petition by leaving it with the Office of Judicial Support in the Cumberland County Courthouse
in Carlisle, Pennsylvania.
A petition is a formal statement of your reasons for challenging the judgment. You must
include the names of the parties at the top of the first page and the case number, which is shown
above. The petition must state your reasons for challenging the judgment in separate numbered
paragraphs. You have to sign the petition and include a sworn statement at the end of the
document verifying that the facts you state in the petition are true and accurate. You will waive
any defenses and objections not included in your petition to strike or open. You must therefore
make every effort to raise all possible issues and defenses in your petition to strike or open in
order to avoid waiving any claims.
If you elect to file a petition, it must meet the requirements of Rule 2959 of the Rules of
Civil Procedure. A full copy of Rule 2959 is attached to this Notice. You may also have to
comply with local rules of procedure in effect in the county where the judgment was entered.
If you do not file a petition challenging the judgment, the Plaintiff may take steps to
collect on the judgment by asking the Sheriff to seize your assets. Accordingly, you should
immediately seek the advice of attorney. If you wish to discuss the matter with an attorney but
do not know how to find one, you may request a referral by contacting the following agency:
Cumberland County Bar Association
34 S. Bedford Street
Carlisle, PA 17013
717-249-3166
Corporations may be unable to represent themselves in court. If the defendants include a
corporation, the corporation must appear through an attorney if it intends to challenge the
judgment.
You may receive other papers and notices regarding the judgment. Those other papers do
not negate or override this Notice. Likewise, this Notice is not intended to and does not negate
any of the notices or information obtained in other papers that may be served upon you.
We reiterate that you are required to act promptly if you wish to seek relief from the
judgment. Under certain circumstances, you have only 30 days in which to file a petition after
papers are served on you. Even if the 30-day rule does not apply, you must act promptly in order
to protect your interests. Failing to act in a timely manner will render you unable to challenge
the judgment at a later time.
If you were incorrectly identified and the judgment was entered against you in error,
you may be entitled to collect costs and reasonable attorney's fees as determined by the Court
2
Rule 2959. Striking off or Opening Judgment.
Pleadings. Procedure.
(a)(1) Relief from a judgment by confession shall be sought by petition. Except as
provided in subparagraph (2), all grounds for relief whether to strike off the judgment or to open
it must be asserted in a single petition. The petition may be filed in the county in which the
judgment was originally entered, in any county to which the judgment has been transferred or in
any other county in which the sheriff has received a writ of execution directed to the sheriff to
enforce the judgment.
(2) The ground that the waiver of the due process rights of notice and hearing was not
voluntary, intelligent and knowing shall be raised only
(i) in support of a further request for a stay of execution where the court
has not stayed execution despite the timely filing of a petition for relief from the
judgment and the presentation of prima facie evidence of a defense; and
(ii) as provided by Rule 2958.3 or Rule 2973.3.
(3) If written notice is served upon the petitioner pursuant to Rule 2956.1(c)(2) or Rule
2973.1(c), the petition shall be filed within thirty days after such service. Unless the defendant
can demonstrate that there were compelling reasons for the delay, a petition not timely filed shall
be denied.
(b) If the petition states prima facie grounds for relief the court shall issue a rule to show
cause and may grant a stay of proceedings. After being served with a copy of the petition the
plaintiff shall file an answer on or before the return day of the rule. The return day of the rule
shall be fixed by the court by local rule or special order.
(c) A party waives all defenses and objections, which are not included in the petition or
answer.
(d) The petition and the rule to show cause and the answer shall be served as provided in
Rule 440.
(e) The court shall dispose of the rule on petition and answer, and on any testimony,
depositions, admissions and other evidence. The court for cause shown may stay proceedings on
the petition insofar as it seeks to open the judgment pending disposition of the application to
strike off the judgment. If evidence is produced which in a jury trial would require the issues to
be submitted to the jury the court shall open the judgment.
(f) The lien of the judgment or of any levy or attachment shall be preserved while the
proceedings to strike off or open the judgment are pending.
3
FILED-?O' FICF
OF THE Ppgpr?JOTARy
2009 DEC -9 Fm 3: 48
vVlY1,.+y S:t;'all` J/?1?? f )JNTY
PENNSYLVA Y5
BLANK ROME LLP
Francis X. Crowley, Esquire
Atty. No. 41539
Lev Kalman, Esquire
Atty. No. 89844
One Logan Square
Philadelphia, PA 19103-6998
(215) 569-5500
Attorneys for Plaintiff,
PNC Bank, National Association
as successor to National City Bank
PNC BANK, NATIONAL ASSOCIATION,
AS SUCCESSOR TO NATIONAL CITY BANK COURT OF COMMON PLEAS
1900 E. 9th Street (B7-YB 13 -22- 1) CUMBERLAND COUNTY
Cleveland, OH 44114
Plaintiff,
V.
GRAY DRIVE, LP
76 Emlyn Drive No: (q - 85a3 CIV Terw
Mechanicsburg, Pennsylvania 17055
And
HUGH J.T. SIMPSON and DIANE H.
SIMPSON, h/w,
76 Emlyn Drive
Mechanicsburg, Pennsylvania 17055
CONFESSION OF JUDGMENT
Defendants. FOR MONEY
AFFIDAVIT OF DEFAULT
The undersigned David W. Olenik, being duly sworn according to law, deposes and says
that he is a Senior Vice President of the Plaintiff, PNC Bank, National Association, as successor
to National City Bank, that in such capacity he is authorized to and makes this Affidavit on the
Plaintiff's behalf, and that he further says to the best of his knowledge, information and belief as
follows:
(1) The Defendant Gray Drive, LP, ("Gray Drive"), is in default under the Mortgage
Note and amendments thereto referenced in the Plaintiff's Complaint for Confession of
Judgment for Money for failure to pay to the Plaintiff payments as they became due. There is
thus due and owing to the Plaintiff by the Defendant Gray Drive $18,961,344.62 in unpaid
principal, interest in the amount of $224,384.04, totaling $19,185,728.66 as of October 15, 2009,
plus the continuing accrual of interest on the unpaid principal amount at the per diem interest rate
of $3,555.25 from October 15, 2009 until date of payment.
(2) The Mortgage Note and the Amendments thereto authorize confession of
judgment against the Defendant Gray Drive after an Event of Default under the Note and the
Amendments thereto, or after the amounts thereunder come due, for the entire principal balance,
all accrued interest and late charges owed to the Plaintiff under the Note and the amendments.
thereto, together with costs of suit and an attorneys' commission in an amount equal to ten
percent (10%) of such unpaid principal balance and accrued interest for collection; in this case
National City Bank demands a reasonable attorneys' commission of $200,000, which is less than
ten percent (10%) of the $19,185,728.66 in principal and interest owed as of October 15, 2009,
subject to the judgment being modified if the attorneys' fees exceed that amount.
(3) The Guaranties authorizes confession of judgment against the Defendants Hugh
J.T. Simpson and Diane Simpson after an Event of Default under the Note and the Amendments
thereto, or after the amounts thereunder come due, for the entire principal balance, all accrued
interest and late charges owed to the Plaintiff under the Note and the Amendments thereto,
together with costs of suit and an attorneys' commission in an amount equal to ten percent (10%)
of such unpaid principal balance and accrued interest for collection; in this case, National City
Bank demands a reasonable attorneys' commission of $200,000, which is less than ten percent
2
(10%) of the $19,185,728.66 in principal and interest owed as of October 31, 2009, or
$1,918,572.87, subject to the judgment being modified if the attorneys' fees exceed that amount.
(4) The Mortgage Note and the amendments thereto, the Guaranties and other loan
agreements referred to in the Plaintiff's Complaint all remain valid and enforceable and the
aforesaid sums owed by the Defendants thereunder remain unpaid and justly due and owing.
(5) The Mortgage Note and the amendments thereto, the Guaranties and other loan
agreements referred to in the Plaintiff's Complaint are true and correct copies of the same
entered into by the Defendants as set forth in the Complaint. awl
David W. Olenik
Sworn to and subscribed before
me this day o , 2009.
Notary Public
My Commission Expires:
loam M. thab, Nfary Pd ft
State of Ohb, Labe Coo*
commWW on. Aug. 13, 20'11
PPJ
2009 DEC _9 P6 3: 4 9
?
BLANK ROME LLP
Francis X. Crowley, Esquire
Atty. No. 41539
Lev Kalman, Esquire
Atty. No. 89844
One Logan Square
Philadelphia, PA 19103-6998
(215) 569-5500
Attorneys for Plaintiff,
PNC Bank, National Association.
as successor to National City Bank
PNC BANK, NATIONAL ASSOCIATION,
AS SUCCESSOR TO NATIONAL CITY BANK COURT OF COMMON PLEAS
1900 E. 9th Street (B7-YB13-22-1) CUMBERLAND COUNTY
Cleveland, OH 44114
Plaintiff,
V.
GRAY DRIVE, LP
76 Emlyn Drive
Mechanicsburg, Pennsylvania 17055
No: CR- 85d3 0". v?1 Terw?
And
HUGH J.T. SIMPSON and DIANE H.
SIMPSON, h/w,
76 Emlyn Drive
Mechanicsburg, Pennsylvania 17055
Defendants.
CONFESSION OF JUDGMENT
FOR MONEY
ENTRY OF JUDGMENT
AND NOW, this = day of December, 2009, judgment is hereby entered in favor of
the Plaintiff, PNC Bank, National Association, as successor to National City Bank, and against
the Defendants, Gray Drive, LP Hugh J.T. Simpson and Diane Simpson, jointly and severally, in
the amount of $19,385,728.66, plus costs of suit,
plus interest thereon at the per diem rate of $3,555.25 from October 15, 2009 to the date of
payment as provided in the Mortgage Note and its amendments.
ry of Cumberland nt)Pr-&
4 Pr honota4-L"X! )Q - "
2
BLANK ROME LLP
Francis X. Crowley, Esquire
Atty. No. 41539
Lev Kalman, Esquire
Atty. No. 89844
One Logan Square
Philadelphia, PA 19103-6998
(215) 569-5500
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GLjJe++~
~.,,
Attorneys for Plaintiff,
PNC Bank, National Association
as successor to National City Bank
PNC BANK, NATIONAL ASSOCIATION,
AS SUCCESSOR TO NATIONAL CITY BANK,
Plaintiff,
v.
GRAY DRIVE, LP
And
HUGH J.T. SIMPSON and DIANE H.
SIMPSON, h/w,
Defendants.
CONFESSION OF JUDGMENT
FOR MONEY
ANSWER OF PLAINTIFF PNC BANK, NATIONAL ASSOCIATION, AS SUCCESSOR
TO NATIONAL CITY BANK, IN OPPOSITION TO DEFENDANTS' VERIFIED
PETITION TO STRIKE OFF AND/OR OPEN CONFESSED JUDGMENT AND FOR A
STAY OF EXECUTION ON THE JUDGMENT
Plaintiff/Respondent PNC Bank, National Association, As Successor to National City
Bank, ("PNC") hereby files this Answer in Opposition to Defendants' Petition to Strike Off
And/Or Open Confessed Judgment. For the following reasons, Defendant/Petitioners' Petition
should be denied:
• Petitioners never deny that Gray Drive is in default of the obligations contained in
the relevant Note and its Amendments and have no meritorious defense to its
defaults and the confession of judgment entered against Petitioners.
COURT OF COMMON PLEAS
CUMBERLAND COUNTY
No: 09-8523 Civil Term
131832.01421 /21845257v.1
• Petitioners have failed to allege any defect of record relating to PNC's propriety as
a party that would justify striking the judgment. Plaintiff has provided record
evidence that it is the successor to National City Bank and Petitioners have failed
to identify any evidence of record that it is not. As discussed in greater detail
herein, Petitioners' exact argument has been considered and rejected by reported
Pennsylvania case law.
• Petitioners have failed to demonstrate that the attorneys' fees sought by PNC are
grossly excessive, or even excessive, and have, instead, made bald assertions as to
their unreasonableness which cannot, as a matter of law, form the basis to open or
strike the judgment.
In support of its Answer in Opposition to the Petition to Open and/or Strike, PNC avers
as follows:
Admitted, upon information and belief.
2. Denied as stated. On December 9, 2009, PNC Bank, as Successor to National
City Bank, filed a Complaint for Confession of Judgment against Petitioners.
3. Admitted.
4. Denied as stated. The Complaint, pursuant to valid and enforceable warrants of
attorney, properly confessed judgment against Gray Drive pursuant to a Mortgage Note and
against Hugh and Diane Simpson as guarantors of Gray Drive's obligations thereunder.
Admitted.
6. Denied. This averment references a document that speaks for itself and any
characterization thereof is denied.
7. Denied as stated. On October 28, 2004, Guarantors Hugh and Diane Simpson
executed an enforceable Guaranty and Suretyship Agreement whereby they became the
unconditional guarantors of all obligations of Gray Drive under the Note.
8. Denied. This averment references a document that speaks for itself and any
characterization thereof is denied.
9. Admitted.
2
131832.01421 /21845257v.1
10. Admitted in part, denied in part. The allegations relating to PNC's averments in
the Complaint are admitted. The remainder of the allegations in this averment are denied as they
reference a document that speaks for itself and any characterization thereof is denied.
11. Admitted.
12. Admitted.
13. Admitted.
14. Admitted.
15. Denied. After reasonable investigation, PNC is without knowledge or
information sufficient to form a belief as to the truthfulness of this averment and it is,
accordingly, denied. By way of further Answer, even if true, this averment has no relevance
whatsoever, and cannot constitute an affirmative defense, to PNC's ability to confess judgment
and to Petitioners' breach of their obligations to make timely payments to PNC. Notably,
Petitioners do not deny that Gray Drive is in default under the Note and its amendments.
16. Admitted. By way of further Answer, this averment has no relevance whatsoever,
and cannot constitute an affirmative defense, to PNC's ability to confess judgment and to
Petitioners' breach of their obligations to make timely payments to PNC.
17. Admitted. By way of further Answer, this averment has no relevance whatsoever,
and cannot constitute an affirmative defense, to PNC's ability to confess judgment and to
Petitioners' breach of their obligations to make timely payments to PNC.
18. Admitted. By way of further Answer, this averment has no relevance whatsoever,
and cannot constitute an affirmative defense, to PNC's ability to confess judgment and to
Petitioners' breach of their obligations to make timely payments to PNC. Furthermore,
Petitioners never qualified for HUD financing and never obtained it.
131832.01421 /21845257x.1
19. Denied. After reasonable investigation, PNC is without knowledge or
information sufficient to form a belief as to the truthfulness of this averment and it is,
accordingly, denied. By way of further Answer, even if true, this averment has no relevance
whatsoever, and cannot constitute an affirmative defense, to PNC's ability to confess judgment
and to Petitioners' breach of their obligations to make timely payments to PNC.
20. Denied. This averment is a conclusion of law to which no response is required
and it is, accordingly, denied. By way of further Answer, the Judgment should not be stricken.
Petitioners allege that PNC "has provided no evidence that it is the successor to National City
Bank[("NCB"])" and that it has, therefore, not shown that it is entitled to enforce the agreements
between Petitioners and NCB. This argument must be rejected and cannot form a basis to strike
the confessed judgment. Pa.R.C.P. 2959 permits a judgment to be stricken or opened based only
upon allegations of defects appearing of record. PNC's Complaint alleges that PNC is the
successor to NCB in the caption and in the body of the Complaint. See Complaint at ¶1.
Because PNC's successor relationship to NCB appears of record and because Petitioners have not
identified anything in the record showing otherwise, it is entitled to enforce the contracts
between Petitioners and NCB.
Petitioner's exact argument has been considered and rejected by at least one Pennsylvania
court. In Fleet National Bank v. Sterling & Locke, Inc., 2006 Pa.Dist. & Cnty. Dec. LEXIS 352
(Montgomery County CCP, October 23, 2006), plaintiff, as successor to an original lender,
confessed judgment against defendants. Defendants argued that the confessed judgment should
be stricken based on the original lender's assignment of the agreement containing the provision
for confession of judgment. The court recognized that "a court may strike a confessed judgment
only for a defect appearing on the face of the record" and held that "the defendants are off base in
4
131832.01421 /21845257v.1
saying confession of judgment in favor of the lender's successor by merger without the
defendants' [sic] having specifically signed a new confession of judgment was a defect on the
face of the record." Id. at *5. The court held that the plaintiff bank could enforce the warrants of
attorney given to its predecessor without the execution of any new documents. Id.
Petitioners here have not identified any facts of record showing that PNC is not entitled
to confess judgment against them and have, accordingly, failed to meet their burden of showing a
defect of the confession of judgment. The enforcement of a warrant of attorney by a successor
bank is, as a matter of law, not a facial defect of the confession of judgment. See Id. Petitioners
have failed to allege any meritorious defense to the entry of judgment against them and their
Petition should be denied.
21. Denied. This averment is a conclusion of law to which no response is required
and it is, accordingly, denied. By way of further Answer, the attorneys' fees included in the
confessed judgment were not grossly excessive or even excessive. Initially, it should be noted
that the relevant warrants of attorney permitted PNC to obtain counsel fees in an amount equal to
10% of the principal owed. Here, therefore, PNC was authorized to confess judgment for
approximately $1.9 million in attorneys' fees - an amount equal to 10% of the outstanding
principal. PNC did not do so, and instead confessed judgment for a reasonable $200,000 in
attorneys' fees -just slightly more than 1% of the outstanding principal.
Pennsylvania case law has uniformly held that attorneys' fees in the amount of at least
10% of principal are reasonable and not grossly excessive. See Dollar Bank, Federal Savings
Bank v. Northwood Cheese Co., 431 Pa.Super. 541, 637 A.2d 309 (1994) (holding attorneys'
fees of 15% of principal in confessed judgment were reasonable and not grossly excessive
because they were authorized in the warrant of attorney and petitioner failed to present any
131832.01421 /21845257v.1
evidence or specific argument as to why the fees were excessive); Citicorp Mortgage, Inc. v.
Morrisville Hampton Villa e Realty Limited Partnership, 443 Pa.Super. 595, 662 A.2d 1120
(1995) (attorneys' fee of 10% of principal reasonable as a matter of law when specifically
provided for in loan documents and where petitioner had failed to allege anything more that
"bald assertions" as to unreasonableness of fee).
Here, Petitioners have done nothing more than make bald assertions that an attorneys' fee
of 1 % is unreasonable, despite the fact that the relevant warrant of attorney allowed PNC to
obtain attorneys fees of 10% of principal. Petitioners have not set forth any specific argument as
to why an attorneys' fee of $200,000 is grossly excessive. It is clear, however, that PNC's
confession for $200,000 in attorneys' fees is a very reasonable assessment of attorneys' fees in
this case. PNC had to confess judgment, and will have to continue to defend against Petitioners'
current and future motion practice and take all necessary steps to execute on the judgment and
recoup its losses. In addition, PNC has been informed of the possibility that Petitioners may file
bankruptcy. A bankruptcy filing would increase the time and effort, and the attorneys' fees, that
PNC would have to expend to collect on its judgment. The attorneys' fee sought by PNC which,
at 1 % of principal, is less than the 10% authorized under the warrant of attorney, is not
excessive, and is certainly not grossly excessive.
Even if the attorney fee was excessive (which is denied by PNC) - as opposed to grossly
excessive -the only remedy is that the "court will modify the judgment and cause a proper
judgment to be entered." Dollar Bank, 431 Pa.Super. at 551. A judgment will only be stricken
when the attorneys' fees are clearly grossly excessive. Id. As a matter of law, in this case, where
Petitioners have failed to do anything more than make bald assertions of the unreasonableness of
6
131832.01421 /21845257v.1
the attorneys' fee, PNC's attorneys' fee of 1 % of principal is reasonable, not grossly excessive,
and may not form the basis for the court to strike or open the judgment.
Here, although the relevant warrant of attorney provided that the amount of attorneys'
fees that PNC could recover shall not exceed the actual attorneys fees incurred by the bank, a
distinction must be drawn between the ability of PNC to confess judgment for attorneys' fees
equivalent to 10% of the principal owed and its ability to recover those fees from the debtor.
The warrant of attorney clearly authorized PNC to confess judgment for attorneys' fees
equal to 10% of principal and, as a matter of law, the attorneys' fee confessed by PNC is not
grossly excessive. Whether PNC can ultimately recover those fees from Petitioners requires a
separate analysis. The proper interpretation of the language limiting PNC's ability to recover
attorneys' fees is that it is permitted to confess judgment for attorneys' fees for 10% of principal;
if the Petitioner presents a specific argument, supported by relevant evidence as to the
unreasonableness of that fee, the court may modify the judgment and limit the amount of fees
PNC may recover. See Dollar Bank, 431 Pa.Super. at 551. Any other interpretation would
render the language regarding the ability to confess judgment for attorneys' fees in an amount of
10% of principal superfluous and meaningless. The proper time and opportunity for Petitioners
to object to attorneys' fees is after an execution sale has occurred and the sheriff is making its
distribution of sale proceeds.
22. Denied. This averment is a conclusion of law to which no response is required
and it is, accordingly, denied. By way of further Answer, PNC incorporates its response to
Paragraph 21 and further avers that Petitioners have not set forth any specific argument as to the
unreasonableness of PNC's attorneys' fee. Rather, Petitioners have merely set forth bald
assertions which, as a matter of law, cannot support the opening or striking of PNC's judgment.
7
131832.01421 /21845257v.1
23. Denied. This averment is a conclusion of law to which no response is required
and it is, accordingly, denied. It is specifically denied that Petitioners have a meritorious defense
that should result in the opening or striking of the confessed judgment, and a stay of execution
proceedings is not warranted.
WHEREFORE, Plaintiff/Respondent PNC Bank, National Association, As Successor to
National City Bank, respectfully requests that this Court deny Defendant/Petitioners' Petition to
Open or Strike Confessed Judgment, and order any such other relief as it deems fair and just,
including an award of attorneys' fees and costs.
BLANK ME LLP
By:
Francis X Crowley, Esquire
Atty. No. 41539
Lev Kalman, Esquire
Atty. No. 89844
BLANK ROME LLP
One Logan Square
Philadelphia, PA 19103-6998
(215) 569-5500
131832.01421/21845257v.1
VERIFICATION
The undersigned Lev Kalman, Esquire, hereby deposes and says that he is the attorney
for the Plaintiff in the above-captioned action, and that has reviewed the foregoing Answer and
that the facts contained therein are true and correct to the best of his knowledge, information and
belief. This Verification is made due to the unavailability of counsel's client. The undersigned
understands that the statements made herein are subject to the penalties of 18 Pa.C.S.A. § 4904,
relating to unsworn falsification to authorities.
Dated: January ~, 2010
9
131832.01421 /21845257v.1
CERTIFICATE OF SERVICE
I, Lev Kalman, Esquire, hereby certify that, on this Z~ day of January, 2010, a true and
correct copy of the foregoing Answer to Verified Petition to Open/Strike Confessed Judgment
was served, by email and first class mail, postage prepaid, on the following individual:
John C. Barnoski, Esquire
Cozen O'Connor
1900 Market Street
Philadelphia, PA 19103
10
131832.01421 /21845257v.1
t)F THE P i'H{ OTARY
20f0MA~ -3 PM 1~ Q7
PNC BANK, NATIONAL ASSOCIATION, CU~~~.;~.,~~. ~.wU ; ,, ,j
AS SUCCESSOR TO NATIONAL CITY BANK,p~=~ ~,~~y~~~`~~l~F COMMON PLEAS
. CUMBERLAND COUNTY
Plaintiff,
v. No: 09-8523 Civil Term
GRAY DRIVE, LP
And
HUGH J.T. SIMPSON and DIANE H.
SIMPSON, h/w,
. CONFESSION OF JUDGMENT
Defendants. FOR MONEY
.STIPULATED ORDER REGARDING DEFENDANTS' WITHDRAWAL OF PETITION
TO OPEN AND PLAINTIFFS' REDUCTION OF ATTORNEYS' FEES INCI,UllED IN
JUDGMENT BY CONFESSION
AND NOW this~~ da of'" ~ 2010, u on sti ttlation and agreement
Y P p
between the Plaintiff and Defendants of record, the following is hereby ORDERED and
DECREED with regard to the judgment obtained by confession on December 9, 2009, in the
amount of $19,385,728.66 by Plaintiff against Defendants:
1. The Rule to Show Cause entered on January 12, 2010 is vacated and is of no
further force and effect;
2. The Defendants confirm the right of Plaintiff to confess judgment and the validity
of the judgment, subject only to the adjustment set forth herein;
3. Defendants will withdraw, with prejudice, their Verified Petition to Strike Off
And/Or Open Confessed Judgment And For A Stay Of Execution Of The Judgment that was
filed on or about January 7, 2010;
4. Plaintiff will amend its confessed judgment by reducing oi~Iy the portion of that
judgment representing attorneys' fees to reflect the attorneys' fees actually incurred and billed to
date, related to the applicable loan documents and other agreements of the parties, in the amount
of $75,362.60. After this reduction and amendment, and. the addition of accrued interest of
$3,555.25 per diem from October 15, 2009 through March 3, 2010 for a total of $494,179.75, the
aniount of the judgment is to be $19,755,271.01.
Plaintiff has the right to fiirther amend the judgment to include additional
attorneys' fees, and any other fees and costs, that aze incurred in connection with, and
recoverable under, the applicable loan documents and agreements as the same are incurred;
The parties hereto agree to execute any and all supplementary documents and to
take all reasonable additional actions that inay be necessary or appropriate to give full force and
effect to the basic terms and intent of this Stipulation.
Signed this 3~ day of
J.
.SIGNATURES OF COUNSEL ON TH.~ FOLLOW_[NG SAGES
IT IS SO STIPULATED:
* Copies or facsimile transmissions of the below signatures shall have the same effect as
and may be substituted for an original.
C`
Jo C. Barnoski, ~ quire
Cozen O'Connor
1900 Market Street
Philadelphia, PA 19103
Counsel for Defendants
~Fl
le , Esq .ire
Lev Kalman, Esquii
Blank Rome LLP
One Logan Square
Philadelphia, PA 19103
Counsel for Plaint
'~L
I ~S /YLd.I l~
~~ /~
~~
BLANK ROME LLP
Francis X. Crowley, Esquire
Atty. No. 41539
Lev Kalman, Esquire
Atty. No. 89844
One Logan Square
Philadelphia, PA 19103-6998
(215) 569-5500
Attorneys for Plaintiff,
PNC Bank, National Association
as successor to National City Bank
PNC BANK, NATIONAL ASSOCIATION,
AS SUCCESSOR TO NATIONAL CITY BANK
Plaintiff,
~ ='
~-' ~ ~= ~
COURT OF COMMON PEAS :a= _
~ ,,
CUMBERLAND COUN`1:- ~ ~
f~-_
.
_
? ~'
~,. ~':
,r _`
No: 09-8523 Civil Term ~~ ~= ~'
~`? ~''fl
-~
n:
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.~~'
~,
GRAY DRIVE, LP, and HUGH J.T. SIMPSON
and DIANE H. SIMPSON, h/w,
Defendants.
CONFESSION OF JUDGMENT
FOR MONEY
PRAECIPE
To the Prothonotary:
Mark the judgment in the above case to the use of Pios Grande Graham Hill Apartments, L.P.
upon payment of your costs only.
Dated: ~~,(, ~ ~ , , 2010.
BLANK ROME LL
By:
Francis X Crowley, squire
Atty. No. 41539
Lev Kalman, Esquire
Atty. No. 89844
BLANK ROME LLP
One Logan Square
Philadelphia, PA 19103-6998
(215) 569-5500
~8•0o PQ IZTT`~
C~ ~~ 15~F(Q(p
Q,~dU y 43(v
131832.01421/12005318x.1
•~ -r .
BLANK ROME LLP
Francis X. Crowley, Esquire
Atty. No. 41539
Lev Kalman, Esquire
Atty. No. 89844
One Logan Square
Philadelphia, PA 19103-6998
(215) 569-5500
Attorneys for Plaintiff;
PNC Bank, National Association
as successor to National City Bank
PNC BANK, NATIONAL ASSOCIATION, .
AS SUCCESSOR TO NATIONAL CITY BANK
Plaintiff,
v.
GRAY DRIVE, LP, and HUGII J.'1'. SIMPSON
and DIANE H. SIMPSON, h/w,
Defendants.
COURT' OF COMMON PLEAS
CUMBERLAND COUNTY
No: 09-8523 Civil Term
CONFESSION OF JUDGMENT
FOIL MONEY
ASSIGNMENT OF JUDGMENT
KNOW ALL MEN BY 1'HI:SE PRESENTS, that the undersigned, on behalf of PNC
Bank, National Association, As Successor to National City Bank ("PNC"), with an address of
1900 E. 9~~' Street (B7-YB13-22-1}, Cleveland, OH 44114, with frill authority to sign on its
behalf, for good and valuable consideration, receipt of which is acknowledged, do hereby grant,
bargain, transfer, assign, and make over to Pios Grande Graham Hill Apartments, L.P., a
Delaware limited partnership, c/o 601 Delaware Avenue, Wilmington, Delaware 19801, its
successors and assigns, a certain judgment recovered by PNC in the Court of Common Pleas of
Cumberland County, Pennsylvania, 2009, No. 09-8523, against Gray Drive, LP, Hugh J.T.
Simpson and Diane H. Simpson, all of 76 Emlyn Drive, Mechanicsburg, PA 17055, for the sum
of $19,755,271.01, plus $3,555.25 per diem from March 4, 2010, until the date of payment;
131832.01421/12005665v.1
`.
-..
together with all the benefits and advantages that may be obtained thereby, and full power to
enforce and recover the judgment to his or her own and their own use. I further authorize and
empower the prothonotary or any attorney on behalf of the assignee to mark the judgment to the
assignee's use.
1N WI"CNESS WHEREOF, I have set my hand and seal this 24th day of June, 2010.
YNC BANK, NA"I'IONAL ASSOCIATION,
succe~~ t~ National City Bank
By: UY~~
Nar~re: rte' CA ~? o~~
Title: U're~ P~.,g ~a.~
Signed, Sealed, and Delivered
In t resence o
~~~~' (Witness)
ey Q~d .~rC`zef9
(WitnL'sS)
~J'~ Usc~sl~--~
131832.01421/12005665x.1
BLANK ROME LLP
Francis X. Crowley, Esquire
Atty. No. 41539
Lev Kalman, Esquire
Atty. No. 89844
One Logan Square
Philadelphia, PA 19103-6998
(215) 569-5500
PNC BANK, NATIONAL ASSOCIATION,
AS SUCCESSOR TO NATIONAL CITY BANK
Plaintiff,
V.
GRAY DRIVE, LP, and HUGH J.T. SIMPSON
and DIANE H. SIMPSON, hlw,
Defendants.
Attorneys for Plaintiff,
PNC Bank, National Association
as successor to National City Bank
COURT OF COMMON PLEAS
CUMBERLAND COUNTY
No: 09-8523 Civil Term
CONFESSION OF JUDGMENT
FOR MONEY
WITHDRAWAL OF APPEARANCE
TO THE PROTHONOTARY:
Kindly withdraw the undersigned's appearance on behalf of the Plaintiff, }ANC Bank,
National Association, as Successor to National City Bank.
BL ROME LLP
?- By:
Francis X Crow ey, Esquire
Atty. No. 41539
Lev Kalman, Esquire
., Atty. No. 89844
BLANK ROME LLP
-? One Logan Square
U Philadelphia, PA 19103-6998
n, 40 v (215) 569-5500
V
tv
133597.01000/21882317v.1
GEBHARDT & SMITH LLP
Ramsay M. Whitworth, Esq.
Attorney No. 85208
One South Street, Suite 2200
Baltimore, Maryland 21202
(410) 385-5101
Attorneys for Pios Grande Graham Hill
Apartments, L.P., assignor-in-interest to
Plaintiff, PNC Bank, National Association,
as successor to National City Bank
PNC BANK NATIONAL ASSOCIATION,
AS SUCCESSOR TO NATIONAL CITY
BANK,
Plaintiff
V.
GRAY DRIVE, LP
Defendant
COURT OF COMMON PLEAS
OF CUMBERLAND COUNTY
No: 09-8523 Civil Term
CONFESSION OF JUDGMENT
FOR MONEY
NOTICE OF ENTRY OF APPEARANCE
DUE TO ASSIGNMENT OF JUDGMENT
Pios Grande Graham Hill Apartments, L.P., assignor-in-interest to the Plaintiff, PNC
Bank National Association, as successor to National City Bank, hereby provides notice of the
appearance of its undersigned counsel on its behalf in this case as assignt-in-interest to the
Plaintiff, and further provides notice of the withdrawal of the appearance of Bank Rome LLP,
Francis X. Crowley, Esq. and Lev Kalman, Esq., pursuant to the Withdrawal of Appearance filed
t
by Blank Rome LLP on this same date.
r r,
v 43
GEBHARPT & SMITH LLP
rl-A44'
Ramsay orth , Esq.
Atty. No. 85208
One South Street, Suite 22100
Baltimore, Maryland 21202
(410) 385-5101