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HomeMy WebLinkAbout10-1402WEIR & PARTNERS LLP By: Daniel D. Haggerty, Esquire Attorney ID No. 77894 The Widener Building, Suite 500 1339 Chestnut Street Philadelphia, PA 19107 wweir@weirpartners.com (215) 665-8181 SOVEREIGN BANK 1100 Market Street Philadelphia, PA 19107 2010 FE3 26 Pp1 42 Attorneys for Sovereign Bank COURT OF COMMON PLEAS CUMBERLAND COUNTY Plaintiff, V. CIVIL ACTION NO. 10 - 14.09 0""'., L-Err' STEWARTSTOWN CORNERSTONE, LP 1 East Market Street, Suite 401 York, PA 17401 Defendant. NOTICE TO DEFEND NOTICE You have been sued in court. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this complaint and notice are served, by entering a written appearance personally or by attorney and filing in writing with the court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so the case may proceed without you and a judgment may be entered against you by the court without further notice for any money claimed in the complaint or for any other claim or relief requested by the plaintiff. You may lose money or property or other rights important to you. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW. THIS OFFICE CAN PROVIDE YOU WITH INFORMATION ABOUT HIRING A LAWYER. IF YOU CANNOT AFFORD TO HIRE A LAWYER, THIS OFFICE MAY BE ABLE TO PROVIDE YOU WITH INFORMATION ABOUT AGENCIES THAT MAY OFFER LEGAL SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE OR NO FEE. Cumberland County Bar Association Cumberland Law Journal 32 South Bedford Street Carlisle, PA 17013 Telephone: 717-249-3166 AVISO Le han demandado a ustted en la corte. Si usted quiere defenderse de estas demandas expuestas en las paginas siguientes, usted tiene veinte (20) dial de plazo al partir de la fecha de la demanda y la notificacion. Hace falta a sentar una comparencia escrita o en persona o con un abogado y entregara la cortte en forma escrita sus defenses o sus objeciones a las d mandas en contra de su persona. Sea a visado que si usted no se defiende, la cone tomara medidas y puede continuar la demanda en contra suya sin previo aviso o notificacion. Ademas, la corte puede decidir a favor del demandante y requiere que usted cumpla con todas las provisiones de esta de manda. Usted puede perder dinero o sus propiedades o otros de rechos importantes para usted. LLEVE ESTA DEMANDA A UN ABOGADO IN MEDIATAMENTE SI NO TIENE ABOGADO 00 SI NO TIENE EL DINEROSUFICIENTE DE PAGAR TAL SERVICIO, VAYA EN PERSONA O LLAME POR TELEFONO A LA OFICINA CUY DIRECCION SE ENCUENTRA ESCRITA ABAJO PARA AVERICUAR DONDE SE PUEDE CONSEGUIR ASISTENCIA LEGAL. Asociacion de Licenciados de Filadelfia Servicio de Referencia a Informacion Legal 32 South Bedford Street Carlisle, PA 17013 Telephone: 717-249-3166 qa. oo PA k'm/ VV-* sormq PIT *.23g 0 qa WEIR & PARTNERS LLP By: Daniel D. Haggerty, Esquire Attorney ID No. 77894 The Widener Building, Suite 500 1339 Chestnut Street Philadelphia, PA 19107 wweir@weirpartners.com (215) 665-8181 Attorneys for Sovereign Bank SOVEREIGN BANK COURT OF COMMON PLEAS 1100 Market Street CUMBERLAND COUNTY Philadelphia, PA 19107 Plaintiff, CIVIL ACTION V. NO. STEWARTSTOWN CORNERSTONE, LP 1 East Market Street, Suite 401 York, PA 17401 Defendant. COMPLAINT IN MORTGAGE FORECLOSURE Plaintiff, Sovereign Bank, by and through its undersigned counsel, hereby brings this complaint in mortgage foreclosure against Defendant, Stewartstown Cornerstone, LP and says: 1. Plaintiff, Sovereign Bank (the "Bank") is a federally chartered financial institution organized and existing under the laws of the United States with offices for the purpose of doing business located at 1100 Market Street, Philadelphia, Pennsylvania 19107. 2. Defendant, Stewartstown Cornerstone, LP ("Stewartstown") is a Pennsylvania Limited Partnership with an address at 1 East Market Street, Suite 401, York, Pennsylvania 17401. 3. On or about October 6, 2005, Stewartstown executed and delivered to the Bank, a promissory note (the "Note"), evidencing a loan extended to Stewartstown by the Bank in the principal amount of $5,858,992.00 (the "Loan") which Note was amended four times pursuant to certain promissory note modification agreements ("Modification Agreements") dated respectively January 25, 2006, January 31, 2008, March 19, 2008 and on July 16, 2008. True and correct copies of the Note, and all of the foregoing Modification Agreements are attached hereto collectively as Exhibit "A". 4. To secure payment of the Loan, Stewartstown executed and delivered to the Bank a mortgage dated October 6, 2005, which was duly recorded of record on October 10, 2005, in the Office of the Recorder of Deeds, Cumberland County, in Book 1926, Page 1120, et seq. (the "Mortgage"), which Mortgage was modified pursuant to a certain Modification of Mortgage (the "Mortgage Modification") dated January 25, 2006. True and correct copies of the Mortgage and Mortgage Modification are attached hereto collectively as Exhibits "B" and "C". (The Note, Modification Agreements, Mortgage and Mortgage Modification, in addition to any and all documents or instruments executed or created in connection with the Loan, shall sometimes be collectively referred to herein as the "Loan Documents.") 5. The Mortgage was executed in favor of the Bank, and granted a mortgage lien to the Bank upon the premises identified in the Mortgage, including all improvements thereon (the "Mortgaged Property") 6. The Mortgaged Property, which is more fully described in the Mortgage, includes: ALL THAT CERTAIN tracts or parcels of land and premises, situated lying and being in the Township of Silver Spring in the County of Cumberland and Commonwealth of Pennsylvania, more particularly described as follows: BEGINNING at an iron pin located on the centerline of sixty (60') foot right-of-way of an unnamed access drive (as set forth in Deed Book 35-A, page 534) and northern property line of Pennsylvania- American Water company; thence along lands now or formerly of Pennsylvania-American Water Company, North 88 degrees 15 minutes 30 seconds West a distance of 1,009.93 feet through two 351903 2 (2) iron pipes to an iron pipe set along the eastern bank of the Conodoguinet Creek; thence, along Conodoguinet Creek the following four (4) courses and distances: 1) North 24 degrees 46 minutes 00 seconds West a distance of 112.39 feet to a point; 2) North 30 degrees 00 minutes 00 seconds West a distance of 273.41 feet to a point; 3) North 13 degrees 45 minutes 00 seconds West a distance of 549.69 feet to a point; 4) North 22 degrees 26 minutes 00 seconds West a distance of 665.37 feet to a point; Thence, along lands now or formerly of Kwan and Iney Wan, North 76 degrees 15 minutes 00 seconds East a distance of 1,712.00 feet to a point along the centerline of Sample Bridge Road, thence, along said centerling of Sample Bridge Road, South 24 degrees 50 minutes 00 seconds East a distance of 759.80 feet to a point at the intersection of Sample Bridge Road and unnamed access drive; thence, along centerline of said unnamed access drive the following seven (7) courses and distances: 1) South 65 degrees 09 minutes 59 seconds West a distance of 25.00 feet to a point; 2) Along a curve to the left with a radius of 277.72 feet and curve length of 151.72 feet, a chord bearing of South 49 degrees 30 minutes 58 seconds West and chord distance of 149.84 feet to a point; 3) South 33 degrees 52 minutes 00 seconds West a distance of 275.05 feet to a point; 4) Along a curve to the left with a radius of 260.00 feet and curve length of 208.67 feet, a chord bearing of South 10 degrees 52 minutes 29 seconds West and chord distance of 203.11 feet to a point; 5) South 12 degrees 07 minutes 00 seconds East a distance of 318.95 feet to a point; 6) Along a curve to the right with a radius of 290.00 feet and curve length of 219.33 feet, a chord bearing of South 09 degrees 33 minutes 00 seconds West and chord distance of 214.14 feet to a point; 7) South 31 degrees 13 minutes 00 seconds West a distance of 207.21 feet to an iron pin set at the point of BEGINNING. Total tract is 2,591,437 square feet (59.49 acres). 351903 3 The Real Property or its address is commonly known as 59.49 acre residential tract land known as County Club Estates, Silver Spring Township, PA. 7. The Mortgaged Property is titled in the name of Stewartstown. 8. Stewartstown is in default under the terms of the Mortgage, in that Stewartstown has failed to pay the Loan pursuant to the terms of the Loan Documents. 9. As of January 4, 2010, Stewartstown is indebted to the Bank under the terms of the Loan as follows: Principal $2,779,426.43 Interest (through 1/4/2010) $ 215,184.46 Late Charges $ 95.00 Attorneys fees and costs to date $ 14,032.67 TOTAL REAL DEBT: $3,008,738.56 In addition, interest continues to accrue on principal at the per diem rate of $521.14, plus costs of suit, and attorneys' fees and expenses. WHEREFORE, Plaintiff, Sovereign Bank demands judgment in mortgage foreclosure in its favor and against Defendant, Stewartstown Cornerstone, LP, in the amount of $3,008,738.56, plus per diem interest of $521.14, plus costs of suit and additional attorneys' fees and expenses, and costs for foreclosure and sale of the Mortgaged Property. WEIR & PAXENERS LLP By. Dated: February 25, 2010 Attorneys foyPloti#f, Sovereign 351903 4 VERIFICATION I, Van J. Anderson, hereby verify that I am a Vice President of the Plaintiff, Sovereign Bank, and that I am authorized to make this verification on its behalf, and that the facts set forth in the foregoing Complaint in Mortgage Foreclosure are true and correct to the best of my knowledge, information and belief. I understand that this verification is made subject to the penalties 18 Pa. C.S.A. §4904, relating to unsworn falsification to authorities. r Van J. An rson, Vice President ?S??Ow Dated: Cab;}fY PROMISSORY NOTE Borrower: Stewwtstawn Cornerstone Limited Partnership Lender: Sovereign Bank 200 Bailey Drive, Suite 204 Commercial Banking Division Stewartstown. PA 17363 101 S. George Street - York, PA 17401 Principal Amount: $5,858,992.00 Date of Note: October 6, 2005 PROMISE TO PAY. Stswartstown Cornerstone Limited Partnership ("Borrower") promises to pay to Sovereign Bank ("Lender"), or order, in lawful money of the United States of America, the principal amount of Five Million Eight Hundred Fifty-eight Thousand Nine Hundred Ninety two & 001100 Dollars ($5,858,992.00). together with interest on the unpaid principal balance from October 6, 2DD5, until paid In full. PAYMENT. Borrower will pay this loan in one principal payment of $5,856,992.00 plus interest on October 6, 2007. This payment due on October 6. 2007, will be for all principal and all accrued interest not yet paid. In addition, Borrower will pay regular monthly payments of all accred unpaid interest due as of each payment date, beginning November 6, 2005, with all subsequent Interest payments to be due on the same day of each month after that. Unless otherwise agreed or required by applicable law, payments will be applied first to any accrued unpaid Interest; then to principal; then to any late charges; and then to any unpaid collection costs. The annual interest rate for this Note Is computed on a 3651360 basis; that is, by applying the ratio of the annual interest rate over a year of 360 days, muhipHed by.the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing. VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from time to time based on changes in an index which is the Sovereign Bank Prime Rate. The Sovereign Bank Prima Rate shall mean the rate per annum from time to time established by tender as the Prime Rate and made available by Lender at its main office or, in the discretion of Lender, the base, reference or other rate then designated by Lender for general commercial loan reference purposes, it being understood that such rate is a reference rate, not necessarily the lowest, established from time to time, which serves as the basis upon which effective interest rates are calculated for loans making reference thereto. (the "Index'). The Index is not necessarily the lowest rate charged by Lender on its loans and is set by Lender in its sole discretion. If the Index becomes unavailable during the term of this loan, Lander may designate a substitute index after notifying Borrower. Lander will tell Borrower the current Index rate upon Borrower's request. The interest rate change wilt not occur more often than each time as and when the "Index" changes. Borrower understands that Lander may make loans based on other rates as well. The interest rata to be applied to the unpaid principal balance of this Note will be at a rate of 0.500 percentage points over the index. NOTICE: Under no-circumstances will the interest rate on this Note be more then the maximum rate allowed by applicable law. PREPAYMENT. Borrower agrees that all loan fees and other prepaid finance charges are earned fully as of the date of the loan and will not be subject to refund upon early payment (whether voluntary or as a result of default), except as otherwise required by law. Except for the foregoing, Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not, unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked "paid in full", "without recourse", or will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts, including any check or other payment instrument that indicates that the payment constitutes "payment in full" of the amount owed oc that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: Sovereign Bank, P. 0. Box 12707 Reading, PA 19612-2707. LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment or $10.00, whichever is greater. INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final maturity, Lender, at its option, may, if permitted under applicable law, increase the variable interest rate on this Note to 3.500 percentage points over the Index. The interest rate will not exceed the maximum rate permitted by applicable law. If judgment is entered in connection with this Note, interest will continue to accrue on this Note after judgment at the interest rate applicable to this Note at the time judgment is entered. DEFAULT. Each of the following shall constitute an event of default ("Event of Default') under this Note: Payment Default. Borrower fails to make any payment when due under this Note. Other Defaulta. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Note or in any of the related documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lander and Borrower. Default in Favor of Third Parties. Borrower or any Grantor defaults under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that miry materially affect any of Borrower's property or Borrower's ability to repay this Note or perform Borrower's obligations under this Note or any of the related documents. Environmental Default. Failure of any party to comply with or perform when due any term, obligation, covenant or condition contained in any environmental agreement executed in connection with any loan. False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Note or the related documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter. Death or Insolvency. The dissolution or termination of Borrower's existence as a going business or the death of any partner, the insolvency of Borrower, the appointment of a receiver for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the loan. This includes a garnishment of any of Borrower's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceading and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any guaranty of the indebtedness evidenced by this Note. In the event of a death, Lender, at its option, may, but shall not be required to, permit the Guarantor's estate to PROMISSORY NOTE (Continued) Page 2 assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lander, and, in doing so, cure any Event of Default. Events Affecting General Partner of Borrower. Any of the preceding events occurs with respect to any general partner of Borrower or any general partner dies or becomes incompetent. Change In Ownership. The resignation or expulsion of any general partner with an ownership interest of twenty-five percent (25%) or more in Borrower. Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of this Note is impaired. Insecurity. Lender in good faith believes itself insecure. Cure Provisions. If arty default, other than a default in payment is curable and if Borrower has not been given a notice of a breach of the some provision of this Note within the preceding twelve (12) months, it may be cured if Borrower, after receiving written notice from Lender demanding cure of such default: (1) cures the default within thirty (301 days: or (2) if the cure requires more than thirty (30) days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default, Lender may, after giving such notices as required by applicable law, declare the entire unpaid principal balance on this Note and an accrued unpaid interest immediately due, and then Borrower will pay that amount. ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone also to help collect this Note If Borrower does not pay. Borrower will pay Lander that amount. This includes, subject to any limits under applicable law. Lender's attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit, including attorneys' fees, expenses for bankruptcy proceedings (including efforts to modify or vacete arty automatic stay or injunction), and appeals, If not prohibited by applicable law, Borrower also will pay any court costs, in addition to all other sums provided by Law. JURY WAIVER. Lender and Borrowar hereby waive the right to any jury trial in any action, proceeding, or counterciaim brought by either Lender or Borrower against the other. GOVERNING LAW. This Note will be governed by federal Law applicable to Lender and, to the extent not preempted by federal law, the laws of the Commonwealth of Pennsylvania without regard to its conflicts of law provisions. This Note has been accepted by Lender in the Commonwealth of Pennsylvania. RIGHT OF SETOFF. To the extent permitted by applicable law, Lander reserves a right of setoff in all Borrower's accounts with Lender {whether checking, savings, or some other account). This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the indebtedness against any and all such accounts. and at ender'c notion to administratively freeze all such accounts to allow Lender to protect Lender's charge and setoff rights provided in this paragraph. SUCCESSOR INTERESTS. The terns of this Note -shall be binding upon Borrower, and upon Borrower's heirs, personal representatives, successors and assigns, and shall inure to the benefit of Lender and its successors and assigns. GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower and any other person who signs, guarantees or endorses this Note, to the extent allowed by law, waive presentment, demand for payment, and notice of dishonor. Upon any change in the terms of this Note, and unless otherwise expressly stated in writing, no party who signs this Note, whether as maker, guarantor, accommodation maker or endorser, shall be released from I)abTity. All such parties agree that Lander may renew or extend (repeatedly and for any length of time) this loan or release any party, partner, or guarantor or collateral; or impair, fail to realize upon or perfect Lender's security interest in the collateral; and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lander may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Note are joint and several. If any portion of this Note is for any reason determined to be unenforceable, it will not affect the enforceability of any other provisions of this Note. CONFESSION OF JUDGMENT. BORROWER HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR THE PROTHONOTARY OR CLERK OF ANY COURT IN THE COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE, TO APPEAR AT ANY TIME FOR BORROWER AFTER A DEFAULT UNDER THIS NOTE AND WITH OR WITHOUT COMPLAINT FILED, CONFESS OR ENTER JUDGMENT AGAINST BORROWER FOR THE ENTIRE PRINCIPAL BALANCE OF THIS NOTE AND ALL ACCRUED INTEREST, LATE CHARGES AND ANY AND ALL AMOUNTS EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECURING THIS NOTE, TOGETHER WITH COSTS OF SUIT, AND AN ATTORNEY'S COMMISSION OF TEN PERCENT (10%) OF THE UNPAID PRINCIPAL BALANCE AND ACCRUED INTEREST FOR COLLECTION, BUT IN ANY EVENT NOT LESS THAN FIVE HUNDRED DOLLARS (6500) ON WHICH JUDGMENT OR JUDGMENTS ONE OR MORE EXECUTIONS MAY ISSUE IMMEDIATELY; AND FOR SO DOING, THIS NOTE OR A COPY OF THIS NOTE VERIFIED BY AFFIDAVIT SHALL BE SUFFICIENT WARRANT. THE AUTHORITY GRANTED IN THIS NOTE TO CONFESS JUDGMENT AGAINST BORROWER SHALL NOT BE EXHAUSTED BY ANY EXERCISE OF THAT AUTHORITY, BUT SHALL CONTINUE FROM TIME TO TIME AND AT ALL TIMES UNTIL PAYMENT IN FULL OF ALL AMOUNTS DUE UNDER THIS NOTE. BORROWER HEREBY WAIVES ANY RIGHT BORROWER MAY HAVE TO NOTICE OR TO A HEARING IN CONNECTION WITH ANY SUCH CONFESSION OF JUDGMENT AND STATES THAT EITHER A REPRESENTATNE OF LENDER SPECIFICALLY CALLED THIS CONFESSION OF JUDGMENT PROVISION TO BORROWER'S ATTENTION OR BORROWER HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL. PROMISSORY NOTE (Continued) Page 3 PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO THE TERMS. OF THE NOTE. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE. THIS NOTE IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS NOTE IS AND.SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. BORROWER: CORNERSTONE LIMITED, PARTNERSHIP GROUP, INC., General Partner of StewaMtawn Cornerstone Limited Partnership BY: " a uel Juffe, (jPrei Development Grou Inc. LENDER: SOVEREIGN BANK IL erstons Stewartstown Comerstom, 41 Partnership Loan #51648025 -Q I Page 1 j Sovereign Bank NOTE MODIFICATION AGREEMENT This Agreement made this 25th day of January, 2006 by and between, Stewartstown Cornerstone Limited Partnership, having an address of 200 Bailey Drive, Suite 204, Stewartstown, PA 17363 (the "Borrower"); Samuel Juffe, having an address of 68 Cranbury Neck Road, Cranbury, NJ 08512, John M. Huenke, having an address of 4400 Bridgeview Road, Stewartstown, PA 17363, and Bruce W. Wilt, having an address of P.O. Box 189, Manville, NJ 08835 (the "Guarantors'); and Sovereign Bank, having an address of 101 S. George Street, York, PA 17401 (the "Lender"); Whereas, on October 6, 2005, the Borrower obtained from Lender a Line of Credit evidenced by a Promissory Note in the amount of Five Million Eight Hundred Fifty Eight Thousand Nine Hundred Ninety Two and 00/100 Dollars ($5,858,992.00) (the 'Principal Amount) bearing the same date (the "Note"). The Note is due and payable upon Lender's Demand (the "Maturity Date"); and Whereas, the rate of interest applied to the unpaid principal balance on the Note is equal to one half percent (.50%) above Lender's Prime as same may change from time to time; and Whereas, the Note is secured by a mortgage on 59.49 acres of land known as Country Club Es tates, Silver Spring Township, PA, (the "Mortgage"). The Mortgage was recorded in the County Recordee Whereas, a sales pace of six units per quarter will be established starting in January of 2006. The execution of a sales contract defines a sale. This covenant will be reviewed every three months. Sales ahead of the required sales pace in one period may only be applied to the sales requirement in the next period but not subsequent periods. If the required sales pace is not achieved the Borrower will make a payment equal to the required lot release price times the number of lots below the sales requirement. Whereas, the outstanding principal balance owing on the Note as of January 18, 2006, is Five Million Eight Hundred Fifty Eight Thousand Nine Hundred Ninety Two and 00/100 Dollars ($5,858,992.00) (the "Outstanding Balance"); and Whereas, at the request of the Borrower and in agreement of Lender the Note will be modified. Now Therefore, in consideration of the mutual benefits inuring to Borrower and Lender and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and intending to be legally bound hereby, it is agreed that the Note is hereby modified as described below. 1. Upon execution of the within Agreement, the Principal Amount of the Note is hereby increased from $5,858,992.00 to $6,506,492.00. 2. Borrower promises to pay to Lender or order, in lawful money of the United States of America, the principal amount of Six Million Five Hundred Sic Thousand Four Hundred Ninety Two and 001100 Dollars ($6,506,492.00) or so much as may be outstanding, together with interest on the unpaid principal balance of each advance. Borrower will continue to pay regular monthly payments of all accrued unpaid interest due as of each payment due date. Stewartstown Comerston, .. ad Partnership Loan #51648025 Page 2 3. Concurrent with the execution and delivery of this Agreement Borrower shall execute and deliver to Lender a Modification of Mortgage on 59.49 acres of land known as Country Club Estate, Silver Spring Township, PA. The lien amount shall be increased from $5,858,992.00 to $6,506,492.00. 4. The required lot release price shall be modified from $58,600.00 to $64,000.00 per IOL Guarantors acknowledge and consent to the Borrower's execution and delivery of this Note Modification Agreement and the Modification of Mortgage and hereby ratifies and affirms the actions taken therein. The Guarantors affirm that as of the date herein, the obligations and liabilities of the Guarantor under the Guarantees remain absolute, unconditional and in full force and effect. All terms of the Note will continue to be fully effective, except to the extent that any of them are expressly changed by this Agreement. The undersigned Borrower and Guarantors hereby confirm and acknowledge that they have no defense, counterclaim or setoff, which could affect the enforceability of the Note, and other Loan Documents and hereby reaffirm the validity of the Note and all other Loan Documents. This Agreement will be binding upon the Parties hereto, as well as their Successors and assigns, as the case may be. In Witness hereof, the parties hereto have hereunto set their hands and seal this 25th day of January 2006. LENDER: Witness: SOVEREIGN BANK Witness: BORR R: Stew town amuel JufFe, Limited Partnership Stewartstown Cornerstone Limited Partnership Loan #51648025-75 # Sovereign Bank SECOND PROMISSORY NOTE MODIFICATION AGREEMENT This Agreement made this 3 117 day of January, 2008 by and between, Stewartstown Cornerstone Limited Partnership, having an address of 200 Bailey Drive, Suite 204, Stewartstown, PA 17363 (the 'Borrower); Samuel Juffe, having an address of 1100 Centennial Avenue, Piscataway, NJ 08854, John M. Huenks, having an address of 4400 Bridgeview Road, Stewartstown, PA 17363, and Bruce W. Wilt, having an address of P.O. Box 189, Manville, NJ 08835 (the 'Guarantors'); and Sovereign Bank, having an address of 235 North Second Street, Harrisburg, PA 17101 (the *Lender*); Whereas, on October 6, 2005, the Borrower obtained from Lender a Time Loan evidenced by a Promissory Note in the amount of Five Million Eight Hundred Fifty Eight Thousand Nine Hundred Ninety Two and 001100 Dollars ($5,858,992.00) (the 'Principal Amount") bearing the same date, which Note was subsequently increased to the amount of $6,506,492.00 (the "Note'). The Note has a maturity date due and payable in full on October 6, 2007 (the "Maturity Date'); and Whereas, on January 25, 2006, Borrower obtained from Lender a Note Modification 4(the "First Modification'); and Whereas, the outstanding principal balance owing on the Note as of December 31, 2007 is Two Million Six Hundred Twenty Eight Thousand Eight Hundred Thirty Nine and 161100 Dollars ($2,628,839.16) (the "Outstanding Balance'); and further modified. Now Therefore, in consideration of the mutual benefits inuring to Borrower and Lender and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and intending to be legally bound hereby, it is agreed that the Note is hereby modified as described below. 1. Upon execution of the within Agreement, the Maturity Date on the Note shall be extended from October 6, 2007 February 6, 2008, at which Urns the outstanding principal balance, together with accrued unpaid Interest, late fees and unpaid loan charges, if any, shall be due and payable In full. Borrower will continue to pay regular monthly payments as of each payment due date. The Guarantors acknowledge and consent to the Borrowers execution and delivery of this Note Modification Agreement and hereby ratifies and affirms the actions taken therein. The Guarantors affirm that as of the date herein, the obligation and liability of the Guarantors under the Guaranties remain absolute, unconditional and in full force and effect. All terms of the Note will continue to be fully effective, except to the extent that any of them are expressly changed by this Agreement The undersigned Borrower and Guarantors hereby confirm and acknowledge that they have no defense, counterclaim or setoff, which could affect the enforceability of the Note, and other Loan Documents and hereby reaffirm the validity of the Note and all other Loan Documents. rw Stewartstown Cornerstone Limited Partnership Loan #51648025-75 CONFESSION OF JUDGMENT: BORROWER HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR THE PROTHONOTARY OR CLERK OF ANY COURT IN THE COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE, TO APPEAR AT ANY TIME FOR BORROWER AFTER A DEFAULT UNDER THE NOTE AS MODIFIED HEREIN AND WITH OR WITHOUT COMPLAINT FILED, CONFESS OR ENTER JUDGMENT AGAINST BORROWER FOR THE ENTIRE PRINCIPAL BALANCE OF THE NOTE, AS MODIFIED, AND ALL ACCRUED INTEREST, LATE CHARGES AND ANY AND ALL AMOUNTS EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECURING THE NOTE, TOGETHER WITH COSTS OF SUIT, AND AN ATTORNEY'S COMMISSION OF TEN PERCENT (10%) OF THE UNPAID PRINCIPAL BALANCE AND ACCRUED INTEREST FOR COLLECTION, BUT IN ANY EVENT NOT LESS THAN FIVE HUNDRED DOLLARS ($500.00) ON WHICH JUDGMENT OR JUDGMENTS ONE OR MORE EXECUTIONS MAY ISSUE IMMEDIATELY; AND FOR SO DOING, THIS MODIFICATION AGREEMENT OR A COPY OF THIS MODIFICATION AGREEMENT VERIFIED BY AFFIDAVIT SHALL BE SUFFICIENT WARRANT. THE AUTHORITY GRANTED IN THIS MODIFICATION AGREEMENT TO CONFESS JUDGMENT AGAINST BORROWER SHALL NOT BE EXHAUSTED BY ANY EXERCISE OF THAT AUTHORITY, BUT SHALL CONTINUE FROM TIME TO TIME AND AT ALL TIMES UNTIL PAYMENT IN FULL OF ALL AMOUNTS DUE UNDER THE NOTE AND THIS MODIFICATION AGREEMENT. BORROWER HEREBY WANES ANY RIGHT BORROWER MAY HAVE TO NOTICE OR TO A HEARING IN CONNECTION WITH ANY SUCH CONFESSION OF JUDGMENT AND STATES THAT EITHER A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THIS CONFESSION OF JUDGMENT PROVISION TO BORROWER'S ATTENTION OR BORROWER HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL. This Agreement will be binding upon the Parties hereto, as well as their Successors and assigns, as the case may be. In Witness hereof, the parties hereto have hereunto set their hands and seal this 3? day ATTEST: hip rw LENDER: SOVE I N BANK ?? By: Stewartstown Comers,_,= Limited Partnership Loan #51648025-75 DISCLOSURE FOR CONFESSION OF JUDGMENT THE UNDERSIGNED IS EXECUTING ON BEHALF OF DECLARANT, THIS -[ jZ DAY OF JANUARY, 2008 A MODIFICATION AGREEMENT OF A PROMISSORY NOTE DATED OCTOBER 6, 2005 IN THE ORIGINAL PRINCIPAL AMOUNT OF $5,858,992.00, SUBSEQUENTLY INCREASED TO $6,506,492.00 OBLIGATING DECLARANT TO REPAY THE AMOUNT AS STATED THEREIN. A. THE UNDERSIGNED UNDERSTANDS THAT THE MODIFICATION AGREEMENT CONTAINS A CONFESSION OF JUDGEMENT PROVISION THAT WOULD PERMIT LENDER TO ENTER JUDGMENT AGAINST DECLARANT IN COURT, AFTER A DEFAULT ON THE NOTE, WITHOUT ADVANCE NOTICE TO DECLARANT AND WITHOUT OFFERING DECLARANT AN OPPORTUNITY TO DEFEND AGAINST THE ENTRY OF JUDGMENT. IN EXECUTING THE MODIFICATION AGREEMENT, BEING FULLY AWARE OF DECLARANTS RIGHTS TO ADVANCE NOTICE AND TO A HEARING TO CONTEST THE VALIDITY OF ANY JUDGMENT OR OTHER CLAIMS THAT LENDER MAY ASSERT AGAINST DECLARANT UNDER THE NOTE, THE UNDERSIGNED, ON BEHALF OF THE DECLARANT, IS KNOWINGLY, INTELLIGENTLY, AND VOLUNTARILY WAIVING THESE RIGHTS, INCLUDING ANY RIGHT TO ADVANCE NOTICE OF THE ENTRY OF JUDGMENT, AND THE UNDERSIG D EXPRESSLY AGREES AND CONSENTS TO LENDER' S ENTERING JUDGMEN AGAINST DECLARANT BY CONFESSION AS PROVIDED FOR IN THE CONFES 0 J DGMENT PROVISION. INITIALS: B. THE UNDERSIGNED FURTHER UNDERSTANDS THAT IN ADDITION TO GIVING LENDER THE RIGHT TO ENTER JUDGMENT AGAINST DECLARANT WITHOUT ADVANCE NOTICE OR A HEARING, THE CONFESSION OF JUDGMENT PROVISION IN THE MODIFICATION AGREEMENT ALSO CONTAINS LANGUAGE THAT WOULD PERMIT LENDER, AFTER ENTRY OF JUDGMENT, AGAIN WITHOUT EITHER ADVANCE NOTICE OR A HEARING, TO EXECUTE ON THE JUDGMENT BY FORECLOSING UPON, ATTACHING, LEVYING ON, TAKING POSSESSION OF OR OTHERWISE SEIZING DECLARANTS PROPERTY, IN FULL OR PARTIAL PAYMENT OF THE JUDGMENT. IN EXECUTING THE MODIFICATION AGREEMENT, BEING FULLY AWARE OF DECLARANTS RIGHTS TO ADVANCE NOTICE AND A HEARING AFTER JUDGMENT IS ENTERED AND BEFORE EXECUTION ON THE JUDGMENT, THE UNDERSIGNED, ON BEHALF OF DECLARANT, IS KNOWINGLY, INTELLIGENTLY AND VOLUNTARILY WAIVING THESE RIGHTS, AND THE UNDERSI ED EXPRESSLY AGREES AND CONSENTS TO LENDER'S IMMEDIATELY EXECUTI ON THE JUDGMENT, IN ANY MANNER PERMITTED BY APPLICABLE STATE AND FEDERAL wOUT GIVING DECLARANT ANY ADVANCE NOTICE. INITIALS: C. AFTER HAVING READ AND DETERMINED WHICH OF THE FOLLOWING STATEMENTS ARE APPLICABLE, BY INITIALING EACH STATEMENT THAT APPLIES, THE UNDERSIGNED REPRESENTS THAT: INITIALS 1. DECLARANT WAS REPRESENTED BY DECLARANTS OWN INDEPENDENT Y COUNSEL IN CONNECTION WITH THE MODIFICATION AGREEMENT. 2. A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THE CONFESSION OF JUDGMENT PROVISION IN THE MODIFICATION AGREEMENT TO DECLARANTS ATTENTION. rw Stewartstown Comersu..1t; Limited Partnership Loan #51648025-75 THIS DISCLOSURE IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS DISCLOSURE IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. DECLARANT: Rrmonu mis. Cornerstone Limited Partnership By: rw Stewartstown Comerstot.- Limited Partnership Loan #51648025-75 Sovereign Bank THIRD PROMISSORY NOTE MODIFICATION AGREEMENT This Agreement made this 19+? day of March, 2008 by and between, Stewartstown Cornerstone Limited Partnership, having an address of 200 Bailey Drive, Suite 204, Stewartstown, PA 17363 (the "Borrower"); Samuel Juffe, having an address of 1100 Centennial Avenue, Piscataway, NJ 08854, John M. Huenke, having an address of 4400 Bridgeview Road, Stewartstown, PA 17363, Bruce W. Wilt, having an address of P.O. Box 189, Manville, N.J. 08835 and Cornerstone Development Group, Inc., having and address of 200 Bailey Drive, Suite 204, Stewartstown, PA 17363 (the "Guarantors'); and Sovereign Bank, having an address of 235 North Second Street, Harrisburg, PA 17101 (the 'Lender"); Whereas, on October 6, 2005, the Borrower obtained from Lender a Time Loan evidenced by a Promissory Note in the amount of Five Million Eight Hundred Fifty Eight Thousand Nine Hundred Ninety Two and 00/100 Dollars ($5,858,992.00) (the 'Principal Amount") bearing the same date, which Note was subsequently increased to the amount of $6,506,492.00 (the "Note"). The Note had a maturity date due. and payable in full on October 6, 2007, which date was subsequently extended to a current maturity date of February 6, 2008 (the 'Maturity Date'); and Whereas, on January 25, 2006, the Borrower obtained from Lender a Note Modification (the "First Modification'); and Whereas, on January 31, 2008, the Borrower obtained from Lender a Second Promissory Note Modification Agreement (the 'Second Modification'); and Whereas, the outstanding principal balance owing on the Note as of March 17, 2008 is Two Million Seven Hundred One Thousand One Hundred Forty Two and 37/100 Dollars ($2,701,142.37) (the 'Outstanding Balance'); and Whereas, at the request of the Borrower and in agreement of Lender the Note will be further modified. Now Therefore, in consideration of the mutual benefits inuring to Borrower and Lender and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and intending to be legally bound hereby, it is agreed that the Note is hereby modified as described below. 1. Upon execution of the within Agreement, the Maturity Date on the Note shall be extended from February 6, 2008 to May 6, 2008, at which time the outstanding principal balance, together with accrued unpaid interest, late fees and unpaid loan charges, if any, shall be due and payable in full. Borrower will continue to pay regular monthly payments as of each payment due date. The Guarantors acknowledge and consent to the Borrower's execution and delivery of this Note Modification Agreement and hereby ratifies and affirms the actions taken therein. The Guarantors affirm- that as of the date herein, the obligation and liability of the Guarantors under the Guaranties remain absolute, unconditional and in full force and effect. All terms of the Note will continue to be fully effective, except to the extent that any of them are expressly changed by this Agreement. The undersigned Borrower and Guarantors rW Stewartstown Comerstoi,- Limited Partnership Loan #51648025-75 hereby confirm and acknowledge that they have no defense, counterclaim or setoff, which could affect the enforceability of the Note, and other Loan Documents and hereby reaffirm the validity of the Note and all other Loan Documents. CONFESSION OF JUDGMENT: BORROWER HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR THE PROTHONOTARY OR CLERK OF ANY COURT IN THE COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE, TO APPEAR AT ANY TIME FOR BORROWER AFTER A DEFAULT UNDER THE NOTE AS MODIFIED HEREIN AND WITH OR WITHOUT COMPLAINT FILED, CONFESS OR ENTER JUDGMENT AGAINST BORROWER FOR THE ENTIRE PRINCIPAL BALANCE OF THE NOTE, AS MODIFIED, AND ALL ACCRUED INTEREST, LATE CHARGES AND ANY AND ALL AMOUNTS EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECURING THE NOTE, TOGETHER WITH COSTS OF SUIT, AND AN ATTORNEY'S COMMISSION OF TEN PERCENT (10%) OF THE UNPAID PRINCIPAL BALANCE AND ACCRUED INTEREST FOR COLLECTION, BUT IN ANY EVENT NOT LESS THAN FIVE HUNDRED DOLLARS ($500.00) ON WHICH JUDGMENT OR JUDGMENTS ONE OR MORE EXECUTIONS MAY ISSUE IMMEDIATELY; AND FOR SO DOING, THIS MODIFICATION AGREEMENT OR A COPY OF THIS MODIFICATION AGREEMENT VERIFIED BY AFFIDAVIT SHALL BE SUFFICIENT WARRANT. THE AUTHORITY GRANTED IN THIS MODIFICATION AGREEMENT TO CONFESS JUDGMENT AGAINST BORROWER SHALL NOT BE EXHAUSTED BY ANY EXERCISE ,OF THAT AUTHORITY, BUT SHALL CONTINUE FROM TIME TO TIME AND AT ALL TIMES UNTIL PAYMENT IN FULL OF ALL AMOUNTS DUE UNDER THE NOTE AND THIS MODIFICATION AGREEMENT. BORROWER HEREBY WAIVES ANY RIGHT BORROWER MAY HAVE TO NOTICE OR TO A HEARING IN CONNECTION WITH ANY SUCH CONFESSION OF JUDGMENT AND STATES THAT EITHER A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THIS CONFESSION OF JUDGMENT PROVISION TO BORROWER'S ATTENTION OR BORROWER HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL. This Agreement will be binding upon the Parties hereto, as well as their Successors and assigns, as the case may be. In Witness hereof, the parties hereto have hereunto set their hands and seal this r day of March 2008. ATTEST: LENDER: SOVEREIGN BANK - Adu-lek B ne Limited Partnership el Juffe, Presi M,ERCIAL GUARANTORS: 7rstone De elopment Group, Inc. el Juffe, Pre§id rW Stewartstown Cornerstone Limited Partnership Loan #51648025-75 rw Stewartstown Cornerstone Limited Partnership Loan #51648025-75 DISCLOSURE FOR CONFESSION OF JUDGMENT THE UNDERSIGNED IS EXECUTING ON BEHALF OF DECLARANT, THIS 11 DAY OF MARCH, 2008 A MODIFICATION AGREEMENT OF A PROMISSORY NOTE DATED OCTOBER 6, 2005 IN THE ORIGINAL PRINCIPAL AMOUNT OF $5,858,992.00, SUBSEQUENTLY INCREASED TO $6,506,492.00 OBLIGATING DECLARANT TO REPAY THE AMOUNT AS STATED THEREIN. A. THE UNDERSIGNED UNDERSTANDS THAT THE MODIFICATION AGREEMENT CONTAINS A CONFESSION OF JUDGEMENT PROVISION THAT WOULD PERMIT LENDER TO ENTER JUDGMENT AGAINST DECLARANT IN COURT, AFTER A DEFAULT ON THE NOTE, WITHOUT ADVANCE NOTICE TO DECLARANT AND WITHOUT OFFERING DECLARANT AN OPPORTUNITY TO DEFEND AGAINST THE ENTRY OF JUDGMENT. IN EXECUTING THE MODIFICATION AGREEMENT, BEING FULLY AWARE OF DECLARANT'S RIGHTS TO ADVANCE NOTICE AND TO A HEARING TO CONTEST THE VALIDITY OF ANY JUDGMENT OR OTHER CLAIMS THAT LENDER MAY ASSERT AGAINST DECLARANT UNDER THE NOTE, THE UNDERSIGNED, ON BEHALF OF THE DECLARANT, IS KNOWINGLY, INTELLIGENTLY, AND VOLUNTARILY WAIVING THESE RIGHTS, INCLUDING ANY RIGHT T ADVANCE NOTICE OF THE ENTRY OF JUDGMENT, AND THE UNDER IGNED EXPRE LY AGREES AND CONSENTS TO LENDER' S ENTERING JUDG NCLARANT BY CONFESSION AS PROVIDED FOR IN THE CONF FF G PROVISION. B. THE UNDERSIGNED FURTHER UNDERSTANDS THAT IN ADDITION TO GIVING NDER THE RIGHT TO ENTER JUDGMENT AGAINST DECLARANT WITHOUT ADVANCE NOTICE OR A HEARING, THE CONFESSION OF JUDGMENT PROVISION IN THE MODIFICATION AGREEMENT ALSO CONTAINS LANGUAGE THAT WOULD PERMIT LENDER, AFTER ENTRY OF JUDGMENT, AGAIN WITHOUT EITHER ADVANCE NOTICE OR A HEARING, TO EXECUTE ON THE JUDGMENT BY FORECLOSING UPON, ATTACHING, LEVYING ON, TAKING POSSESSION OF OR OTHERWISE SEIZING DECLARANT'S PROPERTY, IN FULL OR PARTIAL PAYMENT OF THE JUDGMENT. IN EXECUTING THE MODIFICATION AGREEMENT, BEING FULLY AWARE OF DECLARANT'S RIGHTS TO ADVANCE NOTICE AND A HEARING AFTER JUDGMENT IS ENTERED AND BEFORE EXECUTION ON THE JUDGMENT, THE UNDERSIGNED, ON BEHALF OF DECLARANT, IS KNOWINGLY, INTEJEEGMENT, TLY AND VOLUNTARILY WAIVING THESE RIGHTS, AND THE UNDE ED LY AGREES AND CONSENTS TO LENDER'S IMMEDIATELY EXE IN IN ANY MANNER PERMITTED BY APPLICABLE STATE AND FED ING DECLARANT ANY ADVANCE NOTICE. KIMIAl n. C;. AFTER HAVING READ AND DETERMINED WHICH OF THE FOLLOWING STATEN TS ARE APPLICABLE, BY INITIALING EACH STATEMENT THAT APPLIES, THE UNDERSIGNED REPRESENTS THAT: INITIAI S DECLARANT WAS REPRESENTED BY DECLARANTS OWN INDEPENDENT COUNSEL IN CONNECTION WITH THE MODIFICATION AGREEMENT. A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THE CONFESSION rW Stewartstown Cornerstone Limited Partnership Loan #51648025-75 OF JUDGMENT PROVISION IN THE MODIFICATION AGREEMENT TO DECLARANTS ATTENTION. THIS DISCLOSURE IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS DISCLOSURE IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. DECLARRAt BORROWFR- Cornerstone Limited Partnership By: uffe, rw Stewartstown Come, mi#ed Partnership Loan No. 51648025.70 Page 1 of 3 Sovereign Bank FOURTH PROMISSORY NOTE MODIFICATION AGREEMENT This Agreement made this _ 6 day of July, 2008 by and between, Stewartstown Cornerstone Limited Partnership, having an address of 1 East Market Street, Suite 401, York, PA 17401 (the 'Borrower'; Samuel Juffe, having an address of 1100 Centennial Avenue, Piscataway, NJ 08854, John M. Huenke, having an address of 4400 Bridgeview Road, Stewartstown, PA 17363, Bruce W. Witt, having an address of P.O. Box 189, Manville, N.J. 08835 and Cornerstone Development Group, Inc., having and address of 1 East Market Street, Suite 401, York, PA 17401 (the `Guarantors"); and Sovereign Bank, having an address of 235 North Second Street, Harrisburg, PA 17101 (the `Lender'); Whereas, on October 6, 2005, the Borrower obtained from Lender a Loan evidenced by a Promissory Note in the amount of Five Million Eight Hundred Fifty Eight Thousand Nine Hundred Ninety Two and 00/100 Dollars ($5,858,992.00) (the `Principal Amount") bearing the same date, which Note was subsequently increased to a principal amount of $6,506,492.00 (the `Note").' The Note had a maturity date due and payable in full on October 6, 2007, which date was subsequently extended to May 6, 2008 (the `Maturity Date'); and Whereas, on January 25, 2006, the Borrower obtained from Lender a Note Modification; and Whereas, on January 31, 2008, the Borrower obtained from Lender a Second Promissory Note Modification Agreement; and Whereas, on March 19, 2008, the Borrower obtained from Lender a Third Promissory Note Modification Agreement; and Whereas, the outstanding principal balance owing on the Note as of July 2, 2008 is Two Million Seven Hundred Forty Thousand Nine Hundred Eighty Five and 08/100 Dollars ($2,740,985.08) (the `Outstanding Balance"); and Whereas, at the request of the Borrower and in agreement of Lender the Note will be further modified. Now Therefore, in consideration of the mutual benefits inuring to Borrower and Lender and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and Intending to be legally bound hereby, it is agreed that the Note is hereby modified as described below. 1. Upon execution of the within Agreement, the Maturity Date on the Note shall be extended from May 6, 2008 to August 6, 2008, at which time the outstanding principal balance, together with accrued unpaid Interest, late fees and unpaid loan charges, If any, shall be due and payable In full. Borrower will. continue to pay regular monthly payments as of each payment due date. The Guarantors acknowledge and consent to the Borrower's execution and delivery of this Note Modification Agreement and hereby ratify and affirm the actions taken therein. The Guarantors affirm that as of the date herein, the obligation and liability of the Guarantors under the Guarantees remain absolute, unconditional and in full force and effect. All terms of the Note will continue to be fully effective, except to the extent that any of them are expressly changed by this Agreement. The undersigned Borrower and Guarantors hereby confirm and acknowledge that they have no defense, counterclaim or setoff, which could affect the enforceability of the Note, Guarantees, and other Loan Documents and hereby reaffirm the validity of the Note, Guarantees and all other Loan Documents. Doc7.3.1 Stewartstown Comer i mited Partnership Loan No. 51648025-75 Page 2 of 3 CONFESSION OF JUDGMENT. BORROWER HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR THE PROTHONOTARY OR CLERK OF ANY COURT IN THE COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE, TO APPEAR AT ANY TIME FOR BORROWER AFTER A DEFAULT UNDER THE NOTE AS MODIFIED HEREIN AND WITH OR WITHOUT COMPLAINT FILED, CONFESS OR ENTER JUDGMENT AGAINST BORROWER FOR THE ENTIRE PRINCIPAL BALANCE OF THE NOTE, AS MODIFIED, AND ALL ACCRUED INTEREST, LATE CHARGES AND ANY AND ALL AMOUNTS EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECURING THE NOTE, TOGETHER WITH COSTS OF SUIT, AND AN ATTORNEY'S COMMISSION OF TEN PERCENT (10X) OF THE UNPAID PRINCIPAL BALANCE AND ACCRUED INTEREST FOR COLLECTION, BUT IN ANY EVENT NOT LESS THAN FIVE HUNDRED DOLLARS ($500.00) ON WHICH JUDGMENT OR JUDGMENTS ONE OR MORE EXECUTIONS MAY ISSUE IMMEDIATELY, AND FOR SO DOING, THIS MODIFICATION AGREEMENT OR A COPY OF THIS MODIFICATION AGREEMENT VERIFIED BY AFFIDAVIT SHALL BE SUFFICIENT WARRANT. THE AUTHORITY GRANTED IN THIS MODIFICATION AGREEMENT TO CONFESS JUDGMENT AGAINST BORROWER SHALL NOT BE EXHAUSTED BY ANY EXERCISE OF THAT AUTHORITY, BUT SHALL CONTINUE FROM TIME TO TIME AND AT ALL TIMES UNTIL PAYMENT IN FULL OF ALL AMOUNTS DUE UNDER THE NOTE AND THIS MODIFICATION AGREEMENT. BORROWER HEREBY WANES ANY RIGHT BORROWER MAY HAVE TO NOTICE OR TO A HEARING IN CONNECTION WITH ANY SUCH CONFESSION OF JUDGMENT AND STATES THAT EITHER A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THIS CONFESSION OF JUDGMENT PROVISION TO BORROWER'S ATTENTION OR BORROWER HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL This Agreement will be binding upon the Parties hereto, as well as their Successors and assigns, as the case may be. In Witness hereof, the parties hereto have hereunto set their hands and seal this 16 July, 2008. day of ATTEST: ATT V T B ce W. Wilt, Secretary ATT B ce W. Wilt, ecretary LENDER: SOVEREIGN BANK By: ` Cornerstone Limited Partnership no veyyelopMent Group, Inc. D=73.1 Stewartstown Comet ? sited Partnership Loan No. 51648025-75 Page 3 of 3 DISCLOSURE FOR CONFESSION OF JUDGMENT THE UNDERSIGNED IS EXECUTING ON BEHALF OF DECLARANT, THIS-A-DAY 2008 A MODIFICATION AGREEMENT OF A PROMISSORY NOTE DATED OCTOBER 6, 2008 IN THE ORIGINAL PRINCIPAL AMOUNT OF $5,858,992.00, SUBSEQUENTLY INCREASED TO $6,506,492.00, OBLIGATING DECLARANT TO REPAY THE AMOUNT AS STATED THEREIN. A. THE UNDERSIGNED UNDERSTANDS THAT THE MODIFICATION AGREEMENT CONTAINS A CONFESSION OF JUDGEMENT PROVISION THAT WOULD PERMIT LENDER TO ENTER JUDGMENT AGAINST DECLARANT IN COURT, AFTER A DEFAULT ON THE NOTE, WITHOUT ADVANCE NOTICE TO DECLARANT AND WITHOUT OFFERING DECLARANT AN OPPORTUNITY TO DEFEND AGAINST THE ENTRY OF JUDGMENT. IN EXECUTING THE MODIFICATION AGREEMENT, BEING FULLY AWARE OF DECLARANTS RIGHTS TO ADVANCE NOTICE AND TO A HEARING TO CONTEST THE VALIDITY OF ANY JUDGMENT OR OTHER CLAIMS THAT LENDER MAY ASSERT AGAINST DECLARANT UNDER THE NOTE, THE UNDERSIGNED, ON BEHALF OF THE DECLARANT, IS KNOWto INTELLIGENTLY, AND VOLUNTARILY WAIVING THESE RIGHTS, INCLUDING ANY RIGHT TO CE NOTICE O F THE ENTRY OF JUDGMENT, AND THE UNDERSIGNED EXPRESSLY AGREES TO LENDER' S ENTERING JUDGMENT AGAINST DECLARANT BY CONFESS D FOR IN THE CONFESSION OF JUDGMENT PROVISION. INITIS i . B AYENTER DERSIGNED FURTHER UNDERSTANDS THAT IN ADDITION TO GIVING LENDER THE RIG T JUDGMENT AGAINST DECLARANT WITHOUT- ADVANCE NOTICE OR A HEARING, THE b9KFESSION OF JUDGMENT PROVISION IN THE MODIFICATION AGREEMENT ALSO CONTAINS LANGUAGE THAT WOULD PERMIT LENDER, AFTER ENTRY OF JUDGMENT, AGAIN WITHOUT EITHER ADVANCE NOTICE OR A HEARING, TO EXECUTE ON THE JUDGMENT BY FORECLOSING UPON, ATTACHING, LEVYING ON, TAKING POSSESSION OF OR OTHERWISE SEIZING DECLARANTS PROPERTY, IN FULL OR PARTIAL PAYMENT OF THE JUDGMENT. IN EXECUTING THE MODIFICATION AGREEMENT, BEING FULLY AWARE OF DECLARANTS RIGHTS TO ADVANCE NOTICE AND A HEARING AFTER JUDGMENT IS ENTERED AND BEFORE EXECUTION ON THE JUDG NT, THE UNDERSIGNED, ON BEHALF OF DECLARANT, IS KNOWINGLY, INTELLIGE Y AND VOLUNTARILY WANING THESE RIGHTS, AND THE UNDERSIGNED EXPRESSL AG ES AND CONSENTS TO LENDER'S IMMEDIATELY EXECUTING ON THE JUDGM IN A ER PERMITTED BY APPLICABLE STATE AND FEDERAL LAW, WITHOUT GIVING WAADVANCE NOTICE. WITTALS % L1, STATEMEN C. AfTV HAVING REA TS ARE-APPLICABLE, BY DINITIALING EACH STATEMENT OTHATH APPLIS,THE UNDERSIGNED REPRESENTS THAT: INITIALS: 1. rAEPRESENTATIVE RANT WAS REPRESENTED BY DECLARANTS OWN INDEPENDENT EL IN CONNECTION WITH THE MODIFICATION AGREEMENT. Z4 2. OF LENDER SPECIFICALLY CALLED THE CONFESSION GMENT PROVISION IN THE MODIFICATION AGREEMENT TO DECLARANTS ION. THIS DISCLOSURE IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS DISCLOSURE IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. DECLARANT: BORROWER:/ Limited Partnership DevelopmMt Group, Inc., General Partner D=7.3.1 ink, d-`+ /3 1 t t t , i a i Parted klendticatlan Btrnbar: RECC RDAM pyj ROGUI cvwww " MsuidnQ tmm" got s' ttaorQa s1 rock, Pn 17 treet . WM RKGORDED MAIL TO: ?-040." P. Z'E OLER OPEN - END MORTGAGE THIS MORTGA46 SECURE$ FUTURE ADVANCES THIS IS A PURCHASE MONEY liI OKrGABE Anna um Smoured Hereblr: 45,858,992.00 THIS MORTGAGE dead October 6, 2001;, Is merle and axeaatad between awwwarattowrr Comsrstwto MOW Partnership. whose atitimm Is 200 Begsy Drive, Suits =4, stswartmewn, PA 173$3 (referred to below as "Grant**) and Savsreign Brink, whose address Is 101 9. George Suva( Yok PA 17401 (refaved to below as'pander"),' ' t#RAW of LWKrWOL VW vskuMo oomddaretoN, tdraatrr yranlr. =='50,4M. oawW«. aaripaa, trra"trra. nhiosar, oorrNraa and mortssptu m (snarler di of anmlol'a Aehb tltir. arrd to an fbN*Anq daabad red prq". andethar with ai Wdeft or aabtyrpwntr m tad at *And tpd met, knpn *mmw and ficwm dl sdurb. WWS, ataya, ptaaahP46 and W&VI; aU SWIM iSa, Al ft or W@V, di MWIM, POANOW trsaneM16 hwsdita rm" and appur miWo thwwnto bal mmft m anyWo made ho sattw. ctrl *4 rewnioaa aed (*MWAdrrs with rr+apaet (hennas OU WO", dicta( f#VW, watarowraa w?jtts pnoiahNnp V" in udlt 0 vdth dkch or Iropwbn riphu)t eeNW sU adnr Alum. roWbbM and r?" ie aatri ?r?.rhr wtt+otrt C?,4"ff& wsslw of P mnahyl ? 1ar nnntar.. t 'Res ?rgparty"l roaataif M? AL Tawnw* L THAT CERTAIN or narmala of landto a*ad r ??nti" Connrto? irtln ? Yk?udss.. rt allow s ?y d as wst men • (tears or toot nos of Ae a?ntitt?en.ssan a+bpntlamosr?v? A 04) +°atd ri tbl" 1th d aoc+ee d North" vnmww dest?nnexal?tmk!! tio.nret?0's°° ° hat % Creeks titeaoe, long Canodogalnet QreekNr*tltaa 1oKow&rp tour W) courarea and dlaanore: 1 N" 24 dtrgrsse mtautis p000 sounds West a dIbtana? ai 14 fwt to ae p ?rt; North 30 degnaaa QQ Mu1rr Oq Whist as diatelNOe of 3 North 13d grsae 4c rn?ntMes qq 3 f r 4 Nord( 72 digrass 26 mtnuhe 90 seconds West a distance of j 71W to a pWn6 1'hent:s, ak?ns lands now or formedy of Kwon end keep Wan, NoM 76 tieWses 15 whumrs 00 sscontie mitt a distance of 1,712.pp het to a Dade" W the of Oddpe Road. thonve, along mard oaMwilrtg of 111"W Winne Ius?d,, Sow 7 deyrest BO t 12/04/2016 12:18:91 PM SK'1-926PG•1 120 CUMSERt.AND CQUNW knW 2200687875 -Page 1 or 11 ' D rr?cl Ir?cntifir?tinn Number: RECORDATION REQUESTED BY: Sovereign Bank Commercial Banking Division 101 S. George Street York, PA 17401 WHEN RECORDED MAIL TO: FOR RECORDER'S USE ONLY OPEN - END MORTGAGE THIS MORTGAGE SECURES FUTURE ADVANCES THIS IS A PURCHASE MONEY MORTGAGE Amount Secured Hereby: $5,858,992.00 THIS MORTGAGE dated October 6, 2005, is made and executed between Stewartstown Cornerstone Limited Partnership, whose address is 200 Bailey Drive, Suite 204, Stewartstown, PA 17363 (referred to below as "Grantor") and Sovereign Bank, whose address is 101 S. George Street, York, PA 17401 (referred to below as "Lender"). GRANT OF MORTGAGE. For valuable consideration, Grantor grants, bargains, sells, conveys, assigns, transfers, releases, confirms and mortgages to Lender all of Grantor's right, title, and interest in and to the following described real property, together with all existing or subsequently erected or affixed buildings, improvements and fixtures; all streets, lanes, alleys, passages, and ways; all easements, rights of way, all liberties, privileges, tenements, hereditaments, and appurtenances thereunto belonging or anywise made appurtenant hereafter, and the reversions and remainders with respect thereto; all water, water rights, watercourses and ditch rights (including stock in utilities with ditch or irrigation rights); and all other rights, royalties, and profits relating to the real property, including without limitation all minerals, oil, gas, geothermal and similar matters, (the "Real Property") located in Cumberland County, Commonwealth of Pennsylvania: ALL THAT CERTAIN tracts or parcels of land and premises, situated lying and being in the Township of Silver Spring in the County of Cumberland and Commonwealth of Pennsylvania, more particulary described as follows: BEGINNING at an iron pin located on the centerline of sixty (601 foot right-of-way of an unnamed access drive (as set forth in Deed Book 35-A, page 534) and northern property line of Pennsylvania-American Water Company' thence, along lands now or formerly of Pennsylvania-American Water Company, North 88 degrees 15 minutes 30 seconds West a distance of 1,009.93 feet through two (2) iron pipes to an iron pipe set along the eastern bank of the Conodoguinet Creek; thence, along Conodoguinet Creek the following four (4) courses and distances: 1) North 24 degrees 46 minutes 00 seconds West a distance of 112.39 feet to a point; 2) North 30 degrees 00 minutes 00 seconds West a distance of 273.41 feet to a point; 3) North 1.3 degrees -45 -minutes 00.seconds.West.a..dis.tance of.542.6.9..feet to..a point; 4) North 22 degrees 26 minutes 00 seconds West a distance of 665.37 feet to 'a point; Thence, along lands now or formerly of Kwan and Iney Wan, North 76 degrees 15 minutes 00 seconds East a distance of 1,712.00 feet to a point along the centerline of Sample Bridge Road, thence, along said centerling of Sample Bridge Road, South 24 degrees 50 ORUGAG€ (Continued) Page 2 minutes 00 seconds East a distance of 759.80 feet to a point at the intersection of Sample Bridge Road and unnamed access drive; thence, along centerline of said unnamed access drive the following seven (7) courses and distances: 1) South 65 degrees 09 minutes 59 seconds West a distance of 25.00 feet to a point; 2) Along a curve to the left with a radius of 277.72 feet and curve length of 151.72 feet, a chord bearing of South 49 degrees 30 minutes 58 seconds West and chord distance of 149.84 feet to a point; 3) South 33 degrees 52 minutes 00 seconds West a distance of 275.05 feet to a point; 4) Along a curve to the left with a radius of 260.00 feet and curve length of 208.67 feet, a chord bearing of South 10 degrees 52 minutes 29 seconds West and chord distance of 203.11 feet to a point; 5) South 12 degrees 07 minutes 00 seconds East a distance of 318.95 feet to a oint; a) chord bea curve to the right with a radius of aring of South 09 degrees 33 minutes ? 00 seconds West and tchord distance feet, 214.14 feet to a point; 7) South 31 degrees 13 minutes 00 seconds West a distance of 207.21 feet to an iron pin set at the point of BEGINNING. Total tract are is 2,591,437 square feet (59.49 acres). The Real Property or its address is commonly known as 59.49 acre residential tract land known as Country Club Estates, Silver Spring Township , PA. Grantor presently assigns to Lender all of Grantor's right, title, and interest in and to all present and future leases of the Property and all Rents from the Property. In addition, Grantor grants to Lender a Uniform Commercial Code security interest in the Personal Property and Rents. THIS MORTGAGE, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN THE RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE (A} PAYMENT OF THE INDEBTEDNESS AND (B) PERFORMANCE OF RELATED DOCUMENTS, AND THIS MORTGAGE. THIS MORTGAGE, INCLUDING THE ASSIGNMENT OF RENTS,AND THE SECURITY INTEREST IN THE RENTS AND PERSONAL PROPERTY, IS ALSO GIVEN TO SECURE ANY AND ALL OF GRANTOR'S OBLIGATIONS UNDER THAT CERTAIN CONSTRUCTION LOAN AGREEMENT BETWEEN GRANTOR AND LENDER OF EVEN DATE HEREWITH. ANY EVENT OF DEFAULT UNDER THE CONSTRUCTION LOAN AGREEMENT, OR ANY OF THE RELATED DOCUMENTS REFERRED TO THEREIN, SHALL ALSO BE AN EVENT OF DEFAULT UNDER THIS MORTGAGE. THIS MORTGAGE IS GIVEN AND ACCEPTED ON THE FOLLOWING TERMS: PURCHASE MONEY MORTGAGE. If any of the debt secured by this Mortgage is lent to Grantor to acquire title to the Real Property, this Mortgage shall be a purchase money mortgage under 42 P.S. Section 8141. PAYMENT AND PERFORMANCE. Except as otherwise provided in this Mortgage, Grantor shall pay to Lender all amounts secured by this Mortgage as they become due and shall strictly perform all of Grantor's obligations under this Mortgage. POSSESSION AND MAINTENANCE OF THE PROPERTY. Grantor agrees that Grantor's possession and use of the Property shall be governed by the following provisions: Possession and Use. Until the occurrence of an Event of Default, Grantor may (1) remain in possession and control of the Property; (2) use, operate or manage the Property; and (3) collect the Rents from the Property. Duty to Maintain. Grantor shall maintain the Property in tenantable condition and promptly perform all repairs, replacements, and maintenance necessary to preserve its value. Compliance With Environmental Laws. Grantor represents and warrants to Lender that: (1) During the period of Grantor's ownership of the Property, there has been no use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance by any person on, under, about or from the Property; (2) Grantor has no knowledge of, or reason to believe that there has been, except as previously disclosed to and acknowledged by Lender in writing, (a) any breach or violation of any Environmental Laws, (b) any use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance on, under, about or from the Property by any prior owners or occupants of-the Prol eirty, or (c) any actual or threatened litigation or claims of any kind by any person relating to such mattes; -and (3) Except as previously disclosed to and acknowledged by Lender in writing, (a) neither Grantor nor any tenant, contractor, agent or other authorized user of the Property shall use, generate, manufacture, store, treat, dispose of or release any Hazardous Substance on, under, about or from the Property; and (b) any such activity shall be conducted in compliance with all applicable federal, state, and local laws, regulations and ordinances, including without limitation all Environmental Laws. Grantor authorizes Lender and its agents to enter upon the Property to make such inspections and tests, at Grantor's expense, as Lender may deem appropriate to determine compliance of the (Continued) Page 3 Property with this section of the Mortgage. Any inspections or tests made by Lender shall be for Lender's purposes only and shall not be construed to create any responsibility or liability on the part of Lender to Grantor or to any other person. The representations and warranties contained herein are based on Grantor's due diligence in investigating the Property for Hazardous Substances. Grantor hereby (1) releases and waives any future claims against Lender for indemnity or contribution in the event Grantor becomes liable for cleanup or other costs under any such laws; and (2) agrees to indemnify and hold harmless Lender against any and all claims, losses, liabilities, damages, penalties, and expenses which Lender may directly or indirectly sustain or suffer resulting from a breach of this section of the Mortgage or as a consequence of any use, generation, manufacture, storage, disposal, release or threatened release occurring prior to Grantor's ownership or interest in the Property, whether or not the same was or should have been known to Grantor. The provisions of this section of the Mortgage, including the obligation to indemnify, shall survive the payment of the Indebtedness and the satisfaction and reconveyance of the lien of this Mortgage and shall not be affected by Lender's acquisition of any interest in the Property, whether by foreclosure or otherwise. Nuisance, Waste. Grantor shall not cause, conduct or permit any nuisance nor commit, permit, or suffer any stripping of or waste on or to the Property or any portion of the Property. Without limiting the generality of the foregoing, Grantor will not remove, or grant to any other party the right to remove, any timber, minerals (including oil and gas), coal, clay, scoria, soil, gravel or rock products without Lender's prior written consent. Removal of Improvements. Grantor shall not demolish or remove any Improvements from the Real Property without Lender's prior written consent. As a condition to the removal of any Improvements, Lender may require Grantor to make arrangements satisfactory to Lender to replace such Improvements with Improvements of at least equal value. Lender's Right to Enter. Lender and Lender's agents and representatives may enter upon the Real Property at all reasonable times to attend to Lender's interests and to inspect the Real Property for purposes of Grantor's compliance with the terms and conditions of this Mortgage. Compliance with Governmental Requirements. Grantor shall promptly comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental authorities applicable to the use or occupancy of the rope , me u rng without limitation, the mencans isa es ct. raptor may contest in go faith any such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Grantor has notified Lender in writing prior to doing so and so long as, in Lender's sole opinion, Lender's interests in the Property are not jeopardized. Lender may require Grantor to post adequate security or a surety bond, reasonably satisfactory to Lender, to protect Lender's interest. Duty to Protect. Grantor agrees neither to abandon or leave unattended the Property. Grantor shall do all other acts, in addition to those acts set forth above in this section, which from the character and use of the Property are reasonably necessary to protect and preserve the Property. DUE ON SALE - CONSENT BY LENDER. Lender may, at Lender's option, declare immediately due and payable all sums secured by this Mortgage upon the sale or transfer, without Lender's prior written consent, of all or any part of the Real Property, or any interest in the Real Property. A "sale or transfer" means the conveyance of Real Property or any right, title or interest in the Real Property; whether legal, beneficial or equitable; whether voluntary or involuntary; whether by outright sale, deed, installment sale contract, land contract, contract for deed, leasehold interest with a term greater than three (3) years, lease-option contract, or by sale, assignment, or transfer of any beneficial interest in or to any land trust holding title to the Real Property, or by any other method of conveyance of an interest in the Real Property. If any Grantor is a corporation, partnership or limited liability company, transfer also includes any change in ownership of more than twenty-five percent (25%) of the voting stock, partnership interests or limited liability company interests, as the case may be, of such Grantor. However, this option shall not be exercised by Lender if such exercise is prohibited by federal law or by Pennsylvania law. TAXES AND LIENS. The following provisions relating to the taxes and liens on the Property are part of this Mortgage: Payment. Grantor shall pay when due (and in all events prior to delinquency) all taxes, payroll taxes, special taxes, assessments, water charges and sewer service charges levied against or on account of the Property, and shall pay when due all claims for work done on or for services rendered or material furnished to the Property. Grantor shall maintain the Property free of any liens having priority over or equal to the interest of Lender under this Mortgage, except for those liens specifically agreed to in writing by Lender, and except for the lien of taxes and assessments not due as further specified in the Right to Contest paragraph. Right.to Contest. Grantor may withhold payment of any tax, assessment,. or. claim in. connection with .a good faith dispute over the obligation to pay, so long as Lender's interest in the Property is not jeopardized. If a lien arises or is filed as a result of nonpayment, Grantor shall within fifteen (15) days after the lien arises or, if a lien is filed, within fifteen (15) days after Grantor has notice of the filing, secure the discharge of the lien, or if requested by Lender, deposit with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender in an amount sufficient to discharge the lien plus any costs and attorneys' fees, or other charges that could accrue as a (Continued) Page 4 result of a foreclosure or sale under the lien. In any contest, Grantor shall defend itself and Lender and shall satisfy any adverse judgment before enforcement against the Property. Grantor shall name Lender as an additional obligee under any surety bond furnished in the contest proceedings. Evidence of Payment. Grantor shall upon demand furnish to Lender satisfactory evidence of payment of the taxes or assessments and shall authorize the appropriate governmental official to deliver to Lender at any time a written statement of the taxes and assessments against the Property. Notice of Construction. Grantor shall notify Lender at least fifteen (15) days before any work is commenced, any services are furnished, or any materials are supplied to the Property, if any mechanic's lien, materialmen's lien, or other lien could be asserted on account of the work, services, or materials. Grantor will upon request of Lender furnish to Lender advance assurances satisfactory to Lender that Grantor can and will pay the cost of such improvements. PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring the Property are a part of this Mortgage: Maintenance of Insurance. Grantor shall procure and maintain policies of fire insurance with standard extended coverage endorsements on a replacement basis for the full insurable value covering all Improvements on the Real Property in an amount sufficient to avoid application of any coinsurance clause, and with a standard mortgagee clause in favor of Lender. Grantor shall also procure and maintain comprehensive general liability insurance in such coverage amounts as Lender may request with Lender being named as additional insureds in such liability insurance policies. Additionally, Grantor shall maintain such other insurance, including but not limited to hazard, business interruption and boiler insurance as Lender may require. Policies shall be written by such insurance companies and in such form as may be reasonably acceptable to Lender. Grantor shall deliver to Lender certificates of coverage from each insurer containing a stipulation that coverage will not be cancelled or diminished without a minimum of thirty (30) days' prior written notice to Lender and not containing any disclaimer of the insurer's liability for failure to give such notice. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or default of Grantor or any other person. Should the Real Property be located in an area designated b the Director of the Federal Emer en Man n specie flood hazard area, Grantor agrees to obtain and maintain Federal Flood Insurance, if available, within 45 days after notice is given by Lender that the Property is located in a special flood hazard arda; for the full unpaid principal balance of the loan and any prior liens on the property securing the loan, up to the maximum policy limits set under the National Flood Insurance Program, or as otherwise required by Lender, and to maintain such insurance for the term of the loan. Application of Proceeds. Grantor shall promptly notify Lender of any loss or damage to the Property. Lender may make proof of loss if Grantor fails to do so within fifteen (15) days of the casualty. Whether or not Lender's security is impaired, Lender may, at Lender's election, receive and retain the proceeds of any insurance and apply the proceeds to the reduction of the Indebtedness, payment of any lien affecting the Property, or the restoration and repair of the .Property, If Lender elects to apply the proceeds to restoration and repair, Grantor shall repair or replace the damaged or destroyed Improvements in a manner satisfactory to Lender. Lender shall, upon satisfactory proof of such expenditure, pay or reimburse Grantor from the proceeds for the reasonable cost of repair or restoration if Grantor is not in default under this Mortgage. Any proceeds which have not been disbursed within 180 days after their receipt and which Lender has not committed to the repair or restoration of the Property shall be used first to pay any amount owing to Lender under this Mortgage, then to pay accrued interest, and the remainder, if any, shall be applied to the principal balance of the Indebtedness. If Lender holds any proceeds after payment in full of the Indebtedness, such proceeds shall be paid to Grantor as Grantor's interests may appear. Grantor's Report on Insurance. Upon request of Lender, however not more than once a year, Grantor shall furnish to Lender a report on each existing policy of insurance showing: (1) the name of the insurer; (2) the risks insured; (3) the amount of the policy; (4) the property insured, the then current replacement value of such property, and the manner of determining that value; and (5) the expiration date of the policy. Grantor shall, upon request of Lender, have an independent appraiser satisfactory to Lender determine the cash value replacement cost of the Property. LENDER'S DCPENDI i URES. If any action or proceeding is commenced that would materially affect Lender's interest in the Property or if Grantor fails to comply with any provision of this Mortgage or any Related Documents, including but not limited to Grantor's failure to discharge or pay when due any amounts Grantor is required to discharge or pay under this Mortgage or any Related Documents; Lender on Grantor's behalf may (but shall not be obligated to) take any action that Lender deems appropriate, including but not. limited to discharging or paying all. taxes, liens, .security interests, encumbrances and other claims, at any time levied or placed on the Property and paying all costs for insuring, maintaining and preserving the Property. All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Grantor. All such expenses will become a part of the Indebtedness and, at Lender's option, will (A) be payable on demand; (8) be added to the balance of the Note and be apportioned among and be payable with any installment (Continued) Page 5 payments to become due during either (1) the term of any applicable insurance policy; or (2) the remaining term of the Note; or (C) be treated as a balloon payment which will be due and payable at the Note's maturity. The Mortgage also will secure payment of these amounts. Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon Default. Grantor's obligation to Lender for all such expenses shall survive the entry of any mortgage foreclosure judgment. WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of the Property are a part of this Mortgage: Title. Grantor warrants that: (a) Grantor holds good and marketable title of record to the Property in fee simple, free and clear of all liens and encumbrances other than those set forth in the Real Property description or in any title insurance policy, title report, or final title opinion issued in favor of, and accepted by, Lender in connection with this Mortgage, and (b) Grantor has the full right, power, and authority to execute and deliver this Mortgage to Lender. Defense of Title. Subject to the exception in the paragraph above, Grantor warrants and will forever defend the title to the Property against the lawful claims of all persons. In the event any action or proceeding is commenced that questions Grantor's title or the interest of Lender under this Mortgage, Grantor shall defend the action at Grantor's expense. Grantor may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of Lender's own choice, and Grantor will deliver, or cause to be delivered, to Lender such instruments as Lender may request from time to time to permit such participation. Compliance With Laws. Grantor warrants that the Property and Grantor's use of the Property complies with all existing applicable laws, ordinances, and regulations of governmental authorities. Survival of Representations and Warranties. All representations, warranties, and agreements made by Grantor in this Mortgage shall survive the execution and delivery of this Mortgage, shall be continuing in nature, and shall remain in full force and effect until such time as Grantor's Indebtedness shall be paid in full. CONDEMNATION. The following provisions relating to condemnation proceedings area art of this Morta e: Proceedings. If any proceeding in condemnation is filed, Grantor shall promptly notify Lender in writing, and Grantor shall promptly take such steps as may be necessary to defend the action and obtain the award. Grantor may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of its own choice, and Grantor will deliver or cause to be delivered to Lender such instruments and documentation as may be requested by Lender from time to time to permit such participation. Application of Net Proceeds. If all or any part of the Property is condemned by eminent domainor proceedings or by any proceeding or purchase in lieu of condemnation, Lender may at its election require that all any portion of the net proceeds of the award be applied to the Indebtedness or the repair or restoration of the Property. The net proceeds of the award shall mean the award after payment of all actual costs, expenses, and attorneys' fees incurred by Lender in connection with the condemnation. IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following provisions relating to governmental taxes, fees and charges are a part of this Mortgage: Current Taxes, Fees and Charges. Upon request by Lender, Grantor shall execute such documents in addition to this Mortgage and take whatever other action is requested by Lender to perfect and continue Lender's lien on the Real Property. Grantor shall reimburse Lender for all taxes, as described below, together with all expenses incurred in recording, perfecting or continuing this Mortgage, including without limitation all taxes, fees, documentary stamps, and other charges for recording or registering this Mortgage. Taxes. The following shall constitute taxes to which this section applies: • (1) a specific tax upon this type of Mortgage or upon all or any part of the Indebtedness secured by this Mortgage; (2) a specific tax on Grantor which Grantor is authorized or required to deduct from payments on the Indebtedness secured by this type of Mortgage; (3) a tax on this type of Mortgage chargeable against the Lender or the holder of the Note; and (4) a specific tax on all or any portion of the Indebtedness or on payments of principal and interest made by Grantor. Subsequent Taxes. If any tax to which this section -applies is enacted subsequent to the date of this Mortgage, this event shall have the-same effect as an Event of Default, and Lender may exercise any or all of its available remedies for an Event of Default as provided below unless Grantor either (1) pays the tax before it becomes delinquent; or (2) contests- the tax as provided above- in the Taxes and Liens section and deposits with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender. SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relating to this Mortgage as a security agreement are a part of this Mortgage: Security Agreement. This instrument shall constitute a Security Agreement to the extent any of the Property (Continued) Page 6 constitutes fixtures, and Lender shall have all of the rights of a secured parry under the Uniform Commercial Code as amended from time to time. Security Interest. Upon request by Lender, Grantor shall take whatever action is requested by Lender to perfect and continue Lender's security interest in the Rents and Personal Property. In addition to recording this Mortgage in the real property records, Lender may, at any time and without further authorization from Grantor, file executed counterparts, copies or reproductions of this Mortgage as a financing statement. Grantor shall reimburse Lender for all expenses incurred in perfecting or continuing this security interest. Upon default, Grantor shall not remove, sever or detach the Personal Property from the Property. Upon default, Grantor shall assemble any Personal Property not affixed to the Property in a manner and at a place reasonably convenient to Grantor and Lender and make it available to Lender within three (3) days after receipt of written demand from Lender to the extent permitted by applicable law. Addresses. The mailing addresses of Grantor (debtor) and Lender (secured parry) from which information concerning the security interest granted by this Mortgage may be obtained (each as required by the Uniform Commercial Code) are as stated on the first page of this Mortgage. FURTHER ASSURANCES; ADDITIONAL AUTHORIZATIONS. The following provisions relating to further assurances and additional authorizations are a part of this Mortgage: Further Assurances. At any time, and from time to time, upon request of Lender, Grantor will make, execute and deliver, or will cause to be made, executed or delivered, to Lender or to Lender's designee, and when requested by Lender, cause to be filed, recorded, refiled, or rerecorded, as the case may be, at such times and in such offices and places as Lender may deem appropriate, any and all such mortgages, deeds of trust, security deeds, security agreements, financing statements, continuation statements, instruments of further assurance, certificates, and other documents as may, in the sole opinion of Lender, be necessary or desirable in order to effectuate, complete, perfect, continue, or preserve (1) Grantor's obligations under the Note, this Mortgage, and the Related Documents, and (2) the liens and security interests created by this Mortgage as first and prior liens on the Property, whether now owned or hereafter acquired by Grantor. Unless prohibited by law or Lender agrees to the contrary in writing, Grantor shall reimburse Lender for all costs and expenses incurred in connection with the matters referred to in is paragraph. Additional Authorizations. If Grantor fails to do any of the things referred to in the preceding paragraph, Lender may do so for and in the name of Grantor and at Grantor's expense. For such purposes, Grantor hereby irrevocably authorizes Lender to make, execute, deliver, file, record and do all other things as may be necessary or desirable, in Lender's sole opinion, to accomplish the matters referred to in the preceding paragraph. It is understood that nothing set forth herein shall require Lender to take any such actions. FULL PERFORMANCE. If Grantor pays all the Indebtedness when due, and otherwise performs all the obligations imposed upon Grantor under this Mortgage, Lender shall execute and deliver to Grantor a suitable satisfaction of this Mortgage and suitable statements of termination of any financing statement on file evidencing Lender's security interest in the Rents and the Personal Property. Grantor will pay; if permitted by applicable law, any reasonable termination fee as determined by Lender from time to time. EVENTS OF DEFAULT. Each of the following, at Lender's option, shall constitute an Event of Default under this Mortgage: Payment Default. Grantor fails to make any payment when due under the Indebtedness. Default on Other Payments. Failure of Grantor within the time required by this Mortgage to make any payment for taxes or insurance, or any other payment necessary to prevent filing of or to effect discharge of any lien. Environmental Default. Failure of any party to comply with or perform when due any term, obligation, covenant or condition contained in any environmental agreement executed in connection with the Property. Other Defaults. Grantor fails to comply with or to perform any other term, obligation, covenant or condition contained in this Mortgage or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between'Lender and Grantor. Default in Favor of Third Parties. Should Grantor default under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Grantor's property or Grantor's ability to repay the Indebtedness or Grantor's ability to perform Grantor's obligations under this Mortgage or any related document. False Statements. Any warranty, representation or statement made or furnished to Lender by Grantor or on Grantor's behalf under this Mortgage or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter. Defective Coilateralization. This Mortgage or any of the Related Documents ceases to be in full force and effect (including failure of any collateral document to create a valid and perfected security interest or lien) at any time and (Continued) Page 7 for any reason. Death or Insolvency. The dissolution or termination of Grantor's existence as a going business or the death of any partner, the insolvency of Grantor, the appointment of a receiver for any part of Grantor's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Grantor. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Grantor or by any governmental agency against any property securing the Indebtedness. This includes a garnishment of any of Grantor's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Grantor as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Grantor gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute. Breach of Other Agreement. Any breach by Grantor under the terms of any other agreement between Grantor and Lender that is not remedied within any grace period provided therein, including without limitation any agreement concerning any indebtedness or other obligation of Grantor to Lender, whether existing now or later. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness. In the event of a death, Lender, at its option, may, but shall not be required to, permit the Guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender, and, in doing so, cure any Event of Default. Adverse Change. A material adverse change occurs in Grantor's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender in good faith believes itself insecure. Rig! t to Guie. if eny default; othe, dian a defat3it i1i payinentis cuicible c1nd if 812311tut has not been given a nutict: of a breach of the same provision of this Mortgage within the preceding twelve (12) months, it may be cured if Grantor, after receiving written notice from Lender demanding cure of such default (1) cures the default within thirty (30) days; or (2) if the cure requires more than thirty (30) days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of an Event of Default and at any time thereafter, Lender, at Lender's option, may exercise any one or more of the following rights. and remedies, in addition to any other rights or remedies provided by law: Accelerate Indebtedness. Lender shall have the right at its option, after giving such notices as required by applicable law, to declare the entire Indebtedness immediately due and payable. UCC Remedies. With respect to all or any part of the Personal Property, Lender shall have all the rights and remedies of a secured party under the Uniform Commercial Code. Collect Rents. Lender shall have the right, without notice to Grantor, to take possession of the Property and collect the Rents, including amounts past due and unpaid, and apply the net proceeds, over and above Lender's costs, against the Indebtedness. In furtherance of this right, Lender may require any tenant or other user of the Property to make payments of rent or use fees directly to Lender. If the Rents are collected by Lender, then Grantor irrevocably authorizes Lender to endorse instruments received in payment thereof in the name of Grantor and to negotiate the same and collect the proceeds. Payments by tenants or other users to Lender in response to Lender's demand shall satisfy the obligations for which the payments are made, whether or not any proper grounds for the demand existed. Lender may exercise its rights under this subparagraph either in person, by agent, or through a receiver. Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the Property, with the power to protect and preserve the Property, to operate the Property preceding foreclosure or sale, and to collect the Rents from the Property and apply the proceeds, over and above the cost of the receivership, against the Indebtedness. The receiver may serve without bond if permitted by law. Lender's right to the appointment of a receiver shall exist whether or not the apparent value of the Property exceeds the Indebtedness by a substantial amount. Employment by Lender shall not disqualify a person from serving as a receiver. Judicial Foreclosure. Lender may obtain a judicial decree foreclosing Grantor's interest in all or any part of the Property. Possession of the Property. For the purpose of procuring possession of the Property, Grantor hereby authorizes (Continued) Page 8 and empowers any attorney of any court of record in the Commonwealth of Pennsylvania or elsewhere, as attorney for Lender and all persons claiming under or through Lender, to sign an agreement for entering in any competent court an amicable action in ejectment for possession of the Property and to appear for and confess judgment against Grantor, and against all persons claiming under or through Grantor, for the recovery by Lender of possession of the Property, without any stay of execution, for which this Mortgage, or a copy of this Mortgage verified by affidavit, shall be a sufficient warrant; and thereupon a writ of possession may be issued forthwith, without any prior writ or proceeding whatsoever. Nonjudicial Sale. If permitted by applicable law, Lender may foreclose Grantor's interest in all or in any part of the Personal Property or the Real Property by nonyudicial sale. Deficiency Judgment. Lender may obtain a judgment for any deficiency remaining in the Indebtedness due to Lender after application of all amounts received from the exercise of the rights provided in this section. Tenancy at Sufferance. If Grantor remains in possession of the Property after the Property is sold as provided above or Lender otherwise becomes entitled to possession of the Property upon default of Grantor, Grantor shall become a tenant at sufferance of Lender or the purchaser of the Property and shall, at Lender's option, either (1) pay a reasonable rental for the use of the Property, or (2) vacate the Property immediately upon the demand of Lender. Other Remedies. Lender shall have all other rights and remedies provided in this Mortgage or the Note or available at law or in equity. Sale of the Property. To the extent permitted by applicable law, Grantor hereby waives any and all right to have the Property marshalled. In exercising its rights and remedies, Lender shall be free to sell all or any part of the Property together or separately, in one sale or by separate sales. Lender shall be entitled to bid at any public sale on all or any portion of the Property. Notice of Sale. Lender shall give Grantor reasonable notice of the time and place of any public sale of the Personal Property or of the time after which any private sale or other intended disposition of the Personal Property is to be made. Unless otherwise required by applicable law, reasonable notice shall mean notice iven at least ten (10) ays De tore the time o t e ii 111 a or disposition. ny sale o the ersonal Property may be made in conjunction with any sale of the Real Property. Election of Remedies. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Grantor under this Mortgage, after Grantor's failure to perform, shall not affect Lender's right to declare a default and exercise its remedies. Nothing under this Mortgage or otherwise shall be construed so as to limit or restrict the rights and remedies available to Lender following an Event of Default, or in any way to limit or restrict the rights and ability of Lender to proceed directly against Grantor and/or against any other co-maker, guarantor, surety or endorser and/or to proceed against any other collateral directly or indirectly securing the Indebtedness. Attorneys' Fees; Expenses. If Lender institutes any suit or action to enforce any of the terms of this Mortgage, Lender shall be entitled to recover such sum as the court may adjudge reasonable as attorneys' fees at trial and upon any appeal. Whether or not any court action is involved, and to the extent not prohibited by law, all reasonable expenses Lender incurs that in Lender's opinion are necessary at any time for the protection of its interest or the enforcement of its rights shall become a part of the Indebtedness payable on demand and shall bear interest at the Note rate from the date of the expenditure until repaid. Expenses covered by this paragraph include, without limitation, however subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit, including attorneys' fees and expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services, the cost of searching records, obtaining title reports (including foreclosure reports), surveyors' reports, and appraisal fees and title insurance, to the extent permitted by applicable law. Grantor also will pay any court costs, in addition to all other sums provided by law. NOTICES. Unless otherwise provided by applicable law, any notice required to be given under this Mortgage shall be given in writing, and shall be effective when actually delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Mortgage. All copies of notices of foreclosure from the holder of any lien which has priority over this Mortgage and notices pursuant to 42 Pa. C.S.A. Section 8143; et. seq., shall be sent to Lender's address, as shown near the beginning of this Mortgage. Any party may change its address for notices under this Mortgage by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address. For notice purposes, Grantor agrees to keep Lender informed at all times of Grantor's current address. Unless otherwise provided by applicable law, if there is more than one Grantor, any notice given by Lender to any Grantor is deemed to be notice given to all Grantors. (Continued) p,,,,,, o MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Mortgage: Amendments. This Mortgage, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Mortgage. No alteration of or amendment to this Mortgage shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Annual Reports. If the Property is used for purposes other than Grantor's residence, Grantor shall furnish to Lender, upon request, a certified statement of net operating income received from the Property during Grantor's previous fiscal year in such form and detail as Lender shall require. "Net operating income" shall mean all cash receipts from the Property less all cash expenditures made in connection with the operation of the Property. Caption Headings. Caption headings in this Mortgage are for convenience purposes only and are not to be used to interpret or define the provisions of this Mortgage. Governing Law. This Mortgage will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the Commonwealth of Pennsylvania without regard to its conflicts of law provisions. This Mortgage has been accepted by Lender in the Commonwealth of Pennsylvania. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Mortgage unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Mortgage shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Mortgage. No prior waiver by Lender, nor any course of dealing between Lender and Grantor, shall constitute a waiver of any of Lender's rights or of any of Grantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Mortgage, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. unenforceable as to any circumstance, that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance. If feasible, the offending provision shall be considered modified so that it becomes legal, valid and enforceable. If the offending provision cannot be so modified, it shall be considered deleted from this Mortgage. Unless otherwise required by law, the illegality, invalidity, or unenforceability of any provision of this Mortgage shall not affect the legality, validity or enforceability of any other provision of this Mortgage. Merger. There shall be no merger of the interest or estate created by this Mortgage with any other interest or estate in the Property at any time held by or for the benefit of Lender in any capacity, without the written consent of Lender. Successor interests. The terms of this Mortgage shall be binding upon Grantor, and upon Grantor's heirs, personal representatives, successors, and assigns, and shall be enforceable by Lender and its successors and assigns. Time is of the Essence. Time is of the essence in the performance of this Mortgage. Waive Jury. All parties to this Mortgage hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by any party against any other party. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Mortgage. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Mortgage shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word "Borrower" means Stewartstown Cornerstone Limited Partnership and includes all co-signers and co-makers signing the Note and all their successors and assigns. Default. The word "Default" means the Default set forth in this Mortgage in the section titled "Default". Environmental Laws. The words "Environmental Laws" mean any and all state, federal and local statutes, regulations and ordinances relating to the protection of human health -or the environment, including without limitation the Comprehensive Environmental.Response, Compensation, and Liability Act of 1980, _es amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, at seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, at seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto. Event of Default. The words "Event of Default" mean any of the events of default set forth in this Mortgage in the MORTGAGE ontlnue 10 events of default section of this Mortgage. Grantor. The word "Grantor" means Stewartstown Cornerstone Limited Partnership. Guarantor. The word "Guarantor" means any guarantor, surety, or accommodation party of any or all of the Indebtedness. Guaranty. The word "Guaranty" means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part of the Note. Hazardous Substances. The words "Hazardous Substances" mean materials that, because of their quantity, concentration or physical, chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words "Hazardous Substances" are used in their very broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the Environmental Laws. The term "Hazardous Substances" also includes, without limitation, petroleum and petroleum by-products or any fraction thereof and asbestos. Improvements. The word "Improvements" means all existing and future improvements, buildings, structures, mobile homes affixed on the Real Property, facilities, additions, replacements and other construction on the Real Property. Indebtedness. The word "Indebtedness" means all principal, interest, and other amounts, costs and expenses payable under the Note or Related Documents, together with all renewals of, extensions of, modifications of, consolidations of and substitutions for the Note or Related Documents and any amounts expended or advanced by Lender to discharge Grantor's obligations or expenses incurred by Lender to enforce Grantor's obligations under this Mortgage, together with interest on such amounts as provided in this Mortgage. Lender. The word "Lender" means Sovereign Bank, its successors and assigns. Mortgage. The word "Mortgage" means this Mortgage between Grantor and Lender. Note. The word "Note" means the promissory note dated October 6, 2005, in the original principal amount • - ran or o en er, oge er wi a renewals of, extensions o , m i cations o , refinancings of, consolidations of, and substitutions for the promissory note or agreement. NOTICE TO GRANTOR: THE NOTE CONTAINS A VARIABLE INTEREST RATE. Personal Property. The words "Personal Property" mean all equipment, fixtures, and other articles of personal property now or hereafter owned by Grantor, and now or hereafter attached or affixed to the Real Property; together with all accessions, parts, and additions to, all replacements of, and all substitutions for, any of such property; and together with all proceeds (including without limitation all insurance proceeds and refunds of premiums) from any sale or other disposition of the Property. Property. The word "Property" means collectively the Real Property and the Personal Property. Real Property. The words "Real Property" mean the real property, interests and rights, as further described in this Mortgage. Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter existing, executed in connection with the Indebtedness. Rents. The word "Rents" means all present and future rents, revenues, income, issues, royalties, profits, and other benefits derived from the Property. MORTGAGE It,ontinued) Page GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MORTGAGE, AND GRANTOR AGREES TO ITS TERMS. THIS MORTGAGE IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS MORTGAGE IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. GRANTOR: CORNERSTONE LIMITED PARTNERSHIP GROUP, INC., General Partner of Stewartstown By: Inc. CERTIFICATE OF RESIDENCE I hereby certify, that the precise address of the mortgagee, Sovereign Bank, herein is as follows: Commercial Banking Division, 101 S. George Street, York, PA 17401 /1 Attorney or PARTNERSHIP ACKNOWLEDGMENT COMMONWEALTH OF PENNSYLVANIA ? ` ary )SS COUNTY OF ? On a day of 2 , the undersigned Notary Public, personally appeared 20 before me Cornerst ne Development Group, Inc., who acknowledged himself or herself to be the partnernoradesignated agent of Stewartstown Cornerstone Limited Partnership, a partnership, and that he or she as such a partner or designated agent, being authorized to do so, executed the foregoing instrument for purposes the in contained by signing the name of the partnership by himself or herself as as a a r designate In witne=neeMnNwF?1LTM OF PENNS?fLl?? r? _ n A Stacey L Seder, Notary Publi ! City Of York, York Casrly My (mission Expires Mar. 14, 2009 otary Public in and for t tats of Member. Pennsylvania Association of Notaries IASE# PAO LwNNY. Vn. LOS.00.001 CiOpf. XMbM fLIwCLI SOhnkm, Ine tAA. ]DOS. N ?svnn Mw+tl. - PA G:I000{Aill{?Cgy,q,ICAG.iC TMAA$A M.10 MODIFICATION OF MORTGAGE (Continued) Pow 4 LENDER ACKNOWLEDGMENT COMMONWEALTH OF PENNSYLVANIA COUNTY OF yQ/K )SS 1 On this, the _J:W day of the undorsign® Notary Pubfi s 20 before me Personally appeared who ackno lodged himself or herself to be the K,a, ?, of a lender, and that he or she as such b purposes therm contained by signing the name of the ender by himself or hersellfased the foregoing instrument hlo? is J ,. --------------- In witness whereof, I hereunto set my hand and official se Notarial Seal J2' awn M. Gatiernz, Notary Public City of York, York County Notary public in and for the ate of Commi ssion Expires Apr. 15, 2006 Em er.pa V%WaWA=cabonofR-a-Wies IASJgI NID R Yom, iC7t1.l0.pp1 t:,p,, NMlnd q?yr iq?i?a ! 4 tN7 lOW. M C ?,,; ? F ?- ';I,r , J %c Paroal fdenn gtampber. R6?M mY: dQ ?Rgtdlf? 101$, tvoor0?fittoat York, wA 17pp} WHEfY t RECORDED MAIL ' L .C - 17 US. JON 30 RM 10 46 MOORCATION MORTGAGE THIS MODIPMATMN OF mow "911 deMd b"ween etawarfaRtewn Conteou" iinNlRd to ttw. and al egc ** dnww SO" 2t. Sluy,?eebiowp. PA 173ft {rerinNl bd%W No * rtv fte) Mb• ft lp Be* whore uldrees Is 1010- 0*0%* SW*44 YWk, PA1 0014ned bebwm w r'•etdf, +IOtt, f ender Rhd dframor have w oarad tats a Mal dated Ooeobor Q bsgn roeerdod kr Cumberlsnd Cwantr. CommanweRMh of - % , tam itlw " Nortye/?'7 which fw Martprgo raeprdad N the t:o wmile, 0?Qowat t12p. w*r f wordore 010ss of Cmnhaanq,.o,? DOWW 10, 2005. In lank ft121. toys Counyr. 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CO fact to a ROW tea/ yM qty of 5wppb B70 ffaad. lMnas aktyy0:ruavd am mikog ear so Imb" a* 5elnt„0Psrai 6m o of of meavle M md, 9 24 ?d?p stWyd IW a of 750.80 ful to a POW at ft ddw by toflowktl ft gr eaves M outages a and dhganwa: a *bw hangs, Skm ow"wilr s of um unnamed somas f7! 1) V*Wh e5 dWm o9 w*wkes 56 48$9mb VV" p dkXwft of 2SA0 fee % a #pktef 2! 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George Street York, PA 17401 WHEN RECORDED MAIL TO: FOR RECORDER'S USE ONLY MODIFICATION OF MORTGAGE THIS MODIFICATION OF MORTGAGE dated is made and executed between Stewartstown Cornerstone Limited Partnershlp, 'whose address is 200 Bailey Drive, Suite 204, Stewartstown, PA 17363 (referred to below as "Grantor") and Sovereign Bank, whose address is 101 S. George Street, York, PA 17401 (referred to below as "Lender"). MORTGAGE. Lender and Grantor have entered into a Mortgage dated October 6, 2005 (the "Mortgage") which has been recorded in Cumberland County, Commonwealth of Pennsylvania, as follows: Mortgage recorded in the County Recorder's Office of Cumberland, on October 10, 2005, in Book 1926, Page 1120. REAL PROPERTY DESCRIPTION. The Mortgage covers the following described real property located in Cumberland County, Commonwealth of Pennsylvania: ALL THAT CERTAIN tracts or parcels of land and premises, situated lying and being in the Township of Silver Spring in the County of Cumberland and Commonwealth of Pennsylvania, more particulary described as follows: BEGINNING at an iron pin located on the centerline of sixty (60') foot right-of-way of an unnamed access drive (as set forth in Deed Book 35-A, page 534) and northern property line of Pennsylvania-American Water Company; thence, along lands now or formerly of Pennsylvania-American Water Company, North 88 degrees 15 minutes 30 seconds West a distance of 1,009.93 feet through two (2) iron pipes to an iron pipe set along the eastern bank of the Conodoguinet Creek; thence, along Conodoguinet Creek the following four (4) courses and distances: 1) North 24 degrees 46 minutes 00 seconds West a distance of 112.39 feet to a point; 2) North 30 degrees 00 minutes 00 seconds West a distance of 273.41 feet to a point; 3) North 13 degrees 45 minutes 00 seconds West a distance of 549.69 feet to a point; 4) North 22 degrees 26 minutes 00 seconds West a distance of 665.37 feet to a point; Thence, along lands now or formerly of Kwan and Iney Wan, North 76 degrees 15 minutes 00 seconds East a distance of 1,712.00 feet to a point along the centerline of Sample Bridge Road, thence, along said centerling of Sample Bridge Road, South 24 degrees 50 minutes 00 seconds East a distance of 759.80 feet to a point at the intersection of Sample Bridge Road and unnamed access drive; thence, along centerline of said unnamed access drive the following seven (7) courses and distances: 1) South 65 degrees 09 minutes 59 seconds West a distance of 25.00 feet to a point; 2) Along a curve to the left with a radius of 277.72 feet and curve length of 151.72 feet, a chord bearing of South 49 degrees 30 minutes 58 seconds West and chord distance of 149.84 feet to a point; 3) South 33 degrees 52 minutes 00 seconds West a distance of 275.05 feet to a point; 4) Along a curve to the left with a radius of 260.00 feet and curve length of 208.67 feet, a chord bearing of South 10 degrees 52 minutes 29 seconds West and chord distance of 203.1-1 feet to a point 5) South 12 degrees 07 minutes 00 seconds East a distance of 318.95 feet to a point; 6) Along a curve to the right with a radius of 290.00 feet and curve length of 219.33 feet, a chord bearing of South 09 degrees 33 minutes 00 seconds West and chord distance of 214.14 feet to a point; MODIFICATION OF MORTGAGE (Continued) p . e 2 71 South 31 degrees 13 minutes 00 seconds West a distance of 207.21 feet to an iron pin set at the point of BEGINNING. Total tract are is 2,591,437 square feet (59.49 acres). The Real Property or its address is commonly known as 59.49 acre residential tract land known as Country Club Estates, Silver Spring Township, PA, MODIFICATION. Lender and Grantor hereby modify the Mortgage as follows: The principal amount of the lien shall be increased from the original amount of 55.858,992.00 to a ben amount of $6,506,492.00. The release amount per lot will be modified from $58,600.00 to $64,000.00 per lot. CONTINUING VALIDITY. Except as expressly modified above, the terms of unchanged and in full force and effect and are lgally valid, binding, and enforceableinin aco dance with their respective terms. Consent by Lender to this Modification does not waive Lender's right to require strict performance of the Mortgage as changed above nor obligate Lender to make any future modifications. Nothing in constitute a satisfaction of the promissory note or other credit agreement secured by the Mortgage this Modification shall the intention of Lender to retain as liable all parties to the Mortgage and all parties, makers and endorsers to the Note, including accommodation parties, unless a party (the `Note'). It is including accommodation makers, shall not eleased by virtule of th syModdification. If an original MoLender in rtgage Any does not sign this Modification, then all persons signing below acknowled e person who signed the given conditionally, based on the representation to Lender that the non-signing person g consents that to this the Modifichangescation is provisions of this Modification or otherwise will not be released by it. This waiver applies not only to any initial extension or modification, but also to all such subsequent actions. and GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MODIR ATION OF M RT AGE AND GRANTOR AGREES TO ITS TERMS. THIS MODIFICATION OF MORTGAGE IS DATED THIS MODIFICATION IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS MODIFICATION IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. GRANTOR: CORNERSTONE LIMITED PARTNERSHIP DEVELOPMENT GROUP, INC., General Partner of Stewartstown ted ParinerAhtn LENDER: Inc. SOVEREIGN BANK X Authori d Si (Seal) LIL MODIFICATION OF MORTGAGE (Continued) 'r-n 1 Il`-II:ATE OF RESIDENCE 1 hereby certify, that the Precise address of the Commercial Bankin mortgagee, Sovereign Bank, herein is as follows: g Division, 101 S. George Street, York, PA 17401 Attomey or t for Mo gee ------------- n A AT.. a ^"' 'rcnahlit' ACKNOWLEDGMENT COMMONWEALTH OF PENNSYLVANIA COUNTY OF ? )SS ?jY4, ) On this, the day of ?/n Cornerstone Deveb the undersigned Notary, Pu c 20 - before me Stm"'artstown Pment Group, Inc., who acknowledged himself or s Personally apPeered Samuel ?fe, Pr Cornerstone Limited Partnership herself to a partner or designated e Bent of being authorized to do so, executed the fo , a partnership, a he or sh ass agent of the Partnership by himself or herself as as a gar?e? d i purposes signing a conta' paw or designated agent, ed In wi the name of set ?my hand and o on.VANIA sea {Vofer)al seal CglY O( Y Public Q*, York h# y Counly, Notary Public in and for a fa 2"T? SOM Mar.14, 14,210109 to of S"= of Notaries COMMONWEALTH OF PLNN8YLVANIA NV:R ial Seal Stacey ! , b'rL+4Q? k; VWY Pul:illc GRy of Y;:t. fvutty My CWViJs9=EW,-- k ar.14, 2009 Member, Pennsylvania Association of Notaries WEIR & PARTNERS LLP By: Daniel D. Haggerty, Esquire Attorney ID No. 77894 The Widener Building, Suite 500 1339 Chestnut Street Philadelphia, PA 19107 wweir@weirpartners. com (215)665-8181 ~~ THE pROTF~O~'N~'Y 2010 HAR ~ AM ~ ~ , p ~ CUMp~ ~sl.~~~~u €~ P~1v5YLV(ANtA Attorneys for Sovereign Bank SOVEREIGN BANK 1100 Market Street Philadelphia, PA 19107 Plaintiff, v. STEWARTSTOWN CORNERSTONE, LP 1 East Market Street, Suite 401 York, PA 17401 Defendant COURT OF COMMON PLEAS CUMBERLAND COUNTY CIVIL ACTION NO. 2010-1402-CIVIL TERM PRAECIPE TO REINSTATE COMPLAINT TO THE PROTHONOTARY: Kindly reinstate the Complaint in Mortgage Foreclosure in the above-captioned matter. WEIR & PARTNERS LLP Dated: March 19, 2010 ~, Danie .Haggerty squire Attorneys for Plaintiff, Sovereign Bank pd r~ ~~ ~J ~~~~1 Pk# s/air ~pC~ ,~~v~is SHERIFF'S OFFICE OF CUMBERLAND COUNTY Ronny R Anderson Sheriff Jody S Smith Chief Deputy Richard W Stewart SOiICItOr ~~~tt1r of ~ ~t~~6ett,~~~s~ :; ~ ~. -_~f RCE ;:::...c .`FiYi~F ~1~ 'f'~~r r'^ ZQ~Q .~vl+ ~ 5 i't~i ~~~ J~,i Cl.~ , <<~ i y, ,~~f1i ~. Sovereign Bank vs. Stewartstown Cornerstone, LP Case Number 2010-1402 SHERIFF'S RETURN OF SERVICE 05/11/2010 Ronny R. Anderson, Sheriff who being duly sworn according to law states that he made a diligent search and inquiry for the within named defendant, to wit: Stewartstown Cornerstone, LP, but was unable to locate them in his bailiwick. He therefore deputized the Sheriff of York County, PA to serve the within Complaint and Notice according to law. 06/07/2010 York County Return: And now June 7, 2010 at 1210 hours I, Richard P. Keuerleber, Sheriff of York County, Pennsylvania, do herby certify and return that I served a true copy of the within Complaint in Mortgage Foreclosure, upon the within named defendant, to wit: Stewartstown Cornerstone, LP by making known unto Albert Blakley, Attorney for Stewartstown Cornerstone, LP at 17 East Market Street Suite 401, York, PA 17401 its contents and at the same time handing to him personally the said true and correct copy of the same. SHERIFF COST: $37.00 June 14, 2010 SO ANSWERS, RON R ANDERSON, SHERIFF ir,) CnunfySuite .S'henff. Tei.^,csoft. Inr. SHERIFF'S OFFICE OF YORK COUNTY Richard P Keuerleber PETER J. MANGAN, ESQ. Sheriff Solicitor Reuben B Zeager Richard E Rice, II Chief Deputy, Operations ~% _~ ~ ~; Chief Deputy, Administration SOVEREIGN BANK Case Number vs. 10-1402 STEWARTSTOWN CORNERSTONE, LP. (et al.) SHERIFF'S RETURN OF SERVICE 06/07/2010 12:10 PM -DEPUTY DAVID GOOD, BEING DULY SWORN ACCORDING TO LAW, SERVED THE REQUESTED COMPLAINT IN MORTGAGE FORECLOSURE (GIMP) BY HANDING A TRUE COPY TO A PERSON REPRESENTING THEMSELVES TO BE ALBERT BLAKLEY, ATTORNEY FOR DEFENDANT, WHO ACCEPTED AS "ADULT PERSON IN CHARGE" FOR STEWARTSTOWN CORNERSTONE, LP. AT 17 EAST MARKET STREET, SUITE 401, YORK, PA 17401. DAVI OOD, DEPUTY SHERIFF COST: $68.44 June 09, 2010 SO ANSWERS, RICHARD P ERLEBER, ERIFF -- _- -_ NOTARY CQMMQNIH~AI~TN Q~ ~~NN$YLVANIA Affirmed and subscribed to before me this NQTaRIA;, '!w"""""-"~ LISA L. THQRpE, NCTARy PUBLIC j 9tr1 day of JIJIQE 2OlO CITY OF YO.~K, YORrt COUNTY ~ MY COMPd1SS10N EXPIRES AUG. 12. 2013 ; ~!~~ 1N THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION SOVEREIGN BANK, Plaintiff No. 10-1402 Civil Term vs. STEWARTSTOWN CORNERSTONE, LP, Defendant PRELIMINARY OBJECTIONS ON BEHALF OF DEFENDANT. STEWARTSTOWN CORNERSTONE, LP Defendant STEWARTSTOWN CORNERSTONE, LP, individually, preliminarily objects to Plaintiffs' Complaint as it violates the provisions of Pa. R.C.P. 1019(a), in that it does not set forth material facts on which a cause of action is based and fails to make a statement in a concise and summary form. Defendant STEWARTSTOWN CORNERSTONE, LP, individually, preliminarily objects to Plaintiffs' Complaint as it violates the provisions of Pa. R.C.P. 1019(e), in that it does not set forth with adequate particularity that a prior court denied the specific relief requested herein. n ~ ,_~ c ~, -~, -~~ ~ ~ ~~ _ r-r, , .~ ' c r-- _ '~' L.. ,., ' -t, ~i7~i ~ ~ ., . C 3 ! ,,, , = . . . _Iv .- ~' . --i t a~ N "C BLAKEY, YOST, BUPP & BAUSCH, LLP PENBERTHY & PF,pd~3ERTHY, PC By A76ert G. B ,Esquire Supreme . No. 07486 John C. en erthy, III, Esq re Supreme Court I.D. No. 57 28 17 East Market Street York, PA 17401 Telephone (717) 845-3674 Fax No. (717) 854-7839 Supreme Ct. I.D. No. 07486 Attorneys for STEWARTSTOWN CORNERSTONE, LP CERTIFICATE OF SERVICE I hereby certify that I am this day causing a copy of the foregoing document to be served by First Class United States Mail, postage prepaid, on the following person: Daniel D. Haggerty, Esquire The Widener Building, Suite 500 1339 Chestnut Street Philadelphia, PA 19107 BLAKEY, YOST, BUPP & BAUSCH, LLP Dated: (D ~~ ~Q By; Ileen S. Kr ne, Secretary to Albert G. Blakey, Esquire Counsel for Defendant WEIR & PARTNER LLP By: Daniel D. Ha erty, Esquire Christopher L McDonald, Esquire Attorney ID No. 778 /230671 The Widener Buildin ,Suite 500 1339 Chestnut Street Philadelphia, PA 191 7 wweir@weirpartners. om cmcdonald@weirp ers.com (215) 665-8181 (215) 665-8464 SOVEREIGN BAN Plaintiff, v. STEWARTSTOWN ORNERSTONE, LP Defendant. Plaintiff Defendant avers as follows: 1. On or Sovereign a promi cn ~ ;~:~ ~ ,.Yl 'C'i„ ~~ i I-` ~ ~~ ~ ' ~ c " ~ r,', ,_ C ( ~ ~ ~: ~ ~~ ; ~ n Ba- s for Soverei Att =~ `~ r - ~ _ ; g orney ~ . ~ ~. , . r? ~ ~ _~; _ r~:> ~~ COURT OF COMMON PLEAS CUMBERLAND COUNTY NO. 10-1402 Civil Term OBJECTIONS n Bank ("Sovereign") files these preliminary objections to Cornerstone, LP's ("Stewartstown") preliminary objections and about October 6, 2005, Stewartstown executed and delivered to note evidencing a loan extended to Stewartstown by Sovereign in the principal sum of 5,858,992.00. 2. To mortgage dated Octo Cumberland County. the loan, Stewartstown executed and delivered to Sovereign a 6, 2005, which was duly recorded with the Recorder of Deed in 3. After tewartstown defaulted on its loan by failing to make timely payments on the loan on August 15, 2008, Sovereign confessed judgment against Stewartstown in this ourt on December 1, 2008. See Confessed Judgment, a true and correct copy of which is attached as Exhibit "A." 4. On Jul 30, 2009, this Court granted Stewartstown's Petition to Open the Confessed Judgment. See Order, dated July 30, 2009, a true and correct copy of which is attached as Exhibit " ." 5. On Fe ruary 25, 2010, Sovereign filed this present Mortgage Foreclosure action resulting from Stewartstown's failure to make timely payments on the loan. See Complaint, a true an correct copy of which is attached as Exhibit "C." 6. On or about June 29, 2010, Stewartstown filed preliminary objections. 7. Stewa~tstown did not provide numbered paragraphs or give indication of what relief it was see ing, but rather, it propounded two conclusory paragraphs. 8. Stew stown alleged, first, that Sovereign's Complaint violates Pa.R.Civ.P. 1019(a) ~s it "does not set forth material facts on which a cause of action is based and fails to make a statement in a concise and summary form." 9. Stew stown also alleges that Sovereign's Complaint violates Pa.R.Civ.P. 1019(e) in "that it do snot set forth with adequate particularity that a prior court denied the specific relief 10. violates either herein." ig further is pled, including why or how Sovereign's Complaint s Pa.R.Civ.P. 1019(a) or 1019(e). PRELIMINARY OBJECTIONS PURSUANT TO PA R.CIV.P. 1028(a)(2) A. Prelim For FS To La' 11. Stewa~ to set forth numbered WHEREFOR Court to sustain its pr Stewartstown Corner,. Sovereign Bank. PRELIMINA A. Prelin Stews 12. Aden insufficient to establi Catastrophe Loss Fw 13. Penns pleadings "is actually opponent to guess at Penns,, l~vania, 886 A 14. Pursu also Standard Penns; with the rule re~ardi~ Objections As To Stewartstown's Preliminary Objections Of Stewartstown's Preliminary Objections To Conform 's preliminary objections violate Pa.R.Civ.P. 1022 for failing in its pleading. Plaintiff Sovereign Bank respectfully requests this Honorable objections and dismiss with prejudice Defendant LP's Preliminary Objections in their entirety against Plaintiff Y OBJECTIONS IN THE NATURE OF A DEMURRER PURSUANT TO PA R.CIV.P. 1028(a)(4) Objection In The Nature Of A Demurrer As To n's Preliminary Objections Against Sovereign is appropriate dismissing an action where "the complaint is the pleader's right to relief." Willet v. Pennsylvania Medical 549 Pa. 613, 619 (1997). lvania courts have been clear in holding that the purpose of to convey notice of the intended grounds for suit, not require the substance." Schweikert v. St. Luke's Hosp. of Bethlehem, 265, 270 (Pa.Super. 2005). to Pa.R.Civ.P.1017(4), apreliminary objection is a pleading. See lvania Practice 2d § 25:34 (A preliminary objection must comply the contents of pleadings). 15. Indeed pleadings "must apprise the defendant of the nature and extent of the plaintiff s claim s~ that the defendant has notice of what the plaintiff intends to prove...." Weiss v. uibank, 313 Pa.Super. 446, 453 (Pa.Super.1983). 16. Here, ~overeign has no notice of what Stewartstown's actual claims for relief are. Sovereign ~as been left to guess as to the substance of Stewartstown's Complaint. 17. Stewa~tstown's two objections are improper as they fail to plead with specificity the reason for why Sovereign's Complaint violates Pa.R.Civ.P. 1019(a) or 1019(e). Samuels v. ~Iendricks, 300 Pa.Super. 11, 445 A.2d 1273 (Pa.Super. 1982)(holding that a preliminary objection which states merely that the complaint fails to state a cause of action is defective); Wolfson v. Gicas, 88 Pa. D. & C. 145 (Schuylkill Cty. 1954)(noting that Pa.R.Civ.P. 1028(a) requires preliminary objections to state specifically the grounds relied upon); Dillon v. Evans, 45 Sch.L.R. 95, 69 Pa. D. & C. 430, 431 (Schuylkill ~ty. 1950)(holding that a general allegations that the averments in the complaint do not Constitute a good cause of action is insufficient). 18. Without knowing what Stewartstown claims specifically does not comply with Pa.R.Civ.P. 101~9(a) or 1019(e), Sovereign cannot respond adequately. Plaintiff Sovereign Bank respectfully requests this Honorable Court to sustain its Cornerstones, LP's I objections and deny Defendant Stewartstown Objections in their entirety against Plaintiff Sovereign Bank. B. Preliminary Objections In The Nature Of A Demurrer As To Stewa stown's Preliminary Objection That Sovereign Has Failed To Adeau tely State A Cause Of Action 19. Sovereign's Complaint conforms to the six requirements under Pa.R.Civ.P 1147 for bringing a m rtgage foreclosure action. See Exhibit "C;" see also Bank of Penns lvania v. G/N me rises Inc., 316 Pa.Super. 367, 371, 463 A.2d 4 (Pa.Super. 1983). 20. Sower ign has pled the parties to and the date of the mortgage, and a statement of the placd of record of the mortgage. Exhibit "C" at ¶¶ 4-5. 21. Sover~ign has pled a description of the land subject to the mortgage. Exhibit "C" at ¶ 6. 22. Sower ian has set forth the names, addresses and interest of the defendants in this action, namely` Stewartstown. Exhibit "C" at ¶ 2 and 7. 23. Sover~ign averred specifically that Stewartstown has defaulted on its Mortgage. Exhibit "~" at ¶ 8. 24. Sover~ign has pled an itemized statement of the amount due. Exhibit "C" at ¶ 9. 25. Sover~ign has made a demand for judgment for the amount due. Exhibit "C" at Ad Damnum WHEREFO ,Plaintiff Sovereign Bank respectfully requests this Honorable Court to sustain its p eliminary objections and deny Defendant Stewartstown Cornerstone, LP's Preliminary Objections in their entirety against Plaintiff Sovereign Bank. C. Preli 'nary Objections In The Nature Of A Demurrer As To Stewa stown's Preliminary Objection That Sovereign Has Failed To Plead hat A Prior Court Denied The Specific Relief Requested In Sower ign's Complaint 26. Sovereign's Complaint is a Mortgage Foreclosure Action. 27. This C{~urt ordered only that Sovereign's Confessed Judgment, in an entirely separate action, was to be opened. See this Court's Order dated July 7, 2009, a true and copy of which is attached as Exhibit "A." 28. Both actions are entirely separate and seek different forms of relief. 29. Pennsylvania law allows a party to file two concomitant actions for a mortgage foreclosure and a confessed judgment because the former is an action in rem while the latter is an ction in personam. Indeed, each action is separate and exclusive and the doctrines of merger and collateral estoppel do not apply. Sams Corp. v. Garin, 352 Pa.Super. 105, Sc7 A.2d 402 (Pa.Super. 1986)(affirming the lower court's findings that appellant's collateral estoppel and merger azguments were inapplicable since a mortgage foreclosur proceeding was an action in rem as opposed to the confessed judgment action, whi h was in personam); Levitt v. Patrick, 976 A.2d 581, 591-92 (Pa.Super. 2009)(not ng that a mortgage foreclosure action and a confessed judgment action aze actions in em and in personam respectively); Bank of Pennsylvania v. G/N Enterprises, Inc., su a, at 371-72 (noting the difference between a confessed judgment and a mortgage foreclosure and that both involve completely sepazate actions). 30. Additionally, this Court's Order only opened the confessed judgment. 31. Such ~n Order does not grant relief; rather, it allows the defendant to prove a defense to al~ or part of a plaintiff's claim. Manor Bldg_ Corp. v. Manor 435 Pa.Super. 246, 251 n.2, 645 A.2d 843 (Pa.Super. 1994). 32. Consequently, Stewartstown cannot rely on this Court's Order which was entered in a completely separate action because both actions are separate, they seek different forms of reli~f and this Court's Order has no bearing on this Mortgage Foreclosure action. for the foregoing reasons and the reasons set forth in Plaintiff Sovereign Bank's Bri fin support of its Preliminary Objections to Defendant Stewartstown Corner tone, LP's Preliminary Objections, Plaintiff Sovereign Bank respectfully requests Defendant's Preliminary Objections be denied. WEIR & PARTNERS LLP By: Christopher L. McDonald, Esquire Attorneys for Plaintiff, Sovereign Bank Dated: July 16, 201 x~ ~B ~r WEIR & PARTNERS L P By: Daniel D. Hagge ,Esquire Attorney I.D. No 77894 The Widener Building, uite 500 1339 Chestnut Street Philadelphia, PA 19107 (215) 665-8181 Attorneys for Plaintiff SOVEREIGN BANK 1100 Market Street Philadelphia, PA 19107 v. STEWARTSTOWN C RNERSTONE, LP 1 East Market Street - S ite 401 York, PA 17401 and SAMUEL JUFFE 1100 Centennial Avenue Piscataway, NJ 08854 and CORNERSTONE DE LOPMENT GROUP, INC. 1 East Market Street, Sui e 401 York, PA 17401 and JOHN M. HUENKE 4400 Bridgeview Road Stewartstown, PA 1736 and BRUCE W. WILT P.O. Box 189 Manville, NJ 08835 De NOTICE CUMBERLAND COUNTY COURT OF COMMON PLEAS CIVIL ACTION NO.: ©~~- X307 ~?~~ ~ f tln 322770-1 Pursuant to JUDGMENT BY enclosed herewith is a any questions 236 of the Supreme Court of Pennsylvania, you are hereby notified that a ON has been entered against you in the above proceeding and that of all the documents filed in support of the said judgment. If you have this notice, please call Daniel D. Haggerty, Esquire, at (215) 665-8181. rothonot 322770-1 WEIR & PARTNERS LP By: Daniel D. Hagg ,Esquire Attorney I.D. N .77894 The Widener Building, uite 500 1339 Chestnut Street Philadelphia, PA 19107 (215) 665-8181 Attorneys for Plaintiff 0 SOVEREIGN BANK CUMBERLAND COUNTY 1100 Mazket Street COURT OF COMMON PLEAS Philadelphia, PA 19107 CIVIL ACTION v. ~ ~ " STEWARTSTOWN C RNERSTONE, LP 1 East Mazket Street - S ite 401 ; York, PA 17401 ; and SAMUEL JUFFE ; 1100 Centennial Avenu ; Piscataway, NJ 08854 and CORNERSTONE DE LOPMENT GROUP, INC. ; 1 East Mazket Street, S to 401 . York, PA 17401 and JOHN M. HUENKE ; 4400 Bridgeview Road • Stewartstown, PA 1736 ; and BRUCE W. WILT . P.O. Box 189 Manville, NJ 08835 D fendants : NOTICE Pi: ATTORNEYI STRI] UANT TO 42 Pa.C.S.A. §2737.1 OF RIGHT TO RECOVER .S AND COSTS AND PROCEDURE TO FOLLOW TO OFF OR OPEN A CONFESSED JUDGMENT 322770-1 TO: STEWARTST 1 East Mazket S York, PA 1740 V CORNERSTONE, LP - Suite 401 SAMUEL JUF E 1100 Centennial Avenue Piscataway, NJ 8854 CORNERSTO E DEVELOPMENT GROUP, INC. 1 East Mazket S eet, Suite 401 York, PA 1740 JOHN M. HUE 4400 Bridgevie Road Stewartstown, P 17363 BRUCE W. WI T P.O. Box 189 Manville, NJ 08 35 Pursuant to 42 a.C.S.A. 2737.1, you aze hereby notified that a debtor who has been incorrectly identified an had a confession or judgment entered against him shall be entitled to costs and reasonable attorney ees as determined by the court. Pursuant to 42 P procedure to follow to s Procedure 2959, which i .C.S.A. 2737.1, you are hereby notified of the instructions regazding the ;ike off or open a confessed judgment under Pennsylvania Rule of Civil reproduced in full, on the following page. LLP By: Dated: November Daniel D. 2008 Attorneys 322770-1 Pennsylvania Rule of Civil Procedure 2959 (a) (1) Reli f from a judgment by confession shall be sought by petition. Except as provided in subpazagra (2), all grounds for relief whether to strike off the judgment or to open it must be asserted in a sin le petition. The petition maybe filed in the county in which the judgment was originally entered, n any county to which the judgment has been transferred or in any other county in which the she 'ff has received a writ of execution directed to the sheriff to enforce the judgment. (2) a ground that the waiver of the due process rights of notice and hearing was not voluntary, intelligen and knowing shall be raised only (i in support of a further request for a stay of execution where the court h snot stayed execution despite the timely filing of a petition for relief from judgment and the presentation of prima facie evidence of a defense; and as provided by Rule 2958.3 or Rule 2973.3. (3) If 'tten notice is served upon the petitioner pursuant to Rule 2956.1(c)(2) or Rule 2973.1(c), the petit' n shall be filed within thirty days after such service. Unless the defendant can demonstrate that the e were compelling reasons for the delay, a petition not timely filed shall be denied. (b) If the petitic cause and may grant a plaintiff shall file an an: be fixed by the court by (c) A parry wai answer. (d) The petition Rule 440. (e) The court depositions, admissions petition insofar as it see: the judgment. If eviden~ to the jury the court sha (f) The lien of t proceedings to strike off states prima facie grounds for relief the court shall issue a rule to show ~y of proceedings. After being served with a copy of the petition the ~r on or before the return day of the rule. The return day of the rule shall rule or special order. all defenses and objections which aze not included in the petition or the rule to show cause and the answer shall be served as provided in all dispose of the rule on petition and answer, and on any testimony, nd other evidence. The court for cause shown may stay proceedings on the to open the judgment pending disposition of the application to strike off is produced which in a jury trial would require the issues to be submitted open the judgment. judgment of or .any levy or attachment shall be preserved while the open the judgment aze pending. 322770-1 WEIR & PARTNERS LP By: Daniel D. Hagg ,Esquire Attorney I.D. N .77894 The Widener Building, uite 500 1339 Chestnut Street Philadelphia, PA 19107 (215) 665-8181 Attorneys for Plaintiff SOVEREIGN BANK 1100 Mazket Street Philadelphia, PA 1910 v. STEWARTSTOWN C RNERSTONE, LP 1 East Mazket Street - S ite 401 York, PA 17401 and SAMUEL JUFFE 1100 Centennial Avenu Piscataway, NJ 08854 and CORNERSTONE DE LOPMENT GROUP, INC. 1 East Market Street, Su to 401 York, PA 17401 and JOHN M. HUENKE 4400 Bridgeview Road Stewartstown, PA 1736 and BRUCE W. WILT P.O. Box 189 Manville, NJ 08835 CUMBERLAND COUNTY COURT OF COMMON PLEAS CIVIL ACTION NO.. BY 322770-1 TO THE ARY: Kindly enter judgment ~y confession in the above-captioned matter against the Defendants and assess damages in the ar diem rate of $347.43, ca Principal Interest ti Costs Total Plus of $3,105,961.93, plus interest from November 24, 2008, at the per ;d as follows: ru 11 /24/08 ' Fees (10%) $2,779,426.43 $ 44,080.32 $ 95.00 $ 282,360.18 $3,105,961.93 from November 24, 2008, at the per diem rate of $347.43. WHEREFORE, laintiff demands judgment in its favor and against the Defendants, jointly and severally, and assess damages in the amount of $3,105,961.93, plus interest from November 24, 2008, at the per diem rat of $347.43 and cost of suit. Dated: November ~, 2008 WEIR & PARTNERS By: V ,~.~V Daniel D. Ha; Attorneys for 322770-1 WEIR & PARTNERS I By: Daniel D. HaggE Attorney I.D. Ns The Widener Building, 1339 Chestnut Street Philadelphia, PA 19107 (215) 665-8181 Attorneys for Plaintiff SOVEREIGN BANK 1100 Mazket Street Philadelphia, PA 1910 v, STEWARTSTOWN 1 East Mazket Street - ; York, PA 17401 and SAMUEL JUFFE 1100 Centennial Avenu Piscataway, NJ 08854 and CORNERSTONE DE GROUP, INC. 1 East Market Street, Sl York, PA 17401 and JOHN M. HUENKE 4400 Bridgeview Road Stewartstown, PA 1731 and BRUCE W. WILT P.O. Box 189 Manville, NJ 08835 y, Esquire 77894 rite 500 CUMBERLAND COUNTY COURT OF COMMON PLEAS CIVIL ACTION NO.. YERSTONE, LP 401 . PMENT 401 JUDGMENT 322770-1 AND NOW, thi day of , 2008, a complaint in confession of judgment and an Affida it as to the amount due having been filed; it is hereby ORDERED T AT JUDGMENT IS HEREBY ENTERED in favor of Plaintiff, SOVEREIGN BANK, and against Defendants Stewartstown Cornerstone, LP, Samuel Juffe, Cornerstone Developm nt Group, Inc., John M. Huenke and Bruce W. Wilt, jointly and severally, in the amount of $3,105,961.93, plus interest from November 24, 2008, at the per diem rate of $347.43 and costs of suit. Prothonotary 322770-1 WEIR & PARTNERS LP By: Daniel D. Hagg rty, Esquire Attorney I.D. N .77894 The Widener Building, cite 500 1339 Chestnut Street Philadelphia, PA 19107 (215) 665-8181 Attorneys for Plaintiff : CUMBERLAND COUNTY COURT OF COMMON PLEAS CIVIL ACTION NO.. SOVEREIGN BANK 1100 Mazket Street Philadelphia, PA 1910 v. STEWARTSTOWN 1 East Market Street - York, PA 17401 and SAMUEL JUFFE 1100 Centennial Avenu Piscataway, NJ 08854 and CORNERSTONE DE GROUP, INC. 1 East Market Street, Si York, PA 17401 and JOHN M. HUENKE 4400 Bridgeview Road Stewartstown, PA 173E and BRUCE W. WILT P.O. Box 189 Manville, NJ 08835 YERSTONE, LP 401 . ~PMENT 401 F 322770-1 1. Plaintiff Sovereign Bank, is a Pennsylvania banking corporation with its principal place of business at 11 Market Street, Philadelphia, PA 19107 ("Plaintiff'). 2. Defend t, Stewartstown Cornerstone, LP, is a Limited Partnership with a principal place of business locate at 1 East Mazket Street, Suite 401, York, PA 17401 ("Stewartstown"). 3. Defend t, Samuel Juffe, is an adult individual residing at 1100 Centennial Avenue, Piscataway, NJ 08854 "Juffe"). 4. Defend t, Cornerstone Development Group, Inc., is a Guazantor with an address of 1 East Market Street, Suit 401, York, PA 17401 ("Cornerstone"). 5. Defend t, John M. Huenke, is an adult individual residing at 4400 Bridgeview Road, Stewartstown, PA 1736 ("Huenke"). 6. Defend t, Bruce W. Wilt, is an adult individual with an address of P. O. Box 189 Manville, NJ 08835 (" ilt")(Wilt together with Huenke, Cornerstone, and Juffe collectively being the "Guazantors" and Stewaztstown together with the Guarantors being collectively the "Defendants") 7. This is action to confess judgment for damages arising out of Stewartstown's breach of its promissory note and the Guarantors breach of their separate individual guazantees. 8. On or abo t October 6, 2005, Plaintiff did lend to Stewartstown the principal sum of $5,858,992.00 (the "Lo ") . 9. In order t induce Plaintiff to make the Loan, the Stewartstown promised to repay Loan pursuant to the to s of the Promissory Note dated October 6, 2005 (the "Note") and authorized Confession o Judgment. (See Note attached hereto as Exhibits "A"). 10. The Conf ssion of Judgment set forth in the Note authorizes the Plaintiff to confess judgment in any court in a Commonwealth of Pennsylvania. 322770-1 11. Stewarts own understood that the Note contained a Confession of Judgment as evidenced by the Discl sure For Confession of Judgment, a true and correct copy of which is attached as Exhibit "B". 12. In order t further induce Plaintiff to make the loan, the Guarantors promised to repay the Loan under the to s of their Guarantees and authorized Confession of Judgment. See Guarantees attached her~to as exhibits "C", "D", "E", and "F"). 13. The G antors understood their guarantees contained confessions of judgment as evidenced by the Disclo es for Confession of Judgment, executed by each of them, true and correct copies of which are atta hed as Exhibits "G", "H", "I", and "J". 14. By way Stewartstown agreed to copy of the Fourth 15. The pay the Loan in full on Note Modification Ae~ a Fourth Promissory Note Modification Agreement, Plaintiff and end the maturity date on the Note to August 6, 2008. A true and correct >ry Note Modification Agreement is attached as Exhibit "K". nts have defaulted on their obligation by reason of their failure to timely Est 6, 2008 pursuant to the terms of the Note and the Fourth Promissory 16. The judg ent being entered herewith does not involve a consumer credit transaction. 17. As a resu t of Defendants' default on their obligations due under the terms of the Note, Commercial Guar ties the Loan and Change in Terms Agreement, Defendant owes the following amounts whic have become immediately due and payable to the Plaintiff: Principal Interest tl Costs Attorney, Total 11 /24/08 Fees (10%) $2,779,426.43 $ 44,080.32 $ 95.00 $ 282,360.18 $3,105,961.93 322770-1 Plus inte#est from November 24, 2008, at the per diem rate of $347.43. WHEREFORE, laintiff demands judgment in its favor and against the Defendant, jointly and severally, in the unt of $3,105,961.93, plus interest from November 24, 2008, at the per diem rate of $347.43 an cost of suit. WEIR By: Dated: November 2 ~ , 2008 Daniel D. Haggerty, 322770-1 WEIR & PARTNERS LP By: Daniel D. Hagg rry, Esquire Attorney I.D. N .77894 The Widener Building, uite 500 1339 Chestnut Street Philadelphia, PA 19107 (215)665-8181 Attorneys for Plaintiff SOVEREIGN BANK 1100 Mazket Street Philadelphia, PA 1910 v. STEWARTSTOWN C 1 East Mazket Street - S York, PA 17401 and SAMUEL JUFFE 1100 Centennial AvenuE Piscataway, NJ 08854 and CORNERSTONE DES GROUP, INC. 1 East Market Street, Su York, PA 17401 and JOHN M. HUENKE 4400 Bridgeview Road Stewartstown, PA 1736 and BRUCE W. WILT P.O. Box 189 Manville, NJ 08835 iff . ~1ERSTONE, LP 401 . 401 CUMBERLAND COUNTY COURT OF COMMON PLEAS CIVIL ACTION NO.. CONFESSION OF JUDGMENT 322770-1 Pursuant to the uthority contained in the Warrants of Attorney, copies of which are attached to the Complaint in Co fession of Judgment, I appear for the Defendants and confess judgment in favor of the Plaintiff d against the Defendants as follows: Interest Costs Attorne~ Total Plus into WHEREFORE, against the Defendants. November 24, 2008, at ~ $2,779,426.43 hru 11/24/08 $ 44,080.32 $ 95.00 s' Fees (10%) $ 282,360.18 $3,105,961.93 rest from November 24, 2008, at the per diem rate of $347.43. I appeaz for the Defendants and confess judgment in favor of Plaintiff and jointly and severally, in the amount of $3,105,961.93, plus interest from the per diem rate of $347.43 and costs of suit. Dated: November ~ , 2008 322770-1 WEIR & PARTNERS L P By: Daniel D. Hagge ,Esquire Attorney I.D. No 77894 The Widener Building, uite 500 1339 Chestnut Street Philadelphia, PA 19107 (215) 665-8181 Attorneys for Plaintiff SOVEREIGN BANK CUMBERLAND COUNTY 1100 Market Street COURT OF COMMON PLEAS Philadelphia, PA 19107 Pl 'ntiff CIVIL ACTION v. NO.. STEWARTSTOWN C RNERSTONE, LP 1 East Market Street - S ite 401 : York, PA 17401 . and . SAMUEL JUFFE . 1100 Centennial Avenue . Piscataway, NJ 08854 : and . CORNERSTONE DE ELOPMENT GROUP, INC. . 1 East Market Street, Su to 401 York, PA 17401 . and JOHN M. HUENKE 4400 Bridgeview Road Stewartstown, PA 1736 and . BRUCE W. WILT P.O. Box 189 . Manville, NJ 08835 : D fendants ASSESSMENT OF DAMAGES 322770-1 TO THE PROTHONOI~ARY: You are hereby directed to assess damages in favor of Plaintiff and against Defendants as follows: Principal Interest 11/24/08 Costs Attorney 'Fees (10%) Total $2,779,426.43 $ 44,080.32 $ 95.00 $ 282,360.18 $3,105,961.93 Plus interest from November 24, 2008, at the per diem rate of $347.43. WHEREFORE,1~laintiff demands judgment in its favor and against the Defendant, jointly and severally, in the am~unt of $3,105,961.93, plus interest from November 24, 2008, at the per diem rate of $347.43 an~ cost of suit. Dated: November~/~? , 2008 LP By: Daniel D. Haggerty, Esquire 322770-1 WEIR & PARTNER LLP By: Daniel D. H gerty, Esquire Attarney I.D. o. 77894 The Widener Buildin ,Suite S00 1339 Chestnut Street Philadelphia, PA 191 7 (215) 665-8181 Attorneys for Plainti SOVEREIGN BANI 1100 Market Street Philadelphia, PA 191 Plaintiff v. STEWARTSTOWN CORNERSTONE, LP 1 East Market Street Suite 401 York, PA 17401 and SAMUEL JUFFE 1100 Centennial Av ue Piscataway, NJ 0885 and CORNERSTONE D VELOPMENT GROUP, INC. 1 East Market Street, uite 40l York, PA 17401 and JOHN M. HUENKE 4400 Bridgeview Roa Stewartstown, PA 17 63 and BRUCE W. WILT P.O. Box 189 Manville, NJ 08835 CUMBERLAND COUNTY COURT OF COMMON PLEAS CIVIL ACTION NO.. VERIFICATION OF BUSINESS PURPOSE I, Stephen J. odrich, hereby verify that I am the Commercial Real Estate Relationship Manager, AVP of Sovereign Bank, that I am authorized to make this verification on behalf of the 3227b4-1 Plaintiff and that tt Confession of 7udg . entered into for pers I understand C.S.A. §4904, relati~ Dated: November Z transaction represented by the instruments attached to the Complaint in :nt filed in this action arose out of a business transaction and was not al, family or household purposes. iat false statements herein are made subject to the penalties of 18 Pa. to unsworn falsification to authorities. SOVEREIGN BANK BY: ~~~r~ Stephen J. oodrich _, 2008 Commercial Real Estate Relationship Manager, AVP 322769-1 WEIR & PARTNE LLP By: Daniel D. H erty, Esquire Attorney I.D. o. 77894 The Widener Buildin ,Suite SOU 1339 Chestnut Street Philadelphia, PA 191 7 (215) 665-8181 Attorneys for Plainti SOVEREIGN BAN 1100 Market Street Philadelphia, PA 191 7 v. STEWARTSTOWN CORNET 1 East Market Street Suite 401 York, PA 17401 and SAMUEL JUFFE 1100 Centennial Ave e Piscataway, NJ 0885 and CORNERSTONE D VELOP] GROUP, INC. 1 East Market Street, uite 401 York, PA 17401 and JOHN M. HUENKE 4400 Bridgeview Roa Stewartstown, PA 17 63 and BRUCE W. WILT P.O. Box 189 Manville, NJ 08835 CUMBERLAND COUNTY COURT OF COMMON PLEAS CIVIL ACTION NO.: LP VERIFICATION OF ADDRESSES I, Steph n J. Goodrich, hereby verify that I am the Commercial Real Esta#e Relationship Manager, VP of Sovereign Bank, that I am authorized to make this verification on 322769-1 behalf of the Plainti and hereby certify that the address of Plaintiff is 1100 Market Street, Philadelphia, PA 1910 . The last known addresses of Defendants are: STEWARTSTOWN CORNERSTONE, LP 1 East Market Street -Suite 401 York, PA 17401 SAMUEL JUFFE 1100 Centennial Avenue Piscataway, NJ 08854 CORNERSTONE DEVELOPMENT GROUP, INC. 1 East Market Street, Suite 401 York, PA 17401 JOHN M. HUENKE 4400 Bridgeview Road Stewartstown, PA 17363 BRUCE W. WILT P.O. Box 189 Manville, NJ 08835 I understand that false statements herein are made subject to the penalties of 18 Pa. C.S.A. §4904, relating t unsworn falsification to authorities. Stephen J. G odrich Dated: November Z'~ 2008 Commercial Rea! Estate Relationship Manager, AVP 322769-1 WEIR 8c PARTNERS LP By: Daniel D. Hagg rty, Esquire Attorney I.D. N .77894 The Widener Building, Suite 500 1339 Chestnut Street Philadelphia, PA 1910 (215) 665-8181 Attorneys for Plaintiff SOVEREIGN BANK 1100 Market Street Philadelphia, PA 1910 CUMBERLAND COUNTY COURT OF COMMON PLEAS CIVIL ACTION v. NO.. STEWARTSTOWN ORNERSTONE, LP 1 East Market Street - uite 401 . York, PA 17401 , and SAMUEL JUFFE . 1100 Centennial Avenu Piscataway, NJ 08854 , and CORNERSTONE DE LOPMENT . GROUP, INC. , 1 East Market Street, S ite 401 . York, PA 17401 ; and JOHN M. HUENKE 4400 Bridgeview Road , Stewartstown, PA 173 3 , and BRUCE W. WILT P.O. Box 189 Manville, NJ 08835 , fendants . I, Stephen J. G odrich, hereby verify that I am the Commercial Real Estate Relationship Manager, AVP of Sov sign Bank, that I am authorized to make this verification on behalf of the 3227b9-1 Plaintiff and that this udgment by Confession is not being entered against a natural person in connection with a cons er credit transaction. I understand th t false statements herein are made subject to the penalties of 18 Pa. C.S.A. §4904, relating to unsw rn falsification to authorities. ,~V~ ~ /Vd17Vtiv'~ . Stephen J. Go 'ch Commercial Real Estate Relationship Dated: November Z S , 2008 Manager, AVP 3227G9-1 WEIR & PARTNER LLP By: Daniel D. Ha gerty, Esquire Attorney I.D. o. 77894 The Widener Buildin ,Suite 500 1339 Chestnut Street Philadelphia, PA 191 7 (215) 665-8181 Attorneys for Plainti SOVEREIGN B : CUMBERLAND COUNTY 1100 Market Street COURT OF COMMON PLEAS Philadelphia, PA 191 7 , Plaintiff CIVIL ACTION v. NO.. 5TEWARTSTOWN CORNERSTONE, LP 1 East Market Street Suite 401 . York, PA 17401 , and SAMUEL JUFFE 1100 Centennial Ave e Piscataway, NJ 0885 , and CORNERSTONE D VELOPMENT . GROUP, INC. , 1 East Market Street, uite 401 , York, PA 17401 , and JOHN M. HUENKE 4400 Bridgeview Roa , Stewartstown, PA 17 63 , and BRUCE W. WILT P.O. Box 189 Manville, NJ 08835 . efendants . I, Stephen J. Manager, AVP of S 322769-1 h, hereby verify that I am the Commercial Real Estate Relationship Bank, that I am authorized to make this verification on behalf of the Plaintiff and that tt installment sale cont I understand C.S.A. §4904, relate Dated: November is not an action by a seller, holder or assignee arising out of a retail :t or account. -at false statements herein are made subject to the penalties of 18 Pa. to unsworn falsification to authorities,,.~~V1~~ ~~~ / ~Vau Stephen J. odrich Commercial Real Estate Relationship _, 2008 Manager, AVP 322769-1 I, Stephen J. Sovereign Bank, he Plaintiff in this matt Judgment aze true aJ Exhibits attached to I understand C.S.A. §4904, relati~ VERIFICATION ~odrich, Commercial Real Estate Relationship Manager, AVP of Plaintiff, ~y verify that I am authorized to make this verification on behalf of the and that the matters set forth in the foregoing Complaint in Confession of correct to the best of my knowledge, information and belief; and that the ;Complaint are true and correct copies of the originals. gat false statements herein are made subject to the penalties of I8 Pa. to unsworn falsification to authorities. ~di'~2~ Stephen J. drich Commercial Real Estate Relationship Dated: November Z , 2048 Manager, AVP 322769-I WEIR & PARTNE LLP By: Daniel D. Hag erty, Esquire Attorney I.D. o. 77894 The Widener Buildin ,Suite 500 1339 Chestnut Street Philadelphia, PA 191 7 (21 S) 665-8181 Attorneys for Plainti _ SOVEREIGN BAN CUMBERLAND COUNTY 1100 Market Street COURT OF COMMON PLEAS Philadelphia, PA 191 7 laintiff CIVIL ACTION v. NO.. STEWARTSTOWN ORNERSTONE, LP 1 East Market Street - Suite 401 York, PA 17401 and SAMUEL JUFFE 1100 Centennial Aven e Piscataway, NJ 08854 and CORNERSTONE D VELOFMENT . GROUP, INC. 1 East Market Street, S ite 401 . York, PA 17401 and JOIN M. HUENKE 4400 Bridgeview Ro Stewartstown, PA 173 3 and BRUCE W. WILT P.O. Box 189 Manville, NJ 08835 fendants AVERMENT OF DEFAULT 322769-1 I, Stephen J. oodrich, Commercial Real Estate Relationship Manager, AVP of Plaintiff, Sovereign Bank, av that the Defendants are in default of the instruments attached to the Complaint in Confes ion of Judgment filed in this matter in that the Defendants have failed to make payments of all sums due and owing thereunder when due under the terms of the attached exhibits, as a result of which the sums owing under the attached exhibits have become immediately due and ayable. Dated: November Z 2008 SO /VEREIGN BANK //_ w'' // BY:_~K,~ ~. ~gl'~L2W~ Stephen J. Goodrich Commercial Real Estate Relationship Manager, AVP 322769-1 ~~~~ ~~ p~ exh~hi~ A~ PROMISSORY NOTE Eorrovver: Stewartstown Comersto a Limited Partnership Lender: Sovereign Bank 200 Bailey Drrve, Suite 2 Commercial Banking Division Stewartstown, PA 173 101 S. George 5~eet York, PA 17401 Principal Amount: $5,858,99 .00 Date of Note: October 6, 2005 PROMISE TO PAY. Stewartstown C rnerstone Limited Partnership ("Borrower") promises to pay to Sovereign Bank ("Lender"), or order, in lawful money of the United States of merica, the principal amount of Fve Mgfion tight Hundred Fifty-eight Thousand Nine Hundred Ninety-two & 001100 Dollars (55,858,992.00), gather with interest on the unpaid principal balance from October 6, 2005, until paid in fup. PAYMENT. Borrower will pay this to n in one principal payment of S5,858,992.00 plus interest on October 6, 2007. This payment due on October 6, 2007, will be for ag print pal and all accrued interest not yet paid. In addition, Borrower will pay regular monthly payments of all accrued unpaid interest due as of ea h payment date, beginning November 6, 2005, with all subsequent interest payments to ba due on the same day of each month after that. nless otherwise agreed or required by applicable law, payments wll be applied first to any accrued unpaid interest; then to principal; then to any late charges; and then to any unpaid collection costs. The annual interest rate for this Note is computed on a 3651360 basis; that is, by appl ing the ratio of the annual interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual nu bar of days the principal balance is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lenda may designate in writing. VARIABLE INTEREST RATE. The int rest rate on this Note is subject to change from time to time based on changes in an index which is the Sovereign Bank Prime Rate. The ereign Bank Prime Rate shall mean the rate per annum from time to time established by Lender as the Prime Rate and made available by Le der at its main office or, in the discretion of Lender, the base, reference or other rate then designated by Lender for general commercial loan eference purposes, it being understood that such rate is a reference rate, not necessarily the lowest, established from time to time, which erves as the basis upon which effective interest rates are calculated for loans making reference thereto. (the "Index"). The Index is not net ssarily the lowest rate charged by Lender on its loans and is set by Lender in its sole discretion. If the Index becomes unavailable during th term of this loan, Lender may designate a substitute index after notifying Borcower. Lender will tell Borrower the current Index rate upon Borcower's request. The interest rate change will not occur more often than each time as and when the "Index" changes. Borrower understa ds that Lender may make loans based on other rates as well. The interest rate to be applied to the unpaid principal balance of this Note will be t a rate of 0.500 percentage points over the Index. NOTICE: Under no circumstances will the interest rate on this Note be mots than them ximum rate allowed by applicable law. PREPAYMENT. Borrower agrees that all loan fees and other prepaid finance charges are earned fully as of the date of the loan and will not be subject to refund upon early payme t (whether voluntary or as a result of defaultl, except as otherwise required by law. Except for the foregoing, Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not, unless agreed to by Lender in writing, relieve Borr er of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal b lance due. Borrower agrees not to send Lender payments marked "paid in full", "without recourse", or willlremain obligated xo pay any furth r amount owed to Lender. All written communications concerning disputed amounts, including any check or other payment instrument that ind Cates that the payment constitutes "paymerit in full" of the amount owed or. that is tendered with other conditions or limitations or as full sati faction of a disputed amount must be mailed or delivered to: Sovereign Bank, P. O. Box 12707 Reading, PA 19612-2707. LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment or S 10.00, whichever is gra ter. INTEREST AFTER DEFAULT. Upon d fault, including failure to pay upon final maturity, Lender, at its option, may, if permitted under applicable law, increase the variable interest rat on this Note to 3.500 percentage points over the Index. The interest rate will not exceed the maximum rate permitted by applicable law. I judgment is entered in connection with this Note, interest will continue to accrue on this Note after judgment at the interest rate applicab a to this Note at the time judgment is entered. DEFAULT. Each of the following shat constitute an event of default ("Event of Default") under this Note: Payment Default. Borrower fails to make any payment when due under this Note. Other Defaults. Borrower fails t comply with or to perform any other term, obligation, covenant or condition contained in this Note or in any of the related documents or o comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower. Default in Favor of Third Parties. Borrower or any Grantor defaults under any loan, extension of credit, security agreement, purchase or sales agreement, or any other a reement, in favor of any other creditor or person that may materially affect any of Borrower's property or Borrower's ability to repay this ote or perform Borrower's obligations under this Note or any of the related documents. Environmental Default. Failure f any party to comply with or perform when due any term, obligation, covenant or condition contained in any environmental agreement ex toted in connection with any loan. False Statements. Any warrant ,representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Note or the related documents i false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time therea er. Death or Insolvency. The dissol ion or termination of Borrower's existence as a going business or the death of any partner, the insolvency of Borrower, the appointment o a receiver for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the comma cement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. Creditor or Forfeiture Proceedin s. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other meth d, by any creditor of Borrower or by any governmental agency against any collateral securing the loan. This includes a garnishment of ny of Borrower's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good fait dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borr war gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor r forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute. Events Affecting Guarantor. ny of the preceding events occurs with respect to any Guarantor of any of the indebtedness or any Guarantor dies or becomes in ompetent, or revokes or disputes the validity of, or liability under, any guaranty of the indebtedness evidenced by this Note. In the vent of a death, Lender, at its option, may, but shall not be required to, permit the Guarantor's estate to PROMISSORY NOTE (Continued) Page 2 assume unconditionally the oblig bons arising under the guaranty in a manner satisfactory to Lender, and, in doing so, cure any Event of Default. Events Affecting General Partner f Borrower. Any of the preceding events occurs with Tespect to any general partner of Borrower or any general partner dies or becomes i competent. Change In Ownership. The resig anon or expulsion of any general partner with an ownership interest of twenty-five percent (2596) or more in Borrower. Adverse Change. A material a verse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of this Note is impai ed. Insecurity. Lender in good faith elieves itself insecure. Cure Provisions. If any default, ther than a default in payment is curable and if Borrower has not been given a notice of a breach of the same provision of this Note wi in the preceding twelve (12- months, it may be cured if Borrower, after receiving written notice from Lender demanding cure of such efault: (1) cures the default within thirty (30) days; or {2) if the cure requires more than thirty (30) days, immediately initiates step which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all real nable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default, nder may, after giving such notices as required by applicable law, declare the entire unpaid principal balance on this Note and all accrued npaid interest immediately due, and then Borrower will pay that amount. ATTORNEYS' FEES; EXPENSES. Len er may hire or pay someone else to help collect this Note if Borrower does not pay. Borcower will pay Lender that amount. This includes, s bject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit, including attor eys' fees, expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), and appeals. If not pr ibited by applicable law, Borrower also will pay any court costs, in addition to all other sums provided by law. JURY WAIVER. Lender and Borcower hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by either Lender or Borrower against the other. GOVERNING LAW. This Note will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the Commonwealth of Pennsylvania without regard to its conflicts of law provisions. This Note has been accepted by lender in the Commonwealth of Pennsylvania. RIGHT OF SETOFF. To the extent pe miffed by applicable taw, Lender reserves a right of setoff in all Borrower's accounts with Lender {whether checking, savings, or some other ace unt). This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open in the future. However, this d es not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Borrower authorizes Lender, to a extent permitted by applicable law, to charge or setoff all sums owing on the indebtedness against any rights provided in this paragraph. SUCCESSOR INTERESTS. The to s of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal representatives, successors and assigns, and shall inu to the benefit of Lender and its successors and assigns. GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower and any other person who signs, guaran ees or endorses this Note, to the extent allowed by law, waive presentment, demand for payment, and notice of dishonor. Upon any Chang in the terms of this Note, and unless otherwise expressly stated in writing, no party who signs this Mote, whether as maker, guarantor, accom odation maker or endorser, shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any Len of time) this loan or release any party, partner, or guarantor or collateral; or impair, fail to realize upon or perfect Lender's security interest i the collateral; and take any other action deemed necessary by Lender without the consent of ar notice to anyone. Ali such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. Th obligations under this Note are joint and several. If any portion of this Note is for any reason determined to be unenforceable, it will not affect the enforceability of any other provisions of this Note. CONFESSION OF JUDGMENT. ORROWER HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR THE PROTHONOTARY OR CLERK OF AN COURT IN THE COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE, TO APPEAR AT ANY TIME FOR BORROWER AFTER A DEFAUL UNDER THIS NOTE AND WITH OR WITHOUT COMPLAINT FILED, CONFESS OR ENTER JUDGMENT AGAINST BORROWER FOR THE ENT RE PRINCIPAL BALANCE OF THIS NOTE AND ALL ACCRUED INTEREST, LATE CHARGES AND ANY AND ALL AMOUNTS EXPENDED OR AD NCED BY LENDER RELATING TO ANY COLLATERAL SECURING THIS NOTE, TOGETHER WITH COSTS OF SUIT, AND AN ATTORNEY'S CO MISSION OF TEN PERCENT (1096) OF THE UNPAID PRINCIPAL BALANCE AND ACCRUED INTEREST FOR COLLECTION, BUT IN ANY EVENT NOT LESS THAN FIVE HUNDRED DOLLARS ($500) ON WHICH JUDGMENT OR JUDGMENTS ONE OR MORE EXECUTIONS MAY ISSUE IM EDIATELY; AND FOR SO DOING, THlS NOTE OR A COPY OF THIS NOTE VERIFlED BY AFFIDAVIT SHALL BE SUFFICIENT WARRANT. THE UTHORITY GRANTED IN THIS NOTE TO CONFESS JUDGMENT AGAINST BORROWER SHALL NOT BE EXHAUSTED BY ANY EXERC{SE OF HAT AUTHORITY, BUT SHALL CONTINUE FROM TIME TO TIME AND AT ALL TIMES UNTIL PAYMENT IN FULL OF ALL AMOUNTS DUE UND THIS NOTE. BORROWER HEREBY WAIVES ANY RIGHT BORROWER MAY HAVE TO NOTICE OR TO A HEARING IN CONNECTION WITH NY SUCH CONFESSION OF JUDGMENT AND STATES THAT EITHER A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THIS CO FESSION OF JUDGMENT PROVISION TO BORROWER'S ATTENTION OR BORROWER HAS BEEN REPRESENTED BY INDEPENDENT LE AL COUNSEL. PR10R TO SIGNING THIS NOTE, BO INTEREST RATE PROVISIONS. BORF BORROWER ACKNOWLEDGES RECEI THIS NOTE IS GIVEN UNDER SEAL SEALED INSTRUMENT ACCORDING ' BORROWER: STEWARTS~WN CORNERSTONE LI CORNERS ONE DEVELAF~A~NT GRC gY; ri - - v a uel Juffe, re ent Development Grou Inc. LENDER: SOVEREIGN BANK I PROMISSORY NOTE _ (Continued) Page 3 )WER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE fER AGREES TO THE TERMS_OF THE NOTE. OF A COMPLETED COPY OF THIS PROMISSORY NOTE. ID R IS INTENDED THAT THIS NOTE IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A LAW. .PARTNERSHIP INC., General Partner of Stewartstown Cornerstone Limited Partnership ~A~T IJ `~p~ eXti~h~k a~ DIS~Cl.OSURE FOR CONFESSION OF JUDGMENT Declarant: Stewartstown Comes 200 Bailey Drive, Sui Stewartstown, PA 1 one Limited Partnership Lender: Sovereign Bank 204 Commercial Banking Division 63 101 S. George Street THE UNDERSIGNED IS Ek PROMISSORY NOTE FOR S A. THE UNDERSIGNED UNDERST LENDER TO ENTER JUDGMENT A DECLARANT AND WITHOUT OFFEI THE NOTE, BEING FULLY AWARE ANY JUDGMENTrOR OTHER CLAI BEHALF OF TH D •CLARANT, IS k ADVANCE NOT THE ENTRY JUDGMENT A • DECLARANT INITIALS: X CLOSURE FOR CONFESSION OF JUDGMENT J~ ~ I.r •+ ON BEHALF OF DECLARANT, THIS ~ DAY OF (,~(, ' w~"C'n 20~ A '.00 OBLIGATING DECLARANT TO REPAY THAT AMOUNT. WDS THAT THE NOTE CONTAINS A CONFESSION OF JUDGMENT PROVISION THAT WOULD PERMIT iAINST DECLARANT IN COURT, AFTER A DEFAULT ON THE NOTE, WITHOUT ADVANCE NOTICE TO ZING DECLARANT AN OPPORTUNITY TO DEFEND AGAINST THE ENTRY OF JUDGMENT. IN EXECUTING )F DECLARANT'S RIGHTS TO ADVANCE NOTICE AND TO A HEARING TO CONTEST THE VALIDITY OF CIS THAT LENDER MAY ASSERT AGAINST DECLARANT UNDER THE NOTE, THE UNDERSIGNED, ON 110WINGLY, INTELLIGENTLY, AND VOLUNTARILY WAIVING THESE RIGHTS, INCLUDING ANY RIGHT TO )F JUDGMENT, AND THE UNDERSIGNED EXPRESSLY AGREES AND CONSENTS TO LENDER`S ENTERING BY CONFESSION AS PROVIDED FOR IN THE CONFESSION OF JUDGMENT PROVISION. B. THE UNDER~FIGNED FURTHER NDERSTANDS THAT IN ADDITION TO GIVING LENDER THE RIGHT TO ENTER JUDGMENT AGAINST DECLARANT WITHOUT ADVANCE OT1CE OR A HEARING, THE CONFESSION OF JUDGMENT PROVISION IN THE NOTE ALSO CONTAINS LANGUAGE THAT WOULD PERMIT ENDER, AFTER ENTRY OF JUDGMENT, AGAIN WITHOUT EITHER ADVANCE NOTICE OR A HEARING, TO EXECUTE ON THE JUDGMENT BY FORECLOSING UPON, ATTACHING, LEVYING ON, TAKING POSSESSION OF OR OTHERWISE SEIZING DECLARANT'S PROPERTY, IN FUL OR PARTIAL PAYMENT OF THE JUDGMENT. IN EXECUTING THE NOTE, BEING FULLY AWARE OF DECLARANT'S RIGHTS TO ADVA CE NOTICE AND A HEARING AFTER JUDGMENT IS ENTERED AND BEFORE IXECUTION ON THE JUDGMENT, • E UNDERSIGNED, BEHALF OF THE DECLARANT, IS KNOWINGLY, INTELLIGENTLY AND VOLUNTARILY WAIVING THESE RIGHTS, AI~7~Tt~E UNDERSIGNED PRESSLY AGREES AND CONSENTS TO LENDER'S IMMEDIATELY EXECUTING ON THE JUDGMENT IN INITIALS: ~' ~• C. _ AFTER HAVING READ AND DETERMINED WHICH OF THE FOLLOWING STATEMENTS ARE APPLICABLE, BY INITIALING EACH S A MENT THAT APPLIES, THE U DERSIGNED REPRESENTS THAT: 1 LS 1. DECLARANT WAS REPRESENTED BY DECLARANT'S OWN INDEPENDENT LEGAL COUNSEL IN CONNECTION WITH THE NOTE. 2. A REPRESENTATIV OF LENDER SPECIFICALLY CALLED THE CONFESSION OF JUDGMENT PROVISION IN THE NOTE TO DECLARANT'S ATTENT ON. THIS DISCLOSURE IS GIVEN UNDE SEAL AND IT IS INTENDED THAT THIS DISCLOSURE IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT CCORDING TO LAW. DECLARANT: CORNERSTONE LI~VlIITED PARTNERSHIP Dave{opment INC., General Partner of Stewartstown Cornerstone Limited Partnership ~ASd nro t..eM~, vw. e.a.oaaos tow. w\rr q„r,dr s.ww,A ha. +w~, Laos At Nona Ao,w.e. - IA 0:1D000MILPRO\CR1LR\070.FC TR-B!5{ ro-\o 'P a RT ~p~s tiXlnibi~' I~~ COMMERCIAL GUARANTY Borrower: Stewartstown Comers ne Limited Partnership Lender: Sovereign Bank 200 Bailey Drive, Suke 04 Commercial Banking Division Stewartstown, PA 173 3 101 S. George Street York, PA 17401 Guarantor: Samuel Juffe _ _ 68 Cranbury Neck Road Cranbury, NJ 08512 CONTINUING GUARANTEE OF PAY ENT AND PERFORMANCE. For good and valuable consideration, Guarantor absolutely and unconditionally guarantees full and punctual payme and satisfaction of the Indebtedness of Borrower to Lender, and the performance and discharge of all Borrower's obligations under the No and the Related Documents. This is a guaranty of payment and performance and not of collection, so Lender can enforce this Guaranty ag inst Guarantor even when lender has not exhausted Lender's remedies against anyone else obligated to pay the Indebtedness or against any ollateral securing the Indebtedness, this Guaranty or any other guaranty of the Indebtedness. Guarantor will make any payments to Lender or is order, on demand, in legal tender of the United States of America, in same-day funds, without set-off or deduction or counterclaim, and will therwise perform Borrower's obligations under the Note and Related Documents. Under this Guaranty, Guarantor's liability is unlimited and uarantor's obligations are continuing. INDEBTEDNESS. The word "Indebte Hess" as used in this Guaranty means all of the principal amount outstanding from time to time and at any one or more times, accrued unpaid in areal thereon and all collection costs and legal expenses related thereto permitted by law, attorneys' fees, arising from any and all debts, liabili 'es and obligations of every nature or form, now existing or hereafter arising or acquired, that Borcower individually or collectively or intercha geably with others, owes or will owe lender. "indebtedness" includes, without limitation, loans, advances, debts, overdraft indebtedness, credit and indebtedness, lease obligations, other obligations, and liabilities of Borrower, and any present or future judgments against Borrower, future dvances, loans or transactions that renew, extend, modify, refinance, consolidate or substitute these debts, liabilities and obligations whe er: voluntarily or involuntarily incurred; due or to become due by their terms or acceleration; absolute or contingent; liquidated or unliquidated determined or undetermined; direct or indirect; primary or secondary in nature or arising from a guaranty or surety; secured or unsecured; jo nt or several or joint and several; evidenced by a negotiable or non-negotiable instrument or writing; originated by Lender or another or o ers; barred or unenforceable against Borrower for any reason whatsoever; for any transactions that may be voidable for any reason (such as i fancy, insanity, ultra vires or otherwisel; and originated then reduced or extinguished and then afterwards increased or reinstated. The above limitation on liability is no a restriction on the amount of the Note of Borrower to Lender either in the aggregate or at any one time. If Lender presently holds one or more guaranties, or hereafter receives additional guaranties from Guarantor, Lender's rights under all guaranties shall be cumulative. This Guaranty all not (unless specifically provided below to the contrary) affect or invalidate any such other guaranties. Guarantor's liability will be Guarantor s aggregate liability under the terms of this Guaranty and any such other unterminated guaranties. CONTINUING GUARANTY. THIS IS A "CONTINUING GUARANTY" UNDER WHICH GUARANTOR AGREES TO GUARANTEE THE FULL AND HEREAFTER ARISING OR ACQUIR D, ON AN OPEN AND CONTINUING BASIS. ACCORDINGLY, ANY PAYMENTS MADE ON THE INDEBTEDNESS WILL NOT DISCHA GE OR DIMINISH GUARANTOR'S OBLIGATIONS AND LIABILITY UNDER THIS GUARANTY FOR ANY REMAINING AND SUCCEEDING IN EBTEDNESS EVEN WHEN ALL OR PART OF THE OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE FROM TIME TO TIME. DURATION OF GUARANTY. This Gu ranty will take effect when received by Lender without the necessity of any acceptance by Lender, or any notice to Guarantor or to Borrower, nd will continue in full force until all the Indebtedness incurced or contracted before receipt by Lender of any notice of revocation shall have b en fully and finally paid and satisfied and all of Guarantor's other obligations under this Guaranty shall have been performed in full. If Guarant r elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written notice of revocation must be mailed to Lender, by certified mail, at Lender's address listed above or such other place as Lender may designate in writing. Written revocation of this Guaranty ill apply only to advances or new Indebtedness created after actual receipt by Lender of Guarantor's written revocation. For this purpose nd without limitation, the term "new Indebtedness" does not include the Indebtedness which at the time of notice of revocation is contingent unliquidated, undetermined or not due and which later becomes absolute, liquidated, determined or due. This Guaranty will continue to bind Guarantor for all the Indebtedness incurred by Borrower or committed by lender prior to receipt of Guarantor's written notice of revoca on, including any extensions, renewals, substitutions or modifications of the Indebtedness. All renewals, extensions, substitutions, and modifi ations of the Indebtedness granted after Guarantor's revocation, are contemplated under this Guaranty and, specifically will not be consider d to be new Indebtedness. This Guaranty shall bind Guarantor's estate as to the Indebtedness created both before and after Guarantor's d ath or incapacity, regardless of Lender's actual notice of Guarantor's death. Subject to the foregoing, Guarantor's executor or administrato or other legal representative may terminate this Guaranty in the same manner in which Guarantor might have terminated it and with the sam effect. Release of any other guarantor or termination of any other guaranty of the Indebtedness shall not affect the liability of Guarantor under this Guaranty. A revocation Lender receives from any one or more Guarantors shall not affect the liability of any remaining Guarantors under t is Guaranty. It is anticipated that fluctuations may occur in the aggregate amount of the Indebtedness covered by this Guaranty, and Guara for specifically acknowledges and agrees that reductions in the amount of the Indebtedness, even to zero dollars (50.00), prior to Guarantor's ritten revocation of this Guaranty shall not constitute a termination of-this Guaranty. This Guaranty is binding upon Guarantor and Guarant is heirs, successors and assigns so long as any of the Indebtedness remains unpaid and even though the Indebtedness may from time to time a zero dollars ($0.00). GUARANTOR'S AUTHORIZATION T LENDER. Guarantor authorizes Lender, either before or after any revocation hereof, without notice or demand and without lessening Guara tor's liability under this Guaranty, from time to time: (A) prior to revocation as set forth above, to make one or more additional secured or nsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise to extend additional credit to Borrower; (B) to Iter, compromise, renew, extend, accelerate, or otherwise change one or more times the time for payment or other terms of the Indebtednes or any part of the Indebtedness, including increases and decreases of the rate of interest on the Indebtedness; extensions may be rep ated and may be for longer then the original loan term; (C) to take and hold security for the payment of this Guaranty or the Indebtedness, a d exchange, enforce, waive, subordinate, fail or decide not to perfect, and release any such security, with or without the substitution of new c lateral; (D) to release, substitute, agree not to sue, or deal with any one or more of Borrower's sureties, endorsers, or other guarantors on a y terms or in any manner Lender may choose; (E) to determine how, when and what application of payments and credits shall be made n the Indebtedness; (F) to apply such security and direct the order or manner of sale thereof, including without limitation, any nonjudicial sal permitted by the terms of the controlling security agreement or deed of trust, as Lender in its discretion may determine; (G) to sell, transfe ,assign or grant participations in all or any part of the Indebtedness; and (H) to assign or transfer this Guaranty in whole or in part. GUARANTOR'S REPRESENTAT{ONS AND WARRANTIES. Guarantor represents and warrants to Lender that (A) no representations or agreements of arty kind have been m de to Guarantor which would limit or qualify in any way the terms of this Guaranty; {B) this Guaranty is COMMERCIAL GUARANTY (Continued) Page 2 executed at Borcower's request and n t at the request of Lender; (C} Guarantor has full power, right and authority to enter into this Guaranty; (D) the provisions of this Guaranty d not conflict with or result in a default under any agreement or other instrument binding upon Guarantor and do not result in a violation of any aw, regulation, court decree or order applicable to Guarantor; (E) Guarantor has not and will not, without e pnor wr en consen o en er, se , ease, assign, encum er, ypot ecate, cans er, or of erwise ispose o a or su stantta y a o Guarantor's assets, or any interest th rein; (Fi upon Lender's request, Guarantor will provide to Lender financial and credit information in form acceptable to Lender, and all such fi ancial information which currently has been, and all future financial information which will be provided to Lender is and will be true and corce t in all material respects and fairly present Guarantor's financial condition as of the dates the financial information is provided; (GI no ma erial adverse change has occurred in Guarantor's financial condition since the date of the most recent financial statements provided to Len er and no event has occurced which may materially adversely affect Guarantor's financial condition; (H) no litigation, claim, investigation, ad inistrative proceeding or similar action (including those for unpaid taxes) against Guarantor is pending or threatened; (U Lender has made no representation to Guarantor as to the creditworthiness of Borrower; and (J) Guarantor has established adequate means of obtaining from B mower on a continuing basis information regarding Borcower's financial condition. Guarantor agrees to keep adequately informed from such eans of any facts, events, or circumstances which might in any way affect Guarantor's risks under this Guaranty, and Guarantor further agre s that Lender shall have no obligation to disclose to Guarantor any information or documents acquired by Lender in the course of its relationshi with Borrower. GUARANTOR'S FlNANCIAL STATEM TS. Guarantor agrees to furnish Lender with the following: Annual Statements. As soon a available, but in no event later than one-hundred-twenty (1201 days after the end of each fiscal year, Guarantor's balance sheet and in ome statement for the year ended, compiled by a certified public accountant satisfactory to Lender. Tax Returns. As soon as avails le, but in no event later than one-hundred-twenty (120) days after the applicable filing date for the tax reporting period ended, Federal a d other governmental tax returns, prepared by a certified public accountant satisfactory to Lender. All financial reports required to be pr vided under this Guaranty shall be prepared in accordance with GAAP, applied on a consistent basis, and certified by Guarantor as being true a d corcect. GUARANTOR'S WAVERS. Except s prohibited by applicable law, Guarantor waives any right to require Lender (A) to continue lending money or to extend other credit to mower; (B) to make any presentment, protest, demand, or notice of any kind, including notice of any nonpayment of the Indebtedness or f any nonpayment related to any collateral, or notice of any action or nonaction on the part of Borrower, Lender, any surety, endorser, or oth r guarantor in connection with the Indebtedness or in connection with the creation of new or additional loans or obligations; (C) to resort fo payment or to proceed directly or at once against any person, including Borcower or any other guarantor; (D) to proceed directly against or ex aust any collateral held by Lender from Borcower, any other guarantor, or any other person; (E) to give notice of the terms, time, and place f any public or private sale of personal property security held by Lender from Borrower or to comply with any other applicable provisions of the Uniform Commercial Code; (F) to pursue any other remedy within Lender's power; or (GI to commit any act or omission of any kind, or at any time, with respect to any matter whatsoever. In addition to the waivers set forth h~rein, if now or hereafter Borrower is or shall become insolvent and the Indebtedness shall not at all times Lender's and Borrower's respective uccessors, any claim or right to payment Guarantor may now have or hereafter have or acquire against Borrower, by subrogation or otherwi e, so that at no time shall Guarantor be or become a "creditor" of Borrower within the meaning of 11 U.S.C. section 547(b), or any succes or provision of the Federal bankruptcy laws. Guarantor also waives any and all rig is or defenses based on suretyship or impairment of collateral including, but not limited to, any rights or defenses arising by reason of (A) ny "one action" or "anti-deficiency" law or any other law which may prevent Lender from bringing any action, including a claim for deficien y, against Guarantor, before or after Lender's commencement or completion of any foreclosure action, either judicially or by exercise of a ower of sale; (B) any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or Gu raptor's rights to proceed against Borrower for reimbursement, including without limitation, any loss of rights Guarantor may suffer by resso of any law limiting, qualifying, or discharging the Indebtedness; IC) any disability or other defense of Borrower, of any other guarantor, or f any other person, or by reason of the cessation of Borrower's liability from any cause whatsoever, other than payment in full in legal tender, of the Indebtedness; (D) any right to claim discharge of the Indebtedness on the basis of unjustified impairment of any collateral for the I debtedness; (E) any statute of limitations, if at any time any action or suit brought by Lender against Guarantor is commenced, there is ou ending Indebtedness which is not barred by any applicable statute of limitations; or (F) any defenses given to guarantors at law or in equ ty other than actual payment and performance of the Indebtedness. If payment is made by Borrower, whether voluntarily or otherwise, orb any third party, on the Indebtedness and thereafter Lender is forced to remit the amount of that payment to Borrower's trustee in bankruptcy r to any similar person under any federal or state bankruptcy law or law for the relief of debtors, the Indebtedness shall be considered unp id for the purpose of the enforcement of this Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff, counterclaim, count r demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower, the Guarantor, or both. GUARANTOR'S UNDERSTANDING TH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor's full knowledg of its significance and consequences and that, under the circumstances, the waivers are reasonable and not contrary to public policy or law. any such waiver is determined to 6e contrary to any applicable law or public policy, such waiver shall be effective only to the extent permitted y law or public policy. RIGHT OF SETOFF. To the extent ermitted by applicable law, Lender reserves a right of setoff in all Guarantor's accounts with Lender (whether checking, savings, or some other account). This includes all accounts Guarantor holds jointly with someone else and all accounts Guarantor may open in the future. H wever, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Guarantor authori es Lender, to the extent permitted by applicable law, to hold these funds if there is a default, and Lender may apply the funds in these account to pay what Guarantor owes under the terms of this Guaranty. SUBORDINATION OF BORROWER'S EBTS TO GUARANTOR. Guarantor agrees that the Indebtedness, whether now existing or hereafter created, shall be superior to any clai that Guarantor may now have or hereafter acquire against Borrower, whether or not Borrower becomes insolvent. Guarantor hereby express y subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any claim that Lender may now or hereaft r have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through bankruptcy, by an assignme t for the benefit of creditors, by voluntary liquidation, or otherwise, the assets of Borrower applicable to the payment of the claims of both ender and Guarantor shall be paid to Lender and shall be first applied try Lender to the Indebtedness. Guarantor does hereby assign to L der all claims which it may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower; provided ho ever, that such assignment shall be effective only for the purpose of assuring to Lender full payment in legal tender of the Indebtedness. If L nder so requests, any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be mark d with a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor agrees, and Lender is hereby authori ed, in the name of Guarantor, from time to time to file financing statements and continuation statements COMMERCIAL GUARANTY (Continued) Page 3 and to execute documents and to to a such other actions as Lender deems necessary or appropriate to perfect, preserve and enforce its rights under this Guaranty. ' a_mie Ilanao ~~ provieion~c'7re a nart cf this Guaranty - Amendments. This Guaranty, t ether with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this uaranty. No akeration of or amendment to this Guaranty shall be effective unless given in writing and signed by the party or parties s ght to be charged or bound by the alteration or amendment. Attorneys' Fees; Expenses. Gu rantor agrees to pay upon demand all of Lender's costs and expenses, including Lender's attorneys' fees and Lender's legal expenses, in urred in connection with the enforcement of this Guaranty. Lender may hire or pay someone else to help enforce this Guaranty, and Gu rantor shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal exp ses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings (including efforts t modify or vacate any automatic stay or injunction), appeals, and any anticipated post judgment collection services. Guarantor also shall p y all court costs and such additional fees as may be directed by the court. Caption Headings. Caption hea ings in this Guaranty are for convenience purposes only and are not to be used to interpret or define the provisions of this Guaranty. Governing Law. This Guaranty will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the Commonwealth of ennsylvania without regard to its conflicts of law provisions. This Guaranty has been accepted by Lender in the Commonwealth of Penns ania. Integratwn. Guarantor further . grees that Guarantor has read and fully understands the terms of this Guaranty; Guarantor has had the opportunity to be advised by Gu cantor's attorney with respect to this Guaranty; the Guaranty fully reflects Guarantor's intentions and parol evidence is not required to into pret the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmless from all losses, claims, damages, and costs (inc uding Lender's attorneys' fees) suffered or incurred by Lender as a result of any breach by Guarantor of the warranties, representations and agreements of this paragraph. Interpretation. In all cases whe be deemed to have been used named in this Guaranty or wl respectively shall mean all and a assigns, and transferees of eacl fact by itself will not mean the provisions of.this Guaranty eve Borrower or Guarantor are corps into the powers of Borrower or their behalf, and any indebtedne Notices. Unless otherwise prop except for revocation notices ! otherwise required by law), wl States mail, as first class, certif. All revocation notices by Guars Guaranty entitled "DURATION C notice to the other parties, spe agrees to keep Lender informed than one Guarantor, any notice e there is more than one Borrower or Guarantor, then all words used in this Guaranty in the singular shall n the plural where the context and construction so require; and where there is more than one Borrower en this Guaranty is executed by more than one Guarantor, the words "Borrower" and "Guarantor" ny one or more of them. The words "Guarantor," "Borrower," and "Lender" include the heirs, successors, i of them. If a court finds that any provision of this Guaranty is not valid or should not be enforced, that the rest of this Guaranty will not be valid or enforced. Therefore, a court will enforce the rest of the n if a provision of this Guaranty may be found to be invalid or unenforceable. If any one or more of rations, partnerships, limked liability companies, or similar entities, k is not necessary for Lender to inquire Guarantor or of the officers, directors, partners, managers, or other agents acting or purporting to act on ss made or created in reliance upon the professed exercise of such powers shall be guaranteed under this ded by applicable law, any notice required to be given under this Guaranty shall be given in writing, and, y Guarantor, shall be effective when actually delivered, when actually received by telefacsimile (unless an deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United :d or registered mail postage prepaid, directed to the addresses shown near the beginning of this Guaranty. ntor shall be in writing and shall be effective upon delivery to Lender as provided in the section of this r GUARANTY." Any party may change its address for notices under this Guaranty 6y giving formal written ;ifying that the purpose of the notice is to change the party's address. For notice purposes, Guarantor at all times of Guarantor's current address. Unless otherwise provided by applicable law, if there is more liven by Lender to any Guarantor is deemed to be notice given to all Guarantors. No Waiver by Lender. Lenders all not be deemed to have waived any rights under this Guaranty unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Guaranty shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that pro ision or any other provision of this Guaranty. No prior waiver by Lender, nor any course of dealing between Lender and Guarantor, shall co stitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lend r is required under this Guaranty, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequ nt instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Successors and Assigns. T e terms of this Guaranty shall be binding upon Guarantor, and upon Guarantor's heirs, personal representatives, successors, an assigns, and shall be enforceable by Lender and its successors and assigns. Waive Jury. Lender and Guar ntor hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by either Lender or Borrower against the other. ERROR AND OMISSIONS. In consi eration of the loan made by Sovereign Bank, (hereafter referred to as "Lender" to the undersigned, the undersigned does hereby represent he promise as follows: Upon request made by the Lender, its successors or assigns, the undersigned will execute such documents as are rea onable to provide assurance to Lender (1) that the obligations undertaken by the undersigned in connection with said loan will be faithfully pe rmed; l2) that any and all documents and instruments signed by the undersigned in connection with said loan are accurate statements as to he truth of the matters set forth in them and constitute binding obligations upon the undersigned according to their tenor; or (3) as to the amou t of said loan outstanding from time to time, and the date and amount of payments made in respect to said loan. Upon request made by the ender, its successors or assigns, the undersigned will re-execute any document or instrument signed in connection with said loan or execut any document or instrument that ought to have been signed at or before closing of said loan, or which was incorrectly drafted and signed, to fa ilitate full execution of the appropriate documents. All such requests shall receive the full cooperation and compliance by the undersigned wit in seven (7) days of the making of the request set forth above. The failure of the undersigned to comply with their obligations hereunder she I constitute a default under the documents executed in connection with said loan and shall entitle Lender or its successors and assigns, to the r medies available for default under the documents executed by the undersigned. DEFINITIONS. The following capit ized words and terms shall have the following meanings when used in this Guaranty. Unless specifically stated to the contrary, all reference to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include th plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Guaranty shall have t e meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word "Borrow r" means Stewartstown Cornerstone Limited Partnership and includes all co-signers and co-makers signing COMMERCIAL GUARANTY _ (Continued) Page 4 the Note and all their successor and assigns. GAAP. The word "GAAP" mea s generally accepted accounting principles. --Guarantor-~t~e-wor r°-means-everyone-sigrring-this~aarant~rYClading~vith s~Y- signer's successors and assigns Guaranty. The word "Guaranty means this guaranty from Guarantor to Lender. Indebtedness. The word "Indeb edness" means Borrower's indebtedness to Lender as more particularly described in this Guaranty. Lender. The word "Lender" me ns Sovereign Bank, its successors and assigns. Note. The word "Note" mean and includes without limitation all of Borrower's promissory notes and/or credh agreements evidencing Borrower's loan obligations in f or of Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of and substitutions for promise ry notes or credit agreements. Related Documents. The wor s "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, securi agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, wh ther now or hereafter existing, executed in connection with the Indebtedness. CONFESSION OF JUDGMENT. UARANTOR HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR THE PROTHONOTARY OR CLERK OF A COURT IN THE COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE, TO APPEAR AT ANY TIME FOR GUARANTOR AFTER THE AM UNTS HEREUNDER BECOME DUE AND WITH OR WITHOUT COMPLAINT FILED, CONFESS OR ENTER JUDGMENT AGAINST GUARANTO FOR THE ENTIRE PRINCIPAL BALANCE OF THIS GUARANTY AND ALL ACCRUED INTEREST, LATE CHARGES AND ANY AND ALL A OUNTS EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECURING THE INDEBTEDNESS, TOGETHER WITH COSTS OF SUIT, AND AN ATTORNEY'S COMMISSION OF TEN PERCENT (10%) OF THE UNPAID PRINCIPAL BALANCE AND ACCRU INTEREST FOR COLLECTION, BUT IN ANY EVENT NOT LESS THAN FIVE HUNDRED DOLLARS (5500) ON WHICH JUDGMENT OR JUDGM NTS ONE OR MORE EXECUTIONS MAY ISSUE IMMEDIATELY; AND FOR SO DOING, THIS GUARANTY OR A COPY OF THIS GUARANTY VERI IED BY AFFIDAVIT SHALL BE SUFFICIENT WARRANT. THE AUTHORITY GRANTED IN THIS GUARANTY TO CONFESS JUDGMENT AGAINS GUARANTOR SHALL NOT BE EXHAUSTED BY ANY EXERCISE OF THAT AUTHORITY, BUT SHALL CONTINUE FROM TIME TO TIME ND AT ALL TIMES UNTIL PAYMENT IN FULL OF ALL AMOUNTS DUE UNDER THIS GUARANTY. GUARANTOR HEREBY WAIVES AN RIGHT GUARANTOR MAY HAVE TO NOTICE OR TO A HEARING IN CONNECTION WITH ANY SUCH CONFESSION OF JUDGMENT AND TATES THAT EITHER A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THIS CONFESSION OF JUDGMENT PROVISION TO GUARA TOR'S ATTENTION OR GUARANTOR HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL. EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO (TS TERMS. IN ADDITION, EACH GUA NTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO ENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER S~7' FORTH IN THE SECTION TITLED 'DURATIO OF GUARANTY". NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY THIS GU~~TY tS GIVEN UNDER EAL AND IT IS INTENDED THAT THIS GUARANTY IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCO ING TO LAW. V V A( v, ~. X INDIVIDUAL ACKNOWLEDGMENT COMMONWEALTH OF PENNSYLI COUNTY OF 0~ IC On this, the u"f'~ ~ proven) to be the person whose purposes therein contained. SS _ day of l~~ll"Ud~l , 20 Q ~ ,before me a- I~0 the undersigned Notary Public, personally appeared Samuel Juffe, known to me r satisfactorily is subscribed to the within instrument, and acknowledged that he or she executed t e same for the In witness whereof, I hereunto Set my hand and official seal. N 'al Seal public Dawn M. Gu'enrz. Notary City of rk, York Conn 5, 2006 My Cotnmissio Expires Apc --•----- Notary Public in and o the State of LA9FR PRO 9. Vr. 6.79.09.00/ Ceq. IWYM FlnneiY Sdutlana In¢ 1997. 2009. Y RIpnD R.~,v.G. ~ PA 0:1DONMLLPR0IGRIA1E79.PC 711.9960 PR•10 ~ A ~T ~- ~p~ .~xh ib ik ~~ COMMERCIAL GUARANTY Borrower: Stevvartstown Comersto a Limited Partnership Lender: 200 Bailey Drive, Suite 04 Stewartstown, PA 173 3 Guarantor: Cornerstone Development Group, Inc. 200 Bailey Drive, Suita 04 Stewartstown, PA 173 3 CONTINUING GUARANTEE OF PAYN guarantees full and punctual paymer Borrower's obligations under the Not Lender can enforce this Guaranty ag pay the Indebtedness or against any wilt make any payments to Lender or deduction or counterclaim, and will Guarantor's liability is unlimited and INDEBTEDNESS. The word "Indebtei one or more times, accrued unpaid in arising from any and all debts, liabili individually or collectively or interchai debts, overdraft indebtedness, credit judgments against Borrower, future debts, liabilities and obligations whet contingent; liquidated or unliquidated or surety; secured or unsecured; jc originated by Lender or another or o1 be voidable for any reason (such as i increased or reinstated. NT AND PERFORMANCE. For good and valuable consideration, Guarantor absolutely and unconditionally and satisfaction of the Indebtedness of Borrower to Lender, and the performance and discharge of all and the Related Documents. This is a guaranty of payment and performance and not of collection, so lost Guarantor even when Lender has not exhausted Lender's remedies against anyone else obligated to oltateral securing the Indebtedness, this Guaranty or any other guaranty of the Indebtedness. Guarantor s order, on demand, in legal tender of the United States of America, in same-day funds, without set-off or Cherwise perform Borcower's obligations under the Note and Related Documents. Under this Guaranty, iarantor's obligations are continuing. less" as used in this Guaranty means all of the principal amount outstanding from time to time and at any ;rest thereon and all collection costs and legal expenses related thereto permitted by law, attorneys' fees, es and obligations of every nature or form, now existing or hereafter arising or acquired, that Borrower Ieably with others, owes or will owe Lender. "Indebtedness" includes, without limitation, loans, advances, and indebtedness, lease obligations, other obligations, and liabilities of Borrower, and any present or future idvances, loans or transactions that renew, extend, modify, refinance, consolidate or substitute these per. voluntarily or involuntarily incurred; due or to become due by their terms or acceleration; absolute or determined or undetermined; direct or indirect; primary or secondary in nature or arising from a guaranty it or several or joint and several; evidenced by a negotiable or non-negotiable instrument or writing; Hers; barred or unenforceable against Borrower for any reason whatsoever; for any transactions that may Fancy, insanity, ultra wires or otherwise); and originated then reduced or extinguished and then afterwards The above limitation on liability is not a restriction on the amount of the Note of Borrower to Lender e'itfier in the aggregate or at any one time. If Lender presently holds one or more guaranties, or hereafter receives additional guaranties from Guarantor, Lender's rights under all guaranties shall be cumulative. This Guaranty s all not (unless specifically provided below to the contrary) affect or invalidate any such other guaranties. Guarantor's liability will be Guarantor' aggregate liability under the terms of this Guaranty and any such other unterminated guaranties. CONTINUING GUARANTY. THIS IS A "CONTINUING GUARANTY" UNDER WHICH GUARANTOR AGREES TO GUARANTEE THE FULL AND HEREAFTER ARISING OR ACQUIRE INDEBTEDNESS WILL NOT DISCHAI REMAINING AND SUCCEEDING INC BALANCE FROM TIME TO TIME. DURATION OF GUARANTY. This Gu notice to Guarantor or to Borrower, any notice of revocation shall have be been performed in full. If Guarantc revocation must be mailed to Lender, Written revocation of this Guaranty written revocation. For this purpose of notice of revocation is contingent, This Guaranty will continue to bind Guarantor's written notice of revocat extensions, substitutions, and modff and, specifically will not be consider both before and after Guarantor's di Guarantor's executor or administrato have terminated it and with the same affect the liability of Guarantor under of any remaining Guarantors under t covered by this Guaranty, and Guara dollars .(S0.00), prior to Guarantor's binding upon Guarantor and Guarantc Indebtedness may from time to time I GUARANTOR'S AUTHORIZATION Tt demand and without lessening Guara one or more additional secured or i additional credit to Borrower; IB) to or other terms of the Indebtednes: Indebtedness; extensions may be rep this Guaranty or the Indebtedness, ar or without the substitution of new cc endorsers, or other guarantors on ai payments and credits shall be made without limitation, any nonjudicial sal may determine; IG) to sell, transfer Guaranty in whole or in part. ON AN OPEN AND CONTINUING BASIS. ACCORDINGLY, ANY PAYMENTS MADE ON THE OR DIMINISH GUARANTOR'S OBLIGATIONS AND LIABILITY UNDER THIS GUARANTY FOR ANY EDNESS EVEN WHEN ALL OR PART OF THE OUTSTANDING INDEBTEDNESS MAY BE A ZERO ranty will take effect when received by Lender without the necess'ty of any acceptance by Lender, or any id will continue in full force until all the Indebtedness incurred or contracted before receipt by Lender of ~n fully and finally paid and satisfied and all of Guarantor's other obligations under this Guaranty shall have elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written notice of ~y certified mail, at Lender's address listed above or such other place as Lender may designate in writing. will apply only to advances or new Indebtedness created after actual receipt 6y Lender of Guarantor's ind without limitation, the term "new Indebtedness" does not include the Indebtedness which at the time unliquidated, undetermined or not due and which later becomes absolute, liquidated, determined or due. Guarantor for all the Indebtedness incurred by Borrower or committed by Lender prior to receipt of ~n, including any extensions, renewals, substitutions or modifications of the Indebtedness. All renewals, ations of the Indebtedness granted after Guarantor's revocation, are contemplated under this Guaranty d to be new Indebtedness. This Guaranty shall bind Guarantor's estate as to the Indebtedness created 3th or incapacity, regardless of Lender's actual notice of Guarantor's death. Subject to the foregoing, or other legal representative may terminate this Guaranty in the same manner in which Guarantor might effect. Release of any other guarantor or termination of any other guaranty of the Indebtedness shall not his Guaranty. A revocation Lender receives from any one or more Guarantors shall not affect the liability is Guaranty. It is anticipated that fluctuations may occur in the aggregate amount of the Indebtedness for specifically acknowledges and agrees that reductions in the amount of the Indebtedness, even to zero written revocation of this Guaranty shall not constitute a termination of this Guaranty. This Guaranty is 's heirs, successors and assigns so long as any of the Indebtedness remains unpaid and even though the 3 zero dollars (50.00). LENDER. Guarantor authorizes Lender, either before or after any revocation hereof, without notice or tor's liability under this Guaranty, from time to time: (A) prior to revocation as set forth above, to make neecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise to extend Iter, compromise, renew, extend, accelerate, or otherwise change one or more times the time for payment or any part of the Indebtedness, including increases and decreases of the rate of interest on the ated and may be for longer than the original loan term; (C) to take and hold security for the payment of f exchange, enforce, waive, subordinate, fail or decide not to perfect, and release any such security, with lateral; (D) to release, substitute, agree not to sue, or deal with any one or more of Borrower's sureties, y terms or in any manner Lender may choose; (E) to determine how, when and what application of n the Indebtedness; IF) to apply such security and direct the order or manner of sale thereof, including permitted by the terms of the controlling security agreement or deed of trust, as Lendar in its discretion assign or grant participations in all or any part of the Indebtedness; and (H) to assign or transfer this Sovereign Bank Commercial Banking Division 101 S. George Street York, PA 17401 GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to Lender that (A) no representations or agreements of any kind have been m de to Guarantor which would limit or qualify in any way the terms of this Guaranty; (B) this Guaranty is COMMERCIAL GUARANTY (Continued) Page 2 executed at Borrower's request and no at the request of Lender; (C) Guarantor has full power, right and authority to enter into this Guaranty; (D) the provisions of this Guaranty do not conflict with or result in a default under any agreement or other instrument binding upon Guarantor and do not result in a violation of any 1 w, regulation, court decree or order applicable to Guarantor; (E) Guarantor has not and will not, without Guarantor's assets, or any interest the ein; (F) upon Lender's request, Guarantor will provide to Lender financial and credit information in form acceptable to Lender, and all such fine cial information which currently has been, and all future financial information which will be provided to Lender is and will be true and corcec in all material respects and fairly present Guarantor's financial condition as of the dates the financial information is provided; IG) no mat rial adverse change has occurred in Guarantor's financial condition since the date of the most recent financial statements provided to Lend and no event has occurced which may materially adversely affect Guarantor's financial condition; IH) no litigation, claim, investigation, admi isVative proceeding or similar action (including those for unpaid taxes) against Guarantor is pending or threatened; (II Lender has made no epresentation to Guarantor as to the creditworthiness of Borrower; and (Jl Guarantor has established adequate means of obtaining from 80 ower on a continuing bass information regarding Borrower's financial condition. Guarantor agrees to keep adequately informed from such eons of any facts, events, or circumstances which might in any way affect Guarantor's risks under this Guaranty, and Guarantor further agree that Lender shall have no obligation to disclose to Guarantor any information or documents acquired by Lender in the course of its relatiortshi with Borrower. GUARANTOR'S FINANCIAL STATEMENTS. Guarantor agrees to furnish Lender with the following: Annual Statements. As soon as available, but in no event later than one-hundred-twenty (120) days after the end of each fiscal year, Guarantor's balance sheet and in me statement for the year ended, compiled by a certified public accountant satisfactory to Lender. Tax Returns. As soon as avails le, but in no event later than one-hundred-twenty (120) days after the applicable filing date for the tax reporting period ended, Federal a other governmental tax returns, prepan:d by a certified public accountant satisfactory to Lender. All financial reports required to be pro ided under this Guaranty shalt be prepared in accordance with GAAP, applied on a consistent basis, and certified by Guarantor as being true an correct. GUARANTOR'S WAIVERS. Except a prohibited by applicable law, Guarantor waives any right to require Lender (A) to continue lending money or to extend other credit to B mower; (B) to make any presentment, protest, demand, or notice of any kind, including notice of any nonpayment of the Indebtedness or o any nonpayment related to any collateral, or notice of any action or nonaction on the part of Borrower, Lender, any surety, endorser, or othe guarantor in connection with the Indebtedness or in connection with the creation of new or additional loans or obligations; (C) to resort for payment or to proceed directly .or at once against any person, including Borcower or any other guarantor; (D) to proceed directly against ore ust arty collateral held by Lender from Borrower, any other guarantor, or any other person; (E) to give notice of the terms, time, and place o any public or private sale of personal property security held by Lender from Borrower or to comply with any other applicable provisions of the niform Commercial Code; (F) to pursue any other remedy within Lender's power; or (G) to commit any act or omission of any kind, or at any 'me, with respect to any matter whatsoever. in addition to the waivers set forth ein, if now or hereafter Borrower is or shall become insolvent and the Indebtedness shall not at all times until paid be fully secured by collateral pledged by Borrower, Guarantor hereby forever waives and gives up in favor of Lender and Borrower, and en er s an orrower s respective s ccessors, any claim or right to payment Guarantor may now have or hereafter have or acquire against Borrower, by subrogation or otherni , so that at no time shall Guarantor be or become a "creditor" of Borcower within the meaning of 11 U.S.C. section 547{b), or any success r provision of the Federal bankruptcy laws. Guarantor also waives any and all rig is or defenses based on suretyship or impairment of collateral including, but not limited to, any rights or defenses arising by reason of (A) y "one action" or "anti-deficiency" law or any other law which may prevent Lender from bringing any action, including a claim for deficien y, against Guarantor, before or after Lender's commencement or completion of any foreclosure action, either judicially or by exercise of a ower of sale; (B) any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or Gu raptor's rights to proceed against Borrower for reimbursement, including without limitation, any loss of rights Guarantor may suffer by reaoo of any law limiting, qualifying, or discharging the Indebtedness; (CI any disability or other defense of Borrower, of any other guarantor, or f any other person, or by reason of the cessation of Borrower's liability from any cause whatsoever, other than payment in full in legal tender, of the Indebtedness; (D) any right to claim discharge of the Indebtedness on the basis of unjustified impairment of any collateral for the I debtedness; (E) any statute of limitations, if at any time any action or suit brought by lender against Guarantor is commenced, there is o standing Indebtedness which is not barred by any applicable statute of (imitations; or {F1 any defenses given to guarantors at law or in equ ty other than actual payment and performance of the Indebtedness. If payment is made by Borrower, whether voluntarily or otherwise, orb any third party, on the Indebtedness and thereafter Lender is forced to remit the amount of that payment to Borrower's trustee in bankruptcy r to any similar person under any federal or state bankruptcy law or law for the relief of debtors, the Indebtedness shall be considered unp id for the purpose of the enforcement of this Guaranty. Guarantor further waives and agrees not Lo assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff, counterclaim, count r demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower, the Guarantor, or both. GUARANTOR'S UNDERSTANDING RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor's toil knovrledg of its significance and consequences and that, under the circumstances, the waivers are reasonable and not contrary to public policy or law. f any such waiver is determined to be contrary to any applicable law or public policy, such waiver shall be effective only to the extent permitted by law or public policy. RIGHT OF SETOFF. To the extent ermitted by applicable law, Lender reserves a right of setoff in all Guarantor's accounts with Lender (whether checking, savings, or som other account). This includes all accounts Guarantor holds jointly with someone else and all accounts Guarantor may open in the future. H wever, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Guarantor authori es Lender, to the extent permitted by applicable law, to hold these funds if there is a default, and Lender may apply the funds in these accoun to pay what Guarantor owes under the terms of this Guaranty. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness, whether now existing or hereafter created, shall be superior to any clot that Guarantor may now have or hereafter acquire against Borrower, whether or not Borrower becomes insolvent. Guarantor hereby expres ly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any claim that Lender may now or herea er have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through bankruptcy, by an assignme t for the benefit of creditors, by voluntary liquidation, or otherwise, the assets of Borrower applicable to the payment of the claims of both ender and Guarantor shall be paid to Lender and shall be first applied by Lender to the lndebtedness. Guarantor does hereby assign to L nder all claims which it may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower; provided ho ever, that such assignment shall be effective only for the purpose of assuring to Lender full payment in legal tender of the Indebtedness. If ender so requests, any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be mar d with a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor agrees, and Lender is hereby authori ad, in the name of Guarantor, from time to time to file financing statements and continuation statements COMMERCIAL GUARANTY (Continued) Page 3 and to execute documents and to tak~ such other actions as Lender deems necessary or appropriate to perfect, preserve and enforce its rights under this Guaranty. Amendments. This Guaranty, to ether with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this uaranty. No alteration of or amendment to this Guaranty shall be effective unless given in writing and signed by the party or parties sou ht to be charged or bound by the alteration or amendment. Attorneys' Fees; Expenses. Gua antor agrees to pay upon demand all of Lender's costs and expenses, including Lender's attorneys' fees and Lender's legal expenses, inc rred in connection with the enforcement of this Guaranty. Lender may hire or pay someone else to help enforce this Guaranty, and Gua antor shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal expen es whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings (including efforts to odify or vacate any automatic stay or injunction), appeals, and any anticipated past-judgment collection services. Guarantor also shall pa all court costs and such additional fees as may be directed by the court. Caption Headings. Caption head~ngs in this Guaranty are for convenience purposes only and are not to be used to interpret or define the provisions of this Guaranty. Governing Law. This Guaranty ill be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the Commonwealth of P nnsyhrania without regard to its conflicts of taw provisions. This Guaranty has been accepted by Lender in the Commonwealth of Pennsyl ante. Integration. Guarantor further a rees that Guarantor has read and fully understands the terms of this Guaranty; Guarantor has had the opportunity to be advised by Gua antor's attorney with respect to this Guaranty; the Guaranty fully reflects Guarantor's intentions and parol evidence is not required to inter rat the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmless from all losses, claims, damages, and costs (incl ding Lender's attorneys' fees) suffered or incurred by Lender as a result of any breach by Guarantor of the warranties, representations and greements of this paragraph, Interpretation, In all cases whey there is more than one Borrower or Guarantor, then all words used in this Guaranty in the singular shall be deemed to have been used ( the plural where the context and construction sa require; and where there is more than one Borrower named in this Guaranty or wh n this Guaranty is executed by more than one Guarantor, the words "Borrower" and "Guarantor" respectively shall mean all and a y one or more of them. The words "Guarantor," "Borrower," and "Lender" include the heirs, successors, assigns, and transferees of each of them. If a court finds that any provision of this Guaranty is not valid or should not be enforced, that fact by itself will not mean the the rest of this Guaranty will not be valid or enforced. Therefore, a court will enforce the rest of the provisions of this Guaranty eve if a provision of this Guaranty may be found to be invalid or unenforceable. If arty one or more of Borrower or Guarantor are corpo ations, partnerships, limited liability companies, or similar entities, it is not necessary for Lender to inquire into the powers of Borrower or uarantor or of the officers, directors, partners, managers, or other agents acting or purporting to act on their behalf, and any indebtedne s made or created in reliance upon the professed exercise of such powers shall be guaranteed under this Notices. Unless otherwise prov ed by applicable law, any notice required to be given under this Guaranty shall be given in writing, and, except for revocation notices b Guarantor, shall be effective when actually delivered, when actually received by telefacsimile (unless otherwise required by lawl, wh n deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certifi d or registered mail postage prepaid, directed to the addresses shown near the beginning of this Guaranty. All revocation notices by Guara for shall be in writing and shall be effective upon delivery to Lender as provided in the section of this Guaranty entitled "DURATION O GUARANTY." Any party may change its address for notices under this Guaranty by giving formal written notice to the other parties, spa ifying that the purpose of the notice is to change the party's address. For notice purposes, Guarantor agrees to keep Lender informed at all times of Guarantor's currant address. Unless otherwise provided by applicable law, if there is more than one Guarantor, any notice iven by Lender to any Guarantor is deemed to be notice given to all Guarantors. No Waiver by Lender. Lenders alt not be deemed to have waived arty rights under this Guaranty unless such waiver is given in writing and signed by Lender. No delay or mission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a rovision of this Guaranty shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provi ion or any other provision of this Guaranty. No prior waiver by Lender, nor any course of dealing between Lender and Guarantor, shall con titute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lende is required under this Guaranty, the granting of such consent by Lender in any instance shall not constitute continuing consent to subseque t instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Successors and Assigns. T terms of this Guaranty shall be binding upon Guarantor, and upon Guarantor's heirs, personal representatives, successors, an assigns, and shall 6e enforceable by Lender and its successors and assigns. Waive Jury. Lender and Guar for hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by either Lender or Borrower against the they. ERROR AND OMISSIONS. In consid ration of the loan made by Sovereign Bank; (hereafter referred to as "Lender" to the undersigned, the undersigned does hereby represent a promise as follows: Upon request made by the Lender, its successors or assigns, the undersigned wilt execute such documents as are reas nable to provide assurance to Lender (1) that the obligations undertaken by the undersigned in connection with said loan will be faithfully pert rmed; (2) that any and all documents and instruments signed by the undersigned in connection with said loan are accurate statements as tot a truth of the matters set forth in them and constitute binding obligations upon the undersigned according to their tenor; or (3) as to the amou of said loan outstanding from time to time, and the date and amount of payments made in respect to said loan. Upon request made by the nder, its successors or assigns, the undersigned will re-execute any document or instrument signed in connection with said loan or execute any document or instrument that ought to have been signed at or before closing of said loan, or which was incorrectly drafted and signed, to fa ilitate full execution of the appropriate documents. All such requests shall receive the full cooperation and compliance by the undersigned with n seven (7) days of the making of the request set forth above. The failure of the undersigned to comply with their obligations hereunder shat constitute a default under the documents executed in connection with said loan and shall entitle Lender or its successors and assigns, to the re edies available for default under the documents executed by the undersigned. DEFlNITIONS. The following capital zed words and terms shall have the following meanings when used in this Guaranty. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Guaranty shall have t e meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word "Borrowet" means Stewartstown Cornerstone Limited Partnership and includes all co-signers and co-makers signing COMMERCIAL GUARANTY_ ~Contirlued} Page 4 the Note and all their successors end assigns. GAAP. The word "GAAP" mean$ generally accepted accounting principles. Inc., and in each case, any signs 's successors and assigns. Guaranty. The word "Guaranty" means this guaranty from Guarantor to Lender. Indebtedness. The word "Indebtedness" means Borrower's indebtedness to Lender as more particularly described in this Guaranty. Lender. The word "lender" mea s Sovereign Bank, its successors and assigns. Note. The word "Note" means and includes without limitation all of Borrower's promissory notes and/or credit agreements evidencing Borrower's loan obligations in fa or of Lender, together with a!! renewals of, extensions of, modifications of, refinancings of, consolidations of and substitutions for promiss ry notes or credit agreements. Related Documents. The word "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, securi agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreemenrts and documents, wh ther now or hereafter existing, executed in connection with the Indebtedness. CONFESSION OF JUDGMENT. UARANTOR HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR THE PROTHONOTARY OR CLERK OF AN COURT IN THE COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE, TO APPEAR AT ANY TIME FOR GUARANTOR AFTER THE AM LINTS HEREUNDER BECOME DUE AND WITH OR WITHOUT COMPLAINT FILED, CONFESS OR ENTER JUDGMENT AGAINST GUARANTO FOR THE ENTIRE PRINCIPAL BALANCE OF THIS GUARANTY AND ALL ACCRUED INTEREST, LATE CHARGES AND ANY AND ALL A OUNTS EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECURING THE INDEBTEDNESS, TOGETHER WITH COSTS OF SUIT, AND AN ATTORNEY'S COMMISSION OF TEN PERCENT (10%) OF THE UNPAID PRINCIPAL BALANCE AND ACCRUE INTEREST FOR COLLECTION, BUT IN ANY EVENT NOT LESS THAN FIVE HUNDRED DOLLARS ($500) ON WHICH JUDGMENT OR JUDGM TS ONE OR MORE EXECUTIONS MAY ISSUE IMMEDIATELY; AND FOR SO DOING, THIS GUARANTY OR A COPY OF THIS GUARANTY VERI ED BY AFFIDAVIT SHALL BE SUFFICIENT WARRANT. THE AUTHORITY GRANTED IN THIS GUARANTY TO CONFESS JUDGMENT AGAINS GUARANTOR SHALL NOT BE EXHAUSTED BY ANY EXERCISE OF THAT AUTHORITY, BUT SHALL CONTINUE FROM TIME TO TIME ND AT ALL TIMES UNTIL PAYMENT IN FULL OF ALL AMOUNTS DUE UNDER THIS GUARANTY. GUARANTOR HEREBY WAIVES AN RIGHT GUARANTOR MAY HAVE TO NOTICE OR TO A HEARING IN CONNECTION WITH ANY SUCH CONFESSION OF JUDGMENT AND TATES THAT EITHER A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THIS CONFESSION OF JUDGMENT PROVISION TO GUARA TOR'S ATTENTION OR GUARANTOR HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL. EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUA ANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO ENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED "DURATIO OF GUARANTY". NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY THIS GUARANTY tS GIVEN UNDER EAL AND IT IS INTENDED THAT THIS GUARANTY IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCO ING TO LAW. INC. By: Development Group, CORPORATE ACKNOWLEDGMENT COMMONWEALTH OF PENNSYLV COUNTY OF /~~ On this, the Group, Inc., who acknowledged she as such President of Comei therein contained by signing the In witness whereof, I here Dawn M. City ~ My Commis Member, Penn SS day of ~r~4Wl- , 20 Q~ ,before me C. _, the undersigned Notary Public, personally appeared Samuel Jaffe, President of Cornerstone D velopment iself or herselt to be the President of Comerstone Development Group, Inc., of a corporation, an that he or ~e Deve{opment Group, Inc., being authorized to do so, executed the foregoing instrument for the purposes ~e of the corporation by himself or herself as Preside of Cornerstone Development Group, Inc.. set my hand and official seal. /~ ~/~ Notarial Seal ~~'u•~Y [ Gudecrez, Notary Public F York, York CoQaty Notary Public in and fo a State of ion Expires Apr. 15, 2006 assn r"o i.~,"~,a v.,. s.~s.co.aot e"n,. wa."e A".nar sautlma M6 iso~. mos. Ap wa"n n..w.a. • ~~ a~oocuRw.rno~crnu+.~m.x rn-ease n,no pA~~ `'Zp~ exhibik ~~ COMMERCIAL GUARANTY Borrower: Stewartstown Cornerst a Limited Partnership Lender: Sovereign Bank 200 Bailey Drive, Suite 04 Commercial Banking Division Stewartstown, PA 173 3 101 S. George Street York, PA 17401 Guarantor: John M. Huenke 4400 Bridgeview Road Stewartstown, PA 17; CONTINUING GUARANTEE OF PAYM NT AND PERFORMANCE. For good and valuable consideration, Guarantor absolutely and unconditionally guarantees full and punctual paymen and satisfaction of the Indebtedness of Borrower to Lender, and the performance and discharge of all Borrower's obligations under the Not and the Related Documents. This is a guaranty of payment and performance and not of collection, so Lender can enforce this Guaranty ag inst Guarantor even when Lender has not exhausted Lender's remedies against anyone else obligated to pay the Indebtedness or against any ollateral securing the Indebtedness, this Guaranty or any other guaranty of the Indebtedness. Guararrtor will make any payments to Lender or order, on demand, in legal tender of the United States of America, in sameilay funds, without set-off or deduction or counterclaim, and will therwise perform Borrower's obligations under the Note and Related Documents. Under this Guaranty, Guarantor's liability is unlimited and G grantor's obligations are continuing. INDEBTEDNESS. The word "Indebted ess" as used in this Guaranty means all of the principal amount outstanding from time to time and at any one or more times, accrued unpaid in rest thereon and all collection costs and legal expenses related thereto permitted by law, attorneys' fees, arising from any and all debts, liabili es and obligations of every nature or form, now existing or hereafter arising or acquired, that Borrower individually or collectively or interchan eably with others, owes or will owe Lender. "Indebtedness" includes, without limitation, loans, advances, debts, overdraft indebtedness, credit and indebtedness, lease obligations, other obligations, and liabilities of Borrower, and any present or future judgments against Borrower, future dvances, loans or transactions that renew, extend, modify, refinance, consolidate or substitute these debts, liabilities and obligations whet er: voluntarily or involuntarily incurred; due or to become due by their terms or acceleration; absolute or contingent; liquidated or unliquidated; determined or undetermined; direct or indirect; primary or secondary in nature or arising from a guaranty or surety; secured or unsecured; joi t or several or joint and several; evidenced by a negotiable or non-negotiable instrument or writing; originated by Lender or another or of ers; barred or unenforceable against Borrower for any reason whatsoever; for any transactions that may be voidable for any reason (such as i ancy, insanity, ultra vires or otherwise); and originated then reduced or extinguished and then afterwards increased or reinstated. The above limitation on liability is not a restriction on the amount of the Note of Borrower to Lender either in the aggregate or at any one time. If Lender presently holds one or more uaranties, or hereafter receives additional guaranties from Guarantor, Lender's rights under all guaranties shall be cumulative. This Guaranty s all not (unless specifically provided below to the contrary) affect or invalidate any such other guaranties. Guarantor's liability will be Guarantor' aggregate liability under the terms of this Guaranty and any such other unterminated guaranties. CONTINUING GUARANTY. THIS IS "CONTINUING GUARANTY" UNDER WHICH GUARANTOR AGREES TO GUARANTEE THE FULL AND HEREAFTER ARISING OR ACQUIRE ON AN .OPEN AND CONTINUING BASIS. ACCORDINGLY, ANY PAYMENTS MADE ON THE INDEBTEDNESS WILL NOT DISCHA E OR DIMINISH GUARANTOR'S OBLIGATIONS AND LIABILITY UNDER THIS GUARANTY FOR ANY REMAINING AND SUCCEEDING IND BTEDNESS EVEN WHEN ALL OR PART OF THE OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE FROM TIME TO TIME. DURATION OF GUARANTY. This Gu ranty will take effect when received by Lender without the necessity of any acceptance by Lender, or any notice to Guarantor or to Borrower, a d will continue in full force until all the Indebtedness incurred or contracted before receipt by Lender of any notice of revocation shall have be n fully and finally paid and satisfied and all of Guarantor's other obligations under this Guaranty shall have been performed in full. If Guaranto elects to revoke this Guaranty, Guarantor may only do so in .writing. Guarantor's written notice of revocation must be mailed to Lender, y certified mail, at Lender's address listed above or such other place as Lender may designate in writing. Written revocation of this Guaranty ill apply only to advances or new Indebtedness created after actual receipt by Lender of Guarantor's written revocation. For this purpose nd without limitation, the term "new Indebtedness" does not include the Indebtedness which at the time of notice of revocation is contingent, unliquidated, undetermined or not due and which later becomes absolute, liquidated, detemtined or due. This Guaranty will continue to bind Guarantor for all the Indebtedness incurred by Borrower or committed by Lender prior to receipt of Guarantor's written notice of revocati n, including any extensions, renewals, substitutions or modifications of the Indebtedness. All renewals, extensions, substitutions, and modifi ations of the Indebtedness granted after Guarantor's revocation, are contemplated under this Guaranty and, specifically will not be consider to be new Indebtedness. This Guaranty shall bind Guarantor's estate as to the Indebtedness created both before and after Guarantor's de th or incapacity, regardless of Lender's actual notice of Guarantor's death. Subject to the foregoing, Guarantor's executor or administrator or other legal representative may terminate this Guaranty in the same manner in which Guarantor might have terminated it and with the same ffect. Release of any other guarantor or termination of any other guaranty of the Indebtedness shall not affect the liability of Guarantor under his Guaranty. A revocation Lender receives from any one or more Guarantors shall not affect the liability of any remaining Guarantors under s Guaranty. It is anticipated that fluctuations may occur in the aggregate amount of the Indebtedness covered by this Guaranty, and Guaran or specifically acknowledges and agrees that reductions in the amount of the Indebtedness, even to zero dollars (50.00), prior to Guarantor's ritten revocation of this Guaranty shall not constitute a termination of this Guaranty. This Guaranty is binding upon Guarantor and Guaranto 's heirs, successors and assigns so long as any of the Indebtedness remains unpaid and even though the Indebtedness may from time to time b zero dollars (50.00). GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before or after any revocation hereof, without notice or demand and without lessening Guaran or's liability under this Guaranty, from time to time: (A) prior to revocation as set forth above, to make one or more additional secured or u secured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise to extend additional credit to Borrower; (B) to a ter, compromise, renew, extend, accelerate, or otherwise change one or more times the time for payment or other terms of the Indebtedness or any part of the Indebtedness, including increases and decreases of the rate of interest on the Indebtedness; extensions may be repe fed and may be for longer than the original loan term; (C} to take and hold security for the payment of this Guaranty or the Indebtedness, an exchange, enforce, waive, subordinate, fail or decide not to perfect, and release any such security, with or without the substitution of new col feral; (D) to release, substitute, agree not to sue, or deal with any one or more of Borrower's sureties, endorsers, or other guarantors on an terms or in any manner Lender may choose; (E) to determine how, when and what application of payments and credits shall be made o the Indebtedness; (F) to apply such security and direct the order or manner of sale thereof, including without limitation, any nonjudicial sale permitted by the terms of the controlling security agreement or deed of trust, as Lender in its discretion may determine; (G) to sell, transfer, assign or grant participations in all or any part of the Indebtedness; and (H) to assign or transfer this Guaranty in whole or in part. GUARANTOR'S REPRESENTATIONS ND WARRANTIES. Guarantor represents and warrants to Lender that (A) no representations or agreements of arty kind have been ma a to Guarantor which would limit or qualify in any way the terms of this Guaranty; (B) this Guaranty is COMMERCIAL GUARANTY (Continued) Page 2 executed at Borrower's request and of at the request of Lender; (C) Guarantor has full power, right and authority to enter into this Guaranty; (D) the provisions of this Guaranty o not conflict with or result in a default under any agreement or other instrument binding upon Guarantor and do not result in a violation of an law, regulation, court decree or order applicable to Guarantor; (E) Guarantor has not and will not, without __.._~. .,, ...~...., .......y.., ............,..., ..~F..... ....... w, .. ... w...., ... .. w... ....~.. ..wF,.v.w v. vu v. auva wuuany an ~r Guarantor's assets, or any interest erein~ (F) upon Lender's request, Guarantor will provide to Lender financial and credit information in form acceptable to Lender, and all such ancial information which currently has been, and all future financial information which will be provided to Lender is and will be true and Corr ct in all material respects and fairly present Guarantor's financial condition as of the dates the financial information is provided; (G) no m terial adverse change has occurred in Guarantor's financial condition since the date of the most recent financial statements provided to Le er and no event has occurred which may materially adversely affect Guarantor's financial condition; (H) no litigation, claim, investigation, ad inistrative proceeding or similar action (including those for unpaid taxes) against Guarantor is pending or threatened; (q Lender has made n representation to Guarantor as to the creditworthiness of Borrower; and fJ) Guarantor has established adequate means of obtaining from orrower on a continuing basis information regarding Borrower's financial condition. Guarantor agrees to keep adequately informed from suc means of any facts, events, or circumstances which might in any way affect Guarantor's risks under this Guaranty, and Guarantor further agr es that Lender shall have no obligation to disclose to Guarantor any information or documents acquired by Lender in the course of its relations ip with Borrower. GUARANTOR'S FINANCIAL STATEIII~ENTS. Guarantor agrees to furnish Lender with the following: Annual Statements. As soon s available, but in no event later than one-hundred-twenty (120) days after the end of each fiscal year, Guarantor's balance sheet and i come statement for the year ended, compiled by a certified public accountant satisfactory to Lender. Tax Returns. As soon as avail ble, but in no event later than one-hundred-twenty (120) days after the applicable filing date for the tax reporting period ended, Federal nd other governmental tax returns, prepared by a certified public accountant satisfactory to Lender. All financial reports required to be p vided under this Guaranty shall be prepared in accordance with GAAP, applied on a consistent basis, and certified by Guarantor as being true nd correct. GUARANTOR'S WAIVERS. Except s prohibited by applicable law, Guarantor waives any right to require Lender (A) to continue lending money or to extend other credit to orrower; (B) to make any presentment, protest, demand, or notice of any kind, including notice of any nonpayment of the Indebtedness or f any nonpayment related to any collateral, or notice of any action or nonaction on the part of Borrower, Lender, any surety, endorser, or oth r guarantor in connection with the Indebtedness or in connection with the creation of new or additional loans or obligations; (C) to resort f r payment or to proceed directly or at once against any person, including Borrower or any other guarantor; (D) to proceed directly against ore haust any collateral held by Lender from Borrower, any other guarantor, or any other person; (E) to give notice of the terms, time, and place f any public or private sale of personal property security held by Lender from Borrower or to comply with any other applicable provisions of th Uniform Commercial Code; (F) to pursue any other remedy within Lender's power; or (G) to commit any act or omission of any kind, or at an time, with respect to any matter whatsoever. In addition to the waivers set forth rein, if now or hereafter Borrower is or shall become insolvent and the Indebtedness shall not at all times until paid be fully secured by collater I oledaed by Borrower. Guarantor hereby forever waives and gives uo in favor of Lender and Borrower. and Lenoer's ono Borrower's respective uccessors, any claim or right to payment Guarantor may now have or hereafter have or acquire against Borrower, by subrogation or otherw e, so that at no time shall Guarantor be or become a "creditor° of Borrower within the meaning of 11 U.S.C. section 547(b), or any succes or provision of the Federal bankruptcy laws. Guarantor also waives any and all ri hts or defenses based on suretyship or impairment of collateral including, but not limited to, any rights or defenses arising by reason of (A) ny "one action" or "anti-deficiency" law or any other law which may prevent Lender from bringing any action, including a claim for deficie y, against Guarantor, before or after Lender's commencement or completion of any foreclosure action, either judicially or by exercise of a ower of sale; (B) any election of remedies 6y Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or G grantor's rights to proceed against Borrower for reimbursement, including without limitation, any loss of rights Guarantor may suffer by reas n of any law limiting, qualifying, or discharging the Indebtedness; ICI any disability or other defense of Borrower, of any other guarantor, or f any other person, or by reason of the cessation of Borrower's liability from any cause whatsoever, other than payment in full in legal tender, of the Indebtedness; (D) any right to claim discharge of the Indebtedness on the basis of unjustified impairment of any collateral for the ndebtedness; (E) any statute of limitations, if at any time any action or suit brought by Lender against Guarantor is commenced, there is o tstanding Indebtedness which is not barred by any applicable statute of limitations; or (F) any defenses given to guarantors at law or in eq ity other than actual payment and performance of the Indebtedness. If payment is made by Borrower, whether voluntarily or otherwise, or y any third party, on the Indebtedness and thereafter Lender is forced to remit the amount of that payment to Borrower's trustee in bankruptcy or to any similar person under any federal or state bankruptcy law or law for the relief of debtors, the Indebtedness shall be considered unp id for the purpose of the enforcement of this Guaranty: Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff, counterclaim, count r demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower, the Guarantor, or both. GUARANTOR'S UNDERSTANDING ITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor's full knowledg of its significance and consequences and that, under the circumstances, the waivers are reasonable and not contrary to public policy or law. f any such waiver is determined to be contrary to any applicable law or public policy, such waiver shall be effective only to the extent permitted by law or public policy. RIGHT OF SETOFF. To the extent ermitted by applicable law, Lender reserves a right of setoff in all Guarantor's accounts with Lender (whether checking, savings, or som other account). This includes all accounts Guarantor holds jointly with someone else and all accounts Guarantor may open in the future. H waver, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Guarantor authori es Lender, to the extent permitted by applicable law, to hold these funds if there is a default, and Lender may apply the funds in these account to pay what Guarantor owes under the terms of this Guaranty. SUBORDINATION OF BORROWER'S EBTS TO GUARANTOR. Guarantor agrees that the Indebtedness, whether now existing or hereafter created, shall be superior to any clot that Guarantor may now have or hereafter acquire against Borrower, whether or not Borrower becomes insolvent. Guarantor hereby express y subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any claim that Lender may now or hereaft r have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through bankruptcy, by an assignme t for the benefit of creditors, by voluntary liquidation, or otherwise, the assets of Borrower applicable to the payment of the claims of both ender and Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness. Guarantor does hereby assign to L der all claims which it may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower; provided ho ever, that such assignment shall be effective only for the purpose of assuring to Lender full payment in legal tender of the indebtedness. If L nder so requests, any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be mark d with a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor agrees, and lender is hereby authori ed, in the name of Guarantor, from time to time to file financing statements and continuation statements COMMERCIAL GUARANTY (Continued) and to execute documents and to under this Guaranty. Page 3 such other actions as Lender deems necessary or appropriate to perfect, preserve and enforce its rights Amendments. This Guaranty, t ether with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this uaranty. No alteration of or amendment to this Guaranty shall be effective unless given in writing and signed by the party or parties so ght to be charged or bound by the alteration or amendment. Attorneys' Fess; Expenses. Gu rantor agrees to pay upon demand all of lender's costs and expenses, including Lender's attorneys' fees and Lender's legal expenses, inc rred in connection with the enforcement of this Guaranty. Lender may hire or pay someone else to help enforce this Guaranty, and Gu rantor shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal expo ses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post judgment collection services. Guarantor also shall p all court costs and such additional fees as may be directed by the court. Caption Headings. Caption headings in this Guaranty are for convenience purposes only and are not to be used to interpret or define the provisions of this Guaranty. Governing Law. This Guaranty ill be governed by federal law apprcable to Lender and, to the extent not preempted by federal law, the taws of the Commonwealth of P nsylvania without regard to its conflicts of law provisions. This Guaranty has been accepted by Lender in tfie Commonwealth of Penns ants. Integration. Guarantor further a rees that Guarantor has read and fully understands the terms of this Guaranty; Guarantor has had the opportunity to be advised by Gu antor's attorney with respect to this Guaranty; the Guaranty fully reflects Guarantor's intentions and parol evidence is not required to inte ref the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmless from all losses, claims, damages, and costs (incl ding Lender's attorneys' fees) suffered or incurred by Lender as a result of any breach by Guarantor of the warranties, representations and greements of this paragraph. Interpretatron. In all cases wher there is more than one Borrower or Guarantor, then all words used in this Guaranty in the singular shall be deemed to have been used i the plural where the context and construction so require; and where there is more than one Borrower named in this Guaranty or wh n this Guaranty is executed by more than one Guarantor, the words "Borrower" and "Guarantor" respectively shall mean all and a y one or more of them. The words "Guarantor," "Borrower," and "Lender" include the heirs, successors, assigns, and transferees of each of them. If a court finds that any provision of this Guaranty is not valid or should not be enforced, that fact by itself will not mean that the rest of this Guaranty will not be valid or enforced. Therefore, a court will enforce the rest of the provisions of this Guaranty eve if a provision of this Guaranty may be found to be invalid or unenforceable. If any one or more of Borrower or Guarantor are corpo ations, partnerships, limited liability companies, or similar entities, it is not necessary for Lender to inquire into the powers of Borrower or uarantor or of the officers, directors, partners, managers, or other agents acting or purporting to act on their behalf, and any indebtedne s made or created in reliance upon the professed exercise of such powers shall be guaranteed under this Notices. Unless otherwise provi ed by applicable law, any notice required to be given under this Guaranty shall be given in writing, and, except for revocation notices b Guarantor, shall be effective when actually delivered, when actually received by telefacsimile (unless otherwise required by law-, wh n deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certifi or registered mail postage prepaid, directed to the addresses shown near the beginning of this Guaranty. All revocation notices by Guars for shall be in writing and shall be effective upon delivery to Lender as provided in the section of this Guaranty entitled "DURATION O GUARANTY." Any party may change its address for notices under this Guaranty by giving formal written notice to the other parties, spe fying that the purpose of the notice is to change the party's address. For notice purposes, Guarantor agrees to keep Lender informed tall times of Guarantor's current address. Unless otherwise provided by applicable law, if there is more than one Guarantor, any notice g en by Lender to any Guarantor is deemed to be notice given to all Guarantors. No Waiver by Lender. Lender sh II not be deemed to have waived any rights under this Guaranty unless such waiver is given in writing and signed by Lender. No delay or fission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a ovision of this Guaranty shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provi on or any other provision of this Guaranty. No prior waiver by Lender, nor any course of dealing between Lender and Guarantor, shall cons itute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lender s required under this Guaranty, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequen instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Successors and Assigns. Th terms of this Guaranty shall be binding upon Guarantor, and upon Guarantor's heirs, personal representatives, successors, and ssigns, and shall be enforceable by Lender and its successors and assigns. Waive Jury. Lender and Guara or hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by either Lender or Borrower against the a er. ERROR AND OMISSIONS. In conside ation of the loan made by Sovereign Bank, (hereafter referred to as "Lender" to the undersigned, the undersigned does hereby represent th promise as follows: Upon request made by the Lender, its successors or assigns, the undersigned will execute such documents as are reaso able to provide assurance to Lender (1) that the obligations undertaken by the undersigned in connection with said loan will be faithfully perfor ed; 12) that any and all documents and instruments signed by the undersigned in connection with said loan are accurate statements as to th truth of the matters set forth in them and constitute binding obligations upon the undersigned according to their tenor; or (3J as to the amount of said loan outstanding from time to time, and the date and amount of payments made in respect to said loan. Upon request made by the Le der, its successors or assigns, the undersigned will re-execute any document or instrument signed in connection with said loan or execute ny document or instrument that ought to have been signed at or before closing of said loan, or which was incorrectly drafted and signed, to facil tats full execution of the appropriate documents. All such requests shall receive the full cooperation and compliance by the undersigned within seven 17) days of the making of the request set forth above. The failure of the undersigned to comply with their obligations hereunder shall onstitute a default under the documents executed in connection with said loan and shall entitle Lender or its successors and assigns, to the rem dies available for default under the documents executed by the undersigned. DEFINITIONS. The following capitaliz d words and terms shall have the following meanings when used in this Guaranty. Unless specifically stated to the contrary, all references t dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shad include the p ural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Guaranty shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word "Borrower" means Stewartstown Cornerstone Limited Partnership and includes all co-signers and co-makers signing COMMERCIAL GUARANTY _ (Continued) the Note and all their successorsand assigns. GAAP. The word "GAAP" meant generally accepted accounting principles. Page 4 ___._..._ .. ..... ....... ............ ....,,...~ .,. .,....,. ,,.y.....y ...., ......o.~. y, ..,,.,,.....y ..~...,,..............,...,..............`.... ....... ~a any signer's successors and assi ns. Guaranty. The word "Guaranty" means this guaranty from Guarantor to Lender. Indebtedness. The word "Indebt dness" means Borrower's indebtedness to Lender as more particularly described in this Guaranty. Lender. The word "Lender" means Sovereign Bank, its successors and assigns. Note. The word "Note" means and includes without limitation atl of Borrower's promissory notes andlor credit agreements evidencing Borrower's loan obligations in fa or of Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of and substitutions for promiss notes or credit agreements. Related Documents. The word "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, securi agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, wh that now or hereafter existing, executed in connection with the Indebtedness. CONFESSION OF JUDGMENT. UARANTOR HEREBY IRREVOCABLY AUTHORIZES :AND EMPOWERS ANY ATTORNEY OR THE PROTHONOTARY OR CLERK OF AN COURT IN THE. COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE, TO APPEAR AT ANY TIME FOR GUARANTOR AFTER THE AM UNTS HEREUNDER BECOME DUE AND WITH OR WITHOUT COMPLAINT FILED, CONFESS OR ENTER JUDGMENT AGAINST GUARANTOR FOR THE ENTIRE PRINCIPAL BALANCE OF THIS GUARANTY AND ALL ACCRUED INTEREST, LATE CHARGES AND ANY AND ALL A OUNTS EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECURING THE INDEBTEDNESS, TOGETHER WITH OSTS OF SUIT, AND AN ATTORNEY'S COMMISSION OF TEN PERCENT (1096) OF THE UNPAID PRINCIPAL BALANCE AND ACCRUE INTEREST FOR COLLECTION, BUT IN ANY EVENT NOT LESS THAN FIVE HUNDRED DOLLARS (3500) ON WHICH JUDGMENT OR JUDGME TS ONE OR MORE EXECUTIONS MAY ISSUE IMMEDIATELY; AND FOR SO DOING, THIS GUARANTY OR A COPY OF THIS GUARANTY VERIFI D BY AFFIDAVIT SHALL BE SUFFICIENT WARRANT. THE AUTHORITY GRANTED IN THIS GUARANTY TO CONFESS JUDGMENT AGAINS GUARANTOR SHALL NOT BE EXHAUSTED BY ANY EXERCISE OF THAT AUTHORITY, BUT SHALL CONTINUE FROM TIME TO TIME ND AT ALL TIMES UNTIL PAYMENT IN FULL OF' ALL AMOUNTS DUE UNDER THIS GUARANTY. GUARANTOR HEREBY WAIVES ANY RIGHT GUARANTOR MAY HAVE TO NOTICE OR TO A HEARING IN CONNECTION WITH ANY SUCH CONFESSION OF JUDGMENT AND TATES THAT EITHER A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THIS CONFESSION OF JUDGMENT PROVISION TO GUARAN OR'S ATTENTION OR GUARANTOR HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL. EACH UNDERSIGNED GUARANTOR CKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUA TOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO NDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED 'DURATIO OF GUARANTY". NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY THIS GUARANTY LS GIVEN UNDER S LAND IT IS INTENDED THAT THIS GUARANTY IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTR ACCOR ING TO LAW. GU i X ~ '~-~ (Seal) Jo . Hu ke INDIVIDUAL ACKNOWLEDGMENT COMMONWEALTH OF PENNSYLV COUNTY OF On this, the SS proven) to be the person whose purposes therein contained. _ day of l/~~ , 20 05 "before me I l~ the undersigned Notary Public, personally appeared John M. Huenke, known to me (ors sfac' torily is subscribed to the within instrument, and acknowledged that he or she executed the sa a for the In witness whereof, I hereunto s~t my hand and official seal. Notari Sea) Dawn M. G z, Notary Public Ciry of York. Coanty My Commission Ex fires Apr. I5, 2006 Notary Public in an r the Stat of I user mo i....a..al v.. a.m.oo.au con,. wn".a Fw....~ soYao"a w.s ins, moa. .u wy.n x......e. . PA u:wocwntmoicAUti~emx rn-eaas rs-io ~ ART ~~~ ~ti~b~k t~~ COMMERCIAL GUARANTY Borrower: Stewartstown Cornerst ne Limited Partnership Lender: Sovereign Bank 200 Bailey Drive, Suite 04 Commercial Banking Division Stewartstown, PA 173 3 101 S. George Street York, PA 17401 Guarantor: Bruce w: wilt P. O. Box 189 Manville, NJ 08835 CONTINUING GUARANTEE OF PAYI1 guarantees full and punctual paymei Borrower's obligations under the No• Lender can enforce this Guaranty ag pay the Indebtedness or against any will make any payments to Lender or deduction or counterclaim, and will Guarantor's liability is unlimited and INDEBTEDNESS. The word "Indebte~ one or more times, accrued unpaid it arising from any and all debts, liabifi individually or collectively or interchai debts, overdraft indebtedness, credit judgments against Borrower, future debts, liabilities and obligations whe' contingent; liquidated or unliquidated or surety; secured or unsecured; jc originated by Lender or another or o~ be voidable for any reason (such as i increased or reinstated. ENT AND PERFORMANCE. For good and valuable consideration, Guarantor absolutely and unconditionally t and satisfaction of the Indebtedness of Borrower to Lender, and the performance and discharge of all and the Related Documents. This is a guaranty of payment and performance and not of collection, so iinst Guarantor even when Lender has not exhausted Lender's remedies against anyone else obligated to collateral securing the Indebtedness, this Guaranty or any other guaranty of the Indebtedness. Guarantor is order, on demand, in legal tender of the United States of America, in same-day funds, without setoff or ithervvise perform Borrower's obligations under the Note and Related Documents. Under this Guaranty, uarantor's obligations are continuing. Hess" as used in this Guaranty means all of the principal amount outstanding from time to time and at any serest thereon and all collection costs and legal expenses related thereto permitted by law, attorneys' fees, ies and obligations of every nature or form, now existing or hereafter arising or acquired, that Borrower geably with others, owes or will owe Lender. "Indebtedness" includes, w'rchout limitation, loans, advances, :ard indebtedness, lease obligations, other obligations, and liabilities of Borrower, and any present or future advances, .loans or transactions that renew, extend, modify, refinance, consolidate or substitute these per: voluntarily or involuntanly incurred; due or to become due by their terms or acceleration; absolute or determined or undetermined; direct or indirect; primary or secondary in nature or arising from a guaranty nt or several or joint and several; evidenced by a negotiable or non-negotiable instrument. or writing; Hers; barred or unenforceable against Borrower for any reason whatsoever; for any transactions that may ifancy, insanity, ultra vires or otherwise); and originated then reduced or extinguished and then afterwards The above limitation on liability is no a restriction on the amount of the Note of Borrower to Lender either in the aggregate or at any one time. If Lender presently holds one or mor guaranties, or hereafter receives additional guaranties from Guarantor, Lender's rights under all guaranties shall be cumulative. This Guaranty hall not (unless specifically provided below to the contrary) affect or invalidate any such other guaranties. Guarantor's liability will be Guarantor s aggregate liability under the terms of this Guaranty and any such other unterminated guaranties. CONTINUING GUARANTY. THIS IS A "CONTINUING GUARANTY" UNDER WHICH GUARANTOR AGREES TO GUARANTEE THE FULL AND HEREAFTER ARISING OR ACQUIR D, ON AN OPEN AND CONTINUING BASIS. ACCORDINGLY, ANY PAYMENTS MADE ON THE INDEBTEDNESS WILL NOT DISCHA GE OR DIMINISH GUARANTOR'S OBLIGATIONS AND LIABILITY UNDER THIS GUARANTY FOR ANY REMAINING AND SUCCEEDING IN EBTEDNESS EVEN WHEN ALL OR PART OF THE OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE FROM TIME TO TIME. DURATION OF GUARANTY. This Gu ranty will take effect when received by Lender without the necessity of any acceptance by Lender, or any notice to Guarantor or to Borrower, nd will continue in full force until all the Indebtedness incurred or contracted before receipt by Lender of any notice of revocation shall have b en fully and finally paid and satisfied and all of Guarantor's other obligations under this Guaranty shall have been performed in full. If Guarant r elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written notice of revocation must be mailed to Lender, by certified mail, at Lender's address listed above or such other place as Lender may designate in writing. Written revocation of this Guaranty will apply only to advances or new Indebtedness created after actual receipt by Lender of Guarantor's written revocation. For this purpose and without limitation, the term "new Indebtedness" does not include the Indebtedness which at the time of notice of revocation is contingent unliquidated, undetermined or not due and which later becomes absolute, liquidated, determined or due. This Guaranty will continue to bind Guarantor for all the Indebtedness incurred by Borrower or committed by Lender prior to receipt of Guarantor's written notice of revoca on, including any extensions, renewals, substitutions or modifications of the Indebtedness. All renewals, extensions, substitutions, and modi ations of the Indebtedness granted after Guarantor's revocation, are contemplated under this Guaranty and, specifically will not be consider d to be new Indebtedness. This Guaranty shall bind Guarantor's estate as to the Indebtedness created both before and after Guarantor's d ath or incapacity, regardless of Lender's actual notice of Guarantor's death. Subject to the foregoing, Guarantor's executor or administrato or other legal representative may terminate this Guaranty in the same manner in which Guarantor might have terminated it and with the sam effect. Release of any other guarantor or termination of any other guaranty of the Indebtedness shall not affect the liability of Guarantor under this Guaranty. A revocation Lender receives from any one or more Guarantors shall not affect the liability of any remaining Guarantors under is Guaranty. li is anticipated that fluctuations may occur in the aggregate amount of the Indebtedness covered by this Guaranty, and Guara for specifically acknowledges and agrees that reductions in the amount of the Indebtedness, even to zero dollars ($0.00), prior to Guarantor's ritten revocation of this Guaranty shall not constitute a termination of this Guaranty. This Guaranty is binding upon Guarantor and Guarant is heirs, successors and assigns so long as any of the Indebtedness remains unpaid and even though the Indebtedness may from time to time a zero dollars ($0.00). GUARANTOR'S AUTHORIZATION T LENDER. Guarantor authorizes Lender, either before or after any revocation hereof, without notice or demand and without lessening Guara tor's Gabit'rty under this Guaranty, from time to time: (A) prior to revocation as set forth above, to make one or more additional secured or nsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise to extend additional credit to Borrower; (B} to Iter, compromise, renew, extend, accelerate, or otherwise change one or more times the time for payment or other terms of the Indebtednes or any part of the Indebtedness, including increases and decreases of the rate of interest on the Indebtedness; extensions may be rep ated and may be for longer than the original loan term; (C) to take and hold security for the payment of this Guaranty or the Indebtedness, a d exchange, enforce, waive, subordinate, fail or decide not to perfect, and release any such security, with or without the substitution of new c lateral; (D) to release, substitute, agree not to sue, or deal with any one or more of Borrower's sureties, endorsers, or other guarantors on a y terms or in any manner Lender may choose; (E) to determine how, when and what application of payments and credits shall be made n the Indebtedness; (F) to apply such security and direct the order or manner of sale thereof, including without limitation, any nonjudicial sal permitted by the terms of the controlling security agreement or deed of trust, as Lender in its discretion may determine; (G) to sell, transfe ,assign or grant participations in all or any part of the Indebtedness; and (H) to assign or transfer this Guaranty in whole or in part. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to Lender that (A) no representations or agreements of any kind have been m de to Guarantor which would limit or qualify in any way the terms of this Guaranty; (B) this Guaranty is COMMERCIAL GUARANTY (Continued) Page 2 executed at Borrower's request and n t at the request of Lender; IC) Guarantor has full power, right and authority to enter into this Guaranty; (D) the provisions of this Guaranty d not conflict with or resuk in a default under any agreement or other instrument binding upon Guarantor and do not resuk in a violation of any aw, regulation, court decree or order applicable to Guarantor; (E) Guarantor has not and will not, without Guarantor's assets, or any interest th rein; (F) upon Lender's request, Guarantor will provide to Lender financial and credit information in form acceptable to Lender, and all such fi ancial information which currently has been, and all future financial information which will be provided to Lender is and will be true and come t in all material respects and fairly present Guarantor's financial condition as of the dates the financial information is provided; (G) no ma erial adverse change has occurred in Guarantor's financial condition since the date of the most recent financial statements provided to Len er and no event has occurred which may materially adversely affect Guarantor's financial condition; (H) no litigation, claim, investigation, ad inistrative proceeding or similar action (including those for unpaid taxes) against Guarantor is pending or threatened; (q Lender has made no representation to Guarantor as to the creditworthiness of Borrower; and lJ) Guarantor has established adequate means of obtaining from B mower on a continuing basis information regarding Borrower's financial condition. Guarantor agrees to keep adequately informed from such eans of any facts, events, or circumstances which might in any way affect Guarantor's risks under this Guaranty, and Guarantor further agre s that Lender shall have no obligation to disclose to Guarantor any information or documents acquired by Lender in the course of its relationshi with Borrower. GUARANTOR'S FINANCIAL STATEM TS. Guarantor agrees to furnish Lender with the following: Annual Statements. As soon a available, but in no event later than one-hundred-twenty (120) days after the end of each fiscal year, Guarantor's balance sheet and in ome statement for the year ended, compiled by a certified public accountant satisfactory to Lender. Tax Returns. As soon as avail le, but in no event later than one-hundred-twenty (120) days after the applicable filing date for the tax reporting period ended, Federal a d other governmental tax returns, prepared by a certified public accountant satisfactory to Lender. All financial reports required to be pr vided under this Guaranty shall be prepared in accordance with GAAP, applied on a consistent basis, and certified by Guarantor as being true a d correct. GUARANTOR'S WAIVERS. Except s prohibited by applicable iaw, Guarantor waives any right to require Lender (A) to continue lending money or to extend other credit to orrower; (B) to make any presentment, protest, demand, or notice of any kind, including notice of any nonpayment of the Indebtedness or f any nonpayment related to any collateral, or notice of any action or nonaction on the part of Borrower, Lender, any surety, endorser, or oth r guarantor in connection with the Indebtedness or in connection with the creation of new or additional loans or obligations; (C) to resort fo payment or to proceed directly or at once against any person, including Borcower or any other guarantor; (D) to proceed directly against or ex aust any collateral held by Lender from Borrower, any other guaranrtor, or any other person; (E) to give notice of the terms, time, and place f any public or private sale of personal property security held by Lender from Borrower or to comply with any other applicable provisions of the Uniform Commercial Code; (F) to pursue any other remedy within Lender's power; or (G) to commit any act or omission of any kind, or at any time, with respect to any matter whatsoever. In addition to the waivers set forth h rein, if now or hereafter Borrower is or shall become insolvent and the Indebtedness shall not at all times until paid be fully secured by collater 1 pledged by Borrower, Guarantor hereby forever waives and Ives up in favor of Lender and Borrower, and en er s an orrower s respective uccessors, any c aim or right to payment Guarantor may now have or hereafter have or acquire against Borrower, by subrogation or otherwi e, so that at no time shall Guarantor be or become a "creditor" of Borrower within the meaning of 11 U.S.C. section 547(b), or any succes or provision of the Federal bankruptcy laws. Guarantor also waives any and all ri hts or defenses based on suretyship or impairment of collateral including, but not limited to, any rights or defenses arising by reason of (A) ny "one action" or "anti-deficiency" law or any other law which may prevent Lender from bringing any action, including a claim for deficien y, against Guarantor, before or after Lender's commencement or completion of any foreclosure action, either judicially or by exercise of a ower of sale; IB) any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or G raptor's rights to proceed against Borrower for reimbursement, including without limitation, any loss of rights Guarantor may suffer by reas n of any law limiting, qualifying, or discharging the Indebtedness; {C) any disability or other defense of Borrower, of any other guarantor, or f any other person, or by reason of the cessation of Borrower's liability from any cause whatsoever, other than payment in full in legal tender, of the Indebtedness; (D) any right to claim discharge of the Indebtedness on the basis of unjustified impairment of any collateral for the 1 debtedness; (E) any statute of limitations, if at any time any action or suit brought by Lender against Guarantor is commenced, there is o standing Indebtedness which is not barred by any applicable statute of limitations; or (F) any defenses given to guarantors at law or in eq ity other than actual payment and performance of the Indebtedness. If payment is made by Borrower, whether voluntarily or otherwise, or y any third party, on the Indebtedness and thereafter Lender is forced to remit the amount of that payment to Borrower's trustee in bankruptcy or to any similar person under any federal or state bankruptcy law or law for the relief of debtors, the Indebtedness shall be considered unp id for the purpose of the enforcement of this Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff, counterclaim, count r demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower, the Guarantor, or both. GUARANTOR'S UNDERSTANDING ITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor's full knowledg of its significance and consequences and that, under the circumstances, the waivers are reasonable and not contrary to public policy or law. f any such waiver is determined to be contrary to any applicable law or public policy, such waiver shall be effective only to the extent permitted by law or public policy. RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Guarantor's accounts with Lender (whether checking, savings, or som other account). This includes all accounts Guarantor holds jointly with someone else and all accounts Guarantor may open in the future. H wever, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Guarantor authori es Lender, to the extant permitted by applicable law, to hold these funds if there is a default, and Lender may apply the funds in these account to pay what Guarantor owes under the terms of this Guaranty. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness, whether now existing or hereafter created, shall be superior to any clai that Guarantor may now have or hereafter acquire against Borrower, whether or not Borrower becomes insolvent. Guarantor hereby expres ly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any claim that Lender may now or herea r have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through bankruptcy, by an assignme t for the benefit of creditors, by voluntary liquidation, or otherwise, the assets of Borrower applicable to the payment of the claims of both ender and Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness. Guarantor does hereby assign to L nder all claims which it may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower; provided ho ever, that such assignment shall be effective only for the purpose of assuring to Lender full payment in legal tender of the Indebtedness. if ender so requests, any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be mark d with a legend that the szme are subject to this Guaranty and shall be delivered to Lender. Guarantor agrees, and Lender is hereby authori ed, in the name of Guarantor, from time to time to file financing statements and continuation statements COMMERCIAL GUARANTY _ (Continued) and to execute documents and to tal under this Guaranty. MISCELLANEOUS PROVISIONS. The Page 3 such other actions as Lender deems necessary or appropriate to perfect, preserve and enforce its rights miscellaneous provisions are a part of this Amendments. This Guaranty, t gather with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this uaranty. No alteration of or amendment to this Guaranty shall be effective unless given in writing and signed by the party or parties so ght to be charged or bound by the alteration or amendment. Attorneys' Fees; Expenses. Gu rantor agrees to pay upon demand all of Lender's costs and expenses, including Lender's attorneys' fees and Lender's legal expenses, in urred in connection with the enforcement of this Guaranty. Lender may hire or pay someone else to help enforce this Guaranty, and Gu rantor shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal expo ses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings (including efforts t modify or vacate any automatic stay or injunctionl, appeals, and any anticipated post judgment collection services. Guarantor also shall p y all court costs and such additional fees as may be directed by the court. Caption Headings. Caption hea ings in this Guaranty are for convenience purposes only and are not to be used to interpret or define the provisions of this Guaranty. Governing Law. This Guaranty will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the Commonwealth of ennsyhrania without regard to its conflicts of law provisions. This Guaranty has been accepted by Lender in the Commonwealth of Penns ania. Integration. Guarantor further grees that Guarantor has read and fully understands the terms of this Guaranty; Guarantor has had the opportunity to be advised by Gu raptor's attorney with respect to this Guaranty; the Guaranty fully reflects Guarantor's intentions and parol evidence is not required to inter rat the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmless from all losses, claims, damages, and costs (inc ding Lender's attorneys' fees) suffered or incurred by Lender as a result of any breach by Guarantor of the warranties, representations and greements of this paragraph. Interpretation. In all cases whe a there is more than one Borrower or Guarantor, then all words used in this Guaranty in the singular shall be deemed to have been used n the plural where the context and construction so require; and where there is more than one Borrower named in this Guaranty or. w en this Guaranty is executed by more than one Guarantor, the wards "Borrower" and "Guarantor" respectively shall mean all and a y one or more of them. The words "Guarantor," "Borrower," and "Lender" include the heirs, successors, assigns, and transferees of eac of them. If a court finds that any provision of this Guaranty is not valid or should not be enforced, that fact by itself will not mean the the rest of this Guaranty will not be valid or enforced. Therefore, a court will enforce the rest of the provisions of this Guaranty ev if a provision of this Guaranty may be found to be invalid or unenforceable. If any one or more of Borrower or Guarantor are core rations, partnerships, limited liability companies, or similar entities, it is not necessary for Lender to inquire into the powers of Borrower or uarantor or of the officers, directors, partners, managers, or other agents acting or purporting to act on their behalf, and any indebtedne s made or created in reliance upon the professed exercise of such powers shall be guaranteed under this Notices. Unless otherwise provded by~applicable law, any notice required to be given under this Guaranty shall be given in writing, and, except for revocation notices Guarantor, shall be effective when actually delivered, when actually received by telefacsimile (unless otherwise required by law), wh n deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certifi d or registered mail postage prepaid, directed to the addresses shown near the beginning of this Guaranty. All revocation notices by Guara ter shall be in writing and shall be effective upon delivery to Lender as provided in the section of this Guaranty entitled "DURATION O GUARANTY." Any party may change its address for notices under this Guaranty by giving formal written notice to the other parties, spa ifying that the purpose of the notice is to change the party's address. For notice purposes, Guarantor agrees to keep Lender informed at all times of Guarantor's current address. Unless otherwise provided by applicable law, if there is more than one Guarantor, any notice iven by Lender to any Guarantor is deemed to be notice given to all Guarantors. No Waiver by Lender. Lenders all not be deemed to have waived any rights under this Guaranty unless such waiver is given in writing and signed by Lender. No delay or mission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a rovision of this Guaranty shall not prejudice or constitute a waiver of lender's right otherwise to demand strict compliance with that provi ion or any other provision of this Guaranty. No prior waiver by Lender, nor any course of dealing between Lender and Guarantor, shall con titute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Guaranty, the granting of such consent by Lender in any instance shall not constitute continuing consent to subseque t instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Successors and Assigns. Th terms of this Guaranty shall be binding upon Guarantor, and upon Guarantor's heirs, personal representatives, successors, an assigns, and shall be enforceable by Lender and its successors and assigns. Waive Jury. Lender and Guara for hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by either Lender or Borrower against the ther. ERROR AND OMISSIONS. In consid ration of the loan made by Sovereign Bank, (hereafter referred to as "Lender" to the undersigned, the undersigned does hereby represent t e promise as follows: Upon request made by the Lender, its successors or assigns, the undersigned will execute such documents as are reas noble to provide assurance io Lender (1) that the obligations undertaken by the undersigned in connection with said loan will be faithfully perfo mad; (2) that any and all documents and instruments signed by the undersigned in connection with said loan are accurate statements as tot a truth of the matters set forth in them and constitute binding obligations upon the undersigned according to their tenor; or (3) as to the amoun of said loan outstanding from time to time, and the date and amount of payments made in respect to said loan. Upon request made by the L nder, its successors or assigns, the undersigned will re-execute any document or instrument signed in connection with said loan or execute ny document or instrument that ought to have been signed at or before closing of said loan, or which was incorrectly drafted and signed, to fac litate full execution of the appropriate documents. All such requests shall receive the full cooperation and compliance 6y the undersigned vvithi seven (7) days of the making of the request set forth above. The failure of the undersigned to comply with their obligations hereunder shall constitute a default under the documents executed in connection with said loan and shall entitle Lender or its successors and assigns, to the re edies available for default under the documents executed by the undersigned. DEFINITIONS. The following capitali ed words and terms shall have the following meanings when used in this Guaranty. Unless specifically stated to the contrary, all references o dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the lural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Guaranty shall have th meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word "Borrowert means Stewartstown Cornerstone Limited Partnership and includes all co-signers and co-makers signing COMMERCIAL GUARANTY _ (Continued) Page 4 the Note and all their successors and assigns. GAAP. The word "GAAP" mea generally accepted accounting principles. signer's successors and assigns. Guaranty. The word "Guaranty" means this guaranty from Guarantor to Lender. Indebtedness. The word "Indeb dness" means Borrower's indebtedness to Lender as more particularly described in this Guaranty. Lender. The word "Lender" me ns Sovereign Bank, its successors and assigns. Note. The word "Note" means and includes without limitation all of Borrower's promissory notes and/or credit agreements evidencing Borrower's loan obligations in fa or of Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of and substitutions for promiss ry notes or credit agreements. Related Documents. The word "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, securi agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, wh ther now or hereafter existing, executed in connection with the Indebtedness. CONFESSION OF JUDGMENT. UARANTOR HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR THE PROTHONOTARY OR CLERK OF AN COURT IN THE COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE, TO APPEAR AT ANY TIME FOR GUARANTOR AFTER THE AM UNTS HEREUNDER BECOME DUE AND WITH OR WITHOUT COMPLAINT FILED, CONFESS OR ENTER JUDGMENT AGAINST GUARANTOR FOR THE ENTIRE PRINCIPAL BALANCE OF THIS GUARANTY AND ALL ACCRUED INTEREST, LATE CHARGES AND ANY AND ALL A OUNTS EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECURING THE INDEBTEDNESS, TOGETHER WITH OSTS OF SUIT, AND AN ATTORNEY'S COMMISSION OF TEN PERCENT (10%) OF THE UNPAID PRINCIPAL BALANCE AND ACCRUE INTEREST FOR COLLECTION, BUT IN ANY EVENT NOT LESS THAN FIVE HUNDRED DOLLARS (5500) ON WHICH JUDGMENT OR JUDGME TS ONE OR MORE EXECUTIONS MAY ISSUE IMMEDIATELY; AND FOR SO DOING, THIS GUARANTY OR A COPY OF THIS GUARANTY VERIF ED BY AFFIDAVIT SHALL BE SUFFICIENT WARRANT. THE AUTHORITY GRANTED IN THIS GUARANTY TO CONFESS JUDGMENT AGAINS GUARANTOR SHALL NOT BE EXHAUSTED BY ANY EXERCISE OF THAT AUTHORITY, BUT SHALL CONTINUE FROM TIME TO TIME ND AT ALL TIMES UNTIL PAYMENT IN FULL OF ALL AMOUNTS DUE UNDER THIS GUARANTY. GUARANTOR HEREBY WAIVES AN RIGHT GUARANTOR MAY HAVE TO NOTICE OR TO A HEARING IN CONNECTION WITH ANY SUCH CONFESSION OF JUDGMENT AND TATES THAT EITHER A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THIS CONFESSION OF JUDGMENT PROVISION TO GUARA OR'S ATTENTION OR GUARANTOR HA5 BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL. EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUA OR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO ENDER ANO THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED "DURATIO OF GUARANTY". NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY 70 MAKE THIS GUARANTY THRS GUARANTY IS GIVEN UNDER L AND R IS INTENDED THAT THIS GUARANTY IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INS RUMENT ACCOR lNG TO LAW. GUARANTOR• ~~.~ X ISeaq Bruce .Wilt INDIVIDUAL ACKNOWLEDGMENT COMMONWEALTH OF PENNSYLV COUNTY OF On this, the SS proven) to be the person whose purposes therein contained. _ day of ~UUi+•C/l , 20 Q5 ,before me (~- / `G~ the undersigned Notary Public, personally appeared Bruce W. Wilt, known to me for s~factorily is subscribed to the within instrument, and acknowledged that he or she executed the same for the Notary Public in and f r e State of In witness whereof, 1 hereunto stet my hand and official seal. Notarial eal Dawn M. Gutierrez, Notary Public City of York, Y County My Commission F.xp' Apr. 15, 2006 1ASSe11 !'110 l..+wn~, V". e.]e.0o.004 Cepr. X""m0 Flmndtl Salutlon", Inc Ip'!, Z008. M Wyhb Mewv"0. • PA onoocumu.P"ae~~em.FC rn-esae P"-+o i a ~~ ~6~ .e,ach~b ~k I~~ DISCLOSURE FOR CONFESSION OF JUDGMENT BOP~OWe~: Stewartstown Comersl 200 Baaey Drive, Suite Stewartstown, PA 17: Limited Partnership Lender: Sovereign Bank Commercial Banking Division 101 S. George Street Declarant: Samuel Juffe 6S Cranbury Neck Ro Cranbury, NJ 08512 SCLOSURE FOR CONFESSION OF JUDGMENT 1 AM IXECUTING. THIS lA`µ'1 DAY OF _~C%I~Yj.-2J~ 20 ~s, A GUARANTY OF A PROMISSORY NOTE FOR 55,858,992.00 OBLIGATING ME 70 REPAY THAT AMOUNT. A. i UNDERSTAND THAT THE GUA JUDGMENT AGAINST ME IN COU OFFERING ME AN OPPORTUNITY T( OF MY RIGHTS' TO ADVANCE NO7 LENDER MAY SERT AGAINST M RIGHTS, INC DING ANY RIGHT 1 LENDER'S 1 G JUDGMENT AI INITIALS: B. 1 FURTHER UNDERSTAND THAT NOTICE OR A HEARING, THE CON PERMIT LENDER, AFTER ENTRY 0 JUDGMENT BY FORECLOSING UPOI OR PARTIAL PAYMENT OF THE JU[ AND A HEARING AFTER JUDGMEN JUDGMENT` I~NY MANNER INITIALS: ~`L C. AFTER HAVING READ AND ST EMENT THAT APPLIES, I REPI INI 1. I WAS REPRESENT 2. A REPRESENTATI\ TO MY ATTENTION. D. I CERTIFY THAT MY ANNUAL AND SIGNED IT; AND THAT 1 REC ANN CONTAINS A CONFESSION OF JUDGMENT PROVISION THAT WOULD PERMIT LENDER TO ENTER T, AFTER A DEFAULT ON THE GUARANTY, WITHOUT ADVANCE NOTICE TO ME AND WITHOUT DEFEND AGAINST THE ENTRY OF JUDGMENT. IN EXECUTING THE GUARANTY, BEING FULLY AWARE :E AND TO A HEARING TO CONTEST THE VALIDITY OF ANY JUDGMENT OR OTHER CLAIMS THAT UNDER THE GUARANTY, I AM KNOWINGLY, INTELLIGENTLY, AND VOLUNTARILY WAIVING THESE I ADVANCE NOTICE OF THE ENTRY OF JUDGMENT, AND I IXPRESSLY AGREE AND CONSENT TO 41NST ME BY CONFESSION AS PROVIDED FOR IN THE CONFESSION OF JUDGMENT PROVISION. IN ADDITION TO GIVING LENDER THE RIGHT TO ENTER JUDGMENT AGAINST ME WITHOUT ADVANCE ESSION OF JUDGMENT PROVISION IN THE GUARANTY ALSO CONTAINS LANGUAGE THAT WOULD JUDGMENT, AGAIN WITHOUT EITHER ADVANCE NOTICE OR A HEARING, TO IXECUTE ON THE ATTACHING, LEVYING ON, TAKING POSSESSION OF OR OTHERWISE SEIZING MY PROPERTY, IN FULL GMENT. IN EXECUTING THE GUARANTY, BEING FULLY AWARE OF MY RIGHTS TO ADVANCE NOTICE ' IS ENTERED AND BEFORE EXECUTION ON THE JUDGMENT, I AM KNOWINGLY, INTELLIGENTLY AND BY APPLICABLE STATE AND FEDERAL LAW, WITHOUT GIVING ME ANY ADVANCE NOTICE. WHICH OF THE FOLLOWING STATEMENTS ARE APPLICABLE, BY INITIALING EACH THAT: BY MY OWN INDEPENDENT LEGAL COUNSEL IN CONNECTION WITH THE GUARANTY. OF LENDER SPECIFICALLY CALLED THE CONFESSION OF JUDGMENT PROVISION IN THE .GUARANTY AE EXCEEDS 510,000; THAT THE BLANKS IN THIS DISCLOSURE WERE FILLED IN WHEN 1 INITIALED A COPY AT THE TIME OF SIGNING. THIS DISCLOSURE IS GIVEN UND SEAL AND IT IS INTENDED THAT THIS DISCLOSURE IS AND SHALL CONSTITUTE AND HAVE THE EFFECT,bEF A SEALED INSTRUMENT CCORDING TO LAW. X ~wsFn mo a v.- s.u-oo.ooa uw• nwr ~.ndr savre~., x~a. ~p~, mua. iu ngnu n.w.w. - -~ a:wocu~~mo~eFnix~oao.rt rn-eese rn-ia ~a~T I~ ~p~ ~hibik Kt~ DIS Borrower: OSURE FOR CONFESSION OF JUDGMENT Stewartstown Cornersto a limited Partnership Lender: Sovereign Bank 200 Bailey Drive, Suite 2 4 Commercial Banking Division Stewartstown, PA 1736 101 S. George Street York, PA 17401 Declarant: Cornerstone Developmen Group, Inc. 200 Bailey Drive, Suite 2 4 Stewartstown, PA 173 DISCLOSURE FOR CONFESSION OF JUDGMENT THE UNDERSIGNED IS EXECUTING ~N BEHALF OF DECLARANT, THIS (Q rte} DAY OF V C~~ 20 6 S , A GUARANTY OF A PROMISSORY NOT FOR 55,858,992.00 OBLIGATING DECLARANT TO REPAY THAT AMOUNT. A. THE UNDERSIGNED UNDERSTA DS THAT THE GUARANTY CONTAINS A CONFESSION OF JUDGMENT PROVISION THAT WOULD PERMIT LENDER TO ENTER JUDGM T AGAINST DECLARANT IN COURT, AFTER A DEFAULT ON THE GUARANTY, WITHOUT ADVANCE NOTICE TO DECLARANT AND WITH UT OFFERING DECLARANT AN OPPORTUNITY TO DEFEND AGAINST THE ENTRY OF JUDGMENT. IN EXECUTING THE GUARANTY, BEING FULLY AWARE OF DECLARANT'S RIGHTS TO ADVANCE NOTICE AND TO A HEARING TO CONTEST THE VALIDITY OF ANY JUDGMENT R OTHER CLAIMS THAT LENDER MAY ASSERT AGAINST DECLARANT UNDER THE GUARANTY, THE UNDERSIGNED,, ON BEHALF OFT E DECLARANT, IS KNOWINGLY, INTELLIGENTLY, AND VOLUNTARILY WAIVING THESE RIGHTS, INCLUDING RIGHT TO ADVA CE NOTICE OF THE ENTRY OF JUDGMENT, AND THE UNDERSIGNED EXPRESSLY AGREES AND CONSENTS T LENDER'S ENTERING JUDGMENT AGAINST DECLARANT BY CONFESSION AS PROVIDED FOR IN THE CONFESSION OF JUDGMENT ION. INITIALS: B. THE UNDERSIGNED FURTHER U DERSTANDS THAT IN ADDITION TO GIVING LENDER THE RIGHT TO ENTER JUDGMENT AGAINST DECLARANT WITHOUT ADVANCE OTICE OR A HEARING, THE CONFESSION OF JUDGMENT PROVISION IN THE GUARANTY ALSO CONTAINS LANGUAGE THAT WOUL PERMIT LENDER, AFTER ENTRY OF JUDGMENT, AGAIN WITHOUT EITHER ADVANCE NOTICE OR A HEARING, TO EXECUTE ON THE JUD MENT BY FORECLOSING UPON, ATTACHING, LEVYING ON, TAKING POSSESSION OF OR OTHERWISE SEIZING DECLARANT'S PROPERTY. I FULL OR PARTIAL PAYMENT OF THE JUDGMENT. IN EXECUTING THE GUARANTY, BEING FULLY AWARE OF DECLARANT'S RIGHTS THE JUDGMENT, THE UNDERSIGN THESE RIG ,AND THE UNDEF JUDGMEN 1 ANY MANNER PERT NOTICE. INITIALS: C ,AFTER HAVING READ AND S TEMENT THAT APPLIES, THE U I LS 1. DECLARANT WAS GUARANTY. 2. A REPRESENTATIVE TO DECLARANT'S ATTE THIS DISCLOSURE IS GIVEN UNDER EFFECT OF A SEALED INSTRUMENT E CORN By: Development Group, ] ADVANCE NOTICE AND A HEARING AFTER JUDGMENT IS ENTERED AND BEFORE EXECUTION ON ON BEHALF OF THE DECLARANT, IS KNOWINGLY, INTELLIGENTLY AND VOLUNTARILY WAMNG GNED EXPRESSLY AGREES AND CONSENTS TO LENDER'S IMMEDIATELY EXECUTING ON THE RED BY APPLICABLE STATE AND FEDERAL LAW, WITHOUT GIVING DECLARANT ANY ADVANCE WHICH OF THE FOLLOWING STATEMENTS ARE APPLICABLE, BY INITIALING EACH REPRESENTS THAT: BY DECLARANT'S OWN INDEPENDENT LEGAL COUNSEL IN CONNECTION WITH THE LENDER SPECIFICALLY CALLED THE CONFESSION OF JUDGMENT PROVISION IN THE GUARANTY AND IT IS INTENDED THAT THIS DISCLOSURE IS AND SHALL CONSTITUTE AND HAVE THE DING TO LAW. , INC. 1Afi911 1710 LaMin9. K• 5.79.90.OOS Cap,. XM,nC Handal fiolutlanp, Ma 1997, Zo09. N Wyrc, P,~M. • PA rn-eu9 Pn.7o ~p~,T `~of exhibit K1~ DISCLOSURE FOR CONFESSION OF JUDGMENT Borrower: Stewartstown Comerst ne Limited Partnership Lender: Sovereign Bank 200 Bailey Drive, Suite 204 Commercial Banking Division Stewartstown, PA 17 63 101 S. George Street ' York, PA 17401 Declarant: John M. Huenke 4400 Bridgeview Road Stewartstown, PA 17 63 ISCLOSURE FOR CONFESSION OF JUDGMENT I AM EXECUTING, THIS ~ DAY OF li~'~° 20 Us, A GUARANTY OF A PROMISSORY NOTE FOR $5,858,992.00 OBUGATING ME TO REPAY THAT AMOUNT. A. 1 UNDERSTAND THAT THE GUA NTY CONTAINS A CONFESSION OF JUDGMENT PROVISION THAT WOULD PERMIT LENDER TO ENTER JUDGMENT AGAINST ME IN COU T, AFTER A DEFAULT ON THE GUARANTY, WITHOUT ADVANCE NOTICE TO ME AND WITHOUT OFFERING ME AN OPPORTUNITY T DEFEND AGAINST THE ENTRY OF JUDGMENT. IN EXECUTING THE GUARANTY, BEING FULLY AWARE OF' MY RIGHTS TO ADVANCE NOT CE AND TO A HEARING TO CONTEST THE VALIDITY OF ANY JUDGMENT OR OTHER CLAIMS THAT LENDER SERT AGAINST M UNDER THE GUARANTY, I AM KNOWINGLY, INTELLIGENTLY, AND VOLUNTARILY WAIVING THESE RIGHTS, 1 L D NG ANY RIGHT T ADVANCE NOTICE OF THE ENTRY OF JUDGMENT, AND I EXPRESSLY AGREE AND CONSENT TO LENDER' E T 11NG JUDGMENT A AINST ME BY CONFESSION As PROVIDED FOR IN THE CONFESSION OF JUDGMENT PROVISION. INITIALS: B. 1 FU NOTICE PERMIT OR PART ANDAf VOLUNT :R U DERSTAND THAT N ADDITION TO GIVING LENDER THE RIGHT TO ENTER JUDGMENT AGAINST ME WITHOUT ADVANCE A RING, THE CON ESSION OF JUDGMENT PROVISION IN THE GUARANTY ALSO CONTAINS LANGUAGE THAT WOULD ID ,AFTER ENTRY O JUDGMENT, AGAIN WITHOUT EITHER ADVANCE NOTICE OR A HEARING, TO EXECUTE ON THE FORECLOSING UPO ,ATTACHING, LEVYING ON, TAKING POSSESSION OF OR OTHERWISE SEIZING MY PROPERTY, IN FULL AY T OF THE JU MENT. IN EXECUTING THE GUARANTY, BEING FULLY AWARE OF MY RIGHTS TO ADVANCE NOTICE G FTER JUDGMEN IS ENTERED AND BEFORE EXECUTION ON THE JUDGMENT, 1 AM KNOWINGLY, INTELUGENTLY AND ANING THESE RI HTS, AND I EXPRESSLY AGREE AND CONSENT TO LENDER'S IMMEDIATELY EXECUTING ON THE JUDGMENT Iji( ~Y MANNER PERM ED BY APPLICABLE STATE AND FEDERAL LAW, WITHOUT GNING ME ANY ADVANCE NOTICE. INITIALS: C. AFT R HA NG READ AND ETERMINED WHICH OF THE FOLLOWING STATEMENTS ARE APPUCABLE, BY INITIALING EACH STEM, NT TT APPLIES, 1 REPR ENT THAT: ~ 1. 1 WAS REPRESENTE BY MY OWN INDEPENDENT LEGAL COUNSEL IN CONNECTION WITH THE GUARANTY. 2. A REPRESENTATNE OF LENDER SPECIFICALLY CALLED THE CONFESSION OF JUDGMENT PROVISION IN THE GUARANTY TO MY ATTENTION. CERTIFY THAT MY ANNUAL IN OME EXCEEDS 510,000; THAT THE BLANKS IN THIS DISCLOSURE WERE FlLLED tN WHEN I INfTIALED AND SIGNED IT; AND THAT 1 RECEI ED A COPY AT THE TIME OF SIGNING. THIS DISCLO LIRE IS GIVE UNDE SEAL AND R IS INTENDED THAT THIS DISCLOSURE IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INST U ENT CORDING TO LAW. X assn reo ~^~^d, vw. s.m.oo.ow cow. wn.na Ao.odr saoeeo., n.. ins, zoos. ~e Menw e.....a. - ~~ G:ID000MIt1M01CRLLPLIG3C.FL to-ease P a ~-~ ~o~ e~~e~k ~~ DISCLOSURE FOR CONFESSION OF JUDGMENT BOfrOWer: Stewartstown Cornersto a Limited Partnership Lender: Sovereign Bank 200 Bailey Drive, Suite 04 Commercial Banking Division Stewartstown, PA 173 3 101 S. George Street ' York, PA 17401 Bruce W. Wilt P. O. Box 189 Manville, NJ 08835 SURE FOR CONFESSION OF JUDGMENT I AM IXECUTING, THIS DAY OF Ot/~UI~~ 20 ~, A GUARANTY OF A PROMISSORY NOTE FOR 55,858,992.00 OBLIGATING ME TO EPAY THAT AMOUNT. A. 1 UNDERSTAND THAT THE GUA NTY CONTAINS A CONFESSION OF JUDGMENT PROVISION THAT WOULD PERMIT LENDER TO ENTER JUDGMENT AGAINST ME IN COU T, AFTER A DEFAULT ON THE GUARANTY, WITHOUT ADVANCE NOTICE TO ME AND WITHOUT OFFERING ME AN OPPORTUNITY TO DEFEND AGAINST THE ENTRY OF JUDGMENT. IN IXECUTING THE GUARANTY, BEING FULLY AWARE OF MY RIGHTS TO ADVANCE NOTI E AND TO A HEARING TO CONTEST THE VALIDITY OF ANY JUDGMENT OR OTHER CLAIMS THAT LENDER MAY ASSERT AGAINST M UNDER THE GUARANTY, I AM KNOWINGLY, INTELLIGENTLY, AND VOLUNTARILY WAIVING THESE RIGHTS, INCLUDING ANY RIGHT T ADVANCE NOTICE OF THE ENTRY OF JUDGMENT, AND I EXPRESSLY AGREE AND CONSENT TO LENDER'S ENT ~UDGMENT AG INST ME BY CONFESSION AS PROVIDED FOR IN THE CONFESSION OF JUDGMENT PRgVISION. INITIALS: B. I FURTHER UNDERSTAND THAT ADDITION TO GIVING LENDER THE RIGHT TO ENTER JUDGMENT AGAINST ME WITHOUT ADVANCE NOTICE OR A HEARING, THE CON ION OF JUDGMENT PROVISION IN THE GUARANTY ALSO CONTAINS LANGUAGE THAT WOULD PERMIT LENDER, AFTER ENTRY O JUDGMENT, AGAIN WITHOUT EITHER ADVANCE NOTICE OR A HEARING, TO IXECUTE ON THE JUDGMENT BY FORECLOSING UPON ATTACHING, LEVYING ON, TAKING POSSESSION OF OR OTHERWISE SEIZING MY PROPERTY, IN FULL OR PARTIAL PAYMENT OF THE JUD MENT. IN IXECUTING THE GUARANTY, BEING FULLY AWARE OF MY RIGHTS TO ADVANCE NOTICE AND A HEARING AFTER JUDGM !S ENTERED AND BEFORE EXECUTION ON THE JUDGMENT, 1 AM KNOWINGLY, INTELLIGENTLY AND VOLUNTARILY WAIVING THESE RI HTS, AND 1 EXPRESSLY AGREE AND CONSENT TO LENDER'S IMMEDIATELY EXECUTING ON THE JUDGMENT I MANNER PERM ED BY APPLICABLE STATE AND FEDERAL LAW, WITHOUT GIVING ME ANY ADVANCE NOTICE. INITIALS: C. AFTER HAVING READ AND ETERMINED WHICH OF THE FOLLOWING STATEMENTS ARE APPLICABLE, BY INITIALING EACH STATEMENT THAT APPLIES, I REPR ENT THAT: IN LES~ 1. I WAS REPRESENTE BY MY OWN INDEPENDENT LEGAL COUNSEL IN CONNECTION WITH THE GUARANTY. 2. A REPRESENTATIVE OF LENDER SPECIFlCALLY CALLED THE CONFESSION OF JUDGMENT PROVISION IN THE GUARANTY TO MY ATTENTION. D. I CERTIFY THAT MY ANNUAL IN~OME EXCEEDS 510,000; THAT THE BLANKS IN THIS DISCLOSURE WERE FlLLED IN WHEN 1 INITIALED AND SIGNED IT; AND THAT 1 RECEI ED A COPY AT THE TIME OF SIGNING. THIS DISCLOSURE IS GIVEN UNDE SEAL AND IT IS INTENDED THAT THIS DISCLOSURE IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT CGORDING TO LAW. X LASER MO I.wiEl~. V,r. 9.39.0009% Cu W. NMn! Mr~WI idutlw~a Na. 1997. 707L Al NpFtr MNVM. • M G:1DOClAALLP110~CFlLLrL1D70.iC TA-!W ~~~Y `~oF ~h1b~k p~ -- ~ Stewartstown Co x~. mited Partnership - Loan No. 5164802 -~ 5 - Page 1 of 3 r So erei n Bank' g F URTH PROMISSORY NOTE MODIFICATION AGREEMENT This Agre meet made this ~ ~ 6 day of Juiy, 2008 by and between, Stewartstown Cornerstone Lim' ed Partnership, having an address of 1 East Market Street, Suite 401, York, PA 17401 (the ' newer"); Samuel Joffe, having an address of 1100 Centennial Avenue, Piscataway, NJ 0 54, John M. Huenke, having an address of 4400 Bridgeview Road, Stewartstown, PA 17363, Bruce W. Wilt, having an address of P.O. Box 189. Manville, N.J. 08835 and Come one Development Group, inc., having and address of 1 East Market Street, Suite 401, York, P 17401 (the `Guarantors`); and Sovereign Bank, having an address of 235 North Second Str t, Harrisburg, PA 17101 (the "Lender"); Whereas, n October B, 2005, the Borrower obtained from Lender a Loan evidenced by a Promissory Not in the amount of Frve Million Eight Hundred Fifty Eight Thousand Nine Hundred Ninety T and 00/100 Dollars ($5,858,992.00) (the `Principal Amount") bearing the same date, which ote was subsequently increased to a prinapai amount of $6,506,492.00 (the `Note"): The Note had a maturity date due and payable in full on October 6, 2007, which date was subsequently ended to May 6, 2008 (the `Maturity Date'); and Whereas, can January 25, 2006, the Borrower obtained from Lender a Note Modification; and Whereas, n January 3i, 2008, the Borrower obtained from Lender a Second Promissory Note M ification Agreement; and Whereas, n March 19, 2008, the Borrower obtained from Lender a Third Promissory Note Modification A reemenfi and Whereas, a outstanding principal balance owing on the Note as of July 2, 2008 is Two Million Seven Hu dyed Forty Thousand Nine Hundred Eighty Five and 08/100 Dollars ($2,740,985.08) (th `Outstanding Balance'); and Whereas, a~ the request of the Borrower and in agreement of Lender the Note will be further modified. Now There re, in consideration of the mutual benefits inuring to Borrower and Lender and other good an valuable consideration, the receipt and sufficiency of which are hereby acknowledged and mending to be legally bound hereby, it is agn3ed that the Note is hereby modified as describe below. 1. Upo execution of the within Agreement, the Maturity Date on the Note shall bee ended from May 6, 2008 to August 6, 2008, at which time the outstandin princlpai balance, together with accrued unpaid interest, late fees and unpaid loa charges, ff any, shall be due and payable to foil. Borrower will. continue to ay regular monthly payments as of each payment due date. The Guaran rs acknowledge and consent to the Borrower's execution and delivery of this Note Modificatio Agreement and hereby ratify and affirm the actions taken therein. The Guarantors affirm th t as of the date herein, the obligation and liability of the Guarantors under the Guarantees rem in absolute, unconditional and in full force and effect. All terms of a Note will continue to be fully effective, except to the extent that any of them are expressly hanged by this Agreement. The undersigned Borrower and Guarantors hereby confirm and cknowledge that they have no defense, counterclaim or setoff, which could affect the enforceabil of the Note, Guarantees, and other Loan Documents and hereby reaffirm the validity of the Not ,Guarantees and all other Loan Documents. Doc7.3.1 i Stewartstown Com an .mited Partnership Loan f3o. 5164502 75 Page 2 of 3 CONFESSI N OF JUDGMENT: BORROWER HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY TTORNEY OR THE PROTHON07ARY OR CLERK OF ANY COURT IN THE COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE, TO APPEAR AT ANY TIME FOR BORROWER AFTE A DEFAULT UNDER THE NOTE AS MODIFIED HEREIN AND WITH OR WITHOUT COMPLAINT FILED, CONFESS OR ENTER JUDGMENT AGAINST BORROWER FOR THE ENTIRE PRINCIPAL BALAN E OF THE NOTE, AS MODIFlED, AND ALL ACCRUED INTEREST, LATE CHARGES AND A AND ALL AMOUNTS EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERA SECURING THE NOTE, TOGETHER WITH COSTS OF SUIT, AND AN ATTORNEY'S COM ISSION OF TEN PERCENT {109'0) OF THE UNPAID PRINCIPAL BALANCE AND ACCRUED INTERE FOR COLLECTION, 8UT IN ANY EVENT NOT LESS THAN FIVE HUNDRED DOLLARS (5500.00) ON WHICH JUDGMENT OR JUDGMENTS ONE OR MORE EXECUTIONS MAY ISSUE IMMEDIATEL ;AND FOR SO DOING, THIS MODIFICATION AGREEMENT OR A COPY OF THIS MODIFICATION AG EEMENT VERIFlED BY AFFlDAVIT 5HALL BE SUFFlCIENT WARRANT. THE AUTHORITY GRA IN THIS MODIFlCATION AGREEMENT TO CONFESS JUDGMENT AGAINST BORROWER SHALL NOT BE EXHAUSTED BY ANY EXERCISE OF THAT AUTHORITY, BUT SHALL CONTINUE FROM TI E TO TIME AND AT ALL T'tMES UNTIL PAYMENT IN FULL OF ALL AMOUNTS DUE UNDER THEN TE AND THIS MODIFlCATION AGREEMENT. BORROWER HEREBY WAIVES ANY RIGHT BORRO MAY HAVE TO NOTICE OR TO A NEARING IN CONNECTION WRH ANY SUCH CONFESSION OF JUDGMENT AND STATES THAT EITHER A REPRESENTATIVE OF LENDER SPECIFICALLY CA LED THIS CONFESSION OF JUDGMENT PROVISION TO BORROWER'S ATTENTION OR BOR OWER HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL This Agre ent will be binding upon the Parties hereto, as well as their Sucxessors and assigns, as the case may be. to Witness hereof, a parties hereto have hereunto set their hands and seal this ~6 day of July, 2008. LENDER: ATTESST: ~ SOVEREIGN BANK i/~C~ ~ ' By. ATT T B ce W. Wilt, Corners ne [ By: Sa uel Juffe, Cornerstone Limited Partnership Group, Inc. Bv~ce W. wilt, COMMER tAl Comerst e [ By: S,am Juffe, w. GUARANTORS: :vglppr~t Group, Inc. Doc7.3.1 Stewartstown Com ~n ,nited Partnership Loan No. 5164802 ~ Page 3 of 3 DISCLOSURE FOR CONFESSION OF JUDGMENT THE UNDERSIGNE IS EXECUTING ON BEHALF OF DECLARANT, THIS ~ DAY OF JULY, 2008 A MODIFICATI N AGREEMENT OF A PROMISSORY NOTE DATED OCTOBER 6, 2005, IN THE ORIGINAL PRINCIP AMOUNT OF $5,858,992.00, SUBSEQUENTLY INCREASED TO $8,506,492.00, OBLIGATING DEC TO REPAY THE AMOUNT AS STATED THEREIN. A. TH UNDERSIGNED UNDERSTANDS THAT THE MODIFICATION AGREEMENT CONTAINS A CONF S$ION OF JUDGEMENT PROVISION THAT WOULD PERMIT LENDER TO ENTER JUDGMENT AGAIN T DECLARANT IN COURT, AFTER A DEFAULT ON THE NOTE, WITHOUT ADVANCE NOTICE O DECLARANT AND WITHOUT OFFERING DECLARANT AN OPPORTUNITY TO DEFEND AGAINST HE ENTRY OF JUDGMENT. IN EXECUTING THE MODIFICATION AGREEMENT, BEING FULLY AW E OF DECLARANT'S RIGHTS TO ADVANCE NOTICE AND TO A HEARING TO CONTEST THE VAL DITY OF ANY JUDGMENT OR OTHER CLAIMS THAT LENDER MAY ASSERT AGAINST DEC UNDER THE NOTE, THE UNDERSIGNED, ON BEHALF OF THE DECLARANT, IS KNOWING I LLIGENTLY, AND VOLUNTARILY WAIVING THESE RIGHTS, INCIUDING.ANY RIGHT TO A ANC NOTICE OF THE ENTRY OF JUDGMENT, AND THE UNDERSIGNED EXPRESSLY AGREES CO TO LENDER'S ENTERING JUDGMENT AGAINST DECLARANT BY CONFESS ~ j D FOR IN THE CONFESSION OF JUDGMENT PROVISION. B. U DERSIGNED FURTHER UNDERSTANDS THAT IN ADDITION TO GIVING LENDER THE RIG T T ENTER JUDGMENT AGAINST DECLARANT WITHOUT ADVANCE NOTICE OR A HEARING, THE FESSION OF JUDGMENT PROVISION IN THE MODIFICATION AGREEMENT ALSO CONTAINS GUAGE THAT WOULD PERMIT LENDER, AFTER ENTRY OF JUDGMENT, AGAIN WITHOUT EITHER DVANCE NOTICE OR A HEARING, TO EXECUTE ON THE JUDGMENT BY FORECLOSING UP N, ATTACHING, LEVYING ON, TAKING POSSESSION OF OR OTHERWISE SEIZING DECLARA S PROPERTY, IN FULL OR PARTIAL PAYMENT OF THE JUDGMENT. IN EXECUTING THEM IFICATION AGREEMENT, BEING FULLY AWARE OF DECLARANTS RIGHTS TO ADVANCE NOTICE D A HEARING AFTER JUDGMENT IS ENTERED AND BEFORE EXECUTION ON THE JUDG NT, E UNDERSIGNED, ON BEHALF OF DECLARANT, IS KNOWINGLY, INTELLIGE Y A VOLUNTARILY WAIVING THESE RIGHTS, AND THE UNDERSIGNED EXPRESSL AG S AND CONSENTS TO LENDER'S fMMEDIATELY EXECUTING ON THE JiJDGM , IN A ER PERMITTED BY APPLICABLE STATE AND FEDERAL' LAW, WITHOUT GIVING ~e91R~4 ADVANCE NOTICE. C. HAVING READ AND DETERMINED WHICH OF THE FOLLOWING STATEMENTS AR APPLICABLE, BY INITIALING EACH STATEMENT THAT APPLIES, THE UNDERSIGNED REP ESENTS THAT: INITIALS: i' 1. G NT WAS REPRESENTED BY DECLARANTS OWN INDEPENDENT EL IN CONNECTION WffH THE MODIFICATION AGREEMENT. 2. A E RESENTATIVE OF LENDER SPECIFICALLY CALLED THE CONFESSION O J DGMENT PROVISION IN THE MODIFICATION AGREEMENT TO DECLARANTS NTION. THIS DISCLOSURE I GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS DISCLOSURE IS AND SHALL CONSTITUTE ND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. DECLARANT: BORROWER: Limited Partnership Group, Inc., General Partner By: Doc7.3.1 ~K~'IB~T SOVEREIGN BANK, Plaintiff/Respondent vs. STEWARTSTOWN CORNERSTONE, LP; SA UEL JUFFE; CORNERSTONE DEVELOPMENT GROUP, INC.; JOHN M. HUENKE; AND BRUCE W. WILT, D IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION -LAW NO. 08-7307 CIVIL BEFORE HESS, J. ORDER AND NOW, this Open Judgment is hereby G ' day of July, 2009, it is ordered that the Defendants' Petition to BY THE COURT, Daniel D. Haggerty, Esq For the Plaintiff Albert G. Blakey, Esquire For the Defendants :rlm ~`e~ ~~~ ~~~ ~~~~~~ M SOVEREIGN BANK, Plaintiff/Responden~ vs. STEWARTSTOWN CORNERSTONE, LP; SA UEL JUFFE; CORNERSTONE DEVELOPMENT GROUP INC.; JOHN M. HUENKE; AND BRUCE W. WILT, At issue is a Stewartstown Cornerstone, Samuel Juffe ("Juffe"), ("Wilt"), and defendant signed as additional background is as follows. ~ Juffe, president of business entities have done years, with an estimated IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION -LAW NO. 08-7307 CIVIL A TTC~ f BEFORE HESS. J. OPINION AND ORDER of judgment arising from a real estate development loan between ("Stewartstown") and Sovereign Bank ("Sovereign"). Defendant John M. Huenke ("Huenke"), defendant Bruce W. Wilt Cornerstone Development Group, Inc. ("Cornerstone") for Stewartstown (collectively, "Petitioners"). Relevant and a partner in Stewartstown, testified that he and his iness with Sovereign and its predecessor banks for about fourteen of $65 million borrowed over that time period. (R. at 4:9-5:11.) ~ The parties stipulated to the use f the record in Sovereign Bank v. Bridgeview Investments, L. P., Bailey Springs Corp., Cornerstone Development roup, Inc., John M. Huenke, Bruce W. Wilt and Samuel Juffe, No. 2008-NO- 006211-Y30 aduplicate proceedi in York County in the instant case. N0. 08-7307 CIVIL Typically, the construction but the nature of real estate Because of the almost were careful to do business used by Petitioners had terms ranging from 18 to 24 months, opment dictated the need for extensions. (R. at 5:12-21.) i~ need for extensions of the due dates for these loans, Petitioners with banks willing to renew these loans, provided that interest was paid and the Petitioners] financial credentials remained strong. (R. at 5:21-25.) This business reality and bon owing strategy was echoed by Huenke, who is also a partner in Stewartstown and is a vice president of Cornerstone. (R. at 49:11-12.) In 2005, Mac McConnell ("McConnell"), a Sovereign employee, visited Juffe at his office in New Jersey to discuss expanding the relationship between Juffe, his partners, and Sovereign. (R. at 6:13-24.) During this discussion, Juffe shared with McConnell his desire for flexibility on the part of the ~anlc: "[A)s long as we're financially solvent, we're paying our interest, that the loans would not be called because of the nature of business. These loans are short term, and the time peri~ds to achieve what you want usually are longer than the terms of the loans." (R. at 7:7-12.) J~ffee testified that McConnell assured him that Sovereign was "in here for the long haul" and t>~at "they understood the real estate business." (R. at 7:1-4.) McConnell's assurances of flexibility on the part of Sovereign were also echoed by Stephen Goodrich ("Goodrich"), the loan officer managing the loan at issue from 2007 to 2008. (R. at 30:25-31:6.) Speci long as the interest on the renewals. (R. at 31:11-16.) represented to Petitioners 37:3.) Goodrich testified that in January 2008, he told Juffe that as was current, they need not be concerned about maturity dates and t the same time, however, Goodrich testified that he~never the maturity date would be extended "ab infinitum." (R. at 36:25- 2 NO. 08-7307 CIVIL On October 6, 2005 Stewartstown and Sovereign executed a promissory note to finance a real estate development p~oject. The original maturity date of the note was October 6, 2007. The parties executed four modification agreements, and each extended the maturity date by three months. The fourth and fin~l modification agreement, executed on July 16, 2008, set a maturity date of August 6, 2008. Hdwever, in the case of each of the modification agreements, the bank did not take immediate actin upon the coming of the loan's maturity date; instead, at least a month would pass prior to ~he drafting and execution of a new modification agreement. (R. at 45:19-47:4.) The previously amiable relationship between Petitioners and Sovereign began to sour in August 2008, in the midst f a sharp downturn in the real estate market. On August 6, the maturity date under the fou h modification agreement, the parties met to discuss the possibility of an additional modificati n. At that meeting, Goodrich and other representatives of Sovereign indicated to Petitioners tha~ the appraisal on the collateral for the existing loan reflected a substantial decrease in value. (R. at 62:16-21.) As a result, the loans were now undercollateralized, as per overeign's lending requirements. To remedy this new deficiency, Sovereign requested that P titioners offer additional collateral and provide Sovereign with additional financial information. (R. at 39:11-19.) In October 2008, Sovereign made the internal decision to get out of the real estate development business. (R. at 12:14-17, 31:25-32:5, 45:2-5.) Next, at the end of October 2008, Goodrich indicated that he information from Stewartstown, indicated received neither additional collateral nor the requested financial Huenke, a vice president of Cornerstone and partner in t during the August meeting, several scenarios regarding additional 3 NO. 08-7307 CIVIL collateral were discussed, b t no formal proposal was ever made. (R. at 50:23-51:6.) Additionally, Huenke testi ed that he had provided the majority of the requested financial information in a "huge, one ous spreadsheet." (R. at 49:17-50:1.) Sovereign informed Huenke that they required the info ation provided in a specific format, which Huenke said Cornerstone's controller w s "chipping away at" at the time judgment was confessed. (R. at 50:2-6.) In November 2008, Juffe sent Sovereign a letter indicating his willingness to work. with Sovereign's representative to reach a solution favorable to all involved parties. Prior to the end of November, counsel for overeign wrote Petitioners indicating that Sovereign intended to call Petitioners' loans with Sov~reign, including the one at issue here. (R. at 11:7-9.) After receiving this letter, a meeting was s~heduled for December 5, 2008. On December 1, 2008, Sovereign entered Judgment by Confession against Petitioners in a loan not at issue here. At that meeting, Petitioners learned from Sovereign's counsel that the action was taken to "get their attention." (R. at 12:2-4.) Sovereign entered Judgment by Confession against Petitioners in the loan at issue in the instant case on Dece~iber 15, 2008. DISCUSSION Rule 2959 sets forth the procedures used by courts in determining whether to open a previously confessed jud ent. A judgment taken by confession will be opened only if the petitioner acts promptly, al eges a meritorious defense and presents sufficient evidence of that defense to require submission of the issues to the jury. Rittenhouse v. Barclay White Inc., 425 Pa.Super. 501, 505, 625 A the light most favorable to 1208, 1210 (1993). The evidence proffered should be viewed in petitioner. Id. At bottom, the standard is identical to that of a 4 NO. 08-7307 CIVIL directed verdict: "viewing accepting as true all rejecting adverse al Mechanical Contractors, its promulgation in 1973, the evidence in the light most favorable to the petitioner and and proper inferences therefrom supporting the defense while of the party obtaining the judgment." See, e. g. ,Suburban v. Leo, 348 Pa.Super. 324, 327, 502 A.2d 230, 232 (1985). Since le 2959 has been interpreted as prohibiting courts from weighing the sufficiency of evidence pre ented by the petitioning party. See, e.g., First Pennsylvania Bank, N.A. v. Lehr, 293 Pa.Super. 189, 193, 438 A.Zd 600, 602-03 (19.80). In the case sub judi e, Petitioners have met timeliness requirement of Rule 2959(a)(3). The primary issue here is t e question of whether sufficient evidence exists to demonstrate the existence of a meritorious efense. Petitioners contend that such evidence does in fact exist, averring that it has several efenses' (1) that the contracts between Petitioners and Sovereign were modified orally, (2) t at Sovereign breached its contractual duty of good faith and fair dealing, and {3) that the do trine of equitable estoppel should prevent Sovereign from entering judgment by confession ag~inst Petitioners. First, Petitioners cl~im that oral modification of each of its contracts with Sovereign has taken place. Generally, a ntract may be modified by words, conduct, or both. See, e.g., Trombetta v. Raymond Ja es Financial Services, Inc., 907 A.2d 550, 558 (Pa.Super. 2006). Unless a contract is for the sale of goods, a contract can be modified orally although it provides that it can be modified onl~ in writing. Universal Builders, Inc. v. Moon Motor Lodge, Inc., 430 Pa. 550, 557, 244 A.2d 10, 15 (1968). As the Pennsylvania Supreme Court stated, "The most ironclad written contract supported by adequate always be cut into by the acetylene torch of parol modification .... The hand that pens a writing may not gag the mouths of the 5 NO. 08-7307 CIVIL assenting parties." Wagner To support a findi Matevish v. School Dist. of A valid modification does original contract to the 360, 166 A. 880, 881 (1933. Graziano Const. Co., 390 Pa. 445,448, 136 A.2d 82, 83-84 (1957). of a modification, there must be a new meeting of the minds. ugh of Ramey, 167 Pa.Super 313, 318, 74 A.2d 797, 800 (1950). displace a prior valid contract; rather, it only substitutes for the that it alters it. See, e.g., Knight v. Gulf Refining Co., 311 Pa. 357, The facts in the case sub judice demonstrate that there is merit to Petitioners' claims that the contracts at issue have been modified. The verbal communications between the parties and the conduct of the parties in performing the contracts at issue point in the opposite direction of the language of the contract. themselves. On one hand are the discussions between Petitioners and McConnell in 2005 an~ discussions between Petitioners and Goodrich in 2008, where McConnell and Goodrich bath indicated to Petitioners that current payment of interest on the loan would result in modification of the loan with a new maturity date. On the other hand is the relevant contract language. ~ The promissory note reads: All such pa ies agree that Lender may renew or extend (repeatedly and for any ength of time) this loan or release any parry, partner, or guarantor or collateral; or impair, fail to realize upon or perfect Lender's se urity interest in the collateral; and take any other action dee ed necessary by Lender without the consent of or notice to an one. (R. at Ex. B, Item 6.) Each of the four promissory note modification agreements executed between the parties include the following language: All terms of the Note will continue to be fully effective, except to the extent hat any of them are expressly changed by this Agreement. The undersigned Borrower and Guarantors hereby confirm and acknowledge that they have no defense, counterclaim or setoff, w ich could affect the enforceability of the note, and 6 NU. U8-7307 CIVIL other Loan L and all other (R. at Ex. B, Items 7-10.) 1 written modification has an; Notwithstanding, Pe question regarding whether form of Sovereign's promis promise to pay interest on t form of Sovereign's failure maturity dates. This course of cond "Lender may delay or forgc losing them." Id. Another assurances of McConnell a in modification and extensi Next, Petitioners as We question the applicatio. v. Mid-State Bank and Tru. addressed the applicability plaintiff borrower appealec with the plaintiff in good f Creeger Brick, 385 Pa.Sup Restatement (Second) of C gents and hereby reaffirm the validity of the note Documents. clauses, read together, support the conclusion that only a effect between the parties. itioners have presented sufficient evidence to give rise to a jury he contracts at issue were modified. This modification comes in the to modify and extend the maturity date in exchange for Petitioners' Additional evidence of the alleged modification comes in the declare Petitioner's loan in default at not one of the four original can be explained by the following promissory note language: enforcing any of its rights or remedies under this Note without explanation, however, is that this jibes with the oral Goodrich, that Petitioners' timely payment of interest would result -n of the loan's maturity date. ert that Sovereign breached its duty of good faith and fair dealing. of such a duty in this case. In Creeger Brick and Bldg. Supply Inc. Co., 385 Pa.Super. 30, 560 A.2d 151 (1989), the Superior Court ~f the duty of good faith and fair dealing to lending institutions. The the demurrer of its suit alleging that the defendant bank failed to deal ith, although it never violated any of the terms of its loan agreement. .r. at 32, 560 A.2d at 152. The court noted that Section 205 of the ~ntracts "suggests that `[e]very contract imposes upon each party a 7 NO. 08-7307 CIVIL duty of good faith and fair d aling in its performance and its enforcement."' Creeger Brick, 385 Pa.Super. at 35, 560 A.2d at 153 (quoting Restatement (Second) Contracts § 205). The court stated that aside from contracts governed by the Uniform Commercial Code, the duty of good faith and f it dealing has been imposed in a limited number of circumstances, including franchise agreem nts and insurance contracts. Creeger Brick, 385 Pa.Super. at 35, 560 A.2d at 153-54 (internal cit tions omitted). The Creeger Brick court went on to note that the Pennsylvania Supreme Co has explicitly refused to impose a duty of good faith where it would modify or defeat the egal rights of a creditor. Creeger Brick, 385 Pa.Super at 36, 560 A.2d at 154 (citing Heights .Citizens Nat'l Bank, 463 Pa. 48, 342 A.2d 738 (1975)). The court concluded its discussion by It seems re sonably clear from the decided cases that a lending institution oes not violate a separate duty of good faith by adhering to its agreement with the borrower or by enforcing its legal and c ntractual rights as a creditor. The duty of good faith imposed up n contracting parties does not compel a lender to surrender ri is which it has been given by statute or by the terms of its contra t. Creeger Brick, 385 Pa.Sup r. at 36-37, 560 A.2d at 154. Finally, Petitioners ssert that they also possess a valid equitable estoppel defense. Equitable estoppel is a vali defense for the purpose of a petition to open a confessed judgment. Allied Bldg. Products Cor v. Delco Roofing Co., Ind., 951 F.Supp. 1183, 1193 (E.D.Pa. 1996) f (applying Pennsylvania la ). See also, Lengyal v. Heidelberg Sports Enter., Inc., 412 Pa.512, 518, 194 A.2d 869, 873 (1 63). The Pennsylvania Supreme Court has summarized equitable estoppel as follows: When a silence by his `acts, representations, or admissions, or by his he ought to speak out, intentionally or through 8 NO. 08-7307 CIVIL culpable neg igence induces another to believe certain facts to exist and such of r rightfully relies and acts on such belief, so that he will be prej iced if the former is permitted to deny the existence of such facts ...the person inducing the belief in the existence of a certain state f facts is estopped to deny that the state of facts does in truth exis , aver a different or contrary state of facts as existing at the sam time, or deny or repudiate his acts, conduct, or statements. Blofsen v. Cutaiar, 460 Pa. 11, 417, 333 A.2d 841, 843-844 (1975) (internal quotation marks and citations omitted). Eq table estoppel protects the reasonable expectations of one who relies upon the conduct or repres tations of another. Doppler v. Doppler, 393 Pa.Super. 600, 608, 574 A.2d 1101, 1105 (1990 . The essential elements of an equitable estoppel defense are inducement and justifiable eliance on that inducement. See, e.g., Novelty Knitting Mills, Inc. v. Siskind, 500 Pa. 432, 436, 57 A.2d 502, 503-04 (1983). Additionally, "There can be no equitable estoppel where th complainant's act appears to be rather the.result of his own will or judgment than the product f what defendant did or represented." In re Tallarico's Estate, 425 Pa. 280, 288, 228 A.2d 736, 741 (1967). It is also important ~o note that, a party seeking to assert an equitable estoppel defense must come before the court with clean hands. See, e. g. , Lucey v. W. C.A. B. (Vy-Cal Plastics PMA Group), 557 Pa. 272, 279, ~'32 A.2d 1201, 1204 (1999) ("[The doctrine of unclean hands] is a self-imposed ordinance bad faith relative to the that its suitors shall have have acted fairly and Petitioners point to Goodrich. Both assured closes the doors of a court of equity to one tainted with iniquity or in which he seeks relief.... Thus, while equity does not demand blameless lives as to other matters, it does require that they shall fraud or deceit as to the controversy in issue"). of not one, but two agents of Sovereign: McConnell and that so long as they remained current on their interest 9 NO. 08-7307 CIVIL payments, the loan would were given assurances that modification agreements as downturn in the real estate flexibility on the part of S between the parties. These they also extend to the i with a time gap between agreement, not once or credibility to the verbal remained current on i needed. As the maturity Petitioners, based on the they had when the interest and met with agreement. Unbeknownst real estate development maturity date of the financial blow to Petiti out of real estate made out a prima facie extended. As discussed in the context of modification, Petitioners y contradicted the promissory note and subsequent . Undoubtedly, these assurances were made prior to the and they represent a seemingly genuine assurance of necessary to fostering a successful long-term relationship ces are not limited to those of McConnell and Goodrich, but of Sovereign when the loan's maturity date came and passed, old maturity date and the execution of a new note modification but four times. This conduct on the part of Sovereign gives of McConnell and Goodrich, that so long as Petitioners payments, the maturity date of the note would be extended as set by the fourth note modification agreement came and went, :ions of Sovereign and its agents, conducted themselves as date came and passed the three previous times: they paid their gn's representatives to move toward executing a new modification Petitioners, Sovereign had made the internal decision to phase out ~g in October 2008. Then, in December 2008, well past the final y note, Sovereign entered judgment by confession, a crippling While this action may have reflected Sovereign's desire to both get and protect its best individual interests, Petitioners have at least e of equitable estoppel sufficient to warrant opening judgment. 10 NO. 08-7307 CIVIL ORDER AND NOW, this Open Judgment is hereby day of July, 2009, it is ordered that the Defendants' Petition to BY THE COURT, Daniel D. Haggerty, Esq For the Plaintiff Albert G. Blakey, Esquire For the Defendants :rlm .~ Kevi .Hess, J. 11 ~,X~i81r C WEIR & PARTNERS I By: Daniel D. Hagge Attorney ID No. 77894 The Widener Building, 1339 Chestnut Street Philadelphia, PA 19107 (215) 665-8181 SOVEREIGN BANK 1100 Market Street Philadelphia, PA 19107 v. STEWARTSTOWN C 1 East Market Street, S York, PA 17401 Esquire 500 Plaintiff, f2I~TERSTONE, LP to 401 Defendant. n r o ~ ;~ ~ r~!r,- , ~-, Q < Y~ ~ : N ~ Attorneys for Sovereign Ban~'~= . ~, '.~ ::. `r Fy . ~~ COURT OF COMMON~LE.~ CUMBERLAND COUNTY ~.. _~, r~ ={Y ~= J rri ~a -~ CIVIL ACTION No. to-i4oa C-v<<Terr~ NOTICE TO DEFEND NOTICE You have been sued in court. if you ish to defend against the claims set forth in the following peg s, you must take action within twenty (20) days after this c mplaint and notice are served, by entering a written appe ce personally or by attorney and filing in writing with th court your defenses or objections to the claims set forth agai you. You are warned that if you fail to do so the case may p oceed without you and a judgment may be entered against y by the court without further notice for any money claimed i the complaint or for any other claim or relief requested by the Isintiff. You may lose money or property or other rights irtQo t to you. YOU SHOULD TAKE THIS PAPE TO YOUR LAWYER AT ONCE. TF YOU DO NOT HAVE LAWYER GO TO OR TELEPHONE THE OFFICE SET F RTH BELOW. THIS OFFICE CAN PROVIDE YOU rrH INFORMATION ABOUT HIRING A LAWYER. IF YOU CANNOT AFFORD TO HI A LAWYER, THIS OFFICE MAY BE ABLE TO P OVIDE YOU WITH INFORMATION ABOUT AGENCIE THAT MAY OFFER LEGAL SERVICES TO ELIGIB E PERSONS AT A REDUCED FEE OR NO FEE. Cumberland County B Association Cumberland La Journal 32 South Bedfor Street Carlisle, PA 1 013 Telephone: 717-2 9-3166 AVISO Lc hen demandado a ustted en la come. Si usted quiere defenderse de estas demandas expuestas en las paginas siguientes, usted time veinte (20) dies de plazo al partir de la fecha de la demands y la notification. Hate fella a sentar una comparencia escrita o en persona o con un abogado y entregara la cortte en forma escrita sus defenses o sus objeciones a las d msndas en contra de su persona Sea a visado que si usted no se defiende, Ia torte tomara medidas y puede continuer la demands en contra suya sin previo aviso 0 notification. Ademas, la Corte puede decidir a favor del demandante y requiere que usted cumpla con lodes las provisiones de esta de mends. Usted puede perder dinero o sus propiedades o otros de rechos importantes pars usted. LLEVE ESTA DEMANDA A UN ABOGADO IN MEDIATAMENTE SI NO TIENE ABOGADO 00 SI NO TIENE EL DINEROSUFICIENTE DE PAGAR TAL SERVICIO, VAYA EN PERSONA O LLAME POR TELEFONO A LA OFICINA CUY DIRECCION SE ENCUENTRA ESCRITA ABAJO PARR AVERICUAR DONDE SE PUEDE CONSEGUIR ASISTENCIA LEGAL. Asociacion de Licenciados de Filadelfia Servicio de Referencia a informacionLegal 32 South Bedford Street Cazlisle, PA 17013 Telephone: 717-249-3166 TRUE COPY FROM RECORD M Testimony whereof, I here unto set my hand and the ~ of said Court art Cartlsle, Pa. ~~_ ar 20 L2. ~ . ~ P Prothorwtary WEIR & PARTNERS L P By: Daniel D. Hagge ,Esquire Attorney ID No. 77894 The Widener Building, cite 500 1339 Chestnut Street Philadelphia, PA 19107 (215) 665-8181 SOVEREIGN BANK 1100 Market Street Philadelphia, PA 19107 v. STEWARTSTOWN 1 East Market Street, York, PA 17401 Attorneys for Sovereign Bank COURT OF COMMON PLEAS CUMBERLAND COUNTY Plaintiff, CIVIL ACTION NO. 1ERSTONE, LP 401 Defendant. E Plaintiff, Sovereign Bank, by and through its undersigned counsel, hereby brings this complaint in mortgage f reclosure against Defendant, Stewartstown Cornerstone, LP and says: 1. Plaintiff, Sovereign Bank (the "Bank") is a federally chartered financial institution organized an existing under the laws of the United States with offices for the purpose of doing business locate at 1100 Market Street, Philadelphia, Pennsylvania 19107. 2. Defend Stewartstown Cornerstone, LP ("Stewartstown") is a Pennsylvania Limited Partnership w 17401. 3. On or al; promissory note (the "' principal amount of $5, an address at 1 East Market Street, Suite 401, York, Pennsylvania ut October 6, 2005, Stewartstown executed and delivered to the Bank, a ote"), evidencing a loan extended to Stewartstown by the Bank in the 58,992.00 (the "Loan") which Note was amended four times pursuant to certain promissory note modification agreements ("Modification Agreements") dated respectively January 25,~ 2006, January 31, 2008, Mazch 19, 2008 and on July 16, 2008. True and correct copies of th~ Note, and all of the foregoing Modification Agreements are attached hereto collectively as Ex~ibit "A". 4. To secure payment of the Loan, Stewartstown executed and delivered to the Bank a mortgage dated Octob~r 6, 2005, which was duly recorded of record on October 10, 2005, in the Office of the Recori "Mortgage"), which Mc "Mortgage Modification Mortgage Modification Modification Agreeme~ documents or instrume~ collectively referred to l 5. The Mor the Bank upon the prep "Mortgaged Property"). 6. The Mo includes: of Deeds, Cumberland County, in Book 1926, Page 1120, et seq. (the was modified pursuant to a certain Modification of Mortgage (the dated January 25, 2006. True and correct copies of the Mortgage and attached hereto collectively as Exhibits "B" and "C". (The Note, Mortgage and Mortgage Modification, in addition to any and all executed or created in connection with the Loan, shall sometimes be as the "Loan Documents.") was executed in favor of the Bank, and granted a mortgage lien to identified in the Mortgage, including all improvements thereon (the Property, which is more fully described in the Mortgage, ALL T CERTAIN tracts or parcels of land and premises, situated 1 ing and being in the Township of Silver Spring in the County o Cumberland and Commonwealth of Pennsylvania, more particulaz v described as follows: BEGINN G at an iron pin located on the centerline of sixty (60') foot right of-way of an unnamed access drive (as set forth in Deed Book 35- ,page 534) and northern property line of Pennsylvania- American Water company; thence along lands now or formerly of Pennsyly ia-American Water Company, North 88 degrees 15 minutes 3 seconds West a distance of 1,009.93 feet through two 351903 2 (2) iron ipes to an iron pipe set along the eastern bank of the Conodog inet Creek; thence, along Conodoguinet Creek the following four (4) courses and distances: 1) N rth 24 degrees 46 minutes 00 seconds West a distance of 11 .39 feet to a point; 2) N rth 30 degrees 00 minutes 00 seconds West a distance of 27 .41 feet to a point; 3) N rth 13 degrees 45 minutes 00 seconds West a distance of 5 9.69 feet to a point; 4) N rth 22 degrees 26 minutes 00 seconds West a distance of 6 5.37 feet to a point; Thence, ong lands now or formerly of Kwan and Iney Wan, North 76 degrees 15 minutes 00 seconds East a distance of 1,712.00 feet to a point along the centerline of Sample Bridge Road, the ce, along said centerling of Sample Bridge Road, South 24 degree 50 minutes 00 seconds East a distance of 759.80 feet to a point a the intersection of Sample Bridge Road and unnamed access dri e; thence, along centerline of said unnamed access drive the follo 'ng seven (7) courses and distances: 1) S uth 65 degrees 09 minutes 59 seconds West a distance of 2 .00 feet to a point; 2) A ong a curve to the left with a radius of 277.72 feet and c e length of 151.72 feet, a chord bearing of South 49 d grees 30 minutes 58 seconds West and chord distance of 1 9.84 feet to a point; 3) S uth 33 degrees 52 minutes 00 seconds West a distance of 2 5.05 feet to a point; 4) A ong a curve to the left with a radius of 260.00 feet and c e length of 208.67 feet, a chord bearing of South 10 d grees 52 minutes 29 seconds West and chord distance of 2 3.11 feet to a point; 5) S uth 12 degrees 07 minutes 00 seconds East a distance of 3 8.95 feet to a point; 6) A ong a curve to the right with a radius of 290.00 feet and c e length of 219.33 feet, a chord bearing of South 09 d grees 33 minutes 00 seconds West and chord distance of 2 4.14 feet to a point; 7) S uth 31 degrees 13 minutes 00 seconds West a distance of 2 7.21 feet to an iron pin set at the point of BEGINNING. Total is 2,591,437 square feet (59.49 acres). 351903 ~ 3 The Real Property or its address is commonly known as 59.49 acre residenti 1 tract land known as County Club Estates, Silver Spring Townshi . PA. 7. The Mo gaged Property is titled in the name of Stewartstown. 8. Stewarts wn is in default under the terms of the Mortgage, in that Stewartstown has failed to pay the Lo pursuant to the terms of the Loan Documents. 9. As of J uary 4, 2010, Stewartstown is indebted to the Bank under the terms of the Loan as follows: Principal $2,779,426.43 Interest ( ough 1/4/2010) $ 215,184.46 Late Ch ges $ 95.00 Attorney fees and costs to date $ 14,032.67 TOTAL AL DEBT: $3,008,738.56 In addition, inte est continues to accrue on principal at the per diem rate of $521.14, plus costs of suit, and attorn ys' fees and expenses. WHEREFORE, Plaintiff, Sovereign Bank demands judgment in mortgage foreclosure in its favor and against D fendant, Stewartstown Cornerstone, LP, in the amount of $3,008,738.56, plus per diem interest f $521.14, plus costs of suit and additional attorneys' fees and expenses, and costs for foreclosur and sale of the Mortgaged Property. WEIR & P$RS LLP By: Attorneys fo~y1'1~rht?ff, Sovereign Dated: February 25, 10 351903 4 I, Van J Bank, and that I am in the foregoing VERIFICATION hereby verify that I am a Vice President of the Plaintiff, Sovereign ized to make this verification on its behalf, and that the facts set forth nt in Mortgage Foreclosure are true and correct to the best of my knowledge, information and belief. I understand that this verification is made subject to the penalties 18 Pa. C.S.A. ? relating to unsworn falsification to authorities. Van J. An rson, Vice President Dated: ~`/~5/ pAR`~ ~o~ exh~b~f C~ PROlI!!lSSORY NOTE E~.orrower: Stewartstown Corn tone LimRad Partnership Lender: Sovereign Bank • 20Q Barley Drive, 204 Commercial 8anfdng Division Stewartstown, PA 1 363 101 S. George Street York, PA 17401 •~ Principaj Amount: 55,858, 92.00 Date of Note: October 6, 2005 •PRO[VllS6 TO PAY. Stewartstow Cornerstone l3tnfted Partnership {'Borrower") Promises to pay to Sovereign Bank {"Lender'), or order, m lawful money of tM United States f America, the principal amount of Five Milrion fight Hundred Fifty-eight Thousand Mme Hundred Ninety-two .•~ ~& 001100 Doflare 155,858,992.00 together with intermit on the unpaid prindpal balance from October 6, 2D05, ants{ paid fn fail. • PAYMIB+iT. Borrower wHl pay iaan in one principal payment of 55,858,992.00 plus interest on October 6, 2007. Tfus paymeret due on October B, 2007, wHl bs for all p incipal an4 ap accrued interact not yet paid. In addition, Borrower wID pay regular morrthly payments of ail accrued unpaid ~tarast due as of each payment date, beginning November 6, 2005, with art subsequent intareai paymerris to be due as the same day of each month after t<4 Unless otherwise agreed or required by applicable taw, payments wi6 be applied first to any aceauad unpaid interest; then to princryiat; then to y fate charges; and than to any unpaid collection costs. The annual interest rata for this Nota is computed on a 365/360 basis; that is, by a plying the ratio of the annual interest rata over a year of 360 days, multiplied by, the outstanding principa[ • balance, multiplied by the actual umber of days the principal balance is outstanding. Borrower will pay Lender at Lender's address shown above or at such other pieta as Le er may designate in writing. VARIABLE INTl3iEST RATE. The cast rata on this Note is subject to change from rims to lima based on changes in an index which is the Sovereign Bank Prime Rate. Th Sovereign Bank Prima Rate shall mean the rata par annum from limo to time established by lender as tfie •Prime Rata and made avarlabie by Lander at its main office or, in the discretion of Lender, the base, reference or other rate than designated by Lender for generel commerdal to n reference purposes, it being understood that such rata is a reference rata, not necessarily the lowest, estabished from time to time, wh ch serves as the basis upon which effective irtarest rates era calculated for loans making reference thereto. {the "index'}. The Index is not eeassanly the lowest refs charged by Lender on its (Dens and is set by Lender in its sate discretion. 1f the Endax becomes unavailable dart the farm of this loan, Lander may designate a substitute index after notifying Borrower. lender w61 tell Borrower the current•Index rate u on Borrower's request. The interact rate change vw'R not oxur more often than each time as and when the 'index" changes. Borrower ands ds that Lender may make leans based on other rates as we!!. Tha interest rate to be applied m the unpaid principal balance of this Note wilt be ai a rate of 0.500 percentage poirm aver the Index. NOTICE: Under no• circumstances will the interest rata on this Nota be more than th maximum rate allowed by applicable law. PREPAYM1~iT. Borrower agroes at ail loan fees and other prepaid fatance charges are lamed fully as of the date of the loan and wit! not be s4tbjeei to refund upon early pa ant (whether voluntary or as a result of default), except as otherwise required by law. Except for the foregoing, Borrower may pay w' out penalty alt or a portion of the amount owed earlier than it is due. Early payments wll not, unless agreed to by Candor in writing, relieve rower of Borcower`s obligation to continua to make payments under the paymerrt schedule. Rather, early paymer~ will reduce the princi f balance due. Borrower agrees not to send Lender payments marked "paid in full", "wtthout recourse", or wll romain obligated t;o pay any rther amount owed to Lender. All written communications concerning disputed amounts, including any check or ether payment instrument that indicates that the payment constitutes 'payment in fuA" of the amount owed oc tftat is tendered with other conditions or I'snitations or as fuR satisfaction of a disputed amount must be mailed or delivered m: Sovereign Bank, P. O. Box 12707 Reading, PA 18612-2707. LATE CHARGE. if a payment i 15 days or more late, Borrower wiG be charged 5.00096 of the unpaid portion of the regularly scheduled payment or 510.00, whichever es greater. INTEREST AFTER DEFAULT. U default, including faifuro to pay upon final maturriy, Lender, at its option, may, if permitted under applicable law, increase the variable G~tere rate on this Nets to 3.500 percentage points over the Index. The interest rate vrill not exceed the maximum rata permitted by appi'icabla fa if judgment is entered in connection with this Note, interest will contmue to active on this Note after judgment at the interest rate app cable to this Nota at the time judgment is entered. DEFAULT. Each of the foGowing ~Shail constitute an event of default ("Event of Default') under this Note: Payment Default. Borrower its to make any payment when due under this Nate. Other Defaults. Borrower 3s to comply wiUt or to perform any other term, obligation, covenant or oondition contained in this Note or in any of the related documen or to comply with or to perform any term, obE'igation, covenant or condrtion contained in any other agreement between Lander and Borrow Default ire Fawr of Third P 'as. Borrower or any Grarrtor defaults under any loan, extension of credrt, exactly agreement, purchase or sales agreement, or any o r agroamenL in favor of any other creditor or person ti•iat may materially affect any of Borrower's property or ~• Borrower's ability to repay 's Nota or perform Borrower's ob[igat3ons under this Note or any of the related documents. • Environmental Default. FaG a of any party to comply with or perform when due any term, obligation, covenant or condition contained in any environmental sgreeme t executed in connection with any !Dart, False Statements. Any wa anty, representation or statement made or famished to Lender by Borrower or on Borrower's behalf under this Note or the related docum is false or misleading in arty material respect, either now or at the time made or famished or becomes false or misleading at any time th reafter. Death or insolvency. The safudon or termination of Borrower's existence as a going business or the death of any partner, the insolvency of Borcower, the apposntm t of a receiver for any part of Borcower's properly, arty assignment for the benefit of creditors, any type of creditor workout, or the co encement of any proceeding under any bankruptcy or insolvency taws by or against Borrower. Creditor or Forfeiture Proc edtngs. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, selffielp, repossession or any other ethod, by arty creditor of Borrower or by arty governmental agency against any collateral securing the loan. This includes a gamishman of any of Borrower's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of 13se claim which is the basis of the creditor or forfeiture proceeding and if oorower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies err a surety bond for the cred or or forfeiture proceeding, In art amount determined by Lender, in its sole discretion, as being an adequate reserve err bond for the die e. C-vents Affecting Guaranto . Any of the preceding events occurs with respect to any Guarantor of any of the tndebtsdness or any Guarartar dies or become incompetent, or revokes or disputes the validity of, or fiabTty under, any guaranty of the indebtedness evidenced by this Nota. to the event of a death, Lender, at its option, may, but shall not be required to, permit the Guarantor's estate to PROMISSORY NOTE - ~ iCorttinued) assume uncondetionafly the befault Events Affecting General Pe general partner dies or beta Change fn Ownership. The in Borrower. Adverse Chance. A meta performance of tfus Note is kesseurity. Lender in good 1 Cure Provisions. if am/ def same provision of this Not Lender demanding cure of days, immediately initiates continues and templates aU LENDER'S RIGHTS. Upon dale balance on this Nota and at( acct ATTORNEYS' FEES: EXPENSES. Lender that amount This includ not them is a lawsuit, including or injunction}, and appeals. if nt Saw. JURY WANER. Lender and Gorr or Borrower against the other. GOVERNING LAW. This Nate w the Commonwealth of Penrtsyb Conutronweafth of Psrinsylvania, RIGHT OF SETOFF. To the exter checking, savings. or some other span in the future. However, th law. Borrower authorizes La•idei Page 2 arising under the guaranty in a manner satisfactory to Sander, and, in doing sa, cure anyEvent of • of Borrower. Any of the precedng events occurs with respect to any genera{ partner of Borcowor or any incompetent. nation or expuis(on of any general partner with an ownership (merest of twenty-fore percent (25%} or mare adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or baBeves itself insecure. rit, other than a default in Payment is curabie and if Borrower has not 1»en given a notice of a breach of the witl°iin the preceding twelve (12i months, it may be cured if 8orcower, after receiving written Halite from ich default (7} cures the defauk within thirty {301 days; or I2J if the cure requires more than thirty (34) which Lander deems in Lender's sole discretion to be sufficient to cure the default and thereafter aasonable and necessary steps sufficient to produce eomp}(ance as soon as reasonably practical. t Lender may, after giving such notices as required by app['icabie Saw, declare the entire unpaid principal ~ unpaid interest immediately dus, and then Borrower wiq pay that amount. Lander may hire or pay someone else to help collect this Note if Borrower does not pay: Borrower wBl pay :, subject to arty limits under appliicable law, Lender's attorneys' fees and Lender's legs! expenses, whether or tomeys' fees, expanses for baniwptcy proceedings ((neiuding eftarts to modify or vacate arty automatic stay prohibited by applicable law, 8orcower also will pay any court costs, in addition to all other sums provided by hereby waive the right to arty jury trial in airy action, proceeding, or eounterelaim brought by either Lender ba governed by federal taw applicable m Lander and, to the extent not preempted by federal taw, the taws of nia without regard to its oonf4cts of iaw provisions. This Note has bean accepted by Lender in the t permitted by applicable taw, Lander reserves a right of setoff in ai Borrower's accoums with Lender (whether account}, This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may s does not include any 1RA or Keogh accounts, or any trust accounts for which setoff would be prohibited by to ilia extent permitted by applicable law, to charge or setoff all sums owing on the indebtedness against any rights provided in this paragraph SUCCESSOR Q~ITERESTS. The terms of this Note -shag be binding upon Borrower, end upon Borrower's heirs, persona( represematives, successors and assigns, and sh inure to tfie benefit of Lender and its successors and assigns. GiBrIERP.L PROVLSIONS. Lends any other person who signs, g notice of dishonor. Upon airy c whether as maker, guarantor, a or extend (repeatedly and for a~ or perfect Lender's security tote anyone. All such parties else whom the modification is made to be unenforceable, it will not CONFESSION OF JUDGMB+Ii PROTHONOTARY OR CLERK 0 FOR BORROWER AFTER A DE AGAINST BORROWER FOR THE ALL AMOUNTS IXPENDED OR OF SUIT, AND AN ATTORNEY'I COLLECTION, BUT IN ANY EV MORE EXECUTIONS MAY iSSU BE SUFFICIENT WARRANT. T EXHAUSTED BY ANY EXERCIS! FULL OF ALL AMOUNTS DUE t HEARING IN CONNECTION Wf SPECIFICALLY CALLED TH1S REPRESENTED BY INDEPENDEN may delay or forgo enforcing any of its rights or remedies under this Nona without losing them. Borrower and mess or endorses this Note, to the extent allowed by law, waive pnxentment, demand for paymem, and ange in the terms of this Nota, and unless otherwise expressly stated in writEng, no party who signs this Note, ommodat(on maker or endorsor, shall be released from liability. AIi such parties agree that Lender may renew length of time} this loan or release any party, partner, or guarantor or cotlatareh, or impair, fat( to realize upon rest in the coRatera[; and take any other action deemed necessary by tender without the consent of or notice to igrae that Lender may modify th(s Joan without the consent of or notice to arryona other than the party with The abGgations under this Note are joim and several. if any portion of this Nota is for any reason determuied Ffect the enforceability of arty other provisions of this Note. BORROWER HEREBY IRREVOCABLY AUTHORlZE5 AND EMPOWERS ANY ATTORNEY OR THE ' ANY COURT iN THE COMMONWEALTH OF PEJVNSYLVANIA, OR ELSEWHERE, TO APPEAR AT ANY TIME AULT UNDER THiS NOTE AND WITH OR WITHOUT COMPLAINT FlLED, CONFES5 OR ENTER JUDGMENT ENTIRE PRINCIPAL BALANCE OF THiS NOTE AND ALL ACCRUED INTEREST, SATi3 CHAAGES AND ANY AND ADVANCID BY LENDER RELATING TO ANY COLLATERAL SECURING THIS NOTE, TOGETHFA WITH'. COSTS COMMISSION OF TEN PERCENT (10%1 OF THE UNPAID PRINCIPAL BA(.ANCE AND ACCRUED INTEREST FOR :NT NOT LESS THAN FIVE HUNDRED DOLLARS ($500} ON WHICH JUDGMENT OR JUDGMENTS ONE OR ,IMMEDIATELY; AND FOR SO DOING, THIS NOTE OR A COPY OF THIS NOTE YERIRED 8Y AFFIDAVIT SHALL iE AUTHORITY GRANTED IN THIS NOTE TO CONFESS JUDGMENT AGAINST BORROWER SHALL NOT BE OF THAT AUTHORfI'Y, BUT SHALL CONTINUE FROM TIME TO TiME AND AT ALL TIMES UNTIL PAYMENT IN NDER THIS NOTE. BORROWER HEREBY WAIVES ANY RIGHT BORROWER MAY HAVE TO NOTICE OR TO A H ANY SUCH CONFESSION OF JUDGMENT AND STATES THAT EITHER A REPRESENTATNE OF LENDER CONFESSION OF JUDGMENT PROVISION TO BORROWER'S ATTiTiT1ON OR BORROWER HAS BEEN LEGAL COUNSEL. PRIOR TO SIGNING THIS NOTE, INTEREST RATE PROVISION5. B BORROWER ACKNOWLEDGES RI THIS NOTE ~ GIVEN UNDER S SEALED INSTRUM9+IT ACCORDI BORROWER: PROMISSORY NOTE ..... (Continued) Page 3 iRROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THLS NOTE. INCLUDING THE VARIABLE ROWER AGREES TO THE TERMS.OF.THE NOTE. - ' [P7 OF A COMPLETED COPY OF THlS PROMISSORY NOTE. ,AND iT 1S INTENDED THAT THlS NOTE !S ANb SHALL GONSTRUTS AND HAVE THE EFFECT OF A TO LAW. LIMITED PARTNERSHIP INC., General Partner of Stewartstawn Cornerstone Limited Partnership By: ~ uei Jaffe, e+, Devdopmeot Grou Inc. LENDER: SOVEREIGN BANK X t.lt6,~~ ~ J 1~""~ Stewartstown Comers n.,_ .ad'Partnership Loan #51648025 -q I Page 1 ~SovereignBank NOTE MODIFICATION AGREEMENT This Agreem nt made this 25th day of January, 2006 by and between, Stewartstown Cornerstone Limited artnership, having an address of 200 Bailey Drive, Suite 204, Stewartstown, PA 17363 (the "Borrowe ); Samuel Juffe, having an address of 68 Cranbury Neck Road, Cranbury, NJ 08512, John M. Huen e, having an address of 4400 Bridgeview Road, Stewartstown, PA 17363, and Bruce W. Wilt, having an address of P.O. Box 189, Manville, NJ 08835 (the'Guarantors'; and Sovereign Bank, haul g an address of 101 S. George Street, York, PA 17401 (the'Lender'~; Whereas, on October 6, 2005, the Borrower obtained from Lender a Line of Credit evidenced by a Promissory Note in the amount of Five Million Eight Hundred Fifty Eight Thousand Nine Hundred Ninety Two and 0011 Dollars ($5,858,992.00) (the "Principal Amount") bearing the same date (the `Note"). The Note is ue and payable upon Lender's Demand (the `Maturity Date'); and Whereas, th rate of interest applied to the unpaid principal balance on the Note is equal to one half percent (.50° )above Lender's Prime as same may change from time to time; and Whereas, the Note is secured by a mortgage on 59.49 acres of land known as Country Club Estates, Silver Spring Township, PA, (the "Mortgage"). The Mortgage was recopied in the County .... .~ iwww _~ 1`1___ JI/1A. ..J Whereas, a ales pace of six units per quarter will be established starting in January of 2006. The execution of a es contract defines a sale. This covenant will be reviewed every three months. Sales ahead of the r wired sales pace in one period may only be applied to the sales requirement in the next period but n t subsequent periods, If the required sales pace is not achieved the Borrower will make a payment ual to the required lot release price times the number of lots below the sales requirement. Whereas, th outstanding principal balance owing on the Note as of January 18, 2006, is Five Million Eight Hundred Fifty Eight Thousand Nine Hundred Ninety Two and 001100 Dollars ($5,858,992.00) (the "Outstanding Balance"); and Whereas, at ~he request of the Borrower and in agreement of Lender the Note will be modified. . Now Theref re, in consideration of the mutual benefits inuring to Borrower and Lender and other good and valua le consideration, the receipt and sufficiency of which are hereby acknowledged and intending to be I ally bound hereby, it is agreed that the Note is hereby modified as described below. 1. Upon ex~ution of the within Agreement, the Principal Amount of the Note is hereby increas from $5,858,992.00 to 56,506,492.00. 2. Borrow r promises to pay to Lender or order, in lawful money of the United States of Ame ,the principal amount of Six Million Five Hundred Six Thousand Four Hundre Ninety Two and 00!100 Dollars (56,506,492.00) or so much as may be outstan ing, together with irterest on the unpaid principal balance of each advanc Borrower will continue to pay regular monthly payments of all accrued unpaid i terest due as of each payment due date. Stewartstovm Come n, .. _ed Partnership Loan #51648025 Page 2 3. Concu nt with the execution and delivery of this Agreement Borrower shall execute nd deliver to Lender a Modfication of Mortgage on 59.49 acres of land known Country Club Estate, Silver Spring Township, PA. The lien amount shall be incre ed from 55,858,992.00 to 56,506,492.00. 4. The requ#red lot release price shall be modfied from 558,600.00 to 564,000.00 per lot. Guarantors a knowledge and consent to the Borrower's execution and delivery of this Note Modification Agreeme t and the Modfcation of Mortgage and hereby ratifies and affirms the acctions taken therein. The G arantors affirm that as of the date herein, the obligations and liabilities of the Guarantor under the uarantees remain absolute, unconditional and in full force and effect. All terms of Note will continue to be fully effective, except to the extent that any of them are expressly Chang by this Agreement. -The undersigned Borrower and Guarantors hereby confirm and acknowledge tha they have no defense, counterclaim or setoff, which could affect the enforceabif'~ty of the N te, and other Loan Documents and hereby reaffirm the validity of the Note and all other Loan Docum nts. This Agreem~nt will be binding upon the Parties hereto, as well as their Successors and assigns, as the case ay be. In Witness hereof, tt~e parties hereto have hereunto set their hands and seal this 25th day of January 2006. Witness: I SOVEREIGN BANK Witness: Limited Partnership Huenke, Wilt, Indivi wally Stewartstown Comerstbne Limited Partnership Loan #51648025-75 ~SovereignBank PROMISSORY NOTE MODIFICATION AGREEMENT This Agr nt made this ~ ! ~ day of January, 2008 try and between, Stewartstown Corns a Limited Partnerehip, having an address of 200 Bailey Drive, Suite 204, Stewartstown, A 17363 (the "Borrower'); Samuel Juffe, having an address of 1100 Centennial Avenue, iscataway, NJ 08854, John M. Huenke, having an address of 4400 Bridgeview Raad, St artstown, PA 17363, and Bruce W. Wilt, having an address of P.O. Box 189, Manville, NJ 08 35 (the 'Guarantors'; and Sovereign Bank, having an address of 235 North Second Street, arrisburg, PA 17101 (the'Lende~; Whereas, o October 6, 2005, the Borrower obtained from Lender a Time Loan evidenced by a Pro issory Note in the amount of Froe Mill'ron Eight Hundred Fifty Eight Thousand Nine Hund Ninety Two and 00/100 Dollars ($5,858,992.00) (the'Prlncipal Amount") bearing the same d ,which Note was subsequently increased to the amount of $6,506,492.00 (the 'Note'). The N to has a maturity date due and payable in full on October 6, 2007 (the 'Maturity Date7; and Whereas, on January 25, 2006, Borrower obtained from Lender a Note Modification4(the "Fret Modification7; nd Whereas, th outstanding prinapal balance owing on the Note as of December 31, 2001 is Two Million Six Hu dred Twenty Eight Thousand Eight Hundred Thirty Nine and 161100 Dotiars ($2,628,839.16) (the'Outstanding Balance"); and further modified. Now The ro, in consideration of the mutual benefits inuring to Borrower and Lender and other good an valuable consideration, the receipt and sufficiency of which are hereby acknowledged and i tending to be legalty bound hereby, it is agreed that the Note is hereby modfied as descri below. 1. Upo sxecutton of the within Agreement, the Maturity Dats on the Note shall be nded from October 6, 2007 ~ February B, 2008, at which time the outstand{n principal balance, together with accrued unpaid interest, late fees and unpaid i charges, H arty, shall .be due and payable in full. Borrower will conttnue to pay regular monthly payments as of each payment due dab. The Guaran ors acknowledge and consent to the Borrowers execution and delivery of this Note Modiftcatio Agreement and hereby ratfies and affirms the actions taken therein. The Guarantors affirm th t as of the date herein, the obligation and liablity of the Guarantors under the Guaranties rem n absolute, unconditional and in full force and effect All terms of the Note will continue to be fully effective, except to the extent that any of them are expressly changed by this Agreement The undersigned Borrower and Guarantors hereby conftrm and nowiedge that they have no defense, counterclaim or setoff, which could affect the enforceabi kY of the Note, and other Loan Documents and hereby reaffirm the validity of the Note and alt oth r Loan Documents. rw Stewartstown Comers ne Limited Partnership Loan X51648025-75 CONFESSION OF JUDGMENT: BORROWER HEREBY IRREVOCABLY AUTHORIZES AND POWERS ANY ATTORNEY OR THE PROTHONOTARY OR CLERK OF ANY COURT IN COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE, TO APPEAR AT ANY T1 E FOR BORROWER AFTER A DEFAULT UNDER THE NOTE AS MODIFlED HEREW D WITH OR WITHOUT COMPLAINT FILED, CONFESS OR ENTER JUDGMENT AGAINS BORROWER FOR THE ENTIRE PRINCIPAL BALANCE OF THE NOTE, AS MODIFlE ,AND ALL ACCRUED INTEREST, LATE CHARGES AND ANY AND ALL AMOUNTS ENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SE RING THE NOTE, TOGETHER WITH COSTS OF SUIT, AND AN ATTORNEY'S COM 1SSION OF TEN PERCENT (10X) OF THE UNPAID PRINCIPAL BALANCE AND ACC UED INTEREST FOR COLLECTION, BUT IN ANY EVENT NOT LESS THAN FIVE HUND DOLLARS (5500.00) ON WHICH JUDGMENT OR JUDGMENTS ONE OR MORE EXEC ONS MAY ISSUE fMMEDIATELY; AND FOR SO DOING, THIS ~MODIFiCATION AG MENT OR A COPY OF THIS MODIFICATION AGREEMENT VERIFIED BY AFFlD VR SHALL BE SUFFICIENT WARRANT. THE AUTHORITY GRANTED W THIS MODIFICA N AGREEMENT TO CONFESS JUDGMENT AGAINST BORROWER SHALL NOT BE LISTED BY ANY EXERCISE OF THAT AUTHORITY, BUT SHALL CONTINUE FROM E TO TIME AND AT ALl. TIMES UNTIL PAYMENT IN FULL OF ALL AMOUNT'S DUE UND THE NOTE AND THIS MODIFlCATION AGREEMENT. BORROWER HEREBY WANES RIGHT BORROWER MAY HAVE TO NOTICE OR TO A HEARING IN CONNECTION WITH SUCH CONFESSION OF JUDGMENT AND STATES THAT ER'HER A REPRESENTA OF LENDER SPECIFlCALLY CALLED THIS CONFESSION OF JUDGMENT PRO ION TO BORROWER'S ATTENTION OR BORROWER HAS BEEN REPRESENTED BY ! DEPENDENT LEGAL COUNSEL This Agreeme twill be binding upon the Parties hereto, as well as their Successors and assigns, as the case ay be. In Witness hereof, th parties hereto have hereunto set their hands and seal this3+'~_ day ATTEST: yip m LENDER: ~J,, ~ SOVER '1 N BANK ~/I (/Y C,~,/~ By: Stewartstown Com rs~.., ~~ Limited Partnership Loan #51648025-7 URE FOR CONFESSION OF JUDGMENT THE UNDERSIGN D IS EXECUTING ON BEHALF OF DECLARANT, THIS ~t ~~ DAY OF JANUARY, 2008 A MODIFICATION AGREEMENT OF A PROMISSORY NOTE DATED OCTOBER 6, 2 05 IN THE ORIGINAL PRINCIPAL AMOUNT OF $5,858,992.00, SUBSEQUENTLY NCREASED TO $6,506,492.00 OBLIGATING DECLARANT TO REPAY THE AMOUNT AS STA ED THEREIN. A TI AGREEMENT CO PERMaT LENDER DEFAULT ON TH OFFERING DECL JUDGMENT. IN E DECLARANTS RI VALIDITY OF ANA DECLARANT UNC IS KNOWINGLY, INCLUDING ANY UNDERSIG D I JUDGMEN AGA CONFES OF GIVING LENDER ADVANCE NOTICE MODIFICATION f LENDER, AFTER I A HEARING, TO I LEVYING ON, T PROPERTY, IN Fl MODIFICATION A ADVANCE NOTIC EXECUTION ON l KNOWINGLY, INT UNDERSt ED E E7CECUTI~ ON C. STATEMENTS UNDERSIGNED E UNDERSIGNED UNDERSTANDS THAT THE MODIFICATION JTAINS A CONFESSION O.F JUDGEMENT PROVISION THAT WOULD TO ENTER JUDGMENT AGAINST DECLARANT IN COURT, AFTER A NOTE, WITHOUT ADVANCE NOTICE TO DECLARANT AND WITHOUT ~RAJVT AN OPPORTUNITY TO DEFEND AGAINST THE ENTRY OF CECUTING THE MODIFICATION AGREEMENT, BEING FULLY AWARE OF 3HTS TO ADVANCE NOTICE AND TO A HEARING TO CONTEST THE JUDGMENT OR OTHER CLAIMS THAT LENDER MAY ASSERT AGAINST .R THE NOTE, THE UNDERSIGNED, ON BEHALF OF THE DECLARANT, INTELLIGENTLY, AND VOLUNTARILY WAIVING THESE RIGHTS, TIGHT TO ADVANCE NOTICE OF THE ENTRY OF JUDGMENT, AND THE XPRESSLY AGREES AND CONSENTS TO LENDER' S ENTERING NST DECLARANT BY CONFESSION AS PROVIDED FOR IN THE IUDGMENT PROVISION. :UNDERSIGNED FURTHER UNDERSTANDS THAT IN ADDITION TO rFiE RIGHT TO ENTER JUDGMENT AGAINST DECLARANT WITHOUT OR A HEARING, THE CONFESSION OF JUDGMENT PROVISION IN THE 3REEMENT ALSO CONTAINS LANGUAGE THAT WOULD PERMIT NTRY OF JUDGMENT, AGAIN WITHOUT EITHER ADVANCE NOTICE OR XECUTE ON THE JUDGMENT BY FORECLOSING UPON, ATTACHING, J<ING POSSESSION OF OR OTHERWISE SEIZING DECLARANTS LL OR PARTIAL PAYMENT OF THE JUDGMENT. IN EXECUTING THE 3REEMENT, BEING FULLY AWARE OF DECLARANTS RIGHTS TO AND A HEARING AFTER JUDGMENT IS ENTERECF AND BEFORE ~E JUDGMENT, THE UNDERSIGNED, ON BEHALF OF DECLARANT, IS :LLIGENTLY AND VOLUNTARILY WAIVING THESE RIGHTS, AND THE CPRESSLY AGREES AND CONSENTS TO LENDER'S IMMEDIATELY HE JUDGMENT, IN ANY MANNER PERMITTED BY APPLICABLE STATE AND OUT GIVING DECLARANT ANY ADVANCE NOTICE. .R HAVING READ AND DETERMINED WHICH OF THE FOLLOWING APPLICABLE, BY INITIALING EACH STATEMENT THAT APPLIES, THE =BENTS THAT: IN ITiALS 1. DE LARANT WAS REPRESENTED BY DECLARANTS OWN INDEPENDENT CO NSEL IN CONNECTION WfTH THE MODIFICATION AGREEMENT. 2. A PRESENTATIVE OF LENDER SPECIFICALLY CALLED THE CONFESSION OF UDGMENT PROVISION IN THE MODIFICATION AGREEMENT TO DECLARANTS A NT10N. rw Stewartstown Co rst~.~~ Limited Partnership Loan #51648025-7 THIS DISCLOSURE IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS DISCLOSURE IS AND SHALL CONSTiTU AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. DECLARANT:. BORROWS Stewartsto n sy: ~ Sam I Joffe, Limited Partnership rw t Stewartstown Come to~.~ Limited Partnership Loan #51648025-75 Sover~ign Bank PROMISSORY NOTE MODIFICATION AGREEMENT This Agreem nt made this ~ day of March, 2008 by and between, Stewartstown Cornerstone Limit d Partnership, having an address of 200 Bailey Drive, Suite 204, Stewartstown, PA 17 63 (the `Borrower"); Samuel Juffe, having an address of 1100 Centennial Avenue, Piscataway, NJ 08854, John M. Huenke, having an address of 4400 Bridgeview Road, Stewartstown, PA 1 363, Bruce W. Wilt, having an address of P.O. Box 189, Manville, N.J. 08835 and Corners one Development Group, Inc., having and address of 200 Bailey Drive, Suite 204, Stewartst wn, PA 17363 (the `Guarantors'); and Sovereign Bank, having an address of 235 North Second treet, Harrisburg, PA 17101 (the'Lender'); Whereas, o October 6, 2005, the Borrower obtained from Lender a Time Loan evidenced by a Pr missory Note in the amount of Frve Million Eight Hundred Fifty Eight Thousand Nine Hun red Ninety Two and 00/100 Dollars ($5,858,992.00) (the "Principal Amount") bearing the same da e, which Note was subsequently increased to the amount of $6,506,492.00 (the 'Note"). The N to had a maturity date due.and payable in full on October 6, 2007, which date was subsequen ly extended to a current maturity date of February 6, 2008 (the 'Maturity Date°); and Whereas, o January 25, 2006, the Borrower obtained from Lender a Note Modification (the "First Modificatio "); and Whereas, o January 31, 2008, the Borrower obtained from Lender a Second Promissory Note Mo fication Agreement (the'Second Modification'); and Whereas, th outs#anding principal balance owing on the Note as of March 17, 2008 is Two Million Seven Hundred One Thousand One Hundred Forty Two and 37/100 Dollars ($2,701,142.37) (the `Outstanding Balance"); and Whereas, at a request of the Borrower and in agreement of Lender the Note will be further modified. Now Theref re, in consideration of the mutual benefits inuring to Borrower and Lender and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and i tending to be legally bound hereby, it is agreed that the Note is hereby modified as describe below. 1. Upo execution of the within Agreement, the Maturity Date on the Note shall bee ended from February 6, 2008 to May 6, 2008, at which time the outstanding principal balance, together with accrued unpaid interest, late fees and unpaid loan charges, if any, shall be due and payable in full. Borrower will continue to ay regular monthly payments as of each payment due date. The Guarant rs acknowledge and consent to the Borrower's execution and delivery of this Note Modificatio Agreement and hereby ratifies and affirms the actions taken therein. The Guarantors affirm th t as of the date herein, the obligation and liability of the Guarantors under the Guaranties remai absolute, unconditional and in full force and effect. All terms of a Note will continue to be fully effective, except to the extent that any of them .are expressly hanged by this Agreement. The undersigned Borrower and Guarantors rw Stewartstown Comer toi ~.. Limited Partnership Loan #51648025-75 hereby confirm and nowledge that they have no defense, counterclaim or setoff, which could affect the enforceabili of the Note, and other Loan Documents and hereby reaffirm the validity of the Note and all othe Loan Documents. CONFESSIO AUTHORIZES AND OF ANY COURT III APPEAR AT ANY ' MODIFIED HEREIN JUDGMENT AGAIN NOTE, AS MODIFIE ALL AMOUNTS I COLLATERAL SEC ATTORNEY'S CON BALANCE AND AC THAN FNE HUNDR OR MORE EXECI MODIFICATION A( VERIFIED BY AFFIC IN THIS MODIFICA SHALL NOT BE E; CONTINUE FROM 1 AMOUNTS DUE UN HEREBY WAIVES ~ CONNECTION WITf A REPRESENTATI JUDGMENT PROM REPRESENTED BY This Agreerr assigns, as the case In Witness hereof, of March 2008. ATTEST: V OF JUDGMENT: BORROWER HEREBY IRREVOCABLY EMPOWERS ANY ATTORNEY OR THE PROTHONOTARY OR CLERK THE COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE, TO 'IME FOR BORROWER AFTER A DEFAULT UNDER THE NOTE AS AND WITH OR WITHOUT COMPLAINT FILED, CONFESS OR ENTER 5T BORROWER FOR THE ENTIRE PRINCIPAL BALANCE OF THE D, AND ALL ACCRUED INTEREST, LATE CHARGES AND ANY AND XPENDED OR ADVANCED BY LENDER RELATING TO ANY URING THE NOTE, TOGETHER WITH COSTS OF SUIT, AND AN MISSION OF TEN PERCENT (70%) OF THE UNPAID PRINCIPAL :RUED INTEREST FOR COLLECTION, BUT IN ANY EVENT NOT LESS .D DOLLARS ($500.00) ON WHICH JUDGMENT OR JUDGMENTS ONE TIONS MAY ISSUE IMMEDIATELY; AND FOR SO DOING, THIS ~REEMENT OR A COPY OF THIS MODIFICATION AGREEMENT AVIT SHALL BE SUFFICIENT WARRANT. THE AUTHORITY GRANTED 'ION AGREEMENT TO CONFESS JUDGMENT AGAINST BORROWER :HAUSTED BY ANY EXERCISE OF THAT AUTHORITY, BUT SHALL IME TO TIME AND AT ALL TIMES UNTIL PAYMENT IN FULL OF ALL )ER THE NOTE AND THIS MODIFICATION AGREEMENT. BORROWER NY RIGHT BORROWER MAY HAVE TO NOTICE OR TO A HEARING 1N ANY SUCH CONFESSION OF JUDGMENT AND STATES THAT EITHER /E OF LENDER SPECIFICALLY CALLED THIS CONFESSION OF 510N TO BORROWER'S ATTENTION OR BORROWER HAS BEEN INDEPENDENT LEGAL COUNSEL. will be binding upon the Parties hereto, as well as their Successors and i be. e parties hereto have hereunto set their hands and seal this ~ r day LENDER: SOVEREIGN BANK ,c~:.,~ BO Cornerstone Limited Partnership uel Juffe, IA~RCIAL GUARANTORS: ~rstone De el~op Lment Group, Inc. ~M_ uel Juffe, Pre~id rw Stewartstown Come Loan #51648025-75 Limited Partnership rw Stewartstown Come Laan #51648025-75 THE UNDERSIGNE MARCH, 2008 A MC 6, 2005 IN THE INCREASED TO $ STATED THEREIN. A. THE AGREEMENT CONI PERMIT LENDER T DEFAULT ON THE OFFERING DECLAf JUDGMENT. IN EXE DECLARANT'S RIGt VALIDITY OF ANY J' DECLARANT UNDEf IS KNOWINGLY, I INCLUDING ANY RI( UNDER;;IG~~NED EX JUDGNIk?l'~T~A~N Limited Partnership DISCLOSURE FOR CONFESSION OF JUDGMENT IS EXECUTING ON BEHALF OF DECLARANT, THIS ~~ DAY OF iIFICATION AGREEMENT OF A PROMISSORY NOTE DATED OCTOBER RIGINAL PRINCIPAL AMOUNT OF $5,858,992.00, SUBSEQUENTLY 506,492.00 OBLIGATING DECLARANT TO REPAY THE AMOUNT AS UNDERSIGNED UNDERSTANDS THAT THE MODIFICATION SINS A CONFESSION OF JUDGEMENT PROVISION THAT WOULD ENTER JUDGMENT AGAINST DECLARANT IN COURT, AFTER A OTE, WITHOUT ADVANCE NOTICE TO DECLARANT AND WITHOUT ANT AN OPPORTUNITY TO DEFEND AGAINST THE ENTRY OF LUTING THE MODIFICATION AGREEMENT, BEING FULLY AWARE OF TS TO ADVANCE NOTICE AND TO A HEARING TO CONTEST THE DGMENT OR OTHER CLAIMS THAT LENDER MAY ASSERT AGAINST THE NOTE, THE UNDERSIGNED, ON BEHALF OF THE DECLARANT, JTELLIGENTLY, AND VOLUNTARILY WAIVING THESE RIGHTS, HT T ADVANCE NOTICE OF THE ENTRY OF JUDGMENT, AND THE 'RE LY AGREES AND CONSENTS TO LENDER' S ENTERING CLARANT BY CONFESSION AS PROVIDED FOR IN THE ~G N~ PROVISION. B. THE GIVING NDER TI ADVANCE NOTICE MODIFICATION AG LENDER, AFTER EN A HEARING, TO EX LEWING ON, TAH PROPERTY, IN FUL MODIFICATION AG. ADVANCE NOTICE EXECUTION ON TH KNOWINGLY, INTEL UNDEI~S~I61~IED EXI STATEMENTS ARE UNDERSIGNED REP INITIALS DE( COl AR rw UNDERSIGNED FURTHER UNDERSTANDS THAT IN ADDITION TO iE RIGHT TO ENTER JUDGMENT AGAINST DECLARANT WITHOUT IR A HEARING, THE CONFESSION OF JUDGMENT PROVISION IN THE ~EEMENT ALSO CONTAINS LANGUAGE THAT WOULD PERMIT TRY OF JUDGMENT, AGAIN WITHOUT EITHER ADVANCE NOTICE OR ECUTE ON THE JUDGMENT BY FORECLOSING UPON, ATTACHING, ING POSSESSION OF OR OTHERWISE SEIZING DECLARANT'S _ OR PARTIAL PAYMENT OF THE JUDGMENT. IN EXECUTING THE 2EEMENT, BEING FULLY AWARE OF DECLARANT'S RIGHTS TO AND A HEARING AFTER JUDGMENT IS ENTERED AND BEFORE JUDGMENT, THE UNDERSIGNED, ON BEHALF OF DECLARANT, IS LI ENTLY AND VOLUNTARILY WAIVING THESE RIGHTS, AND THE ~ SSLY AGREES AND CONSENTS TO LENDER'S IMMEDIATELY E GMENT, IN ANY MANNER PERMITTED BY APPLICABLE STATE AND IVING DECLARANT ANY ADVANCE NOTICE. HAVING READ AND DETERMINED WHICH OF THE FOLLOWING LICABLE, BY INITIALING EACH STATEMENT THAT APPLIES, THE VTS THAT: JT WAS REPRESENTED BY DECLARANTS OWN INDEPENDENT 1N CONNECTION WITH THE MODIFICATION AGREEMENT. 'RESENTATIVE OF LENDER SPECIFICALLY CALLED THE CONFESSION Stewartstown Come tone Limited Partnership - Loan #51648025-75 OF JI.~DGMENT PROVISION IN THE MODIFICATION AGREEMENT TO DECLARANTS ATTE ON. THIS DISCLOSURE IS GIVEN UNDER SEAL AND R IS INTENDED THAT THIS DISCLOSURE IS AND SHALL CONSTITUTE ND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. Cornerstone Limited Partnership Sam el J_uffe, P rw ~- . Stewartstown Co ~, .m~ed Partnership Loan No. 516480 5-7s Page 1 of 3 So ereign Bank F URTH PROMISSORY NOTE MODIFICATION AGREEMENT This Agre ent made this - ,~ 6 day of July, 2008 by and between, Stewartstown Cornerstone Li ed Partnership, having an address of 1 East Market Street, Suite 401, York, PA 17401 (the ' orrower"); Samuel Juffe, having an address of 1100 Centennial Avenue, Piscataway, NJ 8854, John M. Huenke, having an address of 4400 Bridgeview Road, Stewartstown, P 17363, Bruce W. Wilt, having an address of P.O. Box 189. Manville, N.J. 08835 and Corne tone Development Group, Inc., having.and address of 1 East Market Street, Suite 401, York, A 17401 (the 'Guarantors'); and Sovereign Bank, having an address of 235 North Second Str t, Harrisburg, PA 17101 (the `Lender'); Whereas, on October 6, 2005, the Borrower obtained from Lender a Loan evidenced by a Promissory Noe in the amount of Fnre Million Eight Hundred Ffty Eight Thousand Nine Hundred Ninety wo and 00/100 Doiiars ($5,858,992.00) (the 'Principal Amount") bearing the same date, which Note was subsequently increased to a principal amount of $6,506,492.00 (the `Note"): The Not had a maturity date due and payable in ful! on October 6, 2007, which date was subsequently extended to May 6, 2008 (the `Maturity Date`); and Whereas, on January 25, 2006, the Borrower obtained from Lender a Note Modification; and Whereas, on January 31, 2008, the Borrower obtained from Lender a Second Promissory Note odification Agreement; and Whereas, on March 19, 2008, the Borrower obtained from Lender a Third Promissory Note Modification greement; and Whereas, the outstanding principal balance owing on the Note as of July 2, 2008 is Two Million Seven H ndred Forty Thousand Nine Hundred Eighty Fve and 08/100 Dollars ($2,740,985.08) ( e `Outstanding Balance"); and Whereas, at the request of the Borrower and in agreement of Lender the Note will be further modified. Now The efore, in consideration of the mutual benefits inuring to Borrower and Lender and other good nd valuable consideration, the receipt and sufficiency of which are hereby acknowledged an intending to be legally bound hereby, it is agreed that the Note is hereby modified as descri ed below. 1. U on execution of the within Agreement, the Maturity Date on the Note shall be extended from May 6, 2008 to August 6, 2008, at which time the outstand' g principal balance, together with accrued unpaid interest, fate fees and unpaid 1 an charges, if any, shall be due and payable In full. Borrower will. continue o pay regular monthly payments as bf each payment due date. The Gua tors acknowledge and consent to the Borrower's execution and delivery of this Note Modtfi lion Agreement and hereby ratify and affirm the actions taken therein. The Guarantors affirm riat as of the date herein, the obligafion and liability of the Guarantors under the Guarantees re ain absolute, unconditional and in full force and effect. All terms f the Note will continue to be fully effective, except to the extent that any of them are express y changed by this Agreement. The undersigned Borrower and Guarantors hereby confirm an acknowledge that they have no defense, counterclaim or setoff, which could affect the enforc bility of the Note, Guarantees, and other Loan Documents and hereby reaffirm the validity of the ote, Guarantees and ail other Loan Documents. Doc73.1 { $teVYartStOWn Loan No. 516 Page 2 of 3 EMPOWERS ANY COMMONWEALTI- BORROWER AFTE COMPLAINT FILE'; PRINCIPAL BALA CHARGES AND A ANY COLLATER/ ATTORNEY'S COII ACCRUED INTERi DOLLARS ($500.0 ISSUE IMMEDIATE MODIFICATION A~ AUTHORfTY GRAI BORROWER SHAT CONTINUE FROM DUE UNDER THE ANY RIGHT BORF SUCH CONFESSIC SPECIFlCALLY C ATTENTION OR Bt This Agre assigns, as the c~ In Witness herec July, 2008. ATTES99~~T: ATT T a ~e w. wilt. A' E;viGce w. i ,mited Partnership 5 ON OF JUDGMENT: BORROWER HEREBY IRREVOCABLY AUTHORIZES AND ATTORNEY OR THE PROTHONOTARY OR CLERK OF ANY COURT IN THE OF PENNSYLVANIA, OR ELSEWHERE, TO APPEAR AT ANY TIME FOR Z A DEFAULT UNDER THE NOTE AS MODiFlED HEREIN AND WITH OR WITHOUT ~, CONFESS OR ENTER JUDGMENT AGAINST BORROWER FOR THE ENTIRE JCE OF THE NOTE, AS MODIFlED, AND ALL ACCRUED INTEREST, LATE IY AND ALL AMOUNTS EXPENDED OR ADVANCED BY LENDER RELATING TO L SECURING THE NOTE, TOGETHER WITH COSTS OF SUIT, AND AN MISSION OF TEN PERCENT (iD%) OF THE UNPAID PRINCIPAL BALANCE AND ST FOR COLLECTION, BUT !N ANY EVENT NOT LESS THAN FNE HUNDRED ON WHICH JUDGMENT OR JUDGMENTS ONE OR MORE EXECUTIONS MAY .Y; AND FOR SO DOING, THIS MODIFICATION AGREEMENT OR A COPY OF THIS ~REEMENT VERIFlED BY AFFIDAVIT SHALL BE SUFFlCIENT WARRANT. THE TED IN THIS MODIFCATION AGREEMENT TO CONFESS JUDGMENT AGAINST L NOT BE EXHAUSTED BY ANY EXERCISE OF THAT AUTHORITY, BUT SHALL 'IME TO TIME AND AT ALL TIMES UNTIL PAYMENT IN FULL OF ALL AMOUNT5 COTE AND THIS MODIFCATION AGREEMENT. BORROWER HEREBY WANES EWER MAY HAVE TO NOTICE OR TO A HEARING IN CONNECTION WfTH ANY Y OF JUDGMENT AND STATES THAT EITHER A REPRESENTATNE OF LENDER ~LLED THIS CONFESSION OF JUDGMENT PROVISION TO BORROWER'S RROWER HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL ent will be binding upon the Parties hereto, as welt as their Successors and maybe. the parties hereto have hereunto set their hands and seal this ~6 LENDER: SOVEREIGN BANK By: day of 5tewa ' n Cornerstone Limited Partnership Co ' ers ne D elo ent Group, Inc. By: 5a uel Joffe, P e COMMER L4L GUARANTORS: Comerst a Dev p t Group, Ina By: S,am Joffe, P,f~si t e, indiil/fd Jo n M Hb e y e W. Wilt, Ind idually Doc73.1 S#ewartstown Co ~. ~ mited Partnership Loan No. 516480 5-75 Page 3 of 3 DISCLOSURE FOR CONFESSION OF JUDGMENT THE UNDERSIGN D IS EXECUTING ON BEHALF OF DECLARANT, THIS ~~ DAY OF JULY, 2008 A MODIFICA ON AGREEMENT OF A PROMISSORY NOTE DATED OCTOBER 8, 2005, IN THE ORIGINAL PRINCI AL AMOUNT OF $5,858,992.00, SUBSEQUENTLY INCREASED TO $6,506,492.00, 09LIGATING DEC TO REPAY THE AMOUNT AS STATED THEREIN. A. E UNDERSIGNED UNDERSTANDS THAT THE MODIFICATION AGREEMENT CONTAINS A CON ESSION OF JUDGEMENT PROVISION THAT WOULD PERMIT LENDER TO ENTER JUDGMENT AGAI ST DECLARANT IN COURT, AFTER A DEFAULT ON THE NOTE, WITHOUT ADVANCE NOTIC TO DECLARANT AND WITHOUT OFFERING DECLARANT AN OPPORTUNITY TO DEFEND AGAINS THE ENTRY OF JUDGMENT. IN EXECUTING THE MODIFICATION AGREEMENT, BEING FULLY AW OF DECLARANTS RIGHTS TO ADVANCE NOTICE AND TO A HEARING TO CONTEST THE V IDITY OF ANY JUDGMENT OR OTHER CLAIMS THAT LENDER MAY ASSERT AGAINST DE UNDER THE NOTE, THE UNDERSIGNED, ON BEHALF OF THE DECLARANT, IS KNOWING I LLIGENTLY, AND VOLUNTARILY WAIVING THESE RIGHTS, INCLUDING,ANY RIGHT TO A AN E NOTICE OF THE ENTRY OF JUDGMENT, AND THE UNDERSIGNED EXPRESSLY AGREES C N TO LENDER'S ENTERING JUDGMENT AGAINST DECLARANT BY CONFESS ~ D FOR IN THE CONFESSION OF JUDGMENT PROVISION. B. U DERSIGNED FURTHER UNDERSTANDS THAT IN ADDITION TO GIVING LENDER THE RIG T T ENTER JUDGMENT AGAINST DECLARANT WITHOUT ADVANCE NOTICE OR A HEARING, THE FESSION OF JUDGMENT PROVISION IN THE MODIFICATION AGREEMENT ALSO CONTAINS GUAGE THAT WOULD PERMIT LENDER, AFTER ENTRY OF JUDGMENT, AGAIN WITHOUT EITHE ADVANCE NOTICE OR A HEARING, TO EXECUTE ON THE JUDGMENT BY FORECLOSING U ON, ATTACHING, LEVYING ON, TAKING POSSESSION OF OR OTHERWISE SEIZING DEC S PROPERTY, IN FULL OR PARTIAL PAYMENT OF THE JUDGMENT. IN EXECUTING THE ODIFICATION AGREEMENT, BEING FULLY AWARE OF DECLARANTS RIGHTS TO ADVANCE NOT1C AND A HEARING AFTER JUDGMENT IS ENTERED AND BEFORE EXECUTION ON THE JUDG NT, THE UNDERSIGNED, ON BEHALF OF DECLARANT, IS KNOWINGLY, INTELLIGE Y D VOLUNTARILY WANING THESE RIGHTS, AND THE UNDERSIGNED EXPRESSL AG ES AND CONSENTS TO LENDER'S IMMEDIATELY EXECUTING ON THE JUDGM , IN ER PERMITTED BY APPLICABLE STATE AND FEDERAL' LAW, WITHOUT GIVING ADVANCE NOTICE. C. STATEMENTS UNDERSIGNED INITIALS: 1. THIS DISCLOSI SHALL CONSTI" DECLARANT: BORROWER: j Stewartstow Co erst e D By: HAVING READ AND DETERMINED WHICH OF THE FOLLOWING 'LICABLE, BY INITIALING EACH STATEMENT THAT APPLIES, THE NTS THAT: JT WAS REPRESENTED BY DECLARANTS OWN INDEPENDENT IN CONNECTION WITH THE MODIFICATION AGREEMENT. EPRESENTATIVE OF LENDER SPECIFICALLY CALLED THE CONFESSION JUDGMENT PROVISION IN THE MODIFICATION AGREEMENT TO DECLARANTS IS GNEN UNDER SEAL AND R IS INTENDED THAT THIS DISCLOSURE I5 AND AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. Limited Partnership Group, Inc., General Partner Doc7.3.1 ~aRT `fob exh~b~k ~~ i .~ t I t i r i +. i •~ ~ •, Pa Numbar; doh ~~ ~~ w~ ~`~~ - ~3'" RECCRC~A71 R6fZU BY3 fiovrraipn ~ ' ~ , ~p1 $, 9traat Yod4 PA 1401 , fi WH ~ RsCG DED MA1L '. 't,.:.::'t 3F bEEDS ...~? Ir4i ~~ T13~ .LU .LU ~~+R ~ ~I~ I~Q~~~~ THI$ INORTGA4E S~Cl1RES FU7'URL ppVpNCES THIS IS A PURCHASI~ iYIONEY lV1QRTC3A6E Amouae Sec d Hereby: ~9,$b$.fi9Z.OO THIS MO E detail Ootober 8. Zoos. b fnf<de and exsafted batwesn 9tnaerartovva Cumarrwni erl Psrtnrrstslp. wAiwe address la ZOO eney Ddvs. ~ 2{i4- Stawrrutawsi. PA 1733 nterred to below ee "13rd~air"? .sail 9ovrnipr- Rdiffk. whore address (s 1O1 9. Osorgr S York. PA 17411'! Irirlwrod ftp bNow as "l~drir").' ~ . 9AA8rf DF p'i'r1AQfZ. f+or wip8bla oolMidrer~doi4 9rarmr 9nrKS, bua~-~. ~- ~~WS. +~Yra. ttraeen, rvrla.es, Mid nuireowpw so tand.r aN o! ~rarror'ir ah~rG fills, and tMaac In M1O tv fJN faMoaAio daixftiiid ra>7 prapany, r whh ~ ardadgp or w~gwmh rraotrd ar rdlMrrd 61il1dlpr, iiia~-ffmaeis and fb~Mra rR atxNYb. iMUa. allya. Wpl~b Mid 'MaYri if8 [A~ptafltii- d~ Of weW d MbnrdN. ~ y~radhain•iw, d apyworndieia rl-ahunoa batoriplltp nr aynyrda muh Rt n w ~ 1~~praf,~irinNrMMn+wNa."R~~erty"~ o~ ~ Cowlty, otfwe+~r of Pirrn~s ALL TH '1' AN~ er psiraeis of lemd~n~yand , ted ih rind brtlp yy.~ ilxe T ~ ef~. r „i~ drieriMd ~ frliawa~fn-leHu1~. ~ G~~insisomrssiYfk of f'ans3r- Rfwn pe NL'91 at an Aron pir- lavwled on1~~~~ forma of a~ctlr (O0•~ toot riyhtwt-wr~Y a! rM ~ugnn aacarr las silt iattlf kf 17000 3G•A. 'peen liS4) and riortbrre pwna Y *^1i OOB ter NurouC ~~~yf~~~~~p~pn~°aat~doao iYrrai~ ~1k i~ano~ Crsak: tlfeaa!. dOno CbnodoQutaft Creek ttt! toNowtr~ tas~r {+-) con,rws Bind dears 7 i~l ' ?A de0nes ~ rs~wtis 00 seaontia West a disf~cri of 112.39 tent m a p ht7 H 9O tleQrree flQ 1rt111utee 00 .repo West a trilloe of Z i itt#t fro a 4 N ~2 dips 2~B rn~lnuf~is QUO ~ Wes! a aof 86~? fe~it ire s n~ Thenea. ~~ AMn3s rrow tK fornl;d~r of Kwei1 end kwppgW~en~. oNt~~prth~ 79 d+yree~ 16 g~~r~s B~ddps dad ~ ~disq~n r~fd -aeM+~>~ ~ Ssmple~ prld9+ Rv~~So~ 4e~gras BO i i _~ 12fD4/2006 1xfB~1 aan ~~~~~~~~~~~~ ~ 2a _..~. _ _ CIJrdBi32t,AND COt1MTY lnatfi 200637875 • Pape 1 or f 1 ' Number: RECORDATION REQUESTED B Sovereign Bank Commercial Banki g Division 101 S. George S ee~. York, PA 17401 WHEN RECORD TO: MAIL OPEN -END MORTGAGE THIS MORTGAGE SECURES FUTURE ADVANCES THIS IS A PURCHASE MONEY MORTGAGE Amount Secured ~-leceby: S5,858,992.00 THtS MORTGAG dated October 6, 2005, is made and executed between Stewartstown Cornerstone Limi ed Partnership, whose address is -200 Bailey Drive, Suite 204, Stewartstown, PA 17363 (ref rred to below as "Grantor") and Sovereign Bank, whose address is 101 S. George Street, Y rk, PA 17401 (referred to below as "Lender"). GRANT OF MORTi releases, confirms real property, toga streets, lanes, ally hereditaments, and remainders with re: ditch or irrigation i limitation all mines County, Commi ALL THAT Township _ BEGINNING unnamed ai tine of Pen distance of bank of the courses and 1) North 24 2) North 30 3) .N.orth i.3 4) North 22 Thence, slot 00 seconds Bridge Road 3E. For valuable consideration, Grantor grants, bargains, sells, conveys, assigns, transfers, mortgages to Lender al! of Grantor's right, title, and interest in and to the following described with all existing or subsequently erected or affixed buildings, improvemerrts and fixtures; all passages, and ways; all easements, rights of way, all liberties, privileges, tenements, wrtenances thereunto belonging or anywise made appurtenant hereafter, and the reversions and :t thereto; all water, water rights, watercourses and.. ditch rights (including stock in utilities with ts); and all other rights, royalties, and profits relatin to the real roparty, including without oil, gas, geothermal and similar matters, (the 'Real ~roperty") Located in Cumberland nrealth of Pennsylvania: RTAIN tracts or parcels of land and premises, situated lying and being in the Silver Spring in the Coun~ of Cumberland and Commonwealth of more particulary described as fo lows: an iron ppin located on the centerline of sixty (60') foot right-of-way of an ss drive (as set forth in Deed Book 35-A, page 5341 and northern property /Ivania-American Water Company; thence, along lands now or formerly of American Water Company, North 88 degrees 15 minutes 30 seconds West a D09.93 feet through two (2) iron pipes to an iron pipe set along the eastern ~nodoguinet Creek; thence, along Gonodoguinet Greek the following four (4) agrees 46 minutes 00 seconds West a distance of 112.39 feet to a point; agrees 00 minutes 00 seconds West a distance of 273.41 feet to a point; egcees 45_aziautes QO.seconds.~8test.a..distance of..5.4.9.69. feet ta.a point; agrees 26 minutes 00 seconds West a distance of 665.37 feet to a point; lands now or formerly of Kwan and Ivey Wan. North 76 degrees 15 minutes ~ast a distance of 1,712.00 feet to a point along the centerline of Sample thence, along said centerling of Sample Bridge Road, South 24 degrees 50 (Caniinued) Page 2 minutes 00 se onds East a distance of 759.80 feet to a point at the intersection of Sample Bridge Road a d unnamed access drive; thence, along centerline of said unnamed access drive the folio ing seven (7j courses and distances: . . 1) South 65 d grees 09 minutes 59 seconds West a distance of 25.00 feet to a point; 21 Along a cu a to the left with a radius of 277.72 feet and curve length of 151.72 feet, a chord bearing of South 49 degrees 30 minutes 58 seconds West and chord distance of 149.84 feet to a point; 31 South 33 d grees 52 minutes 00 seconds West a distance of 275.05 feet to a point; 4) Along a cu a to the left with a radius of 260.00 feet and curve length of 208.67 feet, a chord bearing of South 10 degrees 52 minutes 29 seconds West and chord distance of 203.11 feet t a point; 51 South 12 d grees 07 minutes 00 seconds East a distance of 318.95 feet to a point; 33 f t th f 219 l d 61 Along a cu a chord bean ee , curve eng o . a to the right with a radius of 290.00 feet an g of South 09 degrees 33 minutes 00 seconds West and chord distance of 214.14~feet t a point; 71 South 31 d grees 13 minutes 00 seconds West a distance of 207.21 feet. to an iron pin set at the poin of BEGINNING. Total tract are is 2,591,437 square feet (59.49 acres}. The Real Prope or its address is commonly known as 59.49 acre residential tract land known as Coun Club Estates. Silver Spring Township , PA. Grantor presently assi ns to Lander all of Grantor's right, title, and interest in and to all present and future leases of the Property and all Rents from the Property. In addition, Grantor grants to Lender a Uniform Commercial Code security interest in the Persona Property and Rents. THIS MORTGAGE, IN LUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN THE RENTS AND PERSONAL PROPER . IS GNEN TO SECI~RE (A) PAYMENT OF THE INDEBTEDNESS AND (B) PERFORMANCE OF RELATED DOCUMENT ,AND THIS MORTGAGE. THIS MORTGAGE. INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY 1 TIN THE RENTS AND PERSONAL PROPERTY, IS ALSO GNEN TO SECURE ANY AND ALL OF GRANTOR'S OBLIGA ONS UNDER THAT CERTAIN CONSTRUCTION LOAN AGREEMENT BETWEEN GRANTOR AND LENDER OF EVEN DA E HEREWITH. ANY EVENT OF DEFAULT UNDER THE CONSTRUCTION LOAN AGREEMENT, OR ANY OF THE RELA DOCUMENTS REFERRED TO THEREIN, SHALL ALSO BE AN EVENT OF DEFAULT UNDER THIS MORTGAGE. THIS M RTGAGE 1S GNEN AND ACCEPTED ON THE FOLLOWING TERMS: PURCHASE MONEY ORTGAGE. If any of the debt secured by this Mortgage is lent to Grantor to acquire title to the Real Property, this Mo gage shall be a purchase money mortgage under 42 P.S. Section 8141. PAYMENT AND P RMANCE. Except as otherwise provided iri this Mortgage, Grantor shall pay to Lender all amounts secured by is Mortgage as they become due and shall strictly perform all of Grantor's obligations under this Mortgage. POSSESSION AND M INTENANCE OF THE PROPERTY. Grantor agrees that Grantor's possession and use of the Property shall be gove ed by the following provisions: Possession and sa. Until the occurrence of an Event of Default, Grantor may (1) remain in possession and control of the Pro rty; (2) use, operate or manage the Property; and (3) collect the Rents from the Property. Duty to Maintain Grantor shall maintain the Property in tenantable condition and promptly perform all repairs, replacements, an maintenance necessary to preserve its value. Compfianca With Environmental Laws. Grantor represents and wan•ants to Lender that: (1) During the period of Grantor's owners ip of the Property, there has been no use, generation, manufacture, storage, treatment, disposal, release ar threat ned release of any Hazardous Substance by any person on, under, about or from the Property; {21 Grantor has o knowledge of, or reason to believe that there has been, except as previously disclosed to and acknowledged b Lender in writing, (al any breach or viola'~on of any Environmental Laws, (b) any use, generation, man acture, storage, treatment, disposal, release or threatened release of any Hazardous Substance on, under, about or from the Property by any prior owners or occupants of•the Pro~,terty, or Ic1 any actual or threatened I'ttig on or claims of any kind by any person relating to such matters; and (3) Except as previously disclosed to and . cknowledged by Lender in writing, (a) neither Grantor nor any tenant, contractor, ayen~ ar other authored user o the Property shall use, generate, manufacture, store, treat, dispose of or release any Hazardous Substance on, u er, about or from the Property; and (b) any such activity shall be conducted in compliance with all applicable f eral, state, and local laws, regulations and ordinances, including without limitation all Environmental ws. Grantor authorizes Lender and its agents to enter upon the Property to make such inspections and ests, at Grantor's expense, as Lender may deem appropriate to determine compliance of the (Continued) Page 3 Property with this section of the Mortgage. Any inspections or tests made 6y Lender shall be for Lender's purposes only and shall not be construed to create any responsibility or liability on the part of Lender to Grantor or to any other perso The representations and warranties contained herein are based on Grantor's due diligence in investigating the operty far Hazardous Substances. Grantor hereby (11 releases and waives any future claims against Lender for indemnity or contribution in the event Grantor becomes liable for cleanup or other costs under any such taws; an (21 agrees to indemnify and hold harmless Lender against any and all claims, losses, liabilities, damages, panaltie ,and expenses which Lender may directly or indirectly sustain or suffer resulting from a breach of this section of the Mortgage or as a consequence of any use, generation, manufacture, storage, disposal, release or threats ed release occurring prior to Grantor's ownership or interest in the Property, whether or net the same was or sh Id have been known to Grantor. Tha provisions of this section of the Mortgage, including the obligation to rode nify, shall survive the payment of the Indebtedness and the satisfaction and reconveyance of the lien of this M age and shall not be affected by Lender's acquisition of any interest in the Property, whether by foreclosure or erwise. Nuisance, Waste. Grantor shall not cause, conduct or permit any nuisance nor commit, permit, or suffer any stripping of or wa on or to the Property or any portion of the Property. Without limiting the generality of the foregoing, Grento will not remove, or gram to any other party the right to remove, any timber, minerals (including oil and gas), coal, lay, scoria, soil, gravel or rock products without Lender's prior written consent. Removal of Imp vements. Grantor shall not demolish or remove any Improvements from the Real Property wthout Lender's riot written consent. As a condition to the removal of any Improvements, Lender stay require Grantor to make rrangements satisfactory to Lender to replace such Improvements with Improvements of at least equal value. Lender's Right to nter. Lender and Lender's agents and representatives may enter upon the Real Property at all reasonable times to attend to Lender's interests and to inspect the Real Properly for purposes of Grantor's compliance with a terms and conditions of this Mortgage. Compliance witty Governmental Requirements. Grantor shall promptly comply with all laws, ordinances, and regulations, now r hereafter in affect, of all gavemmental authorities applicable to the use or occupancy of the such law, ordinan so long as Grantor interests in the Pi bond, reasonably ; Duty to Protect. acts, in addition t~ reasonably necess DUE ON SALE - CONSI secured by this Mortga Property, or any intern title or interest in the F outright sale, deed, ins than three 13} years, le trust holding title to th+ Grantor is a corporatioi than twenty-five perca case may be, of such federal law or by Penn TAXES AND LIENS. T Payment. Grantor assessments, war when due afl Clair maintain the Prop except for those I not due as further Right to Contest. dispute over the C is filed as a resul within fifteen 115 Lender, deposit w amount sufficient :e, or regulation and withhold compliance during any proceeding, including appropriate appeals, has notified Lander in writing prior to doing so and so long as, in Lender's sole opinion, Lender's operty are not jeopardized. Lender may require Grantor to post adequate security or a surety satisfactory to Lender, to protect Lender's interest. Grantor agrees neither to abandon or leave unattended the Property. Grantor shall do all other ~ those acts set forth above in this section, which from the character and use of the Property are ary to protect and preserve the Property. M BY LENDER. Lender may, at Lender's option, declare immediately due and payable all sums ga upon the sale or transfer, without Lender's prior written consent, of all or any part of the Real t in the Real Property. A 'sale or transfer" means the conveyance of Real Property or any right, cal Property; whether legal, beneficial or equitable; whether voluntary br involuntary; whether by tallment sale contract, land contract, contract for deed, leasehold interest with a term greater sse-option contract, or by sale, assignment, or trensfer of any beneficial interest in or to any land i Real Property. or 6y any other method of conveyance of an interest in the Real Property. If any ~, partnership or limited liability company, transfer also includes any change in ownership of more nt 125 %} of the voting stock, partnership interests or limited liability company interests, as the Grantor. However, this option shall not be exercised by Lender 'rf such exercise is prohibited by ;ylvania law. ie following provisions relating to the taxes and liens on the Property are parf of this Mortgage: shall pay when due (and in all events prior to delinquency} all taxes, payroll taxes, special taxes, ar charges and sewer service charges levied against or on account of the Property, and shall pay is for work done on or for services rendered or material furnished to the Property. Grantor shall arty free of any liens having priority over or equal to the interest of Lender under this Mortgage, 'ens specifically agreed to in writing by Lender, and except for the lien of taxes and assessments specified in the Right to Contest paragraph. Grentdr may withhold payment of any tax, assessment,.or.claim in.connection with. a. good faith bligation to pay, so long as Lender's interest in the Praperty~is not jeopardized. If a lien arises or t of nonpayment, Grantor shall within fifteen (15} days after the lien arises or, if a Ren is filed, days after Grantor has notice of the filing, secure the discharge of the lien, or if requested by ith Lander cash or a sufficient corporate surety bond or other security satisfactory to Lender in an to discharge the lien plus any costs and attorneys' fees, or other charges that could accrue as a (Continued) Page 4 resuk of a forecl sure or sale under the flan. In any contest, Grantor shall defend itself and Lender and shall satisfy any advers judgment before enforcement against the Property. Grantor shall name Lender as an additional obligee under any urety bond furnished in the contest proceedings. ' Evidence of Paym nt. Grantor shall upon demand furnish to Lender satisfactory evidence of payment of the taxes or assessments a d shall authorize the appropriate governmental official to deliver to Lender at any time a written statement of the xes and assessments against the Property. Natica of Constru 'on. Grantor shall notify Lender at least fifteen (15) days before any work is commenced, any services are fumi had, or any materials are supplied to the Property, if any mechanic's lien, matarialmen's lien, or other lien could asserted on account of the work, services, or materials. Grantor will upon request of Lender furnish to Lender advance assurances satisfactory to Lender that Grantor can and will pay the cost of such improvements. PROPERLY DAMAGE INSURANCE. The following provisions relating to insuring the Property are a part of this Mortgage: Maintenance of I surance. Grantor shall procure and maintain policies of fire insurance with standard extended coverage endorse ants on a replacement basis for the full insurable value covering all Improvements on the Real Property in an a ount sufficient to avoid application of any coinsurance clause, and with a standard mortgagee clause in favor of nder. Grantor shall also procure and maintain comprehensive general liability insurance in such coverage amou as Lender may request with Lender being named as additional insureds in such liability insurance policies. Additio ally, Grantor shall maintain such other insurance, including but not limited to hazard, business interruption and filer insurance as Lender may require. Policies shall be written by such insurance companies and in such form as ay be reasonably acceptable to Lender. Grantor shall deliver to Lender certificates of coverage from each insurer containing a stipulation that coverage will not ba cancelled or diminished without a minimum of thirty (30) days' riot written notice to Lender and not containing any disclaimer of the insurer's fiabiCrty for fa8ure to give such nett e. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not impaired in any way by any act, omission or defauk of Grantor or any other person. Should the Real Property be I ated in an area designated by the Director of the Federal Flnemencv Management Aae~y as a days after notice principal balance set under the N insurance for the area, raptor agrees to obtain and maintain Federal Flood Insurance, if available, within 45 given by Lender that the Property is located in a special flodd hazard area,' for the full unpaid the loan and any prior liens on the property securing the {oan, up to the maximum policy limits opal Flood Insurance Program, or as otherwise required by Lender, and to maintain such m of the loan. Application of Pr eeds. Grantor shall promptly notify Lender of any loss or damage to the Property. Lender may make proof of to s if Grantor fails to do so within L•iftaen (15) days of the casualty. Whether or not Lender's security is impair ,Lender may, at Lender's election, receive and retain the proceeds of any insurance and apply the proceeds to a reduction of the Indebtedness, payment of any lien affecting the Property, or the restoration and repair of the roperty. If Lender elects to apply the proceeds to restoration and repair, Grantor shall repair or replace the dam gad or destroyed Improvements in a manner satisfactory to Lender. Lender shall, upon satisfactory proo of such expenditure, pay or reimburse Grantor from the prxeeds for the reasonable cost of repair or restores n if Grantor is not in defauk under this Mortgage. Any proceeds which have not been disbursed within 180 days fter their receipt and which Lender has not committed to the repair or restoration of the Property shall be used fir to pay any amount owing to Lender under this Mortgage, then to pay accrued interest, and the remainder, if any, shall be applied to the principal balance of the Indebtedness. If Lender holds any proceeds after payment in full of the Indebtedness, such proceeds shall be paid to Grantor as Grantor's interests may appear. Grantor's Report r to Lender a repot insured; (3) the property, and the request'of Lender, of the Property. LENDER'S EXPr'NDIil1 the Property or if Gran not limited to Grantor's this Mortgage or any f~ thdt (.&!1S(~C d~~C[lS ap encumbrances and of maintaining and preset bear interest at the ral Grantor. All such exp demand; (B) be adds n Insurance. Upon 'request of Lender, however not more than once a year, Grantor shall furnish on each existing policy of insurance showing: (1) the name of the insurer; (2) the risks amount of the policy; (4) the property insured, the then current replacement value of such pepper of determining that value; and (5) die expiration data of the policy. Grantor shall, upon have an independent appraiser satisfactory to Lender determine the cash value replacement cost iES. if any action or proceeding is commenced that would materially affect Lender's interest in or fails to comply with any provision of this Mortgage or any Related Documents, including but failure to discharge or pay when due arty amounts Granter is required to discharge or pay under slated Documents; Lender on Grantor's behalf may (but shall not be obligated tot take arty action !rRprjale. it,rJ4dirlg k4t Dot..fir[llited to discharging or paying all, taxes, .liens, .security interests, per claims, at any time levied or placed on the Property and paying all costs for insuring, deg the Property. All such expend'ttures incurred or paid by Lender for such purposes will then s charged under the Note from the data incurred or paid by Lander to the date of repayment by epees will become a part of the Indebtedness and, at Lender's option, will fA1 be payable on d to the balance of the Note and be apportioned among and be payable with any installment (COnfinued) Page 5 payments to become d the Note; or (CI be tri Also will secure payme Lander may be entitled mortgage foreclosure ji WARRANTY; DEFENSI Mortgage: Title. Grantor wa free and clear of title insurance po with this Mortgag Lender. Defense of Title. title to the Proper that questions Gi Grantor's expens participate in the Grantor will delive to permit such pa during either (I) the term of any applicable insurance policy; or (21 the remaining term of 3d as a baboon payment which will be due and payable at the Note's maturity. The Mortgage of these amounts. Such right shall be in addition to all other rights and remedies tb which on Default. Grantor's obligation to Lender for all such expenses shall survive the entry of any OF TITLE. The following provisions relating to ownership of the Property are a part of this ants that: (al Grantor holds good and marketable title of record to the Property in fee simple, liens and encumbrances other than those set forth in the Real Property description or in any ~, title report, or final title opinion issued in favor of, and accepted by, Lender in connection and (b1 Grantor has the full right, power, and authority to execute and deliver this Mortgage to Subject to the exception in the paragraph above, Grantor warrants and will forever defend the y against the lawful claims of all persons. In the event any action or proceeding is commenced rotor's title or the interest of Lender under this Mortgage, Grantor shall defend the action at Grantor may be the nominal party in such proceeding, but Lender shall be entitled to proceeding and to be represented in the proceeding by counsel of Lender's own choice, and •, or cause to be delivered, to Lender such instruments as Lender may request from time to time Compliance With~ws. Grantor warrants that the Property and Grantor's use of the Property complies with all existing applicabl laws, ordinances, and regulations of governmental authorities. Survival of Re this Mortgage remain in full i CONDEMNATION. ntations and Warranties. All representations, warranties, and agreements made by Grantor in sunirve the execution and deCrvery of this Mortgage, shall be continuing in nature, and shall and effect until such time as Grantor's Indebtedness shall be paid in full. to condemnation proceedings are a Proceedings. If ny proceeding in condemnation is filed, Grantor shall promptly notify Lender in writing, and Grantor shall pro ptly take such steps as may ba necessary to defend the action and obtain the award. Grantor may be the nomi I party in such proceeding, but Lender shall. be entitled to participate in the proceeding and to be represented in th proceedng by counsel of its own choice, and Grantor wll deliver or cause to be delivered to Lender such in mantis and documentation as may be requested by Lender from time to time to permit such participation. Application of Ne Proceeds. If all or any part of the Property is condemned 6y eminent domain proceedings or by any proceeding o purchase in lieu of condemnation, Lender may at its election require that all or any portion of the net proceeds of a award be applied to the Indebtedness or the repair or restoration of the Property. The net proceeds of the ward shall mean the award after payment of all actual costs, expenses, and attorneys' fees incurred by Lend in connection with the condemnation. IMPOSITION OFT ,FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following provisions relating xo governmental taxes fees and charges are a pan: of this Mortgage: Current Taxes, F es and Charges. Upon request 6y Lender, Grantor shall execute such documents in addition to this Mortgage an take whatever other action is requested by Lender to perfect and continue Lender's lien on the Real Property. cantor shall reimburse Lender for all taxes, as described below, together with all expenses incurred in taco ding, perfecting or continuing this Mortgage, including without limitation all taxes, fees, documentary sta ps, and other charges for recording or registering this Mortgage. Taxes. The folio ing shall constitute taxes to which this section applies: • (1) a specific tax upon this type of Mortgage or upo all or any part of the Indebtedness secured by this Mortgage; (2) a specific tax on Grantor which Grantor is authorized or required to deduct from payments on the Indebtedness secured by this type of Mortgage; (3) a tax on this type of Mortgage chargeable against the Lender or the holder of the Note; and (4) a specific tax on all or any portion of the Indebtedness or on payments of principal and interest made by Grantor. Subsequent Taxe . if any tax to which this section •applies is enacted subsequent to the date of this Mortgage, this event shall eve the.same effect as an Event of Default, and Lender may exercise any or all of its available remedies for an vent of Default as provided below unless Grantor either (11 pays the tax before it becomes delinquent; or () contests the tax as provided above• in- the' Faxes and liens section and deposits with Lender cash or a sufficie t corporate surety bond or other security satisfactory to Lender. SECURITY AGREEM ;FINANCING STATEMENTS. The following provisions relating to this Mortgage as a security agreement are a part f this Mortgage: Security Agraem~nt. This instrument shall constitute a Security Agreement to the extent any of the Property (Continued) Page 6 constitutes fixtur ,and Lender shall have all of the rights of a secured party under the Uniform Commercial Code as amended ftom 'me to time. Security Interest. Upon request by Lender, Grantor shall take whatever action is requested by Lender to perfect and continue Len er's security interest in the Rents and Personal Property. In addition to recording this Mortgage in the real grope records, Lender may, at any time and without further authorization ftom Grantor, file executed counterparts, cop es or reproductions of this Mortgage as a financing statement. Grantor shall reimburse Lender for all expenses i tarred in perfecting or continuing this security interest. Upon default, Grantor shall not remove, sever or detach a Personal Property from the Property. Upon default, Grantor shall assemhle any Personal Property not affi d to the Property in a manner and at a place reasonably convenient to Grantor and Lander and make it available to Lender within three (3) days after receipt of written demand from Lender to the extent permitted 6y appl able law. Addresses. The mailing addresses of Grantor (debtor) and Lender (secured party) from wfiich information concerning the s curity interest granted by this Mortgage may be obtained (each as required by the Uniform Commercial Code are as stated on the first page of this Mortgage. FURTHER ASSURANC ;ADDITIONAL AUTHORIZATIONS. The following provisions relating to further assurances and additional authorizatio s are a part of this Mortgage: Further Assuranc s. At any time, and from time to time, upon request of Lender, Grantor will make, execute and deliver, or will ca se to be made, executed or delivered, to Lender or to Lender's designee, and when requested by Lender, cause to be filed, recorded, refiled, or rerecorded, as the case may be, at such times and in such offices and places as Le der may deem appropriate, any and all such mortgages, deeds of trust, security deeds, security agreements, fine cing statements, continuation statements, instruments of further assurance, certificates, and other documents s may, in the sole opinion of Lender, be necessary or desirable in order to effectuate, complete, perfect, continu or preserve (1} Grantor's obligations under the Note, this Mortgage, and the Related Documents, and 12) the liens and security interests created by this Mortgage as first and prior liens on the Property, wfiethe now owned or hereafter acquired by Grantor. Unless prohibited by law or Lender agrees to the contrary in writi g, Grantor shall reimburse Lender for all costs and expenses incurred in connection with the e ~ w eTe ., ,~ ,e ~~~~~~r Additional Autho ' bons. If Grantor fails to do any of the things referred to in the preceding paragraph, Lender may da so for nd in the name of Grantor and at Grantor's expense. For sucfi purposes, Grantor hereby irrevocably autho "zes Lender to make, execute, deliver, file, record and do all other things as may be necessary or desirable, in La er's sole opinion, to accomplish the matters referred to in the preceding paregraph. It is understood that othing set forth herein shall require Lender to take any such actions. FULL PERFORMANCE If Grantor pays all the Indebtedness when due, and otherwise performs all the obligations imposed upon Granto under this Mortgage, Lender shall execute and deliver to Grantor a suitable satisfaction of this Mortgage and suitabl statements of termination of any financing statement on file evidencing Lender's securty interest in the Rents and the arsonal Property. Grantor will pay; if permitted by applicable law, any reasonable termination fee as determined by Len er from time to time. EVENTS OF DEFAUL Each of the following, at Lender's option, shall constitute an Everrt of Defauk under this Mortgage: Payment Default Grantor fails to make any payment when due under the lndebtadness. Default on Other Payments. Failure of Grantor within the time required by this Mortgage to make any payment for taxes or insuranc , or any other payment necessary to prevent filing of or to effect discharge of any lien. Environmental D fault. Failure of any party to comply with or perform when due any term, obligation, covenant or condition contain d in any environmental agreement executed in connection witft the Property. Other Defaults. Grantor fails to comply with or to perform any other term, obligation, covenant or condition contained in thi Mortgage or in any of the Related Documents or to comply with or to perform any term, obligation, coven nt or condition contained in any other agreement between'Lender and Grantor. Default in Favor f Third Parties. Should Grantor default under any loan, extension of credit, security agreement, purchase or sale agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of G antor's properly or Granrtor's abTty to repay the Indebtedness or Grantor's ability to perform Grantor's oblige ons under this Mortgage or any related document. False Statemen Any warranty, representation or statement made or furnished to Lender by Grantor or on Grantor's behalf under this Mortgage or the Related Documents is false or misleading in any material respect, either now or at a time made or famished or becomes false ar misleading at any time thereafter. Defective Collet rai"¢ation. This Mortgage or any of the Related Documents ceases to be in full force and effect (including failure of any collateral document to create a valid and perfected security interest or lien) at any time and ,Continued) Page 7 for any reason. Death or Insolven .The dissolution or termination of Grantor's existence as a going business or the death of any partner, the ins envy of Grantor, the appointment of a receiver for any part of Grantor's property, any assignment f-0r a benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any 6ankru tcy or insolvency laws by or against Grantor. Creditor or Forfe' re Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self Ip, repossession or any other method, by any creditor of Grantor or by any governmental agency against any prop rty securing the Indebtedness. This includes a garnishment of any of Grantor's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Grant r as to the vaGd'rty or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and i Grerttor gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, a being an adequate reserve or bond for the dispute. Breach of Other greement. Any breach by Grantor under the terms of any other agreement between Grantor and Lender that is n remedied within any grace period provided therein, including without limitation any agreement concerning any i ebtedness or other obligation of Grantor to Lender, whether existing now or later. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or ny Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guar my of the Indebtedness. In the event of a death, Lender, at its option, may, but shall not be required to, perm the Guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfact ry to Lender, and, in doing so, cure any Event•of Defauk. Adverse Change A material adverse change occurs in Grantor's financial condition, or Lender believes the prospect of pa nt or performance of the Indebtedness is impaired. Insecurity. Lend r in good faith believes itself insecure. of a breach of a same provision of this 'Mortgage within the preceding twelve (12) months, it may bQ cured if Grantor, after r eiving written notice from Lender demanding cure of such default (1) cures the default within thirty (30) days; or (2) if the cure requires more than thirty (30) days, immediately initiates steps which Lender deems in Lender s sole discretion to be sufficient to cure the defauk and thereafter continues and completes all reasonable and n cessary steps sufficient to produce compliance as soon as reasonably prectical. RIGHTS AND REMEDI ON DEFAULT. Upon the occurrence of an Event of Default and at any time thereafter, Lender, at Lender's option, m y exercise any one or more of the following rights. and remedies, in addition to any other rights or remedies provided by aw: Accelerdte lode edness. Lender shall have the right at its option, after giving such notices as required 6y applicable law, t declare the entire Indebtedness immediately due and payable. UCC Remedies, wth respect to all or any part of the Personal Property, Lender shall have all the rights and remedies of a se ured party under the Uniform Commercial Code. Collect Rents. ender shall have the right, without notice to Grantor, to take possession of the Property and collect the Ren ,including amounts past due and unpaid, and apply the net proceeds, over and above Lender's costs, against Indebtedness. In furtherance of this right, Lender may require any tenant or other user of the Property to mak payments of rent or use fees directly to Lender. If the Rents are collected by Lender, then Grantor irrevoca ly authorizes Lender to endorse instruments received in payment thereof in the name of Grantor and to negotiate the same and collect the proceeds. Payments by tenants or other users to Lender in response to Lender's demon shall satisfy the obligations for which the payments are made, whether or not any proper grounds for the demand xisted. Lender may exercise its rights under this subparagraph ether in person, 6y agent, or through a receiv r. Appoint Receive . Lender shall have the right to have a receiver appointed to take possession of all or any part of the Property, w' the power to protect and preserve the Property, to operate the Property preceding foreclosure or sale, and to co lest the Rents from the Property and apply the proceeds, aver and above the cost of the receivership, ag inst the indebtedness. The receiver may serve without bond if permitted 6y law. Lender's right to the appointm nt of a receiver shall exist whether or not the apparent value of the Property exceeds the Indebtedness 6y a substantial amount. Employment 6y Lender shall not disqualify a person from serving as a receiver. Judicial Foreclo re. Lender may obtain a judicial decree foreclosing Grantor's interest in all or any part of the Property. Possession of th~a Property. For the purpose of procuring possession of the Property, Grantor hereby authorizes (Continued) Page 8 and empowers an attomey of any court of record in the Commonwealth of Pennsylvania or elsewhere, as attomey for Lender and all ersons claiming under or through Lender, to sign an agreement for entering in any competent court an amicable action in ejectment for possession of the Property and to appear for and confess judgment against Grantor, nd against all persons claiming under or through Grantor, for the recovery by Lender of possession of the Property, without any stay of execution, for which this Mortgage, or a copy of this Mortgage verified by affida t, shall be a sufficient warrant; and thereupon a writ of possession may be issued forthwith, without any prior rit or proceeding whatsoever. Nonjudicial Sale. I permitted by applicable law, Lender may foreclose Grantor's interest in all or in any part of the Personal Property r the Real Property by non-judicial sale. Deficiency Judgm nt. Lender may obtain a judgment for any deficiency remaining in the Indebtedness due to Lender after appfi ation of all amounts received from the exercise of the rights provided in this section. Tenancy at Suffe nce. If Grantor remains in possession of the Property after the Property is sold as provided above or Lander therwise becomes entitled to possession of the Property upon default of Grentor, Grantor shill/ become a tenant t sufferance of Lender or the purchaser of the Property and shall, at Lender's option, either 111 pay a reasonable ante/ for the use of the Property, or (2) vacate the Property immediately upon the demand of Lender. Other Remedies. at law or in equity Sale of the Prope the Property mare Property together on all or any porti Notice of Sale. ~ Property or of the made. Unless of shall have all other rights and remedies provided in this Mortgage or the Note or available .y. To the extent permitted by applicable law, Grantor hereby waives any and all right to have balled. In exercising its rights and remedies, Lender shall be free to sell all or any part of the x separately, in one sale or by separete sales. Lender shall be entitled to bid at any public sale n of the Property. nder shall give Grantor reasonable notice of the time and place of any public sale of the Personal time after which any private sale or other intended disposition of the Personal Property is to be ~erwise required by applicable law, reasonable notice shall mean notice iven at least ten 110) ~e o e sa a or rsoosmon. nY sa e o e ersona roperty may a ma ern conjunction with any sale of the R 1 Property. Election of Rem res. Election by Lander to pursue any remedy shall not exclude pursuit of any other remedy, and an election to ma a expenditures or to take action to perform an obligation of Grantor under this Mortgage, after Grantor's failure perform, shall not affect Lender's right to declare a default and exercise its remedies. Nothing under this Mortg ge or otherwise shall be construed sa as to Limit or restrict the rights and remedes available to Lender following n Evert of Default, or in any way to limit or restrict the rights and ability of Lender to proceed directiy against G ntor and/or against any other co-maker, guarantor, surety or endorser and/or to proceed against any other collate I directly or indirectly securing the Indebtedness. Attorneys' Fees; erases. If Lender institutes any s4it or action to enforce any of the terms of this Mortgage, Lender shall be a titled to recover such sum as the court may adjudge reasonable as attomeys' fees at trial and upon any appeal Whether or net any court action is involved, and to the extent not prohibited by law, all reasonable expo es Lender incurs that in Lender's opinion are necessary at any time for the protection of its interest or the en orcement of its rights shall become a part of the Indebtedness payable on demand and shall bear interest at the No a rate from the date of the expenditure until repaid. Expenses covered by this paragraph include, without limitation however subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses, wheth r or not there is a lawsuit, including attomeys' fees and expenses for bankruptcy proceedings (including efforts o modify or vacate any automatic stay or injunction?, appeals. and any anticipated post judgment collection service ,the cost of searching records, obtaining title reports (including foreclosure reports), surveyors' reports, and app isal fees and title insurance, to the extent permitted 6y applicable law. Grantor also wilt pay any court costs, in a ition to all other sums provided by law. NOTICES. Unless o erwise provided by applicable law, any notice required to be given under this Mortgage shall be given in writing, an shall 6e affective when actualty delivered, when actually received by telefacsimile (unless otherwise required by /awl, when deposited wr`Ji a nationally recognized overnight courier, or, if mailed, when deposited in the United States ail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of is Mortgage. All copies of notices of foreclosure from the holder of any lien which has priority over this Mortgage an notices pursraant to 42 Pa. C.S.A. Section 8143r et. seq., shall be sent to Lender's address, as shown n_e_ar the. begi Wing of this Mortgage. Any party may .change its address for notices under this Mortgage by g'nring formal written notice tc the other parties, specifying that the purpose ~ of the notice is to change the party's address. For notice p rposes, Grantor agrees to keep Lander informed at all times of Grantor's current address. Unless otherwise provided h applicable law, if there is more than one Grantor, any notice given by Lender to any Grantor is deemed to be notice . iven to all Grantors. (Continued) Page 9 MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Mortgage: Amendments. Th s Mortgage, together with any Related Documents, constitutes the entire understanding and agreement of the arties as to the matters set forth in this Mortgage. No operation of or amendment to this Mortgage shall be effective unless given in writing and signed by the parry or parties sought to be charged or bound by the aker "on or amendment. Annual Reports. f the Property is used for purposes other than Grantor's residence, Grantor shall furnish to Lender, upon requ st, a certified statement of net operating income received from the Property during Grantor's previous fiscal ye r in such form and detail as Lender shall require. "Net operating income" shall mean all cash receipts from the roperty less all cash expenditures made in connection with the operation of the Property. Caption Headings. Caption headings in this Mortgage are for convenience purposes only and are not to be used to interpret or define a provisions of this Mortgage. Governing Law. is Mortgage will be governed by federal law applicable to Lender and, to the extent not preempted by fed raI law, the laws of the Commonwealth of Pennsylvania without regard to its conflicts of law provisions. This ortgaga has been accepted by Lender in the Commonwealth of Pennsyvania. No Waiver by Le er. Lender shall not be deemed to have waived any rights under this Mortgage unless such waiver is given in ruing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a giver of such right or any other right. A waiver by Lender of a provision of this Mortgage shall not prejudice or c nst9tute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provisio of this Mortgage. No prior waiver by Lender, nor any course of dealing between Lender and Grantor, shall co "lute a waiver of any of Lender's rights or of any of Grantor's obligations as to any future transactions. Wh never the consent of Lender is required under this Mortgage, the granting of such consent by Lender in any in nce shall not consttute continuing conserrt to subsequent instances where such consent is required and in all aces such consent may be granted or withheld in the sole discretion of Lender. unenforceable as to any circumstance, that finding shall not make the offending provision illegal, invalid, or unenforceable as o any other circumstance. If feasible, the offending provision shall be considered modified so that k becomes egal, valid and enforceable. If the offending provision cannot be so modified, k shall be considered dele d from this Mortgage. Unless otherwise required by law, the illegalrty, invalidky, or unenforoeability o any provision of this Mortgage shall not affect the legality, validity or enforceability of any other provision of this ortgage. Merger. There s all be no merger of the interest or estate created by this Mortgage with any other interest or estate in the Pro rty at any time held by or for the beneft of Lender in any capacity, without the written consent of Lender. Successor Interes .The terms of this Mortgage shall be binding upon Grantor, and upon Grantor's heirs, personal representatives, s ccessors, and assigns, and shall be enforceable by Lender and its successors and assigns. Time is of the Ess ce. lime is of the essence in the performance of this Mortgage. Waive Jury. All arties to this Mortgage hereby waive the right to any jury trial in aml action, proceeding, or counterclaim bro ht by any party against any other party. DEFINITIONS. The f (lowing capitalized words and terms shall have the following meanings when used in this Mortgage. Unless sp ifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United fates of America. Words and terms used in the singular shall include the plural, and the plural shall include the sing ar, as the context may require. Words and terms not otherwise defined in this Mortgage shall have the meanings a 'buted to such terms in the Uniform Commercial Code: Borrower. The rd "Borrower" means Stewartstown Cornerstone Limited Partnership and includes all co-signers and co-makers si Wing the Note and all their successors and assigns. Default. The wor "Default" means the Default set forth in this Mortgage in the section titled "Defauk". Environmental La s. The words "Environmental Laws" mean any and all state, federal and local statutes, regulations and rdinances relating to the pro'tecdon ~ of human health •or the environment, including without [imitation the Co_ prehensive Environmental.Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9 01, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 ("SA "), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules, or regulations ad pled pursuant thereto. Event of Default. ~ The words "Event of Default" mean any of the events of default set forth in this Mortgage in the MORTGAGE onvnue rage ~ v events of default action of this Mortgage. Grantor. The wor 'Grantor" means Stewartstown Cornerstone Limited Partnership. Guarantor. The ord "Guarantor" means any guarantor, surety, or accommodation party of any or all of the Indebtedness. Guaranty. The ord "Guaranty" means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or art of the Note. Hazardous Subs nces. The words "Hazardous Substances" mean materials that, because of their quantity, concentration or hysicaf, chemical or infectious characteristics, may cause or pose a present or potential hazard to human health r the environment when improperly used, treated, stored, disposed of, generated, manufactured, transported or o erwise handled. The words °Hazardous Substances" are used in their very broadest sense and include without li nation any and all hazardous or toxic substances, materials or waste as defined by or listed under the Environ ental Laws. The term "Hazardous Substances" also includes, without limitation, petroleum and petroleum by-pro acts or any fraction thereof and asbestos. Improvements. a word "Improvements" means all existing and future improvements, buldings, structures, mobile homes a xed on the Real Property, facilities, additions, replacements and other construction on the Real Property. Indebtedness. a word "Indebtedness" means all principal, interest, and other amounts, costs and expenses payable under th Note or Related Documents, together with all renewals of, extensions of, modifications of, consolidations of nd substitutions for the Nota or Related Documents and any amounts expended or advanced by Lender to discha a Grantor's obligations or expenses incurred by Lender to enforce Grantor's obligations under this Mortgage, to ether with interest on such amounts as provided in this Mortgage. Lender. The wor "Lender" means Sovereign Bank, its successors and assigns. Mortgage. The v~}ord "Mortgage" means this Mortgage between Grantor and Lender. Note. The word Note" means the promissory note dated October 6, 2005, in the original principal amount , o or o en er, toga er w a renews s o, e ensions o, m ~ attons o, refinancings of, c nsolidations of, and substitutions for the promissory note or agreement. NOTICE TO GRANTOR: THE NOTE CONT NS A VARIABLE INTEREST RATE. ' Personal Prope The wards "Personal Property" mean all equipment, fixtures, and other articles of personal property now or hereafter owned by Grantor, and now or hereafter attached or effaced to the Real Property; together with all accessions, parts, and additions to, all replacements of, and all substitutions for, any of such property; and to ether with all proceeds (including without limitation all insurance proceeds and refunds of premiums) from ny sale or other disposition of the Property. Property. Thew rd "Property" means collectively the Real Property and the Personal Property. Real Property. a words "Real Property" mean the real property, interests and rights, as further described in this Mortgage. Related Docume ts. The words 'Related Documents" mean all promissory notes, credit agreements, loan agreements, en ronmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter existing, execute in connection with the Indebtedness. Rents. The wo "Rents" means all present and future rents, revenues, income, issues, royalties, profits, and other benefits de 'ved from the Property. MORTGAGE ontlnue GRANTOR ACKNOWL DGES HAVING READ ALL THE PROVISIONS OF THIS MORTGAGE, AND GRANTOR AGREES TO ITS TERMS. THIS MORTGAGE tS IVFJV UNDER SEAL AND iT IS INTENDED THAT THIS MORTGAGE IS AND SHALL CONSTITUTE AND HAVE THE l~FE T OF A SEALED INSTRUMENT ACCORDING TO LAW. GRANTOR: STEWARTST CO NERSTONE LIMITED PARTNERSHIP CORNERST DEV LOPMEN GROUP, INC., General Partner of Stewartstown Comers ited P ers gy; (Seaq el Juffe, Pr i of merstone Development Group, Inc. CERTIFICATE OF RESIDENCE I hereby certify, that a precise address of the mortgagee, Sovereign Bank, herein is as follows: Commercial Banking ivision, 101 S. George Street, York, PA 17401 ~ _ Attorney or A n for Mort~a ` PARTNERSHIP ACKNOWLEDGMENT COMMONWEALTH 0 PEKNNSYLVANIA COUNTY OF ~ © ' 1 ) SS 1 On 's, a `f'~"~' day of ~/ `-~' 20 ~ ,before me the undersigned Notary Public, personally appeared Samuel Juffe, President of Cornerst ne.Develop ent Group, Inc., who acknowledged himself or herself to ba the parf~er or designated agent of Stewartstown Comer tone Limited Partnership, a partnership, and that he or she as such a partner or designated agent, being authorized to d so. executed the foregoing instrument for purposes the in contained 6y signing the name of the partnership by hi self or herself as as a par~n r designat e In witne F P NNSyI.YA~I~ fficial se _ L Sediler, Notary Pubs ~Y Of Yak, York C,ar~Y ~ F~Ires Mat.14, 2009 otary Public in and for fate of ~ nba ,Pennsylvania Assoctatwn of Notaries MODIFICATION OF MORTGAGE (Continued) LENDER ACKNOWLEDGMENT COMMONWEALTH OF NSYLVANIA I SS COUNTY OF aK , On this, the 7~! day of 20 ~ ~ ,before me the unden;ign Notary PubR personally appeared who ackno lodged himself or herself to be the ~' ~ of a lender, and that ha or she as such /~t~ being authorized to do so, executed the foregoing instrument For the purposes the in o twined by signing the name of the lender by himself or herself as In witness whereof 1 hereurrto set my hand and official s ' Seal Dawn M. 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At~S.14 fiatto a PcinC i7rcvzaae ixl6:at t~ t,Ua{or~tt,~t~ CoU1d1'Y pfattF 2000030aa • Pape 1 d 4 Parcel Identification Number: REQUESTED BY: Soveragn Bank Commercial Banking Division 101 S: George Street York, PA 17401 WHEN RECORDED TO: - - .... MODIFICATION 0 MORTGAGE THIS MODIFICATION OF MORTGAGE dated is made and executed between Stewartsto n Cornerstone Limited Partnership, whose address is 200 Bailey Drive, Suite 204, Stewartst wn, PA 17363 (referred to below as "Grantor") and Sovereign Bank, whose address is 101 S. George Street, York, PA 17401 (referred to below as 'Lender"). MORTGAGE. Lender and cantor have errtered into a Mortgage dated October 6, 2005 (the 'Mortgage") which has bean recorded in Cumberia d County, Commonwealth .of Pannsyhrania, as follows: ~~~~~ sae rocoraea m e ~ounry necoraer's voice of Cumberland, on October 10, 2005, in Book 1926, Page 1120. REAL PROPERTY DESCRI ON. The Mortgage covers the following described real property located in Cumberland Coumy, Commonwealth of ennsvivania: ALL THAT CERTAIN i~cts or parcels of land and premises, situated lying and being in the Township of Silver Spring in the County o Cumberland and Commonwealth of Pennsylvania, more particulary described as follows: BEGINNING at an iron 1 set forth in Deed Booi thence, along lands not seconds West a distane the Conodoguinet Creel 1) North 24 degrees 46 2) North 30 degrees 00 3) North 13 degrees 45 4) North 22 degrees 2B Thence, along lands nc distance of 1,712.00 fi Sample Bridge Road, S~ irrtersection of Sample drive the following save 1 } South B5 degrees 08 2) Along a curve to the 49 degrees 30 minutes 3) South 33 degrees 52 41 Along a curve to the 10 degrees 52 minutes 5) South 12 degrees 07 6) Along a curve to the South 09 degrees 33 ml n located on the centerline of sixty (60') foot right-of-way of an unnamed access drive (as 35-A, pegs 534) and northern property line of Pennsylvania-American Water Company; or formerly of Pennsylvania-American Water Company, North 88 degreea 15 minutes 30 ~ o~ 1,009.93 fast through two (2! iron pipes to an iron pipe set along the eastern bank of thence, along Conodoguinet Creek the following four (4} courses and distances: minutes 00 seconds West a distance of 112.39 feet to a poir~ minutes 00 seconds West a distanco of 273.41 feet to a point; minutes 00 seconds West a distance of 549.69 feet to a point minutes 00 seconds West a distance of 665.37 feet to a point; .w or formerly of Kwan and Iney Wan, North 76 degrees 15 minutes 00 seconds East a jet to a poirrt along the center)ne of Sample Bridge Road, thence, along said centeriing of >uth 24 degrees 50 minutes 00 'seconds East a distance of 759.80 feat to a point at the Bridge Road and unnamed axess drive; thence, along centerline of said unnamed access n ~(7) courses and distances: minutes 59 seconds West a distance of 25.00 feet to a point; left with a radius of 277.72 feet and curve length of 151.72 feet, a chord bearing of South 58 seconds West and chord distance of 149.84 feet to a point; minutes 00 seconds West a distance of 275.05 feet to a point; left with a radius of 260.00 feet and curve length of 208.67 feet, a chord bearing of South 29 seconds West and chord distance of 203.1.1 feet to a point? minutes 00 seconds East a distance of 318.95 feet to a point; r right with a radius of 290.00 feet and curve length of 219.33 feet, a chord bearing of notes 00 seconds West and chord distance of 214.14 feet to a point; MODIFICATION OF MORTGAGE (Continued} 7) South 31 degrees 13 minutes 00 seconds West a distance of 20'x.21 feet to an iron pin set at the point of BEGINNING. Total tract are is 2,5 1,437 square feat (59.49 acres). The Real Property or its ddress is commonly known as 59.45 acre residential tract land known as Country Club Estates, Saver Spring To ship , PA. MODIFlCATION. Lander a d Grantor hereby modify the Mortgage as follows: The principal amount f the Gen sfiaG be increased from the original amount of 55,858,992.00 bo a ban amount of 56,506,492.00. The release amount per lot will be modified from 558,600.Q0 th Sti4A00.00 pas bt. CONTINUING VALIDITY, Except as expressly modified above, the terms of the original Mortgage shall remain unchanged and in fuG and effect and are legally valid, binding, and enforceable in accordance with their respective terms. Consont by Lend r to this Modification does not waive Lender`s right to require strict performance of the Mortgage as changed a e nor obligate Lender to make any future modifications. Nothing in ties Modification shall constitute a satisfaction the promissory note or other credit agreement secured by the Mortgage (the 'Note'). K is the intention of Lander to fain as liable all pasties to the Mortgage and ail pertles, makers and endorsers to the Note, including accommodation arties, unless a party is expressly roleased by Lander in writing. Arty maker or endorser, including accommodation akers, shall not be released by virtue of this Modification. if any person who signed the original Mortgage does no sign this Modification, them ail porsons signing below acknowledge that title Modification )s given conditionally, based on the representation to Lander thattha non-signing person consents to the changes and provisioms of this Modific lion or otherwise wiG not be released by it. This waiver applies not only to any initial exteruion or modification, also to all such subsequent actions. GRANTOR ACKNOWLEDG HAVING READ ALL THE PROVISIONS OF THIS MODIFl ATION OF M PtT AGE AND GRANTOR AGREES TO tTS TERMS. THIS MODIFlCATION OF MORTGAGE IS DATED ~ THIS MODIFlCATION LS 11/E]V UNDER SEAL AND R 6S INTENDED THAT TH)S MODIFICATION IS AND SHALL CONSTITUTE AND HAVE E EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. GRANTOR: LIMITED PARTNERSHIP GROUP, INC., General Partner of Stewartstown 8Y= I.EiVDER: SOVEREIGN BANK Inc. x (~ ~--•-= \ F Lt ~ ~t,.~...-rte / ..C t/ i r MODIFICATION OF MORTGAGE (Continued) CERTIFICATE OF RESIDENCE I hereby certify, that the p ties address of the mortgagee, Sovereign Bank, herein is as follows: Commercial Banktng Dlvisi n, 101 S. George Street, York, PA 17401 Attorney or t for M gee PARTNERSHIP ACKNOWLEDGMENT COMMONWEALTH OF PEN SYLVANIA ~ SS COUNTY OF ~ i On this, the Cornerstone Devebpment Stewarts3own Cornerstone being authorized to do so, the partnership by himself In ~~ _---~. '~smt~r aorM day of 20 1J • ~ before me the undersigned Notary Pu c, personally appeared Samusl .)uffe, President of oup, Inc., who acknowledged himself or herself to partrtar or designated agent of mlted Parfiership, a partnership, a at he ors ass h a partner or designated agerrt, stated the foregoing instrum purposes t erei coma' ed signing the name of herself as as a artnar or d ' irgr~r~aet my.hand and o se ~~AA 1 t / nt Y ~y pNas Mar.14, 2009 Assaci;tion of Notarise Notary Public in and for yhe Mate of Na*~~al Seal ! . S~,tE~ °+~Y Public Ny CorTrsuas+on r~rm !x'.14, 2009 Mem r, Pennsylvania Assoaation of Notaries WEIR & PARTNER' By: Daniel D. Hal Christopher L Attorney ID No. 778! The Widener Buildin 1339 Chestnut Street Philadelphia, PA 191 wweir@weirpartners (215) 665-8181 (215) 665-8464 SOVEREIGN v. STEWARTSTOWN LLP ;erty, Esquire McDonald, Esquire 1/230671 . Suite 500 .com Attorneys for Sovereign Bank COURT OF COMMON PLEAS CUMBERLAND COUNTY Plaintiff, NO. 10-1402 Civil Term TONE, LP Defendant. CERTIFICATE OF SERVICE I, Christoph Plaintiff Sovereign Defendant Stewarts 16, 2010, via U.S. fi L. McDonald, hereby certify that a true and correct copy of Preliminary Objections and Brief in Support thereof to Cornerstone, LP's Preliminary Objections were served on July class mail, postage prepaid, upon the following: Albert G. Blakey, Esquire BLAKEY, YOST, BUPP & BAUSCH, LLP 17 East Market Street York, PA 17401 Christopher L. McDonald CAI AL PRAECIPE FOR LISTING CASE FOR ARGUMENT (Must be typewritten and submitted in triplicate) TO THE PROTHON TARY OF CUMBERLAND COUNTY: (List the within matter for ~e n~ '-~ i Argument Court.) ~?~1 i__. L- ~` `'' =' CAPTION OF CASE -- ~ ~ - ~ j (entire caption must b ~' stated in full) ~~ l Sovereign Bank ,- . _ ~' ° ~ `; ~._. ,, - vs. ~ ~. == Stewartstown Comers ne, LP No. 2010-1402 Civil Term I 1. State matter t be argued (i.e., plaintiffs motion for new trial, defendant's demurrer to complaint, et .): 2. Identify all counsel who will argue cases: (a) f r plaintiffs: Christopher L McDonald, Esquire (Name and Address) Weir & Parts rs LLP, 1339 Chestnut Street, Suite 500, Philadelphia, PA 19107 (b) f r defendants: Albert G. Bla ey, Esquire (Name and Address) Blakey, Yost, upp & Bausch, LLP, 17 East Market Street, York, PA 17401 3. I will notify II parties in writing within two days that this case has been listed for argument. 4. Argument C urt Date: August 18, 2010 Date: July ~ 6, 2010 1.0 i 2.T 3. T 4. If Signature Christopher L. McDonald Print your name Sovereign Bank Attorney for iginal and two copies of all briefs must be filed with the COURT ADMINISTRATOR iot the Prothonotary) before argument. e moving party shall file and serve their brief 12 days prior to argument. e responding party shall file their brief 5 days prior to argument. argument is continued new briefs must be filed with the COURT DMINISTRATOR (not the Prothonotary) after the case is relisted. I ~ -:,. WEIR dE PARTNFdtS LLP By: Darnel D. Aagga~y, Esgoioe Clr<istoP6er L. McDooaW, Esgair+e Atsocaey ID Nos. 77894CZ03671 The Widener Buil~og, Smte 500 1339 Q~d Sheet Phdadelphi~ PA 19107 (215) 66e5-8181 (215) 665-8464 corn com SOVEREIGN BANK 1100 Madoet Sheet P'h~~ladeipbia, PA 19107 vs_ . ~ ' l.i ~ Avg! t P/n s : c~ r ~ - ', Attornelrs 1'or Sovereign 8aot COURT OF LION PLEAS : C[1MBE:RI.AND C70illN1'Y CIVIL ACTION NO : 2010.1402-C1VII. "TERM sTEWARTSroWN CORr1~rsT~or1E, L,P, : 1 East Ma~laet Sheet, Smte 401 Yodc, PA 17401 TO THE PROTHONOTARY: Kindly te4ist the hearing listed for Atguarmt on Augnat 18, 2010, to October 6, ZOIO. W1:1R dt PAR1Tl LP BIr ~. L- ~~, 1339 C3~t ~ Snite 500 PhBaddphis, PA 19107 Caron~el for.SoMa~ Bmdr I.i,P 17 Fart Street Ycdr, PA 17401 C.arairrel~orS~ae C.arria:tom, LY Dated: A7nguat 9, 2010 362130-1 ~q~AL PRAECIPE FOR LISTING CASE FOR ARGUMENT (Must be typewritten and submitted in triplicate) TO THE PROTHONOTARY OF CUMBERLAND COUNTY: (List the within matter for the next Argument Court.) CAPTION OF CASE ~ Q (entire caption must be stated in full) ~' r~r ~~ c~ SOVEREIGN BANK ~~ ~ -~ ~~ i V.S. ~.w '1 ~ ~! E 3 T..~+ ~'. STEWARTSTOWN CORNERSTONE, LP o ~~ No. 2010-1402 Civil --a c,~ .-~„errr~ 1. State matter to be argued (i.e., plaintiffs motion for new trial, defendant's demurrer to complaint, etc.): Plaintiff Sovereign Bank's Preliminar y Objections to Defendant Stewartstown Cornerstone, LP 2. Identify all counsel who will argue cases: (a) for plaintiffs: Christopher L. McDonald, Esquire- 215-665-8181 (Name and Address) Weir & Partners LLP, 1339 Chestnut Street, Suite 500, Philadelphia, PA 19107 (b) for defendants: Albert G. Blakey, Esquire (Name and Address) 17 East Market Street, York, PA 17401 3. I will notify all parties in writing within two days that this case has been listed for argument. 4. Argument Court Date: December 15, 2010 ~~~ ign re Christopher L. McDonald Print your name Plaintiff S tember 30, 20l 0 Attorney for Date: ~ c~a -;~ ---t ~~ ~~~ ~;° `c°~ ~' a t~f "C' ~'~S ..~ ~" ~ c-:, +~y~ ~_F Y ~.:? INSTRUCTIONS: 1.Original and two copies of all briefs must be filed with the COURT ADMINISTRATOR (not the Prothonotary) before argument. 2. The moving party shall file and serve their brief 12 days prior to argument. 3. The responding party shall file their brief 5 days prior to argument. 4. If argument is continued new briefs must be filed with the COURT ADMINISTRATOR (not the Prothonotary) after the case is relisted. WEIR & PARTNERS LLP By: Daniel D. Haggerty, Esquire Christopher L. McDonald, Esquire Attorney ID Nos. 77894/203671 The Widener Building, Suite 500 1339 Chestnut Street Philadelphia, PA 19107 (215) 665-8181 (215) 665-8464 daggerty@weirpartners. com cmcdonald@weirpartners.com SOVEREIGN BANK 1100 Market Street Philadelphia, PA 19107 i~..~-~FE~ 1~~.:: G~ ~° I °'~ m-' ~ ~ ! ~I OP 0 ~A ~i'1 210 t1~T - I .I~~ I~~ ~8 ~ti~°~BERL~'~i{D COU~Ei~ ~' P`~'&`~SYi-WA~~I1~ Attorneys for Sovereign Bank COURT OF COMMON PLEAS CUMBERLAND COUNTY Plaintiff, CIVIL ACTION vs. NO.: 2010-1402-CIVIL TERM STEWARTSTOWN CORNERSTONE, LP, 1 East Market Street, Suite 401 York, PA 17401 Defendant. PRAECIPE TO REMOVE HEARING FROM ARGUMENT LIST TO THE PROTHONOTARY: Kindly remove the hearing listed for Argument on October 6, 2010 in connection with the above-captioned matter. Dated: September 30, 2010 WEIR & PARTNERS LLP _. - By: - ~ ~ ~~ Christopher L. McDonald, Esquire Counsel for Sovereign Bank 364641-1 Plaintiff Defendant : IN THE COURT OF COMMON PLEAS OF Sovereign Bank CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION -LAW Stewartstown Cornerstone : No. 2010-1402 CIVIL TERM n o ao s - =M r- M C-) M m U) -cr o ov ORDER OF COURT CD 3am IN RE: ARGUMENT COURT F3 v? © ? AND NOW, this 91h day of December, 2010, the case listed above has been stricken from the 12/15/2010 Argument Court List due to the listing party's failure to file a brief in accordance with Cumberland County Local Rule 1028 (c) (5). By the Court, AIL- A. Hess, P.J. • WEIR & PARTNERS LLP By: Daniel D. Haggerty, Esquire Christopher L. McDonald, Esquire Attorney ID Nos. 77894/203671 The Widener Building, Suite 500 1339 Chestnut Street Philadelphia, PA 19107 (215) 665-8181 (215) 665-8464 dhaggerty@weirpartners.com cmcdonald@weirpartners.com SOVEREIGN BANK 1100 Market Street Philadelphia, PA 19107 Plaintiff, VS. STEWARTSTOWN CORNERSTONE, LP,: 1 East Market Street, Suite 401 York, PA 17401 Defendant. OF TFILED OFFICE FRO T HOHO T,,a,k, 2010 DEC 15 AM 10: SGE CJM???S YL ??,OUi?T ?` j, d: . Attorneys for Sovereign Bank COURT OF COMMON PLEAS CUMBERLAND COUNTY CIVIL ACTION NO.: 10-1402 PRAECIPE TO SETTLE, DISCONTINUE AND END TO THE PROTHONOTARY: Kindly mark the above-captioned matter Settled, Discontinued and Ended. WEIR & PARTNERS LLP By: C Daniel D. Hagge y, Esquire Attorney for Plaintiff Dated: December 10, 2010 368662.1 WEIR & PARTNERS LLP By: Daniel D. Haggerty, Esquire Christopher L. McDonald, Esquire Attorney ID Nos. 77894/203671 The Widener Building, Suite 500 1339 Chestnut Street Philadelphia, PA 19107 (215) 665-8181 (215) 665-8464 dhaggerty@weirpartners.com cmcdonald@weirpartners.com SOVEREIGN BANK 1100 Market Street Philadelphia, PA 19107 Plaintiff, VS. STEWARTSTOWN CORNERSTONE, LP,: 1 East Market Street, Suite 401 York, PA 17401 Defendant. Attorneys for Sovereign Bank COURT OF COMMON PLEAS CUMBERLAND COUNTY CIVIL ACTION NO.: 10-1402 CERTIFICATE OF SERVICE I, Daniel D. Haggerty, Esquire, hereby certify that a true and correct copy of the Praecipe to Settle, Discontinue and End was served on the following by U.S. First Class Mail, postage prepaid, on December 10, 2010: Albert G. Blakey, Esquire Blakey, Yost, Bupp & Rausch, LLP 17 East Market Street York, PA 17401 By:_ Daniel D. Haggerty, Esquire 368662.1