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Home My WebLink About10-2573(` Christopher E. Rice, Esquire Attorney I.D. No. 90916 Jacob M. Theis, Esquire Attorney I.D. No. 208631 MARTSON DEARDORFF WILLIAMS OTTO GILROY & FALLER MARTSON LAW OFFICES 10 East High Street Carlisle, PA 17013 (717) 243-3341 Attorneys for Plaintiff MEMBERS 1 FEDERAL CREDIT : IN THE COURT OF COMMON PLEAS OF UNION, : CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff V. : NO. 2010 - ), SZ3 CIVIL TERM CARLETON COMMUNICATIONS, INC., and CHARLES L. ROTHSTEIN, Defendants NOTICE OF ENTRY OF JUDGMENT PURSUANT TO PA. R.C.P. NO. 236 TO: Carleton Communications, Inc.. 937 Nixon Drive, Box 364, Mechanicsburg, PA 17055. You are hereby notified that on ko , "mI6 , judgment by confession was entered against you in the above-captioned case in favor of Members 1" Federal Credit Union as follows: Credit Agreement (Under Loan # 227614-04) Principal $150,000.00 Late Fees $58.77 Interest (through 2/24/2010) $3,157.63 Costs of Suit (estimated) $250.00 Attorney Fees (estimated) $15,321.64 Total: $168,788.04* *Plus interest per diem at $17 .47, along with additional costs and fees incurred, until paid in full. Promissory Note (Under Loan # 227614-03) Principal $290,932.26 Late Fees $50.00 Interest (through 2/24/2010) $12,458.48 Costs of Suit (estimated) $250.00 Attorney Fees (estimated) $30,344.07 Total: $334,034.81* *Plus interest per diem at $63 .37, along with additional costs and fees incurred, until paid in full. Date: Prothonotary ?J Christopher E. Rice, Esquire Attorney I.D. No. 90916 Jacob M. Theis, Esquire Attorney I.D. No. 208631 MARTSON DEARDORFF WILLIAMS OTTO GILROY & FALLER MARTSON LAW OFFICES 10 East High Street Carlisle, PA 17013 (717) 243-3341 Attorneys for Plaintiff MEMBERS 1 FEDERAL CREDIT : IN THE COURT OF COMMON PLEAS OF UNION, : CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff V. : NO. 2010 - 5 73 CIVIL TERM CARLETON COMMUNICATIONS, INC., and CHARLES L. ROTHSTEIN, Defendants NOTICE OF ENTRY OF JUDGMENT PURSUANT TO PA. R.C.P. NO. 236 TO: Charles Rothstein, 40 Avon Lane, Staten Island, New York, 10314. You are hereby notified that on judgment by confession was entered against you in the above-captioned case in favor of Members 1 S` Federal Credit Union as follows: Credit Agreement (Under Loan # 227614-04) Principal $150,000.00 Late Fees $58.77 Interest (through 2/24/2010) $3,157.63 Costs of Suit (estimated) $250.00 Attorney Fees (estimated) $15,321.64 Total: $168,788.04* *Plus interest per diem at $17 .47, along with additional costs and fees incurred, until paid in full. Promissory Note (Under Loan # 227614-03) Principal $290,932.26 Late Fees $50.00 Interest (through 2/24/2010) $12,458.48 Costs of Suit (estimated) $250.00 Attorney Fees (estimated) $30,344.07 Total: $334,034.81* *Plus interest per diem at $63 .37, along with additional costs and fees incurred, until paid in full. Date: G u.C a? X0/0 /Sy &? 9 Prothonotary (Y9 ( a F: FILES\Cliems\ 11470 Members I st\FILES\Current\ 102 Carleton\ 11470.102.com.confl .wpd Christopher E. Rice, Esquire Attorney I.D. No. 90916 Jacob M. Theis, Esquire 214 ?? Attorney I.D. No. 208631 rt . ? ` (? Ia -m MARTSON DEARDORFF WILLIAMS OTTO GILROY & FMM06 1, \JMMM' IV. 7. sv d y MARTSON LAW OFFICES 10 East High Street C{r. a Y 2( Carlisle, PA 17013 LV67 y (717) 243-3341 Attorneys for Plaintiff No+lco xjzi1e d MEMBERS 1" FEDERAL CREDIT : IN THE COURT OF COMMON PLEAS OF UNION, : CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff V. :NO. 2010 - J_ S 73 CIVIL TERM CARLETON COMMUNICATIONS, INC., and CHARLES L. ROTHSTEIN, Defendants CONFESSION OF JUDGMENT Pursuant to the authority contained in the Credit Agreement, Promissory Note, and Commercial Guaranty attached as Exhibits "A," `B," and "C," to the Complaint filed in the above- captioned case, we appear for Defendant Carleton Communications, Inc., and for Defendant Charles L. Rothstein and confess judgment in favor of Members 1" Federal Credit Union against Carleton Communications, Inc., and Charles L. Rothstein as of February 24, 2010, as follows: Credit Agreement (Under Loan # 227614-04) Principal $150,000.00 Late Fees $58.77 Interest (through 2/24/2010) $3,157.63 Costs of Suit (estimated) $250.00 Attorney Fees (estimated) $15,321.64 Total: $168,788.04* *Plus interest per diem at $17.47, along with additional costs and fees incurred, until paid in full. Promissory Note (Under Loan # 227614-03) Principal $290,932.26 Late Fees $50.00 Interest (through 2/24/2010) $12,458.48 Costs of Suit (estimated) $250.00 Attorney Fees (estimated) $30,344.07 Total: $334,034.81* *Plus interest per diem at $63.37, along with additional costs and fees incurred, until paid in full. Grand Total: $502,822.85* * Plus interest per diem at $80.84, along with additional costs and fees incurred, until paid in full. Respectfully submitted: MARTSON LAW OFFICES By: Christopher E. Rice, Esquire Attorney I.D. No. 90916 Jacob M. Theis, Esquire Attorney I.D. No. 208631 10 East High Street Carlisle, PA 17013 (717) 243-3341 pM al 'i1ARY ?Hc ; ? `: Christopher E. Rice, Esquire AM 10:? Attorney I.D. No. 90916 Zfl?? ??? Z? Jacob M. Theis, Esquire ?- Attorney I.D. No. 2086310,;=?I MARTSON DEARDORFF WILLIAMS OTTO GILRO MARTSON LAW OFFICES 10 East High Street Carlisle, PA 17013 (717) 243-3341 Attorneys for Plaintiff MEMBERS 1 FEDERAL CREDIT : IN THE COURT OF COMMON PLEAS OF UNION, : CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff V. NO. 2010 - ?- 5-73 CIVIL TERM CARLETON COMMUNICATIONS, INC., and CHARLES L. ROTHSTEIN, Defendants COMPLAINT FOR CONFESSION OF JUDGMENT Members I" Federal Credit Union, by and through its undersigned counsel, hereby files this Complaint for Confession of Judgment pursuant to Pa. R.C.P. Rule 2951 and in support thereof, avers the following: 1. Plaintiff, Members I" Federal Credit Union, ("Plaintiff') is a federally chartered credit union located at 5000 Louise Drive, Mechanicsburg, Pennsylvania 17055. 2. Defendant Carleton Communications, Inc., is a Pennsylvania corporation with a business address of 937 Nixon Drive, Box 364, Mechanicsburg, Cumberland County, Pennsylvania. 3. Defendant Charles L. Rothstein is an individual with a last known address of 40 Avon Lane, Staten Island, New York. 4. On June 21, 2007, Defendant Carleton Communications, Inc., entered into a Credit Agreement and Disclosure ("Credit Agreement") with Plaintiff for a line of credit with a credit limit of $150,000.00. A true and correct copy of the Credit Agreement is attached hereto as Exhibit "A" and is incorporated herein by reference. 5. On June 21, 2007, Defendant Carleton Communications, Inc., entered into certain loan documents, including a Promissory Note ("Note"), with Plaintiff to borrow $350,000.00, and agreed to, among other things, make monthly payments of $5,460.48, until satisfaction of the principal balance. A true and correct copy of the executed Note is attached hereto as Exhibit "B" and is incorporated herein by reference. 6. On June 26, 2007, Defendant Charles L. Rothstein executed a Commercial Guaranty and Disclosure for Confession of Judgment ("the Guaranty") and agreed to, among other things, guarantee full payment and satisfaction of all of Defendant Carleton Communication, Inc.'s indebtedness to Plaintiff. A True and correct copy of the Commercial Guaranty and Disclosure for Confession of Judgment is attached hereto as Exhibit "C"and is incorporated herein by reference. 7. Defendant Carleton Communications, Inc., has defaulted under the Credit Agreement and Note, by and including, but not limited to, allowing a material adverse change in their financial condition, and failing to make payments as required under the Note and Credit Agreement (collectively the "Events of Default"). 8. The Credit Agreement, Note, and Guaranty provide that Plaintiff, after the Events of Default have occurred, may confess judgment against Defendant Carleton Communications, Inc., and Defendant Charles L. Rothstein for all sums due and owing thereunder. 9. The total sum due and owing under the Credit Agreement and Note from Defendant Carleton Communications, Inc., as of February 24, 2010, is as follows: Credit Agreement (Under Loan # 227614-04) Principal $150,000.00 Late Fees $58.77 Interest (through 2/24/2010) $3,157.63 Costs of Suit (estimated) $250.00 Attorney Fees (estimated) $15,321.64 Total: $168,788.04* *Plus interest per diem at $17.47, along with additional costs and fees incurred, until paid in full. Promissory Note (Under Loan # 227614-03) Principal $290,932.26 Late Fees $50.00 Interest (through 2/24/2010) $12,458.48 Costs of Suit (estimated) $250.00 Attorney Fees (estimated) $30,344.07 Total: $334,034.81* *Plus interest per diem at $63.37, along with additional costs and fees incurred, until paid in full. 10. All conditions precedent have been satisfied to allow Plaintiff to confess judgment against Defendant Carleton Communications, Inc., and Defendant Charles L. Rothstein under the Credit Agreement, Note, and Guaranty. 11. Judgment has not been confessed against Defendant Carleton Communications, Inc., nor Defendant Charles L. Rothstein in any other jurisdiction under the Credit Agreement, Note, and Guaranty. 12. Plaintiff is the holder of the Credit Agreement, Note, and Guaranty. 13. The Note, Credit Agreement, and Guaranty were executed and delivered in connection with a commercial transaction, and judgment is not being entered by confession against a natural person in connection with a consumer credit transaction. 14. The Credit Agreement and Note have not been assigned. WHEREFORE, Members 1" Federal Credit Union requests that this Court enter judgment by confession against Carleton Communications, Inc., and Charles L. Rothstein in the amounts of $168,788.04 and $334,034.81, along with interest accruing at the per diem rates of $17.47 and $63.37, respectively, and additional fees and costs as prayed for in the Complaint. Respectfully submitted, MARTSON LAW OFFICES By: ?'- rzu- Christopher E. Rice, Esquire Attorney I.D. No. 90916 Jacob M. Theis, Esquire Attorney I.D. No. 208631 10 East High Street Carlisle, PA 17013 (717) 243-3341 Date: Attorneys for Plaintiff EXHIBIT "A" CRE. T AGREEMENT AND DISCLC JRE References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or Item. Any item above containing "" • "" has been omitted due to text length limitations. Borrower: Carleton Communications, Inc. Lender: Members let Federal Credit Union PO Box 364 ATTN: Small Business Lending Mechanicsburg, PA 17055-0364 5000 Louise Drive Mechanicsburg, PA 17055 CREDIT LIMIT: $150,000.00 DATE OF AGREEMENT: June 21, 2007 Introduction. This Credit Agreement and Disclosure ("Agreement") governs Borrower's line of credit (the "Credit Line" or the "Credit Line Account") issued through Members 1 at Federal Credit Union. Borrower agrees to the following terms and conditions: Promise to Pay. Borrower promises to pay Members 1 at Federal Credit Union, or order, the total of all credit advances and FINANCE CHARGES , together with all costs and expenses for which Borrower is responsible under this Agreement or under "a Security Agreement" which secures Borrower's Credit Line. Borrower will pay Borrower's Credit Line according to the payment terms set forth below. If there is more than one Borrower, each is jointly end severally Gable on this Agreement. This means Lender can require any Borrower to pay sill amounts due under this Agreement, including credit advances made to any Borrower. Each Borrower authorizes any other Borrower, on his or her signature alone, to cancel the Credit Line, to request and receive credit advances, and to do ap other things necessary to carry out the terms of this Agreement. Lender can reless• any Borrower from responsibility under this Agreement, and the others wN remain responsible. Term. The term of Borrower's Credit Line will begin as of the date of this Agreement ("Opening Date") and will continue until June 21, 2010 ("Maturity Date"). All Indebtedness under this Agreement, if not already paid pursuant to the payment provisions below, will be due and payable upon maturity. The draw period of Borrower's Credit Una will begin on a date, after the Opening Data, when the Agreement Is accepted by Lender in the Commonwealth of Pennsylvania, following the perfection of the security agreement, and the meeting of all of Lender's other conditions. Borrower may obtain credit advances during this period ("Draw Period"). Borrower agrees that Lender may renew or extend the period during which Borrower may obtain credit advances or make payments. Borrower further agrees that Lender may renew or extend Borrower's Credit Line Account. Minimum Payment. Borrower's "Regular Payment" will equal the amount of Borrower's accrued FINANCE CHARGES or $50.00, whichever is greater. Borrower will make 35 of these payments. Borrower will then be required to pay the entire balance owing in a single balloon payment. If Borrower makes only the minimum payments, Borrower may not repay any of the principal balance by the end of this payment stream. Borrower's payments will be due monthly. An Increase in the ANNUAL PERCENTAGE RATE may increase the amount of Borrower's Regular Payment. In any event, if Borrower's Credit Line balance falls below $250.00, Borrower agrees to pay Borrower's balance in full. Borrower agrees to pay not less then the Minimum Payment on or before the due date. Balloon Payment. Borrower's Credit Line Account is payable in full upon maturity in a single balloon payment. Borrower must pay the entire outstanding principal, interest and any other charges then due. Unless otherwise required by appflcable law, Lender Is under no obNgation to refinance the balloon payment at that time. Borrower may be required to make payments out of other assets Borrower owns or find a lender, which may be Lender, willing to lend Borrower the money. If Borrower refinances the balloon, Borrower may have to pay some or all of the closing costs normally associated with s new credit lira account, even If Borrower obtains refinancing from Lender. How Borrower's Payments Are Applied. Unless otherwise agreed or required by applicable law, payments end other credits will be applied first to late charges and other charges; then to any amounts that exceed Borrower's Credit Limit; then to any voluntary credit life and disability Insurance premiums; then to Finance Charges; and then to unpaid principal. Credit Limit. This Agreement covers a revolving line of credit for the principal amount of One Hundred Fifty Thousand & 00/100 Dollars 0150,000.00), which will be Borrower's "Credit Limit" under this Agreement. Borrower may borrow against the Credit Line, repay any portion of the amount borrowed, and re-borrow up to the amount of the Credit Limit. Borrower's Credit Limit is the maximum amount Borrower may have outstanding at any one time. Borrower agrees not to attempt, request, or obtain a credit advance that will make Borrower's Credit Line Account balance exceed Borrower's Credit Limit. Borrower's Credit Limit will not be increased should Borrower overdraw Borrower's Credit Line Account. If Borrower exceeds Borrower's Credit Limit, Borrower agrees to repay immediately the amount by which Borrower's Credit Line Account exceeds Borrower's Credit Limit. Any amount greater than the Credit Limit will be secured by the security agreement covering Borrower's property. Charges to Borrower's Credit Line. Lender may charge Borrower's Credit Line to pay other fees and costs that Borrower is obligated to pay under this Agreement, the security agreement or any other document related to Borrower's Credit Line. In addition, Lender may charge Borrower's Credit Line for funds required for continuing insurance coverage as described in the paragraph titled "Insurance" below or as described in the security agreement for this transaction. Any amount so charged to Borrower's Credit Line will be a credit advance and will decrease the funds available, if any, under the Credit Line. However, Lender has no obligation to provide any of the credit advances referred to in this paragraph. Effective Disbursement Date. The words "Effective Disbursement Date" as used in this Agreement mean a date, after the Opening Date, when the Agreement is accepted by Lender in the Commonwealth of Pennsylvania following the perfection of Lender's security agreements and the meeting of all of Lender's other conditions. Borrower agrees and understands that Borrower may not receive any credit advance under Borrower's Credit Line until after the Effective Disbursement Data of this Agreement. Credit Advances. After the Effective Disbursement Date of this Agreement, Borrower may obtain credit advances under Borrower's Credit Line as follows: Telephone Request. Requesting a credit advance from Borrower's Credit Una to be applied to Borrower's designated account by telephone. Except for transactions covered by the federal Electronic Fund Transfers Act and unless otherwise agreed in your deposit account agreement, Borrower acknowledges and Borrower agrees that Lender does not accept responsibility for the authenticity of telephone instructions and that Lender will not be liable for any loss, expense, or cost arising out of any telephone request, including any fraudulent or unauthorized telephone request, when acting upon such instructions believed to be genuine. Requests By Mail. Requesting an advance by mail. Requests in Person. Requesting a credit advance in person at any of Lender's authorized locations. . Y C :)IT AGREEMENT AND DISCLOS E Loan No: 227614-04 (Continued) Page 2 one Borrower telling Lender not to give advances to the other. Transaction Requirements. The following transaction limitations will apply to the use of Borrower's Credit Line: Request By Mail, In Person Request and Telephone Request Limitations. There are no transaction limitations for requesting an advance by mail, requesting an advance in person or requesting an advance by telephone. Future Credit Line Services. Borrower's application for this Credit Line also serves as a request to receive any new services (auch as access devices) which may be available at some future time as one of Lender's services in connection with this Credit Line. Borrower understands that this request is voluntary and that Borrower may refuse any of these now services at the time they are offered. Borrower further understands that the terms and conditions of this Agreement, together with any specific terms covering the new service, will govern any transactions made pursuant to any of these new services. Collateral. Borrower acknowledges this Agreement is secured by the following collateral described in the security Instrument listed herein: Inventory, chattel paper, accounts, equipment and general intangibles described in a Commercial Security Agreement dated June 21, 2007. Insurance. Borrower must obtain insurance on the Property securing this Agreement that is reasonably satisfactory to Lender. Borrower may obtain property insurance through any company of Borrower's choice that is reasonably satisfactory to Lender. Borrower has the option of providing any insurance required under this Agreement through an existing policy or a policy independently obtained and paid for by Borrower, subject to Lender's right, for reasonable cause before credit is extended, to decline any insurance provided by Borrower. Subject to applicable law, if Borrower fails to obtain or maintain insurance as required in the security agreement, Lender may purchase insurance to protect Lender's own interest, add the premium to Borrower's balance, declare the loan in default, or do any one or more of these things. Statutory Lien. Borrower agrees that all credit advances Borrower receives under the plan are secured by all shares and deposits in all joint and individual accounts Borrower has with Lender now and in the future. Borrower authorizes Lender to apply the balance in these accounts to pay any amounts due under this Agreement when Borrower Is In default under this Agreement. Shares and deposits in an Individual Retirement Account and any other account that would lose special tax treatment under state or federal low if given as security are not subject to the security interest Borrower has given in Borrower's shares and deposits. When FINANCE CHARGES Begin to Accrue. Periodic FINANCE CHARGES for credit advances under Borrower's Credit Line will begin to accrue on the date credit advances are posted to Borrower's Credit Line. There is no "free ride period" which would allow Borrower to avoid a FINANCE CHARGE on Borrower's Credit Line credit advances. Method Used to Determine the Balance on Which the FINANCE CHARGE WO Be Computed. A monthly FINANCE CHARGE will be imposed on all credit advances made under Borrower's Credit Line Imposed from the date of each credit advance based on the "average daily balance" method. To get the average dally balance, Lender takes the beginning balance of Borrower's Credit Line Account each day, add any new advances and subtract any payments or credits. This gives Lender a daily balance. Then, Lender adds up all the dally balances for the statement cycle and divides the total by the number of days in the statement cycle. This gives Lander the "average daily balance." Method of Determining the Amount of FINANCE CHARGE. Any FINANCE CHARGE is determined by applying the monthly "Periodic Rate" to the balance described herein. This Is Borrower's FINANCE CHARGE calculated by applying a Periodic Rate. Borrower also agrees to pay FINANCE CHARGES, not calculated by applying a Periodic Rate, as set forth below: Minimum FINANCE CHARGE. In any event, including payment of the Credit Line balance in full, Borrower may have to pay a Minimum FINANCE CHARGE of $0.50. This fee will be charged as follows: Monthly. Annual Review Fee. At the time of an annual review of Borrower's Credit Line Account Borrower will be charged a fee as follows: 0.00. Periodic Rate and Corresponding ANNUAL PERCENTAGE RATE. The Periodic Rate and the corresponding ANNUAL PERCENTAGE RATE on Borrower's Credit Line are subject to change from time to time based on changes in an index which is Lender's Prime Rate (the "Index"). This is the rate Lender charges, or would charge, on 90-day unsecured loans to the most creditworthy corporate customers. This rate may or may not be the lowest rate available from Lender at any given time. The ANNUAL PERCENTAGE RATE on Borrower's Credit Line is based upon the Index and the margin described below ("Margin"). The Periodic Rate and the corresponding ANNUAL PERCENTAGE RATE on Borrower's Credit Line will increase or decrease as the Index increases or decreases from time to time. Lender will determine the Periodic Rate and the corresponding ANNUAL PERCENTAGE RATE as follows: Lender starts with the current Index and then adds a certain Margin as disclosed below. To determine the Periodic Rate that will apply to Borrower's account, Lander adds a margin to the value of the Index, then divides the value by 12 (monthly). To obtain the ANNUAL PERCENTAGE RATE Lender multiplies the Periodic Rate by 12 (monthly). This result is the ANNUAL PERCENTAGE RATE. In no event will the corresponding ANNUAL PERCENTAGE RATE be less than 3.000% per annum or more than the lesser of 18.000% or the maximum rate allowed by applicable law. Adjustments to the Periodic Rate and the corresponding ANNUAL PERCENTAGE RATE resulting from changes in the Index will take effect the first business day after a payment is made following a change in interest rates. Notwithstanding the above provisions, the maximum increase or decrease in the interest rate at any one time on this loan will not exceed 3.000 percentage points. Today the Index is 8.250% per annum, and therefore the initial ANNUAL PERCENTAGE RATE and the corresponding Periodic Rate on Borrower's Credit Line are as stated below: Current Rates for the First Payment Stream Range of Balance Margin Added or Conditions to Index AN Balances 1.000% ANNUAL PERCENTAGE RATE 9.250% Monthly Periodic Rate 0.77083% Notwithstanding any other provision of this Agreement, Lender will not charge interest on any undisbursed loan proceeds. Forgo Rats Increases. If we forgo an ANNUAL PERCENTAGE RATE increase, at the time of a later adjustment we may return to the full Index value plus margin. Conditions Under Which Other Charges May Be Imposed. Borrower agrees to pay all the other fees and charges related to Borrower's Credit Line as set forth below: Fee to Stop Payment. Borrower's Credit Line Account may be charged 830.00 when Borrower requests a stop payment on Borrower's account. Late Charge. In addition to Lender's rights upon default, Borrower's payment will be late if It is not received by Lender within 15 days after the "Payment is Date" shown on the voucher Borrower receives with each credit advance. If Borrower's oavment is late Lander may C. JIT AGREEMENT AND DISCLOS' E Loan No: 227614-04 1Continued? Page 3 Right to Credit Advances. After the Effective Disbursement Date, Lender will honor Borrower's requests for credit advances up to Borrower's Credit Limit so long as: (A) Borrower is not in default under the terms of this Agreement; (B) this Agreement has not been terminated or suspended; and (C) Borrower's Credit Line has not been cancelled as provided above in the section of this Agreement titled "Term." Default. Lender may declare Borrower to be in default if any one or more of the following events occur: (A) Borrower fails to pay a Minimum Payment when due; (B) an event of default occurs under the security agreement for the Property; (C) the Property is further encumbered in any way, voluntarily or involuntarily; (D) Borrower dies; (E) Borrower makes any false or misleading statements on Borrower's Credit Line application; IF) Borrower violates any provision of this Agreement or any other agreement with Lender; (G) any garnishment, attachment, or execution is Issued against any material asset owned by Borrower; IH) Borrower exceeds Borrower's Credit Limit; (1) Borrower files for bankruptcy or other insolvency relief, or an involuntary petition under the provisions of the Bankruptcy Code is filed against Borrower; (J) Lender in good faith believes itself insecure. Lender's Rights. If Borrower is in default, Lender will send notice to Borrower setting forth a time period of at least thirty (30) days within which such default may be cured. During this cure period, without notice, Lender may suspend Borrower's Credit Line as provided below. If such default is not cured during this period, Lender may either terminate or continue suspension of Borrower's Credit Line Account. Suspension. If Lender suspends Borrower's Credit Line, Borrower will lose the right to obtain further credit advances. However, all other terms of this Agreement will remain in effect and be binding upon Borrower, Including Borrower's liability for any further unauthorized use of any Credit Line access devices. Termination. If Lender terminates Borrower's Credit Line, Borrower's Credit Line will be suspended and the entire unpaid balance of Borrower's Credit Line Account will be immediately due and payable, without prior notice except as may be required by law, and Borrower agrees to pay that amount plus all FINANCE CHARGES and other amounts due under this Agreement. Collection Costs. Lender may hire or pay someone also to help collect this Agreement if Borrower does not pay. Borrower will pay Lender 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 vacate any 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. Rate Increase. In addition to Lender's other rights on default, Lender may increase the variable interest rate under this Agreement to 15.000 percent per annum. The interest rate will not exceed the maximum rate permitted by applicable law. If Lender does not Increase the interest rate on default, it will continue at the variable rate in effect as of the date Lender declares a default. Delay in Enforcement. Lender may delay or waive the enforcement of any of Lender's rights under this Agreement without losing that right or any other right. If Lender delays or waives any of Lender's rights, Lender may enforce that right at any time in the future without advance notice. For example, not terminating Borrower's account for non-payment will not be a waiver of Lender's right to terminate Borrower's account in the future if Borrower has not paid. Termination by Borrower. If Borrower terminates this Agreement, Borrower must notify Lender. Despite termination, Borrower's obligations under this Agreement will remain in full force and effect until Borrower has paid Lender all amounts due under this Agreement. Prepayment. Borrower may prepay all or any amount owing under this Credit Line at any time without penalty, except Lender will be entitled to receive the Minimum FINANCE CHARGES as stated above and to receive all accrued FINANCE CHARGES, and other charges, if any. Payments in excess of Borrower's Minimum Payment will not relieve Borrower of Borrower's obligation to continue to make Borrower's Minimum Payments. Instead, they will reduce the principal balance owed on the Credit Line. Borrower agrees not to send Lender payments marked "paid in full", "without recourse", or similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lender's rights under this Agreement, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts, including any check or other payment instrument that indicates that the payment constitutes "payment in full" of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: Members 1 at Federal Credit Union, 5000 Louise Drive Mechanicsburg, PA 17050. Notices. All notices will be sent to Borrower's address as shown in Borrower's Credit Line application. Notices will be mailed to Borrower at a different address if Borrower gives Lender written notice of a different address. Borrower agrees to advise Lender promptly if Borrower changes Borrower's mailing address. Annual Review. Borrower agrees that Borrower will provide Lender with a current financial statement, a new credit application, or both, annually, on forma provided by Lender. Based upon this Information Lender will conduct an annual review of Borrower's Credit Line Account. Borrower also agrees Lender may obtain credit reports on Borrower at any time, at Lender's sole option and expense, for any reason, including but not limited to determining whether there has been an adverse change in Borrower's financial condition. Lender may require a new appraisal of the Property which secures Borrower's Credit Line at any time, including an internal Inspection, at Lender's sole option and expense. Borrower agrees to pay the annual review fee shown above. Borrower authorizes Lender to release information about Borrower to third parties as described in Lender's privacy policy and Lender's Fair Credit Reporting Act notice, provided Borrower did not opt out of the applicable policy, or as permitted by law. Based upon a material adverse change in Borrower's financial condition (such as termination of employment or loss of income), Lender may suspend Borrower's Credit Lana. Transfer or Assignment. Without prior notice or approval from Borrower, Lender reserves the right to sell or transfer Borrower's Credit Line Account and Lender's rights and obligations under this Agreement to another lender, entity, or person, and to assign Lender's rights under the security agreement. Borrower's rights under this Agreement belong to Borrower only and may not be transferred or assigned. Borrower's obligations, however, are binding on Borrower's heirs and legal representatives. Upon any such sale or transfer, Lender will have no further obligation to provide Borrower with credit advances or to perform any other obligation under this Agreement. Notify Us of Inaccurate Information We Report To Consumer Reporting Agencies. Please notify us if we report any inaccurate information about your accountls) to a consumer reporting agency. Your written notice describing the specific inaccuracylies) should be sent to us at the following address: Members 1 at Federal Credit Union 5000 Louisa Drive Mechanicsburg, PA 17050. Jury Waiver. Lender and Borrower 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 Agreement will be governed by federal law applicable to Lender and, to the extant nat preempted by federal low, the laws of the Commonwealth of Pennsylvania without regard to its conflicts of law provisions. This Agreement has been accepted by Lender in the Commonwealth of Pennsylvania. Choice of Venue. If there is a lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Cumberland County, Commonwealth of Pennsylvania. C. JIT AGREEMENT AND DISCLOS E Page 4 Loan No: 227614-04 (Continued) provisions of this Agreement. her with the security agreement, is the best evidence of Borrower's agreements with . Borrower agrees that this Agreement, toget interpretation Lender. If a court finds that any provision of this Agreement is not valid or should not be enforced, that fact by itself will not mean that the rest of this Agreement will not be valid or enforced. Therefore, a court may enforce the rest of the provisions of this Agreement even if a provision of this Agreement may be found to be invalid or unenforceable. If Lender goes to court for any reason, Lender can use a copy, filmed or electronic, of any periodic statement, this Agreement, the security agreement or any other document to prove what Borrower owes Lender or that a transaction has taken place. The copy, microfilm, microfiche, or optical image will have the same validity as the original. Borrower agrees that, except to the extent Borrower can show there is a billing error, Borrower's most current periodic statement is the best evidence of Borrower 'a obligation to pay. SeverabiBty. If a court of competent jurisdiction finds any provision of this Agreement to be illegal, invalid, or 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 Agreement. Unless otherwise required by law, the illegality, invalidity, or unenforceabiiity of any provision of this Agreement shall not affect the legality, validity or enforceability of any other provision of this Agreement. Arbitration. Bwrowsr and Lender agree that all disputes. claims and controversies between them whether Individual, joint, or class in nature, arising from this Agreement or otherwise, including without limitation contract and tort disputes, shall arbitrated to take pursuant dispose the any Collate American Arbitration Association in effect at the time the claim Is filed, upon request of either party. No obtaining shall constitute a waiver of this arbitration agreement or be prohibited by this arbitration agreement. This includes, witho? l writ of . c? Injunctive relief or s temporary restraining order; invoking a power of sale under any deed of trust or mortgage; obtaining property with or without imposition of a receiver. or exercising any rights relating to personal property. Including taking or disposing of such judicial process pursuant to Article 8 of the Uniform Commercial Code. Any disputes, c lad claim to rescind rsies conce ni othee lawful me odes any any , , or reasonableness of any act, or exercise of any right, concerning any Collateral, agreement relating to the Collateral, shall also be arbitrated, provided however that no arbitrator shag have the right or the power to enjoin or restrain any act of any party. Judgment upon any award rendered by any arbitrator may be entered in any court having jurisdiction. Nothing In this Agreement shall preclude any party from seeking equitable relief from a court of competent jurisdiction. The statute of limitations, estoppel, waiver, Inches, and similar doctrines which would otherwise be applicable In an action brought by a party shall be applicable in any arbitration proceeding, and the commencement of an arbitstion proceeding shall be deemed the commencement of an action for these purposes. The Federal Arbitration Act shall apply to the construction, Interpretation, and enforcement of this arbitration provision. Y OR Confession of Judgment. BORROWER HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS O APPEAR AT ANY TIME FOR BORROWER AFTER CLERK OF ANY COURT IN THE COMMONWEALTH OF PENNSYLVANIA, OR A DEFAULT UNDER THIS AGREEMENT AND WITH OR WITHOUT COMPLAINT FILED, CONFESS OR ENTER JUDGMENT AGAINST BORROWER FOR THE ENTIRE PRINCIPAL BALANCE OF THE CREDIT LINE ACCOUNT AND ALL ACCRUED INTEREST, LATE CHARGES AND ANY AND ALL AMOUNTS EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECURING THE CREDIT LINE ACCOUNT, 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 MOO) ON WHICH JUDGMENT OR JUDGMENTS ONE OR MORE EXECUTIONS MAY ISSUE IMMEDIATELY; AND FOR SO DOING, THIS AGREEMENT OR A COPY OF THIS AGREEMENT VERIFIED BY AFFIDAVIT SHALL BE SUFFICIENT WARRANT. THE AUTHORITY GRANTED IN THIS 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 THIS 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. Acknowledgment and Amendments. Borrower understands and agrees to the terms and conditions in this Agreement. Borrower acknowledges that, subject to applicable laws, Lender has the right to change the terms and conditions of the Credit Una program, including without limitation, the Margin. If Lender changes the Periodic Rate and subsequent new credit advances are made under this Agreement, the entire balance will be subject to the new rates. Borrower also understands and agrees that Borrower may be subject to other agreements with Lender regarding transfer instruments or access devices which may access Borrower's Credit Lana. Any person signing below may request a modification to this Agreement, and, if granted, the modification will be binding upon all signers. By signing this Agreement, Borrower acknowledges that Borrower has read this Agreement. Borrower also acknowledges receipt of a completed copy of this Agreement. This Agreement is dated June 21, 2007. THIS AGREEMENT IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS AGREEMENT IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. BORROWER: CARLETO ION B (Seal) as . Rd President of Carleton Communications. Inc. C DIT AGREEMENT AND DISCLOS E Loan No: 227614-04 (Continued) Page 5 ACCEPTED: MEMBERS 1ST FEDERAL CREDIT UNION By: (Seal) A 9nK Effective Disbursement Date: IASN MD LMIp W. 5.37AD=4 Cm. Hwf d ft-" f.wdY Mr. 107. Mo. "wow M-." -PA cr=&& 4mwjWLwnjc m% at iwia EXHIBIT `B" i PROMISSORY NOTE References in the shaded area are for Lender'a use only end"do not limit the applicability of this document to any particular loan or tem. Anv Item above containing " has been omitted due to text length limitations. Borrower' Carleton Communications, Inc. Lender: Members tat Federal Credit Union PO Box 364 ATTN: Small Business Lending Mechanicsburg, PA 17055-0364 5000 Louise Drive Mechanicsburg, PA 17055 Principal Amount: $350,000.00 Interest Rate: 7.950% Date of Note: June 21, 2007 PROMISE TO PAY. Carleton Communications, Inc. ('Borrower') promises to pay to Members 1st Federal Credit Union ("Lender", or order, in lawful money of the United States of America, the principal amount of Three Hundred FHty Thousand & 001100 Dollars ($350,000.00), together with interest at the rate of 7.950% per annum on the unpaid principal balance from June 21, 2007, untie paid in full. The interest rate may change under the terms and conditions of the "INTEREST AFTER DEFAULT" section. PAYMENT. Borrower will pay this loan in 83 payments of $5,460.48 each payment and an Irregular last payment estimated at $5,460.31. Borrower's first payment Is due August 1, 2007, and all subsequent payments we due on the some day of each month after that. Borrower's final payment wM be due on July 1, 2014, and wW be for aN principal and aN accrued interest not yet paid. Payments include principal and interest. Unless otherwise agreed or required by applicable law, payments wiM be applied Arst to any unpaid collection costs; then to any Into charges; than to any accrued unpaid interest; and then to principal. Interest on this Note Is computed on a 3651365 simple interest basis; that Is, by applying the ratio of the annual interest rate over the number of days in a year, multiplied by the outstanding principal balance, multipkd by the actual number of days the principal balance is outstanding' Borrower wiN pay Lender at Lender's address shown above or at such other place as Lender may designate In writing. MAXIMUM INTEREST RATE. Under no circumstances will the interest rate on this Note exceed (except for any higher default rate shown below) the lesser of 18.000% per annum or the maximum rate allowed by applicable law. PREPAYMENT; MINIMUM INTEREST CHARGE. In any event, even upon full prepayment of this Note, Borrower understands that Lender Is entitled to a minimum interest charge of $1.00. Other then Borrower's obligation to pay any minimum Interest charge, 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 and may result in Borrower's making fewer payments. Borrower agrees not to send Lender payments marked "paid in full", "without recourse", or similar language. If Borrower sends such a payment, Lender may accept It without losing any of Lender's rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts, including any check or other payment instrument that Indicates that the psyment constitutes "payment in full" of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: Members 1 at Federal Credit Union, 5000 Louise Drive Mechanicsburg, PA 17050. 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 $25.00, whichever is less. INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final maturity, the interest rate on this Note shall be Increased to 15.000% per annum l"Default Rate"). If judgment is entered in connection with this Note, interest will continue to accrue after the date of judgment at the Default Rate. However, In no event will the Interest rate exceed the maximum Interest rate limitations under applicable law. 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 Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Note or in any of the related documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower. 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 may 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. Fake Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Note or the related documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter. Insolvency. The dissolution or termination of Borrower's existence as a going business, the insolvency of Borrower, the appointment of a 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 proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any guaranty of the indebtedness evidenced by this Note. In the event of 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. Change In Ownership. Any change in ownership of twenty-five percent (25%) or more of the common stock of Borrower. Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of this Note is impaired. PROMISSORY NOTE Loan No: 227614-03 (Continued) Page 2 Insecurity. Lender in good faith believes Itself insecure. Cure Provisions. If any default, other than a default in payment is curable and if Borrower has not been given a notice of a breach of the same provision of this Note within the preceding twelve 0 2) months, it may be cured if Borrower, 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 end 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 under this Note and all accrued unpaid Interest immediately due, and then Borrower will pay that amount. ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone else to help collect this Note If Borrower does not pay. Borrower will pay Lender 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 vacate any 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 Borrower 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 wid 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. CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Cumberland County, Commonwealth of Pennsylvania. DISHONORED ITEM FEE. Borrower will pay a fee to Lender of 825.00 if Borrower makes a payment on Borrower's loan and the check or preauthorized charge with which Borrower pays is later dishonored. STATUTORY LIEN. Borrower agrees that all loan advances under this Note are secured by all shares and deposits in all joint and individual accounts Borrower has with Lender now and In the future. Borrower authorizes Lender, to the extent permitted by applicable law, to apply the balance in these accounts to pay any amounts due under this Note when Borrower Is In default under this Note. Shares and deposits in an Individual Retirement Account and any other account that would lose special tax treatment under state or federal law If given as security are not subject to the security Interest Borrower has given in Borrower's shares and deposits. COLLATERAL. Borrower acknowledges this Note is secured by the following collateral described In the security Instrument listed herein: inventory, chattel paper, accounts, equipment and general Intangibles described in a Commercial Security Agreement dated June 21, 2007. ARBITRATION. Borrower and Lender agree that sill disputes, claim and controversies between them whether individual, joint, or class in nature, arising from this Note or otherwise, including without limitation contract and tort disputes, shah be arbitrated pursuant to the Rules of the American Arbkratkm Association In effect at the time the claim is Rod, upon request of either party. No act to take or dispose of any collateral securing this Note shall constitute a waiver of this arbitration agreement or be prohibibd by this arbitration agreement. This includes, without Nnatation, obtaining Injunctive relief or a temporary restraining order; Invoking a power of sale under any deed of trust or mortgage; obtaining a writ of attachment or imposhion of a receiver; or exercising any rights relating to personal property, including taking or disposing of such property with or without judicial process pursuant to Article 9 of the Uniform Comn IW Code. Any disputes, claims, or controversies concerning the lawfulness or reasonableness of any act, or exercise of any right, concerning any collateral securing this Note, including any claim to rescind, reform, or otherwise modify any agreement relating to the cogatsrsl securing this Note, shall also be arbitrated, provided however that no arbitrator shad have the right or the power to enjoin or restrain any act of any party. Judgment upon any award rendered by any arbitrator may be entered In any court having jurisdiction. Nothing in this Note shad preclude any party from seeking equitable relief from a court of competent jurisdiction. The statute of lkeitatknns, estoppel, waiver, laches, and similar doctrines which would otherwise be applicable in an action brought by a party shag be applicable in any arbitration proceeding, and the commencement of an arbitration proceeding shag be deemed the commencement of an action for these purposes. The Federal Arbitration Act shag apply to the construction, Interpretation, and enforcement of this arbitration provision. MEMBERSHIP REQUIREMENTS. All borrowers and Guarantors must maintain a membership with the Credit Union in good standing for the life of the loan. SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal representatives, successors and assigns, and shall inure to the benefit of Lender and Its successors and assigns. NOTIFY US OF INACCURATE INFORMATION WE REPORT TO CONSUMER REPORTING AGENCIES. Please notify us If we report any inaccurate information about your account(s) to a consumer reporting agency. Your written notice describing the specific inaccuracy()es) should be sent to us at the following address: Members 1 at Federal Credit Union 5000 Louise Drive Mechanicsburg, PA 17050. GENERAL PROVISIONS. If any part of this Note cannot be enforced, this fact will not affect the rest of the Note. 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 liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time) this loan or release any party or guarantor or collateral; or 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 Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Note are joint and several. If any portion of this Note is for any reason determined to be unenforceable, it will not affect the enforceability of any other provisions of this Note. CONFESSION OF JUDGMENT. BORROWER HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR THE PROTHONOTARY OR CLERK OF ANY COURT IN THE COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE, TO APPEAR AT ANY TIME FOR BORROWER 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 OFTEN PERCENT (10%) OF THE UNPAID PRINCIPAL BALANCE AND ACCRUED INTEREST FOR COLLECTION, BUT IN ANY EVENT NOT LESS THAN FIVE HUNDRED DOLLARS (8500) 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 PROMISSORY NOTE Page 3 Loan No: 227614-03 (Continued) LENDER FULL ALL AMOUNTS WITH ANY SUCH CONFESSION OFJUDGMENT AND TATES THAT EITHER A REPRESENTATIVE OFC A HEARING IN C SPECIFICALLY CALLED THIS OCONFESSION OF PROVISION TO BORROWER'S ATTENTION OR BORROWER HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL. PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE. 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: CARLETON M 10 , By. J`r k (Seal) Ch' R resident of Csds Communications, Inc. LENDER: ME B S 1ST FEDERAL CREDIT UNION X ed S er LAIN M WROW w,. %.===4 e,t. M. M.?.w iNYWn. Mr. OWL =7. M MOM MM"W" - M Ce"m AlII mumm" pe MIM W7 EXHIBIT "C" ,OMMERCIAL GUARANTY 'tH:TxS,' ti£..:;...?iR' :;Hf:3>' . ::3??k:k:. a:.tnY:rxiv:.m..::?•::•::.v:.:.v::::::-::n.... ,... ................... ...._ _ _ References in the shaded area`a*e.for Lender's use ininnly e• d"d es not been limit t tteddue abtoilittext o phis documelimitationsnt o any particular loan or item. Borrower: Carleton Communications, Inc. PO Box 364 Mechanicsburg, PA 17055-0364 Lender: Members let Federal Credit Union ATTN: Small Business Lending 5000 Louise Drive Mechanicsburg, PA 17055 Guarantor: Charles L. Rothstein 40 Avon Lane Staten Island, NY 10314 GUARANTEE OF PAYMENT AND PERFORMANCE. For good and valuable consideration, Guarantor absolutely and unconditionally guarantees full and punctual payment and satisfaction of the Indebtedness of Borrower to Lender, and the performance and discharge of all Borrower's obligations under the Note and the Related Documents. This is a guaranty of payment and performance and not of collection, so Lender can enforce this Guaranty against Guarantor even when Lender has not exhausted Lender's remedies against anyone else obligated to pay the Indebtedness or against any collateral securing the Indebtedness, this Guaranty or any other guaranty of the Indebtedness. Guarantor will make any payments to Lender or Its 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 otherwise perform Borrower's obligations under the Note and Related Documents. INDEBTEDNESS. The word "Indebtedness" 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 interest thereon and all collection costs and legal expenses related thereto permitted by law, attorneys' fees, arising from any and all debts, liabilities and obligations that Borrower individually or collectively or Interchangeably with others, owes or will owe Lender under the Note and Related Documents and any renewals, extensions, modifications, refinancings, consolidations and substitutions of the Note and Related Documents. If Lender presently holds one or more guaranties, or hereafter receives additional guaranties from Guarantor, Lender's rights under all guaranties shall be cumulative. This Guaranty shall not (unless specifically provided below to the contrary) affect or invalidate any such other guaranties. Guarantor's liability will be Guarantor's aggregate liability under the terms of this Guaranty and any such other unterminated guaranties. DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender, or any notice to Guarantor or to Borrower, and will continue in full force until all the Indebtedness shall have been fully and finally paid and satisfied and all of Guarantor's other obligations under this Guaranty shall have been performed in full. Release of any other guarantor or termination of any , other guaranty of the Indebtedness shall not affect the liability of Guarantor under this Guaranty. A revocation Lender receives from any one or more Guarantors shall not affect the liability of any remaining Guarantors under this Guaranty. GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, without notice or demand and without lessening Guarantor's liability under this Guaranty, from time to dine: (A) to make one or more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise to extend additional credit to Borrower; (B) to alter, compromise, renew, extend, accelerate, or otherwise change one or more times the time for payment or other terms of the Indebtedness or any part of the Indebtedness, including increases and decreases of the rate of interest on the Indebtedness; extensions may be repeated and may be for longer than the original loan term; (C) to take and hold security for the payment of this Guaranty or the Indebtedness, and exchange, enforce, waive, subordinate, fail or decide not to perfect, and release any such security, with or without the substitution of new collateral; (D) to release, substitute, agree not to sue, or deal with any one or more of Borrower's sureties, endorsers, or other guarantors on any temps or in any manner Lender may choose; (E) to determine how, when and what application of payments and credits shall be made on the Indebtedness; (F) to apply such security and direct the order or manner of sale thereof, including without limitation, any 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 AND WARRANTIES. Guarantor represents and warrants to Lender that (A) no representations or agreements of any kind have been made to Guarantor which would limit or qualify in any way the terms of this Guaranty, (B) this Guaranty is executed at Borrower's request and not at the request of Lender; (C) Guarantor has full power, right and authority to enter into this Guaranty; (D) the provisions of this Guaranty do not conflict with or result in a default under any agreement or other instrument binding upon Guarantor and do not result in a violation of any law, regulation, court decree or order applicable to Guarantor; (E) Guarantor has not and will not, without the prior written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially all of Guarantor's assets, or any interest therein; (F) upon Lender's request, Guarantor will provide to Lender financial and credit information in form acceptable to Lender, and all such financial information which currently has been, and all future financial Information which will be provided to Lender is and will be true and correct in all material respects and fairly present Guarantor's financial condition as of the dates the financial information is provided; (G) no materiel adverse change has occurred in Guarantor's financial condition since the date of the most recent financial statements provided to Lender and no event has occurred which may materially adversely affect Guarantor's financial condition, (H) no litigation, claim, investigation, administrative proceeding or similar action (including those for unpaid taxes) against Guarantor is pending or threatened; (1) Lender has made no representation to Guarantor as to the creditworthiness of Borrower; and (J) Guarantor has established adequate means of obtaining from Borrower on a continuing basis information regarding Borrower's financial condition. Guarantor agrees to keep adequately informed from such means of any facts, events, or circumstances which might in any way affect Guarantor's risks under this Guaranty, and Guarantor further agrees that Lander shall have no obligation to disclose to Guarantor any information or documents acquired by Lender in the course of its relationship with Borrower. GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives any right to require Lender (A) to continue lending money or to extend other credit to Borrower; (B) to make any presentment, protest, demand, or notice of any kind, including notice of any nonpayment of the Indebtedness or of any nonpayment related to any collateral, or notice of any action or nonaction on the pert of Borrower, Lender, any surety, endorser, or other guarantor in connection with the Indebtedness or In connection with the creation of new or additional loans or obligations; (C) to resort for payment or to proceed directly or at once against any person, including Borrower or any other guarantor; (D) to proceed directly against or exhaust any collateral held by Lender from Borrower, any other guarantor, or any other person; (E) to give notice of the terms, time, and place of any public or private sale of personal property security held by Lender from Borrower or to comply with any other applicable provisions of the Uniform Commercial Code; (F) to pursue any other remedy within Lender's power; or (G) to commit any act or omission of any kind, or at any time, with respect to any matter whatsoever. Guarantor also waives any and all rights or defenses based on suretyship or impairment of collateral including, but not limited to, any rights or defenses arising by reason of (A) any one action" or "anti-deficiency" law or any other law which may prevent Lender from bringing any action, including a claim for deficiency, against Guarantor, before or after Lender's commencement or completion of any foreclosure action, COMMERCIAL GUARANTY (Continued) Page 2 Loan No: 227614-03 either judicially or by exercise of a power of sale; (B) any election of remedies by Lender which destroys or otherwise adversely effects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement, including without limitation, any loss of (C) any disability or other defense of rights Guarantor may suffer by reason of any law limiting, qualifying, or discharging the Indebtedness; Borrower, of any other guarantor, or of any other person, or by reason of the cessation of Borrower's liability from any cause whatsoever, other claim of unj basis the Inde of t (E)s any (D) any roight to ified than payment in full legal tender, the Indebtedness; limitatio s If at any timehany action ores it b ought by Landertaga nst impairment of any collateral for the Indebtedness; ss; applicable statute of limitations; or (F) any defenses Guarantor is commenced, there is outstanding Indebtedness which is not barred by any app given to guarantors at law or in equity other than actual payment and performance of the Indebtedness. If payment is made by Borrower, whether voluntarily or otherwise, or by any third party, on the Indebtedness and thereafter Lender is forced to remit the amount of that payment to Borrower's trustee in bankruptcy or to any similar person under any federal or state bankruptcy law or law for the relief of debtors, the Indebtedness shall be considered unpaid for the purpose of the enforcement of this Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff, counterclaim, counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower, the Guarantor, or both. forth agrees s and warran Guarantor WAIVERS RESPECT nces,f he waivvers ere rea on able and GUARA STA above made th Guaranltor sRfu I klnowl dgei of its significance and consequences and that ,under the circumsteach made not contrary to public policy or law. If any such waiver is determined to be contrary to any applicable law or public policy, such waiver shall effective only to the extent permitted by law or public policy. agrees Indebtedness, that now SUBORDINATION BORROWER'S now haver orthero fter acquireeagainst Borrowerh hether orenottiBor owerrb comes to any claim Eh at G GUARANTOR. created, shall superior Y insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any claim that Lender may now or hereafter have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, by voluntary liquidation, or otherwise, the assets of Borrower applicable to through bankruptcy, by an assignment for the benefit of creditors, the payment of the claims of both Lander and Guarantor shell be paid to Lender and shall be first applied by Lender to the Indebtedness. Guarantor does hereby assign to Lender all claims which it may have or acquire against Borrower or against any assignee or trustee in credit agreements ynofor the purpose of assuring w or hereafter evidencing tany debtsforl obligations payment n l of bankruptcy of thee Indebtedness. If Lender o that such requests, any notes shall be effective legal al tender Borrower to Guarantor shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor and to agrees, exand Lander Is hereby authorized, In the name of Guarantor, from time to time to ecute documents and to take such other actions as L nder deems n cessary or l appropriate to perfect, preserve aind enforce Its rights under this Guaranty. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Guaranty: Amendments. This Guaranty, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Guaranty. No alteration of or amendment to this Guaranty shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Arbitration. Borrower and Guarantor and Lender agree that aw disputes, claims and controversies between them whether Individual, joint, or class in nature, arising from this Guaranty or otherwise, including without limitation contract and tort disputes, shall be arbitrated act to pursuant to the Rules of the American Arbitration Association in effect at the time the ement claim prohibited filed. upon request of alth agparty. eementNo. This take or dispose of any Collateral shall constitute a waiver of this arbitration agro or be by this arbitration r trust includes, without linitodon, obtaining injunctive relief or a temporary restraining order: invok" relating to personal a power of ask punder roperty, IdIncluding taki g mortgage; obtaining a writ of attachment or imposition of a receiver; or exercising any rights or disposing of such property with or without judicial process pursuant to Article 9 of the Uniform Commercial Code. Any disputes, claims, or controversies concerning the lawfulness or reasonableness of any act, or exercise right, of any concern" any CoNsawal. Including bitrated p ovkled however that no any claim to rescind, reform, or otherwise modffy any agreement relating to the Collateral shaill s?ignth be arany award rendered by any arbitrator arbitrator shall have the right or the power to enjoin or restrain any act of any party. udg upon relief from a court may be entered in any court having jurisdiction. Nothing in this Guarnty shall preclude any party from seeking equitable of competent jurisdiction. The statute of IMnkatioms, estoppel, waiver, Inches, and sinAw doctrines which would otherwise be applicable In the construction, pproceeding shall, end an action brought by a party shall be applicable In any arbitration proceeding, and the cornmencoment of an deemed the commencement of an action for these purposes. The Federal Arbitration Act shall apply to enforcement of this arbitration provision. Attorneys' Fees; Expenses. Guarantor agrees to pay upon demand all of Lender's costs and expenses, including Lender's attorneys' fees and Lender's legal expenses, incurred in connection with the enforcement of this Guaranty. Lender may hire or pay someone else to help enforce this Guaranty, and Guarantor shall pay he cost and expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services. Guarantor also shall pay all court cost 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 wilt 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 low provisions. This Guaranty has been accepted by Lender in the Commonwealth of Pennsylvania. Choice of Venue. If there is a lawsuit, Guarantor agrees upon Lender's request to submit to the jurisdiction of the courts of Cumberland County, Commonwealth of Pennsylvania. Integration. Guarantor further agrees that Guarantor has read and fully understands the terms of this Guaranty; Guarantor has had the opportunity to be advised by Guarantor's attorney with respect to this Guaranty; the Guaranty fully reflects Guarantor's intentions and parol evidence is not required to interpret the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmless from all losses, claims, damages, and costs (including Lender's attorneys' fees) suffered or incurred by Lender as a result of any breach by Guarantor of the warranties, representations and agreements of this paragraph. Interpretation. In all cases where there is more then one Borrower or Guarantor, then all words used in this Guaranty in the singular shall be deemed to have been used in the plural where the context and construction so require; and where there is more than one Borrower named in this Guaranty or when this Guaranty is executed by more then one Guarantor, the words "Borrower" and "Guarantor" respectively shall mean all and any one or more of them. The words "Guarantor," "Borrower," and "Lender" include the heirs, successors, COMMERCIAL GUARANTY (Continued) Page 3 Loan No: 227614-03 assigns itself wtransferees of each of them. If a court finds that any ill not mean that the rest f this Guar my will not be valid for enforced. u Therefore, a court o will should enforce not thbe enforced, e rest of the fact by provisions of this Guaranty even if a provision of this Guaranty may be found to be invalid or unenforceable. If any one or more o quire Borrower or Guarantor are corporations, partnerships, limited directors, partners, or si ilar a tities, gentot nece oa purfor porting r to inqu into the powers of Borrower Guarantor or of the officers, ttheir behalf, and any indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed under this Guaranty. Notices. Unless otherwise provided by applicable law, any notice required to be given under his Guaranty shall be given in writing, an hen less oth shall ally rnightcourier,, ,or, if mailed, lwhen deposited Infthe UlnitednStates me 1, as first of ssycertifi d oar r gistered mailh e nationally recognized oe change the party s adde s notice to the other pa, ein specifying ng that the u pose of he may change notice is Its address for notices under postage prepaid, ivinLefdrmal the w addresses this Guaranty by giving 9 o Gua antor is deemed to be notice given to all by For notice purposes, low, If there ?Isrmore than oneoGukeep Lander informed at a Guarantor, any notice given all btimes of y Lander to Guarantor's applicable given Guarantors. unle such w oriany otheran writing No Waer by L EdeLander, r. No delay or omission on the part of Lender In exercising any right shall oapea a as a8waiver ofasuchiver signed ed y right. A waiver by Laner of a of Guaranty om liance with that provisionsor any other provision oflthnot prejudice is Guaranty. No prior waiver by Lendernnor,any course of dealing between attic p Lender and Guarantor, shell constitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whe nervier tC nsent to subsequent instances where such consent Is ® qgranting of such consent by Lender in any instance uired and in all cases such consent may be granted o shall winot thholddsit^tute continuing the sole discretion of Lender. Successors and Assigns. The terms of this Guaranty shall be binding upon Guarantor, and upon Guarantor's heirs, personal representatives, successors, and assigns, and shall be enforceable by Lander and its successors and assigns. Waive Jury. Lender and Guarantor hereby waive the right to any jury trial In any action, proceeding, or counterclaim brought by either Lender or Guarantor against the other. Guaranty in this used when follo all have terms s wor to dollar as and mounts shallhmean mounts Inwing of the Uni ed States of American1eWords ainid terms DEFINITIONS. The cally stated to the contrary all caalized the stated to the ngular, as einithe Uniform Commercial Code:ulra. Words and terms not otherwise may req used in the singular sheli8he'?ave the meanings attributed to such shall terms defined in this Guaranty Borrower. The word "Borrower" means Carleton Communications, Inc. and includes all co-signers and co-makers signing the Note and all their successors and assigns. each " everyone signing this Guaranty, including without limitation Charles L. Rothstein, and in Guarantor. The word Guarantor" means ry case any signer's successors and assigns. Guaranty. The word "Guaranty' means this guaranty from Guarantor to Lender. Indebtedness. The word "Indebtedness" means Borrower's indebtedness to Lander as more particularly described in this Guaranty. Lender. The word "Lender" means Members 1 at Federal Credit Union, its successors and assigns. refinancing inal pnnciplidatamns of of $350,000.00 froom Borrower the Note. The word "Note" means the promissory elonote t of dated June 21, modifications 2007, In to Lender, together with all renewals of, promissory note or agreement. Related Documents. retis, security agreements, mortgages, deeds promissory of trust, security deeds, collateral mortgages, and allsotheri agreements, ins uments, guaranties, agreements and documents, whether now or hereafter existing, executed in connection with the Indebtedness. CONFESSION OF JUDGMENT. GUARANTOR HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR THE PROTHONOTARY OR CLERK OF ANY IN THE OF , OR ELS, TO APPEAR AT ANY AFTER THE AMOUNTOS HE EUND ROBECOME DUE AND WITH ORLWITHIOUT COMPLVAIINT FI ED CONFESS OR ENTERS AND ALL OR GUARANTOR S GUARANTY FOR ACCRUED JUDGMENT AND ANY AND ALL AMOUNTS EXPENDED OR ADVANCED BY LENDER (RELATING TO ANY COLLATERAL S CURING THET CHARGES INDEBTEDNESS, TOGETHER WITH COSTS OF SUIT, AND AN ATTORNEY'S COMMISSION 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 HIS GUARANTY VERIFIED BY AFFIDAVOIT SHALL BEISUFFICIENT WAR ANT. IMMEDIATELY, THE AUTHORITY GRANTED ,IN THIS GUARANTY THIS GUARANTY R A COPY E T TONTIINUE FROM TIME TO TIME AND AT ALL GUARANTOR TIIMES UNTIL PAYMENT AIN FULL OF ALLYAMOUNTS DUE UNDER UTHISRGUAR NTY. AL EXERCISE OF THAT , BUT CO GUARANTOR HEEBY WAIVES ANY RIGHT GUARANTOR MAY HAVE TO NOTICE CONF HIS CONF SS ON OF CONFESSION OFJ UDGMENT AND STATES THAT EITHER A REPRESENTATIVE OF OR ER SPECIFICALLY CALL D TO JUDGMENT PROVISION TO GUARANTOR'S ATTENTION OR GUARANTOR HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL. COMMERCIAL GUARANTY Loan No: 227614-03 (Continued) Page 4 EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED 'DURATION OF GUARANTY". NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED JUNE 21, 2007. THIS GUARANTY IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS GUARANTY IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. GUARANTOR' ISeal) a s L. INDIVIDUAL ACKNOWLEDGMENT COMMONWEALTH OF PENNSYLVANIA (,Ind ) SS COUNTY OF I On this, the a& day of , 20 0 7 , before ms ctorily a ,the undersigned Notary Public, personally appeared Charles L. Rothstein, known to me for satisfa proven) to be the person whose name is subscribed to the within Instrument, and acknowledged that he or she executed the same for the purposes therein contained. In witness whereof, I hereunto set my hand and official seal. wa? COMMONWEALTH OF PENNSYLVANIA VJJ??- Notatiel Seal Notary Public In and for the State of Laura L Hoke, Notary Pubic Upper Alen Twp., Cumberland County My Corr mission Expires Jan. 25, 2011 Member, Pennsylvania Association of Notaries LASS PRO I,MYq. w. L33AGAN Cw. mw wwjM "_ swwv, M. IW7. aw. "NOW MMMA -PA C1%C0VA4WIAUC"dj%AW.7C TROM /N.? Declarant: CChh Avon L. Rol stein Staten Island, NY 10314 Lender: ;MENT Members 1st Federal Credit Union ATTN: Small Business Lending 5000 Louise Drive Mechanicsburg, PA 17055 DISCLOSURE FOR CONFESSION OF JUDGMENT DAY OF 40- , 20 V L_, A GUARANTY OF A PROMISSORY NOTE FOR I AM EXECUTING, THIS ?- J $350,000.00 OBLIGATING ME TO REPAY THAT AMOUNT. A. I UNDERSTAND THAT THE GUARANTY CONTAINS A ON THE GUARANTY, WIT OUT ADVANCE NOTICE TO ME AND WITHOUT O ENTER PROVISION THAT WOULD JUDGMENT AGAINST ME IN COURT, AFTER A DEFAULT ON T GUARANTY BEING OFFERING ME AN OPPORTUNITY TO DEFEND AGAINST THE ENTRY O?TUDH VALIDITY O EgNYINUDGMENT OR O ER CLA MS THAWARE WAIVING THESE OF MY RIGHTS TO ADVANCE NOTICE AND TO A HEARING TO CNrt LENDER MAY ASSERT AGAINST ME UNDER THE GUARANTY, I AM KNOWINGLY, INTELLIGENTLY, AND VOLUNTARILY SLY A SION. UDGMENT PROVN CONSE RIGHTS, INCLUDI G ANY RIGHT TO ADVANCE NOTICE OF THE ENTRY OF AS PROVIDED FOR N,THE CONFES?ON OFGREE AND NT AGAINST ME BY CONFESSION LENDER'S • INITIALS: NETHRIGHT TO ENTER JUDGMENT E GUARANTY ALSO CONTAINS LANGUAGE THAT WOULDNCE B. I FURTHER UNDERSTAND THAT IN ADDITION TO GIVING LENDER NOTICE OR A HEARING, THE CONFESSION OF JUDGMENT PROVISION TO EXECUTE ON THE TS MY PROPERTY, IN LENDER, AFTER ENTRY OF JUDGMENT. AL LEVYING ON. TAKING POSSESSION OF OR OTHERWISE SEIZING L JUDGMENT AT O ADVANCE NOTICE JUDGMENT BY FORECLOSING UPON, OR PARTIAL PAYMENT THE EJUDGMENT. IN EXECUTING NT IS ENTERED AND BEFORE HEXECUTION N HEJ DGMENT, II AM KNOWINGLY, INTELLIGENTLY AND AND A HEARING AFTER JUDGMENT LENDER' EXECUTING VOLUNTARILY W IVING THESE RIGHTS, AND I EXPRESSLY DERAL LNT .AW. WITHOUT GIVINGIME ANY ADVANCE NO ICE. STATE AND FD JUDGMENT 1 NNER PERMITTED BY APPLICABLE INITIALS C. AFTER HA READ AND DETERMINED WHICH OF THE FOLLOWING STATEMENTS ARE APPLICABLE, BY INITIALING EACH STATEMENT THAT APPLIES, I REPRESENT THAT: INITIALS 1. I WAS REPRESENTED BY MY OWN INDEPENDENT LEGAL COUNSEL IN CONNECTION WITH THE GUARANTY. ON OF JUDGMENT PROVISION IN THE GUARANTY 2. A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THE CONFESS TO MY ATTENTION. D. I CERTIFY THAT MY ANNUAL INCOME EXCEEDS $10,000; THAT THE BLANKS IN THIS DISCLOSURE WERE FILLED IN WHEN I INITIALED AND SIGNED IT; AND THAT 1 RECEIVED A COPY AT THE TIME OF 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: (Seal) r L. R n .__.. ?......r •w.fwY /147 DISCLOS 3E FOR CONFESSION OF JU Vw. '.=W C... MrIwA Iilal,hl {,WII,O,. M1t. 1!!7, 1007. N M/In ??' ' ,w .aw..++••- uull na ww Borrower: Carleton Communications. Inc. PO Box 364 Mechanicsburg, PA 17055-0364 DISCLOS,, AE FOR CONFESSION OF JU 3MENT 2N W, References in the Yshaded area are 'for Lender's use-only» ? d?dhes been omitted due tolitext ieniath/imitations. any particular loan or tem. Anv item above containing Declarant: Carleton Communications, Inc. PO Box 364 Mechanicsburg, PA 17055-0364 Lender: Memberi let Federal Credit Union ATTN: Small Business Lending 5000 Louise Drive Mechanicsburg, PA 17055 DISCLOSURE FOR CONFESSION OF JUDGMENT 20 A / ?? DAY OF THE UNDERSIGNED IS EXECUTING 00 O AGATNQ DECLARANTTHIS Y THAT AMOUNT. TO REPA PROMISSORY NOTE FOR $350,000 A. THE UNDERSIGNED UNDERSTANDS THAT THE NOTE CONTAINS A CONFESSION OF JUDGMENT 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 NOTE, 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 TO ENTERING ADVANCE NOTICE OF THE ENTRY OF CJUDGMENT, AND THE UNDERSIGNED EXPRESSLY AGREES AND CONSENTS TO ONFESSION AS PROVIDED OR IN THE CONFESSION OF JUDGMENT PROVISION. JUDGM RANT BY INITIA 0. 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 NOTE 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 OTTH `WISSEIZING E OF DECLARANT'S PROPERTY, IN FULL OR PARTIAL PAYMENT OF THE JUDGMENT. IN EXECUTING THE NOTE, BEING DECLARANT'S RIGHTS TO ADVANCE NOTICE AND A HEARING AFTER JUDGMENT IS ENTERED AND BEFORE EXECUTION ON THE JUDGMENT, THE UNDERSIGNED, ON BEHALF OF THE DECLARANT, IS KNOWINGLY, INTELLIGENTLY AND VOLUNTARILY WAIVING THESE RIGHTS, AND THE UNDERSIGNED EXPRESSLY E STATE AND FEDERAN WSWTO LENDER'S IMMEDIATELY EXECUTING ON THE ITHOUTGNING DECLARANT ANY ADVANCE NOT CE. JUDGMENT IN ANY MA TT BY APB INITIALS: v C. AFTER HAVING READ AND DETERMINED WHICH OF THE FOLLOWING STATEMENTS ARE APPLICABLE, BY INITIALING EACH STATEMENT THAT APPLIES, THE UNDERSIGNED REPRESENTS THAT: INITIALS (452* DECLARANT WAS REPRESENTED BY DECLARANT'S OWN INDEPENDENT LEGAL COUNSEL IN CONNECTION WITH THE OTE. . A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THE CONFESSION OF JUDGMENT PROVISION IN THE NOTE TO DECLARANT'S ATTENTION. THIS DISCLOSURE IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS DISCLOSURE IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. DECLARANT: CARLETO M TIONS, I (Seel) By frees dent of arieton Communic ns, Inc. uses mo L dwq. v«. c.x.oo aw cw.• 11n,wd fl-I s.w+.... w.,• »i. zar. ne ww n..o..a - r? enc01 weeeuuwnrnvmpc MIN" M7 VERIFICATION I, Dan Summers, Collection Manager for Members 1" Federal Credit Union, acknowledge I have the authority to execute this Verification on behalf of Members I" Federal Credit Union and certify that the foregoing Complaint for Confession of Judgment is based upon information which has been gathered by my counsel in the preparation of the lawsuit. The language of this document is that of counsel and not my own. I have read the document and to the extent the Complaint for Confession of Judgment is based upon information which I have given to my counsel, it is true and correct to the best of my knowledge, information and belief. To the extent the content of the Complaint for Confession of Judgment is that of counsel, I have relied upon counsel in making this Verification. This statement and Verification are made subject to the penalties of 18 Pa. C.S. § 4904 relating to unsworn falsification to authorities, which provides that if I knowingly make false averments, I may be subject to criminal penalties. MEMBERS 1ST FEDERAL CREDIT UNION By:?/YV Dan Summers, Collection Manager Christopher E. Rice, Esquire Attorney I.D. No. 90916 Jacob M. Theis, Esquire Attorney I.D. No. 208631 MARTSON DEARDORFF WILLIAMS OTTO GILROY MARTSON LAW OFFICES 10 East High Street Carlisle, PA 17013 (717) 243-3341 Attorneys for Plaintiff & Fa'??.oR 20 A?1 ta? PENNS`?-V?? MEMBERS 1 FEDERAL CREDIT : CUMBERLLAND OF COMMON PENNSYLVANIA UNION, Plaintiff : V. NO. 2010 - S -73 CIVIL TERM CARLETON COMMUNICATIONS, INC., and CHARLES L. ROTHSTEIN, Defendants CERTIFICATE OF RESIDENCE We hereby certify that the last known addresses of the Defendants are: Carleton Communications, Inc. 937 Nixon Drive P.O. Box 364 Mechanicsburg, PA 17055-0364 Charles L. Rothstein 40 Avon Lane Staten Island, NY 10314 The address of Plaintiff is: 5000 Louise Drive, Mechanicsburg, PA 17055 MARTSON LAW OFFICES By: /1-- Christopher E. Rice, Esquire Jacob M. Theis, Esquire Date: `g_ ?p Attorneys for Plaintiff Christopher E. Rice, Esquire Attorney I.D. No. 90916 Y Jacob M. Theis, Esquire ,[NE Qt??, , Attorney I.D. No. 208631 MARTSON DEARDORFF WILLIAMS OTTO GILROY & FA Rak 10% MAR 58 TSON LAW OFFICES 2014 APR 10 East High Street Carlisle, PA 17013 VANS (717) 243-3341 Attorneys for Plaintiff MEMBERS 1ST FEDERAL CREDIT UNION, Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA V. CARLETON COMMUNICATIONS, INC., and CHARLES L. ROTHSTEIN, Defendants :NO. 2010 - s 73 CIVIL TERM AFFIDAVIT AS TO MILITARY SERVICE COMMONWEALTH OF PENNSYLVANIA ) SS. COUNTY OF CUMBERLAND ) Christopher E. Rice, Esquire, being duly sworn according to law, deposes and says that he has authority to make this affidavit on behalf of his client, and to the best of his knowledge, information and belief, the Defendant Charles L. Rothstein is not in the military service of the United States of America, that he has knowledge that Charles L. Rothstein resides at 40 Avon Lane, Staten Island, New York. Affiant believes that Charles L. Rothstein is an officer of Carleton Communications, Inc. Sworn toted subscribed b fore me this 624Vk/ day of , 2010. *NotbliLc Christopher E. Rice, Esquire COMMONWEALTH OF PENNSYLVANIA Notarial Seal Mary M. Price, Notary Public Carl My Commission E)ires Aug. 18,,2011 Member, Pennsylvania Association of Notaries Christopher E. Rice, Esquire Attorney I.D. No. 90916 ?" Jacob M. Theis, Esquire -L F1L •' X " Attorney I.D. No. 208631 ?' "J ?-? Hr MARTSON DEARDORFF WILLIAMS OTTO GILROY & FALLER MARTSON LAW OFFICES 2010 AFR 2? ?? 10; 58 10 East High Street Carlisle, PA 17013 P?i1``lLVAI (717) 243-3341 Attorneys for Plaintiff MEMBERS 1 s' FEDERAL CREDIT : IN THE COURT OF COMMON PLEAS OF UNION, : CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff V. NO. 2010 - 7 3 CIVIL TERM CARLETON COMMUNICATIONS, INC., and CHARLES L. ROTHSTEIN, Defendants AFFIDAVIT I, Christopher E. Rice, Esquire, attorney for Plaintiff, hereby certify, that to the best of my knowledge, that the Confession of Judgment for Money attached is not being entered against a natural person in connection with a consumer credit transaction. Christopher E. Rice, Esquire Sworn to and sub before me this, 2010. COMMONWEALTH OF PENNSYLVANIA Notarial Seal Mary M. Pnce, Notary Public Carlisle Boro, Cumberland County my Commission hires Aug. 18, 2011 Member, Pennsylvania Aasooistlon of Notaries Christopher E. Rice, Esquire Attorney I.D. No. 90916 Jacob M. Theis, Esquire FILED-'w "lI OF THE POTH,??, !C? TARY Attorney I.D. No. 208631 MARTSON DEARDORFF WILLIAMS OTTO GILROY & FALLER 1010 APR 20 AM 10' 58 MARTSON LAW OFFICES 10 East High Street Carlisle, PA 17013 PEPtItiSY1.VANiA (717) 243-3341 Attorneys for Plaintiff MEMBERS 1 IT FEDERAL CREDIT : IN THE COURT OF COMMON PLEAS OF UNION, : CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff : V. : :NO. 2010 - S73 CIVIL TERM CARLETON COMMUNICATIONS, INC., and CHARLES L. ROTHSTEIN, Defendants NOTICES IN CONNECTION WITH JUDGMENTS BY CONFESSION REQUIRED BY 42 PA. C.S.A. §2737.1. (Act 105 of 2000) To: All Defendants PURSUANT TO 42 PA. C.S.A. SECTION 2737.1, IF YOU HAVE BEEN INCORRECTLY IDENTIFIED AND HAD A CONFESSION OR JUDGMENT ENTERED AGAINST YOU, YOU ARE ENTITLED TO COSTS AND REASONABLE ATTORNEY FEES AS DETERMINED BY THE COURT. INSTRUCTIONS REGARDING THE PROCEDURE TO STRIKE THE CONFESSED JUDGMENT ARE SET FORTH BELOW: Pennsylvania Rule of Civil Procedure 2959 - Striking Off Judgment (a) (1) Relief from a judgment by confession shall besought by petition. Except as provided in subparagraph (2), all grounds for relief whether to strike off the judgment or to open it must be asserted in a single petition. The petition may be filed in the county in which the judgment was originally entered, in any county to which the judgment has been transferred or in any other county in which the sheriff has received a writ of execution directed to the sheriff to enforce the judgment. (2) The ground that the waiver of the due process rights of notice and hearing was not voluntary, intelligent and knowing shall be raised only: (i) in support of a further request for a stay of execution where the court has not stayed execution despite the timely filing of a petition for relief from the judgment and the presentation of prima facie evidence of a defense; and (ii) as provided by Pennsylvania Rule of Civil Procedure 2958.3 or Rule 2973.3. (3) If written notice is served upon the petitioner pursuant to Rule 2956.1(c)(2) or Rule 2973.1(c), the petition shall be filed within thirty days after such service. Unless the defendant can demonstrate that there were compelling reasons for the delay, a petition not timely filed shall be denied. (b) If the petition states prima facie grounds for relief the court shall issue a rule to show cause and may grant a stay of proceedings. After being served with a copy of the petition the plaintiff shall file an answer on or before the return of the rule. The return day of the rule shall be fixed by the court by local rule or special order. (c) A party waives all defenses and objections which are not included in the petition or answer. (d) The petition and the rule to show cause and the answer shall be served as provided in Rule 440. (e) The court shall dispose of the rule on petition and answer, and on any testimony, depositions, admissions and other evidence. The court for cause shown may stay proceedings on the petition insofar as it seeks to open the judgment pending disposition of the application to strike off the judgment. If evidence is produced which in a jury trial would require the issues to be submitted to the jury the court shall open the judgment. (f) The lien of the judgment or of any levy or attachment shall be preserved while the proceedings to strike off or open the judgment are pending. (g) (l) A judgment shall not be stricken or opened because of a creditor's failure to provide a debtor with instructions imposed by an existing statute, if any, regarding procedures to follow to strike a judgment or regarding any rights available to an incorrectly identified debtor. (2) Subdivision (g)(1) shall apply to (1) judgments entered prior to the effective date of subdivision (g) which have not been stricken or opened as of the effective date and (2) judgments entered on or after the effective date. r s. ' w You may have other rights available to you other than as set forth in this notice. You should take this paper to your lawyer at once. If you do not have a lawyer, go to or telephone the office set forth below. This office can provide you with information about hiring a lawyer. If you cannot afford to hire a lawyer, this office may be able to provide you with information about agencies that may offer legal services to eligible persons at a reduced fee or no fee. Cumberland County Bar Association 32 South Bedford Street Carlisle, Pennsylvania 17013 Telephone (717) 249-3166