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HomeMy WebLinkAbout01-0929STEVEN L. SUGARMAN & ASSOCZATES BY: St, even L. Sugarman, Esquire IDENTIFICATION NO. #32473 1273 LANCASTER AVENUE BERWYN, PA 19312 (610) 889-0700 FAX: (610) 993-0498 A'I-FORNEY FOR Plaintiff, Manufacturers and Traders Trust Company, d/b/a M&T Bank, Successor by Merger to Keystone Financial Bank, N.A., f/k/a Financial Trust Company MANUFACTURERS AND TRADERS TRUST COMPANY d/b/a M&T BANK, Successor by Merger to KEYSTONE FINANCIAL BANK, N.A., f/k/a F[NANCZAL TRUST COMPANY 601 Dresher Road Horsham, PA 19044 vs. VALLON, 'rNC. 400 South Fourth Street Minneapolis, MN 55415, and MZCHAEL 3. BLAKE 910 Folwell Drive S.W. Rochester, MN 55902, and CHARLES G. SCHEZSS 5200 Dundee Road Edioa, MN 55436, and BRZAN E. DANZZS 301 Chestnut Ridge Drive Mechanicsbur§, PA 17055 Cumberland County Court of Common Pleas Civil Division TERM, No.O,-q ? CONFESSt'ON OF 3UDGMENT FOR MONEY DAMAGES Pursuant to the authority contained in the Promissory Note and the Commercial Guaranties, dated April 23, 1998, true and correct copies of which are attached to the Complaint filed in this action, ! appear for the Defendants and confess judgment in favor of the Plaintiff and against the Defendants, jointly and severally, as follows: Principal outstanding Interest to February 7, 2001 Attorneys' fees @10% TOTAL AMOUNT DUE $12,698.67 $ 49.65 $ 1,274,83 $14,023.15 STEVEN L. SUGARMAN & ASSOCIATES Steven L. Sugarman, Esquire Elliot H. Berton, Esquire 2. Defendant, Vallon, inc. (the "Borrower"), is a corporation which receives mail at 400 South Fourth Street, Suite 300, Minneapolis, Minnesota, 554:[5. 3. Defendant, Michael .1. Blake ("Blake"), is an adult individual who resides at 9:[0 Folwell Drive South West, Rochester, Minnesota, 55902. 4. Defendant, Charles G. Scheiss ("Scheiss"), is an adult individual who resides at 5200 Dundee Road, Edina, Minnesota, 55436. 5. Defendant, Brian E. Danzis ("Danzis"), is an adult individual who resides at 301 Chestnut Ridge Drive, Mechanicsburg, Cumberland County, Pennsylvania, 17055. 6. On April 23, :[998, the Borrower executed a Promissory Note, pursuant to which it received $900,000.00 from the Bank and agreed to repay the same under the terms and conditions set forth therein. A true and correct copy of said Promissory Note is attached hereto as Exhibit "A" incorporated herein and made a part hereof. 7. The Promissory Note provides in pertinent part, the following: BORROWER HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY A'I-rORNEY OR THE PROTHONOTARY OR CLERK OF ANY COURT IN THE COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE, TO APPEAR AT ANY 'I-[NE FOR BORROWER AFTER A DEFAULT UNDER THIS NOTE, AND WlTH OR WlTHOUT COMPLAINT FILED, AS OF ANY TERM, CONFESS OR ENTER .1UDGMENT AGAINST BORROWER FOR THE ENTIRE PP~NCIPAL BALANCE OF THIS NOTE, ALL ACCRUED ]INTEREST, LATE CHARGES AND ANY AND ALL AMOUNTS EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECURING THTS NOTE TOGETHER WlTH INTEREST ON SUCH AMOUNTS TOGETHER WlTH COSTS OF SU1T, AND AN ATI'ORNEY'S COMMISSION OF TEN PERCENT (10%) OF THE UNPAID P~NCIPAL BALANCE AND ACCRUED INTEREST FOR COLLEC'I'~ON, BUT IN ANY EVENT NOT LESS THAN FIVE HUNDRED DOLLARS ($500) ON WHICH JUDGMENT -2- STEVEN L SUGARMAN & ASSOCIATES · 1273 LANCASTER AVENUE · BERWYN, PA 19312 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 ]UDGMENT 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 UNDERTHIS NOTE. BORROWER HEREBYWAIVESANY RIGHT BORROWER MAY HAVE TO NOTICE OR TO A HEARING IN CONNECTION WITH ANY SUCH CONFESSION OF JUDGMENT EXCEPT ANY NOTICE AND/OR HEARING RE(~UIRED UNDER APPLICABLE LAW WITH RESPECT TO EXECUTION OF THE ]UDGMENT, AND STATES THAT EITHER A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THIS CONFESSION OF 3UDGMENT PROVISION TO BORROWER'S A1-FENTION OR BORROWER HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL. 8. In addition, on April 23, 1998, Blake, Scheiss and Danzis (collectively, the"Guarantors'~ each executed a Commercial Guaranty (the"Guaranties'd, which provide, in pertinent part, as follows: GUARANTOR HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY A'I-I'ORNEY OR THE PROTHONOTARY OR CLERK OF ANY COURT IN THE COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE, TO APPEAR AT ANY TIME FOR GUARANTOR AFTER A DEFAULT UNDERTHIS GUARANTY, AND Wl-II-I OR WITHOUT COMPLAINT FILED, AS OF ANY TERM, CONFESS OR ENTER JUDGMENT AGAINST GUARANTOR FOR THE ENTIRE PRINCIPAL BALANCE OF THIS GUARANTY, ALL ACCRUED INTEREST, LATE CHARGES, AND ANY AND ALL AMOUNTS EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECURING THE INDEBTEDNESS TOGETHER WITH INTEREST ON SUCH AMOUNTS, TOGETHER WITH COSTS OF SUIT, AND AN ATTORNEY'S COMMISSION OF TEN PERCENT (10°/o) OF THE UNPAID PRINCIPAL BALANCE -3- STEVEN L. SUGiARMAN & ASSOCIATES · 1273 LANCASTER AVENUE · SERWYN, PA 19312 AND ACCRUED iNTEREST FOR COLLECT[ON, BUT iN ANY EVENT NOT LESS THAN FI~/E HUNDRED DOLLARS ($500) ON WHICH lUDGMENT OR JUDGMENTS ONE OR MORE EXECUTIONS MAY iSSUE iMMEDIATELY; AND FOR SO DOING, THiS GUARANTY OR A COPY OF THiS GUARANTY VERiFiED BY AFFIDAVl-r SHALL BE SUFFiCiENT WARRANT. THE AUTHORITY GRANTED iN THiS GUARANTY TO CONFESS JUDGMENT AGAINST GUARANTOR SHALL NOT BE EXHAUSTED BY ANY EXERCISE OF THAT AUTHORI-rY, BUT SHALL CONTINUE FROM 'lIME TO 'lIME AND AT ALL 'lIMES UNTZL PAYMENT IN FULL OF ALL AMOUNTS DUE UNDER THiS GUARANTY. GUARANTOR HEREBY WAIVES ANY RIGHT GUARANTOR MAY HAVE TO NO'I-iCE OR TO A HEARING iN CONNECT[ON WlTH ANY SUCH CONFESSI'ON OF JUDGMENT, EXCEPT ANY NOTICE AND/OR HEARING REQUIRED UNDER APPLICABLE LAW WITH RESPECT TO EXECUTION OF THE JUDGMENT, AND STATES THAT E1THER A REPRESENTATIVE OF LENDER SPECiFiCALLY CALLED THiS CONFESSION OF JUDGMENT PROViSiON TO GUARANTOR'S ATTEN'I'ION OR GUARANTOR HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL. True and correct copies of said Commercial Guaranties are collectively attached hereto as Exhibit "B", incorporated herein and made a part hereof. 9. Judgment has not been entered on the Promissory Note or the Guaranties in any jurisdiction. 10. The attached Promissory Note and the Guaranties have not been assigned. 11. The Borrower and the Guarantors are in default of their obligations to the Bank pursuant to the Promissory Note and the Guaranties for failing to make payments on demand and when due. -4- STEVEN L. SUGARMAN & ASSOCIATES · 1273 LANCASTER AVENUE · BERWYN, PA 19312 12. As a consequence of the foregoing, Plaintiff prays for judgment against the Defendants as follows: 13. Principal outstanding Interest to February 15, 2001 Attorneys' fees @10% TOTAL AIqOUNT DUE $12,698.67 $ 49.65 $1,274.83 $14,023,15 Such amount is due and owing by virtue of the Defendants' execution of said Promissory Note, the Guaranties, and the underlying consideration therefor. 14. 3udgment is not being entered by confession against a natural person in connection with a consumer credit transaction. WH~:REFOR£, Plaintiff, Manufacturers and Traders Trust Company, d/b/a H&T Bank, Successor by Merger to Keystone Financial Bank, N.A., f/k/a Financial Trust Company, demands that judgment be entered against the Defendants, Vallon, Inc., Michael 3. Blake, Charles G. Scheiss and Brian E. Danzis, jointly and severally, in the amount of $14,023.15, plus interest from the date of judgment at the rate set forth in the Promissory Note, together with costs of this action. STEVEN L. SUGARMAN & ASSOCIATES Steven L. Sugarman, Esquire Elliot H. Berton, Esquire Attorneys for Plaintiff -5- STEVEN L, SUGARMAN & ASSOCIATES · 1273 LANCASTER AVENUE · BERWYN, PA 19312 PROMISSORY NOTE Prln=lp~l I Lo,..-'-I Maturity o4-2,,1.-1HSl. .......... U.__Nr.SE.__.C..,'.__, Borrower: Vallon, Inc. Lender: 400 South Fourth Street, Suite 30o Minneapolis, MN 55415 Principal Amount: $900,000.00 FinanclM Trust Company Middletown Office 120 South Union Streel Middletown, PA 17057 Initial Rate: 9.000% Date of Note: April 23, 199E PROMISE TO PAY. VMIon, Inc. ("Borrower") prumleea to pay to Financial Trust Company ("Lender"), or order, in lawful money of the Unlte~ States of Anterlca, on demand, the principal amount of Nine Hundred Thousand & 00/100 Dollars (Se00,000.00) or ~o much aa may b~ outstanding, together with Interest on the unpaid outstanding principal balance of each advance. Internat shall be calculated from the date o' each advance until repayment of each advance. PAYMENT. Borrower will pay this loan Immediately upon Lender's demand. In addlllon, Borrower will pay regular monthly payments of al accrued unpaid Interest due as of each payment date, beginning May 23, 1990, with all subsequent Interest payments Io be due on the same day of each month after that. The annual interest rate for this Note is computed on a 365/360 basis; that is, by applying the ratio of the annual interaa rate over a year ot 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance outalanding. Borrower witi pay Lender st Lender's address shown above or at such other place as Lender may designate in writing. Unless olherwis; agreed or mquimd by applicable law, payments will be apptlad first to accrued unpaid interest, then to principal, and any remaining amount to unpaid collection costa and late charges. .VARIABLE INTEREST RATE. The Interest rate on this Note is subject lo change from time to time based on changes in an index which is LendeCs Prime Rata (the "Index"). This is the rate Lender chergos, or would charge, on 90-day unsecured leans to the most cmdltworthy coq)orate customers This rote may or may not be the lowest rate available from Lender st any given time. Lender will tell Borrower the current Index rata upon Borrower's request. Borrower understenda that Lender may make loans based on other rates as well. The interest rate change will not occur more often tha~ each DAY. The Index currently Is 8.500% per annum, Tho Interest rate to be applied to the unpaid principal balance of this Note will be at rate of 0,500 percentage polnte over the Index, resulting In an Initial rate of 9.000% par annum. NOTICE: Under no cimumstancas will the interest rote on this Note be more than the maximum rote allowed by applicable law. PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed eadier than it is due. Eady payments will not, unless agreed by Lender In wdting, relieve Borrower of Borrower's obligation to continue to make payments of accrued unpaid interest. Rather, Ihey witl reduce the principal balance due. LATE CHARGE. If a regularly scheduled interest payment is 15 days or more late, Borrower will be charged 5.000% of the regularly scheduled payment. If Lender demands payment of this loan, and Borrower does not pay the loan within 15 days after Lender's demand, Borrower also will be charged 5.000% of the sum of the unpaid principal plus accrued unpaid Interest. DEFAULT. Borrower will be in default if any of the following happens: (a) Borrower fails to make any payment when due. (b) Borrower breaks any promise Borrower has mede to Lender, or Borrower fails to comply with or to perform when due any other term, obligation, covenant, or condition contained in this Note or any agreement related to this Note, or in shy other agreement or loan Borrower has with Lender. (c) Borrower defaults under any loan, extension of credit, secudty agreement, pumhese 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 pedorm Borrower's obligations under this Note or any of the Related Documents. (d) Any representation or statement made or furnished to Lender by Borrower Or on Borrower's behalf is false or mislaeding in any matedal respect either now or at the time made or furnished. (e) Borrower becomes insolvent, a receiver is appointad for any part of Borrower's properly, Borrower makes an assignment for the benefit of creditors, or any proceeding is commenced either by Borrower or agalnsi Borrower under any bankruptcy or insolvency laws. (f) Any creditor tries In take any of Borrower's property on or in which Lender has a lien or sscudfy interest. This includes a garnishment of any of Borrower's accounts with Lender. (g) Any guarantor dies or any of the other events described in this default section occurs with respect to any guarantor of this Note. (h) A metedal adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or ped'ormanoa of the Indebtedness is impaired. (i) Lender in good faith deems itself insecure. LENDER'S RIGHTS. Upon default, Lender may, after giving such notices as required by applloable law, deniers the entire unpaid principal balance on this Note and all accrued unpaid interest immediately due, and then Borrower will pay that amount. Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower also will pay Lender that amount. This includes, subject to any limits under applicable law, Lender's afforneys' fees and Lender's legal expenses whether or not then 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 cotiection ser~cas. If not prohibited by applicable law, Borrower also will pay any court costa, in addition to all other sums provided by law. If judgment is entered in connection with this Note, interest will continue to accrue on this Note after judgment at the interest rate appticable to this Note at the time judgment is entered. This Note has been delivered to Lender and accepted by Lender In the Commonwealth of Pennaylventa. If there Is a lawsuit, Borrower agrees upon Lender's request to submit to the Jurisdiction of the courts of Dauphin County, the Commonwealth of Pennsylvania. This Note shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania. RIGHT OF SE'TOFF. Borrower grants to Lender a contractual possesscry security interest in, and hereby assigns, conveys, delivers, pledges, and transfers to Lender all Borrower's dghl, title and interest in and to, Borrower's accounts with Lender (whether checking, sav~ngs, or some other account), including without limitation all accounts held jointly with someone else and all accounts Borrower may open In the futura, excluding however all IRA and Keogh accounts, and all trust accounts for which the grant of a secudly interest would be prohibited by law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on this Note against any and all such accounts. LINE OF CREDIT. This Nolo evidences a revolving line of credit. Advances under this Nots may be requested orally by Borrower or by an authorized person. Lender may, but need not, require that all oral requests be confirmed Jn writing. Ail communications, instructions, or directions by telephone or otherwise to Lender are to be directed to Lender's office shown above. The following party or parties are authorized to request advances under the line of credit until Lender receives Irom Borrower al Lender's address shown above written notice of revocation ol their authority: Alan C. Discount, President; Scott T. Richardson, Chief Flnanclsi Officer; and Mlchecl J. Blake, Chairman of the Board. Borrower agrees to be liable for ell sums either: (a) advanced in accordance with the instructions of an authorized person or (b) credited to any of Borrower's accounts wilh Lender. The unpaid principal balance owing on this Note st any time may be evidenced by endorsements on this Note or by Lender's internal records, including daily computer print-outs. Lender will have no obligation to advance funds under this Note if: (e) Borrower or any gueranlor is in default under the terms of Ibis Note or any agreement that Borrower or any guarantor has with Lender, including any egraemenl made in connection with Ihs signing of this Note; (b) Borrower Or any guarantor ceases doing business or is insolvent; (c) any gueranlcr seeks, claims or otherwise altempls to limit, modify or revoke such guarantor's guarantee of this Note or any other loan with Lender; (d) Borrower has applied funds provided pursuant In this Note for purposes other than Ihose authorized by Lender; or (e) Lender in good faith deems itself insecure under this Nots or any other agraemenl belween 04-~3-199~ - '~ PROMISSORY NOTE Page ' (ConUnued) ~ L~nde~ ~nd NI s~h p~ ~ ~ ~t ~ ~y m~ thb I~n ~hout t~ count of ~ ~ Io ~WO~ ot~ ~n ~ ~ ~h whom t~ m~or Nole. ~NDED ~ ~V~D BY ~NDER ~NG TO ~ C~ ~C~ING ~1~ N~ T~ W~ I~RE~ ON SUCF J~GME~ ~ J~E~ ~ ~ M~E ~C~ONS ~Y ISSUE IMMED~LY; ~ F~ ~ D~, ~IS N~ ~ A CO~ OF ~1~ ~ ~RIFIED BY ~DA~ S~ BE SU~I~E~ W~. ~ A~ G~D IN ~IS N~ TO ~FESS dUDGME~ A~N~ B~R ~ ~ BE ~U~D BY ~ ~RCI~ ~ ~T k~, B~ ~ ~N~ ~OM ~ME TO ~ME ANC AT ~L ~MES U~L PA~E~ IN ~ ~ ~ ~ DUE UNDER ~1~ N~. B~ ~Y W~ ~ ~G~ B~O~F H~IN6 ~1~ U~ ~ ~W W~ ~ TO ~C~ON ~ ~ J~ME~, ~ ~A~S ~T E~ER ~ B~RO~ ~ BEEN ~~ BY I~E~E~ ~ C~N~. PRIOR TO ~IGNING ~IS ~, ~0~ R~ ~D ~D~ ~ ~ PRO~SIONS OF THIS NO~, IN~ING ~ V~I~E IHi~EST ~ ~1~8. ~RO~ AGRa8 TO ~ ~MS OF ~ ~TE ~D A~NO~6ES RECEI~ OF A COM~=i=C COPY OF ~E NO~. THIS NOTE HAS BEEN SIGNB) .VID SEALED BY THE UNDERSIGNED. BORROWER: COMMERCIAL GUARANT. E I lne pal ' t I.o,,en Date .,,Maturity,. J · · I . t .. · t · I,, ReMm~ ~n the shaded area are f~ Lender's u~ 0nly and do not limit the sppl~0ill~ of this d~umenl Io any p~UMr I~n ~ item. Borrower: Vallon, Inc. Lender: 400 South Fourth Street, Suite 300 Mlnnaapolte, MN 55415 Guarantor: Mlcheat J. BIm~e 4614 Edlna Boulevard Edlna, MN S~424 Flnasctel Truat Company Mlddtefuwn Office 120 South Union Street Mlddtefuwn, PA 17057 AMOUNT OF GUARANTY. This Is a guaranty of payment of the Note, Including without limitation the principal Note amount of Nine Hundre Thousand & 00/100 Dollars ($900,000.00). GUARANTY. For good and valuable consideration, Mlcbeal J. Blake ("Guarantor") absolutely and uncondJttonatty guarantees and promises pay to Financial Trust Company ("Lender") or Its order, on demand, In legal tender of the United States of America, the Indebtedness (as tfu term Is defined below) of Vatlon, Inc. ("Borrower") to Lender on the terms and conditions sst forth In thte Guaranty. DEFINITIONS. The following words shall heva the following meanings when used In this Guaranty: Sorrower. T~e word '~orrowar' means Vallon, Inc.. Guarantor. The word 'Guaranlor" means MIchsal J. Blake. Guaranty. The word "Guaranty" means this Guaranty mede by Guarantor for the benefit of Lender dated April 23, 1998. Indebtedness. The word "Indebtedness" means tim Note, including (al all principal, (b) s# Interest, (c) all late charges, (d) ell loan fees loan chargas, and (el ell collection costs and expenses relating to the Note or to any collateral for the Note. Collection costs and expense include without limitation all of Lender's attorneys' fees and Lender's legal expenses, whether or not suit is instituted, and attorneys' fees and isg; expenses for bankruptcy proceedings (including effods to modify or vacate any automatic stay or injunction), appeals, and any anticipste~ post-judgment collection services. Lender. The word "Lender" moans Financial Trust Company, its successors and assigns. Note. The word "Note" means the promissory note or credit agreement dated April 23, 1998, In the original prlnclpat amount of $900,000.0~ from Sorrower to Lender, togelher with all renewals of, extensions of, modifications of, reflnenclngs et, consolidations of, and substitutions for th~ promissory note or agreement. Nottce to Guarantor: The Note evidences a revolving line of credit from Lender to Borrower. Related Documents. The words "Related Documents" mean and include without limitstion all promissory notes, credit agreements, agreements, environmental agreements, guaranties, secudty agreements, modgagea, deeds of b'ust, and ell other instruments, agreements an( documents, whether now or hereafter e~dsting, executed in connection with the Indebtedness. MAXIMUM LIABILITY. The maximum liability of Guarantor under thte Guaranty Mlall not exceed at any one ttme the amount of th; Indebtedness described above, plus all coats and expenses of (al enforcement of this Guaranty and (b) collection and sale of any collators sscurlng this Guaranty. The above limitation on liability is not a restriction on the amount of the Indebtedness of Borrower to Lender either in the aggregate or at any one time If Lender presently holds one or more guaranties, or hereafter receives additional guarsn~es from Guarantor, the rights of Lender under all guarantie,' shall be cumulative. This Guaranty shall not (unless specifically provided below to the contrary) affect or invalidate any such other guaranties. Th; liability of Guarantor will be the aggregate liability of Guarantor under the terms of this Guaranty and any such other unterminated guaranties. NATURE OF GUARANTY. Guarantor intends to guarantee at all times the performance and prompt payment when due, whether at maturity or eariie~ by reason of acceleration or otherwise, of all Indebtedness within the limits set forth in the preceding section of this Guaranty. This Guaranty covers revolving line of credit and guarantor understands and agrees that thte guarantee Mlatl be open and continuous until the line of credll terminated and the Indebtedness Is paid In full, as provided below. DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lander, or any notice to Guarantor or to Borrower, and will continue in tull force until all Indebtedness shall have been fully and finally paid and satisfied and all olhe~ obligations of Guarantor under this Guaranty shell have bean performed in full. Release of any other guarantor or termination of any other guaranty ol the Indebtedness shall not affect the liability of Guarantor under this Guaranty. A revocation received by Lender from any one or more Guarantors shei not affect the liability of any remaining Guarantors under this Guaranty. Thte Guaranty covers a revolving line of credtt and It Is specifically anticipated that fluctuations will occur in the aggregate amounl of Indebtedness owing from Borrower to Lender. Guarantor specifically acknowledges and agrees that fluctuations In the amount of Indebtedness, even to zero dollars ($ 0.00), shall not constitute a termlnatten el tbte Guaranty. Guarantor's liability under this Guaranty shall terminate only upon (al termlnetlon In wrttlng by Borrower and Lender of the lies of credit, (b) payment of the Indebtedness In full In legal tender, and (c) payment In full in legal tender of all other obligations of Guarantor 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 time: (al to make one or more additional secured or unsecured loans to Borrower, fo lease equipment or other goods to Sorrower, or otherwise to ex'tend additional credtt to Borrower; (b) to alter, compromise, renew, extend, accelerate, or otherwise change one or more tress 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; extenNons may be repeated and may be for longer than Ihs original loan term; (c) lo take and hold security for Ihs payment of this Guaranty or the Indebtedness, and exchange, enforce, waive, subordinate, fall or decide not to perfect, and release any such security, with or wllhout the substitution of new collateral; (d) to release, · ubatltute, agree not to sue, or deal wtth any one or more of Borrower's sureties, endorsers, or other guarantors on any terms or In any manner Lender may choose; (el to detarmlne how, when and what application of payments and credits shall be made on the Indel3tedneeS; (fl to apply soch sacurily and direct the order or manner of sale thereof, Including wtthout limitation, any nonjudicial sale permitted by the terms of the controlling eecurlty agreement or deed of trust, aa Lender In Its discretion may determine; (gl to sell, transfer, assign, or grant participations In all or any part of the Indebtedness; and (h) to assign or transfer Ibis Guaranty In whole or In part. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warranls to Lender thai a) no representalions 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 a Borrower's request and not at the request of Lender; (c) Guarantor has tull power, right and authority to enter into this Guaranty; (d) Ihs provisions of ,o4.-2:3-.199e ~ COMMERCIAL GUARANTY ~ Page (Continued) this Guaranty do nct conflict with or result In a default under any egreamect er other Instrument binding upon Guarenter and do not result in a vtotatic of any law, regulation, court decree or order epplioabta to Guarantor; (s) Guarantor has not and will not, without the prior written consent of Lends sell, lease, assign, encumber, hYl~olheoata, transl,', er cthen~vlse dispose of all or substantially all of Guarenter's assets, or any interest therein; (f) ups Lender's request, Guarantor will provide to Lender financial end credit Inlormetion In form ecoa;labia to Lender, and all such financial informatio which currently has been, end all future tiuanclal information which will be provided to Lender is and will bo flue and con'ect in all material respects an taidy present the financial condition of Guarantor as of the dates the financial information Is provided; (g) no material adverse change has occurred i Guarantor's tinenclal condition since the date of the mosl recent financial statements provided to Lender end no event has occurred which ma materially adversely affect Guarantor's tinencial condition; (h) no litigation, claim, investigation, administrative proceeding or similar action (includin those for unpaid taxes) against Guaranlor is pending or threstsned; (i) Lender has made no representation to Guarantor as to the creditwodhiness Borrower; and (J) Guarantor has established adaquata means of obtaining from Borrower on a continuing basis information regarding Borrower~ financial condition. Guarantor agrees to keep adequately informed from such means of any facts, events, er circumstances which might in any wa affect Guerentor's risks under this Guaranty, and Guarantor further agrees that Lender shall have no obligation to disclose fe Guarantor any 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 la) to continue lending money or t extend cthor cmdti to Borrower; lb) to make any presentment, protest, demand, or notice of any kind, including notice of any nonpayment of th Indebtedness or of any nonpayment related to any collateral, or notice of any action or nonaction on the pert of Borrower, Lender, any surety, endo~e~ or other guarantor in connection with the Indebtedness or in connection with the creation of new or additional loans or obligations; lc) to resod f¢ payment or to proceed directty or at once against any person, including Borrower or any other guarantor;, (d) to proceed directly against or exhaust an coilataral 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 private sale of personal pro~uarty security held by Lender from Bo~Tower 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 ecl or omission of any kind, or et any time, with respect to an melter whatsoever. If now or herealter la} Borrower shall be or become Insok, ent, and lb) the Indebtedness shati not al all times until paid be fully secured by cotietar~ pledged by Borrower, Guarantor hereby ferever waives and rallnquishes In favor of Lender end Borrower, and their respective successors, any claim right to payment Guarantor may now have or hereafter have or acquire against Borrower, by subrogation er otherwise, so that at no time she Guarantor be er become a 'creditor" of Borrower within the meaning of 11 U.S.C. section 547(b), or any successor provision of the Federal bankruptc Guarantor also waives any and all rights or defenses arising by reason of la) any "one action" er "anti--deficiency' law or any other taw which me' prevent Lender from bringing any action, iocludlng a claim for deficiency, against Guaranter, befere or alter Lender's commencement or completion any foreclosure action, either judicially or by exercise of a power of sale; lb) any election of remedies by Lender which destroys or otherwise adverselI affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement, including without limitation, any loss rights Guarantor may suffer by reason of any law limiting, quati~ng, or discharging the Indebtedness; lc) any disability or other defense of Borrower, c any other guarantor, or of any other person, er by reason of the cessation of Borrower's liability/rom any cause whatsoever, other then payment in in legal tender, of the Indebtedness; (d) any, right to claim discharge of the Indebtadness on the basis of unjustified impairment Of any collateral J'or th~ Indebtedness; (e) any statute of limitations, if al any time any action or suit brought by Lender against Guaractor is commenced there is outstandir~ Indebtedness of Borrower lo Lender which is not barred by any applicable statute of limitations; or (f) any defenses given to guaractors et taw or equity other than actual payment end perlorroance of the Indebtedness. If payment is made by Borrower, whether voluntarily or otha~vlse, or by an! 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 an! 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 o Guarantor fudher waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim o setoff, counterclaim, counter demand, recoupment or similar right, whether such claim, demand or fight may be asserted by the Borrower, th; GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above is mede with Guarantor's full knowledge of its significance and consequences and that, under the circumstances, the waivers are reasonable and not contrary tc public policy er law. If any such waiver is determined to be contrary to any applicable law or public policy, such waiver shall be effective only to the extent permitted by law or public policy. LENDER'S RIGHT OF SETOFF. In addition tO all liens upon and rights of setoff against the moneys, securities or other properly of Guarantor given Lender by law, Lender shall have, with respect to Guarantor's obligations to Lender under this Guaranty and to the extent permiffed by law, contractual possessory security interest in and a right of setoff against, and Guarantor hereby assigns, conveys, delivers, pledges, and transfers tc Lender all of Guarantor's right, title and interest in and to, all deposits, moneys, securities end other properly of Guarantor now or hereafter in the possession of or on deposit with Lender, whether held In · general or special accounl or deposit, whether held jointly wlth someone else, or whelhe~ half for safekeeping or otherwise, excluding however all IRA, Keogh, and trust accounts. Every such security interest and right of setoff may bE exercised without demand upon or notice to Guarantor. No security interest or right of seloff shall be deemed to have been waived by any act o~ conduct on the part of Lender or by any neglect fu exemise such right of seloff or to enforce such security interest or by any delay in so doing. Ever~ right of setolt and security interest shall continue in full force and effect until such right of setoff or security interest is specifioaily waived or released SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness of Borrower to Lender, whether now through bankruptcy, by an assignment for the benefit of creditors, by voluntary liquidation, or otherwise, the assets of Borrower applicable to the payment of the claims 0! both Lender and Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness of Borrower ic Guaranty. ~04-23-1998 ~ COMMERCIAL GUARANTY (Continued) Page Appllcabta Law. This Guaranty has been dellverod to Lender and accepted by Lender in the Commonwealth of Pennsylvania. If thoro is lawsuit, Guarantor agrees upon Lender's request to submit to the jurisdiction of the courts of Dauphin County, Commonwealth of Pennsyiv~nis This Guaranty shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania. Attorneys' Fees; F. xpen~ea. Guarantor agrees to pay upon demand ell ct Lender's costs and expenses, Including attorneys' fees and Lende~ legal expenses, incurred in connection with the enforcement of this Guaronty. Lender may pay someone else to help enforce this Guaranty, Guarantor shall pay the costs end expenses of such enforcement. Costs end expenses include Lender's eflornays' fees and legal expense~ whether or not there is a lawsuit, including effornays' fees and legal expenses for bankruptcy proceedings (end including effods to modify o vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services. Guarontor also shell pay ell court cosh end such additional fees as may be directed by the courL Notlnea. All notices required to be given by alther pady to the other under this Guaranty shall be in writing, may be sent by teietscsimile (unles~ othe~vise required by law), and shall be effective when actually delivered or when deposited with a nationally recognized overnight couder, o when deposited In tho United States mail, first class postage prepaid, addressed to the par-fy to whom the notice is to be given at the eddros= shown above or to such other addresses as either pefly may designsta to the other In wdiing. If there is more then one Guarantor notice to en~ Guarantor will constitute not~'e to all Guarontem. For notice purposes, Guarantor agrees to keep Lender informed et all times of Guarantor' current address. Interpretation. In all cases where there is more then one Borrower or Guarantor, then all words used in this Guaranty in the singular shell b* deemed to have been used in the plural where the context end construction so require; end where thoro is more then one Borrower named in th~ Guaranty or when this Guaranty is executed by more then one Guarantor, the words '~orrower~ and "Guarontor" respectively shell mean all any one or more of them. The words "Guarantor,' "~orrower," and "Lender" include the heirs, successom, assigns, and transferees of each o them. Ca~tion headings in this Guaranty era for convenience purposes only and are not to be used to Interpret or define the provisions of thL, Guaranty. If · court of competent jurisdiction finds any provision of this Guaranty to be invalid or unenforceable as to any parson or circumstance such finding shall not render that provision invalid or unenforceable es Io any othm persons or circumstances, and all provieions of this Guarent~ In all other respects shall tomato v~lld and enforceable. If any one or mom of Bonower or Guarantor are corporations or partnerships, it is no necessary for Lender to inquire into the powers of Bonower or Guarantor or of the officers, direofors, partners, or agents acting or purporting to ec on their behalf, and any Indebtedness made or oreated in reliance upon the professed exercffae of such powers shall be guaranteed under thh Guaranty. Wa/var. Lender shall not be deemed to have waived any rights under this Guaranty unless such waiver is given in writing and signed by Lender NO delay or omission on the part of Lender In exercising any itght shell operate as e waiver of such right or any other right. A waiver by Lender o a provision of this Guaranty shall not prejudice or constitute a waiver of Lender's right othemase to demand strict compliance with that provision any uther provision of this Guaranty. No prior waiver by Lender, nor any course of dealing between Lender and Guarantor, shall constitute waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions, whenever the consent of Lender is requiroc under this Guaranty, the granting of such consent by Lender in any instance shell not constitute continuing consent to subsequent Instsnce~ where such consent is required and in all cases such c, onsent may be granted or withheld in the sole discretion of Lender. CONFESSION OF JUDGMENT. GUARANTOR HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY A'ITORNEY OR THE PROTHONOTARY OR CLERK OF ANY COURT iN THE COMMONWEN.TH OF PENNSYLVANIA, OR ELSEWHERE, TO APPEAR AT ANY TIME FO~ GUARANTOR AFTER A DEFAULT UNDER THIS GUARANTY, AND WITH OR WITHOUT COMPLAINT FILED, AS OF ANY TERM, CONFESS ENTER JUDGMENT AGAINST GUARANTOR FOR THE ENTIRE PRINCIPAL BALANCE OF THIS GUARANTY, ALL ACCRUED INTEREST, LATE CHARGES, AND ANY AND ALL AMOUNTS EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECURING THE INDEBTEDNESS TOGETHER WITH INTEREST ON SUCH AMOUNTS, 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 THA~ FIVE HUNDRED DOLLARS ($500) ON WHICH JUDGMENT OR JUDGMENTS ONE OR MORE EXECUTIONS MAY ISSUE IMMEDIATELY; AND FOF SO DOING, THIS GUARANTY OR A COPY OF THIS GUARANTY VERIFIED BY AFFIDAVIT SHALL BE SUFFICIENT WARRANT. THE AUTHORITY GRANTED iN THIS GUARANTY TO CONFESS JUDGMENT AGAINST GUARANTOR SHALL NOT BE EXHAUSTED BY ANY EXERCISE OF THA'r AUTHORITY, BUT SHALL CONTINUE FROM TIME TO TIME AND AT ALL TIMES UNTIL PAYMENT IN FULL OF ALL AMOUNTS DUE UNDER THIS GUARANTY. GUARANTOR HEREBY WAIVES ANY RIGHT GUARANTOR MAY HAVE TO NOTICE OR TO A HEARING IN CONNECTION WITH AN~ SUCH CONFESSION OF JUDGMENT, EXCEPT ANY NOTICE AND/OR HEARING REQUIRED UNDER APPLICABLE LAW WFI'H RESPECT TC EXECUTION OF THE JUDGMENT, AND STATES THAT EITHER A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THIS CONFESSION OF JUDGMENT PROVISION TO GUARANTOR'S A'I I ENTION OR GUARANTOR HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL. EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION ANr~ 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 APRIL 23, 1998. THIS GUARANTY HAS BEEN SIGNED AND SEALED BY THE UNDERSIGNED. x Mlc'ah~ll J. Blake LASER PRO, Rag, U.S. Pal, & T,M. Ofl., var, 3.24c~ (c) 1996 CFI ProSarvices, Inc. All rights reser~e{~. [PA-E 20 E3.24 F3,24 P3.24 VALLON.LN C2. OVL] M MERCIAL, GUARANTY [l~_._l~t¢lpal ' Loan Date i Maturity s Loan No i Call ! Collateral [ A~.,~unt ! Offi;~r ! Inltl,,la ' ........ i · ..'COMM i UNSEC . 28S2~1 iTL84 : I R 'u'e-::es .... ."es 'c'-"''.': '" ..... ; =.', ' =,, ,,." ?'. ......... ----_ Borrower: vallon, Inc. Lender: 400 South Fourth Street, Suite 300 Minneapolis, MN 55415 Financial Trust Company Mlddtatown Office 120 South Union Street Middletown, PA 17057 Guarantor: Brian E. Danzie 301 Chestnut Ridge Drive MechenlcM)urg, PA 17065 AMOUNT OF GUARANTY. This Is a guaranty of payment of the Nolo, Incfudlng without limitation the principal Note amount of Nine Hundred Thousand & 00/100 Dollars ($900,0oo.00). GUARANTY. For good and valuable conalderafion, Brian E. Danzie ("Guarantor") absolutely and unconditionally guarantees and promises to pay to Financial Trust Company ("Lender") or Its order, on demand, In legal tender of the United States of America, the Indebtedness (ss that term la defined below) of Voiles, Inc. ("Borrower") Io Lender on the terms and conditions sat forth In Ihla Guaranty. DEFINITIONS. The following w~rds shati have the following meanings when used in this Guaranty: Borrower. The word ~orrower' means Vallon, Inc.. Guarantor. The word "Guarantor" means Brian E. Dan:is. Guaranty. The word "Guaranty" means this Guaranty made by Guarantor for the benefit of Lender dated April 23, 1998. Indebtedness. The word "lndeblodcess" means the Note, including (a) all pdnolpal, (bi all interest, (c) all late oherges, (d) all loan fees end loan charges, and (e) all collection costs end expenses relating to the Note or to any collateral for the Note. Collection costs and expenses inolude without limitation all of Lender's attorneys' fees end Lender's legal expenses, whether or not suit is instituted, end attorneys' fees and legal expenses for bankruptcy proceedings (including eflorts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services. Lender. The word 'Lender" means Financial Trust Company, its successors and assigns. Note. The word "Note" means the promissory note or oredit agreement dated Apdl 23, 1998, In the orlglnol prloclpal amount of $900,000.00 from Borrower to Lender, together with all renewals of, extensions of, modifications of, reflnenolngs of, consolidations of, end substitutions for the promissor~ note or agreement. Notice to Guarantor: The Note evidences · revolving line of credit from Lender to Borrower. Related Documents. The words "Related Documents" mean and include without limitation all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, secudty agreements, mortgages, deeds of trust, and alt other instruments, agreements and documents, whethe~ now or hereafter exJsfing, executed in connection with the Indebtedness. MAXIMUM LIABILITY. The maximum liability of Guarantor under this Guaranty shall not exceed at any one time the amount of the Indebtedness described above, plus all costs and expenses of (a) entorcement of this Guaranty and (bi collection and sale of any collateral securing Ihls Guaranty. The above limitation on liability is not a restriction on the amount of the Indebtedness of Sorrower to Lender either in the aggregate or at any one time. If Lender presently holds one or more guaranties, or hereafter receives additional guaranties from Goarentor, the dghts of Lender under all guaranties shell be cumulative. This Goaranly shall not (unless specifioally provided below to the contrary) affect or invalidate any such other guaranties. The liability of Guarantor will be the aggregate liability of Guarantor under the terms of this Goaranly and any such other untormlnetad guaranties. NATURE OF GUARANTY. Guarantor intends to guaranlce st all times the performance and prompt payment when due, whether at maludty or ashier by reason of scoaleration or otherwise, of all Indebtedness within the limits set fodh in the preceding section of this Guaranty. This Guaranty covers s revolving line of credit and guarantor understands and agrees that this guarantee shall be open and continuous until the line of credit la terminated end the Indebtedness la paid In full, aa provided below. DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the nec6ssJfy of any acceptance by Lender, or any notice to Guarantor or to Sorrower, and will continue in full force until all Indebtedness shall have bean fully and finally paid end satisfied end ali other obligations of Guarantor under this Guaranty shall have bean 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 received by Lender from any one or more Guaranto~s shall not affect the liability of any remaining Guarantors under this Guarani'/. This Guaranty covers e revolving line of oredlt and II Is specifically anficlpeted that fluctuations will occur In the aggregate amount of Indel~tedneea owing from Borrower to Lender. Guarantor spaclflcally acknowledges and agrees thai fluotuafions In the amount of Indebtedness, even to zero dollars ($ 0.00), shall not constitute s termination of thta Guaranty. Guarantor's liability under this Guaranty shall terminate only upon (a) termination in writing by Sorrower end Lender of the tics of credit, (bi payment of the Indebtedness In full In legal tender, end (c) payment In full In legal tender of all other obligations of Guarantor under this Guaranty. GUARANTOR'S AUTHORIZATION TO LENDER. Goaranlor aulhorizes Lender, wlthoul notice or demand end without lessening Guarantor's liability under this Guaranty. from time to fame: (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; (bi 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 et the Indebtedness, Including Increases and decreases of the rate of Inlereet on the Indebtedces~; extensions may be repeated end may be for longer then the original loan term; (c) to ta~e and hold eacurlty for the payment of this Guaranty or Ihs Indebtedness, end exchange, enforce, waive, · ubordlnsle, fall or decide not to perfect, end release any such security, with or without Ihs substitution et new collateral; (d) Io release, Subetltule, agree not to sue, or deal with any one or more of Borrower's sureties, endorsers, or other guarantors on any terms or In any manner Lender may choose; (e) to determine how, when and what application of payments and credits shall be made on Ihs Indebledness; (fi to apply such security end direct the order or manner of sale thereof, Including wllhout 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 Ihs Indebtedness; end (h) to assign or transfer thio Guaranty in whole or in pert. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guaranlor represents end warrants to Lender that (a) no representations or agreements of shy kind have bean made to Guarantor which wouJd limit or qualify in any way the terms of this Guaranty; (bi this Guaranty is executed at Borrower's request and sol at the requesl et Lender; (c) Guarantor has tull power, right and authority to osier into this Guaranty; (d) the provisions et - COMMERCIAL GUARANTY Page .04-23:-1998 '~ (Continued) this Guaranty do not conflict with or result in a default under any agreement or other Instrumenl binding upon Guarent~ end do not result in e vioiatio of any law, regulation, coud decree or order applicable to Guarantor; (e) Guarantor has not and will not, without the prior wdttan consent of Lends sell, lease, assign, encumber, hypothecate, transfer, or olherwise dispose of all or substantially all of Guarentor's assets, or any interest therein; (~) upo Lender's request, Guarantor will provide fo Lender financial end credit information in form acceptable to Lender, end ell such financial informatio which currently has been, and ell future financial information which will be provided fe Lender is and will be true and correct in ell meted,al respects an taifiy present the financial condition o! Guarantor as of the dates the financial intormation is provided; (g) no material adverse change has occurred i Guarantor's financial condition since the dale of the most recent financial stalements provided to Lender and no event has occurred which ma materially adversely affect Guarantor's financial condition; (h) no litigation, claim, investigation, administrative proceeding or similar action (includin, those for unpaid taxes} against Guarantor is pending or threatened; (i) Lender has made no representation to Guarantor as to the creditworthiness c Sorrower; and (j) Guarantor has established adequate means of obtaining from Borrower on a continuing basis information regarding Borrower' financial condition. Guarantor egress to keep edebuatsty informed from such means of any facts, events, or circumstances which might in any wa affect Guarantor's risks under this Guaranty, and Guarantor further agrees that Lender shell have no obligation to disclose to Guarantor any informatlo~ or documents acquired by Lender in the course of its relationship with Borrower. GUARANTOR'S WAIVERS. Excepl as prohibited by applicable law, Guarantor waives any dght to require Lender (a) to continue lending money or ti extend other credit to Borrower; (b) to make any presentment, protest, demand, or notice of any kind, including notice of any nonpayment of th* Indebtedness or of any nonpayment related to any collateral, or notice of any action or nonection on the part 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 fo, payment or to proceed directly or at once against any person, including Borrower or any other guarantor; (d) to proceed directly against or exhaust an~ 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 o~ private sale of personal properly security held by Lender from Borrower or to comply with any other applicable provisions of the Uniform Commercia 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 an) matter whensoever. If now or hereafter (a) Borrower shall be or become insolvent, end (b) the Indebtedness shati not et all times until paid be fully secured by coliataral pledged by Borrower, Guarantor hereby forever waives and relinquishes in favor of Lender end Borrower, and their respective successors, any claim or fight to payment Guarantor may now have or hereafter have or acquire against Borrower, by subrogation or otherwise, so that at no time shall Guarantor be or become a "creditor" of Borrower within the meaning of 11 U.S.C. section 547(b), or any successor provision of the Federal bankruptcy Guarantor also waives any and all fights 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, either judicially or by exercise of a power of sale; (b) any election of remedies by Lender which deslroys or otherwise adversely affects Guarantor's subrogation rights or Guarantor's fights to proceed against Borrower for reimbursement, including without limitation, any loss of rights Guarantor may suffer by reason of any law timitiog, qualifying, or diSCharging the Indebtedness; (c) any disability or other defense of 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 than payment in full in legal tender, of the Indebtedness; (d) any fight to claim diSCharge of the Indebtedness on the basis of unjustified impairment of any collateral for the Indebtedness; (e) any statute of limitations, if at any time any action or suit brought by Lender against Guarantor is commenced there is outstanding Indebtedness of I~orrower to Lender which is not barfed by any applicable statute of limitations; or (f) any defenses 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 enforcement of this Guaranty. Guarantor further waives and agrees not to assed or claim at any time any deductions to the amount guaranteed under this Guaranty for Any claim ct setoft, counterclaim, counter demand, recoupment or similar fight, whether such claim, demand or fight may be asserted by the Borrower, the Guarantor, or both. GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor's full knowledge of Its signirmance and consequences and that, under the circumstances, the waivers are reasonable and 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 be effective only to the extent permitted by law or public policy, LENDER'S RIGHT OF SETOFF. In addition to all liens upon and fights of setoff against the moneys, securities or other property of Guarantor given to Lender by law, Lender shall have, with respect to Guarantor's obligations to Lender under this Guaranty and to the extent permitted by law, a contractual possessor'/secufity interest in and a right of setoff against, and Guarantor hereby assigns, conveys, delivers, pledges, and transfers to Lender all of Guarantor's dght, title and interest in and to, all deposits, moneys, secufifles and other property of Guarantor now or hereafter in the possession of or on deposit with Lender, whether held in a general or special account or deposit, whether held jointly with someone else, or whether held for safekeeping or otherwise, excluding however all IRA, Keogh, and trust accounts. Every such security interest end right of seloft may be exercised without demand upon or notice to Guarantor. No security interest or fight of setoff shall be deemed to have been waived by any act or conduct on the pert of Lender or by any neglect to exercise such dght of setoff or to enforce such security interest or by any delay in so doing. Every fight of selcff and security interest shall continue in full force and effect until such right of setoff or security interesl is specifically waived or released by an instrument in writing executed by Lender. SUBORDINATION OF BORROWER'S DERTS TO GUARANTOR. Guarantor agrees that the Indebtedness of Borrower to Lender, whether now existing or hereafter created, shall be odor to any claim that Guarantor may now have or hereafter acquire against Borrower, whether or not Borrower becomes 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 end consequent liquidation of the assets of Borrower, through bankruptcy, by an assignment for the benefit of creditors, by voluntary liquidation, or otherwise, the assets of Borrower applicable lo the payment of the claims cf both Lender end Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness of Borrower to Lender. Guarantor does hereby assign to Lender all claims which il may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower; prOvided however, that such assignment shall be effective only for the purpose of assuring to Lender full payment in legal tender of the Indebtedness. If Lender so requests, any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shell be marked with a legend thai the same are subjocl lo this Guaranty and shall be delivered to Lender. Guarantor agrees, and Lender hereby is authorized, in the name of Guarantor, from time to time 1o execute and file financing stalements and continuation statements and to execute such other documents and to take such other actions as Lender deems necessary or appropdele to perfecl, preserve and enforce ils dghts under this Guaranty. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of lhis Guaranty: Amendments. This Guaranty, together with any Related Documents, constitutes the entire understanding end agreement of/he parties as to the metiers set forth in this Guaranty. No alteration of or amendment to lhis Guaranty shall be effective unless given in wrifiog and signed by Ihs party or parties sought 1o be charged or bound by Ihs alteration or amendment. ,04-23-1998 ,) COMMERCIAL GUARANTY Page (Cmltlnued) Applicable Law. This Guaranty has been delivered to Lender and accepted by Lender in the Commonwealth of Pennsy~vsnis. If there is lawsuit, Guarantor agrees upon Lender's request to submit to the jurisdiction ot the courts of Dauphin County, Commonwealth of Pennsylveni, This Guorenty shell be governed by and construed in accordance with the laws of the Commonweellh ol Pennsylvania. Attorneys' Fees; Expeneee. Guarantor egress to pay upon demand all of Lender's costs and expenses, Including attorneys' fees end Lender legal expenses, incurred In connection wilh the enforcemenl of this Guaranty. Lender may pay someone else to help enforce this Guaranty, an Guarantor shell pay the costs end expenses of such enforcement. Costs end expenses include Lender's ettorney~' lees end legal expens~ whether or not there is s lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings (end including efforts to modify vacate any automatic stay or injunction), appeals, end any anticipstad post-judgment collection services. Guarantor also shall pay all court end such additional fees as may be directed by the court. Notices. All notices required to be given by either party to the other under lhis Guaranty shall be in writing, may be sent by teiafacsimile (unres otherwise required by law), and shell be effective when actually delivered or when deposited with s nationally recognized overnight courier, when deposited in the United States mail, first claes postage prepaid, addressed to the party to whom the notice is to be given at the sddres shown above or to such other addresses ss either pen',/may designate to the other in writing, if there is more than one Guarantor, notice to an Guarantor will constitute notice to ell Guarenlors. For notice purposes, Guarantor agrees to keep Lender informed st all times of Guarsntor' current address. Inte~'pretatlon. In all cases where there is more than one Sorrower or Guarantor, then all words used in this Guaranty in Ihs singular shall b, deemed to have been used in the plural where the context and construction so require; and where there is more then one Bon'ower named in thi Guaranty or when this Guaranty is executed by more than one Guarantor, the words "Borrower" and "Guarantor" respectively shall mean all sm any one or more of them. The words "Guarantor," '13orrower," end "Lender" include the heirs, successors, assigns, end transferees of each them. Caption headings in this Guaranty ere for convenience purposes only and are not to be used to interpret or define the provisions of thi= Guaranty. If · court of competent jurisdiction finds any provision of this Guaranty to be invalid or unenforceable as to any person or circumstance such finding shall not render that provision invalid or unenforceable as to any other persons or circumstances, end ell provisions of this Guarani. in att other respects shall remain valid and enforceable. If any one or more of Borrower or Guarantor are corporations or partnerships, it is no necessary for Lender to inquire into the powers of Borrower or Guarantor or of the officers, directors, padners, or agents acting or purporting to sc on their behalf, end any Indebtedness made or created in reliance upon the professed exercise of such powers shell be guaranteed under thL, Guaranty. Waiver. Lender shall not be deemed to have waived any dghts under this Guaranty unless such waiver is given in wdting and signed by Lender No delay or omission on the part of Lender in exercising Shy right shall operate as a waiver of such dght or any other right. A waiver by Lender ol · provision of this Guaranty shall not prejudice or constitute · waiver of Lender's dght otherwise to demand strict compliance with that provision any other provision of this Guaranty. No prior waiver by Lender, nor any coume of dealing between Lender end Guarantor, shall constitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Guaranty, the granting of such consent by Lender In any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. CONFESSION OF JUDGMENT. GUARANTOR HERESY IRREVOCASLY 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 GUARANTOR AFTER A DEFAULT UNDER THIS GUARANTY, AND WITH OR WITHOUT COMPLAINT FILED, AS OF ANY TERM, CONFESS OR ENTER JUDGMENT AGAINST GUARANTOR FOR THE ENTIRE PRINCIPAL BALANCE OF THIS GUARANTY, ALL ACCRUED INTEREST, LATE CHARGES, AND ANY AND ALL AMOUNTS EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECURING THE INDEBTEDNESS TOGETHER WITH INTEREST ON SUCH AMOUNTS, TOGETHER WITH COSTS OF SUIT, AND AN ATTORNEY'S COMMISSION OF TEN PERCENT (10%) OF THE UNPAID PRINCIPAL BALANCE AND ACCRUED INTEREST FOR COLLECTION, BUT IN ANY EVENT NOT LESS THAN FIVE HUNDRED DOLLARS ($500) ON WHICH JUDGMENT OR JUDGMENTS ONE OR MORE EXECUTIONS MAY ISSUE IMMEDIATELY; AND FOR SO DOING, THIS GUARANTY OR A COPY OF THIS GUARANTY VERIFIED BY AFFIDAVIT SHALL BE SUFFICIENT WARRANT. THE AUTHORITY GRANTED IN THIS GUARA/'~FY TO CONFESS JUDGMENT AGAINST GUARANTOR 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 GUARANTY. GUARANTOR HEREBY WAIVES ANY RIGHT GUARANTOR MAY HAVE TO NOTICE OR TO A HEARING IN CONNECTION WITH ANY SUCH CONFESSION OF JUDGMENT, EXCEPT ANY NOTICE AND/OR HEARING REQUIRED UNDER APPLICABLE LAW WITH RESPECT TO EXECUTION OF THE JUDGMENT, AND STATES THAT EITHER A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THiS CONFESSION OF JUDGMENT PROVISION TO GUARANTOR'S ATTENTION OR GUARANTOR HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL. EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ AU. 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 APRIL 2:3, 19~8. THIS GUARANTY HAS BEEN SIGNED AND SEALED BY THE UNDERSIGNED. x :::::::::::::::::::::::::::::::: Brian E.~i~alnz~e LASER PRO, Reg. U.S. Pat. & T,M, O~f., Var, 3.24c~ (c) 1998 CFi ProService $. Inc. All rights reser~ed. IPA-E 20 E3.24 F3.24 PS,24 VALLON.L N C2,OVLI ')COMMERCIAL GUARANTY I' '"~ ' | . ' ! ' "~',['COMM I:,'UI;~EC~.'I .".~2~,t .": I ..... Retsranoas In the shaded area are for Lender's usa only and do not limit the appllcabillly of this documanl 1o any particular loan or item. Bo~ower: Vattort, Inc. 400 South Fourth Street, Sulfa 300 Minneapolis, MN 56415 Lender: Financial Trust Company MJddlefown Office 120 South Union Stroof Mlddlefown, PA 170S7 Guarantor: Charles G. Schteee 5200 Dundee Road Edlna, MN 56436 AMOUNT OF GUARANTY. This ia a guaranty of payment of the Note, Including without Ilmttatlon the prlnclpel Note amount of Nine Hund~ Thousand & 00/100 Dollars ($900,000.00). GUARANTY. For good and valuable consideration, Charles G. Schlass ("Guarantor") absolulely and unconditionally guarantees and proml; lo pay to Financial Trust Company ("Lender") or lie order, on demand, In legal tender of the United Stales of Amerlce, the Indebtedness i that term la defined below) of Vallon, Inc. ("Borrower") to Lander on the terms and conditions set fOrth In lhla Guaranty. DEFINITIONS. The following words shall have Ihs following meanings when used in this Guaranty: Borrower. The word "Borrower" means Vallon, Inc.. Guarantor. The word "Guarantor" means Charles G. Schiess. Guaranty. The word "Guaranly' means this Gumanly made by Guarantor for the benefit ut Lender deled April 23, 1998. Indebtedness. The word "Indebtedness' means the Note, including (al att principal, lb) all interest, (cJ all late charges, (dj all loan fees a; loan charges, and (el all collection costs and expenses relating to the Note or fo any co#ateral for the Note. Collection costs and expen.~ include without limitation all of Lender's afforneys' fees and Lender's legal expenses, whether or not suit is instituted, and attorneys' fees and lei; expenses for bankruptoy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipat; post-Judgment collection sarvtees. Lander. The word "Lender" means Financial Trust Company, its successors and assigns. Note. The word "Note" means the promissory note or credit agreement dated April 23, 1998, In Ihs orlglnsi prlnolpol amount of SgO0,000.; from Borrower to Lender, together with all renewals of, extensions of, modtiiceitons of, reflnancings et, consolidations of, and substitutions for th promissory note or agreement. Notice fo Guaranlor: The Note evidences a revolving line of oredlt from Lender lo Borrower. Related Documents. The words qReteted Documents" mean and include without limitation all promissory notes, credit agreements, lea agreements, environmental agreements, guaranties, ssourily agreements, mortgages, deeds of trust, and all other instruments, egraements an documents, whether now or hereettar existing, executed in oonneciton with the Indebtedness. MAXIMUM LIABILITY. The maximum liability of Guarantor under this Guaranty shall riel excee~ at any one time the emounl of th~ Indebtedness described above, plus all costs and expenses of. (al enforcement of this Guaranty and ~o) collection end sale of any collalers securing this Guaranty. The above limitation on liability is not a restriction on the amount of the indebtedness of Borrower to Lender either in the aggregate or al any one time If Lender presently holds one or more guaranties, or horsstter receives additional guaranties from Guarantor, the rights of Lander under all gusranlte~' shall be cumulative. This Guaranty shall not (unless speciflcelty provided below to the contrary) affect or invalidate any such other guaranties. Th; liability of Guarantor will be the aggregate liability of Guarantor under the terms of this Guersnfy and any such other unterminated guaranties, NATURE OF GUARANTY. Guarantor intends to guarantee at all times the performance and prompt paymenl when due, whether at maturity or sadie by reason of acceleration or olherwtse, of all Indebtedness within the limits sat forth in the preceding section of this Guaranty. This Guaranty covers s revolving line of credit and guarantor understands and egress that this guarantee shall be open and continuous until the line of credit Is termlnaled and the Indebtedness te paid In full, as provided below. 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 Indebtedness shall have been fully and finally paid end satisfied and all other obligations of Guarantor 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 received by Lender from any one or more Guarantors shall not affect the liability of any remaining Guarantors under this Guaranty. This Guaranty covers · revolving line of credit and II la specifically anlfolpated that fluctuations will occur Jn the aggregate amount of Indebtedness owing from Borrower to Lender. Guarantor apeclflcelty acknowledges and agrees that fluctuations In the amount of Indebtedness, even to zero dollars ($ 0.00), shall not constitute a termfoallon of this Guaranty. Guarantor's liability under Ihls Guaranty shall terminate only upon (al termination In writing by Borrower and Lender of the line of credit, lb) payment of the Indeblednees In full In legal tender, and lc) payment In full In legal lender of all other obligations of Guarantor under lhla Guaranty. GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, without notice or demand and wtthoul lessening Guarantor's liability under this Guaranty, from time to time: (al to make one or more eddltfonsi secured or unsecured loans to Borrower, fo lease equipment or other goods to Borrower, or otherwise to extend additional credit Io Borrower; lb) Io alter, compromise, renew, extend, accelerate, or olherwlss change one or more times the time for paymenl or olher lares of the Indebtedness or any part of the Indet)/ednesu, Including Increases and decreases of Ihs rate of Interest on the Indebtedness; extensions may be repeated and may be for longer than Ihs orlglnsi loan term; lc) to take and hold security for the payment of thte Guaranty or the Indebtedness, and exchange, enforce, waive, subordinate, fall or decide not to perfect, and release any such security, wtth or without Ihs substitution of new coltelerel; (dj to release, subatttule, agree not lo sue, or deal with any one or more of Borrower's aureltea, endorsers, or other guerenlora on any terms or In any manner Lender may choose; (el to determine how, when and what application of payments and credits shall be matte on Ihs Indebtedness; (t) to apply such security and direct the order or manner of sale thereof, Including wtthout IImltellon, any nonjudicial sale permitted by Ihs terms of the conlrulting security agreement or deed of trusl, as Lender In Its dlecrelfon may determine; (gl Io sell, Iranafer, assign, or grenl Participations In all or any part of Ihs Indebtedness; and (h) fo assign or transfer Ihls Guaranty In whole or In part, GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants lo Lender that (al no representations or agreements of any kind have been made fo Guarantor which would limit or quality in any way the terms of lhis Guaranty; lb) this Guaranty Is executed st Borrower's rsquesl and nol al Ihs request of Lender; lc) Guarantor has tull power, dght and authority lo shier inlo this Guaranty; (dj the provisions of COMMERC AL GUARANTY .04--23-~98 ~ . Pap .(Continued) this Guaranty do not conflict with or result In s deMuil under any agreement or other Instrument binding upon Guaranlor and do nol result In a viol,, of any law, regulation, ooud decree or order applicable to Guarantor;, (e) GUarantor has not and will not, without Ihs prior wdften consent ot Lan sell, lease, as.sign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially all of Guarantor's ~'-'-sets, or any interest therein; (1) u Lender's request, Guarantor will provide to Lender financial and credit information in form acceptable to Lender, and all such I~nanclal informs whicb currently has been, end all fulura financial Information which will be provided to Lender is and will be/rue end correct in all materiel respesis = fairly presenl the financial condition of Guarantor as of the dates the financial Intormati0n is provided; (g) no matahal adverse change has occurre, Guarantor's §nancfal condition since the dale of the most recent financial statements provided to Lender and no event has occurred which r materially adver~y affect Guarantor's financial condition; (h) no litigation, claim, investigation, administrative proceeding or similar action (Inclu~ those tot unpaid taxes) against Guarantor is pending or threatened; (i) Lender has made no representation to Guarantor as to the cradtiWodhinas~ Borrower; and (j) Guarantor has established adequate means of obtaining from Borrower on s continuing basis information regarding Borrow. financial condition, Guarantor agrees to keep adequately informed from such means of any facts, events, or circumstances which might in any ~ affect Guerantods risks under this Guaranty, and Guarantor furthor agrees that Lander shall have no obligation to disclose to Guarantor any informal or documents acquired by Lender in the course of Its relationship with Borrower. GUARANTOR'S WAIVERS. Except es prohibited by applicable law, Guarantor waives any right to require Lender (a) to continue lending money <~ extend other oredlt to Borrower; (b) to make any presentment, protest, demand, or notice of any kind, including notice of any nonpayment of indebtedness or of any nonpayment related to any collateral, or notice of any action or nonastion on the pod of Bo~owar, Lender, any surety, endon. or other guarantor in connection with the Indebtedness or In connection with the creation of new or additional loans or obligations; (c) to resort payment or to proceed directly or st once against any person, including Borrower or any other guarantor; (d) to proceed directly against or exhaust i collaleral 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 private sale of personal property security held by Lender from Borrower or to comply with any other applicable provisions of the Uniform Commer( 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 a matter whatsoever. If now or hereafter (e) Borrower shall be or become Insolvent, end (b} Ihs Indebtedness shall not et all times until paid be fully secured by collate pledged by Borrower, Guarantor hamby forever waives and relinquishes In favor of Lender and Borrower, end their respective successors, any claim Hght to payment Guarantor may now have or hereafter have or acquire against Borrower, by subrogation or otherwise, so that et no time si~ Guarantor be or become a "creditor" of Borrower within the meaning of 11 U.S.C. section 547(b), or any successor provision of the Federal bankrupl laws. Guarantor also waives any and all rights or defenses adsing by reason of (a) any "one action" or "ent~deficiaosy" law or any other law which m prevent Lender from bringing any action, including a claim for deticlency, against Guarantor, before or e~fer Lender's commencement or completion any foreclosure action, either judicially or by exercise of · power of sale; (b)~any election of remedies by Lender which destroys or otherwise adver~ affects Guarantor's subrogation dghts or Guarantor's rights to proceed agmnst Bon'ower for reimbursement, including without limitation, any loss rights Guarantor may suffer by reason of any law limiting, quelling, or discharging the Indebtedness; (c) any disability or other defense of Borrower, any other guarantor, or of any other pemon, or by reason of the cessation of Borrower's liability from any cause whatsoever, other than payment in f~ in legal tender, of the Indebtedness; (d) any right to claim discharge of the Indebtedness on the basis of unjustified impairment of any collateral for tt Indebtedness; (e) any statute of limitations, if at any time any action or suit brought by Lender against Guarantor is commenced there is outsfandir Indebtedness of Borrower to Lender which is not barred by any applicable statute of limitations; or (f) any defenses given to guarantom st law or equity other than actual payment and performance of the Indebfedneas. If payment is made by Borrower, whether voluntarily or otherwise, or by ar Ihird party, on the Indebtedness end thereafter Lender is forced to remit the amount of that payment to Borrower's trustee In bankruptcy or to ar similar person under any federal or state bankruptcy law or law for the relief ol debtors, the Indebtedness shall be considered unpaid for the purpose ~ 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 < eetoff, counterclaim, counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower, th Guarantor, or both. GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers sat forth above is mad with Guarantor's full knowledge of its significance and consequences and that, under the circumstances, the waivers are reasonable and not contrary t public policy or Jaw. If any such waiver is determined to be contrary to any applicable law or public policy, such waiver shall be effective only to th. extent permiffed by law or public policy. LENDER'S RIGHT OF SETOFF. In addition to all liens upon and dghts of seloff against the moneys, securities or olhar property of Guarantor given t~ Lender by law, Lender shall have, with respect to Guarantor's obligations to Lender under this Guaranty and to the extent permitted by law, ~ contractual possessory security interest in and a right o1' setoff against, end Guarantor hereby assigns, conveys, dallvem, pledges, and transfers ti Lender all of Guarantor's right, title end interest In end to, all deposits, moneys, securities and other properly of Guarantor now or hereafter in th~ possession of or on deposit with Lender, whelher held In a general or special account or deposit, whether held jointly with someone else, or whethe held for safekeeping or otherwise, excluding however all IRA, Keogh, and trust accounts. Every such security interest and fight of setoff may be exercised without demand upon or notice to Guarantor. No security interest or right of setoff shall be deemed to have been waived by any act o conduct on the part of Lender or by any neglect lo exercise such right of setoff or to antoine such security interest or by any delay in so doing. Eve~ right ot satoff and security interest shall continue in full force and effect until such right of setoff or security interssl is specifically waived or released b~ an instrument in writing executed by Lender. SUBORDINATION OF BORROWER'S DE~TS TO GUARANTOR, Guarantor agrees that the Indebtedness of Borrower to Lender, whether now existing or hereafter created, shall be prior to any claim that Guarantor may now have or hereafter acquire against Borrower, whether or nol Borrowe~ becomes insolvent. Guaranlor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to an~ claim that Lender may now or hereafter have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through bankruptcy, by an assignment for the benefit of creditors, by voluntary liquidation, or otherwise, Iha assets of Borrower applicable to the payment ot the claims of both Lender and Guarantor shall be psid to Lender and shall be fimt applied by Lender to the Indebtedness of Borrower 1o Lender. Guarantor does hereby assign to Lender all claims which it may have or acquire egainsl Borrower or agatnsl any assignee or trustee in bankruptcy ol Borrower; provided however, that such assignmenl shall be effective only for the purpose of assuring to Lender lull paymenl in legal tender of Iha Indebtedness. If Lender so requests, any notes or credil agreements now or hereafter evidencing any debts or obligations ot Borrower 1o Guarantor shall be marked wilh a legend Ihat the same are subject to this Guaranty and shall be delivered to Lender, Gueranlor agrees, and Lender hereby is authorized, in the name of Guarantor, from time lo time to execule and file financing statements and continuation statements end to execute such other documents and to lake such other actions as Lender deems necessary or approprists to perfect, preserve and enforce its rights under this Guaranty. MISCELLANEOUS PROVISIONS. The tollowing miscellaneous provisions are a part of this Guarenty: Amendmenla. This Guaranty, Iogether with any Related Documents, constitules the entire undemlsnding and agreemenl of the parties as to the matiem sol Iorlh in this Guaranty. NO alteration of or amendment to this Guaranty shall be effective unless given in writing end signed by Ihs party or parties sought 1o be charged or bound by the alteration or amendmenl. VERZFZCATTON I, Gary Golden, Vice President of Manufacturers and Traders Trust Company, d/b/a M&T Bank, verify that the statements made in the foregoing Complaint are true and correct to the best of my knowledge, information and belief. ! understand that false statements herein are made subject to the penalties of 18 Pa. C.S. Section 4904, relating to unsworn falsification to authorities. Date: STEVEN L. SUGARMAN & ASSOCIATES * 1273 LANCASTER AVENUE * BERWYN, PA 19312 STEVEN L. SUGARMAN & ASSOCZATES BY: Steven L. Sugarman, Esquire IDENTIFICAI-[ON NO. #32473 1273 LANCASTER AVENUE BERWYN, PA 19312 (610) 889-0700 FAX: (610) 993-0498 A~I'ORNEY FOR Plaintiff, Manufacturers and Traders Trust Company, d/b/a M&T Bank, Successor by Merger to Keystone Financial Bank, N.A., f/k/a Financial Trust Company MANUFACTURERS AND TRADERS TRUST COMPANY d/b/a M&T BANK, Successor by Merger to KEYSTONE FZNANCZAL BANK, N.A., f/k/a F~NANCZAL TRUST COMPANY 601 Dresher Road Horsham, PA 19044 VS. VALLON, 1'NC. 400 South Fourth Street Minneapolis, MN 55415, and MICHAEL 3. BLAKE 910 Folwell Drive S.W. Rochester, MN 55902, and CHARLES G. SCHEZSS 5200 Dundee Road Edina, NN 55436, and BI'TAN E. DANT,.TS 301 Chestnut Ridge Drive Mechanicsburg, PA 17055 Cumberland County Court of Common Pleas Civil Division TERM, NO, AFFIDAVI'I' OF NON-HILTTARY SERVZ~F COMMONWEALTH OF PENNSYLVANIA : COUNTY OF MONTGOMERY : Gary Golden, Vice President of Manufacturers and Traders Trust Company, d/b/a M&T Bank, plaintiff, being duly sworn, according to law, deposes and says that to the best of his/her knowledge, information and belief that Defendants are not in the Military or Naval Service of the United States or its Allies, or otherwise within the provisions of the Solider's and Sailors' Civil Relief Act of Congress of 1940 as amended. Sworn to and Subs~;ribed before me this of~-~'/ ,2001 A.D. { . !~-~y n.:.Brockwell, Notary Pul~ic / Homnam i.wp. Montgomery Cou~ty /My Comm smon Expires May Member, Pennsylvania Assodation of Nofe~s Gary Golden, Vice ~res~7~e-nt -- STEVEN L. SUGARMAN & ASSOCIATES BY: Steven L. Sugarman, Esquire IDENTIFICATION NO. #32473 1:)73 LANCASTER AVENUE BERWYN, PA 1931:) (610) 889-0700 FAX: (610) 993-0498 A'I-FORNEY FOR Plaintiff, Manufacturers and Traders Trust Company, d/b/a N&T Bank, Successor by Merger to Keystone Financial Bank, N.A., f/k/a Financial Trust Company MANUFACTURERS AND TRADERS TRUST COMPANY d/b/a M&T BANK, Successor by Merger to KEYSTONE FINANCIAL BANK, N.A., f/k/a FINANCIAL TRUST COMPANY 601 Dresher Road Horsham, PA 19044 VS, VALLON, INC. 400 South Fourth Street Minneapolis, MN 55415, and MICHAEL 3. BLAKE 910 Folwell Drive 5.W. Rochester, MN 55902, and CHARLES G. SCHEtrSS 5200 Dundee Road Edina, MN 55436, and BR~AN E. DANZI'S 301 Chestnut Ridge Drive Mechanicsburg, PA 17055 Cumberland County Cour~ of Common Pleas Civil Division TERM, NO, PLAINTIFF'S AFFIDAVIT OF DEBTOR'S WAIVER OF RIGHT£ COMMONWEALTH OF PENNSYLVANIA : COUNTY OF MONTGOMERY : Gary Golden, being duly sworn/affirmed according to law, deposes and upon information and belief says/that he is the Vice President of Manufacturers and Traders Trust Company, d/b/a M&T Bank, plaintiff in the above captioned matter; that at the time of the signing of the document containing provision for judgment by confession in the said matter, the individual natural defendants (1) earned more than $10,000 annually, or (2) intentionally, understandingly, and voluntarily waived (a) the right to notice and hearing (b) the right of defalcation, i.e. the right to reduce or set off a claim by deducting a counterclaim (c) release of error (d) inquest (to ascertain whether rents and profits of defendant's real estate will be sufficient to satisfy the judgment within seven years) (e) stay of execution (if defendant owns real estate in fee simple within the county worth the amount to which the plaintiff is entitled, clear of encumbrances) (f) exemption laws now in force or hereafter to be passed (g) --- The facts showing such waiver are: Defendants' loan application and financial statements. Sworn to and Subscribed : before n'~ thisbe/day : of ~/,/,20ol A.D. : ? · NOTARY ~UBLIC ry Golden, Vice P~esi~nt -2- STEVEN L. SUGARMAN & ASSOCIATES · 1273 LANCASTER AVENUE · BERVVYN, PA 19312 STEVEN L. SUGARMAN & ASSOCZATES BY: Steven L. Sugarman, Esquire IDENTIFICATION NO. #32473 1273 LANCASTER AVENUE ATTORNEY FOR Plaintiff, Manufacturers and Traders Trust Company, d/b/a M&T BERWYN, PA 19312 Bank, Successor by Merger to Keystone Financial Bank, N.A., f/k/a Financial Trust (610) 889-0700 Company Fa,)(: (610) g93-0498 MANUFACTURERS AND TRADERS TRUST COMPANY d/b/a M&T BANK, Successor by Merger to KEYSTONE FZNANC~'AL BANK, N.A., f/k/a FTNANC~AL TRUST COMPANY 601 Dresher Road Horsharn, PA 19044 VS. VALLON~ TNC. 400 South Fourth Street Minneapolis, MN 55415, and MZCHAEL 3. BLAKE 910 Folwell Drive S.W. Rochester, MN 55902, and CHARLES G. SCHEZSS 5200 Dundee Road Edina, MN 55436, and BRZAN E. DANZZS 301 Chestnut Ridge Drive Mechanicsburg, PA 17055 Cumberland County Court of Common Pleas Civil Division TERM, NO, AFFIDAVIT OF NON-CONSUMER CREDI'r TRANSACTZG:' COMMONWEALTH OF PENNSYLVANIA COUNTY OF MONTGOMERY Gary Golden, Vice President for Manufacturers and Traders Trust Company, d/b/a M&T Bank, plaintiff, being duly sworn/affirmed according to law, deposes and upon information and belief says/that the transaction upon which the judgment being entered is based was a business transaction and that judgment is not being entered by confession against a natural person in connection with a consumer credit transaction. ~,orn to and S~bs¢ibed : hero_re rr~e this,2.,~ay : o~,2~01 A.D. : No.~s. I Gary Golden, Vice-~'Pre-~ent - rockwell, Notary Public ~ J ..H°-reham. T~.P., Montgomery County J J My Commi~s,~n Expires Ma~/26, 2003 J Member, Pennsylvania A~-,soci~tion of Notades STEVEN L. SUGARMAN & ASSOCIATES BY: Steven L. Sugarman, Esquire IDENTIFICATION NO. #32473 1273 LANCASTER AVENUE AI-I'ORNEY FOR Plaintiff, Nanufacturem and Traders Trust Company, d/b/a M&T BERVVYN, PA 19312 Bank, Successor by Merger to Keystone Financial Bank, N.A., f/k/a Financial Trust (610) 889-0700 Company FAX: (610) 993-0498 MANUFACTURERS AND TRADERS TRUST COMPANY d/b/a M&T BANK, Successor by Merger to KEYSTONE FZNANCZAL BANK~ N.A., f/k/a FZNANCZAL TRUST COMPANY 601 Dresher Road Horsham, PA 190,~- VS. VALLON~ ZNC. ~t00 South Fourth Street Minneapolis, MN 55415, and Mi~CHAEL 3. BLAKE 910 Folwell Drive S.W. Rochester, FIN 55902, and CHARLES G. SCHEZSS 5200 Dundee Road Edina, MN 55'~36, and BRZAN E. DANZZS 301 Chestnut Ridge Drive FIechanicsburg, PA 17055 Cumberland County Court of Common Pleas Civil Division NO. TERM, _CERTZFt'CATE OF ADDR_F$$F$ I hereby certify that the addresses of the parties to this action are as follows: Manufacturers and Traders Trust Company d/b/a M&T Bank 601 Dresher Road Horsham, PA 190~ Vallon Inc. 400 South Fourth Street, Suite 300 Minneapolis, MN 55,~15 Michael 3. Blake 910 Folwell Drive Rochester, MN 55902 Charles G. Scheiss 5200 Dundee Road Edina, MN 55436 Brian E. Danzis 301 Chestnut Ridge Drive Mechanicsburg, PA 17055 STEVEN L. SUGARMAN & ASSOCIATES By: ~ Steven L. Sugarman, Esquire Elliot H. Berton, Esquire Attorneys for Plaintiff ~BEBY U A,iR~TE N RESPONSE TO THE WRI CLOSED THIN TWENTY (20) DAYS FROM RVICE HEREOF OR A 'JUDGMENT W RE ENTERED AGAINST YOU ~TTORNEY WE DO HEREBY CERTIFY THAT THE WITHIN IS A TRUE AND COR- RECT COPY OF THE ORIGINAL STEVEN L. SUGARMAN & ASSOCZATES BY: Steven L. Sugarman, Esquire IDENTZFZCATZON NO. #32473 :1.273 LANCASTER AVENUE BERWYN, PA 19312 (610) 889-0700 FAX: (610) gg3-O498 MANUFACTURERS AND TRADERS TRUST COMPANY d/b/a M&T BANK, Successor by '~ Merger to KEYSTONE F~NANCZAL BANK, N.A., f/k/a FINANC~,L TRUST COMPANY 601 Dresher Road Horsham, PA 19044 V5, VALLON~ INC. 400 South Fourth Street Minneapolis, MN 55415, and MICHAEL 3. BLAKE 910 FolweII Drive S.W. Rochester, MN 55902, and CHARLES G. SCHEZSS 5200 Dundee Road Edina, MN 55436, and BR[AN E. DAN7..~S 301 Chestnut Ridge Drive Mechanicsburg, PA 17055 AI-rORNEY FOR Plaintiff, Manufacturers and Traders Trust Company, d/b/a M8~T Bank, Successor by Merger to Keystone Financial Bank, N.A., f/kJa Financial Trust Company Cumberland County Court of Common Pleas Civil Division TERM, NO. ENTRY OF APPEARANCE To the Prothonotary: Kindly enter our appearance on behalf of the Plaintiff, Manufacturers and Traders Trust Company, d/b/a M&T Bank, Successor by Merger to Keystone Financial Bank, N.A., f/k/a Financial Trust Company, in the above captioned matter. STEVEN L. SUGARMAN & ASSOCIATES BY;lliot~uire Attorney for Plaintiff .STEVEN L. SUGARMAN ~ ASSOCIATES ATTORNEYS AI LAW STEVEN L. SUGARMAN & ASSOCZATES BY: Steven L. Sugarman, Esquire IDENTiFICATiON NO. #32473 1273 LANCASTER AVENUE BI=RWYN, PA 19312 (610) 889-0700 FAX: (610) 993-0498 A'I-FORNEY FOR Plaintiff, Manufacturers and Traders Trust Company, d/b/a M&T Bank, Successor by Merger to Keystone Financial Bank, N.A., f/k/a Financial Trust Company MANUFACTURERS AND TRADERS TRUST COMPANY d/b/a M&T BANK, Successor by Merger to KEYSTONE FINANCIAL BANK, N.A., f/k/a FINANCIAL TRUST COMPANY 601 Dresher Road Horsham, PA 19044 V$, VALLON, 1'NC, 400 South Fourth Street Minneapolis, MN 55415, and MICHAEL 3, BLAKE 910 Folwell Drive S,W, Rochester, MN 55902, and CHARLES G. SCHEISS 5200 Dundee Road Edina, MN 55436, and BRIAN E. DAN7.ZS 301 Chestnut Ridge Drive Mechanicsburg, PA 17055 Cumberland County Court of Common Pleas Civil Division TERM, No. 01-929 PRAECZPE TO SATISFY JUDGMENT TO THE PROTHONOTARY: Please mark the judgment entered against the Defendants, Vallon, Inc., Michael 3. Blake, Charles G. Scheiss and Brian Danzis, SATZSFIED, upon payment of your costs only. STEVEN L. SUGARMAN & ASSOCIATES By: ~ Elliot H. Berton, Esquire Attorney for Plaintiff