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10-6269
c MID PENN BANK, IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff V. HENRIX, LLC d/b/a T&M AUTOMOTIVE and HENRICK SHAMIRIAN, Defendants :NO. 10 - LOX01 CONFESSION OF JUDGMENT Pursuant to the warrants of attorney contained in the Loan Agreement, Note, Guaranty, and Second Guaranty true and correct copies of which are attached to the Complaint in Confession of Judgment as Exhibits "A", "C", "D", and "F"respectively, filed in this action, I appear for the Defendants, Henrix, LLC d/b/a T&M Automotive and Henrick Shamirian, and as set forth more fully in the Complaint for Confession of Judgment, and confess Judgment in favor of Plaintiff, Mid Penn Bank, and against: 1 2 3. Defendant, Henrix, LLC d/b/a T&M Automotive- $229,992.54; Defendant, Henrick Shamirian - $229,992.54; Plus continuing interest at a rate of $28.30per diem from September 23, 2010, continuing costs and fees. Date: SeptemberOO , 2010 2 FO Norih Se nd Street ffarrisburg? PA 17110 Telephone: (717) 238-6570 Attorneys for Defendants ?. r ? t O -$&'I SO Pa A-r V C14-794a 2#ay9oy0 6?fu jua& P s ? MID PENN BANK, IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff NO. V. HENRIX, LLC d/b/a T&M AUTOMOTIVE and HENRICK SHAMIRIAN, Defendants COMPLAINT FOR CONFESSION OF JUDGMENT NOW COMES, the Plaintiff, Mid Penn Bank, by and through its counsel, Cunningham & Chernicoff, P.C., and files its Complaint for Confession of Judgment, and in support thereof avers as follows: 1. Plaintiff, Mid Penn Bank (the "Bank"), is a banking institution with a place of business located at Market Square Plaza, 17 North Second Street, Harrisburg, Dauphin County, Pennsylvania 17101. 2. Upon information and belief, Defendant, Henrix, LLC d/b/a T&M Automotive ("Henrix"), is a Pennsylvania Limited Liability Company, having its registered office in Pennsylvania at 1412 Trindle Road, Carlisle, Cumberland County, Pennsylvania 17013. 3. Upon information and belief, Defendant, Henrick Shamirian ("Mr. Shamirian"), is an adult individual and resident within the Commonwealth of Pennsylvania, having a residential address of 12 Edgewood Drive, Mechanicsburg, Cumberland County, Pennsylvania 17055. 4. Upon information and belief, at all times relevant hereto except otherwise indicated, Mr. Shamirian was a member of Henrix. 5. On or about January 16, 2009, Henrix, by its authorized representative, Mr. Shamirian, executed a Business Loan Agreement in the principal amount of $216,000.00 (hereinafter the "Loan Agreement"). A true and correct copy of the Loan Agreement is attached hereto as Exhibit "A" and is incorporated herein by reference. 6. As collateral for the Loan Agreement, Henrix granted the Bank a security interest in all inventory, chattel paper, accounts, equipment and general intangibles in favor of the Bank. A true and correct copy of the Commercial Security Agreement dated Janaury 16, 2009 is attached hereto as Exhibit "B" and is incorporated herein by reference. 7. On or about January 16, 2009, Defendant, Mr. Shamirian, executed a SBA Unconditional Guaranty (the "Guaranty"), guaranteeing payment under the Business Loan executed by Henrix. A true and correct copy of the Guaranty is attached hereto as Exhibit "C" and is incorporated herein by reference. 8. On or about January 22, 2009, Henrix, by its authorized representative, Mr. Shamirian, executed a Promissory Note in the principal amount of $10,000.00 (the "Note"). A true and correct copy of the Note is attached hereto as Exhibit "D" and is incorporated herein by reference. 9. As collateral for the Note, Henrix granted the Bank a security interest in all inventory, chattel paper, accounts, equipment and general intangibles as previously filed with the Commonwealth of Pennsylvania on January 23, 2009, Financing Number 2009012305339. A true and correct copy of the January 22, 2009 Security Agreement is attached hereto as Exhibit "E" and is incorporated herein by reference. 10. On or about January 22, 2009, Defendant, Mr. Shamirian, executed a second Commercial Guaranty (the "Second Guaranty"), guaranteeing payment under the Note executed by Henrix. A true and correct copy of the Second Guaranty is attached hereto as Exhibit "F" and is incorporated herein by reference. 11. Defendant, Henrix, has defaulted under the Loan Agreement and Note by failing and refusing to make payment of, among other things, principal, interest, late fees and administrative fees when due. 12. Defendant, Mr. Shamirian, has defaulted under the Guaranty and Second Guaranty, by, among other things, failing and refusing to make payment of, among other things, principal, interest, late fees and administrative fees when due. 13. With respect to the Loan Agreement and Note, Henrix agreed to pay the Bank all 14. 15 16 expenses, including but not limited to, attorney fees, legal expenses and Court costs incurred by the Bank in its attempts to collect the amounts due and owing to it by Henrix under the Note. With respect to the Guaranty and Second Guaranty, Mr. Shamirian agreed to pay the Bank all its expenses, including but not limited to, attorney fees, legal expenses and court costs incurred by the Bank in its attempts to collect the amounts due and owing to it under the Guaranty. The following amount is due and owing to the Bank on the Business Loan Agreement: Principal Balance $203,404.86 Interest to 9-23-10 (at a rate of $8,545.55 $26.84 per diem) UCC (1) $84.00 Current Late Charge Balance $1,249.384 Costs and Administrative Fees $1,000.00 Attorney Fees $2,000.00 TOTAL: $216,283.79 plus continuing interest at a rate of $26.84 per diem from 9-23-10, continuing late charges and fees In accordance with the Guaranty, the Defendant, Mr. Shamirian, is liable to the Bank as follows: Principal Balance $203,404.86 Interest to 9-23-10 (at a rate of $8,545.55 $26.84 per diem) 17. 18 UCC (1) $84.00 Current Late Charge Balance $1,249.384 Costs and Administrative Fees $1,000.00 Attorney Fees $2,000.00 TOTAL: $216,283.79 plus continuing interest at a rate of $26.84 per diem from 9-23-10, continuing late charges and fees The following amount is due and owing to the Bank on the Note: Principal Balance $10,000.00 Interest to 9-23-10 (at a rate of $408.75 $1.46 per diem) Current Late Charge Balance $300.00 Costs and Administrative Fees $1,000.00 Attorney Fees $2,000.00 TOTAL: $13,708.75 (plus continuing interest from 9-23-10 at a rate of $1.46 per diem plus continuing fees and costs) In accordance with the Second Guaranty, the Defendant, Mr. Shamirian, is liable to the Bank as follows: Principal Balance $10,000.00 Interest to 9-23-10 (at a rate of $408.75 $1.46 per diem) Current Late Charge Balance $300.00 Costs and Administrative Fees $1,000.00 Attorney Fees $2,000.00 TOTAL: $13,708.75 (plus continuing interest from 9-23-10 at a rate of $1.46 per diem plus continuing fees and costs) 19. The Judgment is not being entered against a natural person in connection with a Judgment transaction. 20. No assignment has been made of either the Loan Agreement, the Note, the Guaranty or the Second Guaranty. 21. Judgment has not been previously entered against the Defendants in any jurisdiction on either the Loan Agreement, the Note, the Guaranty or the Second Guaranty. 22. Judgment is demanded as authorized by the warrants of attorney contained in the Loan Agreement, the Note, Guaranty and Second Guaranty which have previously been attached to this Complaint. 23. The warrants of attorney appearing in the Loan Agreement, the Note, the Guaranty and Second Guaranty are less than twenty (20) years old. WHEREFORE, Mid Penn Bank, hereby respectfully demands that Judgment be entered in its favor and against the Defendants, Henrix, LLC d/b/a T&M Automotive and Henrick Shamirian, in the amounts of $229,992.54 together with continuing interest at a rate of $28.30 per diem from September 23, 2010 plus continuing costs and attorney fees and grant Plaintiff, Mid Penn Bank, such further relief as is just and proper. Date: September 1'©, 2010 Telephone: (717) 238-6570 Attorneys for Plaintiff Harrisburg, PA 17110 EXHIBIT `A' 6/kkz? w BUSINESS LOAN AGREEMENT References in the shaded area are for Lenders use only and do not limit the applicability of this document to any particular ban or item. An Item above containing ""•• has been omitted due to text lencilh limitations. Borrower: Handy, LLC dbe T&M Automotive MN: Lender: Mid Penn Bank 215.3231470) Allentown Boulevard 1412 Trindle Road 5500 Allardown Boulevard Carlisle, PA 17013 Harrisburg, PA 17112 THIS BUSINESS LOAN AGREEMENT dated January 10, 2009, is made and executed between Henrix, LLC dba T&M Automotive ("Borrower") and Mid Penn Bank ("Lander") on the following terms and conditions. Borrower has received prior comnwelal lours from Lender or has applied to Lender for a commercial loan or loans or other financial accommodations, Including those which may be described on any exhibit or schedule attached to this Agrsernent ("Loan'). Borrower understands and agrees that: (A) in granting, renewing, or extending any Loan, Lender Is relying upon Borrower's representations, warranties, and agreanrents as ad forth In this Agreerrnent; (B) the granting, renewing, extending of any Loan by Lender at all times shall be subject to Lender's sole judgment and discretion; and (C) all such Loon such Loans shall be or remain subject to the terms and conditions of this Agreement. s shall and TERM. This Agreement shall be effective as of January 16, 2009, and shall continue in full force and effect until such time as all of Borrower's Loans in favor of Lender have been paid in full, including principal, interest, costs, expenses, attorneys' fees, and other fees and charges, or until January 16, 2019. CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to make the initial Advance and each subsequent Advance under this Agreement shall be subject to the fulfillment to Lender's satisfaction of all of the conditions set forth in this Agreement and in the Related Documents. Loan Documents. Borrower shall provide to Lender the following documents for the Loan; (1) the Note; (2) Security Agreements granting to L ender security Interests in the Collateral; (3) financing statements and all other documents perfecting Lender's Security Interests; (4) evidence of Insurance as substance satisfactory required below; (5) guaranties; (g) together with all such Related Documents as Lender may require for the loan; all In form and factory to Lender and Lender's counsel. Borrower's Authorisation. Borrower shall have provided In form and substance satisfactory to Lender properly certified resolutions, duly authorizing the execution and delivery of this Agreement, the Note and the Related Documents. In addition, Borrower shall have provided such other resolutions, authorizations, documents and Instruments as Lender or its counsel, may require. Payment of ense& Borrower shall specified in ese and AgreemenEntt or any Related Doc mennt Ve paid r all fees, charges, and other expenses which are then due and payable as Representations and Warranties. The representations and warranties set forth in this Agreement, in the Related Documents, and in any document or certificate delivered to Lender under this Agreement are true and correct. No Evernt of Default. There shall not exist at the time of any Advance a condition which would constitute an Event of Default under this Agreement or under any Related Document. REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as of the date of this Agreement, as of the date of each disbursement of loan proceeds, as of the date of any renewal, extension or modification of any Loan, and at all times any Indebtedness exists; Organisation. Borrower is a limited liability company which is, and at all times shall be, duly organized, validly existing, and in good standing under and by virtue of the laws of the Commonwealth of Pennsylvania. Borrower Is duly authorized to transact business in all other states in which Borrower Is doing business, having obtained all necessary filings, governmental licenses and doing business. Specifically, Borrower Is, and at all times shall be, du approvals for each state In which Borrower is failure to so qualify would have a material adverse effect on its business or finaanci ll as a condition. IBorrroower hfiass thfull p in all stelae o ty to the Its properties and to transact the business in which it Is presently engaged or presently proposes to engage. 01Nin and authority to own Trindi Road, Carlisle, PA 17013. Unless Borrower has designated otherwise in writing, the principal office Issttheeofeflce alt whic hg?er keep its books and records Including its records concerning the Collateral. Borrower will notify Lender prior to any change In the location of Borrower's state of organization or any change In Borrower's name. Borrower shall do all things necessary to preserve and to keep In full force and effect its existence, rights and privileges, and shall comply with all regulations, rules, ordinances, statutes, order: and decrees of any governmental or quasi-governmental authority or court applicable to Borrower and Borrower's business activities. Assumed Business Names. Borrower has filed or recorded all documents or filings required by law relating to all assumed business names used by Borrower. Excluding the name of Borrower, the following is a complete list of all assumed business names under which Borrower does business: None. Authorization. Borrower's execution, delivery, and performance of this Agreement and all the Related Documents have been duly authorized by all necessary action by Borrower and do not conflict with, result in a violation of, or constitute a default under (1) any provision of (a) Borrower's gov articles ental rgan ??' court decree bersh or agreements, or (b) any agreement or other Instrument binding upon Borrower or (2) any law, applicable to Borrower or to Borrower's properties. Financial Information. Each of Borrowers financial statements supplied to Lender truly and completely disclosed Borrowers financial condition as of the date of the statement, and there has been no material adverse change In Borrower's financial condition subsequent to the date of the most recent financial statement supplied to Lender. Borrower has no material contingent obligations except as disclosed In such financial statements. Legal Effect. This Agreement constitutes, and any Instrument or agreement Borrower Is required to give under this Agreement when delivered will constitute legal, valid, and binding obligations of Borrower enforceable against Borrower in accordance with their respective terms. Properties. Except as contemplated by this Agreement or as previously disclosed in Borrowers financial statements or in writing to tender and as accepted by Lender, and except for property tax liens for taxes not presently due and payable, Borrower owns and has t good title all of Borrower's properties free and clear of all Security Interests, and has not executed any security documents or financing sta properties. All of Borrower's properties are titled In Borrowers legal name, and Borrower has not used or filed a financing sstate?menttiur deto such other name for at least the last five (5) years. r any Hazardous Substances. Except as disclosed to and acknowledged by Lender In writing, Borrower period of Borrowers ownership of the Collateral, there has been no use, generation manufacturrepresents e, storrage?e tment disposal, During the threatened release of any Hazardous Substance by any person on, under, about or from any of the Collateral. (2) Borrower has knwledgee of r or reason to believe that there has been (a) any breach or violation of any Environmental Laws; (b) any use, generation, manufacture. storaoe_ BUSINESS LOAN AGREEMENT Loan No: 500050851 (Continued) Page 2 treatment, disposal, release or threatened release of any Hazardous Substance on, under, about or from the Collateral by any prior owners or occupants of any of the Collateral; or (c) any actual or threatened litigation or claims of any kind by any person relating to such matters. (3) Neither Borrower nor any tenant, contractor, agent or other authorized user of any of the Collateral shall use, generate, manufacture, store, treat, dispose of or release any Hazardous Substance on, under, about or from any of the Collateral; and any such activity shall be conducted in compliance with all applicable federal, state, and local laws, regulations, and ordinances, including without limitation all Environmental Laws. Borrower authorizes Lender and its agents to enter upon the Collateral to make such inspections and tests as Lender may deem appropriate to determine compliance of the Collateral with this section of the Agreement. Any Inspections or tests made by Lender shall be at Borrower's expense and for Lender's purposes only and shall not be construed to create any responsibility or liability on the part of Lender to Borrower or to any other person. The representations and warranties contained herein are based on Borrower's due diligence in investigating the Collateral for hazardous waste and Hazardous Substances. Borrower hereby (1) releases and waives any future claims against Lender for Indemnity or contribution In the event Borrower becomes liable for cleanup or other costs under any such laws, and (2) agrees to indemnify, defend, and hold harmless Lender against any and all claims, losses, liabilities, damages, penalties, and expenses which Lender may directly or Indirectly sustain or suffer resulting from a breach of this section of the Agreement or as a consequence of any use, generation, manufacture, storage, disposal, release or threatened release of a hazardous waste or substance on the Collateral. The provisions of this section of the Agreement, including the and shion of Indemnity affected a d dehall survive the payment of the Indebtedness and the termination, expiration or satisfaction of this Agreement by Lande,s acquisition of any interest in any of the Collateral, whether by foreclosure or otherwise. Litigation and Claims. No litigation, claim, Investigation, administrative proceeding or similar action (including those for unpaid taxes) against Borrower is pending or threatened, and no other event has occurred which may materially adversely affect Borrower's financial condition or properties, other than litigation, claims, or other events, if any, that have been disclosed to and acknowledged by Lender In writing. Taxes. To the best of Borrower's knowledge, all of Borrower's tax returns and reports that are or were required to be filed, have been filed, and all taxes, assessments and other govemmental charges have been paid in full, except those presently being or to be untested by Borrower in good faith in the ordinary course of business and for which adequate reserves have been provided. Lien Priority. Unless otherwise previously disclosed to Lender In writing, Borrower has not entered Into or granted any Security Agreements, or permitted the filing or attachment of any Security Interests on or affecting any of the Collateral directly or Indirectly securing repayment of Borrower's Loan and Note, that would be prior or that may in any way be superior to Lender's Security Interests and ruts In and to such Collateral. Binding Effect. This Agreement, the Note, all Security Agreements (If any), and all Related Documents are binding upon the suers thereof, as well as upon their successors, representatives and assigns, and are legally enforceable in accordance with their respective terms. AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lander that, so long as this Agreement remains In effect, Borrower will: Notices of Claims and Litigation. Promptly Inform Lender in writing of (1) all material adverse changes in Borrower's financial condition, and (2) all existing and all threatened litigation, claims, Investigations, administrative proceedings or similar actions affecting Borrower or any Guarantor which could materially affect the financial condition of Borrower or the financial condition of any Guarantor. Financial Records. Maintain Its books and records In accordance with GAAP, applied on a consistent basis, and permit Lender to examine and audit Borrower's books and records at all reasonable times. Financial Statements. Fumish Lender with the following: Annual Statements. As sun as available, but In no event later than one-hundred-twenty (120) days after the end of each fiscal year, Borrower's balance sheet and Income statement for the year ended, compiled by a certified public accountant satisfactory to Lender. Tax Rotuma. As soon as available, but In no event later than thirty (30) days after the applicable filing date for the tax reporting period ended, Federal and other governmental tax returns, prepared by Borrower. All financial reports required to be provided under this Agreement shall be prepared in accordance with GAAP, applied on a consistent basis, and certified by Borrower as being true and correct. Additional Information. Fumish such additional Information and statements, as Lender may request from time to time. Insurance. Maintain fire and other risk insurance, public liability Insurance, and such other insurance as Lender may require with respect to Borrower's properties and operations, In form, amounts, coverages and with Insurance companies acceptable Lender, will deliver to Lender from time to time the policies or certificates of Insurance inform satisfactory to Lender, including stipulalations that coverages will not be cancelled or diminished without at least ten (10) days prior written notice to Lender. Each Insurance policy also shall include an endorsement providing that coverage In favor of Lender will not be impaired in any way by any act, omlesion or default of Borrower or any other person. In connection with all policies covering assets in which Lender holds or Is offered a security interest for the Loans, Borrower will provide Lender with such lender's loss payable or other endorsements as Lender may require. Insurance Reports. Furnish to Lender, upon request of Lender, reports on each existing Insurance policy showing such information as Lender may reasonably request, Including without limitation the following: (1) the name of the insurer; (2) the risks Insured; (3) the amount of the policy; (4) the properties Insured; (5) the then current property values on the basis of which Insurance has been obtained, and the manner of determining those values; and (6) the expiration date of the policy. In addition, upon request of Lender (however not more often than annually), Borrower will have an Independent be pa satisfactory tLLender determine, as applicable, the actual cash value or replacement cost of any Collateral. The cost of such Guaranties. Prix to disbursement of any Loan proceeds, fumish executed guaranties of the Loans in favor of Lender, executed by the guarantor named below, on Lender's forms, and in the amount and under the conditions set forth in those guaranties. Name of Guarantor Amount Henrik Sharnirian $216,000.00 Other Agreements. Comply with all terms and conditions of all other agreements, whether now or hereafter existing, between Borrower and any other party and notify Lender Immediately In writing of any default In connection with any other such agreements. oan Proceeds. Use all Loan proceeds solely for Borrower's business operations, unless specifically consented to the contrary by Lender in writing. Taxes, Charges and Liens. Pay and discharge when due all of its indebtedness and obligations, including without limitation all assessments, taxes, governmental charges, levies and liens, of every kind and nature, Imposed upon Borrower or its properties, income, or profits, prior to the date on which penalties would attach, and all lawful claims that, if unpaid, might become a lien or charge upon any of Borrower's properties, income, or profits. Performance. Perform and comply, in a timely manner, with all terms, conditions, and provisions set forth in this Agreement, In the Related BUSINESS LOAN AGREEMENT Loan No: 500050851 (Continued) Page Documents, and in all other Instruments and agreements between Borrower and Lender. Borrower shall notify Lender immediately in writing of any default in connection with any agreement Operations. Maintain executive and management personnel with substantially the same qualifications and experience as the present executive and management personnel; provide written notice to Lender of any change In executive and management personnel; conduct its business affairs in a reasonable and prudent manner. Environmental Studies. Promptly conduct and complete, at Borrower's expense, all such investigations, studies, samplings and testings as may be requested by Lender or any governmental authority relative to any substance, or any waste or by-product of any substance defined as toxic or a hazardous substance under applicable federal, state, or local law, rule, regulation, order or directive, at or affecting any property or any facility owned, leased or used by Borrower. Compliance with Governmental Requirements. Comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental authorities applicable to the conduct of Borrower's properties, businesses and operations, and to the use or occupancy Collateral, including without limitation, the Americans V ft Disabilities Act. Borrower may contest In the regulation and withhold compliance during any proceeding, Including appropriate appeals, so long as Borrower hafaith s notified sLender In writing for to doing so and so long as, in Lender's sole opinion, Lender's Interests in the Collateral are not jeopardized. Lender may require Borrower to adequate security or a surety bond, reasonably satisfactory to Lender, to protect Lender's Interest. post Inspection. Permit employees or agents of Lender at any reasonable time to inspect any and all Collateral for the Loan or Loans and Borrower's other properties and to examine or audit Borrower's books, accounts, and records and to make copies and memoranda of Borrower's books, accounts, and records. If Borrower now or at any time hereafter maintains any records (including without limitation computer generated records and computer software programs for the generation of such records) in the possession of a third party, Borrower, upon request of Lender, shall notify such party to permit Lender free access to such records at all reasonable times and to provide Lender with copies of any records it may request, all at Borrower's expense. Environmental Compliance and Reports. Borrower shall comply in all respects with any and all Environmental Laws; not cause or penult to exist, as a result of an intentional or unintentional action or omission on Borrower's part or on the part of any third party, on property owned and/or occupied by Borrower, any environmental activity where damage may result to the environment, unless such environmental activity is pursuant to and In compliance with the conditions of a permit Issued by the appropriate federal, state or local governmental authorities; shall furnish to Lender promptly and in any evert within thirty (30) days after receipt thereof a copy of any notice, summons, lien, citation, directive, letter or other communication from any governmental agency or instrumentality concerning any Intentional or unintentional action or omission on Borrower's part In connection with any environmental activity whether or not there Is damage to the environment and/or other natural resources. Additional Assurances. Make, execute and deliver to Lefler such promissory notes, mortgages, deeds of trust, security agreements, assignments, financing statements, Instruments, documents and other agreements as Lefler or its attorneys may reasonably request to evidence and secure the Loans and to perfect all Security Interests. LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's Interest in the Collateral or If Borrower fails to comply with any provision of this Agreement or any Related Documents, including but not limited to Borrower's failure to discharge or pay when due any amounts Borrower is required to discharge or pay under this Agreement or any Related Documents, Lender on Borrowers behalf may (but shall not be obligated to) take any action that Lefler deems appropriate, including but not limited to discharging or paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on any Collateral and paying all costs for Insuring, maintaining and preserving such Lexpenditu en for the Incurred or paid by Lender for such purposes will then bear Interest at the rate charged under the Note from the da CIncurred lateralor All paid by date of option, will A be repayment by Borrower. All such expenses will become a part of the Indebtedness and, at Lender's () payable on demand; (B) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during either (1) the term of any applicable Insurance policy; or (2) the remaining term of the Note; or (C) be treated as a balloon payment which will be due and payable at the Note's maturity. CESSATION OF ADVANCES. If tender has made any commitment to make any Loan to Borrower, whether under this Agreement or under any other agreement, Lender shall have no obligation to make Loan Advances or to disburse Loan under the terms of this Agreement or any of the Related Documents or any other agreement that Borrower Borrower or any Gua?? has with ?e ; (B) default Borrower or any Guarantor dies, becomes Incompetent or becomes insolvent, files a petition In bankruptcy bankrupt; (C) there occurs a material adverse change In Borrowers financial condition, In the financial condition of any Guarantor, , or Is or In the value of any Collateral securing any Loan; or (D) any Guarantor seeks, claims or otherwise attempts to limit, modify or revoke such Guarantors guaranty of the loan or any other loan with Lender, or (E) Lender In good faith deems itself Insecure, even though no Event of Default shall have occurred. RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Borrowers accounts with Lender (whether checking, savings, or some other account). This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open In the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the Indebtedness against any and all such accounts, and, at Lenders option, to administratively freeze all such accounts to allow Lender to protect Lender's charge and setoff rights provided in this paragraph. DEFAULT. Each of the following shall constitute an Event of Default under this Agreement: Payment Default. Borrower tails to make any payment when due under the Loan. Other Defaults. Borrower falls to comply with or to perform any other tens, obligation, covenant or condition contained in this Agreement 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. False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrowers behalf under this Agreement or the Related Documents Is false or misleading In any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter. Death or Insolvency. The dissolution of Borrower (regardless of whether election to continue is made), any member withdraws from Borrower, or any other termination of Borrower's existence as a going business or the death of any member, the Insolvency of Borrower, the appointment of a receiver for any part of Borrowers 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. Detective Collaterelizatlon. This Agreement or any of the Related Documents ceases to be in full force and effect (including failure of any collateral document to create a valid and perfected security Interest or lien) at any time and for any reason. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfelture 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 BUSINESS LOAN AGREEMENT Loan No: 500050851 (Continued) Page 4 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 gwos 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. Adverse Changa. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of the Loan Is Impaired. Insecurity. Lender in good faith believes Itself insecure. EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except where otherwise provided In this Agreement or the Related Documents, all commitments and obligations of Lender under this Agreement or the Related Documents or any other agreement immediately will terminate (including any obligation to make further Loan Advances or disbursements), and, at Lender's become due and payable, all without notice of any kind to Borrower, except that In the case of an Evenoption, efaall ult of the Indebtedness immediately will 'Insolvency' subsection above, such acceleration shall be automatic and not optional. In addition, Lender shall have all the?righis and remedies described In the provided in the Related Documents or available at law, in equity, or otherwise. Except as may be prohibited by applicable law, all of Lender's rights and remedies shall be cumulative and may be exercised singularly or concurrently. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Borrower or of any Grantor shall not affect Lender's right to declare a default and to exercise its rights and remedies. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Agreement: maAners ttd set forth ini this ?, tamer with any Related Documents, constitutes the entire understanding and agreement of the parties as to the Agreement No alteration of or amendment to this Agreement 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. Attorneys' Fess; Expenses. Borrower 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 Agreement. Lender may hire or pay this Agreement, and Borrower shall pay the costs and expenses of such enforcement. Costs and expenses someone else r help enforce ney' in a fees and legal expenses whether or not there Is a lawsuit, including attorneys' fees and legal expenses for kru? Nude Lender's aclud efforts to modify or vacate any automatic stay or Injunction), appeals, and any anticipated post-judgment collection services. Borrower (ri also shalll pay all court costs and such additional fees as may be directed by the court. pay all ion pap tis slfofeaddin s. Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the ov this Agreement. Consent to Loan Participation. Borrower agrees and consents to Lender's sale or transfer, whether now or later, of one or more participation Interests In the Loan to one or more purchasers, whether related or unrelated to Lender. Lender may provide, without any limitation whatsoever, to any one or more purchasers, or potential purchasers, any information or knowledge Lender may have about Borrower or about any other matter relating to the Loan, and Borrower hereby waives any rights to privacy Borrower may have with respect to such matters. Borrower additionally waives any and all notices of sale of participation interests, as well as all notices of any repurchase of such participation Interests. Borrower also agrees that the purchasers of any such participation interests will be considered as the absolute owners of such Interests in the Loan and will have all the rights granted under the participation agreement or agreements governing the sale of such participation Interests. Borrower further waives all rights of offset or counterclaim that it may have now or later against Lender or against an unconditionally agrees that either Lender or such purchaser may enforce Borrower's obligation under the Loan IIrreasppe?ie? Interest and insolvency of any holder of any Interest In the Loan. Borrower further agrees that the purchaser of any such participation Interests ay enforce its Interests Irrespective of any personal claims or defenses that Borrower may have against Lender. Governing Law. This Agreement will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the Commonwealth of Pennsylvania without regard to its conflicts of law provisions. This 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 Dauphin County, Commonwealth of Pennsylvania. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Agreement unless such waiver is given In writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Agreement shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Agreement. No prior waiver by Lender, nor any course of dealing between Lender and Borrower, or between Lender and any Grantor, shall constitute a waiver of any of Lender's rights as to any future transactions. Whenever the consent of Lender is requred under this Agreement 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. Notie& Unless otherwise provided by applicable law, any notice required to be given under this Agreement shall be given in writing, and shall be effective when actually delivered, when actually received by telefacsimils (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Agreement. Any party may change its address for notices under this Agreement by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address. For notice purposes, Borrower agrees to keep Lender informed at all times of Borrower's current address. Unless otherwise provided by applicable law, If there is more than one Borrower, any notice given by Lender to any Borrower Is deemed to be notice given to all Borrowers. Severabllity. 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 lt 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 unenforceability of any provision of this Agreement shall not affect the legality, validity or enforceability of any other provision of this Agreement Subsidiaries and Affiliates of Borrower. To the extent the context of any provisions of this Agreement makes it appropriate, including without limitation any representation, warranty or covenant, the word 'Borrower' as used in this Agreement shall include all of Borrower's subsidiaries and affiliates. Notwithstanding the foregoing however, under no circumstances shall this Agreement be construed to require Lender to make any Loan or other financial accommodation to any of Borrower's subsidiaries or affiliates. BUSINESS LOAN AGREEMENT Loan No: 500050851 (Continued) Page Successors and Assigns. All covenants and agreements by or on behalf of Borrower contained in this Agreement or any Related Documents shall bind Borrower's successors and assigns and shah Inure to the benefit of lender and its successors and assigns. Borrower shall not, however, have the right to assign Borrower's rights under this Agreement or any interest therein, without the prior written consent of Lender. Survival of Representations and Warranties. Borrower understands and agrees that in making the Loan, Lender Is relying on all epresentatkxis, warranties, and covenants made by Borrower In this Agreement or in any certificate or other Instrument delivered by Borrower to Lender under this Agreement or the Related Documents. Borrower further agrees that regardless of any investigation made by Lender, all such representations, warranties and covenants will survive the making of the Loan and delivery to Lender of the Related Documents, shall be continuing In nature, and shah remain in full force and effect until such time as Borrower's Indebtedness shah be paid in full, or until this Agreement shall be terminated in the manner provided above, whichever is the last to occur. Time Is of the Essence. Time is of the essence in the performance of this Agreement. Wave Jury. All parties to this Agreement hereby waive the right to any jury trial In any action, proceeding, or counterclaim brought by any party against any other party. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Agreement. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used In the singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Agreement shall have the meanings attributed to such terms In the Uniform Commercial Code. Accounting words and terms not otherwise defined in this Agreement shall have the meanings assumed to them in accordance with generally accepted accounting principles as In effect on the date of this Agreement: Advance. The word "Advance' means a disbursement of Loan funds made, or to be made, to Borrower or on Borrower's behalf on a line of credit or multiple advance basis under the terms and conditions of this Agreement. time Agreement. The word "Agreement" means this Business Loan Agreement, as this Business Loan Agreement may be amended or modified from to time, together with all exhibits and schedules attached to this Business Loan Agreement from time to time. Borrower. The word 'Borrower" means Henrix, LLC dba T&M Automotive and includes all co-signers and co-makers signing the Note and all their successors and assigns. Collateral. The word "Collateral" means all property and assets granted as collateral security for a Loan, whether real or personal property, whether granted directly Indirectly, trust, assignment, ether granted now or In the future, and whether granted In the form of a security interest, mortgage, collateral mortgage, ignment, pledge, crop pledge, chattel mortgage, collateral chattel mortgage, trust, conditional sale, trust receipt, lien, charge, lien or title retention contract, lease or consignment Intended as a security device, or, any other security or lien interest whatsoever, whether created by law, contract, or otherwise. Environmental Laws. The words "Environmental Laws" mean any and all state, federal and local statutes, regulations and ordinances relating to the protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto. Event of Default. The words "Event of Default' mean any of the events of default set forth in this Agreement In the default section of this Agreement. GAAP. The word "GAAP" means generally accepted accounting principles. Grantor. The word 'Grantor' means each and all of the persons or entities granting a Security Interest in any Collateral for the Loan, including without limitation all Borrowers granting such a Security Interest. Guarantor. The word "Guarantor" means any guarantor, surety, or accommodation party of any or all of the Loan. Guaranty. The word "Guaranty" means the guaranty from Guarantor to Lender, Including without limitation a guaranty of all or part of the Note. Hazardous Substances. The words 'Hazardous Substances" mean materials that, because of their quantity, concentration or physical, chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words "Hazardous Substances are used in their very broadest sense and Include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the Environmental Laws. The term "Hazardous Substances" also includes, without limitation, petroleum and petroleum by-products or any fraction thereof and asbestos. Indebtedness. The word "Indebtedness" means the Indebtedness evidenced by the Note or Related Documents, including all principal and interest together with all other indebtedness and costs and expenses for which Borrower Is responsible under this Agreement or under any of the Related Documents. Lender. The word 'Lender' means Mid Penn Bank, its successors and assigns. Loan. The word "Loan' means any and all loans and financial accommodations from Lender to Borrower whether now or hereafter existing, and however evidenced, including without limitation those bans and financial accommodations described herein or described on any exhibit or schedule attached to this Agreement from time to time. Note. The word 'Note' means the Note executed by Henrix, LLC dba T&M Automotive in the principal amount of $216,000.00 dated January 16, 2009, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the note or credit agreement. Related Documents. The words 'Related Documents' mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter existing, executed in connection with the Loan. Security Agreement. The words "Security Agreement" mean and include without limitation any agreements, promises, covenants, arrangements, understandings or other agreements, whether created by law, contract, or otherwise, evidencing, governing, representing, or creating a Security Interest. Security Interest. The words "Security Interest" mean, without limitation, any and all types of collateral security, present and future, whether in the form of a lien, charge, encumbrance, mortgage, deed of trust, security deed, assignment, pledge, crop pledge, chattel mortgage, collateral chattel mortgage, chattel trust, factor's lien, equipment trust, conditional sale, trust receipt, lien or title retention contract, lease or consignment intended as a security device, or any other security or lien interest whatsoever whether created by law, contract, or otherwise. BUSINESS LOAN AGREEMENT Loan No: 500050851 (Continued) Page 6 BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN AGREEMENT AND BORROWER AGREES T ITS TERMS. THIS BUSINESS LOAN AGREEMENT 18 DATED JANUARY 18, 2009, THIS AGREEMENT IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS AGREEMENT 18 AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. BORROWER: HENRIX, LLC/D?BA T&M AUTOMOTIVE By: Henri k ami an, embegeel) of Henrix, L d TdcM Automotive LENDER: MID PENN BANK By: Robert McDonald, Vice resident seeq wee PRO trtl % v . &NA MM Capt. NVMW ftW WW Serer, ha 1W, Na M X M MM. • M r.'W LLMWAMFC TR.&M Fl1dHCCTegq EXHIBIT'B' ? ?11? 14,12 3 17 LLC dbe T&M Automotive (TIN: 1412 Trindli Road Carlisle, PA 17015 -WIMRIt LU a"y paracuiar wan or item. limitations. Mid Penn Bank Allentown Boulevard 5500 Allentown Boulevard Harrisburg, PA 17112 THIS COMMERCIAL SECURITY AGREEMENT dated January 1e, 2000, is made and executed between Henrfx, LLC dba T&M Automotive ('Grantor') and Mid Penn Bank ("Lender'). GRANT OF SECURITY INTEREST. For valuable consideration, Grantor grants to Lender a security Interest in the Collateral to secure the Indebtedness and egress that Lender shall have the rights stated In this Agreement with respect to the Collateral, in addition to all other rights which Lender may have by law. COLLATERAL DESCRIPTION. The word "Collateral" as used in this Agreement means the following described property, whether now owned or hereafter acquired, whether now existing or hereafter arising, and wherever located, In which Grantor Is giving to Lender a security Interest for the payment of the Indebtedness and performance of all other obligations under the Note and this Agreement: Purchase Money Security Interest in all Inventory, Chattel Paper, Accounts, Equipment and General Intangibles In addition, the word "Collateral" also Includes all the following, whether now owned or hereafter acquired, whether now existing or hereafter arising, and wherever located: (A) All accessions, attachments, accessories, tools, parts, supplies, replacements of and additions to any of the collateral described herein, whether added now or later. (B) All produce and produce of any of the property described In this Collateral section. disposAll itionany of the property Ipt ?I?ri? in this Co??emmonies, ? payments, and all other rights, arising out of a sale, lease, consignment or other (D) All proceeds (including Insurance proceeds) from the sale, destruction, loss, or other disposition of any of the Collateral section, and sums due from a third party who has damaged or destroyed the Collateral or from that property described in this Judgment, settlement or other process, party's Insurer, whether due to (E) All records and data relating to any of the property described In this Collateral section, whether in the form of a writing, microfiche, or electronic media, together with all of Grantor's right, title, and interest In and to all computer software ruirreed ttoututilize,creal e, maintain, and process any such records or data on electronic media. CROSS-COLLATERALIZATiON. In addition to the Note, this Agreement secures all obligations, debts and liablifes, plus Interest thereon, to Lender, or any one or more of them, as well as all claims by Lender against Grantor or any one or more of them, whether now existing orofhereafterGrantor arising, whether related or unrelated to the purpose of the Note, whether voluntary or otherwise, whether due or not due, direct or indirect, determined or undetermined, absolute or contingent, liquidated or unliquidated, whether Grantor may be liable individually or jointly with others, whether obligated statute of lI or, s oet ,an?e? ? obparty ligation ye, and whether recovery upon such amounts may be or hereafter may become barred by any gb repay such amounts may be or hereafter may become otherwise unenforceable. FUTURE ADVANCES. In addition to the Note, this Agreement secures all future advances made by Lender to Grantor regardless of whether the advances are made a) pursuant to a commitment or b) for the same purposes. RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff In all Grantor's accounts with Lender (whether checking, savings, or some other account). This includes all accounts Grantor holds jointly with someone else and all accounts Grantor may the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Go antoir authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the Indebtedness against any and all such accounts, and, at Lender's option, to administratively freeze all such accounts to allow Lender to protect Lender's charge and setoff rights provided in this paragraph. GRANTOR'S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COLLATERAL. with respect to the Collateral, Grantor represents and promises to Lender that: P efe ion the Security IMF. Grantor agrees to take whatever actions are requested by Lender to perfect and continue Lender's security Pon request of Lender, Grantor will deliver to Lender any and all of the documents evidencing or constituting the Collateral, and Grantor will note Lender's interest upon any and all chattel paper and instruments if not delivered to Lender for possession Lender. This Is a continuing Security Agreement and will continue in effect even though all or any part of the Indebtedness Is paid In full and even though for a period of time Grantor may not be Indebted to Lander. Notices to Lander. Grantor will promptly notify Lender in writing at Lender's address shown above (or such other addresses as Lender may designate from time to time) prior to any (1) change in Grantor's name; (2) change In Grantor's assumed business name(s); (3) change In the management or in the members or managers of the IimRed liability company Grantor; (4) change in the authorized signer(s); (5) change in Grantor's principal office address; (t3) change in Grantor's state of or (7) conversion of Grantor to a new or different type of business en of or (8) change in any or aspect of Grantor th at directly or indirectly relates to any agreements between Grantor and Lender. No change in Grantor's name or state ol organization will take effect until after Lender has received notice. No Violation. The execution and delivery of this Agreement will not violate any law or agreement governing Grantor or to which Grantor is a party, and its membership agreement does not prohibit any term or condition of this Agreement. Enforceability of Collateral. To the extent the Collateral consists of accounts, chattel paper, or general intangibles, as defined by the Uniform Commercial Code, the Collateral is enforceable in accordance with its terms, is genuine, and fully compiles with all applicable laws and regulations concaming form, content and manner of preparation and execution, and all and capacity b contract and are fn fact obligated as th a persons appearing b obligated on the Collateral have authority interest in favor of Lender, the account shall be a ppeer to be on the Collateral. At the Ume any account becomes subject to a security account debtor, for merchandise held su 9end and valid account representing an undisputed, bona tide indebtedness Incurred by the bject b delNery instn?ctions or previously shipped or delivered pursuant b a contract of sale. or for COMMERCIAL SECURITY AGREEMENT COMMERCIAL SECURITY AGREEMENT Loan No: 500050851 (Continued) Page 2 services 's previously performed by Grantor with or for the account debtor. So long as this Agreement remains in effect, Grantor shall not, without Lenders prior written consent, compromise, settle, adjust, or extend payment under or with regard to any such Accounts. There shall be no setoffs or counterclaims against any of the Collateral, and no agreement shall have been made under which any deductions or discounts may be claimed concerning the Collateral except those disclosed to Lender In writing. Location of the Collateral. Except In the ordinary course of Grantor's business, Grantor agrees to keep the Collateral (or to the extent the Collateral consists of intangible property such as accounts or general intangibles, the records concerning the Collateral) at Grantor's address shown above or at such other locations as are acceptable to Lender. Upon Lender's request, Grantor will deliver to Lender in form satisfactory to Lender a schedule of real properties and Collateral locations relating to Grantor's operations, including without limitation the fol uses; roperty Grantor owns or Is purchasing; (2) all real property Grantor is renting or leasing; (3) all storage facilities Grantor owns rents lease leases, or and () all other properties where Collateral is or may be located. Removal of the Collateral. Except In the ordinary course of Grantor's business, including the sales of inventory, Grantor shall not remove the Collateral from Its existing location without Lender's prior written consent To the extent that the Collateral consists of vehicles, or other tided property, Grantor shall not take or permit any action which would require application for certificates of title for the vehicles outside the e Collater? of Pennsylvania, without Lender's prior written consent Grantor shall, whenever requested, advise Lender of the exact location of Transactions Involving Collateral. Except for inventory sold or accounts collected In the ordinary course of Grantor's business, or as otherwise provided for in this Agreement, Grantor shall not sell, offer to sell, or otherwise transfer or dispose of the Collateral. While Grantor Is not in default under this Agreement, Grantor may sell inventory, but only In the ordinary course of its business and only to buyers who qualify as a buyer In the ordinary course of business. A sale In the ordinary course of Grantor's business does not Include a transfer in partial or total satisfaction of a debt encuany or ch Grantor shall not pledge, mortgage, encumber or otherwise permit the Collateral to be subject to any lien, security interest, ther i? the security Interest provided for In this Agreement, without the prior written consent of Lender. This Includes security Interests even if ojunior disposition of the Collateral (for whatever reason) shall be held in trust under this Lender and shall Cnot be Unless commin witany p other proceeds from any however, this requirement shall not constitute consent by Lender to any sale or other disposition. Upon receipt, Grantor shall Immfunds; ovided any such proceeds to Lender. ediate y deliver TM& Grantor represents and warrants to Lender that Grantor holds good and marketable tide to the Collateral, free and clear of all liens and encumbrances except for the lien of this Agreement No financing statement covering any of the Collateral is on file in any public office other than those which reflect the security Interest created by this Agreement or to which Lender has specifically consented. Grantor shall defend Lender's rights In the Collateral against the claim and demands of all other persons. Repairs and Maintenance. Grantor agrees to keep and maintain, and to cause others to keep and maintain, the Collateral in good order, repair and cond remains rendered oar materials mishiedthInsco nreemen ectiontwith theCollateral so that no lien or encumbrancwhen due all claims for work done on, or services Collateral. e may ever attach to or be led against the Inspection of Collateral. Lender and Lender's designated representatives and agents shall have the right at all reasonable times to examine and inspect the Collateral wherever located. Taxes, Assessments and Liens. Grantor will pay when due all taxes, assessments and liens upon the Collateral, its use or o upon this pera upon any promissory note or rotes evidencing the Indebtedness, or upon any of the other Related Documents. Grantor m y withhold any such payment or may elect to contest any lien if Grantor Is In good faith conducting an and so long as Lender's Interest In the Collateral is not Jeopardized in Lender's sole opinion if thetCollate amts subjectedtto a limn which Ispnot discharged within fifteen (15) days, Grantor shall deposit with Lender cash, a suffclent Lender In an amount adequate to provide for the discharge of the lien plus any Interest, costs, attorneys' fees or other c arges thatscould ? eo as a result of foreclosure or sale of the Collateral. In any contest Grantor shall defend Itself and Lender and shall satisfy any final adverse judgment before enforcement against the Collateral. Grantor shall name Lender as an additional obligee under any surety bond fumished in the contest proceedings. Grantor further agrees to fumish Lender with evidence that such taxes, assessments, and governmental and other charges have been paid in full and Ina timely manner. Grantor Imayy withhold any such payment or may elect to contest any lien if Grantor is in good faith conducting an appropriate proceeding obligation pay and so long as Lender's Interest In the Collateral is not Jeopardized. Compliance with Governmental Requirements. Grantor shall corn and regulations governmental authorities, now or hereafter in effect, applicable to the ownership,, production, with disposition, or rduse of the Collateral, Including all laws II or regulations relating to the undue erosion of highly-erodible land or relating to the conversion of wetlands for the product or commodity. Grantor may contest In production of any agricultural Includin good faith any such law, ordinance or regulation and withhold compliance during any proceeding, 9 appropriate appeals, so long as Lender's interest In the Collateral, in Lender's opinion, is not jeopardized. Hazardous Substances. Grantor represents and warrants that the Collateral never has been, and never will be so long as this Agreement remains a lien on the Collateral, used In violation of any Environmental Laws or for the generation, manufacture, storage, transportation, treatment, disposal, release or threatened release of any Hazardous Substance. The representations and warranties contained herein are based on Grantor's duad iligence In Investi gating the Collateral for Hazardous Subs7er es, Grantorhereby (1) releases and waives any future claims against Lender for indemnity or contribution in the avant Grantor becomes cleanup or other costs under any Environmental Laws, and (2) agrees to 'n n k Uon m tndemn? ily less and end all sa?e y as laims and losses resulting from a breach of this provision of this Agreement. payment of the Indebtedness and the satisfaction of this Agreement Maintenance of Casualty Insurance. Grantor shall procure and maintain all risks Insurance, including without limitation fire, theft and liability coverage together with such other insurance as Lender may require with respect to the Collateral, in form, amounts, coverages and basis reasonably acceptable to Lender and issued by a company or companies reasonably acceptable to Lender. Grantor, u deliver to Lender from time to time the policies or certificates of Insurance in form satisfactory ? request of Lender, will not be cancelled or diminished without at least ten days' wry to Lender, including stipulations that coverages will for failure to (10) prior written notice to Lender and not Including any disclaimer of the Insurer's liability fo tied in give such a notice. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be holds or is of ered a secure Inter?sG omission wej prow de L Lender any s? ?SOn• In connection with all policies covering assets in rewhi . If Lender at any time fails to obtain or maintain any Insurance as required under this Agrpayable or other eement, Lender may (but shall not bed obligated tto)reobtain suchr insurance as Lender deems appropriate, Including If Lender so chooses 'single interest insurance,' which will cover nnlu I --I-- Collateral. Application of Insurance Proceeds. Grantor shall promptly notify Lender of any loss or damage to the Collateral, whether or not such casualty or loss is covered by Insurance. Lender may make proof of loss If Grantor fails to do so within fifteen (15) days of the casualty. All proceeds of any insurance on the Collateral, including accrued proceeds thereon, shall be held by Lender as part of the Collateral. If Lender consents to repair or ranla?g wnanf of the rl,maruuf nr rlactrnvarr r`.nllataral. I anrlar Rhall. uoon satisfactorv proof of expenditure. oav or reimburse Grantor from the COMMERCIAL SECURITY AGREEMENT Loan No: 500050851 (Continued) Page Proceeds for the reasonable cost of repair or restoration. If Lender doss not consent to repair or replacement of the collateral, Lender shall retain a sufficient amount of the proceeds to pay all of the Indebtedness, and shall pay the balance to Grantor. Any proceeds which have not been disbursed within six (6) months after their receipt and which Grantor has not committed to the repair or restoration of the Collateral shall be used to prepay the Indebtedness. Insurance Reserves. Lender may require Grantor to maintain with Lender reserves for payment of Insurance premiums, which reserves shall be created by monthly payments from Grantor of a sum estimated by Lender to be sufficient to produce, at least fifteen (15) days before the premium due date, amounts at least equal to the insurance premiums to be paid. If fifteen (15) days before payment is due, the reserve funds are insufficient, Grantor shall upon demand pay any deficiency to Lander. The reserve funds shall be held by Lender as a general deposit and shall constitute a non-Interest-bearing account which Lender may satisfy by payment of the Insurance premiums required to be paid by Grantor as they become due. Lender does not hold the reserve funds In trust for Grantor, and Lender Is not the agent of Grantor for payment of the insurance premiums required to be paid by Grantor. The responsibility for the payment of premiums shall remain Grantor's sole responsibility. Insurance Reports. Grantor, upon request of Lender, shall fumish to Lender reports as Lender may reasonably request including the following: (i) the name oIsurreerh(2 a ?kp s icy his ed; (g) the ashowing m of tide policy; (4) the property insured; (5) the then current value on the basis of which Insurance has been obtained and the manner of determining that value; and (6) the expiration date of the policy. In addition, Grantor shall have an Independent appraiser satisfy upon request Lender (however not more often than annually) story to Lender determine, as applicable, the cash value or r replacement cost of the Collateral. Financing Statements. Grantor authorizes Lender to file a UCC financing statement, or aftematively, a copy of this Agreement to perfect Lender's security Interest At Lender's request, Grantor additionally agrees to sign all other documents that are necessary to Lender's security Interest in the Property. Grantor will pay all filing fees, title transfer fees, and other fees and osts Inv olvedua? pand ?ed by law or unless Lender is required by law to pay such fees and costs. Grantor Irrevocably transfer title if there is a defaulL Lender may file a copy of this A appoints to execute documents necessary o address, or the name or address of an y Agreement as a financing statement If Grantor changes Grantor's name or of such char any person granting a security interest under this Agreement changes, Grantor will promptly nobly the Lender ge. GRANTOR'S RIGHT TO POSSESSION AND TO COLLECT ACCOUNTS. Until default and except as otherwise provided below with respect to accounts, Grantor may have possession of the tangible personal property and beneficial use of all the Collateral and may use it in any lawful manner not Inconsistent with this slon re ?e Collateral by Lender Documents, d provided that Grantor's right to possession and beneficial use shall not apply to any Collateral where pit by perfect Lender's security Interest In such Collateral. Until otherwise notified by Lender, Grantor may collect any of the Collateral consisting of accounts. At any time and even though no Event of Default exists, Lender may exercise its rights to collect the accounts and to notify account debtors to make Lender at an time has payments directly tender for application the Indebtedness, If y possession of any Collateral, whether before or after an Event of Default, Lender shall be deemed to have exercised reasonable care In the custody and preservation of the Collateral If Lender takes such action for that purpose as Grantor shall request or as Lender, in Lender's sole discretion, shall deem appropriate under the circumstances, but failure to honor an to exercise reasonable care. Lender shall not be required to take any st by of to n y request ve Grantor aGrantor rights in shall the C not C itself ollateral bl deemed be a failure to protect, preserve or maintain any security Interest given to secure te Indebtedness. to preserv against prix parties, nor LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's Interest In the Collateral or ff Grantor falls to comply with any provision of this Agreement or any Related Documents, Including but not limited to Grantor's failure to discharge or pay when due obliga to) any at ount take tarror Is y ra? that discharge Lender psay under this Agreement or any Related Documents, Lender on Grantor's behalf may (but shall not be encumbrances and other claims, at any time levied por placeedf outhegCol notterallimited and to discharging or payu all taxes, liens, security interests, Collateral. All such expenditures Incurred or paid by Lender for such purposes will thenb b ear Iall costs for insuring, maintaining and preserving the incurred or paid by Lender to the date of ear nterest at the rate charged under the Note from the date repayment by Grantor. All such expenses will become a part of the Indebtedness and, at Lender's option, will (A) be payable on demand; (B) be added to the balance of the Note and be apportioned a become due during either (1) the term of any applicable insurance I mong and payable with any installment payments to payment which will be due and Po loY; or (2) the remaining term of the Note; or (C) be treated as a balloon addition to all other payable at the Notes maturity. The Agreement also will secure payment of these amounts. Such right shall be in rights and remedies to which Lender may be entitled upon Default DEFAULT. Each of the following shall constitute an Event of Default under this Agreement Payment Default. Grantor fails to make any payment when due under the Indebtedness. Other Defaults. Grantor fails to comply with or to perform any other term, obligation, covenant or condition contained in this Agreement or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Grantor. False Statements. Any warranty, representation or statement made or furnished to Lender by Grantor or on Grantor's behalf under this Agreement or the Related Documents is false or misleading in any material respect, either now or at the time made or fumished or becomes false or misleading at any time thereafter. Defective Collaterelizatlon. This Agreement or any of the Related Documents ceases to be in full force and effect (including failure of any collateral document to create a valid and perfected security Interest or lien) at any time and for any reason. Insolvency. The dissolution of Grantor (regardless of whether election to continue Is made), any member withdraws from the limited liabil company, or any other termination of Grantor's existence as a going business or the death of any member, the insolvency of Grantor, the appointment of a receiver for any part of Grantor's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Grantor. Creditor or Forfelture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, ssion or Threposse lodes gany oth of any by any creditor ditor ofnGtsr t Grantor any governmental agency against any collateral securing the Indebtedness. Inc if there is a good faith dls Y Grantor's Including deposit accounts, with Lender. However, this Event of Default shall not apply pute by Grantor as to the validity or reasonableness of the claim which Is the basis of the creditor or forfeiture proceeding and ff Grantor gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surely bond for the creditr 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 Guarantor dies or becomes Incompetent or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness. Adverse Change. A material adverse change occurs in Grantor's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is Impaired. Insecurity. Lender in good faith believes itself insecure. COMMERCIAL SECURITY AGREEMENT Loan No: 500050851 (Continued) Page 4 RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this Agreement, at any time thereafter, Lender shall have all the ruts of a secured party under the Pennsylvania Uniform Commercial Code. In addition and without limitation, Lender may exercise any one or more of the following rights and remedies: Aerate Indebtedness. Lender may declare the entire Indebtedness, including any prepayment penalty which Grantor would be required to pay, Immediately due and payable, without notice of any kind to Grantor. Assemble Collateral. Lender may require Grantor to deliver to Lender all or any portion of the Collateral and any and all certificates of title and other documents relating to the Collateral. Lender may require Grantor to assemble the Collateral and make it available to Lender at a place to be designated by Lender. Lender also shall have full power to enter upon the property of Grantor to take possession of and remove the Collateral. If the Collateral contains other goods not covered by this Agreement at the time of repossession, Grantor agrees Lender may take such other goods, provided that Lender makes reasonable efforts to return them to Grantor after repossession. Sell the Collateral. Lender shall have full power to sell, lease, transfer, or otherwise deal with the Collateral or proceeds thereof In Landes own name or that of Grantor. Lender may sell the Collateral at public auction or private sale. Unless the Collateral threatens to decline speedily in value or Is of a type customarily sold on a recognized market, Lender will give Grantor, and other persons as required by law, reasonable notice of the time and place of any public sale, or the time after which any private sale or any other disposition of the Collateral is to be made. However, no notice need be provided to any person who, after Event of Default occurs, enters into and authentk;ates an agreement waiving that person's right to notification of sale. The requirements of reasonable notice shall be met if such notice is given at least ten (10) days before the time of the sale or disposition. All expenses relating to the disposition of the Collateral, including without limitation the expenses of retaking, holding, insuring, preparing for sale and selling the Collateral, shall become a part of the Indebtedness secured by this Agreement and shall be payable on demand, with Interest at the Note rate from date of expenditure until repaid. Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the Collateral, with the power to protect and preserve the Collateral, to operate the Collateral preceding foreclosure or sale, and to collect the Rents from the Collateral and apply the proceeds, over and above the cost of the receivership, against the Indebtedness. The receiver may serve without bond If permitted by law. Lendes right to the appointment Lender shall receiver nshall ot disqualify whether or not the apparent value of the Collateral exceeds the Indebtedness by a substantial amount. Frrn isq ify person from serving as a receiver. Collect Revenues, Apply Accounts. Lender, either itself or through a receiver, may collect the payments, rents, Income, and revenues from the Collateral. Lender may at any time in Lender's discretion transfer any Collateral Into Landes own name or that of Lender's nominee and receive the payments, rents, income, and revenues therefrom and hold the same as security for the Indebtedness or apply it to payment of the Indebtedness In such order of preference as Lender may determine. Insofar as the Collateral consists of accounts, general intangibles, Insurance policies, instruments, chattel paper, chases in action, or similar property, Lender may demand, collect, receipt for, settle, compromise, adjust, sue for, foreclose, or realize on the Collateral as Lender may determine, whether or not Indebtedness or Collateral b then due. For these purposes, Lender may, on behalf of and in the name of Grantor, receive, open and dispose of mail addressed to Grantor, change any address to which mail ddir ro L stor and payments are to be sent; and endorse notes, checks, drafts, money orders, documents of title, Instruments and items pertaining loo payment, age of any Collateral. To facilitate collection, Lender may notlfy acxount debtors and obligors on any Collateral to make payments b ninDDeficie Lender duehooLes to sell any or all of the Collateral, Lender may obtain a judgment against Grantor for any deficiency remaing on Grantor shall be liable for a deficiency even If the t suction descrilbed inuthis subsection Is a sale of acco ts or ? v paper. in this Agreement. Other Rights and Remedies. Lender shall have all the rights and remedies of a secured creditor under the provisions of the Uniform Commercial Code, as may be amended from time to lime. In addition, Lender shall have and may exercise any or all other rights and remedies it may have available at law, in equity, or otherwise. Election of Remedies. Except as may be prohibited by applicable law, all of Lender's rights and remedies, whether evidenced this Agreement, the Related Documents, or by any other writing, shall be cumulative and may be exercised singularly or concurrently. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and obligation of Grantor under this Agreement, after Grantor's failure to perform, shall noelection to make t affect Lende srig?ht to rdecllare take fauand exercise an remedies. UNITED STATES SMALL BUSINESS ADMINISTRATION REQUIREMENTS. The Loan secured by this lien was made under a United States Small Business Administration (SBA) nationwide program which uses tax dollars to assist small business owners. If the United States is seeking to enforce this document, then under SBA regulations: a) When SBA is the holier of the Note, this document and all documents evidencing or securing this Loan will be construed in accordance with federal law. b) Lender or SBA may use local or state recording documents, giving notice, foreclosing liens, and other procedures for purposes such as filing papers, local or state control, penalty, tax or liability. No Borrower or Guar mayclaiusin the m or assssert against SBA any local or state law tofdeny any oblig tion of Borrower, or defeat any claim of SBA with respect to this Loan. Any clause In this document requiring arbitration is not enforceable when SBA is the holder of the Note secured by this Instrument. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Agreement: Amendments. This Agreement, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Agreement. No alteration of or amendment to this Agreement 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. Attorneys' Fass; Expenses. Grantor agrees to pay upon demand all of Landes costs and expenses, Including Lender's attorneys' fees and Lender's legal expenses, incurred In connection with the enforcement of this Agreement. Lender may hire or this Agreement, and Grantor shall pay the costs and expenses to 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. Grantor also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings. Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the provisions of this Agreement. Governing Law. This Agreement will be governed by federal law applicable to Lander and, to the extert not preempted by federal law, 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, Grantor agrees upon Lender's request to submit to the jurisdiction of the courts of Dauphin County, Commonwealth of Pennsylvania. COMMERCIAL SECURITY AGREEMENT Loan No: 500050851 (Continued) Page No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Agreement unless such waiver Is given In writing and signed by Lender. No delay or omission on thpart e Lander exercising any right shall operate as a waiver of such right or any other right. A Lander compliance with that a prov other vprov isor any this gr? provision of shall this A? prejudice or constitute a waiver of Lenders right otherwise to demand stria and Grantor, shall constitute a waiver of Agreement No prior waiver by Lander, nor any course of dealing between lender consent t Lender in any of Lender's rights or of any of Grantor's obligations as to any future transactions. Whenever the under this the consent to subsequent nstarnncces where such creement onsent is required and in all casessent by consent Lander may instance shall not constitute continuing of Lender. y granted or withheld In in the the sole discretion Notices. Unless otherwise provided by applicable law, any notice required to be given under this Agreement shall be given in writing, and shall be effective when actually delivered, when actually received by telefacslmile (unless otherwise required law, when recognized overnight courier, or, If mailed, when d by ) deposited with a nationally directed to the addresses shown near the eposited in the United States mail, as first class, certified or registered mail postage prepaid, giving formal written notice to the other beginning of this Agreement. Any party may change its address for notices under this Agreement by spec Grantor agrees to keep Lender informed a?ttall times off Grantor's current address. Unless ?erwisee the party's address. For notice purposes, than one Grantor, any notice given by Lender to any Grantor Is deemed to be notice given to all Grantors. provided applicable law, If there in more Additional Authorizations. Grantor hereby authorizes tender, with full power of substitution, to execute In Grantor's name any documents necessary to perfect, amend, or to continue the security Interest granted in this Agreement or to demand termination of flings of other secured parties and, without further authorization from Grantor, to file a carbon, photographic or other reproduction any financing Agreement for use as a financing statement. Grantor will reimburse Lender for all ex n and the statement or of this perfection of Lender's security Interest In the Collateral. It Is understood and agreed that any exercise of this authorization b continuation of the Lender y Lender Lender s be on Is not an hereby Lender shallll a behalf and prudence aanndt oLender shall eep full anndHer, In daccurate record of all authorization 9 nd disbursements. eceipts and h Severability. 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 offendin it shall be considered deleted from this Agreement, Unless otherwise required by law, the III 9 provision cannot be so modified, of this Agreement shall not affect the legality, validity or enforceability of any other provision of?l Agrreemernt , or unenforceability of any provision Successor Interests. The terns of this Agreement shall be binding upon Grantor, and upon Grantor's heirs, personal representatives, successors, and assigns, and shall be enforceable by Lender and its successors and assigns. Survival of Representations and Warranties. All representations, warranties, and agreements made by Grantor In this Agreement shall survive the execution and delivery of this Agreement, shall be continuing in nature, and shall remain in full force and effect until such time as Grantor's Indebtedness shall be paid in full. Time Is of the Essence. Time Is of the essence in the performance of this Agreement. Waive Jury. All parties to this Agresrnent hereto waive the rl any party against any other party. Y right to any jury trial In any action, proceeding, or counterclaim brought by DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Agreement. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used In the singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terns not otherwise defined in this Agreement shall have the meanings attributed to such terms In the Uniform Commercial Code: Agreernent. The word "Agreement" means this Commercial Security Agreement, as this Commercial Security Agreement may be amended or modified from time to time, together with all exhibits and schedules attached to this Commercial Security Agreement from time to time. Borrower. The word "Borrower" means Henrix, LLC dba T&M Automotive and includes all co-signers and co-makers signing the Note and all their successors and assigns. Collateral. The word 'Collateral' means all of Grantor's right, title and Interest in and to all the Collateral as described In the Collateral Description section of this Agreement. Default. The word "Default means the Default set forth In this Agreement In the section titled 'Default'. Environmental Laws. The words "Environmental Laws' mean any and all state, federal and local statutes, regulations and ordinances relating to the protection of human health or the environment, Including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, at seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub. the Act, No. .499 (("Salon %901 e=azardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery 42 eq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto. Event of Default. The words 'Event of Defaulr mean any of the events of default set forth in this Agreement in the default section of this Agreement. Grantor. The word "Grantor" means Henrix, LLC dba T&M Automotive. Guarantor. The word 'Guarantor* means any guarantor, surety, or accommodation party of any or all of the Indebtedness. Guaranty. The word "Guaranty" means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part of the Note. Hazardous Substances. The words 'Hazardous Substances' mean materials that, because of their quantity, concentration or physical, chemical or Infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when Improperly stored, disposed of, generated, manufactured, transported or otherwise handled. The words "Hazardous Substances' are In their vteryy broadest sense and Include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the Environmental Laws. The term "Hazardous Substances' also includes, without limitation, petroleum and petroleum by-products or any fraction thereof and asbestos. Indebtedness. The word 'Indebtedness' means the indebtedness evidenced by the Note or Related Documents, including all principal and interest together with all other indebtedness and costs and expenses for which Grantor is res Related Documents. Specifically, without limitation, Indebtedness includes the future advancesi setuforth In the Future Advances any provi the sion, together with all interest thereon and all amounts that may be indirectly secured by the Cross-Collateralization provision of this Agreement. Lender. The word "Lender' means Mid Penn Bank, its successors and assigns. COMMERCIAL SECURITY AGREEMENT Loan No: 500050851 (Continued) Page 6 Notes The word "Note" means the Note executed by Henrix, LLC dba T&M Automotive in the principal amount of $216,000.00 dated January 16, 2009, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the note or credit agreement. P roperty. The perty" means all of Grantor's right, title and interest In and to all the Property as described in the 'Collateral Description" sectim of this ent. Related Documents. The words "Related Documents' mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other Instruments, agreements and documents, whether now or hereafter existing, executed in connection with the Indebtedness. GRANTOR HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS COMMERCIAL SECURITY AGREEMENT AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED JANUARY 16, 2009. 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. GRANTOR: HENRDX LLC DBA T&M AUTO OTIVE By:. Seat) enrik Shamlrian, Ahenrlx, LL dba T&M Automotive - my L",r4 yN d]l to" C'W ? F w 3"W - ^P+Pwwq PA 014"LLP11N0.PC TIF67Y PiFDECDiENd EXHIBIT `C' EKG„drt ? ...' awM A/ 1 ow U.S. Small Business Administration UNCONDITIONAL GUARANTEE So -- - SBA Loan * 385448004 SBA Loan Name Herk LLC dbe T & M Automotive Henrik Shan-Arlan Guarantor Borrower I Henrix, LLC dba T & M Automotive Lender Mid Penn Bank Date January 10. 2W9 Note Amount 218,D00.0o I. GUARANTEE: Guarantor unconditionally guarantees payment to Lender of all amounts owing under the Note. This Guarantee remains in effect until the Note is paid in full. Guarantor must pay all amounts due under the Note when Lender makes written demand upon Guarantor. Lender is not required to seek payment from any other source before demanding payment Prom Guarantor. 2. NOTE: The "Note" is the promissory note dated January 18, 2009 - in the principal amount of TWO HUNDRED SIXTEEN THOUSAND AND NO Dollars, from Borrower to Lender. It includes any assumption, renewal, substitution, or replacement of the Note, and multiple notes under a line of credit. 3. DEFINITIONS: "Collateral" means any property taken as security for payment of the Note or any guarantee of the Note. "Loan" means the loan evidenced by the Note. "Loan Documents" means the documents related to the Loan signed by Borrower. Guarantor or any other guarantor, or anyone who pledges Collateral. "SBA" means the Small Business Administration, an Agency of the United States of America. SBA Form 148 (10/98) Prevlous editions obeols*. Page 1/S ?-- WOltere Kluwer Financial Services, St. Cloud, MN r ? 4. LENDER'S GENERAL POWERS; Lender may take any of the following actions at any time, without notice, without Guarantor's consent, and without making demand upon Guarantor. A. Modify the terms of the Note or any other Loan Document except to increase the amounts due under the Note; B. ReBrain from taking any action on the Note, the Collateral, or any guarantee; C. Release any Borrower or any guarantor of the Note; D. Compromise or settle with the Borrower or any guarantor of the Note; E. Substitute or release any of the Collateral, whether or net Lender receives: anything in return; F. Foreclose upon or otherwise obtain, and dispose of, any Collateral at public or private sale, with or without advertisement; 0. Bid or buy at any sale of Collateral by Lender or any other lienholder, at any price Lender chooses; and H. Exercise any rights it has, including those in the Note and other Loan Documents. These actions will not release or reduce the obligations of Guarantor or create any rights or claims against Lender. 5. FEDERAL LAW: When SBA is the holder, the Note and this Guarantee will be construed and enforced under federal law, including SBA regulations. Leader or SBA may use state or local procedures for tiling papers, recording documents, giving notice, foreclosing liens, and other purposes. By using such procedures, SBA does not waive any federal immunity from state or local control, penalty, tax, or liability. As to this Guarantee, Guarantor may not claim or assert any local or state law against SBA to deny any obligation, defeat any claim of SBA, or preempt federal law. 6. RIGHTS, NOTICES, AND DEFENSES THAT GUARANTOR WAIVES: To the extent permitted by low, A. Guarantor waives all rights to: 1) Require presentment, protest, or demand upon Borrower, 2) Redeem any Collateral before or after Lender disposes of it, 3) Have any disposition of Collateral advertised; and 4) Require a valuation of Collateral before or after Lender disposes of it. B. Guarantor waives any notice of 1) Any default under the Note; 2) Presentment, dishonor, protest, or demand; 3) Execution of the Note; 4) Any action or inaction on the Note or Collateral, such as disbursements, payment, nonpayment, acceleration, intent to accelerate, assignment, collection activity, and incurring enforcement expenses; 5) Any change in the financial condition or business operations of Borrower or any guarantor, 6) Any changes in the terms of the Note or other Loan Documents, except increases in the amounts due under the Note, and 7) The time or place of any sale or other disposition of Collateral. C. Guarantor waives defenses based upon any claim that. 1) Lender failed to obtain any guarantee; 2) Lender fitiled to obtain, perfect, or maintain a security interest in any property offered or taken as Collateral; 3) Lender or others improperly valued or inspected the Collateral; 4) The Collateral changed in value, or was neglected, lost, destroyed, or underinsured; S9A Form 148 (10/98) PMVbA editions obsoleee. Pape 2/8 i Wolters Kluwer Financial SeMces, St. Cloud, MN 5) Lender impaired the Collateral; 6) Lender did not dispose of any of the Collateral; 7) Lender did not conduct a commercially reasonable sale; 8) Lender did not obtain the fair market value of the Collateral; 9) Lender did not make or perfect a claim upon the death or disability of Borrower or any guarantor of the Note; 10) The financial condition of Borrower or any guarantor was overstated or has adversely changed; 11) Lender made errors or omissions in Loan Documents or administration of the Loan; 12) Lender did not seer payment from the Borrower, any other guarantors, or any Collateral before demanding payment from Guarantor: 13) Lender impaired Guarantor's suretyship rights, 14) Lender modified the Note terms, other than to increase amounts due under the Note. If Lender modifies the Note to increase the amounts due under the Note without Guarantor's consent, Guarantor will not be liable for the increased amounts and related interest and expenses, but remains liable for all other amounts; 15) Borrower has avoided liability on the Note; or 16) Lender has taken an action allowed under the Note, this Guarantee, or other Loan Documents. 7. DUTIES AS TO COLLATERAL: Guarantor will preserve the Collateral pledged by Guarantor to secure this Guarantee. Lender has no duty to preserve or dispose of any Collateral. 8. SUCCESSORS AND ASSIGNS: Under this Guarantee, Guarantor includes heirs and successors, and Lender includes its successors and assigns. 9. GENERAL PROVISIONS: A. ENFORCEMENT EXPENSES. Guarantor promises to pay all expenses Lender incurs to enforce this Guarantee, including, but not limited to, attorney's fees and costs. B. SBA NOT A CO-GUARANT()R. Guarantor's liability will continue even if SBA pays Lender. SBA is not a co-guarantor with Guarantor. Guarantor has no right of contribution from SBA. C. SUBROGATION RIGH'T'S. Guarantor has no subrogation rights as to the Note or the Collateral until the Note is paid in full. D. JOINT AND SEVERAL LIABILITY. All individuals and entities signing as Guarantor are jointly and severally liable. E. DOCUMENT SIGNING. Guarantor must sign all documents necessary at any time to comply with the Loan Documents and to enable Lender to acquire, perfect, or maintain Lender's liens on Collateral. F. FINANCIAL STATEMENTS. Guarantor must give Lender financial statements as Lender requires. 0. LENDER'S RIGHTS CUMULATIVE, NOT WAIVED. Lender may exercise any of its rights separately or together, as many times as it chooses. Lender may delay or forgo enforcing any of its rights without losing or impairing any of them. H. ORAL STATEMENTS NOT BINDING. Guarantor may not use an oral statement to contradict or after the written term of the Note or this Guarantee, or to raise a defense to this Guarantee. L SEVERABILITY. If any part of this Guarantee is found to be unenforceable, all other parts will remain in effect. J. CONSIDERATION. The consideration for this Guarantee is the Loan or any accommodation by Lender as to the Loan. SBA Form 14a itorea) Previous editions obsolete. Page 3/5 Wolters Kluwer Financial SeMces, St. Cloud, MN 11 10. STATE-SPECIFIC PROVISIONS: 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, CONFESSOR ENTER JUDGMENT AGAINST BORROWER•FOR THE ENTIRE PRINCIPAL BALANCE OF THIS NOTE AND ALL ACCRUED INTEREST, LATE CHARGES AND ANY AND ALL AMOUNTS EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECURING THIS NOTE, TOGETHER WITH COSTS OF SUIT. AND AN ATTORNEY'S COMMISSION OF TEN PERCENT (10%) OF THE UNPAID PRINCIPAL BALANCE AND ACCRUED INTEREST FOR COLLECTION, BUT IN ANY EVENT NOT LESS THAN FIVE HUNDRED DOLLARS ($300) ON WHICH JUDGMENT OR JUDGMENTS ONE OR MORE EXECUTIONS MAY ISSUE IMMEDIATELY; AND FOR SO DOING. THIS NOTE OR A COPY OF THIS NOTE VERIFIED BY AFFIDAVIT SHALL BE SUFFICIENT WARRANT. THE AUTHORITY GRANTED IN THIS NOTE TO CONFESS JUDGMENT AGAINST BORROWER SHALL NOT BE EXHAUSTED BY ANY EXERCISE OF THAT AUTHORITY, BUT SHALL CONTINUE FROM TIME TO TIME AND AT ALL TIMES UNTIL PAYMENT IN FULL OF ALL AMOUNTS DUE UNDER THIS NOTE. BORROWER HEREBY WAIVES ANY RIGHT BORROWER MAY HAVE TO NOTICE OR TO A HEARING IN CONNECTION WITH ANY SUCH CONFESSION OF JUDGMENT AND STATES THAT EITHER A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THIS CONFESSION OF JUDGMENT PROVISION TO BORROWER'S ATTENTION OR BORROWER HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL. SBA Form 148 (10!98) Previous adillons obsob*. Page 415 , MN r- j Wolters Kluwer FlnaWal Servlcea, St. Cloud St I I . GUARANTOR ACKNOWLEDGMENT OF TERMS. Guarantor acknowledges that Guarantor has read and understands the significance of all terms of the Note and this Guarantee, including allwaivers. 12. GUARANTOR NAME(S) AND SIGNATURE(S): By signing below, each individual or entity becomes obligated as Guarantor under this Guarantee. Henrt . LLC dha T a M Autonwtlve Henrik Shamiden ---------------- SBA Form /4a (was) Previous edwons obsolme. Pape 3/6 Woltws Khrwer Financtat Services, St. Cloud, MN f EXHIBIT `D' PROMISSORY NOTE References in the shaded area are for Lender's use only and do not limit the aapppplIicability of this document to an .................................?.•.,::::.::::::::?:::??:::::•:?:: A item above containfn '•••• has been omitted due to text len Ilmitatkbns. y particular loan or Rem. Borrower: Henrix, LLC dbs T&M Automotive MN: Lender: Mid Penn Bank 26-MI470) Allentown Boulevard 1412 Trlndle Road 5600 Allentown Boulevard Carlisle, PA 17015 Harrisburg, PA 17112 Principal Amount: $10,000.00 Initial Rate: 5.250% Date of Note: January 22, 200! PROMISE TO PAY. Henrix, LLC dbe T&M Automotive ("Borrower") promises to pay to Mid Penn Bank ("Lender"), or order, In lawful money of the United States of America, the principal amount of Ten Thousand d 001100 Dollars (:10,000.00) or so much as may be outstanding, together with Interest on the unpaid outstanding principal balance of each advance. Interest shall be calculated from the date of each advance until repayment of each advance. PAYMENT. Borrower will pay this loan In full Immediately upon Lender's demand. If no demand Is made, Borrower will pay payment of all outstanding principal plus all accrued unpaid Interest on January 22, 2010. In addition, Borrower will pay this loan in one regular the payments of all accrued unpaid Interest due as of each payment date, beginning March 1, 2009, with all subsequent Interest due on the same day of each month after that. Unless otherwise agreed or required by applicable law paw to be accrued unpaid Interest; then to principal; then to any unpaid collection costs; and then to any Ists charges. ' payments The will annual l be to Into first for any Note Is computed on a 3061300 bash, that is, by s year set rats for tth outstanding principal balance, muttiplisd by the actual numbthe ratio of er of days the annual Interest rate over a year of 3Q0 days, multiplied by the Lender's address shown above or at such other place as Lender may gnthe ats In writing. I?ve Is outstanding. Borrower will pay Lender at VARIABLE INTEREST RATE The Interest rate on this Note Is subject to change from time to time based on changes In an index which Is 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. Lender will tell Borrower the current Index rate upon Borrower's request. The Interest rate change will not occur more often than each month, on the first business day of the month. Borrower understands that Lender may make loans based on other rates as well. The Index currently is 3.750% per annum. The Interest rate to be applied to the unpaid principal balance during this Note will be at a rate of 1.500 percentage points over the Index, adjusted If necessary for any minimum and maximum rate limitations described below, resulting in an Initial rate of 5.250% per annum. NOTICE: Under no circumstances will the Interest rate on this Note be less than 4.500% per annum or more than the maximum rate allowed by applicable law. PREPAYMENT. 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 of accrued unpaid Interest. Rather, early payments will reduce the principal balance due. 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 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: Mid Penn Bank, Allentown Boulevard, 5500 Allentown Boulevard, Harrisburg, PA 17112. LATE CHARGE If a payment is 15 days or more late, Borrower will be charged 10.000% of the regularly scheduled payment or $25.00, whichever Is greater. INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final maturity, the Interest rate on this Note shall be Increased by adding a haw e0 percen had thpe et no default. Rate Margin"). The Default Rate Margin shall also apply to each succeeding interest rate change that would been at the rate applied effect at the time judgment Is entered in connection with this Note, interest will continue to accrue after the date of judgment applicable law. Judgment entered. However, in no event will the Interest rate exceed the maximum Interest rate limitations under 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. False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Note or the related documents Is false or misleading in any material respect, either now or at the time made or fumished or becomes false or misleading at any time thereafter. Death or Insolvency. The dissolution of Borrower (regardless of whether election to continue is made), any member withdraws from Borrower, or any other termination of Borrowers existence as a going business or the death of any member, the Insolvency of Borrower, the appointment of a receiver for any part of Borrowers 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 gamishment of any of Borrowers accounts, Including deposit accounts, with Lender. However, this Event of Default shall not apply ff 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 under 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. Adverse Change. A material adverse change occurs in Borrowers financial condition, or Lender believes the prospect of payment or performance of this Note Is Impaired. Insecurity. Lender in good faith believes itself Insecure. 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. PROMISSORY NOTE Loan No: 500051 073 (Continued) Pegg 2 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 appeal wsuis.Inlcfuing attorneys' fees, expenses for bankruptcy proceedings (Including efforts to modify or vacate any automatic stay or injunction), and la 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 will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the Commonwealth of Pennsylvania without regard to Its conflicts of law provisions. This Note has been accepted by Lender in the Commonwealth of Pennsylvania. CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Dauphin County, Commonwealth of Pennsylvania. RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Borrower's accounts with Lender (whether checking, savings, or some other account). This Includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the Indebtedness against any and all such accounts, and, at Lender's option, to administratively freeze all such accounts to allow Lender to protect Lender's charge and setoff rights provided in this paragraph. COLLATERAL Borrower acknowledges this Note is secured by the following collateral described in the security Instruments listed herein: (A) an Open-End Mortgage dated January 22, 2009, to Lender on real property located In Cumberland County, Commonwealth of Pennsylvania. (B) Inventory, chattel paper, accounts, equipment and general intangibles described in a Commercial Security Agreement dated January 22, 2009. LINE OF CREDIT. This Note evidences a revolving line of credit. Advances under this Note, as well as directions for payment from Borrower's accounts, may be requested orally or in writing by Borrower or by an authorized person. Lender may, but need not, require that all oral requests be confirmed in writing. Borrower agrees to be liable for all sums either. (A) advanced in accordance with the instructions of an authorized person or (B) credited to any of Borrower's accounts with Lender. The unpaid principal balance owing on this Note at any time may be evidenced by endorsements on this Note or by Lender's Internal records, including daily computer print-outs. PRIMARY DEPOSIT ACCOUNTS. Borrower agrees to open and maintain its primary business deposit account ("Accounr) with Lender so long as this Note has an outstanding balance or loan availability. If Borrower does not open or maintaln the Account with Lender, Borrower authorizes Lender to Increase the Interest rate on this loan by one-quarter of one percent (0.250%). ANNUAL PROCESSING FEE Lender shall assess a processing fee for this revolving line of credit. The assessment of this processing fee does not necessarily mean that the line of credit has been renewed . DEMAND LOAN MATURITY AND ANNUAL REVIEW. This loan Is written on demand with no specific maturity date. This loan is subject to an annual review by Lender of financial information and loan performance. The first annual review is scheduled for August 1, 2010. To facilitate the annual review process, Lender may use a maturity date on its computer system or systems which may appear on billing statements or other mailings and notices to Borrower. The presence of a maturity date on billing statements or other mailings and notices shall not be considered a waiver of Lenders right to demand full repayment of the loan at any time. . 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(ies) should be sent to us at the following address: Mid Penn Bank, Allentown Boulevard, 5500 Allentown Boulevard, Harrisburg, PA 17112. riG ENE L P 8OVISION& This Note is payable on demand. The Inclusion of specific default provisions or rights of Lender shall not preclude tender's payment of this Note on its demand. 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 this Note, and unless otherwise expressly stated in writing, no party who signs this Note, whether as maker, guaranr, ayccochan In the terms of mm?xodation maker or endorser, shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of tine) 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 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 NOTE OR A COPY OF THIS NOTE VERIFIED BY AFFIDAVIT SHALL BE SUFFICIENT WARRANT. THE AUTHORITY GRANTED IN THIS NOTE TO CONFESS JUDGMENT AGAINST BORROWER SHALL NOT BE EXHAUSTED BY ANY EXERCISE OF THAT AUTHORITY, BUT SHALL CONTINUE FROM TIME TO TIME AND AT ALL TIMES UNTIL PAYMENT IN FULL OF ALL AMOUNTS DUE UNDER THIS NOTE. BORROWER HEREBY WAIVES ANY RIGHT BORROWER MAY HAVE TO NOTICE OR TO A HEARING IN CONNECTION WITH ANY SUCH CONFESSION OF JUDGMENT AND STATES THAT EITHER A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THIS CONFESSION OF JUDGMENT PROVISION TO BORROWER'S ATTENTION OR BORROWER HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL PROMISSORY NOTE N Loan No: 500051073 (Continued) Page PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE VARIABI INTEREST RATE PROVISIONS. BORROWER AGREES TO THE TERMS OF THE NOTE BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE THIS NOTE IS GIVEN UNDER SEAL AND IT iS INTENDED THAT THIS NOTE IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF SEALED INSTRUMENT ACCORDING TO LAW. BORROWER: HENRVX LLC DBA T&M TryE By. seaq Henrik hamirian, ber rlt LL dba UM Automotive LMR Pao LK4% W. LAW.004 CW. IYAmu R-- aawar. I.. 107.2= Al a,mt arnq • PA P. UMPL1WAM TW&M PWlGO}1aF EXHIBIT 'E' frh,??f E COMMERCIAL SECURITY AGREEMENT ....... ..:....... :::::..: .:. References In the shaded area are for Lender's use only and do not limit the alricablity of this document to any particular loan or item. Any item above containing '"'•' has been omitted due to text length limitations Grantor: Henrix, LLC dba T&M Automotive (TIN: Lender: Mid Penn Bank 26%=1470) Allentown Boulevard 1412 Trinde Road 55000 lwdown Boulevard Carlisle, PA 17013 Harrisburg, PA 17112 THIS COMMERCIAL SECURITY AGREEMENT dated January 22, 2009, is made and executed between Henrix, LLC dba T&M Automotive ("Grantor") and Mid Penn Bank ("Lender"). GRANT OF SECURITY INTEREST. For valuable consideration, Grantor grants to Lender a security Interest in the Collateral to secure the Indebtedness and agrees that Lender shall have the rights stated in this Agreement with respect to the Collateral, in addition to all other rights which Lender may have by law. COLLATERAL DESCRIPTION. The word 'Collateral' as used in this Agreement means the following described property, whether now owned or hereafter acquired, whether now existing or hereafter arising, and wherever located, in which Grantor is giving to tender a security Interest for the payment of the Indebtedness and performance of all other obligations under the Note and this Agreement: All Inventory, Chattel Paper, Accounts, Equipment and General Intangibles as previously filed with the Commonwealth of Pennsylvania on January 23, 2009, Financing Number 2009012305339 In addition, the word 'Collateral' also includes all the following, whether now owned or hereafter acquired, whether now existing or hereafter arising, and wherever located: (A) All accessions, attachments, accessories, tools, parts, supplies, replacements of and additions to any of the collateral described herein, whether added now or later. (B) All products and produce of any of the property described in this Collateral section. (C) All accounts, general Intangibles, instruments, rents, monies, payments, and all other rights, arising out of a sale, lease, consignment or other disposition of any of the property described In this Collateral section. (D) All proceeds (including Insurance proceeds) from the sale, destruction, loss, or other disposition of any of the property described in this Collateral section, and sums due from a thins party who has damaged or destroyed the Collateral or from that party's Insurer, whether due to judgment, settlement or other process. (E) All records and data relating to any of the property described in this Collateral section, whether in the form of a writing, photograph, microfilm, microfiche, or electronic media, together with all of Grantor's right, title, and Interest in and to all computer software required to utilize, create, maintain, and process any such records or data on electronic media. CROSS-COLLATERALIZATION. In addition to the Note, this Agreement secures all obligations, debts and liabilities, plus Interest thereon, of Grantor to Lender, or any one or more of them, as well as all claims by Lender against Grantor or any one or more of them, whether now existing or hereafter arising, whether related or unrelated to the purpose of the Note, whether voluntary or otherwise, whether due or not due, direct or Indirect, determined or undetermined, absolute or contingent, liquidated or unliquidated, whether Grantor may be liable Individually or jointly with others, whether obligated as guarantor, surety, accommodation party or otherwise, and whether recovery upon such amounts may be or hereafter may become barred by any statute of limitations, and whether the obligation to repay such amounts may be or hereafter may become otherwise unenforceable. FUTURE ADVANCES. In addition to the Note, this Agreement secures all future advances made by Lender to Grantor regardless of whether the advances are made a) pursuant to a commitment or b) for the same purposes. RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff In all Grantor's accounts with Lender (whether checking, savings, or some other account). This includes all accounts Grantor holds jointly with someone else and all accounts Grantor may open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Grantor authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the Indebtedness against any and all such accounts, and, at Lender's option, to administratively freeze all such accounts to allow Lender to protect Lender's charge and setoff rights provided In this paragraph. GRANTOR'S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COLLATERAL With respect to the Collateral, Grantor represents and promises to Lender that Perfection of Security Interest. Grantor agrees to take whatever actions are requested by Lender to perfect and continue Lender's security interest In the Collateral. Upon request of Lender, Grantor will deliver to Lender any and all of the documents evidencing or constituting the Collateral, and Grantor will note Lender's Interest upon any and all chattel paper and instruments if not delivered to Lender for possession by Lender. This Is a continuing Security Agreement and will continue in effect even though all or any part of the Indebtedness is paid in full and even though for a period of time Grantor may not be Indebted to Lender. Notkes to Lender. Grantor will promptly notify Lender In writing at Lender's address shown above (or such other addresses as Lender may designate from time to time) prior to any (1) change In Grantor's name; (2) change In Grantor's assumed business name(s); (3) change in the management or in the members or managers of the limited liability company Grantor, (4) change in the authorized signer(s); (5) change in Grantor's principal office address; (6) change in Grantor's state of organization; (7) conversion of Grantor to a new or different type of business entity; or (8) change In any other aspect of Grantor that directly or Indirectly relates to any agreements between Grantor and Lender. No change in Grantor's name or state of organization will take effect until after Lender has received notice. No Violation. The execution and delivery of this Agreement will not violate any law or agreement governing Grantor or to which Grantor is a party, and its membership agreement does not prohibit any term or condition of this Agreement. Enforceability of Collateral. To the extent the Collateral consists of accounts, chattel paper, or general intangibles, as defined by the Uniform Commercial Code, the Collateral is enforceable in accordance with its terms, is genuine, and fully complies with all applicable laws and regulations concerning form, content and manner of preparation and execution, and all persons appearing to be obligated on the Collateral have authority and capacity to contract and are in fact obligated as they appear to be on the Collateral. At the time any account becomes subject to a security interest in favor of Lender, the account shall be a good and valid account representing an undisputed, bona file indebtedness incurred by the COMMERCIAL SECURITY AGREEMENT Loan No: 500051073 (Continued) Page 2 account debtor, for merchandise held subject to delivery instructions or previously shipped or delivered pursuant to a contract of sale, or for services previously performed by Grantor with or for the account debtor. So long as this Agreement remains In effect, Grantor shall not, without Lender's prior written consent, compromise, settle, adjust, or extend payment under or with regard to any such Accounts. There shall be no setoffs or counterclaims against any of the Collateral, and no agreement shall have been made under which any deductions or discounts may be claimed concerning the Collateral except those disclosed to Lender In writing. Location of the Collateral. Except in the ordinary course of Grantor's business, Grantor agrees to keep the Collateral (or to the extent the Collateral consists of intangible property such as accounts or general intangibles, the records concerning the Collateral) at Grantor's address shown above or at such other locations as are acceptable to Lender. Upon Lender's request, Grantor will deliver to Lender in form satisfactory to Lender a schedule of real properties and Collateral locations relating to Grantor's operations, including without limitation the following: (1) all real property Grantor owns or Is purchasing; (2) all real property Grantor is renting or leasing; (3) all storage facilities Grantor owns, rents, leases, or uses; and (4) all other properties where Collateral Is or may be located. Removal of the Collateral. Except In the ordinary course of Grantor's business, including the sales of Inventory, Grantor shall not remove the Collateral from its existing location without Lender's prior written consent. To the extent that the Collateral consists of vehicles, or other titled property, Grantor shall not take or permit any action which would require application for certificates of title for the vehicles outside the Commonwealth of Pennsylvania, without Lender's prior written consent. Grantor shall, whenever requested, advise Lender of the exact location of the Collateral. Transactions Involving Collateral. Except for Inventory sold or accounts collected in the ordinary course of Grantor's business, or as otherwise provided for in this Agreement, Grantor shall not sell, offer to sell, or otherwise transfer or dispose of the Collateral. While Grantor is not in default under this Agreement, Grantor may sell inventory, but only In the ordinary course of its business and only to buyers who quality as a buyer in the ordinary course of business. A sale In the ordinary course of Grantor's business does not include a transfer In partial or total satisfaction of a debt or any bulk sale. Grantor shall not pledge, mortgage, encumber or otherwise permit the Collateral to be subject to any lien, security interest, encumbrance, or charge, other than the security Interest provided for in this Agreement, without the prior written consent of Lender. This includes security Interests even If junior in right to the security interests granted under this Agreement. Unless waived by Lender, all proceeds from any disposition of the Collateral (for whatever reason) shall be held in trust for Lender and shall not be commingled with any other funds; provided however, this requirement shall not constitute consent by Lender to any sale or other disposition. Upon receipt, Grantor shall Immediately deliver any such proceeds to lender. Title. Grantor represents and warrants to Lender that Grantor holds good and marketable title to the Collateral, free and clear of all liens and encumbrances except for the lien of this Agreement. No financing statement covering any of the Collateral is on file in any public office other than those which reflect the security interest created by this Agreement or to which Lender has specifically consented. Grantor shall defend Lender's rights in the Collateral against the claims and demands of all other persons. Repairs and Maintenance. Grantor agrees to keep and maintain, and to cause others to keep and maintain, the Collateral In good order, repair and condition at all times while this Agreement remains in effect Grantor further agrees to pay when due all claims for work done on, or services rendered or material furnished In connection with the Collateral so that no lien or encumbrance may ever attach to or be filed against the Collateral. Inspection of Collateral. Lender and Lender's designated representatives and agents shall have the right at all reasonable times to examine and Inspect the Collateral wherever located. Taxes, Assessments and Liens. Grantor will pay when due all taxes, assessments and liens upon the Collateral, Its use or operation, upon this Agreement, upon any promissory note or notes evidencing the Indebtedness, or upon any of the other Related Documents. Grantor may withhold any such payment or may elect to contest any lien lt Grantor Is in good faith conducting an appropriate proceeding to contest the obligation to pay and so long as Lender's interest in the Collateral Is not jeopardized in Lender's sole opinion. If the Collateral is subjected to a lien which is not discharged within fifteen (15) days, Grantor shall deposit with Lender cash, a sufficient corporate surety bond or other security satisfactory to Lender in an amount adequate to provide for the discharge of the lien plus any Interest, costs, attorneys' fees or other charges that could accrue as a result of foreclosure or sale of the Collateral. In any contest Grantor shall defend Itself and Lender and shall satisfy any final adverse judgment before enforcement against the Collateral. Grantor shall name Lender as an additional obligee under any surety bond fumished in the contest proceedings. Grantor further agrees to fumish Lender with evidence that such taxes, assessments, and governmental and other charges have been paid In full and In a timely manner. Grantor may withhold any such payment or may elect to contest any lien N Grantor is in good faith conducting an appropriate proceeding to contest the obligation to pay and so long as Lender's Interest in the Collateral is not jeopardized. Compliance with Governmental Requirements. Grantor shall comply promptly with all laws, ordinances, rules and regulations of all governmental authorities, now or hereafter in effect, applicable to the ownership, production, disposition, or use of the Collateral, including all laws or regulations relating to the undue erosion of highly-erodible land or relating to the conversion of wetlands for the production of an agricultural product or commodity. Grantor may contest in good faith any such law, ordinance or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Lender's Interest in the Collateral, in Lender's opinion, Is not jeopardized. Hazardous Substances. Grantor represents and warrants that the Collateral never has been, and never will be so long as this Agreement remains a lien on the Collateral, used in violation of any Environmental Laws or for the generation, manufacture, storage, transportation, treatment, disposal, release or threatened release of any Hazardous Substance. The representations and warranties contained herein are based on Grantor's due diligence in investigating the Collateral for Hazardous Substances. Grantor hereby (1) releases and waives any future claims against Lender for Indemnity or contribution in the event Grantor becomes liable for cleanup or other costs under any Environmental Laws, and (2) agrees to Indemnify, defend, and hold harmless Lender against any and all claims and losses resulting from a breach of this provision of this Agreement. This obligation to Indemnify and defend shall survive the payment of the Indebtedness and the satisfaction of this Agreement. Maintenance of Casualty Insurance. Grantor shall procure and maintain all risks insurance, including without limitation fire, theft and liability coverage together with such other insurance as Lender may require with respect to the Collateral, In form, amounts, coverages and basis reasonably acceptable to Lender and issued by a company or companies reasonably acceptable to Lender. Grantor, upon request of Lender, will deliver to Lender from time to time the policies or certificates of insurance in form satisfactory to Lender, Including stipulations that coverages will not be cancelled or diminished without at least ten (10) days' prior written notice to Lender and not including any disclaimer of the insurer's liability for failure to give such a notice. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be Impaired In any way by any act, omission or default of Grantor or any other person. In connection with all policies covering assets in which Lender holds or is offered a security interest, Grantor will provide Lender with such loss payable or other endorsements as Lender may require. If Grantor at any time fails to obtain or maintain any insurance as required under this Agreement, Lender may (but shall not be obligated to) obtain such insurance as Lender deems appropriate, including if Lender so chooses 'single Interest Insurance,' which will cover only Lender's interest in the Collateral. Application of Insurance Proceeds. Grantor shall promptly notify Lender of any loss or damage to the Collateral, whether or not such casualty or loss is covered by insurance. Lender may make proof of loss If Grantor fails to do so within fifteen (15) days of the casualty. All proceeds of any insurance on the Collateral. includino accrued Droceeds thereon, shall be held by Lender as part of the Collateral. If Lender consents to repair or COMMERCIAL SECURITY AGREEMENT Loan No: 500051073 (Continued) Page replacement of the damaged or destroyed Collateral, Lender shall, upon satisfactory proof of expenditure, pay or rei nburse Grantor from the proceeds for the reasonable cost of repair or restoration. If Lender does not consent to repair or replacement of the Collateral, Lender shall retain a sufficient amount of the proceeds to pay all of the Indebtedness, and shall pay the balance to Grantor. Any proceeds which have not been disbursed within six (6) months after their receipt and which Grantor has not committed to the repair or restoration of the Collateral shall be used to prepay the Indebtedness. Insurance Reserves. Lender may require Grantor to maintain with Lender reserves for payment of Insurance premiums, which reserves shall be created by monthly payments from Grantor of a sum estimated by Lender to be sufficient to produce, at least fifteen (15) days before the premium due date, amounts at least equal to the insurance premiums to be paid. If fifteen (15) days before payment Is due, the reserve funds are Insufficient, Grantor shall upon demand pay any deficiency to Lender. The reserve funds shall be held by Lender as a general deposit and shall constitute a non-Interest-bearing account which Lender may satisfy by payment of the insurance premiums required to be paid by Grantor as they become due. Lender does not hold the reserve funds in trust for Grantor, and Lender is not the agent of Grantor for payment of the insurance premiums required to be paid by Grantor. The responsibility for the payment of premiums shall remain Grantor's sole responsibility. Insurance Reports. Grantor, upon request of Lender, shall furnish to Lender reports on each existing policy of Insurance showing such information as Lender may reasonably request including the following: (1) the name of the insurer, (2) the risks insured; (3) the amount of the policy; (4) the property insured; (5) the then current value on the basis of which insurance has been obtained and the manner of determining that value; and (6) the expiration date of the policy. In addition, Grantor shall upon request by Lender (however not more often than annually) have an independent appraiser satisfactory to Lender determine, as applicable, the cash value or replacement cost of the Collateral. Financing Statements. Grantor authorizes Lender to file a UCC financing statement, or altematively, a copy of this Agreement to perfect Lender's security Interest. At Lender's request, Grantor additionally agrees to sign all other documents that are necessary to perfect, protect, and continue Lender's security Interest in the Property. Grantor will pay all filing fees, tide transfer fees, and other fees and costs involved unless prohibited by law or unless Lender Is required by law to pay such fees and costs. Grantor irrevocably appoints Lender to execute documents necessary to transfer title If there is a default. Lender may file a copy of this Agreement as a financing statement. If Grantor changes Grantor's name or address, or the name or address of any person granting a security interest under this Agreement changes, Grantor will promptly notify the Lender of such change. GRANTOR'S RIGHT TO POSSESSION AND TO COLLECT ACCOUNTS. Until default and except as otherwise provided below with respect to accounts, Grantor may have possession of the tangible personal property and beneficial use of all the Collateral and may use it in any lawful manner not inconsistent with this Agreement or the Related Documents, provided that Grantor's right to possession and beneficial use shall not apply to any Collateral where possession of the Collateral by Lender Is required by law to perfect Lender's security Interest in such Collateral. Until otherwise notified by Lender, Grantor may collect any of the Collateral consisting of accounts. At any time and even though no Event of Default exists, Lender may exercise Its rights to collect the accounts and to notify account debtors to make payments directly to Lender for application to the Indebtedness. If Lender at any time has possession of any Collateral, whether before or after an Event of Default, Lender shall be deemed to have exercised reasonable care In the custody and preservation of the Collateral If Lender takes such action for that purpose as Grantor shall request or as Lender, In Lender's sole discretion, shall deem appropriate under the circumstances, but failure to honor any request by Grantor shall not of itself be deemed to be a failure to exercise reasonable care. Lender shad not be required to take any steps necessary to preserve any rights in the Collateral against prior parties, nor to protect, preserve or maintain any security Interest given to secure the Indebtedness. LENDER'S EXPENDITURES. If any action or proceeding Is commenced that would materially affect Lender's Interest In the Collateral or If Grantor fails to comply with any provision of this Agreement or any Related Documents, Including but not limited to Grantor's failure to discharge or pay when due any amounts Grantor Is required to discharge or pay under this Agreement or any Related Documents, Lender on Grantor's behalf may (but shall not be obligated to) take any action that Lender deems appropriate, including but not limited to discharging or paying all taxes, liens, security Interests, encumbrances and other claims, at any time levied or placed on the Collateral and paying all costs for Insuring, maintaining and preserving the Collateral. All such expenditures Incurred or paid by tender for such purposes will then bear Interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Grantor. All such expenses will become a part of the Indebtedness and, at Lender's option, will (A) be payable on demand; (B) be added to the balance of the Note and be apportioned among and be payable with any Installment payments to become due during either (1) the term of any applicable Insurance policy; or (2) the remaining term of the Note; or (C) be treated as a balloon payment which will be due and payable at the Note's maturity. The Agreement also will secure payment of these amounts. Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon Default. DEFAULT. Each of the following shall constitute an Event of Default under this Agreement: Payment Default. Grantor fails to make any payment when due under the Indebtedness. Other Dsfautts. Grantor fails to comply with or to perform any other term, obligation, covenant or condition contained In this Agreement or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained In any other agreement between Lender and Grantor. False Statements. Any warranty, representation or statement made or furnished to Lender by Grantor or on Grantor's behalf under this Agreement or the Related Documents Is false or misleading in any material respect, either now or at the time made or fumished or becomes false or misleading at any time thereafter. Defective Collateraltzation. This Agreement or any of the Related Documents ceases to be in full force and effect (including failure of any collateral document to create a valid and perfected security Interest or Ben) at any time and for any reason. Insolvency. The dissolution of Grantor (regardless of whether election to continue Is made), any member withdraws from the limited liability company, or any other termination of Grantor's existence as a going business or the death of any member, the insolvency of Grantor, the appointment of a receiver for any part of Grantor's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Grantor. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Grantor or by any governmental agency against any collateral securing the Indebtedness. 'Th there iilluaes a garnishment of any of Grantor's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply good faith dispute by Grantor as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and If Grantor gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or Guarantor dies or becomes incompetent or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness. Adverse Change. A material adverse change occurs in Grantor's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness Is Impaired. Insecurity. Lender in good faith believes itself insecure. COMMERCIAL SECURITY AGREEMENT Loan No: 500051073 (Continued) Page 4 RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this Agreement, at any time thereafter, Lender shall have all the rights of a secured party under the Pennsylvania Uniform Commercial Code. In addition and without limitation, Lender may exercise any one or more of the following rights and remedies: Accelerate Indebtedness. Lender may declare the entire Indebtedness, including any prepayment penalty which Grantor would be required to pay, immediately due and payable, without notice of any kind to Grantor. Assemble Collateral. Lender may require Grantor to deliver to Lender all or any portion of the Collateral and any and all certificates of title and other documents relating to the Collateral. Lender may require Grantor to assemble the Collateral and make it available to under at a place to be designated by Lender. Lender also shall have full power to enter upon the property of Grantor to take possession of and remove the Collateral. If the Collateral contains other goods not covered by this Agreement at the time of repossession, Grantor agrees lender may take such other goods, provided that Lender makes reasonable efforts to return them to Grantor after repossession. Sell the Collateral. Lender shall have full power to sell, lease, transfer, or otherwise deal with the Collateral or proceeds thereof in Lender's own name or that of Grantor. Lender may sell the Collateral at public auction or private sale. Unless the Collateral threatens to decline speedily in value or Is of a type customarily sold on a recognized market, Lender will give Grantor, and other persons as required by law, reasonable notice of the time and place of any public sale, or the time after which any private sale or any other disposition of the Collateral Is to be made. However, no notice need be provided to any person who, after Event of Default occurs, enters Into and authenticates an agreement waiving that person's right to notification of sale. The requirements of reasonable notice shall be met if such notice is given at least ten (10) days before the time of the sale or disposition. All expenses relating to the disposition of the Collateral, including without limitation the expenses of retaking, holding, insuring, preparing for sale and selling the Collateral, shall become a part of the Indebtedness secured by this Agreement and shall be payable on demand, with Interest at the Note rate from date of expenditure until repaid. Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the Collateral, with the power to protect and preserve the Collateral, to operate the Collateral preceding foreclosure or sale, and to collect the Rents from the Collateral and apply the proceeds, over and above the cost of the receivership, against the Indebtedness. The receiver may serve without bond if permitted by law. Lender's right to the appointment of a receiver shall exist whether or not the apparent value of the Collateral exceeds the Indebtedness by a substantial amount. Employment by tender shall not disqualify a person from serving as a receiver. Collect Revenues, Apply Accounts. Lender, either itself or through a receiver, may collect the payments, rents, income, and revenues from the Collateral. Lender may at any time In Lender's discretion transfer any Collateral Into Lender's own name or that of Lender's nominee and receive the payments, rents, income, and revenues therefrom and hold the same as security for the Indebtedness or apply it to payment of the Indebtedness in such order of preference as Lender may determine. Insofar as the Collateral consists of accounts, general Intangibles, insurance policies, Instruments, chattel paper, choses In action, or similar property, Lender may demand, collect, receipt for, settle, compromise, adjust, sue for, foreclose, or realize on the Collateral as Lender may determine, whether or not Indebtedness or Collateral is then due. For these purposes, Lender may, on behalf of and in the name of Grantor, receive, open and dispose of mail addressed to Grantor; change any address to which mail and payments are to be sent; and endorse notes, checks, drafts, money orders, documents of title, Instruments and items pertaining to payment, shipment, or storage of any Collateral. To facilitate collection, Lender may notify account debtors and obligors on any Collateral to make payments directly to Lender. Obtain Deficiency. If Lender chooses to sell any or all of the Collateral, Lender may obtain a judgment against Grantor for any deficiency remaining on the Indebtedness due to Lender after application of all amounts received from the exercise of the rights provided In this Agreement. Grantor shall be liable for a deficiency even If the transaction described in this subsection Is a sale of accounts or chattel paper. Other Rights and Remedies. Lender shall have all the rights and remedies of a secured creditor under the provisions of the Uniform Commercial Code, as may be amended from time to time. In addition, Lender shall have and may exercise any or all other rights and remedies it may have available at law, in equity, or otherwise. Election of Remedies. Except as may be prohibited by applicable law, all of Lender's rights and remedies, whether evidenced by this Agreement, the Related Documents, or by any other writing, shall be cumulative and may be exercised singularly or concurrently. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Grantor under this Agreement, after Grantor's failure to perform, shall not affect Lender's right to declare a default and exercise its remedies. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Agreement: Amendments. This Agreement, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Agreement. No alteration of or amendment to this Agreement 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. Attorneys' Fes; Expenses. Grantor 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 Agreement. Lender may hire or pay someone else to help enforce this Agreement, and Grantor shall pay the costs 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. Grantor also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings. Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the provisions of this Agreement. Governing Law. This Agreement will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the Commonwealth of Pennsylvania without regard to Its conflicts of law provisions. This Agreement has been accepted by Lender in the Commonwealth of Pennsylvania Choice of Venue. If there Is a lawsuit, Grantor agrees upon Lender's request to submit to the jurisdiction of the courts of Dauphin County, Commonwealth of Pennsylvania. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Agreement unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender In exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Agreement shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Agreement. No prior waiver by Lender, nor any course of dealing between Lender and Grantor, shall constitute a waiver of any of Lender's rights or of any of Grantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Agreement, 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. COMMERCIAL SECURITY AGREEMENT Loan No: 500051073 (Continued) Page Notices. Unless otherwise provided by applicable law, any notice required to be given under this Agreement shall be given in writing, and shall be effective when actually delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certifled or registered mail postage prepaid, directed to the addresses shown near the beginning of this Agreement. Any party may change its address for notices under this Agreement by giving formal written notice to the other parties, specifying that the purpose of the notice Is to change the party's address. For notice purposes, Grantor agrees to keep Lender Informed at all times of Grantor's current address. Unless otherwise provided by applicable law, if there is more than one Grantor, any notice given by Lender to any Grantor Is deemed to be notice given to all Grantors. Ad al Authorization. Grantor hereby authorizes Lender, with full power of substitution, to execute In Grantor's name any documents necessary to perfect, amend, or to continue the security Interest granted in this Agreement or to demand termination of filings of other secured parties and, without further authorization from Grantor, to file a carbon, photographic or other reproduction of any financing statement or of this Agreement for use as a financing statement. Grantor will reimburse Lender for all expenses for the perfection and the continuation of the perfection of Lender's security Interest in the Collateral. It is understood and agreed that any exercise of this authorization by Lender shall be on behalf of Lender and not on behalf of Grantor. Lender Is not an agent or fiduciary of Grantor. However, In exercising the authorization granted hereby, Lender shall exercise reasonable caution and prudence and Lender shall keep full and accurate record of all actions, receipts and disbursements. Severability. 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 unenforceability of any provision of this Agreement shall not affect the legality, validity or enforceability of any other provision of this Agreement. Successor Interests. The terns of this Agreement shall be binding upon Grantor, and upon Grantor's heirs, personal representatives, successors, and assigns, and shall be enforceable by Lender and its successors and assigns. Survival of Representations and Warranties. All representations, warranties, and agreements made by Grantor in this Agreement shall survive the execution and delivery of this Agreement, shall be continuing in nature, and shall remain in full force and effect until such time as Grantor's Indebtedness shall be paid in full. 71me Is of the Essence. Time Is of the essence in the performance of this Agreement. Waive Jury. All parties to this Agreement hereby waive the right to any fury trial In any action, proceeding, or counterclaim brought by any party against any other party. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used In this Agreement. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural, and the plural shall Include the singular, as the context may require. Words and terms not otherwise defined in this Agreement shall have the meanings attributed to such terms in the Uniform Commercial Code: Agreement. The word 'Agreement' means this Commercial Security Agreement, as this Commercial Security Agreement may be amended or modified from time to time, together with all exhibits and schedules attached to this Commercial Security Agreement from time to time. Borrower. The word "Borrower' means Henrix, LLC dba T&M Automotive and includes all co-signers and co-makere signing the Note and all their successors and assigns. Collateral. The word 'Collateral' means all of Grantor's runt, title and interest in and to all the Collateral as described in the Collateral Description section of this Agreement. Default. The word 'Default' means the Default set forth in this Agreement in the section titled 'Default'. Environmental Laws. The words 'Environmental Laws' mean any and all state, federal and local statutes, regulations and ordinances relating to the protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9801, at seq. ('CERCLA'), the Superfund Amendments and Reauthorization Act of 1988, Pub. L No. 99-499 ('SARA% the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, at seq., the Resource Conservation and Recove Act, 42 U.S.C. Section 8901, at seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto. ry Event of Default The words "Event of Default' mean any of the events of default set forth in this Agreement in the default section of this Agreement. Grantor. The word 'Grantor" means Henrix, LLC dba T&M Automotive. Guarantor. The word 'Guarantor' means any guarantor, surety, or accommodation party of any or all of the Indebtedness. Guaranty. The word 'Guaranty' means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part of the Note. Hazardous Substances. The words "Hazardous Substances' mean materials that, because of their quantity, concentration or physical, chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words 'Hazardous Substances' are used In their very broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the Environmental Laws. The term "Hazardous Substances' also includes, without limitation, petroleum and petroleum by-products or any fraction thereof and asbestos. Indebtedness. The word "Indebtedness" means the Indebtedness evidenced by the Note or Related Documents, including all principal and interest together with all other indebtedness and costs and expenses for which Grantor Is responsible under this Agreement or under any of the Related Documents. The liens and security interests created pursuant to this Agreement covering the Indebtedness which may be created in the future shall relate back to the date of this Agreement. Specifically, without limitation, Indebtedness includes the future advances set forth in the Future Advances provision, together with all Interest thereon and all amounts that may be indirectly secured by the Cross-Collateralization provision of this Agreement. Lender. The word "Lender' means Mid Penn Bank, its successors and assigns. Note. The word "Note' means the Note executed by Henrix, LLC dba T&M Automotive in the principal amount of $10,000.00 dated January 22, 2009, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the note or credit agreement. Property. The word 'Property" means all of Grantor's right, title and interest in and to all the Property as described in the 'Collateral Description' section of this Agreement. COMMERCIAL SECURITY AGREEMENT Loan No: 600051073 (Continued) Page 6 Related Documents. The words 'Related Documents' mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other Instruments, agreements and documents, whether now or hereafter existing, executed in connection with the Indebtedness. GRANTOR HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS COMMERCIAL SECURITY AGREEMENT AND AGREES TO ITS TERMS. THIS AGREEMENT 18 DATED JANUARY 22,2001L 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. GRANTOR: HENRDX LLC DBA T&M AUTO VE By: ` seal) Henrik sm risn, Member Herr x, LL Me TAM Automotive L "M PRO L W WWs& VW- LK00=4 Cep. N,Nrel R W" SaMNg1e, Ma. 19x1.9999. N N" PM- - PA P:ICRLLPLIMM Mom m4n_.INS EXHIBITT' r COMMERCIAL GUARANTY 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 lencth limitations. Borrower: Henrlx, LLC dbe TBM Automotive (TIN: Lender: Mkt Penn Bank 1412 Trinddlle Road Allentown Boulevard 5500 Allentown Boulevard Carlisle, PA 171115 Harrisburg, PA 17112 Guarantor: Henrik Shamirlen (SSN: 185414-1331) 12 Edgewood Drive Mechanicsburg, PA 17055 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 terns of this Guaranty and any such other untemminated guaranties. CONTINUING GUARANTY. THIS GUARANTY ENCOMPASSES A LINE OF CREDIT AND GUARANTOR UNDERSTANDS AND AGREES THAT TI GUARANTY SHALL BE OPEN AND CONTINUOUS UNTIL THE INDEBTEDNESS IS PAID IN FULL AND THE LENDER DECLARES THAT THE LINE CREDIT IS FULLY SATISFIED, PERFORMED AND TERMINATED. 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. This Guaranty covers a revolving line of credit and it is specifically anticipated that fluctuations will occur In the aggregate amount of the Indebtedness. Guarantor specifically acknowledges and agrees that fluctuations in the amount of the Indebtedness, even to zero dollars ($ 0.00 shall not constitute a termination of this Guaranty. Guarantor's liability under this Guaranty shall terminate only upon (A) termination In writing by Borrower and Lender of the line of credit, (B) payment of the Indebtedness in full In legal tender, and (C) payment in full In legal tender of all of Guarantor's other obligations 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 tiros: (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 tines the time for payment or other terra 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 deckle 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 terms 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 quallly 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, might 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; (17 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 material 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 financlal 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 Lender 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 FINANCIAL STATEMENTS. Guarantor agrees to fumish Lender with the following: Annual Statements. As soon as available, but in no event later than one-hundred-twenty (120) days after the end of each fiscal year, Guarantor's balance sheet and income statement for the year ended, prepared by Guarantor. Tax Rotuma. As soon as available, but in no event later than thirty (30) days after the applicable filing date for the tax reporting period ended, Federal and other governmental tax returns, prepared by Guarantor. COMMERCIAL GUARANTY Loan No: 500051073 (Continued) Page 2 All financial reports required to be provided under this Guaranty shall be prepared in accordance with GAAP certified by Guarantor as being true and correct. ,applied on a consistent basis, and 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 an action or nonaction on the ? endorser or other guarantor In connection with the Indebtdness or in connection with the creation of new or additiof Borrower onal loans orr,obliga?s (C)surety to,resort for, payment or to proceed directly or at once against any person, including Borrower or any other guarantor, (D) to proceed dir 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 ? against or exhaust Code; (F) to pursue any other remedy within Lender's power; or (G) to commit any act or omission of any kind, or et any time, with respect to an y matter whatsoever. y 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 Maim for deficiency, against Guarantor, before or after Lender's commencement or completion of any foreclosure action, either judicially or by exercise power of sale; (B) any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation to proceed against Borrower for reimbursement, Including without limitation, any loss of rights Guarantor ma suffer?by of , ? rights or Guarantor', qualifying, or discharging the Indebtedness; (C) any disability or other defense of Borrower, of any other y or reason h any law I, or by reason of the cessation of Borrower's liability from any cause whatsoever, other than guarantoof the r, or d any other person, or by to claim discharge of the Indebtedness on the basis of unjustified Impairment of any cOlateral for the Indebtedness; legal tender, E) any statute of limitations If att any time any action or suit brought by Lender against Guarantor is commenced, there Is outstanding Indebtedness which is not barred by any applicable statute of limitations; or (F7 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 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 G aarrantor orbot ym, counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower, the 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 significance 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. RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Guarantor's accounts with Lender (whether checking, savings, or some other account). This Includes all accounts Guarantor holds jointly with someone else and all accounts Guarantor may open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Guarantor authorizes Lender, to the extent permitted by applicable law, to hold these funds If there is a default, and Lender may apply the funds in these accounts to pay what Guarantor owes under the terms of this Guaranty. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness, whether now existing or hereafter created, shall be superior to any 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 and 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 to the payment of the claims of both Lender and Guarantor shall 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 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 shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor agrees, and Lender Is hereby authorized, in the name of Guarantor, from time to time to file financing statements and continuation statements and to execute documents and to take such other actions as Lender deems necessary or appropriate to perfect, preserve and 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. Attorneys' Fees; Expenses. Guarantor agrees to pay upon demand all of Lender's costs and expenses, , Lender's legal expenses, incurred in connection with the enforcement of this Guaranty. Lender may re or including Lender's attorneys fees and pay someone else to help enforce this Guaranty, and Guarantor shall pay the costs and expenses of such enforcement. Costs and expenses ' expenses whether or not there is a lawsuit, Including attorneys' fees and legal expenses for bankruptcy ruptcy include proceedings Lender's (including ding efforts to fees and legal vacate any automatic stay or Injunction), appeals, and any anticipated ted modify or and such additional fees as may be directed by the court. Y post-judgment collection services. Guarantor also shall pay all court costs 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 will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the Commonwealth of Pennsylvania without regard to Its conflicts of law provisions. Choice of Vanua If there is a lawsuit, Guarantor agrees upon Lender's request to submit to the jurisdiction of the courts of Dauphin 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 indemnities 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 than 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 Loan No: 500051073 COMMERCIAL GUARANTY (Continued) Page ; Guaranty or when this Guaranty Is executed by more than one Guarantor, the words 'Borrower' and 'Guarantor' res tiv any one or more of them. The words 'Guarantor,' 'Borrower," and ' pec ely shall mean all and them. If a court finds that an Lender` include the heirs, successors, assigns, and transferees of of each any provision of this Guaranty Is not valid or should not be enforced, that fact by itself will not mean that the rest of this Guaranty will not be valid or enforced. Therefore, a court will enforce the rest of the provisions of this Guaranty even N a provision of this Guaranty may be found to be Invalid or unenforceable. If any one or more of Borrower or Guarantor are corporations, partnerships, limited liability companies, or similar entities, it is not necessary for Lender to Inquire Into the powers of Borrower or Guarantor or of the officers, directors, partners, managers, or other agents acting or purporting to act on their 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 this Guaranty shall be given in writing, and shall be effective when actually delivered, when actually received by telefacsknile (unless otherwise required by law), when deposited with a nationally recognized ovemight courier, or, 9 mailed, when deposited In the United States mail, as first class, certified or r directed to the addresses shown near the beginning of this Guaranty. Any party egutered mall postage prepaid, formal written notice to the other parties, specifying that the purpose of the notice to change the may change its address for notices under this Guaranty by given, Guarantor agrees to keep Lender Informed at all times of Guarantor's urrent address Unlesserwise?,s address. For notice pu g, provided more than one Guarantor, any notice given by Lender to any Guarantor is deemed to be notice given to all Guarantors applicable law, ff there is No Waiver by Lender. 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 right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Guaranty shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Guaranty. No prior waiver by Lender, nor any course of dealing between Lender and 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. 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 Lender and its successors and assigns. Waive Jury. Lander ?1 GM r a ntor hereby waive the right to any jury trial In any action, proceeding, or counterclaim brought by either Lender or Guarantor ther. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Guaranty, Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall Include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Guaranty shall have the meanings attributed to such terms In the Uniform Commercial Code: Borrower. The word "Borrower' means Henrix, LLC dba T&M Automotive and includes all co-signers and co-makers signing the Note and all their successors and assigns. GAAP. The word 'GAAP' means generally accepted accounting principles. Guarantor. The word 'Guarantor' means everyone signing this Guaranty, Including without limitation Henrik Shamirian, and In each 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 Lender as more particularly described in this Guaranty. Lender. The word 'Lender' means Mid Penn Bank, its successors and assigns. Note. The word "Note" means the promissory note dated January 22, 2009, in the original principal amount of $10,000.00 from Borrower to Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the promissory note or agreement. Related Documents. The words 'Related Documents' mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other Instruments, agreements and documents, whether now or hereafter existing, executed In connection with the Indebtedness. CONFESSION OF JUDGMENT. GUARANTOR 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 FOF GUARANTOR AFTER THE AMOUNTS HEREUNDER BECOME DUE AND WITH OR WITHOUT COMPLAINT FILED, CONFESS OR ENTER JUDGMENT AGAINST GUARANTOR FOR THE ENTIRE PRINCIPAL BALANCE OF THIS GUARANTY AND ALL ACCRUED INTEREST, LATE CHARGES AND AN' AND ALL AMOUNTS EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECURING THE INDEBTEDNESS, TOGETHEI 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 GUARANTY TO CONFESS JUDGMENT AGAINST GUARANTOi 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 TC 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 GUARANTOR'S ATTENTION OR GUARANTOR HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL Loan No: 500051073 COMMERCIAL GUARANTY (Continued) Pala EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO M 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 13 NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED JANUARY 22, 2WO. 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: X . A' Seel) en am rim INDIVIDUAL ACKNOWLEDGMENT COMMONWEALTH OF PENNSYLVANIA COUNTY OF ) SS On this, the d d day of ? the unders ed Notary Public, i before me T 1 C C7lJ / 20 J2-? to be the Person whose name is subscribed to the within I m t. v $ akn?Mn„ appeared Henrik Shamirian, known to me (or tts ctaHl Pro contained. ledged that he or she executed the same for the purposes therein In witness whereof, l hereunto set my hand and official seal. Lo stny Kay Look' Nft vrv Public Paxton 'rte n..._., Notary Pu and for the State L.wft w. axoom? ca,r. w,r a P4wpy s" ," Ma. +N7, aopa N wy"nw v,a . PA MID PENN BANK, IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff V. HENRIX, LLC d/b/a T&M AUTOMOTIVE and HENRICK SHAMIRIAN, Defendants NO. 10 - (oot(or1 l.jvi? . C-_ C=) r) C-) -0 C-n . ?' 1 m AFFIDAVIT Amy Custer, being duly sworn according to law, deposes and says that she is the Collections Manager for Mid Penn Bank, Plaintiff herein; that she is authorized to make this Affidavit on behalf of Plaintiff, that the facts set forth in the foregoing Complaint in Confession of Judgment are true and correct to the best of her knowledge, information and belief; and that the Exhibits attached to the Complaint are true and correct, copies of the originals. MID PENN BANK Date: ' ? • `? B j. uste Collections Manager COMMONWEALTH OF PENNSYLVANIA SS. COUNTY OF DAUPHIN On this, the ,23ra?day of " , 2010, before me, a Notary Public, the undersigned officer, personally appeared Amy Custer, known to me (or satisfactorily proven) to be the person described in the within instrument, and acknowledged that she executed the same in the capacity therein stated and for the purposes therein contained. IN WITNESS WHEREOF, I hereunto set my hand and official seal. Notary Public COMMONWEALTH OF PENNSYLVAMA NOTARIAL SEAL Scott D. Washinger, Notary Public Steelton Borough, Dauphin County M commission expires July 14, 2012 MID PENN BANK, Plaintiff V. HENRIX, LLC d/b/a T&M AUTOMOTIVE and HENRICK SHAMIRIAN, Defendants : IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA NO. l 0 - toa(o9 ` rr, ca Z1 rn ca ' ?,. Cl) C) AFFIDAVIT THAT ACTION DOES NOT ARISE OUT OF RETAIL INSTALLMENT CONTRACT Amy Custer, Collections Manager, being duly sworn according to law, deposes and says that she is the Collections Manager for Mid Penn Bank, Plaintiff herein; that she is authorized to make this Affidavit on behalf of Plaintiff, and that this action is not an action by a Seller, Holder or Assignee arising out of a retail installment sale, contract or account. MID PENN BANK Date: Q •? ?? . 16 -4 By: A Custe Collections Manager COMMONWEALTH OF PENNSYLVANIA COUNTY OF DAUPHIN : SS. On this, the 3r? day of 1900 2010, before me, a Notary Public, the undersigned officer, personally appeared Amy Custer, known to me (or satisfactorily proven) to be the person described in the within instrument, and acknowledged that she executed the same in the capacity therein stated and for the purposes therein contained. IN WITNESS WHEREOF, I hereunto set my hand and official seal. 01z Notary Public NOTARIAL SEAL Scott D. Washinger, Notary Public Steelton Borough, Dauphin County M commission expires Jul 14, 2012 '°-d p ?ci MID PENN BANK, Plaintiff V. HENRIX, LLC d/b/a T&M AUTOMOTIVE and HENRICK SHAMIRIAN, Defendants IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA NO. (0 -1.ea.Co9 0- M berm AFFIDAVIT PURSUANT TO Pa. R.C.P. 2951(A)(2)(ii) Amy Custer, Collections Manager, being duly sworn according to law, deposes and says that she is the Collections Manager for Mid Penn Bank, Plaintiff herein; that she is authorized to make this Affidavit on behalf of Plaintiff, and that the Judgment is not being entered by confession against a natural person in connection with a consumer credit transaction. MID PENN BANK ? ? D 2 1-71 i ate: cnt" M By: A Custe ---- Collections Manager ?> 4 -v -n ? COMMONWEALTH OF PENNSYLVANIA .,.,_ Em SS 70 . COUNTY OF DAUPHIN On this, the day of , 2010, before me, a Notary Public, the undersigned officer, personally appe ed Amy Custer, known to me (or satisfactorily proven) to be the person described in the within instrument, and acknowledged that she executed the same in the capacity therein stated and for the purposes therein contained. IN WITNESS WHEREOF, I hereunto set my hand and official seal. oS? Notary Public COMMONWEALTH OF PENNSYLVANIA NOTARIAL SEAL Scott D. Washinger, Notary Public Steelton Borough, Dauphin County [My commission expires Jul 14, 2012 MID PENN BANK, V. Plaintiff HENRIX, LLC d/b/a T&M AUTOMOTIVE and HENRICK SHAMIRIAN, Defendants IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA NO. I p n?- AFFIDAVIT OF BUSINESS TRANSACTION Amy Custer, Collections Manager, being duly sworn according to law, deposes and says that she is the Collections Manager for Mid Penn Bank, Plaintiff herein; that she is authorized to make this Affidavit on behalf of Plaintiff, and that these transactions upon which Judgment is being entered by confession were business and commercial transactions. MID PENN BANK Date: q-dt • COMMONWEALTH OF PENNSYLVAN COUNTY OF DAUPHIN ?F- B • Custer Collections Manager '7>C-) ?CD SS. IA ca --i On this, the au-,/ day of ?+ , 2010, before me, a Notary Public, the undersigned officer, personally appeared Amy Custer, known to me (or satisfactorily proven) to be the person described in the within instrument, and acknowledged that she executed the same in the capacity therein stated and for the purposes therein contained. IN WITNESS WHEREOF, I hereunto set my hand and official seal. ??/'z .4;? Notary Public COIvH?fAN AL?H Of F$MSYLVAMA NOTARIAL SEAL Scott D. Washinger, Notary Public Steelton Borough, Dauphin County M commission expires Jul 14, 2012 a r' ? -n r? ? MID PENN BANK, V. Plaintiff HENRIX, LLC d/b/a T&M AUTOMOTIVE and HENRICK SHAMIRIAN, Defendants IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA :NO. 10 - I09Uo9 0'ivilTem AFFIDAVIT OF NON-MILITARY SERVICE Amy Custer, Collections Manager, being duly sworn according to law, deposes and says that she is the Collections Manager for Mid Penn Bank, Plaintiff herein; and that to the best of her knowledge, information and belief, the Defendant, Henrick Shamirian, is not in the military service of the United States nor any state or territory thereof or its allies as defined in the Soldiers and Sailors Civil Relief Act of 1940 and the amendments thereto. MID PENN BANK Date: _ Q-?q Cf to COMMONWEALTH OF PENNSYLVANIA COUNTY OF DAUPHIN In't -. M -<>I By"- Amy(euster C-) Collections Manager' SS. C-) I -a On this, the a3r? day of , 2010, before me, a Notary Public, the undersigned officer, personally appe ed Amy Custer, known to me (or satisfactorily proven) to be the person described in the within instrument, and acknowledged that she executed the same in the capacity therein stated and for the purposes therein contained. IN WITNESS WHEREOF, I hereunto set my hand and official seal. Notary Public COMMONWEALTH OF PENNSYLVANIA NOTARIAL SEAL Scott D. Washinger, Notary Public Steelton Borough, Dauphin County M commission ex its Jul 14 2012 -vrn ;sJ CD I'D -n CDC) _--4 M ?z MID PENN BANK, Plaintiff V. HENRIX, LLC d/b/a T&M AUTOMOTIVE and HENRICK SHAMIRIAN, Defendants IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA NO. l0 - (P 61(09 a-tvloTeroi PRAECIPE FOR ASSESSMENT AND ENTRY OF DAMAGES' TO THE PROTHONOTARY:'' ° 73 M r- Please assess damages now due on the Judgment in this action against Defers, ; - c, Henrix, LLC d/b/a T&M Automotive and Henrick Shamirian, as more fully set fortl nhe=r- -n Complaint for Confession of Judgment, as follows: 1. Defendant, Henrix, LLC d/b/a T&M Automotive- $229,992.54; 2. Defendant, Henrick Shamirian - $229,992.54; 3 Plus continuing interest at a rate of $28.30 continuing costs and fees. Date: Septemberk,26, 2010 By: diem from September 23, 2010, HArrisburg, PA" 17110 Telephone: (717) 238-6570 MID PENN BANK, IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff NO. eivi( Trwl V. HENRIX, LLC d/b/a T&M AUTOMOTIVE and HENRICK SHAMIRIAN, : Defendants ENTRY OF JUDGMENT AND NOW, this day of , 2010, by virtue of the warrant of attorneys contained in the Mid Penn Bank Loan Agreement and Mid Penn Bank Guaranty, IT IS HEREBY ORDERED AND DECREED that judgment be entered in favor of Plaintiff, Mid Penn Bank and against Defendant, Henrix, LLC d/b/a T&M Automotive and Henrick Shamirian, and damages are assessed against Defendants as follows: 1. Defendant, Henrix, LLC d/b/a T&M Automotive- $229,992.54; 2. Defendant, Henrick Shamirian - $229,992.54; 3. Plus continuing interest at a rate of $28.30 per diem from September 23, 2010, continuing costs and fees. Prothonotary F:\Home1KKTRGHT?DOCS\MidPenn\Henrix LLOConfession of Judgmentmpd MID PENN BANK, Plaintiff V. HENRIX, LLC d/b/a T&M AUTOMOTIVE and HENRICK SHAMIRIAN, Defendants : PENNSYLVANIA IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, NO. 10 - (.oo1(oy ?vi I-rerpn3 = - --- -<> Q? c-) c:) M :Z_ c7" 7 AVERMENT OF DEFAULT Amy Custer, Collections Manager, being duly sworn according to law, deposes and says that she is the Collections Manager for Mid Penn Bank, Plaintiff herein; that she is authorized to make this Affidavit on behalf of Plaintiff, and that Defendant, Henrix, LLC d/b/a T&M Automotive, entered into a Business Loan Agreement dated Janaury 16, 2009 in the aggregate sum of $216,000.00, a true and correct of which is attached to Exhibit "A" in the Complaint for Confession of Judgment and also entered into a Promissory Note on January 22, 2009 in the aggregate sum of $10,000.00, a true and correct of which is attached to the Complaint for Confession of Judgment as Exhibit "D" . Further, Defendant, Henrick Shamirian, executed a SBA Unconditional Guaranty on January 16, 2009 with respect to the Business Loan Agreement, a true and correct copy of which is attached hereto as Exhibit "C" to the Complaint in Confession of Judgment and also executed a Commercial Guaranty on January 22, 2009 which is attached at Exhibit "F" to the Compliant in Confession of Judgment. Deponent also avers that there is a balance due to Mid Penn Bank in the amount of $229,992.54 under the Loan Agreement, Note, Guaranty and Second Guaranty. In accordance with the Loan Agreement, Note, Guaranty and Second Guaranty, the Deponent further avers that Defendants are liable to Plaintiff as follows: 1. Defendant, Henrix, LLC d/b/a T&M Automotive- $229,992.54; 2. Defendant, Henrick Shamirian - $229,992.54; 3. Plus continuing interest at a rate of $28.30 per diem from September 23, 2010, continuing costs and fees. MID PENN BANK Date: BY* Am uster Collections Manager COMMONWEALTH OF PENNSYLVANIA COUNTY OF DAUPHIN : SS. On this, theday of , 2010, before me, a Notary Public, the undersigned officer, personally appeared Amy Custer, known to me (or satisfactorily proven) to be the person described in the within instrument, and acknowledged that she executed the same in the capacity therein stated and for the purposes therein contained. IN WITNESS WHEREOF, I hereunto set my hand and official seal. Notary Public WAffiAlB OF FEWSYLVANIA NOTARIAL SEAL Scott D. Washinger, Notary Public Steelton Borough, Dauphin County 1Z M commission expires Jul 14 20 MID PENN BANK, IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff V. :NO. (p (002109 a-wilTerm HENRIX, LLC d/b/a T&M AUTOMOTIVE and HENRICK SHAMIRIAN, Defendants NOTICE OF ENTRY OF JUDGMENT Notice is hereby given that a Judgment in the above matter has been entered against the following in the following amount plus continuing interest at the rate of $28.30 per diem, Court costs and continuing costs and fees: 1 • Defendant, Henrix, LLC d/b/a T&M Automotive- $229,992.54; and 2. Defendant, Henrick Shamirian - $229,992.54. A copy of all documents filed with the Prothonotary in support of the within Judgment are enclosed. Arothonot Pary If you have any questions regarding this Notice, please contact t he Filing Party: Kelly M. Knight, Esquire Cunningham & Chernicoff, P.C. 2320 North Second Street Harrisburg, PA 17110 Telephone: (717) 238-6570 (This Notice is given in accordance with Pa. R.C.P. 236) Notice sent to: Henrix, LLC Mr. Henrick Shamirian d/b/a T&M Automotive 12 Edgewood Drive 1412 Trindle Road Mechanicsburg, PA 17055 Carlisle, PA 17013 SHERIFF'S OFFICE OF CUMBERLAND COUNTY Ronny R Anderson Sheriff Q ycr ; : , , : ?-!O T o`? Jody S Smith Chief Deputy (, }! tt}} qr). ! P Richard W Stewart Solicitor s:. Mid Penn Bank Case Number . Henrvsix, LLC (et al.) 2010-6269 SHERIFF'S RETURN OF SERVICE 10/04/2010 02:40 PM - Robert Bitner, Deputy Sheriff, who being duly sworn according to law, states that on October 4 2010 at 1440 hours, he served a true copy of the within Complaint in Confession of Judgment, upon the within named defendant, to wit: Henrix, LLC d/b/a T & M Automotive, by making known unto Elina Arakelian, Secretary for T & M Automotive at 1412 Trindle Road, Carlisle, Cumberland County, Pennsylvania 17013 its contents and at the same time handing to her personally the said true and correct copy of the same. ROB RT BITNER, EPUTY 10/04/2010 08:20 PM - Robert Bitner, Deputy Sheriff, who being duly sworn according to law, states that on October 4 2010 at 2020 hours, he served a true copy of the within Complaint in Confession of Judgment, upon the within named defendant, to wit: Henrick Shamirian, by making known unto Marina Mamedova, Sister In Law at 12 Edgewood Drive, Mechanicsburg, Cumberland County, Pennsylvania 17055 its contents and at the same time handing to her personally the said true and correct copy of the same. ROB RT BITNER, DEPUTY SHERIFF COST: $58.84 October 05, 2010 SO ANSWERS, RON R ANDERSON, SHERIFF ;c) GouniySuite Sheriff, Teieosoft . Inc. FILED-OFFICE OF THE PROTHONOTARY 2011 APR 12 AM 10: 35 CUMBERLAND COUNTY PENNSYLVANIA MID PENN BANK, IN THE COURT OF COMMON PLEAS Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW vs. 2010-6269 Civil Term HENRIX, LLC d/b/a : T&M AUTOMOTIVE and HENRIK SHAMIRIAN, Defendants PRAECIPE TO WITHDRAW APPEARANCE TO THE PROTHONOTARY: Please withdraw the appearance of Cunningham & Chernicoff, P.C. and Kelly M. Knight, Esquire, formerly of Cunningham & Chernicoff, P.C., on behalf of Mid Penn Bank, Plaintiff in the above-captioned action. Date: , 2011 CUNNINGHAM & CHERNICOFF, P.C. By: W, lW MAR W. WITZIG I.D. #29929 P.O. Box 60457 Harrisburg, PA 17106-0457 HENRY & BEAVER LLP By: Marc A. Hess Identification No. 55774 By: Roberta J. Gantea Identification No. 306625 937 Willow Street P.O. Box 1140 Lebanon, PA 17042-1140 (717) 274-3644 -OFFICE U)= THELPROTHONOTARY 2011 APR 12 AM 10: 35 CUMBERLAND COUNTY PENNSYLVANIA MID PENN BANK, IN THE COURT OF COMMON PLEAS Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW vs. 2010-6269 Civil Term HENRIX, LLC d/b/a T&M AUTOMOTIVE and HENRIK SHAMIRIAN, Defendants PRAECIPE FOR ENTRY OF APPEARANCE TO THE PROTHONOTARY: Please enter the appearance of Marc A. Hess and Roberta J. Gantea, of the law firm of Henry & Beaver LLP, whose address is 937 Willow Street, P.O. Box 1140, Lebanon, Pennsylvania 17042-1140, as attorney for Mid Penn Bank, the Plaintiff in the above-captioned matter. Date: , 2011 H B' By: GQ J r-..L l R BERTA J. GA TEA I.D. #306625 '- F1,; t .F yr ri. e r, ', j Lf i ;'3°R J Cii r,"IMSEF,t_AND CMI { fir P E N N S Y LVANIA HENR & BEAVER LLP By: Ma rc A. Hess Identific ation No. 55774 By: Ro berta J. Gantea Identific ation No. 306625 937 Wil low Street P.O. Bo x 1140 Lebano , PA 17042-1140 (717) 2 "4-3644 MID P?NN BANK, Plaintiff IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION -LAW vs. HENRI , LLC d/b/a T&M A TOMOTIVE and HENRI SHAMIRIAN, Defendants 2010-6269 Civil Term MOTION TO AMEND AND CORRECT THE SPELLING OF DEFENDANT'S NAME & TO SUBSTITUTE EXHIBIT "A" OF PLAINTIFF'S COMPLAINT FOR CONFESSION OF JUDGMENT 1. On ctober 1, 2010, Plaintiff filed a Complaint for Confession of Judgment in the Coin of Common Pleas of Cumberland County at Action No. 2010-6269, and Confession of Judgment was entered on the same date. 2. The Caption and Complaint identified Defendants as, Henrix, LLC d/b/a T&M Autolmotive and Henrick Shamirian. 3. Th? caption and Complaint should have identified Defendants as, Henrix, LLC d/b/a TO Automotive and Henrik Shamirian. 4. Plaintiff respectfully moves this Court to permit the amendment of the caption and Complaint to identify Defendant by the correct spelling of his name as follows, from: MID PENN BANK, IN THE COURT OF COMMON PLEAS Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW vs. HENRI , LLC d/b/a T&M A TOMOTIVE and HENRI K SHAMIRIAN, Defendants 2010-6269 Civil Term to: MID P NN BANK, IN THE COURT OF COMMON PLEAS Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW vs. 2010-6269 Civil Term HENRI , LLC d/b/a T&M AUTOMOTIVE and HENRI SHAMIRIAN, Defendants 5. Paragraphs 5 and 23 of Plaintiff's Complaint for Confession of Judgment identified "A," the Business Loan Agreement, as the proper document for confession of judgment for the loan in the principal amount of Two Hundred Sixteen Thousand Dollars ($216,000.00). 6. Plaintiff's Complaint for Confession of Judgment mistakenly attached the wrong ment to confess judgment on the loan in the principal amount of Two Hundred Sixteen Thousand Dollars ($216,000.00). 2 7. They proper document, containing the warrant of attorney, is the Promissory Note for the ?rincipal amount of Two Hundred Sixteen Thousand Dollars ($216,000.00), atta hed hereto and incorporated herein by reference as Exhibit "A." 8. Plai tiff respectfully moves this Court to permit the supplemental amendment of Plaintiffs Complaint for Confession of Judgment to replace the existing Exhibit "A," the Pusiness Loan Agreement with the attached Exhibit "A," the Promissory Note in the Orincipal amount of Two Hundred Sixteen Thousand Dollars ($216,000.00). EREFORE, Plaintiff, Mid Penn Bank, respectfully requests this Court permit PlaintiTs Complaint for Confession of Judgment, filed at Action No. 2010-6269, be amendod to correctly identify Defendant, Henrick Shamirian as "Henrik Shamirian" and to substitute Exhibit "A" of Plaintiff's Complaint for Confession of Judgment with the Exhibit "A." HENRY V LP By: AR A: HE S I.D. #55774 ?Z By. j-' tea R'OBERTA J. GANTEA I.D. #306625 937 Willow Street P.O. Box 1140 Lebanon, PA 17042-1140 (717) 274-3644 Attorneys for Plaintiff 3 U.S. Small Business Administration NOTE SBA Loan 3654461)04 SBA Loan amg He", LLC dba T & M Autornollve Date January 16, 2009 Loan Anxxi nt 1218, , .00 Interest Rat 4.759L (Variable at Wal Sheet Journal Prime Rate ("Index") Plus 1.50%) Borrower Fkw t> LLC Me T & M Automotive Operating Company Henrix. LLC Lender Mid Penn Bank 1. PROMISS TO PAY: In return r the Loan, Bon wen promises to pay to the order of Lender the amount of TWO ED SIXTEEN THOUSAND AND NO interest or? the unpaid principal balance, and all other amounts required by this Note. 2. "Loan" 11 "Loan Di pages "SBA" rr SBA Form 147 means any property taken as security for payment of this Note or any guarantee of this Note. means each person or entity that signs a guarantee of payment of this Note. rs the loan evidenced by this Note. Tents" means the documents related to this ban signed by Borrower, any Guarantor, or anyone who the Small IBusiness Administration, an Agency of the United States of America Dollars, pop 116 Woken KkMW Financial Services, SL Claud, MN 3. PAYM?ENTTERMS: Barro er must make all payments at the place Lender designates. The payment terms for this Note are: The interest rate on this Note will fluctuate. The initial interest rate is 4.75% per annum. This initial rate is the prime rate on date SBA received the loan application, plus 1.50%. The initial Interest rate must remain in effect until the first than a period begins. Borrower must pay principal and interest payments of $2,265.00 every month, beginning one month from the month this Note i dated; payments must be made on the 16th calendar day In the months they are due. Lender will apply each installment payment first to pay interest accred to the day Lender receives the payment, then to bring pri cipal current, then to pay any late fees, and will apply any remaining balance to reduce principal. The intere?t rate will be adjusted every month (the "change period"). The "Primed Rate" is the prime rate in effect on the first business day of the month in which an interest rate change occurs, as ublishbd in the wall Street Journal on the next business day. The adjust interest rate will be 1.50% above the Prime Rate. Lender will adjust the interest rate on the first calendar d y of each chdtlrnge period. The change in interest rate is effective on that day whether or not Lender gives Borrower notice of the change. The Initial Interest rate must remain in effect untl the first change period begins. Lender mu t adjust the payment amount at least annually as needed to amortize principal over the remaining term of the note. If SBA pu ases the guaranteed portion of the unpaid principal balance, the interest rate becomes fixed at the rate in effect at 1 time of the earliest uncured payment default. If there is no uncured payment default, the rate becomes fi?ed at the rate in effect at the time of purchase. All remain4 principal and accrued interest is due and payable 10 years from date of Note. anything to the contrary: Borrower m prepay this Note. Borrower may prepay 20% or less of the unpaid principal balance at any time without noli If Borrower prepays more than 20% and the Note has been sold on the secondary market, Borrower must; a. Give Lendler written notice; b. Pay all interest; and c. If the payment Is received less than 21 days from the date Lender receives the notice, pay an amount equal to 21 days Interest from the date Lender receives the notice, less any interest accrued during the 21 days and paid under subparagraph b. above. If Borrower dpes not prepay within 30 days from the data Lender receives the notice, Borrower must give Lender a new notice. Wl1 Farm 147 (OQ 2) Version 4.1 Pala W Wttiters Iahtrrsr Fkwndal Ser*=, St. CkXW. MN SBA 147: Note Page 2 Continuation Continuation lof "..." Page 2 Prepayment arge: When in any of the first 3 years from the date of initial disbursement Borrower voluntarily prepays mo than 25% of the outstanding principal balance of the loan, Borrower must pay to Lender on behalf of SBA a pre yment fee for that year as follows: a. During the rst year after the date on which the loan is first disbursed, 5% of the total prepayment amount; b. During the second year after the date on which the loan is first disbursed, 3% of the total prepayment amount; and c. During the bird year after the date on which the loan is first disbursed, 1% of the total prepayment amount. Late Charge: If a payment on this Note Is more than 10 days late, Lender may charge Borrower a late fee up to 5% of the unp ld portion of the regularly scheduled payment. Page 1 Bankers Systems, Inc., St. Cloud, MN 4. DEFAULT. Borrower m default under this Note if Borrower does not make a payment when due under this Note, or if Borrower or Operati g Company: A. Fails do anything required by this Note and other Loan Documents; B. Defau on any other loan with Lender; C. Does of preserve, or account to Lender's satisfaction for, any of the Collateral or its proceeds; D. Does t disclose, or anyone acting on their behalf does not disclose, any material fact to Lender or SBA; E. Makes , or anyone acting on their behalf makes, a materially false or misleading representation to Lender or SBA; F. Defaul on any loan or agreement with another creditor, if Lender believes the default may materially affect Borro wer's ability to pay this Note; G. Fails t pay any taxes when due; H. Becom es the subject of a proceeding under any bankruptcy or insolvency law; 1. Has a r weiver or liquidator appointed for any part of their business or property, J. Makes assignment for the benefit of creditors; K. Has an adverse change in financial condition or business operation that Lender believes may materially affect Borro er's ability to pay this Note; L. Reorgan izes, merges, consolidates, or otherwise changes ownership or business structure without Lendcr's prior written consent; or M. Become s the subject of a civil or criminal action that Lender believes may materially affect Borrower's ability to pay thi Now 5. LENDER'S RIGHTS IF THERE IS A DEFAULT: Without not?ce or demand and without giving up any of its rights, Lender may: A. Require immediate payment of all amounts owing under this Note; B. Collect ill amounts owing from any Borrower or ouaarrtor, C. File suit and obtain judgment; D. Take possessionofaw/Collateral; or E. Sell, t or otherwise dispose of, any Collateral at public or private sale, with or without advertisement. 6. LENDER'S ¢ENERAL POWERS: Without no* and without Borrower's consent, Lender may: A. Bid on buy the Collateral at its sale or the We of another lienhokler, at any price it chooses; B. Incur ex nses to collect amounts due under this Note, enforce the terms of this Note or any other Loan for prop fen and expam C. Release i D. Compeer, E. Take any SBA Faun 147 Nell and preserve or dispose of the Collatersl. Among other things, the expenses may include payments taxes, prior liens, insurance, appraisals, anviromnerntel ranediation costs, and reasonable attorney's as. If Lender incurs such expenses, it nay demand immediate repayrnent from Borrower or add the the principal balance, me obligated to pay this Note; release; renew, extend or substitute any of the Collateral; and on necessary to protect the Collateral or collect amounts owing on this Note. Version 4.1 Paps 318 ?'! Wolters Kluwer Flnartdal SerNcas, St ClwA MN 7. WHEN FEDERAL LAW APPLIES: When S IM is the holder, this Note will be interpreted and enforced under federal law, including SBA regulations. Lender or SBA may use state or local procedures for filing papers, recording documents, giving notice, foreclosing liens, arul other purposes. By using such procedures, SBA does not waive any federal immunity from state or local control, penalty, tax, or liability. As to this Note, Borrower may not claim or assort against SBA any local or state law to deny any obligation, defeat any claim of SBA, or preempt federal law. 8. SUCC ORS AND ASSIGNS: Under this Note, Borrower and Operating Company include the successors of each, and Lender includes its successors and assn . 9. GENERAL A. All it B. Born C. BUM Lend D. Lends may 1 E. Borra F. If any G. To the presen that U dividuals and entities signing this Note arc jointly and severally liable. wer waives all suretyship defenses. Ner must sign all documents necessary at any time to comply with the Loan Documents and to enable :r to acquire, perfect, or maintain Lender's liens on Collateral. r may exercise any of its rights separately or together, as many times and in any order it chooses. Lender clay or forgo enforcing any of its rights without giving up any of them ecr may not use an oral statement of Lender or SBA to contradict or alter the written terms of this Note. art of this Note is unenforceable, all other parts remain in effect. :xtent allowed by law, Borrower waives all demands and notices in connection with this Note, including xrnnt, demand, protest, and notice of dishonor. Borrower also waives any defenses based upon any claim nder did not obtain any guarantee; did not obtain, perfect, or maintain a lien upon Collateral; impaired rat; or did not obtain the fair market value of Collateral at it sale. i t SBA Form 147 (067 VftW 4.1 gaps 418 Wolters KkMW FkMcM Services, St. Cloud, MN n 1`@ 10. STATE-VECIFIC PROVISIONS: BORR ER HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR THE PROTHONOTARY OR CLERK OF ANY OURT IN THE COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE, TO APPEAR AT ANY TIME FOR BORR ER AFTER A DEFAULT UNDER THIS NOTE AND WITH OR WITHOUT COMPLAINT FILED, CONFESS OR ENTER JUDGM AGAINST BORROWER FOR THE ENTIRE PRINCIPAL BALANCE OF THIS NOTE AND ALL ACCRUED INTEREST, LATE C ROES AND ANY AND ALL AMOUNTS EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECURI THIS NOTE, TOGETHER WITH COSTS OF SUIT, AND AN ATTORNEY'S COMMISSION OF TEN PERCENT (10%) OF THE AID PRINCIPAL BALANCE AND ACCRUED INTEREST FOR COLLECTION, BUT IN ANY EVENT NOT LESS THAN FIVE HUIVDR DOLLARS ($500) ON WHICH JUDGMENT OR JUDGMENTS ONE OR MORE EXECUTIONS MAY ISSUE IMME?1 TELY, AND FOR SO DOING, THIS NOTE OR A COPY OF THIS NOTE VERIFIED BY AFFIDAVIT SHALL BE SUFFICIENT WAR , THE AUTHORITY GRANTED IN THIS NOTE TO CONFESS JUDGMENT AGAINST BORROWER SHAD. NOT BE EXHA US ED BY ANY EXERCISE OF THAT AUTHORITY, BUT SHALL CONTINUE FROM TIME TO TIME AND AT ALL TIMES UNTIL P YMENT IN FULL OF ALL AMOUNTS DUE UNDER THIS NOTE. BORROWER HEREBY WANES ANY RIGHT SORB ER MAY HAVE TO NOTICE OR TO A HEARING IN CONNECTION WITH ANY SUCH CONFESSION OF JUDGMENT AND STATES rHAT EITHER A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THIS CONFESSION OF JUDGMENT PROVISI TO BORROWER'S ATTENTION OR BORROWER HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL. SBA Fo?m 147 W7 VG WM 4.1 Paps 505 I'- WO" IO~ Rmmdd SWVIMS, St Cloud, MN i r SBA F 'J/O I._.. MN CERTIFICATE OF SERVICE Lisa M. Harris, of the firm of Henry and Beaver, LLP, do hereby certify that I have forwarded a certified true and correct copy of the within Motion by First Class, CertifieO, Return Receipt United States mail, postage prepaid, on April 21, 2011, to the followi Henrix, LLC d/b/a T M Automotive 1412 T indle Road Carlisl . PA 17013 Mr. He rick Shaminan 12 Edg wood Drive Mechanicsburg, PA 17055 LISA M. HARRIS ORIGINAL 3 rnw l ? 4.n 1 HENRY & BEAVER LLP , By: Marc A. Hess rte-: Identification No. 55774 t o x• = o -4; :;c- By: Roberta J. Gantea co ?'. Identification No. 306625 937 Willow Street ` P.O. Box 1140 Lebanon, PA 17042-1140 (717) 274-3644 MID PENN BANK, IN THE COURT OF COMMON PLEAS Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW vs. 2010-6269 Civil Term HENRIX, LLC d/b/a T&M AUTOMOTIVE and HENRICK SHAMIRIAN, Defendants a;P?day ORDER OF COURT AND NOW, to wit, this of XP_,2011,upon consideration of Plaintiffs Motion, IT IS HEREBY ORDERED AND DECREED that Plaintiff's Complaint for Confession of Judgment, filed at Action No. 2010-6269, be amended to correctly identify Defendant, Henrick Shamirian as "Henrik Shamirian" in both the pleading and the caption as follows, from: ' r MID PENN BANK, Plaintiff vs. HENRIX, LLC d/b/a T&M AUTOMOTIVE and HENRICK SHAMIRIAN, Defendants to: MID PENN BANK, Plaintiff vs. HENRIX, LLC d/b/a T&M AUTOMOTIVE and HENRIK SHAMIRIAN, Defendants IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW 2010-6269 Civil Term IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW 2010-6269 Civil Term and to substitute Exhibit "A" of Plaintiffs Complaint for Confession of Judgment with Exhibit "A" of Plaintiffs Motion to Amend and Correct the Spelling of Defendant's Name and to Substitute Exhibit "A" of Plaintiff's Complaint for Confession of Judgment. J. Mr. Hanr•ick Sbarnir+a,n Aenri x , IyC C-? Nenr4+ Bar, LLP '??9r peg 2 WRIT OF EXECUTION and/or ATTACHMENT COMMONWEALTH OF PENNSYLVANIA) COUNTY OF CUMBERLAND) NO 10-6269 Civil CIVIL ACTION - LAW TO THE SHERIFF OF CUMBERLAND COUNTY: To satisfy the debt, interest and costs due MID PENN BANK Plaintiff (s) From HENRIX, LLC d/b/a T&M AUTOMOTIVE, 1412 Trindle Road, Carlisle, PA 17103 and HENRIK SHAMIRIAN, 12 Edgewood Drive, Mechanicsburg, PA 17055 (1) You are directed to levy upon the property of the defendant (s)and to sell levy upon the personal property of each Defendant. (2) You are also directed to attach the property of the defendant(s) not levied upon in the possession of GARNISHEE(S) as follows: METRO BANK, 65 ASHLAND AVENUE, CARLISLE, PA 17013 and to notify the garnishee(s) that: (a) an attachment has been issued; (b) the garnishee(s) is enjoined from paying any debt to or for the account of the defendant (s) and from delivering any property of the defendant (s) or otherwise disposing thereof; (3) If property of the defendant(s) not levied upon an subject to attachment is found in the possession of anyone other than a named garnishee, you are directed to notify him/her that he/she has been added as a garnishee and is enjoined as above stated. Amount Due $229,992.54 Interest from 9/23/2010 ($28.30 per diem) Atty's Comm % Atty Paid $113.34 Other Costs Plaintiff Paid Date: 7/14/11 (Seal) REQUESTING PARTY: Name MARC A. HESS, ESQUIRE Address: HENRY & BEAVER LLP 937 WILLOW STREET PO BOX 1140 LEBANON, PA 17042-1140 Attorney for: PLAINTIFF Telephone: 717-274-3644 Supreme Court ID No. 55774 L.L. $.50 Due Prothy $2.00 David D. Buell, Prothonotary By: Deputy 'ILkO-Or FICE OF Tt. RROTHONOTAR`1' 7g! I JUL 14 PM 2. 15 .UPENNY VTY ANA HENRY & BEAVER LLP By: Marc A. Hess Identification No. 55774 937 Willow Street P.O. Box 1140 Lebanon, PA 17042-1140 (717) 274-3644 MID PENN BANK, IN THE COURT OF COMMON PLEAS Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW vs. 2010-6269 Civil Term HENRIX, LLC d/b/a T&M AUTOMOTIVE and HENRIK SHAMIRIAN, Defendants PRAECIPE FOR WRIT OF EXECUTION UPON A CONFESSED JUDGMENT - WITH ATTACHMENT TO THE PROTHONOTARY: Issue a Writ of Execution upon a Judgment entered by confession in the above matter, 1. Directed to the Sheriff of Cumberland County to levy upon the personal property of; a. Henrix, LLC d/b/a T&M Automotive, Defendant, of 1412 Trindle Road, Carlisle, Cumberland County, Pennsylvania 17103; and b. Henrik Shamirian, Defendant, of 12 Edgewood Drive, Mechanicsburg, Cumberland County, Pennsylvania 17055; v 2. Directed to the Sheriff of Cumberland County to attach the property of Defendants in the hands of Metro Bank, Garnishee, 65 Ashland Avenue, Carlisle, Cumberland County, Pennsylvania 17013. 3. Amount Due - Interest from 9/23/2010 ($28.30 per diem) - Attorney's Fees - Costs - O.C.P.P.- This Writ - Plus continuing costs and attorney's fees as set forth in the Complaint. CERTIFICATION I, certify that: $ 229,992.54 a) This Praecipe is based upon a judgment entered by confession; and b) Notice will be served upon Defendant Henrix, LLC d/b/a T&M Automotive with the Writ of Execution pursuant to Rule 2958.3. c) Notice pursuant to Pa.R.C.P. 2958.1 was served on Defendant Henrik Shamirian as is evidenced by the Certificate of Service filed of record in this matter. J7-S 0 ` a ? ? Cam. r HENR - LLP By: M RC SS I.D. #55774 937 Willow Street P.O. Box 1140 Lebanon, PA 17042-1140 (717) 274-3644 Attorney for Plaintiff -2- wl(*-? 0( C-C L&VO-1 0AeSkA ?-tlKell+ ILED-OF F1CE 0i THE PROTHONOTARY 2011 ,!UL 14 PM 2: 15 CUMBERLAND COUNTY PENNSYLVANIA HENRY & BEAVER LLP By: Marc A. Hess Identification No. 55774 937 Willow Street P.O. Box 1140 Lebanon, PA 17042-1140 (717) 274-3644 MID PENN BANK, IN THE COURT OF COMMON PLEAS Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW vs. 2010-6269 Civil Term HENRIX, LLC d/b/a T&M AUTOMOTIVE and HENRIK SHAMIRIAN, Defendants NOTICE UNDER RULE 2958.3 OF JUDGMENT AND EXECUTION THEREON NOTICE OF DEFENDANTS' RIGHTS To: Henrix, LLC d/b/a T&M Automotive 1412 Trindle Road Carlisle, PA 17013 A judgment in the amount of Two Hundred Twenty-Nine Thousand Nine Hundred Ninety-Two Dollars and Fifty-Four Cents ($229,992.54), plus continuing interest at the rate of Twenty-Eight Dollars and Thirty Cents ($28.30) per diem from September 23, 2010 and the continuing costs and fees, has been entered against you and in favor of the Plaintiff without any prior notice or hearing based on a confession of judgment contained in a written agreement or other paper allegedly signed by you. The Court has issued a Writ of Execution which directs the Sheriff to take your money or other property owned by you to pay the judgment. If your money or property has been taken, you have the right to get the money or property back if you did not voluntarily, intelligently and knowingly give up your constitutional right to notice and hearing prior to the entry of judgment or if you have defenses or other valid objections to the judgment. You have a right to a prompt court hearing if you claim that you did not voluntarily, intelligently and knowingly give up your rights to notice and hearing prior to the entry of the judgment. If you wish to exercise this right, you must immediately fill out and sign the petition to strike the judgment which accompanies the Writ of Execution and deliver it to the Sheriff of Cumberland County at One Courthouse Square, Carlisle, Pennsylvania 17013. IT IS IMPORTANT THAT YOU ACT PROMPTLY. IT WILL BE TOO LATE TO REGAIN YOUR PROPERTY IF YOU WAIT UNTIL AFTER THE PROPERTY HAS BEEN SOLD BY THE SHERIFF OR TURNED OVER TO THE PLAINTIFF. YOU MUST FILE A PETITION SEEKING RELIEF FROM THE JUDGMENT AND PRESENT IT TO A JUDGE WITHIN THIRTY (30) DAYS AFTER THE DATE ON WHICH THIS NOTICE IS SERVED ON YOU OR YOU MAY LOSE YOUR RIGHTS. -2- YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP: LAWYER REFERRAL SERVICE Court Administrator Cumberland County Courthouse One Courthouse Square Carlisle, PA 17013 (717) 240-6200 HE By: Lebanon, PA 17042-1140 (717) 274-3644 Attorney for Plaintiff AMERICANS WITH DISABILITIES ACT OF 1990 The Court of Common Pleas of Cumberland County is required by law to comply with the Americans with Disabilities Act of 1990. For information about accessible facilities and reasonable accommodations available to disabled individuals having business before the Court, please contact the Court Administrator's Office at (717) 240-6200. All arrangements must be made at least 72 hours prior to any hearing or business before the Court. You must attend the scheduled conference or hearing. -3- 937 Willow Street P.O. Box 1140 HENRY & BEAVER LLP By: Marc A. Hess Identification No. 55774 937 Willow Street P.O. Box 1140 Lebanon, PA 17042-1140 (717) 274-3644 MID PENN BANK, IN THE COURT OF COMMON PLEAS Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW vs. 2010-6269 Civil Term HENRIX, LLC d/b/a T&M AUTOMOTIVE and HENRIK SHAMIRIAN, Defendants PETITION TO STRIKE JUDGMENT REQUEST FOR PROMPT HEARING I hereby certify that I did not voluntarily, intelligently, and knowingly give up my right to notice and hearing prior to the entry of judgment. I Petition the Court to strike the judgment on this ground and request a prompt hearing on this issue. I verify that the statements made in this Request for Hearing are true and correct. I understand that false statements herein are made subject to the penalties of 18 Pa.C.S. §4904 relating to unsworn falsification to authorities. Notice of the hearing should be given to me at Address: Telephone: Date: , 2011 Defendant I W{.. c H;7 PROTHONOTAR 2011 AUG -8 AM 11: 06 CUMBERLAND COUNTY PENNSYLVANIA HENRY & BEAVER LLP By: Marc A. Hess Identification No. 55774 937 Willow Street P.O. Box 1140 Lebanon, PA 17042-1140 (717) 274-3644 MID PENN BANK, IN THE COURT OF COMMON PLEAS Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW vs. 2010-6269 Civil Term HENRIX, LLC d/b/a T&M AUTOMOTIVE and HENRIK SHAMIRIAN, Defendants and METRO BANK Garnishee INTERROGATORIES TO GARNISHEE To: Garnishee: Metro Bank 65 Ashland Avenue Carlisle, PA 17013 You must file with the Prothonotary of the Court of Common Pleas verified answers to the following interrogatories in attachment within twenty (20) days after service upon you. Failure to do so may result in judgment against you. A copy of the answers must be served on the undersigned. 1. At the time you were served or at any subsequent time did you owe any of the Defendants any money or were you liable to any of the Defendants on any negotiable or other written instrument, or did any of the Defendants claim that you owed him/her/it any money or were liable to any of the Defendants for any reason? Defendant had account xxxxxx9952 with a balance of$204 68. Defendant did not receive $300 exemption. 2. At the time you were served or at any subsequent time was there in your possession, custody or control or in the joint possession, custody or control of yourself and one or more other persons any property of any nature owned solely or in part by any of the Defendants? no 3. At the time you were served or at any subsequent time did you hold legal title to any property of any nature owned solely or in part by any of the Defendants or in which any of the Defendants held or claimed any interest? no -2- 4. At the time you were served or at any subsequent time did you hold as fiduciary any property in which any of the Defendants had an interest? no 5. At any time before or after you were served did any of the Defendants transfer or deliver any property to you or to any person or place pursuant to your direction or consent and if so, what was the consideration therefore? no 6. At any time after you were served did you pay, transfer or deliver any money or property to any of the Defendants or to any person or place pursuant to the Defendants' direction or otherwise discharge any claim of any of the Defendants against you? no 7. If you are a bank or other financial institution, at the time you were served or at any subsequent time did any of the Defendants have funds on deposit in an account in which funds are deposited electronically on a recurring basis and which are identified see answer to question 1 -3- as being funds that upon deposit are exempt from execution, levy or attachment under Pennsylvania or federal law? If so, identify each account and state the amount of funds in each account, and the entity electronically depositing those funds on a recurring basis. 8. If you are a bank or other financial institution, at the time you were served or at any subsequent time did any of the Defendants have funds, on deposit in an account in which the funds on deposit, not including any otherwise exempt funds, did not exceed the amount of the general monetary exemption under 42 Pa.C.S. §8123? If so, identify each account. see answer to question 1 HEN M- By: 1?11AR(f7A. P ES I . D. #55774 937 Willow Street P.O. Box 1140 Lebanon, PA 17042-1140 (717) 274-3644 Attorney for Plaintiff -4- VERIFICATION The undersigned does hereby verify subject to the penalties of 18 PA. C.S. § 4904 relating to unsworn falsifications to authorities, that he/she is Jennifer Hilbish (Name) Levy Specialist of Metro Bank, garnishee herein, (Title) (Company) that he/she duly authorized to make this verification, and that the facts set forth in the foregoing Answers to Interrogatories are true and correct to the best of his/her knowledge, information and belief. (SIG ATURE) SHERIFF'S OFFICE OF CUMBERLAND COUNTY Ronny R Anderson Sheriff Jody S Smith Chief Deputy Richard W Stewart Solicitor ? ;A,' 0 Cr:atrp6,4, n Or} OF THE PROTHONOTARY 101 I AUG 19 PM 2= 33 CUMBERLAND COUNTY PENNSYLVANIA Mid Penn Bank Case Number vs. 2010-6269 Henrix, LLC t/d/b/a T&M Automotive (et al.) SHERIFF'S RETURN OF SERVICE 07/22/2011 10:02 AM - Shawn Gutshall, Deputy, who being duly sworn according to law, attached as herein commanded all goods, chattels, rights, debts, credits, and monies of the Defendant, in the hands, possession, or control of the within named garnishee, Metro Bank at 65 Ashland Avenue, Carlisle Borough, Carlisle, PA 17013, Cumberland County, by handing to Carol Walter, Customer Service Rep., personally three copies of interrogatories together with three true and attested copies of the Writ of Execution and made the contents there of known to her. 07/27/2011 08:20 PM - Shawn Gutshall, Deputy, being duly sworn according to law, states that on July 27, 2011 at 8:20 PM hours, served the requested Writ of Execution and Claim for Exemption Form by "personally" handing a true and attested copy to a person representing themselves to be the Defendant, to wit: Henrick Shamirian at 12 Edgewood Drive, Mechanicsburg Borough, Mechanicsburg, PA 17055, informed Defendant of contents of same. 08/18/2011 Ronny R Anderson, Sheriff, who being duly sworn according to law, states this writ of execution is returned STAYED, per request from plaintiff's attorney. SHERIFF COST: $107.61 SO ANSWERS, August 19, 2011 RON R ANDERSON, SHERIFF , ?r? L1 'inGt, {o; CoimtySu to Send Te'0o.=0*t im„ 63 yr/