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HomeMy WebLinkAbout11-0095~ r Donald L. Kornfield, Esq. Kornfield and Benchoff, LLP 17 North Church Street Waynesboro, PA 17268 (717) 762-8222 FAX 762-6544 don@kornfield.net Atty. I.D. #19242 GRAYSTONE BANK vs. JOHN M. MESAROS, III Plaintiff Defendant ~~~~~-~f ~~~~ ~ //~~ .i.l ~ ~ ~~.k~ `~ F9~1 ~ ~ , f`, ,:r :~ IN THE COURT OF COMMON PLEAS OF THE 9th JUDICIAL DISTRICT, PA. CUMBERLAND COUNTY BRANCH CIVIL ACTION -LAW No. aot l- q S C~~v~ ~ i~~u CONFESSION OF JUDGMENT PURSUANT TO Pa. R.C.P. RULE 2951 (b) Pursuant to the authority contained in the Warrant of Attorney, a copy of which is attached to the complaint filed in this action, I appear for Defendant and confess judgment in favor of the Plaintiff and against Defendant as follows: Principal balance $70,156.06 Interest to 12/08/2010 838.27 Late charges 10,306.30 Prepayment 2%/60 months 503.14 Attorney fees 7,099.44 Total $88,903.21 PURSUANT TO THE FAIR DEBT COLLECTION PRACTICES ACT YUU ARE ADVISED THAT THIS LAW FIRM IS DEEMED TO BE A DEBT COLLECTOR ATTEMPTING TO COLLECT A DEBT. ANY INFORMATION OBTAINED WILL F3E t1SED FOR THAT PURPOSE. KORN L ND I3 LLP By Dona L. Kori fi d Attorney for De e dart Pursuant to Warrant of Attorney Contained in Complaint Filed Hereinbefore ~~~a1.S0~~a~ cti~ a~ sy Donald L. Kornfield, Esq. Kornfield and Benchoff, LLP 17 North Church Street Waynesboro, PA 17268 (717) 762-8222 FAX 762-6544 don@kornfield.net Atty. I.D. #19242 GRAYSTONE BANK IN THE COURT OF COMMON PLEAS OF Plaintiff :THE 9th JUDICIAL DISTRICT, PA. vs. :CUMBERLAND COUNTY BRANCH JOHN M. MESAROS, III CIVIL ACTION -LAW Defendant No. COMPLAINT NOW COMES Plaintiff and states: 1. Plaintiff is Graystone Bank, a banking institution, with offices located at 112 Market Street, Harrisburg, Dauphin County, Pennsylvania. 2. Defendant is John M. Mesaros, III, a sui juris adult, living and residing at 2171 Merrimac Avenue, Mechanicsburg, Cumberland County, Pennsylvania. COUNTI 3. Paragraphs 1 and 2 are incorporated herein. 4. Attached hereto as Exhibit A and made a part hereof is a true and correct copy of the original Commercial Guaranty dated February 28, 2008, executed by Defendant, containing a warrant of attorney, in conjunction with a loan from Plaintiff to Hollywood Restaurant Group, LLC, which loan is in default. 5. The instant judgment is not being entered by confession against a natural person in connection with a consumer transaction. 6. The guaranty has not been assigned. 7. No judgment has been entered upon the guaranty in any jurisdiction, 8. Defendant is indebted to Plaintiff in the principal sum of $25,156.88, which amount represents the balance due Plaintiff pursuant to the Promissory Note signed by Hollywood Restaurant Group, LLC dated February 28, 2008, together with interest and attorney's fees. 9. A true and correct copy of the Promissory Note to Plaintiff is attached hereto as Exhibit B and made a part hereof. 10. Defendant is indebted to Plaintiff as follows: Principal balance Interest to 12/08/2010 Late charges Prepayment 2%/60 months Attorney fees Total $25,156.88 490.77 6,731.27 503.14 2,564.77 (only fees incurred will be collected) $35,446.83 11. By reason of Defendant's guaranty to Plaintiff and Defendant's default, Plaintiff is entitled to judgment against Defendant in the sum of $35,446.83. WHEREFORE, Plaintiff demands judgment against Defendant on Count I in the amount of $35,446.83, together with interest from December 9, 2010, at the rate of $6.11 per diem, court costs and such other damages as may be available at law. COUNT II 12. Paragraphs 1 and 2 are incorporated herein. 13. Attached hereto as Exhibit C and made a part hereof is a true and correct copy of the original Commercial Guaranty dated February 28, 2008, executed by Defendant, containing a warrant of attorney, and attached hereto as Exhibit D and made a part hereof is a true and correct copy of the original Change in Terms Agreement dated September 25, 2009, in conjunction with a loan from Plaintiff to Hollywood Restaurant Group, LLC, which loan is in default. 14. The instant judgment is not being entered by confession against a natural person in connection with a consumer transaction. 15. The guaranty has not been assigned. 16. No judgment has been entered upon the guaranty in any jurisdiction. 17. Defendant is indebted to Plaintiff in the principal sum of $44,999.18, which amount represents the balance due Plaintiffpursuant to the Promissory Note signed by Hollywood Restaurant Group, LLC dated February 28, 2008, together with interest and attorney's fees. 18. A true and correct copy of the Promissory Note to Plaintiff is attached hereto as Exhibit E and made a part hereof. 19. Defendant is indebted to Plaintiff as follows: Principal balance $44,999.18 Interest to 12/08/2010 347.50 Late charges 3,575.03 Attorney fees 4,534.67 (only fees incurred will be collected) Total $53,456.38 20. By reason of Defendant's guaranty to Plaintiff and Defendant's default, Plaintiff is entitled to judgment against Defendant in the sum of 53,456.38. WHEREFORE, Plaintiff demands judgment against Defendant on Count II in the amount of $53,456.38 together with interest from December 9, 2010, at the rate of $6.56 per diem, court costs and such other damages as may be available at law. WHEREFORE, Plaintiff demands judgment against Defendant on Count I and Count II in the amount of $88,903.21 together with interest from December 9, 201.0, at the rate of $12.67 per diem, court costs and such other damages as may be available at law. KOI~iFIE~,D AND~ENCHOFF, L,LP By '. Do ald L. Kor Attorney for P J ~ I verify that the statements made in this Complaint are true and correct. I understand that false statements herein are made subject to the penalties of 18 Pa.C.S.A. Section 4904, relating to unsworn falsification to authorities. GRAYSTONE BANK By ~~ ~ ~-- ~.,> COMMERCIAL GUARANTY. Borrower: Hollywood Restaurant Group, LLC Lender: GRAYSTONE BANK 400 Forster Street Capital Region Harrisburg, PA 17102 112 Market Street ' Harrisburg, PA 17701 Guarantor: John M. Mesaros, 111 2171 Merrimac Avenue ' Mechanicsburg, PA 17055 CONTINUING 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 hs 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. Under this Guaranty, Guarantor's liability is unlimited and Guarantor's obligations are continuing. 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, reasonable attorneys' fees, arising from any and all debts, liabilities and obligations of every nature or form, now existing or hereafter arising or acquired, that Borrower individually or collectively or interchangeably with others, owes or will owe Lender. "Indebtedness" includes, without limitation, loans, advances, debts, overdraft indebtedness, credit card indebtedness, lease obligations, liabilities and obligations under any interest rate protection agreements or foreign currency exchange agreements or commodity price protection agreements, other obligations, and liabilities of Borrower, and any present or future judgments against Borrower, future advances, loans or transactions that renew, extend, modify, refinance, consolidate or substitute these debts, liabilities and obligations whether: voluntarily or involuntarily incurred; due or to become due by their terms or acceleration; absolute or contingent; liquidated or unliquidated; determined or undetermined; direct or indirect; primary or secondary in nature or arising from a guaranty or surety; secured or unsecured; joint or several or joint and several; evidenced by a negotiable or non-negotiable instrument or wrting; originated by Lender or another or others; barred or unenforceable against Borrower for any reason whatsoever; for any transactions that may be voidable for any reason (such as infancy, insanity, ultra vitas or otherwise); and originated then reduced or extinguished and then afterwards increased or reinstated. If Lender presently holds one or more guaranties, or hereafter receives eddkional guaranties from GUarBnt0r, 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 liabifity under the terms of this Guaranty end any such other unterminated guaranties. CONTINUING GUARANTY. THIS IS A "CONTINUING GUARANTY" UNDER WHICH GUARANTOR AGREES TO GUARANTEE THE FULL AND PUNCTUAL PAYMENT, PERFORMANCE AND SATISFACTION OF THE INDEBTEDNESS OF BORROWER TO LENDER, NOW EXISTING OR HEREAFTER ARISING OR ACQUIRED, ON AN OPEN AND CONTINUING BASIS. ACCORDINGLY, ANY PAYMENTS MADE ON .THE INDEBTEDNESS WILL NOT DISCHARGE OR DIMINISH GUARANTOR'S OBLIGATIONS AND LIABILITY UNDER THIS GUARANTY FOR ANY REMAINING AND SUCCEEDING INDEBTEDNESS EVEN WHEN ALL OR PART OF THE OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE FROM TIME TO TIME. 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 Borcower, and will continue in full force until all the Indebtedness incurred or contracted before receipt by Lender of any notice of revocation shall have been fully and finally paid and satisfied and all of Guarantor's other obligations under this Guaranty shall have been pertormed in full. If Guarantor elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written notice of revocation must be mailed to Lender, by certified mail, at Lender's address listed above or such other place as Lender may designate in writing. Written revocation of this Guaranty will apply only to new Indebtedness created after actual receipt by Lender of Guarantor's written revocation. For this purpose and without limitation, the term "new Indebtedness" does not include the Indebtedness which at the time of notice of revocation is contingent, .unliquidated, undetermined or not due and which later becomes absolute, liquidated, determined 'or due.. For this purpose and without limitation, "new Indebtedness" does not include all or part of the Indebtedness that is: incurred by Borrower prior to revocation; incurred under a commitment tfiat became binding before revocation; any renewals, extensions, substitutions, and modifications of the Indebtedness: This Guaranty shall bind Guarantor's estate as to the Indebtedness created both before and after Guarantor's death or incapacity, regardless of Lender's actual notice of Guarantor's death. Subject to the foregoing, Guarantor's executor or administrator or other legal representative may terminate this Guaranty in the same manner in which Guarantor might have terminated it and with the same effect. Release of any other guarantor or termination of any other guaranty of the Indebtedness shall not affect the liability of Guarantor under this Guaranty. A revocation lender receives from any one or more Guarantors shall not affect the liability of any remaining Guarantors under this Guaranty. It is anticipated that fluctuations may occur in the aggregate amraunt of the Indebtedness covered by this Guaranty, and Guarantor specifically acknowledges and agrees that reductions in the amount of the Indebtedness, even to zero dollars (10.00), shalt not constkute a termination of tfiis Guaranty. This Guaranty is binding upon Guarantor and Guarantor's heirs, successors and assigns so tong as any of the Indebtedness remains unpaid and even though the Indebtedness may from time to time be zero dollars (80.001. . GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before or after any revocation hereof, without notice or demand and w'Nwut lessening Guarantor's Gabi~ity under this Guaranty, from time to time: IA) prior to revocation as sat forth above, 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 aher, compromise, renew, extend, accelerate, or otherwise change one or more times the time for payment or other terms of the Indebtedness or any part of the Indebtedness, including increases and decreases of the rate of interest on the Indebtedness; extensions may be repeated and may be for longer than the original loan term; (C) to take and hold security for the payment. of _ ~ this Guaranty or the Indebtedness, and exchange, enforce, waive, subordinate, fail or decide not to perfect, end 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;, IF) 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) ~jjj,~ Guaranty in whole or in part. EXH~B~T GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to Lender that agreements of any kind have been made to Guarantor which would limit or qualify in any way the terms of this Guar executed at Borcower's request and not at the request of Lender; (CI Guarantor has full power, right and authority t (DI the provisions of this Guaranty do not cor-flict whh or resuh in a defauk under any agreement or other instrum J , COMMERCIAL GUARANTY Loan No: 4-4890 (Continued) Page 2 and do not result in a violation of any law, regulation, court decree or order applicable to Guarantor; IE) Guarantor has not and will not, without the prior written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially all of Guarantor's assets, or any interest therein; (F) upon Lender's request, Guarantor will provide to Lender financial and credit information in form acceptable to Lender, and all such financial information which currently has been, and all future financial information which will be provided to Lender is and will be true and correct in all material respects and fairly presets Guarantor's financial condition as of the dates the financial information is provided; iGl 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 condhion; (HI 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 6aeis information regarding Borrower's financial condition. Guarantor agrees to keep adequately informed from such means of any facts, events, or circumstances which might in any way affect Guarantor's risks under this Guaranty, end 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 furnish Lender with the following: Annual Statements. As soon as available, but in no event later than one-hundred-twenty (920) days after the end of each fiscal year, Guarantor's balance sheet and income statement for the year ended, prepared by Guarantor. Tax Returns. As soon as available, but in no event later then one-hundred-twenty (120) days after the applicable filing date for the tax reporting period ended, Federal and other governmental tax returns, prepared by Guarantor. All financial reports required to be provided under this Guaranty shall be prepared in accordance with GAAP, applied on a consistent basis, and certified by Guarantor as being true and correct. . 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 credh to Borrower; IB) to make any presentment, protest, demand, or notice of any kind, including notice of any nonpayment of the Indebtedness or of any nonpayment related to any collateral, or notice of any action or nonactlon on the part of Borrower, Lender, any surety, endorser, or other guarantor in connection with the Indebtedness or in connection with the creation of new or additional loans or obligations; IC) to resort for payment or to proceed directly or at once against any person, including Borrower or any other guarantor; (D) to proceed directly against or exhaust any collateral held by Lender from Borrower, any other guarantor, or any other person; (E) to give notice of the terms, time, and place of any public or private sale of personal property security held by Lender from Borrower or to comply wkh any other applicable provisions of the Uniform Commercial Code; (F) to pursue any other remedy within Lender's power; or IGI to commit any act or omission of any kind, or at any time, with respect to any matter whatsoever. Guarantor also waives any and all rights or defenses based on suretyship or impairment of collateral including, but not limited to, any rights or defenses arising by reason of (A) any "one action" or "anti-deficiency" law or any other law which may prevent Lender from bringing any action, including a claim for deficiency, against Guarantor, before or after Lender's commencement or completion of any foreclosure action, either judicially or by exercise of a power of sale; (B) any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement, including without limkation, any loss of rights Guarantor may suffer by reason of any law limiting, qualifying, or discharging the Indebtedness; IC) any disability or other defense of Borrower, of any other guarantor, or of any other person, or by reason of the cessation of Borrower's liability from any cause whatsoever, other than payment in full in legal tender, of the Indebtedness; IDI any right to claim discharge of the Indebtedness on the basis of unjustified • impairment of any collateral for the Indebtedness; (E) any statute of limitations, if. at any time any action or suit brought by Lender against Guarantor is commenced, there is outstanding Indebtedness which is not barred by any applicable statute of limitations; or (F) any defenses given to guarantors at law or in equity other than actual payment and performance of the Indebtedness. If payment is made by Borrower, whether voluntarily or otherwise, or by any third party, on the Indebtedness and thereafter Lender is forced to remh the amount of that payment to Borrower's trustee in bankruptcy or to any similar person under any federal or state bankruptcy law or law for the relief of debtors, the Indebtedness shall be considered unpaid for the purpose of the enforcement of this Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff, counterclaim, counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower, the Guarantor, or both. 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 wkh 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 Borrowei, 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 io•Guarantor shall be marked with a legend that the same are subject to this Guaranty and shall tie 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 iteration or amendment. COMMERCIAL GUARANTY Loan No: 4-4890 {Continued) . Page 3. Attorneys' Fees; Expenses. Guarantor agrees to pay upon demand all of Lender's costs and expenses, including Lender's reasonable attorneys' fees and Lender's legal expenses, 'incurred in connection with the enforcement of this Guaranty. Lender may hire or pay someone else to help enforce this Guaranty, end Guarantor shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's reasonable attorneys' fees end legal expenses whether or not there is a lawsuit, including reasorable attorneys' fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals,. and any anticipated post-judgment collection services. Guarantor also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings. Caption headings in this Guaranty are for convenience purposes only and are not to be used to interpret or define the provisions of this Guaranty. Governing Law. This Guaranty will be governed by federal law app4cabla to Lander and, to the extent not preempted by federal law, the laws of the Commonwealth of Pennsylvania without regard to its conflicts of law provisions. Choico of Venue. If there is a lawsuh, 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 GuarerKor's intentions and parol evidence is not required to interpret the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmless from all losses, claims, damages, and costs (including Lender's attorneys' fees) suffered or incurred by Lender as. a resuh of any breach by Guarantor of the warcanties, 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 Guaranty or when this Guaranty is executed by more than one Guarantor, the words "Borrower" and "Guarantor" respectively shall mean all and any one or more of them. The words "Guarantor," "Borrower," and "Lerider" include the heirs, successors, assigns, and transferees of each of them. If a court finds that any provision of this Guaranty is not valid or should not be enforced, that fact by itself will riot 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 if 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 net 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, except for revocation notices by Guarantor, 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 Untied States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Guaranty. All revocation notices by Guarantor shall be in writing and shall be effective upon delivery to Lender as provided in the section of this Guaranty entitled "DURATION OF GUARANTY." Any party may change hs address for notices under this Guaranty 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, Guarantor agrees to keep Lender informed at all times of Guarantor's current address. Unless otherwise provided by applicable law, if there is more than one Guarantor, any notice given by Lender to any Guarantor is deemed to be notice given to all Guarantors. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Guaranty unless such waiver is given in writing end 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. Lender and Guarantor hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by either Lender or Guarantor against the other. CROSS COLLATERALIZE/CROSS DEFAULT. This loan will be cross-collateralized/cross-defaulted with all other loans from Borrower, or any of~ Borrower's related entities, to Lender. If at any time there is a default under this loan, all loans will be considered in defauh end all outstanding amounts under the loans will be immediately due and payable in full. A default in one loan shall constitute a default in all others. DEFINITIONS. The following capkalized words and terms shell have the following meanings when used in this Guaranty. Unless spec'rfically 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 shalt 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 Hollywood Restaurant Group, LLC and includes all co-signers end 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 John M. Mesaros, III, 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 es more particularly described in this Guaranty. Lender. The word "Lender" means GRAYSTONE BANK, its successors and assigns. Note. The word "Note" means and includes without limitation all of Borrower's promissory notes and/or credit agreements evidencing Borrower's loan obligations in favor of Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of and substitutions for the promissory notes or credit agreements. Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental COMMERCIAL GUARANTY Loan No: 4-4890 (Continued) Page 4 agreements, guaranties, security agreements, mortgages, deeds of trust, securky deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter existing, executed in connection wkh 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 FOR 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 ANY AND ALL AMOUNTS EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECURING THE INDEBTEDNESS, TOGETHER WITH COSTS OF SUIT, AND AN ATTORNEY'S COMMISSION OF TEN PERCENT 11096) 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 GUARANTOR SHALL NOT BE EXHAUSTED BY ANY EXERCISE OF THAT AUTHORITY, BUT SHALL CONTINUE FROM TIME TO TIME AND AT ALL TIMES UNTIL PAYMENT IN FULL OF ALL AMOUNTS DUE UNDER THIS GUARANTY. GUARANTOR HEREBY WAIVES ANY RIGHT GUARANTOR MAY HAVE TO NOTICE OR TO A HEARING IN CONNECTION WITH ANY SUCH CONFESSION OF JUDGMENT AND STATES THAT EITHER A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THIS CONFESSION OF JUDGMENT PROVISION TO GUARANTOR'S ATTENTION OR GUARANTOR HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL. EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNT)L TERMINATED tN THE MANNER SET FORTH IN THE SECTION TITLED 'DURATION OF GUARANTY". NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED FEBRUARY 26, 2008. 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 ACOpRDING TO LAW. GUARANTOR: MO WMYiy, V,,. 6.7!.10.001 Ceyr. Ilrl~q FInr4M Selulku. Mo. Y MAY IbMMO. - -A i:1peN41GFl1tK1f]D.FC PROMISSORY NOTE Borrower: Hollywood Restaurant Group, LLC Lender: GRAYSTONE BANK 400 Forster Street Capital Region Harrisburg, PA 17102 112 Market Street• Harrisburg, PA 17101 Principal Amount: 845,000.00 Interest Rate: 8.750°~f, ~ Date of Note: February 28, 2008 PROMISE TO PAY. Hogywood Restaurant Group, LLC ("Borrower") promises to pay to GRAYSTONE BANK 1"Lender"), or order, in lawful money of the United States of America, the principal amount of Forty-five Thousand & 00!100 Dollars (545,000.00), together with interest at the rate of 8.750% par annum on the unpaid principal balance from February 28, 2008, until paid in full. The interest rate may change under the terms and conditions of the "INTEREST AFTER DEFAULT" section. PAYMENT. Borrower wiN pay this loan in 69 payments of 5931.27 each payment and an lrregular.last payment estimated at 5931.38. Borrower's first payment is due March 28, 2008, and all subsequent payments are due on the same day of each month after that. Borrower's final payment will be due on February 28, 2013, and wtp be for all principal and all accrued interest not yet paid. Payments include princ~al and interest. Unless otherwise agreed or required by applicable law, payments will be applied first to any accrued unpaid interest; then to principal; then to any late charges; and then to any unpaid collection costs. The annual interest rate for this Nots )s computed on a 365/360 basis; that is, by applying the ratio of the annual interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in wrting. PREPAYMENT PENALTY. Upon prepayment of this Note, Lender is entitled to the tolbwing prepayment penalty: A prepayment fee wUl be charged if the Note is prepaid, In whole or in part, during the fixed rate period. The fee wld be calculated at two percent (2%) of the principal amount prepaid. A prepayment fee wgl not be charged on any amount prepaid within any loan year from internally generated funds. Except for the foregoing, Borrower may pay all or a portion of the amount owed earner than it is due. Early payments will not, unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due and may result in Borrower's making fewer payments. Borrower agrees not to send Lender payments marked "paid in full", "without recourse", or similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lender's rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts, including any check or other payment instrument that indicates that the payment constitutes "payment in full" of the amount owed or that is tendered with other condkions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: GRAYSTONE BANK, 112 Market Street Harrisburg, PA 17101. LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged 10.000% of the regularly scheduled payment or 5250.00, 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 2.000 percentage points. If judgment is entered in connection wkh this Note, interest will continue to accrue after the date of judgment at the rate in , effect at the time judgment is entered. However, in no event will the interest rate exceed the maximum interest rate limitations under applicable law. DEFAULT. Each of the following shall constitute an event of default ("Event of Default"1 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 condkion 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 materiel 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 Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the loan. This includes a garnishment of any of Borrower's accounts, including deposit accounts, with Lender. However, this Event of Default shell not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the credkor or forfeiture proceeding, in an amount determined by Lender, in ks sole discretion, as being en adequate reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any guaranty of the indebtedness evidenced by this Note. In the event of a death, Lender; at ks option, may, but shall not be required to, permit the Guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender, and, in doing so, cure any Event of Default. Adverse Change. A material adverse change occurs in Borrower's financial condkion, or Lender believes the prospect of payment or performance of this Note is impaired. Cure Provisions. If any default, other than a default in payment is curable and if Borrower has not been given a notice of a breach of the ' same provision of this Note within the preceding twelve (121 months; it may be cured if Borrower, after receiving written notice from Lender demanding cure of such default: 11) cures the defauh within fifteen (15) days; or (2} if the cure requires more than fifteen (15) days, immediately inkiates steps which Lander deems in Lender's sole discretion to be sufficient to cure the defauk and thereafter continues end completes all reasonable and necessary steps sufficient to produce compliance.as soon as reason°'~'•• --°-~'--' LENDER'S RIGHTS. Upon default, Lender may, after giving such notices as required by applicable law, declar EXHIBIT balance under.this Note and all accrued unpaid interest immediately due, and then Borrower will pay that amount. (~ ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone a{se to help collect this Note if Borrower does ~/~ Lender that amount. This includes, subject to any limits under applicable law, Lender's reasonable attorneys' fees PROMISSORY NOTE Loan No: 4-4890 (COnfinuBd) Page 2 whether or not there is a lawsuit, including reasonable attorneys' fees, expenses. for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction!, and appeals. If not prohibited by applicable law, Borrower also will pay any court costs, in addhion to all other sums provided by law. JURY WAIVER. Lender and Borrower hereby waive the i~ght to any jury trial in any action, proceeding, or counterclaim brought by either Lender or Borrower against ths other. GOVERNING LAW. This Note wilt begoverned by federal law applicable to Lander and, to the extent not preempted by federal law, the lawa of the Commonwealth of PennsyMania without regard to its conflicts of law provisions. This Note has been accepted by Lender in the Commonwealth of Pennsyvania. 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 prohibted 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. SECURITY. All collateral (as herein defined) is security for this Note and any renewals, extensions and modifications thereof, end the payment, performance and discharge of ail other present or future indebtedness, obligations and undertakings (whether individual, joint, several, direct, contingent or otherwise) of the Borrower to or for the benefit of Lender, whether arising directly to Lender under this Note or under any other agreement, promissory note or undertakings now existing or hereinafter entered into by the Borrower to the Lender. The term "Collateral" includes all tangible and intangible property (i) described in any mortgage, pledge, assignment or other security document separately executed in favor of Lender, artd (ii1 in which a securky inrterest has been granted to Lender pursuant to this Note. CROSS COLLATERALIZE/CROSS DEFAULT. This loan will be cross-collateralized/cross-defaulted with ell other loans from Borrower, or any of Borrower's related entities, to Lender. If at any time there is a default under this loan, all loans will be considered in defauk and ell outstanding amounts under the loans will be immediately due and payable in full. A default in one Loan shall constitute a defeuk in all others. SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower's heirs, -personal representatives, successors and assigns, end shall inure to the benefk of Lender and its successors and assigns. GENERAL PROVISIONS. If any part of this Note cannot be enforced, this fact will not affect the rest of the Note. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower and any other person who signs, guarantees or endorses this Note, to the extent allowed by law, waive presentment, demand for payment, and notice of dishonor. Upon any change in the terms of this Note, and unless otherwise expressly stated in writing, no party who signs this Note, whether as maker, guarantor, accommodation maker or endorser, shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time) this loan or release any party or guarantor or collateral; or impair, fail to realize upon or pertect 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 then the parry 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 FlLED, 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 (1096) OF THE UNPAID PRINCIPAL BALANCE AND ACCRUED INTEREST FOR COLLECTION, BUT IN ANY EVENT NOT LESS THAN FIVE HUNDRED DOLLARS (55001 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 dNY 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 Loan No: 4-4890 (Continued) Page 3 PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE. THIS NOTE IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS NOTE IS AND SHALL CONSTffUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. BORROWER:. HOLLY D R TAUBL1dLGROUP, LLC BY: (Seal) By: Robert S. Fogelman, mbar of Hollywood Restaur nt Group, LLC BY~ / ~ (Seal) teven T. ember of Hollywood Restaurant Group, LLC LENDER: X usce vxo u,src. v.. saeno.am Ce/r. HxW:O pNpgd /WrINn,, Im. 1M7, m0~. All IIiyIN,A„rr,l. - -A l:yrw:bICFILLRID70.7C 7M1176e v146 , , COMMERCIAL GUARANTY Borrower: Hollywood Restaurant Group, LLC Lender: GRAYSTONE BANK 400 Forster Street Cap'nal.Region Harrisburg, PA 17702 712 Market Street • Harcisburg, PA 17101 Cau9rantOr: John M. Mesaros, III ' 2171 Merrimac Avenue Mechanicsburg, PA 17055 CONTINUING GUARANTEE OF PAYMENT AND PERFORMANCE. For good and valuable consideration, Guarantor absolutely end 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 end 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 Borcower's obligations under the Note and Related Documents. Under this Guaranty, Guarantor's liability is unlimited and Guarantor's obligations are continuing. 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, reasonable attorneys' fees, arising from any and all debts, liabilities and obligations of every nature or form, now existing or hereafter arising or acquired, that Borrower individually or collectively or interchangeably with others, owes or will owe Lender. "Indebtedness" includes, without limitation, loans, advances, debts, overdraft indebtedness, credh card indebtedness, lease obligations, liabilities and obligations under any interest rate protection agreements or foreign currency exchange agreements or commodity price protection agreements, other obligations, and liabilities of Borrower, and any present or future judgments against Borrower, future advances, loans or transactions that renew, extend, modify, refinance, consolidate or substitute these debts, liabilities and obligations whether: voluntarily or involuntarily incurred; due or to become due by their. terms or acceleration; absolute or contingent; liquidated or unliquidated; determined or undetermined; direct or indirect; primary or secondary in nature or arising from a guaranty or surety; secured or unsecured; joint or several or joint and several; evidenced by a negotiable or non-negotiable instrument or writing; originated by Lender or another or others; barred or unenforceable against Borrower for any reason whatsoever; for any transactions that may be voidable for any reason (such es infancy, insanity, ultra vires or otherwisel; and originated then reduced or extinguished and then afterwards increased or reinstated. 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 temms of this Guaranty and any such other uMerminated guaranties. CONTINUING GUARANTY. THIS IS A "CONTINUING GUARANTY" UNDER WHICH GUARANTOR AGREES TO GUARANTEE THE FULL AND PUNCTUAL PAYMENT, PERFORMANCE AND SATISFACTION OF THE INDEBTEDNESS OF BORROWER TO LENDER, NOW EXISTING OR HEREAFTER ARISING OR ACQUIRED, ON AN OPEN AND CONTINUING BASIS. ACCORDINGLY, ANY PAYMENTS MADE ON THE INDEBTEDNESS WILL NOT DISCHARGE OR DIMINISH GUARANTOR'S OBLIGATIONS AND LIABILITY UNDER THIS GUARANTY FOR ANY REMAINING AND SUCCEEDING INDEBTEDNESS EVEN WHEN ALL OR PART OF THE OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE FROM TIME TO TIME. 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 ell the Indebtedness incurred or contracted before receipt by Lender of any notice of revocation 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. If Guarantor elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written notice of revocation must be mailed to Lender, by certified mail, at Lender's address listed above or such other place as Lender may designate in writing. Written revocation of this Guaranty will apply only to new Indebtedness created after actual receipt by Lender of Guarantor's written revocation. For this purpose and without limitation, the term "new Indebtedness" does not include the Indebtedness which et the time of notice of revocation is contingent, unliquidated, undetermined ai not due and which later becomes absolute, .liquidated, determined or due:, For this purpose and without limitation, "new Indebtedness" does not include all or part of the Indebtedness that is: incurred by Borrower prior to revocation; incurred under a commitment that became binding before revocation; any renewals, extensions, substkutions, and modifications of the Indebtedness. This Guaranty shall bind Guarantor's estate as to the Indebtedness created both before and after Guarantor's death or incapacity, regardless of Lender's actual notice of Guarantor's death: Subject to the foregoing, Guarantor's executor or administrator or other legal representative may terminate this Guaranty in the same manner in which Guarantor might have terminated it and with the same effect. Release of any other guarantor or termination of any other guaranty of the Indebtedness shall not affect the liability of Guarantor under this Guaranty. A revocation Lender receives from any one or more Guarantors shall not affect the liability of any remaining Guarantors under this Guaranty. R is anticipated that fluctuations may occur in the aggregate amount of the Indebtedness covered by this Guaranty, and Guarantor specifically acknowledges and agrees that reductions in the amount of the Indebtedness, even to zero dollars 00.00), shall not constitute a tarm'uration of this Guaranty. This Guaranty Is binding upon Guarantor and Guarantor's heirs, successors and assigns so long as any of tfie Indebtedness remains unpaid and even though the Indebtedness may from. lane to time be zero dollars (80.00). GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before or after any revocation hereof, without notice or demand and without lessening Guarantor's liability under this Guaranty, from tkne•to time: (A) prior to revocation as set forth above, 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 aher, compromise, renew, extend, accelerate, or otherwise change one or more times the time for payment . or other terms of the Indebtedness or any part of the Indebtedness, including Increases and decreases of the rate of interest on the Indebtedness; extensions may be repeated and may be for longer than the original loan term; (C) to take and hold security for the payment of this Guaranty or the Indebtedness, and exchange, enforce, waive, subordinate, fail or decide not to perfect, and release any such security, with or without the substitution of new collateral; (D) to release, substitute, agree not to sue, or deal with any one or more of 8orrower's sureties, endorsers, or other guararrtors 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 pert. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to Lender that ( EXHIBIT agreements of any kind have been made to Guarantor which would limit or qualify in any way the terms of this Guar executed at Borrower's request and not at the request of Lender; fC! Guarantor has full power, right and authority t (D) the provisions of this Guaranty do not conflict with or resuh in a default under any agreement or other instrume , COMMERCIAL GUARANTY Loan No: 4-4893 ~ (Continued) Page 2 and do not resuh 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 arty interest therein; iF) upon Lender's request, Guarantor will provide~to Lender financial and credk 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; fG1 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; (I) Lender has made no representation to Guarantor as to the creditworthiness of Borrower; and (J- Guarantor has established adequate means of obtaining. from Borrower on a continuing basis information regarding Borrower's financial condition. Guarantor agrees to keep adequately informed from such means of any facts, events, or circumstances which might in any way affect Guarantor's risks under this Guaranty, and Guarantor further agrees that 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 FlNANCIAL STATEMENTS. Guarantor agrees to furnish Lender with the following: Annual Statements. As soon as available, but in no event later than one-hundred-twenty (120) days after the end of each fiscal year, Guarantor's balance sheet and income statement for the year ended, prepared by Guarantor. Tax Returns. As soon as available, but in no event later than one-hundred-twenty (120) days after the applicable filing date for the tax reporting period ended, Federal and other governmental tax returns, prepared by Guarantor. All financial reports required to be provided under this Guaranty shall be prepared in accordance with GAAP, applied on a consistent basis, and certified by Guarantor as being true and correct. 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; (BI to make any presentment, protest, demand, or notice of any kind, including notice of any nonpayment of the Indebtedness or of any nonpayment related to any collateral, or notice of any action or nonaction on the part of Borrower, Lender, any surety, endorser, or other guarantor in connection with the Indebtedness or in connection with the creation of new or addhional loans or obligations; IC) to resort for payment or to proceed directly or at once against any person, including Borrower or any other guarantor; (D) to proceed directly against or exhaust any collateral held by lender from Borrower, any other guarantor, or any other person; (E) to give notice of the terms, time, and place of any public or private sale of personal property security held by Lender from Borrower or to comply whh any other applicable provisions of the Uniform Commercial Code; IF) to pursue any other remedy whhin Lender's power; or IGI to commh any act or omission of any kind, or at any time, whh respect to any matter whatsoever. , Guarantor also waives any and all rights or defenses based on suretyship or impairment of collateral including, but not limited to, any rights or defenses arising by reason of (Al any "one action" or "anti-deficiency" law or any other law which may prevent Lender from bringing any action, including a claim for deficiency, against Guarantor, before or after Lender's commencement or completion of any foreclosure action, ehher judicially or by exercise of a power of sale; (B) any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement, including without limitation, any loss of rights Guarantor may suffer by reason of any law limiting, qualifying, or discharging the Indebtedness; (C) any disability or other defense of Borrower, of any other guarantor, or of any other person, or by reason of the cessation of Borrower's liability from any cause whatsoever, other than payment in full in legal tender, of the Indebtedness; (D) any right to claim discharge of the Indebtedness on the basis of unjustified impairment of any collateral for the Indebtedness; (E) any statute of limitations, if at any time any action or suh brought by Lender against Guarantor is commenced, there is outstanding Indebtedness which is'not barred by any applicable statute of limkations; or (FI 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 setoff,.countercleim, counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower, the Guarantor, or both. GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above is made whh Guarantor's fuA 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 ell 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 prohibhed by law. Guarantor authorizes Lender, to the extent permitted by applicable law,, to hold these funds if there is a defauh, 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 bf Borrower, through bankruptcy, .by an assignment for the benefh 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 h 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 fife 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 aheration 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. ~ A COMMERCIAL GUARANTY Loan No: 4-4893 {Continued) • Page 3 Attorneys' Fees; Expenses. Guarantor agrees to pay upon demand all of Lender's costs and expenses, including Lender's reasonable attomeys.' fees and Lender's legal expenses, incurred in connection with the enforcement of this Guaranty. Lender may hire or pay someone else to help enforce this Guaranty, and Guarantor shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's reasonable attorneys' fees and legal expenses whether or not there is a lawsuit, including reasonable attorneys' fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunctiori), appeals, and any anticipated post-judgment collection services. Guarantor also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings. Caption headings in this Guaranty are for convenience purposes only and are not to be used to interpret or define the provisions of this Guaranty. Governing Law. This Guaranty 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 witlwut regard to its confGcta of law provisions. Ghoice of Vsnue. 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 pero! evidence is not required to interpret the terms of this Guaranty. Guarantor hereby indemnifies end holds Lender harmless from all losses, claims, damages, and costs (including Lender's attorneys' fees) suffered or incurred by Lender as a resuk 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 6e deemed to have been used in the plural where the context and construction so require; and where there is more than one Borrower named in this Guaranty or when this Guaranty is executed by more than one Guarantor, the words "Borrower" and "Guarantor" respectively shall mean all and any one or more of them. The words "Guarantor," "Borrower," end "Lender" include the heirs, successors, assigns, and transferees of each of them. If a court finds that any provision of this Guaranty is not valid or should not be enforced, that fact by itself will not mean that the rest of this Guaranty will not be valid or enforced. Therefore, a court will enforce the rest of the provisions of this Guaranty even if 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, except for revocation notices by Guarantor, 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 Unirted States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Guaranty. All revocation notices by Guarantor shall be in wrking and shall be effective upon delivery to Lender as provided in the section of this • Guaranty entitled "DURATION OF GUARANTY." Any party may change ks address for notices under this Guaranty 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, Guarantor agrees to keep Lender informed at all times of Guarantor's current address. Unless otherwise provided by applicable law, if there is more than one Guarantor, any notice given by Lender to any Guarantor is deemed to be notice given to all Guarantors. 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. Lender and Guarantor hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by either Lender or Guarantor against the other. ANNUAL REVIEW. The Lender will review the Note annually for renewals and extensions; such renewals and extensions to be granted predicated on the performance of the company and/or individuals and adherence to the Loan Agreement and/or loan policy. CROSS COLLATERALIZE/CROSS DEFAULT. This loan will be cross-collateralized/cross-defaulted with all other loans from Borrower, or any of Borrower's related entities, to Lender. If at any time there is a default under this loan, all loans will be considered in default and all outstanding .amounts under the loans will be immediately due and payable in full. A defauh in one loan shall constitute a default in all others. DEFlNITIONS. 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 Untied 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 Hollywood Restaurant Group, LLC 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 John M. Mesaros, III, 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 GRAYSTONE BANK, its successors and assigns. Note., The word "Note" means and includes without limitation all of Borrower's promissory notes andlor credit agreements evidencing Borrower's loan obligations in favor of Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations COMMERCIAL GUARANTY Loan No: 4-4893 (Continued). of and substitutions for promissory notes or credit agreements. Page 4 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 FOR 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 ANY AND ALL AMOUNTS EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECURING THE INDEBTEDNESS, TOGETHER WITH COSTS OF SUIT, AND AN ATTORNEY'S COMMISSION OF TEN PERCENT (10%) OF THE UNPAID PRINCIPAL BALANCE AND ACCRUED INTEREST FOR COLLECTION, BUT IN ANY EVENT.NOT LESS THAN FIVE HUNDRED DOLLARS (S500) 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 GUARANTOR SHALL NOT BE EXHAUSTED BY.ANY EXERCISE OF THAT AUTHORITY, BUT SHALL CONTINUE FROM TIME TO TIME AND AT ALL TIMES UNTIL PAYMENT IN FULL OF ALL AMOUNTS DUE UNDER THIS GUARANTY. GUARANTOR HEREBY WAIVES ANY RIGHT GUARANTOR MAY HAVE TO NOTICE OR TO A HEARING IN CONNECTION WITH ANY SUCH CONFESSION OF JUDGMENT AND STATES THAT EITHER A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THIS CONFESSION OF JUDGMENT PROVISION TO GUARANTOR'S ATTENTION OR GUARANTOR HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL. EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO RS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL.CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED "DURATION OF GUARANTY". NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY.IS DATED FEBRUARY 28, 2008. 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: USER PRO WiAlny, Vu. 6.3E.IQ001 tapr. M"bn/ PYrneiM Sabtlmb Ind AE Rlyl.b Ru"vtl. - PA S:Iprs"iINCFILLPL1E70.FC iR-1711 PII.1 PROMISSORY (VOTE Borrower: HoNywood Restaurant Group, LLC Lender: •GRAYSTONE. BANK 400 Forster Street Capital Region Harrisburg, PA 17102 112 Market Street Haniaburg, PA 17101 Principal Amount: $1'5,000.00 Date of Note: February 28, 2008 PROMISE TO PAY. HoNywood Restaurant Group, LLC ("Bonowe~") promises to pay to GRAYSTONE BANK ("Candor"), or•order, in lawful money of the United States of America, on demand, the principa[ amount of Fifteen Thousand dr 00/100 Dollars (916,000.00) or so much as may bs outstanding. together with interest on the unpaid outstanding principal balance of each advance. Interest shall be calculated from the date of each advance untN repayment of each advance. PAYMENT. Borrower wiN pay this loan in full immediately upon Lender's demand. eonower wNl pay regular morrtltly payments of aN accrued unpaid interest due as of each payment date, beginning AprN 1, 2008, with aN subsequent Interest paym~ts to ba due on the same day of each month after that. Unleaa otherwise agreed or required by appgcabk law, payments will bs appNed first to any accrued unpaid interest; than to principal; then to any late charges; and then to any unpaid collection costa, The annwl interest rate for this Note h computed on a 365/360 basis; that is, by applying the ratio of the annual interest rate over a year of 360 days, multlp6ad by the outstarrdtng principal balance, multiplied by the actual number of days the prficipal balance Is outstanding. Bonower will pay Lender at Lender's address shown above or at such other place as Lender may designate 1n writing. VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from time to time based on changes in an index which is 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 rata change will not occur more often than each day. Borrower understands that Lender may make loans based' on other rates as well. The interest rate to be applied to the unpaid principal balance during this Note will be at a rate of 2.000 percentage points over the Index. NOTICE: Under no circumstances will the interest rate on this Note be less then 5.00096 per annum or more than the maximum. rate allowed by eppt)cabla 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 eonower 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 Lander 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 Nmitations or as full satisfaction of a disputed amount must be mailed or delivered to: GRAYSTONE BANK, 112 Market Street Hanisburg, PA 17101. • LATE CHARGE. If a regularly scheduled interest payment is 20 days or more late, Borrower will be charged 10.000% of the regularly scheduled payment or $250.00, whichever is greater. If Lender demands payment of this loan, and Borrower does not pay the loan in full within 20 days ' after Lender's demand, Borrower also wNl be charged either 10.000% of,tha sum of the unpaid principal plus accrued unpaid interest or 5260.00, whichever is greater. • INTEREST•AFTER DEFAULT. Upon default, including failure to pay upon final maturity, the interest rate on this Note shall be increased f>y adding a 2.000 percentage point margin ("Defauh Rate Margin"). The Defauk Rate Margin shall also apply to each succeeding Interest rate change that would have applied had there been no defauh. If judgment is entered in connection with this Note, interest will continue to accrue after the date of judgment et the rate in effect at the time judgment is entered. However, in no event will the ihterest rate exceed the maximum. interest rate limitations under applicable law. LENDER'S RIGHTS. Upon Lender's demand,' Lender may, after. giving such notices as required by applicable law, declare the entire unpaid principal balance under this Note and ell accrued unpaid interest immediately due, end then Borrower will pay that amount. ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower will pay Lender that amount.. This includes, subject to any limits under applicable law, Lender's reasonable ettomeys' fees and Lender's legal expenses, whether or not there is a lawsuit, including reasonable attorneys' fees, expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or Injunction), and appeals. If not prohibited by applicable law, Borrower also will pay any court costs,, in addition to • all other sums provided by law. JURY WANER..Lendsr~and Bpnower hereby waive the rigb to any jury trial in any action, proceeding, or counterclaim brought by elthsr`Lender or Borrower against the other: GOVERNING LAW. This Npte: wilt bs governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the Commonwealth of Pennsylvania whhout regard to its conflicts, of law provisions. Thb Note has been accepted by Lender in the Commonwealth df Pennsylvania. CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender's request to submh to the jurisdiction of the courts of Dauphin County, Commonweahh of Pennsylvania. RIGHT OF SETOFF. To the eMent 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 eMent permitted by applicable law, to charge or setoff all sums owing on the indebtedness against any and all such accounts. LINE OF CREDIT. • This Note evidences a revolving line of credit. Advances under this Note may be requested either orally or in writing by Borrower or by an authorized person. All oral requests shall .be confirmed in writing on the day .of the request, on forms acceptable to Lender. All communications, instructions, or directions by telephone or otherwise to Lender ere to be directed to Lender's office shown above. 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 e or by Lender's internal records, including daily computer print-outs. SECURITY. All collateral (as herein defined) is security for this Note and any renewals, extensions end modiFcations. EXHIBIT performance and discharge of ell other present or future indebtedness, obligations and undertakings {whether indivi contingent or otherwise) of the Borrower to or for the benefit of Lender, whether arising directly to Lender under thi D agreement, promissory note dr undertakings now existing or hereinafter entered into by the Borrower to the ~ Lend includes sll tangible and intangible property (i) described in any mortgage, pledge, assignment or other security docu ~• ~ . a PROMISSORY NOTE Loan No: 4-4893 ~ (Continued). . Page -favor of Lender, and (ii) in which a security interest has been granted to Lender pursuant to this Nota. ANNUAL REVIEW. The lender will review the Note annually for renewals and extensions; such renewals and ,extensions to be granted predicated on the performance of the company and/or individuals and adherence to the Loan Agreement and/or loan policy. CROSS COLLATERALIZE/CROSS DEFAULT. This loan will be cross-collateralized/cross-defaulted with all other loans from Borrower, or any of Borrower's related entities, to Lender. If at any time there is a defauk under this loan, all loans will be considered in default and all outstanding amounts under the loans will be immediately due and payable in full. A default in one loan shall constkute a defauk in all others. 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. GENERAL PROVISIONS. If any part of this Note cannot be enforced, this fact will not affect the rest of the Note. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower and any other person who signs, guarantees or endorses this Note, to the extent allowed by law, waive presentment, demand for payment, and notice of dishonor. Upon any change in the terms of this Note, and unless otherwise expressly stated in writing, no party who signs this Note, whether as maker, guarantor, accommodation maker ar endorser, shell be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time) this loan or release any party or guarantor or collateral; or impair, fail to realize upon or perfect Lender's security interest in the collateral; and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Note are joirn and several. If any portion of,this Note is for any reason determined to be unenforceable, k 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 ADEFAULT 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 (1096) OF THE UNPAID PRINCIPAL BALANCE AND ACCRUED INTEREST FOR COLLECTIbN, BUT IN ANY EVENT NOT LESS THAN FIVE HUNDRED DOLLARS IS500) 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. PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO THE TERMS OF THE NOTE. BORROWEA ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE. THIS NOTE IS GIVEN UNDER SEAL AND IT IS INTENDED THAT'THIS NOTE IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. BORROWER: HOLLY T UW~T GROUP, LLC BY~ V'XJ ISeap ey: Robert S. Fogeknan, Member of Hollywood Rastauran Group, LLC BY~ (Seal) Steven T. Ky:er, er of Hollywood Restaurant Group, LLC LENDER: GRAYSTONE BAN X Steven D. Butz, Vice President uSFR PIIO lrW1e0. VY. 6.A10.001 Cpr,/MMI~W ibmolY SOlu1g1141ne. 1M7, 200R. /Yl Rlyl~q RWrrtl. •M D:1po,WgKTiLLRVI]O.FC 7W 1747 n1-1 ~ ~, .. CHANGE IN TERMS AGREEMENT BOrrOWer: Hollywood Restaurant Group, LLC Lender: Greystone Bank, a Division of Graystona Tower Bank 400 Forster Street CapMal Regbn Harrisburg, PA 17102 112 Market Street Farrisburg, PA 17101 Principal Amount: ;45,000.00 Date of Agreement: September 25, 2009 DESCRIPTN)N OF EXISTING INDEBTEDNI'e83. On February 28, 2008, Borrower executed and delivered to Lender a Promissory Note in the original Prindpal Amount of Fifteen Thousand and 00/100 Dollars ($15,000.00) ("Note"). DESCRIPTION OF CHANGE IN TERMS. Effective the date of this Agreement, and as provided under the PAYMENT section of this Agreement, Lender and Borrower have agreed to an increase in the Prindpal Amount of the Note to Forty Five Thousand and 00/100 Dollars ($45,000.00}. PROMISE TO PAY. Hollywood Restaurant Group, LLC ("Borrower's promises to pay to Graystone Bank, a Division of Greystone Tower Bank ("Candor"), or order, In lawful money of the United States of America, on demand, the principal amount of Forty-fiw Thousand b 00/100 Dollars (545,000.00) or so much as may be outstanding, together with Interest on the unpaid outstanding principal balance of each advance. Interest atudl bs calculated from the date of each advance urttit repayment of each advance. PAYMENT. Borrower will pay this loan In full Immediately upon Lenders demand. Borrower will pay regular monthly payments of all accrued unpaW Interest due as of each payment date, beginning October 1, 2009, with all subsequent Intsrost payments to be due on the same day of each month after that. Unless otherwise agreed or required by applicable law, payments wUl be appled first to any accrued unpaid interest; then to principal; then to any late charges; and than to any unpaid collection costs. Borrower will pay Lender at Lenders address shown above or at such other place as Lender may destgnab in writing. VARIABLE INTEREST RATE. The interest rate on this loan is subject to charge from time to time based on changes in an index which is Lenders 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 bwest rate available from Lender at any given time. Lender will tell Borrower the cunent Index rate upon Borrowers request. The interest rate change will not occur more often then each day. Borrower understands that Lender may make loans based on other rates as well. Interest on the unpaid prindpal balance of this loan will be calculated as described in the "INTEREST CALCULATION METHOD" paragraph using a rate of 2.000 percentage points over the Index. NOTICE: Under no circumstances will the interest rate on this loan be less than 5.000% per annum or more than the maximum rate allowed by applicable law. INTEREST CALCULATION METHOD. interest on this loan is computed on s 365/360 bests; that is, by applying the ratio of the interest rate over a year of 360 days, mulUplled by the outstanding principal balance, muNiplled by the actual number of days the principal balance is outstanding. All Interest payable under this loan le emmputed using this method. PREPAYMENT. Borrower agrees that all ban fees and other prepaid finance charges are earned fully as of the date of the loan and will not be subject to refund upon early payment (whether voluntary or as a result of default), except as otherwise required by law. Except for the foregoing, Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. F_arly payments will not, unless agreed to by Lender (n writing, relieve Borrower of Borrowers obligation to continue to make payments of accrued unpaid interest. Rather, early payments will reduce the princlpal 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 Lenders rights under this Agreement, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts, including any check or other payment instrument that indicates that the payment constitutes "payment In full" of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: GRAYSTONE TOWER BANK, 112 Market Street Harrisburg, PA 17101. LATE CHARGE. If a regularly scheduled 'interest payment Is 20 days or more late, Borrower will be charged 10.000.6 of the regularly scheduled Payment or 5250.00, whichever is greater. If Lender demands payment of this ban, and Borrower does not pay the loan in full within 20 days after Lender's demand, Borrower also will be charged either 10.000% of the sum of the unpaid principal plus accrued unpaid Interest or' ;250.00, whichever Is greater. INTEREST AFTER DEFAULT. Upon default, induding failure to pay upon final maturity, the interest rate on this loan shall be increased by adding a 2.000 percentage point margin ("Default Rate Margin"). The Default Rate Margin shall also apply to each succeeding interest rate change that would have applied had there been rro default. If judgment is entered in oonnectlon with this Agreement, Interest will continue to axrue after the date of judgment at the rate In effect at the Ume judgment is entered. However, in no event will the Interest rate exceed the maximum interest rate limitations under applicable law. LENDER'S RIGHTS. Upon Lenders demand, Lender may, after giving such notices as required by applicable law, declare the entire unpaid prindpel balance under this Agreement and all accrued unpaid interest immediately due, and then Borrower will pay that amount. ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone else to help collect this Agreement if Borrower does not pay. Borrower will pay Lender that amount. This includes, subject to any limits under applicable law, Lenders reasonable attorneys' fees and Lenders legal expenses, whether or not there is a lawsuit, induding reasonable attorneys' fees, expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), and appeals. If not prohibited by applicable law, Borrower also will pay any court costs, in addition to all other sums provided by law. JURY WAIVER. Lender and Borrower hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by either Lender or Borrower against the other. GOVERNING LAW. This Agreement will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the Commomreakh 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 Lenders request to submlt to the jurisdiction of the courts of Dauphin County, Commonwealth of Pennsylvania. RIGHT OF SETOFF. To the extent permitted by appUcable law, Lender reserves a right of setoff in aA Borrowers accounts with Lender (whether checking, savings, or soots other arx;ount). 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 indebtedr>esa against env and all such axarnts. LINE OF CREDIT. This Agreement evidences a revolving line of credit Advances under this Agreement may be req EXHIBIT writing by Borower or by an authorized person. All oral requests shall be conflrned in writing on the day of the requ Lender. All communications, instructions, or directions by telephone or otherwise to Lender are to be directed to Lend f ~ r~~N CHANGE IN TERMS AGREEMENT Loan No: 4000004893 (Continued) Page 2 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 aamunts with Lender. The unpaid prirtdpal balance owing on this Agreement at any time may be evidenced by endorsements on this Agreement a by Lenders internal records, induding dally computer prinRouts. CONTINUING VALIDITY. Except as expressy changed by this Agreement, the terms of the original obligation or obligations, including all agreements evidenced or securing the obligation(s), remain unchanged and in full force and effect. Consent by Lender to this Agreement does not waive Lenders right to strict performance of the obligation(s) as changed, nor obligate Lender to make any future change in terms. Nothing in this Agreement will constitute a satisfaction of the obligation(s). It is the Intention of Lender to retain as liabb parties atl makers and endorsers of the original obligation(s), inducting accommodation parties, unless a party is expressly released by Lender in writing. Any maker or endorser, inducting accommodation makers, will not be released by virtue of this Agreement. If any person who signed the original obligation does not sign this Agreement below, then all persons signing below acknowledge that this Agreement is given oonditlonaly, based on the representation to Lender that the non-signing party consents to the d~anges and provisions of this Agreement or otterwise will not be released by it. This waiver applies not only to any initial extension, modification or release, but also to al! such subsequent actions. SUCCE330R INTERESTS. The terms of this Agreement shall be binding upon Borrower, and upon Borrowers heirs, personal representatives, successors, and assigns, and shall be enforceable by Lender and its successors and assigns. MISCELLANEOUS PROVISIONS. if any part of this Agreement cannot be enforced, this fact will not affect the rest of the Agreement. Lender may delay or forgo enforcing any of Ita rights or remedies under this Agreement without losing them. Borrower and any other person who signs, guarantees or endorses this Agreement, to the extent allowed by law, waive presentment, demand for payment, and notice of dishonor. Upon any change In the terms of this Agreement, and unless otherwise' expressly stated in writing, no party who signs this Agreement, whether as maker, guarantor, accommodation maker or endorser, shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly and Tor any length of time) this loan or release any party or guarantor or collateral; or impair, fail to realize upon or perfect Lenders security interest In the collateral; and fake 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 thLs Agreement are joint and several. PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO THE TERMS OF THE AGREEMENT. THIS AGREEMENT IS GNEN UNDER SEAL AND R IS INTENDED THAT THIS AGREEMENT IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. BORROWER: HOLLYWOOD STAURANT GROUP LLC By: ~ Seal) Robert S. FoDM n, Mem of Hollywood Restaurerrt p, LLC By~ ~ ~ Seal) Steven T. Kyzer, Me of Hollywood Restaurant Group, LLC LENDER: GRAYSTONE BANI A DN N G STONE TOWER BANK X Steven D. Butz, Vice President lA7EA M01~Oy,Vr.6M.OLLCW GM. NrYM fYWW WIMU.k7M7, 700. A111~1~11rrYY. -M -ICfIVLINOC.fC 7R-ltl/MN Donald L. Kornfield, Esq. Kornfield and Benchoff, LLP 17 North Church Street Waynesboro, PA 17268 (717) 762-8222 FAX 762-6544 don@kornfield.net Atty. I.D. #19242 GRAYSTONE BANK IN THE COURT OF COMMON PLEAS OF Plaintiff :THE 9th JUDICIAL DISTRICT, PA. vs. :CUMBERLAND COUNTY BRANCH CIVIL ACTION -LAW JOHN M. MESAROS, III . Defendant No. ~~ ~ - -1 ~ ~~ ~' ~ ~~rwl NOTICE OF FILING CONFESSION OF JUDGMENT TO: John M. Mesaros, III (x) Notice is hereby given that a Judgment in the above-captioned matter has been entered against you in the amount of $88,903.21 on the ~ day of , 201 ~. (x) A copy of all documents filed with the Prothonotary in support of this matter are enclosed. Pr otary By If you have any questions regarding this Notice, please contact the filing party: NOTICE MAILED: Donald L. Kornfield, Esq. Kornfield and Benchoff, LLP 17 North Church Street Waynesboro, PA 17268 (717) 762-8222 Prothonotary IN RE: JOHN M. UNTIED STATES BANKRUPTCY COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA : IN BANKRUPTCY SAROS, ffl BK. NO. 1-13-06486 Debtor/Movant : CHAPTER 7 PROCEEDING JOHN M. MESAROS, ffl : LIEN AVOIDANCE Movant : COURT OF COMMON PLEAS v. GRAYSTONE BANK Respondent : CUMBERLAND COUNTY, PENNSYLMN4A rT1 - :5 0 4 < 77- • C..,) ei,;) .• : NO. 2011-95 CIVIL TERM ORDER OF COURT VOIDING JUDICIAL LIEN In consideration ofthe within Motion for Order Avoiding Judicial Lien, filed by Counsel for the Debtor/Movant, the Court finds the Respondent has filled to file an Answer or otherwise plead to the Motion fim. an Order Avoiding Judicial Lien filed on January 22, 2014 and duly served upon the Respondent; therefore, the Court orders judgment in favor ofthe Debtor/Movant, John M. Mesaros, HI, and against the Respondent, Graystone Bank as to the reliefrequested in the Motion. IT IS HEREBY ORDERED, adjudged and decreed that the judgment lien held by the Respondent, is hereby declared void in its entirety and ofno further force and effect as it violates 11 U.S.C. Section 522(f)(1) and interkres with 11 U.S.C. Section 522(d). Dated: February 19, 2014 q.50 po cot 5801,9 e803473 By the Court, 6.44 U. 9jV Robert N. Opel, 11, Bankruptcy Judge (BR) CERTIFIED FROM THE RECORD this22-4L- , 20 2.Y Case 1:13-hk-06486-RNO Dnc 25 Filed 02/19/14 Entered 02/19/14 15:49:57 Desc