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Home My WebLink About04-5151 LAMM, RUBENSTONE, TOTARO & DAVID, LLC By: Sherry D. Lowe, Esquire Jennifer M. Davies, Esquire Attorney I.D. No. 66096 and 80988 Four Greenwood Square, Suite 200 BensaIem, P A 19020 (215) 638-9330 (215) 638-2867 - Facsimile Attorneys For Plaintiff SOVEREIGN BANK, Successor-in-Interest to First Essex Bank, FSB One WaIl Street Manchester, NH 03101 COURT OF COMMON PLEAS CUMBERLAND COUNTY, PA Plaintiff, vs. NO. 0 <.f - S-181 ~ LANDIS, INC. 30 Woodcraft Drive Mount Holly Springs, PAl 7065 and STEVEN CAPUANO 1229 Blossom Terrace Boiling Springs, P A 17007 Defendants. NOTICE TO DEFEND "You have been sued in Court. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this Complaint and Notice are served, by entering a written appearance personally or by attorney and filing in writing with the Court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so the case may proceed without you and a judgment may be entered against you by the Court without further notice for any money claimed in the Complaint of for any other claim or relief requested by the Plaintiff. You may lose money or property or other rights important to you." "YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW. THIS OFFICE CAN PROVIDE YOU WITH INFORMATION ABOUT HIRING A LAWYER. IF YOU CANNOT AFFORD TO HIRE A LAWYER, THIS OFFICE MAYBE ABLE TO PROVIDE YOU WITH INFORMATION ABOUT AGENCIES THAT MAY OFFER LEGAL SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE OR NO FEE." 294842-1 1,1\ WYRR REFERRAL SERVICE CUMBERLAND CO BAR ASSOCIATION 32 SOUTH BEDFORD STREET CARLISLE PA 17013 (717) 249-3166 A VISO USTED HA SIDO DEMANDADO/A EN CORTE. Si usted desea defenderse de las demandas que se presentan mas adelante en las siguientes paginas, debe tomar accion dentro de los proximos veinte (20) dias despues de la notificacion de esta Demanda y A visa radicando personalmente 0 por medio de un abogado una comparecencia escrita y radicando en la Corte por escrito sus defensas de, y objecciones a, las demandas presentadas aqui en contra suya. Se Ie advierte de que si usted falla de tomar accion como se describe anterionnente, el caso puede proceder sin usted y un fallo por cualquier suma de dinero reclamada en la demanda 0 cualquier otra reclamacion 0 remedio solicitado por el demandante puede ser dictado en contra suya por la Corte sin mas aviso adicional. Usted puede perder dinero 0 propiedad U otros derechos importantes para usted. USTED DEBE LLEV AR ESTE DOCUMENTO A SU ABOGADO INMEDlA T AMENTE. SI USTED NO TIENE UN ABOGADO, LLAME 0 VA Y A A LA SIGUIENTE OFICINA. EST A OFICINA PUEDE PROVEERLE INFORMACION A CERCA DE COMO CONSEGUlR UN ABOGADO. SI USTED NO PUEDE P AGAR POR LOS SERVICIOS DE UN ABODAGO, ES POSIBLE QUE EST A OFICINA LE PUEDA PROVEER INFORMACION SOBRE AGENCIAS QUE OFREZCAN SERVICIOS LEGALES SIN CARGO 0 BAJO COSTO A PERSONAS QUE CUALIFlCAN. LAWYER REFERRAL SERVICE -CUMBERLAND rOUNT-X COlJK~ 4 lJi1<'UJOK . Cj..nL~. r;~ ~~) t'll J :L4U tauif' ~ 294842- [ LAMM, RUBENSTONE, TOTARO & DAVID, LLC By: Sherry D. Lowe, Esquire Jennifer M. Davies, Esquire Attorney J.D. No. 66096 and 80988 Four Greenwood Square, Suite 200 Bensalem, P A 19020 (215) 638-9330 (215) 638-2867 - Facsimile Attorneys For Plaintiff SOVEREIGN BANK, Successor-in-Interest to First Essex Bank, FSB One Wall Street Manchester, NH 03101 COURT OF COMMON PLEAS CUMBERLAND COUNTY, PA Plaintiff, vs. NO. ()-f ~ 5' / .11 ~ LANDIS, INC. 30 Woodcraft Drive Mount Holly Springs, P A 17065 and STEVEN CAPUANO 1229 Blossom Terrace Boiling Springs, P A 17007 Defendants. COMPLAINT Plaintiff, Sovereign Bank, Successor-in-Interest to First Essex Bank, FSB ("Plaintiff'), by and through its attorneys, Lamm, Rubenstone, Totaro & David, LLC, brings this action against the above-named Defendants, Landis, Inc. and Steven Capuano (collectively referred to as "Defendants"). In support thereof, Plaintiff avers as follows: 1. Plaintiff, Sovereign Bank, Successor-in-Interest to First Essex Bank, FSB ("Sovereign"), is a financial institution with a place of business located at One Wall Street, Manchester, NH 031010. 294842-1 2. Defendant, Landis, Inc. ("Landis"), upon information and belief, is a Pennsylvania Corporation with its last known principal place of business located at 30 Woodcraft Drive, Mount Holly Springs, Cumberland County, P A 17065. 3. Defendant, Steven Capuano ("Capuano"), upon information and belief, is an adult individual whose last known address to Sovereign is 1229 Blossom Terrace, Boiling Springs, Cumberland County, P A 17007. 4. On or about March 29, 2000, Landis made, executed and delivered to First Essex Bank, FSB ("First Essex") among other loan documents, a Promissory Note ("Note") and a Business Loan Agreement ("Loan Agreement") evidencing a certain loan in the principal amount of $685,000.00 from First Essex to Landis. A true and correct copy of the Note and Loan Agreement are attached hereto, made a part hereof, and marked as Exhibits "A" and "B." 5. The Note requires, inter alia, that Landis repay the loan in 119 regular monthly payments of principal and interest in the amount of $8,897.93, with an irregular last payment of $8,897.50. 6. The Note requires, inter alia, that interest will accrue at a rate of 9.450%, unless a default occurs wherein the interest rate will increase to 5% over the regular interest rate of 9.450% or 14.450% default rate. 7. In order to induce First Essex to enter into the Note, by even date, Landis executed and delivered to First Essex a Commercial Security Agreement ("Security Agreement") granting First Essex security interest in the following assets of Landis: (I) 1979 Grove TMS 300 Crane, Serial No. 45173; (2) 1993 Krupp Model 6190 All Terrain Crane, Serial No. 61901103; and (3) all accounts, general intangibles, etc, as more fully described in the Security Agreement 294842-1 ("Collateral"). A true and correct copy of the Security Agreement is attached hereto, made a part hereof, and marked as Exhibit "D." 8. In order to secure the obligations of Landis evidenced by the Note, by even date, Capuano, as an individual guarantor, executed and delivered to First Essex a Commercial Guaranty ("Guaranty") wherein Capuano guaranteed and agreed to become the absolute and unconditional guarantor for aU of the obligations of Landis due to First Essex. A true and correct copy of the Guaranty is attached hereto, made part hereof, and marked as Exhibit "C." 9. First Essex properly perfected its security interest in and to the CoUateral by the filing of UCC-I Financing Statement with the County of Cumberland, Pennsylvania and the Secretary of the Commonwealth of Pennsylvania. A true and correct copy of said UCC-I Financing Statements is attached hereto, made a part hereof, and marked collectively as Exhibit "E." 10. Thereafter, Sovereign became the successor to First Essex by interest, thereby acquiring aU of First Essex's right, title and interest in and to the Note, Loan Agreement, Guaranty and any and all other related loan documents ("Loan Documents"), including the right to institute legal proceedings to execute the rights and remedies of First Essex pursuant to the Loan Documents. II. Landis and Capuano breached the terms of the Loan Documents and became in default thereof by, inter alia, (a) failing to pay when and as due the outstanding amount of the Note; (b) failing to comply with the financial covenants and provisions set forth in the Note and Loan Agreement, and providing required financial reports, thereby causing Sovereign to declare and demand the entire amount due and owing under the Note as immediately due and payable. 294842-l 12. Despite repeated demands for payment and to cure the nonpayment financial covenants set forth in the Note and/or Loan Agreement, Defendants, Landis and Capuano, have failed and refused to pay all sums due and owing, or any portion hereof under the Loan Documents, and have failed to cure the nonpayment financial defaults. 13. Under the terms and conditions of the Loan Documents, Sovereign is entitled to continually accruing interest at the default loan rate, attorneys' fees, and costs until the satisfaction of the Note. 14. In accordance with the terms and conditions of the Loan Documents, Landis and Capuano are individually, jointly and severally obligated and liable to Sovereign in the amount of Five Hundred Eighty Thousand Eight Hundred Thirty-Nine Dollars and Eleven Cents ($580,839.11) and assess the following damages which are readily calculated by referenced to the Note and Loan Agreement: (a) Principal Balance Due (b) Interest (up to and including 10/8/04, plus $201.92 per diem at the default rate thereafter) (c) Late Charges (d) Attorney's Fees (e) Appraisal Fee Total COUNT I BREACH OF CONTRACT $503,054.44 $63,358.01 $4,426.66 $8,500.00 $1500.00 $580,839.11 15. The allegations set forth in the preceding paragraphs of this Complaint are hereby incorporated by reference as though they were set forth in full herein. 16. Landis and Capuano are in default of the Loan Documents due to their failure, inter alia, to make the payments as required pursuant to Loan Documents. 294842-) 17. Due to Landis' and Capuano's default under the Loan Documents, Landis and Capuano are liable to Sovereign for the amount of $580,839.11, plus continuing interest at the default rate, late charges, attorneys' fees and other fees and costs as permitted under the Loan Documents. 18. Despite demands for payment, Landis and Capuano have failed and refused to pay all sums due and owing, or any portion thereof due pursuant to the Loan Documents. WHEREFORE, Plaintiff, Sovereign Bank, Successor-in-Interest to First Essex Bank, FSB, demands judgment in its favor and against Defendants, Landis Service, Inc. and Steven Capuano, individually, jointly and severally, in the sum of $580,839.11, additional late charges, interest at a per diem of $201.92, attorneys' fees, expenses and costs for suit and for such other and further relief as this Honorable Court deems appropriate. COUNT II - REPLEVIN 19. The allegations set forth in the preceding paragraphs of this Complaint are hereby incorporated by reference as though they were set forth in full herein. 20. Pursuant to the terms and conditions of Security Agreement and the Uniform Commercial Code as enacted in Pennsylvania and, by virtue of the default of Landis and Capuano, Sovereign is entitled to immediate possession of the Collateral as set forth in the Security Agreement and as provided by 13 Pa. C.S.A. ~2A-525 and 2A-518-525, and/or 13 Pa. C.S.A. ~9-61O et seq. 294842-1 21. Landis and Capuano remain in possession of the Collateral and Sovereign believes, and therefore avers, that the Collateral is located at 30 Woodcraft Drive, Mount Holly Springs, PA 17065. 22. The estimated value of the Collateral is not in excess of $581 ,000.00. 23. Although frequent demands have been made, Landis and Capuano have failed, refused, and neglected to deliver possession of the Collateral to Sovereign. WHEREFORE, Plaintiff, Sovereign Bank, Successor-in-Interest to First Essex Bank, FSB, demands that Judgment be entered against Defendants, Landis, Inc. and Steven Capuano, individually, jointly and severally, for possession of the Collateral; or in the alternative, for the sum of $580,839.11, plus continuing interest at a per diem of $201.92, late charges, attorneys' fees, costs of suit and such other and further relief as this Honorable Court shall deem just and proper. COUNT 11I- CONVERSION 24. The allegations set forth in the preceding paragraphs of this Complaint are hereby incorporated by reference as though they were set forth in full herein. 25. Landis and Capuano have interfered, without lawful justification, with Sovereign's property rights in the Collateral. 26. Landis and Capuano have demonstrated an intent to exercise dominion, or control over the Collateral, that is inconsistent with Sovereign's property rights, as established by the conditions set forth in the Security Agreements and the applicable provisions of the Uniform Commercial Code. 27. Alternatively, Landis and Capuano are unreasonably withholding possession from Sovereign as to the Collateral, and Sovereign has the right to immediate possession of same. 294842-1 28. As a proximate result of said conversion by Landis and Capuano, Sovereign has suffered damages in the amount of $580,839.11, the balance currently due and owing under the Loan Documents, and/or the fair market value of the Collateral at the time of the conversion. WHEREFORE, Plaintiff, Sovereign Bank, Successor-in-Interest to First Essex Bank, FSB, demands that Judgment be entered against Defendants, Landis, Inc. and Steven Capuano, individually, jointly and severally, for the value of the Collateral at the time of conversion; or in the alternative, for the sum of $580,839.1 I, plus continuing interest at a per diem of $20 I. 92, late charges, attorneys' fees, costs of suit and such other and further relief as this Honorable Court shall deem just and proper. LAMM, RUBENSTONE, TOTARO & DAVID, LLC Date: \0-7-0+ By: ~ Sherry D. Lowe, Esquire Jennifer M. Davies, Esquire Attorneys for Plaintiff 294842-1 VERIFICATION Leland Fastnacht, is an Authorized Officer, Sovereign Bank, being duly sworn according to law, deposes and says that he is a representative of the Plaintiff, and he is authorized to make this Verification on behalf of Plaintiff; that the facts set forth in the foregoing Complaint are true and correct to the best of his knowledge, information and belief; that the foregoing statements are made subject to the penalties of 18 Pa.C.S.A. ~4904 related to unsworn falsifications to authorities. SOVEREIGN BANK ~~~~;.v6 eland Fastnacht Authorized Officer Date: t1Crrit!..n<- ~ ,?J ".J 'I 294842-1 PROMISSORY NOTE Borrower: Landis, Inc. Woo4craft Drive - POBox 196 ML Holly Sllrincs, PA 17065 lender: FilSt wex Bank, FS8 296 we. Street Lawrence. MA 01842 Principal Amount: $685,000,00 Inreresr Rare: 9.450% Dare of Note: March 29, 2000 PROMISE TO PAY. l.1ndis, Inc. (.Borrower") promises to pay to First Essex Bank, FSB ("Ll!!nder"), or order, in lawful mon~ of the United S..... of America, "'e principal amount 01 SIx Hundred Elabty Five fllousand.. 001100 Dollars {$685,OOO.OOI, "",e"'er with interest'l the rale 0(9.450% per MlnUm on the uncmd principal ~bnce from MMch 29, 2000, until paid in full. . PAYMENT. Borrower will pay this loan on demand, 0< II no demand b made, In 119 payments 01 $8,897.93 each payment and an itreculat last payment atim.ated.u 58.897.50. Borrower's flrst ~tnt is due Apri129, 2000, and ~II subsequent lUynlt!nU .ne due on the SMIle cby of NCh month after dut. 80rr0w~s final ~t wiU bt due on Moloch 29, 2010, and will be for all principal ~nd ~ accrued inttrest not yet 1Wd. Payments.lndude prtndp~ and Interet. The annual i1lefest rate for this Note is COI'l'\PUted on a 3651360 basis; that is, by appIyng the ratio of the annual interest rate over 8 y88r of 360 days, rnutlplied by the outstanding principal balance. murtiplMKl by the actual number Of days the principal balance is 0UIStanding. Borrowef will pay Lender at Lender's address shown ab<we Of at sUCh other plaCe as LQOder may designate in Wfiling. Unless __ ~ Of required by applicable law. payments wIl b. applied II",! 10 any unpaid _ cOSIO an<l any late charges. then to any unpeid inleres1, and any remD1ing amount to princlpel. PREPAYMENT PENALTY. Upon _yment of!hk Note, lender b endded to the folIowInc ptep.ymenl penolty, II!hb loan b _aid durina tho fim yo... a I'lb pr_ent penolty wll be charpd. If thb loan b prep.id durlne ye.., 2, l or 4, . prepayment penalty of l'lb will be chaIpd. Except IOf Ihe loregoing. Borrower may pay .1 or a portion of .he alT1OlOll owed earlier lhan lis due. Early pa_ will not ""ess agreed to by Lander In writing, relieVe Borrower of Borrower's OIliigatlon to 0,,",,""" to make paymentS under tile pay"""" _.... RaIher. lhey will reduce the ~ balance due and may result in Borrower making fewer payments. LATE CHARGE. H a payment Is 15 <bys or more late, Borrower will be cIlatged 5.1lOO'lb 01 !he rqularly scheduled payment DefAULT. Bon'OW'er will be in default if any of the following happens: (a) Berrowet fails 10 make any paymoot when due. (b) aorrower breaks any promise Borrower has made to lender. or Borrowef fails to comply with or to perform wh9n duG any other term. Obligation. covenant. or condition contained in this Note or any agreement related to ttIis Note. ()C" in any other agfElement or loan Botrower has with LerIdef. (c) Borrower defaults under any loan. extenSion 01 credit. security agreement, purehas9 or sales agreement. oc any other agreement, In favor of any other creditor or person that may matertalty affect any of Borrowef's property 01 Borrower'$ ability to repay this Note or perlonn Borrower's obligations l.a'1det 1his Note Of any of the Retated Documents. (d) Any representation or statement made or fumish6d to lender by Borrower or on Borrowe(s behalf is false or misleading in any material respect sittler now or at the time made Of furnished. (8) Borrower becomes insolvent. a receiver is appointed for any part of Borrower's property, Borrower makes an assignment for the benefit of creditors, or any proceeding is commenced either by Borrower or against Borrower under any banktupr:y or insolvency laws. (f) My creditor tries to take ant of Borrower's property on or in whtch Lender has a lien or security interest. This includes a garnishment of any of Borrower's accounts with Lender. (g) Any guctfantof dies or any of the other events desaibed in this defalAt section 0CCtJI'S with respect. to any guaranlor of this Note. (h) A material adverse change occurs in Borf()W4t(s financial condition. 0( Lender befl9Ves the prospect of payment or performance of the Indebtedness is impaired. (I) Lender in good faith deems Itself insecure. If eny default. other than a default in payment. is curable and if Borrower has not been given a notice of a breach of Ihe same provISion of this Note within the pceceding twelve (12) months, it may be cured (and no event of defautt wll have occurred) if Borrower. after receiving written notice from Lender demandJn9 cure of StJetl default: (8) cures the default within thirty (30) dayS; or (b) if the Cute requires more than thirty (30) days. irTWnediateIy initiates steps which lender deems in Lender's sole discretion to be suffICient to cure the defaut and theteahBr continues and complet9$ aU reasonable and necessary steps suffICient to prOduce ~iance as soon as raasonably practical. LENDER'S RIGHTS. Upon deCauh. Lender may declare the entire unpaid principal balance on this Note and all accrued unpaid interest immediately du8, without notice, and then Borrower will pay that amount. Upon default. including failure to pay upon final maturity, Lender, at its optloo. may also, If permitted under applicable law, increase the interest rate on this Note 5.000 percentaQ8 points. The hterest rate will not el<c&ed the maximum rate permitted by applicable law. Leflder may hire or pay $Or'IleOOe etse to help coRect this Note if Borrower does not pay. Borrower also will pay Leodef' that amount. This includes. Subject to any limits under applicable law, Lender's anorneys' lees and lender's legal eJ<penses whether or not there ts a IawsUil. including .ltOmeys' lees end lege! expeosos foe _ruploy proceedings (induding .fforts to modify Of vacete 8I1Y autometic stay or ;r>junctiQo). appeals, and any anticipated post-judl1flent collactm services. (I not prohi>ited by applicable law, Borrower also wiU pay any court costs, in addition to aft other sums prOYided by law. This Note has been deOvered to lender and ~ttd by Lender in the Commonwe4llth of M.assichuseus, If there Is ~ L1.wsuit, Borrower acrees upOn lender's request to submit to the jurisdiction of the courts of Essex County, the ConunooWeMth of ~tts. Lender and Borrow<< hereby w~ve the rip to o1Oy Jury ubi in ~ ~cdon, proceeding.. or countercblm brought by either Lender or Borrower against th~ other. This Nolt $NO be governed by ~d consaued In accord~nce with the I.lWS of the Commonwealth of Mass.achusew, RIGHT Of SETOFF, Borrower If.lnU to Lender 41 cootrXtual S<<Ur1ty interest in, .and hereby 4ISSilllS, conveys, delivefS. pledges, md tr3nsfers [0 L~ aU Borrower's richt, dtle .Jnd interest in ~d to, Borrower's ~ounts with lender (whether checking, savinJS, or some other 41Ccou.nt). lndudlng without limitation .all ~counts held ioindy with someone eb:e aOO .all accounts Borrower may open in the future, exdudinl however aU IRA 41nd Keach ~CO\Ints, md ~l trust <<:counts for which the 1f4lnt of a security inte(eSt would be prohibited by I.lw, Borrower authoriles lender, to the extent pennitted by applicable law, to charge or setoff .111 sums owing on this Note 41gainst ..oy and all s~ch accounts. WAlVERS AND GENERAL PROVISIONS. This Note is payable on demand. The inclusiQn of specific default provisions or ri{tlts of Lender shan not preclude Lender's right to declare payment of this Note on its demand. Lender may detay or forgo enforcing any of its rights ()r remedies under this Note without losing them. Borrower and any other person who sig\S, guarantees or endorses this Note, to the extent allowed by law, waive presentment, demand for paymenl, protest and notice of dishonor, Upon any change in the terms of this Note, and unless otherwise expressly staled in writing. no party who signS this Not8. whether as makar, guarantor. accommodation maker or endorSer, shall be released from liability. To the extent permitted by appIk:abJe law, aU such parties agree that Lender may renew or extend (repeated1y and for any length of time) this loan, or release any party or t)lJ8JanIor or collateral; or rnpair, fail to realil:e upon or parleellender's security interest In the collateral; and take any other action deemed necessary by l.eoder without the consent of Of notice to anyone. AU such parties also agree that lender may modify this loon without the consent of or notice to anyone other than the party with whom the modifulion is made. '0&"'1.. (Condnued) PIUOR TO SIGNING TliIS TE. BORROWER READ AND UNDERSTOOD ALL TliE PROVISIONS OF TliIS NOTE. TliIS NOTE IS EXECUTED UNDER SEAL. BORR AGREES TO THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPlETED COpy OF TilE NOTE. 1l4v-. ,,{)j~ or AssisUnt 5<<",....,. ( Corporate Seal ) lASEAPAO. Reg. u.s. P~. T.1Iol 0If~ v<<_ 3.29 {C)~2000 .u riGhts~. (MA-mO LANOIS.lHc:l.OYlJ Commonwealth of Pennsylvania M iQ tJj~ss [_W~ Then pe~~~=. . teven Capu~no, known to me or satisfactorily proven to be t e ,.. Ignature as his free act and deed for the purposes above stated. , - .. '1V\A..~ ~ ~ .2000 fd-m/JJ~ Notary Public BUSINESS LOAN AGREF. ~ENT ~--- ~ Borrower: landis, lnc. Woodcraft Drive - P 0 Do. 196 MI. Holly Springs. PA 17065 Lender: First Esse. Bank. FSB 296 Essex Street Lawrence. MA 0 I 842 mlS BUSL'ffiSS WA,."l AGREEMENT betweefl Landis. Inc. CBoaower"'} and fil'Sl Essell Bank, FS8 ("Lender") fs made and executed 00 the (Qllowing 'crtD$ and roaditions. Borrower has: received prior comrnerciaJ Ioaus from Leoda or has applitd to Lender for a commercialloao or loan:i and other tinanci.'lI accotnmodatioos. Including those which may be desctibcd 011 aay uhibil or schedule alt;K:hed to this Agreemcul. All such Ioaos and financial ,Jccommodations. together with all future Ioaas add ftnancial accommodalioos from Leodcr to Borrower, arc referred to in this A~t iodividuaUy as tbt Lolli" and coUectivcly as the "loadS." BOfIOWCt uudc:rsWlc:& add agrees: that: (a) fa graacinS. rencwiog. or ex~dioa: a1l)' Loan. Leodct IS relying upoa 800'owa's represedtaUOdS. wamuuics. and agrecmeots. as set forth in this A~l, (b) the graaliog. ICDewiag.lltexteodiPS of any Loan by Lcnderat aU rimes shaD be subject 10 Leoder's soJejudgment and discretiOll.; u;d (c) all such Loaas shan beaad sbaJl remain subjc:ct to die CoUowinJ terms aud coodirioos of tbis Ag:rtement TERM. Thiiil Agmemeo.t shall be effective as of March 29. 2000. and shall COdtioue thereafter until aU lAdebtcdneu of Borrower to Lender has beeo ptrftwmed in fuD.and the parties termllIak this Agreement in writing. DEF1NITIONS. 1bc foJlowins: words shall baw: the following meanings when used in this Agreement. Terms IlOI otherwise defined in this Agreemeut shaJl have the rneaaiogs attributed to such termS in the Uniform Commercial Code. All refereuCiC$ 10 dollar lmouaf, shaJI mean amounts in Jawful mont)' of the United Sta1eS of America. AgreetnenL The word "Agreement" meaDS lhis BusiDesS Loan Agrttment together with aU exhibits and schedules attached to th.is Business Loaa Agreetntnt tTom rime co bmc:. if any. as amended ti'om time to time. Borrower. 1bc: word "Borrower" meaJlS Landis. lnc., The word "Borrower" also includes. as applicable. all subsidiaries and affiliates of Borrower as provided below in the panI&I'Ipb titled 'Subsidiaries and Affiliates;: Collalc:riJ. The: woro "ColblreraJ'" means aad includes without limitation aU property and assets,grankd as coDaleral security for a Loan. wberhet real Or personJ poperty, wht1ber granted directly Of" indirectly, wbether gran[Cd now or in the fimrre. and ~er granted in the form of a security interesl. mortgage. deed of trust, assignmeul. pledge, chattel mortgage. chattel trust. fil<:tOr's lien. equipment bUst, conditional sale. nst ~ipt, lien, cbarge. lieD Of ritle retentioo conbad, lease: or COllsignment intended as a security device. ()( any other security or lien interest whafSO('Ver, wbether created by law, CODtraCf. or otherwise. Event of Default. The words "Bvent of ~(ault" meall and include wilhoot limitation auy of the Events of Default set forth below jn the section titled "'EVENTS OF DEI'AULT.- Grantor. The word ~Granror" meaDS and includes without limitation each entity granting II Security Interest ia any CoDateta1 foe the lPdc:btroness_ Guarantor. The word "Guarantor" meallS and includes withoullimitatioo each and all 0( the guarantors. sureties, and accoOUl1odatiou partKs io cooaection with any m~kdo~s. . Iodebted.oess. The word '.lndebtedness" means and includes w,thoutlimitHion aD Loans, together wilb aD other oblig,atiOlls, debts aad liabitincs of Borrowa".w Lendet. Or aDy one or mote oflhem. 4I:S well as a.1I claims by LeDdtr aga'fLSt Bllrt'OWer. or adY one or more of them; whether now or ha"eafttt existing. voluntary 01" involuRtary. doe 01" not due, absolute or contingent. liquidated or unliquidated; whether Borrower may be liable iodividuaUy or joindy with others; wbcther Borrower may be obligated as a guaraattlt". surety. Of' otherwise;. whethct" recovay upon such lndcbkdness may be or hereafter may become barred by any naMe of limitations: and whether sitch IndebtedlI.ess may be or ltereaftec may become othcrwise uncllforceabJe. Lender. 1he word "Lender" means first Essex Bank. rsB. its successors and assigns. Loan. l1K word "Loan" or "Loans" meaIlS any and aU commercial loans and (maocial accommodations from Lender 10 Borrower. including widtout limitation those loans and fin8acial accommodations described hereift. Nofe. The word "NOIe~ means Borrower"s promisSOry note Of notes. It any. evidencing Borrower's loal) obligations in favor of I..endu. as wen as any substitute. replacement or refinancing note or ricks. Penniuec1 wellS. The words "Pecmilted Uens" mean: (a) liens and security inteusts securiDg fudebtedness owed by Borrower to Leader: (b) liens for taxes. assessmentS. or Umilar chacges eilher not yel due or belllgcom.e.ste:d in good Caith; (e) licos ofmaterialale.a. mechaniC$, warehousemen. ()( carriers, or odter like Jiens arising io the O(dinary course of bu.siness and securing obligations which are not yet delinquenl; (d) pW"ooase money liens or purchase money security mtaests upon or to any property acquired or held by Borrower in the ordilWy course of business 10 secure indebtedness outstandiag 00 the date of this Agreement or permitted to be iOCWTed under die puagr.aph of (his AgKCment titled "IndebIed~ and Liens"; (e) liens and St:Curity interests which. as of the date of this Agreement, have been discJosed to aod approved by the lender In wriling: and (f) those liens and security inlerests which in Ibe aggregace constitute an immaterial atId itlsignific.aOl monetary amouot. ReIated Docucnen.u.. The words "ReJared Documents'. mean and include without limitation aU psomissory aOles. credit agreements, .Ioao agreements. guaranties, security agreements and all other instruments. .lIueernents and documel1(s. wbdher noW or herea{ler existing. ~ecuted in conne(:tion withthe' Indebledness. Security A-gn:emenL The words "Security Agreement" mean aDd include without 'imic:atioo allY agreements. promises. (:ovenaots. 8mngemen15. undttstandings or ocher agreements. whether crealoo by Jaw, cQOtract, or otherwise, evidencip8. governing, rc:pmeuting. or creating a Security lfItetesf. S<<urity lmerest The w()((h; "Security lPu:iest" mean and include wilboallimitation any type of collateral security. wbether in the form of a lien. cbarge, assignmenl, pledge. chattel mortgage, ,haUd trUSI, equipment trusl. conditioual sale, tnlSI receipt, lien. lease or consignment intended as a security device. or any otb<< security or Jien interest whatsoever_ 3-29-2000 Page 2 BUSINESS LOAN AGREEMENT (Continued) CONDmONS PRECEDENT TO BACH ADVANCE. Lender's obligation to make the initial Loan Advances and each subsequent ~p Advance uodct the Agreement shall be subjett to the fulfillment to Ltnde(s satisfactiOn of all of the coaditions 5(:( forth in ,bis Agreement and .in the Related Documents. Loan Documents. Borrower shall provide to Lender in fonn satisfurOlY to Lender the following docwnents f~ the Loan: (a) rhe Note. (b) Security AgcemeJlts granting 10 Leader x<:urity interests in the Collateral. (C) financing Slalemc:nts perfeaing Lende(s Security lntcrcsts;(d) evideoce of insuraoce as requited below; .md (e) lIay other documents required uoder (his Agret.:menl. Borrower's Audaoriutioo. Borrower shall have provided in form and SlIb$Laace safisfactory to Lcoder properly certified resolurions. duJy ....thorizing Ih~ execution and deljvery of this Agreemedt. dle No&e and the Related DocutDC8ts.. and such other .wdIorizatiOIlS. dOC;luneots and io.stnunents as l...e:nder truly require. hymnttof Fees ud fu.peoses. Borrower shall have paid to Leoder aU fees. charges. ud other expenselJ which are: then due and payablt: as spa:ified in this Agree.melII 01 aay Related Document Rcprescntatioos aad Warrandes. TllC tqJresentatiOl1$ and wamanties set fonb ie this Agreelnc:nt, in Ihc Relaced Oocumeuts. and ill aoy document or- certificate delivered EO Lender ulNler this Agreement ate true and correct. No Event of Dc:fauJt. There shall II()( exist at the time of any advance a coo<fifiOll which would cooslltutt' an Event of Defauk under this AgreemeoL REPRESENTATIONS AND WARRANTIES, BOfI"OWer represetlts and warrants to LeIIder.~ offhe date ofthili Agrcc:ment. as of the daft: of each disbursement of Loan proceeds. as of the d&te of illY renew.l. extension or OlOdiflCaliOll of an.y Loan. and at aU limes any Indebtedaess exists: Organ.ution. Rcnnwt'r is a COIpOI'ahon which is duly organlzc:d. validly existiog. .nd in good. staading tinder the laws of the Commoowealtb of ~nnsyivania and is nJidlyexisting and in good stabding in all swes in wwch BOITOwer is doing business. Barrower has the full power and authority to own Its properties aud to tlansact tbe buslnC'$$CS '0 which il is presently engaged or ~t1y proposes to engage. BortO\1iet also is duly qWllified as a fOJcign coqxntiat alld is iD good staading in all stares in wbich the failure to so qualify would have a tmIterial adverse effect 00 its businC$leS or finaaciaJ condiaon. Authoriutioo. The execution. delivery. and pt:ffonnaoce of this Agro:meDl and an Related Documents by Booower. to tbe C.1.tenl to be executed. delivered or performed by Borrower. bave been duly 4ulhori.zcd by aft n<<mary actioo by Borrower; do nor require the consent or approval of aoy other person. regulatory authority or governmental body; .and do not conflict with, resuH ifl a violation of. or cocstitute a default under (a) any provisiOd of its art:icJ~ of incorpontion or organizatioo. ~ bylaws, or aDY agreement or orber instrument binding upon BorrQWef or (b) aDY law. governrnauaf rcgulatiou. COW"t decree. or order applicable to Bono_. financial Jofocmation. Each finaociaJ statement of Borrower supplied to Lender truly aad complelely disclosed Borrowc's filWtcial condition as of the date of tbe slaCemcnt..and there has been no material advc:rsc change in Borrower's financial condition illbsequ.clu to the date of the most recent financial stltement supplied to l.e.odtt. Borrower ha~ 00 material cootingcnt obligations except as disclosed in such firtaocial statements. Legal Effect. This A~I constitutes. and aoy iasrnunet1( Of' agreement required hereunder to be given by BOITOwer when deliverro will constitute, legal, v.aIid and biudiQ8 obligatious of BOllTOWCf enfon:eable against PorroWCf in accorcbnce wim dteit respective tcnns. Propertie$. EJI;cept as contemplated by this Agreement or as pcevtously disclosed in Bottowcr'l; tipanci.d statements or in writing lo tender" and as accepted by Len.do. aad except for property tal( liens for taxes not presently due and payable. Botrowcr owns and n..s good title 10 all of the properties. An of Borrower's properties are titled in Borrower's legal name. and Borrower has not used. or tiled <J fitw1cing st.ttcrnent under. any Other name for at least the L1$t five (5) yc.acs. litigatiOll and Claims_ No litigation, ctaim. investigation. mministrative ptucecding or similar action (iu(;luding tlwse for unpaid faJl;es) against Borrower is pending or tbreauaed. and nO odlet eveQ( has occurred .....lUcb may materially.adven'ely affect Borrower's. financial conditiOft 0( properties. other than litigatioo, claims, or otherevcats. ifuy. thal have beco disclosed to and aclc.llOwledged by I4l1oder in wririDg. Tlxes. To the best of Borrower's knowledge, allu.x returns and reports of BOfTOwer dJat are Of werr required (0 be fiAel:1. have been tiled. and all taXes. assessments aRd otbcr goVC'flInleIltlJ charges have been paid in fuU. eA.ctpC thoo:: presently being or to be contested by Borrower in good [aim in the onlinary CQUr:5e ofbuslUc:.ss: and for which adequate reserves have been provided. Ueo Priority. Unless Ofberwise previously discJosc:.d to Lender in writiug. BOl1'Ower has nOl entered int4> or granted any ~curity Agreements. or permitted the filing or attachJJ1Cllt of allY Security Interests on oc affc:c:ting any afme Collateral directly or indirectly securing repayment of BOfTOwcis 1...oaa aad Note, that would be prior or that may in any way be superior to Lender's Security ktterests and rights in and to such ConateraL BindiDg Effect. 'Jbjs Ag.reemeot. tbe Nole. aU Security AgrcemetllS direcflyor indirectly securing repayment of Borrower's Loan and Note and aU of the Related Oocu.metlts are billdil1g upon 8orrow~r as: well as upon Borrower's succes.sors., re~tatives and assigns. IQd are legally enforceable in accordance ....ith tbeir respectivelerms. Commercial Purposes. Borrower intends to use the Loan proceeds solely for business or conunercial rebled. purposes, Location of Borrower's Offias and Records. Borrower's place of business. or Borrower's Chief ex~cutive office. if Borrower has more than one place of business. is located at Woodcraft Drive - P () Box 196. Mt, HoHy Springs. PA 17065. Unless Borrowei' has designated otherwise in Writing this location is also (he officc or offices where Borrower keeps irs records concerning the CoUateral. , 03-29-2000 Page 3 BUSINESS LOAN AGREEMENT (Continued) Jnfonnation_ All information beretofon: or cootemp<nncously herewith furnished by BOITower to Lend<< fot tbe pllrpo$eS of or in ConnecliOll with this Agrec:mcul Of any fntnsactioo contemplated hereby is, and all jaformalion hereafter fiamished by or 011 behalf of BOITower to Lender will ~. true and accuntc in every materia.! respect OIl tbe date as of which sucl1 i_formafion is da(e(J or certified; and none o( such ioformafloo is or will be incomplete by omitting to state ally material fact necessary'o make such infonnalioo nO( nUsleadiag, Survival of Representation5 add Warranties. Borrower understands.tad agrees that Leudet. widloUt independent investigation. is relying upon tb<: above o:prcseulations and wanaDties in making the above IUcreoced Loan Co Botrower. Booowcr fwther ~ that the foregoing Rprcsentalioos and W3R'21alies shall be cominuing in aalUte and shal1 remain in rull force and cffccf uatil ~uch time as Borrower's Indebtedness shall be paid in fuJI, or uaril this Agreement wD be temUlla1ed in the manner provided above. whichevQ" is the Jut to occur. AFARMA TIVE COVENANTS. BorrofNe1" coveGanf$ and agrecswith 1...eocIu dut. wbile Chis Agreemeftt is in effect, Booower wiJJ: Litigation. Promptly inform Lender in writidg at (a) all material adveru changes. in Borrower's financial condition, and (b) all existing and all tbreaiened litigatioo. c;Qims, ;QVc:stigaCOdS. adminiSlrarive proceedil1gs or similar actiOllS affecting Borrower or any GuarcilDlar which could materially affect the fioancial condition of BOI'rOWCJ or the financial condition of ,ny Guarantor. fiaaacial Records:. Maialaio its books and records in accordance with generally accepted accounting ~rinciple5. applied on a consistent basis. aDd permit Lender to ell:amine .nd alldir Borrower's boob and records 1.1 all reasOGabJe I.mes. Financial StI[CtneUts. famish Lender with. as soon: as available. but in. no evenllatcr than one hundred tWenl:y (120) days after lhe end of each flS.ca1 year. 80rr0wer'$lM~oce sheel iJOd income statement for Ibe year ended. compiled by a certified public accountaol satisfaclOfy 10 Leoder. AU rwapdal reports. requircd. to be provided andu this Agm:ment shall be prepared in acccroaoee with gencra11y accepted ~tuiQg principles. applied 00. a consistent basis. and certified by BorroWtt as being b'Ue and OOfTC:ct.. Adc:fitioMllnfonnation.. Furnish such additional ittfonnatlon and 5tattmCllls with respect to BOrTOwcc'S and Guarantor's ftoaociaI condition and buiiness operations as Leader may request from time 10 timc_ Insurance. Ma;pbin Ii", add other risk iasllGUlce, public liability iasuraace. and such ad1cr insunncc as LaJder may require with respect: to Borrower's propetties and operauons, in form, amounts. covttages and with insurance companiC' reasonably acceplablc '0 l.cnder. Borrower, upon requt:st of Lender. wiD deliver to Lender (rom time to time the policies or CertificafCS ot iasurance in fann utisfactOf)' 10 Lender. incllldiQg stipulations thai covcnges. wiu DOt be cancelled or diminished without a! ICJSt twenty (20) days' prior writtco notice to Lender. Bach insUdllCe policy also shall include an cAdotsemem providiug chat covehge in favor of l.eoderwiU DOC be impaired in any way by any aei, omissioo or defauk of Borrowtr or any other person. rn eonnection witb all policies covering assetS in which Lender holds Of is offered a security interest for the Loans, 8caower will provide Lender with such l~s payablt or other codorsemenlS as l..er1der may require. tnsunmcc Reports. Purnish to under. upon request of l...et1der. reports OIl eac;h e:Kistiog insllrance policy showing StICh infOlllJation as .Leoder may reasonably reqUC$t, including witltoollimitation the following: (a) dtc name of the insurer. (b) the risks insured; (C) (he amount oflhe policy; (d) the pl'(lpeJties in.surc:d; (e) the theo cunmt property values on tbe basis of which insurance I1llS been obcained. and die manner of detenninins l..bose values; aod (f) the cxpiratioo dale of the policy ID addition. upon request of Lender (however not more ofttn than annually), Borrower will have an independent appraiser S3iufactory to Lender determine. as applicable, the aelUal cash value or replacement cost of any Collateral. The COSt of such appraisal shall be paid by BOlTOwer. Guaradlies. Prior to disbursement of any Ioap proceeds. furnish execuled guaranties of the Loons in favor of Leader, executt:d by tJu: guarantor named below, on Le4der's forms, and in he amount md under the cooditioQi spelled OUI in those guaranties. !iJ!mIlll2I: Steven Capuano AmOUfl( U..limited Other AgteemcnlS. Comply with all terms and conditions of an other agreements, whether BOW' or hereafter existing. between Borrower and any other party and notify Lender immediately in writing of any default in coonectiOl1 witbany other such agreements. loan Proceeds. Use <III Loan proceeds wlely for BOrroWCT'S busioess operations, unless specifu;aUy COllsetlte<:1tO the coPtrary by Leader in writiog. Taxes, Charges and Liens. Pay and discharge when due all of its indebtedness and obligations. includiog without lim.itatioa all asstssments. taxes, governmental charges. levies and liens. of every kind aod .lWUre, imposed upon Borrowtr or its properties, income, or- profits, prior to the date on wwch pen,lties would anach, and an lawful claims illat. if unpaid, mighllxcome a lien or cbarge uport anyo! Borrowcfs properties. income. or profits. Provided. however. Borruwcr will 1t0l be required to pay and discl1arge any stich assessment. tax, charge, levy, lien Of claim SQ Ioog as (a.) the legality of the same shall be contesttd in g;ood faitb by appropriate proceedings, and (b) Borrower shaH have estabtisbed 00 its books adequate reserves with respect to such contested assessment, tiIK. charge, levy, liea, or claim in accordance with genen.Uy accepted accouQling practices. Boaower, upon demand ot Leader. will fumish to Lender evidence of payment of the assessments. taxes. charges. levies. liens and claims and will au.hOOze the appropriate ~ovemmentlJ official to deliver to Lender at any time a written statement of any assessmeniS, taxes, chaJ'ges, le\'i~, liens and claims agaios( Borrower's ptopertic:s. income, or profits. 03-29-2000 Page 4 BUSINESS LOAN AGREEMENT (Continued) Performance. Perform aDd comply wilh all terms. conditions. and provisions set forth in this Agreement and in the Related Documents in.t timely manDel'. and promptly notify lader if Borrower learns of the occurrem:e oI..oy ~veol whkb COOst1tUltS an fveQ( of De{alllt under this Agreement or under ao,. of I~ Rebkd Documenfs, Iospedion. Penoit empJoyees or agents of.Lender- at any (casoaable time to laSflcd adY aad aJ1 Collateral (or the Loaa oc LoatlIs and to eumiae 0( audit Borrower's books, accouoU. and rerords and to makt: copi~ <lad rnernonoda of B~'$ boots. .l.ccounU. and records. If Borrower now or at ao)' time heTeaftcT maiottios auy n:corda (iaeluding wit~l1imitatiOD computet geaerafed records and cotIIputet software programs fat du: generatJOIl of such records) in the possessioa of a. third patty, Borrower, upoo tequest of uDder, stul1t Gotify s:uclt patty co pennil1..eslder free access to sllCh re(ords iii' aD relsanable times aDd tD provide Laadtr with copies of .111'111 recants it may U'quest. AddiOOnal Assurances. Make. eucute aGd deJiva to Ltnckr such plomisswy data, motIgages. deeds of trust. securitYolgrecmeats, firumang stalen1cnls, instrumeors, documeqts and otheJ" agrecmeors as Lender or iu aaorneys may ~Iy request to evidence and secure .he LoaDS add to pcdect all Security Interests. NEGATIVe COVENANTS. Borrower oovenanlS and a8fC'e$ with LeDdeT that while !his AgreeDlellt is it!: effect. BOROWCI' shalJl Dot. \Vithout the priOf writteu cotISdlt of Lo:ndes, Conti/Juit)' of Operations. (a) Engage io any business JetivWes substaatiaUy ditfeten( thall diose in which BoaO\Vel" is presentJy eQsaged. or (b) cease oper.Wous. liquidate. merge. transfer, acquire or consolidate with aay other Cdtify, chance owaenhip, change its name. dissolve OT transfer or sclJ Collateral 0111 of tbc ordinary course oIbu$i:pcss. CESSA.11ON OP ADVANCES. If udder has made aay oommitment to mate auy Loan to Boaower:, wltethet undcc this Agreement or lIodcr any c:MMr ~t.. I...cndet shall have 110 obligation to mate Loan Advaoc;;es (W to diiburse Loan proceeds_ if: (a) Borrower or any Goata,uar is jn default rmder the terms of this Agreemect or aoy of the Related Documents 0( aLlY ofiler agJeemcJlt that HOITOWer or 4flY Guarantor has with Lendet; (b) Borrower 01'" any GuarantOr" becomes iDsoIvcot, files, a peritiOll in baoknqJtcy or similar proceediagS-, or is adjudged iI bankrupt; (e) thCl"C occurs a matenaJ adverse change in 8ortower's financial condition. it! the financial c:oadiciOll: of any OtlaDDtoc, or in the value: of an)' Collateral securing any Loan; {d) any Ou;nnoo.- ~ks. claitlli or otherwise atrempts to rimil. modify or- Tcvoke such GuataDIor"'S guanDty of the Loan Of any other loan with lender. BORROWER FINANCLAL REQUIREMENTS. Boaowc:r shaU furnish Lender with, as soon as available. but in no eVCflllafer than ooc buodn:d t\Vent)" (120) days aflet the cad of ~cb fiscal year end. Borrower's balance sheet and .nCOrtle statement fat lhc year ended complied by a certified public ACCOUDtauf satisfactory fO Lmdtr. AU IiAuml reports requiTed 10 be ptovfded under this provisiotl shall be prepared in acoorchncc with geno;tlly a<<epted accounting principles applied Of! a coosisteot basis. and certified by BOlTowers as bciD8 true aud COIRCI. GUARANTOR f'UI,lANCIAL REQUIREMENTS. Guarantoc shall lUfI1ish Lender with his Pasooal Nnancid Statement at inception of Joan.1nd again IlpM TeIeaSC' of ~tiooal collateraL AU reports required to be pro"ided under this provislOO shalJ be prepared in accordance with generally accepted acCOtlDting principles applied on a coosisteof basis. and certitied by Gu.arantOt as befng ttuc and corm:l EVENTS Of DEFAULT. Each of the following shan cotlStiture an Event of Default under this Agreemeot; Oefallk OQ Iodcbf..eOO:es:s. nilll{e of Borrower co make any payment within IS days wfu:n such payment.s due. Ocher lkf.ullts. FailJIfC of 8ouower oc any OlanfOT to comply with or to perform when due aay other term, obligatiou, covenant oc condition contained jn Ibis Agreement or iD allY of the Related Dtlcumenrs., or failwe of Borrower 10 comply with or to ~rform any other teon. obligation. covenaot or condiuOll contaioed in any other agR'emenl between LeDdtr aad BOIlOwer. Deftuk In FaVOl: of Third Parties. ShouJd Borrower Of any Gratw.x defauJl under any loaD, extcosioa of credit, SC'Curity agr-eement purch.ase or uJes .agreemenl. 0( any other ag.-eement, in fav(W of allY oIhcr creditor or paSOll thai may ~terially affect any of Borrower's properTy or Borrower's or any Grantor's ability to repay .he Loans or perform dleir respective obligatioos UDder this Agreemenl or any 0( the Related Documents. False Sutemenu. Any warranty, represaltlfWn or statemcnl made or fumislled to Lender by or 00 behalf of Borrower or any Gcantoc under this AgreelOeoJ or the Retared Documents is false OT misleading in any material respect al the time made or furnished. OT becomes false or misleading at aQY lime lhere.ahcT. Oefeclive CoUatetllliz.atioo. This AgreeR1l:l1l or any of the Related Oocumeo.ts ceases to be io full force: and e(fecl (including faiJure of auy Security Agrecmenl to create a valid and perfected Security InteTcst) at any time aod fm- any reason. Jnsolvency. The dissolution or- terminatiOrt of Bonower's eA1steDCe liS a goio,g business. lhe insolvency of BQlTower. the appointlheDt of a TCce1Vet for any part of Borrower's property. any assignmeat for the beDefit of CreditOTS, any trust mortgage or any other type of cre4iror workout, (TT the commencement of any procteding undo: any baokruprcy or insolvency laws by OT against Bocrowet. CredilOf" or forfeinu-e Procudings. Commencement of foreclosure: or fOffciture proceedings whether by judicial proceeding, self.help. repossession or any other mefbod. by any creditor of Borrower, allY Creditor o( any gr.a.ntoT agaiost any collareral securing the rndcbfed'atss. or by auy governmental agency. This includes: a garnishment, atlachmenl, or Ic\'yon or of any of Borrower'S deposit accounts with Leader. However. this Evenl of Default shall not apply if lbere is.a good faith dispute by Borrower or GranloT, as the case may be. :IS IX> the validity or rea50tlableness of Ibe claim wroth is I:bt basis of the creditor or fcnfeiture proceeding. and if BOf1ow~r Of Granlor gives Lender wrincn IlOtice of the creditor or fotfeiturc: proceeding and furnishes reserves or a StlJety bond for the creditor or forfcituR proceeding satisfaCtory to tedder. ......~-_.--------.,,~._..... ----".-'-....".. 03-29-2000 Page 5 BUSINESS LOAN AGREEMENT (Continued) Evenu Aifet:tio& Guarantor. Any of the preceding eveuts occurs: with respect to any Guarantor of any of the llldebreduc:ss ()I'" aRY Guanntor dies or Ixcomes jacocnpecent, or revokes (H" disputes the validity of. Ol" liability under, any Guaranty of the ItJdebtedness. Leader..1 its option. may. bllt shal1 not Ix required to, permit the Guan.otor's estate to assume uacooditioaal1y the obligatWns arisiol ulldcr the guaraoty in a. ma.nDer ~ti$(acrory to Leader. and. jn OOin, so. cure: the Eveot of Def4Ult. Rigbt to Cure. If .IIDY default. <Khet Ibad :l Default oa htdebtC(tftCS5. is curabl<e and if Borrower Of Gt3ntor. as lhe case may be. has no( been given a. notice of z similar dd'Mdt within the precediug twelve (12) moo.dts. it may be Cll~ (aad no l3vear of Default wiD have occurred) j( BotrOwet or GraUIOI', .1$ die case may be. after recei., writreo. DOIice from uDder demand.lQ8 cure of such defadlt (a) cures the default wilhin thirty (30) day.s; or (b) jf!he cure requires monl titan thirty (30) days. ~ initiaMs steps which l..eiIdet deems jp l..eQdcr's sok: disc:retioo to be s1Ifficient to cure the defttuk aru11ht1'eafter continues aDd c:omple\t1i aU ~ 11ftd. ~ 5UplS sufficient ro produce comp1WJce as SOOIlas rc.lsonably practic.al. BfFECT OF AN EVENT OF DEFAULT. If any 8mu of Default sba.ll occur, eJlccpt where otherwise provided in this AgrtemeaIt oc the Related Documents. aU ClJfIUIUtmalts aDd obligations of Lender lIDdtr thU AgrtaDcnt or die Related Docomerlls Of' any other agreement immediaee)y will temrinate .ad. at 1..eada's oprioa. aU kIdebt.m immedialeIy will become d<<e and payable, aU without nat.ice of.any tind to Bonowcr. ~ Ihat in du:l case. of.to EKnt of DefAult of tilt: type described ia tbe '1asol'IeQcy" subsectioa .bov~ such a.::celerahOll than be automatic and not opDooal. fIJ additiOl1, l...ender shaJJ have dJ tbe rigbts and remedies provided in IbeRelated DocIllllCOIS or available at Jaw, ;. equity, Qf otbetwIs.e. Except as may be prohibited by appliC3'bte law, ,,1) of Lcudct's rights IIDd remedies shaft be cumulative and may be e~W singularty or COGCUrrCwy. Electiou by LeIldcr to pursue any mnody shall nol exclude pursuit of iO)' ot:htr remedy. and 311 dectioo to make c:lI:peodiwteS or to take aciioll to perform an obIigatioQ of Borrower or 0{ any Grantor shall nO( affect L.eoder"s: right to declare a dtfauh and ro exerci:se its rights aDd remedies. MISCEU-ANEOUS PROVlSIONS. The followiag miscellaneollS ptoviJiOlls are a put of this Agrte'meru; AmcndmeIIu.. TILis Agreement, togelho' ....ith any Rc:lated Docaments. coastitule's tbe entire lInda'st.~ !l:ding aDd agreement of the pan~ as to tbe manen: set torrh in this AgreemeoL No alter.alion of or a.metldment to this Agreement shan be effective UJ:l1ess ,given in ....titiug and signed t)y the: part)' lit parties sough1 to be: cmuged Of" bound by tile aJtctaaoo 0( amendment. Apptk:abk: Law. This AgrttmcQt has. been delivered ~ lAoder' and ac<:epted by Leader 1r1 the CammonweaJlh of Massachusetts. If there is a lawsuit. BOlTOWCI' agrees upon Leudcr's request to submit to tJle Jurisdiction of the <=ouru of Essex COUGty, the ComIQoawea.lth of Massachusdt$. LePder aad Boaower hert:by waive (be right to allY jwy Jria) in any actioa. proceeding, or couoterClaim brought by eilbtr Lender or Borrower against me other. This Agreement sbt.U be governtd by and coostnl.ed 10. acaJtdaDCe witb the laws of Ibe Commonweallh of Massachusetts. Caplioo. Headinp. Caption beadings ill this Agttetnent 31(' fur COQvenieAce parposes only and are not fa be used 10 ioterptet or define the provisiOllS of this ^_c Cooseat to l.oaa Participation. Borrower aerees and consents ro lender's sale or masfer, whethu oow or later. of ooe (H more participafiOfl interests in the Loans 10 OI1e or tJlOI"(! purcbasets. whedler relaced or unrelated to Lender, LtndtT may provide. without aay lintil.1lion whatsoc::ver, 10 any OllIe or IDQfC purchasers, f:Il pOlenbal p~, aay inCocmatioa. or knowledge Lender may have aboot BOITower or aboul.any otbCl" mauer relating 10 die Loan. lDd 8orrowa' hereby waives any rights. to pr1r.lCy if may have. with respect to sucb maaers. 80fl'0WeT addilion.aUy w.aives any And aU not.ices of sale: of pOU1icipation jQteres(s, as wel) as aU hOliCC1 ofaay N:pUr(:hue of such participation interests. Borrowc:r also agrees that the: purcbascrs of any ~uch patticiplll;OO jnterests will be C()D.Sidered.as the .absolute owuers of such iattr.:sts iIIlbe Loans aod will h....e.aU the rights granted under the participation agreement or .agreements govemiqg !he sale of such parUcipatioa iatercsts. BOfTPwer further waives an rights of offset orcDl,IQlerclaim that it may bave now at later against Lender- or against any purchasa of such;) partkipatioo lattrest and Ul'lf.:OOditiooaUyag.ees tbat either Lcdder or such purCb.uer may coforce Borrower's obligatioo IInder tbe Loans inespe<:tive of the faiture or insolvency of any bolder of any jnterest ia the Lo;1JJs. Borrower further agrees that the purchaser of auy slJCh participation inlerests may enfOf"C~ its interests' inespective of any penooal claitm or defeases thai Borrower may have against Lender. Costs aocl Sltpcrts<S. In the eveat of Defaulr. BOfroWCl agrees to pay upon demand aU of Lender's expenses.. includiug wimoot limitation attorneys' fees, iOCUSTe<l Us OOIUlCCOon widl Ole coUC(':tioa 0{ this Agreement. In the event of a defauk by Botrower which is nOl correcacd. lender may pay someone else to help collect lilt loans 10410 eqfotce this Agreement, and BOf'I'OWt( will pa.y that amount. This includes, subject to any limits IIrldet applicable ~w, lendCf's attOlUt)'$' ftts aDd l.bIdti~ legal npeascs, wl\e.ther 0{ not there i~.. lawsuit. iocludid.g attorneys' fees for bukntpCcy proceedillgs (including efforts 10 modify 01 vacate any aUlomauc st.ay or WjUdCtioa),.appeaIs. and any anticip.ued po$t-judgmCOt collectioo services. fJo.rrower also will pay aay court costs. in addition 10 an oCher sucm provided by J.aw. Notices.. AU notices requimi to be given unda- tbiJ Agrumept shall be givell in writing, ruay be sent by telefacsimile (unless omerwise required by taw). and shaD be c:ffec:tive wbeo actually deliveted or when deposilCd with a nationally recognized Dvcmight courier or deposited in the United StateS mail. fil'$t class. postage prepaid, addre$$ed to the party to wham the notice: is 00 be giVetl at the: address mown above. Any pan)' may change its address for notices under Ibis Agret:rnent by giving fonnal written notice to the other pvties. specifying that the purpose of the notice is to chaage the p;llrty's address. To the Cll.kot pcrmillcl by applicable law. if there is mote than one Bonowcr, noc~ to any Borrower will constitute notice (.0 all Bon:owers. For notice purposes. 80n0wt:r will keep Leader jnfOlTntd at.all times of 8ol1OWtt's current addressees). 03-29-2000 Page 6 BUSINESS LOAN AGREEMEN. (Continued) Severability. If a court of oompt:Een.t jurisdiction finds any pmvisiciO of tms Agreement to be invalid or uaeafoR:eabJe as to any petsOfl 0( cin:u.rnstaa.ce. tach finding shall IlOt reodcc lhat provisiaD invalid or uacnfOlUable as to aay otbcr persolls or drclllnSl1UMXS. If feasible. ally such olfeadidg provisioo shall be d<<med 10 be modified (0 be within the JimilS 0( caforce.lbility 01" validity; bowc\lct. if the offending provision cannol: be so modiised. it shaH be Sb'ickeD aad aU Olbet provisiOlU of this Agreemeut in aU other tnpects shall remain valid and eofOl"tt2bk_ Subsidiaries and Affili.alai of Borrower. To ~ atePt the cootexf of any provisions of this Apecment makes j[ appropriate, iocludinc witbolat lirnitllioa any rcpreseutuion. WIfTIIl1)' 01 COVet1llllt, the word "'Borrowerw as used hacia ,hall include all subsidiariC$ and affiliates of Borrower. Notwlthstandiag the foregoing bowevtr. under no citcul1lSta8ccs snaJJ tb;s Agreemrnt be COI)strued to require Leader to male any LoaD or other (1Ducial accodUnOdalioo to aQY subsidiaJy or affiliate of Borrower. Succcuors Idd Assigus. AU covenantS ud agrecmeqts contained by or on bebaIf of lIoaoWQ' shaJJ bind its sacccssor.s and anips and sball inure 10 the ~fit of under. its successors aod assIps_ 1lorrowt'r sbaD dot. however. have the right to usign its rights under Ibis Agreerneo.l (W" lIDY;OCCtest t:herN. wilhour the priat wriUm coasent of lalder. Survival. AU wanuties, tqJR:Sen1arioas. IDd covcoadts made by 8orrowtr in tb.is A~t Of ja any cc:rtif'fCale or otbet iostrumeft( deJiwnd by Borrower to l.cndr:r aodc:r this Agm:ment shall be coasidercd to have been relied upon by L.eader and wiD survive tbe tnaking of the loaD and delivCl)' 10 Leadc:rofdle Rdakd DocUlMeDts. ~prdle$s 01. ..DY iovestigazlOf1 IMde by Lender or 011 lender's behalf. Waiv~. l..cadCT shall ooa: be deemed to have waived any rights under this Agrumeu. wlltu such waiver is pven in writidg add sig,oed by Leodcr. No delay or omission 011 the patt of J..c:ndcr in e'xen:WdB aay right shaD opetilfe as a waiver of such right or any other ngbl. A ~"cr by l.edder of a provi$ioa of dUs Agn:cmeoI sIlall not prejudice 01" CODStitute a waiver of.Lca<kr's righl OIberw1sc 10 demaDd compli.aacc: with. lbat provi:siod or auy other provision of this Agreement. No prior waivcr by LeDder, DOl aD)' course of deang between LeDdc:r and BOI'lOM1 << Gnntor. $ball constitute a waiver of any of l..cader's ripts, or of uy obtisazioas of BQITOWQ" or Or.Iat:or in tbe future. Wbeocwcr the COGsent of Leader .it ~red ulldet Ibis Agn:cmeol. lhc grantiDg of SCIcli C:Odsent by Lcddcr in ..y iutaace shan DOl constitute cootilluiagconsnsl in so t instaaces where such consent is required. .lId ia all cues such conscr.. may be grutcd orwitbhold in 1M soIe4isctetion ofLeockr. HA VINO READ AIL nlE PROVISIONS Of 1ll1S BUSINESS WAN AGIU!l!MENT. AND BORROWER AGRI!BS TO rrs DA Tl3D AS OF MARCH 29. 2000, THIS AORBE""EN'f IS EXECU'llID UNDER SEAl. 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No ..._Ill "'_OllIla IliJ GtMnolIr _'" -..- ..... ......-........,.. portr __......10 III""""",, ar_ till'" _.. ...__ ~ 003/004 003 i '.L If I'l- l '. .II I" ;,t . , I.j ~ -I I! ., " . I 1,!It ''"1 I.! i:~ \~ ~'1 " .~ ., 4 "II I I 10~/2004 TUE 14:49 FAX ~ 0041004 ;/04/2004 13:25 781 49? 0982 ~ 91633G478731 o~/:a/oo Tl~ 1S:'1 PAX OJ. 8S8 '806 FIRST ESSEX .ANK . 01.29-2000 -......I 1-P.139 'CIUU'ID " COMMERCIAL GUARANTY ~ (Coadnuedl haeJ ~lllIII'~Nt \oW. "". ~ .... -. __ III ~ e/Id IIC<8Illod br .- "' ... ~..,...~.""'. OIl *-- ...... II . _, - IQI'''' _......... '-' ID ._III.......1oCIIoaon ell.. """'" GI e..a. CIuIlW. Goo/llllOO -p-- 11_ lafIIlW II1f a-*lrllllllll1.... "'.10 11II' llllY"'" iIIl/If........ ~.. _""cfaInI bltloIIll '" tIIIIIr..-.. Gull.- ~..._. TtoII~_IlIQ1lo1m1ll""_/:Il_... 1l'u'....iIlill._or...Cll/ImlO ,",,,,___, "."..,.. Fell; ~ au...,., _ '" JlV _ll8MlhI.. or ~. __..., ....... ~..-..p' '"' llNI ~ _ CIJIlOIIHI, - iI_._.... willi.... __._. Ill.... G_. \..IIIdt!..... 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IN ADD llUAMoMTCII UNDasTIIN05 TItAT THIS OUl\&AHn l~ UPClN ~'S ~ ANI. DE\.lYU' OF THIS to L.... AND 1'IiAT TIiII CUMAlm' wu. CONTP'lUt TUMIIlATDlIK TlIli JIIAJINP $1'1' fOtTK IN TIft SEC\'ION 1'101'1 OF GllAlANTY.' NO ,OIl1AL "'&:r.ur~~1iNlI1a 1$ NIa5SoUV TO 1>WC111IlS c"......,.,. UKJ:11VS. TIllS N1Y IS DA TD HA.Clue. 200D.. TIflS liIJI.MNrt IS UNO" H.\l.. G )I: 11I4 dtIIvOllllIl! till PlMIIA' 011 )I: WbelI WPOlIIlll41Q ...T......IItr....ll'f__._ ..__.~_LH~ 004 r~ )'1. q If 1 , Ii. I . r , I:~ , , Ii !~ I.~ .. j I I' I.. H I~ \'1 1/09/2004 WED 14:17 FAX ~002/006 ~"""'I COt-.)ERClAl.', SECURITY AGREEMEI'.J . J .....< . BOlTOwer: undlr. Inc. Woo<<taft Dnve . P 0 Be.. 196 M<. Holly S~. PA 17065 Lender: flm box ...... Fsa 296 "".. S_. lawrence. "'^ 0le'lZ THIS COMMERCIAL SKUIUTY AGllUMENT Is en","" In'" t........ ........ Inc. (..(ltred to lIelow ... "e,",IOt"); '.d flm ""ox a.ok, 'SB ("(.....d to I>tlow IS "!.ende<"). For ..1...,1. _rallon, Or.nlDr IJ'IAl$ to ......... . r.COlliIy _In dle CoI_ .. RlCUre dle Indob_ ond ...... dial l<.der man ..... dI' fish.. ,u.ed In d1Is ........... ..1Ih tup<C( ro III' Colli......, In .ddlllDh ro all Olller noh" _~ l,"""..." h... ~y I.... DmNInO"'S. 'I11Il """"""'" _ WI! ""y. "'" followInG .....1nQ& """" used In IllIS Ag",",""",- . T.""" nol 0ch0NItKI ""'.noclln lhIa AQrbomonl ahaJ/ twva the meanings atttCbut8d to sueh tonne In the V"lform Comroom.' COd(t, NI l'll'Ierences 10 dtIr URJDumG 8MlI I'11Nf1 amQ\II'II8. in IMwfl.ll ....,.,. 01111. U_ _.. 01 America. AFccment TIlo _ 'Agroomen" ,,-no thl. Cornmorci81 SOCIIIII\I AIjJ8OIIlOIX, llG "'.. C<lI11IlUI<CIOI Soo..-., A;.- ","y bo _d .. modified I""" limo .. _, Iog8ll1er wl.. 011 .xl'I_"'. _l'le' .\IAohod 10 lhill C<lmmor<J/<II SGcU<i>y .oor_ 110m _10 dmq. CaUAccQt The word "CoIlafGMf" means thcI JoIIowtng aascfibvd propeRV' of GrantaI. whGth8i' (taW own&d or hef'e8fter aQQultad. whelher new .~$1g or hereaner .r/v-Ing. and wtl*r8ltEll' 1ocOKf: (I ) I 979 GROVE 'lMSlOO, SIN '15/73 (1) KRW'I'MODE!. 0190 AlI'TERRAlN CRAAI'IE 190 TONS CAfACITY INCl.UDING. 197 fT Bool1, 125 FT liB, '.AXLE CAR~Ep." 74 TON BLOCK, 350 La.....U WlSWlVa ANI) HOOK. MERCEDES DlESa UP AND DOWN, smAl NUMBER 6190IIOJ (1993) In oIddItton. the wo<d "CoI1a_' IncluClOs 011110 /oIloioolng. -.., now _ lit 0.""''' .acqui..... _1l8r ""'" _ling '" he._ "olng. and who<oYOt Io<aW (a) AlI_mMls. occ_, ""'*""'''''',1<>01o. "..,.. _. "",,_eo, and...,.tions to and 011 '.pI"_"""" 01 ana st.C>.titulloo. lor -~-_. (0) Ail_ and pI<ldllC8 01 any of the proportv d8SC1_.. this CoIIalol.1 .octIon. (0) All 8CCQlJI"Ita, QfH'\Iirl.lll intangtJlGG. lnstr'Umltf1l::s. ronlS. monIes.. peymGl"l'&. and tdl 001<< rlQhf$. ariatng ou1 of a calef IMIe. 01 o1hor d..posIlIon 0/ any 01 tI18 pr_ dooo_ in Ih;o COIlaIOrol.ooliOn. (<I} Ad "",,,.ods (~l!touranca PlVOoodG' Irern "'" .lIio. doo_. I...., '" ""'or djo"".itiDn or flY( 0/.,. propertV lleOort>od in """ COUalOta'_ (01 All r_ and d<tI.t rolallng 10 any 01'" pl'll_ d_ In .... ColIa_.-. _.. In the /elm 0/ a "'Illng.~, mlatomm. INCronctw. Of "'8CIrOnIC media, togethGt ~ .A 01 GrantOt'& tight, $. etId ~t in end to aD con'1JUte1 $OfMars requ1r8cl to utmzo, onKne, maintsIn. and PJOC8S1 tin)' loon tGCOn:l$ or data 01' GIeclronic medIa. e.,1It o( D.....I<. Tho word. _ of 0./""", moon sncllnolud. ..i1IIoUl V....lion any 01 lit. Evott15 Dr oetoUII ... ronn b4110W In ... - _ .E.... oIllo'taul1.' GIontor. Tho mud "QflOI'tIO<" moans......, InC.. "" ._ snd ...igns GINtMIlIH'. 1he word "GUarDnlOr" tn88I'I6 ancllnCludoJ: wJlhout ImtatiOtl each and an of thQ IjIlJa(8t'Itors. BUfOtl98. and aoco,.....0d41loo p8rtie. in """"",,,ion wlIIllho 1_.... . 1_'....... T/18 word '1___' ........1II. intloI>Iudn... ev_ by "'" Nolo. ..,.,dIng 011 prlnoipul ond 1nceteS~ _ _ all DlI'Iott lnd~8SS .tId mG. and expenI:fi for wnith Grantor fa r(llpomlblQ ~ d1i:! Agreemol'lt or una.r .ny of the R8l8f8C1 DQCl.I'nGl1b. Under. Tho wotll "I.onaar ",...... FlrOl E..... 11001<, FSB. iIs suc:c_ ond ...Igne. N<l1Ie. Tho wo<d "Noho" ....". lit. """ 0' ctedlll_ 41"'" Man:h 29. 2DOO. in "'" ~ """'.... "'_.000.00 (rom~, lnc. 10 L8t1d8l', IOgOIhor with aU reneutals 01. exten&Jon&l of, I'f'OCIIfIcatiQna: 01, r,1Inanc1nOs or, con&OlJd8bonK of and'~ ror ""If MI8 ()f credlr ogr_ Relalfd Do<ument<. Tho wonlc ._ 000...,.".... ...... .nd include ~ limitnlion all prcmis50lY ........ ...- s__, loon ._IS. orwlrclnmon1IIl .__. _snti... ...tnIly _monts, _. d_ of "..~ and 011 _ i_. .gr......... and dDcumenII. wheUutf now or J\et8ll.... existing.. .~8ClIIBd tn. eonnedion INIth. tI"to lndebledneeo. lUCHT OF SETOFF, Or_ huroby gran'" l.8ndo< a __ """WIlly Inl_' ., and hereby _1_. CQIIVeyS, ....... pladQos. _ _.. all 01 Ill........ right. ... .r.cI inlo<as. In """ 10 a_. _.. ",Itl l.end.. 1_, ch&d<JnO, lO.ings. '" some ClIhot SDCO\lIlIl. Ittoluding all ~ hold jojnIIy wlm _010. .nd .. 4cOoUll\S a_ may open ., lit. futur.. _Ing. OOw...r, 1ft IRA .... J<oogh necaun!l:. ."., all ...,.. __ 10. whic:h",. g...... "'" .....,;cy _.t would bo ~..., by low. Gronror .......iz.. lendor. 10 Ih> "*'" pornlKl<ld by Ipp'_ law, 10 "'-" or _ oJI _. 8QOlnsl nny and .ft ._IlC<OIMlln. OBlIGA TlONS Of GMNTOR. GIll"'O' ...rrsn.. _ covsnan.. "landor .. ""_; I'<<f<<llon .f Searrlll' I.......L Gtonlor a_ 10 ox"""'" OU<h 1lnonclrtg o_nanrs ond lo Ink_ whot_ _ _ ... r_toO by , Lttnder 10 p8f'14Id ancl ClOI'ItinlM Lenctefs securtry lmetest in ttw CoUlIterAl. Upon r8QtlQSt of LendM, Gr.rnor will deUWDl' Ul LMnd8r any aftd ., or "'" doc"""",,, ....1OOIlt:inO or COll'~luting I/tCl ColUllo<a1. .".. Granlor wllt nata ~. "".,... ~ any.,., all_\laI_ "not.d."""'" to UndDr f.. _...;on ""~. a,.- ""'oby ~. LoMe< eo As 1".YO<6blo .ltotnOY.iri'I... lOt lito _. of "OCUMg any ~ n8CM04ly to perieGI Or IQ <:onU"U8 trle .eeurity inlor,s. ;rt/1led in 11" Agreement. Lendttr n,.y at any Ifme. and witttoul: runner. OUlhori.znUon """' aronror. Ii. . ""tlIon. pnalagraphlc lit olh.. f8llIt>dUCllon o( any fJootv;lng ""'- t)t of thIo Agreomont for .... .... . """",,ir>a -. _.... ralrrtbu... L_ (or all __ for lito peofoc.... and ..... ,x,"',nu",,"" oIltta ~ of Londol'o ."'"riIl' """reot In lito 00/laI-. arontor pIO/l1IlIIy wi' notify lond.' bofol8 ony chonllO In G..---. """'" incI~ any cIIon;o II> the ...umcxI __ nomos of Gf1II1I<Ir. . N~ VJolllJon. The SJlecuIIOn.nc1 d8JJvery fA tf1i8 AQreemctht wm not vioIele a"~ taw,C)t egt&efn8nf govarning Gferrtor or 10 ~Ich Gra.nlOt ~ A _. """ ;to _lCAlo '" __ allnctlrporallon and bylaw. do not pro/llbll 011)' ....... .... _Uon or fhjO AgrIl8monL En""<<OIoII", .,reon......'. To II1e .-. ""' COl/a""" oonnlsts oIl1OCDU1la. _.. popor, 01 _,ot i'>langIbloe, "'" CoIla_ is _. In KCO'_ wiln lIS tormC. jc gonulno. """ oompIlas ,.;e, nppllcolllo laws conovmlng r..... <onIllnI end _ 01 ",_otion end _. 6/09/2004 WED 14:17 FAX ~ 003/006 - ---- ~ ----.. ....-... ~vvo:. llJ.29.2000 )MMERCIAl SECURITY AGREEMEl. (Comlnued) Paee. 2 . ~ Md al pM$OI'I5 eppe.rng 10 tie DbUgalBd on hi CoIIalel'al have auttlorky and capaoity to c~t and .ro in fact ObUQIred as. thery e.ppeet 10 be 011 the COHe1br4f. Loatlon of die COlbtonl. G_. upon ,_, of !.onder, will ......r 10 l.fn<I8' "' form aatiolodo<y 10 "'ndor . ocnllCllll. '" rMlllfOIl8r1ias .nd CoIIolarol ~ ruIatIng 10 Gron"'r~ """",lions, lndudIng_ullImlrauon tho Io/Iowolg' (0) 011 noal pIOpony_ or boIng P<IfC/1UO<! by G_ (b)" ,eol plqMN\y being 'en'" Of' lM.od llV Gl'GOlo<; (e) 411 ._'aci_ ........ "",t>d, loosed. or bok1g used by Cl'atIb>r, ond (0) .. _ _109 wh.,.. ColI......, I. '" moy be _. Except in tho oltlinory """"'. 01 II< ""'__. G,..... <hat noI ,_ 1l1e CoIIaIerbl fn)rTIlte _isling locations Wilhola 11'18 prior wrillen c:onsettl oI1.8ndot. . II<n1<MI of CoIIoreraL Cl...... sIlall k..p IlK> CoIloto,.. (0' ...... ."'01\1 .... CqlloIeral ......... 01 intonglblo 1lfOIl8"Y o..,h ... _. Ill. recofdG eoncemInQ tho CODatGI,.at) at Qr~r,. addreu Ihown abov.. at HI such oINt kx:Atlons illS .r. ACCepI8b1elO &..ndet. Ex~l rn. the ordiroory cou,,", 01" bUllInoo.. """""'"" "'" .olos oI....onlaY. Gt'IlI1lo' InalI not """"". l/IO Colla_I 110m Ito """"lno _UoItO _'IIl. prio< wrllllln conoonl 0/ '-"_. To IlK> _ lhOt 1ho CcIIo18tal COllais\$ <II veniel"" or ""'"' _ p<opO"Y. GronIo' ohall ... \ok. or I>ORI'lIl any 0Gtl0n whlC:ll OODUId requita opjlllc.tiao1 lo'...._ of 11I10 lor.... -... o...lCIe "'" Commorl_ 01 P......yMon!a. ..lhckl' !hg ~ wrlllon ~ 0/ LonclOT. T~ In\/GlVfl1a Colbtolll. E><cepllor Il,.8ntO<y oold 0( accounts c:oII_ 111116 ___ co.... 01 GrGnlO"$ _.. _ 011011 noI.o'. ""... '" soli. ... _ h....... 0( db"""" 01 !h. ColI._. _ 0,...,,,,, .. not '" ~ WId<< _ Ail-t ......- moy S8Il ~. .... only In "" ordlna<y ...... ollis b.......s """ ~ \0 bolyors WllO qtlOIIly .. . bqyOf In tIIe..-" COUloe 01........... A.. In tile -.y ....... 01 G'amer" "uoi~ _""'....IIde.. hano1or in poI1IaI or _ ..tiOfocl.ion <II. _ D< IIIlY IlUlI< __ Gro_'1VlII not 1'111<I00. --. PtlCumIlor or _....... ~'m~ .,. CQII6ta(a1 fD ... oWjeot 10 ""y lion. .oourtly "'- oncumbr......... '" cbalVP. ON' 1Il1Kl.... .oeurily inIBrooll>/llVl<l<<l1or In II1lo AQrftmont _tho.__......... oIl.oodw. ThlolllClud"".oc:urIIy _ ovon II junior.. "gilt 10 Iho .ocuroy 10_ granlllll_ _ Agr_. lJfl/Q.. w.ivPd f>{ L<X1do" all p,oc_1Iom any dlspooillor. 01'" ~ (for Wha_ _I _ lot hBld '" IruSt lor Land<< and ~1JaI' "'" be commingled "'"" .ny _ hM>lo; ..- _. "*' '............ .hall "", c0n01llulo......... bY lan<IOl ",.oy ......._ ...poolO"'" Upon ,...1p1. GronlO' _Imrnoofiotoly doIivot MI'f_h """"""'" 1O~. I. TIlle. 0,","", ""'r........ and won..... "' Lender Ihol ~ held. good ond ""'"'"lable Il!le .. tho Callal..,t .... """ ...., 0/ <II Iioln& .... .,"'.""",,,,"'" .'.OP' lor ... lien 01 "'Ie _rnonL No flnGnclng 0"'_ _n~ Ol'ft of .... ~ 10 011 ". In ony pullIIc _ <<he, 1Iwl _ _ toftool ... secutlly In\lOl'oot Olea"" by "is ~ or II> _ Londar .... ."oelllc8lly _...,. G,,,,",,, 5IIOllllG/.nd Lonoor. '1g!Ua In lha CollOl.'oA ~,lt1o cI.... """ <lO/l1OtId& 01 aII_ _.. CoIbteraI SCMcha":s .ncf Locadom.. lnaolat u thlt CoaarotBI consiStS OIInvMlOfy, Grantot aMII deliver to ldnchtt. as ofltn as L&nlI8r IiI1alI 'eqUlre. ._ _. drlocAJlion&. and ""siQnolicns of a_ c_a,'" ... 19J>dor may 'Ollulro io il8nIlIy !he nOluro. _. _ _ 0/ ouoh CoIIatoral, Suoh In,,,,,,,,,,,,,,, sholl'" .......... /or 11,_i and 0IlCh 01 ;jO _... ... '''''lOll ....ponioa. HaIn....aoce ;Jfld ,,,,_ 01 COlla...... _ .h..1lloJn181n olIlangllllo CoI_a1ln good <:ondI\Ian and ,opa;,. G_...lI noI comma or pormll cIamllQa 10 Of d_ 01 tho CeIlalor" ... ..... port d. 1116 CoIIslor.L Lond.' _ iI8 doolllllOlod '~IIv" """ 'vorM ..... _ ""'"""," o. __ _ Ie ...,.,In., 1M".... and audll tho C......oral "'horeVO' ....ted. G,._ _ _roly IlOllfy LOI>der 0/ all cases lrwoIvfng d'fe return. reJeCtiOn, (epol.est:Jcm.IQSS or damage d Dr 10 any Cclls"n.li of any raqu&&llor ord or ~UG&ment. or of any olMr dilipute wing with reepect to 119 CoCJauqJ: ond generally of all tuJpptnlflgs end AVOI'lIS aHectirlQ me COlla... or Ift4 value or b ~ at tflO CoIIaQ1t.i. Taxes. ~ments and LIeN.. G/1m1ot wilt pay when due aD 1aXOS, "803Wl1ef1T& ahd liOnS won me CdIa,.,.... J~ UlIe or opoI'AtJon. ~ lhIs AgolIIlll1O/II. upon """ pIOI1\IGa<l<y "'18 or 1tQIeO. a<ridenclng.1I16 __.. Of '-' OOly 011110 ""'" _ 0............ G"'- "'"y wlC_ IIIV ...,tt po_ or may ofeel to _, ..y Ilon ~ Qr."" 10 '" good 10'" COotluo1lng an __ _ 10 _I 1tl8 obllgollort 10 rJ6f """ 10 long .. ~o inlBral in 11Io CciI_ Ie noI joopordi>oclln lllndor's sol. Ojlinioo. W tne C_ lll.ulIjeaod 10 . lion whiC/l is not olIGchorg.d whhln _ (15) dave. Gtllll/Ol' ..... dopooa wllll ~...dor _11. 0 '...-. _.... ....tv band Of olher oecurlt)/ saliOloclory 10 ......." in "" .onoun< _... 10 provldo ... the dioohorg. 01 IN IIan plus 01\)' "''''''''. _IS. atIOmoyO' f_ 0' 0Ih0t cIVJ,~ 1I16t COlId _1IIe .. a ,.....-. of /or........... or .... 01 \toO CoIIo_. In any """'"' Grontor _ _ I1NlI ."" Londor ..., IhoIl ~ sny final odv_ J_ _ ""~ .gainot 1he CQII6ta(.,. G,onto,..... name Lon<l.' .. an __ oIltlgea u_ lilY suroty band fumfG_ in IlIO con"', proc.Ol1lngO. COtttpl!m<< WIdt o-mmenAl a.qu...monu. a_ ahoAl compI'f ptO<nIIIIy with ," 10.... '-os, ruleS _ rogula~O/lO at OR 0001_ ou_, .- Of _In .lfoct appllC4b1. 10 tho ownonol1lp. proc/l;CIion, d1_11Ion, or US, 01... CoI101oral. ~_ may coni... III good r_ ""l' s""" low. _""... _I..... .nd _d ~Ionco during .ny proooodlng. _; -""" oppooIo. .. ''''''1'' Lendo<.In'....., in 'he Cot_al. in Lelldar'a.....1on. Is not__ Hmtdous Sub$Qnc... G.."tot ,..._ """ w."""'" """ ... CoIlaIorol _or hoo -.. oncI _ wid bA 00 ""'" .. thla Aw-' rGltlOins a lion "" ... CcltatetoJ. ",,001 fer tho gon.'.1Icr>. ""'nuloot.... .,or_. .....poIlotion. v..lI1lOn1. dIIlpoUl, ""..... 01 _"noel 'ol.... ot My ~ w,ata or SUtl$1Ionco. as those 18trn6 .'0 de"'*' In 01. ~ivB S'nYfl'Ol'1mel'ltal AfipDnse, ComptI\SMOn. aI'Id Liability Ad 01 !l11lO. .. .onendIlcl. 42 u.S.C. S_ 9<<lf. al soq. ("CERCLA"). tho SuporttJr.:l Amon4monlS and -.-lIon Act 01 ,see. Pw. L No. _911 ("SARA"). ... Hazar_ _.. Tron_lIon..... .. V,S.C. _ 'eel1, o,.oq., rho Rooooro. Conro8IValion and R.......,y Act. 4. V.s.C. Section 8901. ot ooq.. or 0_ oppI_ slola or FoderollOWS, t\lIOO. or rogullllonS """Plod pun".o," 10 ony GIllie ""-'u. The_ "110.._ we...... .... ......1'llOUS subC..-' .hoII aIoo include. wltltout li""latlon. .,.ooIoum .... pooIm/<oool by-produclB or oony b....., _001 """ os_.,.. _ '''1''......._ and _".nI'" contoinod horoln "0 !loGo<! on _f. _ lfIIICOnto .. 1It_....ting ",. ColIo_ lot haZardous wu"s and SllbSfanCM. Ginmlor I'\efaby (a) releases and walV03 any (UIlJre dD.ims agaInat L.nd9t for Ind8mntty or contrfbudon n 1tMJ OVOll' G'antor _. liable lor __ ... oil"" coo.. ...- .ny o..,h I.ows. and (0) og'''' to indorml/y and _ _~ ....- agains' ""y _ all 010""0 and 100_ ,,,,,ulllng /tom . _ oIl11is prOvl.1on 01 tills Agr_. Thlt obligation to indomnlfy oMli.tIIVIve 11IO poyrnonl .,....~_""'~oIIhIsA_l HiilJlUnan'~ of Usu~I~ 1rI1Uf'a8C1'. Q,.,.tor shQll PfOCIK8' 8nc1 mainlalo .. risks InliVt'lU'I;.. inclUding wJu10uI WniCalion fIrQ. 'd'\eft and liability QaYGf1tge. ~ wl1t'a eucn ather ft1Sur8ncA 40 a...ndst may requfre Vttth ~PACI to the collate..... In form. 8I'r1OIrIII;. CO\I$f8geG and bIsJs FoOs<ll1IobIy O<<:ePQIbl. 10 ~.nder and Is.ued by a compel\)' 0' caroponl.. .....onaIlly ocooptalll. '" ~""olor. GIBI'IUll'. upon ,oquoo' of lAndor, will _1o.Lo<dor "om lima '" '""" .... poIlOiOO or 00l1ll1ee... of ""UrotlCO .. lorm ootis~ to l.AIndor. ini:IudlnO $1IpUI"_ _ _agoO . will not be ooncolIod or d\rnlnlohOd without at I..., twOll!l' (20) clay.' pdor wtilfon nodeo '0 ......... _ not IncIUdIn9 '''Y _ of IllO In........ -IIY lot 1.,;1ura 10 glv. sUCh a nolic:o. caen insu,an.. pOllOI' .Iso _ InCI<lde on __ .,.,...,."g 11101 __age In Ie_ '" ~wwjor ... not be lmp8IIod In "'Y. ...y Jty 01\)' ao1, _ion or Clo141ol1 01 Grantor or ony .""" DOlSon. In ~ with oD poIld.. .....riog ...... In _ Lor.dO' holds or IS """'001 a ....ur\ly ",,.,..t G,OIIIor wIIi prov<lo ....- with 8""" IoIa /llIV- 01' _ andoroam''''s .. I.ondor may 'eq...... II 0_ aI.ny ....... 'oIIc .. 0bIa1n or malolOin any.""'...nco os rvquItOd .-, .... AQIw8lnOnl. L8ndat ll\Ily (bul...... 110' 110 oblJgoteollO) obl.olrlouoh Ins_ .. L..-"'_ _iato. including K n ao.oIloos.. "1ngIa "'_ """".....: _ wll_ only Lend.". ~(erest tn nw Collalel'aI. ApplIcodon 01""",_, P/'OCftd<. Gronlor .8IloJi plonoptly ""'ily ~onoor or an~ ,_ or damage .. 1he CoIllIloraL Londor """. moko III"'" 01 1"'"11,,,,,,,,, _ II> do eo willl" fi/IBan (1$) doys 0111Io oosuol1y. All pooo:ood. 01 otly insUlon.. on "'" CoIIoIetal. _g _owd IJlOCOOd6 6/09/2004 WED 14:18 FAX ~ 004/006 ~UlJ~ 03'29.2000 l..J'1MERCIAl SECURITY AGREEMEN I (Condl1lled) Pap 3 -, cI>oN be held l>y Len..,. .. .... of 1IlO COlla'.."'. If lo._r e"",","", II) 'opel' Of replae""""" ollila ~ 0' desuoy... C_,.~ l.9ndet shall. upon S8Itlld.ctccy proal 01 ~PGndI:tur8. psy or ~ GlintOJ' 1rom tho ptOC8I(br. tor Ihe lUCOr\IbIe COGt 01 refl8ir or 'lIstor~. Ifl.ond8f __ ... COhlIenl II) ~~ 01' ,~ 0' "'" CdI8...... LendOt _ ,otain a ._ .".,"'" gf tho prcceodo '" P'ly ell of 111. ....-. aIId ehall pay th. bolonea ., Oron1Ol'. Art'i.....- wl>id\ hav. 001 boon dl6ll_ wlllli1 six (8) monlI1o ollar \heir ,_1pI ood _ GranIo' h.. ""'_10..... ropalr 0( "'Ioro'an '" the CoIla_ el1aII be US...'" p_1I1e J_. lnmmtee Reserves. I..:8ndvt may reQulrG Granter to maintain wlUll.Dnder reserves for paymant of tnaurance.premlums. which fMQl'VGI; ahaI ba - blt monIhly poyrnonls frcm Gronlot DI 0 ..." _od l>y L8ndor 10... .uffiel...... prod".... ot loost _ (15) day. bot"", Ih8 pr_ due -. e""",fIb III Ieest......, '" In. InoWllllC8 promiums 10 1l& paid, If _ ('6) ...".Il&fore poytnollllo do4. 1ha .....". _ are inSulf1Ciant. Grantor shell \IPOf"I ~ PIIY IIIlY ~iency to l...erIder. The fGGGJV8 runds .... be held by l..ond8t as . genlll'al d8podc f,/')(f >holI COM...... 0 non-InlOtOG.'_rinO _ w_ lon<J... may .....11 blt ""ymonl '" 'he ins""""", praml.... ~ 10 bo pold l>y Grantor as hy becomGI due. Lender does not tlOId the l'08ilt1VQ 1uncts In tnJQ;t far GUUD. 8N1 L.8ndar " nee ,he aQellt of GrantOt for pa~enI' 01 th. "'ulanc8 1'- roquIted., be poId blt Gr......,. Tho ,..ponoibfily forlho.._ 01 protniums ..... ,"""'.. Grantor. .... "'poosI>ilily, InNnnce IltJoonI. GnonlOl'. upon r_ 01 L....... ....U I_to Landor ruports on """OlCIIIlng polley of insuro""" &hawing cuch inIannoroan o. Londe, may _ reqll.'" Incll.dlog the following: C.).... """'" '" ... O>suro<: (bllb. tls"" "'.'od; (el.N amount '" 1he polley: (d) 1110 D<OPOrt'i ,_ (eJ "'" Ihon "''',,'''' v",.. on ... _I>is 01 which Insu'""". h4s boon oIllalnod ood tho ""',..,.,. '" doIonninIng ...., .1I1lO; and (~lI1o __lion <Ill'" .. ... poJ;oy. In _delillon. GrO""" sholl """" IOQllesl blt lAndor 1_ not mota -. Ihon onnueuYI ha" an ind8plindent apptalc6oaliGfaclOlY to l,snd4'r detlM'l'nlhe, .. app!\oGbtG, 11'\0 c.ah value or tepIacomerlC 00It of Ih& C*1eral GIlANTOx'S KlCiHT TO POSSES5lON. Unlll 4</leUll, a_r may ha.. __Ion 01 "'el8tlglbllO po,""",,' propertY and _I ... 01 oIllllo Couaceral anc.1 mey use n in at'ly hawfuJ manner fKrt incansist8nl: with !hI; A~ lOr Ihe ReIat8d Ooc~, provided that Orantor's rlgru 10 ~ion and bGneftcIaI UH llnaa not apply to any CoIlatlltsJ \Nl'lcllro po9SIess~ of tn. CoUaforaI by I....eftd.r iD .-oqt.Ued by law to pgftoct lende,'D .s.::urity InterGG4: In such 001ll"8rlll. If Landar id 8f1)' 1fme. has poesenign 01 anv Co&1lO1'aJ. wne1her t)ef'Oht Ot afl:.., en Evsnr of DofUt. leACIet. shall be; deamocIio have exercised reelQl1ab1e care in IrIe cusbly I1fld PfVS8MIDon at '1118 COUI..... it Lsr1d8t' 1all... smh -.ctJOn tot'that j:)Urpo&e as Glantlx BhaII f9QU8St 01 ali Lendot. In LGnder"s ~ discrvlion. shaIIlMttm ~te uncser the OIrCUlmtanC8Cil. but faM\trI1O I'>>Onot any f'8qt.lest by GrentOC' wll net oIl1self tM docwT\eJd' to be a faillM"G to U'81c1at roacorwW'- cata. LDl'1der shall 1101 b8 *JIlted to take any St.p:Il18C8Isary 10 pl'8&0fV8 any ~ In 1M COIfatot&Ieoail\St plior paMS, '* 10 prOtect. ptKer'Ve or rnrm~ t111Y SOCutlcy in10r0.t Ql'vtn 10 eocl.1fO Ihs lndebIedneaa. WENDlTURES BY LENDER. If not _r..... or pIIld whon d.... Lan<Io. /lIo~ (but sholl 001 be ....'V01llCl I(>J dIechOtge (Jf pay Iny _'" l'oQoUod to be _hGrged .r P8Id blt n_1or under lhiIl~. JneNd;ng >rilhoullomllo1ion _M "",... 11eno. .scu.It)I......... __. and oIher claims, at ""Y ..... ItVIe<l or _ on tho Coli....... LO<\dat .Iog moy (buIoholl not bo obligated .0) pi\' ... coals lot Insurlrlg. moInI6N1ing_ proseM>g Iho COIlalo..,. All sucll _lII1ur.. Incurna or paid by Uondw fo, such purpoo.. w~ lI'Ien -. -...., .. \he rale dlorgocl under tho Note from U:MiI d<<te incurred Of paJd by l.8nder to tho dale D' repaytnBnl by Grantor. All slJC;h BXp8I1HS shaM: bocomo . pert of 1he tnd8bIMJf\88' and. ., l.8nllofo ""'ion. wi! (a)'" pay.~ on _. (b) be a_ .. .". _nee .. tho _ .od bo -",""N __ and ... poyaIII. wtlI1 any lnOtlUlmool ""YIIIlI>V$ .. becOma d... during Illl/l8f (I) Ihe leon of any appflCllbl.-"'s_ poley 01' (ill IIle _Ii", ""'" '" ... NOIa,<< (c) b. """'"" '0' ballOOn peymBn' wnichwlU b.~... alld llIIyeblo 0'''' _. malUl\l)l. TllIG Ag""""'" 11I8<> wIII_ IlIymon. ol_ """'""", SUch tighlliihaU be '" llddfUon to aJI othor rigtwG and ton'\edios 10, Whfct1 L9f1d8r",.y be ontiIhtd upon Ihe acelM'rQn(;. c. en Event of 0ef81Jft. EVENTS Of DEfAULT. E<Ich 01 "'" _g..... cons..... an ev.... of Oellwll undor1his Agreement Dd.xflt oa l~nes:s.F8I1lJ1. of GirBntOr 10 ~ any psymenl when due on u..lncIobtedJwJss. QUaer Oe'iUlts. F.~ure or GrimlollO camp/y wnt\ or ItJ pIIf10rm at'IY OlttDr wm. ObIJOa,ttan, Covenant or oondiIIDi1 cantairwd ... this Agteement Dr In any of ttle AeIa1ed DocI.nT8l'1Qj Of tn any otner 8gr.4ft1Unt ~ Lencfer and Grantot. Otf4nak In F~r Or Third hnJa. Should BorrowQf' or any Gtantor dlfauh undsr IlVt ~, ox1snsk:ln 01 CIlIIC#l. security agrHt'hWJt. plJfChUe or ..... ._~ or .ny - _ '" *'- 01 any other ct_ or ....... !hel ""'Y """.n.IIy llff8CI _ 01 Bottowor's _ or 80n0wef"a or an)' Granlol"'s ability to repay U~ Los,n. or petfofm lhoit rvepecUVe oMgatlan:$ under this ~ or any Of Ulu Related Doct.n\antl. FaIR SliltfMraa. Any Yf...-rant)'. rfIpr8t.liUlI4tton 01 mtamant llUIde or J~1ld to t.ef\cler by ot on buhtH of Grantor \Wldat ll1fa Agreement, "0 Not& or the "tII4Uld OOC\lmElnts is fal_u or misleading in Iny mal<<.aI ,,,t*=t, .ither now 0' _ tho time made Of fum\l.hed. D.rOK1lve ColI.....aI.,...... This AgtoGmenl Of .ny .. Iho _led 000",,_ COOS/lS .. be In fUl IotCtI and ell... flllCltJ<flng '11101... of ....y ~ttf'I{ dOCuments. 10 0f99M . vabd and pelfecl8d 8eC\Itlty intenIst or Kon) III WlY time and (or any reason. IbJolvonq. Tho d1....1llIOn Of 101minelion of GrenlOt'S ...Ionco .. . goIno buoin.... the lnooNency of G_Icr. IIlO eppo;l1Imonl ... '"""lvat Igr any pari of Cirantor's prooeny~ any a..~nt mr IhD tKIneftt 01 Ctldibs. al'))' \yp6 of gJ"OditW woncolA" Of 11& ~ ot any ..._Idlug \IndoI' tKPf bankruprcy Dr' lnsolv..-q taws by or 19a1nt.a GranItlr. c_ 0< Forfd1v.. Procecdlna5. Ccmrnoncemenl 01 _"'. 01' Iolftllhlt. Pft)C84ldIngs, -... l>y judlolaJ __.. lolIo/1oIp. _lOh or """ other _. l>y OIlY ._ 01 G"","" or by any g.."",m8l"01 _ ........ the Coi....... or.... _ _.. lIOCUl1ng tho ,-......... Thls IncIUdoo e gomla_.. any Of O.onlo(o depcs_ 0_ wIlh 1.onder. How<nIo'. ItlIs I!vAI\f gf OeI.UII..... not ~ 1f 'Ihet& " II good fakrl dilpute by Grantor at: to U1e W1idity Of nlMone.bIenMs of 11& claim which i. tNl bas'" of tt'tO oredb or fotI'.IMQ procwdlng n if Gr.antor gi'leB L.endst" wnn.n nouc. of U1e creditol or forfeiture pt'OC8GdIng and dGposim with L.andor moNe8 or a aurety boncI 101' tho omcfltor or tor1M:ur. pro;eeding, in .an amount dBtermlned by lender, in its sor. dJcef'G1ion. as bH'Ig BtI Bdtaqu8hj reseNe 01 tKmd for th6 ~... Evt'nu Affer;dn&, vlQl'M&or. Any of tho precedlng event& 0CCtn with ,..pect 10 any CluarBl'b' of any at Ihe lnd~ or .sud1 Guar.tIIcW dIU or 04C0mss: incornpetAnl. Lerldet. At ita optiol11 mav. but shall flot bt reql.lir'.... tal permh the Gw.ranlDr'l _tale to 8SSUInB I.JI\COl1C'JIIl U'lo oblllJlllon$ .l'i.qlng d1d'.., 1Nt guarwlty in. fTWWlQl' Htktfsdory 10 Lundet, MCf. in doiftg ao. Cure 1\0 EvtIOt of DClfaIolh. ~ CIt.Jn&e'. A ma~ IlCSvers. d\ange 0CCUf3 in OrQnI'Ofa flf1ancial COftdftiat1. or Lender bdU8Ve4 111. ptospoct of paymMll or po""'""'_oIlII.'_....... is imp.''''ci . ' . ~. Lender, In good faiIIl, doetnc ...it insac".... .RIa/>t '" an. If ony lleIaufl, _ ""'" 0 Delo.., on I_nasa. 18 cur_ ond ~ G,...... """ not been given ~ pliof notlcO of . _~ oIlha - _Ion of 1IlIe AGnlOfIlBnI. _ may be curod (enll 110 II.... .1 DeIo... will ho.. occutnldl U 0,._, offer 1.endor _ wriltGn noIlco donmndlng OIl'. "! .ueII d....u1L' (el cur.. tile dollWft wIIhIn 1IlIr1y 1:!O) days: Of (ell. ill.... CUIlllequl.... ""'"' Ihon flirtY (30) ~ lmrnodiofoIy - scope wh:ch Lond<< _ In Londor'. ..... cl1sl:....... II> bo .ullIc'8/\I 10 CUl1l "'" _.... and __r conlIn... ond """"'""" ell n:u:anabl'e end ncJC.ttSAIY cktpe atM'IDion11O produca complIanCe 8S SOOtIM t8llSOn8bilr praCtIcal. RIOIlTS AND ReMEDIES ON OEfAULT. "on Evan! 01 Do..... 0CCUI3 under """ ""'''''''''''''' .. any limo ",.,_r, Lendor _ he"" all"'" .,_ 01 · laQUI"lKf perty under 1I'Kt PemsylVAnla lJnIfOtm Commetc.... Code. In addJclcn and wIIhold flmi'tatloh let1def mlY 9XlN'C!8e any OM cr mor. Qf 1hv foIIgwlng rights and reme<Jin: . 6/09/2004 WED 14:18 FAX ~ 005/006 - ---.- ----.. -.-.... lUI'-'ol.>J 003-29-2000 )MMERCIAL SECURITY AGUEMEi ,. (ContIl1IIl!d) Page '" _.,...... Indebtednea: Londilr ""'y d8Clllre thO _ _.Ir1C1""'''O any ."'P_' """"'ly """'" G.~ WOtJId lle _ to pay. _Illy aueandpayaeoo,__O. Au<mble (;_...1. LllIldor may t*lul.. G.onlOt 10 _, '" L.ondor oil Of ...,. _ d 111. eOI."'''' .nd .ny _ all oenll"",,- <<We _ - docu",""," ....lInQ "'... CoII_oI. Lender may ._ OranlOr 10 ...eml>le 111. C_ ond _ I av_ .. Lender aI. place .. bo doolgnalod by Lendor. Londo...... ol1?II n.vo lull _ to enIor upoo lht propony or Glr"""" 10 talCO 1108._ or end ","",ve Iho ~"'_ If !he CoIare<oI _0 ..,., gooda nol cavwed by IUS Agreoment at "'" ..... of 'opoo....ion. Or..- __ LBndor ....y lake ~uc:h omGl QOOdS, prOYldod lhat LeI1der makes reezsQflIlble effOR!t to I'Ilurtt Ih8m to GrAf\tOt' gHar ropCISSO$!kwt Selllhe UIlIacmL lAnd.. shill hllvo tuII_ ro .011. _. "-,.... 0' olMWiso....' "''''' "'" Collator.. '" ~ Ih..aalln its awn_ Of tl1a1 0/ Gton.... UlnG8l'may &011 lite CoIIo..rol .'lllll>llc ...cllcn 0( ..wale .aI.. UnIeS. "" C_.. tv_ '" ~Ina 8pOOdily In VII..... or '" "'e 1)1" CU&1O_ ..'" on. t<ICOgl'O!Gd """".1.. Londef wlIl alYo Grsnlor ....anabI. _ (II Cho Ilmo aIIot....eIl OIlY 1'..... ....01 _ __ iltandOd CIls_. 01 U18 CoIIa18r8I is II> ba moo:l8. T... ""l<k........ 01 _. nolle. .1WI1l8""" " ouch noIIce i. gIve/'l .. _. ,on (0) days. be/oflo ,no tkn8 0/ lho.... or.......1lIcn. All .......... rolallng 10 !he "'poollron 0/ U18 Co_ol. lr1r:Iudinu wllhouc ,_"'" .......,... of """'Ing. _g. 1nauring, ",Oll8t1ng fer ...Ie and 00IIing ... CeII.t..... _ beCO/Ilo . pIlrl oflbo _ ...",...a oy 1/11s Agnoemsnt ood.... ba poyob1ean d_ will1_ allh8 Nolo ro.. from..... of ~lIIO ",,1M _Id. Aopolnl R<<...... To ""'.otent.....- by applIc.b1. law. L_ shal nave ""''-wIno liahb and _....... ~ "'" _nonont <<. B receMw: (a) lMId8r ""')I MV6 . ~ivll( cappoingd .. a lTIS1tWf of right" (b) ~ recetvur may tKf an 8111PkJ.y8o.01 LM1dDr ar'Id may ..Ne _ bond..no (c) 011_ Of "" ...olVIlr_ ~i. or hot __ _ beconla...~ Oltnol-' oacur9d by tI1fs~ond "'.' be payablo on demand. wiIh inIet""l at th.a Note fa,. from date of .:pet)dlILlnt unlfl ropqid. CaIIect a.m...... "ppl. Ac:COUIIlS. lMdor. cftlhw ilSorr 0( lIvough . ...81\1". II1Ol/ """oct "'" ~. "",... _. and ......... /rom 1tHl CoUateraI. Lent181 may at any tin. in II discnuion It6ntIsr any COllateral inlO Its own ".rne or Nt or ita nomln.. _ rec:4IVe .,o~. rtn:tt. inc:orne. and fG'VVPU8S 1herOf1"Onl .11I:i tdd fh$ SfIITWt u.s8CUtlly lot tbv Inl:let:IIedness or ~ it to ~ or 111& IndoblQ~~ In stJCh ...., Of prohot__ lISlon<I8r"""" _... ''''''''.,...... ~ra1 conololO 01 accounts. g&noldl ~. inour8l1CQ poIlcios. -. """1l8I _. cttos.. In octlOn. ... 01"",., pscpany. LorldOr moy _, _I. ....ipt ..... ..IlI.. <_mise. "*"L .... tor. Icr_ or rOt,II~" an the COlataral ... L.endat mRY dCiIfetmfM. whetter or ~ IndGbt8dl ~s or CDIhlt...l1I ta thctn due. For the6e pun:alN. l.eoder may. on "'I1oU oI.nd .. tho nome 0/ G'IlnD'. _. "- and dlGpooo ., ...., oddr..- Ia GranIC<; chII_ ony "'""- Ia _~ /lIOIIlU1II .........,/l: Sf. to w oent lIInd el\C1o(eo noIes. cnGCk.s. drafts. money Ord8nli, ~19 01 two, tnc:~$ af\d itemt pcttaInlo;lO p&ym9l11. 1hIpmInt. or Silorago of M'l)' CoftQtorAl. To ~crltat. ooIloction. ltnder may noUfy account d8b1DrC And DtlfigcHS on any COIII'-a! to mekB pD)'MOJ'l" ~ 10 l.orl<W. 01<..... Deflclor1Cy. U LQndor "'-'OS 10 0011 0", 01 01 of U\. C_oI. I.ondot mar obtoln . i<J</gmenf agalnat ar"".... lOr 11I1)I cloIICIO<lcy rematnb10 on lh& Indebtadnoa:a due 10 l.ena4r afrer appUcetion of .u arrlOUnC8 rote.lved from ~e exercise of Ule tigtn, pnMd8d in Ihis AgroentGnt Gtaruot 5hal blllabht tor. d4ilrlClsnoy even If hi .ranaacaan d~ in this sUbs~ is . sa-. of accounb or chattGt pBPIt. au...- R/;hIS and R....dIeS. l.ondor.hoII nave oR tho rfgIu ..... __ C/ << aecu'" _ undor 'h. pmvIaf..,. of ",. UnJIorm CommoreIII C_. as may bo carnended ftom time to lfme. fn ad'tiljgn, Lander snatI MIlO and my e.cardGe any or.tlt oItI.r rights $nd temCdios it ITlIY haVe ayabbl'e "" low. in squJty. Oto1t\Olwi$.. Cumulod.. flemo4les. All cr ....-. 'iglIlS """ __, whoIhar .._ by this ~ er 1M Fl8l_ COCtl...... or by any _ WIilino. shol be """'........ .1Id may b4> ."""'101<1 S""""""y or _1Iy. EJoOticn by J.ondoT Ie pt4$1lO ony """"""' sholl not ........ ""rou. cr ony _ ,_. ..... on ._ to "",k. _ Of to..... _ Ie porter'" on cbIIg._ 01 Gl'IlIllor \lflGGr tl>.s AQt_. allOt a__. 'ollunl \Q porIo,",. shal ... .<<oct Lo....... r!ghl1O __ . doI.UIl 0IId 10 ."raiSe its .._. MISCEUANEOUS PROVISIONS. Tho IOIIorNlng ""...."""""" pooybians or. . PBII of tIllS All'-' _.... Thio Agrvomont. ._ "'11I\ ony R8latod Oocumoroo. _IWI.. lh8........ ul'Cl8ni..-,g ..... aot- 01 tho ",,~ielI .. '" ,n. moltOrs .o/lOm In IhIa AgI_ NO ......lIon of or ''''''''''''n1 .. II1is Agreemon. shd bo offa<;ti.. ....... glvan In writing lU1II slgnad by tho po". Of _ .aUglll," boa chIItgod or lloUIld l>Y 1110 ..",.1IOn 0'_1. APlIBcale Low. This AQr88tl18nl ".. boon dalivor".j Ia Londer Ond.coepIod btI Lon</OI' In ".. C"",""",wo_ at Ma..ad'1u...... . "'ore is a _.. Gt...... ogr.... IIJlOn LlInder'. roquullo ._10 Ihe ",rl_ 0I1l18 couns 01 ... eo_VI 01 "",.""",,-. ....- and G_ _eby walV. .,. .lgI\' '" OIlY j<Jry trial In onyactiOn, ~ or COUI1lenlIaIm brought by _or Lond<or or G,anlOt _Iho olhOf. . ThIs ~....n .. __ by.nd cone""",, In accoOl..- with 1no ,..... or 1/10 CclInIIIOrI_ at _~. -.... F...: E>It>cnse<. _ _ to poy upon dOmOnd 011 01 LoII<Ior'. cess and ........... i""'uding __. _ ond LM\dGI" IOQaI ....."..,.. ilcurrod In cannoclian wlIh UlO _I at "'" "-""",,. I.eI\dor may ... GGmOOOO 01.. 10 halp _co Ihia ~ llt'ld 0_ IiI1aIl poy 1/10 cosio and ""_ o,.\IClI.nIon:GIlIOnL Cools and ......... -... Londol~o aI1brneya' ,_ """ IogIlI _ - or not 1110<0 fa a '.-uI<, _a IttorItOyS' 10.. W Iolllloxponseo lor ~ orocoGdlngs 1_ including _ '" nlo<liIy or VOCOl8I111)1'_ alilY or ~). .ppeaIs. snd OIl)' __ _._ eon_ """icM. _ .lso....1 pay all coun ~ 811<l Such Odell"""'" _ .. may be dirOCl"" by tho ooun. CopUon Hwiop. CapWn heoGIngo In Ihla ~ ar.'or _once _ onI. and a,. nol to lle _ to ..tlllprGl or a_ "'" provlolo.. '" ,,,,.1\grHmont. MuId~ hnIesi C.....,... A'oII10nt)'. All abf"'.flcns '" Gr...... UndGt this AG'_ .....U be jalnl and .....,... .nd all ,.r..roncoo 10 Gtan"" .noo moon ooch .nd OVal)' Gronlor. '111" _... !hat each of .,. porsan& &Igning '*- .. "'pllIllIllI. 'or ill ollIIQa_ ..Ihia AgrNmont. I'lodces. All notico. _..... .. bo giuan und.r "~lia Ag.-nanl..... b4> Iivon" ..,1tIng. mat bo ..." by _ l- _a rOOl"'od by laW). _.aI18II be OlIlCb"a """" acruoll. _..od or whon dopooitod..iIh. "".....,'>' rocognjzod 0It8ItIillhI- Of ~ in Iho Unllod &_ ...... .....closs, _ "'_ __10 111. _10 whom tho _Is 10 be aivon at tho __ .hown __0, NrJ PA/1!I _. cno. ib _a for noo_ ..- lhIo Aor-T18nl by QMng __ _ le1he Olhor _, lIP<<iIylng 1l>8l1he ll\lfIlOSO '" tho ""'''" .. 10 -_ I/ttl POnYa tldclr.... TO !he."'" pormilted by Ill~ law. ij _e is ""'r. ..." OlIo Gran,.,. t>Olillo 10 ony Br.nlor IIoiII "".S1lnno _.. all G.oroo... "'" nolic. iOUtpoo... GranlOr wi" ~eop Landor infonn..... 811_ .. Gt..-.. OIlrronladdletlllCas). Pow.rof ......,.".,.. GIlII1!Il' h816Ily opPolnCs L.ondo<.. ila truolllld ,......... ._ofn-Ioct, in'...-bIy. "'''' 1UIl_ 01 oi.tloIiIlIlion 10 do'" f_~ (.) III dell18lld, _. r_. .oc.op' lOr. allO and ""'over oJl..... Of manor or...., p"","", which may '- or ha__ due, AWing or pey..... "am tno CoIIaI",o'; (b) II> """"ute. .ign ona _ any and .U ...1..... inotrumonlS, rocoIpb, ._. elf'" or ~ Iso.... In lllIyrllllf1Ilcr "'" CcII......~ (e) II> .oftl. Of ~ GAy end all c...... arif<ng under tho ~... and. In .... pI_ """ 0I00Cl 01 G.....".1O Ol!!lCtlIo ond daI!\1or its roI_ ond.- "" 1110 ClaIm: _ (<I)" fiI. ony "'0101 or cia""" or lolo~a """... er Ina_ "'...a part in any ptor.~l(I5. tlfthBr In III QwrJ name ot in tho name or GratROt, (If tlIh8lW&Ct. which i1 rhe dIaotaaon of Lunder may S8Qm 10 be n",,"",>, er -'toblo. Tills POW.. ia given as I-.fly tor ...Indo-.... .nd ... .""""'ll' hOMIly _ed ia lU1IIshalI be kr___ and ohoJl romsln Ir1 Mf tore. 'nd ."""'..... ....,..,.,ad by l.8ndor. s.v.......... I'....." of _on! iurfadlClJcn fItl<Il OIl)' p_ oIlh1a 4g"""nonI '" be Invotid .; ........or_ .. 10 ony lllIrs." 01 6/09/2004 WED 14:18 FAX ~ 006/006 - ----- -~_...... _._.,-~ l.t{,Ju....L. , 03,29-2000 , '.DMMERCIAL SECURITY AGREEMEi...." . ' (ContInued) Pages ct""""",..,...."" 'fInciM,g..... not ~ Ihal..ovi&lon hvaJOl or 1I1GIllc,_" 10 ony _ _ or CIfC_. 11_._ such olt8ndInQ ptoYlsIon .haIIl>8 _ 10 be _Bd \0 bo wIII1in In8lhn11s or _ily .. voIIGny; _.r. U... oI1on<Iag """"""'" _bO.O....,-.... ~'h8lIl>8_""aJI_ptCWIClo/IsoI1hlsAg-'-lnan_.-- __Ydd.",,~ Socc""or In...-. '11>0 lunrnl 01 this AgnIo.,_t sIloll bo tJindk1ll ll(lOI1 _. _ _ ....on_ ""'... __ ;ep._lBlMIO. SIICO".~. ."" ....gos, """ ol>al be __ by londo, ond 1I$,6UOO8IS0I, ond usIgn5. W."". l.onder snBil not Il6 _ 10 hove waived ony rlghlo ...- Ihlo _I unI_ 'udl _"or Is gMIft In """"'v ..., BI;nOd by l.onder. 1\10 d8iay or _.;on on... ..... 0/ '-"'>dot- In ..CICIaIng _ rl~l_ """"'Ie os a waiver 01 sool1/t',.4ll nr ""l' ""'"' rlghl. A __ by Londer of . provIolon 01 tIlis Agreemon1 ohQII nOl .rllJUCllOo or cons_ . w_ 01 Londera tiohI_ 10 ........., ..uta _ wllll tla\ PtOY1Ston or 8ny otner ptO'lIislon o11hil A\QrIi8ment, No prior W61Yer bV Lender. r.or Any course of aoaIlng bsCWton 1...end9r and Or.mOt. ehcIlI ...,..;_ . _ rrI ""I of L.anclot, ~_ or 01 ony 01 ar........ ......11on& os 10 ony Mur. nn..._. 1NhoI1ev.r'" __ of Lender IS roqolracl undet lHs Ag_~ ... granting 01 'uoh ........" by ~_, In BI1lI _ .I18H nor oonatiWlo .Cl<lI8uIihg .-anl'" _,.", msrarcM -.g such consent I. roqWed and In aD co"' euch" c;ooaont may be QIBnt*' Of wtrhneId in sne coJe di8crodorl of l.nder. GRJ\NTOR ACKNOW\.EllGfS HAVING RUI) ALL THE PROVISIONS Of TIllS COMHEl\ClAt SecuRITY AGll.EEMENT, AND GIUlNTOR "GWS TO ITS T~MS. THIS AGREEMENT IS bAnD MA2C11 29,2000. SIGNeD AND SlW.ED tY TIlE UNDEIlSIGNEO. (SfAL) ( Corporate S~l ) ~fNDg" AI>< faU 8...... FSB ~ ~ . Aol/!oIlIedOlll<., I..ASUl PItO..AIiOo u.C:...... &. T.M. ~.... if.28(C)eonc.nuu 2tlOO AU..g.... """'...IPA,oECOLANDIS.LN C3 oiAl PENNSYLVANIA DEPARTMENT OF STATE CORPORATION BUREAU UNIFORM COMMERCIAL CODE P.O. BOX 8721 HARRISBURG, PA 17105-8721 FIRST ESSEX BANK FSB 296 ESSEX ST LAWRENCE MA 01842 DEBTOR: LAlIDIS INC WOODCRAFT DR PO BOX 196 MOUNT HOLLY SPRINGS, PA 17065 SECURED PARTY: FIRST ESSEX BANK FSB 296 ESSEX ST LAWRENCE, MA 01842 EFFECTIVE DATE: APRIL 24, 2000 AT 10:53 AM FINANCING STATEMENT NUMBER: 31540015 FAi E'XHt~~~~m~';~XtlMEfb;:';.~:' 'OO'1n,. ". 1~" . ..;.. . .;,.,.. ,~...; ..,.." " ., "~ ,:':.. 1 1'~";' ,:y-. . ~~.... .'" - ..', ~- . " . .," ". ",\. 't._ .~." ::-.':' . .- '03.1'2'.1'00 U'E 15: &I IlEJTO&: ;,......:.. ....:::.. '-.... MAlUNG ADDRESS. __.PO...N............M 11065'," . ' r.:~_' " ...... ..... 29'. ZCIDO .....; ::".'.' '315,.0016 <.~~ .: ":'. .~'. '" . .,. ,;" '., ..~- : ~::~. . " . ',-.' ~:~~4S17J ,,~r~:~.'..i.<\,' ~;.;L'...:,L '."!,. .:.' 111__ ..to__c:aMN& .t01CNSCAP...an a.io::l~ln"1DIIK IZSFf"'~C'.-- ' l't1Oll1UXX, J50.. MU. WJSlIIYIt'" ~ I ~, IS.....,.., 00lIII!f;,sEIIl\L .....,t9lM1OJ utmI-.. "'........... ---rlooor,... . L....... lor 'l....:~.. . " ' . "..."'........ t>..,..1""~ ........ ........... __.......,~~'.... r ~ . --:........ A' ~~. -, 'IloII~.........._.........,.._. ... ',', :' ;:'. . .- .' \ 'J" ',. ;' :,.' '" . "..; .,' . ~~i.i~~'~ .:' L:' ~L;.'.:' "..,.:' "";.:,;:::. ':~J::.I" ''''. .. '" '~/.'" < . ..... ". - '.f' -. "'. " .r .0:; .'..... . ;.~ , :". '.,' l' ," : ~: . .. ; .;.. ~:;;..;.:.. ';';': . ;':{;.: ~., ~~ ',' I': : ;~~:~ f.~ ", . .. . '~~{ , ," " ". ....:. 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'''t' !.o>" OJ/Z8/00 Tl'E 15:49 FAX 976 669 7905 PAtTIES ou'roA' _ AMI".",.".............."--,,....,........: LandII. InC. _oIIonve.POlloJrl98 loll Hally ~ PA t7Ollf> DEB1'0'...... AMM,....II."~.....~........ DEBroR..... It.l............If~)..~..,.,..; !IECl.JIl'IEO ..~ ftMle4;tl ~.... ... . ~ ......... .. ~..........-..: Am _ _.I'Sll. 296 Essex $trvet law........ AlA 01842 -.ssKiNEliISJ OF SECIWO "ARTY ......c.) fl. '*'- 1lr.f.lll' ~l Afld ......-..............~; lP&CJAL 'l'W'PESOF ..ARTiES. (Chec:tt.~~ O '"'*....~......s.cUl8dParty"'"Im"l.......CI"ll.....ao('. -" o o n...,...,. ~ ~"SeaHMPM~,""" .~. n _.-, OMIlot~.~lJdIllY SECUW> PAiTY SlGNATUU/S) .. STAlWMEHT 1$ AlED WfTlo4ONlY THe SKUAEP PAA.1'Ys 1GNAl\JRE topeM:t.~.........~ (vNc~ ~1PllI "M), - o o ACOUIIAED AfTER... CMANGE OF MAUli. IDIONTllV Oft CtIAPOAATEa~ot..OIOtOt. ..,lIIftIcftan.lIlrfgtwlllClWd. WtHctt~_.NtUItIr""""I" ANOTHfMCOUHTY In ..~. o ........COl...l.ATERALWASW(MiOIOIflle~"". o 1IIIINn...DE8TCM'SMU)ENCEOAPlACEOIeusIN&:SS wA$IIIOYEO.....~. ........1IUIIIecI...~......."'AHOTWEA..I\IfiWSDICllO- o lIIlI'elI_COUATEfW.wASAIOWEOIO........,.....,... o .....,...oeeTOA'J~NClOlPlACfOF--"1NE84 WQICWED.,..,....... o WWdI.PAOCI!'!DdOl...~~InI*ltCll..... -"IDft.~................, ~(......... ................it~........~...1'I<< ......,.........OIJ..~linendng~J. stCuRI:D PARTY ....,""""); ~M1IJMIC..'..~....&ow.):' NDAlJ) fOlM. FOAM UCC-I (7-89) _ by tIl< S<<retoIy or lilt eo.....ow..!dl of "MSylvonl. FIRST ESSEX DANK L::Xf) h- 1ll0ZJ FIN""'_~ STATtMEHT lHFOAM COtI84!ACw.. COD5 FQAMlJCC.t N.H!lNO_~b'rllllnGoIIk-'J: DAlto -. FlUIoGOFFG -....- t ~CCO -d53(q lLU- -.., a ,...,,~ ,.... - , / "., -:; ,. " ;~'_I-,J. 1NtFINAJllClNGSTA~HTIt:~'orllllnt~IO..~~CcIM.-1~,\i\~.::,'{; 'J;~-\'!,4, .........,lh..CftKtl.......1lo1l): - -'" '-",. '., .. o Jec.....,OI...O"..._......." 00-0- o ....-....... 01 . .,...,- .......~ A&:lC)f11Oru,L SMEET'$(W.nrt ClP11ONALs.ECtM._NTJACATK:lJrttM-- ..~ COUATEAAL 7 . ~~8;'''''''f/lttJWlW* 2 See _ e_1O UCC FNIlCt1g_ _ Mon:Il29. 2000_ ,. [!] ~Ofl.,II~PtoductsolChet:QIt..........-o~ ID8ITIFY AEl.ATmR~ ESTAT(.1f ~.. The ~ II. 00....... tct-Ir...... ->>- .. 0 CROPSlJ'VWIIlgOf"IltOtQlV""Ron- 8 0 OOOlII~"'k;JMCeIM~"TUAEOI'- c_ 0 "lNEAALSO/I"'*"'~4"'IolfaNt,_.u....IKted~- CI. 0 ACCOuNTSAESU&.flNlIFfKJtoI1'WE6AlEOFM~"'l.SOI"'''~oI''''gllfl .......~OI~~- . , thefollOWtO_....; STRiEf ADCN!9S: 0I;5CfWBE "l~ BoQII ... rJje,*konet DDMdI O........P..,_. Cc..ftt.,. ~hJeMkWIIho o o..ue.OfI....tIo....~ '0 II DEBTOR SIGNATURE(S) o.bIoI~r , -." .. 11 "-TURN AECEu-T TO; FlI$t &su -. FSB 296 fssox S..... Lowron<<. 11,.. D J U2 . I 12 SfCURED PARTY COPY NOTE - ThIs JlOGO will net be ,._ by the ~,..... 01__ 03/28/00 Tl~ 15:49 FAX 978 889 7905 FIRST ESSEX &ANK EX' 'JT TO UCC-l fINANCING ST . "'EMENT ~024 ~ 19, 2000 DEBTOIt: L-.Inc. MAJUNG ADDRESS: Woo.lcr.ll<IhM - , 0 ... 196. MI. HoIJ SortnIs. PA 17065 COl.I.AlUA1IK5CllPl1ON: (I) 1979 GlOVE TMSJOO. SIN 45173 (1)1Cl\JIII' HODa 6190 All-TERIA/N ClAANE 190 TONS CAlMnY 1NCWDlNG, 197 FT 100M. I IS FT )., 6-AXLl CARlIEa, 7+ TON 11.00<, JSO La tAU W/SWIVEl. AND HOOIC. MERCEDES _ lA" AND DOWN, SEllW NUMIiR 6190IIOJ (1993);........... "" 01 rile"""'" Is ~_OI"__-' ._. . ~"'-'~""'R__.......""oIrIle"'''''''&.._of...,1dnd ........ .. .., 01.... ~ _ . _ .....-.cIr.... ID _ 01 rile ........ ('''-'' _ -"' ~_ .-, """ ICDlllllU ..-..)- TNI f\IundIoI s... ._d is '" be......, Ill........ _....... ...... tIa<o..lbt UCC-I f........ S......,..."" first &ru ...... fSl "'" tho ~ C'_._._ flrstF<<a_ fSl 8.. -..-........ ( (~? r-J , -' c----... --I -, r--' ". Oi ...t::J r-~ 0 C' 1'''';' ~ '---S ~ '" -, i:'. L). ....J U. '...> CJ [....: UJ , I c. ~ y:-- C' LAMM, RUBENSTONE, TOTARO & DAVID, LLC By: Sherry D. Lowe, Esquire Jennifer M. Davies, Esquire Attorney LD. No. 66096 and 80988 Four Greenwood Square, Suite 200 Bensalem, P A 19020 (215) 638-9330 (215) 638-2867 - Facsimile Attorneys For Plaintiff SOVEREIGN BANK, Successor-in-Interest to First Essex Bank, FSB One Wall Street Manchester, NH 03101 COURT OF COMMON PLEAS CUMBERLAND COUNTY, PA Plaintiff, vs. LANDIS, INC. 30 Woodcraft Drive Mount Holly Springs, P A 17065 and STEVEN CAPUANO 1229 Blossom Terrace Boiling Springs, P A 17007 NO. Iyt~ 5151 Defendants. PLAINTIFF'S MOTION FOR THE ISSUANCE OF A WRIT OF SEIZURE PURSUANT TO PA.R.C.P. 1075.1 Plaintiff, Sovereign Bank, Successor-in-Interest to First Essex Bank, FSB ("Sovereign") pursuant to Rule 1075.1 of the Pennsylvania Rules of Civil Procedure, by its attorneys, Larnm, Rubenstone, Totaro & David, LLC, moves this Honorable Court for the issuance of a Writ of Seizure and assigns the following reasons therefore: I. The Complaint in Replevin filed with the Prothonotary by Sovereign sets forth the facts upon which Sovereign's claim of and entitlement to possession of certain collateral given to secure certain loans ("Collateral") described therein is based. (A true and correct copy of such Complaint is attached hereto, made a part hereof, and marked Exhibit "A"). 294842-1 2. Sovereign believes, and therefore avers, that the Collateral is located at 30 Woodcraft Drive, Mount Holly Springs, PA 17065. 3. There exists probable validity to the claims of Sovereign as set forth in the copy of the verified Complaint attached hereto and as will be further established at the hearing thereon, and a Writ of Seizure should be issued pursuant to Pa. R.C.P. No. 1075.1 (e), upon hearing hereon. WHEREFORE, Sovereign Bank, Successor-in-Interest to First Essex Bank, FSB, moves this Honorable Court to schedule a hearing on Sovereign's Motion for Issuance of Writ of Seizure, and upon such hearing, to direct the Prothonotary to issue a Writ of Seizure and grant such other, and further relief as this Court may deem just and proper. Respectfully Submitted, LAMM, RUBENSTONE, TOTARO & DAVID, LLC ~ By: Dated: \b-7-<>"'t Sherry D. Lowe, Esquire Jennifer M. Davies, Esquire Attorneys for Plaintiff 294842-1 VERIFICATION I, Sherry D. Lowe, Esquire, Attorney for Plaintiff herein, verify that the statements made in the foregoing Motion are true and correct to the best of my knowledge, information and belief. I understand that false statements herein are subject to the penalties of 18 Pa. C.S.A. Section 4904 relating to unsworn falsification to authorities. LAMM, RUBENSTONE, TOTARO & DAVID, LLC By: ~~ Sherry D. Lowe, Esquire Attorneys for Plaintiff Dated: \0- 7-0,* 294842- ] LAMM, RUBENSTONE, TOTARO & DAVID, LLC By: Sherry D. Lowe, Esquire Jennifer M. Davies, Esquire Attorney LD. No. 66096 and 80988 Four Greenwood Square, Suite 200 Bensalem, P A 19020 (215) 638-9330 (215) 638-2867 - Facsimile Attorneys For Plaintiff SOVEREIGN BANK, Successor-in-Interest to First Essex Bank, FSB One Wall Street Manchester, NH 03101 COURT OF COMMON PLEAS CUMBERLAND COUNTY, PA Plaintiff, vs. NO. LANDIS, INC. 30 Woodcraft Drive Mount Holly Springs, P A 17065 and STEVEN CAPUANO 1229 Blossom Terrace Boiling Springs, P A 17007 Defendants. NOTICE TO DEFEND "You have been sued in Court. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this Complaint and Notice are served, by entering a written appearance personally or by attorney and filing in writing with the Court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so the case may proceed without you and a judgment may be entered against you by the Court without further notice for any money claimed in the Complaint of for any other claim or relief requested by the Plaintiff. You may lose money or property or other rights important to you." "YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW. THIS OFFICE CAN PROVIDE YOU WITH INFORMATION ABOUT HIRING A LAWYER. IF YOU CANNOT AFFORD TO HIRE A LAWYER, THIS OFFICE MAY BE ABLE TO PROVIDE YOU WITH INFORMATION ABOUT AGENCIES THAT MAY OFFER LEGAL SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE OR NO FEE." 294842-1 LAWYER REFERRAL SERVICE CUMBERLAND COUNTY COURTHOUSE 4TH FLOOR CARLISLE, PA 17013 (717) 240-6200 A VISO USTED HA SIDO DEMANDADO/A EN CORTE. Si usted desea defenderse de las demandas que se presentan mas adelante en las siguientes paginas, debe tomar accion dentro de los proximos veinte (20) dias despues de la notificacion de esta Demanda y A viso radicando personalmente 0 por medio de un abogado una comparecencia escrita y radicando en la Corte por escrito sus defensas de, y objecciones a, las demandas presentadas aqui en contra suya. Se Ie advierte de que si usted falla de tomar accion como se describe anterionnente, el caso puede proceder sin usted y un fallo por cualquier suma de dinero reclamada en la demanda 0 cualquier olra reclamacion 0 remedio solicitado por el demandante puede ser dictado en contra suya por la Corte sin mas aviso adicional. Usted puede perder dinero 0 propiedad u otros derechos importantes para usted. USTED DEBE LLEV AR ESTE DOCUMENTO A SU ABOGADO INMEDIA T AMENTE. SI USTED NO TIENE UN ABOGADO, LLAME 0 VA Y A A LA SIGUIENTE OFICINA. EST A OFICINA PUEDE PROVEERLE INFORMACION A CERCA DE COMO CONSEGUIR UN ABOGADO. SI USTED NO PUEDE PAGAR POR LOS SERVICIOS DE UN ABODAGO, ES POSIBLE QUE ESTA OFICINA LE PUEDA PRO VEER INFORMACION SOBRE AGENCIAS QUE OFREZCAN SERVICIOS LEGALES SIN CARGO 0 BAlO COSTO A PERSONAS QUE CUALIFICAN. LAWYER REFERRAL SERVICE CUMBERLAND COUNTY COURTHOUSE 4TH FLOOR CARLISLE, PA 17013 (717) 240-6200 294842-1 LAMM, RUBENSTONE, TOTARO & DAVID, LLC By: Sherry D. Lowe, Esquire Jennifer M. Davies, Esquire Attorney LD. No. 66096 and 80988 Four Greenwood Square, Suite 200 Bensa1em, P A 19020 (215) 638-9330 (215) 638-2867 - Facsimile Attorneys For Plaintiff SOVEREIGN BANK, Successor-in-Interest to First Essex Bank, FSB One Wall Street Manchester, NH 03101 COURT OF COMMON PLEAS CUMBERLAND COUNTY, PA Plaintiff, vs, NO. LANDIS, INC. 30 Woodcraft Drive Mount Holly Springs, P A 17065 and STEVEN CAPUANO 1229 Blossom Terrace Boiling Springs, PAl 7007 Defendants. COMPLAINT Plaintiff, Sovereign Bank, Successor-in-Interest to First Essex Bank, FSB ("Plaintiff'), by and through its attorneys, Lamm, Rubenstone, Totaro & David, LLC, brings this action against the above-named Defendants, Landis, Inc. and Steven Capuano (collectively referred to as "Defendants"). In support thereof, Plaintiff avers as follows: I. Plaintiff, Sovereign Bank, Successor-in-Interest to First Essex Bank, FSB ("Sovereign"), is a [mancial institution with a place of business located at One Wall Street, Manchester, NH 031010. 294842-1 2. Defendant, Landis, Inc. ("Landis"), upon information and belief, is a Pennsylvania Corporation with its last known principal place of business located at 30 Woodcraft Drive, Mount Holly Springs, Cumberland County, P A 17065. 3. Defendant, Steven Capuano ("Capuano"), upon information and belief, is an adult individual whose last known address to Sovereign is 1229 Blossom Terrace, Boiling Springs, Cumberland County, PA 17007. 4. On or about March 29, 2000, Landis made, executed and delivered to First Essex Bank, FSB ("First Essex") among other loan documents, a Promissory Note ("Note") and a Business Loan Agreement ("Loan Agreement") evidencing a certain loan in the principal amount of $685,000.00 from First Essex to Landis. A true and correct copy of the Note and Loan Agreement are attached hereto, made a part hereof, and marked as Exhibits "A" and "B." 5. The Note requires, inter alia, that Landis repay the loan in 119 regular monthly payments of principal and interest in the amount of $8,897.93, with an irregular last payment of $8,897.50. 6. The Note requires, inter alia, that interest will accrue at a rate of 9.450%, unless a default occurs wherein the interest rate will increase to 5% over the regular interest rate of 9.450% or 14.450% default rate. 7. In order to induce First Essex to enter into the Note, by even date, Landis executed and delivered to First Essex a Commercial Security Agreement ("Security Agreement") granting First Essex security interest in the following assets of Landis: (1) 1979 Grove TMS 300 Crane, Serial No. 45173; (2) 1993 Krupp Model 6190 All Terrain Crane, Serial No. 61901103; and (3) all accounts, general intangibles, etc, as more fully described in the Security Agreement 294842-( ("Collateral"). A true and correct copy of the Security Agreement is attached hereto, made a part hereof, and marked as Exhibit "D." 8. In order to secure the obligations of Landis evidenced by the Note, by even date, Capuano, as an individual guarantor, executed and delivered to First Essex a Commercial Guaranty ("Guaranty") wherein Capuano guaranteed and agreed to become the absolute and unconditional guarantor for all of the obligations of Landis due to First Essex. A true and correct copy of the Guaranty is attached hereto, made part hereof, and marked as Exhibit "C." 9. First Essex properly perfected its security interest in and to the Collateral by the filing of UCC-I Financing Statement with the County of Cumberland, Pennsylvania and the Secretary of the Commonwealth of Pennsylvania. A true and correct copy of said UCC-I Financing Statements is attached hereto, made a part hereof, and marked collectively as Exhibit HE." 10. Thereafter, Sovereign became the successor to First Essex by interest, thereby acquiring all of First Essex's right, title and interest in and to the Note, Loan Agreement, Guaranty and any and all other related loan documents ("Loan Documents"), including the right to institute legal proceedings to execute the rights and remedies of First Essex pursuant to the Loan Documents. II. Landis and Capuano breached the terms of the Loan Documents and became in default thereof by, inter alia, (a) failing to pay when and as due the outstanding amount of the Note; (b) failing to comply with the financial covenants and provisions set forth in the Note and Loan Agreement, and providing required financial reports, thereby causing Sovereign to declare and demand the entire amount due and owing under the Note as immediately due and payable. 294842-1 12. Despite repeated demands for payment and to cure the nonpayment financial covenants set forth in the Note and/or Loan Agreement, Defendants, Landis and Capuano, have failed and refused to pay all sums due and owing, or any portion hereof under the Loan Documents, and have failed to cure the nonpayment financial defaults. 13. Under the terms and conditions of the Loan Documents, Sovereign is entitled to continually accruing interest at the default loan rate, attorneys' fees, and costs until the satisfaction of the Note. 14. In accordance with the terms and conditions of the Loan Documents, Landis and Capuano are individually, jointly and severally obligated and liable to Sovereign in the amount of Five Hundred Eighty Thousand Eight Hundred Thirty-Nine Dollars and Eleven Cents ($580,839.11) and assess the following damages which are readily calculated by referenced to the Note and Loan Agreement: (a) Principal Balance Due (b) Interest (up to and including 10/8/04, plus $201.92 per diem at the default rate thereafter) (c) Late Charges (d) Attorney's Fees (e) Appraisal Fee Total COUNT I BREACH OF CONTRACT $503,054.44 $63,358.01 $4,426.66 $8,500.00 $1.500.00 $580,839.11 15. The allegations set forth in the preceding paragraphs of this Complaint are hereby incorporated by reference as though they were set forth in full herein. 16. Landis and Capuano are in default of the Loan Documents due to their failure, inter alia, to make the payments as required pursuant to Loan Documents. 294842-1 17. Due to Landis' and Capuano's default under the Loan Documents, Landis and Capuano are liable to Sovereign for the amount of $580,839.11, plus continuing interest at the default rate, late charges, attorneys' fees and other fees and costs as permitted under the Loan Documents. 18. Despite demands for payment, Landis and Capuano have failed and refused to pay all sums due and owing, or any portion thereof due pursuant to the Loan Documents. WHEREFORE, Plaintiff, Sovereign Bank, Successor-in-lnterest to First Essex Bank, FSB, demands judgment in its favor and against Defendants, Landis Service, Inc. and Steven Capuano, individually, jointly and severally, in the sum of $580,839.11, additional late charges, interest at a per diem of $201.92, attorneys' fees, expenses and costs for suit and for such other and further relief as this Honorable Court deems appropriate. COUNT II - REPLEVIN 19. The allegations set forth in the preceding paragraphs of this Complaint are hereby incorporated by reference as though they were set forth in full herein. 20. Pursuant to the terms and conditions of Security Agreement and the Uniform Commercial Code as enacted in Pennsylvania and, by virtue of the default of Landis and Capuano, Sovereign is entitled to immediate possession of the Collateral as set forth in the Security Agreement and as provided by 13 Pa. C.S.A. ~2A-525 and 2A-518-525, and/or 13 Pa. C.S.A. ~9-61O et seq. 294842-1 21. Landis and Capuano remalll III possession of the Collateral and Sovereign believes, and therefore avers, that the Collateral is located at 30 Woodcraft Drive, Mount Holly Springs, PA 17065. 22. The estimated value of the Collateral is not in excess of$581,000.00. 23. Although frequent demands have been made, Landis and Capuano have failed, refused, and neglected to deliver possession of the Collateral to Sovereign. WHEREFORE, Plaintiff, Sovereign Bank, Successor-in-Interest to First Essex Bank, FSB, demands that Judgment be entered against Defendants, Landis, Inc. and Steven Capuano, individually, jointly and severally, for possession of the Collateral; or in the alternative, for the sum of $580,839.11, plus continuing interest at a per diem of $201.92, late charges, attorneys' fees, costs of suit and such other and further relief as this Honorable Court shall deem just and proper. COUNT III- CONVERSION 24. The allegations set forth in the preceding paragraphs of this Complaint are hereby incorporated by reference as though they were set forth in full herein. 25. Landis and Capuano have interfered, without lawful justification, with Sovereign's property rights in the Collateral. 26. Landis and Capuano have demonstrated an intent to exercise dominion, or control over the Collateral, that is inconsistent with Sovereign's property rights, as established by the conditions set forth in the Security Agreements and the applicable provisions of the Uniform Commercial Code. 27. Alternatively, Landis and Capuano are unreasonably withholding possession from Sovereign as to the Collateral, and Sovereign has the right to immediate possession of same. 294842-1 28. As a proximate result of said conversion by Landis and Capuano, Sovereign has suffered damages in the amount of $580,839.11, the balance currently due and owing under the Loan Documents, and/or the fair market value of the Collateral at the time of the conversion. WHEREFORE, Plaintiff, Sovereign Bank, Successor-in-Interest to First Essex Bank, FSB, demands that Judgment be entered against Defendants, Landis, Inc. and Steven Capuano, individually, jointly and severally, for the value of the Collateral at the time of conversion; or in the alternative, for the sum of $580,839.11, plus continuing interest at a per diem of $201.92, late charges, attorneys' fees, costs of suit and such other and further relief as this Honorable Court shall deem just and proper. LAMM, RUBENSTONE, TOTARO & DAVID, LLC Date: \0-7-0t By: ~ Sherry D. Lowe, Esquire Jennifer M. Davies, Esquire Attorneys for Plaintiff 294842-1 VERIFICATION Leland Fastnacht, is an Authorized Officer, Sovereign Bank, being duly sworn according to law, deposes and says that he is a representative of the Plaintiff, and he is authorized to make this Verification on behalf of Plaintiff; that the facts set forth in the foregoing Complaint are true and correct to the best of his knowledge, information and belief; that the foregoing statements are made subject to the penalties of 18 Pa.C.S.A. ~4904 related to unsworn falsifications to authorities. SOVEREIGN BANK ~;le;:6 eland Fastnacht Authorized Officer Date: tJCrti.t!=- S; OJ u'-' '/ 294842-1 PROMISSORY NOTE , Borrower: l.Jndls, Inc. Woodc"ft Driv. . POBox 196 M~ HoUy Sllringl, PA 17065 lender: FilS' Essex bk, FiB 296 Essex Street uwr.nce. MA 01842 Principal Amount: $685,000.00 Interest IYte: 9.450% Date of Note: March 29, 2000 PROMISE TO PAY. Undis, Inc. ("Borrower") promises (0 p.y to First Essex B.nI<, FSB (.Lend....). or order, in I_I money of ,he United sw.. of Amerla, dt. prind"" .n\()un, of SIx Hundred Bahty Fiv. Tboos.nd & 00/100 Doll.... (S685,OOO,OQ), rog.dter widt interest at the ".. of9.45O% p<< MWI111 on the unpaid prindpaJ b~l,)O(e from March 29, 2000, until paid in full. PAYMENT. Borrow... wi. p.y dtis Io.1n on denund, or If no denwt<l1s .oo.,ln 119 Po1ym.nu qt' S8,897.93 '<1Ch ..ymen, md.. ilTopU Lis, ..ymcnt <5tInm<d at S8,897.50. 8<>m>wer's 8m p.ymentls due April 29. 2000, and .. ,u"'-en, ....yrn..u .... due on the ....,. my of """ month .fter...... Bonower's final p.Jymen' wi. be due 00 Ma<<:h 29, 2010, and "ill be for.. principal and all xcrued in....., no< yet paid. Payments Include prIndpaI md In....m. The annual _est rate for 1his Note is computed 00 a 3651360 basiS; !ha' is. by applying the ratio of the ......1 """_ rale over a year of 360 days. nUtipIied by the _ pnnc;paJ balanc4. muI\iplied by the actual number 0/ days the princip;sI _ is ClUIStandlng, Borrower will pay Lender at Lendef's address shown abov<l or at such other pIaCQ as Lender may designate in Wfiting. Unless _ ~ or required by applicable law. pa~ will be applied _ to any unpaid ooIeclloo costs and 8I"t/ late charges, then \0 any unpaid n_ aM any remaining amounI to prlnclpoI. PREPAYMENT PENALTY. Upon ~ of this Note. Lender is .ndtled to the foIk>winc ""..ymen! penalty: If this loan Is .......... durinc the tirst yo.... <'lb pr_"" penalty wtI be <harred- If this loan is pr.....id durlne ye.rs 2,3 or 4, . pr.....ym.n' pen>lty of 1% wi! be <harred- Except lor the foregoing. Borrower may pay aU or a potlion of the a"""",, owed earlier than I is due. Earty paymentS wiU not. unless agreed \0 by L...- In writing, relieve Borrower of Bormwer"s obligalloo to cootinue \0 make pa~ ..-. the payment _<Ae. Rather. they wit -.ce the principal balance due and may resUI in Borrower making fewer paymentS. LATE OiARGE. n a payment is 15 mys or more lot,. _ wit be d1argod 5.0Cl0% of tho r....t.rly scheduled ..,..,...~ DEFAULT. Borrower wilt be in deta~ if any of the toIowiog happens: (a) Borrower fails 10 make any paVment when due. (b) Borrower bleaks any promise Bom:Iwer has made to Lender, Of Borrower fats to comply with or 10 perform wfloo 00" any other term. Obligation, covenant, or condition comained in Itlis Note or any agreement related 10 thi$ Note, or in any other agreement or loan 8orrower has with Lender. (e) Borrower defaults undef any loan. extension of credit. s8ClM"ity agteement. purcI\aSe or sales agreement, or anv olhar agreement. in favor of any other creditor or person that may materially affect any of Borrower's propecty Of Borrower's ability to repay Ulis Note or pedoml 6orfower's obligations under 1his Note Of any' of the Related Documen1s. (d) Any representation or $ta1ement made or fumijshad to lender by Borrower or on Borrower's behalf is false C)( misleading in any material respect either now or at the time made Of fumished, (e) Borrower becomes insolvent, a receivef is appoioted for any part of Borrowefs property, Borrower makes an assignment tor the benefd of creditors. or any prOCOOdiog is convnenced ei1her by Borrower or against BoITower under any- ba~ or insolvency laws. (f) Ally cteditor tries to take any of 8ofrower"s property 00 or in which Lender has a lien or s6Ct.lfity interest This indudes a gamistwneot of any of Borrower's accounts with l..&nder. (g) Any guarantor dies or any of the other events descrtbed in Ihis defalAt section occurs wiIh f9$pecI. to any guarantor at this Note. (h) A material adverse dlange OOCUfS in Borrower"s fin8lncia4 coodition. Of' Lender befl9V&s the prospect of payment or performance ~ the Indebtedness is impaired. (i) leoder in good faith deems ltse4f insecure. tf env default. other than a defaull in payment, is curable and If Borrower has not been given a notice of 8 breach of !:he same pl'Olllsion of this Note within Ole preceding twelve (12) months, it may be cured (and no fM3nt of defautt wit have occurred) if 8orTower, after receiving mitten notice from l$nder demanding cure of sUCh default: (a) CUfe5 the default within thirty (30) days; or (b) if the cue'e requires more than thirty (30) days, imT1Gdiatoly ilitiates steps wtUCh lender deems" lender's sol9 cJiscr9tion to be sufflcieflt to cure Ule detaul and thereafter continues and compleles an reasonable and necessary steps suffICient to produce compliance as soon as reasonably practical. lENOEl'S RIGHTS. Upon default, lender may dectare the entire unpaid Pfincipal balance on ttlis. Note and an accrued unpaid interest immediateiy due. without notice, and then Borfower will pay that amount Upon default. including failure to pay upon final maturity, leodef. at its option, may also, If permitted U'1der applicabte law, increase the interest rate on this Note 5.000 percentage points. The nerest rate wilt not 8KCeed the maximum rate permittQd by appIicabfe law. lender may hire ()( pay someone else to help collect this Note if 8olYower doeS not pay. Borrower also will pay leoder that amount. This includes. subject to any limits under applicable law, Lendef's attorneys' fees and lender's legal expenses whether or not there is a Iawsuil. irdlding e_s' fees and legal expenses for bankruptcy proceedings (including efforts 10 modify or vacate any automatic Slay or ir'junctiool. appeals, and any anticipated post-iud{Jnetlt collection services. If not prohibited by applicable law, Borrower also win pay any court costs, in addition to all o1her sums prOYided by law. this Note Ius beM deUvered to lender 1nd xcepted by Lender in the. Commonwealth of Musachusetts. If there Is a bwsuil, Borrower agrees upon lender's request ro submit to the jurisdictlon of the couru of Essex County, tM Commonwealth of ~tu. Lender md Borrower hereby w~ve the richt to any Jury trial in <lIlY action, procetdinc, (l( countercbim brought by either l.ender or ~r ag.tinst the other. This Note ~ be governed by and conmued In accordance wlth the I~ of the Commonwealth of H~sxhusetl5:. RIGHT OF SETOfF. Borrower grmU to l~nder a contractuoll security interest in, and hereby migns, conveys, deliv~rs, pledges. and tn.nsfen to lender aU Borrower's fiche, tkJe and inter-en in and to. Borrower's accounts with Lender (whether checfc:ine. uvincs. or some other ~nt). lnduding without limiudon ~ xcounts held joindy with someone else and all accounrs Borrower mClV open in the rowre. exdudi:n& however aU IRA and Keogh ~counts. .md ~I trust ICcounts for which the &fMtt of a security intere'St woukt be prohibited by tAw. 80rr0~ ~t:horizes Lender, to the extent pennltted by appIicab~ law, to ch.uge or seroff all sums owing on this Note against my and aU sud1 accounts. WAIVERS AND GENERAL PROVISIONS. This Note is payable on demand. The inclusion of specific default provisions or rlgl1s of leoder sha. not preclude lender's right to declare payment 0( this NotE! on its demand. Lender may delay or forgo enforoing any of its rights Of remedies under this Note wiltiout losing th$m. Borrower and any o1her person who siglS. guarantees or endors.es this Note. to Ihe extent allowed by law, waive presentment. demand for payment, protest and notice of dishooac. Upon any ct\ange in the terms of this Note, and unless otherwise expressly staled in writing. no party who s9'S this Note, whether as maker, guarantor. accommodation maker or eodOrSer, shall be released fromliabitity. To the extent permitted by applicable law. all such parties agree that Lender may renew or extend (repeatedlvand tor any length 01 time) this loan. or release any party or guarantor or COllateral: or ~. fail to realize upon or parted lender's security interest In the collateral; and take any other action deemed necessary by Lender without the conseru: of (l( notice to anyone. A11 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. ...........4.0 (Continued) PIUOIl.TO SIGNING THIS n, BOllIlowu. REI\\) AND UNDERSTOOD ALL TltE PROVISIONS OF THIS NOTE. TltIS NOTE IS EXECUTED UNDER SEAL 80RR AGREES TO THE TERMS Of THE NOTE AND ACKNOWLEDGES RECEIPT Of A COMPLETED Copy OfTltE NOTE. /!4v>. ~ Of Assisunt S.CretMY ( Corporate Seal ) lASEAPRO. ne;: UA pg 'IT.M. 0tL VOf. a.i!tc)~ 2000 ... ftQhts~. [MA-mOlANOIS..lHC3.oYt.J Commonwealth of Pennsylvania ~~ fJl~ss -- ' ICIAl IN, SliAlTO. NOrAaY Then pe~~~ ~ . leven Capu~no. known to me or satisfactorily proven to be t e .' . 'I, . Ignature as his free act and deed for the purposes . above stated. .. - ~~d~ ,2000 ~~/JJ~ Notary Public JSU~lNJ<,~~ LUAN A(jRh.... -ENT ~ Borrower: Landis, Inc. Woodcraft Drive - POBox 196 MI. Holly Springs. PA 17065 Lender: FlfS' Essex Bank. FSB 296 Essex Street Lawrence. MA 0 I 842 nus BUSINESS LOAN AGREEMENTbet'wffu Lmdis. Inc. CBocrower")..oo Fitst Essex DOlAk. fS8 ("'l..tnd~") Is made and e.-;cc;utcd 00 the: followiug terms ~d coadic:ioos. 80mJwer has received prior commercial )oaus from Leader-or has .applied to L..endct for a coouncrci..l Joaa or )oaus and ofbcr lioaoci.al accommodatioos. Jucludios dtase which may be described oct aay ubiblt Of SCbtduk.tttchcd 10 this Agreemcat. All web Ioaas and fill4ocial.accommodations. IOg<:lhct with aN future Joa;Il$ aad fUWlCial a<<oIIUIIOdatioas from: Lc:oc:.kr (0 BorrOVla. a<< referred to id this Agreement iadividuaJIy as the "'Loan" and cuUecli"dy .as the "LoaIU." ~ uodcrsl.aads 'lad ilgtecS that:: (a) lD granting, .rmewia,. or ellttcndiDg aay Loa. Lcoder Is rcJyiag: upoo BGrtowa"s uprese.autions. w.uraoties. ,nd ~ts. as set fonh In this Agm:aaeor. (b) rhe graatiag. <<Aewia.g. or CXtCtJding of aoy 1...oao by l..eDder at aU rimes sbaU be.subject to Leodet's ~ judgment and discretion; .aad: (c) aU sudI LoaQ$ shan be .lad SbU renuta subject to lite foUowin, terms and cooditioos of lhis AgrocmcnL 'lERM. This Agn:lemea.t shilU be effective as of MiUth 29. 2000. ~d shall COfItiaue thereafter uotil aU Indebtedness of BOITOWet (0 Lender has beea performed iu fuD add the parties: temai.G* rltis Agreement i.. wril;og. DEf1NlT1ONS. 11Ie following words shaD bavt the: foIIowidg meaniDg$ w~ II.scd in this Agrcemeo(. Tc:rms QOt otheJwlsc: defined: in rIIis Ageetne&t shall have * mcaaiQgs auributed 1'0 sucb t:eIJbS in die Uniform Commercial Code. All references to dollar amotJdU shaJJ mean amounts ill lawful money of l:ht United Slates of Ameria. Agtttmenl The wont.. AgtttDtelllt" mudS tiUs Business Loan AgreelACllt 108cfbeT with aU exhibits <lAd schcda1es atuchcd 10 this Bl1siaess Loan Agreement from rime to time. if any. as amtnded from time to time. Bonower. n.e word "Borrower'" meaas Landis. lnc. The word "aOllOwer" also includes. as applicable. all subsidiaries and affiliates of Borrower as plO\oided below il1 the paragraph tiUed 'Subsidiaries .lied Affilim:s: CoIw'cnl. Th.e WOl'd "CoUaceral'" metQS aod (Ilcludei withold. limitltioo aU property and assets gr.mkd as ooUatcral security fur a. l.JJaa. wbcdlec JUt Or perrow property. wheIbe:t g.ranwt directlyoc induecd}'. whether grankd now or iu the futlhoe. aud wbetbet granted in the form of a ,ecurity intacst,. mortgage. deed of trust. usignmeo.t. pCedge. dlattd mOrtgage. chattel tnJst, (act<.H"i tien. eqlLlpm..:tt( U'Uu. coo.ditiau.t uk, trust recapt. b. charge. tieo. or title reten.tioo. c:ootraI:(. lease (I( mosignment ia.tc:nded as a w:urity t:kvice. 0( any oebcr security 0( lien interest WMuoev<<. wbetkr created by law, COQtnlcl. or otherwise. fiw:c( of Default. lhe w<<d$ ..e....ent of Default" mean. aad lQclude without lIlTlitatiop. any of thoe Events of Oeb.uk set fofth below ill the rectioo litlcd "EVENTS OF DEPAULT.- Gta.a.t<<. The word "Gcaaror" tmads. md. indqdd without limitation each entity gnnting a Security Interest ja any Coltalcra..l (Of the Jndcbtedocss. Guarantal'. 1be WOld "Glial3J1ror" meadS .wd iocJudes without limitatioo each and all of the gtl:3AQtOt"S, snrcrics, and .accommodation pa~ in cooncction with any bldebtedoen. < lDdebteddess. The word "lodebtedness" means and jocludes wflhoolllrrut2tloo aU Loans, together with allodlet" obligalioos. debt:.!; aad liabilities of Barrowtt to I...c:nder. or anyone or more ofthc01, as well as aU cJaims by l..eOOcr against: BOtrOwec. or ,nyone tv more of them; whether dOW 0( haeaft:er erisung. voJuatuy 01" iavoluntalY. due or not d1Jt, absolute or coo.tingcot. liquidated or unliquidated; wbelhet BorrQWef may be liable irJdividuaUy or joiody with others; Whether 80n'0wc:r Itdy be obligated as a g~. sur-ety. 0{ othecwise;. wheIhcT rcX'Ovct}' upoo such ltIdeb<<cdnes$ may be or heteaffer may become barred by ady StaMe of litnitatioos; and whetha- such Indebtedaess may be or ht:teafte.- may become oUtcrwiscuneo(Of"Ce<lbk Lender. The word "tender" means Fitst Essex Bant, FS8, its succe;:sors and assigns. Loan. 1M' word "Loaa" 01" "Loans" means .any and all commcn;ialloao$ aad (wanei.., accornmod.1tiQrls from Leader 10 Borrowcr-. including without limitation: thosc loans and tinallC;al accommoda.tions described bcrein., Noce. The WO(d "Nore" means BOfTOwer'S proatis$Of)' note' 0{ dotes, if any, evidcnciing Booowcr's Lo.all' obligations in fawr of Lendcr-. .u ~IJ.lIS any substitute. teplacemest Ill: refinancing note (]I notes. Pennitted Leas. The words "PCl1Uilted Liens" mean: (.1) 'iens and security interests secllriJJg fudebtcd~s owed by 8000wcr to Leoder; (b) liens (or taxes, ilsscssmeats, Of similaT chatges either oot yet due 0( bttiag co(ltcstcd iu good faith; (C) Jieas of QM(eriahneJ:l, mcch3nic.s. w.arehouscmen, oc ~rriers. or othet" like Jjens ariSidg jo the orditlary course of business .100 $eCUfing obligations wftich .are RQt yet detinqueot; (d) purcfiase money liens. or putcbase mooey security iotcrests upon Of io arty property acquired or held by Borrower in Ute ordioal}' courst of business 10 secure iadebtcdness oatstandjag 00 die date of thjs Agreement or permitted to bt iucumd uDder Ibe 1*agrapb of this: Agrccmclll titled ..lD.debtcd~ and Licos"; (e) liens and stcurity ioler'eS(S which. as of me d.ak: of this Agreement. bne beeo disclosed 10 and approved' by tlu: lender in. writing:. and (f) those liens and security iak:rcsts which in the aggregacc coostiture an immaterial and insignificant monetaty arnoudt. Related Doc.ulletl~. The words "Re&a.raf Oacumcnts" meaa. ~ad include without timlta.tioa aU promiss<<r Date!, credit agrumeau, loan agrecmeoLS. guaranties. security agreemeots aad aU other lttSUUfncnt:s, agrt'cmeots and doc~ts., whether now oa- hereafter existing. execu.ted in connection with the lndebf:edlless.. Security Agr;ecltlC1lt. The wQ(ds: "Security Agree.mettf' mean;aad iuctude without limitllfoo aoy agreements. promises, CQvcnaolS. amngcrtlClu.s. understlndillgs 01' other ~eem:n{s. wttettla created by taw, .cootracl, Qf' otherwise. evidencing. governing, representing. or creating a Security InterCSf. Security Interest. The WOt"d.s "Security 1otere5t" mean and include wi.bout limitation any type of cotL1terai security. whefbcr in the form of a lial. charge. assignment. pledgc. ch.attel mortgage. cluneJ trust, cql.ljpmeot trust. coodtuOIIaJ sale, truSf receipt, lien, lease: 01' cansigllmclu inlCllded as a security devic.e. or any OlhCf.s<<1Uity Of" Jien iota-est whatsoever. 3-29-2000 Page 2 BUSINESS LOAN AGREEMENT (Continued) CONDl11ONS PRBCEDENT TO BArn ADVANCE. unda-'s obligatioe to make the in.iriaJ Loa.u Ad...allccs .1Qd eaCh subsequent Lo.aa Adnoce ullder lhe Agreement shari be ,object to Itle fulfillment 10 Lrnder'l utinwiOft of all of 1he COOdition5 set fOftb i81,"S Agreement aod.in the Related Documents_ Loan ~ts, Borrower shalt provide to Leader in form s:arisfacrory to Lender Ihc iQUowiog docwneats fur the Loan: (a) the Note. (b) Security Agreemt'llt$ graotiog to Leader security infe'cests in the Collateral. (c) Finaneing Statements perfecting Lendds S.ew;:urity Interests; -(d) evidence of inSl.Ifa.llCt' as required bdow": and Cr) uy otbu doclJl'QCdts required under Ibis Agreement. Borrowd's AlIChoriutioo. 80cr0wershaU b.1,vc provided iu. (Qrm, aad wbstacl(:c s.ltisfactacy to Lmdec property cctti.Caed resoIutiorts. duly aodlorizing (he:: cx<<utioo. and delivery of this Agreemem. the Nc&e and the Related. Docuttaefta. and such ol.t'oct .autboriutiOO$. documents and instniroentS as tendcf may ftqW.fC. hYJneQI ofFccs md lixpernes. Borrowersha:lI bave paid co lade aU fefi, ch3lges. aid 0Ihef expemes which arc thefl due and payable as specif'tcd in this Agreemeal or Il'Iy ReJ;tred Document. R~~ and. W.mandes. 1ltt tepresenuuOI1$ and wam.Ques sel forth i.'his Agr.eemeuL..II the Related OocumestS~ md in any document or ccrtificare delivered to l...c:a<1ec under mis ~(U'e true and com:ct.. No Event of Default. 1bere shall not exist at the; time of allY.sdvancc a CODditiOll which would COUStitll1C an Svau of Default under this Agrttment. REPRESENTA110NS AND W ARRANTmS. BoIrower tql'tndU$ aad warra.D1$ to Leader. as of the date of thili A~t. as of the dak of each wsblJl'SWlmt of Loan prooeeds..u of the date of any reac:wa.f. exlenSioo or modifICation of any Loan. .lad at all times atIy IodebfNdCSS exists: OtgaAiDlioa. 8.onnwer is a corporat1on which is. duly organized. validly existing. and in good sundiag ulld<< the taws of the Com.moctwealtb of ~iylvao1a and is v.Uid1y ai$t:inC and in good sraac1iRg in aU staces in whic:b BOffOwt:(" is doing basines:J_ Bonowerhas the fuU power and aulhority to own its propesbes and to lJaasact (be busiDeues i. wfridt il is prescrtdy CIlIgl.ged or presently propo:$e$ 10 engage. BOIll>WeT also is duly qualifl((j as a foreign corporatiorl and is io good staodiag in all SWes in which Ihc: f.a.i'lIfe 10 so qualify woald have a INlcrial ad'venc effect aa its busiIlesit$ Of fillaacW coadition. AutborizuioQ. Tht ex.ecu<<oo.. delivery. and perfoon.aoce o( Utis Agro:tnCllt and au. Related Documents by 801T(lwel". to the utcot ta be eu:cu~. deti.~a'ed or petfonncd by Booow~. have been duly authorized by all necessary actioo by Borrower; do 00( require tbe conxnt or approval of tily other pctSoo. re,ulatcty authority 01" governmental body; aod do not conflicl with, resull ill' a vioJatioo of. Of ClltlMule: a default UDder fa) aDY provisiOlll of its artlda: of incorpontion or orgaaUatiOD. or bybws:. at 20Y agr-et:mctlt 0( other instrument modiuS upon Borrower or (b) any law. governmental regulatiOD. cowt deatt, or-order applicable to Borm~r. AuancU.l tClfocmatiou. &en tiuancial sta(emmt of 8()(T()\t'U sappJi.ed to l...et:lder trufy 8zJd complady disclosed Botro\1i'ef'.s fiaaacial condition as oflhc date 0/" the stakmen.~ and ~ has. bc:cn no material a,dv<ne change ill. BMQw<<s finact.Cial cortdition subsequent to Ute date of the most: recca.( fiq4ncia1 statemenl sopplied tn UDder. Botrower hJt!l 00 materia) conLingcot obligations except as disclosed io sucll fiaaocial $U.temt'Ou. LegaJ .effect. Thi$ Agn:emeot COd$tftutes, 2Rd .toy jn.strumetU Of agteelI1eor required ~under to be giVCII by 8orro~ when delivered will ,"Onsl/tote, legal, \"alid and binditlg obllr;lioos of BOlllo-wet cO(O(Ceable o1gain.s. Borrower in accordance wilh their respective tcnn:s-. f'ropenies. S-xttpt as contemplatai by this Agreement or is prevIously disclooed in Boaowds financial su,temeob Of 1.0 writing In le~ ;ad as accepted by Lender. aod except fO( property tax liens for LUes not presently due and payable. Botrowcr OWlJS and has good title to all of the Fopetbc:s- AU of Borrowers propcnies au tided io Borrower's legal name, and Borrower bas 00( used, 0( filed a lioanciog statement under. any other daQll: fot" at least the 1.1$1 flve (5) year.>. litiptioa aod ClaiQl$_ No Jilig.Uioo. c1a.im. illvestigariOll., o1dminislnuive proc::eedit:lg Of similar action (i.ll(;Jl.ldrng those for unpaid (;u:es) .agaiosl BorroW<:( is pending (If' ~ed. add no odlet evco.( has: occurred which may materiallyadvecsely affect &mJwds. financial cooditiaa at' properties. otfter thall Jitiptioo. claims. or ocher evCGU. if auy. tbal have b<<n disclosed to and ~kBawltdSed by Lc:1\del" in writiag. Tam. To tbe best of BorroutU's kllOwkdge. aU lax rt(Um$ and reports. of Borrowu rhac an: or were; faJuitcd to be filed. bave beeo tiled. and all faxes. asSdSOlCdts ud of.ba goVftfllUClltU cba.-ges have been paid in full. CACCpt tftosc presen.Uy beiag or 10 be conle:sted by Borrower in good laid! in the ontio.ar}l COU:r$c of busilJcss md. foe whicb adequi(e reserv<::i have b<<n provided. Lien Priority. Unkss- Ofherwise previously disclosed IQ LendQ'io writing, Borrower has not eo~ed into Of' granted any Security Agret:mtoU. or permitted the filing or Mtachment of allY Security In~($ 00 OT affecting aoy of the CoUatel"al difCl:tly or indirectly securing repaymeac of Borrower's l..oa4 and Note:. th.1t would be prioI or dlat may in any way be superior to l.cnda's Securi1Y Interests and righls io aod 10 sucb CoUalCl"al. Hindil13 Effect.. This AguemeDl, I~ Note. aU ~urity Agreements. direcdy Of indirectly secllfing repayment of 8QftoWct's Loan and Note and aU of the Related OocumetltS' are binding upon Borrower as well as upon B.orrower's successors., rcpresO'ltatives aad assigns, and are: legaUy eoforceabk in acc()(daace wilh their ~pective lCtmS". Com.mccciat t'utpo~s. Borrower llJ.tcads. IQ use the Loan plOCeed$ solely fOf blJS:~s 0( commercial (d.ued purposes. Location of Borrower's Offices and Records. Borrowec's place of business. or Borrower's crucf executive office. if Borrower has more man one place of business. is located at Woodcraft Drive - POBox 196. Mt. Holly Springs. PA 11065. Unless Borrower has designated ochetwise in writing this location is also the office or offices where Borrower keeps its records concerning (:h(: Collateral. 03-29-2000 Page 3 BUSINESS LOAN AGREEMENT (Continued) Information. An. ittf<.tnnatioa beretof(1ft: or coalempoqneocsly herewith firmished by Brmowt:r to ltndtt fOf the P\Jrposes. of O!' 11\ connection with this. ~ or any Ihn~ conteolfJbled h~y is, aod .0 ioforatatioQ bereaher fvmisbed by Of 00 behalf of Bonower to Leodcf will be. trlIe and a&CuDtC in evay mateNi ~ oa <<be dafe as of wtUch such. 'lIformati08 is dated or certified; aod qOtZC' of such infonnarioo is or wiU be .intOmpktc by omitlinS to ~e all)' material ftet tlCCeUafy to make such information nor dUslcadiag. Survival of Rqm:$eRutians aad Warta~. 80rr0wer IW.der$tlnd$ aad .grca; that Leader. widlout iQde~lIf investigaUOfl. is relying upon the above ~tICioRs and warruties in. mak:ing the,t.bov.e tcfctau.:ed Laaa w Boaowec. Borrowct fi.uther agrees daac me foregoiug fqJlCSC:Dtatioos .and warrauties mall be continuing jp uatote met shall rtm.lm in 11.U force IP.d dfed uatil tudt lime as B'tlf'tower's Inlk~ shall be p.w in full or until chis Agn:emcgt siAU be tenni.ated ia the IIlllDlIeA" ptOVided above. whichever is the last to OCCQt. AFARMATlVE COVENANTS. 8orrowct coveu.tnts and a8f"$ .with Uodct that, whtk chis A~( is ia effecr. BotrQWCT will; Litigation_ Promptly inform 1..eItckf"' writiGg Qf <al all mtI.f:ria( advuse d:wlp. io. Boaowe($ ~ coodirion. md (b) all existing and all tbreatened IitigatiOQ. c~rus. ioVC$dgatiOl\$. admioistrativl: proceedings Of similar ~0IlS aff'ectiag BcHrower Qf' .I.(1y Guu.aQ(Qt which could materially ,,<<cct the fioaac.ial condifion of Bonowcr<< the fi..aJ\CW condiriOn of .any Guaruror. fioucW Records. Maiatai. jrs boots and terot'ds in '~ct; with generally accepted accounting principles, afJphed OCt a cooSish:Gt basis. :wd pcmtit Lender to ~u.nUne and audic p()f'('O\lA':f'S boob: and f'e('()t;ds .at all l'eaSoaable times. Financial StatmlCUf5;. Furnish la\du with. u soon as lIlvailable. but iA RQ event later than ooc ~ twauy (120) days after chc end of each fiscal year, BOtrQwds babnce shed aad income statement fot t~ year ended. comp.iled by.a ccrtdied pdbfic acCQllQUDI satisfactoly CO Lender. All fif\llllctal reports rcquif'Cd Co be provided' under this Agrcemedt shall be pupUM in accooJaoce with galCraUy accepted llCCOUDtlQ.!l principles. applied 00 -a CODsUtc:n\ basis. and certified by Borrower as being fn.z(: aftd correct Ac:ldiOon.allnfocma.tioo... Fumi.sh ~h additional iltformatioo and statemeO.ts wiUt rc::spect to 8olTOWer's afld Guarantor's tillaacial coadition and buiJness oper.uioos JS Lender may request flom rime to time. ln$:uance. MaiaUiu firr.add otbe1- risk: iQSIlf3Qtt, paWic. liability i.llSurance. 4rId such other iaswancc.as Lo:ldet may r<quire witb respect to Boaower's propettiti and op::r:ations., io foon, .mounts. co~ and with IOSUaQCC compani<< reasoaably <to;Cpfable to Under. BOtrOWe.-. upoo I"tquest of Lender-. wiD deliver 10 Lcodct (rom tinltll.O time the policies or cenificatol m ias.uaace ia bm s.Ttridactoty fO L..endeI-. iadudiGg stipulation, that CQvttages will DOt be cancelled or- 4imicrisbc4 wt(bout _t Ic:ast tweclly (20) days' pcioc written ulXio:: to Lender, Bach insuQ.QCC policy al$o shaft Utcwde.an endor:scmem: ptoViding lhat coverage io f;tYOf oflcDder wiD IlOC. be impand in, auy way by any acI. ocnissiou ordcfauttof 801TQWet'()f ad! OIlier ~$OO_ fa connccUOO wilb aU policies coveridg.u$d'5 is wh1cb l.cndcr holds Of is otfcn.'d a $<<:urity intcte5l f(ll" the loans. Borrower wiD provide luder nh ~uch loiS pa.yable or other c~ts as L..endet may require, btsuratlCe Reporn. Furnisb to Lauier. upoo rcquW: of l.eoder. reports OR <<eh cKjstiag .nsurance policy showing such information a3 LcOOer may reasonably tequcst., iacluding withootlimiutioo the following: (a) die name ofrhe iU$un:t:; (b) (he risks iosurtd; (c) tlu:: atooUQ[ ofthc pOOcy; (d) !he properties InsUred; (e) the tbea ClUtCIlt: property values on tlte bult of wbicb il1.Sf.lr.lRce has been obtained. and the maftfter (If der:crmining those values; and (I) the expiration date of lhe policy In addition. upoll ~ucst of lenckr (ho\tfever nm morc olttcllhaA Il1nually), 8amJwcr win have all independenl appra;ur S3.fufactory IQ lender deter-mille, as applicable, Ihc ;icrua) cash value Or replaceBJCtll cost of any CoUateraJ. The COSt of s.uch appr.iiul sh..1I be p~id by Borrowcr. Ouvuties. Prior to disbursement of any Ioao proceeds. furnish executed guaraatics of lhe Loons in favor of Leader. executed by the goataot{)f named bek>w. OD l..c4der"s foons..and in be a.rnou.nt and undCT!be coaditioos speUtd Ollt in those guaranties. ~ SieVed CaplUlno Amount Unlimited Olin Agr:eemcnrs_ Comply with:aU tciOlS aad cooditioos of an other .ilgrecJ:reQlS, whctber QOW 0( hereafter existing. betWetd Borrower and aoy ocher party and uotify lelid<< imme<lU\td)" "' writing of any defau't in COOfU:Ctiott witl1 any otlteI: weh agrccmcats. Loan Proceeds. U~ alll..l;qll proceeds sa1ely for Borrower's busioess operations. uak$!O specifically oonSC1lted to the t..otJtn.ty by Lender in writiGg. Tues, CIl.acge$.aod Uou. Pay aad discharge when due all of its indebtedness and obligOllions. includiog without limitation aU ,ilss<:ssmest5. Rites. goveromcnul cbarges. lelfies and ti:ens. of e\"C!y kind 3Ud nature. imposed upon aOttOW~ or iu pwperties. illlcome, II profits. prior ro the due on wblch pC:JUJties WOIIJd attaeb. and an lawfu.l cbims that, if\.lD~aid. might become. a lieD orcbar~ upoa. I.ny<d' 8<KTowu"s propertict. income. or profits. Provided howevCT. 8Qn'ow(';f" wiU nO( be rcquin:d to pay and discharge any such asscssmC1lL Lu, charge. levy. lien Of claim so Ioog n (a) the k:p.lily of the same shan be COCotated ill g.ood faith by awl'Opriare proceediogs:. aad (b) 80rr0wer shalf have estabtisbtd 00 its 000l.::s adequate reserves: with rc.spec[ to such conlCSttd assessment. In. cbasge. levy. lien. or claim. in a<;cQldance with geQenlJy ,iGcepced accOllluil'lg practices. Borrower, upon demand of Leader. will furnish to lender evidence of payment of ~ asses.imc:ols. bu:es. Charges. k"w., liens and claims ud will authorize the appropria.te eovcmmenw official fa deliver to LerJder at any rime a written sukment of any a$scssmems. UXes.. charges. Ie~, licni and cbims against 801l'0Wer's ptoperties. inc<m\e. or profits. 03-29-2000 Page 4 BUSINESS LOAN AGREEMENT (Continued) ferfQfl.1W1O:.. Perform and comply with. aU teems, conditions. and provisions set forth in this Agreement and in the Rela1t:d Documents in a timely manner, and promptly oorify leader if Bonower kacus. of the occun-CQ.Ce of alaY ~vent which coomtlSks aft Event of [)cfault ~ this A~mefJt Of under- my of the Relafcd Documents. Inspection. Permit eOl9loyees or a.geats. of 1...cAder.at arty reasooabJe time to inspect aDY ~ aU Collatcl'al (or tbe loaa. or Louu;; .aqd (0 u~ Of .audit BOITower's books. ~.lad rcaxds and to make copfC$ ~ad mc.rnorao4a of BOI'I'OWds boob. accounts. aod~. If Son"owcr SlOW OC' at auy time ~ maitttaias any l'eCOfds (illcludiq& without timitatioa cam.pa.tf:r generated rtC(J(ds and COlllpIlCu software programs: fur the gcttetadon of such records) in the ~iOlt of.a 1IUld pafty, ~. upon <<quest oll.l=a4ec..shan Dotify 5lK'h puty to permit Lender free aeeess to s\ICh ~ ~ aU reuooabte ti.tncs.tad tD provide Leader 'With copiQ of auy nconk it may ~lK$t. AdditiouI Ass.ranc4. Mab, cxc:c11tc.aad ckli:\IQ fa l.eoder .AU:h plomiuory ooces. mortgages. deeds of ttUS(, security a.gr<<mcols, fiMlK:ing statcmeuts. ie.scnuueafS. documeciCS aod...xber aeoo:meou ~ l..ender tt iu attorneys 8\lY ~bly tcquest to evidence and sccure tbe: l.oan$ .lad 10 perfect aU Securit)' Jattttsts. NEGATIVe COVENANTS. 8oaowec cowmanlS aod agrceswith Leodc:r tbat while this Agreement is in cff'tct. Bocrower shall not, \Ifilhoul the prior WIiuea CODitnt of Lendtt Cooliuuity of 0per~(1oos. <a) Engage: ill any business aaivi(j~ SUbsfaDtSr.8y ditferen.t than diose in wlUch BOQ'owe1" is presaldy eo,gagc:d. or (b) cease oper.l(i<ms. liquidace. merge.. ttllnst'ec. acqWl"C or COd$Olidatc with Olay other entity. change: OW'Q(';(Ship. change its: name. diuolve or1':raMfCl Of seD Coll:UtnJ out of tbt. Ol'dinary cooruofbu$.iness. cesSATION Of AnV ANCES. ft Lender ba$ nude any oommitment to make 3d)' L.oaft to 8Qnowe(. wbelhc:f I.Indec this Agr~t or UDder aay other aen:emeot. Lt:ndtt shall bave no obfigatioo. CO mKc UJan Ad\'.aOCC:li or to disburse Loan procotds if: (a) Bonowt:r or aoy Guaralltor is in dc;fault WIder the te'nm of 1bis A~ Of ~y of ~ Rela~ Ooeuments or any olber .agreement that Borrower or Iny G\u.caatoc has with Lendec; (b) 80rr0wec or any Guarantor b&:romcs In'KII'\le&t. files a petitioo in ba:o.ktuptcy or simital proceedings. ()r tS adjOOged a bankrupt; (e) there: QCCUt$. a material advaw dwtge ia Bo.ttowCf'S financial condition. in me financial cooditioP of any 0uarau.1or. or Ur. rtu: ".aloe of any CoUateral $Ccuring "'Dy loan; {d) any Guarantor scels. claims. 0( otherwisc a.ur:mpts 10 limil modify or 'evoke such Guanurtof's guaranty at'the Loa.. oc any other loan with LeDder. BORROWER FlNANCtAL ReQUIRBMENts. Banowcr shall fumi$h Len<kr with, as SOOt1 as .available. bur ia no even' later than 00<: bUl1dred 1wenty (120} days after the: cod of each fiscal yeueQd. BOO"Ow<<'s baJmce shtt1: I12d jncome stakmcnt fur the ycarcudcd CORtplkd by a certified public aCCOU:Qtant utisfacwry to UDder. All fiClMcial (q1Gd:$ <<IqUircd In be provided utw.1et this provisiou. shall be: pcepan:d in acoordaocc 1rith generaUy accepted accoooting prim::iipk:; appiled Oft :to CQQS~t basis, ~ certined by POi'1'OW<<S as bei.llg true aqd 00<<<<1. GUARANTOR FINANCIAL REQIJIREMENTS. GuataQ(oc shall furnish Latder wjf.h. his p('l'Wd..1J Finallcw Statement at inceptioo of lma.1nd ~n upoo release: of ~tioaal coUaeral AU tep<lft3 rtquied to be provided under Chis proviUoa shall be prepared in accO(daocc with gen~ly accepted accoullting prillciplts ap~ed on a COO$isteQ( bui&. and c<<tifitd by Gtt.ararnor as being true and correct. EVENTS OF DEFAULT. Each of the foltowing shall constiWlC ad a....ent of Default uadel this Agn::c:mcru: Default 00 1u.dcbtedtless, ~lure of 6OffOWCf to male any payment wttWn [S (jays when such payment js due. Othec: lkmlt$. Failure of Bonowu or any <JranUlr Co oomply with.or to perfOl'Rt wbca due allY other fco:n. obligatiOlll, roveuant or condition c.ontained in this Agteemott or jn any of the Relat~ Documen.fS, or failUfe of ~t ro comply with Q( 10 perfonn allY oth~ term. obligation. covenant or cortditioo oontUoro in any otlt.er a~t between Lender aod Bonower Oe&:ult lrt FaVOl ofTbird Parties. Sboold Bcn-ower or ;JAY ~tor defalllt under ~y Ioao, exlcnsWn of credit. security agreement. pUTCtusc or sales agreement. or uy other agreement, in f~vor of lay other creditOl' oc person that may nuterially affect aay o( BotfOwer's property or BorrOweT's or any Gmrtor's. ability to. repay ,he. LoaM or perform tbeir respective obliga.tioos IlIJder Ibis AgretmtUt or ;my uflbe Related DocumertlS. Falose SUtctnet\ti, Any wamully. representation at statemenl ma:de or furnished to It:ada by or {)Q behalf of Borrow.er 0{' any GGlo.lOf' uDdct this AgreelMn\ or the Related OocuR1CO.ts is falie Qt mleading in ~QY material respttt at lh1: time- made ur fUfD1sbed. or becomes false or mntading al auy rime thereafter. Or:f<<live Colbta'afiurioo. This Agreement or wy of the Rt'lakd [)o.;lImeots ceases to be in fill! force and effect (including failure of any St:cutity Agrecmenl (0 CTe4lte a. ....alid aad peffected Security [,.ucreso at wy lime ,ud fOl" any reaSOll, lnsQlvency. 1bc di$SOlutioa ()( termina.tion of BorrO'NeT's e.Uslc.oce liS a goiug business. the insol...,eocy of Borrowcr. tbe appointment o( .;r. ceceivt:!: fix any part of Borrowu's property, any assignment for the benefit of cferlitotS. any lrUSt mortgage ()( any other type (]( cced,(Of wotkOllI. or me commencement of any proceeding Cl~ any bankruptcy or insoJliettCy laws by 01' .Jg.ainst 8(lfTOwef. Creditor or forldture Proceed'fI;S. CommelLCement Q( (occclosun: or todeilUte proceedings wf:rether by judicial proceeding. self-belp. rqJOSSess\on ()( May other method. by any creditor of' Borrower, aoy Creditor of any gratltoc agaiost.any (oU..uetal securing Ute fndebtedaes$. or by any gO\fanmental ageucy. This includes. a gantnh:mt:nt., ....tlcb.m(.Qt. Of levy on 01' of any ol80rtower"s deposil al::CQUots with Leuder, Howtvec. this Event of DefOlult shall nol a.pp~ i{ that it a good &id\ disputr by 80fr0Wttor GnntOf. as. the ~ase may be, as co the validity or- reasOQable&teSs o(the claim 'Which U the basts oftbe t:.teditoror forfcil:u.re (Koc<<d.iog. aad if 80a0wet or Gr311tClr gives lender wri~n notice: of dteaeditoc Of (orfei(Ut~ proceeding and fumishcs reserves or a suret)' bQnd for lhe crt.ditor Of forfciroce prooceding satisfactory to Leader. 03-29-2000 Page 5 BUSINESS LOAN AGREEMENT (Continued) Evcqts ACft:Cting (juaraa(O(. Any of Ute pre<<:diag evmts occw:s: wilh n:spect to MY Ouat;aptOf of .any of the ~S or 3ft)' Guahtltor dies Of becomes i~~. or revokes ordisp.tes the validity of. or llability under, my Guaraaty of the fn~s. Leader, at i.t$. optioo. may. bat shall not be required 1.0. permit Ihc Gl:Iarutor'$ C$(a'le to SSSlUtle U1lCORdltiQuRy the obligatioo.s arisia: uada' the guataQly in a ItI~D(ler satisfactory to 1..euder. and.. hi doing so. cure the E\'~t of Default. fti&tlt to ~- ({any default. otbet dwL.a Oela.uU oa ladebtcdGess. .is cllf'.tble 4I1ld if Donowcr or Urzoror. tIS lbe case may be, hat noI been givea 2. notitt of it $imilar ddMIt wil'.bio. the pl"CCCdiag twelve (12) mooth$. it may be cured (ud no BVCIII of Default will ha~ ocromd) ir Burrowu or Gmnor, a$ lbc case may be. Uter recciriq writte8 aotice from Lc:oder demaadiag cute 0( $l.ld:t defi.u.lt (a) cures the default within dlirty (30) da)'S; or (b) if the cure requires morc \ball thiny (30) days. ....-... I;. i~ steps wbich Leddcr dec:m.t jll Leudct's so'= discrerioo to be: sufficient to cw-e the defal.lk aDd thm;:aher continocs aDd eomplcte$ an reasonable aad ~ $IcpS wfficient co prOduce compIiaoce as SOOII. as tC:lSOrlably ,.actial. eFPECr OF AN EVEN"(' OF OBPAUtT. I( uy BveQr of Ddault $ban occur. except when:: OIbc:cwise provided m lhis Agrtemeat or (be Related ~. an <A,.. ....... tit tad obliptioa1 of l..endc:r uDder dWi ~t or tbe Rdatcd OocumedfS or any other "gr<<mer1( immedi.atcly wiJl tamiAate '.ad. M Leader"s opdoa. aU 1adebttdoC$S ~y will become due. D4 p*:y1bJe. aU without lIQtice of ..ay tiod (Q Borrower, excepc fbaf in die casc of Q Evut of 1>efOlIull of the type described in Ibe "IJnoI'iCRCY" ~1~i()U above... such ~titla shall be 1Uf00000k and dOt optiooal. In .addition. Lender WU have ~I the rights and ~ provi<kd in tbeRdated Doc~or...vailableat aw. io equity. <<otherwise. Eu:cpt as may be~ byappfiCilb&e Iaw.a.Uofl..cddc(srigbts aad l'CtJlediessbaUbccumulativew maybe exerciw:d smgubdy Of ~t1y. electiOd by leAder to pursue _y remedy shall no( eJc1ude puo:uif of aay oc:hcr remedy. aad an e1ectioo to make expcndiWil"eS or to ta~e ar;:tiaa 10 pcrfonn an obligatiott of Borrower or of any Odulor sbaU IlOf affect L..e8det's right to declare .. ddault Uld to exercise its rights aJSd n:mclie1;. MlSCEUANEOUS PROVISIONS. The foltowiag n'lRceu.cous provisro.$ art 41 pm of this Agreement; AlnmdJntll.u. Tbis Agreemrnl. togdha with afty Related Oocv.mctt<<, CacmitllkS the entire lUIdttst;ndiqg ..ad agreement of die pa~ as to the maIlers set fOf1b in this ~ No attention. uf or' ~ot lO this A~dt shall be effective: unless given ia "Hiring and signed by the party or p:ntits sought to be clw-ged i)I" bond by (be alteratioo or 2mendmeot, A9P~ Law. This AgrecateUt fw; been delivered to 1ader aud accc:pted by Leader bJ the Commonwealth of Massach~. {fthere is ;a bwsuit, BooQWCC agrees 4lplJIl1..eoclds req~t to submit to tbe Jurisdiction of the COUrtS of Essex County. the CommoowalCh of Massachusetts. lelldcr aod BOO'Owet hac:by waive the right 10 uy jwy trial io aay actioo. pr<lC<<ding, or (:()UQten:;wm brought by eithtx lender Qr BOlTOWc:r against rbe olhc:T. This Agr"mmt shall be governt4 by and ooastnled In ~ wilh the laws ofthc: Commonwealth ol~busetts.. capoo Headings. Caption beadings in tfW AgttttneO.t arc fufcoovenienet ptJrpose.s ottly '-Dd are: 00! to be used to inrctpfCt or define thcprovisioos of this Agr<<mtlU. CoasaK to Lou rmicipArioR. 8arf()wer igt<<S and. CQQSCnlS (0 Lender's $.1.te Of" tnnsfa. whcmet oow (If )akr, of Otle or mort panicipatioo interests in tht. Loans to one or R\O('(!~. whdher related or unrelated fo l.eOOer. Leader may provide. without Bfty timita:1lOll whatsoever. to an)' 08C- or ~ puc~ or ~ putc:basen. any ioformation or bowledge LtDdec may have ilbout Bou'ow<< Of about any other matter reLuiag Ia tile Laan.l.od Bormwet'" hereby wai\fes :my rigbu. \0 privacy it IRaY have w<<b. c~ to liuch matters:. OOfJ"OWet addjtionaUy w4Iives.any 4nd aU ootices of sale of p.articipatioo iaterest$, as well as aU rwticcs or uy cepuc(base. of sucb patticipaliOll interests. Borrowcr also agrees that Ihe purchasc:rs of any such participation ioleresls wilt be CQwdeted as che absolute OWlleJ"S or.such io.west1 ita the Loanli ud will hallc aU the rights gl:ul.ted. under tht participatioa agreement or agn:cmcnts: governing dte sale of such partkipatioa IPteR:$U_ 90tr0Wef rlll1tl<< waives aU rights. of O<<~t or COUR~Un that it may have ROW ()( WU "gains! Led&r Of against any purchaSer of such .<2 participalion interest and unconditioaaUyagr.ec:s d1a.t either Lender or such purchaser may eofor:ce Borrower's obIigaliOCl lIada' the Llaas imspc.ctive of dae (ailure ()( iIJSo1vency of any boIdu of any hnr:rtst ia 1M: 1..l)aos. SOfTOWer further &gfttS that the put(:hllser 0( ao.y sa participation interesu fnily en(oree its iQterc:s-ts irrespective of any peuooal claims Of defenses that BOlTOVfer may h:lve against Lc:ndet. Costs.aod &pcnscs. In the eV~ot of Defautt. 8o.mwu :lCf<<s. to pa.y upoa demalld aU of l..ett<kr's cxp:n5e$. iacludiog wichout Jimitatioo.;lttomeys' fct$. iocwred iD COBDCCtion wich the coIlectioo 0( this A~nt. ltt the eVCdtQ{ a default by Borrower whicb is nor~. Lender may pa)' someone else: tn bclp coUect the Loans and toedfoo:.e this A.gree.mcrtt.and 800:'0WCC Will pay dta:t amouot. ThiJ iRdudes. subject to any lirnitsund<< appliC2.ble law. Len<<kr's <\u'O('I1eys' fw; aGd l.etIder's. legal uped.Set. whether (I( not Utae is a la1A'$uit, iQduding atlomeys" lees for butkJUptcy proce~ings (including tfforts to modify or vacate:' .iay au~atic $tay or iIl:juoction>..appca1s. and allY anticipated post-judgmeat coIfectioo ~kes_ 8arroWl::r alro will pay aoy CQUrt (:OS1s. in additioo (() all ofhtT sums- provided by law. NoW:es. All QO(iccs required to be giVCll tinder t1U.!l Agn:emcnl sh4lU be given jn writipg, may be salt by te1efacsimik (unbs odtC-twisc ccql.liud by lAw), 4111d shall be effective wbeo actuaJly delivtted 01' when deposited with a llauooaUy CttOgllized oltc:migbt courier or deposited in the United States mail. first ctw. postage prepaid. addffl$cd to tbt:: ~rty to whom Ute notice: is to be gt\lCll.u the address s:h~ abcwc. Aay p&l1)' may ch.InCC its address fOl' notices under this Agt('amI\t by givlllg fomu.l wriUt:tt notice to thc otttcr parties. specifying Ih.oll the purpose: of the QOIice is to change tbe paftY's addtes$. To the c~kn( pcnrultcd by 41pplic<tbk:: Jaw, if there is fOOfC: tbao ooe Bonow.er. nO(i<< fj) any Borrow<< win coosurute Clotice to aU BOlT<lWers. For notice plltpoiC$. 80rr0wer willl:eep L.e:o&:r informed at an times of BorroWtt"s (:U{l'CBt address( es). -- "^"^' Page 6 BUSINESS LOAN AGREEMEN. (Continued) SevcnbiJity. If a (:QU{t of ~ juri~ tiuds. auy pmvisioo of this Agreement to be: iQv~d or uaeat'on:table.as 10 aay pmoa. IX circumstance.;uch fuuliog .shaD QOt ralda- dial pn:rtision inv;i)id or ultCnforceable as to uy ()tber persons 01" circumstaa<<:S. If feasible. aay S<<h offeadiog pI'OViiioa shall be deemed to be moditkd to be wilbia <<be limits at ea..foo:eability Of V'atidity~ bowcvc:r. jf the offendlag provisioo cannot be so modirted. it shall be strkkeo add all odIet provisiOlU of r.bis AgreefbeOl ia all oIbet tc1pettS shall remain valid ~ eaforceabk_ S.<<1,~ &ad Affiliates ol8txrowec. To tbe eatenl tile: CO:Qtcxc of .ilny proritiOdS of this Agra:mem D1iIkcs jr appropriate, including without limilltioa any r~tioIl. wanaaty <:w \."O\fC:IWlt. die ward '"Borrower" as v.sed betciu th4ft ioclud.e aU tubsidiaries ud.affiJWes of 801T0WCf". Notwitbstaadidg: tile forc:goiag howe~~ und<< 110 ~ sbaIJ this Agreemau ~ COIJstnred to reqWte Leader to make any Loan Of other fUlaacial ~ to any wtmdiaa) Of affiliate ofB~. S(lC(euors aod Auigns.. AU covc:oants and agm=meqa OOQtailk:d by or on bduU' of Boaower shall bind its S~ and ~P5 and shall iatlte to the- beoefit of l..eGder. it$ soccessors aQd MIllS. lbrowc:r sfaa1J dOt. ~. &avc: fItc rigflt to auien its rights CIadct dlis ~I or a01 iaUrQI tbam... wilhoacdle prior written COIl~t of1eadt:r. Survival. All wanubts, ~eratIIioas. lad oovawltS. ElUde by Bonowcr ill. this ~ or ia uy catifica.tc: 01" od1er msll1lmeA( delivm:d by .Borrowa- (0 Lender uadet (bi;s ^~( shaH be COO$idtr<<l1O mvc been relied upotJ by L..eoder and will lw'v;ve tbt mW.ng of the LoaQ an4 ddi"er)' 10 Leader of me Rdrtted Docmncnts. sqardles$ d.auy islovesUguion mr.de. by lcaderoroa l.cGder"s t>>dul(. WaivC!%. Lcodcr sIWl 001: be deemed to have waived.y rigbrs under dais Ap::emeot unless sucb waiver is pven in writisg and sigDc:d by Lc:Pdc:r, Nodeb.y or omission 0Ii she palt ol1..c::adcr i. e~1 lAY ri&ftt shall opcQ(C as a waiver of fIlCh. rigtU 0( .ally odttt right. A waiver by Lcdder of a pR)risioo of Ibis Agn:aneat $ball not pnjuctice Of" coastitutc .. ....WI" of l..coder", ript 0Ibtrwise: 10 demand compIiaace with <<hat ptoVisioa or aay Qthc:f provision of dris "~t, No prior waiver by Leader. IlOI' "y coune of dcIliag bdweea. L..eIIdcr and Borrowa- 0( Gnntor. daan coastitulC a waiver of ,lny of Leader's rigbn. #Y of JO)' obligalioa$ of 80n0wcr (W Gr.IGtor i8 the fucurc. Wheucwr the COOSCC1t 0{ l...eBder i! ~ under dais. A.grecmeat. (he gpatiftg of sum Cdrd$edl by Leock:r in allY iMIaDce $baD DOt COOSDnne COGtUl.uing consent ia subsrlqaegt iQS(a.DcQ ~ s.uch cooseot is required. .Rd in aU cues such eonsent rmy be gnil!ed or witbbold in the sotc ~ of leDder. IIA VINO REAO ;UJ.. lllE P\l.OVISIONS 01' 1ll1S BUSINESS WAN AGRl!EMENT. ANO BORROWER AGREBS TO ITS VA TED AS OF MAR0129. 2000 11IlS AGREEMENT IS EJOlCUTIID UNDER SI!AL. 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GIMiffl'IV'; No "'" ...,.. IIw 1.In4Or, ... ..., c_ /If ..... _ UlIdIt ... '" rTI~. lIIIOII......... . ......01..... of lMolIIl'. fIIlII Of ill.... or _.. _', ~ IS lD I/IY ..... _ w........... ~ d ~ III1/l1li1Oot __ CluolImY. fie ~ <II"""" -1Iw............, 1IIoItIlGiI..... "'" ~ ~ __ III ~".......-- __ _i"'....-....".P..... _~.........., "'8'_ or""'" 111........ 1IIan"~. u.cll UNO lUANlOl AaN01IIUDGU IfA\IING lUll AU. TIlt: ",",K~N5 '1'HI$ GIlALUITt .\NO MltUS to ITS.. TE1M5. IN IlUA NTClI l\NOS T/IA-r llti O\MlWm' rs UPON ~'S ~'" AN.. Da1\IP.' 01' nll$ TO =: ~ THI ClWIANlY wu. CONT1IoIl TUHllfATEIIIH TH5 JlOWOIE(l SiT fOIl.TH IN Ofl SfC1'ION TlClN Of liUAJANTY.' tfO fORl'W. 4otr.m'~~ 15lftaSS,U~ TO ~ 11IlS ~ UffO'lYS. THIS NlY IS IIA TO HAaCH t.. 2000. THIS CilJAMNTl' IS lIMID. IW. (i II IIIIfd,."ttIIIlrIllI.~o/l x WI/1IIIc# .......OIIO.Jloo.I/.a .....n.....vw ~..IJ:f~._ ..._.......,fIIl"4O'.-.LH~ . 1/09/2004 WED 14:17 FAX ~002l006 ot::.lyy. COt-.'-')ERClAi. : SECURITY AGREEMEI'.-} - ~._., "~ 8otTOwer: LJndlr, fnc. Woodc:raft1lJ1ve.PO Il<l. 196 Mt. Holly Sprtne<, PA 17065 Lender: FIr.it E.ux ....... fS8 296 Essex SIR" l.....nc.. ~ 01114% THIS COHMERClAL SI\CUlUTY AClEl;MENT b <II""" .... _ ......." /IK. (ro'"," '" _w .. .Croo.....); >Ad flm Ess.. 8""'- fIB (..'....d '" ~.. "r..ndo<.l. for ..luiOle COOIlder.doo. Or'"1OI' ........ to Undor. .<Olrify Info....ln die ~ .. H<1ll'< Ihe 'nclcbt....... """ .... m.t l<ndot ""'8 ..... dI, rlshl> ...,ed In dlJI ............. WkIl _ .. "', CollJt",;d. In ._ '" '" od1er riJlds _ Uncler...." h"" by low. omNlTlONS. 11lG 0lIIc>WiIl9 WOldS .".. ....v. "'" _1nQ nwonInQ& ...... ""od I. tl>lo Ag-..nt. T.""" no< ~ _In this Agreomenl ah8II hid 1he fP8IIfllnQl atflCbotad 10 S'IJeh 1Onn8 In the Unlf<<rn ~t Cod'e. ^-II ll)ferencG$ 10 40IIw e.moun16 BMI mNO an'IO\II'dS in IIMfoI _of Ih. UoIIod _ 01_0. '"-"'"", TIl& """""~ nw<<'" thlG C.......,..., sOCl#ftV..~... fI1ia c_ Soollrily ~ mey "" _d Of lllO>dItIod..... .h IIllkne. klgeIIKIr..... ..,__ ond _. ._ to thie C<>mmenlI<II _............_ &em _10 lIm&. CoIIMc<>l. 11lG WUfd 'Ca/IafGr..... _ "'" IoIIoWfng aosctlbod -"" 01 GranIot. "",,1h0i' flaW o"'.Dd at ...._, _u"ed. _liter ".,., _*'0 Of _ ....Ing. .nd .",.,wor_: (1)1979 ClOVE TMSlDO. SIN "5/71 (I) KRurI'MODEL 6190 AI!-1'EUAIN CltAANE 190 TONS 'I\PACI'lY INCI.lJDINC. 197 IT 8001'1. I %5 IT 11B, 6-AXLE CARRIER. 74 TON ll.OC/C. 3$0 LI BAll WlSWlVa AND HOOK, HEaCfDfS DIESEL UP AND DOWN. surAL NllH8Ek 6190 1I0} (1993) In -.lho wo<d "Colle...."'. 111Clud6s of'" following. -..,""W _ '" hen>ettor -"'<lUIted. _ now.xlelinQ '" I1e,_ orlGlng. end__""'_ fa) AI.ltId1m8ntS. 8lXeu~. <<ece&eotlea. tooI$. pant:. ouppfid.. mct9lJ8Ot, end ElddI'tian& kJ ~ AU rQpI<<ttrnlint6 of ana SUbl:fitutfons (Ot My~cle___9. (Ill All pt(lduCllI .1111 procjlJO<> '" any oI1he pr_ desellIlGd In !hi. Colle....' .uc;tIOn. (0) /AM 8QCOUl'Itli. geMral intangtJJ4MI. InslrUmlN1f,s, roots. mot1lcJ;!'. PBVmentG.. and all aBler ~. ariak1g out ot a ColIs. lNse, Of o\hQr of~ 01 My oIlI11I pr_ cloqctlbOd i.1hio c-.....Iion. Ill} A/1 """"ods (4n<:hJdfnQ""-.ce """'_) lrorn "'" s""'. doolrllCtloo, ,oss, or ""'or di...,.1tion '" .or 01 tI1e "'_"" tleoo_ in .... Collo..... _ (e) All t_ and do'" ,e/eIlng 10 onv 0/ ",. pmpony __ In """ colI....ar s-. _., In /he fcIm 01 a W<1IlnQ. p/loIOgnIph, mIanJfUm; nwcrotJcne. Of' .,~ media, tggathet w4h .If at GtatltOfli tight, .., fnd intec'&.$f in ,end co all COfT1lLlt8f Sol'Iwaro (equired Id ~o. ~, rnainfBIn. and pIOCeSS any such: t6CMi$ or data 0I't GIecttOr1ic msdJa. EvUlt 01 Pc_ ,.". WOf<ls "'v"'" of De!.",r """'" """ Include wfthaul V""",tiOo eny 01 "'. eve.1S of Pele... .... fO<t/1 l>elow In .... _ filled ..._ of 0e1atA1.' Gnn<or. Tho ""'" "G."""". m<roI1Slsn<fIs. 1rlC.. "" ._..d .09igns ~IO(. The wOld "Guarontar" InMn& ana b1clud0:5 wJlhcK.rt runitatiOt'l each and .n 01 tho lilu8(APtof1l. tlUfGtl08. end 4OOO..~tIoo plil"tieB in COf'lttQQfian wfth 1tto IndolMedneu. ' lndebCI!Gness. TM word "JndGbt~ooss~ I1lHllS the inaobWdn85$ evkIcMl;fd by '!he Note, incIudlng aJl prlnoiplll.nd ~t. tog.8IhQr with aN oItI., Ind~ and COG" and experwos. for wnieh Grantor Is fVlpondoitlkl vnder #U3 Agrflem&rtT <K una.,. soy of 1he R.Ud9C1 Documents. l<_. Tho wor[f 1.""""'" "*"" FlrOl E__IIanl<, FSB. iIs ~<M ond assfgn.. Nooo:. Tho _d 'Not." .....". !he noI. 0' orOdlt._ d8tBi1Maroh 29. 2OQO. In .... ~ _ 01 $88S,OcD.OO ftorn~, Inc. to lMdor. __ willi all ,_s o~ """"'""'" 01, """'_... 01. "'."''''''- 01, """"OUdaUon. 01 end ._ 10' !/I. ..... 0( c:t8d. lIg'- ItelKed Documenu. nw wMSc "Re;eted DocLmOllt,N mHh and' inaudEt w1chout tirmalion all promissory note&. crd" B~, loin 5Olhil.....q:. ..,QOhinsl1llf .~. guatMtiI,a. sec:tdfty _"INnis. rr\Ol1pIges. deed$ of trU5~ and &II other ifl$tn.ltt18mS. agrMm9flD: and _. __ oowor /l8f..l1M OldsUng. ..lICUIIld 'o_wlth Iho /fldobf_.. IUCHT OF S6TOFf. lit...... h.....y lI'anl; l.ende< a """_ """,fly ""......' " and ","obit ""ans. __. ".m. plodQ8s, _ "~'s ell 01 lltenlOf'$ tlghl. fiIle end _, .. and 10 ll,anror'O 8CC:OU<1lo _ Lender (WheIIrer chocl<JnO. ...ingS. or ...... o/h.. ~. In<;Iudir1g 011 acoouna: _ jolnIfy wlm someone <llO. ond oR 0<:00"'" ll_ "",y open III tho Iulut.. ._"'cr. _WI'. ." IRA ood I<eogh aecauno,. ol1d 811 _ _10< which .,. lJnonr 0( 0 '8C1Iq> ,",ore.! _ b. JlrOhI;rod by low, GrllIItQt aul/1Ofiz.. t.end..., to !hA """"" pef_ by applicable .....10_ or _ OI_ness again" On\' anclon._ or:couNo, OlllG... TlONS Of GMNTOR. a...lo, wen..I; _ covenen.. to LaMe, .. follow.; . hd<<IIon at SecvrllV (nt.ftHL Grantor agroee to execute GUGn 11nanc1ng 11IIUlfnanlS 8ftCI to tak. wNatover otn<< ~ Me requoe.ted by . Landor to _ """ oonlinue Lantfe~. securlty I_os.;n ... CoIIeW<OI. Upon ,_, 0/ Ulnrl<W. G_, wil _or It> l.en<far aJlY llI\d.' 01 1M duo_ _ '" """.';wting rho Co'''''''"'. .... GtaIIlor wlII nolo LeN9r's ""'""81_ On\' IlnO "" """.... _" notdelIV'- 10 Londet 'or _...;on "" Len<ter, or.....".,.."" appolnf. Londo< .. As It!"""""" ._y.;"""",,, lOt tho _a of OltllCtlOng any ~ ~ to pec1ect elr 10 C:OfUfF'lye tile 1r.9CUI'iCY .inlor8S1 grtnted in chili Agreement L.endIK IIUW ., any Iltne, 8nd witfJcKtt ftJl'1n6r . ....,.;zillion ll<lnl _. li. a oorbOn, pI1<>Iago'.phlc Of ""'"' roproduclIon Of eny flnenelng ~ 01 <II lhfc ~I tor ue. ..' . fInat1<ir>a .....,,_.. llt""""... (a/mIwr..l_'O( ell _lor !Iv> podGe""" end "'" ooruitw1llIlo\ 0( Iha ~ lllle<\de<'a ."..oly """'001 In Ihe CoIIe.lotal G,_r P'0Il1IlUy w"nOWy ler1det b%le My eIlar>ge in ~c __ incl..,j/ng tJtl'f oI\on;a 10 !Iv> _ __010_. . N. \/10_. Tha.....-..nd daI~ d 1m AQr_ will nol viol... .nYlawor ~ _ning ~ or 10 _ G'llOIOt '" . pruty, end II> "."'"eato at __ oIlncotpOtotIon aJld bylaws do OOCpRlhlblt any ........._ oIl/1ill ~ Erl....wl>lII'" atO>ll..."I. To 1110 .-.. "'" COII_" cons.... 0I~. oIJeUeI _. Of _... intonQIbI.., "'" 0oll&'''. is _ In oceordencl> w;", II< <Brms-. "' gan..... _ <:ompllos Irilh llQjlI1"""", laWS e_1nQ (001I. on.- _ ........... a' prepar..lion end .x_. 6/09/2004 WED 14:17 FAX 14l 003/006 _ ____ _ ____. _._.n If!JUUO:', 03-29-2000 )MMERCIAl SECUlUlY AGREEME1. (Condnued) P~2 A'ld .8 ".,..,..lljlplioQnQ to b8 obIIgoI8d "" Iho Co/Ialera' h.v. aoAltott1y ilnd ""pol""" to COOl"",,, .nd .r. in lao' 0blIQa"'" ..1Iley _ fO ba en Il10 ColIolar". . . Loaclon of tho CbIl>ttnL G_. l4>/lO r_1 01 ~"'. wDI_1o lAnaor .. \oml sa~ 10 lAndor 8 llCII8dlJlO 01...1 _rlias and C<>I.......1OoIl\IoIl$ <oIatIng to GrantOr. _1i<J<lS, lndudlrtg_1ImIIa1lon che """"""D' (OJ 811 ruI pro"..." __ '" boInll poorGhA:wd byG_ (b)" rell-"y IlOlngr...'od"'_1ly GIGnlo<; (e) 0110_ _ __ -. _. or bIIng...odfly G,...."'" ond (d) .. _ _Ias .....r. ColI""" .. 01 moy "" _. Excopt In tho _nary """"'. '" II.< ""S""". tOr..... <hAA 1101 ronoo;e1he CoIioIorol '.om'18 ...isIing I"",,~""" _1l1o prior -. COC'oSen' oIl.Jlndor. I\<mQv.aI of CalJ.aICfal. G_ sI18II ...... dt4 COlla"'., l.r ., "'" _I lito CqlfMer&l canola.. 0' ~ _.IIy ..... .. _ \tie nacoros ooncamlng 1'10 COllIWoII) at Qr~ adm'-.a IIhuwn aboVe. or fll &uct\ oIt1er kx::aGonll filS .,.. ft<<lIPf8bIe ~ &.endet. ex~ In th4 .rdOwy COIlroo 01" bill....... ~... ._ oIlowonfo<y. Granror.".. not _. "'" CoftatA>r.ll ""'" III ...ratlnO __ _. Ill. prior WlUlllln COt'-'.... aI LGnd<<. To" 0JCttnt tItat tho CaIotetaJ. OOOSiSl$ d Venicl8S.. or OIMI titiQd prop6rtY. Grenr.or shill not toke or permit tiny actlan _ ......d r8qtJir. 8jlIlI1ca_ "'" 08IIi_ of lIlte 'ot... ~ 0",""'" "..c......",.._ 0/ p"""'.......... ...1ho.l1lt1. ptIor_ _oI~. Transaakw l.voMnc CoIbwll. EkcOPI....,.w_ _ot _ _ k1 dt4 """""'" __ 01 Gr_. buo:InoG$._ sI18II "'" Hr. _10 s.II. or _tr_ ot cIIopaoe oIllti> CoII._. _ ar"""" is no! In _ ..- INs 1\ilf8Iln18f1~ a.-..- /lIlIlISoIl ",-. "'" only 'n lhe o~ """"'e ollis lluo...... and only 01 _ WllO qtllIIIfy .. a buy<< in.... ~...... 01_, A saIw '" "'" -'Y _"'. 01 Gtantor'. .......... _l1Ot _.. .......... in 1l8fII'" or _ ._Iion <11. _.... any ""'" __ Ql'lI_ ,.... rIOt _08. --. __ ...._-.. parmi! tho Co/Iotor.. fa "" ~\o ""y II.....8CUI1ly ...... encumIJr........ or <barge. olher ""'" tho .ecurilJ inloroslPftl'llde<l tor /0 lI1Is ~l_"""__"""'" of~. Tn.. k1clod...oc:urIIy _ even<<;.._"1!glo to lh. secumy intBmoIs grAlllGll_.... AfT-. Untocs.../.ed by loncfor. '" p,_ 1Illm... dlsposillon 01"'" COIla_ (1ot........... _I ..... ... hold "' IruSI fOr l_ and _ "'" be eommingla<l ""'" any olhor /undo; __ _. """ _ .hall r>ol _oanoont by Londer '" on. ....or_ dlspoelffon. Upon _ipt. GllInlO' _ ~ del...... any &<lOIl..- to L..-. I, TIde. Greneor _,...... and w...."'" '" 1.8_ .... ~ l10Ias good oond """""leblo _ '" "'" c-t"'.l lr"" .... doe' 0/ .. ..... and 8I1ClJmIlr...,.. "'COll' tor the lien oIrhlc __ No lfnenc:1ng .Ia_ _.q MY at .... ~ .. on ... 111 ..... public _ <<her ""'" Ihose _ _ ... ucurII)r """001 a_". ..io Agr_ 0( fa _ Landa< .... __"rcdlly c..,./Il'''. G,..,." slI8ll11"I'" I.oooor. rIgID In..... CoIalerOl 1\QOi'o>11ho cl.... and demands 0/ alI_ _.. eon.w.l S<:hcdvl..- 0"" 1.0<_ It<a_ as ... ~., consists 0/ t\vonIO<y. Gr_ Il/Ifld _... \0 L.-... ... _ os L~ .holl reqolr.. .- ..... cIeoctlp(ions. and dosiQn8tioo& or ..... c_ral .. l_ moy req"'" '" id<lnlIfy 1h8 n....r.. -. ond lOCatIon 0/ ...,h Co/Io,.,... Su:h Wonnollon Shalf .. """'n8d /or l3ronbi IInd """" 0/ ;jS _ or '....Id """,ponies. ~ ond Int_ 01 CaOallOf3l. Gtonlar _ _In &Illaog/llfo ~lIIln good eoMIl/Oll.nd.-u. Or"""" wlIl"",_ or permlt ""'- to or d_1On or lh. C_..... or """ port of the CoIIale,ll Lend.r...... """I_ad r~"" ond ogonIs ..... _ ~ rlghr 01 IR __ _ II> _""".. ","pocl. lInd.udIr rh. eoa.n...., ",lloreWor loCaled. G..._ shoJi -..ar IlOllIy L8nd4r 01 all cases twaMng Cl'l'e reu..m., r6leCUOn, f.polCtCCion. loss or deltnAQe c1f Of so any CaIIBIsJ..; of any request lOr ord or adJUGCmBnl or gf Q"Y ....r '""_ wing ..Ill reepect to tho Col/elor", ond oeno'eJIy 0/ .. _Ings """ ..._ e/f1lCti"lllhe COlIollollll or .... ....... or the _ 0/ "'" ""'_... T~ Jwcas:mentI and Ltens~ GI'1ll'\tOt' will P8~ when q"", eO taJ:ti, au~smenlS and IfOnS upon 1:1'1& ~ai,. Itc UN or gpor.~. ~ this ~. upon any Pf<lIIlI$SCty nolo or ........OYldenclnq. 1M 1ndob4_.. or ~ 4'1)' 01 ... _ _1Illd 0_. G_"'. WlIht>oItI on. _ poymenr ., may 0"'" to _.1 ..y lIOn l Q,._ 10 '" good I.1lh COIllluctlng an oppn:lpliolll _ to .,....1 lh8 0"""""'" '" poy ond SO fonQ IS l.8ndeI'. _"'" .. fI18 ColI....., '" t10l joopoRlitod k1 Len<t6r's .... op;njon. "1It8 C-.. '" alll>/8Cl8d to I 'Ion w_ is not ~ wJrhln fIfleon (IS) <lay.. Gran"" oIIoa deP<>tril _Under cash. . .S<lIflOlont ..".,.,81.......ty band or ."... securl<y .....loc:Iilry .....".,., in "" a"""", ,-u.'010 prOVlUo "'lhe dischoIg.""" Uen plus ""y 1Il_. _IS. 8ltOr/1lIY$' f_ orothor"'"'1/H thaI _lid "'.RI. .. . ....... 01 /OnIclOSUr.. .... ..Ie 01 IN c...._. 'n any QOl'II88l GtonfOl' _ _ _ 0'" t.ondor end lI/l&Il &8lIoIy any finol IdvMf JlIdgnWnf b9f0re Sflfon:mnGnt: against 1M CollcltefSI. GrGn10l' ah6'l name Lender .. an QdditioMl obligee ur$r eny .urAtry boncI tumfGhecl in Il\6 conl8Gt procill8d1nQ5. ~ W/dJ Qovommenal 1I<qu"""",nu. to_ _I oomply prompIIy wllh ." "'WI. _a,"" f\l1e6 end 'oguladon' of all govorrlft\lJ/\l4lau_. .- or..._ IrI eIl8c~ appllCOlll. '" 1he ~ pr_n. dIapoolllon. or 1/8. 01... ColI8torol. Q_ may coni.., '^ good ,.... any ,..". ""'. _'" regulofion and _. """""Ieoo8 dur;"g...y pt~ _g ~_a/ll, so Ianq.. Lendot'I II1lereat;"lhe CoI_... in ......,.. """Ion. 15"",__Hu.atdous SubsuItC8. Grantor rdDtflUrlIC ard- wa,.,.ntI: rtMil Ine eou.r,mll MVCIf hel b<Hn ond nevar. Will bG GO: tong N: Ihle Agreomonr 'emains I lien on ... CoI_at. usld lor "'" gon.t.llon. """'"...._ _.. .._poI1otion. ...._ dfspooal. ""..... or ......"'_ r...... 0( on. _ w.... or SlItIOlAnce. eo l/xlso ..... ... _In "'. CoI\lprO/tGmiv. l!_toI A..-. Cor1lp8IIsauon, atId u.bt1ily Acf 0/ 1880. .0 amandecl. "" O.S.C. SOClJon ge01. or ""l. f'Cef\CLA'). "'" SuporltJnd _menIS and __llon Act 0/ lsea. Pub. LN.. ~11Il ("SARA'). "'" Haz<udouo "'",."'". Tron.......llon AcI. 49 U.S.C. Seclion 1101. .1_.. !h. Rooourc. Cone8JVolion and R-..y ~ 42 U,S.C. __ 8901. .. ""'I.. or olt1or oppI_ slole or Fodorel IeWS. rutes. 01 teg,,''""'"'' _prOd pun"..n'lO any a1lhe /orovoing. Tn8....... .~._ we..... And _ sUbc_- _ .,..1ndudo. wl1hollt r""'rol!on. _ _"...,...." by-produclO or any btc1lol1lh....... """ _.... _ rOpre8O<llallan& end _rr.ndeo _ined heroin "'. ""'ad on GI>lntot's <I... dIIfQence h "'~ lhe 00Ila_ .... IlllZ4tdouo _ and...-...... _....8by (o)"""'es "'" _Iv., any lu..'. dlIlms agelnal ~ lorlndomnlly or _ h \he "".... <ir_ *"""'. liable .... __ or....., _.. ..- any .uch lew&. A'ld (II) a~... 10 inOotmlfy fItld />01<1 _s l..-r .~oln.' ony and .. ololm. end _ resulllng ""'" . broach 0111110 provloion 0/ "'" Ail'_. Tnlt obIiq&Ilon 10 indomnlfy 01>08 slU\ltv6lhe poyrnG<ll "1110 lnd.bIed...... IInd Iho sati&t&01lon ot!hls A_I l'1i1I'n!eft,act of CmI~lty In~_ GrlMtOr ,hail p(QCUN' Grld tNlintafn .. tm<s In-5UtMcB. inclUding wUhouI trniCalion fIN. 'f\4ft aad UablUty 'CVYUrage. ~ WI1h eucn dher iMursnca ... J..vndst ntd)' .-equlre with rdi~ ~O U1e ColI_r". JI'I lorn1. MJ1Ol.R'I;. oover8ge& AM _is rouonaI>Iy __bl. .. L.-' ond Is.ued by . company or ~ ,ea.-y occsplal>lo '" l..,,<ter. GI1lrl.... l4>/lO r_' of l8r1<Ior, wifI_ "'.l4ndor 110m tme 10 '""" "'. _ or a_en 01"'"","""" h 'orm salisf&<lofy Ie l.AInder. -.., GIl(>uIaliono _ coveraqe. . will not be _ or ._ _ 0""" lWllf1I\' (20) d...' P<"" _ _ 01 I.ender _ nollocllldlng eoy _ 0/ "" Insurer'. UobIllY tor lsilUr. to (/Iv. sU<:lt . nolioo. Ellen insurance poIlCI' .Iso """" _ on _'"""" ~Q IhoJ _.11811I _ 01 Lonfor will nor III lmp8Ir'" .. ony or.. ny 8n}I .... .......... or <loIttAl at Granlor or eny 0_ oarsOll. In c:onnodoon _ .. poIlQ.. covering ....... '" - L8I1dOr l1oIlIo or is _ad . """"rIlV _01. Grantor wlII ",,,,,<Ie /.OJw:ior willi .""" Iou /llIl'- 01' _ _om. ... ......... mey roq,,~.. II 0_ o! any ....... ,.... .,....In or .....nlaln any'rn".....n"" "" requlrO<l "-r """ AgIVGmOflI. Lender may (W otJ8II r>ol be oI>lI_ 01' obtain ouch ......r..,..... t...- ""_ """,oprlal.. indudIng U "10._" "8'ngIa '"_ ",........... _ will _ only I.onda"sln_c In "'" Co/-.u. ~don of ....r__ Pro<eed<. Grantor....e.II pr""'Plfy I10CiIy l...- '" .n. Iou or ~ to ""' ColI4lor.L L8nder mot maIur "'''''' aI '_If a,,,,,,,,, _ to do.. witn... -lIS) <18\'0 0I1/tO co,ll8lly. AfI__ 0/ any insuron.. on tile ColIIIeral. -ll ~ '"""""'" 16/09/2004 WEO 14: 18 FAX 14l004/006 . a ...~.~_ ___.......... w......~ I{UVV"4 03'29.2000 L~)..,MERaAL SECURITY AGREEMEN. (CoIldll\ltd) P.3 __. ol>?1I "" hold IlY ....- OS _ d ... COIIa'....,. IIl.8n<18r --. 10 repe!r or /op/aCemenl 01 lIMo domIIQ8d or Gootn>y... C_toro~ I...... -. .-.."""""""'V proal of..tI<lflCIINre. ilOY or _ _!rom "'" proc_ for lh8 _ C<)8\ of _r '" fOstoralfor>. IlLondot _ nol CONIIHIl ., _Ir or roplocomont of lhe OoIIa""oI. lO"dor _ roWn a ._ _un! 01 "'" JlIOOO'ld= to I"'y .. of Ill. ,..._.. and _ pey8>. bolonoe., OrOlllQ(. N>i ~ w.lidlhav. 110'_ _ _ six (81 _ .1Ierlheitr_ipISnd _ G_r """ nol~..,_IO.... ropolr or ....tors\ianof the CoI!a_ aha111r8 wed \0 Pf_y lllo ~ """"'n<e R...,.... UII1Clot may requlr6 er_lo.......... w"" LII/ldot .............Ior ..~ oIln''''''''''''lIl'811llums, whielt r..."'.. ..,.. b. _ by monIhIy payM8I\IS frO(tl Gr_r '" . ..... _ed Ily ~ ro ... .uIficl"'" 10 rwod-. 01 1...1 ...... (15) dey. _ lIMo 11'_ dUo> _ """,omls'" ""'.. _... ....nul..";............. to Il8 peId. n...... (1.' day. _. ""l""8"l1o doe.1t1e ___ are _ GronIDr _ \IPOf1 """""'" llOY lII1Y _to~. The _1V8 ..ndo"'" be _Ily ~ IS. go..- <lopooIt """ S/IOJ _..... ~t.~ """""'" _1.8nd... may"",fY by peymenl <II ... ino_ pr......... requAd to be peId by G_r os ..." """""'" due. ~ -. noI_ the /05QM0 _ In .....1 r... Grantor, and l.ondM 16 IlOl tho agoo! of Gramor tor llO...ant 01 It.. """_ "'"'""""" l'llqUIrod '" "" paid fly Gr_r, Tho ...__ "" tho pe~ol promi..... ..... ,_ a_. _ IlIGpoIISibjfity. II\SIlI'OIIa R<pons. Gran(Or. upon _ 01 LoMOr, _ ,_ to ~... ~ on _'8>CIoIIng policy 01 _"""" ohowInQ CcJCh _,... 0$ '--' mey .- _1/lClUdIoQ .... 1OIlowing: (.1""'...... '" lhe NuI8(; (bllbe rfs" "''''0<1; leI N -W <11 tho pollC1: (d) lIMo -..Insured: (0) thelhen _ '"'''''' "" ""'...... oI....1cl1 ...._ has boon ClbIOined.ncl tho _ oI-.-g """ vII",,; """ (q",. _"""" dabo 01.... pol<Iy. b _... <010_ sholl """'...._ by Londor 1_ "'" mono -. ..... onnuotly) ""....en indepondenr ~"_1OIy co L._r d_. .'IIPl'_, 1M c..h v...... '" repIac8<11O/lIoost ollhe C0II01QfJl. CIlANrOll'S ItlCiHT TO POSSES5ION. VnlII dele... a_ mill' 118... _olon 01 Ill. l&1glbIe pet""'" P'O/lOrtY ond _I us. Of lIIIl,.,. COIlaIorOl _ mo. UH . In atOy "'''''''' "*""" .... nc~ WlIfl .... A__ or ... _tad Doc_, p-oorided thai Grantors rIgI11 ro -"'" "'" _ ... __ not apply lO any CdIaloral .....r. _SSIon or ... ~ by \.011<I.' Ie ,oquiNd Ily low .. perfoc! Loride~. _""'" lnl8rest Ill""'" CoIeloral. n....- or en, _has pcIlI_.ion of _ ~al. _ 1>810", otah"'.. EvonI 0'_ lend8< shall "" _.."... .._bod..........,. car.lr1 .......loay llIld plWS8fV3llon 01 m. CoIIG_llBndat """....... _...._ _ os G,onID< ..... _ 0' .. .....-. In le_f. ..... _lion. ..... doom ~.. UlldGt lIlo c~c:ums_, but _ 10 """'" any IOquasllly Gr...... sI18ll nor of Irs.., llo _ 10 1>0 a I........ ox....... _'...... Lander.1uIll "'" be r~8<l to lIk. 8IYf _ _uoy 10 _..... any tigtul; In me COffa!etaf 8Q4I'\St plioi' p.rtius. nor 10 ptCfgc:l, p(MEIfW or mo,1sip "11)' HCUtIcy ~orGGl ~ 10 eoc=wo the todebIedneM. ~TURE~ BY LENOEIl. II no( _god or pol(! _. due. I.Jln<ler mat (but _ not be obllgotQ<J 101 dI_go '" !laY any .......n'" "",_to bo _god or lllIld by G_ """'" ftds .&gnement. IncJud;ng will1out1lmllallon .. IU", liens. GllCUrl\)I _..... a"eumb".,.,... and other da;ms. .. &ny _ ..vlOG or pIIlCed "" lit<> CoIlateroI. l8l\d<< al... rnay (I>ut shall not 1>0 obllQated 10) pey all COS" for ","urlng. maIrUaln;ng """ proseM>g tho CoIl4Ietll. All sUCh _eo _.. or peId by ~ for such _eo WfIl1l18n beat _... ..... ... </UIrgao' under the Nole'rom \Il8 _ """"I8d or pekllly l...w 10 tho dolo "__by Gramor. All .uch __ booom8 0 port (J/ tho __I _. .. Lenao1'. ""'ion. wII (OJ bO poyabfe on -.and. (b) be ._ .. rho bel<l_ 01... _ aod bo apportIOn"" _ and .. payobIo wtlll any _ _to -.. duo during _ II) lt1e IOrm 01 any oppficabI. ina_ policy or (II) \lltl r-.g """' .. "'" Nota. or l~) boo -'*' .. . balloon peym'"11 wnich wJII be ".,. AIldll8table 1II ... .........s ms\Ullly. TI1Is AgreMlenl _ .... """"'" peymenr 01"... _. S<la/l right _ ". In __ lo all olh<lr rlghfG and romadies k>. _ LUlldGr ","y be _ __ "'. occ"'~. cI en E..... 01 081_ EVtiNl'S Of DEfAULf. E<<ch 01'" _g.... cons_ en ev8'll of 08_ underlhis Agreemerlt I>d>uk" __.... 1'011"'. d G_.. _ any poymont when due 0Il1l\e ~.. OdIer ~JUtts. F.'UI"8 of Grantot " comply wl!h (}f ItJ pIIrlomt atYt/ otfJOr tom\. ObIlQ4tfan. CoYonam Of concflllon cantaiMCIIn tN& AQteomMt ar h any of the Aerat.d Documonrs Of' '" any ouw agraqmgnt bslweet1 LondGf Illld Orantzx, Dt/auk In f...or or Third hnJa. Should Borrowe< or .ny _ doIotAt undar _loan. .'<I....1on 0/ ",8lllr. Gecurity ogreomont. __. or _. a","""","" or an. _ _ " "'_ of any ...., _ or ........ lhfll ".., ""'''riaIy affeat _ or BorlOWer'S pnl(l8I\Y Of _a or any Gr.rvors obllily to ropey In. """'" '" porlonn ..,;, "",pectlll. oIlSg.l..... under lI1io Agr_ or any or Ill. ""'oled lloo>Jnlen19. f...., Sti_.... Any wetr8nly, '.pr..onlotron 01' """"""nI me"" or '_ad 10 le/lde, by or "" _ of Gr&IIlo, undo( IIJI. IIgr_11I. "'. Not& or mill AMUed Documents .. fal:l8 0( mlsleadf/19 in '11)" matGt'aaI ",poet. 4idler now ." At tho rIme nt6de 01' fumlahecf. De"""'" CoII_ar.,.tron. This AQr...",..., or any 0/ .... ReleIO<l Docun_ CUa&8S 10 be In fuo /orCa and etfoe< (JflC!tJCllnQ 'pi""" of 8/ly """"'""" dOC_is '0 or_ 0 v.1Id ond l"'rf8d8d -..rity _or IIonI et _ tlme _'or M\'f ra""",,. ~"""<Y. Tho dl..OIurlorl or .",.".tion 01 OrlllllO(S .......... a. a going ........... the ""'oIWncy 01 Grenlor. ",. Iljlpoi""""'" of a r...rver lor ..... pan 01 Gm1Ior'. _. any ...~ /0, "'" ~ 01 _""'", "oy ~ of ._ ..""'oot, or fl. cornmonoorne<lI 01 any "",cHdII", onder.... _upccy o<lnsOlv"""Y laws Ily OI8Glblsl_. Gro<fIfO( '" ForfdnI.. Procmlln&s. Commencemonl of "-""sure or fori...... ~. ........r Ily Jud- _-110 ool1./1e1p, ............,.. or any other _. Ily any ._ 0/ Grantor or by fIO\' _ammor>tal _ -"'"' "'" CclI...- or.fIlI ""'"' _ .1IClIIfnQ d1e _adn..... ThIs _ . gomIs_ '" any 0/ Granlor. deposk _nb with l.Bndllr. /iolMlvor. lllI. EvonI 01 DeloUII ..... nol tppl)' . -"1> . good ,."" d;,,,,,,,,"y _ .. to"" WIIidi!y '" .....oneblenes. '" "'" ."Im _ i. "'" ..... 01 d1e OlVdilor or 10<1...... llroceed1ng ond '''ronto< gIVe. lande, _ """". ollhe e,ed;'" .. forfeltu,. ptClCOIe<Iing and dIljlosjIs ..... t.ondar ........ Or 0 surely bond I... "'" "'........ or """"'Uf. ~ing. k1 on 0IIIcwll d.tor_ Ily t.end8r. in ;ts..".. d1cefGticn. os boVlg oto 044quot. _ or bond tor 1M _to. tv_ AIl-. (i......I<)(. An, O' ... preceding __ ..,.... with rnp8C1to eny G......... 01 any '" ". rnd8llOldneaa or oud1 0.......- cll81 at b4t0mei incotnpQlarV. l.eMer. at its cpfiQtI, may. but shall l10t be reql.lirlld 101 parmlt lhe OwrantDt'. .__ to assume ~ U10 """"lIOnS ....Ir1ll........ "'" O"""""Y in . manner _1.""''11 to L""""'. ...... in doillCl.... c"'" WID Event 01 Dole.... - CNn&oo. A molBllcal _. d1&rIllf """"'" " Or....... r.."",,;oJ cendlGon. or Lander 11aII_ ... proapoot of peymanl. 0' "........._ 01 Ill. Indebl_ .. impIdtod. .' . ~, Lendo<, tot ~faitn, dtooms lIG6itlnsocure. .RIef>t ID a... if any llG/lNt, __. Oot"'-""" I~ 10 c",_ and ~ Gr._ has not -.. glven ~ p<ior _ of. breech oIlho ..... """",,Ion of IIl/o ~ . ""'" /)0 c:tlRId (eM no !;y"", 01 Dafow wit haw ~ U GranIa'. afte< l.eMor _ wr!Il8n _ d~ our. "! auch dolalll1.' C.) _.. .... de_ _1llIcIy (30) d&yo; ot (l>J. U ,........ r_ ",.>t.""" f1irtv /30) ~ fmmodiotoIy - "GpO ..- L..- _ in Londer'. .... _...... 10 Ila .uIlIclOlllIO ""'" ... dela"" anc:t 1I1<lIoe/t'or cont..... and _.~loI.. .., r_ on.! ...,...... s\epo ._ \0 __................ soon.. r......-y prlldlCllL :ans AND JWofEDres ON OefAUl.r. If on Evont 01 De..... ""'""""""'" lItJo AorMfl18"llll env IIrne """""""r. '-der ahaII have ell hi tf_ of ",,'.fO.d polly onI8r VIe /"ems_nIB UnIfOrm C.."man:lal Cod.. 'n 4ddIlIon and _ 1_ l.o<1da< me, __ env .... or 11\01. of 1ho ...ing rights and f111_i8s: . 16/09/2004 WED 14: 18 FAX 14l005/006 - -_.-- ----- -.-.... ~V.l..U <>-3.29-2000 )MMERCIAL SECURITY AGUEMEi .' (ContInued) Pa&~ .. -----...- ___...Inde1l_ 1._ may _lI18 onliro1ndel>to<lne<o, In"""""".... P'epqment ponolly.mien GrantOr _llo rOOUired to p;ay. tmmAdiJtIeI)' dutt ancI payetJl8. wiIlCM llOIic.. """"""" C_. l.8ndfo' may fSQuI,. G_1o _.r "'....- 011 or.". _ 0/ lt18 c.q.to"" .nd .ny"" -'1"_ 01 \lie """ __ """Mo to lito CoIt_al. ~ rIllI)' r_ _ to ..._lhe CoIlalenoI_ make #._ It> Londe, eta ~., be ~ by Lender. l.,.,d.".... eIteIl n.va r..u _ to enIor _ dt4 /lIOP8fIY ()! _ 10 to"" _SIOrl of .nd ramove "'" C>IIotwaI. If Ih6 CoIaIetlII __ .."., good8 nol ~ by \IllS "",_t at tII8 ...... 01 "'pooM$Slon. G_ _ ~ _Iak. .treh Othor goodS. ptOYktod that l.4ncter makes ~ etfons 10 ,.11MtI1lem to GrAntor.ft<< l'OpOS'es!Iicn.. Sell dlo ColIatmI. lander'hoa hovo fuII_", It> eoll. _. _or. "'.- _. "''''' l/lO ColIaterel or ~ ""..."', In lis own fIoIl1O or _ 0/ GMntor. I.sn<lor may seDlhe Col!aler&l., ~ OUGlion 0("""'" ..,.. Unles.... CofIRIBraI __ '" _ ~ In WlI"" 0( .. 01. ...... ClI&_ .... on. O'4C<>gI1IZed """".l.t...-. will _ G_ rea........ _ <11 /he ..... ""'" """"" .... priY.... .a1. 0' _ _ ilIBnded lIl>po>ll... 0I1l18 CoIla1Mm is '" ba modo. T.. 18qUIromenla ot _ _ .11IIlI1la """ . ouch _ is gIveIt at....1 .... (10) dayO _ tha _ of tne seJe or dISposition. All _.. _ling '" "'" """"ilIon of "'" C_..'. Including _ ,-. lI>t a_.. 01 "''''''IrIll. _'" Ineumg. pnlJlGting Ill<.... and oeI/VIQ Il18 COlI._ oIvIJJ _ . pori "'..,. __ """'"" by 1h1s AgreenlIInt end..... bo P*Y8l>1eon-. wiIh -"".1"'" NolO.... from....,. at __Ute' "".. r_1d. AppoInI_. T. ""'._ pe<mitlecl by """"'.Illa'.... ~ wi nave Iho _0 """.. end __a _nlI01O "'" __ant 0( . r_vor; (0) l.endor .....y _ . ,..,.ivor oppcit... .. . ..._ 01 Jlaht. (b) "'" __ mey IlIr An ""'*"'....of L.- """ me. ._ _ bond. 0Ild IIll "" _ 0/... __ and.is '" her -...y sI18II tioconIa Il'IlIl Gll/18'11<l8OlOdn8u _Ily lt1Is ~and oil.. "" PO""",. on~. wiIh _.'811118 Nolo rare 'rom ..... ot ~..........~. CaII<<t Itewtllle$, Appl, .....COUI1... Ulnd.... _ ilslllf... through. __. moy _.... P'Y"**. ren". -. and __ foom 1ha ColIalfraI. I..oo<l'or "",y 41 ."1' IIm8 .. 110 diScla'ion .."""lot _ CoI'.tar'" *"" 110 """ ....... ot ..... GI .. """"n... and r_ 1/1. _. ....... _. and r.........._mm_ hold "'"........ &ecurIty lor.... -.. Of"1>P!i II "'_ oI1b8_In...", onf8r (II prol_ ..lender may -. _or..... r::onatorol """"roll 01_, _, rntong/bIeo, insur"""" poticioo. inSIr_ """1lOl _. """"OS In _. or clll'iler propeny. I.e<l4er may -.... _I. r....ipc lot, ..IU.. __. "'*""" ....lot. lor""'.... or ".,11". an ... C_ral.. \.OndI>r..... """"mine. __ or "'" I_c or ColIuIor" .. tIMNl due. For _ _eo. ~ 1T8Y. on ......" 0/."" .,.... nome 01 G,IrUDr. -. """" end ~a 01 ma.lIddr_1o Gr_...._ ony oddMoo to _ .... __ or. I. be aenc; orwJ ._ noIes. cnOOks. ""'fill. cnoney 0"",,". _.. ot fIUo. Ino_. aNI iIoImo parle1n1rtg 10 peymen~ ohlpmINll. or .IOr.oI en, a_or.... Tolacl...lo coIl_ LonfIer may nolIly eccouno: _c """ ""'igor' an any Coh_ to rnok8 po,"'.... dirvolIy It> ~. . 01>.... Doft<'ency. <<l#1dOr """""... to soil _ or ._ 01 III. C_eraJ, lAn<Ior fIlA, oblllln .. _ qelnsI Gran"" for any -..,.,., rerJ18Inb1O on 1hIt JndQbttlCineu dus 10 tendcN' aft8r appIICatidln of aU 4mounce roc&fVed fn:wn tile P8fclse 0' the tigt'q provtdad in INs AQtG8mQnt Gta;t11I)( shall be IlatJle tor .. dlil(~ evon ., 119 Iraneacaan ~ in chis tubcQCtJo(l kI . sale of ~ounb or oh4tt8t papet. Ochar IUIIho and llelM_. l.eI1dor.hoIl have 011 !he rfghoo .... .- 01 a ...u,ea _ under Ih. pnwtot..,. of the UnIlonn ~I COdo. AS IN)" bo cunendcd ftom-tirntJ to U""'. In atftIlian. lander sMtl rsavo lJt'Id IMY ...91$0 any or all oNt riuf1tS and temocrfOS it may have 6.vUabfe at: Iow~ in equJrr. Of ottlorwi.a. Cum.b............... All Of L8<1d8r'a rights _ __. _....idenoed by !his Au<- or'" AeI_ a"""..- Ot Ily any _ oo1ling, _ ""............. and....y be ""_ad 'iIlgo.Wly or _onlly. _Ily ~ 10 p<4&U8 OIlY rvmody_ not _. py"",n ot any _ ......... _ "" __.. mQk8 _ or to ..... ...... III ~'" en obligatIOn of a........ UndOr lI>8 Ac1f- aIlet o__c f.1lunl1o l>efl""" sIl8I "'" a<<eet 1.0........ rig"'" _. . do/d....1O a......... its re_. H1SCEUANEOUS PJl.OVlSlONS. ",. 'Qj~ ""o"'vo,,,..,,, provioions .,a. pert 01_ AQr_: _ This AQreon_. __ wlllt ony AaIa,ad tloc:uInoNa. _1M... 1118 _e "~"""'"'" and 40(- 01 \118 llOrtifi .. 10 'h. maIt8,. .01 /on/lln 111I5 Agt-. No _.rron ot or .mend.".". '" this ~I ""of be _". """"'" ~Iv,," In wrlllng 011<1 lliQllOd by tho_or _ Gougnt Iu be chiir!led or_ by 1110 allera..... Of _I. ~ loaW. This Agt_I_ b88l'J dflIj_od 10 l.endor ondaccapted by L..-In 1ho C~ 01 Me..llCtlu._. W \11... is . IOwa... GranlOr..... upon L..-o roqllOSl .. 0._'" lhe jOd_ '" /he coun:c 0' .... eo_.. ot .....__. LeI1<Ief end a_ _oIly...lV9.,. r/gN ro any /tJry ldolt. an,.action, proc....mo. or cou__ brGUQht by trit/1er londor Ot Gn.".... againstlhe other. . 1\llS Ag<oon18nI"'" .. govome<Illy and CMClrUOl/ in acao"'"""" with lhe lawa of... ~ 01___ _... F...; E><ocns<<. GIIU1Ior __ I. pay '-' Gfmend 011 01 l.o<1dor'. _10 end _oe. inoluding _. _ and Lender'. Icgal.......... i>currod In _lion ""'" "'" """""'"'" 01 INS ~. ~ may p:oy GOI>1OOO. 01.. III holp _C9111io ~ """ G_ tiho1l poy I/lO _lIl1d _.. 0/ oUCh enlore......... Costs and.~ _ LAnde~. 8IIomoyo' '- _ /egJJI_ - or nor tha<. " . /aW&ult, InCItJdlnQ ........... Ie... and leQGl .."."... for ~ IlUlC88dIngs (ontf lnc:Iudilg e/Iorts to rocdIIy ot v....."""._..... or~l. "f'l'8l\IS. and.... ontioiPa1Bd """"_ _ _.a. _ 81... -pay 011 cOUll_ an4 6uel1 a""'_..... as ma. ba .''''clod Ily 1M COllI\. UpdOll H....... COplicn _ngo In "'.. 4greomenl ar. 'or COf1V<lI'/..... _ OIW and a'. IlOIlo be ueed 10 Inlorprel or ._ 1110 "'.......",. 01 "". Agr........ M.I~ Poc1J..; eo,-p."... AudJomy. All obHIl...... 01 Grlll1lflr under "'is _..... be jolnl end _oral, .nd 811 ,.lel1ll1Cl>O 10 Gran"" ....0 mean GOOh .nd ovory Gr&ntor. Th.. _.... rho< oect. 0/ ... __ slQning ootowla ...ponotllq ,or oil otlIlQallono In ... AglNnwnL Node.,.. AII_ requJnod '" b' given .nder Ihla Ac1f"""'n1..... be riven in wrl1lng. may .. _, by __ (_ _. ,oq""" by "'W!. _._, ba ""'"". ....... ocwall. _orad '" ....... "-"ilsd ..... .. _11y r~"" ovemighl ......... 0( ~d in 1118 UnIMd Slio... ....... .....leI.58. poacage pr_ 4<lc1r..ud1o ll1e _10_ "'" _Is III "" Given.. !he -. l/lown _.. Ivri Pa>IY _. ~hlI. i.. _... lOt nocf_ _1hIe ~ by gMng _ _on <1Qlit:8 to the oCher _. ._iIyIng 1IllIl the P\IIpc>S8 0/ /he ......,. IS to _ll1e pony'c _.... To the...... porm_ by ~ law. ii_a Is mor. ....., on. Grantor, ""'ice to _ <ar._Ooill .<orl$lIIl/I6 _to all Gr.".,... for llOIIc. _... Gromor wtII taop Lender _ .111I_ 01 Gr.......... currot>! addreae(oo). _of A__ GJlII1Illr _. a"""""" l.6ndao'.. ita trua W 1_ _-t>fect. in'_.. """lUll _ 01 $iA>oliluIian 10 do lie ,~ I.) 10 demand, coaoet, IGCOIvo. recl!lpr,.,. '110 and r_ &II.urns of _ ororl18r _fly """"" may'- or "..._........ duo. -.g or pay",*, tr....ll1e CoIIalor..; (Il) '" ..""llte. 6ign ."" ondorw 0Iry and.r "'elms. _Is, _Pis. .-. drolls Ot-.- ""..... In PO....... "" .... ColIal8r.~ (oj to .oftla Of ""'""""'" .",. O/ld all d_ arlto>g <lIIdat Ina CoGaIosrol, end. .. ... ~ _ 01_ 01 G"""",. 10 _ end dellvet its roI_ end $_"" "'" doIII1: and 1<1) 1411I. any dolm '" cl8tma 0( k> Iota any _ or 6dtut......... ""rt In 8l'JI P~. ...",,, In lIIl own ".",. otln lho neme 01 Gr"""". or _.. _ in ll1e _ of Lender rIllI)''-'' to "" n-....y or _t$8b1o. TIlls _... is QivelI as ,-,'or "'a "-1lIednoso. and lItO .....,...''Y h...8I>y _aorJ io and o/ralI be Irr........... _ - _In In'uII /00:. """ _""" r_ by lends.. ~ev_, <<.. <oUr! of __ iurlodlOrioo _ any ptoVtalon of "'. Ao<_ ro be InvGtid ~ __ as to """ Il'lIGOn oi 16/U9/2UU4 WHU 14:1H ~A! I@006/006 ~ __._ ~ _.....____ ~.4._~ Ie.JUJ..1. . :03.29.2000 , "DMMERCIAL SECURITY AGREEMfi... ' . . (Condnued) Pa..,5 c1""""'''''''. _l!ncling .....1101_ """ proviflcn _ '" tI18nfOr_ lIS fo llnY _ ponlOl\S or _. 1/ _. any """" oltendInQ _lap s""" be _ to "" _ ... be _ tne lhnIls aI ~ o, '4dI<l1ty; _or. u... offtwlag.......... _be.o_......boAlCl<en...,aII_fl'll'/IOIOIl3011111&Ao_lnllll_~___.....~: I~ s.c~ lntmm. Tho ~ 01 _ """""'.""~ shill Do IliIdno upon Gronlor. and _ .......... hol'", f""OO'>lII rOpr_ SUC09Q:COI'S. af1d! dMl5ltl&t IIfld obaIlt8 fJllIGtcNble by Le.14or emf Irs. suooauOt6: add auJQn&.- W.'-, u.-'118II not b8 _10....... _.... rIgIoo und<<1IIIe _.......uo!> _Net '" _ In ~ _ ~ Ily l.Alndor, "lo <Ialey or omro..... on... part or '-</... in ..-Ing "'" rl~ _ _16 os a ...""" of such IfWI1I '" ""11- riQM. A _ by Londfr of . pnl'<IIolon 01 _ Agr_ 01>011 no! orGJldCo '" conoll!ulo . w'"""" 01 Londer'. rigtd _10 de_'- ~ with """ 0/0YiS... or any _ JlIO'Iislon 01"'10 Aar_ No _........ by 14nd8r. nor any....... of d8IIlng __ Lender """ Or....... ahoU __. __ or""Y '" I..tlncIor'$ tfQllb orollll1Y of at....... allIgafloola as fo any lutu,. __. Wh""e,.." "'" __ 01 L...-.. roqUl'" W1d8< _ AQ_~ ... ~ 01..." _, by t..-In ony __ _ POt tonoWIlo c<ItlIinUIng _ \D_""", .......... _ouencons_'. ""1__10 .e_ .llCh'conoonImey ba QfIU1IOCt'" _~;n \hB..,. ~ol~. GAANTOIt ACl(NOWl.WGES tfAVING REAl) ALL TllE PROVISIONS Of TIllS COMMERCIAL SectJlUTY AGUa-fENT, AND GI!ANTOIt AGRas TO ITS TEQ1.S. 11115 AGlUMEHT IS OAT!I) MA1lOl 29, 2000. TffiS AGI1.EiHtNT H... GAANTOR, Undls, Inc. 5IGNEO AND 5EALal IV tilE UNOWlGNEO. (SeAL) ( Corporate Seill ) ~ENDE'" FI", Eutt 8..... F5' .A5ui'P'.CUI.,. u.,e:,,,, &. TJd. ;,..(C)~2OGCI AlltIghti~tP~407AHDlS.LNe;,OVLJ . PENNSYLVANIA DEPARTMENT OF STATE CORPORATION BUREAU UNIFORM COMMERCIAL CODE P.O. BOX 8721 HARRISBURG, PA 17105-8721 FIRST ESSEX BANK FSB 296 ESSEX ST LAWRENCE MA 01842 DEBTOR: LAlIDIS INC WOODCRAFT DR PO BOX 196 MOUNT HOLLY SPRINGS, PA 17065 SECURED PARTY: FIRST ESSEX BANK FSB 296 ESSEX ST LAWRENCE, MA 01842 EFFECTIVE DATE: APRIL 24, 2000 AT 10:53 AM FINANCING STATEMENT NUMBER: 31540015 , ~ FAX .'11 "':~"S~~':':~~~~'~";~:'i~".):..,;;;: :;" . . EXlliRIT ~-d'lJt\. -1' ~~uti'EMQ\tr ".., .u"m''':.i,1r;:.:....~, -;,,':;'.;:':,:,.'.::.'- :j '., ;- ' . ....". ,'" .' .....- O~"'ZI'OO ttE lS,~' bPTOI: ::~.~:~ n. =-~ ,.. .' '.' . ..... "-Joe. MAIUNG ADOWS. r':~: : "... . .~:. "O"'I~""''''''''''''''' 1_5':' ....?~.~ .Y 1.- ":". ",1. " . tc.da t9'. 2GlIO '.- '.' :":~:-' ......' " ...... '.'" 315400/6 '. .' - ~ " CClUAUlA/.DIlaIrIlON< o!-~<:... ;::(, :<>. ~i. :.;':, lire'~~-=:nfi~*;f~~~~r~~\lW=';:.r-1OIl~ ___--...... .. 0 ~. ........ '.. ' 0 'Iii............. u J \of...... ........."'...__..___......._.............r . _' u:--,o, .. ___I " . ,.. ". 1loIl~.....1I..._.........~;;,.,.,... ... ',. ,. .. :.: . .: -; ~~ . . .. , :.",~ ~~:.~ .::1:.....::- .",':' ';'-;..:;- ,>,.. , -, . " ',.' , l'l"! f,'" ", : ~ . ':"J_.: ; .~: :..; ", .. . .. ~ "-'. , . :i.: .... .:~~~::- ,- .~"":._' .:'. ..,t... . ~'~}.:'. . .,.... -.:' ;.1 . . :,:,'~~':";<', ::' t.;~:: .::',:::" .; ;..':~", ; .., .-~:.~~'~ . ~", .~::it:: ". .' "'.,,' . ~t~~ ..;~". . :' .' ." -. ~.' . "-: ,~ : .-. .::,. .:"i .' \;. '- . ." " ., :", ..' . .'::.;:l~, ',' '.. ,,~ .. I~'-; '.:, ,. .}. ',' ~)" ". '.' ,:'" .~. - ': I.~':~' ;.~{'! r' .'j . ~. :l;~ .' ~ ),: . .~ . I . ~!r.'~ti,~;i. . ":~~', ,,:,,.; ""., . ":',?;, .. .';" .. o' '. ',,1, ",t-. >>'-11 ..' '.~ ~ . .:'~:\ r._.; . .... i':~' . L~.. '. .:::.:: . ::":" ...__....IIQj.U.....,...~.,..___...... _..... .-.., ., t /" ~. 0', __. . ":" 0' -<It., .. -...' ';0-" , . ;-','; .:' ~',:. .:~:~' ":.. -,'. . ,-.{f:~~..:~~ii).~~ .:,::: i,. .,~ii) j~.i~;ir ;.;-', ...-0:, . .... .. .:.:...;;.' -:;..... .\~. Ir- >.. '.1"- ."';; :'" ..... "-\I " ,,' .. " , 0 . " . ..';-- '...... ..... : .,' . .,~.. . __..... ...".10' f"llA "'0 00" , &l'Ui) 'AtTlES ~ ~ (u.I,..,...............,....rr.lllnt........ UIldIa. Inc. _on ome. p 0 Iloor 196 Ml Holly 6pIttgO. PA 1708S )E8TQjIIIJ..... .....,......II_"~)~.........___. E8lOfI ...."... llAM:.......... ".........,.- ~.-.u;; :CUMEO p~ ........1 ~,..... _ ..........,... ..... It:It ~~.........: ~ e- -. PS8. 2!l6 Essox_ ......,.".....01_ hONEEISJo;~PNt1Y ~~_"'1"~)McI ....Ior-..c..........,..~; !::rAl..lVPESOFP.t,RTG ~1I'~J; ] Ttwt""""0.64~ ....".SetW'ld P.Il)'.""aI\ ""l.......... "...or. -..0,. J n..*"",- ~"'"$ecUlMPIM"",""~. tI1d ~~."""",",r ] ~,..1'~VM'Y SKUQD ,....TY SlGNA~SJ \"~1BIBtT1$~Wfn4ONt.V THE sE:CURQ\PAl'tT'f", ,ruN:IO~.~~lft~f\7h<<.~ >>- ] ] ACQUIRED ~flA CMANGE OF 1tIAME.1OC;;1Il'ITY CIA COAPOA~TE 8tRUC'nJAE 01.... tMCMot. "\O~"""'ohM\""", dr'~.....".,~IftAHOTHf"COUHn'InP'~ ] -..... CClt.AfEAAt WAS WCJVa) ..,....COUNt'f. ] ......,.....oenOM"SM:SUWCEORPl..ACE.OF&US1t4&$$ WASMOVEOw"'~. r,~..~""""'~AHO'toEIf JUHlSDlCTI(ltf- , .......,.w.CQJ.ATeNAl..WAS MOW:OIoP_Jf'\;tItll__ I ~_DeltfOW$~NCE OR P\.JrlCf: OF 8U6lHe8& WQICNED.P......... r.l..K.::Jl t.';'.::JC.A 01\~n L/JUI k C@jY':..J Ftt,INBHO.,........."....oIlIc8tJ: flMJ\t.._.,iK; STA T919IT \It5CNI~w.~S:OFiMucc., OA.... __.,.!.u --- :tV ~cnJ -d53~ ILU:- . , . .~ " ') I , " - r,i-! ~ ;"::;' '. ;~'_\....L llWIF~S1'A1'EMeNfIl,.....,'ar~,..,.....IO....~~eoo..Mlf~t\i\:Sy~'./j\ ,i'; 1. ............~~t.hJ -.., " .. .., .. o s.c...,.,d...c......_~.. [!] ..........,.0lJIICe o __.....01 . .,...,. ........~~ StEEl'$(l1ftJf QP1lONAl~IM:IlI'nRCAH:lN~ "_I__~. . COUA T1/W. 7 . ............. lit..... MflkKf\IPe: 2 SM_E_IOUCC .~_dal8d _29, 2000. .. m ~ONy.,4Rl'9d)l'1vcIwcuolu..t;QW......_IMO~ ID6fT1fYAElATEOAEALESTATL"~ lM~It_(1r~tc:f*:lc~. -- .. 0 CAOPS~Of.be~Of\- It 0 QOOlII'tIlI'WCfI"'IO~l"tJt"'-"'fQn- t, 0 MlNI;I\ALSOftl'le_~.aIf..w,..t.....~OI'- d. 0 ACCOlXillSfU<:6Ul.fNJ,.AOMmESAlEOFMIfllfl<A.u:(Jr......~olIt1M'QllIJ .....~..~-- . > Nfo/fooIlIng_"'.; STREET AQDAE!S: ~SCPRIE Al~ 8cJolo: .. dtet'<<kQl'o8} DOMdI O~.PJllglO)_. Cowo\cy. tJtoI,-,"'veal~ o DMuloa......,...NlSt"'Nl ,,<'lOOeotot....~.........flI~ " OEllTOl SIGNATURElS) 1)ablot~t , - ~..PAOCEfDSd""~~"'DlOct'.," ~~--:::ri==-~~....~ ,. .......~0Il..~"'-"dfIO~1. sreuN"OP.tAT\"S*lA1UR5(8}: ,. f~~'Mt&f")Ia~",.a.o-J: ItD fORM. fOltH UCC.I (7"9) bt ... 5<0...". 01... C<l....,""....kh 01 P_Iv..... " MTUWAEce"TTO: fII>t Essu ....... fiB 296 &<.. StrHt ~. tv. Olli2 12 SKUREIl ,....TY COPY NOTE - ThIo pogo'" noli>. returned fly Iho~. 0/ SlIto. u~/l$/OO Tl~ 15:4& FAX &78 88& 7&05 FIRST ESSE! &ANK EXI 'IT TO UCC-l FINANCING ST ....EMENT QJ024 ...-~ ,- bEaTOR: ~ 29. 2000 ........Int. HAJUNG ADDRESS: W-.rt:Dtlw -'0"196, ML IlolIpSc>mll.'^ 17065 C0UA1IIlAL IlE5ClI'TION< (1)1979 GtoVE lMSJOo, SIN 45173 tIllCalJrPHODB.619O AI-'RUAINCIMNf IIlOYONS CAl'ACITY INCi.IJDlN(;, 191 FTIOOM, IZS FT J., 6-AXJ.tCAallEa, 7+TONIlI.OCK, no lIlIIU. Wm#IVa AND HOOl(. HPCEDES DIlSa lW AND DOWIol, _ NUMIa .1901101 (19911:........... oar of die.....,.., Is __or~1oIor. .-.....-. -.... a_"'~ro.",ofdle'" ...... _of.",W .........., of_ ~...... .1"\1".."...-....., ofdlO .........llncllolol--.. -" _"I~ "'" ~ ~)_ TIlls fInmcJnc s... _is lit "" ~.. dlo m1_........ ...... - os "'" lICe-I FIlutIdtI 5.......... by first Elru B.... FSI oncI 1M ............. C"",._._ Am_I..... fSII Iy, -..--- .... LAMM, RUBENSTONE, TOTARO & DAVID, LLC By: Sherry D. Lowe, Esquire Jennifer M. Davies, Esquire Attorney 1.D. No. 66096 and 80988 Four Greenwood Square, Suite 200 Bensalem, P A 19020 (215) 638-9330 (215) 638-2867 - Facsimile Attorneys For Plaintiff SOVEREIGN BANK One Wall Street Manchester, NH 03101 COURT OF COMMON PLEAS CUMBERLAND COUNTY, PA Plaintiff, vs. NO. LANDIS, INC. 30 Woodcraft Drive Mount Holly Springs, P A 17065 and STEVEN CAPUANO 1229 Blossom Terrace Boiling Springs, P A 17007 Defendants. CERTIFICATE OF SERVICE I, Sherry D. Lowe, Esquire hereby certify that on October 8, 2004, I caused a true and correct copy of Plaintiffs Motion for Issuance of a Writ of Seizure to be forwarded by First Class Mail, Postage. Prepaid, to the following: Landis, Inc. 30 Woodcraft Drive Mount Holly Springs, PAl 7065 Steven Capuano 1229 Blossom Terrace Boiling Springs, P A 17007 LAMM, RUBENSTONE, TOTAR ,LLC . owe, Esquire Jennifer M. Davies, Esquire Attorneys for Plaintiff By: 6~ LAMM, RUBENSTONE, TOTARO & DAVID, LLC OCT '1/150'1 By: Sherry D. Lowe, Esquire Jennifer M. Davies, Esquire Attorney I.D. No. 66096 and 80988 Four Greenwood Square, Suite 200 Bensalem, P A 19020 (215) 638-9330 (215) 638-2867 - Facsimile Attorneys For Plaintiff SOVEREIGN BANK, Successor-in-Interest to First Essex Bank, FSB One Wall Street Manchester, NH 0310 I COURT OF COMMON PLEAS CUMBERLAND COUNTY, PA Plaintiff, vs. NO. (J4~ IJ I 'J I ~ LANDIS, INC. 30 Woodcraft Drive Mount Holly Springs, P A 17065 and STEVEN CAPUANO 1229 Blossom Terrace Boiling Springs, P A 17007 Defendants. ORDER AND NOW, this~ay of f3tbf-1.J-C4:.. _, 2004, upon consideration of Plaintiff's Motion for the Issuance of a Writ of Seizure, it is ORDERED that a Hearing shall be held on '-1&zt.t~?-L. t<? AooL( at )" QO d f'.M. ORDERED that Plaintiff shall personally serve the Defendants at their last known addresses, as set forth in the Complaint, a copy of all Pleadi.ngS~. Motion for Issuance of Writ of Seizure pertaining to the action in Replevin in the~bo)'J~ oned matte. ///,/ . ' /" ~ -- /" ~ BY EC ~G 294842-1 \ \) J. I n ,,~. '.~ ,) . ,:.., "I ::,":J Zd l:~!D ~ncz Sherry D. Lowe, Esquire Four Greenwood Square, ste. 200 Bensalem, PA 19020 215-638-9330 v. Commonwealth of Pennsylvania Cumberland County Court of Common Pleas Docket/Index # 04-5151 SOVEREIGN BANK STEVEN CAPUANO Affidavit of Service Commonwealth of Pennsylvania S5: County of Philadelphia I, Thomas J. Crean, Jr. being duly sworn according to law upon my oath, depose and say, that deponent is not a party to this action, has no direct personal interest in this litigation and is over 18 years of age. That on November 1, 2004 at 4:25 PM, deponent served the within named Motion for Issuance of Writ of Seizure & Order for Hearing upon Steven Capuano, Defendant. Said service was effected at 30 Woodcraft Dr., Mounty Holly Springs, PA, in the following manner; By delivering thereat a true copy to Patricia Adams, Secretary, a person of suitable age and discretion. That person was also asked by deponent whether said premises was Steven Capuano's usual place of business and their reply was affirmative. Patricia Adams is described to the best of deponent's ability at the time and circumstances of service as follows: Sex: Female Skin: Caucasian Hair: Grey Age(Approx): 63 Ht.(Approx): 5' 6" Wt.(Approx): 180-190 Ibs Please note: I spoke to Steven Capuano on the phone and he told me to leave the papers with his secretary at the location in Mount Holly Springs, PA. I hereby affirm that the information contained in the Affidavit of Service is true and correct. This affirmation is made subject to the penalties of 18 PA C.S. 4904 relating to unsworn falsification to authorities. fore me on November 9,2004 ,~,~\, Thomas J. Crean, J~, Process Server Dennis Richman's Services For The Professional, Inc. 1617 JFK Boulevard, Suite 820 Philadelphia, PA 19103 (215) 977-9393, (215) 977-9806 (Fax) DRS # 23509 ,(Ie,j Notari I Se I Regina A. Richman, Notary Public Falls Twp., Bucks County My Commission Expires: December 12, 2005. r--' C? = .>;.- --. C) ...:;;: (..rI o -'11 .-1 :1: -n rnr"::' 00(11'11 -,.";0 ;:o:;h :, J ,0'1', .' L-n ';~.~ ':70:\ i?: -t1 -", -"\~. .r:.- o Sherry D. Lowe, Esquire Four Greenwood Square, ste. 200 Bensalem, PA 19020 215-638-9330 v. Commonwealth of Pennsylvania Cumberland County Court of Common Pleas Docket/Index # 04-5151 SOVEREIGN BANK LANDIS, INC. Affidavit of Service Commonwealth of Pennsylvania SS: County of Philadelphia " Thomas J. Crean, Jr. being duly sworn according to law upon my oath, depose and say, that deponent is not a party to this action, has no direct personal interest in this litigation and is over 18 years of age. That on November 1, 2004 at 4:25 PM, deponent served the within named Motion for Issuance of Writ of Seizure & Order for Hearing upon Landis, Inc., Defendant. Said service was effected at Landis, Inc., 30 Woodcraft Dr., Mount Holly Springs, PA 17065, in the following manner; By delivering thereat a true copy of each to Patricia Adams personally. Patricia Adams stated that she was the Secretary thereof, an authorized person to accept service of process. Patricia Adams is described to the best of deponent's ability at the time and circumstances of service as follows: Sex: Female Skin: Caucasian Hair: Grey Age(Approx): 63 Ht.(Approx): 5' 6" Wt.(Approx): 180-190 Ibs I hereby affirm that the information contained in the Affidavit of Service is true and correct. This affirmation is made subject to the penalties of 18 PA C.S. 4904 relating to unsworn falsification to authorities. Sworn to before me on November 9.2004 '2pL Notari I Se " Regina A. ichman, Notary Public Falls Twp., Bucks County My Commission Expires: December 12, 2005. ~\_c.. ..~ Thomas J. Crean, J~, Process Server Dennis Richman's Services For The Professional, Inc. 1617 JFK Boulevard, Suite 820 Philadelphia, PA 19103 (215) 977-9393, (215) 977-9806 (Fax) DRS # 23508 o c i 1"-.' <:::> = o "II :~:n nlr... 3; t:J ..1. I' c)o t~i ~~ \........ ~~~,; .-.:,. C) ...,w.::;: CJ1 -;; ......".. _'\.1" o LAMM, RUBENSTONE, TOTARO & DAVID, LLC By: Sherry D. Lowe, Esquire Jennifer M. Davies, Esquire Attorney J.D. No. 66096 and 80988 Four Greenwood Square, Suite 200 Bensalem, P A 19020 (215) 638-9330 (215) 638-2867 - Facsimile Attorneys For Plaintiff SOVEREIGN BANK, Successor-in-Interest to First Essex Bank, FSB COURT OF COMMON PLEAS CUMBERLAND COUNTY, P A Plaintiff, vs. NO. 04-5151 LANDIS, INC. and STEVEN CAPUANO Defendants. ORDER r AND NOW, this 12- day of November, 2004, it is hereby ORDERED that the hearing on Plaintiff's Motion for the Issuance of a Writ of Seizure scheduled for November 10,2004 at 2:00 P.M. is continued to Friday, December 9,2004 at 1 :30 P.M. in Courtroom Cumberland County Courthouse, Carlisle, P A. BEo Honorable Edgar B. vSherry D. Lowe, Esquire Lamm, Rubenstone, Totaro & David, LLC Four Greenwood Square, Suite 200 Bensalem, P A 19020 ~ ftaig A. Diehl, Esquire 3464 Trindle Road Camp Hill, P A 17011 297909-1 V;;\!t!;rv, (~r!: J ::,-4 AlNne,::-; :-.'.:- --,. ,- ;-';';n:J 90 :f Pd " "'} 'n~llflUZ " I"! !.~ 171 ~ - L,..j.'r IV ;'d'ilC\'o':-UCdd 3,~1 ::!() ?i21:!..iC:;---OJ7!::f SOVEREIGN BANK, Successor-in-Interest : IN THE COURT OF COMMON PLEAS to First Essex Bank, FSB, CUMBERLAND COUNTY, PENNSYL VANIA Plaintiff vs. : NO. 04-5151 CIVIL LANDIS, INC. and STEVEN CAPUANO, Defendants DEFENDANTS' ANSWER TO PLAINTIFF'S COMPLAINT AND NOW COME, Defendants, Landis, Inc. and Stev<:~n Capuano, by and through their attorneys, Law Offices of Craig A. Diehl, and files this Answer to Plaintiffs Complaint as follows: 1. Admitted. 2. Admitted. 3. Admitted. 4. Admitted. 5. Admitted. 6. Admitted. 7. Denied. The security interest granted only included all accounts, general intangibles . . . arising out of a sale, lease, or other disposition of any of the property described in this Collateral section. 8. Admitted. 9. Admitted. 10. Admitted. -1- 11. Denied. The averment contains a conclusion of law to which no responsive pleading is required. 12. Denied. The averment contains a conclusion of law to which no responsive pleading is required. 13. Denied. The loan documents are written documents that speak for themselves. 14. Denied. The averment contains a conclusion of law to which no responsive pleading is required. COUNT I - BREACH OF CONTRACT 15. See responses to the averments set forth in paragraphs 1 through 14 herein. 16. Denied. The averment contains a conclusion of law to which no responsive pleading is required. 17. Denied. The averment contains a conclusion of law to which no responsive pleading is required. 18. Denied. The averment contains a conclusion of law to which no responsive pleading is required. WHEREFORE, Defendants, Landis, Inc. and Steven Capuano, respectfully request judgment in their favor and against Sovereign Bank. COUNT II - REPLEVIN 19. See responses to the averments set forth in paragraphs 1 through 18. -2- 20. Denied. The averment contains a conclusion of law to which no responsive pleading is required. 21. Admitted. 22. Admitted. 23. Denied. The averment contains a conclusion of law to which no responsive pleading is required. By way of further answer, Defendants are actively pursuing the sale of the Collateral. WHEREFORE, Defendants, Landis, Inc. and Steven Capuano, respectfully request judgment in their favor and against Sovereign Bank. COUNT III - CONVERSION 24. See responses to the averments set forth in paragraphs 1 through 23. 25. Denied. The averment contains a conclusion of law to which no responsive pleading is required. 26. Denied. The averment contains a conclusion of law to which no responsive pleading is required. 27. Denied. The averment contains a conclusion of law to which no responsive pleading is required. 28. Denied. The averment contains a conclusion of law to which no responsive pleading is required. -3- WHEREFORE, Defendants, Landis, Inc. and Steven Capuano, respectfully request judgment in their favor and against Sovereign Bank. LAW OFFICES OF CRAIG A. DIEHL Dated: November 19,2004 By: {l~a- T:.LJJ ~ehl, Esquire Attorney ID No. 52801 3464 Trindle Road Camp Hill, PA 17011-4436 (717) 763-7613 Counsel for Defendants -4- ~ SOVEREIGN BANK, Successor-in-Interest : IN THE COURT OF COMMON PLEAS to First Essex Bank, FSB, : CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff vs. : NO. 04-5151 CIVIL LANDIS, INC. and STEVEN CAPUANO, Defendants CERTIFICATE OF SERVICE: AND NOW, this 19th day of November, 2004, the undersigned hereby certifies that a true and correct copy of the foregoing DEFENDANTS' ANSWER TO PLAINTIFF'S COMPLAINT was served upon the opposing party by way of United States first class mail, postage prepaid, addressed as follows: Sherry D. Lowe, Esquire Jennifer M. Davies, Esquire LAMM, RUBENSTONE, TOTARO & DAVID, LLC Four Greenwood Square, Suite 200 Bensalem, P A 19020 LA W OFFICES OF CRAIG A. DIEHL BY:(~ Helen E. Rasmussen, Legal Assistant 3464 Trindle Road Camp Hill, PA 17011-4436 (717) 763-7613 .. ("') f~: 2;f"; "":.t g 0 ..r.:::- " -- C5 "< l'.) .s:.- ~ ~:} ::::i~ J::~{ C).-- d~ ".?J -<:: """'0 :;jj;: N " -l:" CO LAMM, RUBENSTONE, TOTARO & DAVID, LLC By: Sherry D. Lowe, Esquire Jennifer M. Davies, Esquire Attorney J.D. No. 66096 and 80988 Four Greenwood Square, Suite 200 Bensalem, P A 19020 (215) 638-9330 (215) 638-2867 - Facsimile Attorneys For Plaintiff SOVEREIGN BANK, Successor-in-Interest to First Essex Bank, FSB COURT OF COMMON PLEAS CUMBERLAND COUNTY, PA Plaintiff, vs. NO. 04-5151 LANDIS. INC. and STEVEN CAPUANO Defendants. ORDER AND NOW, this 11 day of December, 2004, it is hen:by ORDERED that the hearing on Plaintiffs Motion for the Issuance of a Writ of Seizure sche:duled for December 9, 2004 at 1 :30 P.M. is continued to Monday, February 28, 2005 at 1 :30 .~~ ourtroom No.2, Cumberland County Courthouse, Carlisle, P A. / ' *COURT. SO~~dgar B. Bayley -- ~rry D. Lowe, Esquire Lamm, Rubenstone, Totaro & David, LLC Four Greenwood Square, Suite 200 Bensalem, P A 19020 vztaig A. Diehl, Esquire 3464 Trindle Road Camp Hill, P A 17011 ~ 299800-1 ...;t' r::: 2:: ::::) .~.~.: r-:) ., :::..l- ," -:1 M (-' Lw a _T .' ? J._ = :-.) C) = U ".... LAMM, RUBENSTONE, TOTARO & DAVID, LLC By: Sherry D. Lowe, Esquire Jennifer M. Davies, Esquire Attorney LD. No. 66096 and 80988 Four Greenwood Square, Suite 200 Bensalem, P A 19020 (215) 638-9330 (215) 638-2867 .. Facsimile Attorneys For Plaintiff SOVEREIGN BANK, Successor-in-Interest to First Essex Bank, FSB COURT OF COMMON PLEAS CUMBERLAND COUNTY, PA Plaintiff, vs. NO. 04-5151 LANDIS, INC. and STEVEN CAPUANO Defendants. ORDER AND NOW, this Mday of March, 2005, it is hereby ORDERED that the hearing on Plaintiffs Motion for the Issuance of a Writ of Seizure scheduled for February 28, 2005 at 1:30 P.M. is continued to Monday, May 2, 2005 at II :00 A.M. in Courtroom No.2, Cumberland County Courthouse, Carlisle, PA. ) BY THE COURT: . \/~, Honorable Edgar . ayley S}1erry D. Lowe, Esquire ~amm, Rubenstone, Totaro & David, LLC Four Greenwood Square, Suite 200 Bensalem, P A 19020 Counsel for Sovereign Bank > -------... ~aig A. Diehl, Esquire 3464 Trindle Road Camp Hill, PA 17011 Counselfor Landis. Inc., et al ,3.-0 i-65 299800. I ~~.- (:r ;,i~ r'. f;~i~; (~)~<, C\<: ujL.l.: ~,_l u:~.}-l j:::: tL ,"'-, -' <,/") ~.. ~4 (L cry I O~:: """.1: :J.C t.r~ t:~) t:~.:;;; <" ,"1 ~~ SHERIFF'S RETURN - REGULAR CASE NO: 2004-05151 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND SOVEREIGN BANK VS LANDIS INC ET AL RONALD HOOVER r Sheriff or Deputy Sheriff of Cumberland County, Pennsylvania, who being duly sworn according to lawr says, the within COMPLAINT & NOTICE was served upon LANDIS INC the DEFENDANT , at 1024:00 HOURS, on the 20th day of October ,2004 at 1229 BLOSSOM TERRACE BOILING SPRINGSr PA 17007 by handing to KIM CAPUANOr OWNER'S WIFE a true and attested copy of COMPLAINT & NOTICE together with and at the same time directing Her attention to the contents thereof. Sheriff's Costs: Docketing Service Affidavit Surcharge So Answers: 18.00 4.44 .00 10.00 .00 32.44 ~~~ R. Thomas Kline 10/21/2004 LAMM RUBENS TONE TOTARO DAVID Sworn and Subscribed to before By: (~):/ Deputy Sheriff me this r I(f? day of ~-j4'('1. Jilff.,j" A.D. l h~~oet?!:~~f),. " ~. ~ ~ .~"'" --..p.,. SHERIFF'S RETURN - REGULAR CASE NO: 2004-05151 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND SOVEREIGN BANK VS LANDIS INC ET AL RONALD HOOVER , Sheriff or Deputy Sheriff of Cumberland County,Pennsylvania, who being duly sworn according to law, saysr the within COMPLAINT & NOTICE was served upon CAPUANO STEVEN the DEFENDANT r at 1024:00 HOURS, on the 20th day of October ,2004 at 1229 BLOSSOM TERRACE BOILING SPRINGS, PA 17007 by handing to KIM CAPUANO, WIFE a true and attested copy of COMPLAINT & NOTICE together with and at the same time directing Her attention to the contents thereof. Sheriff's Costs: Docketing Service Affidavit Surcharge So Answers: 6.00 .00 .00 10.00 .00 16.00 ~' ~(,?,</' . -;"-,.~:'~: . ., . , j ,~/;1'1' ~'::''' '-, ;~- ;/~ R. Thomas Kline 10/21/2004 LAMM RUBENS TONE TOTARO DAVID Sworn and Subscribed to before By: 62v~~ Deputy S eriff me this if'=: day of 1J: L . 101>'/ < A.D. O.~ .-; '" prothonotary,.7: ~ . GREEN & SIMON By: Mener Simon, Mqune Attorney' .0. 704ilR ~O. Box 397, Glenside ~A 19038 IN THE COURT OF COMMON PLEAS OF CUMBERLAND CIVIL ACTION". tAW Atl! Plaintiff orney or COUNTY, PENNSYLVANIA MCM DIM10ND CO., INC. 608 Fifth Avenue, Suite 510 New Yud,., Wi 10020 , Y. KEITH E15ENSTEIN * N . 2004-05141 0, and Pennsylvania State Bank, Garnishee 4401 Carlisle Pike Camp Hill, PA 17011 PRAECIPE FOR WRIT OF EXECUTION - MONEY JUDGMENTS To the Prothonotary: * 2148 Market Street, Camp Hill, PA ISSUE WRIT OF EXECUTION IN THE ABOVE MATIER. (1) Directed to the Sheriff of CUMBERLAND County, PA; (2) against Keith Eisenstein Defendanl(s); (3) ane! against Pennsylvania State Bank Garnishee(s); (4) ane! index this writ (a) against Keith Eisenstein Defendant(s) and (b) . t Pennsylvania State Bank agalOs /~shee( as a lis pendens against the mal property of the defendimt(s) In tht/~a , e of Specifically describe property per attached property description): / e Garnishee(s), (5) Amount due: $ 10,912.50 600.16 SignaturE!!of Attorney I Interest from: $ 2/19/04 Tota.!: $ 11,512.66 ~ Esquire \ 17011 ~, -f- b ~ ~ ~ -i4 - ~ ~ ..... ~ ., C) I.rt C> c- D l -0 - .I:: ~ <0 0~ l' C'. L-- k\ VI ~ ~ Vt ~ "t>g. ~~-:<J.Vi~~ -() "t \) II') ..t ~ CC; C () <;)() I I \ I -.J ~ , ~ ~ 0?- , ~+:::> ~ ' - : z;;J=- C-'> C:-;' C) ~ -,-; <:.- :~ :;-2:':: I (11 " f'.,) :-.1 0) ..<. COMMONWEALTH OF PENNSYL VANIA) COUNTY OF CUMBERLAND) NO 04-5141 Civil CIVIL ACTION - LAW WRIT OF EXECUTION andlor ATTACHMENT . TO THE SHERIFF OF CUMBERLAND COUNTY: To satisfy the debt, inlerest and costs due MCM DIAMOND CO., INC., Plaintiff (s) From KEITH EISENSTEIN, 4401 CARLISLE PIKE, CAMP HILL, PA 17011 (1) You are directed to levy upon the property of the defendant (g)and to sell (2) You are also directed to attach the property of the defendant(s) not levied upon in the possession of ATTACH ANY AND ALL BANK ACCOUNTS IN THE NAME OF KEITH EISENSTEIN LOCATED AT PENNSYLVANIA STATE BANK, 2147 MARKET STREET, CAMP HILL, PA 17011 GARNISHEE(S) as follows: and to notify the garnishee(s) that: (a) an attachment has been issued; (b) the garnishee(s) is enjoined from paying any debt to or for the accounl of the defendant (s) and from delivering any property of the defendant (s) or otherwise disposing thereof; (3) If property of the defendant(s) not levied upon an subject to attachment is found in the possession of anyone other than a named garnishee, you are direcled to notify himlher that helshe has been added as a garnishee and is enjoined as above stated. Amount Due $10,912.50 Inlerest FROM 2/19/04 - $600.16 L.L. $.50 Atty's Comm % Atty Paid $117.90 Plaintiff Paid Date: JANUARY 5, 2005 Due Prothy $1.00 Other Costs CURTIS R. LONG (Seal) proth~ "-B.v: a--.. 0 P 7f~/2-r ('-- / Deputy REQUESTING PARTY: Name MEYER SIMON, ESQillRE Address: P.O.BOX 397 GLENSIDE, PA 19038 Attorney for: PLAINTIFF Telephone: 215-885-1370 Supreme Court ID No. 20488 SOVEREIGN BANK, Successor-in- Interest to First Essex Bank, FSB, PLAINTIFF V. LANDIS, INC. AND STEVEN CAPUANO, DEFENDANTS AND NOW, this IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA 04-5151 CIVIL TERM ORDER OF COURT 2._ ~ day of May, 2005, upon relation that Landis, Inc. has filed for bankruptcy, the hearing scheduled this date IS CONTINUED GENERALL Y to the call of either party when at issue. herry D. Lowe, Esquire For Plaintiff ..-6aig A. Diehl, Esquire For Defendants :sal ---- ~. By tb.e-Court, ./ / / , .~~ \.: ., ~) S ( ~.[) ~,O~ ~ ~;~- '--. v:~..y\ ~i:.\ji~:: i')~:' uJ>-'- 'O.~\.v u-:C ,..... '6 <:::> -- <P .',c'- "~ ""...... C"> , r ..:<. ~ G ~ ,.. t:; ,-,:.~ -:;J ----- - ,. LAMM, RUBENSTONE, TOTARO & DAVID, LLC By: Sherry D. Lowe, Esquire Jennifer M. Davies, Esquire Attorney I.D. No. 66096 and 80988 Four Greenwood Square, Suite 200 Bensalem, P A 19020 (215) 638-9330 (215) 638-2867 - Facsimile Attorneys For Plaintiff SOVEREIGN BANK, Successor-in-Interest td First Essex Bank, FSB COURT OF COMMON PLEAS CUMBERLAND COUNTY, P A Plaintiff, vs. NO. 04-5151 LANDIS, lNC, and STEVEN CAPUANO Defendants. SUGGESTION OF BANKRUPTCY TO THE PROTHONOTARY: 1t is hereby suggested of record that the above-captioned matter is STAYED as against I)EFENDANT, LANDIS, INC., ONLY, with respect to the Civil Action Complaint, pursuant to 11 U.S.C. 9362 by reason of the filing by Defendant Landis, Inc. for protection under Chapter 11 of the U.S. Bankruptcy Code, at Case No. 05-02823, in the Bankruptcy Court for the Middle Il>istrict of Pennsylvania. LAMM, RUBENS TONE, TOTARO & DAVID, LLC ('~ By: Sherry D. Lowe, Esquire Attorneys for Plaintiff Dated: May 2, 2005 3lOll3-1 ,. LAMM, RUBENSTONE, TOTARO & DAVID, LLC By: Sherry D. Lowe, Esquire Jennifer M. Davies, Esquire Attorney LD. No. 66096 and 80988 Four Greenwood Square, Suite 200 Bensalem, P A 19020 (215) 638-9330 (215) 638-2867 - Facsimile Attorneys For Plaintiff COURT OF COMMON PLEAS CUMBERLAND COUNTY, P A SOVEREIGN BANK, Successor-in-lnterest to First Essex Bank, FSB Plaintiff, vs. NO. 04-5151 LANDIS, INe. and STEVEN CAPUANO Defendants. CERTIFICATE OF SERVICE I, Monique D. Denton, Paralegal to Lamm, Rubenstone, Totaro & David, LLC, certify tbat on Mav 2, 2005, I caused a true and correct copy of the foregoing Suggestion of Bankruptcv tQ be served by first class, regular U.S. Mail, postage prepaid, on the persons listed below: qraig A. Diehl, Esquire 3464 Trindle Road damp Hill,PA 17011 (Attorney for Landis, Inc. and Steven Capuano) LAMM, RUBENS TONE, TOTARO & DAVID, LLC By: Vir})) lXfV01~ Monique D. Denton, Paralegal Four Greenwood Square, Suite 200 Bensalem, P A 19020 Phone: 215-638-9330 Facsimile: 215-638-2867 310113.1 <? ~ f'J ....., <= [:;;--~ .;:.,-, o -n ;_"": -..< I (J'I :r-