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HomeMy WebLinkAbout12-5657 n N (.--fir iv ~ ~ ~ "C7 ' - Matthew C. Samley, Esquire ~ ~ ~ Reese, Samley, Wag~nseller, Mecum & Longer, P.C. r--~= 120 North Shippen Street Lancaster, PA 17602 ~ ~ ~ v~ rv fir' Phone: (717) 393-06'~ 1 ~ ,..r Attorney LD. No. 65#42 - ~ Attorney for Plaintiff IN THE COURT ~F COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL DIVISION COMMUNITY FIRST FUND, Plaintiff LeBLANC'S SUI~NYSIDE RESTAURANT, I~LC, Defendant ACTION IN REPLEVIN NOTICE TO DEFEND YOU HAV BEEN SUED IN COURT. If you wish to defend against the claims set forth in the followi g pages, you much take action within twenty (20) days after this Complaint and Notice are serv ' d, by entering a written appearance personally or by attorney and filing in writing with the Co' your defenses or objection to the claims set forth against you. You are warned that if you it to do so the case may proceed without you and a judgment may be entered against you by the ourt without further notice for any money claimed in the Complaint or for any other claim or ~{elief requested by the Plaintiff. You may loose money or property or other rights important to ~rou. YOU SHO LD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LA ER, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW. THIS OFFICE CA 'PROVIDE YOU WITH INFORMATION ABOUT THE HIRING OF A LAWYER. IF YOU C KNOT AFFORD TO HIRE A LAWYER, THIS OFFICE MAY BE ABLE TO PROVIDE YO WITH INFORMATION ABOUT AGENCIES THAT MAY OFFER LEGAL SERVICE TO ELIGIBLE PERSONS AT A REDUCED FEE OR NO FEE. CUMBERLAND COUNTY BAR ASSOCIATION 32 SOUTH BEDFORD STREET CARLISLE, PA 17013 J TELEPHONE NUMBER: (717) 249-3166 ~ ~03.7S Pd A7T'~ C /a,339 II' The undersigned is attempting to collect a debt and any information obtained will be used for that purpose. Respectfully Submitted REESE, SAMLEY, WAGENSELLER MECUM & LONGER, P.C. By: Matthew C. Samley squire Pa. Attorney 65442 120 North Shippen Street Lancaster, PA 17602 (717) 393-0671 _ _ _ _ i, Matthew C. Samley, iEsquire Reese, Samley, Wag~nseller, Mecum & Longer, P.C. 120 North Shippen Sttreet Lancaster, PA 17602'' Phone: (717) 393-06'1 Attorney LD. No. 6542 Attorney for Plaintif IN THE COURT ~F COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL DIVISION COMMUNITY FIRST FUND, Plaintiff v. No.. LeBLANC'S SLTNSIDE ACTION IN REPLEVIN RESTAURANT, L C, Defendant COMPLAINT Community First Fund, by and through its attorneys, REESE, SAMLEY, WAGENSELLER,~MECUM & LONGER, P.C., herewith files this Complaint in Replevin and in support thereof avers as follows: 1. Plaintiff is community First Fund, a Pennsylvania non-profit Corporation, with offices at 30 West Or~nge Street, Lancaster, Pennsylvania 17608. 2. Defendant i~ LeBlanc's Sunnyside Restaurant, LLC, a Pennsylvania limited liability company, v~ith a last known address at 850 North Hanover Street, Carlisle, Pennsylvania 17013. 3. On December 13, 2010, Defendant, by and through its authorized agent, Patrick A. LeBlanc, executed a Promissory Note for the benefit of Plaintiff in the principal amount of Two Hundred Thousand ($200,000.00) Dollars under a fifteen (15) year term with an interest rate.. of 8.49% and with monthly payments of One Thousand Nine Hundred Eighty-Three and 76/100 ($1,983.76) Dollars. A true and correct copy of the Promissory Note is attached as Exhibit `A' and incorporated by reference. 4. On Decemb~r 13, 2010, Defendant executed and delivered to Plaintiff, a secured party, a Commercial Security Agreement on the Pennsylvania Restaurant Liquor License No. R- 16975. A c~ipy of the Commercial Security Agreement is attached as Exhibit `B' and incorporated by reference. 5. Defendant ~xecuted and delivered the Commercial Security Agreement to Plaintiff as collateral sej~urity for the payment of Defendant's Promissory Note. Plaintiff filed a Uniform Commercial Code Financing Statement on December 17, 2010, affecting the aforesaid Sq~~urity Agreement which statement is still in effect. 6. Defendant neglected and refused to make the monthly payments due under the Promissory $~Iote and still neglects and refuses to pay the same or any part thereof, notwithstanding the fact that due demand of payment thereof has been made on Defendant b~ Plaintiff. 7. Defendant f led a Chapter 7 Bankruptcy Petition with the U.S. Bankruptcy Court, Middle District of Pennsylvania on January 16, 2012, docketed to No. 12-00101-MDF. 8. On March 3~, 2012, Plaintiff filed a Motion for Relief from Automatic Stay with the U.S. Bankruptcy ICourt with regard to the aforementioned liquor license. ~ - 9. On Apri124, 2012, the U.S. Bankruptcy Court issued an Order permitting Plaintiff to obtain possession of the aforementioned liquor license. A copy of the Order of April 24, 2012 is attached as Exhibit `C' and incorporated by reference. 10. Plaintiff, by!, virtue of Defendant's non-payment on the aforesaid Promissory Note, and, in accordance (with Plaintiff's Rights and Remedies located on pages 3 and 4 of the Security Agreement,) is entitled to possession of the personal property as its collateral for the loan. In addition thereto, Plaintiff is entitled to reimbursement of attorney fees, costs and other expenses incurred in connection with the enforcement of the Security Agreement in accordance Irnvith the Miscellaneous Provisions located on page 4 of the Security Agreement.' 11. As of Augu$t 22, 2012 Defendant owed Plaintiff the amount of Two Hundred Six Thousand Fbur Hundred Ninety-Four and 61/100 ($206,494.61) Dollars, including attorney's fees and costs, and ongoing interest calculated at 12.49%, as allowed under the Promissory Note and Commercial Security Agreement. 12. Plaintiff believes and therefore avers that the collateral, the Pennsylvania Restaurant Liquor Lice#~se No. R-16975, is currently on inactive status with the Pennslyvania Liquor Control Board. WHEREFORE, Plaintiff prays in this Replevin action for judgment against Defendant: 1. For tie recovery of said personal property or for damages of Two Hundred Six Tho~isand Four Hundred Ninety-Four and 61/100 ($206,494.61) Dollars, the value of saj~ne in case Plaintiff cannot obtain possession of same; 2. For damages for the detention of said property, including ongoing attorney's fees; _ _ 3. For costs of this action; and 4. For such other and further relief as this Court deems just and appropriate. Respectfully submitted, REESE, SAMLEY, WAGENSELLER MECUM & LONGER, P.C. Dated: ~l Z gy: Matthew C. Samley, quire 120 North Shippe treet Lancaster, PA 17602 (717) 393-0671 Attorney ID No. 65442 ` I~ I~ II VERIFICATION I, Gary R~. Johnson, on behalf of Community First Fund to which I am the Vice President of Loan Administration, have read the foregoing Complaint and hereby affirm that it is true and correct to the befit of my personal knowledge, information and belief. The language of the foregoing is that ~lof my own. I understand that false statements herein are made subject to the penalties of 18 P~. C.S.A. Section 4904 relating to unsworn falsification to authorities. Date: S ary R. J son, ice Presi ent Community First Fund i _ _ PROMISSORY NOTE Principal Loan D 'te Maturity Loan No Call !Coll Account Officer Initials $ 200,000.00 12-13-2 10 12-15-2025 2010-01878 Mort a e * * References In the boxes abo a are for Lender's use only and do not limit the applicability of this document to any particular loan or item. A item above containin has been omitted due to text ten th limitations. Borrower: Leblanc's SunnysFde Restaurant, LLC Lender: COMMUNITY FIRST FUND 850 North Hanov~r Street 30 Weat Orange Street Carlisle, PA 170 '3 P. O. Box b24 LANCASTER, PA 17808-0524 (717) 393-2351 Principal Amount: $200, 00.00 Date of Note: December 13, 2010 PROMISE TO PAY. Leblanc'a annysida Restaurant, LLC ("Borrower") promises to pay to COMMUNITY FIRST FUND ("Lender"}, or order, to lawful money of the United Sta ~s of America, the principal amount of Two Hundred Thousand & 00/100 Dollars !8200.000.00}, together with interest on the unpaid principal aianca from December 13, 2010, until paid in full. PAYMENT. Subject to any pay ' ant changes resulting from changes in the Index, Borrower will pay this loan in accordance with the following payment schedule, which calc !else interest on the unpsld principal balances as described In the "INTEREST CALCULATION METHOD" paragraph using the interest rat s described in this paragrsph: 60 monthly consecutive principal and interest payments in the initial amount of 81,983.76 each, beginning Ja ary 16, 2011, with interest cslculstsd on the unpaid principal balances using an interest rate of 8.490% per annum based on a year of 3 days; 119 monthly consecutive principal and Mtereat payments in the inkial amount of 81,984.83 each, beginning January 16, 2016, ith interest calculated on the unpaid principal balances using an intsreat rate based on the Wall Street Jownal Prima (currently 3.250%}, plus margin of b.260 percentage points, resuiNng In an tnkial interest rate of 8.500% per annum based on a year of 360 days; and one principal a d interest payment of 81,984.94 on December 15, 2025, with interest calculated on the unpaid. principal balances using an interest rate seed on the Wail Street Journal Prime (currently 3.260%1, piua a margin of 5.250 percentage points, resulting in an initial interest rate of 8.5 % per annum based on a year of 380 days. Thfa estimated fkral payment is based on the assumption that all payments wiN be made axactiy 's scheduled and that the Index does not change; liar actual final payment will be for ail principal and accrued interest not yet paid, together th any other unpsld amounts under this Note. Unless otherwise agreed w required by applicable law, payments will be applied fkst to any accru d unpaid interest; then to prindpal; then to any late chsrges; and then to any unpaid cailection costs. Borrower w~l pay Lsndsr at Lender's addr ss shown above or at such other place as Lender may designate in writing. VARIABLE INTEREST RATE. T Ip interest rate on this Note ie subject to change from time to lime based on changes in an Independent index which is the WaIi Street Journa'Prime (the "Index"}. The Index la not neceasarlly the lowest rate charged by Lender on its loans. If the Index becomes unavailable during the kerm of this loan, Lender may designate a substitute index after notifying Borrower. Lender will tell Borrower the current Index rate upon Borr war's request. The intsreat rate change will not occur more often than each Each day. Borrower understands that Lender may make loans ba don other rates as well. The Index currently is 3.250% per annum. The interest rate or rates to be applied to the unpaid principal balance du ing this Note wilt be the rate or rates set forth herein In the `Payment" section. Notwithstanding any other provision of this Note, after th first payment stream, the interest rate for each subsequent payment stream wilt be affective es of the last payment date of the just-endin 'payment stream. NOTICE: Under no ctrcumetences will the interest rate on this Note be more than the maximum rate slowed by appli able law. Whenever increases occur in the interest rata, Lender, at its option, may do one or more of the following: IA1 Increase Borrow is payments to ensure Borrower's loan will pay off by its origins! final maturity date, (e) increase Borrower's payments to cover accruing int lest, iC) increase the number of Borrower's payments, and iD} continue Borrower's payments et the same amount and Increase Borrower's Sinai payment. INTEREST CALCULATION MET ~D. Interest on this Nots is computed on a 365!360 basis; that la, by applying the ratio of the interest rate over a year of 360 days, mull lied by the outstanding principal balance, multipNed by the actual number of days the principal balance is outstanding. Ab intsreat payabl ,ender this Nate Is computed using this method. PREPAYMENT PENALTY. Upo ',prepayment of this Nate, Lender is entitled to the foNowing prepayment penalty: Prepayment penaltydn the event that a Borrower voluntaril repays more than 25 percent of the outstanding principal balance of the loan In any one year, the Borrower mast psy to Community First Fu ' a prepayment tee as follows:a.Throughout the initial term of the loan the prepayment penalty will equal a flat rate of two percent 12%) of th principal amount prepaid. Except for the foregoing, Borrower may pay all or a portion of the amount owed earlier than it fs due. Early pay ants will not, unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments under the paym ht schedule. Rather, early payments will reduce the principal balance due and may result in Sorrower's making fewer payments. Borrower agr as not to send lender payments marked "paid in full", "without recourse", or similar language. if Borrower sends such a payment, Lender ay accept it without losing any of Lender's rights under this Note, and Borrower will remain obligated io pay any further amount owed to rider. All written communications concerning disputed amounts, including any check or other payment instrument that Indicates that t 'e payment constitutes "payment in full" of the amount owed or that is tendered with other conditions or limitations or as full satisfaction bf a disputed amount must be mailed or delivered to: COMMUNITY FIRST FUND, PO BOX 524 LANCASTER, PA 1760E-0524. LATE CHARGE. If a payment ~s 5 days or more late, Borrower will be charged 10.000% of the regularly scheduled payment o? 815.00, whichever is greate?, ENTEAEST AFTER OEFAUIT. U on default, including failure to pay upon final maturity, the interest rate on th(s Note shall be increased by adding a 4.000 percentage poin margin ("Default Rata Margin"1. The Default Rate Margin shall also apply to each succeeding interest rate change that woukf have applied fed there been no default. After maturity, or after this Note would have matured had there been no default, the Default Rate Margin will continu i to apply to the final interest rate described In this Note. If judgment Is entered in connection with this Note, interest will continue to accrue (ter the date of judgment at the rate In effect at the time judgment is entered. However, in no event will the interest rate exceed the maxima interest rate 1(mitetions under applicable law. DEFAULT. Each of the following i+hall constitute an event of default 1"Event of Default"} under this Note; Payment Default. Borrower ails to make any payment when due under this Note. Other Defaults. Borrower f its to comply with or to perform any other term, obligation, covenant or condition contained in this Note or in any of the related document or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrow r. Default in Favar of Third Pa~ties. Borrower or any Grantor defaults under any loan, extension of credit, security sales agreement, or any oth r agreement, In favor of any other creditor or person that may materially affect any ''ter, ~'i ; Borrower's ability to repay t Is Note or perform Borrower's obligations under this Note or any of the related docum I T _ _ PROMISSORY NOTE Loan No: 2010-01878 {Continued) Page 2 False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Note or the related docum$nts is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter. Death or Insolvency. Thy dissolution of Borrower (regardless of whether election to continue is made), any member withdraws from Borrower, or any other ter ination of Borrower's existence as a going business or the death of any member, the insolvency of Borrower, the appointment of a recei $r for any part of Borrower's property, any assignment for the benefit of creditors, arty type of creditor workout, or the commencement of a y proceeding under any bankruptcy or insolvency laws by or against Borrower. Creditor or Forfeiture Proc tidings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other dnethod, by any creditor of Borrower or by any governmental agency against any collateral securing the loan. This includes a gernishme ' of any of Borrower's accounts, Including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a goo 'faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the cre for or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or band for the dis ute. Events Affecting Guarant Any of the preceding events occurs with respect to any Guarantor of any of the indebtedness or any Guarantor dies or becom incompetent, or revokes or disputes the validity of, or (lability under, any guaranty of the indebtedness ev(denced by this Note. Adverse Change. A mate ial adverse change occurs in Borrower's financial condition, or Lander believes the prospect of payment or performance of this Note is Impaired. Insecurity. Lender in good aith believes itself insecure. Cure Provisbna. If any de eult, other than a default in payment is curable and if Borrower has not been given a notice of a breach of the same provision of this Not within the preceding twelve 112} months, it may be cured if Borrower, after Lender sends written notice to Borrower demanding cure f such default: f11 cures the default within fifteen 115) days; or f2} if the cure requires more than fifteen It 5} days, immed€ately initiates'~steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes al (reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RfGHTS. Upon def trli, Lender may, aher giving such notices as required by applicable law, declare the entire unpaid principal balance under this Note and all ccrued unpaid interest Immediately due, and then Borrower will pay that amount. ATTORNEYS' FEES; EXPENSES .Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower will pay Lander that amount. This inclu s, subject to any limits under applicable law, Lender's reasonable attorneys' fees and Lender's legal expenses, whether or not there is a laws t, including reasonable attorneys' fees, expenses for bankruptcy proceedings !including efforts to modify or vacate any automatic stay or inJ nctionl, and appeals. if not prohibited by applicabfe law, Borrower also will pay any court costs, in addition to all other sums provided by law. JURY WAIVER. Lender and Borrower hereby waive the right to any jury tr(al in any action, proceeding, or counterclaim brought by etthar Lender or Borrower against the other. GOVERNING LAW. Thla Nate 11 be governed by federal law applkeble to Lander and, to the extent not preempted by federal law, the laws of the Commonwealth of Pannsyl ants without regard to its conflicts of law provisions. This Nate has been accepted by lender in the Commonwealth of Pennayivanla. CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of LANCASTER County, Commonwealth of Penn fvanla. DISHONORED ITEM FEE. Borr er will pay a tee to Lender of $25.00 if Borrower makes a payment on Borrower's loan and the check or preauthorized charge with which Borrower pays is later dishonored, COLLATERAL. Borrower ackno ledges this Note is secured by the following collateral described in the security instruments listed herein: iAl general intangibles des tibed in a Commercial Security Agreement dated December 13, 2010. IB) Pennsylvania Reatauran Liquor License No. R-16975 described in a Commercial Pledge Agreement dated December 13, 2010. BORROWER REPORTING REQUI MENTS. Borrower agrees to additionaE provisions as follows: For as long as the loan is outsta ding, borrower must provide internal quarterly financial statements, including balance sheets, and year end tax returns and/or accountant prepay d atatementa and be avaiiabfe to discuss the progress of the business with Community First as needed. SUCCESSOR INTERESTS. The farms of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal representatives, successors and assigns, and she !inure to the benefit of Lender and its successors and assigns. GENERAL PROVISIONS. If any art of this Note cannot be enforced, this fact will not affect the rest of the Nota. Lender may delay ar forgo enforcing any of its rights or re dies under this Note without losing them. Borrower end any other person who signs, guarantees or endorses this Note, to the extent allowed y law, waive presentment, demand for payment, and notice of dishonor. Upon any change in the terms of this Note, and unless otherwise expr asly stated in writing, no party who signs this Note, whether as maker, guarantor, accommodation maker or endorser, shall 6e released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time} this loan or release any party or guar ntor or collateral; or impair, fail to realize upon or perfect Lender's security interest in the collateral; and take any other action deemed necess ?y by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of 'r notice to anyone other than the party with whom the modification is made. Tha obligations under this Note are joint and several. If any por ion of this Note is for any reason determined to be unenforceable, it will not affect the enforceability of any other provisions of this Note. CONFESSION OF JUDGMENT. BORROWER HEREBY IRREVOCABLY AUTHORIZES ANO EMPOWERS ANY ATTORNEY OR THE PROTHONOTARY OR CLERK OF ANY COURT IN THE COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE, TO APPEAR AT ANY TIME FOR BORROWER AFTER A DEF ULT UNDER THIS NOTE AND WITH OR WITHOUT COMPLAINT FILED, CONFESS OR ENTER JUDGMENT AGAINST BORROWER FOR THE NTIRE PRINCIPAL BALANCE OF THIS NOTE AND ALL ACCRUED INTEREST, LATE CHARGES AND ANY AND ALL AMOUNTS EXPENDED OR DVANCED BY LENDER RELATING TO ANY COLLATERAL SECURING THIS NOTE, TOGETHER WITH COSTS OF SUIT, AND AN ATTORNEY'S OMMISSION OF TEN PERCENT i10%) OF THE UNPAID PRINCIPAL BALANCE AND ACCRUED INTEREST FOR COLLECTION, BUT IN ANY EVE 'f NOT LESS THAN FIVE HUNDRED DOLLARS ($500} ON WHICH JUDGMENT OR JUDGMENTS ONE OR MORE EXECUTIONS MAY ISSUE IMMEDIATELY; ANO FOR SO DOING, THIS NOTE OR A COPY OF THIS NOTE VERIFIED 8Y AFFIDAVIT SHALL BE SUFFICIENT WARRANT. TH AUTHORITY GRANTED IN THIS NOTE TO CONFESS JUDGMENT AGAINST BORROWER SHALL NOT BE PROMISSORY NOTE Loan No: ?010-01Fi7II (Continued} Page 3 EXHAUSTED BY ANY EXERCISI= OP THAT AUTHORITY', BUT SHALL CONTINUE FROM TIME TO TIME AND AT ALL TIMiES UNTIL PAYMENT IN FULL OF ALL AMOUNTS DUE ~1NDER THIS NOTE. BORROWER HEREBY WAIVES ANY RIGHT BORROWER MAY HAVE TO NOTICE OR TO A HEARING IN CONNECTION WI~fH ANY SUCH CONFESSION OF JUDGMENT AND STATES THAT EITHER A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THIS', CONFESSION OF JUDGMENT PROVISION TO BORROWER'S ATTENTION OR BORROWER HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL. PRIOR TO SIGNING THIS N07 BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. 130RROWER AGREES TO THE TERMS OF THE NOTE. BORROWER ACKNOWLEDGES ECEIPT OF A COMPLETED COPY Of THIS PROMISSORY NOTE. THIS NOTE IS GIVEN UNDER EAL AND IT IS INTENDED THAT THIS NOTE IS AND SHALL CONSTITUTE AND HAVE ThiE EFFECT OF• A SEALED INSTRUMENT ACCOR ING TO LAW. BORROWER: LEBLANC'5 SUNNYSIDE RESTAURANT, LLC / ~ i By: ! ~ l ~ ~ ~ (Seal) Patrick A. LeBlanc, Membe of Leblanc's Sunnyside Restaurant, LLC LENDER: COMM ~fVITY FIRSI" FU / , Doufllas W~ er, L n Officor ,I ?i ,fA.Fp t.. . ~ J.r. 5 . ll?1 C... r.r f i.~,... - , 1!31. 7D10 A A ~If Fe u,.l,f. ~ PA I~ Cf. lil~DeJ f~ T14?DI F0.1 I , _ - T- CC ,'IIIERCIAL SECURITY AGREE ,.NT Principe! Loan d ' to Maturity Loan No caN ! coN Account Officer Initials $200,000.00 12-13- 10 12-15-2025 2010-01878 Mort a e References in the boxes abo ~ are for Lender's use only and do not Nmit the applicability of this document to any particular loan or item. m item above containin has been omitted due to text le th Iimitatlona. Grantor: Leblenc's Sunny de Restaurant LLC Lender: COMMUNITY FIRST FUND 850 North Hano~r Street 30 West Orange Street Carlisle, PA 170{13 P. O. Box 524 LANCASTER, PA 17608.0524 1717) 383-2351 THIS COMMERCIAL SECURITY .AGREEMENT dated December 13, 2010, Is made and executed between Lablanc'a Sunnyside Restaurant, LLC ("Grantor") and COMMUNITY F pST FUND ("Lender"). GRANT OF SECURITY INTERE T. For valuable consideration, Grantor grants to Lender a security interest in the Collateral to secure the Indebtedness and agraea that L nder shalt have the rights stated in this Agreement with respect to the Collateral, in addition to all other rights which Lender may have by taw. COLLATERAL DESCRIPTION. he word "Collateral" as used in this Agreement means the following described property, whether now owned or hereafter acquired, whether no existing or hereafter arising, and wherever located, in which Grantor is giving to Lender a security interest for the payment of the Indebtednes and performance of all other obligations under the Note and this Agreement: Pennsylvania Restaurant Li uor License No. R-16975 In addition, the word "Collatera " also includes all the following, whether now owned or hereafter acquired, whether now existing or hereafter arising, and wherever located: (A) Ail accessions, attachments, accessories, replacements of and additions to any of the collateral described herein, whether added now or later. iB1 All products and produ a of any of the property described in this Collateral section. (C) All accounts, general i tangibles, instruments, rents, monies, payments, end all other rights, arising out of a sale, lease, consignment or other disposition of any 'f the property described in this Collateral section. (D? All proceeds (including insurance proceeds) from the sale, deairuction, lose, or other disposition of any of the property described in this Collateral section, and su due from a third party who has damaged or destroyed the Collateral or from that party's insurer, whether due to Judgment, settlement or ther process. IE) All records and data r lacing to any of the property described in this Collateral section, whether in the form of a writing, photograph, microfilm, microfiche, or el 'otronic media, together with all of Grantor's right, title, and interest in and to all computer software required to utilize, create, maintain, an process any such records or data on electronic media. CROSS-COLLATERALI2ATION. in addition to the Note, this Agreement secures all obligations, debts and liabilities, plus interest thereon, of Grantor to lender, or any one r more of them, as well as all claims by Lender against Grantor or any one or more of them, whether now existing or hereafter arising, wh char related or unrelated to the purpose of the Nota, whether voluntary or otherwise, whether due or not due, direct or indirect, determined o 'undetermined, absoiuie or contingent, liquidated or untiquidated, whether Grantor may be liable individually or jointly with others, whether obll ~ ated as guarantor, surety, accommodation party or otherwise, and whether recovery upon such amounts may be or hereafter may become ba ked by any statute of limitations, and whether the obligation to repay such amounts may be or hereafter may become otherwise unenforceabE . GRANTOR'S REPRESENTATION AND WARRANTIES WITH RESPECT TO THE COLLATERAL. With respect to the Collateral, Grantor represents and promises to lender that: Perfection of Security Inter pt. Grantor agrees to take whatever actions are requested by Lender to perfect and continue Lender's security interest In the Collateral. U on request of Lender, Grantor will deliver to lender any and all of the documents evidencing or constituting the Collateral, and Grantor will hots Lender's interest upon any and all chattel paper and Instruments if not delivered to Lender for possession by Lender. This is a contin 'ing Security Agreement and wiN continue in effect even though all or any pert of the Indebtedness is paid in full and even though for a pario of time Grantor may not be indebted to Lender. Notices to Lender. Grantor will promptly notify Lender in writing at Lender's address shown above (or such other addresses as Lender may designate from time to tim I prior to any 11) change in Grantor's name; (2} change in Grantor's assumed business namels); (3) change in the management or in t q members or managers of the limited liability company Grantor; (4) change In the authorized signers}; 15) change in Grantor's princip I office address; (61 change in Grantor's state of organization; (7) conversion of Grantor to a new or different type of business entity; or n8) change in any other aspect of Grantor that directly or indirectly relates to any agreements between Grantor and Lender. No change in rancor's Hama or state of organization will take effect until after Lender has received notice. No Violation. The executio and delivery of this Agreement will not violate any law or agreement governing Grantor or to which Grantor is a party, and its membership agreement does not prohibit any term or condition of this Agreement. Enforceability of Collateral. To the extent the Collateral consists of accounts, chattel paper, or general intangibles, as defined by the Uniform Commercial Code, Jte Collateral is enforceable in accordance with its terms, is genuine, and fully complies with all applicable laws and regulations concerning sform, content and manner of preparetlon and execution, and all persons appearing to be obligated on the Collateral have authority an I capacity to contract and era in fact obligated as they appear to be on the Collateral. There shall be no setoffs or counterclaims against an of the Collateral, and no agreement shall have been made under which any deductions or discounts may be claimed concerning the Colt feral except those disclosed to Lender in writing. Location of the Collateral. xcapt in the ordinary course of Grantor's business, Grantor agrees to keep the Collateral (or to the extent the Collateral consists of intan tibia property such as accounts or general intangibles, the records concerning the Collateral) at Grantor's address shown above or at 'uch other locatiane as are acceptable to Lender. Upon Lender's request, Grantor satisfactory to Lender a ach Jule of real properties and Collateral locations relating to Grantor's operations, In - following: (1} ail real prop tty Grantor owns or Is purchasing; (2) aN real property Grantor is renting or leas °P, Grantor owns, rents, leasesa or uses; and (4) all other properties where Collateral Is or may be located. lr~ •/IMERCIAL SECURITY AGREEM~. Loan Na: 2010-01878 (ContinUed)~ Page 2 Removal of the Collateral ' Except in the ordinary course of Grantor's business, Grantor shall not remove the Collateral from its existing location without Lender's tar written consent. Grantor shall, whenever requested, advise Lender of the exact location of the Collateral. Transactions involving Col ateral. Except for inventory sold or accounts collected in the ordinary course of Grantor's business, or as otherwise provided for in t'is Agreement, Grantor shall not sell, offer to sell, or otherwise transfer or dispose of the Collateral, Grantor shall net pledge, mortgag ,encumber or otherwise permit the Collateral to be subject to any lien, security interest, encumbrance, or charge, other than the sec city interest provided for in this Agreement, without the prior written consent of Lender. This includes security interests even if junior in r~ht to the security interests granted under this Agreement. Unless waived by lender, all proceeds from any disposition at the Collatsr ~ (for whatever reason) shall be hekf in trust for Lender and shall not be commingled with any other funds; provided however, this re irement shall not constitute consent by Lender to any sale or other disposition. Upon receipt, Grantor shall immediately deliver any su 'proceeds to Lender. Title. Grantor represents d warrants to Lender that Grantor holds good and marketable title to the Collateral, free and clear of ail liens and encumbrances exc8pt Aor the Ifen of this Agreement. Ido financing statement covering any of the CoNateral is on file in any public office other than those w ich reflect the security interest created by this Agreement or to which Lender has specifically consented. Grantor shall defend Lende !s rights in the Collateral against the claims and demands of all other persons. Repairs and Maintenance. Qrantar agrees to keep and maintain, and to cause others to keep and maintain, the Collateral in good order, ' repair and condition at alt t rtes while this Agreement remains in effect. Grantor further agrees to pay when due sit claims for work done on, or services rendered or material furnished in connection with the Collateral sa that no lien or encumbrance may ever attach to or be filed against the Collateral. Inspection of Collateral. Le der and Lender's designated representatives and agents anal{ have the right at all reasonable limas to examine and inspect the Collateral w erever located. Taxes, Assessments and Li na. Grantor will pay when due all taxes, assessments and liens upon the Collateral, ifs use or operation, upon this Agreement, upon any omiasory note or notes evidencing the Indebtedness, or upon any of the other Related documents. Grantor may withhold any such pay ,ant or may elect to contest any lien if Grantor is in good faith conducting an appropriate proceeding to contest the obligation to pay and o long es Lender's interest in the Collateral Is not jeopardized in Lender's sole opinion. If the Collateral is subjected to a Ilan which i not discharged within fifteen (f 51 days, Grantor shah deposit with Lender cash, a sufficient corporate surety bond or other security sett factory to Lender in an amount adequate to provide for the discharge of the lien plus any interest, costs, reasonable attorneys' fees r other charges that could accrue as a result of foreclosure or sale of the Collateral. in any contest Grantor shall defend itself and Lend 'r and shall satisfy any final adverse judgment before enforcement against the Collateral. Grantor shall name i Lender as an additional obit tee under any surety bond furnished in the contest proceedings. Grantor further agrees to furnish Lender with evidence that such taxes, a sessments, and governmental and other charges have been paid in full and in a timely manner. Grantor may withhold any such payment br may elect to contest any lien if Grantor is in good faith conducting an appropriate proceeding to contest the obligation to pay and ao ton as Lender's Interest in the Collateral is not jeopardized. Compilattce with Govsrnm ittal Requirements. Granter shall comply promptly with all laws, ordinances, ruses and regulations of ail governmental authorities, n or hereafter in effect, applicable to the ownership, production, disposition, or use of the Collateral, including alt laws or regulations relati p to the undue erosion of highly-erodible land or relating to the conversion of wetlands for the production of an agricultural product or com odity. Grantor may contest in good faith any such taw, ordinance or reguiatbn and withhold compliance during any proceeding, inciu ing appropriate appeals, so long as Lender's interest in the Colateral, in Lender's opinion, is not jeopardized. Hazardous Substances. Gr rotor represents and warrants that the Collateral never has been, and never will be so long as this Agreement remains a lien on the Coilat al, used in violation of any Environmental Lawa or for the generation, manufacture, storage, transportation, treatment, disposal, release r threatened release of any Hazardous Substance. The representations and warranties contained herein are based on Grantor's due dill nce In investigating the Collateral for Hazardous Substances. Grantor hereby 11I releases and waives any future claims against Land d for indemnity or contribution in the event Grantor becomes liable for cleanup or other costs under any Environmental Laws, and (7 agrees to indemnify, defend, and hold harmless Lender against any and all claims and Fosses resulting from a breach of this provision of t is Agreement. This obligation to indemnify and defend shall survive the payment of the Indebtedness and the satisfaction of this Agreame t. Maintenance of Casualty In urance. Grantor shall procure and meinta€n ail risks lnsuranca, including without limitation fire, theft and liability coverage together wi such other insurance as Lender may require with respect to the Cai'lateral, in form, amounts, coverages and basis reasonably acceptable Lender and issued by a company or companies reasonably acceptable to Lender. Grantor, upon request of Lender, will deliver to Lende from time to time the policies or certificates of Insurance in form satisfactory to lender, including stipulations that coverages will not be ancelled or diminished without at least ten (t0) days' prior written notice to Lender and not including any disclaimer of the insurer's li ' 11ity for failure to give such a notice. Each insurance poUcy also shelf include an endorsement providing that coverage in favor of Lender ill not be Impaired in any way by any act, omission or default of Grantor or any other person. In connection with all policies covering ass is in which Lender holds or is offered s security interest, Grantor wits provide Lender with such loss payable or other endoraementa as L rider may require. If Grantor at any time fails to obtain or maintain any insurance as required under this Agreement, lender may abut sfiell not be obligated to) obtain such insurance as lender deems appropriate, including if Lender so chooses "single interest insurance," hick will cover only Lender's interest in the Collateral. Application of Insurance Pro ~aeds. Grantor shall promptly notify Lender of arty loss or damage to the Collaterel if the estimated cost of repair or replacement exceed $600.00, whether or not such casualty or bas is covered by insurance. Lender may make proof of toss if Grantor faits to do so within pfteen (15) days of the casualty. All proceeds of any Insurance on the Collateral, including accrued proceeds thereon, shall be held by L der as part of the CoBateraL If Lender consents to repair or replacement of the damaged or destroyed Collateral, Lender shall, upo ',satisfactory proof of expenditure, pay or reimbwse Grantor from the proceeds for the reasonable cost of repair or restoration, if Len r does not consent to repair or replacement of the Collateral, Lender shall retain a sufficient amount of the proceeds to pay all of the In btedness, and shall pay the balance to Grantor. Any proceeds which have not bean disbursed within six 16) months after their receipt an which Grantor has not Committed to the repair or restoration of the Collateral shall be used to prepay the Indebtedness. lnsuranca Reserves. lender ay require Grantor to maintain with Lender reserves far payment of insurance premiums, which reserves shall be created by monthly paym 1~ts from GraMOr of a sum estimated by Lender to be sufficient to produce, at least liheen 116) days before the premium due date, amou is at least equal to the Insurance premiums to be paid. If fifteen (151 days before payment is due, the reserve funds are insufficient, Granto shall upon demand pay any deficiency to Lender. The reserve funds shall be held by Lender as a general deposit and shall constitute a iron-interest-beating account which Lender may satiety by payment of the insurance premiums required to be paid by Grantor as they beco a due. Lender does not hold the reserve funds in trust for Grantor, and Lender is riot the agent of Grantor for payment of the insuranc 'premiums required to be paid by Grantor. The responsibility for the payment of premiums shall remain Grantor's sole responsibility. ~ _ ~MMERCIAL SECURITY AGREEN~ .T Loan No: 2010-01878 (Continued) Page 3 Insurance Reports. Grantoor, upon request of Lender, shall furnish to Lender reports on each existing policy of insurance showing such information as lender maeasonably request including the following: (1) the name of the insurer; (2) the risks insured; 13) the amount of the policy; 14) the pro rty Insured; (5) the then current value on the basis of which insurance has been obtained and the manner of determining that value; a 16} the expiration date of the policy. In addition, Grantor shall upon request by Lender thowever not more often than annually) have Ian independent appraiser satisfactory to lender determine, as applicable, the cash value or replacement cost of the Collateral Financing Statements. Gr ntor authorizes Lender to file a UCC financing statement, or alternatively, a copy of this Agreement to perfect Lender's security interest. At Lender's request, Grantor additionally agrees to sign all other documents that are necessary to perfect, protect, and continue Len er's security interest in the Property. Grantor will pay all filing fees, title transfer fees, and other fees and costs involved unless prohibited av law or unless Lender is required by taw to pay such fees and costs. Grantot irrevocably appoints Lender to execute documents neces pry to transfer cilia if there is a default. Lender may file a copy of this Agreement as a financing statement. If Grantor chartges Grantor' name or address, or the name or address of any person granting a security interest under this Agreement changes, Grantor will pro ~ttiy notify the Lender of such change. GAANTOR'S RIGHT TO POSSE SION. Until default, Grantor may have possession of the tangible personal property and beneficia{ use of alt the Collateral and may use it in an ',lawful manner not inconsistent with this Agreement or the Related Documents, provided that Grantor's right to possession and beneficial use hall not apply to any Collateral where possession of the Collateral by Lender is required by law to perfect Lender's security interest in su h Collateral. If Lender at any time has possession of any Collateral, whether before or after an Event of Default, Lender shall be deemed to hav '.exercised reasonable care in the custody and preservation of the Collateral if Lender takes such action for that purpose as Grantor shall reque 4 or as Lender, in Lender's sole discretion, shall deem appropriate under the circumstances, but failure to honor any request by Grantor shall no of itself be deemed to be a failure to exercise reasonable care. Lender shall not be required to take any steps necessary to preserve any right in the Collateral against prior parties, nor to protect, preserve or maintain any security interest given to secure the Indebtedness. LENDER'S EXPENDITURES. If ;any action or proceeding is commenced that would materially affect Lender'a interest in the Collateral or if Grantor fails to comply with a y provision of this Agreement or any Related Documents, including but not limited to Grantor's failure to discharge or pay when due an amounts Grantor is required to discharge or pay under this Agreement or any Related Documents, Lander on Grantor's behalf may tbut shall {tat be obligated to! take any action that Lender deems appropriate, including but not limited to discharging or paying all texas, (lens, security interests, encumbrances end other claims, at any time levied or placed on the Collateral and paying all costs for insuring, maintaining and preser ing the Collateral. All such expenditures incurred or paid by Lender for such purposes will than bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Grantor. All such expenses wilt become a part of the indebtedness and, a 'Lender's option, will (A) be payable on demand; IB) be added to the balance of the Nota and be apportioned among and be payable with any ~nstaliment payments to become due during either (1) the term of any applicable insurance policy; or 12) the remaining term of the Note; or C) be treated as a balloon payment which will be due and payable at the Note's maturity. The Agreement also will secure payment of these a vunts. Such right shall be in addition to all other rights and remedies to which Lander may be entitled upon Default. DEFAULT. Each of the followin shall constitute an Event of Default under this Agreement: Payment Default. Grantor f Its to make any payment when due under the Indebtedness. Other Defaults. Grantor fat ~ to comply with or to perform any other term, obligation, covenant or condition co»tained in this Agreement or in any of the Related Doc ments or to comply with or to perform any term, obligation, covenant or conditon contained in any other agreement between Lender end Grantor. Default In Favor of Third P Mtiea. Any guarantor or Grantor defaults under any loan, extension of credit, security agreement, purchase or sales agreement, or any of er agreement, in favor of any other creditor or person that may materially affect any of any guarantor's or Grantor's property or ability Eo perform their respective obligations under this Agreement or any of the Related Documents. False Statements. Any w ranty, representation or statement made or furnished to Lender by Grantor or on Grantor's behalf under this Agreement or the Related D currents is false ar misleading in any material respect, either now or at the time made or Furnished or becomes false or misleading at any ti a thereafter. Defective Coilateralization. This Agreement or any of the Related Documents ceases to be in full force and affect tincluding failure of any collateral document to crest a valid and perfected security interest or Ilan} at any time and for any reason. Insolvency. The dissotutio of Grantor (regardless of whether election to continue is made), any member withdraws from the limited (lability company, or any o her termination of Grantor's existence as a going business or the death of any member, the insolvency of Grantor, the appointment o 'a receiver for any part of Grantor's property, any assignment for the benefit of creditors, any type of creditor workout, or the commence lent of any proceeding under any bankruptcy or insolvency laws by or against Grantor. Creditor or Forfeiture Proc ,dings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, sett-help, repossession or any other unethod, by any creditor of Grentor or by any governmental agency against any collateral securing the Indebtedness. This include ''a garnishment of any of Grantor's accounts, Including deposit accounts, with Lender. However, this Event of Default shall not apply if th de is a good faith dispute by Grantor as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture procee Irtg and If Grantor gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond to the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond fo the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the indebtedness or Guarantor dies or becomes incompeten or revokes or disputes the validity af, or ilability under, any Guaranty of the Indebtedness. Adverse Change. A mater ~i adverse change occurs in Grantor's financial condition, or Lender believes the prospect of payment or performance of the Indebted ass is impaired. Insecurity. Lender In good f Ith believes itself insecure. Cure Provisions. If any def tilt, other than a default in payment is curable and if Grantor has not been given a notice of a breach of the same provision of this Agree ant within the preceding twelve t12) months, it may be cured If Grantor, aher Lander sends written notice to Grantor demanding cure of arch default: t)) cures the default within fifteen {1b) days; or (2) if the cure requires more than fifteen 116) days, immediately Initiates taps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues end completes ail eesonable and necessary steps sufficient to produce compliance as soon as reasonably practical. RIGHTS AND REMEDIES ON DE l4ULT. If an Event of Default occurs under this Agreement, at any time thereafter, Lender shall have all the rights of a secured party under t e Pennsylvania Uniform Commercial Code. In addition and without limitation, Lender may exercise any one or i tl'T C.. /IMERCIAL SECURITY AGREEMC~, Loan No: 2010-01$78 tCantinued} Page 4 more of the following rights and'',. remedies: Accelerate indebtedness. ender may declare the entire Indebtedness, including any prepayment penalty which Grantor would be required to pay, immediately due an~{ payable, without notice of any kind to Grantor. Assemble Collateral. Land r may require Grantor to deliver to Lender al( or any portion of the Collateral and any and ail certificates of title and other documents retati to the Collateral. Lender may require Grantor to assemble the Collateral and make it available to Lander at a place to be designated by Lender. Lender also shall have full power to enter upon the property of Grantor to take possession of and remove the Collateral. If t e Cotiateral contains other goods not covered by this Agreement at the time of repossession, Grantor agrees Lender may take such oche ',goods, provided that Lender makes reasonable efforts to return them to Grantor after repossession. SaN the Collateral. Lender hall have full power to sell, lesae, transfer, or otherwise deal with the Collateral or proceeds thereof in Lender's own name ar that of Grant r. Lender may sal{ tfie Collateral at public auction or private sale. Unless the Collateral threatens to decline speedily in value or is of a type customarily sold on a recognized market, Lender will glue Grantor, and other parsons as required by law, reasonable notice of the ti ~ and place of any public sale, or the time aher which any private sale or any other disposition of the Collateral is to be made. However, p notice need be provided to any parson who, after Event of Default occws, enters Into and authenticates an agreement waiving that per ion's right to notification of sale. The requirements of reasonable notice shall be met if such notice is given at least ten (10) days before fee time of the sale or disposition. All expenses relating to iha diapositlan of the Collateral, including. without Umitation the expenses of r 'taking, holding, insuring, preparing for sale and selling the Collateral, sftall become a part of the indebtedness secured by this Agreement nd shall be payable on demand, with interest at the Note rate from date of expenditure until repaid. Appoint Receiver. Lender ,ail have the right to have a receiver appointed to take possession of all or any part of the Collateral, with the power to protect and pres rue the Collateral, to operate the Coilaterai preceding foreclosure or sate, and to collect the Aents from the Collateral and apply the pro eeds, over and above the cost of the receivership, against the indebtedness. The receiver may serve without bond if pecm(tted by law. 'ender's right to the appointment of a receiver shalt exist whether or not the apparent value of the Collateral exceeds the indebtedness b a substantial amount. Employment by Lender shall not disqualify a person tram serving as a receiver. CoNect Revenues. Apply Ac ounts. Lender, either itself or through a receiver, may collect the payments, rents, Income, and revenues from the Collateral. Lender may ' t any time in Lender's discretion transfer any Collateral Into Lender's own name or that of Lender's nominee and receive the payments, tents, income, and revenues therefrom and hold the same as security for the Mdebtedness or apply it to payment of the tndebtednes in such order of preference as Lender may determine. Insofar as the Collateral consists of accounts, general intangibles, insurance poUci ' ,instruments, chattel paper, chores in action, or s'un)lar property, Lender may demand, collect, receipt for, settle, compromise, adjust, !sue for, foreclose, or realize on the Collateral as Lender may determine, whether ar not Indebtedness or ~ Collateral is then due. For 'these purposes, Lander may, on behalf of and in the name of Grantor, receive, open and dispose of mail addressed to Grantor; chan c any address to which mail and payments are to ba sent; and endorse notes, checks, drafts, money orders, documents of title, insVum hts and items pertaining to payment, shipment, or storage of any Collateral. To facilitate collection, Lender may notify account debtors hd obligors on any Coilaterai to make payments directly to Lender. ObtaM Deficiency. If Lende 'chooses to sell any or all of the Coilaterai, Lender may obtain a judgment against Grantor for any deficiency remaining on the indebtedn ss due to Lender after application of all amounts received from the exercise of the rights provided in this Agreement. Grantor shall liable for a deficiency even if the transaction described in this subsection is a sale of accounts or chattel paper. Other Rights and Remedies Lender shah have all the rights and remedies of a secured creditor under the provisions of the Uniform Commercial Code, as may a amended from time to time. In addition, Lander shall have and may exercise any or all other rights and remedies it may have avails ~ at taw, in equity, or otherwise. Election of Remedies. Exc t as may be prohibited by appRcabfe law, all of Lender's rights and remedies, whether evidenced by this Agreement, the Related Doc ments, or by any ocher writing, shall be cumulative and may be exercised singularly or concurrently, Election by Lander to pursue any re pdy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Gra for under this Agreement, after Grantor's failure to perform, shall not affect Lender's right to declare a default and exercise its remedies. LiaUOR LICENSE ACKNOWLEDG ENT. Acknowledgement - I, the undersigned, do hereby acknowledge, Consent and agree that liquor license number R-t6975 issued by the nnsylvania Liquor Control Board for use at the premises situated at 850 North Hanover Street, Carlisle, PA 1 701 3-1 538 will not be removed lfrom the premises, nor transferred without the prior written consent of Community First Fund until the loan from Community First Fund evide cad by a promissory note dated December 13, 2010 in the principal amount of 8 200,000.00 is paid in full. I hereby authorize a transfer of Iiqu r license number R-16975 to Community First Fund in the event I am declared by Community First Fund to be in default under the terms of the 'rom(ssory note and/or security agreement and subject for trans#ar by the Pennayivania Liquor Control Board. At all times that the liquor licens !is held by security hereunder, i represent and warrant that (a) I am the sole owner of the License and has good, clear and marketable cilia t 'the License, and other than the security interest of Community First Fund, the License is be free of any and all liens, encumbrances, and clal s of any kind whatsoever. (b) There are no outstanding citations or any pending or threatened citations issued by the PLCB or by any gov rnmental authority or body in connection with the License. if a citation Is issued by the PLCB or by any other governmental authority or body d 'ring the term of this Agreement, i will waive the hearing and pay the fine or serve the suspension. Ic) There is no pending ar threaten d judicial or administrative proceeding which would prevent or interfere with my obligations under the promissory note or security agree ant I have with Community First Fund. (d) I have and will continue to file all federal, state, county and municipal tax returns, reports and })eciarations which are required to be filed and have paid all taxes, penalties and interests which had become due pursuant thereto or which be ome due pursuant to assessment. (e) 1 shalt cooperate fu{ly with Community First Fund in processing the transfer of the License should the cense be transferred because of my default. MISCELLANEOUS PROVISIONS. he following miscellaneous provisions ere a part of this Agreement: Amendments. This Agreeme t, together with any Reiatad Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in Khis Agreement. Ho alteration of or amendment to this Agreement shalt be effective unless given in writing and signed by the party or pa lies sought to ba charged or bound by the alteration or amendment. Attorneys' Fees; Expenses. 'Grantor agrees to pay upon demand all of Lender's coats end expenses, including Lender's reasonable attorneys' fees and Lender's legal expenses, Incurred in connection with the enforcement of this Agreement. Lender may hire or pay someone else to help enforc ,this Agreement, and Grantor shall pay the coats and expenses of such enforcement. Costs and expenses include Lender's reasonable a ~orneys' fees and legal expenses whether or not there is a lawsuit, including reasonable attorneys' fees and legal expenses for bankrupte proceedings (including efforts to modify or vacate any automatic stay or lnjunetion), appeals, and any anticipated post-judgment col bction services. Grantor also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings. Caption h~adings in this Agreement are far convenience purposes only and are not to be used to interpret or define the _ _ i7 ' ~MMERCIAL SECURITY AGREENt .T Loan No: 2010-01878 (Continued) Page 5 provisions of this Agreema~nt. Governing Law. This Agr lament wilt be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the Commonwealth of Pennsylvania without regard to its conflicts of law provisions. This Agreement has been accepted by Lender in the Commonwealth of P nnsyivania. Choice of Venue. !f ther ~ is a lawsuit, Grantor agrees upon Lender's request to submit to the jurisdiction of the courts of LANCASTER County, Commonwealth o Pennsylvania. No Waiver by Lender. Le der shall not be deemed to have waived any rights under this Agreement unleae such waiver is given in writing and signed by lender. N 'delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by tender of a provision of this Agreement shall not prejudice or constitute a waiver of Lender's right otharwlse to demand strict compliance With that provision or any other provision of this Agreement. No prior waiver by Lender, nor any course of dealing between Lender a tE Grantor, shall constitute a waiver of any of Lender's rights or of any of Grantor's obligations as to any future transactions. Whenever t e consent of Lender is required under this Agreement, the granting of such consent by Lender in any Instance shall not constitute Conti ing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the bie dfscretian of Lender. Notices. Unless otharwis ,provided by applicable law, any notice required to be given under this Agreement shall be given in writing, and shall be effective when ac wally delivered, when actually received by telefacsimlle (unless otharwlse required by law}, when deposited with a nationally recognized ov (night courier, or, if mailed, when deposited In the United States mail, as first class, certified or registered mail postage prepaid, directed b the addresses shown near the beginning of this Agreement. Any party may change its address for notices under this Agreement by g wing formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address. For notice purpo gs, Grantor agrees to keep Lender informed at all tirnea of Grantor's current address. Unless otherwise provided by applicable law, it there i more than one Grantor, any notice given by Lender to any Grantor is deemed to be notice given to all Grantors. Additional Authorizations. Qrantor hereby authorizes Lender, with full power of substitution, to execute in Grantor's name any documents necessary to perfect, ame 'd, or to continue the security interest granted in this Agreement or to demand termination of filings of other secured parties and, with tut further authorization from Grantor, to file a carbon, photographic or other reproduction of any financing statement or of this Agree 'ant for use as a financing statement. Grantor will reimburse Lender for all expenses for the perfection and the continuation of the perfe titan of Lender's security interest in the CoNateral. It is understood and agreed that any exercise of this authorization by Lender sh II be on behalf of Lender and not on behalf of Grantor. Lender is not an agent or fiduciary of Grantor. However, in exercising the authoriz trion granted hereby, Lender shall exercise reasonable caution and prudence and Lender shall keep full and accurate record of alt actin ~s, receipts and disbursements. Severability. If a court of competent jurisdiction finds any provision of this Agreement to 6e illegal, invalid, or unenforceable as to any circumstance, that finding Mail not make the offending provision illegal, invalid, or unenforceable as to any other circumstance. If feasible, the offending provision she 16e considered modified so that it becomes legal, valid and enforceable. If the otfending provision cannot be so modified, it shall be consid red deleted from this Agreement. Unless otharwlse required by Isw, the Nlegality, invalidity, or unenforceability of any provision of Ehis Agr errant shall not affect the legality, validity or enforceability of any other provision of this Agreement. Successor Interests. The farms of this Agreement shell be binding upon Grantor, and upon Grantor's heirs, personal representatives, successors, and assigns, a d shall ba enforceable by Lender and its successors and assigns. Survival of Representation end Warranties. All representations, warranties, and agreements made by Granter in this Agreement shall survive the execution and plivery of this Agreement, shall be continuing in nature, and shaii remain in full force and effect until such time es Grantor's Indebtedness hail be paid in full. Time is of the Essence. Ti a is of the essence in the performance of this Agreement. Waive Jury. All parties to is Agreement hereby waive the right to any Jury trial in any action, proceeding, or counterclaim brought by any party against any other pa DEFINITIONS. The following ca itaiized words and terms shall have the following meanings when used 1n this Agreement. Unless specifically stated to the contrary, all refers ass to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include khe plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in ;his Agreement shelf #ve the meanings attributed to such terms in the Uniform Commercial Code: Agreement. The word "Ag eement" means this Commercial Secu?Ity Agreement, as this Commercial Security Agreement may be amended or modified trom time to ti e, together with ail exhibits end schedules attached to this Commercial Security Agreement from time to time. Borrower. The word "Borr ewer" means Leblanc's Sunnyside Restaurant, LLC and includes ail co-signers and co-makers signing the Note and all their successors and i3sslgns. Collaterei. The word "Coil feral" means ail of Grantor's right, title and interest in and to all the Collateral as described in the Collateral Description section of this greement. Default. The word "Default means the Default sat forth in this Agreement in the section titled "Default". Environmental Lawa. The ords "Environmental Laws" mean any and alt state, federal and local statutes, regulations and ordinances relating to the protection o 'human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability 'Act of 1980, as amended, 42 U.S.C. Section 9801, et seq. ("CERCLA"1, the Superfund Amendments and Reauthorization Act of 198 } Pub. L No. 99.499 {"SARA"?, the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, ei seq., the Resource Conservation 'and Recovery Act, 42 U.S.C. Section 8901, ei seq., or other applicable state or federal laws, rules, or regulations adopted pursuan:therato. Event of Default. The word "Event of DefaulE" mean any of the events of default set forth in this Agreement in the default section of this Agreement. Grantor. The word "Granto "means Leblanc's Sunnyside RestauranE, LLC. Guarantor. The word "Guar ntor" means any guarantor, surety, or accommodation party of any or all of the Indebtedness. Guaranty. The word "Guar nty" means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part of the Note. Hazardous Substances. Th words "Hazardous Substances" mean materials that, because of their quantity, concentration or physical, chemical or infectious char cteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, toyed, disposed of, generated, manufactured, transported or otherwise handled. The words "Hazardous _ _ _ I.; G /IMERCIAL SECURITY AGREEME, • Loan No: 2010-01£37£3 (Continued) Page 6 Substances" are used in tfpoir very broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listgd under the Environmental Laws. The term "Hazardous Substances" also includes, without limitation, petroleum and petroleum by-products'or any traction thereof and asbestos. Indebtedness. The word "Indebtedness" moans the indebtedness evidenced by the Note or Related Documents, includiny aii principal and interest together with all of er indebtedness and costs and expenses for which Grantor is responsible under this Agreernant or under any of the Related Documents. 'he liens and security interests created pursuant to this Agreement covering the Indebtedness which may be created in the future shall r late back to the date of this Agreement. Specifically, without limitation, Indebtedness includes all amounts that may be indirectly secured y the Cross-Collateralization provision of this Agreement. Lender. The word "Lender means COMMUNITY FIRST FUND, its successors and assigns. Note. The word "Note"mans the Note executed by Leblanc's Sunnyside Restaurant, LLC in the principal amount of 5200,000.00 dated December 13, 2010, toga[ ray witty all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the note or credit agreeme t. Property. The word "Pro lerty" means all of Grantor's right, title and interest in and to ail the Property as described in the "Collateral Description" section of this Agreement. Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and document ,whether now or hereafter existing, executed in connection with the Indebtedness. GRANTOR HAS READ AND U DERS7000 ALL THE PROVISIONS OF THIS COMMERCIAL SECURITY AGREEMENT AND AGREES TO ITS PERMS. THIS AGREEMEN-f IS X1TED DECEMDER 13, 2010. THIS AGREEMENT IS GIVEN INDER SEAL AND IT IS INTENDED THAT THIS AGREEMENT IS AND SHALL CONSTIl'UTI: AND HAVE 1-Hf EFFECT OF A SEALED INSTRU ENl" ACCORDING TO LAW. GRANTOR: LEBLANC'S SUNNYSID@ RESTA~IiJRANT, LLC 1 / l Patrick A. LeBlanc, Member of Leblartc's Sunnyside Restaurant, LLC LENDER: COMM N`TY FIRST FUND ~ ~ ~ / / Uoug as Weis r, Lod r fficor t IPi(R f>.J .-n), ~/a,.5 ,1?L)'~) C^[~ a~, .a.. t, ,JIL •)R,n„R••v.^,. -iA ~'.C~IiL•l ~O FC TR-?dl FR, ORIGINAL MATTHLV~i C. SAMLEY, ESQUIRE Attorney I.D. #65442 REESE, SAM LEY, WAGENSELLER, MECUM & LONGER, P.C. 120 North Shipper Strut Lancaster PA 17602 (717)393-06?l IN THF. COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION -LAW COMMUNITY FIRST FUND, Plaintiff ~.s. No. 12-5657 LeBLANC'S SUNNY"SIDE ~ _ ~ ~~ ~ . RESTAURANT, LLC, _ ; iv - Defendant ~ --, - PRAECIPE FOR DEFAULT JUDGMENT _= :=' r. :: Twenty (20) days having expired since service of the Complaint upon the Defendant, and no appearance or answer having been filed thereto by Defendant or their attorney: 1. Please enter judgment for the recovery of collateral identified as Pennsylvania Restaurant Liquor License No. R016975 as identified in the Commercial Security Agreement dated December 10, 2010. The l~ndersigned certifies that a written notice of intention to file this Praecipe was mailed to Defendant and their attorney of record, if any, after the default occurred and at least ten (10) days prior to the date of filing of this Praecipe. A copy of said notice is attached hereto. Respectfully submitted: REESE, SAMLEY, WAGENSELLER MECUM & LONGER, P.C. /~ Date: _ ~ ~ t ~ - ~~ ~z.._-~~ - - r/ Z ~~~---~ ` ___ - Matthew C. Samley, Es ' ~~re F Attorneys for Plaintiff ;~ Attorney I.D. #65442 , ~~ ~~~ So~ ~``"1 ~~ag~ . \ ~1~hC9 ~~~~~d IN THF, COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION -LAW COMMUNITY FIRST FUND, Plaintiff vs. No. 12-5657 CIVIL TERM LeBLANC'S SLTNNYSIDE RESTAURANT, LLC Defendant TO: LeBlanc's Sunnyside Restaurant, LLC 850 North Hanover Street Carlisle, PA 17013 Date of Notice: October 16, 2012 Via First Class Mail and Certified Mail, Return Receipt Requested, Article No. 7009 0820 0002 0528 2528 IMPORTANT NOTICE YOU ARE IN DEFAULT BECAUSE YOU HAVE FAILED TO ENTER A WRITTEN APPEARANCE PERSONALLY OR BY ATTORNEY AND FILE IN WRITING WITH THE COURT YOUR DEFENSES OR OBJECTIONS TO THE CLAIMS SET FORTH AGAINST YOU. UNLESS YOU ACT WITHIN TEN DAYS FROM THE DATE OF THIS NOTICE, A JUDGMENT MAY BE ENTERED AGAINST YOIJ WITHOL"T A HEARINCr AND YOU MAY LOSE YOUR. PROPERTY OR OTHER IMPORTANT RIGHTS. YOU SHOULD TAKE THIS NOTICE TO A 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. lF YOU CANNOT AFFORD TO HIRE A LAWYER, THIS OFFICE MAY BE ABLE TO PROVIDE YO1J WITH INFORMATION ABOUT AGENCIES THAT MAY OFFER LEGAL SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE OR NO FEE. Cumberland County Bar Association 32 South Bedford Street Carlisle, PA 17013 (717;1249-3166 Respectfully submitted, REESE, SAMLEY WAGENSELLER MECLJ & LON ER, P.C. By• I ,~ (~~ MattKew C. Sar~y, Esq. Attorney I.D. 65442 /~ 120 North Shippen Sffeet Lancaster, PA 17602 717-393-0671