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13-0682
IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA (Pennsylvania Rule of Civil Procedure No. 236) SPECTOR GADON & ROSEN, P.C. By: David M. Giles (I.D. No. 27477) 1635 Market Street, 7th Floor Philadelphia, PA 19103 Phone: (215) 241-8888 Fax: (215) 241-8844 Email: dgiles(a,laws~r.com FOX CHASE BANK 4390 Davisville Road Hatboro, PA 19040-2544 Plaintiff, v. SCOTT C. PENWELL 400 Bear Drive Enola, PA 17025 Defendant. Attorney for Plaintiff COURT OF COMMON PLEAS CUMBERLAND COUNTY, PA TERM, 2013 No. ~3-ln~a ~ivi~ NOTICE IS GIVEN THAT A JUDGMENT HAS BEEN ENTERED AGA ST YOU IN THE ABOVE-CAPTIONED MATTER. .~ PROTHONOTARY IF YOU HAVE ANY QUESTIONS CONCERNING THE ABOVE, PLEASE CONTACT: David M. Giles, Esquire Attorney for Fox Chase Bank SPECTOR GADON & ROSEN, P.C. Seven Penn Center 1635 Market Street - 7th Floor Philadelphia, PA 19103 (215) 241-8888 1561820-1 SPECTOR GADON & ROSEN, P.C. By: David M. Giles (I.D. No. 27477) 1635 Market Street, 7th Floor Philadelphia, PA 19103 Phone: (Z15) 241-8888 Fax: (215) 241-8844 Email: dgiles(a~lawsgr.com FOX CHASE BANK 4390 Davisville Road Hatboro, PA 19040-2544 Plaintiff, v. SCOTT C. PENWELL 400 Bear Drive Enola, PA 17025 ~, -' ~:.M -i Attorney for Plaintiff r.;:.,,. k • i `~' ~~; ~ r c.J ~- e~i 7 ~,, ~., y~, ,n - , :::.:~; ~~, ~. ~ ' ~ : , ~„c. ~- s" ~. COURT OF COMMON PLEAS CUMBERLAND COUNTY, PA TERM, 2013 nn Caul 2, ~a / NO. ~ J Defendant. PRAECIPE FOR ENTRY OF APPEARANCE, CONFESSION OF JUDGMENT FOR MONEY AND ASSESSMENT OF DAMAGES Pursuant to the authority contained in the Warrant of Attorney under a Commercial Guaranty (the "Guaranty"), a copy of which is attached to the Complaint in Confession of Judgment for Money filed in this action, I appear for Defendant, Scott C. Penwell, and confess judgment for money in the amount of $17,500.00 in favor of Plaintiff and against the Defendant, as follows: Principal ...................................................................................................$17,500.00 TOTAL DUE ..........................................17,500.00 a~ # l~aa~ 1560623_I.DOC ~ ~~ ~ ~!' ~--(_ I rl ~ G~ ti SPECTOR GADON & ROSEN, P.C. David M. Giles, Esquire Attorney for Defendant Pursuant to Warrant of Attorney Judgment is hereby entered as above requested. '~ ~. .. t"..~/ Prothonotary 1560623_1.DOC ' } SPECTOR GADON & ROSEN, P.C. By: David M. Giles (I.D. No. 27477) 1635 Market Street, 7t6 Floor Philadelphia, PA 19103 Phone: (215) 241-8888 Fax: (215) 241-8844 Email: dgiles(u~lawsgr.com FOX CHASE BANK 4390 Davisville Road Hatboro, PA 19040-2544 Plaintiff, v. SCOTT C. PENWELL 400 Bear Drive Enola, PA 17025 Defendant. r~ C~ "' ~ '~~ 4..- .... .- .__.! ~`~`';l ~',~ < ~ ;~~ . C, - Attorney for Plaintiff v c .,,, ~ ~ ~~'„? C ~~ ~~ ~,~ u' Y, ~ ~ .. - -i - y -< rv ' . COURT OF COMMON PLEAS CUMBERLAND COUNTY, PA TERM, 2013 3-(~~'a Gail NO. COMPLAINT IN CONFESSION OF JUDGMENT FOR MONEY 1. Plaintiff is a federal savings bank with its principal place of business located at 4390 Davisville Road, Hatboro, Pennsylvania, 19040-2544. 2. Defendant, Scott C. Penwell ("Defendant"), is an individual who, upon information and belief, has an address of 400 Bear Drive, Enola, PA 17025 3. On or about March 2, 2011, Plaintiff loaned Elite Managing General Agency, LLC (the "Borrower") the sum of $75,000.00 (the "Loan") which was evidenced by a Promissory Note executed and delivered by Borrower made payable to the order of Plaintiff in the principal sum of $75,000.00 (the "Note") and a Business Loan Agreement (the "Loan Agreement"). A copy of the Note and Loan Agreement are attached as Exhibit "A". 1560623_1 .DOC 4. The Note provides that Defendant would pay to Plaintiff interest on the unpaid principal balance of the Loan at a variable rate of interest equal to the Prime Rate as published from time to time in the Wall Street Journal plus 1% per annum (the "Interest Rate") 5. On or about March 2, 2011, Defendant executed a Commercial Guaranty ("Guaranty") wherein Defendant irrevocably, absolutely and unconditionally guaranteed the full and punctual payment and satisfaction of all amounts due under the Loan, as well as the performance of all obligations of Borrower under the Loan. However, the Guaranty contains a provision limiting Guarantor's share of the indebtedness to $17,500.00. A true and correct copy of the Guaranty is attached as Exhibit "B". 6. The Note provides that Defendant will pay the Loan in full immediately upon Lender's demand. 7. The Loan Agreement provides that a Default or an Event of Default will occur if payment in full is not made immediately when due. 8. Pursuant to the terms of the Loan Agreement, upon the occurrence of a Default or an Event of Default thereunder, the entire unpaid principal balance, without notice to Defendant becomes due and payable immediately with interest. 9. The Note further provides that, upon the occurrence of a Default or an Event of Default, the interest rate shall be the Interest Rate charged prior to the Default or Event of Default plus five percent (5%) per annum ("Default Rate"). 10. On January 14, 2013, Plaintiff provided Borrower and Defendant with a Notice of Demand for Payment, demanding that Borrower and Defendant pay the Loan in full within 10 days from the date of the Notice of Demand and that interest would accrue at the Default Rate if 1560623_1.DOC the Loan was not paid in full within the aforementioned 10 day period. A true and correct copy of the Notice of Demand is attached hereto as Exhibit "C". 11. Borrower and Defendant failed to pay the Loan in full within the 10 day period set forth above and on January 28, 2013, Plaintiff provided Borrower and Defendant with a Notice of Default and Acceleration ("Notice of Default and Acceleration"} wherein Plaintiff advised Borrower and Defendant that its failure to repay the loan in full within the 10 days required in the Notice of Demand as required by the Note and Loan Agreement constituted a Default or an Event of Default under the Loan, that Plaintiff had declared the unpaid balance of principal and interest immediately due and payable under the Note and the other Loan Documents, and that interest would accrue at the Default Rate. Plaintiff also advised Borrower and Defendant that it intended to exercise any and all of its rights and remedies under the Loan Documents at law or in equity without further notice. A true and correct copy of the Notice of Default and Acceleration is attached hereto as Exhibit "D." 12. After Plaintiff accelerated all amounts due under the Note, Borrower and Defendant have still failed to pay Plaintiff all amounts due under the Loan. In fact, Borrower and Defendant advised Plaintiff on January 29, 2013 that it was going to pay the Loan in full, but failed to do so. A true and correct copy of e-mails from Borrower and Defendant advising Plaintiff that it was going to pay the Loan in full on either February 1, 2013 or February 4, 2013 is attached as Exhibit "E". 13. The Guaranty contains a Warrant of Attorney wherein Defendant authorizes Plaintiff to confess judgment against Defendant for $17,500.00. A copy of the Warrant of Attorney is attached hereto as Exhibit "F" 1560623_1 ~ ? 14. No judgment has been heretofore entered on the Note or Guaranty in any jurisdiction. 15. Plaintiff is the present holder of the Note and Guaranty and has not assigned the same. 16. The Note and Guaranty were based upon a commercial transaction. 17. The judgment is not being entered by confession against natural persons in connection with a consumer credit transaction. 18. All conditions precedent to the entry of judgment for money have occurred. 19. Plaintiff has sent a Notice of Demand and a Notice of Default and Acceleration wherein Plaintiff demanded, inter alia, payment of all amounts due under the Note and Guaranty and the Note and Guaranty does not require Plaintiff to make any further demand prior to the entry of judgment for money. 20. The following amounts are presently due and owing by Defendant, to Plaintiff under the Guaranty: Principal ................................................................................................... $17,500.00 TOTAL DUE ...........................................~1 Z~99~44 21. By virtue of the Warrant of Attorney, Plaintiff is entitled to immediate entry of judgment against Defendant, in the amount of $17,500.00. 1560623_1 .DOC WHEREFORE, Plaintiff demands judgment against the Defendant, in the amount of $17,500.00. SPECTOR GADON & ROSEN, P.C. David M. Giles, Esquire Attorney for Plaintiff 1560623_1 .DOC SPECTOR GADON & ROSEN, P.C. By: David M. Giles (I.D. No. 27477) 1635 Market Street, 7`b Floor Philadelphia, PA 19103 Phone: (215) 241-8888 Fax: (215) 241-8844 Email: dgiles(a~lawsSr.com FOX CHASE BANK 4390 Davisville Road Hatboro, PA 19040-2544 Plaintiff, v. SCOTT C. PENWELL 400 Bear Drive Enola, PA 17025 Defendant. Attorney for Plaintiff COURT OF COMMON PLEAS CUMBERLAND COUNTY, PA TERM, 2013 NO. ~ .,- ~ ~o~- ~'~ . ;3 AVERMENT OF DEFAULT COMMONWEALTH OF PENNSYLVANIA COUNTY OF PHILADELPHIA ss Jerry Holbrook, being duly sworn according to law, deposes and says that he is the Executive Vice President and Chief Operating Officer of Fox Chase Bank ("Bank"), Plaintiff herein; that he is authorized to make this Affidavit on behalf of Plaintiff and that on or about March 2, 2011 Plaintiff loaned Borrower the sum of $75,000.00 (the "Loan") which is evidenced by a Promissory Note executed and made payable to the order of Plaintiff in the principal sum of $75,000.00 (the "Note"). On or about March 2, 2011, Defendant executed a Commercial Guaranty (the "Guaranty") wherein Defendant irrevocably, absolutely and unconditionally guaranteed the full and punctual payment and satisfaction of all amounts due under the Loan, as 1560623_1.DOC } well as the performance of all obligations of Borrower under the Loan. However, the Guaranty contains a provision limiting Guarantor's share of the indebtedness to $17,500.00. The Note provides that the Borrower will pay the Loan in full immediately upon Lender's demand. The Loan Agreement provides that a Default or an Event of Default will occur if payment is full is not made immediately when due. On January 14, 2013, Plaintiff provided Borrower and Defendant with a Notice of Demand for payment, demanding that Borrower and Defendant pay the Loan in full within 10 days from the date of the Notice of Demand and that if the Loan is not paid in full within the aforementioned time period interest would accrue at the Default Rate. Borrower and Defendant have failed to pay the Loan in full as demanded and on January 28, 2013, Plaintiff provided Borrower and Defendant with a Notice of Default and Acceleration and advised Borrower and Defendant that its failure to pay the principal and interest owed under the Note within 10 days from the date of the Notice of Demand constituted an Event of Default under the Loan, that Plaintiff had declared the unpaid balance of principal and interest immediately due and payable under the Note and other Loan Documents, and that interest would accrue at the Default Rate. Plaintiff also advised Borrower and Defendant that it intended to exercise any and all of its rights and remedies without further notice. Pursuant to the terms of the Guaranty, Plaintiff may thereafter confess judgment against Defendant for all amounts due thereunder. The following sums are presently due and owing by Defendant to Plaintiff under the Note and Guaranty: Principal ................................................................................................... $17,500.00 TOTAL DUE ...........................................~_ -O~Q-O- 1560623_1 .DOC __ ~~.. Jerry Holbrook Executive Vice President and Chief Operating Officer Sworn to and S b cribed before me this "day of February, 2013 Notary Public cowwaMlwsar+ o~ -s~anv~wu- N~?ARW. BEN. Came iNbn~' P 1P~c ~ E> 8 , 1560623_1 .DOC SPECTOR GADON & ROSEN, P.C. By: David M. Giles (I.D. No. 27477) 1635 Market Street, 7a' Floor Philadelphia, PA 19103 Phone: (215) 241-8888 Fax: (215) 241-8844 Email: dSiles(a~lawsgr.com FOX CHASE BANK 4390 Davisville Road Hatboro, PA 19040-2544 G;;v ~~ ~~ ~ ~ ~ :~ t Attorney for Plaintiff r ~ ~; _ ~_~? ~, .~- .,.~: rv COURT OF COMMON PLEAS CUMBERLAND COUNTY, PA Plaintiff, v. SCOTT C. PENWELL 400 Bear Drive Enola, PA 17025 TERM, 2013 NO. J 3 - lj 0 ~ ~: !.~ ~~ I tC ~h- Defendant. AFFIDAVIT COMMONWEALTH OF PENNSYLVANIA COUNTY OF PHILADELPHIA ss Jerry Holbrook, being duly sworn according to law, deposes and says that he is the Executive Vice President and Chief Operating Officer of Fox Chase Bank, the Plaintiff herein; and that he is authorized to make this Affidavit on behalf of Plaintiff; and that the facts set forth in the foregoing Complaint for Confession of Judgment for Money are true and correct to the best of his knowledge, information and belief; and that the exhibits attached to the Complaint are true and correct copies of the originals. Sworn to and sub cribed bef re me this ay of February, 2013 Notary Public ~~,~,M ~ ~wsY~yw~wa NOTARIAL SEAL TF~~iEa 8AP~ ~~,q~~y '~ 1Q,Z018 1560623 1.DOC C~~~~ <: _.. r (~~~'"" Jerry Holbroo ,Executive Vice President and Chief Operating Officer SPECTOR GADON & ROSEN, P.C. By: David M. Giles (I.D. No. 27477) 1635 Market Street, 7th Floor Philadelphia, PA 19103 Phone: (215) 241-8888 Fax: (215) 241-8844 Email: dgiles(a~lawsgr.com Attorney for Plaintiff FOX CHASE BANK 4390 Davisville Road Hatboro, PA 19040-2544 Plaintiff, v. SCOTT C. PENWELL 400 Bear Drive Enola, PA 17025 Defendant. COURT OF COMMON PLEAS CUMBERLAND COUNTY, PA TERM, 2013 NO. I ~ ~ / AFFIDAVIT OF BUSINESS TRANSACTION COMMONWEALTH OF PENNSYLVANIA COUNTY OF PHILADELPHIA ss ~ 1,,,~ ~ f c_~~ Jerry Holbrook, being duly sworn according to law, deposes and says that he is the Executive Vice President and Chief Operating Officer of Fox Chase Bank, Plaintiff herein; and that he is authorized to make this Affidavit on behalf of Plaintiff and that the transaction upon which judgment is being entered is a business transaction. ~.._.~ Jerry Holbrook, Executive Vice President and Chief Operating Officer Sworn to and subscribed before me this stay of February, 2013 Notary Public co~oNw~-~~ of ~wrsnv~rwn NOTARIAL SEAL THERESA BAYER, Nohry Pubic 1560623_ l .DOC ~ 0~ ~, . ~r01Ml~y Corr~niiMion 10, 16 SPECTOR GADON & ROSEN, P.C. By: David M. Giles (I.D. No. 27477) 1635 Market Street, 7te Floor Attorney for Plaintiff Philadelphia, PA 19103 Phone: (215) 241-8888 Fax: (215) 241-8844 Email: dgiles(a,lawsgr.com FOX CHASE BANK : COURT OF COMMON PLEAS 4390 Davisville Road CUMBERLAND COUNTY, PA Hatboro, PA 19040-2544 Plaintiff, v. TERM, 2013 SCOTT C. PENWELL 400 Bear Drive NO. ~ ~ 6 ~02 C V ~ r ~~~1,~ Enola, PA 17025 Defendant. AFFIDAVIT THAT JUDGMENT IS NOT BEING ENTERED AGAINST NATURAL PERSON IN CONNECTION WITH A CONSUMER CREDIT TRANSACTION COMMONWEALTH OF PENNSYLVANIA COUNTY OF PHILADELPHIA ss Jerry Holbrook, being duly sworn according to law, deposes and says that he is the Executive Vice President and Chief Operating Officer of Fox Chase Bank, Plaintiff herein; and that he is authorized to make this Affidavit on behalf of Plaintiff; and that the judgment is not being entered by confession against natural 1560623_ I .DOC persons in connection with a consumer credit transaction. 9 Jerry Holbroo ,Executive Vice President and Chief Operating Officer Sworn to and subscribed before me this day of February, 2013 Notary Public ~~TM o~-~nv~ww SEAL ~~ f0~ 16 1560623_I.DOC } SPECTOR GADON & ROSEN, P.C. By: David M. Giles (I.D. No. 27477) 1635 Market Street, 7th Floor Philadelphia, PA 19103 Phone: (215) 241-8888 Fax: (215) 241-8844 Email: dgiles(a~laws~r.com FOX CHASE BANK 4390 Davisville Road Hatboro, PA 19040-2544 : Plaintiff, v. SCOTT C. PENWELL 400 Bear Drive Enola, PA 17025 Defendant. Attorney for Plaintiff COURT OF COMMON PLEAS CUMBERLAND COUNTY, PA TERM, 2013 NO. ) ~~ /_ g'~-- CND ~ lC~~ 1 ~O AFFIDAVIT OF NON-MILITARY SERVICE AND CERTIFICATION OF ADDRESS COMMONWEALTH OF PENNSYLVANIA COUNTY OF PHILADELPHIA ss Jerry Holbrook, being duly sworn according to law, deposes and says that he is the Executive Vice President and Chief Operating Officer of Fox Chase Bank, the Plaintiff herein; and that he is authorized to make this Affidavit on behalf of Plaintiff; that the above-named Defendant, Scott C. Penwell, whose last known address is 400 Bear Drive, Marlvern, PA 19355 is not in the military service of the United States, nor any State or Territory thereof, or its allies as defined in the Soldiers' and Sailors' Civil Relief Act of 1940 and amendments thereto. 1560623_1 .DOC Deponent also certifies that the business address of Plaintiff is as follows: 4390 Davisville Road, Hatboro, PA 19040-2544. r~ ~~~~_ Jerry Ho roo Executive Vice President and Chief Operating Officer Sworn to and sub cribed before me this~day February, 2013 ~~~.~ Notary Public vo~wa~~n+ oR rs~anv~w- ~ ~ TIIlI~ iA11tR, lrodry PabMc talgr"~a~awd~pr~., ~.' o Coranlillion f~tpiro~ 10, 16 1560623_ I .DOC SPECTOR GADON & ROSEN, P.C. By: David M. Giles (I.D. No. 27477) 1635 Market Street, 7th Floor Philadelphia, PA 19103 Phone: (215) 241-8888 Fax: (215) 241-8844 Email: dgiles(a~laws~r.com Attorney for Plaintiff FOX CHASE BANK COURT OF COMMON PLEAS 4390 Davisville Road CUMBERLAND COUNTY, PA Hatboro, PA 19040-2544 Plaintiff, v. TERM, 2013 SCOTT C. PENWELL 400 Bear Drive NO. ~ ~ ~ C ~,,,",' f c<~ Enola, PA 17025 ~ 3 '~ Defendant. AFFIDAVIT THAT TRANSACTION DOES NOT ARISE FROM A RETAIL INSTALLMENT SALE, CONTRACT OR ACCOUNT COMMONWEALTH OF PENNSYLVANIA ss COUNTY OF PHILADELPHIA Jerry Holbrook, being duly sworn according to law, deposes and says that he is the Executive Vice President and Chief Operating Officer of Fox Chase Bank, Plaintiff herein; and that he is authorized to make this Affidavit on behalf of Plaintiff; and that the transaction upon which this confessed judgment is based does not 1560623_1 .DOC arise from a retail installment sale, contract or account. f ~__.: Jerry Holbrook, xecutive Vice President and Chief Operating Officer Sworn to and sub ribed before me this~ay February, 2013 ~,c~,,~,,.~.,,_.. Notary Public COMMO~TTI~OF l~~MNrLYM~MA NOTARIAL. SEAL THERESA BAYER, NoMry Pubk Gang niNip~~ ~ 10, 2014 1560623_1.DOC SPECTOR GADON & ROSEN, P.C. By: David M. Giles (I.D. No. 27477) 1635 Market Street, 7th Floor Philadelphia, PA 19103 Phone: (215) 241-8888 Fax: (215) 241-8844 Email: dgiles(a,laws~r.com FOX CHASE BANK 4390 Davisville Road Hatboro, PA 19040-2544 Attorney for Plaintiff COURT OF COMMON PLEAS CUMBERLAND COUNTY, PA Plaintiff, v. SCOTT C. PENWELL 400 Bear Drive Enola, PA 17025 TERM, 2013 NO. r ~ CN r ~ -I~h, l3 ~~ Defendant. AFFIDAVIT OF INCOME COMMONWEALTH OF PENNSYLVANIA COUNTY OF PHILADELPHIA ss Jerry Holbrook, being duly sworn according to law, deposes and says that he is the Executive Vice President and Chief Operating Officer of Fox Chase Bank, Plaintiff herein; that he is authorized to make this Affidavit on behalf of Plaintiff; that the income of the Defendant is in excess of $10,000.00 per year. Sworn to and subscribed before me this~day of February, 2013 ~~L_--~-.~ _ _ Jerry Holbroo , E ecutive Vice President and Chief Operating Officer ;~~v-~--- ,rte Notary Public cvr+~ot+~war-t,.TM or tr~~.v~wi- TFI~ 81AYLR, Notary P+ib~c 1560623 1.DOQ~~~, Ate, CorsrrMNon 10, 18 ~~ BUSINESS LOAN AGREEMENT Borrower: Elite Managing General Agency, u.c Lender: Fox Chase Bank 191 Sheros Boulevard 4390 Oavtsvflte Road Exton, PA 19341 Hatboro, PA 19040-2544 THIS BUSINESS LOAN AGREEMENT dated March 2, 2011, is made and executed between Elite Managing General Agency, LLC ("Borrower") and Fox Chow Bank ("Lender") on the following terms and condiUona. Borrower has retrolved prior commercial loans from Lender or has applied to Lender for a commeroisi loan or loans or other financial accommodations, including those which may be described on any exh(blt or schedule sttsched to this Agreement. Borrower understands and agross that: (A) in grentinp, ronawing, or exbnd}np sny Loan, Lender is rolytng upon Bortowera roprwsrrYations, wartantiea, end agreements as set forth In this Agroemsnt: (B) the granting, ronewing, or exbnding of arty Loan by Lander at all times shalt be subject to Lenders sole judgment and discretion; and (C) all such Loans shall bs and remain cubjact to the terms end conditions of this Agreement, TERM. This Agreement shag be effective as of March 2, 2011, and shall continue In full force and effect untll such Ume as all of Borrowers Loans in favor of Lender have been paid in full, Including prlndpal, Interest, costa, expenses, attorneys' fees, and other fe>3s and charges, or untll such time as the parties may agree In wrtting to terminate this Agreement CONDITIONS PRECEDENT TO EACH ADVANCE. Landers obllgatfon to make the initial Advance and each subsequent Advance under this Agreement shall be subject to the fulfillment to Lenders satlsfactlon of all of the conditions set forth fn this Agreement and in the Related Documents. Loan Documents. Borrower shall provide to Lender the following documents for the Loan: (1) the Note; (2) Security Agreements grantng to Lender security Interests In the Collateral; (3) financing statements and all other documents pertecting Lenders Security Interests; (4) evidence of insurence as required below; (5) guaranties; (5) subordlnatlons; (7) together with all such Related Documents as Lender may require for the Loan; all In form and substance satisfactory to Lender end Lenders counsel. Borrowers Authorization. Borrower shell have provided in form and substance satisfactory to Lender properly certified resolutions, duly authorizing the sxevetlon and delivery of this Agreement, the Note and the Related Documents. In addition, Borrower shall have provided such other resolutions, authorizations, documents and Instruments as Lender or its counsel, may require. Paymsrrt of Faes and Expenses. Borrower shah have paid to Lender all fees, charges, and other expenses which are then due end payable as spedfled in this Agreement or any Related Document. Reprwentstions and Wamntiac. The representations and warranties set forth In this Agreement, In the Related Documents, and in any document or cerdflaete delvered to Lender under this Agreement are true end correct. No Event of Default There shalt not exist at the time of any Advance a conditon which would constitute an Event of Default under this Agreement or under any Related Document REPRESENTATIONS AND WARRANTiE3. Borrower represents end warrants to Lender, as of the date of this Agreement, as of the date of each dlsbureemsnt of loan proceeds, es of the date of any renewal, extension or modlftcaUon of any Loan, end at all Umea any Indebtedness exists: Organization. Borrower b a limited liability company which is, end at all Umea shat be, duly organized, validly existing, and in good standing under end by vktue of the laws of the Commonwealth of Psru>sylvania. Borrower fs duly authorized to trensact business In aU other states in which Borrovver is doing business, having obtained all necessary fllings, governmental licenses end approvals for each state in which Borrower Is ddng business. Spedftcaily, Borrower ks, and at all times shall be, duly qualified as a forolgn limfted Ilablifty company in all states In which the faGure to so qualify would have a material adverse effect on Its business or flnandal condition. Borrower has the full power and authority to own its properties and to transact the twsiness in which k is presently engaged or presently proposes to engage. Borrovver maintakrs an office at 191 Sheree Boulevard, F_xbon, PA 19341. Unless Borrower has designated otherwise in writing, the principal office is the otilce at whidl borrower keeps Its books and records krduding Its records conr:errnirg the Collateral. Borrower will notify Lender prior to any dianga in the IowUon of eorcowers state of organizaton or any dtange in Borrowers name. Borrower shall do all things necessary Zo preserve and to keep In full force and affect its existence, rights and privileges, and shall comply with ail regulations, ndes, ordinarx~s, statutes, orders and decrees of any governmental or quasi-govemmentai authorty or court applicable to Borrower and Borrowers business actlvlUes. Assumed Businaes Names. Borrower has filed or recorded ail documents or fllings required by law relating to all assumed business names used by Borrower. Excluding the name of Borrower, the following Is a complete list of ail assumed business names under which Borrower does business: None. Authorization. Borrowers execution, delivery, and performanr~ of this Agreement and all the Related Documents have been duly auttxxized by all necessary action by borrower and do net conflict with, result In a vlotaUon of, or constitute a default under (1) any provision of (a) BorrowArs articles of organization or membership agreements, or (b) any agreement or other instrument binding upon Borrower or (2) any law, governmental regulation, court dstxee, or order applicable m Borrower or to Borrowers properties. Financial information. F_adt of Borrowers flnandal statements supplied to Lender truly end completely diadoaed Borrowers flnandal conditlon w of the data of the statement, and there has been no material adverse change in Borrowers financial condkbn subsequent to the date of the most recent flnandal statement supplied to Lander. Borrower has no material wnUngent obligations except as disclosed in such flnandal etetementc. Lsgai Effect. This Agreement constitutes, end any Instrument or agreement Borrower is required to give under this Agreement when delivered will constitute legal, valid, end binding obligations of Borrower enforceable against Borrower in accordance with their respective terms. Properties. F~rcept as corrtemplated by this Agreement or as prevbusly disclosed in Borrowers financial statements or fn writing to Lender and ea accepted by Lender, and except for property tax dens for taxes not presenuy due and payable, Borrower owns and has good title to all of Bortowds propertles free and dear of ail Severity interests, end has not executed any security documents or flnendng statements relating to such propertlec. Ail of Borrowers properties are titled in Borrowers legal name, and Borrower has not used or filed a financing statement under any other name for at least the lest flue (5) years. Hazardous Substances. F~tospt as dlsdosed to and acknowledged by Lender In writing, Borrower represents and warrants that: (1) During the period of Borrower's ownership of the Collateral, there has been no use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance by any parson on, under, about or from any of the Collateral. (2) Borrower has no knowledge of, or reason to believe that there has been (a) any breach or vlolatbn of any Erwironmental Laws; (b) any use, generation, mantrfeaturo, storage, treatment, disposal, release or threatened relsaw of any Hazardous Substance on, Under, about or from the Cogaterol by any prbr owners or occupants of any of the Collateral; or (c) any actual or threatened ItUgation or claims of any kind by any person relating to such matters. (3) Neither Borrower nor.any tenant, contractor, agent or other authorized user of any of the Collateral BUSINESS LOAN AGREEMENT (Continued) Page 2 shatl use, generate, manufacture, store, treat, dispose of or release any Hazardous Substance on, under, about or from any of the Cotlaterel; and any suds actlNty shall be conducted in compltence with aU applicable federal, state, and local laws, regulatbna, and ordinances, including wiUwut flmttaUon ell EnNronmsr><ai Laws. Borrower authorizes Lender and Its agents to enter upon the CoNeterel to make such Inspedlons and tests ea Lender may deem appropriate m determine comptlance of the Couaterel with this sedlon of the Agreement. Any ktspectlona or tests made by Lander shah be at Borrower's expense and for Landara purposes only and shaft not be construed to create any responsiblltty or liability cn the part of Lender to Borrower or to any other person. The ropressntatlona end warranties contained herein ere based on Borrower's due diligerrca In invastigaUng Ure Cotlaterel for hazardous waste and Hazardous Subatanoes. Borrower hsroby (1) releases and wolves any future claims against Lender for indemnity or r:ontributbn in the event Borrower becomes liable for cleanup or other costs under any such laws, and (2) agrees to Indamntly, defend, and hold harrnlese Lender against any and all claims, losses, Ilabliltles, damages, penalties, and expenses which Lender may directly or Indirectly sustain or suffer resuitlng from a broach of this section of the Agreement or as a consequence of any use, generation, menutachue, storage, disposal, release or threatened release of a hazardous waste or substance on the Collateral. The provisions of this sedlon of the Agreement, Including the obtlgatlon to indemnify and defend, shall survive the payment of the Indebtedness and the tertninadon, explretlon or satlsfacdon of this Agreement and shall not be affected by Lender's acquisition of any interest in any of the Collateral, whether by foreclosure or otherwise. Litigation and Claims. No litlgatlon, claim, InvesUgaUon, administretlve proceeding or slmtlar action (including those for unpaid taxes) against Borrower is pending or threatened, end no other event has oxurred which may materially adversely affect Borrower's flnandal condition or properties, other than Iftigatlon, claims, or other events, if any, that have been disclosed to end ad<nowledged by Lender in writing. Taxes. To the best of Borrower's knowledge, all of Borrower's tax retums and reports that are or ware required to be filed, have been filed, and all texas, assessments and other governmental charges have been paid in full, except those presently being or to be contested by Borrower in good faith In the ordinary course of business and for which adequate resenres have been provided. Uen Priority. Unless otherwise previously disclosed to lender In wrung, Borrower has not entered Into or grentad any Security Agreements, or permitted the filing or attachment of any Security interests on or affecting any of the Collaterel directly or indirectly securhrg repayment of Borrowers Loan and Note, that would be prior ar that may In any way be superior to Lender's Security Interests and rights in and to such Collateral. Binding Effect. Thle Agreement, the Note, all Security Agreements (if any), and eg Related Documents are binding upon the signers thereof, es well ea upon their successors, representatives and assigns, and are legally enforceable in accordance with their respective forma. AFFIRMATNE COVENANTS, Borrower covenants and agrees with Lender that, so long as this Agreement remains in effect, Borrower will; Notices of Cklms end Litigation. Promptly inform Lender In wrltlng of (1) all material adveree dranges in 8orcowers flnanclal condition, and (2) all existing and ell threatened Iltigatk~n, claims, Invsatigetlons, adminlstretlve proceedings or similar actions affecting Borrower or any Guarantor which could materially affect the flnandal condRion of Borrower or the flnenclal condition of any Ouarentor. • Finandal Records. Maintain Its books and records in accordance with GAAP, applied on a consistent basis, and permU Lender to examine and audtt Borrowers books and records at all reasonable times. . Financial Statements. Furnish Lender with the following: Tax Ratums. As soon as available, but in no event Tatar than 15 days after the apptlcable flung date for the fax reporting period ended, Federal and other govemrnental tax retums, prepared by a tax professbnal satisfactory to Lender. All flnandal reports required to be provided under this Agreement shall be prepared in accordance with GAAP, applied on a consistent basis, and cenyfied by Borrower as being true and correct Additbnal Information. Furnish such additlonal Information and statemerrts, as Lender may request from time to Ume. Insurance. Maintain fire and other risk insurance, public liabtlity insurance, and such other Insurance as Lender may require with respect to Borrower's properties and opereUons, In form, amounts, oovsreges and with Insurance companies acceptable ~ Lender. Borrower, upon request of Lender, will deliver td Lender from tlme to Ume the poAdes or certificates of Insurance in form satishctory to tender, including stipulations that caveragea will not be cancelled or diminished without at least thirty (30) days prior written notbe to Lender. Each insurencs policy also shall include en endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omlasion or default of Borrower or any other person. In connection with all polidea covering assets in which Lender holds or is offered a securtyy Interest for the Loans, Borrower will provide Lender wtth such lender's Toss payable or other endoreemerrts as Lender may require. Insurance Reports. Furnish to Lender, upon request of Lender, reports on each exlstlng insurance policy showing such infonnetion es Lender rr~y reasonably request, including without ItmRatlon the following: (1) the name of the Insurer, (2) the risks insured; (3) the amount of the policy; (4) the properties insured; (5) the then current propeRy values on the basis of which Irtsurenoa has been obtained, and the manner of determining those values; and (B) the axplratbn da4a of the policy. In addition, upon request of Lender (however not more often than arxiualy), Borrower will have an Independent apprelser satisfactory to Lender determine, as applcable, the actual cash value or replacement cost of any Coflaterel. The coat of ouch epprelsal shall be pant by Borrower. Ouarantiss. Prior to disbursement of any Loan proceeds, furnish executed guarantles of the Loans in favor of Lender, executed by the guerentore named below, on Lenders forms, and in the amounts and render the condltlons set forth in those guarentlea. Names of f3uar~ntora ~QypLq Clxistopher C. Naylor Unlimited Scott C. Penwep $17,500.00 Subordination. Prior to disbursement of any Loan proceeds, deliver to Lender aubordinatlon agreements on Lenders forms, executed by Borrowers creditors named below, subordinating all of Borrower's Indebtedness to such credftors, or such lesser amounts es may be agreed to by Lender In writing, end any securKy Interests in collateral securing that Indebtedness to the Loans and security interests of Lender. , Jyame of Creditor Total Amount of Debt Effte Brokerage Services, Inc. 5390,000.00 Elite Group, LLC 5200,000.00 Other Agreements. Comply with all terms and conditions of all other agreements, whether now or hereafter existing between Borrower and any other party and notify Lender immediately In writing of any default in connection with any other such agreements. BUSINESS LOAN AGREEMENT (Continued) page 3 Loan Proceeds. Use all Loan proceeds sdely for Borrower's business operations, unless specifically consented to the contrery by Lender In writing. Taxes, Charges and Liens. Pay and disdrarge when due ell of its irtdebtednesa and obligations, Induding without limitation ell asaesaments, taxes, govemmer-tei t~tarpea, levies and liens, of every k(nd and nature, imposed upon Borrower ~ Its properflss, inr~me, or profits, prior to the date on which peneltlea would attach, end ell lawful dolma that, N unpaid, might become a Ilan of dtarye ,upon any of Borrower's properties, Income, or profga. Provided however, Borrower will not be required to pay and disdtarge any such assessment, tax, drerge, levy, Ben ar daim an long as (1) the legality of the same shag be contested in good fagh by appropriate proceedbtga, and (2) Borrower shall have eatebgshed on Borrower's books adequate reserves with respect to such contested assessment, tax, charge, levy, lien, or daim in accordance with GAAP. Performance. Perform and comply, in a timely manner, with all terms, conditions, and provisions set forth in this Agreement, in the Related Documents, and in ail other instrurr~nts and agreements between Borrower and Lender. Borrower shall notify Lender Immedlataly In writing of any default in connectbn with any agreement. Operations. Maintain exewtlve and management personnel with substantially the same qualifications end experience as the present executive and management personnel; provide written notice to Lender of any change In executlve and management personnel; conduct its tws[ness atfaire in a reasonable and prudent manner. Environmental Studies. Promptly conduct and complete, at Borrower's expense, all such Investigations, studies, samplings and testings es may be requested by Lender or any governmental authority relative to any substance, or any waste or by-product of any substance defined as toxic or a hazardous substarx;e under applicable federal, state, or local law, rule, regulation, order or directive, at or affecting any properly or any fadlKy owned, leased or used by Borrower. Compliance with Govommentel Requirements. Comply with all laws, ordinances, end regulations, now or hereafter in effect, of all governmental authorities appgceble to tits conduct of Borrower's properties, businesses and operetions, and to the use or occupancy of the Collateral, including without Itmitetbn, the Americana Wlth DlsabNltles Act. Borrower may contest in good faith any such law, ordinance, ~ or regulation and withhold compgance during any proceeding, including appropriate appeals, eo long as Borrower has notified Lender in writing prior to doing so and ao long as, in Lenders sole opinion, Lender's Interests in the Collatarel are not Jeopardized. Lender may require Borrower to post adequate security or a surety bond, reasonably satisfactory to Lender, to protect Lender's interest. Inspection. Permit empk>yeea or agents of Lender at any reasonable time to Inspect any end ail Collatarel for the Loan or Loans and Borrower's other properties and to examine or audit Borrowers books, acxounts, and records and to make copies end memoranda of Borrowers hooka, aocounte, end records. If Borrower now or et any Ume hereafter maintains any records (including without imitatbn computer generated records and computer software progrems for the generatlon of such records) fn the possasslon of a third party, Borrower, upon request of Lender, shell notify such party to penult Lender free access to such records et ell reasonable times and to provide Lender wtth copies of any records it may request, ell at Borrowers expense. EnvironmoMal Compliance and Reports. Borrower shall comply In ail respects with any and atl Environmental Lawa; not cause or permit to exist, as a result of an Intentional or unintanUonal action or omission on Borrowers pert ar on the part of any third party, on property owned and/or ocarpled by Borrower, any environmental adfvlty where damage may remelt to the environment, unless such environmental activity fa punwant to and !n trompilsnce with the condltlons of a psrmg issued by the appropriate federel, state or local governmental authorlUea; shop ftunlah to Lender promptly and In any event within thirty {30) days after receipt thereof a copy of any notice, summons, lien, dtation, directive, letter or other communiceUon from any govemmantai agency or Instrumentality conpming any intentlonal or unintentional action or onrlssion on Borrowers part in connection with any environmental activity whether or not there Is damage to the environment and/or other natural resources. Additional Assurenwa Make, execute and deliver to Lender such promissory notes, mortgages, deeds of trust, security agreements, asaignmer-ta, ftnancing stetemerrts, instruments, documents and other agreements as Lander or Its attorneys may reasonably request to evidence and secure the loans end to perfect ag Security Interests. Primary Deposit Actaunt. Maintain Its primary depostt relationship with the Bank during the term of this Line of Credit. RECOVERY OF ADDITIONAL. COSTS. If the Imposition of or any change In any law, rule, regulation or guideline, or the interpretation or application of arty thereof by any court or adminlstreUve or governmental authority {including any request or policy not having the force of law) shall impose, modify or make applicable any taxes (except federal, state or local Income or franchise taxes Imposed on Lenderj, reserve requirements, capital adequacy requirements or other obligations which would (A) Increase the cost to Lender for extending or maintaining the credk facilities to which this Agreement relates, (B) reduce the amounts payable to Lender under this Agreement or the Rotated Documents, or (C) reduce the refs of return on Lenders capital ae a consequence of Lender's obligations with respect to the credit faclittles to which this Agreement relates, then Borrower agrees to pay Lender such addlUonal amounts as will compensate Lender therefor, within flue (5j days after Lenders written demand for such payment, which demand shalt ba accompanied by an expianetlon of such imposition or charge and e calculation in reasonable detail of the additional amounts payable by Borrower, which explanation and calculations shalt be conclusive in the absence of manifest error. LENDER'S EXPENDITURES. If any actlon ar proceeding Is commenced that would materially effect Lenders Interest in the Collatarel or if Bomawer fatls to comply with any provision of this Agreement or any Related Dooumerrta, including but not Amftsd to Bonowars failure to disd~args or pay when due any arrwunte Borrower la required to dLsdwrge a pay under this Agreement or any Related Documents, Lender on Borrowers behag may (but shell not be obligated to) take arty actlon that Lander deems appropriate, lndudtng but not limited to discharging or paying ail taxes, gene, ssratrfly Intereate, ertoumbrenoea end other claims, at any Uma levied or placed on any Colateral end paying ell Este for Insuring, maintelning and presoMng any Collateral. At! such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate cheuged under tM Note from the date Incurred or paid by Lender to the date of repayment by Borrower. Ali such expenses will become a part of the Indebtedness and, at Lenders option, vrlll (A) be payable on demand; (B) be added to the balance of the Note and be apportioned among end be payable with any Instellmant payments to become due during either (1) the term of any applicable insurance policy; or (2) the remaining term of the Note; or (C) be treated as a balloon payment which will be due and payable at the Note's rnaturlty. NEGATNE COVENANTS. Borrower covenants and agrees with Lender that white this Agreement 1s in off®ct, Borrower shall not, without the prior wrttten consent of Lender. lndebtednese and Liens. (7) Except for trade debt Incurred In the normal course of business end Indebtedness to Lender contemplated by this Agreement, create, incur or assume indebtedness far borrowed money, including capital lasses, (2) sell, transfer, mortgage, assign, pledge, lease, Brent a security interest In, or enaxnber any of Borrowers assets (except as allowed as Permitted Uens}, or (3) sell with recourse any of Borrowers accounts, except to Lender. Continuity of Opeadans. (1) Engle In any business actNgies substantially dliferent than those in which Borrower Is presently engaged, (2) cease operations, liquidate, merge, trensfer, acquire or conaolldete with any other entity, change Its name, dissolve or transfer or sell BUSINESS LOAN AGREEMENT (Continued) page 4 Colieterel out of the ordinary course of buelness, or {3) make any disMbutbn with respect to any capital account, whether by reduction of capital or othenvlae. Loans, Acquisitlons and GuarenBes. (1) Loan, Invest in or advance money or assets to any other person, enterprise or entity, (2) purrhaee, create or acquire any Interest In any other enbsrprlse or entity, or {3) Incur any obligation as surety or guarantor other than In the ordinary course of businses. Agreements. Enter Into any agreement containing any provislona which would be violated or breached by the performanp of Borrower's obligedona under this Agreement or In oonnectbn herowtth. CESSATION OF ADVANCES. !f Lender has made any rrommltment to make any Loan to Borrower, whether under this Agreement or under any other agreement, Lender shall have no obligation to make Loan Advances or to disburse Loan proceeds If: (A} Borrower or any Guarantor Is In default under the terms of this Agreement or any of the Related Documents or any other agreement that Borrpwer or any Guarantor has with Lender, (B) Borrower or any Guarantor dies, becomes incrompetent or becomes Insolvent, files a petitbn !n bankruptcy or simUar proceedings, or is adjudged a bankrupt; (C) there ocarre a material adverse change M Borcower's tinandai rrond(tbn, in the flnandal condition of any Guanantor, or In the value of any Collateral securing any Loan; or {Dj any Guarantor seeks, clslms or otherwise attempts to Ilmlt, modify or revoke such Guarantor's guarerriy of the Loan or any other loan wtth Lender, or (E) Lender In good faith deems itsetflnsecure, even though no • Event of Default shall have ocarrred. RIGHT OF SETOFF. To fhe extent permkted by applicable law, Lender reserves a right of setoff fn all Borrower's accounts with Lender (whether cheddng, savings, or some other aacount). This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open in the future. However, this does not Include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Borrower authorizes Lender, to the extent pennltted by appppble law, to charge or setoff all sums owing on the Indebtedness against any and atl such accounts, and, at Lender's option, to administreflvefy freeze a(I such accounts to allow Lender to protect Lender's charge and setoff rights provided !n this paregreph. DEFAULT. Default will ocrau if payment in full is not made Immediately when due. F~FECT OF AN EVENT OF DEFAULT. if any Event of Default shatl occur, except where otherwise provided in this Agreement or the Related Documents, all commttments and obligations of Lender under th{s Agreement or the Relefed Documents or any other agreement immediatety will terrtdrtate Qndudinp any obpgation tb make further Loan Advances w dlatwrsemertta), and, at Lender's opton, all Indebtedness Immediately will become clue end payable, all without notice of any kind to Borrower, except that In the pee of an Event of Default of the type deacrWed In the "•Insolvency" aubsectlon above, such axeleredon shell be automatic and not optbnal. In addttlon,.Lender shag have ell the rights end remedies provided In the Related Documents or avapabie at law, in equity, or otherwise. Except as may be prohibited by epplipble law, all of Lender's rights and remedies shall be cumulative and may be exerdaed singularly or concurrently. Electlon by Lender to pursue any remedy shall not exclude pursutt of arty other remedy, and en election to make expenditures or to take action to parforrn an obligation of Borrower or of any Grantor shetl not effect Lenders right to declare a default and to exerdse Its rights and remedies. MiSCELLANE0U3 PROVISIONS. The following miscellaneous provisions are a pert of this Agreement: Amendments. This Agreement, together with any Related Documents, constitutes the entire understanding end agreement of the partlea as to the matters set forth In this Agreement. No attaretlon of or amendment to this Agreement shall be effective unless given In writing and s~ned by the party or partlea sough to be drarged or bound by the ettaretlon or amendment. Attorneys' Fses; Expenses. Borrower agrees to pay upon demand all of Lender's costs and expanses, Including Lender's reasonable attorneys' fees and Lenders legal expenses, Incurred In c~nnectlon with the enforcement of fhb Agreement Lender may hire.ar pay someone else to help enforce this Agreement, and Borrower shall pay the costs and expenses of such anforesmertt Costs and expenses include Lender's reasonable attorneys' fees end legal expenses whether or not there Is a lawsuit, including reasonable attorneys' fees and ' legal expanses for bankruptcy proceedings (including efforts to modify or vacate. any automatic stay or Injunction), appeals, and any entldpated postaudgment collection seMces. Borrower also shag pay ell court costs and such addiHonai fees as may be directed by the court. Captlon Headings. Captlon headings In this Agreement are for convenlenp purposes only end are not to be used to Interpret or define the provisions of this Agreement Consent to Loan Participation. Borrower agrees end consents to Lenders sale or transfer, whether now or later, of one or more partidpetion Int~eata In the Loen to one or more purchasers, whether related or unrelated to Lender. Lender may provide, wtthout any ilrrrffatlon whatsoever, to any one or more purchasers, or potential purohesers, any informetbn or knowledge Lender may have about Borrower or about any other matter relat~g to the Loan, end eorrower hereby waives any rights to privacy Borrower may have with respect to such matters. Borrower additionally waives any and all notloes of sale of partidpatlon Interests, as wall as ell nottces of any repurchase of suds pertlclpatlon Interests. Borrower also agrees that the purchasers of any such partldpedon Irrtereats will be aoneldered ea the abedute owners of such interests In the Laan and will have all the righffi granted under the pertldpatbn agreement or agreements governing the sale of such partklpaUon interests. Borrower further waives ail rights of offset or counterdalm that it may have now or later against Lender or against any purchaser of such a partfdpatlon Interest end uncondit(oneliy egress that either Lender or audt purct-sser may enforce Borrowers obUgetlon under the Loan inespectlvs of the fapure or Insolvency of any hakfer of any Interest to the Loan. Borrower further egress that the purchaser of any such parddpatlon interests may enforce its interests irreapectlve of any pereonal claims or defenses that Borrower may have against Lender. Gowming Law. This Agreement will be governed by federal taw appiieabk to Lender and, to the extent not preempted 6y federal law, the laws of the Commonwealth of Pennsylvania without regarcl to lie conflicts of law provisions. This Agreement has been accepted by Lender In the Commonwealth of Psnnaytvanla. Chotes of Yenue. If there is a lawsuit, Borrower agrees upon Lender's request to submit to the JurladicHon of the courts of Montgomery County, Commonwealth of Pennsylvania. No Waiver by Lender. Lander shall not be deemed to have waived any rights under this Agreement unless such waiver Is given in writing and signed by Lender. No delay or omfasion on the part of Lender in exerdsing any right shall operate es a waiver of such right or any other right A waiver try Lender of a provision of this Agreement shell not prejudice ~ constltute a waiver of Lenders Aght otherwise to demand strict oompitance wtth that provtalon or any other provision of this Agreement No prior waiver by Lender, nor any course of dea&tg between Lender and Borrower, or between Lender and any Grantor, shag constitute a waiver of any of Lender's rights or of any of Borrower's or any Grentors obligations as to any future trensactlons. Whenever the consent of Lender is required under this Agreement, the granting of such wnsent by Lender in any Instance shag not constitute oontinuing consent to subsequent instances where such consent is requited and In ail pass such consent may be granted or withheld In the sole discretion of Lander. Notices. Uniesa otherwise provided by applicable law, any notice required to be given under this Agreement shall be gNen in writing, and shall bs sflectlve when actually delivered, when edually received by telefecslmlle (uniese otherwise required by law), when deposited with BUSINESS LOAN AGREEMENT (Continued) Page 5 a nationally recognized overnight courier, or, if maned, when deposited In the Unfted States mail, as flrst• class, certlfled or registered mail pelage pnepald, directed to the addresses shown near the beginnlrtg of this Agreement Any party may drange Its address for notlces under this Agreement by gluing formal written notice to the other parties, spedfying that the purpose of the notice M to change the party's address. For notlca purposes, Borovver agrees to keep Lender Informed at ell dines of Borrower's current address. Unless otherwise provided by applicable law, if there b more then one Borrower, any notice given by Lender to any eortower is deemed to be notice given to all Borrowers. Savenbllity. If a court of competent Jurisdictbn finds any provision of this Agreement to be Ulegal, Irnalld, or unenforceade as to any clroumshnce, that finding shall not make the offending provision Ulagal, Invalid, or unonforcaable as to any other droumstancs. If feasible, the offending provision shall 6e considered rrodMed eo that tt becomes legal, valid end enforceable. If the offending provision cannot be so modified, it shag be considered deleted from this Agreement. Uolesa otherwise required by law, the Ulegalfty, Invalidity, or unenforceablllty of any provision of this Agreement shall not affect the legality, validity or enforceability of any other provision of this Agreement. Subsldiarias and Affiitates of Borrower. To the extent the context of any provisions of this Agreement makes !t appropriate, inducting without Iimltatlon any representation, waranty or covenant, the word "Borrower' as used in this Agreement shall ktdude a0 of Borrowers subaldlarles and afftliates. Notwithstanding the foregdng however, under no dreumstances shall this Agreement be construed to require Lender to make any Loan or other flnandal accommodation to any of Borrower's subaldiaries or aflfUates. Successors and Assigns. AU covenants and agreements by or on behalf of Bomowar corrtalned In this Agreement w any Related Documents shall bind Borrower's successors and assigns and shall Inure to the benefit of Lender and its successors and assigns. Borrower shall not, however, have the right to assign Borrower's rights under this Agreement or any interest therein, without the prior written consent of Lender. Survival of Representations and Warranties. Borrower understands end agrees that in extending Loan Advances, Lender fs relying on all representations, warrentles, end covenants made by Bortower In this Agreement or In any certlflcate or other instnrment delivered by Borrower to Lender under this Agreement or the Related Documents. Borrower further agrees that regardless of any irnestlgetlon made by Lender, all such representations, warantes and covenants will survive the extension of Loan Advances and delivery to Lender of the Related Documents, shall be continuing In nature, shall be deemed made and redated by Borrower at the time each Lwn Advance Is made, and shall rorwin in full force and effect until such time as Borrower's Indebtedness shall be paid in full, or until this Agreement shell ba ternlnated In the manner provided above, whk~tever Is the lest to oxur. Time is of the Essence. Time is of the essence in the performance of this Agreement. DEFINITIONS. Ths folkwving capitalized words and temps shall have the following meardnga when used in this Agreement Unless specifically stated to the contrary, all references to dollar amounts shah mean amounts In lawful money of the United Stelae of America. Words end terms used in the singular shall inducts the plural, and the pknal shell Include the singular, ea the context may require. Words and tonne not otherwise defined M fhb Agreement shall have the meankrgs ettrlbuted to such terms in the Uniform Commended Code. Accounting words and terms not otherwise defined In this Agreement shell have the meanings assigned to them in accordance with generelly accepted accountlng prlndples ae in effect on the data of this Agreement: Advancs. Tha word "Advance' means a disbursement of Loan funds made, or to be made, to Borrower or on Borrower's behalf one 11ne of credU or muttlple advance basis under the terms and ~ndkiona of this ~reement Agreement. The word "Agreement" means this Buslnesa Loan Agreement, as thIe Business loan Agreement may be amended or modified from time to time, together with all exhibits end schedules attached to this Business Loen Agreement from time to time. Borrower. The word "Borrower" means Elite Managing General Agency, LLC end Indudes all co-signers and co-makers signing the Note and all their sucxessore and assigns. Collateral. The word "Collateral" means all property and assets granted as collateral security for a Loan, whether reel or personal property, whether granted directly ar indirectly, whether granted now or In the future, end whether granted in the form of a security interest, mortgage, collateral mortgage, dead of trust, assignment, pledge, crop pledge, chattel mortgage, oollaterel chattel mortgage, chattel trust, factor's Uen, equipment trust, condltbnal sale, trust receipt, Ilan, charge, Uen or title retention contract, lease or consignment intended as a security device, or any other security or Uen Interest whatsoever, whether created by law, crontreck or otherwise. Default. Tire word "Default" means the Default set forth In this Agreement In the section tined `Default". Environmental Laws. The •wonis "Environmental Laws" mean any and all state, federal and local statutes, regulations end ordinances relating to the protection of human health or the envlronmerrt, Inducting without Ifmltatbn the Comprehensive Ernironmental Response, Compensation, end l.tebNky Act of 1980, es emended, 42 U.S.C. Section 9801, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1888, l'ub. L. No. 99-499 ("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 8901, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto. Event of Default The words "Event of Default' mean any of the events of default set forth In this Agreement In the default section of this Agreement. OAAP. The word "OAAP" means generepy accepted axounting prindples. Grantor. Tho word "Grentor" means each and all of the persons or entitles granting a Security Interest In any Collateral for the Loan, Inducting without limitation ell Borrowers granting such a Security Interest Guarantor. The word "Guarantor" means arty guarantor, surety, or accommodation party of any or all of the Loan. Hazardous Substanoea. The words 'Hazardous Substances" mean materials that, because of their quantity, concsntretion or physical, chemical or Infectious cheracteristks, may cause or pose a present or potential hazard to human health or the anvtronment when improperly used, Vented, stored, disposed of, genereted, manufactured, transported or otherwise handled, The words "Hazardous Substances" are used In their vary broadest sense end include without limitation any and all hazardous or toxic substances, materiels or waste ea defined by or Usbad under the Ernlronmental Laws. The tern "Hazardous Substances" also Indudes, without gmitation, petroleum and petroleum by-prodtrcts or any fradbn thereat and asbestos. Indsbtedness. The worrJ "Indebtedness" means the indebtedness evidenced by the Note or Related Doarmants, including all prindpal and interest together with all other Indebtedness and costs end expenses for which Borrower Is reaponsible•under.this Agreement or under any of the Related Documents. Lender. The word "Lender" means Fox Chase Bank, its succeseon and assigns. Loan. The word "Loan" means any and all bans end flnanclal accommodations from Lender to Borrower whether now or hereafter BUSINESS LOAN AGREEMENT (Continued) Page s exlstlng, and however evidenced, Including without limitation those loans end flnanclal accommodations described herein or desulbed on any exhibit or schedub attached to this Agreement from time to time. Note. The word "Note" means the Note executed by Elite Managing General Agency, LLC In the principal amount of $75,000.00 dated March 2, 2011, together with all renowals of, extenslona of, modiflcatlorre of, reflnandnga of, consdidatlons of, and substttutlons for the note or credit agreement. Permitted Liars. The words "Permitted Liens" mean (1} Ilene end security interests securing indebtedness owed by Borrower bD Lender. (2) Ilene for taxes, aseessmerrta, or simAar charges either not yet due or tieing oonteetod in good faith; (3) (lens of matsriaimen, mechanics, warehousemen, or centers, ~ other IAca Asns arising In the ordinary course of twslrress end securtrrg oHiigatbna which are not yet delkpua~tt; (4) purchase rr~ney Ilene or purnlrase money securtty Interests upon or in any property acquired or held try Borrower in the orilnary oorxse of buslmss to secure Indebtedness outstanding on the date of thk Agreement or permitted tc be incurred under the paragraph of this Agreement titled "Indebtedness and Liens"; (5) Ilan and secrrrtty Interests which, as of the date of thk Agreement, have been disdoeed to end approved by the Lender In writing; and (0) those pens and aecurtty Interests which in the aggregate constitute an Immeterlal and Insignificant monetary amount with respect to the net value of Borrower's assets. Related Dornarrenis. The words 'Related Documents" mean ell proMasory notes, credtt agreements, ban agreements, environmental agreements, guarontbs, security agreements, mortgages, deeds of trust, securtty deeds, collateral mortgages, and all other Instruments, agreements and.documents, whether now or hereafter existing, executed in connectlon with the Loan. Security Agreement. The words "Security Agreement" mean end include without lirrdtatbn any agreements, prornkes, covenants, arrengernenta, understandings or other agreements, whether created by law, contract, or otherwise, evidencing, governing, representing, or creating a Security Interest. Security Interest. The words "Security Interest" mean, without Amitetion, any and all types of collateral security, present and future, whether In the form of a Aen, charge, encumbrance, mortgage, deed of trust, security deed, assignment, pledge, cxop pledge, chattel mar~ege, coAeterel chattel mortgage, chattel trust, factor's Ilan, equipment trust, conditional sale, trust receipt, Aen or title retention contrail, lease or consignment Intended ee a security device; or any other security or ilea Interest whatsoever whether created by ]aw, contract, or otherwise. BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN AGREEMENT AND BORROWER AGREES TO ITS TERMS. TH13 BUSINESS lOAN AGREEMENT IS DATED MARCH 2, 2011. THIS AGREEMENT IS GNEW UNDER SEAL AND IT IS INTENDED THAT THIS AGREEMENT I5 AND SHALL CONSTITUTE AND HAVE THE • EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. BORROWER: ELBE MANA ERA! AGENCY, LLC ey: <~~k,~""\ r~---- Seal) Russell R. Naylor, Manager of Elite snag ng General Agency LLC gy; Seal) Scott C. P onager o Elite Managing General Agency, L!C !ENDER: Christop er C. Naylor, Ma gsr of Elite Managing General Agency, LLC FOX CHASE INalllq Wh, Ne• ~f["O.OW Cwc IY~~i /1rntlM MIMr". Y,~ 1/Y.!"I7. M Nw~ p,w1, • M 1l-M71AeOMRYGO.-C Tlldp A4ri PROMISSORY NOTE Borrower: Elite Managing General Agency, LLC Lender: Fox Chase Bank 191 Shane Boulevard 4390 Davisvllle Road Exton, PA 19341 Hatboro, PA 19040-2544 Principal Amount: $75,000.00 Date of Nota: March 2, 2011 PROMISE TO PAY. Ellie Managing General Agency, LLC ("Borrower") promises to pay to Fox Chase Bank ("Lender'7, or order, in lawful money of the United States of America, on demand, the principal amount of Seventydive Thousand & 00/160 Dollars ($76,000.00) or so much as may be outstanding, together with Interost on the unpaid outstanding principal balance of each advance. Interost shall be calculated from the date of each advance undl repayment of each advance. PAYMENT. Borrower will pay this loan In fu0 )mmediataly upon Lender's demand. Borrower will pay regular monthly payments of all accrued unpaid intsrost dus as of each payment date, bsginnittg April 1, 2011, with aN subsequent Interest payments to be dus on the Sams day of each month after that. Unless otherwise agreed or requirod by appicable law, payments will be applied first to any accrued unpaid interest; then to principal; then to any late charges; and then to any unpaid collection costs. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing. VARIABLE INTEREST RATE. The interoat rate on this Note is subject to change from time to rime based on dtanges In an independent Index which is the the Prime Rate as publ(shed from time to time In the Wali Street Joumai (the "Index"). The Index is not necessarily the lowest rate d~arged by Lender on its bans. If the Index becomes unavaliabla during the term of this loan, Lender may designate a substitute index after notifying Borrower. Lender will tell Borrower the cxurent index rata upon Borrower's request The interest refs dtange will not occur more often than each day. eortower understands that Lender may make bans based on other rates as well. The Index currently is 3.25096 par annum. Interest on the unpaid principal balance of this Note will be calculated as described in the "INTEREST CALCULATION METHOD" paragraph using s rate of 1.000 percentage point over the Index, adjusted M necessary for any minimum and maximum rate limitations described below, resulting in an irdtlel rate of 5.000% per anrwm based on a year of 360 days. NOTICE: Under no circumstances will the Interest rate on this Note be less than 5.000% per annum or more than the maximum rate allowed by applicable law. INTEREST CALCULATION METHOD. Irrtenst on this Note Is computed on a 365/360 basis; that Is, by applying the ratio of the interest rate over a year of 360 days, mulUpfled by the outstanding prinoipal balance, multiplied by the actual number of days the prlndpei balance is outstsnding. All interest psyable under this Nota Is computed using this matlrod. This calculation method results in a higher effective interest rate than the numeric interest rate stated In this Note. PREPAYMENT. Borrower sgraes that all loan fees end other prepaid finance charges are earned fully as of the date of the loan and will not be subject to refund upon early payment (whether voluntary or as a result of default), except as otherwbo required by law. Except for the foregoing, Borrower may pay wttitotrt penalty ell or a porbn of the amount owed earlier tram R la due. Early paymante will not, unless agreed to by Lender to writlng, rolleve Borrower of Borrower's otitlgation to cxmflrwa to make payments of accrued unpaid interost. Rather, early payments will reduce the prlndpel balance due. Borrower egress not to sand Lender payments marked "paki In full", "without recourse", or simUer language. If Borrower sends such a payment, Lender may accept It without losing erry of Lender's rlghta under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written commuMcattona conasming dteputed amounts, lndud(ng any check or other payment Instrument that indicates that the payment constitutes "payment in full" of the amount owed or that !s tendered with other condiflona or llmitaflons or as full eatisfectlon of a disputed amount must be mailed or delivered to: Fox Chase Bank, 4390 Davisville Road Hatboro, PA 19040-2544. LATE CHARGE. If a regularly scheduled interest payment Is 16 days or more late, Borrower will be diargad 5.000% of the unpaid porton of the regularly scheduled payment or $25.00, whichever is greater. if Lander demands payment of this loan, and Borrower does not pay the loan In full within 16 days after Leader's demand, Borrower also w-II be charged either 5.000% of the unpaid portion of the sum of the unpaid principal plus accrued unpaid Interest or 525.00, whichever is greater. INTEREST' AFTER DEFAULT. Upon default, tnduding failure to pay upon final maturity, the interest rate on thla Note shalt be Increased by adding an additional 5.000 percentage pdni margin ('Default Rate Margin'. The Default Rate Mergln shall also apply to each succeeding interest rate change that would have applied had there been no default. If Judgment is entered In connectbn with this Note, Interest will continue to arxrue after the date of Judgment at the rate In affect at the time Judgment Is entered. However, In no event will the interest rate exceed the maximum Interest rate Iimttatlons under eppl~able law. LENDER'S RIGHT'S. Upon default, Lender may, after giving such notices as required by applicable law, dedare the entire unpaid principal balance under this Note end all accrued unpaid Interest immediately due, end then Borrower will pay that amount. ATTORNEYS FEES; EXPENSES. Lender may hire or pay someone else to help collect this Note If Borrower does not pay. Borrower will pay Lender that amount. This krdudes, subject to any limits under applicable law, Lender's reaecnable attorneys' fees and Lender's legal expenses, whether or not then is a lawsuft, induding roasoneble attorneys' fees, expenses for bankruptcy proceedings (Induding efforts to modify or vacate any automatic etey or Injundlon), and appeals. if not prohibited by applicable law, Borrower also will pay any court costs, In addition to all other sums provided by law. GOVERNING LAw. This Nota will be govwned by federal taw applicable to Lender and, to the extent not preempted by federal law, the laws of the Commornvsirlth of Pennsylvania wfthout regard to its conflicts of law provisions. This Note has bean accepted by Lender In the Commonwealth of Pennsylvania. CHOICE OF VENUE. If there Is a lawsuit, Borrower agrees upon Lender's request to submit to the JurisdidJon of the courts of Montgomery County, Commorwvealth of Pennsylvania. DISHONORED ITEM FEE, Borrower will pay a fee to Lender of $30.00 if Borrower makes a payment on Borrower's loan and the check or pnsauthorized dtarge with whit Borrower pays Is later dishonored. RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff !m all Borrower's accounts with Larder (whether cheddng, savinga, or some other account). This Indudea all eccaunts Borrower holds JolnUy with someone else end all accounts Borrower may open in the future. However, this does not indude any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Borrower authorizes Lender, to the extent permitted by applcable law, to charge or setoff all sums owing on the Indebtedness against any and ell such amounts, and, at Lender's option, to administrativelyfreeze all such accounts to allow Lender to protect Lenders charge and setoff rights prov)dad in this paragreph. LiNE OF CREDIT. This Note evldenc~s a revolving Ilne of credit Advances under this Note may be requested either oreAy or in writing by Borrower or try an authorized person. All oreI requests shall be wnflrmed in writing on the day of the request, on forms acceptable to Lender. All communk:atkxu, instructions, or diredlons by telephone or otherwlee to Lender ere to be directed io Lender's otftce shown above. Borrower agrees to be Uable for all sums either. (A) advanced In accordance with the Instructions of an authorized person or (B) credited to any of Borrower's amounts with Lender. The unpaid principal balance owing on this Note at any time may be evidenced by endorsements on this Note PROMISSORY NOTE (Continued) or by Lender's internal records, Indudlrtg daNy computer print-outs. Page Z SUCCESSOR INTERESTS. The temro of this Note shall be binding upon Borrower, and upon Borrower's heirs, peroonei representatlves, aucrressore and assigns, and shall Inure to the beneftt of Lender and ka aucoessore and assigns. GPJJERAL PROVISIONS. This Note la payable on demand. The Indusbn of spedfk: defauk provisions or rights of Lender shall not produde Lender's right to dedare payment of thfa Nota on its demand. If any part of this Note cannot be enforced, this fact will not affect the rest of the Note. Lender may delay or forgo enforcing any of Its rights or remedies under this Note without being them. Borrower and any other person who signs, guarentess or endorses this Note, m the oxtent aNowsd by law, waive presentment, demand for payment, and notce of dishonor. Upon any change In the terms of this Note, and unless otherwise expressly stated in wrlUng, no party who signs this Nota, whether as maker, guarantor, acoommodatlon maker or endoroer, shall be rektased from Ilabllky Atl such parties agree that Lender may renew or extend (ropeatedly end for any length of dma) this ban or rebase any party or guarantor or collatsreC or Impair, fall m roaitLe upon or perfect Lender's securky interest in the collateral; and take any other action deemed necessary by Lender wkhout the wnaent of or notice to anyone. All such parties also agree that Lender may modify thfs ban wkhout the consent of a rroUce to anyone other than the party wkh whom the modtflcaUon Is made. The obllgatlorre under this Note are joint end several. If arty portion of this Note is for any roason determined to be unenforceable, It will not effect the enfotsxabliky of any other provielons of thle Note. CONFESSION OF JUDGMENT. BORROWER HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR THE . PROTHONOTARY OR CLERK OF ANY COURT IN THE COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE, TO APPEAR AT ANY TIME FOR BORROWER AFTER A DEFAULT UNDER THIS NOTE AND WITH OR WITHOUT COMPLAINT FILED, CONFESS OR ENTER JUDGMENT AGAINST BORROWER FOR THE ENTIRE PRINCIPAL BALANCE OF THIS NOTE AND ALL ACCRUED INTEREST, LATE CHARGES AND ANY AND ALL AMOUNTS EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECURING THIS NOTE,.. TOGETHER WITH COSTS OF SUlT, ANO AN ATTORNEY'S COMMISSION OF TEN PERCENT (10%) OF THE UNPAID PRINCIPAL BALANCE AND ACCRUED INTEREST FOR COLLECTION, BUT IN ANY EVENT NOT LESS THAN FIVE HUNDRED DOLLARS (5500) ON WHICH JUDGMENT OR JUDGMENTS ONE OR MORE EXECUTIONS MAY ISSUE IMMEDIATELY; AND FOR SO DOING, THIS NOTE OR A COPY OF THIS NOTE VERIFIED 8Y AFFlOAVIT SHALL BE SUFFICIENT WARRANT. THE AUTHORM GRANTED IN THIS NOTE TO CONFESS JUDGMENT AGAINST BORROWER SHALL NOT BE EXHAUSTED BY ANY EXERCISE OF THAT AUTHORITY, BUT SHALL CONTINUE FROM TIME TO TIME AND AT ALL TIMES UNTIL PAYMENT IN FULL OF ALL AMOUNTS DUE UNDER THIS NOTE. BORROWER HEREBY WAIVES ANY RIGHT BORROWER MAY HAVE TO NOTICE OR TO A HEARING IN CONNECTION WITH ANY SUCH CONFESSION OF JUDGMENT AND STATES THAT EITHER A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THIS CONFESSION OF JUDGMENT PROVISION TO BORROWER'S ATTENTION OR BORROWER HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL. PRIOR TO SIGNING TH19 NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO THE TERMS OF THE NOTE. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE. THIS NOTE IS OMEN UNDER 8EAL AND IT lS INTENDED THAT THIS NOTE I5 AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. BORROWER: ELITE MAN GENERAL AGENCY, LLC Bsr__~~~ ~ Sean Russell R. t~ay{or, Manager AAanag ni a GeneraC I Agency, LI.C~ Scott C. ~anwait, alter of EI Managing General Agency, LLC ey: ~ ~ ~ (Sean Christopher C. Naylor, Hager of Elite Managing General Agency, LLC WNMOtYWFKr.iJ/NJY EM.•IMYti An,W YM,M YiG 7Fr.lML NlylO~MNnL •M 1C iM7~7 lIFD COMMERCIAL SECURITY AGREEMENT Grantor: Eilta dianaging General Agency, LLC Lender: Fox Chase Bank 181 8h~'ee Boulevard 4390 Davisvflle Road Exton, PA 19341 Hatboro, PA 13040-2544 THIS COMMERCIAL SECURITY AGREEMENT dated March 2, 2011, is made and executed between Elite Managing General Agency, LLC ("Gronlor'~ and Fox Chase Bank ("Lender"). GRANT OF SECURITY INTEREST. For valuable consideration, Grantor grants to Lender a security Interest In the Collateral to secure the Indebtedness and agrees that Lender shall have the rights stated in this Agreement with respect to the Collateral, In addition to all other rights which Lender may have by law. , COLLATERAL DESCRIPTION. The word "Collateral" as used in this Agreement means the following described property, whether now owned or hereafter acquired, whether now existing or hereafter arising, and wherever located,. in which Grantor Is giving to Lender a security Interest for the payment of the Indebtedness and performance of all other obligations tinder the Note and this Agreement: All inventory, equipment, accounts (including but not limited to all healthcare-insurance receivables), chattel paper, Instruments (including but not Ilmfted to afl promissory notes), letter-of-credit rights, letters of credit, documents, deposit accounts, Investment property, money, other rights to payment and performance, and general EntangiWes Qncluding but not flmfted to all software and all payment irdsngibies); ell oil, gas and other minerals before eztrecdon; all oil, gas, other minerals and accounts t:onstifudng as-extracted collateral; all fixtures; all timber to be cut; all attachments, accessions, accessories, fittings, increases, tools, parts, repairs, supplies, and commingled goods relating to the foregoing property, and all addHions, repisoaments of and substitutions for all or any part of the foregoing property; all insurance refunds relating to the foregoing property; all good will relating to the foregoing property; all records and data and embedded software relating to the foregoing property, and all equipment, inventory and software to utilize, create, maintain and process any such records and date on elsetronk media; and all supporting obligations relating to the foregoing property; alt wtwther now existing or hereafler arising, whether now owned or hereafter acquired or whether now or hereafter sub)ect to any rights in the foregoing property; and all products and proceeds ()nctuding but not limited to all Insurance payments) of or relating to the foregoing property. In addition, the word "Cdiaterel" also includes ell the following, whether now owned or hereafter acquired, whether now existing or hereafter arising, and wherever kx~ted: (A) Ail accessions, attachments, accessories, tools, parts, aupplles, replacements of and addtttons to any of the collateral described herein, whether added now or later. (B) All products and prodtxre of any of the property described 1n this Collateral section. (C) Ail accounts, ganerel Intangibles, instruments, rents, monlea, payments, and ell other rights, arising out of a sale, lease, consignment or other disposition of any of the property described in this Collateral section. (D} AIi proceeds (Including Insurence proceeds) from the sale, destruction, loss, or other disposition of any of the property described In thla Collateral secton, end sums due from a third party who has damaged or destroyed the Collateral or from that parry's Insurer, whether due to Judgment, aedlement or other process. (E) All records and data relating to any of the property desgibad in this Collateral section, whether In the form of a writing, photograph, microfilm, microfiche, or electronic media, together with ell of Grantor's right, tide, and interest In and to all computer software required to utilize, create, malntaln, and prot~as any such records or data on eledronlc media. CROSS-COLLATERALIZATK)N. In addition to the Nota, this Agreement secures all obligations, debts and liabllittes, plus Inten3at thereon, of Grantor to Lender, or arty one or more of them, as well ea all claims by Lender against Grantor or any one or more of them, whether now exiatMg or hereafter adaing, whether related or unrelated to the purpose of the Note, whether voluntary or otherwise, whether due or not due, dkect or indirect, detemdnad or undetermined, ebsdute or contingent, flquidated or unliquidated, whether Grantor may be liable individually or jointly with others, whether obligated as guarantor, surety, accommodation party or otherwise, and whether recovery upon such amounts may be or hereafter may become barred by any statute of Iimltadons, end whether the obligation to repay such amounts may be or hereafter may. bacons otherwise unenforceable. FUTURE ADVANCES. In addition to the Note, this Agreement secures all future advances made by Lender to Grantor regardless of whether the advances era made aj pureuant to a commitment orb) for the same purposes. RIGHT OF SETOFF, To the extent permitted by applicable law, Lender reserves a right of setoff in all Grantor's accounts with Lender (whether d~ddng, savings, or some other account). This Includes all eccourrts Grantor hdds )olndy with someone else and all accounts Grentor may open In tfie Tulare. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Grantor authorizes Lender, to the extent permitted by appflrreble law, to diarge or setoff all sums owing on the Indebtedness against any and all such eccourrts, end, et Lender's option, to adrrilnisttatiVelyfraeze all such accounts to allow Lender to protect Lender's charge and setoff rights provided in this paragraph. GRANTOR'S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO 7HE COLLATERAL. With respect to the Colaterel, Grantor represents end promises to Lender thole Perfection of Security Interest Grentor agrees to take whatever actions era requsated by Lender to perfect and continue Lenders security fntereat in the Collateral. Upon request of Lender, Grantor will daltver to Lender any and aN of the documents evidendng or constltudng the CoQateral, and Grantor will note Lenders interest upon any end all chattel paper and Instruments M not delivered to Lender for possession by Lender. This k a continuing Security Agreement and will continue in effect even though ail or any part of the Indebtedness is paid in fup and even though for a period of time Grantor may not be indebted to Lender. Nodcea to Lander, Grantor will promptly notify lender 1n writing et Lenders address shown above (or such other addresses as Lender may designate from time to time) prior to any (1) change in Grantors name; (2) change in Grantor's assumed business name(s); (3J change ~ the management or in the members or managers of the limited liability company Grantor, (4) change In the authorized signer(s); (5) d,ange in Grantors prindpal office address; (li) change In Grantors state of organization; (7) ~nvereion of Grenror to a new or different type of business entity; or (8) change In any other aspect of Grantor that directly or Indirectly relates to any agreements between Grantor and Lender. No change in Grantors name or state of organization wail take affect urrtil after lender has received notice. No Violation. The exewtion and delivery of this Agreement will not oblate any law or agreement governing Grantor or to which Grantor is a party, end fta 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 COMMERCIAL SECURITY AGREEMENT (Continued} Page 2 Uniform Commerdal Code, the Colaterel la eMorceable In accordance with Its terms, Is genuine, and fully compiles with ail applicable taws end regulations concemtng form, content and manner of preparation and execution, and all persona appear(ng to be obligated on the Cotlatarai have authority and capadty to c~trect and are In fact obligated as they appear in be on the Collateral. At the flme any.account beownes subject to a aewrity interest In favor of leader, the account shall be a good and wild aaxaunt reproaentlng an undisputed, bone fide indebtednasa lnCtxred by the account debtor, for merchandtae held subject to delivery Instructions or prndousiy shipped or delivered pursuant to a contract of sale, or for aeMceq prevkwsly pen`orned by Grantor with or for the arx;ount debtor. So long at this Agreement remains In effect, Grantor shah not, without Lender's prior written consent, compromise, settle, adjust, or extend payment under or with regard to any such Accounts. There shell be no setoffs or counterdalma against any of the Colaterel, and no agreemsrrt shall have been made under whldt any dsduotlons or discounts may be chimed concerning the Collateral except those disclosed to Lender in writing. Location of the Collaterel. Percept to the Ordinary course of Grentors business, Grentor agrees to keep the Colaterel (or to the extent the Collaterei consists of intangible property such as erxarnts or general intangibles, the records oonceming the Collateral) at Orentors address shown above or at such otherviocatbns as are acceptable to Lender. Upon Lender's request Grantor wtll de8wr to Lender In form satisfactory to Lender a sdredule of real properties and CoNaterel locatlons relating to Grentora operetlona, Inducting without limltatlon the following: (1) all real properly Grentor owns or Is purchasing; (2) all real property Grantor Is rontlng or teasing; (3) aN storage facilities Grantor owns, rents, leases, or uses; and (4) al! other properties where Coileterel Is or may be located. 'Removal of the Collaterel. Except in the ofdlnary course of Grantor's business, Including the sales of inventory, Grentor shall not rerwve the CoNataral from its existing bcatlon without Lender's prior written consent. To the extent that the Collateral consists of vehicles, or other titled property, Grantor shell not take or permit any action which would require application for certlflcates of title for the vehides outside the Commonwealth of Pennsylvania, without Lender's prior wrftten consent. Grantor ahaN, whenever requested, advise Lender of the exact locatlon of the Collateral. Transactions involving Collateral. Except for Inventory sold or accounts cdlected in the ordinary course of Grantor's business, or as otherwise provided for In this Agreement, Grantor shall not sell, otter to sell, or otherwise transfer or disp~e of the Collateral. While Grerrtor is not in default under this Agreement, Grantor may sell Inventory, but only in the ordinary course of Its business and only to buyers who qualify as a buyer 1n the ordinary course of business. A sale in the ordinary course of Grantor`s business does not inducts a transfer in partial or total setlsfection of a debt or any bulk sale. Grantor shall not pledge, mortgage, encumber or otherwise permit the Collateral to be subject to any Iten, securityy Interest, encumbrance, or charge, other than the securfty Interest provided for in this Agreement, without the prhx written consent of Lender. This includes security interests even if Junior In right to the security interests granted under this Agreement. Unless walvod by Lender, ail proceeds from any diapositlon of the Collateal (tor whatever reason) shell be held in trust for Lender and shell not be commingled with any other funds; provided however, this requirement shall not constitute consent by Lender to any sale or other dispoaltbn. Upon receipt, Grantor shall immediately deliver any such proceeds to Lender, Title. Grentor represents and warrants to Lender that Grantor hokfs good and marketable Ube to the Collaterei, free and deer of all Ilene and encumbrances except for the Ilan of this Agreement No financing atatoment covering any of the Copataral Is on file in any public office other than those which reflect: the security interact croated by this Agreement ar to which Lender has speolflcelly consented. Grantor shah defend Lender's rights in the Coflaterel against the datms and demands of ell other pereons. Repairs and Msfntenancs. Grentor agrees to keep and matntaln, and to cause others to keep end maintain, the CoNaterel In.good order, repair and ~ndltbn at all times while this Agreement rem@Ins in stied:. Grantor further agrees to pay when due afl dolma for work done on, or services rendered or material fumlahed In connedlon with the CoNeterel so that no Ilan or encumbrance may ever attach to or be filed agaktat the Collateral. inspection of Collateral Lender and Lender's designated representetiws and agents shall have the right at all reasonable times to examine and inspect the Colaterel wherever located. Taxes, Assessments and Lfsna. Grantor will pay when due all taxes, assessments and hens upon the Collateral, Its use or oparetlon, upon this Agreement, upon any promissory note or notes evidendng the Indebtedness, or upon any.of the other Rotated Documents. Grantor may withhold any such payment or may elect to contest any Ilan ff Grantor is in good taRh conducting an appropriate proceeding to contest the obtlgetbn to pay end so long es Lender's Interest In the Cdleterel Is not Jeopardized In Lenders sole opfnlan. !f the Cotiaterel is subjected to a Iten which Eg not disdrargsd within fifteen (15) days, Grantor shall deposit with Lender cash, a auftident corporate surety bond or other security sattsfaotory to Lerxfer in an amount adequate to provide for the discharge of the Ifen plus any Interest, costs, reasonable atiomeys' fees or other dtarges that could accrue as a result of foreclosure or eels of the Colaterai. In any contest Grantor shall defend Itself and Lender end shah satisfy any final adverse Judgment before enforcement against the Colateral. Grantor shah name Lender as an additlonal obggee under any surety bond furnished In the contest proceedings. Grantor further egress to tumlah Lender with evidence that such taxes, assessments, and governmental end other duarges have bean paid to full and in a timely manner. Grentor may withhold any such payment or may elect to contest any Ilan if Grantor Is In good faith conducting an appropriate proceeding to contest the obtlgation to pay and so kxrg ea Lenders Interest in the Collaterel is not Jeopardized. Compitanee with Oovemmenta! Requirements. Grantor shall comply promptly with all taws, ordinances, rules end regulatlons of all governmental authorldas, now or hereafter in effect, appilcable to the ownership, productlon, dlapositbn, w use of the Colateral, inducting all laws ~ repulatlons rolatlng to the undue eresbn of highy-erodikile land or relating td tM aonveralon of wetlenda for the production of an agricultural product a commodity. Grarrtor may contest In good fafth any such law, ordinance or regulation and wlthhoki compliance during any proceeding, Inducting appropriate appeals, so long es Lender's Interest In the Collaterel, In Lenders opinion, is not Jeopardzed. Hazardous Substancsa. Grantor represents and warrants that the Collaterel never has been, and never wUl be so long ae this Agreement rernalns a Ilan on the Cotlaterel, used in vlolatbn of any EnvlronmeMal Levee or for the generetlon, manufacdrre, storage, transportation, treatment, disposal, release or threatened release of any Hazardous Substance. The representations and warranties contained herein ere based on Grantors due dNigence in Investigating the Colatersl for Hazardous Substances. Grantor hereby (1) releases and waives any future claims against Lender for Indemnity or contribution in the event Grantor becomes liable for clearwp or other costs under any Envlronmerttal Lews, and (2) agrees to lndemnHy, defend, and hokl harmless Lender against any end ail dolma and losses resultlng from a breach of this provision of this Agreement. This obligation to indemnity end defend shaA survive the payment of the Indebtedness end the satisfaction of this Agreement. Maintenance of Casualty Insurance. Grantor shall prowre and maintain all risks insurance, Inducting without limitation fire, theft and 1lability coverege together with such other inaurence es Lender may require with respect to the Cdiaterel, In form, amounts, coverages and basis reasonably acceptable to Lender end Issued try a company or companies reasonably exeptable to Lender. Grentor, upon request of Lender, wNl deliver to Lander from time to time the poNdea or certificates of insurance in torn satbfactory to Lander, including stipulatbns that coverages will not be cancelled or diminished without at least thirty (30) days' prbr written notice to Lender and not inducting any disclaimer of the insurers Nabilky for faBuro to give such a notice. Each Insurenoe policy also shall inducts en endorsement providing that coverage in favor of Lender will not be Impaired in any way by any act, omission or default of Grantor or any other penwn. M connectlon with all poNdes covering assets in which Lender hdds oT Is offerod a security interest Grantor wit! provide Lender with such lose payable COMMERCIAL SECURITY AGREEMENT (Continued) Page 3 or other endorsement as Lender may require. if Orentor at any time feAs to obtain or maintain any Insurance es required under this Agreement, Lender may (twt ahaU not be obligated to) obtain such Insurance as Lender deems appropriate, induding if Lender so chooses "single interest krsurence; which will Dover only Lenders interest in the Colieterel. AppNcaUon of Insurance Proceeds. Grantor shall promptly notify Lender of any loss or damage to the Collateral, whether or not such casualty or loss Is covered by Insurance. Lender may make proof of loss if Grentor falls to do so wtthln fllteen (15) days of the casualty. AN proceeds of any irisurence on the Collabrel, induding accrued proceeds thereon, shall be held by Lender as part of the Cdiaterel. If Lender consent to repair or replacement of the damaged or destroyed CoUebrel, Lender shall, upon satisfactory proof of expenditure, pay or relmtxuae Orentor from the proceeds for the reasonable cost of rsp~r or resforadon. If lender does not consent to repair or replacement of the Collateral, Lender shall robin a sufficient amount of the proceeds to pay all of the Indebtedness, and shall pay the balance to Grantor. Any proceeds which have not been disbursed within six {8) months after their receipt and which Grantor has not crommitted to the repak or reatorat(on of the Colateral shall be used to prepay the indebtedness. Insurence Reserves. Lender may require Grantor to mantain with Lander reserves for payment of insurance premiums, which reserves shell be created by monthly payments from Grantor of a sum estimated by Lender to be suftident to produce, at least fifteen (15) days before the premium due date, amounts et least equal to the insurance premiums to be paid. If fifteen (15) days before payment Is due, the reserve funds are insuffldent, Grantor shall upon demand pay any defidency to Lender. The reserve funds shall be held by Lander es a general deposit and shall constlhrte anon-interest-bearing accountwhich L~der may satisfy by payment of the insurance premiums required to be paid by Grentor es they become due. Lender does not hold the reserve funds In trust for Grantor, and Lender is not the agent of Grantor for payment of the insurence premiums required to be paid by Grantor. The responslbllity for the payment of premiums shall remain Grantors sole responsibdtty. Insurance Reports. Grantor, upon request of Lender, shall fumish to Lender reports on each existing policy of Insurance showing such Information as Lender may reasonably request induding the following: (1) the name of the insurer, (2) the risks insured; (3) the amount of the policy; (4) the properly Insured; (5) the than current value on the basis of which Insurance has been attained end the manner of determining that value; and (5) the expirotlon date of the policy. In addition, Grantor shall upon request by Lender (however not more often than annually) have an Independent appralaer satisfactory to Lender determine, as applicable, the cash value or replacement cost of the Collateral. financing Statements. Grantor authorizes Lender to file a UCC financing statement, or ettematlvely, a copy of this Agreement to perfect Landers security interest At Lenders request, Grantor addttlonally egress to sign all other documents that are necessary to perfect, protest, and ~ntinue Lenders security Interest in the Property. Grentor will pay all filing fees, title transfer fees, and other fees and costs involved unless prohibited by law or unless Lender is required by law to pay such fees and costs. Grentor irrevocably appdnb Lender to execute documenNs necessary to transfer the if there Is a default Lender may file a copy of this Agreement as a flnencirg statement. if Grantor changes Grentors name or address, or' the name or address of any person granting a security interest under this Agreement dtangea, Grantor wUl promptly notify the lender of such change. GRANTOR'8 RIGHT TO P089tiE8S10N AND TO COLLECT ACCOUNTS. UntU default and except as otherwise provided below with rasped to accourrb, Grantor may have possesson of the tangible peroonel properly and benefldal use of ell the Collateral and may use it In any lawful manner not inconsistent with thb Agreement or the Related Documents, provided that Grantor's right to posaeaslon and benefldal use shell not apply to any Codeterel where possession of the CoMgterel by Lander la required by law to perfect Lenders seaurity Interoat in such Collateral. Untll otherwise notitled by Lender, Grantor may collect any of the Copateroi wnsisting of accounts. At any time and even though no Default extab, Lender may exerdae its rights to collect the etxounb and to notify atx:ount debtors to make payments directly to Lender for application to the Indebtedrx3sa. If Lender at any time has possession of any CoYabral, whether before rn attar Default, Lender shall be deemed to have exerdsed reasonable care In the custody and preservatlon of the Cdlaterei if Lender takes such action for that purpose as Grantor shall request or as Lender, in Lenders sofa dfscrotion, shah deem appropriate under the droumsbnces, but fallure to honor any request by Grantor shall not 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 rights in the Collateral against prig parttes, nw to protect, preserve or malnbin any security Interest given to secure the Indebtedness. LENDER'S EXPENDITURES. H any acton or proceeding is commenced that would materially affect Lenders interest in the Colaterel or If Grantor faiEs To comply with any proNslon of this Agreement or any Related Documents, induding but not limited to Grantors fallure to dfsd~arge or pay when due any amounts Grantor is required to discharge or pay under this Agreement or any Related Documents, Lender on Orerrtora behalf may (but shall not ba obligated to) take arty action that Lender deems appropriate, induding but not limited to discharging or paying all texas, Ilene, security intereata, encumbrancxs end other daims, at any tkne levied or placed on the Collaterel and paying ell costs for insuring, mainbining and preseMng the Collateral. All such expenditures inwrred or paid by Lender for such purposes will than beer interest at the rate charged under the Nob fr~rr the date Insured or paid by Lender to the date of repayment by Grantor. All such expenses will becorrta a part of the Indebtedneaa end, at Lenders option, will (A) be payable on demand; (e) be added to the balance of the Note and bs apportioned among and be payable with any InsbUment payments to become due during either (1) the term of any applkxiWe inaurence poUcy; or (2) the remaining tens of the Note; or (C) be created ea a balloon payment which will be due and payable at the Note's maturity. The Agreement also will secure payment of these amounts. Such right shall be in addition to all other rights and remedies 4o which Lender may be enUded upon Default . DEFAULT. Default will occur if payment in full la not made Immediately when due. RIQfiTS AND REMEDIES ON DEFAULT. If Default ocarre under this Agreement, at any time thereafter, Lender shall have all the rights of a secured party under the Pennsylvania Uniform Commerdal Code. In addltlon and without ilmibtlon, Lender may exerdsa any one or more of the following rights end remedies: Accebrete Indebbdnesa. Lender may dadare the entire indebtedness, Inducting any prepayment penalty which Grantor would be required to pay, Immediately due end payable, without notice of any kind to Grantor. Assemble Coilabrel. Lander may require Grantor to deliver to Lender all or any portion of the Collateral and any and all certMcates of Utie and other documents r+Nating to the Coliabrel. Lender may require Grantor to assemble the Collateral and make it available to Lender of a place to be designated by Lender. Lender also shall have full power to enter upon the properly of Grantor to take possession of and remove the Collateral. H the Coilaierat contains other goods not covered by this Agreement at the time of repoasessbn, Grantor agrees Lender may take such other goods, provided that Lender makes reasonable effort to return them to Grantor after repoasesalon. Sell the Collateral. Lender shall have full power to sell, lease, transfer, or otherwise deal with the CoUateroi or proceeds thereof in Lenders own name or that of Grantor. Lender may sell the Collaterel at public auction or private sale. Unlesc the Collaterel threatens to decline speedily in value or is of a type customarily sold on a recognized market, Lender will give Grantor, end other persons as required by law, reasonable notice of the time and place of any public sale, or the time after which any private sale or any other disposition of the Collateral fs to be made. However, no notice need be provided to any person who, after Event of Default ocxuro, enters Into and authenticates an agreement waiving that person's right to notification of sale. The requirements of reasonable notice shall be met ff such notice Is given at least ten (10) days before the time of the sale or disposition. All expenses relating to the disposition of the Collateral, induding without COMMERCIAL SECURITY AGREEMENT (Continued) Page 4 Iimkation the expenses of retaking, holding, Insuring, propartng for sale end selling the Collaterei, shall become a part of the Indebtedness secured by this Agreement end shall be payable on demand, with interest al the Note rate from dabs of expenditure until repaid. Appoint Receiver. Lender shall have the right to have ~ receiver appointed to take posseaslon of all or any pert of the Cotlaterol, with the power to protect and prosArve the Collatsrel, to operate the t;opaterei preceding forodosure or sale, arxt to collect the Rents from the Colaterol and apply the proaede, over end above the coat of the recelverehip, against the Indebtedness. The receiver may serve without bond if permitted by law. Lenders right to the appdntment of a receiver shell exist whether or not the apparent value of the Cotlaterel exceeds the Indebtedness by a subatantlai amounk Employment by Lender shall not dlaqualiry a person from aeMng ea a receiver, Cdleet Revenues, Apply Accounts. Lender, eNher Itself or through a receiver, may collect the payments, rents, Income, and revenues from the Collateral. Lender may at any tlme In Lender's disrreton transfer any Collaterel Into Lender's own name or that of Lender's nominee and receive the payments, rents, Income, and revenues therefrom and hold the same es security for the Indebtedness or apply it to payment of the Indebtedness in such order of preference as Lander may determine. Insofar as the Collateral consists of accounts, general Intanglb{es, insurance pogdes, Instruments, chattel paper, doses in action, or similar property, Lender may demand, collect, receipt for, settle, compromise, adjust, sue for, forecbse, or realize on the Collaterel as Lender may determine, whether or not kxtebtedneas or Colaterel is then due. For these purposes, Lender may, on behalf of and in the name of Grantor, receive, open and depose of mail addressed to Grantor; dranpe any address tb which matl and payments are to be sent; and endorse notes, dredu:, drafts, Taney orders, doarments of tide, instruments and llama pertaining to payment, shipment, or storage of any Collateral. To fadlitate collection, Lender may notify account debtors and obligors on any Collaterel to make payments directly to Lender. Obtain Deficiency. If Lender rdwwea to sell any or all of the Collateral, Lender may obtain a judgment against Grantor for any defidency remaining on the Indebtedness due to Lender after application of ail amounts received from the exerdse of the rights provided in this Agreement. Grantor shell be liable for a deficiency even if the transaction described in this subsection is a sale of accounts or chattel paper. Other Rights and Remedies. Lender shaft have ell the rights and remedies of a secured creditor under the provisions of the Unlforn Commercial Code, as may be amended from Ume to time. In addition, Lender shall have and may exerdse any or ail other rights and remedies It may have available at law, in equity, or otherwise. Election of Rerr~dias. Except as may be prohibited by applicable law, all of Lender's rights end remedes, whether evidenced by this Agreement, the Related Documents, or by any other writing, shall be cumulative end may be exerolsed singularly or concurrently. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and en election to make expenditures or to take action to perform en obligation of Grantor under this Agreement, after Grantor's fatlure to perform, shell not affect Lender's right to declare a default and exerdse Its remedies. AAISCELLANEOUS PROVISIONS. Tha following miscellaneous provisions are a part of this Agreement Amendments. This Agreement, together with any Related Documents, constitutes the entire understanding and agreement of the parries as to the matters set forth In this Agreement No alteretbn of or amendment to this Agreement shall be effective unless given In writing and algned by the party or paRlea Bought to be drerged or bound by the etteretlon or amendmenk Aftomeya' Fees; Expanses. Grantor agrees to pay upon demand ell of Lender's coats and expenses, Including Lender's reasonable ettomsys' faea end Lender's legal sxpenaes, incurred In connsctlon wRh the enforcement of this Agresment• Lender may hire or pay someone else to help enforce this Agreement, and Grantor shah pay the costa end expenses of such enforoemenk Cosh end expenses include Lender's reasonable attorneys' faea end legal expenses whether or not (hero la a lawsutt, Including reasonable attorneys' fees end legal expenses for bankruptcy proceedhigs Qnduding efforts to modify or vacate any automatic stay or injundton), eppe~s; -and any antlclpeted postaudgment collection services. Grantor also chap pay all court costs and such addlUonal fees as may be directed by the court. Caption Headings. Caption headings in this Agreement are for convenience purposes only and are not to be used to Interpret or define the provlsbns of this Agreemenk Governing Law. This Agreement will 6e governed by federal law apptlcable 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 Lander in tiw Commonwealth of Pennsylvania. Choice of Venue. If there Is a lawsuit, Grantor agrees upon Lenders request to submit to the jurisdiction of the courts of Montgomery County, Commonwealth of Pennsylvania. No Waher by Lender. Lender shall not be deemed to have waived any rights under this Agreement unless such waiver Ia given in writing and signed by Lender. No delay or omission on the part of Lender In exercising any right ahaQ operate es a waiver of such right or any other right. A waver by Lender of a provlabn of this Agreement shah not prejudce or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Agreement. No prbr waiver by Lender, nor any course of dealpig between Lender and Grantor, shall oonatltute a waver of any of Lenders rights or of any of Grantors ob6gstlons ea to any future treAsections. Whenever the consent of Lender la required under this Agreement, the granting of such consent by Lender in any instance shall not consUtuta conttnuing consent to subsequent Instances where such consent Is required end In all cases such consent may be granted or withheld In the sole discretion of Lender. Notices. Unless otherwise provided by applicable law, any notice required to be given under this Agreement shall be given In writing, and shall be affective when actually delivered, when aduaily received by taisfacsimlle (unless othervvlae required by law}, when deposited with a natlonafy recognized overnight courier, or, H mailed, when deposited in the United Stara mail, as flret class, certified or regbtered mall postage prepaid, directed to the addresses shown near the beglnMng of this Agreemenk Any par'q~ may change Its eddrsaa for noUcea under this Agreement by giving formal wrftten notice to the other parties, specifying that the purpose of the notice Is to change the party's address. For notice purposes, Grantor agresa to keep Lender Enformed at ail times of Grontora wrrent addrosa. Unlssa otherwise provided by applcable law, H there Is more than one Grantor, any notice gven by Lender to any Grantor Is deemed to be notloe gven to all Grantors. Additional AuthorizeUons. Grentor hereby authorizes Lender, with full power of aubstltuUon, to execute In Orentors name any documents necessary to perfect, amend, or to continue the severity Interest granted in this Agreement or to demand termhratlon of filings of other secured parties and, without further authorization from Grantor, to file a carbon, photogrephb or other reproductlon of any ftnandng statement or of thla Agreement for use es a flnaraing statement. Grantor will relrfrburse Lender for all expanses for the per/ectbn and the continuation of the pertecdon of Lenders sacurtty interest in the Collaterel. it is understood and agreed that any exerdae of this authorizatlon by Leader shaA be on behalf of Lender and not on behaM of Grantor. lender Is not an agent or fldudary of Grantor. However, in exsrdsing the authorizatbn granted hereby, Lender aheq exerdae reasonable cautbn and prudence and Lender shall keep full and accurate record of all actions, receipts and disbursements. Severebility. if a court of competent JurtsdlcUon finds any provision of thla Agreement to be illegal, Invalid, or uneniorceable as to any COMMERCIAL SECURITY AGREEMENT (Continued) Page 5 circumstance, that flndirtg shah not make the offending provision Illegal, invalid, or unenforceable as to any other droumstance. If feasible, the offending provision shall be considered modified so that It be~nes legal, valid end enforoeable. If the offending proNalon cannot be so modified, it shah be considered deleted from this Agreement. Unless otherwise roquirod by taw, the Illegality, invalidity, or unenforoeabAity of any provision of this Agreement aheli not affect the legality, validity or enforceebilky of any other provision of this Agreement. Successor Intsrosts. The terms of this Agreement shall be binding upon Grantor, end upon Grantor's hairs, personal representatives, suxesaore, and aes~ns, end shall be enforceable by Lender and Its sur;cesaore and assigns. Survival of Rapressrrtatlons and Wartantles. All repreaentatlons, warranties, and agreements made by Grentor in this Agreement shall survive the exeautlon and delivery of this Agreement, shall be continuing In nature, and shall remain In full foroe and effect until such time as Grentor's Indebtedness shall be paid in full. Time is of the Essanoa. Time Is of the essence In the performance of this Agreement. DEFINCf10NS. The foflowing capitalized words and terms shall have the following meanings when used In this Agreement. Unless spec~caily stated to the contrary, all referonces to ddlar amounts ahaN mean amounts In lawful money of the United States of America. Words and terms used in the singular shall indude the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined In this Agroement shell have the meanings attributed to such terms in the Uniform Commerdal Code: Agreement The word "Agreement means this Commercial Security Agreement, as this Commerdal Security Agreement may be amended or modified from time to dme, Together with all exhtbfts and schedules attached to this Commerdal Security Agreement from tlme'to dme. Borrower. The word "Borrower" means EAte Managing General Agency, LLC and Indudes all co-signers and co-makers signing the Note end all their successors and assigns. Collateral. The word "Collateral" means all of Grantor's right, title and Interest In and to all the Collateral as described in the Collateral Description section of this Agreement Default The word "Default" means the Default set forth In this Agreement In the section titled "Default". Environmental Lws. The words "Environmental t.sws" mean any and all state, federal and local statutes, regulatlons and ordinances relating to the protedbn of human health or the environment, lnduding without Iimftadon the Comprehensive Environmental Response, Compensation, and Uabtllty Act of 1980, as emended, 42 U.S.C. Section 9801, et seq. ("CERCLA"), the Superfund Amendments and Rsauthorizatlon Ad of 1988, Pub. L. No. 99-499 ("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Secton 1801, et seq., the Resource Conservation and Recovery Act, 42 U,S.C. Section 6901, et seq., or other applicable state or federal laws, rules, or regulatlona adopted pursuant thereto. Event of Default The words "Event of Default" mean any of the events of default set forth in this Agreement In the default section of this Agreement Grenlor. The word "Grantor" means Elke Managing General Agency, LLC. Hazardous 8ubsfances. The words "Hazardous Substances" mean materials that, bscsuse of their quantity, concentration or physical, chemical or InfscUoue charecterlatics, may cause or pose a present or potartlel hazard to human health or the environmen4 when improperly used, treated, stored, dlapoaed of, generated, manufactured, transported or otherwisa• handled. The words "Hazardous Substances" ere used In their very broadest sense and Indude without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the Environmental Lows. The term "Hazardous Substances" also Includes, without limitation, petroleum end petroleum by-products or any fradbn thereof and asbestos. Indebtedness. The word "Indebtedness" means the indebtedness evidenced by the Note or Related Documents, Including all principal and interest together with ail other lydebtednasaend costs and expenses for which Grantor la responsible under this Agreement or under any of the Related Documer3s. The liens and security Interests created pursuant to this Agreement covering the indebtedness which may be created In the future shall relate back to the data of this Agreement. Spedtlr;aly, without limitatkxt, Indebtedness Inotudes the future advances set forth in the Future Advances provisbn, together with all Interest thereon and all amounts that may be indirectly secured by the Cross-Cdlatereilzatlon provision of this Agreement Lender. The word "Lender" means Fox Chase Sank, Its successors and assigns. Note. The word "Note" means the Note executed by Eltte Managing Generl Agency, LLC in the prlndpal amount of $75,000.00 dated March 2, 2011, together with ell renewals of, extensions of, modifications of, reflnandnga of, consolidations of, and substitutions for the rxrte or credit agreement. Property. The wort "Property" means all of Grentot's right, title and Interest in and to all the Property es described In the "Collateral Description" aectlon of this Agreement Retstad Documents. The words 'Related Documents" mean all promlasory notes, credit agreements, loan agreements, environmental agreements; guaranties, security agreements, mortgages, deeds of trust, aecurlty deeds, collaterel mortgages, and all other instruments, agreerrorrts and documents, whether now or hereafter exisdng, executed in connectlon with the Indebtedness. GRANTOR HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS COMMERCIAL SECURITY AGREEMENT AND AGREES TO ITS TERMS. THIS AGREEMENT 13 DATED MARCH 2, 2011. . TH13 AGREEMENT 18 GIVEN UNDER SEAL AND 1T IS INTENDED THAT THIS AGREEMENT 13 ANO SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. COMMERCIAL SECURITY AGREEMENT (Continued) Page 6 GRANTOR: ELITE MANAGING ERAL AGENCY, LLC 9y: (SeaQ Russo ay or, Manager of Its Managing General gency, LLC gy; Seal) Scott C. Penwell, Manager o Ellte Managing Generei Agency, LLC LENDER: ~~ By: (Baal) Christop ier C. aylor, pager of Eliht anagtng General Agency, LLC FOX CHASE LNp,110 NMhL. MV.6MLD.ODt GIM. IILIYM IbWN WYIML. M0. IM7.7011. NIII,NL I4nwwi .M F:MRWUIIlY71Vl1El0.K. TII~H7 NN7 DISCLOSURE FOR CONFESSION OF JUDGMENT Declat'anf: Elite Managing Gener>!A Agency, LLC 191 Sheree Boulevard Exton, PA 19341 Lender Pox Chase Bank 4390 Davlsville (toad Hatboro, PA 19040-2544 DISCLOSURE FOR CONFESSION OF JUDGM-E/~/NAT THE UNDERSIGNED IS EXECUTING ON BEHALF OF DECLARANT, THIS 3G DAY OF !I"-lA'R~-L'~' . 20 ~~ A PROMISSORY NOTE FOR S75,000,00 OBLIGATING DECLARANT TO REPAY THAT AMOUNT- A. THE UNDERSIGNED UNDERSTANDS THAT THE NO7E~CONTAWS A CONFESSION OF JUDGMENT PROVISION THAT WOULD PERMIT LENDER TO ENTER JUDGMENT AGAINST DECLARANT IN COURT, AFTER A DEFAULT ON THE NOTE, WITHOUT ADVANCE NOTICE TO DECLARANT AND WITHOUT OFFERING DECLARANT AN OPPORTUNITY TO DEFEND AGAINST THE ENTRY OF JUDGMENT. IN EXECUTING THE NOTE, BEING FULLY AWARE OF DECLARANT'S RIGHTB TO ADVANCE NOTICE AND TO A HEARING TO CONTEST THE VALIDITY OF ANY JUDGMENT OR OTHER CLAIMS THAT LENDER MAY ASSERT AGAINST DECLARANT UNDER THE NOTE, THE UNDERSIGNED, ON BEHALF OF THE DECLARANT, 1S KNOWINGLY, INTELLIGENTLY, AND VOLUNTARILY WANING THESE RIGHTS, INCLUDING ANY RIGHT TO ADVANCE NOTICE OF THE ENTRY OF JUDGMENT, AND THE UNDERSIGNED E7CPRESSLY AGREES AND CONSENTS TO LENDER'S ENTERING JUDGMENT AGAINST DECLARANT BY CONFESSION AS PROVIDED FOR IN THE CONFESSION OF JUDGMENT PROVISION. 8. THE UNDERSIGNED FURTHER UNDERSTANDS THAT IN gDDIT10N TO GIVING LENDER THE RIGHT TO ENTER JUDGMENT AGAINST DECLARANT WITHOUT ADVANCE NOTICE OR A HEARING, THE CONFESSION OF JUDGMENT PROVISION IN THE NOTE ALSO CONTAINS LANGUAGE THAT WOULD PERMIT LENDER, AFTER ENTRY OF JUDGMENT, AGAIN WITHOUT EITHER ADVANCE NOTICE OR A HEARING, TO EXECUTE ON THE JUDGMENT BY FORECLOSING UPON, ATTACHING, LEVYING ON, TAKING POSSESSION OF OR OTHERWISE SEIZING DECIARANT'S PROPERTY, IN FULL OR PARTIAL PAYMENT OF THE JUDGMENT. IN EXECUTING THE NOTE, BEING FULLY AWARE OF pECLARANT'S RIGHTS 70 ADVANCE NOTICE AND A HEARING AFTER JUDGMENT IS ENTERED AND BEFORE EXECUTION ON THE JUDGMENT, THE UNDERSIGNED, ON BEHALF OF THE DECLARANT, IS KNOWINGLY, INTELLIGENTLY AND VOLUNTARILY WANING THESE RIGHTS, AND THE UNDERSIGNED EXPRESSLY AGREES AND CONSENTS TO LENDER'S IMMEDIATELY EXECUTING ON THE JUDGMENT IN ANY MANNER PERMRTED BY APPLICABLE STATE AND FEDERAL LAW, WITHOUT GNING DECLARANT ANY ADVANCE NOTICE. C. AFTER HAVING READ AND DETERMINED WHICH OF THE FOLLOWING STATEMENTS ARE APPLICABLE, SY INITIALING EACH STATEMENT THAT APPLIES, THE UNDERSIGNED REPRESENTS THAT: lNIT1ALS (_U~(r') 1. DECLARANT WAS REPRESENTED BY DECLARANT'S OWN INDEPENDENT LEGAL COUNSEL IN CONNHCTION WITH THE NOTE. 2. A REPRESENTATNE OF LENDER SPECIFICALLY CALLED THE CONFESSION OF JUDGMENT PROVISION IN THE NOTE TO DECLARANT'S ATTENTION. THIS DISCLOSURE IS GNEN UNDER SEAL AND R IS INTENDED THAT THIS DISCLOSURE IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. DECLARANT: ELITE MANAOI EN AL AGENCY, LLC By, ea Rus~er R. or, Manager of to Managing General Agsncy_ ,LLC By: ,L(,.11nCiV (Seal) Christopher C. Naylor, Ma gar of Elite Managing General Agency, LLC ~"'~l B , Seal) it Scott C. Penwell, Manager of Elite Manag ng General Agency, LLC WMIMO l,.r~- Vw. 51SN.Mt Oqc MnwM Ib,W tMllw. K IA/.7N1. M IMM~ II,rML . M IlM07Yfa0~l11011JC Tlhiq FlFD SUBORDINATION AGREEMENT (Continued) Page 2 CREDiTOR'S WAVERS. Creditor waives any right to require Lender. (Aj to make, extend, renew, or modify any loan to Borrower or to greet any other flnandal accommodations 1n Borrower whatsoever, (B) to make any presentment, protest, demand, or nofkx of any kind, Induding notice of any nonpayment of the Superior Indebtedness or of any nonpayment related to any Security Interests, or notice of any action or rwnedbn on the part of Borrower, Lender, any surety, endorser, or other guarantor In connection with the 8uperlor Indebtedness, or in coratection with the creation of new or additional Superior Indebtedness; {C) to resort for payment or to proceed directly or et once against any person, Induding Bortower; (D) to proceed directly against or exhaust any Securtty Interests held by Lender from Borrower, any other guarantor, or any other person; (E) ib give notice of the teens, time, and place of any public or prtvale sale of personal property security held by Lender from Borrower or to comply with any other applicable provsions of the Uniform Commerolal Code; (F) to pureue any other remedy within Lender's power, or (G) to commtt any act or omission of any kind, of any time, with respect to any matter whatsoever, LENDER'S RIGHTS. Lender may take or omit any and all actions with respect to the Superior Indebtedness or any Security interests for the Superior indebtedness without affecting whatsoever any of Lender's rights under this Agreement, In particular, without limitation, Lender may, wfthout notice of any kind to Creditor, (A) make one or more addlUonel secured or unsecured loans to Borrower, (B) ropeatedly sitar, compromise, renew, extend, accelerate, or otherwise change the time for payment or other terns of the Superior Indebtedness or any part thereof, lnduding increases and decreases of the rate of Interest on the Superior Indebtedness; extensions may be repeated and may be for longer than tho original loan term; (C) take and held Security Interests for the payment of the Superior indebtedness, and exchange, enforoe, waive, and Telease any ouch Security Interests, with or without the substitution of new cdlateral; (D) release, substitute, agree not to sue, or des! with any one or more of Borrower's sureties, endorsers, or guarantors on any terms or manner Lender dwosee; (E) determine how, when and what appUcation of payments and credits, shall be made on the Superior Indebtedness; (F) apply such security and direct the order or manner of sale theroof, as Lender in Its discretion may detertnlne; and (G) assign this Agreement in whole or In part. DEFAULT BY BORROWER. If Borrower becomes lnsdvent or bankrupt, this Agreement shall remain In full force and effect. Any default by Borrower under the terms of the Subordinated Indebtedness also shall constitute an event of default under the terms of the Superior Indebtedness in favor of Lender. DURATION AND TERMINATION. This Agreement will take effect when received 6y Lender, without the necessity of any acceptance by Lender, in writing or otherwise, and will remain fn full foroe and effect until Creditor shall notify Lender in writing at the address shown above to the contrary. Any such notice shall nd effect the Superior Indebtedness owed Lender by Borrower at the time of such notice, nor shall such notice affect Superior Indebtedness thereafter granted in compilerwe with a commitment made by Lender to Borrower prior to receipt of such notice, nor shall such notice effect any renewals of or subatltutions for any of the foregoing. Such notice shall affect only Indebtedness of Borrower to Lender arising after receipt of such notice and not arising from flnanda! assistance granted by Lender tp Borrower in compliance with Lender's obligations under a oornmitment. Any notes lodged with Lender pursuant to the section titled "Creditor's Notes" above need not be returned untN this Agreement has no further force or effect. MISCELLANEOUS PROVtS10NS. The following miscellaneous provisions are a part of this Agreement: Amendments. 'This Agreement, together wkh arty Related Documents, constitutes the entire underetanding and agreement of the pertiea as to the matters set forth In this Agreement. No alteration of or amendment to this Agreement shall be effective unless gNen in writing and signed by the party or parties sought to be charged or bound uy the alteration or amendment Attorrwys' Fees; Expanses. Creditor egress to pay upon demand all of Lender's costs and expanses, lnduding Lender's reasonable attorneys' less and Lender's legal expenses, incurrod In connection with the entor~menf of this Agreement. Under may hire or pay someone else to help ~torce this Agreement, and Creditor shall pay the costs and expenses of such enforcement Coats and expenses include Lender's reasonable attorneys' fees end legal expenses whether or not there is a lawsuit, Induding reasonable attorneys' fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or Injunction), appeals, and any anticipated post judgment collection services. Creditor also shall pay all court costs and such additlonal fees as may be directed by the court. Authority, The person who signs this Agreement as or on behalf of Creditor represents and warrants that he or she has authority to execute this Agreement and to subordinate the Subordinated indebtedness and the Creditor's security interests !n Greditor's property, if any. Caption Headings. Captlon headings in this Agreement are for oonvenlence purposes only and are not to be used to interpret or define the provlafons of this Agreement Governing Law. This Agreement will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, thv laws of tlw Commonwealth of Pennsylvania without regard to Its conflicts of law provisions. Thle Agreement has been accepted by Lender in the Commonwealth of Pennsylvania. Choice of Venue. If there is a lawsuk, Creditor agrees upon Lender's request to submit to the jurisdiction of the courts of Montgomery County, Commonwealth of Pemsylvania. . Interpretation. In all cases where there Is more than one Credftor, then ell words used In this Agreement In the singular shall be deemed to have been used in the plural where file context and construction so require; and where there is more than one Creditor Hamad In this Agreement or when this Agreement is executed by more than one ,the words "Credtor" shall mean ell and any one or more of them. Reference to the phrase "Creditor" Includes the heirs, successors, assigns, and transferees of each of them. Succssaors and Assigns. This Agreement shall be understood to be for the benefit of Lender and for such other person or persons es may from time to time become or be the hdder or owner of any of the Superor indebtedness or any Interest therein, and this Agreement shalt be trensfereble to the aeme extent and with the same tore and effect as any such Superior Indebtedness may be transferable. No Walwr by Lender. Lender shall nd be deemed to have waived any rights under this Agreement unless ouch waiver to given In writing and signed by Lender. No delay or omisalon on the part of Lender in exerdsing any right shall operate ac a waiver of such right or any other right. A waiver by Lender of a provision of this Agreement shall not prejudice or conattuta a waiver of Lender's right otherwise to demand atrid compliance with that provision or any other provision of this Agreement. No prior waiver by Lender, nor any course of dsaNng between Lender end Creditor, shall constltute a waiver of any of Lender's rights or of any of Credftor+s obligations as to any future transactions. Whenever the consent of Lender is required under this Agreement, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent Is required and in ell cases such consent may be granted or withheld in the sole dlecretion of Lander. DEFINTTION5. The folbwing capitalized words and terms shall have the following meanings when used in this Agreement. Unless spedflcally stated to the contrary, all references to dollar amounts shall mean amounts ]n lawful money of the United States of America. Words and terms used !n the singular sheN Inck~de the plurel, end the plurel ahaU Include the singular, as the context may require. Words and terms not otherwise deftned in this Agreement shall have the meanings attributed to such terms in the Uniform Commercial Code: Agreement. The word "Agreement` means this Subordination Agreement, as this Subordination Agreement may be amended or modified SUBORDINATION AGREEMENT (Continued) Page s from Ume to Ume, together wkh all exhibits and sdtedules attached to this Subordinatlon Agreement from time to Ume. Borrower. The word "Borrower" means Elite Managing General Agency, LLC and indudea all co-signers and co-makers signing the Note and alt their suoceesore and assigns. Creditor. The word "Creditor" means Egte Group, LLC. Lender. The word `Lender" means Fox Chase Bank, Its successors end assigns. Note. The word "Note" means the Note executed by Eiie Managing General Agency, LLC In the principal amount of $75,000.00 dated March 2, 2011, together with all renewals of, eMenslona of, modlflcaUons of, reflnandngs of, consolidations of, and substitutions for the note or credit agreement. Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guarenties, seaulty agreements, mortgages, deeds of trust, severty deeds, ooNateral rtrortpagas, and all other lnatruments, agreements end documents, whether now or hereafter existing, executed In wnnectlon with the Superior Indebtedness. Security Interest. The words "Security Interest' mean, without Nmltation, any end all types of collateral severity, present and' future, whether In the form of a pen, charge, encumbrance, mortgage, dAed of trust, security deed, assignment, pledge, crop pledge, chattel mortgage, collateral chattel mortgage, chattel trust, factor's Ilan, equipment trust, corrdltlonal sate, trust receipt, Ifen or title retentlon contract, lease or i~nsignment intended as a security device, or any other security or lien interest whatsoever whether created by law, contract, or otherwise. Subordinated indebtedness. The words "Subordinated Indebtedness" mean the Indebtedness described in the section of this Agreement titled "Subordinated Indebtedness". Superior Indebtedness. The words "Superior Indebtedness" mean the indebtedness described in the section of this Agreement titled "Superior indebtedness". BORROWER AND CREDROR EACH ACKNOWLEDGE HAVING READ ALL THE PROVISIONS OF THIS SUBORDINATION AGREEMENT, AND BORROWER AND CREDITOR EACH AGREE TO ITS TERMS. THIS AGREEMENT 1S DATED MARCH 2, 2091. THIS AGREEMENT IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS AGREEMENT IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING 70 LAW. BORROWER: ELITE MANAG NiBiAI. AGENCY, LLC gy; {Baal) usse ay or, M ager_ Eike Managing Generel envy LLC gy; Seal) Scott C. Penwell, Manager o Elite Managing General Agency, LLC CREDITOR: By: ~ ~ Seal) . Chrfstop ar C. ay or, M Hagar Q~ t€i~'anaTg General Agency, LLC ELITE GROUP. By; ~~'~~ __~Seal) Authorized S goer for Elite Group, LLC By: (Seal) Authorized Signor for Elite Group, LLC wa r,m t.iar. w. aarmao: ewc aw ar.aw Yb"r. "w. +ni.1r,,. M nyir "wws . r" rw,aunavrrw».~e n,an "kn SUBORDINATION AGREEMENT Borfower: Elite Managing Ganerel Agency, LLC LendeC Fox Chess Bank 191 Sheroe Boulevard 4390 Davlsv111e Rosd Exton, PA 19341 Hatboro, PA 19040-2544 Creditor: Elite Brokerage Services, Inc. 191 Shares Blvd, Sufte 202 Exton, PA 19341 THIS SUBORDINATION AGREEMENT dated March 2, 2011, Is made and executed among Elite Managing General Agency, LLC; 191 Sheroe Boulevard; Exton, PA 18341 ("Borrower'; EOte Brokerage Services, Inc,; 181 Shares Blvd., Suite 202; Exton, PA 18341 ("Credltor'~; and Fox Chase Bank, 4390 Davlsvtlle Road, Hatboro, PA 19040-2544 ("Lender"}. CURRENT lNDEBTEDNESS OWING TO CREDITOR. As of the date of this Agreement, Borrower Is Indebted to Creditor in the aggregate amount of 5390,000.00. This amount is the total Indebtedness of every kind from Borrower to Creditor. REQUESTED FINANCIAL ACCOMMODATIONS. Creditor and Borrower each want Lender to provide financial acconunodations to Borrower In the form of (A) new wedit or loan advances, (B) an extension of flme to pay or other compromises regarding all w part of Bwrowers present irxlebtedrtass to Lender, w {C} other benefits to Borrower. Bwrower and Creditor each represent and sdcnowladge to Lender that Creditor w111 benefit es a result of these financal accommodations from Lender to Borrower, and Creditor acknowledges receipt of valuable consideration for entering Into this Agreement. Bacsd on the representations and acknowledgments contained in this Agreement, Borrower and Creditor agree with Lender as follows: SUBORDINATED INDEBTEDNESS. The words "Subordinated Indebtedness" as used in this Agreement mean all present and future indebtedness, obligations, Ilabflities, claims, rights, and demands of any kind which may be now w hereafter owing from Borrower to Creditor. The term "Subordinated Indebtedness' is used in Its broadest sense and indudes without Iimitetlon al! principal, sIl Interest, all costs, reasonable attorneys' fees, all sums patd for the purpose of protecting the rights of a holder of securfty, all contingent obligations of Bwrower (such as a guaranty}, and all other obligations, secured w unsecured, of any nature whatsoever. SUPERIOR INDEBTEDNESS. The words "Superior Indebtedness" es used in this Agreement mean and indude all present and future Indebtedness, obligations, Ilabdldas, Balms, rights, and demands of any Wnd which may be now w hereafter owing from Borrower to Lander. The term "Superior indebtedness" is used in its broadest sense and Includes without limltetton all prfndpat, sIl Interest, all costs, reasonable ettwneys' tees, all sums paid for the purpose of protecting Lender's rights in security (such ea paying for Insurance on collateral If the owner fads to do so), ell contingent obligations of Borrower (such as a guaranty), ail obligations arising by reason of Borrower's acryrounts with lender (such as an overdreft on a cheddng account), and all other obligations of Borrower to Lender, secured or unsecured, of any naturo whatsoever, SUBORDINATION. All Subwdinated Indebtedness of Bwrower to Credttor is and ahaA be subordinated in ail respells to al! Superior Indebtedness of Borrower to Lender. If Creditor hdda one or more Security Interests, whether now existing w hereafter acquired, in any of Borrower's real property w personal property, Creditor also subordinates all Credttors Security interests to all Security Interests held by Lender, whether now existing or hereafter acquired. PAYMENTS TO CREDITOR. Borrower will not make and Creditor will not accept, et any time while any Superior Indebtedness Is owing to Lender, (A) ~ any payment upon any Subordinated Indebtedness, (B) any advance, transfer, ar assignment of assets to Creditor in any form whatsoever that would reduce at any time or In any way the amount of Subordinated Indebtedness, w (C) any trensfer of any assets as security for the Subordinated Indebtedness, except upon Lenders prior written consent In the event of any dtstributlon, division, w application, whether partial or complete, voluntary w Invduntary, by operation of law w otherwise, of all w any part of Borrower's assets, or the proceeds of Borrower's assets, in whatever form, to creditors of Borrower or upon any indebtedness of Borrower, whether by reason of the Ilquldetion, dissolution or other winding-up of Borrower, or by reason of any execution sale, retx+iverehip, insolvency, w banlwptcy proceeding, assignment for the txjneflt of creditors, proceedings for reorganization, or readjustment of Borrower or Borrowers properties. then and In such event, (A) the Superior Indebtedness shall be paid in full before any payment is made upon the Subordinated Indebtedness, end (B) all payments and distributions, of any kind w character and whether in cash, property, or securities, which shall be payable or delivsreble upon or in respect of the 5ubordinatsd Indebtedness shall be paid w deivered directly to Lender for application in payment of the amounts then due on the Superior indebtedness until the Superior Indebtedness shall have been paid in full. In order that Lender may establish Its right to prove claims end recover for Its own awount dividends based on the Subordinated indebtedness, Creditor does hereby assign all Its right, title, and interest in such claims to Lender. Credttor further agrees to supply such information and evidence, provide access to and copies of such of Creditor's rocords as may pertain to the Subonilnated Indetedness, and execute suds Instruments ae may be required by Lender ib enable Lender to enforce all such claims and ~Ueat all dividends, payments, w other disbursements whk:h may be made on account of the Subordinated Indebtedness. For such purposes, Creditor hereby Irrevocably authorizes Lender in Its discretion to make and present for or on behalf of Creditor such proofs of claims on account of the Subordinated Indebtedness as Lender may deem expedient and proper and to vote such claims in arty such proceeding end to receive and collect any and all dividends, payments, w other distwreements made thereon in whatever form the same may be paid w Issued and to app} the same on account of the, Superior Indebtedrtesa. Should any payment, distribution, security, or proceeds thereof be received by Creditor et any time on the Subordinated Indebtedness contrery to the terms of this Agreement, Creditor Immediately will deliver the same to Lender In predssly the form receNed (except for the endorsement or assignment of Creditw If necessary), for appllcadon on or to secure the Superior Indebtedness, whether tt la due or not due, and until so delivered the same shall be held in trust by Croditor as property of Lender. in the event Creditw falls to make any such endorsement or esslpnment, Lender, or any of Its officers on behalf of Lender, Is hereby Irrevocably authorized by Creditor to make the same. CREDITOR'S NOTES, Creditor agrees to deliver to Lender, at Lenders request, ail notes of Borrower to Crodltor, or other evidence of the Subordinated indebtedness, now held w hereafter acquMed by Creditor, while this Agreement remains In effect At Lenders regwst, Borrower also will execute and deliver to Creditor a promissory note svidendng any book account or Balm now or hereafter owed by Borrower to Creditor, which note also shall be delivered by Creditor to Lender. Creditor agrees not to sell, assign, pledge or otherwise transfer any of such notes except subJect to all the terms and conditions of this Agreement CREDITOR'S REPRESENTATIONS AND WARRANTIES. Creditor represents and warrertts to Lender that: (A) no representations or agreements of arty kind have been made to Creditor which would iimft or qualify in anyway the tornts of this Agreement; (B} this Agreement la executed et Borrowers request and not at the request of Lender, (C) Lender has made no representation to Creditw es to the creditworthiness of Bonovver; and (D) Creditor has established adequate means of obtaining from Borrower on a continuktg basis information regarding Borrowers firtandel condition. Creditw agrees to keep adequately informed from such means of any facts, events, or circumstances which might in any way affect Creditors risks under this Agreement, and- Creditor further agrees that Lender shall have na obligation to disclose to Creditor infonnatbn or material acquired by Lender In the couree of its relationship with Borrower. SUBORDlNA710N AGREEMENT (Continued) Page 2 CREDlTORB WAIVERS, Credtor valves any right to require Lender. (Aj to make, extend, renew, or modify any ban to Borrower or to grant any other flnandal accommodatlona to Borrower whatsoever, (B) to make any presentment, protest, demand, or notice of any kind, Induding notice of any nonpayment of the Superior indebtedness or of any nwnpayment related to any 5ectrrlty lnterosts, or notlce of any action or nonacdon ~ the part of Borrower, Lender, any surety, endorser, or other guarantor In connection with the Superior Indebtedness, or in connector with the aeatbn of new or additional Superior Indebtednsas; (C) to resort for payment or to proceed directly or at once against any person, Induding Borrower, (D) to proved directly against or exhaust any Security Interests held by Lender from Borrower, any other gueretU>Dr, ar any other person; (E) to ghre notce of the terms, t(me, and place of sny public or private sale of peroonel property securky held by Lender from Borrower or to comply with any other applicable provisions of the Uniform Commerdal Code; (F) to pursue any ether remedy wkhln Lender's power, or (G) to commit any act or omission of any kind, at arty Ume, with respect to any matter whatsoever. LENDER'S RIGHTS. Lender may take or omit any and all actions with respect to the Superior Indebtedness or any Security interests for the Superior Indebtedness without affeding whatsoever any of Lenders rights under this Agreement. In particular, without limitation, Lender may, without notice of any kind to Credtor, (A) make one or more additional secured or unsecured loans to Borrower; (B) repeatedly alter, compromise, renew, extend, accelerate, or otherwise change the Ume for payment or other terms of the Superior Indebtedness or any part thereof, Induding Increases and decreases of the rate of Interest on the Superior Indebtedness; extensions may be rapQated and may be for longer than the original ban tens; (C) take end hold Security Interests for the payment of the Superior Indebtedness, end exchange, enforce, Where, and release arty such Security Interests, with or wthout the subsdtutlon of new cdlaterel; (D) release, substitute, agree not to sue, or deaf with any one or more of Borrowers sureties, endorsers, or guarantor: on any terms or manner Lender chooses; (E) determine how, when and what application of payments and credits, shall be made on the Superkx Indebtedness; {F) apply such secrxlty ahd direct the order or meaner of sale thereof, as Lender In its discretion may determine; and (G) assign this Agreement in whole or In part. DEFAULT BY BORROWER. if Bortower beoornes Insdvent or bankrupt, this Agreement shaA remain In full force and effect. In the event of a corpoate reorganlzatlon or corporate artangement of Borrower under the provisions of the Bankruptcy Code, es amended, this Agreement shall remain In full force and effect and the court having juriadbtlon over the reorgar>izatlon or arrangement is hereby authorized to preserve such priority and subordlnaUon provided under this Agreement in approving any such plan of reorganlzatlon or arrangement Any default by Borrower under the terms of the Subordinated Indebtedness also shall constitute an event of default under the farms of the Superior Indebtedness In favor of Lender. DURATION ANO TERMINATION. This Agreement will take effect when recx~lved by Lender, without the necessity of any acceptance by Lender, In writing or otherwise, and will remain In full force and effect until Creditor shall notify Lender in writing at the address shown above to the rrontrery. Any such notice shall not affect the Superior indebtedness owed Lender by Borrower at the Ume of such notice, nor shalt such notice effect Superior Indabtednesa thereafter granted in compliance wkh a commkment made by Lender to Borrower prbr to recut of such notice, nor sheN suds notice affect any renewals of or substttutlons for any of the foregoing. Such notice shall effect only Indebtsdrrosa of Borrower to Lender arising after receipt of such notice and not arising from flnandal easistarxx~ granted by Lender to Borrower in compliance with Lenders obllgstlons urxler a commkment Any notes lodged with Lender pursuant to the sectbn tkled "Creditors Notes" above need not be returned urltll thin Agreem~rt has no further ~rce or effect. MISCELLANEOUS PROVISIONS. The following miaceileneous provisions are a part of this Agreement: Amendments. fits Agreement, together with any Related Documents, conatltutes the etrtire understanding end agreement of the parties „ as to the matters set forth in this Agreement No akeretbn of or amendment to this Agreement shall be effectlve unless given In writing and signed by the party or parties sought to be charged or bound by the akeretbn ar amendment. Attorneys' F®es; Expanses. Creditor agrees to pay upon demand all of Lender's costs and expenses, Induding Lenders reasonable attorneys' fees and Landers legal expenses, Incurred In r;onnectbn with the enforcement of this Agreement. Lander may hire or pay someone else to help enforce this Agreement, and Creditor shag pay the costs and expenses of such enforcement. Costs and expenses indude Lenders reasonable attorneys' fees and legal expenses whether or not there Is a lawsuit, Induding reasonable attorneys' fees and legal expenses for bankruptcy proceedings (Including efforts to modify or vacate any automatic stay or InJunctlon), appeals, and any anticipated post Judgment collection services. Creditor also shall pay all court costs and such additional tees as may be directed by the court. Authority. The person who signs this Agreement as or on behalf of Creditor represents and warrants that he or she has authority io execute this Agreement and to subordinate the Subordinated Indebtedness and the Creditors security Interests In Creditors property, If any. Caption Headings. Caption headings in this Agreement are for convenience purposes only and ere not to be used to interpret or define the provisions of this Agreement Governing Law. This Agreement will be governed by federal law applicable to Lander and, to the extant not preempted by federal law, the laws of the Commonwealth of Pennsylvania wthout regard to its conflicts of law provisions. This Agreement has been accepted by Lender in the Commonwealth of Pennsylvania. Chotca of Venue. ff there is a lawsuit, Credtor agrees upon Lenders request to submk to the jurisdiction of the courts of Montgomery County, Commonwealth of Pennsylvania. Interpretation. In ail cases where there is more than one Creditor, then all words used In this Agreement in the singular shall be deemed to have been used in the plural where the context end construction sc require; and where there Is more than one Creditor named In this Agreement or when this Agreement is executed by more then one ,the words "Creditor" shalt mean ail and any one or more of them. Reference to the phrase "Credkor" includes the heirs, successors, assigns, and transferees of each of them. Successors and Assigns. Thta Agreement shall be understood to be for the benefit of Lender and for such other person or persons as may from Ums to Ume become or be the hddar or owner of any of the Superior Indebtedness or any interest theroln, and this Agreement shall be transferable to the same extant and with the same force and effect as any such Superior Indebtedness may be trenafereble. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Agreement unless such waiver is given in writing and signed by Lender. No delay or omission, on the part of Lender in exerdainp any right shall operate es a waiver of such right or any other right A waiver by i.ender of a provision of this Agreement shaA not preJudice or constitute a waiver of Lender's tight otherwise to demand strld compliance with that provision or any other provision of this Agreement No prior waiver by Lander, nor any course of deagng between Leader and Credkor, shell constitute s waiver of any of Lenders rights or of any of Creditors obtlgatkxis as to any future trensadfons. Whenever the consent of Lender Is required under this Agreement, the grenUng of such consent by Lender in any Instance shall not constitute continuing consent to subsequent Instances where such consent Is required and in ail cases such consent may be granted or withheld in the sole dlacretlon of Lender. DEFlNITIONS. The following capitalized words and terms shall have the following meanings when used In this Agreement Unless spedflcally stated to the contrary, alt references to dollar amounts shall mean amounts in iawfut money of the United States of America. Words and terms SUBORDINATION AGREEMENT (Continued} Page 3 used in the alrtgular shah lnduda the plural, end the plural shall indude the singular, as the context may require. Words and terms not otherwise defined In this Agreement shall have the meanings etMbuted to such tertna in the Unitorrn Commerdel Code: Agreement. The word 'Agreement means thb Suborclinatlon Agroement, ea this Subordinaton Agreement may be amended or modffled from time to tlme, together with all exhibits and schedules attached to this Subordination Agreement from time to time. Borrower. The word "Borrower" means Epta Managing Ganerat Agency, LLC and Includes ail co-signers end co-makers signing the Note and aN thek successors and assigns. Creditor. The word "Creditor" means Elite Brokerage Services, Inc. Lander. The worcJ "Lender" means Fox Chase Bank, its successors and assigns. Note. The word "Note" means the Note executed by Elite Managing General Agency, LLC In the prindpal amount of $75,000.00 dated March 2, 2011, together with ell renewals of, extensions of, modfflcatk7ns of, reflnandngs of, consolidations of, and substitutions for the note or credit agreement. Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, lose agreements, environmental agreements, guaren<les, security agememerts, mortgages, deeds of trust, security deeds, codateref mortgagee, and all other Instruments, agreements and documents, whethtrr now or hereafter existing, executed In connection with the Superior Indebtedness. Security Interest. Tha worts "Security Interest mean, without Ilmltatbn, any end all types of cotlatarel security, present and future, whether in the form of a Ilan, charge, encumbrance, mortgage, deed of trust, security deed, assignment, pledge, crop pledge, chattel mortgage, ootiaterai chattel mortgage, chattel trust, tailor's lien, equipment trust, conditional sale, trust receipt, Nan or title retention contract, lease or consignment Intended as a security device, or any other security or Ifen Interest whatsoever whether created by law, contract, or otherwise. Subordinabd Indebtedness. The words "Subordinated Indebtedness" mean the indebtedness described in the section of this Agreement Utled "Subordinated Indebtedness". Superior Indebtedness. The words "Superior Indebtedness" mean the Indebtedness described to the section of this Agreement titled "Superior Indebtedness". BORROWER AND CREOROR EACH ACKNOWLEDGE HAVING READ ALL THE PROVISIONS OF THIS SUBORDINATION AGREEMENT, AND BORROWER AND CREDROR EACH AGREE TO ITS TERMS. THIS AGREEMENT IS DATED MARCH 2, 2011. THIS AGREEMENT IS GIVEN UNDER SEAL AND ff 18 INTENDED THAT THIS AGREEMENT IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. BORROWER: ELITE MAN _ G G ERAL AGENCY, LLC By: " (Seal) Russell R. Naylor, Manager of E its Managing Genwal Agency LLC By:--_- ~ Seal) Scott C. Penwell, Manager o Elite Manag ng General Agency, LLC CREDITOR: By: ~ r^ Seal) Christopher C. Naylo Manager or EI(te Managing General Agency, LLC ELITE GE SERVICES, INC. By:. Sealj Authorize S goer for its Brokerage Services, Inc. By: Seal) A Signer r EIIW Bro Brags Services, Inc. Wet FIO N„io, W. ~.Md0.0~7 ML IYW Ilr~fr MiM. M i^A.7M,. N lyr MwwL • M IlIIO~Yel101{IU/IL1C i11dR M4q ~~ COMMERCIAL GUARANTY Borrower: Elite Managing General Agency, LLC Lender: Fox Chaos Bank 191 Sttorea Boulevard 4390 Davisvi(le Road Exton, PA 19341 Hatboro, PA 19040-2544 .Guarantor: scoff c. Penwell 400 Bear brlve Enola, PA 17025 CONTINUING GUARANTEE OF PAYMENT AND PERFORMANCE. For good and valuable consideration, Guarantor absolutely and un~ndidonetly guarantees full and punctual payment and sadafactlon of Guarantors Share of the Indebtedness of Borrower to Lander, end the performance and discharge of ell Borrower's obligations under the Note end the Related Documents. Thla Is a guaranty of payment and perlomtance end not of collection, so Lender can enforce this Guaranty against Guarantor even when Lender has not exhausted Lender's remedies against anyone else obligated to pay the Indebtedness or against any collateral securing the Indebtedness, thts Guaranty or any other guaranty of the Indebtedness. Guarantor will make' any payments to Lender or its order, on demand, In legal tender of the UNtad 5tatas of America, in same-day funds, without set-off or deduction or counterclaim, and will otherwise perform Borrower's obligations under the Note end Related Documents. Under this Guaranty, Guarantor's obtigatbns are continuing. INDEBTEDNESS. The wont "indebtedness" as used in this Guaranty means all of the prindpal amount outstanding from time to time and at any one or more times, aartted unpaid Interest thereon and all wtiedion costs and legal expenses related thereto permitted by law, reasonable attorneys' fees, arising from any end all debts, liabilldes and obRgadons of every nature or form, now etdsdng or hereafter arising or acquired, that Borrower IndlviduaAy or coHedively or Interchangeabty with others, owes or will owe Lender. "Indebtedness" Includes, without Ilmitation, loans, advances, debts, overdraft Indebtedness, credit card indebtedness, lease obllgadone, Ilabllities and obligators under any interest rete protection agreements or foreign currency exdtange agreements or commodity price protection agreements, other obligations, and liabllitles of Borrower, and arty present or future Judgments against Borrower, future advances, bans or trensadions that renew, extend, modify, refinance, wnsdfdate or substitute these debts, IiabAttles and obligations whether. voluntarily or involunterlly incurred; due or to become due by their terms or acceleration; absdute or contingent; Iiquldated or unliquldatad; determined or undetermined; direct or Indirect; primary ar secondary in nature or arising from a guaranty or surety; secured or unsecured; Joint or severel or joint and several; evidenced by a negotiable or non-negotiable instrument or writing; originated by Lender or another or others; barred or unenforceable against Bonnwar far any reason whatsoever; for any transactions that may be voidable for any reason (such as Infancy, Insanity, ultra vitas or otherwise): and originated then reduced or extinguished and then afterwards Increased or reinstated. If Lender presently hdds one or more guaranties, or hereafter receNea additional guaranties from Guarantor, Lender's rights under all guaranties shall be cumulatNe. This Guaranty shall not (unless spedflcally provided below to the contrary) affect or invalidate any such other guaranties. Guaantors Bebiilty will be Guarantor's aggregate liability under the teens of this Guarenty and any such other untemtinated guaranties. GUARANTOR'S SHARE OF THE INDEBTEDNESS. The words "Guaantors Share of the Indebtedness" 8s used In th(s Guarerriy mean an amount not 1o exceed Seventeen Thousand Five Hundred & 00/100 Dollars ($17,ti00.00) of the prfndpal amount of the Indebtedness that is outstanding from time to time and at any one or more dines. "Guarenbr's Share of the Indebtedness" also includes all accrued unpaid interest on the Indebtedness and all ootiedlon costs, expenses and roaeonabla attorneys' fees whether or not there la a lawsuit, and if there is a lawsuit, any fees and costs for trial and appeals paid or Incurred by Lender for the colbdlon of the Indebtedness, the realization on any collaterel securing the lndebtednese or any guaranty of the indebtedness (Including this Guaranty), or the enforcement of ihls Guaranty. Guarantor's Share of the indebtedness will only be reduced by sums actually paid by Guarantor under this Guaranty but wAl not be reduced by sums from any other source induding, but not limited to, sums realized from any collateral securing the Indebtedness or this Guaranty, or payments by anyone other than Guarantor, or redud9one by operation of law, judidal order or equitable prindples. Lender has the sole and absoute discretion to determine how sums shall tie applied among guarondas of the Indebtedness. The above limitation on liability is not a restriction on the amount of the Note of Borrower to Lender either In the aggregate or at any one time. CONTINUING GUARANTY. THIS IS A "CONTINUING GUARANTY" UNDER WHICH GUARANTOR AGREES TO GUARANTEE THE FULL AND PUNCTUAL PAYMENT, PERFORMANCE AND SATISFACTION OF THE GUARANTOR'S SHARE OF THE 1NDEBTEDNESS OF BORROWER TO LENDER, NOW EXISTING OR HEREAFTER ARISING OR ACQUIRED, ON A CONTINUING BASIS. ACCORDINGLY, ANY PAYMENTS MADE ON THE INDEBTEDNESS WILL NOT DISCHARGE OR DIMINISH GUARANTOR'S OBLIGATIONS AND LIABILITY UNDER THIS GUARANTY FOR ANY REMAINING AND SUCCEEDING INDEBTEDNESS EVEN WHEN ALL OR PART OF THE OUTSTANDING INDEBTEDNESS MAY BE A ZERO • BALANCE FROM TIME TO 71ME. DURATION OF GUARANTY. This Guaranty wilt take affect when received by Lender without the necessity of any acceptance by Lender, or any relics to Guarenbr or tp Borrower, end will continue in full force until ail the indebtedness incurred or contracted before receipt by Lender of any notice of revocation shaA have been fully and finally paid and satisfied and all of Guarantors other obligations under this Guaranty shall have bean pertorrned in full. If Guarantor efts to revoke this Guaranty, Guaantor may only do so in writing. Guarantors written notice of revocation must be mailed to Lender, by cerdfled ma8, et Lender's address listed above a such other place as Lender may designate in writing. Written revocation of this Guaranty will apply only to new irtdebtedrtess created after actual roceipt by Larder of Guarentors written revocatbn. For this purpose and without 1lmitetlon, the tens "new Indebtedness" does not Include the indebtedness which at the lima of relics of revocation Ia wMingsrrt, uNtgrtidated, undetermined or not' due and which later becomes absolute, Ilquidatad, detemdned or due, Fw this purpose and without Ilmitadon, "new Indebtedness" does not include all or part of the indebtedness that Is: incumed by eonnwer prior to revocation; incurred under a commitment that became binding before tevocation; arty renewals, extensions, substitutions, and modificetbns of the Mdobtedness. This Guaranty shall bind Guarantors estate as to the Indebtedness created both before and after Guarantors death or in~pactty, rogardieas of Lender's actual notice of Guarantor's death. Subject to the foregdng, Guarantor's executor or adminish'ator or other legal reprtasentatlve may terminate this Guaranty in the same manner In which Guarantor might have terminated it and with the same effect Release of any other guarantor or terminedon of any other guaranty of the Indebtedness shall not affect the tlabtiity of Guarantor under this Guaranty. A rovocation Lender receNes from any one or more Guarantors shell not affect the liability of any remaining Guarantors under this Guaranty. It is anticipated that fluctuations may occur in the aggregate amount of the Indobtednoea eovorod by this Guaranty, and Guarantor speeificslfy acknawiedgos and agrees that reductions In the amount of the indebtedness, even to zero dollars ($0.00), shall not constitute a termination of this Guaranty. This Guaranty Is binding upon Guarantor and Guarentors heirs, successors and assigns eo long as any of the Guarantor's Share of the Indebtedness remains unpaid and even though the Guarantor's Share of the Indebtedness may from time to time be zero dollars (50.00). GUAtL4NTOR'S AUTHORtZAT10N TO LENDER. Guaantor authorizes Lender, either before or after any revocatlon hereof, without notice or demand and without lesserdng Guarantor's liability under this Guaranty, from time to limo: (A) prbr to revocation as set forth above, to make one or more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise to extend additional credd to.eorrower, (B) to after, compromise, renew, extend, accelerate, or otherwise. change one or more rimes the time for payment or other taints of the Indebtedness or any part of the Indebtedness, induding Increases and decreases of the rate of Interest on the COMMERCIAL GUARANTY (Continued) Page 2 Indebtedness; extensions may be repeated and may 6e for longer than the original ben term; (C) to take and hold security for the payment of thb Guaranty or the Indebtedness, and exchange, enforce, waive, subordinate, tall or deride not to perfect, and release any such security, with or without the substitution of new collaterel; (D) to release, substitute, agree not to sue, or deal with arty one or nroro of Borrowers sureties, endorsers, or other guarontora on any terms or in any roamer Lender may dxtose; (E) to determine flow, when and what application of payments and rxedits shall be made on the indebtedness; (F) to apply such security and direct the order or mariner of sale thereof, including rney clef Itermin~e~n(G) ~ eJlltlltransferB asslgnttodr Bryant ptartldpatlons Inoali orn any part~ofineai ceecea ease nd (H to asagn ore nsf~er this Guaranty in whole or In pert. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents end warrants to Lender that (A) no rapresentetlona or agroements of any kind have been made to Guarantor which would Iimlt or qualify in any way the terms of this Guaranty; (B) this Guaranty Is executed at Borrower's request and not at the request of Lender, (C) Guarantor has full power, right and authority to enter into this Guaranty; {p) the provisions of this Guaranty do not conflict with or result In a default under any agreement or other instrument Wnding upon Guarantor and do not result in a violation of any taw, regulation, court decree or order applicable to Guarantor, (E) Guarantor has not and will not, without the prior written consent of Lander, sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose oP ail or substantialy alt of Guarantors assets, or any interest therein; (F) upon Lenders request, Guarantor will provide to Lender financial and. credit informatbn kl form acceptable to Lender, and all such fnanclal information which currently has been, and all future finandal informatbn which will be provided to Lender is and wilt be true and correct in ail material respects and fairly present Guarantor's finandai condition as of the dates the flnandal information is provided; (G) no material adverse change has occurred in Guarantor's financial Condition since the date of the most recent ftnandal statements provided to Lender and no event has occurred which may materialy adversely affect Guarantors flnanclal oondltlon; (H) no iltigetbn, claim, investigation, administrative proceeding or similar action (tnduding those for unpaid taxes) against Guarantor is pending or threatened; (I} Lender has made no representation to Guarantor as to the creditworthiness of Borrower, and (J) Guaantor has established adequate means of obtaining from Borrower ort a corttinuing beats information regarding Borrower's ftnandal condition. Guarantor agrees to keep adequately Informed from such means of any facts, evertts, or circumstances which might in any way affeei Guarantors rlaks under this Guaranty, and Guarantor further agrees that Lender shall have no obligation to dlscbse to Guarantor any information or documents acquired by Lender in the course of its relationship with Borrower. GUARANTOR'S FINANCIAL STATEMENTS. Guarantor agrees to furnish Lender with the following: Tax Returns. As soon as available, but in no event later then 15 days after the applicable filing date for the tax reporting period ended, Federal and other governmental tax returns, prepared by a tax processional satisfactory to Lender_ Additional Requirements. Personal Financial Statement of the Guarantor to be sumbltted to the Lender annually All financial reports required to be.provided under this Guaranty shau be prepared In accordance with GAAP, applied on a consistent basis, and certified by Guarantor as being true and correct GUARANTOR'S WAVERS. Except as prohibited by applicable law, Guarentor waives any right to require Lender (A) to contlnue (ending money or to extarb other credit to Borrower, (e) to make any presentment, protest, demand, or notice of any kind, including notice of any nonpayment of the Indebtednsss or of any nonpayrttent related to any coileGaral, or notice of any action or nonactlon on the part of Borrower, Lertder, arty surety, endoroer, or other guarantor in connectbn with the Indebtedness or In connection with the croetlon of new or edditlonal. loans or obligetlons; (C) to resort for payment or to proceed directly or at once egalnst any person, including Borrower or any other guarentor, (D) to proceed directly against or exhaust any colaterel held by Lender from Borrower, any other guarantor, or any other person; {E) to gtye notice of the terms, time, and place of any public or private stile of peraonai property sacurky held by Lender from Borrower or to comply with any other applcable provisions of the Uniform Commercial Code; (F) to pursue any other remedy within Lenders power, or (G) to commit any act or omission of any kind, or et any time, wtth respect to any matter whatsoever. Guarantor also waives any and all rights or defenses based on suretyship or impalrtnent of collateral Irtciuding, but not limited to, any rights or defenses arising by mason of (A) any "one action" or 'anti-defidency" law or any other law which may prevent Lertder from brirtging any action, including a daart for deficiency, against Guarantor, before or after Lenders oommerxement or completion of any foreclosure acton, either judidaily or by exercise of a power of sale; (B} any election of romedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or Guarantors rights to proceed egalnst Borrower for reimbursement, including without Ilmitation, any loss of rights Guarantor may suffer by reeaon of any law 1}mtting, qualNytng, or discharging the Indebtedness; (C) any disability or other dsfenae of Borrower, of any other guarantor, or of any other person, or by reason of the cessaYan of Borrowers Ileblilty from any cause whatsoever, other than payment to full in legal tender, of the Indebtedness; (D} any right tb claim dlecharge of the Indebtedness on the basis of unJustifled impedrrnent of any colaterel for the Indebtedness; (E) any statute of IlmRatlons, if at any time any action or soft brought by Lender against Guarantor Is commenced, there Is outstanding Indebtedness which Is not ban'ed by any applicable statute of Ilmitations; or (F) arty defenses given to guarerttore et law or In equity other than actual payment and performance of the Indebtedness. If payment Is made by Borrower, whether voluntarily or othenvlae, or by any third party, on the indebtedness and ittareafter Lender is forced to remit the amount of that payment to Borrowers trustee in bankruptcy or to any similar person under any federal or state bankruptcy law or law for the relief of debtors, the Indebtedness shall be considered unpaid for the purpose of the enforcement of thle Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any cia}m of setoff, counterclaim, counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the eortower, the Guarantor, or both. GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waNere set forth above Is made with Guarentors full knowledge of Its significance and consequences ertd that, under the droumstartces, the vraNere are reasonable and not contrary to public poiiey or law. !f any such waiver Is determined to be contrary to any applicable law or public policy, such waiver shall be effective only to the extent permitted by few or public policy. RiOIiT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Guarantors accounts with Lender (whether checking, savings, or some other account). This includes ell accounts Guarantor holds jointly with someone else and all accounts Guarentor may open In the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibtted by law. Guarantor authorizes Lender, to the extent pannitted by appilcable law, to hold these funds if there Is a default, and Lender may apply the funds In these acxiourrts to pay what Guarantor owes under the terms of this Guaanty. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarentor agrees that the Indebtedness, whether now existing or hereafter created, shall be superior to any claim that Guarantor may now have or hereafter aequlre against Borrower, whether or not Borrower becomes lnso}vent Guarantor hereby expressly suborciinates any claim Guazantor may have egalnst Borrower, upon any account whatsoever, to any claim that Lender may now or hereafter have against Borrower. In the event of insolvency and consequent Ilquldatlon of the assets of Borrower, through bankwptcy, by en assignment for the benefit of creditors, by voluntary.IlquldeNon, or otherwise, the assets of Borrower applcable to the payment of the claims of both Lender and Guarantor shaA be paid to Lender and shell be flrat applied by l:ertder to the indebtedness. Guarantor does hereby assign to Lender all claims which It may have or acquire against Borrower or egalnst arty assignee or trustee in COMMERCIAL GUARANTY (Continued) Page 3 bankruptcy of Borrower, provided however, that such asslgrvnent ahaU be effective only for the purpose of assuring to Lander futl payment in legal tender of the Indebtedness. If Lender so requests, any notes or credit egreerrtents now or hereafter evidandng any debts or obligations of Borrower to Guarantor shall be marked with a legend that the same ere subject to this Guaranty aril shall be delivered to Lender. Guarantor agrees, and Lender Is ttaraby authorized, In the name of Guarantor, from time to time to ftle flnarxdng statements and .continuation statements and to execute documents end to take such other actions es Lender deems necessary or appropriate to perfect, preserve and enforce Its rights under this Guaranty. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are s part of this Guarenty: Amendments. This Guaranty, together with any Related Documents, constitutes the entlre understanding end agreement of the parties es to the matters set forth In this Guarenty No alteration of or amendment to this Guaranty shall be effective unless given In writing and signed by the party or parties sought to Lie dtarged or bound by the alteration or amendment. Attorneys' Fees; Expenses. Guarantor egreea to pay upon demand all of Lender's costs and expenses, Including Lender's reasonable attorneys' fees and Lender's legal expenses, incurred.in connection with the enforcement of this Guaranty. Lender may hire ar pay someone else to help enforce this Guaranty, and Guarantor shall pay the costs and expenses of such enforcement. Costs and expenses include lender's reasonable attorneys' fees and legal expenses whether or not there is a lawsuit, Including reasonable attorneys' fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatk: stay or injunction), appeals, end any anticipated post~udgment wlledion services. Guarantor also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings, Caption headings in this Guaranty are for convenience purposes only and are not to be used to Interpret or define the provisions of this Guaranty. Governing Law. This Guaranty will be governed by federal law applicable to Lander and, to the extent not preempted by federal law, the laws of the Commonwealth of Pennsylvania without regard to fts conflicts of law provisions. Choice of Venue. If there is a lawsuk, Guarantor agrees upon Lender's request to submit to the Jurisdiction of the courts of Montgomery County, Commonwealth of Pennsylvania. Integration. Guarantor further agrees that Guarantor has read end fully understands the terms of'thts Guaranty; Guarantor has had the opportunity to be advised by Guarantor's attorney wtth respect to this Guaranty; the Guaranty fully reflects. Guarantor's Intentbns and parol evidence Is not required to Interpret the terms of this Guarenty. Guarantor hereby indemnifies and holds Lender hem>fess from ail losses, claims, damages, and costs (Including Lender's attorneys' teas) suffered or Incurred by Lender es a result of any breach by Guarantor of the warranties, representations and agreements of th15 paragraph. ' Interpretation. In a!I cases where there is more than one Borrower or Guarantor, then all words used in this Guaranty (n the singular shall be deemed to have been used in the plural where the context arx! construction so roqulre; end where there Is more then one Borrower named in this Guaranty or when this Guaranty is executed by more than one Guarentor, the words "Borrower" and "Guarentor" respectively shall mean ail and any one or more of them. The words "Guarantor," "Borrower," and "Lender" include the heirs, successors, aealgns, and tronsfereea of each of them. If a court finds that any provision of this Guerenty Is not vagd or should not be enforced, that fad by Itself will not mean that the rsat of this Guaranty will not be valid or enforced. Tharoforo, a court will enforce the rest of the provisions of this Guaranty even If a provision of this Guaranty may be found to be Irnelld or unenforceable. If any one or more of Borrower or Guarantor are corporetlons, partnerships, limited liability oompaNes, or similar entitle, it Is not necessary for Lender to Inquire Into the powers of Borrower or Guazantor or of the officers, directors, partners, managers, or other. agents acting or purporting to ad on their behalf, and any indebtedness made or created in reliance upon the professed exerdae of such powers shall be guaranteed under this Guaranty. Notices. Unless otherwise provided by applicable law, any notice required to be gNen under this Guaranty shall be given in wrung, and, except for revocation notices by Guarantor, shell be effective when actually delivered, when aduagy received by teletacaimile (unless otherwise required by law), when deposited with a nationaNy recognized overnight ceurier, or, ff mailed, when deposted In the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Guaranty. All revocation notices by Guarantor shat) be in writing and shall be effective upon delivery to Lerxier as provided In the section of this Guaranty entitled "DURATION OF GUARANTY." Any party may change its address for notlrres under this Guaranty by giving formal written notice to the other parties, spedfying that the purpose of the notbe is to change the party's address. For notice purposes, Guaranbr agrees to keep Lender Informed at ail times of Guarantor's current address. Unless otherwise provided by applicable law, it there is more than one Guarantor, any notice given by Lender to any Guarantor is deemed to be notice given to all Guarantors. No Waiver by Lander, Lender shall not be deemed to have waived any rights under this Guaranty unless such waiver Is given in wrtting and signed by Lender. No delay or omission on the pert of Lender In exerdsing any right shall operate as a waiver of such right or any other right A waiver by Lender of a provision of this Guarenty ahaq not prejudice or constitute a waiver of Lenders right otherwise to demand strict compliance with that provision or any other provision of this Guaranty. No prior waiver by Lender, nor any course of dealing between Lender and Guarantor, shall consttute a waiver of any of Lenders rights or of any of Guarantors obligations as to sny future transactions. Whenever the consent of Lender is required under this Guarenty, the granting of such consent by Lender In any instance ahali not constitute continuing consent to sutuequent Instances where such consent la required end in ail cases such rronsent may be granted or withheld In the sole discretion of Lender. Successors and Assigns. Tha terms of this Guaranty shell be binding upon Guarantor, and upon Guarantor's heirs, personal representatives, successors, and asalgns, and shell be enforceable by Lender and tts successors and assigns. pEFINITIONS. The following capltallzed words and terms shall have the following meanings when used in this Guaranty. Uniesa spedftcatly stated to the txntrary, all references to dollar amounts shall mean amounts In lawful money of the Urgted States of America. Words end terms used In the singular shall Include the plurei, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Guaranty shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word "Borrower" means Etlte Managing Generel Agency, LLC and Includes all co-signers and co•makers signing the Nota and all theft successors and assigns. GAAP. The word "GAAP" means generally accepted accounting prindples. Guarantor. The word "Guarantor" means everyone signing this Guaranty, including without Iimitatbn Scott C. Penwell, and In each case, any signers successors and assigns. Guarantors Share of the indebtedness. The words "Guarentors Share of the Indebtedness" mean Guarantors indebtedness to Lender as more particularly described (n this Guaranty. Guaranty. The word "Guaranty" means this guaranty from Guarantor to Lender. COMMERCIAL GUARANTY {Continued) Page 4 Indebtedness. The word "indebtedness' means 8orcowers Indebtedness to Lender as more particulady described In this Guaranty. Lender. The word "t.ender" means Fox Chase Sank, its successors and assigns. Note. The word "Note" means the promissory note dated March 2, 2011, In the original principal amount of 575,000.00 from Borrower to Lender, together with al( renewals of, extenstons of, modifications of, refnancings of, consolkiations of, and substliutions for the promissory note or agreement. Related Documents. The words "Related Documents" mean eU promissory notes, credit agroements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, aeourity deeds, ooUateral mortgages, end all other Instruments, agreements and documer>ta, whether now or hereafter existing, executed In conneatbn with the Indebtedness. CONFESSION OF JUDGMENT. GUARANTOR HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR THE PROTHONOTARY OR CLERK OF ANY COURT IN THE COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE, TO APPEAR AT ANY TIME FOR GUARANTOR AFTER THE AMOUNTS HEREUNDER BECOME DUE AND WITH OR WITHOUT COMPLAINT FILED, CONFESS OR ENTER JUDGMENT AGAMiST GUARANTOR FOR THE ENTIRE PRINCIPAL BALANCE OF THIS GUARANTY AND ALL ACCRUED INTEREST, LATE CHARGES AND ANY AyD ALL AMOUNTS EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECURING THE INDEBTEDNESS, TOGEZFIER 1NITH COSTS OF SUIT, AND AN ATTORNEY'S COMMI3310N OF TEN PERCENT (10%r OF THE UNPAID PRINCIPAL BALANCE AND ACCRUED INTEREST FOR COLLECTION, BUT IN ANY EVENT NOT LESS THAN FNE HUNDRED DOLLARS ($S00) ON WHICH JUDGMENT OR JUDGMENTS ONE OR MORE EXECUTIONS MAY ISSUE IMMEDIATELY; AND FOR SO DOING, THIS GUARANTY OR A COPY OF THIS GUARANTY VERIFIED BY AFFIDAVIT SHALL BE SUFFICIENT WARRANT. THE AUTHORITY GRANTED IN THIS GUARANTY TO CONFESS JUDGMENT AGAINST GUARANTOR SHALL NOT BE EXHAUSTED BY ANY EXERCISE OF THAT AUT•I-IORITY, BUT SHALL CONTINUE FROM TIME TO TIME AND AT ALL TIMES UNTIL PAYMENT IN FULL OF ALL AMOUNTS DUE UNDER THIS GUARANTY. GUARANTOR HEREBY WAIVES ANY RIGHT GUARANTOR MAY HAVE TO NOTICE OR TO A HEARING IN CONNECTION WITH ANY SUCH CONFESSION OF JUDGMENT AND STATES THAT EITHER A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THIS CONFESSION OF JUDGMENT PROVISION .TO GUARANTOR'S ATTENTION OR GUARANTOR HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ AI.L THE PROVISK)NS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED "DURATION OF GUARANTY". NO FORMAL ACCEPTANCE BY LENDER iS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED MARCH 2, 20'11. THIS GUARANTY IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS GUARANTY 1S AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. GUARANTOR: X Gna(/U Seal) Scott C; Penwell INDIVIDUAL ACKNOWLEDGMENT COMMONWEALTH OF PENNSYLVANIA } ) SS COUNTY OF ©ct~h.f~t } On this, the day of ~(arC`1 , 2D ~ { .before me e undersigned Notary Public, personally appeared Scott C. Penwell, n to me (or setisfacton y proven) to be the person whose name is subscribed to the wRhln Instrument, and acknowledged that he or she executed the same for the purposes therein corrtakted. In vri t"~ie ~ F L I seal. NIFlISSA M. ZEIOERS, NOlfin " Cihl Of Harfisbur~, ~ C Notary Public in and for the State of 1l lMp n1"txby.Yr.'••°"^"' 46II,WM Fl,Md"MY,I"".Yv.1M.7~1i. NM/Yl lb,pwl .M ~fN10tIM10dIVU/M1C TIRO Jllf7 DISCLOSURE FOR CONFESSION OF JUDGMENT SOrrOWef: Elits Manaying General Agency, LLC 191 Sheree Boulevard Exton, PA 19341 Lender: Fox Chase Bank 4390 Davisvlile Road Hatboro, PA 19040-2544 Declarant: Scott C. Penwell 400 Bear Drive Enola, PA 17025 DISCLOSURE FOR CONFESSION OF JUDGMENT ' 1 AM EXECUTING, THIS ~ ~ DAY OF , r "' ~~ , 20 1 t , A GUARANTY FOR A LIMBED AMOUNT, AS MORE SPECIFK:ALLY DESCRIBED IN THE GUARANTY. , A. I UNDERSTAND THAT THE GUARANTY CONTAINS A CONFESSION OF JUDGMENT PROVISION THAT WOULD PERMIT LENDER TO ENTER JUDGMENT AGAINST ME IN COURT, AFTER A DEFAULT ON THE GUARANTY, WITHOUT ADVANCE NOTICE TO ME AND WITHOUT OFFERING ME AN OPPORTUNITY TO DEFEND AGAINST THE ENTRY OF JUDGMENT. IN EXECUTING THE GUARANTY, BEING FULLY AWARE OF MY RIGHTS TO ADVANCE NOTICE AND TO A HEARING TO CONTEST THE VALIDITY OF ANY JUDGMENT OR OTHER CLAIMS THAT LENDER MAY ASSERT AGAINST ME UNDER THE GUARANTY, 1 AM KNOWINGLY, INTELLIGENTLY, AND VOLUNTARILY WANING THESE RIGHTS, INCLUDING ANY RIGHT TO ADVANCE NOTICE OF THE ENTRY OF JUDGMENT, AND I EXPRESSLY AGREE AND CONSENT TO LENDER'S ENTERING JUDGMENT AGAINST ME BY CONFESSION AS PROVIDED FOR IN THE CONFESSION OF JUDGMENT PROVISION. B. I FURTHER UNDERSTAND THAT iN ADDITION TO GNING LENDER THE RIGHT TO ENTER JUDGMENT AGAINST ME WITHOUT ADVANCE NOTICE DR A HEARING, THE CONFESSION OF JUDGMENT PROVISION IN THE GUARANTY ALSO CONTAINS LANGUAGE THAT WOULD PERMIT LENDER, AFTER ENTRY OF JUDGMENT, AGAIN WITHOUT EITHER ADVANCE NOTICE OR A HEARING, TO EXECUTE ON THE JUDGMENT 8Y FORECLOSING UPON, ATTACHING, LEVYING ON, TAKING POSSESSION OF OR OTHERWISE SEI7JNG MY PROPERTY, IN FULL OR PARTIAL PAYMENT OF THE JUDGMENT. IN EXECUTING THE GUARANTY, BEING FULLY AWARE OF MY RIGHTS TO ADVANCE NOTICE AND A HEARING AFTER JUDGMENT IS ENTERED AND BEFORE EXECUTION ON THE JUDGMENT, 1 AM KNOWINGLY, INTELLIGENTLY AND VOLUNTARILY WANING THESE RIGHTS, AND !EXPRESSLY AGREE AND CONSENT TO LENDER'S fMMEDIATELY EXECUTING ON THE - JUDGMENT IN ANY MANNER PERMITTED BY APPLICABLE STATE AND FEDERAL LAW, WITHOUT GIVING ME ANY ADVANCE NOTICE. C. AFTER HAVING READ AND DETERMINED WHICH OF THE FOLLOWING STATEMENTS ARE APPLICABLE, BY INITIALING EACH STATEMENT THAT APPLIES, I REPRESENT THAT: - INRIALS - 1. I WAS REPRESENTED BY MY OWN'1NDEPENDENTLECAL COUNSEL IN CONNECTION WITH THE GUARANTY. 2. A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THE CONFESSION OF JUDGMENT PROVISION IN THE GUARANTY TO MY ATTENTION. D. i CERTIFY THAT MY ANNUAL INCOME EXCEEDS 510,000; THAT THE BLANKS IN THIS DISCLOSURE WERE FILLED IN WHEN 1 INITIALED AND SIGNED IT; AND THAT ! RECEIVED A COPY AT THE TIME OF SIGNING. THIS DISCLOSURE IS GNEN UNDER SEAL AND IT IS INTENDED THAT THIS DISCLOSURE IS AND SHALL CONBTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. DECLARANT: X Seal) Scott C. Penwell un[I1twO twdy.Vr.~A.00.0C1 aKlmrrrrrr~M+w,tiwc twr.>nt. Y„ r,I, 11„r+.L •M fYWgRMMJLWLlC 7btq tMi7 ~~ SPECTOR GADON 8z ROSEN, P.C. NEW JERSEY OFFICE: ONE GREENTREE CENTRE 10000 LINCOLN DRIVE. EAST SUITE 201 MARLTON, NJ 08053 [856] 778-8100 NEW YORK OFFICE: ONE PENN PLAZA 36T" FLOOR NEW YORK, NY 10119 [212]786-7394 E-MAIL dgiles lawsgr.com ATTORNEYS AT LAW SEVEN PENN CENTER 1635 MARKET STREET SEVENTH FLOOR PHILADELPHIA, PENNSYLVANIA [215] 241-8888 FAX: [215]241-8844 WWW.LAWSGR.COM January 14, 2013 FIRST CLASS MAIL AND CERTIFIED MAIL RETURN RECEIPT REQUESTED Elite Managing General Agency, LLC 191 Sheree Boulevard Exton, PA 19341 David M. Giles DIRECT DIAL NUMBER [215]241-8816 Re; Notice of Demand for Payment under a Loan made on December 22, 2008 by Fox Chase Bank, (the "Bank") to Elite Managing General Agency, LLC (the "Borrower") in the amount of $825,000.00 (the "Loan") which is evidenced by a Promissory Note dated December 22, 2008 in the amount of $500,000.00, as amended by Change in Terms Agreements dated February 23, 2009 and November 12, 2010 (hereinafter collectively referred to as the "Note") and a Business Loan Agreement dated December 22, 2008 (the "Loan Agreement") executed and delivered by Borrower to Bank NOTICE OF DEMAND FOR PAYMENT Ladies and Gentlemen: Please be advised that this firm has been retained by the Bank to represent its interests with respect to the Loan. The Bank is the payee under the Note and the holder of all of the loan documents executed in connection therewith (hereinafter collectively referred to as the "Loan Documents"). All of the obligations of the Borrower under the Loan Documents are absolutely, irrevocably and unconditionally guaranteed by Russell R. Naylor, Christopher C. Naylor and Scott C. Penwell (the "Guarantors") pursuant to the terms of Commercial Guaranty Agreements dated December 22, 2008 (the "Guaranty Agreements"). The Loan, a demand facility is due and payable upon demand and is secured by all business assets of Borrowers as evidenced by that certain Commercial Security Agreement dated December 22, 2008 executed by Borrower in favor of Bank. The Note contains a provision requiring that Borrower "pay this Loan in full immediately upon Lender's demand." The Lender hereby advises the Borrower and the Guarantors that the Lender demands that the Loan be paid in full within 10 days from the date hereof. As of January 9, 2013, a total of $826,604.12 is due and owing under the Note (not including attorneys fees and costs), consisting of $825,000 in unpaid principal and $1,604.12 in :~~~ L FLORIDA OFFICE: 360 CENTRAL AVENUE SUITE 1550 19103 ST. PETERSBURG, FL 33701 [727] 896-4600 FAX: [727) 896-4604 1528455_ 1. DOC Spector Gadon & Rosen, P.C. ATTORNEYS AT LAW January 14, 2013 Page -2- accrued but unpaid interest. As a result of the issuance of the Notice of Demand, in the event that all of the amounts due under the Note are not paid within the 10 day period, interest shall accrue at the Default Rate of Interest which is equal to the contractual rate of interest;plus an additional five percent (5.000 percent) point margin. Moreover, please be advised that in the event all of the amounts due under the Note are not paid in full with the 10 day period set forth above, the Bank intends to continue to utilize the legal and equitable remedies available to it under the Note and the other Loan Documents against you, and the Bank reserves the right to do so without further notice to you. This Notice does not reflect all of the defaults and/or Events of Default that may have occurred under the Note and any of the other Loan Documents. The Bank reserves any and all rights that it may have in connection with any Notice and all such notices remain in full force and effect. Finally, please be advised that the Borrower remains responsible for the payment of any and all legal fees incurred by the Bank as a result of the Borrower and Guarantors failure to pay the amounts due under the Loan Documents within the 10 day period set forth above. If you have any questions or other concerns regarding this matter, please feel free to contact the undersigned. Very truly yours, By: DMG:cf SPECTOR GADON & ROSEN, P.C. DAVID M. GILES cc: Russell Naylor Chris Naylor Scott Penwell ~~ SPECTOR GADON 8Z ROSEN, P.C. NEW JERSEY OFFICE: ONE GREENTREE CENTRE 10000 LINCOLN DRIVE EAST SUITE 201 MARLTON, NJ 08053 [856] 778-8100 NEW YORK OFFICE: ONE PENN PLAZA 36'" FLOOR NEW YORK, NY 10119 [212] 786-7394 E-MAIL dgiles(a lawsgr.com ATTORNEYS AT LAW SEVEN PENN CENTER 1635 MARKET STREET SEVENTH FLOOR PHILADELPHIA, PENNSYLVANIA [215] 241-8888 FAx: [215] 241-8844 WWW.LAWSGR.COM January 29, 2013 FIRST CLASS MAIL AND CERTIFIED MAIL RETURN RECEIPT REQUESTED Elite Managing General Agency, LLC 191 Sheree Boulevard Exton, PA 19341 David M. Giles DIRECT DIAL NUMBER [215]241-8816 Re: Notice of Default and Acceleration under a Loan made on December 22, 2008 by Fox Chase Bank, (the "Bank") to Elite Managing General Agency, LLC (the "Borrower") in the amount of $825,000.00 (the "Loan") which is evidenced by a Promissory Note dated December 22, 2008 in the amount of $500,000.00 as amended by Change In Terms Agreements dated February 23, 2009, August 31, 2010 and November 12, 2010 and a Business Loan Agreement dated December 22, 2008 (the "Loan Agreement") executed and delivered by Borrower to Bank NOTICE OF DEFAULT AND ACCELERATION Ladies and Gentlemen: Please be advised that this firm has been retained by the Bank to represent its interests with respect to the Loan. The Bank is the payee under the Note and the holder of ali of the loan documents executed in connection therewith (hereinafter collectively referred to as the "Loan Documents"). All of the obligations of the Borrower under the Loan Documents are absolutely, irrevocably and unconditionally guaranteed by Russell Naylor, Christopher C. Naylor and Scott C. Penwell (the "Guarantors") pursuant to the terms of Commercial Guaranty Agreements dated December 22, 2008 (the "Guaranty Agreements"). The Loan, a demand facility is due and payable upon demand and is secured by all business assets of Borrower as evidenced by that certain Commercial Security Agreement dated December 22, 2008 executed by Borrower in favor of Bank. The Note contains a provision requiring that Borrower "pay this Loan in full immediately upon Lender's demand." On January 14, 2013 the Lender provided the Borrower and the Guarantors with a Notice of Demand (which remains in full force and effect) wherein the Lender demanded that the Loan be paid in full within 10 days from January ] 4, 2013 and that if the Loan was not paid in full, interest would accrue at the default rate of interest thereafter. FLORIDA OFFICE: 360 CENTRAL AVENUE SUITE 1550 19103 ST, PETERSBURG, FL 33701 [727] s9s-asoo FAX: [727] 896-4604 1556227 1.DOC Spector Gadon & Rosen, P.C. ATTORNEYS AT LAW January 29, 2013 Page -2- The Loan Agreement provides that a "Default will occur if payment in full is not made immediately when due." Despite the fact that the Lender provided the Borrower with I O days to make the payment, the Borrower failed to do so and has committed a Default or an Event of Default under the Loan Documents. As a result of the defaults and/or Events of Default set forth above, the Bank hereby notifies the Borrower and the Guarantors that it has accelerated all principal, interest and all other amounts due under the Note and the other Loan Documents. As of January 28, 2013, a total of $828,781.15 is due and owing under the Note (not including attorneys fees and costs), consisting of $825,000.00 in unpaid principal, $2,864.50 in accrued but unpaid interest at the contractual rate of interest and $916.65 in accrued but unpaid interest at the default rate of interest. Please be advised that due to the occurrence of the above-described Default or Events of Default, and the acceleration by Bank of all amounts due under the Note and the other Loan Documents, the Bank intends to utilize the legal and equitable remedies available to it under the Note and the other Loan Documents against you, and the Bank reserves the right to do so without further notice to you. Please also be advised that interest shall continue to accrue at the default rate which is equal to the contractual rate of interest plus an additional five percent (5.000 percent) until the Loan is paid in full (including the period following the entry of any judgment). This Notice does not reflect all of the Defaults and/or Events of Default that may have occurred under the Note and any of the other Loan Documents. The Bank reserves any and all rights that it may have in connection with any such additional Defaults or Events of Default. Finally, please be advised that the Borrower remains responsible for the payment of any and all legal fees incurred by the Bank as a result of the Borrower's defaults. If you have any questions or other concerns regarding this matter, please feel free to contact the undersigned. Very truly yours, SPECTOR GADON & ROSEN, P.C. __.____---- ~~~ _~,y DAVID M. GILES DMG:cf ce: Russell Naylor Chris Naylor Scott Penwell 1556227 1.DOC ~~ . From: Jerry Holbrook Sent: Friday, February 01, 2013 9:21 AM To: 'Christopher C. Naylor' Cc: Tim Spacek; John Haurin; Russell Naylor; d4ilesCa~lawsor.com Subject: RE: pay-off of LOC from EMGA to FCB As requested, here are the final payoffs. These now include legal fees. Please let me know if you have any questions. Jerry Holbrook Fox Chase Bank ph: 215-682-4107 www.foxchasebank com From: Christopher C. Naylor [mailto:cnaylorCa~ccnaylor coml Sent: Tuesday, January 29, 2013 4:48 PM To: Jerry Holbrook Cc: Tim Spacek; John Haurin; Russell Naylor Subject: RE: pay-off of LOC from EMGA to FCB Jerry, The funds will be ready this Friday. I will have Tim execute a wire for the entire payoffs of the 2 lines of credit- Monday at the latest. For exactness, please send me the updated payoffs this Friday morning. In the interim, can you please furnish me with your/FCB standard payoff statement letter- release/termination of all liens, guarantors, etc- to be immediately executed once FCB is in receipt of the appropriate funds. Thanks, Chris C[ ' C X~[A,L_ FalconOne Ventures- CEO Elite Companies 191 Sheree Blvd. Exton, PA 19341 Office: 610-280-4315 Mobile: 610-3Z2-0444 Fax: 610-280-4295 Email: cnaylor aC~ccnaylor com 2/8/2013 Page 4 of 5 Email Confidentiality Notice: The information contained in this transmission is confidential, proprietary or privileged and may be subject to protection under the law, including the Health Insurance Portability and Accountability Act (HIPAAJ. The message is intended for the sole use of the individual or entity to whom it is addressed. if you are not the intended recipient, you are notified that any use, distribution or copying of the message is strictly prohibited and may subject you to criminal or civil penalties. !f you received this transmission in error, please contact the sender immediately by replying to this email and delete the material from any computer. From: Jerry Holbrook [maitto:JHolbrook@FoxChaseBank.com] Sent: Tuesday, January 29, 2013 3:03 PM To: Christopher C. Naylor Cc: Tim Spacek; lhaurin@FoxChaseBank.com Subject: FW: pay-off of LOC from EMGA to FCB Chris As requested, attached are payoffs for the two lines of credit. Please let me know if you have any questions. Jerry Holbrook Fox Chase Bank ph: 215-682-4107 www.foxchasebank.com From: John Haurin Sent: Tuesday, January 29, 2013 1:02 PM To: Jerry, Holbrook Subject: FW: pay-off of LOC from EMGA to FCB From: Christopher C. Naylor [mailto:cnavlor@ccnaylor.com] Sent: Tuesday, January 29, 2013 12:19 PM To: John Haurin Cc: Tim Spacek Subject:: pay-off of LOC from EMGA to FCB John, Russ and I are preparing funds to pay-off the 900k LOC between EMGA and FCB. Please let Tim and I know the exact amount that is due for payment. There is a 10 day quiet period and we are beyond that now; and, with no regard from FCB to my reasonable request for this period to be extended to 60.days(quite onerous). This has been a good loan and having it called(demand) has caused me unnecessary stress as the CEO of EMGA. I would like to know why the demand for this payment came to us with no courteous and professional warning (heads up) from you, Jerry, FCB. Receiving the notice from my banker(and supposed friends) at my home was not a tact I was prepared for and certainly not in concert with considerate professionalism and care. Simply, as un- cool as it gets(not at all amicable). Lastly, please accept my thanks and gratitude for providing my company(EMGA) with this line of credit; it was instrumental in building the promising platform that exists today. Regards, 2/8/2013 Page 5 of 5 Chris ' ~~ C X.~.[~- FalconOne Ventures- CEO Elite Companies 191 Sheree Blvd. Exton, PA 19341 Office: 610-280-4315 Mobile: 610-322-0444 Fax: 610-280-4295 Email: cnaylor@ccnaylor.com Email Confidentiality Notice: The information contained in this transmission is confidential, proprietary or privileged and may be subject to protection under the law, including the Health Insurance Portability and Accountability Act (HIPAAJ. The message is intended for the sole use of the individual or entity to whom it is addressed. If you are not the intended recipient, you are notified that any use, distribution or copying of the message is strictly prohibited and may subject you to criminal or civil penalties. If you received this transmission in error, please contact the sender immediately by replying to this email and delete the material from any computer. Fox Chase Bank Established 1867 DISCLAIMER: This email may contain confidential or privileged information. If you think you have received this e-mail in error, please advise the sender by reply e-mail and then delete this e-mail immediately. Thank you. Fox Chase Bank Established 1867 DISCLAIMER: This email may contain confidential or privileged information. If you think you have received this e-mail in error, please advise the sender by reply e-mail and then delete this e-mail immediately. Thank you. Fox Chase Bank Established 1867 DISCLAIMER: This email may contain confidential or privileged information. If you think you have received this e-mail in error, please advise the sender by reply e-mail and then delete this e-mail immediately. Thank you. 2/8/2013 ,~ X' COMMERCIAL GUARANTY {Continued) Page 4 Indebtedness. The word "Indebtedness" means Borrower's Indebtedness to Lender as more particularly described In this Guaranty. Lender. The word "L.ender" means Fax Chase Bank, fts successors and assigns. Note, The word "Note" means the promissory note dated March 2, 2011, in the original principal amount of $75,000.00 from Borrower to Lender, together with all renewals of, extensions of, moditicatlons of, refmandngs of, conaolkiations of, and aubslltuilons for the promissory note or agreement. Related Documsnts. The words "Related Documents" mean ell promissory notes, credk agroemants, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and ail other Instruments, agreements end documents, whether now or hereattar existing, executed In connection with the lndebtednesa. CONFESSION OF JUDGMENT. GUARANTOR HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR THE PROTHONOTARY OR CLERK OF ANY COURT IN TF~ COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE, TO APPEAR AT ANY TIME FOR GUARANTOR 'AFTER THE AMOUNTS HEREUNDER BECOME DUE AND WITH OR WITHOUT COMPLAINT FILED, CONFESS OR ENTER JUDGMENT AGEWNST 'GUARANTOR FOR THE ENTIRE PRINCIPAL BALANCE OF THIS GUARANTY AND ALL ACCRUED INTEREST, LATE CHARGES AND ANY At~D ALL AMOUNTS EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECUWNG THE INDEBTEDNESS, TOGEjF1ER WITH COSTS OF SUIT, AND AN ATTORNEY'S COMMISSION OF TEN PERCENT (10%)' OF THE UNPAID PRINCIPAL BALANCE AND ACCRUED INTEREST FOR COLLECTION, 8UT IN ANY EVENT NOT LESS THAN FNE HUNDRED DOLLARS ($500} ON WHICH JUDGMENT OR JUDGMENTS ONE OR MORE EXECUTIONS MAY ISSUE IMMEDIATELY; AND FOR SO DOING, THIS GUARANTY OR A COPY OF THIS GUARANTY VERIFIED BY AFFIDAVIT SHALL BE SUFFICIENT WARRANT. THE AUTHORITY GRANTED IN THIS GUARANTY TO CONFESS JUDGMENT AGAINST GUARANTOR SHALL NOT BE EXHAUSTED BY ANY EXERCISE OF THAT AUT+ORITY, BUT SHALL CONTINUE FROM TIME TO TIME AND AT ALL TIMES UNTIL PAYMENT IN FULL OF ALL AMOUNTS DUE UNDER THIS GUARANTY. GUARANTOR HEREBY WAIVES ANY 'RIGHT GUARANTOR MAY HAVE TO NOTICE OR TO A HEARING IN CONNECTION WITH ANY SUCH CONFESSION OF JUDGMENT AND STATES THAT EITHER A REPRESENTATIVE OF LENDER SPECIFICALLY CALLED THIS CONFESSION OF JUDGMENT PROVISION .TO GUARANTOR'S ATTENTION OR GUARANTOR HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS, IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED "DURATION OF GUARANTY". NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUAttANTY IS DATED MARCH 2, 2011. • THIS GUARANTY IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS GUARANTY IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. GUARANTOR: X ClC~Oi/U Seal) Scott C. Penwell INDIVIDUAL ACKNOWLEDGMENT COMMONWEALTH OF PENNSYLVANIA ) SS COUNTY OF D~~I~ ) On this, the ~ day of ~ a~l , 20 t { .before me ' e undersigned Notary Public, personalty appeared Scott C. Penwell, known to me (or seta cton y proven) to be the person whose name is subscribed to the wRhln Instrument, and acknowledged that he or she exewted the soma for the purposes theroin contained. In wi i seal. N~S L MELISSA M. BOERS, Pubic CI(y Of ' Nbb t Notary Public in and for the State of Ir' ~ 24 5.:- Wet "IW 4Mp.Yr •"40"-002 to,,. IYIrM /"Nd"MI,Nn, M.tM,l"11. NMy+,7M"M. .M Mh107Urttltln/lYMfc eWN TII•p SUBORDINATION AGREEMENT Borrower: Elite Managing Gsnarel Agency, LLC 181 Shares Boulward Exton, PA 19341 Cred)toC: Elko Group, LLC 191 Shares Blvd. Exton, PA 18341 Lender: Fox Chase Bank 4300 Davlsvllle Road Hatboro, PA 19040-2544 THI3 SUBORDINATION AGREEMENT dated Marsh 2, 2011, Is made and executed among Eflte Managing General Agency, LLC; 191 Sheree BouNvard; Exton, PA 19341 ("Borrower"); Elke Group, LLC; 181 Sharpe Blvd.; Exton, PA 19341 ('Credkor"); and Fox Chase Bank, 4390 Davisville Rosd, Hatboro, PA 19040-2544 ("Lender"). CURRENT INDEBTEDNESS OWING TO CREDITOR. As of the date of this Agreement, Borrower Is indebted to Creditor In the aggregate amount of 5200,000.00. This amount is the total Indebtedness of every kind from Borrower to Creditor. REQUESTED FINANCIAL ACCOMMODATIONS. Creditor and Borrower each want Lender to provide financial accommodations to Borrower in the form of (A) new creditor ban advances, (B) an extenalon of Ume to pay or other compromises regarding all or part of Borrower's present ' Indebtedness to Lender, or (C) other benefks to Borrower. Borrower and Creditor each represent and acknowledge to Lander that Creditor will benefit as a result of these flnandaf accommodatlons from Lender to Borrower, and Creditor acknowledges receipt of valuable conslderetlon far entering Into this Agreement Based on the representatlorrs and acknowledgments contained in this Agreement, Borrower and Credkor agree with Lender as follows: SUBORDINATED INDEBTEDNESS. The words "Subordinated Indebtedness' as used In this Agreement mean aA present end future indebtedness, obligations, IiabillUes, daims, rights, and demands of any kind which may be now or hereafter owing from Borrower to Creditor. The term "Subordinated Indebtedness" Is used Jn Its broadest sense end Includes without iimttatlon all principal, all interest, all costs, reasonable .. attorneys' fees, all sums pahi for the purpose of protecting the rights of a hdder of security, ati contingent obligatons of Borrower (such es a guaranty), and all other obkgaUons, secured or unsecured, of any nature whatsoever. SUPERIOR INDEBTEDNESS. The words "Superior Indebtedness" as used In this Agreement mean end include all present and future indebtedness, obligatlona, liabliides, daims, rights, and demands of any kind which may be now or hereafter owing from Borrower to Lender. The term "Superior Indebtedneaa` is used In its broadest sense and includes without Umltetion all principal, all Interest, ail costs, reasonable attorneys' fees, ai sums paid for the purpose of protecting Lender's rights In security (such as paying for Insurance on collateral if the owner falls to do so), all contingent obllgaUons of Borrower (such ea a guaranty), all obligatons arising by reason of Borrower's amounts with lender (such as an overdraft on a checking account), and ell other obligations of Borrower to Lander, secured or unsecured, of any nature whatsoever. SUBORDINATION. All Subordinated indebf~ness of Borrower to Crodltor la and shall be subordinated In ail respects to all Superior Indebtedness of Borrower to Lender. If Creditor holds one or more Securty Interests, whether now existing or hereafter acquired, in any of Borrower's reel property or personal property, Crodltor also subordinates all Creditor's Sectrrlty Interests to all Security Interests held by Lender, whether now existing or hereafter acquired. PAYMENTS TO CREDITOR Borrower wlli not make and Credkor w[II not accept, at any Ume while any Superior indebtedness is owing to Lender, (A) any payment upon any Subordinated Indebtednssa, {B) any advance, transfer, or easignment of assets to Creditor In any form whatsoever that would reduce at any Ume or in any way the amount of Subordinated Indebtedness, or (C) any transfer of any assets es security for the Subordinated lndebtednesa, except upon Lender's prior written consent. In the event of any distribution, division, or application, whether partial or complete, voluntary or involuntary, by operation of law or otherwise, of ail or any part of Borower's assets, or the proceeds of Borrower's assets, in whatever form, to creditors of Borrower or upon any indebtedness of Borrower, whether by reason of the Ilquklation, dissolution or other winding-up of Borrower, or by reason of any execution sale, receiverehlp, insolvency, or bankruptcy proceeding, assignment for the benefit of creditors, proceedings for reorganization, or readjustment of Borrower or Borrower's properfles, than and in such event, (A) the Superior Indebtedness shall be paid in full before any payment is made upon the Subordinated Indebtedness, and {B) all payments and distributions, of any kind or chareder end whether In cash, property, or securities, which shag be payable or deliverable upon or In rasped of the Subordinated Indebtedness shall be paid or delivered directly to Lender for application In payment of the amounts then due on the Superior Indebtedness until the Superior Indebtedness shall have been paid in full. In order that Lender may establish its right to prove claims and recover for Its own account dividends based on the Subordinated Indebtedness, Creditor does hereby assign all its right, title, and Interest In such daims to Lander. Creditor further agrees to supply such Information and evidence, provide access to and copies of such of Credkor's records as may pertain to the Subordinated Indebtedness, and execute such Instruments as may be required by Lender to enable Lender to enforce all such daims and collect ell dlvklends, payments, or other disbursements which may be made on account of the Subordinated Indebtedness. For such purposes, Crodltor hereby irrevocably authorizes Lender in Its discretion to make and present for rx on behaK of Credkor such proofs of daims on account of the Subordinated Indebtedness as Lender may deem expedient and proper and to vote such daims in any sttch proceeding and to receive and collect any end all dividends, payments, or other disbursements made thereon In whatever form the same may be paid or Issued end to apply the same on account of the Superior Indebtedness. Should any payment, disUibution, security, or proceeds thereof be received by Crodltor at arty Ume on the Subordinated Indebtedness Contrery to the terms of this Agreement, Creditor Immedlatsy will delhrar the same to Lender In predsely the form received (except for the endorsement or assignment of Creditor ff nece~ary), for application on or to saoure the Superior Indebtedness, whether It la due or not due, and until so delEvsred the same shaft be held In treat by Creditor as property of Lender. In the event Credkor fails to make any such endorsement or assignment, Lender, or any of ks officers on behak of Lender, Is hereby Irrevocably authorized by Creditor to make the same. CREDITOR'S NOTES, Creditor agrees to deliver to Lender, at Lender's request, elt notes of Borrower to Creditor, or other evidence of the Subordinated Indebtedness, now held or hereafter enquired by Crodltor, while this Agreement remains in effect. At Lender's request, Borrower alsc will execute and deNver to Creditor a promissory note evldendng any book account or claim now or hereafter owed by Borrower to Creditor, which note also shall be delivered by Creditor to Lender. Creditor agrees not to sell, assign, pledge or otherwise transfer any of such notes except aubjed to ail the terms end condkions of this Agreement CREDROR'S REPRESENTATIONS AND WARRANTIES. Creditor represents and warrerrts to Lender that (A) no representatlons or agreements of any Idnd have been made to Credkor which would Ilmk or qualify in any way the terms of this Agreement; (B) this Agreement is executed at Borrowers request acrd not at the request of Lender, (C) Lender has made no represeniaUon to Creditor as to the creditworthiness of Borrower, and (D) Cradkar has established adequate means of obtaining from Borrower on a oontlnuing basis information regarding Borrower's flnandal oondkion. Creditor agrees to keep adequately )nfonned from such means of any fads, events, or circumstances which might in any way stied CrediWr's risks under this Agreement, and Creditor further agrees that Lender shall have no obflgation to disclose to Creditor.. infonnatlon or material acquired by Lender in the course of its relatlonship wkh Borrower. SPECTOR GADON & ROSEN, P.C By: David M. Giles (I.D. No. 27477) NM FEB 20 Ali 1635 Market Street, 7ch Floor i3 CO ?opey for Plaintiff Philadelphia, PA 19103 1BERLA Phone: (215) 241-8888 PENH.i`l \IAH1A Fax: (215) 241-8844 Email: dgiles(&lawsgr.com FOX CHASE BANK COURT OF COMMON PLEAS CUMBERLAND COUNTY, PA Plaintiff, V. SCOTT PENWELL NO. 2013-00682 Defendant. PRAECIPE TO MARK JUDGMENT SATISFIED TO THE PROTHONOTARY: Kindly mark the judgment against Scott Penwell, in the above-captioned matter, satisfied of record. Dated: February 19, 2013 Respectfully submitted, SPECTOR GADON & ROSEN, P.C. By: David M. Giles, Esquire Attorney for Plaintiff 1568252-1 CERTIFICATE OF SERVICE I, David M. Giles, hereby certify that on this 19th day of February, 2013,1 caused a true and correct copy of the foregoing to be served via email upon the following: Robert W. Tomilson, Esquire Cozen O'Connor 1900 Market Street Philadelphia, PA 19103 David M. Giles, Esquire 1568252-1