HomeMy WebLinkAbout13-2627 Supreme Coui of Pennsylvania
COurt:of leas For Prothonotary Use Only:
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C6 il`C'over Sheet /f
» Docket No: �� r
CUMBERLAND County 3 ,
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The inforniation collecled on this form is used solely for court administration Purposes. This form does not
supplement or replace the filing and service of pleadings or other papers as required by law or rules of court.
Commencement of Action:
S 0 Complaint � Writ of Summons Petition
Transfer from Another Jurisdiction 0 Declaration of Taking
E
C Lead Plaintiff's Name: Lead Defendant's Name:
INTEGRITY BANK SETH B. HUGHES
T
I Are money damages requested? O Yes 0 No Dollar Amount Requested: 0within arbitration limits
(check one) 0outside arbitration limits
0
N Is this a Class Action Suit? M Yes 0 No Is this an MDJAppeal? Q Yes 0 No
A Name of Plaintiff /Appellant's Attorney: NEDRIC L NISSLY
El Check here if you have no attorney (.ire a Self - Represented I Pro Sef Litigant)
Nature of the Case Place an "X" to the left of the ONE case category that most accurately describes your
PRIMARY CASE. If you are making more than one type of claim, check the one that
you consider most important.
TORT (do not include Mass Tort) CONTRACT (do not include Judgments) CIVIL APPEALS
El Intentional El Buyer Plaintiff Administrative Agencies
El Malicious Prosecution 0 Debt Collection: Credit Card Q Board of Assessment
0 Motor Vehicle 0 Debt Collection: Other Board of Elections
Nuisance M Dept. of Transportation
Q Premises Liability El Statutory Appeal: Other
S Product Liability (does not include
E mass tort) Q Employment Dispute:
Slander /Libel/ Defamation Discrimination
C 0 Other: Employment Dispute: Other Q Zoning Board
T M Other:
I Other:
O MASS TORT
Asbestos
N E] Tobacco
0 Toxic Tort - DES
E] Toxic Tort - Implant REAL PROPERTY MISCELLANEOUS
E] Toxic Waste Ejectment
Other: Q Common Law /Statutory Arbitration
B Eminent Domain /Condemnation Q Declaratory Judgment
Q Ground Rent Mandamus
Landlord/Tenant Dispute Non - Domestic Relations
ortgage Foreclosure: Residential Restraining Order
PROFESSIONAL LIABLITY Mortgage Foreclosure: Commercial El Quo Warranto
0 Dental Partition El Replevin
0 Legal 0 Quiet Title 0 Other:
E] Medical E] Other:
d Other Professional:
Updated 1/1/2011
Nedric L. Nissly, Esquire ° 1 ' X140 A"
PA Attorney I.D. No. 44233
100 Pine Street - P.O. Box 1166 LJ 3 .
Harrisburg, PA 17108 -1166 CJM1BEp No CNINTY
Fax: (717) 260- 1731��'�
Phone: (717) 232 -8000
nnissly @mwn.com
Attorneys for Integrity Bank
INTEGRITY BANK, IN THE COURT OF COMMON PLEAS
Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA
�- ,
V. CASE NO. 13 . a Ou l l
SETH B. HUGHES, CIVIL ACTION -LAW
Defendant MORTGAGE FORECLOSURE
NOTICE
YOU HAVE BEEN SUED IN COURT. If you wish to defend against the claims set forth in the
following pages, you must take action within twenty (20) days after this Complaint and Notice are
served, by entering a written appearance personally or by attorney and filing in writing with the
Court your defenses or objections to the claims set forth against you. You are warned that if you fail
to do so the case may proceed without you and a judgment may be entered against you by the Court
without further notice for any money claimed in the Complaint or for any other claim or relief
requested by the Plaintiff. You may lose money or property or other rights important to you.
YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE
A LAWYER, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW. THIS OFFICE
CAN PROVIDE YOU WITH INFORMATION ABOUT HIRING A LAWYER.
IF YOU CANNOT AFFORD TO HIRE A LAWYER, THIS OFFICE MAY BE ABLE TO
PROVIDE YOU WITH INFORMATION ABOUT AGENCIES THAT MAY OFFER LEGAL
SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE OR NO FEE.
CUMBERLAND COUNTY BAR ASSOCIATION
32 South Bedford Street
Carlisle, PA 17013
(717) 249 -3166 or (800) 990 -9108
Ck,4D J D
DC) Oyo1
AVISO
USTED HA SIDO DEMANDADO /A EN CORTE. Si usted desea defenderse de las demandas que
se presentan mas adelante en las siguientes paginas, debe tomar acci6n dentro de los pr6ximos veinte
(20) dias despues de la notificaci6n de esta Demanda y Aviso radicando personalmente o por medio
de un abogado una comparecencia escrita y radicando en la Corte por escrito sus defensas de, y
objecciones a, las demandas presentadas aqui en contra suya. Se le advierte de que si usted falla de
tomar acci6n como se describe anteriormente, el caso puede proceder sin usted y un fallo por
cualquier suma de dinero reclamada en la demanda o cualquier otra reclamaci6n o remedio solicitado
por el demandante puede ser dictado en contra suya por la Corte sin mas aviso adicional. Usted
puede perder dinero o propiedad u otros derechos importantes para usted.
USTED DEBE LLEVAR ESTE DOCUMENTO A SU ABOGADO INMEDIATAMENTE. SI
USTED NO TIENE UN ABOGADO, LLAME O VAYA A LA SIGUIENTE OFICINA. ESTA
OFICINA PUEDE PROVEERLE INFORMACION A CERCA DE COMO CONSEGUIR UN
ABOGADO.
SI USTED NO PUEDE PAGAR POR LOS SERVICIOS DE UN ABOGADO, ES POSIBLE QUE
ESTA OFICINA LE PUEDA PROVEER INFORMACION SOBRE AGENCIAS QUE OFREZCAN
SERVICIOS LEGALES SIN CARGO O BAJO COSTO A PERSONAS QUE CUALIFICAN.
CUMBERLAND COUNTY BAR ASSOCIATION
32 South Bedford Street
Carlisle, PA 17013
(717) 249 -3166 or (800) 990 -9108
r
Nedric L. Nissly, Esquire
PA Attorney I.D. No. 44233
100 Pine Street - P.O. Box 1166
Harrisburg, PA 17108 -1166
Fax: (717) 260 -1731
Phone: (717) 232 -8000
nnissly @mwn.com
Attorneys for Integrity Bank
INTEGRITY BANK, IN THE COURT OF COMMON PLEAS
Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA
V. CASE NO.
SETH B. HUGHES, CIVIL ACTION - LAW
Defendant MORTGAGE FORECLOSURE
COMPLAINT IN MORTGAGE FORECLOSURE
Plaintiff, Integrity Bank, by and through its undersigned counsel, hereby files this Complaint
in Mortgage Foreclosure pursuant to Pa.R.C.P. No. 1141, et seq., and in support thereof avers the
following:
1. Plaintiff, Integrity Bank, is a Pennsylvania banking institution with its principal place
of business at 3345 Market Street, Camp Hill, Pennsylvania 17011.
2. Defendant, Seth B. Hughes (the "Borrower "), is an adult individual with a last known
address of 14 Cardinal Drive, Carlisle, PA 17013 -4309.
3. This Court has jurisdiction over this matter this matter pursuant to 42 Pa.C.S.A. §
931(a).
4. This Court is the proper venue for this matter pursuant to 42 Pa.C.S.A. § 931(c) and
Pa.R.C.P. No. 11142 because the real property in question is located in Cumberland County,
Pennsylvania.
5. On December 30, 2011, the Bank made a loan to the Borrower in the principal
amount of $248,484.67 (the "Loan ") for a business purpose as evidenced by a Construction Loan
Agreement (the "Loan Agreement ") and Promissory Note (the "Note ") both of even date with the
Loan, executed and delivered by the Borrower in favor of the Bank. Attached hereto as Exhibit A
and incorporated herein by reference is a true and correct copy of the Loan Agreement and the Note.
6. On December 30, 2011, to secure the payments due under the Note, Borrower
executed and delivered to Plaintiff a mortgage (the "Mortgage ") against certain real property located
at 1110 Shannon Lane, Borough of Carlisle, Pennsylvania (Parcel ID #05 -19- 1647 -231) (the
"Mortgaged Property "), which was recorded in the Cumberland County Recorder of Deeds Office on
January 19, 2012 in Instrument No. 201201920. Attached hereto as Exhibit B and incorporated
herein by reference is a true and correct copy of the Mortgage.
7. Borrower has defaulted under the Note by failing to make payments due and owing
thereunder for a period in excess of 77 days.
8. As a result of said default, the Bank sent a notice of default and demand letter to the
Borrowers on March 5, 2013. Attached hereto as Exhibit C and incorporated herein by reference is
a true and correct copy of the notice of default and demand letter.
9. The amounts due under the Note and the Mortgage have been accelerated as a result
of the payment defaults by the Borrower and as of April 18, 2013, the amounts due and owing
thereunder are itemized as follows:
Principal: $244,868.03
Interest $4,077.73
Late Fees $610.64
TOTAL: $249,556.40*
*along with additional interest accruing after April 18, 2013 at the per diem rate of
$37.410393472, costs and additional reasonable attorneys' fees for collection as allowed by law,
until all sums are paid in full (the "Indebtedness ").
10. Judgment has not been entered on the Mortgage in any jurisdiction.
11. The Note and Mortgage have not been assigned and are still held by Bank.
12. The Mortgage is not a residential mortgage for purposes of sections 403 and 404 of the
Act of January 30, 1974 (P.L. 13, No. 6), 41 P. S. 101 et seq.
13. Pursuant to Pa.R.C.P. No. 1019(h), this action is based upon a breach of the written
Mortgage.
14. Defendant is an adult individual over the age of eighteen (18) and is not subject to the
protection of the provisions of the Servicemembers Civil Relief Act, f /k/a the Soldier's and Sailor's
Civil Relief Act of 1940, 50 U.S.C. App. 501, et seq., as amended.
15. Plaintiff demands judgment against Defendant in mortgage foreclosure for the
Indebtedness so Plaintiff may sell the Mortgaged Property in an attempt to satisfy the Indebtedness.
WHEREFORE, Plaintiff, Integrity Bank, demands judgment in mortgage foreclosure against
Seth B Hughes, in the amount of $249,556.40 along with interest accruing after April 18, 2013 at the
per diem rate of $37.410393472, costs and additional reasonable attorneys' fees for collection as
allowed by law, until the Indebtedness is paid in full.
McNEES WALLACE & NURICK LLC
Date: May 9, 2013 By:
edric L. Nissly, Esquire
PA Attorney I.D. No. 44233
100 Pine Street - P.O. Box 1166
Harrisburg, PA 17108 -1166
Direct Fax: (717) 260 -1731
Phone: (717) 232 -8000
nnisslygmwn.com
Attorneys for Integrity Bank
VERIFICATION
I, John Z. Havas, Vice President of Integrity Bank, verify that I am authorized to make this
verification on behalf of Integrity Bank, and that the facts contained in the foregoing Complaint in
Mortgage Foreclosure are true and correct to the best of my knowledge, information and belief and
that the same are made subject to the penalties of 18 Pa. C.S.A. § 4904 relating to unsworn
falsification to authorities.
John Z Havas, Vice President
CONSTRUCTION LOAN AGREEMENT
r�ntr #(gat L Nc< calV of Acct trt gar initials
References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item.
Any item above containing - -' has been omitted due to text length limitations.
Borrower: Seth B Hughes Lender: Integrity Bank
14 Cardinal Drive Camp Hill Office
Carlisle, PA 170134309 3345 Market Street
Camp Hill, PA 17011
(717) 920 -4900
THIS CONSTRUCTION LOAN AGREEMENT dated December 30, 2011, is made and executed between Seth B Hughes ( "Borrower ") and Integrity
Bank ( "Lender ") on the following terms and conditions. Borrower has applied to Lender for one or more loans for purposes of constructing the
Improvements on the Real Property described below. Lender is willing to lend the loan amount to Borrower solely under the terms and
conditions specified in this Agreement and In the Related Documents, to each of which Borrower agrees. Borrower understands and agrees
that: (A) in granting, renewing, or extending any Loan, Lender is relying upon Borrower's representations, warranties, and agreements as set
forth In this Agreement, and (B) all such Loans shall be and remain subject to the terms and conditions of this Agreement.
TERM. This Agreement shall be effective as of December 30, 2011, and shall continue in full force and effect until such time as all of
Borrower's Loans in favor of Lender have been paid in full, including principal, interest, costs, expenses, attorneys' fees, and other fees and
charges, or until June 30, 2012.
LOAN. The Loan shall be in an amount not to exceed the principal sum of U.S. $248,484.67 and shall bear interest on so much of the principal
sum as shall be advanced pursuant to the terms of this Agreement and the Related Documents. The Loan shall bear interest on each Advance
from the date of the Advance in accordance with the terms of the Note. Borrower shall use the Loan Funds solely for the payment of: (A) the
costs of constructing the Improvements and equipping the Project in accordance with the Construction Contract; (B) other costs and expenses
Incurred or to be incurred in connection with the construction of the Improvements as Lender in its sole discretion shall approve; and (C) if
permitted by Lender, interest due under the Note, including all expenses and all loan and commitment fees described in this Agreement. The
Loan amount shall be subject at all times to all maximum limits and conditions set forth in this Agreement or in any of the Related Documents,
including without limitation, any limits relating to loan to value ratios and aoquisition and Project costs.
PROJECT DESCRIPTION. The word "Project" as used in this Agreement means the construction and completion of all Improvements
contemplated by this Agreement, including without limitation the erection of the building or structure on the Real Property identified to this
Agreement by Borrower and Lender, installation of equipment and fixtures, landscaping, and all other work necessary to make the Project usable
and complete for the intended purposes.
The word "Property" as used in this Agreement means the Real Property together with all Improvements, all equipment, fixtures, and other
articles of personal property now or subsequently attached or affixed to the Real Property, together with all accessions, parts, and additions to,
all replacements of, and all substitutions for any of such property, and all proceeds (including insurance proceeds and refunds of premiums) from
any sale or other disposition of such property. The real estate described below constitutes the Real Property as used in this Agreement.
The real estate or its address is commonly known as:
Real Property located at 1110 Shannon Lane, Carlisle, PA 17013.
FEES AND EXPENSES. Whether or not the Project shall be consummated, Borrower shall assume and pay upon demand all out -of- pocket
expenses incurred by Lender in connection with the preparation of loan documents and the making of the Loan, including without limitation the
following: (A) all closing costs, loan fees, and disbursements; (B) all expenses of Lender's legal counsel; and (C) all title examination fees,
title insurance premiums, appraisal fees, survey costs, required fees, and filing and recording fees.
NO CONSTRUCTION PRIOR TO RECORDING OF SECURITY DOCUMENT. Borrower will not permit any work or materials to be fumished in
connection with the Project until (A) Borrower has signed the Related Documents; (B) Lender's mortgage or deed of trust and other Security
Interests in the Property have been duly recorded and perfected; (C) Lender has been provided evidence, satisfactory to Lender, that Borrower
has obtained all insurance required under this Agreement or any Related Documents and that Lender's liens on the Property and Improvements
are valid perfected first liens, subject only to such exceptions, if any, acceptable to Lender.
REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as of the date of this Agreement, as of the date of each
disbursement of loan proceeds, as of the date of any renewal, extension or modification of any Loan, and at all times any Indebtedness exists:
Business Activities. Borrower maintains an office at 14 Cardinal Drive, Carlisle, PA 170134309. Unless Borrower has designated
otherwise in writing, the principal office is the office at which Borrower keeps its books and records including its records concerning the
Collateral. Borrower will notify Lender prior to any change in the location of Borrower's principal office address or any change in
Borrower's name. Borrower shall do all things necessary to comply with all regulations, rules, ordinances, statutes, orders and decrees of
any governmental or quasi - governmental authority or court applicable to Borrower and Borrower's business activities.
Assumed Business Names. Borrower has filed or recorded all documents or filings required by law relating to all assumed business names
used by Borrower. Excluding the name of Borrower, the following is a complete list of all assumed business names under which Borrower
does business: None.
Authorization. Borrower's execution, delivery, and performance of this Agreement and all the Related Documents do not conflict with,
result in a violation of, or constitute a default under (1) any provision of any agreement or other instrument binding upon Borrower or (2)
any law, governmental regulation, court decree, or order applicable to Borrower or to Borrower's properties.
Financial Information. Each of Borrower's financial statements supplied to Lender truly and completely disclosed Borrower's financial
condition as of the date of the statement, and there has been no material adverse change in Borrower's financial condition subsequent to
the date of the most recent financial statement supplied to Lender. Borrower has no material contingent obligations except as disclosed in
such financial statements.
Legal Effect. This Agreement constitutes, and any instrument or agreement Borrower Is required to give under this Agreement when
delivered will constitute legal, valid, and binding obligations of Borrower enforceable against Borrower in accordance with their respective
terms.
Properties. Except as contemplated by this Agreement or as previously disclosed in Borrower's financial statements or in writing to Lender
and as accepted by Lender, and except for property tax liens for taxes not presently due and payable, Borrower owns and has good title to
all of Borrower's properties free and clear of all Security Interests, and has not executed any security documents or financing statements
CONSTRUCTION LOAN AGREEMENT
(Continued) Page 2
relating to such properties. All of Borrower's properties are titled in Borrower's legal name, and Borrower has not used or filed a financing
statement under any other name for at least the last five (5) years.
Hazardous Substances. Except as disclosed 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 person 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 violation of any Environmental Laws; (b) any use, generation,
manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance on, under, about or from the
Collateral by any prior owners or occupants of any of the Collateral; or (c) any actual or threatened litigation or claims of any kind by any
person relating to such matters. (3) Neither Borrower nor any tenant, contractor, agent or other authorized user of any of the Collateral
shall use, generate, manufacture, store, treat, dispose of or release any Hazardous Substance on, under, about or from any of the
Collateral; and any such activity shall be conducted in compliance with all applicable federal, state, and local laws, regulations, and
ordinances, including without limitation all Environmental Laws. Borrower authorizes Lender and its agents to enter upon the Collateral to
make such inspections and tests as Lender may deem appropriate to determine compliance of the Collateral with this section of the
Agreement. Any inspections or tests made by Lender shall be at Borrower's expense and for Lender's purposes only and shall not be
construed to create any responsibility or liability on the part of Lender to Borrower or to any other person. The representations and
warranties contained herein are based on Borrower's due diligence in investigating the Collateral for hazardous waste and Hazardous
Substances. Borrower hereby (1) releases and waives any future claims against Lender for indemnity or contribution in the event
Borrower becomes liable for cleanup or other costs under any such laws, and (2) agrees to indemnify, defend, and hold harmless Lender
against any and all claims, losses, liabilities, damages, penalties, and expenses which Lender may directly or indirectly sustain or suffer
resulting from a breach of this section of the Agreement or as a consequence of any use, generation, manufacture, storage, disposal,
release or threatened release of a hazardous waste or substance on the Collateral. The provisions of this section of the Agreement,
including the obligation to indemnify and defend, shall survive the payment of the Indebtedness and the termination, expiration or
satisfaction 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 litigation, claim, investigation, administrative proceeding or similar action (including those for unpaid taxes)
against Borrower is pending or threatened, and no other event has occurred which may materially adversely affect Borrower's financial
condition or properties, other than litigation, claims, or other events, if any, that have been disclosed to and acknowledged by Lender in
writing.
Taxes. To the best of Borrower's knowledge, all of Borrower's tax returns and reports that are or were required to be filed, have been
filed, and all taxes, assessments and other 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 reserves have been provided.
Lien Priority. Unless otherwise previously disclosed to Lender in writing, Borrower has not entered into or granted any Security
Agreements, or permitted the filing or attachment of any Security Interests on or affecting any of the Collateral directly or indirectly
securing repayment of Borrower's Loan and Note, that would be prior or that may in any way be superior to Lender's Security Interests and
rights in and to such Collateral.
Binding Effect. This Agreement, the Note, all Security Agreements (if any), and all Related Documents are binding upon the signers
thereof, as well as upon their successors, representatives and assigns, and are legally enforceable in accordance with their respective
terms.
Title to Property. Borrower has, or on the date of first disbursement of Loan proceeds will have, good and marketable title to the Collateral
free and clear of all defects, liens, and encumbrances, excepting only liens for taxes, assessments, or governmental charges or levies not
yet delinquent or payable without penalty or interest, and such liens and encumbrances as may be approved in writing by the Lender. The
Collateral is contiguous to publicly dedicated streets, roads, or highways providing access to the Collateral.
Project Costs. The Project costs are true and accurate estimates of the costs necessary to complete the Improvements in a good and
workmanlike manner according to the Plans and Specifications presented by Borrower to Lender, and Borrower shall take all steps
necessary to prevent the actual cost of the Improvements from exceeding the Project costs.
Utility Services. All utility services appropriate to the use of the Project after completion of construction are available at the boundaries of
the Collateral.
Assessment of Property. The Collateral is and will continue to be assessed and taxed as an independent parcel by all governmental
authorities.
Compliance with Governing Authorities. Borrower has examined and is familiar with all the easements, covenants, conditions, restrictions,
reservations, building laws, regulations, zoning ordinances, and federal, state, and local requirements affecting the Project. The Project will
at all times and in all respects conform to and comply with the requirements of such easements, covenants, conditions, restrictions,
reservations, building laws, regulations, zoning ordinances, and federal, state, and local requirements.
Survival of Representations and Warranties. Borrower understands and agrees that in making the Loan, Lender is relying on all
representations, warranties, and covenants made by Borrower in this Agreement or in any certificate or other instrument delivered by
Borrower to Lender under this Agreement or the Related Documents. Borrower further agrees that regardless of any investigation made by
Lender, all such representations, warranties and covenants will survive the making of the Loan and delivery to Lender of the Related
Documents, shall be continuing in nature, and shall remain in full force and effect until such time as Borrower's Indebtedness shall be paid
in full, or until this Agreement shall be terminated in the manner provided above, whichever is the last to occur.
CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to make the initial Advance and each subsequent Advance under this
Agreement shall be subject to the fulfillment to Lender's satisfaction of all of the conditions set forth in this Agreement and in the Related
Documents.
Approval of Contractors, Subcontractors, and Materialmen. Lender shall have approved a list of all contractors, subcontractors in direct
privity with a contractor, and all persons in direct privity with such a subcontractor employed in connection with the construction of the
Improvements, showing the name, address, and telephone number of each contractor, a general description of the nature of the work to be
done, the labor and materials to be supplied, the names of materialmen, if known, and the approximate dollar value of the labor, work, or
materials with respect to each contractor or materialman. Lender shall have the right to communicate with any person to verify the facts
disclosed by the list or by any application for any Advance, or for any other purpose.
Plans, Specifications, and Permits. Lender shall have received and accepted a complete set of written Plans and Specifications setting forth
all Improvements for the Project, and Borrower shall have fumished to Lender copies of all permits and requisite approvals of any
governmental body necessary for the construction and use of the Project.
CONSTRUCTION LOAN AGREEMENT
(Continued) Page 3
Architect's and Construction Contracts. Borrower shall have furnished in form and substance satisfactory to Lender an executed copy of
the Architect's Contract and an executed copy of the Construction Contract.
Related and Support Documents. Borrower shall provide to Lender in form satisfactory to Lender the following support documents for the
Loan: Assignment of Construction Contract.
Budget and Schedule of Estimated Advances. Lender shall have approved detailed budget and cash flow projections of total Project costs
and a schedule of the estimated amount and time of disbursements of each Advance.
Borrower's Authorization. Borrower shall have provided in form and substance satisfactory to Lender properly certified resolutions, duly
authorizing the consummation of the Project and duly authorizing the execution and delivery of this Agreement, the Note and the Related
Documents. In addition, Borrower shall have provided such other resolutions, authorizations, documents and instruments as Lender or its
counsel, in their sole discretion, may require.
Bond. If requested by Lender, Borrower shall have furnished a performance and payment bond In an amount equal to 100% of the amount
of the Construction Contract, as well as a materialmen's and mechanics' payment bond, with such riders and supplements as Lender may
require, each in form and substance satisfactory to Lender, naming the General Contractor as principal and Lender as an additional obligee.
Appraisal. If required by Lender, an appraisal shall be prepared for the Property, at Borrower's expense, which in form and substance shall
be satisfactory to Lender, in Lender's sole discretion, including applicable regulatory requirements.
Plans and Specifications. If requested by Lender, Borrower shall have assigned to Lender on Lender's forms the Plans and Specifications
for the Project.
Environmental Report. If requested by Lender, Borrower shall have furnished to Lender, at Borrower's expense, an environmental report
and certificate on the Property in form and substance satisfactory to Lender, prepared by an engineer or other expert satisfactory to Lender
stating that the Property complies with all applicable provisions and requirements of the "Hazardous Substances" paragraph set forth in this
Agreement.
Soil Report. If requested by Lender, Borrower shall have furnished to Lender, at Borrower's expenses, a soil report for the Property in form
and substance satisfactory to Lender, prepared by a registered engineer satisfactory to Lender stating that the Property is free from soil or
other geological conditions that would preclude its use or development as contemplated without extra expense for precautionary, corrective
or remedial measures.
Survey. If requested by Lender, Borrower shall have furnished to Lender a survey of recent date, prepared and certified by a qualified
surveyor and providing that the Improvements, if constructed in accordance with the Plans and Specifications, shall lie wholly within the
boundaries of the Collateral without encroachment or violation of any zoning ordinances, building codes or regulations, or setback
requirements, together with such other information as Lender in its sole discretion may require.
Zoning. Borrower shall have furnished evidence satisfactory to Lender that the Collateral is duly and validly zoned for the construction,
maintenance, and operation of the Project.
Title Insurance. Borrower shall have provided to Lender an ALTA Lender's extended coverage policy of title insurance with such
endorsements as Lender may require, issued by a title insurance company acceptable to Lender and in a form, amount, and content
satisfactory to Lender, insuring or agreeing to insure that Lender's security agreement or other security document on the Property is or will
be upon recordation a valid first lien on the Property free and clear of all defects, liens, encumbrances, and exceptions except those as
specifically accepted by Lender in writing. If requested by Lender, Borrower shall provide to Lender, at Borrower's expense, a foundation
endorsement to the title policy upon the completion of each foundation for the Improvements, showing no encroachments, and upon
completion an endorsement which insures the lien -free completion of the Improvements.
Insurance. Unless waived by Lender in writing, Borrower shall have delivered to Lender the following insurance policies or evidence
thereof: (a) an all risks course of construction insurance policy (builder's risk), with extended coverage covering the Improvements issued
in an amount and by a company acceptable to Lender, containing a loss payable or other endorsement satisfactory to Lender insuring
Lender as mortgagee, together with such other endorsements as may be required by Lender, including stipulations that coverages will not
be cancelled or diminished without at least thirty (30) days prior written notice to Lender; (b) owners and General Contractor general
liability insurance, public liability and workmen's compensation insurance; (c) flood insurance if required by Lender or applicable law; and
(d) all other insurance required by this Agreement or by the Related Documents.
Workers' Compensation Coverage. Provide to Lender proof of the General Contractor's compliance with all applicable workers'
compensation laws and regulations with regard to all work performed on the Project.
Payment of Fees and Expenses. Borrower shall have paid to Lender all fees, charges, and other expenses which are then due and payable
as specified in this Agreement or any Related Document.
Satisfactory Construction. All work usually done at the stage of construction for which disbursement is requested shall have been done in
a good and workmanlike manner and all materials and fixtures usually furnished and installed at that stage of construction shall have been
furnished and installed, all in compliance with the Plans and Specifications. Borrower shall also have furnished to Lender such proofs as
Lender may require to establish the progress of the work, compliance with applicable laws, freedom of the Property from liens, and the
basis for the requested disbursement.
Certification. Borrower shall have furnished to Lender a certification by an engineer, architect, or other qualified inspector acceptable to
Lender that the construction of the Improvements has complied and will continue to comply with all applicable statutes, ordinances, codes,
regulations, and similar requirements.
Lien Waivers. Borrower shall have obtained and attached to each application for an Advance, Including the Advance to cover final payment
to the General Contractor, executed acknowledgments of payments of all sums due and releases of mechanic's and materialmen's liens,
satisfactory to Lender, from any party having lien rights, which acknowledgments of payment and releases of liens shall cover all work,
labor, equipment, materials done, supplied, performed, or furnished prior to such application for an Advance.
No Event of Default. There shall not exist at the time of any Advance a condition which would constitute an Event of Default under this
Agreement or under any Related Document.
DISBURSEMENT OF LOAN FUNDS. The following provisions relate to the disbursement of funds from the Loan Fund.
Application for Advances. Each application shall be stated on a standard AIA payment request form or other form approved by Lender,
executed by Borrower, and supported by such evidence as Lender shall reasonably require. Borrower shall apply only for disbursement with
respect to work actually done by the General Contractor and for materials and equipment actually incorporated into the Project. Each
application for an Advance shall be deemed a certification of Borrower that as of the date of such application, all representations and
CONSTRUCTION LOAN AGREEMENT
(Continued) Page 4
warranties contained in the Agreement are true and correct, and that Borrower is in compliance with all of the provisions of this
Agreement.
Payments. At the sole option of Lender, Advances may be paid in the joint names of Borrower and the General Contractor,
subcontractor(s), or supplier(s) in payment of sums due under the Construction Contract. At its sole option, Lender may directly pay the
General Contractor and any subcontractors or other parties the suns due under the Construction Contract. Borrower authorizes Lender to
make such payments. This authorization shall be deemed coupled with an Interest, shall be irrevocable, and shall survive an Event of
Default under this Agreement.
Projected Cost Overruns. If Lender at any time determines in its sole discretion that the amount in the Loan Fund is insufficient, or will be
insufficient, to complete fully and to pay for the Project, then within ten (10) days after receipt of a written request from Lender, Borrower
shall deposit in the Loan Fund an amount equal to the deficiency as determined by Lender. The judgment and determination of Lender
under this section shall be final and conclusive. Any such amounts deposited by Borrower shall be disbursed prior to any Loan proceeds.
Final Payment to General Contractor. Upon completion of the Project and fulfillment of the Construction Contract to the satisfaction of
Lender and provided sufficient Loan Funds are available, Lender shall make an Advance to cover the final payment due to the General
Contractor upon delivery to Lender of endorsements to the ALTA title insurance policy following the posting of the completion notice, as
provided under applicable law. Construction shall not be deemed complete for purposes of final disbursement unless and until Lender shall
have received all of the following:
(1) Evidence satisfactory to Lender that all work under the Construction Contract requiring inspection by any governmental authority
with jurisdiction has been duly inspected and approved by such authority, that a certificate of occupancy has been issued, and that all
parties performing work have been paid, or will be paid, for such work;
(2) A certification by an engineer, architect, or other qualified inspector acceptable to Lender that the Improvements have been
completed substantially in accordance with the Plans and Specifications and the Construction Contract, that direct connection has
been made to all utilities set forth in the Plans and Specifications, and that the Project is ready for occupancy; and
(3) Acceptance of the completed Improvements by Lender and Borrower.
Construction Default. If Borrower fails in any respect to comply with the provisions of this Agreement or if construction ceases before
completion regardless of the reason, Lender, at its option, may refuse to make further Advances, may accelerate the indebtedness under
the terms of the Note, and without thereby impairing any of its rights, powers, or privileges, may enter into possession of the construction
site and perform or cause to be performed any and all work and labor necessary to complete the improvements, substantially in accordance
with the Plans and Specifications.
Damage or Destruction. If any of the Collateral or Improvements is damaged or destroyed by casualty of any nature, within sixty (60) days
thereafter Borrower shall restore the Collateral and Improvements to the condition in which they were before such damage or destruction
with funds other than those in the Loan Fund. Lender shall not be obligated to make disbursements under this Agreement until such
restoration has been accomplished.
Adequate Security. When any event occurs that Lender determines may endanger completion of the Project or the fulfillment of any
condition or covenant in this Agreement, Lender may require Borrower to furnish, within ten (10) days after delivery of a written request,
adequate security to eliminate, reduce, or indemnify Lender against, such danger. In addition, upon such occurrence, Lender in its sole
discretion may advance funds or agree to undertake to advance funds to any party to eliminate, reduce, or indemnify Lender against, such
danger or to complete the Project. All sums paid by Lender pursuant to such agreements or undertakings shall be for Borrower's account
and shall be without prejudice to Borrower's rights, if any, to receive such funds from the party to whom paid. All sums expended by
Lender in the exercise of its option to complete the Project or protect Lender's interests shall be payable to Lender on demand together with
interest from the date of the Advance at the rate applicable to the Loan. In addition, any Advance of funds under this Agreement, including
without limitation direct disbursements to the General Contractor or other parties in payment of sums due under the Construction Contract,
shall be deemed to have been expended by or on behalf of Borrower and to have been secured by Lender's Mortgage, if any, on the
Collateral.
CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to Borrower, whether under this Agreement or under any
other agreement, Lender shall have no obligation to make Loan Advances or to disburse Loan 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 Borrower or any Guarantor has with
Lender, (B) Borrower or any Guarantor dies, becomes incompetent or becomes insolvent, files a petition in bankruptcy or similar proceedings,
or is adjudged a bankrupt; (C) there occurs a material adverse change in Borrower's financial condition, in the financial condition of any
Guarantor, or in the value of any Collateral securing any Loan; or (D) any Guarantor seeks, claims or otherwise attempts to limit, modify or
revoke such Guarantor's guaranty of the Loan or any other loan with Lender, or (E) Lender in good faith deems itself insecure, even though no
Event of Default shall have occurred.
LIMITATION OF RESPONSIBILITY. The making of any Advance by Lender shall not constitute or be interpreted as either (A) an approval or
acceptance by Lender of the work done through the date of the Advance, or (B) a representation or indemnity by Lender to any party against
any deficiency or defect in the work or against any breach of any contract. Inspections and approvals of the Plans and Specifications, the
Improvements, the workmanship and materials used in the Improvements, and the exercise of any other right of inspection, approval, or inquiry
granted to Lender in this Agreement are acknowledged to be solely for the protection of Lender's interests, and under no circumstances shall
they be construed to impose any responsibility or liability of any nature whatsoever on Lender to any party. Neither Borrower nor any
contractor, subcontractor, materialman, laborer, or any other person shall rely, or have any right to rely, upon Lender's determination of the
appropriateness of any Advance. No disbursement or approval by Lender shall constitute a representation by Lender as to the nature of the
Project, its construction, or its intended use for Borrower or for any other person, nor shall it constitute an indemnity by Lender to Borrower or
to any other person against any deficiency or defects in the Project or against any breach of any contract.
AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, so long as this Agreement remains In effect, Borrower will:
Notices of Claims and Litigation. Promptly inform Lender in writing of (1) all material adverse changes in Borrower's financial condition,
and (2) all existing and all threatened litigation, claims, investigations, administrative proceedings or similar actions affecting Borrower or
any Guarantor which could materially affect the financial condition of Borrower or the financial condition of any Guarantor.
Financial Records. Maintain its books and records in accordance with GAAP, applied on a consistent basis, and permit Lender to examine
and audit Borrower's books and records at all reasonable times.
Financial Statements. Furnish Lender with such financial statements and other related information at such frequencies and in such detail as
Lender may reasonably request.
Additional Information. Furnish such additional information and statements, lists of assets and liabilities, agings of receivables and
� - CONSTRUCTION LOAN AGREEMENT*
Page 5
, ^ -
~= ina ZZ. and
business operations as mayrequest from time to time. t�,A* -1 not L-z- 11:! 4:. cm,
and any other party and notify Egrideir irrhm t 6ly in' w . riting of any defa - Olt In'connection With any�8th�er,�uch'agiree ments
insurance. .,Maintain fire and other risk:insurance,- hail, federal crop Insurance,- public liability insuranceland such other Insurance as Lender
may require with respect to Borrower's properties . and operations, in form, amounts, coverages and with insurance companies acceptable
to Lerider. Borrower, upon request of Lender, will deliver,to Lender from time,to,time,the policies or. certificates, of Insurance in form
satisfactory'to Lender,-inclucliiig stio6l.�ti6n will - riot be cancelled or diminished withoLitat least thirty'(30)"diys priorwritten
notice to Lender. ? Each i�s iii Vii'do'ns'elmie providi66 tKat ;:; 6 f6�6r of Lender will not tie impaired iri
any way by any'act, omission . or default B6�ro with all pol icies'covering assets in which Lender
holds or is offered'a 'security interest f6� thii'Loari�? Borfower will provide Lender with such lencler's loss payable or other endorsements as
Lender fn6� i4ittiout:11mitation'the following:'(1) ' name 'of the'insurer; (2) the risks insured; (3) the
,q-,amount of the policy; %(4)gthe properties insured; (5) the then current property,values on the'basis of,which insurance has been obtainedf
r. vr and,the manner,of determining those values; and �(6) � the expiration date ofrthe policy. In addition,.upon request of Lenderr (however. not
j more often,thaninnually),- Bormwer,will, have �an, independent appraiser satisfactory,to Lender determine, aSLapplic'able, cash
..value replacement cost of any,Collateral. cost of such appraisal shall be paid by r Borrower. ilrw- nii 1!1 4? W1
Gui�iintlii. - Pri'r to disbursement any �oan " procee s,' urnis execute t ,guaranties of the Loans In favor of,Lender, executed by the
- _!- Names of Guarantors
'Jennlfer'lkb�611�ieilt o`v-v`UhIIktid- A( 1)
'
^ ui 16iioo in connection with the preparation of loan documents and the making of the Loan, including, without
limita closing costs, fees, disbursements, all expenses of legal counsel, and alijitle examination fees,, title insurance
pre iums, appraisal fees, survey costs, required fees, and filing and recording fees.'nJ r-.1, t,- 4.
taxes, Charges and Liens. Pay and discharge when due all of Its indebtedness and obligations, including without limitation all assessments,
.6rdp rties, I 'come, or profits,, prior
to the date which penalties wou Id - attacfi - � aind �all liw 61 claims th at,- if uhpaid,'m ight 156cbine'a lien or charge upon any of Borrower's
prop ific6me, 6r or'ofits'�'JPi6 Borrower will not be required to pay and discharge any such assessment, tax, charge,
levy, lien or claim,so long,as,(I) ' Ahe legality of shall be contested,in good faith by appropriate;proceedinds, and (2) Borrower
shall have established on Borrower's books ajequate reserves with respect to such contested assessment, tax; charge, levy, lien,- or claim
In �ccordance 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 - all'bther instruments and agreemerits between Borrower and Lender. 13orrower shall notify Lender immediately in
writing of any default inconnii6tion'with'any 6greemanti
r D oairis and
Borrower's other pr ' 6perties'and10 exarnindl books, accounts, and records and to make copies and memoranda of
. ~.~.~ accoun
computer generated records and computer software programs for the generation of such.records) in the possession of a third-party,
Compliance Certificates., UnI ' ess.waived in,writing,,by � Lender, o provide Lender� at least annually,-,with,a�certificate executed, by. Borrower's i
chief financial, officer, or other officer or person acceptable to Lender, certifying that the representations and warranties set forth in this
Agreement ire true and correct as of the date of the certificate and further certifying that, as of the date of the certificate, no Event of
Default exists; Linder this Agree'me"nit' ZVJ �* Uzcfa, Nc. M."C"Ir. '. W f . .,t: 4 Vz W�- 44 V C I--
Construction, of, the Project. 0 , Cause,th a r Improvements to be constructed � and . equipped � In, a: diligent - and i orderly: manner. and in strict
abcbr6rice with thir.,Plans'and Specifications approved by Construction Contract, and all applicable laws. ordinances, codes,
regulations,"and , rights of adjoining or concurrent property owners.
Defects., Upon demand of Lender, promptly correct any defect in the Improvements or,any departure.from the Plans and Specifications not
ap . proved by,L:6nder In writing b6fore further,work shall be done upon the portion of the Improvements affected. vxwth-,�
Project 4 Clalmi 'iind - Ll�lgatio�:J Promptly' info riYi t Ci��if *of (1) all material adverse changes in the financial condition of the General
Contractor; , (2) any, litigation and claims, actual -or. threatened, affecting, the Project or.jhe�General Contractor, which,could materially.
affect the ,ucc000m/ completion of,the Project_or, the, ability of the Gene;4il Contractor. to, complete, the Project - as agreed;,and (3) any
666dition or event which �onstitutis�a b�reaich or default under any of the Related Documents or any contract related to the Project. A
Improvements to be fully paid an;J discharged in a'timel� manne'raind - (2) 1 take'all reasonable step s'ne oessary-to,remove 611 claims of liens
Collateral or Improvements.' ' Upon Lender's �equ6st� B666%vei shall - make guch demands or. claims upon or against laborers, materialmen,
subcontractors, or otherpersons who J have fumished'or �clalm'tol havel fuinished 1abor, services'. or materials"In connection with the
Improvements,,which demands or,clalms shall,under.the laws - of - the, Commonwealth - of ; Pennsylvania, require: diligent assertions of lien
claims upon penalty of Io!is'6Fwaiver thereof. -'Borrov�er shall, within ten (10) days after.the filingof any.claim of lien that is disputed or
contested 15�,Borrower,'provicle Lend& with, a surety bond issued bya surety, acceptable to Lender, sufficient to releasethe claim of lien or,
deoositwith Lender in anouffit s Lenderfor-the possibility, that the contestwill be unsuccessful.-� If. Borrower fails to remove
any llenonjhe'Collateral�or. , Improvements or provide-a'bond or,deposit pursuant to - this - provision. , Lender may,pay such llen,�or may
contest the validity of the�,Iie B&ft6wer 1 pay all. costs and,expenses of such.contest,tincluding, Lender's, reasonable attorneys'
Taxes and Claims. Pay and o pmrn due /m/v[av,m*vm/nuomnnnusn.om/000 � m n m�m
ono'ono��mxu�.u�vu
.�nu' .' .�� �� ".%�0 �� �^: *
CONSTRUCTION LOAN AGREEMENT
(Continued) Page 6
or charge upon the Collateral or Improvements; provided, however, that Borrower shall not be required to pay and discharge any such
indebtedness, obligation, or claim so long as (1) its legality shall be contested in good faith by appropriate proceedings, (2) the
indebtedness, obligation, or claim does not become a lien or charge upon the Collateral or Improvements, and (3) Borrower shall have
established on its books adequate reserves with respect to the amount contested in accordance with GAAP. If the indebtedness,
obligation, or claim does become a lien or charge upon the Collateral or Improvements, Borrower shall remove the lien or charge as provided
in the preceding paragraph.
Environmental Studies. Promptly conduct and complete, at Borrower's expense, all such Investigations, studies, samplings and testings as
may be requested by Lender or any governmental authority relative to any substance, or any waste or by- product of any substance defined
as toxic or a hazardous substance under applicable federal, state, or local law, rule, regulation, order or directive, at or affecting any
property or any facility owned, leased or used by Borrower.
Additional Assurances. Make, execute and deliver to Lender such promissory notes, mortgages, deeds of trust, security agreements,
assignments, financing statements, Instruments, documents and other agreements as Lender or its attorneys may reasonably request to
evidence and secure the Loans and to perfect all Security Interests In the Collateral and Improvements.
LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lenders interest in the Collateral or if
Borrower falls to comply with any provision of this Agreement or any Related Documents, including but not limited to Borrowers failure to
discharge or pay when due any amounts Borrower is required to discharge or pay under this Agreement or any Related Documents, Lender on
Borrowers behalf may (but shall not be obligated to) take any action that Lender deems appropriate, Including but not limited to discharging or
paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on any Collateral and paying all costs for
insuring, maintaining and preserving any Collateral. All such expenditures incurred or paid by Lender for such purposes will then bear interest at
the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Borrower. All such expenses will become
a part of the Indebtedness and, at Lenders option, will (A) be payable on demand; (B) be added to the balance of the Note and be
apportioned among and be payable with any installment payments to become due during either (1) the term of any applicable insurance policy;
or (2) the remaining term of the Note; or (C) be treated as a balloon payment which will be due and payable at the Note's maturity.
NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this Agreement is in effect, Borrower shall not, without the
prior written consent of Lender.
Indebtedness and Liens. (1) Except for trade debt incurred in the normal course of business and indebtedness to Lender contemplated by
this Agreement, create, incur or assume indebtedness for borrowed money, including capital leases, (2) sell, transfer, mortgage, assign,
pledge, lease, grant a security interest in, or encumber any of Borrower's assets (except as allowed as Permitted Liens), or (3) sell with
recourse any of Borrowers accounts, except to Lender.
Continuity of Operations. (1) Engage in any business activities substantially different than those in which Borrower is presently engaged,
or (2) cease operations, liquidate, merge, transfer, acquire or consolidate with any other entity, change ownership, dissolve or transfer or
sell Collateral out of the ordinary course of business.
Loans, Acquisitions and Guaranties. (1) Loan, invest in or advance money or assets to any other person, enterprise or entity, (2)
purchase, create or acquire any interest in any other enterprise or entity, or (3) incur any obligation as surety or guarantor other than in
the ordinary course of business.
Modification of Contract. Make or permit to be made any modification of the Construction Contract.
Liens. Create or allow to be created any lien or charge upon the Collateral or the Improvements.
Agreements. Enter into any agreement containing any provisions which would be violated or breached by the performance of Borrower's
obligations under this Agreement or in connection herewith.
GENERAL PROJECT PROVISIONS. The following provisions relate to the construction and completion of the Project;
Change Orders. All requests for changes In the Plans and Specifications, other than minor changes involving no extra cost, must be in
writing, signed by Borrower and the architect, and delivered to Lender for its approval. Borrower will not permit the performance of any
work pursuant to any change order or modification of the Construction Contract or any subcontract without the written approval of Lender.
Borrower will obtain any required permits or authorizations from governmental. authorities having jurisdiction before approving or requesting
a new change order.
Purchase of Materials; Conditional Sales Contracts. No materials, equipment, fixtures, or articles of personal property placed in or
incorporated into the Project shall be purchased or installed under any Security Agreement or other agreement whereby the seller reserves
or purports to reserve title or the right of removal or repossession, or the right to consider such items as personal property after their
incorporation into the Project, unless otherwise authorized by Lender in writing.
lenders Right of Entry and Inspection. Lender and its agents shall have at all times the right of entry and free access to the Property and
the right to inspect all work done, labor performed, and materials furnished with respect to the Project. Lender shall have unrestricted
access to and the right to copy all records, accounting books, contracts, subcontracts, bills, statements, vouchers, and supporting
documents of Borrower relating in any way to the Project.
Lenders Right to Stop Work. If Lender in good faith detemvnes that any work or materials do not conform to the approved Plans and
Specifications or sound building practices, or otherwise depart from any of the requirements of this Agreement, Lender may require the
work to be stopped and withhold disbursements until the matter is corrected. In such event, Borrower will promptly correct the work to
Lenders satisfaction. No such action by Lender will affect Borrowers obligation to complete the Improvements on or before the
Completion Date. Lender is under no duty to supervise or inspect the construction or examine any books and records. Any inspection or
examination by Lender is for the sole purpose of protecting Lenders security and preserving Lenders rights under this Agreement. No
default of Borrower will be waived by any inspection by Lender. In.no event will any inspection by Lender be a representation that there
has been or will be compliance with the Plans and Specifications or that the construction is free from defective materials or workmanship.
Indemnity. Borrower shall indemnify, defend, and hold Lender harmless from any and all claims asserted against Lender or the Property by
any person, entity, or governmental body, or arising out of or in connection with the Property, Improvements, or Project. Lender shall be
entitled to appear in any proceedings to defend itself against such claims, and all costs and expenses reasonable attorneys' fees incurred by
Lender in connection with such defense shall be paid by Borrower to Lender. Lender shall, in its sole discretion, be entitled to settle or
compromise any asserted claims against it, and such settlement shall be binding upon Borrower for purposes of this indemnification. All
amounts paid by Lender under this paragraph shall be secured by Lenders security agreement or Mortgage, if any, on the Property, shall be
deemed an additional principal Advance under the Loan, payable upon demand, and shall bear interest at the rate applicable to the Loan.
Publicity. Lender may display a sign at the construction site informing the public that Lender is the construction lender for the Project.
Lender may obtain other publicity in connection with the Project through press releases and participation in ground- breaking and opening
CONSTRUCTION LOAN AGREEMENT
(Continued) Page 7
ceremonies and similar events.
Actions. Lender shall have the right to commence, appear in, or defend any action or proceeding purporting to affect the rights, duties, or
liabilities of the parties to this Agreement, or the disbursement of funds from the Loan Fund. In connection with this right, Lender may
incur and pay reasonable costs, expenses and reasonable attorneys' fees. Borrower covenants to pay to Lender on demand all such
expenses, together with interest from the date Lender incurs the expense at the rate specified in the Note, and Lender is authorized to
disburse funds from the Loan Fund for such purposes.
RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Borrower's accounts with Lender (whether
checking, savings, or some other account). This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may
open in the future. However, this does not Include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by
law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the Indebtedness against any
and all such accounts.
DEFAULT. Each of the following shall constitute an Event of Default under this Agreement:
Payment Default. Borrower fails to make any payment when due under the Loan.
Other Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Agreement
or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other
agreement between Lender and Borrower.
Default In Favor of Third Parties. Borrower or any Grantor defaults under any loan, extension of credit, security agreement, purchase or
sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower's or any
Grantor's property or Borrower's or any Grantor's ability to repay the Loans or perform their respective obligations under this Agreement or
any of the Related Documents.
False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this
Agreement or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes
false or misleading at any time thereafter.
Death or Insolvency. The death of Borrower or the dissolution or termination of Borrower's existence as a going business, the insolvency
of Borrower, the appointment of a receiver for any part of Borrower's property, any assignment for the benefit of creditors, any type of
creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower.
Defective Collateralization. This Agreement or any of the Related Documents ceases to be in full force and effect (including failure of any
collateral document to create a valid and perfected security interest or lien) at any time and for any reason.
Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self -help,
repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the Loan.
This includes a garnishment of any of Borrower's accounts, including deposit accounts, with Lender. However, this Event of Default shall
not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or
forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or
a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as "being an adequate
reserve or bond for the dispute.
Breach of Construction Contract. The Improvements are not constructed in accordance with the Plans and Specifications or in accordance
with the terms of the Construction Contract.
Cessation of Construction. Prior to the completion of construction of the Improvements and equipping of the Project, the construction of
the Improvements or the equipping of the Project is abandoned or work thereon ceases for a period of more than ten (10) days for any
reason, or the Improvements are not completed for purposes of final payment to the General Contractor prior to the completion date
represented by Borrower to Lender, regardless of the reason for the delay.
Transfer of Property. Sale, transfer, hypothecation, assignment, or conveyance of the Property or the Improvements or any portion thereof
or interest therein by Borrower or any Borrower without Lender's prior written consent.
Condemnation. All or any material portion of the Collateral is condemned, seized, or appropriated without compensation, and Borrower
does not within thirty (30) days after such condemnation, seizure, or appropriation, initiate and diligently prosecute appropriate action to
contest in good faith the validity of such condemnation, seizure, or appropriation.
Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any
Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness.
Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or
performance of the loan Is Impaired.
Insecurity. Lender in good faith believes itself insecure.
Right to Cure. If any default, other than a default on Indebtedness, is curable and if Borrower or Grantor, as the case may be, has not been
given a notice of a similar default within the preceding twelve (12) months, it may be cured if Borrower or Grantor, as the case may be,
after Lender sends written notice to Borrower or Grantor, as the case may be, demanding cure of such default: (1) cure the default within
ten (10) days; or (2) if the cure requires more than ten (10) days, immediately initiate steps which Lender deems in Lender's sole
discretion to be sufficient to cure the default and thereafter continue and complete all reasonable and necessary steps sufficient to produce
compliance as soon as reasonably practical.
EFFECT OF AN EVENT OF DEFAULT; REMEDIES. Upon the occurrence of any Event of Default and at any time thereafter, Lender may, at its
option, but without any obligation to do so, and In addition to any other right Lender without notice to Borrower may have, do any one or more
of the following without notice to Borrower: (a) Cancel this Agreement; (b) Institute appropriate proceedings to enforce the performance of this
Agreement; (c) Withhold further disbursement of Loan Funds; (d) Expend funds necessary to remedy the default; (e) Take possession of the
Property and continue construction of the Project; (f) Accelerate maturity of the Note and /or Indebtedness and demand payment of all sums due
under the Note and /or Indebtedness; (g) Bring an action on the Note and /or Indebtedness; (h) Foreclose Lender's security agreement or
Mortgage, if any, on the Property in any manner available under law; and (1) Exercise any other right or remedy which it has under the Note or
Related Documents, or which is otherwise available at law or In equity or by statute.
COMPLETION OF IMPROVEMENTS BY LENDER. If Lender takes possession of the Collateral, it may take any and all actions necessary in its
judgment to complete construction of the Improvements, including but not limited to making changes in the Plans and Specifications, work, or
materials and entering into, modifying or terminating any contractual arrangements, subject to Lender's right at any time to discontinue any
CONSTRUCTION LOAN AGREEMENT
(Continued) Page s
work without liability. If Lender elects to complete the Improvements, it will not assume any liability to Borrower or to any other person for
completing the Improvements or for the manner or quality of construction of the Improvements, and Borrower expressly waives any such
liability. Borrower irrevocably authorizes Lender, with full power of substitution, at Lender's option, to complete the Improvements either in
Borrower's name or in its own name. It is understood that nothing set forth herein shall require Lender to take any such action. In any event,
all sums expended by Lender in completing the construction of the Improvements will be considered to have been disbursed to Borrower and will
be secured by the Collateral for the Loan. Any such sums that cause the principal amount of the Loan to exceed the face amount of the Note
will be considered to be an additional Loan to Borrower, bearing interest at the Note rate and being secured by the Collateral. For these
purposes, Borrower assigns to Lender all of Its right, title and interest in and to the Project Documents; however Lender will not have any
obligation under the Project Documents unless Lender expressly hereafter agrees to assume such obligations in writing. Lender will have the
right to exercise any rights of Borrower under the Project Documents upon the occurrence of an Event of Default. Except as may be prohibited
by applicable law, all of Lender's rights and remedies, whether evidenced by this Agreement or by any other writing, shall be cumulative and
may be exercised singularly or concurrently.
ADDITIONAL DOCUMENTS. Borrower shall provide Lender with the following additional documents:
Opinion of Counsel. When required by Lender, Borrower has provided or will provide Lender with an opinion of Borrower's counsel
certifying to and that: (1) Borrower's Note, any Security Agreements and this Agreement constitute valid and binding obligations on
Borrower's part that are enforceable in accordance with their respective terms; (2) Borrower is validly existing and in good standing; (3)
such other matters as may have been requested by Lender or by Lender's counsel.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Agreement:
Amendments. This Agreement, together with any Related Documents, constitutes the entire understanding and agreement of the parties
as to the matters set forth in this Agreement. No alteration of or amendment to this Agreement shall be effective unless given in writing
and signed by the party or parties sought to be charged or bound by the alteration or amendment.
Attorneys' Fees; Expenses. Borrower agrees to pay upon demand all of Lender's costs and expenses, including Lenders reasonable
attorneys' fees and Lenders legal expenses, incurred in connection with the enforcement of this Agreement. Lender may hire or pay
someone else to help enforce this Agreement, and Borrower shall pay the costs and expenses of such enforcement. Costs and expenses
include Lenders reasonable attorneys' fees and legal expenses whether or not there is a lawsuit, including reasonable attorneys' fees and
legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any
anticipated post judgment collection services. Borrower also shall pay all court costs and such additional fees as may be directed by the
court.
Authority to File Notices. Borrower authorizes Lender to file for the record any notice that Lender deems necessary to protect its interest
under this Agreement. This authorization shall be deemed coupled with an interest and shall be irrevocable while any sum or performance
remains due and owing under any of the Related Documents.
Caption Headings. Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the
provisions of this Agreement.
Governing Law. This Agreement will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the
laws of the Commonwealth of Pennsylvania without regard to its conflicts of law provisions. This Agreement has been accepted by Lender
In the Commonwealth of Pennsylvania.
Choice of Venue. If there is a lawsuit, Borrower agrees upon Lenders request to submit to the jurisdiction of the courts of Cumberland
County, Commonwealth of Pennsylvania.
Indemnification of Lender. Borrower agrees to indemnify, to defend and to save and hold Lender harmless from any and all claims, suits,
obligations, damages, losses, costs and expenses (including, without limitation, Lenders reasonable attorneys' fees, as well as Lenders
architect's and engineering fees), demands, liabilities, penalties, fines and forfeitures of any nature whatsoever that may be asserted
against or incurred by Lender, its officers, directors, employees, and agents arising out of, relating to, or in any manner occasioned by this
Agreement and the exercise of the rights and remedies granted Lender under this. The foregoing indemnity provisions shall survive the
cancellation of this Agreement as to all matters arising or accruing prior to such cancellation and the foregoing indemnity shall survive in
the event that Lender elects to exercise any of the remedies as provided under this Agreement following default hereunder.
Consent to Loan Participation. Borrower agrees and consents to Lenders sale or transfer, whether now or later, of one or more
participation interests in the Loan to one or more purchasers, whether related or unrelated to Lender. Lender may provide, without any
limitation whatsoever, to any one or more purchasers, or potential purchasers, any information or knowledge Lender may have about
Borrower or about any other matter relating to the Loan, and Borrower hereby waives any rights to privacy Borrower may have with respect
to such matters. Borrower additionally waives any and all notices of sale of participation interests, as well as all notices of any repurchase
of such participation interests. Borrower also agrees that the purchasers of any such participation interests will be considered as the
absolute owners of such interests in the Loan and will have all the rights granted under the participation agreement or agreements
governing the sale of such participation interests. Borrower further waives all rights of offset or counterclaim that it may have now or later
against Lender or against any purchaser of such a participation interest and unconditionally agrees that either Lender or such purchaser may
enforce Borrowers obligation under the Loan Irrespective of the failure or insolvency of any holder of any interest in the Loan. Borrower
further agrees that the purchaser of any such participation interests may enforce its interests irrespective of any personal claims or
defenses that Borrower may have against Lender.
No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Agreement unless such waiver is given in writing
and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any
other right. A waiver by Lender of a provision of this Agreement shall not prejudice or constitute a waiver of Lenders right otherwise to
demand strict compliance with that provision or any other provision of this Agreement. No prior waiver by Lender, nor any course of
dealing between Lender and Borrower, or between Lender and any Grantor, shall constitute a waiver of any of Lender's rights or of any of
Borrowers or any Grantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Agreement,
the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent
is required and in all cases such consent may be granted or withheld in the sole discretion of Lender.
Severability. If a court of competent jurisdiction finds any provision of this Agreement to be illegal, invalid, or unenforceable as to any
circumstance, that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance. If feasible,
the offending provision shall be considered modified so that it becomes legal, valid and enforceable. If the offending provision cannot be so
modified, it shall be considered deleted from this Agreement. Unless otherwise required by law, the illegality, invalidity, or unenforceability
of any provision of this Agreement shall not affect the legality, validity or enforceability of any other provision of this Agreement.
Successors and Assigns. All covenants and agreements by or on behalf of Borrower contained in this Agreement or any Related
� L
CONSTRUCTION LOAN AGREEMENT
(Continued) Page 9
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 and agrees that in making the Loan, Lender is relying on all
representations, warranties, and covenants made by Borrower in this Agreement or in any certificate or other instrument delivered by
Borrower to Lender under this Agreement or the Related Documents. Borrower further agrees that regardless of any investigation made by
Lender, all such representations, warranties and covenants will survive the making of the Loan and delivery to Lender of the Related
Documents, shall be continuing in nature, and shall remain In full force and effect until such time as Borrower's Indebtedness shall be paid
in full, or until this Agreement shall be terminated in the manner provided above, whichever is the last to occur.
Time Is of the Essence. Time is of the essence in the performance of this Agreement.
Waive Jury. All parties to this Agreement hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by any
party against any other party.
DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Agreement. Unless specifically
stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms
used in the singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise
defined in this Agreement shall have the meanings attributed to such terms in the Uniform Commercial Code. Accounting words and terms not
otherwise defined in this Agreement shall have the meanings assigned to them in accordance with generally accepted accounting principles as in
effect on the date of this Agreement:
Advance. The word "Advance" means a disbursement of Loan funds made, or to be made, to Borrower or on Borrower's behalf on a line
of credit or multiple advance basis under the terms and conditions of this Agreement.
Agreement. The word "Agreement" means this Construction Loan Agreement, as this Construction Loan Agreement may be amended or
modified from time to time, together with all exhibits and schedules attached to this Construction Loan Agreement from time to time.
Architect's Contract. The words "Architect's Contract" mean the architect's contract between Borrower and the architect for the Project.
Borrower. The word "Borrower" means Seth B Hughes and includes all co- signers and co- makers signing the Note and all their successors
and assigns.
Collateral. The word "Collateral" means all property and assets granted as collateral security for a Loan, whether real or personal property,
whether granted directly or indirectly, whether granted now or in the future, and whether granted in the form of a security interest,
mortgage, collateral mortgage, deed of trust, assignment, pledge, crop pledge, chattel mortgage, collateral chattel mortgage, chattel trust,
factor's lien, equipment trust, conditional sale, trust receipt, lien, charge, lien or title retention contract, lease or consignment intended as a
security device, or any other security or lien interest whatsoever, whether created by law, contract, or otherwise.
Completion Date. The words "Completion Date" mean such date as Lender shall have established as the date by which Borrower is to have
completed the Project as required in this Agreement.
Construction Contract. The words "Construction Contract" mean the contract between Borrower and the general contractor for the
Project, and any subcontracts with subcontractors, materialmen, laborers, or any other person or entity for performance of work on the
Project or the delivery of materials to the Project.
Environmental Laws. The words "Environmental Laws" mean any and all state, federal and local statutes, regulations and ordinances
relating to the protection of human health or the environment, Including without limitation the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. ( "CERCLA "), the Superfund Amendments and
Reauthorization Act of 1986, Pub. L. No. 99 -499 ( "SARA "), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq.,
the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules, or
regulations adopted pursuant thereto.
Event of Default. The words "Event of Default" mean any of the events of default set forth in this Agreement in the default section of this
Agreement.
GAAP. The word "GAAP" means generally accepted accounting principles.
Grantor. The word "Grantor" means each and all of the persons or entities granting a Security Interest in any Collateral for the Loan,
including without limitation all Borrowers granting such a Security Interest.
Guarantor. The word "Guarantor" means any guarantor, surety, or accommodation party of any or all of the Loan and any guarantor under
a completion guaranty agreement.
Guaranty. The word "Guaranty" means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part of the
Note.
Hazardous Substances. The words "Hazardous Substances" mean materials that, because of their quantity, concentration or physical,
chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when
improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words "Hazardous
Substances" are used in their very broadest sense and include without limitation any and all hazardous or toxic substances, materials or
waste as defined by or listed under the Environmental Laws. The term "Hazardous Substances" also includes, without limitation, petroleum
and petroleum by- products or any fraction thereof and asbestos.
Improvements. The word "Improvements" means all existing and future buildings, structures, facilities, fixtures, additions, and similar
construction on the Collateral.
Indebtedness. The word "Indebtedness" means the indebtedness evidenced by the Note or Related Documents, including all principal and
interest together with all other indebtedness and costs and expenses for which Borrower is responsible under this Agreement or under any
of the Related Documents.
Lender. The word "Lender" means Integrity Bank, its successors and assigns.
Loan. The word "Loan" means the loan or loans made to Borrower under this Agreement and the Related Documents as described .
Loan Fund. The words "Loan Fund" mean the undisbursed proceeds of the Loan under this Agreement together with any equity funds or
other deposits required from Borrower under this Agreement.
Note. The word "Note" means the promissory note dated December 30, 2011, In the original principal amount of $248,484.67 from
CONSTRUCTION LOAN AGREEMENT
(Continued) Page 10
Borrower to Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for
the promissory note or agreement.
Permitted Liens. The words "Permitted Liens" mean (1) liens and security interests securing Indebtedness owed by Borrower to Lender;
(2) liens for taxes, assessments, or similar charges either not yet due or being contested in good faith; (3) liens of materialmen,
mechanics, warehousemen, or carriers, or other like liens arising in the ordinary course of business and securing obligations which are not
yet delinquent; (4) purchase money liens or purchase money security interests upon or in any property acquired or held by Borrower in the
ordinary course of business to secure indebtedness outstanding on the date of this Agreement or permitted to be incurred under the
paragraph of this Agreement titled "Indebtedness and Liens "; (5) liens and security interests which, as of the date of this Agreement,
have been disclosed to and approved by the Lender in writing; and (6) those liens and security interests which in the aggregate constitute
an immaterial and insignificant monetary amount with respect to the net value of Borrower's assets.
Plans and Specifications. The words "Plans and Specifications" mean the plans and specifications for the Project which have been
submitted to and initialed by Lender, together with such changes and additions as may be approved by Lender in writing.
Project. The word "Project" means the construction project as described in the "Project Description" section of this Agreement.
Project Documents. The words "Project Documents" mean the Plans and Specifications, all studies, data and drawings relating to the
Project, whether prepared by or for Borrower, the Construction Contract, the Architect's Contract, and all other contracts and agreements
relating to the Project or the construction of the Improvements.
Property. The word "Property" means the property as described in the "Project Description" section of this Agreement.
Real Property. The words "Real Property" mean the real property, interests and rights, as further described in the "Project Description"
section of this Agreement.
Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental
agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments,
agreements and documents, whether now or hereafter existing, executed in connection with the Loan.
Security Agreement. The words "Security Agreement" mean and include without limitation any agreements, promises, covenants,
arrangements, understandings or other agreements, whether created by law, contract, or otherwise, evidencing, governing, representing, or
creating a Security Interest.
Security Interest. The words "Security Interest" mean, without limitation, any and all types of collateral security, present and future,
whether in the form of a lien, charge, encumbrance, mortgage, deed of trust, security deed, assignment, pledge, crop pledge, chattel
mortgage, collateral chattel mortgage, chattel trust, factor's lien, equipment trust, conditional sale, trust receipt, lien or title retention
contract, lease or consignment intended as a security device, or any other security or lien interest whatsoever whether created by law,
contract, or otherwise.
BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS CONSTRUCTION LOAN AGREEMENT AND BORROWER AGREES
TO ITS TERMS. THIS CONSTRUCTION LOAN AGREEMENT IS DATED DECEMBER 30, 2011.
THIS AGREEMENT IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS AGREEMENT IS AND SHALL CONSTITUTE AND HAVE THE
EFFECT O A EALED I T MENT ACCORDING TO LAW.
BOR R:
X (Seal)
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Signed, ac wledaed an delivered in the presence of:
X
Witness
X
Witness
LENDER:
INTEG TY B NK
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John Have , Senior Commercial Lender
USER PRE L"nEing, V- 5.59.00.003 CW, Hh— Fi,"nual S9lutona. Ine. 1991. 9011. AN Right, Retennld- • PA — ENE,MGZFel1iiL1 1 FC TR4436 PR-25
PROMISSORY NOTE
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References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item.
An item above containing 'has been omitted due to text length limitations.
Borrower: Seth B Hughes Lender: Integrity Bank
14 Cardinal Drive Camp Hill Office
Carlisle, PA 170134309 3345 Market Street
Camp Hill, PA 17011
(717) 9204900
Principal Amount: $248,484.67 Date of Note: December 30, 2011
PROMISE TO PAY. Seth B Hughes ( "Borrower ") promises to pay to Integrity Bank ( "Lender "), or order, in lawful money of the United States of
America, the principal amount of Two Hundred Forty-eight Thousand Four Hundred Eighty-four & 67/100 Dollars ($248,484.67), together with
Interest on the unpaid principal balance from December 30, 2011, until paid In full.
PAYMENT. Borrower will pay this loan in one principal payment of $248,484.67 plus interest on June 30, 2012. This payment due on June
30, 2012, will be for all principal and all accrued Interest not yet paid. In addition, Borrower will pay regular monthly payments of all accrued
unpaid interest due as of each payment date, beginning January 30, 2012, with all subsequent Interest payments to be due on the same day of
each month after that. Unless otherwise agreed or required by applicable law, payments will be applied first to any accrued unpaid interest;
then to principal; then to any unpaid collection costs; and then to any late charges. Borrower will pay Lender at Lenders address shown above
or at such other place as Lender may designate in writing,
VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from time to time based on changes in an independent index
which is the New York Prime Rate of Interest. The New York Prime Rate of interest shall mean the interest rate per annum announced from time
to time in various business journals, such as The Wall Street Journal, as the "Prime Rate of Interest ". The New York Prime Rate of Interest is
an index, and loans of the Bank may be established at, above or below the index. The New York Prime Rate of Interest is not necessarily the
Bank's lowest rate of interest. The interest rate shall float at New York Prime (the "Index "). The Index is not necessarily the lowest rate
charged by Lender on its loans. If the Index becomes unavailable during the tens of this loan, Lender may designate a substitute index after
notifying Borrower. Lender will tell Borrower the current Index rate upon Borrower's request. The interest rate change will not occur more
often than each month. Borrower understands that Lender may make loans based on other rates as well. The Index currently is 3.250% per
annum. Interest on the unpaid principal balance of this Note will be calculated as described in the "INTEREST CALCULATION METHOD"
paragraph using a rate of 1.000 percentage point over the Index, adjusted if necessary for any minimum and maximum rate limitations described
below, resulting in an initial rate of 5.500% per annum based on a year of 360 days. NOTICE: Under no circumstances will the interest rate on
this Note be less than 5.500% per annum or more than the maximum rate allowed by applicable law.
INTEREST CALCULATION METHOD. Interest on this Note is computed on a 3651360 basis; that is, by applying the ratio of the interest rate
over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance Is
outstanding. All interest payable under this Note is computed using this method.
PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not, unless
agreed to by Lender in writing, relieve Borrower of Borrowers obligation to continue to make payments under the payment schedule. Rather,
early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked "paid in full ", "without recourse ",
or similar language. if Borrower sends such a payment, Lender may accept it without losing any of Lenders rights under this Note, and
Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts, including
any check or other payment instrument that indicates that the payment constitutes "payment in full" of the amount owed or that is tendered
with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: Integrity Bank, 3314 Market
Street Camp Hill, PA 17011.
LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged 5.000% of the regularly scheduled payment or $10.00,
whichever is greater.
INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final maturity, the interest rate on this Note shall be increased by
adding an additional 5.000 percentage point margin ( "Default Rate Margin "). The Default Rate Margin shall also apply to each succeeding
interest rate change that would have applied had there been no default. If judgment is entered in connection with this Note, interest will
continue to accrue after the date of judgment at the rate in effect at the time judgment is entered. However, in no event will the interest rate
exceed the maximum interest rate limitations under applicable law.
DEFAULT. Each of the following shall constitute an event of default ( "Event of Default ") under this Note:
Payment Default. Borrower fails to make any payment when due under this Note.
Other Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Note or in
any of the related documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement
between Lender and Borrower.
Default in Favor of Third Parties. Borrower or any Grantor defaults under any loan, extension of credit, security agreement, purchase or
sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower's property or
Borrowers ability to repay this Note or perform Borrowers obligations under this Note or any of the related documents.
False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this
Note or the related documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false
or misleading at any time thereafter.
Death or Insolvency. The death of Borrower or the dissolution or termination of Borrower's existence as a going business, the insolvency
of Borrower, the appointment of a receiver for any part of Borrowers property, any assignment for the benefit of creditors, any type of
creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower.
Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self -help,
repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the loan.
This includes a garnishment of any of Borrowers accounts, including deposit accounts, with Lender. However, this Event of Default shall
not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or
forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or
a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate
PROMISSORY NOTE
(Continued) Page 2
reserve or bond for the dispute.
Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the indebtedness or any
Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any guaranty of the indebtedness
evidenced by this Note.
Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or
performance of this Note is impaired.
Insecurity. Lender in good faith believes Itself Insecure.
Cure Provisions. If any default, other than a default in payment is curable and if Borrower has not been given a notice of a breach of the
same provision of this Note within the preceding twelve (12) months, it may be cured if Borrower, after Lender sends written notice to
Borrower demanding cure of such default: (1) cures the default within ten (10) days; or (2) if the cure requires more than ten (10) days,
immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and
completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical.
LENDER'S RIGHTS. Upon default, Lender may, after giving such notices as required by applicable law, declare the entire unpaid principal
balance under this Note and all accrued unpaid interest immediately due, and then Borrower will pay that amount.
ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower will pay
Lender that amount. This includes, subject to any limits under applicable law, Lender's reasonable attorneys' fees and Lender's legal expenses,
whether or not there is a lawsuit, Including reasonable attorneys' fees, expenses for bankruptcy proceedings (including efforts to modify or
vacate any automatic stay or injunction), and appeals. If not prohibited by applicable law, Borrower also will pay any court costs, in addition to
all other sums provided by law.
JURY WAIVER. Lender and Borrower hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by either Lender
or Borrower against the other.
GOVERNING LAW. This Note will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of
the Commonwealth of Pennsylvania without regard to its conflicts of law provisions. This Note has been accepted by Lender in the
Commonwealth of Pennsylvania.
CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Cumberland
County, Commonwealth of Pennsylvania.
DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $29.00 if Borrower makes a payment on Borrower's loan and the check or
preauthorized charge with which Borrower pays is later dishonored.
RIGHT OF SETOFF, To the extent permitted by applicable law, Lender reserves a right of setoff in all Borrower's accounts with Lender (whether
checking, savings, or some other account). This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may
open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by
law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the indebtedness against any
and all such accounts.
COLLATERAL. Borrower acknowledges this Note is secured by Real Property located at 1110 Shannon Lane, Carlisle, PA 17013.
CALL OPTION. The Bank shall have a call option which may be exercised to be effective on each fifth anniversary of the date of closing, subject
to ninety (90) days advance written notice to Borrower advising the Bank's election to call the obligation due.
PATRIOT ACT. TO HELP THE GOVERNMENT FIGHT THE FUNDING OF TERRORISM AND MONEY LAUNDERING ACTIVITIES, FEDERAL LAW
REQUIRES ALL FINANCIAL INSTITUTIONS TO OBTAIN, VERIFY, AND RECORD INFORMATION THAT IDENTIFIES EACH PERSON WHO OPENS
AN ACCOUNT. WHAT THIS MEANS FOR YOU: WHEN YOU OPEN AN ACCOUNT, WHETHER IT BE A DEPOSIT ACCOUNT OR A LOAN, WE
WILL ASK FOR YOUR NAME, ADDRESS, DATE OF BIRTH, AND OTHER INFORMATION THAT WILL ALLOW US TO IDENTIFY YOU. WE MAY
ALSO ASK TO SEE YOUR DRIVER'S LICENSE OR OTHER IDENTIFYING DOCUMENTS.
CROSS COLLATERALIZED /CROSS DEFAULT. This loan also secures payment and performance of all other loans to Borrower or any guarantor.
The word "Guarantor" means any guarantor, surety or accomondation party of any or all of the Loan.
SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal representatives,
successors and assigns, and shall inure to the benefit of Lender and its successors and assigns.
GENERAL PROVISIONS. If any part of this Note cannot be enforced, this fact will not affect the rest of the Note. Lender may delay or forgo
enforcing any of its rights or remedies under this Note without losing them. Borrower and any other person who signs, guarantees or endorses
this Note, to the extent allowed by law, waive presentment, demand for payment, and notice of dishonor. Upon any change in the terms of this
Note, and unless otherwise expressly stated in writing, no party who signs this Note, whether as maker, guarantor, accommodation maker or
endorser, shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time) this
loan or release any party or guarantor or collateral; or impair, fail to realize upon or perfect Lender's security interest in the collateral; and take
any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify
this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Note
are joint and several. If any portion of this Note is for any reason determined to be unenforceable, it will not affect the enforceability of any
other provisions of this Note.
CONFESSION OF JUDGMENT. BORROWER HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR THE
PROTHONOTARY OR CLERK OF ANY COURT IN THE COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE, TO APPEAR AT ANY TIME
FOR BORROWER AFTER A DEFAULT UNDER THIS NOTE AND WITH OR WITHOUT COMPLAINT FILED, CONFESS OR ENTER JUDGMENT
AGAINST BORROWER FOR THE ENTIRE PRINCIPAL BALANCE OF THIS NOTE AND ALL ACCRUED INTEREST, LATE CHARGES AND ANY AND
ALL AMOUNTS EXPENDED OR ADVANCED BY LENDER RELATING TO ANY COLLATERAL SECURING THIS NOTE, TOGETHER WITH COSTS
OF SUIT, AND AN ATTORNEY'S COMMISSION OF TEN PERCENT (10 %) OF THE UNPAID PRINCIPAL BALANCE AND ACCRUED INTEREST FOR
COLLECTION, BUT IN ANY EVENT NOT LESS THAN FIVE HUNDRED DOLLARS ($500) ON WHICH JUDGMENT OR JUDGMENTS ONE OR
MORE EXECUTIONS MAY ISSUE IMMEDIATELY; AND FOR SO DOING, THIS NOTE OR A COPY OF THIS NOTE VERIFIED BY AFFIDAVIT SHALL
BE SUFFICIENT WARRANT. THE AUTHORITY GRANTED IN THIS NOTE TO CONFESS JUDGMENT AGAINST BORROWER SHALL NOT BE
EXHAUSTED BY ANY EXERCISE OF THAT AUTHORITY, BUT SHALL CONTINUE FROM TIME TO TIME AND AT ALL TIMES UNTIL PAYMENT IN
FULL OF ALL AMOUNTS DUE UNDER THIS NOTE. BORROWER HEREBY WAIVES ANY RIGHT BORROWER MAY HAVE TO NOTICE OR TO A
HEARING IN CONNECTION WITH ANY SUCH CONFESSION OF JUDGMENT AND STATES THAT EITHER A REPRESENTATIVE OF LENDER
SPECIFICALLY CALLED THIS CONFESSION OF JUDGMENT PROVISION TO BORROWER'S ATTENTION OR BORROWER HAS BEEN
REPRESENTED BY INDEPENDENT LEGAL COUNSEL.
PROMISSORY NOTE
(Continued) Page 3
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE
INTEREST RATE PROVISIONS. BORROWER AGREES TO THE TERMS OF THE NOTE.
BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.
THIS NOTE IS GIVE UNDER SEAL AND IT IS INTENDED THAT THIS NOTE IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A
SEALED IN TRUME A ORDING TO LAW.
BORRO R:
X is t ti . },. r , r ' Seal)
Set H ughes
Signed, ac ed and delivered In the presence of:
X
Witness•'
X
w
LENDER:
IN7t, K
X
John 1-18 70, Senior Commdfcial Lender
lA9FA FRG Lwdit, Val. 5.59.00.003 Copy, Hr Fln 41 S Vf ft. Mp 1997. 7011. A9 RI9MF R— - FA K ;tENDINGI FNR—FG TRl PR-n
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Parcel Identification
Number:
05-18 -1847 -231
RECORDATION
REQUESTED BY:
Integrity Bank
Camp Hill Offica
3345 Market Street
Camp Hill, PA 17011
WHEN RECORDED MAIL
TO:
Integrity Bank
Camp Hip Office
3345 Market Street
Camp Hill, PA 17011
SEND TAX NOTICES TO:
Integrity Bank
Camp Hill Office
3345 Market Street
Camp HIII PA 17011 FOR RECORDER'S USE ONLY
CONSTRUCTION MORTGAGE
Amount Secured Hereby: $248,484.67
THIS MORTGAGE dated December 30, 2011, is made and executed between Seth B Hughes,
whose address Is 14 Cardinal Drive, Carlisle, PA 170134309 (referred to below as "Grantor")
and Integrity Bank, whose address Is 3345 Market Street, Camp Hill, PA 17011 (referred to
below as "Lender").
GRANT OF MORTGAGE. For valuable consideration, Grantor grants, bargains, sells, oonveys, assigns, transfers,
releases, Confirms and mortgages to Lender all of Grantor's right, title, and interest in and to the following described
real property, together with all existing or subsequently erected or affixed buildings, improvements and fixtures; all
streets, lanes, alleys, passages, and ways; all easements, rights of way, all liberties, privileges, tenements,
hereditaments, and appurtenances thereunto belonging or anywise made appurtenant hereafter, and the reversions and
remainders with respect thereto; all water, water rights, watercourses and ditch rights (including stock in utilities with
ditch or Irrigation rights); and all other rights, royalties, and profits" relating to the real prop�Y Including without
limitation all minerals. oll, . geothermal and similar matters, (the 'Property") located in Cumberland
County, Commonwea�tii of Pennsylvania:
See the exhibit or other description document which is attached to this Mortgage and made
a part of t his Mortgage as if fully set forth herein.
17013. The ReaaP Property parcel identification number is 05-19-111147-2311. Lane Carl
isle, PA
CROSS-COLLATERALIZATION. In addition to the Note, this Mortgage secures all obligations, debts and liabilities, plus
interest thereon, of Grantor to Lender, or any one or more of them, as well as all dams by Lender against Grantor or
any one or more of them, whether now existing or hereafter arising, whether related or unrelated to the purpose of the
Note. whether voluntary or otherwise, whether due or not due, direct or indirect, determined or undetermined, absolute
or contingent, liquidated or unliquidated, whether Grantor may be liable individually or jointly with others, whether
obligated as guarantor, surety, accommodation party or otherwise, and whether recovery upon such amounts may be or
hereafter may become barred by any statute of limitations, and whether the obligation to repay such amounts may be or
hereafter may become otherwise unenforceable.
Grantor presently assigns to Lender al of Grantors right, title, and interest in and to all present and future leases of the
Property and all Rents from the Property. In addition. Grantor grants to Lender a Uniform Commercial Code security
interest in the Personal Property and Rents.
THIS MORTGAGE, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN THE RENTS AND
PERSONAL PROPERTY, IS GIVEN TO SECURE (A) PAYMENT OF THE INDEBTEDNESS AND (B) PERFORMANCE OF
ANY AND ALL OBLIGATIONS UNDER THE NOTE IN THE ORIGINAL PRINCIPAL AMOUNT OF $248,484.67, THE
RELATED DOCUMENTS, AND THIS MORTGAGE. THIS MORTGAGE. INCLUDING THE ASSIGNMENT OF RENTS AND
MORTGAGE
(Continued) Pees 2
THE SECURITY INTEREST IN THE RENTS AND PERSONAL PROPERTY, IS ALSO GIVEN TO SECURE ANY AND ALL OF
GRANTOR'S OBLIGATIONS UNDER THAT CERTAIN CONSTRUCTION LOAN AGREEMENT BETWEEN GRANTOR AND
LENDER OF EVEN DATE HEREWITH. ANY EVENT OF DEFAULT UNDER THE CONSTRUCTION LOAN AGREEMENT, OR
ANY OF THE RELATED DOCUMENTS REFERRED TO THEREIN, SHALL ALSO BE AN EVENT OF DEFAULT UNDER THIS
MORTGAGE. THIS MORTGAGE IS GIVEN AND ACCEPTED ON THE FOLLOWING TERMS:
PAYMENT AND PERFORMANCE. Except as otherwise provided in this Mortgage, Grantor shall pay to Lander all
amounts secured by this Mortgage as they beoome due and shall strictly perform all of Grantor's obligations under this
Mortgage.
CONSTRUCTION MORTGAGE. This Mortgage Is a "construction mortgage" for the purposes of Sections 9 -334 and
2Pr309 of the Uniform Commercial Code, as time sections have been adopted by the Commonwealth of Pennsylvania.
POSSESSION AND MAINTENANCE OF THE PROPERTY. Grantor agrees that Grantors possession and use of the
Property shall be governed by the following provisions:
Possession and Use. Until the occurrence of an Event of Default, Grantor may (1) remain in possession and
control of the Property; (2) use, operate or manage the Property; and (3) collect the Rents from the Property.
Duty to Maintain. Grantor shall maintain the Property in tenantable condition and promptly perform all repairs,
replacements, and maintenance necessary to preserve Its value.
Compliance With Environmental Laws. Grantor represents and warrants to Lander that: (1) During the period of
Grantor's ownership of the Property, there has been no use, generation, manufacture, storage, treatment, disposal,
release or threatened release of any Hazardous Substance by any person on, under, about or from the Property;
(2) Grantor has no knowledge of, or reason to believe that there has been, except as previously disclosed to and
acknowledged by Lender in writing, (a) any breach or violation of any Environmental Laws, (b) any use.
generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance
on, under, about or from the Property by arty prior owners or occupants of the Property, or (c) any actual or
threatened litigation or claims of any kind by any person relating to such matters; and (3) Except as previously
disclosed to and acknowledged by Lender in writing, (a) neither Grantor nor any tenant, contractor, agent or other
authorized user of the Property shall use, generate, manufacture, store, treat, dispose of or release any Hazardous
Substance on, under, about or from the Property, and (b) any such activity shall be conducted in compliance with
all applicable federal. state, and local laws, regulations and ordinances, including without limitation all
Environmental Laws. Grantor authorizes Lender and Its agents to enter upon the Property to make such
inspections and tests, at Grantor's expense, as Lender may deem appropriate to determine compliance of the
Property with this section of the Mortgage. Any Inspections or tests made by Lender shall be for Lender's
purposes only and shall not be construed to create any responsibility or liability on the part of Lender to Grantor or
to any other person. The representations and warranties contained herein are based on Grantor's due diligence in
investigating the Property for Hazardous Substances, Grantor hereby (1) releases and waives any future claims
against Lender for indemnity or contribution in the event Grantor becomes liable for cleanup or other costs under
any such laws; and (2) agrees to indemnify, defend, and hold harmless Lender against any and all claims, losses,
liabilities, damages, penalties, and expenses which Lender may directly or indirectly sustain or suffer resulting from
a breach of this section of the Mortgage or as a consequence of any use, generation, manufacture, storage,
disposal, release or threatened release occurring prior to Grantor's ownership or interest in the Property, whether
or not the same was or should have been known to Grantor. The provisions of this section of the Mortgage,
including the obligation to indemnify and defend, shall survive the payment of the Indebtedness and the satisfaction
and reconveyance of the lien of this Mortgage and shall not be affected by Lender's acquisition of any interest in
the Property, whether by foreclosure or otherwise.
Nuisance, Waste. Grantor shall not cause, conduct or permit any nuisance nor commit, permit, or suffer any
stripping of or waste or to the Property or any portion of the Property. W ithout limiting the generality of the
foregoing, Grantor will not remove, or grant to any other party the right to remove, any timber, minerals (Including
oil and gas), coal, clay, scoria, soil, gravel or rock products without Lender's prior written consent.
Removal of Improvements. Grantor shall not demolish or remove any Improvements from the Real Property
without Lender's prior written consent. As a condition to the removal of any Improvements, Lender may require
Grantor to make arrangements satisfactory to Lender to replace such Improvements with Improvements of at least
equal value.
Landers Right to Enter. Lender and Lenders agents and representatives may enter upon the Real Property at all
reasonable times to attend to Lender's interests and to inspect the Real Property for purposes of Grantors
compliance with the terms and conditions of this Mortgage.
Compliance with Governmental Requirements. Grantor shall promptly comply with all laws, ordinances, and
regulations, now or hereafter in effect, of all governmental authorities applicable to the use or occupancy of the
Property, including without limitation, the Americans With Disabilities Act. Grantor may contest in good faith any
such few, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals,
MORTGAGE
(Continued) Page 3
so long as Grantor has notified Lender in writing prior to doing so and so long as. in Lender's sole opinion. Lender's
interests In the Property are not Jeopardized. Lender may require Grantor to post adequate security or a surety
bond, reasonably satisfactory to Lender, to protect Lenders interest.
Duty to Protect, Grantor agrees neither to abandon or leave unattended the Property. Grantor shall do all other
acts, in addition to those ads set forth above in this section, which from the character and use of the Property are
reasonably necessary to protect and preserve the Property.
CONSTRUCTION LOAN. If some or all of the proceeds of the loan creating the Indebtedness are to be used to
construct or complete construction of any Improvements on the Property, the Improvements shall be completed no later
than the maturity date of the Note (or such earlier date as Lender may reasonably establish) and Grantor shall pay in full
all costs and expenses in connection with the work. Lender will disburse loan proceeds under such terms and
conditions as Lender may deem reasonably necessary to insure that the interest created by this Mortgage shall have
priority over all possible liens, Including those of material suppliers and workmen. Lender may require, among other
things, that disbursement requests be supported by receipted bills, expense affidavits, waivers of liens, construction
progress reports, and such other documentation as Lender may reasonably request.
TAXES AND LIENS. The following provisions relating to the taxes and liens on the Property are part of this Mortgage:
Payment Grantor shall pay when due (and in all events prior to delinquency) all taxes, payroll taxes, special taxes,
assessments, water charges and sewer service charges levied against or on account of the Property. and shall pay
when due all claims for work done on or for services rendered or material furnished to the Property. Grantor shall
maintain the Property free of any liens having priority over or equal to the interest of Lender under this Mortgage,
except for those hens specifically agreed to In writing by Lender, and except for the lien of taxes and assessments
not due as further specified In the Right to Contest paragraph.
Right to Contest Grantor may withhold payment of any tax, assessment, or claim in connection with a good faith
dispute over the obligation to pay, so long as Lender's interest In the Property is not Jeopardized. If a Nan arises or
Is filed as a result of nonpayment, Grantor shall within fifteen (15) days after the lien arises or, if a Ilan is flied,
within fifteen (15) days after Grantor has notice of the filing, secure the discharge of the Ilan, or if requested by
Lender, deposit with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender in an
amount sufficient to discharge the Yen plus any costs and reasonable attorneys' fees, or other charges that could
accrue as a recruit of a foreclosure or sale under the lien. In any contest, Grantor shall defend Itself and Lender and
shall satisfy any adverse Judgment before enforcement against the Property. Grantor shall name Lender as an
additional obligee under any surety bond furnished in the contest proceedings.
Evidence of Payment. Grantor shall upon demand furnish to Lender satisfactory evidence of payment of the taxes
or assessments and shall authorize the appropriate governmental official to deliver to Lender at any time a written
statement of the taxes and assessments against the Property.
Notice of Constr%wtlon. Grantor shall notify Lender at least fifteen (15) days before any work is commenced, any
services are furnished, or any materials are supplied to the Property, if any mechanic's lien, meterialmen's lien, or
other lien could be asserted on account of the work, services, or materials and the cost exceeds $1,D00.00.
Grantor will upon request of Lender furnish to Lender advance assurances satisfactory to Lender that Grantor can
and will pay the cost of such Improvements.
PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring the Property are a part of this
Mortgage;
Maintenance of Inswence. Grantor shall procure and maintain policies of fire Insurance with standard extended
coverage endorsements on a replacement basis for the full Insurable value covering all Improvements on the Real
Property In an amount sufficient to avoid application of any coinsurance clause, and with a standard mortgagee
clause in favor of Lender. Grantor shall also procure and maintain comprehensive general liability insurance in such
coverage amounts as Lender may request with Lender Ming named as additional insureds in such liability Insurance
policies. Additionally. Grantor shall maintain such other Insurance, including but not limited to hazard, business
Interruption and boiler Insurance as Lender may require. Policies shall be written by such insurance companies and
in such form as may be reasonably acceptable to Lender. Grantor shall deliver to Lender certificates of coverage
from each Insurer containing a stipulation that coverage will not be cancelled or diminished without a minimum of
thirty (30) days' prior written notice to Lender and not containing any disclaimer of the insurer's liability for failure
to give such notice. Each Insurance policy also shall include an endorsement providing that coverage in favor of
Lender will not be impaired In any way by any ad. omission or default of Grantor or any other person. Should the
Real Property be located in an area designated by the Director of the Federal Emergency Management Agency as a
special flood hazard area, Grantor agrees to obtain and maintain Federal Flood Insurance, If available, for the full
unpaid principal balance of the loan and any prior liens on the property securing the ban, up to the maximum policy
limits set under the National Flood Insurance Program, or as otherwise required by Lender, and to maintain such
insurance for the term of the loan,
Application of Proceeds. Grantor shalt promptly notify Lender of any loss or damage to the Property if the
MENEW I,
v
MORTGAGE
(Continued) Page a
estimated cost of repair or replacement exceeds $1,000.00. Lender may make proof of loss If Grantor fails to do
so within fifteen (15) days of the casualty. Whether or not Lenders security Is Impaired, Lender may, at Lender's
election, receive and retain the proceeds of any Insurance and apply the proceeds to the reduction of the
Indebtedness, payment of any Ilan affecting the Property, or the restoration and repair of the Property. If Lender
elects to apply the proceeds to restoration and repair, Grantor shall repair or replace the damaged or destroyed
Improvements in a manner satisfactory to Lender. Lender shall, upon satisfactory proof of such expenditure, pay
or reimburse Grantor from the proceeds for the reasonable cost of repair or restoration If Grantor Is not in default
under this Mortgage. Any proceeds which have not been disbursed within 180 days after their receipt and which
Lender has not committed to the repair or restoration of the Property shall be used first to pay any amount owing
to Lender under this Mortgage, then to pay accrued Interest, and the remainder, if any, shall be applied to the
principal balance of the Indebtedness. If Lender holds any proceeds after payment In full of the Indebtedness, such
proceeds shag be paid to Grantor as Grantor's interests may appear.
LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Landers interest in
the Property or If Grantor fails to comply with any provision of this Mortgage or any Related Documents, Including but
not limited to Grantors failure to discharge or pay when due any amounts Grantor Is required to discharge or pay under
this Mortgage or any Related Documents, Lender on Grantors behalf may (but shall not be obligated to) take any action
that Lender deems appropriate, including but not limited to discharging or paying all taxes, liens, security interests,
encumbrances and other claims, at any time levied or placed on the Property and paying all costs for insuring,
maintaining and preserving the Property. All such expenditures Incurred or paid by Lender for such purposes will then
bear Interest at the rate charged under the Note from the date Incurred or paid by Lender to the date of repayment by
Grantor. All such expenses will become a part of the Indebtedness and, at Lender's option, will (A) be payable on
demand; (8) be added to the balance of the Note and be apportioned among and be payable with any Installment
payments to become due during either (1) the tern of any applicable insurance policy; or (2) the remaining term of
the Note; or (C) be treated as a balloon payment which will be due and payable at the Note's maturity. The Mortgage
also will secure payment of these amounts. Such right shall be In addition to a8 other rights and remedies to which
Lender may be entitled upon Default Grantor's obligation to Lender for all such expenses shall survive the entry of any
mortgage foreclosure judgment.
WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of the Property are a part of this
Mortgage;
Title. Grantor warrants that: (a) Grantor holds good and marketable title of record to the Property in fee simple,
free and dear of all liens and encumbrances other then those set forth in the Real Property description or in any
title insurance policy, title report, or final title opinion issued in favor of, and accepted by, Lender in connection
with this Mortgage, and (b) Grantor has the full right, power, and authority to execute and deliver this Mortgage to
Lander.
Defense of Title. Subject to the exception in the paragraph above, Grantor warrants and will forever defend the
the to the Property against the lawful claims of all persons. In the event any action or proceeding is commenced
that questions Grantors title or the interest of Lender under this Mortgage, Grantor shall defend the action at
Grantors expense. Grantor may be the nominal party in such proceeding, but Lender shall be entitled to
participate in the proceeding and to be represented In the proceeding by counsel of Lenders own choice, and
Grantor will deliver, or cause to be delivered, to Lender such instruments as Lender may request from time to time
to permit such participation.
Compliance With Laws. Grantor warrants that the Property and Grantors use of the Property complies with all
existing applicable laws, ordinances, and regulations of governmental authorities.
Survival of Representations and Warranties. All representations, warranties, and agreements made by Grantor In
this Mortgage shall survive the execution and delivery of this Mortgage, shall be continuing In nature, and shall
remain In full force and effect until such time as Grantors Indebtedness shall be paid in full.
CONDEMNATION. The following provisions relating to condemnation proceedings are a part of this Mortgage:
Proceedings. If any proceeding In condemnation is filed, Grantor shall promptly notify Lender in writing, and
Grantor shall promptly take such steps as may be necessary to defend the action and obtain the award. Grantor
may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be
represented in the proceeding by counsel of its own choice, and Grantor will deliver or cause to be delivered to
Lender such instruments and documentation as may be requested by Lender from time to time to permit such
participation.
Application of Net Proceeds. If all or any part of the Property Is condemned by eminent domain proceedings or by
arty proceeding or purchase in lieu of condemnation, Lander may at its election require that all or any portion of the
net proceeds of the award be applied to the indebtedness or the repair or restoration of the Property. The net
proceeds of the award shall mean the award after payment of all actual costs, expenses, and attomsys' fees
incurred by Lender In connection with the condemnation.
, i/�Wlell/WwWYIY l
MORTGAGE
(Continued) Page s
IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following provisions relating
to governmental taxes, fees and charges are a part of this Mortgage:
Currant Taxes, Foos and Charges. Upon request by Lender, Grantor shall execute such documents in addition to
this Mortgage and take whatever other action is requested by Lender to perfect and continue Lenders lien on the
Real Property. Grantor shall reimburse Lender for all taxes, as described below, together with all expenses
incurred in recording, perfecting or continuing this Mortgage, including without limitation all taxes, fees,
documentary stamps, and other charges for recording or registering this Mortgage.
Taxes. The folkrMng shall constitute taxes to which this section applies: (1) a specific tax upon this type of
Mortgage or upon all or any part of the Indebtedness secured by this Mortgage; (2) a specific tax on Grantor
which Grantor is authorized or required to deduct from payments on the Indebtedness secured by this type of
Mortgage; (3) a tax on this type of Mortgage chargeable against the Lender or the holder of the Note; and (4) a
specific tax on all or any portion of the Indebtedness or on payments of principal and Interest made by Grantor.
Subsequent Taxes. If arty tax to which this section applies is enacted subsequent to the date of this Mortgage,
this event shall have the same effect as an Event of Default, and Lender may exercise any or all of Its available
remedies for an Event of Default as provided below unless Grantor either (1) pays the tax before it becomes
delinquent, or (2) contests the tax as provided above In the Taxes and Liens section and deposits with Lender
cash or a sufficient corporate surety bond or other security satisfactory to Lender.
SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relating to this Mortgage as a security
agreement are a part of this Mortgage:
Security Agreement. This instrument shall constitute a Security Agreement to the extent any of the Property
constitutes fixtures, and Lender shall have all of the rights of a secured party under the Uniform Commercial Code
as amended from time to time.
Security Interest Upon request by Lender, Grantor shall take whatever action is requested by Lender to parted
and continue Lenders security interest in the Rents and Persona) Property. In addition to recording this Mortgage
in the real property records, Lender may, at any time and without further authorization from Grantor, file executed
counterparts, copies or reproductions of this Mortgage as a financing statement. Grantor shall reimburse Lender
for all expenses Incurred in perfecting or continuing this security Interest. Upon default, Grantor shall not remove,
sever or detach the Personal Property from the Property. Upon default, Grantor shall assemble arty Personal
Property not affixed to the Property in a manner and at a place reasonably convenient to Grantor and Lander and
make it available to Lender within three (3) days after receipt of written demand from Lender to the extent
permitted by applicable law.
Addresses. The mailing addresses of Grantor (debtor) and Lender (secured party) from which information
cortoeming the security interest granted by this Mortgage may be obtained (each as required by the Uniform
Commercial Code) are as stated on the first page of this Mortgage.
FURTHER ASSURANCES; ADDITIONAL AUTHORIZATIONS. The following provisions relating to further assurances and
additional authorizations are a part of this Mortgage:
Further Assurances. At any time, and from time to time, upon request of Lender, Grantor will make, execute and
deliver, or will cause to be made, executed or delivered, to Lender or to Lenders designee, and when requested by
Lender, cause to be filed, recorded, refiled, or rerecorded, as the Case may be, at such times and in such Offices
and places as Lender may deem appropriate, any and all such mortgages, deeds of trust, security deeds, security
agreements, financing statements, continuation statements, instruments of further assurance, certificates, and
other documents as may, in the sate opinion of Lander, be necessary or desirable in order to effectuate, complete,
perfect, continue, or preserve (1) Grantors obligations under the Note, this Mortgage, and the Related
Documents, and (2) the liens and security Interests created by this Mortgage as first and prior liens on the
Property, whether now owned or hereafter acquired by Grantor. Unless prohibited by law or Lander agrees to the
contrary In writing, Grantor shall reimburse Lender for all costs and expenses Incurred In connection with the
matters referred to In this paragraph.
AddBlonal Audwirintlons. if Grantor fails to do any of the things referred to In the preceding paragraph, Lender
may do so for and In the name of Grantor and at Grantors expense. For such purposes, Grantor hereby
irrevocably authorizes Lender to make, execute, deliver, file, record and do all other things as may be necessary or
desirable, in Lenders sole opinion, to accomplish the matters referred to In the preceding paragraph. It Is
understood that nothing set forth herein shall require Lender to take any such actions.
FULL PERFORMANCE If Grantor pays all the indebtedness when due, and otherwise performs all the obligations
imposed upon Grantor under this Mortgage, Lender shall execute and deliver to Grantor a suitable satisfaction of this
Mortgage and suitable statements of termination of any financing statement on file evidencing Lenders security interest
In the Rents and the Personal Property. Grantor will pay, if permitted by applicable law, any reasonable termination fee
as determined by Lender from time to time.
MORTGAGE
(Continued) Page 6
EVENTS OF DEFAULT. Each of the following, at Lender's option, shall constitute an Event of Default under this
Mortgage:
Payment Default. Grantor fails to make any payment when due under the Indebtedness.
Default on Other Payments. Failure of Grantor within the time required by this Mortgage to make any payment for
taxes or insurance, or any other payment necessary to prevent filing of or to effect discharge of any Ilan.
Other Defaults. Grantor falls to comply with or to perform any other term, obligation, covenant or condition
contained In this Mortgage or in any of the Related Documents or to comply with or to perform any term,
obligation, covenant or condition contained in any other agreement between Lender and Grantor.
Default In Favor of Third Parties. Should Grantor default under any ban, extension of credit, security agreement,
purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially
affect any of Grantor's property or Grantor's ability to repay the Indebtedness or Grantors ability to perform
Grantors obligations under this Mortgage or any of the Related Documents.
False Statements. Any warranty, representation or statement made or furnished to Lender by Grantor or on
Grantors behalf under this Mortgage or the Related Documents Is false or misleading In any material respect,
either now or at the time made or famished or becomes false or misleading at any time thereafter. .
Defective CallateraWtion. This Mortgage or any of the Related Documents ceases to be in full force and effect
(including failure of any collateral document to create a valid and perfected security Interest or lien) at any time and
for any reason.
Death or Insolvency. The death of Grantor, the insolvency of Grantor, the appointment of a receiver for any part of
Grantors property, any assignment for the benefit of creditors, any type of creditor workout. or the
commencement of any proceeding under any bankruptcy or insolvency laws by or against Grantor.
Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial
proceeding, self-help, repossession or any other method, by any creditor of Grantor or by any governmental agency
against any property securing the Indebtedness. This Includes a garnishment of any of Grantor's accounts,
including deposit accounts, with Lender. However, this Event of Default shall not apply If there is a good faith
dispute by Grantor as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture
proceeding and if Grantor gives Lender written notice of the creditor or forfeiture proceeding and deposits with
Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its
sole discretion, as being an adequate reserve or bond for the dispute.
Breach of Other Agreement. Any breach by Grantor under the terms of any other agreement between Grantor and
Lender that is not remedied within any grace period provided therein, including without limitation any agreement
concerning any indebtedness or other obligation of Grantor to Lender, whether existing now or later.
Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the
Indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability
under, any Guaranty of the Indebtedness.
Adverse Change. A material adverse change occurs in Grantor's financial condition, or Lender believes the
prospect of payment or performance of the Indebtedness is impaired.
Insecurity. Lender in good faith believes itself insecure.
Right to Cure. If any default, other than a default In payment Is curable and if Grantor has not been given a notice
of a breach of the same provision of this Mortgage within the preceding twelve (12) months, it may be cured If
Grantor, after Lender sends written notice to Grantor demanding cure of such default: (1) dues the default within
ten (10) days, or (2) if the cure requires more than ten (10) days, immediately initiates steps which Lender deems
in Lenders sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable
and necessary steps sufficient to produce compliance as soon as reasonably practical.
RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of an Event of Default and at any time thereafter, Lender.
at Lenders option, may exercise any one or more of the following rights and remedies. In addition to any other rights or
remedies provided by law:
Accelerate Indebtedness. Lender shall have the right at its option, after giving such notices as required by
applicable law, to declare the entire Indebtedness Immediately due and payable.
UCC Remedies. With respect to all or any part of the Personal Property. Lender shall have all the rights and
remedies of a secured party under the Uniform Commercial Code.
Collect Rents. Lender shall have the right, without notice to Grantor, to take possession of the Property and, with
or without taking possession of the Property, to collect the Rents, Including amounts past due and unpaid, and
apply the net proceeds, over and above Lenders costs, against the Indebtedness. In furtherance of this right,
MORTGAGE
(Continued) Page T
Lender may require any tenant or other user of the Property to make payments of rent or use fees directly to
Lender. If the Rents are collected by Lender, then Grantor irrevocably authorizes Lender to endorse instruments
received in payment thereof In the name of Grantor and to negotiate the some and collect the proceeds. Payments
by tenants or other users to Lender in response to Lender's demand shall set!* the obligations for which the
payments are made, whether or not any proper grounds for the demand existed. Lender may exercise its rights
under this subparagraph either in person, by agent, or through a receiver.
Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of
the Property, with the power to protect and preserve the Property. to operate the Property preceding foreclosure or
sale, and to collect the Rents from the Property and apply the proceeds, over and above the cost of the
receivership, against the Indebtedness. The receiver may serve without bond if permitted try law. Lender's right
to the appointment of a receiver shall exist whether or not the apparent value of the Property exceeds the
Indebtedness by a substantial amount. Employment by Lender shall not disqualify a person from serving as a
receiver.
Judicial Foreclosure. Lender may obtain a judicial decree foreclosing Grantor's Interest In all or any part of the
Property.
Possession of the Properly. For the purpose of procuring possession of the Property, Grantor hereby authorizes
and empowers any attorney of any court of record in the Commonwealth of Pennsylvania or elsewhere, as attorney
for Lender and all persons claiming under or through Lender, to sign an agreement for entering In any competent
court an amicable action in ejectment for possession of the Property and to appear for and confess judgment
against Grantor, and against all persons claiming under or through Grantor, for the recovery by Lender of
possession of the Property, without any stay of execution, for which this Mortgage, or a copy of this Mortgage
verified by affidavit, shall be a sufficient warrant; and thereupon a writ of possession may be issued forthwith,
without any prior writ or proceeding whatsoever.
Nonjudicial Sala. If permitted by applicable law, Lender may foreclose Grantors interest in all or in any part of the
Personal Property or the Real Property by non - judicial sale.
Deficiency Judgment Lender may obtain a judgment for any deficiency remaining in the Indebtedness due to
Lender after application of all amounts received from the exercise of the rights provided in this section.
Tenancy at Sufferance. If Grantor remains In possession of the Property after the Property is sold as provided
above or Lender otherwise becomes entitled to possession of the Property upon default of Grantor, Grantor shall
become a tenant at sufferance of Lender or the purchaser of the Property and shall, at Lenders option, either (1)
pay a reasonable rental for the use of the Property, or (2) vacate the Property immediately upon the demand of
Lender.
Other Remedies. Lender shall have all other rights and remedies provided in this Mortgage or the Note or available
at law or in equity.
Sale of the Property. To the extent permitted by applicable law, Grantor hereby waives any and all right to have
the Property marshalled. In exercising its rights and remedies, Lender shall be free to sell all or any part of the
Property together or separately, in one sale or by separate sales. Lender shall be entitled to bid at any public sale
on all or any portion of the Property.
Notice of Sale. Lender shall give Grantor reasonable notice of the time and place of any public sale of the Personal
Property or of the time after which any private sale or other intended disposition of the Personal Property is to be
made. Unless otherwise required by applicable law, reasonable notice shall mean notice given at least ten (10)
days before the time of the sale or disposition. Any sale of the Personal Property may be made in conjunction with
any sale of the Real Property.
Election of Remedies. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and
an election to make expenditures or to take action to perform an obligation of Grantor under this Mortgage, after
Grantors failure to perform, shall not affect Lenders right to declare a default and exercise its remedies. Nothing
under this Mortgage or otherwise shall be construed so as to limit or restrict the rights and remedies available to
Lender following an Event of Default, or In any way to limit or restrict the rights and ability of Lender to proceed
directly against Grantor and/or against any other co-maker, guarantor, surety or endorser and /or to proceed against
any other collateral directly or indirectly securing the Indebtedness.
Attorneys' Fees; Expenses. It Lender Institutes any suit or action to enforce any of the terms of this Mortgage,
Lender shall be entitled to recover such sum as the court may adjudge reasonable as attorneys' fees at blal and
upon any appeal. Whether or not any court action is involved, and to the extent not prohibited by low, all
reasonable expenses Lender incurs that In Lender's opinion are necessary at any time for the protection of Its
interest or the enforcement of Its rights shall become a part of the Indebtedness payable on demand and shall bear
interest at the Note rate from the date of the expenditure until repaid. Expenses covered by this paragraph Include,
without limitation, however subject to any limits under applicable law, Lenders reasonable attorneys' fees and
MORTGAGE
(Continued) Page e
Lender's legal expenses, whether or not there is a lawsuit, including reasonable attorneys' fees and expenses for
bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any
anticipated post judgment collection services, the cost of searching records, obtaining title reports (including
foreclosure reports), surveyors' reports, and appraisal fees and fide Insurance, to the extent permitted by
applicable law. Grantor also will pay any court costs, In addition to all other sums provided by law.
NOTICES. Unless otherwise provided by applicable law, any notice required to be given under this Mortgage shall be
given in writing, and shall be effective when actually delivered, when actually received by telefacsimile (unless
otherwise required by law), when deposited with a nationally recognized overnight courier, or, N mailed, when deposited
in the United States mall, as first Gass, certified or registered mail postage prepaid, directed to the addresses shown
near the beginning of this Mortgage. All copies of notices of foreclosure from the holder of any lien which has priority
over this Mortgage shall be sent to Lender's address, as shown near the beginning of this Mortgage. Any party may
charge Its address for notices under this Mortgage by giving formal written notice to the other parties, specifying that
the purpose of the notice Is to change the party's address. For notice purposes. Grantor agrees to keep under
Informed at all times of Grantor's current address. Unless otherwise provided by applicable law, If there Is more than
one Grantor, any notice given by Lender to any Grantor is deemed to be notice given to all Grantors.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Mortgage:
Amendments. This Mortgage, together with any Related Documents, constitutes the entire understanding and
agreement of the parties as to the matters set forth In this Mortgage. No alteration of or amendment to this
Mortgage shall be effective unless given in writing and signed by the party or parties sought to be charged or
bound by the alteration or amendment.
Annual Reports. If the Property is used for purposes other than Grantor's residence, Grantor shall furnish to
Leander, upon request, a certified statement of net operating Income received from the Property during Grantor's
previous fiscal year in such form and detall as Lender shall require. "Net operating income" shall mean all cash
receipts from the Property less all rash expenditures made in connection with the operation of the Property.
Caption Headings. Caption headings In this Mortgage are for convenience purposes only and are not to be used to
Interpret or define the provisions of this Mortgage.
Goveming Law. This Mortgage will be governed by federal law applicable to Lender and, to Ue extent not
preempted by federal law, the laws of the Commonwealth of Pennsylvania without regard to Its conflicts of law
provisions. This Mortgage has been accepted by Lander In the Commonwealth of Pennsylvania.
Choice of Venus. If there Is a lawsuit, Grantor agrees upon Lender's request to submit to the jurisdiction of the
courts of Cumberland County, Commonwealth of Pennsylvania.
No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Mortgage unless such
waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right
shall operate as a waiver of such right or any other right A waiver by Lender of a provision of this Mortgage shall
not prejudice or constitute a waiver of Lenders right otherwise to demand strict compliance with that provision or
any other provision of this Mortgage. No prior waiver by Lender, nor any course of dealing between Lender and
Grantor, shall constitute a waiver of any of Lenders rights or of any of Grantor's obligations as to any future
transactions. Whenever the consent of Lender is required under this Mortgage, the granting of such consent by
Lender In any instance shall not constitute continuing consent to subsequent Instances where such consent is
required and in all cases such consent may be granted or withheld in the sole discretion of Lender.
Severability. If a court of competent jurisdiction finds any provision of this Mortgage to be illegal, invalid, or
unenforceable as to any circxrmstence, that finding shall not make the offending provision illegal, invalid, or
unenforceable as to any other circumstance. If feasible, the offending provision shall be Considered modified so
that it becomes legal, valid and enforceable. If the offending provision cannot be so modified, it shall be
considered deleted from this Mortgage. Unless otherwise required by law, the illegality, Invalidity, or
unenforceability of any provision of this Mortgage shall not affect the legality, validity or enforceability of any other
provision of this Mortgage.
Merger. There shall be no merger of the interest or estate created by this Mortgage with any other interest or
estate in the Property at any time held by or for the benefit of Lender in any Capacity, without the written consent
of Lender.
Successor interests. The terms of this Mortgage shall be binding upon Grantor, and upon Grantors heirs, personal
representatives, successors, and assigns, and shall be enforceable by Lender end its successors and assigns.
Time is of the Essence. Time is of the essence in the performance of this Mortgage.
Wales Jury. All parties to this Mortgage hereby waive the right to any jury trial In any action, proceeding, or
counterclaim brought by arty party against any otter party.
DEFINITIONS. The folowing capitalized words and terms shall have the following meanings when used in this
MORTGAGE
(Continued) Page 9
Mortgage. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful
money of the United States of America. Words and terms used in the singular shall include the plural, and the plural
shall include the singular, as the context may require. Words and terms not otherwise defined In this Mortgage shall
have the meanings attributed to such terms in the Uniform Commercial Code:
Borrower, The word "Borrower" means Seth B Hughes and includes all co-signers and co-makers signing the Note
and all their successors and assigns.
Default. The word "Default" means the Default set forth In this Mortgage in the section titled "Default ".
Environmental Laws. The words 'Environmental Laws" mean any and all state, federal and local statutes,
regulations and ordinances relating to the protection of human health or the environment, including without
limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42
U.S.C. Section 9601, at a". ( "CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub. L.
No. 99499 ("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, at seq_, the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, at 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 Mortgage in the
events of default section of this Mortgage.
Grantor. The word "Grantor" means Seth B Hughes.
Guarantor. The word 'Guarantor" means any guarantor, surety, or accommodation party of any or all of the
Indebtedness.
Guaranty. The word 'Guaranty' means the guaranty from Guarantor to Lender, including without limitation a
guaranty of all or part of the Note.
Hazardous Substances. The words "Hazardous Substances' mean materials that, because of their quantity,
concentration or physical, chemical or infectious characteristics, may cause or pose a present or potential hazard
to human health or the environment when improperly used. treated, stored, disposed of, generated, manufactured,
transported or otherwise handled. The words 'Hazardous Substances' are used In their very broadest sense and
Include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed
under the Environmental Laws. The term 'Hazardous Substances" also includes, without limitation, petroleum and
petroleum by-products or any fraction thereof and asbestos.
Improvements. The word 'Improvements' means all existing and future Improvements, buildings, structures,
mobile homes affixed on the Real Property, facilities, additions, replacements and other construction on the Real
Property.
Indebtedness. The word "Indebtedness' means all principal. Interest, and other amounts, costs and expenses
payable under the Note or Related Documents, together with all renewals of, extensions of, modifications of,
consolidations of and substitutions for the Note or Related Documents and any amounts expanded or advanced by
Lender to discharge Grantor's obligations or expenses incurred by Lender to enforce Grantor's obligations under
this Mortgage, together with Interest on such amounts as provided in this Mortgage. Specifically, without
limitation, Indebtedness includes all amounts that may be indirectly secured by the Cross- Collateralization provision
of this Mortgage.
Lander. The word "Lender" means Integrity Bank, Its successors and assigns.
Mortgage. The word 'Mortgage means this Mortgage between Grantor and Lender.
Note. The word 'Note' means the promissory note dated December 30, 2011, in the original principal
amount of $248,484.67 from Grantor to Lender, together with all renewals of, extensions of, modifications
of, refinancings of, consolidations of, and substitutions for the prormissory note or agreement. The maturity date Of
the Note Is June 30, 2012. NOTICE TO GRANTOR; THE NOTE CONTAINS A VARIABLE INTEREST RATE.
Personal Property. The words "Personal Property' mean all equipment, fixtures, and other articles of personal
property now or hereafter owned by Grantor, and now or hereafter attached or affixed to the Real Property;
together with all accessions, parts, and additions to, all replacements of, and all substitutions for, any of such
property; and together with all proceeds (including without limitation all insurance proceeds and refunds of
premiums) from any sale or other disposition of the Property.
Property. The word "Property" means collectively the Real Property and the Personal Property.
Real Property. The words 'Real Property' mean the real property, Interests and rights, as further described in this
Mortgage.
Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan
agreements, a"ronmental agreements, guaranties, security agreements, mortgages, deeds of trust, security
MORTGAGE
(Continued) Page 10
deeds, collateral mortgages, and all other Instruments, agreements and documents, whether now or hereafter
existing, executed In connection with the Indebtedness.
Rents. The word "Rents" means all present and future rents, revenues, income, Issues, royalties, profits, and
other benefits derived from the Property.
GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MORTGAGE, AND GRANTOR AGREES
TO ITS TERMS.
THIS MORTGAGE IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS MORTGAGE IS AND SHALL CONSTITUTE
AND HAVE E EFFECT A S INSTRUMENT ACCORDING TO LAW.
GRANTOR:
CERTIFICATE OF RESIDENCE
I hereby certify, that the precise address of the mortgagee, Integrity Bank, herein is as follows:
Camp Hill Office, 3345 Market Street, Camp Hill, PA 17011
a
Atto Ag or Mortgagee
INDIVIDUAL ACKNOWLEDGMENT
COMMONWEALTH OF PENNSYLVANIA I
C6t C» G K-�fl� �l IS ► ss
COUNTY of >
On s. the �` day of L f 20 1 l before me
_ 7 1 i A,. D . a the undersig Notary Public, personally appeared SWh B Hughes, known to
me (or satisfactorily pro n)to be the person whose name is subscribed to the within instrumen d acknowledged
that he or she executed the some for the purposes therein con ad.
In witness whereof, l hereunto at my hand a official se
COMMON Of PENN8I ; VANIA
Notarial Seal Notary Pub in and for tats of
Trida D. filaylor, Notary Public
tarltsle ftm, Cumberland county
My (gmnis5loa bores Oct. 2, 2014
LASER PRO Lending, Ver. 5.59. 03 Copr. Harland Financial Solutions, Inc_ 1997, 2011. All Rights Reserved. -
PA K:%LENDING%CFIILPL1G03.FC TR-4438 PR -25
ALL THAT CERTAIN tract of land situated in the Borough of Carlisle, Cumberland County, PA being The
Highlands, Phase 3, Lot No. 102, as shown on a plan entitled "The Highlands Final Subdivision Plan, Phase 3,
Section One" dated January 21, 1997, by PennTerra Engineering, Inc., State College, PA, recorded in Plan Book
79, Page 103, being bounded and described as follows:
BEGINNING at an iron pin, lying in a southerly right of way line of Shannon Lane (60 foot right of way), and being a
westerly comer of Lot No. 103; thence along said Lot, South 04 degrees 18 minutes 00 seconds East, 136.88 feet to an iron
pin, being a southerly corner of said Lot and lying in a northerly line of lands owned now or formerly by Thomas Roy and
Pauline V. Lebo (Deed Book N -12, Page 207); thence along said lands, South 85 degrees 44 minutes 30 seconds West, 80.00
feet to an iron pin, lying along said lands and being an easterly comer of Lot No. 101; thence along said Lot North 04 degrees
18 minutes 00 seconds West, 136.82 feet to an iron pin, being a northerly comer of said Lot and lying in a southerly line of
Shannon Lane (60 foot right of way); thence along said right of way, North 85 degrees 42 minutes 00 seconds East, 80.00
feet to an iron pin, being the place of BEGINNING. CONTAINING 0.251 acre.
Lot No. 102 is subject to a 10 foot wide utility easement along its street frontage.
ROBERT P. ZIEGLER
RECORDER OF DEEDS
CUMBERLAND COUNTY _
1 COURTHOUSE SQUARE
CARLISLE, PA 17013 `
717 -240 -6370
Instrument Number - 201201920
Recorded On 1/19/2012 At 3:19:03 PM * Total Pages -12
* Instrument Type - MORTGAGE
Invoice Number - 100475 User ID - KW
* Mortgagor - HUGHES, SETH
* Mortgagee - INTEGRITY BANK
* Customer - SCHERER
* FEES
STATE WRIT TAX $0.50 Certification Page
STATE JCS /ACCESS TO $23.50
JUSTICE DO NOT DETACH
RECORDING FEES — $25.50
RECORDER OF DEEDS
PARCEL CERTIFICATION $1 0.00
This page is now part
FEES of this Iegal document.
AFFORDABLE HOUSING $11.50
COUNTY ARCHIVES FEE $2.00
ROD ARCHIVES FEE $3.00
TOTAL, PAID $76.00
I Certify this to be recorded
in Cumberland County PA
RECORDER O D DS
" - information denoted by an asterisk may change during
the verification process and may not be reflected on this page.
002JU
lllllllllllllll�lllll�lll
�/�
March 5, 2013
Seth B and Jennifer Hughes
14 Cardinal Drive
Carlisle, PA 17013 -4309
Re: Demand for payment
Dear Seth B and Jennifer Hughes,
The purpose of this letter is to advise you that you are currently in default on the
mortgages and corresponding notes dated December 30, 2011. Please be advised that this
letter constitutes your notice that you are in default and that Integrity Bank is demanding
payment in full of all principal and interest of your loans.
As of the date of this letter, the principal amounts of $244,868.03 for loan number
1500554350 are past due and in default. Additionally, under the terms of the Mortgages
and Notes, you are also liable for interest, costs, and attorney's fees incurred due to this
default.
Please be further advised that Integrity Bank reserves the right to pursue each and
every legal and /or equitable remedy available, should this loan not be paid in full within
thirty (30) days of the date of this letter.
We ask that you contact us to advise us as to when payment will be made, so that
legal action can be avoided. Otherwise, we will refer this matter to our legal counsel,
McNees, Wallace, and Nurick LLC. Please understand that this issue requires immediate
attention. Thank you for your cooperation.
Sincerely,
Ivelisse DeMaio
Collections Manager
Integrity Bank
3314 Market Street
Camp Hill, Pa 17011
Ph: 717 - 920 -3684
Nedric L.Nissly,Esquire OF THE PROTI-IONO Arl y
PA Attorney I.D.No. 44233
100 Pine Street-P.O. Box 1166 2013 MAY 14 PM 2: 08
Harrisburg,PA 1.7108-1166
Fax:. (717)260-1731 CUMBERLAND ������'
Phone: (717)232-8000 '
nnissly @mwn.com
Attorneys far Integrity Bank
INTEGRITY BANK, : IN THE COURT OF COMMON PLEAS
Plaintiff CUMBERLAND COUNTY,PENNSYLVANIA
V. CASE NO. 13-2627
SETH B. HUGHES, : CIVIL ACTION- LAW
Defendant MORTGAGE FORECLOSURE
PRAECIPE TO WITHDRAW COMPLAINT IN MORTGAGE FORECLOSURE
TO: THE PROTHONOTARY OF CUMBERLAND COUNTY
Please withdraw the Complaint in Mortgage Foreclosure entered in the above captioned
case and discontinue without prejudice.
McNEES WALLACE&NURICK LLC
Date: May 13, 2013 By:
Nedric L.Nissly,Esquire
PA Attorney I.D.No. 44233
100 Pine Street-P.O. Box 1166
Harrisburg,PA 17108-1166
Direct Fax: (717) 260-1731
Phone: (717)232-8000
nnissly @mwn.com
Attorneys for Integrity Bank