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HomeMy WebLinkAbout13-4205 Supreme Courtof. Pennsylvania Courtbf ;Cdtnmoi Pleas For Prothonotary Use Only C yiLCovei= -:.Sh et Docket No: Curviberland ` COUnty 13 d� lvr� The information collected on this form is used solely for court administration purposes. This form does not supplement or replace the filing and service ofpleadings or other papers as required by law or rules of court. Commencement of Action: S 0 Complaint 0 Writ of Summons 0 Petition 0 Transfer from Another Jurisdiction Declaration of Taking E C Lead Plaintiff s Name: Lead Defendant's Name: Susquehanna Bank Eskimo Seven Limited d /b /a Windows and More, et al. T Dollar Amount Requested: ©within arbitration limits I Are money damages requested? 0 Yes 0 No (check one) ©x outside arbitration limits O N Is this a Class Action Suit? 0 Yes 0 No Is this an MDJAppeal? Yes 0 No A Name of Plaintiff /Appellant's Attorney: Dana C. Panagopoulos, Esquire © Check here if you have no attorney (are a Self - Represented [Pro Se] 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 D Intentional n Buyer Plaintiff Administrative Agencies 0 Malicious Prosecution D Debt Collection: Credit Card 0 Board of Assessment Motor Vehicle Debt Collection: Other Q Board of Elections Nuisance Dept. of Transportation Premises Liability Statutory Appeal: Other S Product Liability (does not include tort) ®Employment Dispute: mass E Discrimination Q Slander/Libel/ Defamation Employment Dispute: Other Zoning Board C Other: � Other: T I Other: O MASS TORT Asbestos N ® Tobacco Toxic Tort - DES © Toxic Tort - Implant REAL PROPERTY MISCELLANEOUS Toxic Waste 0 Other: El Ejectment Q Common Law /Statutory Arbitration B 0 Eminent Domain /Condemnation © Declaratory Judgment Ground Rent Mandamus 0 Landlord /Tenant Dispute 1] Non - Domestic Relations 13 Mortgage Foreclosure: Residential Restraining Order PROFESSIONAL LIABLITY Mortgage Foreclosure: Commercial ❑ Quo Warranto Dental Q Partition D Replevin Legal ® Quiet Title 0 Other: © Medical 0 Other: Breach of Contract Other Professional: Updated 1/1/2011 No. CI -13- BRUBAKER CONNAUGHTON GOSS & LUCARELLI LLC By: Brett D. Jackson, Esquire Attorney I.D. No. 87517 Dana C. Panagopoulos, Esquire , Attorney I.D. No. 89491 460 New Holland Ave, Suite 6205 Attorneys for Plaintiff. Lancaster, PA 17602 Susquehanna Bank SUSQUEHANNA BANK, successor IN THE COURT OF COMMON in interests to Graystone Tower PLEAS OF CUMBERLAND Bank, in its capacity as secured COUNTY, PENNSYLVANIA Lender to Lightstyles, Inc., Plaintiff V : CIVIL ACTIONqq- LAW MCO ESKIMO SEVEN LIMITED, No. CI -13- may _, d/b /a WINDOWS AND MORE, and " re, —(��; � = SHARON YEOMANS,'' Defendants NOTICE TO DEFEND YOU HAVE BEEN SUED IN COURT. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this Complaint and Notice are served, by entering a written appearance personally or by attorney and filing in writing with the Court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so the case may proceed without you and a judgment may be entered against you by the Court without further notice for any money claimed in the Complaint 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 �^ t<0 3 , 7,5 Doc 22451 & 3r1V V 9*; 5 Z No. CI -13- 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 17103 Telephone: 717 - 249 -3166 BRUBAKER CONNAUGHTON GOSS & LUCARELLI LLC I� t3 Date. B � Y Brett D. Jackson, Esquire Attorney I.D. No. 87517 Dana C. Panagopoulos, Esquire Attorney I.D. No. 89491 Attorneys for Plaintiff 2 Doc 22451 No. CI -13- BRUBAKER CONNAUGHTON GOSS & LUCARELLI LLC By: Brett D. Jackson, Esquire Attorney I.D. No. 87517 Dana C. Panagopoulos, Esquire Attorney I.D. No. 89491 460 New Holland Ave, Suite 6205 Attorneys for Plaintiff: Lancaster, PA 17602 Susquehanna Bank SUSQUEHANNA BANK, successor IN THE COURT OF COMMON in interests to Graystone Tower PLEAS OF CUMBERLAND Bank, in its capacity as secured COUNTY, PENNSYLVANIA Lender to Lightstyles, Inc., Plaintiff V. CIVIL ACTION - LAW ESKIMO SEVEN LIMITED, No. CI -13- d/b/a WINDOWS AND MORE, and SHARON YEOMANS, Defendants COMPLAINT The Parties 1. The Plaintiff, Susquehanna Bank, is a financial institution organized and existing under the laws of the Commonwealth of Pennsylvania, with its principal offices located at 1570 Manheim Pike, Lancaster, Lancaster County, Pennsylvania 17604. 2. Plaintiff is the successor -in- interest to Graystone Tower Bank C'Graystone Bank") as the result of a merger by which Plaintiff acquired, merged with and survived Graystone Bank. As a result of such merger, Plaintiff became vested with all of the property, rights, privileges, powers and franchises of Graystone Tower and its predecessor banks. Doc 22451 No. CI -13- 3. Defendant, Eskimo Seven Limited d/b /a Windows and More ("Eskimo Seven ") is a North Carolina corporation, with a principal address of 5317 -A Highway 70, Morehead City, North Carolina 28557. 4. Defendant, Sharon Yeomans, is an adult individual with a last known address of 5317 -A Highway 70, Morehead City, North Carolina 28557. Factual Background 5. Lightstyles, Ltd. ( "Lightstyles ") is a Pennsylvania corporation with a last known address of 1261 Claremont Road, Carlisle, Pennsylvania 17015. Lightstyles is, or was, a window, door and hardware distributor. 6. Defendant Eskimo Seven is or was, at all times relevant to this Complaint, a customer of Lightstyles. 7. Graystone Bank, Plaintiffs predecessor in interest, extended an asset based line of credit loan (the "Loan ") to Lightstyles pursuant to a certain Business Loan Agreement dated December 6, 2006 (as amended, restated and /or otherwise modified, the "Loan Agreement ", and together with each and every instrument, agreement and other document executed by Lightstyles or any other obligor or guarantor under the Loan in connection with the Loan, the "Loan Documents "). A true and correct copy of the Loan Agreement is attached hereto, incorporated by reference and marked Exhibit A. 8. In conjunction with the Loan, and pursuant to the terms of the Loan Agreement, Lightstyles executed and delivered to Graystone Bank, along other Loan Documents, a certain Commercial Security Agreement dated December 6, 2 Doc 22451 �Y No. CI -13- 2006 (the "Security Agreement "). A true and correct copy of the Security Agreement is attached hereto, incorporated by reference and marked Exhibit B. 9. Under the Security Agreement, Lightstyles granted as partial security for the Loan a security interest in the following collateral: All inventory, chattel paper, accounts, accounts receivable, equipment, contract rights, documents, deposit accounts, furniture, fixtures, vehicles, instruments, leasehold improvements, machinery and general intangibles. See Exhibit B. 10. The security interest granted under the Security Agreement is perfected by the filing of a UCC -1 Financing Statement with the Secretary of the Commonwealth of Pennsylvania (File #2006040503161 continued to #2011011403759). True and correct copies of said filings are attached hereto, incorporated by reference and together marked Exhibit C. 11. As a result of certain adverse financial events, Plaintiff has elected to exercise and is exercising, through this Complaint, its rights under the Security Agreement to collect directly from Lightstyles' account debtors (each an "Account Debtor" and collectively the "Account Debtors ") and to sue to recover any and all amounts owed to Lightstyles in connection with accounts receivable generated in the course and scope of Lightstyles' business operations (each an "Account" and collectively the "Accounts "). 12. Defendant Eskimo Seven is an Account Debtor of Lightstyles and, therefore, Plaintiff is entitled to bring this action, as a secured creditor on behalf of 3 Doc 22451 No. CI -13- Lightstyles, against it to recover the outstanding amounts owed by Eskimo Seven to Lightstyles on an Account. COUNT I - BREACH OF CONTRACT - ALL DEFENDANTS 13. Paragraphs 1 through 12 are incorporated by reference as though set forth in full herein. 14. Defendant Eskimo Seven and Lightstyles were parties to an oral agreement (the "Agreement ") pursuant to which Lightstyles, at Defendant's specific insistence and request, sold it certain windows, doors, hardware and related materials and supplies (the "Merchandise ") on open book account. 15. By course of dealing, Eskimo Seven placed orders with Lightstyles' representatives in Cumberland County, Pennsylvania, and Lightstyles delivered the Merchandise to or as directed by Eskimo Seven. 16. Eskimo Seven received invoices from Lightstyles from time to time on account of the Merchandise delivered and payments due therefor. The particular invoices that comprise the Account that is the subject of this lawsuit are not presently accessible to Plaintiff and, accordingly, are not attached to this Complaint. But the total outstanding balance owed by Eskimo Seven to Lightstyles on such invoices is confirmed by Lightstyles' internal books and records made available to Plaintiff. 17. All of the Merchandise ordered by Eskimo Seven and generating the Account that is the subject of this lawsuit was delivered by Lightstyles and accepted by Eskimo Seven. 4 Doc22451 No. CI -13- 18. The prices of the Merchandise purchased from Lightstyles by Eskimo Seven and generating the Account that is the subject of this lawsuit represent Lightstyles' fair, reasonable and usual prices for such Merchandise and are the prices that Eskimo Seven agreed to pay. 19. Eskimo Seven failed to pay in full Lightstyles' invoices when due and has thereby accumulated an unpaid and outstanding Account balance of Three Hundred Thirty -Nine Thousand Six Hundred Twenty -Five and 00/100 Dollars ($339,625.00) as of November 3, 2011. 20. Pursuant to the Guarantee effective November 14, 2003, Sharon Yeomans personally guaranteed the Account. A copy of the Guarantee is attached hereto, incorporated by reference and marked Exhibit D. 21. Both Lightstyles and subsequently Plaintiff, acting on Lightstyles' behalf pursuant to the authorization granted under the Security Agreement, have demanded payment of Defendants' Account Balance owed to Lightstyles, but despite such demands, Defendant has refused, and continues to refuse, to make payment of the amount set forth in paragraph 19 above rightfully owed to Lightstyles for Merchandise sold and delivered. 22. Defendants' failure to make timely payment of its Account balance owed to Lightstyles for Merchandise sold and delivered constitutes a breach of Defendants' contractual obligations under the Agreement between itself and Lightstyles. 5 Doc 22451 ti r No. CI -13- 23. Lightstyles has materially complied with its obligations under the Agreement. 24. As a consequence of Defendants' breach of its contractual obligations under the Agreement, Lightstyles has incurred damages in the principal amount of Three Hundred Thirty -Nine Thousand Six Hundred Twenty -Five and 00/100 Dollars ($339,625.00). WHEREFORE, Plaintiff, Susquehanna Bank, as secured lender acting on behalf of Lightstyles, Ltd., requests judgment in its favor and against Defendants, Eskimo Seven Limited, d/b /a Windows and More and Sharon Yeomans, in the amount of Three Hundred Thirty -Nine Thousand Six Hundred Twenty -Five and 00 /100 Dollars ($339,625.00), plus costs of this action, interest and any other and further relief permitted by law. COUNT II - BOOK ACCOUNT - ALL DEFENDANTS 25. Paragraphs 1 through 24 are incorporated by reference as though set forth in full herein. 26. An implied contract was created through the ongoing course of business between Lightstyles and Eskimo Seven. 27. The terms of the implied contract are established through the invoices over the course of the parties' business relationship. 28. Eskimo Seven did not dispute the invoices comprising the Account that is the subject of this lawsuit when issued. 6 Doc 22451 ' No. CI -13- 29. Eskimo Seven breached the implied contract between itself and Lightstyles by failing to pay the invoices comprising the Account that is the subject of this lawsuit when issued. 30. Lightstyles materially complied with its obligation under the implied contract. WHEREFORE, Susquehanna Bank, as secured lender acting on behalf of Lightstyles, Ltd., requests judgment in its favor and against Defendants, Eskimo Seven Limited, d/b /a Windows and More and Sharon Yeomans, in the amount of Three Hundred Thirty -Nine Thousand Six Hundred Twenty -Five and 00 /100 Dollars ($339,625.00), plus costs of this action, interest and any other and further relief permitted by law. COUNT III - PERSONAL GUARANTEE - SHARON YEOMANS 31. Paragraphs 1 through 30 are incorporated by reference as though set forth in full herein. 32. Pursuant to the personal Guarantee, Defendant Sharon Yeomans is liable for the debts of Eskimo Seven. 33. As set forth in the Complaint, and as a consequence of Defendants' failure to pay amounts due and owing to Lightstyles, Plaintiff has incurred damages in the principal amount of Three Hundred Thirty -Nine Thousand Six Hundred Twenty -Five and 00 /100 Dollars ($339,625.00). WHEREFORE, Susquehanna Bank, as secured lender acting on behalf of Lightstyles, Ltd., requests judgment in its favor and against Defendant, Sharon 7 Doc 22451 k No. CI -13- Yeomans, in the amount of Three Hundred Thirty -Nine Thousand Six Hundred Twenty -Five and 00/100 Dollars ($339,625.00), plus costs of this action, interest and any other and further relief permitted by law. COUNT IV - UNJUST ENRICHMENT - ALL DEFENDANTS 34. Paragraphs 1 through 33 are incorporated by reference as though set forth in full herein. 35. By failing to pay the amounts due and owing to Lightstyles, as described in this Complaint, the Defendants have been unjustly enriched to the detriment of Lightstyles in the amount of Three Hundred Thirty -Nine Thousand Six Hundred Twenty -Five and 00/100 Dollars ($339,625.00). WHEREFORE, Plaintiff, Susquehanna Bank, as secured lender acting on behalf of Lightstyles, Ltd., requests judgment in its favor and against Defendants, Eskimo Seven Limited, d/b /a Windows and More and Sharon Yeomans, in the amount of Three Hundred Thirty -Nine Thousand Six Hundred Twenty -Five and 00/100 Dollars ($339,625.00), plus costs of this action, interest and any other and further relief permitted by law. BRUBAKER CONNAUGHTON GOSS & LUCARELLI LLC Date: t U ,J By: eckson, a Esquire .D. No. 87517 Dana C. Panagopoulos, Esquire Attorney I.D. No. 89491 Attorneys for Plaintiff 8 Doc22451 i i f s �' '�' dam. ,,, w`- _. � � _ . BUSINES,. LOAN AGREEMENT (ASSET _.,ASED) iorrower: Lightstyles, Ltd. Lender: GRAYSTONE BANK 1261 Claremont Road Capital Region Carlisle, PA 17013 112 Market Street -- Harrisburg, PA 17101 THIS BUSINESS LOAN AGREEMENT (ASSET BASED) dated December 6, 2006, is made and executed between Lightstyles, Ltd. ( "Borrower ") and GRAYSTONE BANK ( "Lender ") on the following terms and conditions. Borrower has received prior commercial loans from Lender or has applied to Lender for a commercial loan or loans or other financial accommodations, including those which may be described on any exhibit or schedule attached to this Agreement ( "Loan "). 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; (B) the granting, renewing, or extending of any Loan by Lender at all times shall be subject to Lender's sole judgment and discretion; and (C) 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 6, 2006, 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 such time as the parties may agree In writing to terminate this Agreement. LINE OF CREDIT. Lender agrees to make .Advances to Borrovrer from time to time from the date of this Agreement to the Expiration Date, provided the aggregate amount of such Advances outstanding at any time does riot exceed the Borrowing Base. Within the foregoing limits, Borrower may borrow, partially or wholly prepay, and reborrow under this Agreement as follows: Conditions Precedent to Each Advance. Lender's obligation to make any Advance to or for the account of Borrower under this Agreement is subject to the following conditions precedent, with all documents, instruments, opinions, reports, and other items required under this Agreement to be in form and substance satisfactory to Lender: (1) Lender shall have received evidence that this Agreement and all Related Documents have been duly authorized, executed, and delivered by Borrower to Lender. (2) Lender shall have received such opinions of counsel, supplemental opinions, and documents as Lender may request. (3) The security interests in the Collateral shall have been duly authorized, created, and perfected with first lien priority and shall be in full force and effect. (4) All guaranties required by Lender for the credit facility(ies) shall have been executed by each Guarantor, delivered to Lender, and be in full force and effect. (6) Lender, at its option and for its sole benefit, shall have conducted an audit of Borrower's Accounts, Inventory, books, records, and operations, and Lender shall be satisfied as to their condition. (6) Borrower shall have paid to Lender all fees, costs, and expenses specified in this Agreement and the Related Documents as are then due and payable. (7) There shall not exist at the time of any Advance a condition which would constitute an Event of Default under this Agreement, and Borrower shall have delivered to Lender the compliance certificate called for in the paragraph below titled "Compliance Certificate." Making Loan Advances. Advances under this credit facility, as well as directions for payment from Borrower's accounts, may be requested orally or in writing by authorized persons. Lender may, but need not, require that all oral requests be confirmed in writing. Each Advance shall be conclusively deemed to have been made at the request of and for the benefit of Borrower (1) when credited to any deposit account of Borrower maintained with Lender or (2) when advanced in accordance with the instructions of an authorized person. Lender, at its option, may set a cutoff time, after which all requests for Advances will be treated as having been requested on the next succeeding Business Day. Mandatory Loan Repayments. If at any time the aggregate principal amount of the outstanding Advances shall exceed the applicable Borrowing Base, Borrower, immediately upon written or oral notice from Lender, shall pay to Lender an amount equal to the difference between the outstanding principal balance of the Advances and the Borrowing Base. On the Expiration Date, Borrower shall pay to Lender in full the aggregate unpaid principal amount of all Advances then outstanding and all accrued unpaid interest, together with all other applicable fees, costs and charges, if any, not yet paid. Loan Account. Lender shall maintain on its books a record of account in which Lender shall make entries for each Advance and such other debits and credits as shall be appropriate in connection with the credit facility. Lender shall provide Borrower with periodic statements of Borrower's account, which statements shall be considered to be correct and conclusively binding on Borrower unless Borrower notifies Lender to the contrary within thirty (30) days after Borrower's receipt of any such statement which Borrower deems to be incorrect. XLATERAL. To secure payment of the Primary Credit Facility and performance of all other Loans, obligations and duties owed by Borrower to rider, Borrower (and others, if required) shall grant to Lender Security Interests in such property and assets as Lender may require. Lender's !curity Interests in the Collateral shall be continuing liens and shall include the proceeds and products of the Collateral, including without Citation the proceeds of any insurance. With respect to the Collateral, Borrower agrees and represents and warrants to Lender: Perfection of Security Interests. Borrower agrees to execute all documents perfecting Lender's Security Interest and to take whatever actions are requested by Lender to perfect and continue Lender's Security Interests in the Collateral. Upon request of Lender, Borrower will deliver to Lender any and all of the documents evidencing or constituting the Collateral, and Borrower will note Lender's interest upon any and. all chattel paper and instruments if not delivered to Lender for possession by Lender. Contemporaneous with the execution of this Agreement, Borrower will execute one or more UCC financing statements and any similar statements as may ba required by applicable law, and Lender will file such financing statements and all such similar statements in the appropriate location or locations. Borrower hereby irrevocably authorizes Lender to execute any documents necessary to perfect or to continue any Security Interest. Lender may at any time, and without further authorization from Borrower, file a carbon, photograph, facsimile, or other reproduction of any financing statement for use as a financing statement. Borrower will reimburse Lender for all expenses for the perfection, termination, and the continuation of the perfection of Lender's security, interest in the Collateral. Borrower promptly will notify Lender before any change in Borrower's name including any change to the assumed business names of Borrower. Borrower also promptly will notify Lender before any change in Borrower's Social Security Number or Employer Identification Number. Borrower further agrees to notify Lender in writing prior to any change in address or location of Borrower's principal governance office or should Borrower merge or consolidate with any other entity. Collateral Records. Borrower does now, and at all times hereafter shall, keep correct and accurate records of the Collateral, all of which records shall be available to Lender or Lender's representative upon demand for inspection and copying at any reasonable time. With respect to the Accounts, Borrower agrees to keep and maintain such records as Lender may require, including without limitation s BUSIN,. ,`S LOAN AGREEMENT (ASSET Bk.:,ED) Loan No= 4000002205 (Continued) Page 2 information concerning Eligible Accounts and Account balances and agings. Records related to Accounts (Receivables) are or will be located at 1261 Claremont Road, Carlisle, PA. With respect to the Inventory, Borrower .agrees to keep and maintain _such records as Lender may require, including without limitation information concerning Eligible Inventory aqd records itemizing and describing the kind, type, quality, and quantity of Inventory, Borrower's Inventory costs and selling prices, and the daily withdrawals and additions to Inventory. Records related to Inventory are or will be located at 1261 Claremont Road, Carlisle PA. The above is an accurate and complete list of all locations at which Borrower keeps or maintains business records concerning Borrower's collateral. collateral Schedules. Concurrently with the execution and delivery of this Agreement, Borrower shall execute and deliver to Lender schedules of Accounts and Inventory and schedules of Eligible Accounts and Eligible Inventory in form and substance satisfactory to the Lender. Thereafter supplemental schedules shall be delivered according to the following schedule: With respect to Eligible Accounts, schedules shall be delivered no later than 20 days after the end of each month. With respect to Eligible Inventory, schedules shall be delivered no later than 20 days after the end of each month. Representations and Warranties Concerning Accounts. With respect to the Accounts, Borrower represents and warrants to Lender: (1) Each Account represented by Borrower to be an Eligible Account for purposes of this Agreement conforms to the requirements of the definition of an Eligible Account; (2) All Account information listed on schedules delivered to Lender will be true and correct, subject to immaterial variance; and (3) Lender, its assigns, or agents shall have the right at any time and at Borrower's expense to inspect, examine, and audit Borrower's records and to confirm with Account Debtors the accuracy of such Accounts. Representations and Warranties Concerning Inventory. With respect to the ! nventory, Borrower represGrrts and warrants to Lender: (1) All Inventory represented by Borrower to be Eligible Inventory for purposes of this Agreement conforms to the requirements of the definition of EVgible Inventory; (2) All Inventory values listed on schedules delivered to Lender will be true and correct, subject to immaterial variance; (3) The value of the Inventory will be determined on a consistent accounting basis; (4) Except as agreed to the contrary by Lender in writing, all Eligible Inventory is now and at all times hereafter will be in Borrower's physical possession and shall not be held by others on consignment, sale on approval, or sale or return; (5) Except as reflected in the Inventory schedules delivered to Lender, all Eligible Inventory is now and at all times hereafter will be of good and merchantable quality, free from defects; (6) Eligible Inventory is not now and will not at any time hereafter be stored with a bailee, warehouseman, or similar party without Lender's prior written consent, and, in such event, Borrower will concurrently at the time of bailment cause any such bailee, warehouseman, or similar party to issue and deliver to Lender, in form acceptable to Lender, warehouse receipts in Lender name evidencing the storage of Inventory; and (7) Lender, its assigns, or agents shall have the right at any time and at Borrower's expense to inspect and examine the Inventory and to check and test the same as to quality, quantity, value, and condition. :ONDITIONS 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 thg conditions set forth in this Agreement and in the Related ) ocuments. Loan Documents.. Borrower shall provide to Lender the following documents for the Loan: (1) the Note; (2) Security Agreements granting to Lender security interests in the Collateral; (3) financing statements and all other documents perfecting Lender's Security Interests; (4) evidence of insurance as required below; (5) guaranties; (6) together with all such Related Documents as Lender may require for the Loan; all in form and substance satisfactory to Lender and Lender's counsel. Borrower's Authorization. Borrower shall have provided in form and substance satisfactory to Lender properly certified resolutions, 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, may require. Fees and Expenses Under This Agreement. Borrower shall have paid to Lender all fees, costs, and expenses specified in this Agreement and the Related Documents as are then due and payable. Representations and Warranties. The representations and warranties set forth in this Agreement, in the Related Documents, and in any document or certificate delivered to Lender under this Agreement are true and correct. 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. :PRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as of the date of this Agreement, as of the date of each ;bursement of loan proceeds, as of the date of any renewal, extension or modification of any Loan, and at all times any Indebtedness exists: Organization. Borrower is a corporation for profit which is, and at all times shall be, duly organized, validly existing, and in good standing under and by virtue of the laws of the Commonwealth of Pennsylvania. Borrower is duly authorized to transact business in all other states in which Borrower is doing business, having obtained all necessary filings, governmental licenses and approvals for each state in which Borrower is doing business. Specifically, Borrower is, and at all times shall be, duly qualified as a foreign corporation in all states in which the failure to so qualify would have a material adverse effect on its business or financial condition. Borrower has the full power and authority to own its properties and to transact the business in which it is presently engaged or presently proposes to engage. Borrower maintains an office at 1261 Claremont Road, Carlisle, PA 17013. 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 state of organization or any change in Borrower's name. Borrower shall do all things necessary to preserve and to keep in full force and effect its existence, rights and privileges, and shall comply with all regulations, rules, ordinances, statutes, orders and decrees of an, gcvernmantsl or quasi- yovernmental 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 v;hich Borrower dces business: Nona. Authorization. Borrower's execution, delivery, and performance of this Agreement and all the Related Documents have been duly authorized by all necessary action by Borrower and do not conflict with, result in a violation of, or constitute a default under (1) any provision of (a) Borrower's articles of incorporation or organization, or bylaws, or (b) 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 ro- ar+;.,e BUSING -jS LOAN AGREEMENT (ASSET B)-..,ED) Loan No: 4000002205 (Continued) Page 3 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 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: 0 ) 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; IN 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 cf 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. FFIRMATIVE 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 the following: Annual Statements. As soon as available, but in no event later than one - hundred - twenty (120) days after the end of each fiscal year, Borrower's balance sheet and income statement for the year ended, reviewed by a certified public accountant satisfactory to Lender. Interim Statements. As soon as available, but in no event later than thirty (30) days after the end of each month, Borrower's balance sheet and profit and loss statement for the period ended, prepared by Borrower. Additional Requirements. Borrower shall also provide Lender with monthly accounts receivable aging reports. All financial reports required to be provided under this Agreement shall be prepared in accordance with GAAP, applied on a consistent basis, and certified by Borrower as being true nod correct. Additional Information. Furnish such additional information and statements, as Lender may request from time to time. Insurance. Maintain fire and other risk insurance, public liability insurance, and such other insurance as Lender may require with respect to Borrower's properties and operations, in form, amounts, coverages and with insurencc companies acceptable to Lender. Borrower, upon request of Lender, will deliver to Lender from time to time the policies or certificates of insurance in form satisfactory to Lender, including stipulations that coverages will not be cancelled or diminished without at least fifteen (15) days prior written notice to Lender. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or default of Borrower or any other person. In connection with all policies covering assets in which Lender holds or is offered a security interest for the Loans, Borrower will provide Lender with such lender's loss payable or other endorsements as Lender may require. Insurance Reports. Furnish to Lender, upon request of Lender, reports on each existing insurance policy showing such information as Lender may reasonably request, including without limitation the following: (1) the name of the insurer; (2) the risks insured; (3) the amount of the policy; (4) the properties insured; (5) the then current property values on the basis of which insurance has been obtained, and the manner of determining those values; and (6) the expiration date of the policy. In addition, upon request of Lender (however not more often than annually), Borrower will have an independent appraiser satisfactory to Lender determine, as applicable, the actual cash value or-replacement cost of any Collateral. The cost of such appraisal shall be paid by Borrower. BUSIN..-,S LOAN AGREEMENT (ASSET Bp- ,ED) Loan NO: 4000002205 (Continued) Page 4 Guaranties. Prior to disbursement of any Loan proceeds, furnish executed guaranties of the Loans in favor of Lender, executed by the guarantors named below, on Lender's forms, and in the amounts and under the conditions set forth in those guaranties. Names of Guarantors Amounts Robert L. Slagle Unlimited Susan D. Slagle Unlimited Other Agreements. Comply with all terms and conditions of all other agreements, whether now or hereafter existing, between Borrower and any other party and notify Lender immediately in writing of any default in connection with any other such agreements. Loan Proceeds. Use all Loan proceeds solely for the following specific purposes: working capital line of credit. Taxes, Charges and Liens. Pay and discharge when due all of its indebtedness and obligations, including without limitation all assessments, taxes, governmental charges, levies and liens, of every kind and nature, imposed upon Borrower or its properties; income, or profits, prior to the date on which penalties would attach, and all lawful claims that, if unpaid, might become a lien or charge upon any of Borrower's properties, income, or profits. 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 other instruments and agreements between Borrower and Lender. Borrower shall notify Lender immediately in writing of any default in connection with any agreement. Operations. Maintain executive and management personnel with substantialiy the same qualifications and experience as the present e *ecutive and management personnel; provide written notice to Lender of any change in executive and management personnel; conduct its business affairs in a reasonable and prudent manner. 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. Compliance with Governmental Requirements. Comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental authorities applicable to the conduct of Borrower's properties, businesses and operations, and to the use or occupancy of the Collateral, including without limitation, the Americans With Disabilities Act. Borrower may contest in good faith any such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Borrower has notified Lender in writing prior to doing so and so long as, in Lender's sole opinion, Lender's interests in the Collateral are not jeopardized. Lender may require Borrower to post adequate security or a surety bond, reasonably satisfactory to Lender, to protect Lender's interest. Inspection. Permit employees or agents of Lender at any reasonable time to inspect any and all Collateral for the Loan or Loans and Borrower's other properties and to examine or audit Borrower's books, accounts, and records and to make copies and memoranda of Borrower's books, accounts, and records. If Borrower now or at any time hereafter maintains any records (including without limitation computer generated records and computer software programs for the generation of such records) in the possession of a third party, Borrower, upon request of Lender, shall notify such party to permit Lender free access to such records at all reasonable times and to provide Lender with copies of any records it may request, all at Borrower's expense. Environmental Compliance and Reports. Borrower shall comply in all respects with any and all Environmental Laws; not cause or permit to exist, as a result of an intentional or unintentional action or omission on Borrower's part or on the part of any third party, on property owned and /or occupied by Borrower, any environmental activity where damage may result to the environment, unless such environmental activity is pursuant to and in compliance with the conditions of a permit issued by the appropriate federal, state or local governmental authorities; shall furnish to Lender promptly and in any event within thirty (30) days after receipt thereof a copy of any notice, summons, lien, citation, directive, letter or other communication from any governmental agency or instrumentality concerning any intentional or unintentional action or omission on Borrower's part in connection with any environmental activity whether or not there is damage to the environment and /or other natural resources. 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. COVERY OF ADDITIONAL COSTS. If the imposition of or any change in any law, rule, regulation or guideline, or the interpretation or Dlication of any thereof by any court or administrative or governmental authority (including any request or policy not having the force of law) all impose, modify or make applicable any taxes (except federal, state or local income or franchise taxes imposed on Lender), reserve luirements, capital adequacy requirements or other obligations which would (A) increase the cost to Lender for extending or maintaining the :dit facilities to which this Agreement relates, (B) reduce the amounts payable to Lender under this Agreement or the Related Documents, (C) reduce the rate of return on Lender's capital as a consequence of Lender's obligations with respect to the credit facilities to which this reement relates, then Borrower agrees to pay Lender such additional amounts as will compensate Lender therefor, within five (5) days after tder's written demand for such payment, which demand shall be accompanied by an explanation of such imposition or charge and a culation in reasonable detail of the additional amounts payable by Borrower, which explanation and calculations shall be conclusive in the Bence of manifest error. 11DER'S EXPENDITURES. If any action or proceeding is commenced that would rnate.ially affect Lender's interest in the Coiiateral or if - rower fails to comply with any provision of this Agreement or any Related Documents, including but not limited to Borrower's failure to charge or pay when due any amounts Borrower is required to discharge or pay under this Agreement or any Related Documents, Lender on rower's behalf may (but shall not be obligated to) take any action that Lender deems appropriate, including but not limited to discharging or ,inc all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on any Collateral and paying ail costs for :ring, maintaining and preserving any Collateral. All such expenditures incurred or paid by Lender for such purposes will then bear interest at 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 part of the Indebtedness and, at Lender's option, will (A) be payable on demand; (B) be added to the balance of the Note and be iortioned among and be payable with any installment payments to become due during either (1) the term of any applicable insurance policy; (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. 3ATIVE COVENANTS. Borrower covenants and agrees with Lender that while this Agreement is in effect, Borrower shall not, without the r 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 BUSIN`,S LOAN /AGREEMENT (ASSET B)- -,ED) Page 5 oan No: 400000220 (Continued) recourse any of Borrower's accounts, except to Lender. or sell Continuity of Operations. (1) Engage in any business activities substantially different than those in which Borrower is presently engaged, (2) feral ou of the ordi cours m er g e , bus n fer a qui pay any d� on Borro 's stock (other n dividends 1 payablein s ts r stock ), C provided, however that notwithstanding the foregoing, but only so long as no Event of Default has occurred and is continuing or would result from the payment of dividends, if Borrower is a "Subchapter S Corporation" Jas defined in the Internal Revenue Code of 1986, as its shareho amended), Borrower May taxe ash a nd make estimated s income tax paymen sat sfy their liabilities liabil ties under federal nec ena and law wwhich shareholders to pay i arise solely from their status as Shareholders of a Subchapter S Corporation because of their ownership of shares of orrower's stock, or purchase or retire any of Borrower's outstanding shares or alter or amend Borrower's capital structure. cquisitions and Guaranties. (1) Loan, invest in or advance money or assets to any other person, enterprise or entity, (2) Loans, A purchase, create or acquire any interest in any other enterprise or entity, or 13) incur any obligation as surety or guarantor other than in the ordinary course of business. Agreements. Borrower will not 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. FSSATION OF ADVANCES. If Lender has made any commitment to make any Loan to Borrower, whether under this Agreement or under any rher agreement, Lender shall have no obligation to make Loan Advances or to disburse Loan proceeds if: (A) Borrower or any Guarantor is in ender-uJ6) r the or this A r n ge o r becomes en ompete or becomes a nsolvent, files e a petition n bankrupttcy or similar n proceedi proceedings, r is adjudged a bankrupt; (C) there occurs a material adverse change in Borrower's finan or otherwise att emptcial condition, in the te al condition d i any uarantor, or in the value o r Col lateral s e c uring any o a ny L oan; l an w (D) L Guarantor r seeks, claims s to limit, modify or avoke such Guarantor's gu of t iGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Borrower's accounts with Lender (whether orrower may flckg savin o Howevert this does n not include inc any IRA or Keogh account h joint s,orany trust accounts e e forwh which setoff would be prohibited by P e in iw. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the Indebtedness against any nd 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 Lopn. fa il s to ment Other Defa of the Related r pocuments or is comply with to perform any term, obligati on ,covenant or clondi cont in ned in any ether or m Y agreement between Lender and Borrower. False Statements. Any warranty, representation or statement made furnished t 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. Insolvency. The dissolution or termination of Borrower's existence as a going business, the insolvency of Bo rrower, of creditor workout, or he receiver for any part of proceeding under any bankruptcyo a n olvency laws by or Borrower. typ commencement of any p 9 nderr 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 j udicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the Loan. inc This i nc lu de s rf the eau i s ment y of Borr ower's Borrower accou the validity or dep n easonableness of theclaim which e s the bas s the creditor not ap forfeiture proceeding and if Borrower gives Lender written nan� determined f by Lenders fn ts sole n discretion t deposit as being an adequate r a surety bond for the creditor or forfeiture proceeding, . reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor G any of the Indebtedness or any event not di a or becom i its option, may v s d i s ot be require oper Guarrantor's estateto assume n unconditionally the cure any Event of Default. obligations arising under the guaranty in a manner satisfactory to Lender, and, in doing so, Change in Ownership. Any change in ownership of twenty -five percent (25 %) or more of the common stock of Borrower. 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. be, has not be n Right a to C Lire . !f stile. of a si defaultrw than a thin the twelve months, it be it BorrotweraortGrantor, as case may be days; or (2) if the cure 9 ge t u more han fifteen (15) days, im a e y ini�t ate which h Lender deems in sole disc et on o be sufficient to cure the receiving wr iten q compliance default and thereafter continue and complete all reasonable and necessary steps sufficient to produce corn ,a „ce as soon as reasonably practical. pt where FFEC aOF AN EVEN F DE FAULT. and obligations of Lender u this Agreement or the Related Documents or any other agreement immediately will )scum )eco aaedue andlpayable, o ll without of ce kind o Borrowerrexceptsthat in case Event Defa oft he type desc edness imm will in he Deco Insolvency” subsection above, such acceleration shall be automatic and not optional. In addition, Lender shall have all the rights and remedies wovided in the Related Documents or available at law, in equity, or otherwise. Except as may be prohibited by app licable law, all of Lender's not !x clude pursuit o any other remedy,vandnan election exe on to make expendit res or to take) E b action to perfo m oblig tion of Borrrow or any P irantor shall not affect Lender's right to declare a default and to exercise its rights and remedies. Y BUSIN....,S LOAN AGREEMENT (ASSET B,, ,ED) Loan No: 4000002205 (Continued) Page 5 recourse any of Borrower's accounts, except to Lender. Continuity of Operations. (1) Engage in any business activities substantially different than those in which Borrower is presently engaged, (2) cease operations, liquidate, merge, transfer, acquire or consolidate with any other entity, - change its name, dissolve or transfer or sell Collateral out of the ordinary course of business, or (3) pay any dividends on Borrower's stock (other than dividends payable in its stock), provided, however that notwithstanding the foregoing, but only so long as no Event of Default has occurred and is continuing or would result from the payment of dividends, if Borrower is a "Subchapter S Corporation" (as defined in the Internal Revenue Code of 1986, as amended), Borrower may pay cash dividends on its stock to its shareholders from time to time in amounts necessary to enable the shareholders to pay income taxes and make estimated income tax payments to satisfy their liabilities under federal and state law which arise solely from their status as Shareholders of a Subchapter S Corporation because of their ownership of shares of Borrower's stock, or purchase or retire any of Borrower's outstanding shares or alter or amend Borrower's capital structure. 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. Agreements. Borrower will not 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. ESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to Borrower, whether under this Agreement or under any [her agreement, Lender shall have no obligation to make Loan Advances or to disburse Loan proceeds if: (A) Borrower or any Guarantor is in :fault under the terms of this Agreement or any of the Related Documents or any other agreement that Borrower or any Guarantor has with mcler$ (B) Borrower or any Guarantor dies, becomes incompetent or becomes insolvent, files a petition in bankruptcy or similar proceedings, is adjudged a bankrupt; (C) there occurs a material adverse change in Borrower's financial condition, in the financial condition of any uarantor, or in the value of any Collateral securing any Loan; or (D) any Guarantor seeks, claims or otherwise attempts to limit, modify or voke such Guarantor's guaranty of the Loan or any other loan with Lender. GHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Borrower's accounts with Lender (whether :ecking, savings, or some other account). This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may ten in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by vv. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the Indebtedness against any id all such accounts. :FAULT. 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 it eny other agreement between Lender and Borrower. False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this 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. Insolvency. 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, 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. In the event of a death, Lender, at its option, may, but shall not be required to, permit the Guarantor's estate to assume unconditionally the obligations arising under the guaranty, in a manner satisfactory to Lender, and, in doing so, cure any Event of Default. Change in Ownership. Any change in ownership of twenty -five percent (25 %) or more of the common stock of Borrower. 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. Right to Cure. If any default, other then. a default or. 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 receiving written notice from Lender demanding cure of such default: (1) cure the default within fifteen (1 5) days; or (2) if the cure requires more than fifteen (15) 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. :CT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except where otherwise provided in this Agreement or the Related uments, all commitments and obligations of Lender under this Agreement or the Related Documents or any other agreement immediately will iinate (including any obligation to make further Loan Advances or disbursements), and, at Lender's option, all Indebtedness immediately will )me due and payable, all without notice of any kind to Borrower, except that in the case of an Event of Default of the type described in the olvency" subsection above, such acceleration shall be automatic and not optional. In addition, Lender shall have all the rights and remedies ided in the Related Documents or available at law, in equity, or otherwise. Except as may be prohibited by applicable law, all of Lender's s and remedies shall be cumulative and may be exercised singularly or concurrently. Election by Lender to pursue any remedy shall not ide pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Borrower or of any itor shall not affect Lender's right to declare a default and to exercise its rights and remedies. a BUSINL--,S LOAN AGREEMENT (ASSET Bo —ED) Loan No: 4000002205 (Continued) Page 6 ANNUAL REVIEW /ANNUAL PAYOUT. The Loan is subject to a 30 -day payout during each fiscal year at which time the balance must be paid in full for a period of thirty (30) consecutive days. The Lender will review the Loan annually for_renewals and extensions; sugh renewals and extensions to be granted predicated on the performance of the company and /or individuals and adherence to the Loan Agreement. CROSS COLLATERALIZE /CROSS DEFAULT. This loan will be cross - collateralized /cross - defaulted with all other loans from Borrower, or any of Borrower's related entities, to Lender. If at any time there is a default under this loan, all loans will be considered in default and all outstanding amounts under the loans will be immediately due and payable in full. A default in one loan shall constitute a default in all others. 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 Lender's attorneys' fees and Lender's legal expenses, incurred in connection with the enforcement of this Agreement. Lender may hire or pay someone else to help enforce this Agreement, and Borrower shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal expenses whether or not there is a lawsuit, including 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. Caption readings. Caption i eadi tgs in ibis Agreement are for convenience purposes only and are not to be used to interpret or define the pjovisions of this Agreement. Consent to Loan Participation. Borrower agrees and consents to Lender's 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 Borrower's 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. 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 ccnflicts 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 Lender's request to submit to the jurisdiction of the courts of Dauphin County, Commonwealth of Pennsylvania. 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 Lender's 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 Borrower's 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. Notices. Unless otherwise provided by applicable law, any notice required to be given under this Agreement 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, if mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Agreement. Any party may change its address for notices under this Agreement 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, Borrower agrees to keep Lender informed at all times of Borrower's current address. Unless otherwise provided by applicable law, if there is more than one Borrower, any notice given by Lender to any Borrower is deemed to be notice given to all Borrowers. 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. Subsidiaries and Affiliates of Borrower. To the Extent the context of any provisions of this Agreement makes it appropriate, including without limitation any representation, warranty or covenant, the word "Borrower" as used in this Agreement shall include all of Borrower's subsidiaries and affiliates. Notwithstanding the foregoing however, under no circumstances shall this Agreement be construed to require Lender to make any Loan or other financial accommodation to any of Borrower's subsidiaries or affiliates. Successors and Assigns. Ail covenants and agreements by or on behalf of Borrower contained in this Agreement or any Related Documents shall bind Borrower's successors and assigns and shall inure to the benefit of Lender and its successors and assigns. Borrower shall not, however, have the right to assign Borrower's rights under this Agreement or any interest therein, without the prior written consent of Lender. Survival of Representations and Warranties. Borrower understands and agrees that in extending Loan Advances, 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 extension of Loan Advances and delivery to Lender of the Related Documents, shall be continuing in nature, shall be deemed made and redated by Borrower at the time each Loan Advance is made, 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. ` BUSIN ,-.,S LOAN AGREEMENT (ASSET B. - ED) _oan No: 4000002205 (Continued) Page 6 ANNUAL REVIEW /ANNUAL PAYOUT. The Loan is subject to a 30 -day payout during each fiscal year at which time the balance must be paid in ull for a period of thirty (30) consecutive days. The Lender will review the Loan annually for renewals and extensions; such renewals and ! xtensions to be granted predicated on the performance of the company and /or individuals and adherence to the Loan Agreement. :ROSS COLLATERALIZE /CROSS DEFAULT. This loan will be cross-collateralized/cross-defaulted with all other loans from Borrower, or any of lorrower's related entities, to Lender. If at any time there is a default under this loan, all loans will be considered in default and all outstanding mounts under the loans will be immediately due and payable in full. A default in one loan shall constitute a default in all others. AISCELLANEOUS 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 Lender's attorneys' fees and Lender's legal expenses, incurred in connection with the enforcement of this Agreement. Lender may hire or pay someone else to help enforce this Agreement, and Borrower shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings (including efforts to .modify or vacate any automatic stay or inj.unetion), 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. Caption Headings. Caption headings in this Agreement are for cnnvenience purposes only and are not to be used to interpret or define the provisions of this Agreement. Consent to Loan Participation. Borrower agrees and consents to Lender's 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 Borrower's 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. 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 Lender's request to submit to the jurisdiction of the courts of Dauphin County, Commonwealth of Pennsylvania. 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 Lender's 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 Borrower's 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. Notices. Unless otherwise provided by applicable law, any notice required to be given under this Agreement 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, if mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Agreement. Any party may change its address for notices under this Agreement 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, Borrower agrees to keep Lender informed at all times of Borrower's current address. Unless otherwise provided by applicable law, if there is more than one Borrower, any notice given by Lender to any Borrower is deemed to be notice given to all Borrowers. 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. Subsidiaries and Affiliates of Borrower. To the extent the context of any provisions of this Aqreement makes it apornpriate, including without limitation any representation, warranty or covenant, the word "Borrower" as used in this Agreement shall include all of Borrower's subsidiaries and affiliates. Notwithstanding the foregoing however, under no circumstances shall this Agreement be construed to require Lender to make any Loan or other financial accommodation to any of Borrower's subsidiaries or affiliates. Successors and Assigns. All covenants and agreements by or on behalf of Borrower contained in this Agreement or any Related Documents shall bind Borrower's successors and assigns and shall inure to the benefit of Lender and its successors and assigns. Borrower shall not, however, have the right to assign Borrower's rights under this Agreement or any interest therein, without the prior written consent of Lender. Survival of Representations and Warranties. Borrower understands and agrees that in extending Loan Advances, 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 extension of Loan Advances and delivery to Lender of the Related Documents, shall be continuing in nature, shall be deemed made and redated by Borrower at the time each Loan Advance is made, 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. y BUSIN,A LOAN AGREEMENT (ASSET BF_ .ED) Loan No: 4000002205 (Continued) Page 7 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. )EFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Agreement. Unless specifically tated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms ised in the singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise refined in this Agreement shall have the meanings attributed to such terms in the Uniform Commercial Code. Accounting words and terms not therwise defined in this Agreement shall have the meanings assigned to them in accordance with generally accepted accounting principles as in ffect on the date of this Agreement: Account. The word "Account" means a trade account, account receivable, other receivable, or other right to payment for goods sold or services rendered owing to Borrower (or to a third party grantor acceptable to Lender). Account Debtor. The words "Account Debtor" mean the person or entity obligated upon an Account. Advance. The word "Advance" means a disbursement of Loan funds made, or to be made, to Borrower or on Borrower's behalf under the terms and conditions of this Agreement. Agreement. The word "Agreement" means this Business Loan Agreement (Asset Based), as this Business Loan Agreement (Asset Based) may be amended or modified from time to time, together with all exhibits and schedu!es attached to this Business Loan Agreement (Asset Based) from time to time. 8forrower. The word "Borrower" means L!ghtstyles, Ltd. and includes all co- signers and co- makers signing the Note and all their successors and assigns. Borrowing Base. The words "Borrowing Base" mean, as determined by Lender from time to time, the lesser of (1) $11,000,000.00 or (2) the sum of (a) 80.000% of the aggregate amount of Eligible Accounts, plus (b) 50.000% of the aggregate amount of Eligible Inventory. Business Day. The words "Business Day" mean a day on which commercial banks are open in the Commonwealth of Pennsylvania. 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. The word Collateral also includes without limitation all collateral described in the Collateral section of this Agreement. Eligible Accounts. The words "Eligible Accounts" mean at any time, all of Bcrrovver's Accounts which contain selling terms and conditions acceptable to Lender. The net amount of any Eligible Account against which Borrower may borrow shall exclude all returns, discounts, credits, and offsets of any nature, Unless otherwise agreed to by Lender in writing, Eligible Accounts do not include: (1) Accounts with respect to which the Account Debtor is employee or agent of Borrower. (2) Accounts with respect to which the Account Debtor is a subsidiary of, or affiliated with Borrower or its shareholders, officers, or directors. (3) Accounts with respect to which goods are placed on consignment, guaranteed sale, or other terms by reason of which the payment by the Account Debtor may be conditional. (4) Accounts with respect to which Borrower is or may become liable to the Account Debtor for goods sold or services rendered by the Account Debtor to Borrower. (5) Accounts which are subject to dispute, counterclaim, or setoff. (6) Accounts with respect to which the goods have not been shipped or delivered, or the services have not been rendered, to the Account Debtor. (7) Accounts with respect to which Lender, in its sole discretion, deems the creditworthiness or financial condition of the Account Debtor to be unsatisfactory. (8) Accounts of any Account Debtor who has filed or has had filed against it a petition in bankruptcy or an application for relief under any provision of any state or federal bankruptcy, insolvency, or debtor -in- relief acts; or who has had appointed a trustee, custodian, or receiver for the assets of such Account Debtor; or who has made an assignment for the benefit of creditors or has become insolvent or fails generally to pay its debts (including its payrolls) as such debts become due. (9) Accounts which have not been paid in full within 90 days from the invoice date. Eligible Inventory. The words "Eligible Inventory" mean, at any time, all of Borrower's Inventory as defined below, except: (1) Inventory which is not owned by Borrower free and clear of all security interests, liens, encumbrances, and claims of third parties. (2) inventory which Lender, in its sole discretion, deems to be obsolete, unsalable, damaged, defective, or unfit for further processing. Environmental Laws. The words "Environmental Laws" mean any and all state, federal and loca! statutes, regulations and ordinances relating to the protection of human health or the environment, including without limitation the Coinprehensive 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. Expiration Date. The words "Expiration Date" mean the date of termination of Lender's commitment to lend under 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, BUSINLjS LOAN AGREEMENT (ASSET &. _ED) Loan NO: 4000002205 (Continued) Page 8 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. -- 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. 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. Inventory. The word "Inventory" means all of Borrower's raw materials, work in process, finished goods, merchandise, parts and supplies, of every kind and description, and goods held for sale or lease or furnished under contracts of service in which Borrower now has or hereafter acquires any right, whether held by Borrower or others, and all documents of title, warehouse receipts, bills of lading, and all other documents of every type covering all or any part of the foregoing. !rventory includes inventory temporarily out of Borrower`s custody or possession and all returns on Accounts. Lender. The word "Lender" means GRAYSTONE BANK, its successors and assigns. Loan. The word "Loan" means any and all loans and financial accommodations from Lender to Borrower whether now or hereafter existing, and however evidenced, including without limitation those loans and financial accommodations described herein or described on any exhibit or schedule attached to this Agreement from time to time. Note. The word "Note" means the Note executed by Lightstyles, Ltd. in the principal amount of $11,000,000.00 dated December 6, 2006, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the note or credit 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. Primary Credit Facility. The words "Primary Credit Facility" mean the credit facility described in the Line of Credit 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. RROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN AGREEMENT (ASSET BASED) AND RROWER AGREES TO ITS TERMS. THIS BUSINESS LOAN AGREEMENT (ASSET BASED) IS DATED DECEMBER 6, 2006. IS AGREEMENT IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS AGREEMENT IS AND SHALL CONSTITUTE AND HAVE THE =ECT OF A SEALED INSTRUMENT ACCORDING TO LAW. RROWER: HTSTY - , LTD, (Seal) Rob rt . Slagle, Pr sident cV Lightstyles, Ltd. BUSINL,,S LOAN AGREEMENT (ASSET Bk.,ED) Loan NO: 4000002205 (Continued) Page 9 LENDER: SRAYSTONE BANK ; (Seal) Steven D. B z, Vice Preside USER PRO LPndl,, V., 5.33.00.004 Cope. Pl r,I d Fin-clel Bolollanc, Inc. 1997, 2006. All Righu 11--d. . PA S:IPlocuhc\CFRLPL\C40.FC TR -BOB PR-1 _ _ _ - / - i 1 i i _ .. - � j. l i �� 1 'r. ' r 1 i i - - _ _ � I i - COMMERCIAL SECURITY AGREEMENT Grantor: Lightstyles, Ltd. Lender:, GRAYSTONE BANK 1261 Claremont Road Capital Region Carlisle, PA 17013 112 Market Street Harrisburg, PA 17101 THIS COMMERCIAL SECURITY AGREEMENT dated December 6, 2006, is made and executed between Lightstyles; Ltd. ( "Grantor ") and GRAYSTONE BANK ( "Lender "). GRANT OF SECURITY INTEREST. For valuable consideration, Grantor grants to Lender a security interest in the Collateral to secure the Indebtedness and agrees that Lender shall have the rights stated in this Agreement with respect to the Collateral, in addition to all other rights which Lender may have by law. COLLATERAL DESCRIPTION. The word "Collateral" as used in this Agreement means the following described property, whether now owned or hereafter acquired, whether now existing or hereafter arising, and wherever located, in which Grantor is giving to Lender a security interest for the payment of the Indebtedness and performance of all other obligations under the Note and this Agreement: All Inventory, Chanel Paper, Accounts, Accounts Receivable, Equipment, Contract Rights, Documents, Deposit Accounts, Furniture, Fix'wras, Vehicles, Instruments, Leasahold Improvements, Mlachinery, and General intangibles In addition, the word "Collateral" also includes all the following, whether now owned or hereafter acquired, whether now existing or hereafter arising, and wherever located: (A) All accessions, attachments, accessories, tools, parts, supplies, replacements of and additions to any of the collateral described herein, whether added now or later - (8) All products and produce of any of the property described in this Collateral! section. (C) All accounts, general intangibles, instruments, rents, monies, payments, and all other rights, arising out of a sale, lease, consignment or other disposition of any of the property described in this Collateral section. (D) All proceeds (including insurance proceeds) from the sale, destruction, loss, or other disposition of any of the property described in this Collateral section, and sums due from a third party who has damaged or destroyed the Collateral or from that party's insurer, whether due to judgment, settlement or other process. i (E) All records and data relating to any of the property described in this Collateral section, whether in the form of a writing, photograph, microfilm, microfiche, or electronic media, together with all of Grantor's right, ,title, and interest in and to all computer software required to utilize, create, maintain, and process any such records or data on electronic media. CROSS- COLLATERALIZATION. In addition to the Note, this Agreement secures all obligations, debts and liabilities, plus interest thereon, of Grantor to Lender, or any one or more of them, as well as all claims by Lender -against Grantor or any one or more of them, whether now existing or hereafter arising, 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. FUTURE ADVANCES. In addition to the Note, this Agreement secures all future advances made by Lender to Grantor regardless of whether the advances are made a) pursuant to a commitment or b) for the same purposes. RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Grantor's accounts with Lender (whether checking, savings, or some other account). This includes all accounts Grantor holds jointly with someone else and all accounts Grantor 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. Grantor. 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. GRANTOR'S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COLLATERAL. With respect to the Collateral, Grantor represents and promises to Lender that: Perfection of Security Interest. Grantor agrees to take whatever actions are requested by Lender to perfect and continue Lender's security interest in the Collateral. Upon request of Lender, Grantor will deliver to Lender any and all of the documents evidencing or constituting the Collateral, and Grantor will note Lender's interest upon any and all chattel paper and instruments if not delivered to Lender for possession by Lender. This is a continuing Security Agreement and will continue in effect even though all or any part of the Indebtedness is paid in full and even though for a period of time Grantor may not be indebted to Lender. ' Notices to Lender. Grantor will promptly notify Lender in writing at Lender's address shown above (or such other addresses as Lender may designate from time to time) prior to any (1) change in Grantor's name; (2) change in Grantor's assumed business name(s); (3) change in the management of the Corporation Grantor; (4) change in the authorized signer(s); i5) change in Grantor's principal office address; (6) change in Grantor's state of organization; (7) conversion of Grantor to a new or different type of business entity; or (8) change in any other aspect of Grantor that directly or indirectly relates to any agreements between Grantor and Lender. No change in Grantor's name or state of organization will take effect until after Lender has received notice. No Violation. The execution and delivery of this Agreement will not violate any law or agreement governing Grantor or to which Grantor is a party, and its certificate or articles of incorporation and bylaws do not prohibit any term or condition of this Agreement. Enforceability of Collateral. To the extent the Collateral consists of accounts, chattel paper, or general intangibles, as defined by the Uniform Commercial Code, the Collateral is enforceable in accordance with its terms, is genuine, and fully complies with all applicable laws and regulations concerning form, content and manner of preparation and execution, and all persons appearing to be obligated on the Collateral have authority and capacity to contract and are in fact obligated as they appear to be. on the Collateral, At the time any account becomes subject to a security interest in favor of Lender, the account shall be a good and valid account representing an undisputed, bona fide indebtedness incurred by the account debtor, for merchandise held subject to delivery instructions or previously shipped or delivered pursuant to a contract of sale, or for services previously performed by Grantor with or for the account debtor. So long as this Agreement remains in effect, Grantor shall not, without Lender's prior written consent, compromise, settle, adjust, or extend payment under or with regard to any such Accounts. There shall be no setoffs or counterclaims against any of the Collateral, and no agreement shall have been made under which any deductions or discounts may be claimed concerning the Collateral except those disclosed to Lender in writing. Y COMMERCIAL SECURITY -AGREEMENT Loan No: 4000002205 (Continued) Page 2 Location of the Collateral. Except in the ordinary course of Grantor's business, Grantor agrees to keep the Collateral (or to the extent the Collateral consists of intangible property such as accounts or general intangibles, the records concerning the Collateral) at Grantor's address shown above or at such other locations as are acceptable to Lender. Upon Lender's request, Grantor will deliver to Lender in form satisfactory to Lender a schedule of real properties and Collateral locations relating to Grantor's operations, including without limitation the following: (1) all real property Grantor owns or is purchasing; (2) all real property Grantor is renting or leasing; (3) all storage facilities Grantor owns, rents, leases, or uses; and (4) all other properties where Collateral is or may be located. Removal of the Collateral. Except in the ordinary course of Grantor's business, including the sales of inventory, Grantor shall not remove the Collateral from its existing location without Lender's prior written consent. To the extent that the Collateral consists of vehicles, or other titled property, Grantor shall not take or permit any action which would require application for certificates of title for the vehicles outside the Commonwealth of Pennsylvania, without Lender's prior written consent. Grantor shall, whenever requested, advise Lender of the exact location of the Collateral. Transactions Involving Collateral. Except for inventory sold or accounts collected in the ordinary course of Grantor's business, or as otherwise provided for in this Agreement, Grantor shall not sell, offer to sell, or otherwise transfer or dispose of the Collateral. While Grantor is not in default under this Agreement, Grantor may sell inventory, but only in the ordinary course of its business and only to buyers who qualify as a buyer in the ordinary course of business. A sale in the ordinary course of Grantor's business does not include a transfer in partial or total satisfaction of a debt or any bulk sale. Grantor shall not pledge, mortgage, encumber or otherwise permit the Collateral to be subject to any lien, security interest, encumbrance, or charge, other than the security interest provided for in this Agreement, without the prior written consent of Lender. This includes security interests even if junior in right to the security interests granted under this Agreement. Unless waived by Lender, all proceeds from any disposition of the Collateral (for whatever reason) shall be held in trust for Lender and shall not be commingled with any other funds; provided however, this requirement shall not constitute consent by Lender to any sale or other disposition. Upon receipt, Grantor shall immediately deliver any such proceeds to Lender. Title. Grantor represents and warrants to Lender that Grantor holds good and marketable title to the Collateral, free and clear of all liens and encumbrances except for the lien of this Agreement. No financing statement covering any of the Collateral is on file in any public office other than those which reflect the security interest created by this Agreement or to which Lender has specifically consented. Grantor shall defend Lender's rights in the Collateral against the claims and demands of all other persons. Repairs and Maintenance. Grantor agrees to keep and maintain, and to cause others to keep and maintain, the Collateral in good order, repair and condition at all times while`this Agreement remains in effect. Grantor further agrees to pay when due all claims for work done on, or services rendered or material furnished in connection with the Collateral so that no lien or encumbrance may ever attach to or be filed against the Collateral. Inspection of Collateral. Lender and Lender's designated representatives and agents shall have the right at all reasonable times to examine and inspect the Collateral wherever located. Taxes, Assessments and Liens. Grantor will pay when due all taxes,, assessments and liens upon the Collateral, its use or operation, upon this Agreement, upon any promissory note or notes evidencing the Indebtedness, or upon any of the other Related Documents. Grantor may withhold any•such payment or may elect to contest any lien if Grantor is in good faith conducting an appropriate proceeding to contest the obligation to pay and so long as Lender's interest in the Collateral is not jeopardized in Lender's sole opinion. If the Collateral is subjected to a lien which is not discharged within fifteen 05) days, Grantor shall deposit with Lender cash, a sufficient corporate surety bond or other security satisfactory to Lender in an amount adequate to 'provide for the discharge of the lien plus any interest, costs, attorneys' fees or other charges that could accrue as a result of foreclosure or sale of the Collateral. In any contest Grantor shall defend itself and Lender and shall satisfy any final adverse judgment before enforcement against the Collateral. Grantor shall name Lender as an additional obligee under any surety bond furnished in the contest proceedings. Grantor further agrees to furnish Lender with evidence that such taxes, assessments, and governmental and other charges have been paid in full and in a timely manner. Grantor may withhold any such payment or may elect to contest any lien if Grantor is in good faith conducting an appropriate proceeding to contest the obligation to pay and so long as Lender's interest in the Collateral is not jeopardized. Compliance with Governmental Requirements. Grantor shall comply promptly with all laws, ordinances, rules and regulations of all governmental authorities, now or hereafter in effect, applicable to the ownership, production, disposition, or use of the Collateral, including all laws•or regulations relating to the undue erosion of highly - erodible land or relating to the conversion of wetlands for the production of an agricultural product or commodity. Grantor may contest in good faith any such law, ordinance or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Lender's interest in the Collateral, in Lender's opinion, is not jeopardized. Hazardous Substances. Grantor represents and warrants that the Collateral never has been, and never will be so long as this Agreement remains a lien on the Collateral, used in violation of any Environmental Laws or for the generation, manufacture, storage, transportation, treatment, disposal, release or threatened release of any Hazardous Substance. The representations and warranties contained herein are based on Grantor's due diligence in investigating the Collateral 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 Environmental Laws, and (2) agrees to indemnify, defend, and hold harmless :Lender against any and all claims and losses resulting from a breach of this provision of this Agreement. This obligation to indemnify and defend shall survive the payment of the Indebtedness and the satisfaction of this Agreement. Maintenance of Casualty Insurance. Grantor shall procure and maintain all'. risks insurance, including without limitation fire, theft and liability coverage together with such other insurance as Lender may require with respect to the Collateral, in form, amounts, coverages and basis reasonably acceptable to Lender and issued by a company or companies reasonably acceptable to Lender. Grantor, upon request of Lender, will deliver to Lender from time to time the policies or certificates of insurance in form satisfactory to Lender, including stipulations that coverages will not be cancelled or diminished without at least fifteen (15) days' prior written notice to Lender and not including any disclaimer of the insurer's liability for failure to give such a notice. Each insurance policy also snall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or default of Grantor or any other person. In connection with all policies covering assets in which Lender holds or is offered a security interest, Grantor will provide Lender with such loss payable or other endorsements as Lender may require. If Grantor at any time fails: to obtain or maintain any Insurance as required under this Agreement, Lender may (but shall not be obligated to) obtain such insurance has Lender deems appropriate, including if Lender so chooses "single interest insurance," which will cover only Lender's interest in the Collateral. Application of Insurance Proceeds. Grantor shall promptly notify Lender of;any loss or damage to the Collateral, whether or not such casualty or loss is covered by insurance. Lender may make proof of loss if Grantor fails to do so within fifteen (15) days of the casualty. All proceeds of any insurance on the Collateral, 'including accrued proceeds thereon, shall be held by Lender as part of the Collateral. If Lender consents to repair or replacement of the damaged or destroyed Collateral, Lender shall, upon satisfactory proof of expenditure, pay or reimburse Grantor from the proceeds for the reasonable cost of repair or restoration. If Lender does not consent to repair or replacement of the Collateral, Lender shall retain a sufficient amount of the proceeds to pay all of the Indebtedness, and shall pay the balance to COMMERCIAL SECURITY AGREEMENT Loan No: 4000002205 (Continued) Page 3 Grantor. Any proceeds which have not been disbursed within six (6) monthsiafter their receipt and which Grantor has not committed to the repair or restoration of the Collateral shall be used to prepay the Indebtedness, Insurance Reserves. Lender may require Grantor to maintain with Lender reserves for payment of insurance premiums, which reserves shall be created by monthly payments from Grantor of a sum estimated by Lender fo be sufficient to produce, at least fifteen 0 5) days before the premium due date, amounts at least equal to the insurance premiums to be!paid. If fifteen (15) days before payment is due, the reserve funds are insufficient, Grantor shall upon demand pay any deficiency to Lender. The reserve funds shall be held by Lender as a general deposit and shall constitute a non - interest- bearing account which Lender may satisfy by payment of the insurance premiums required to be paid by Grantor as they become due. Lender does not hold the reserve funds; in trust for Grantor, and Lender is not the agent of Grantor for payment of the insurance premiums required to be paid by Grantor. The responsibility for the payment of premiums. shall remain Grantor's sole responsibility. Insurance Reports. Grantor, upon request of Lender, shall furnish to Lender reports on each existing policy of insurance showing such information as Lender may reasonably request including the following: (1) the;name of the insurer; (2) the risks insured; (3) the amount of the policy; (4) the property insured; (5) the then current value on the basis of which insurance has been obtained and the manner of determining that value; and (6) the expiration date of the policy. In addition, Grantor shall upon request by Lender (however not more often than annually) have an independent appraiser satisfactory to Lender determine, as applicable, the cash value or replacement cost of the Collateral. Financing Statements, Grantor authorizes Lender to file a UCC financing statement, or alternatively, a copy of this Agreement to perfect Lender's security interest. At Lender's request, Grantor additionally agrees to sign all other documents that are necessary to perfect, protect, and continue Lender's security interest in the Property. Grantor will pay all filing fees, title transfer fees, and other fees and costs involved unless prohibited by law or unless Lender is required by law to pay such fees and costs. Grantor irrevocably appoints Lender to execute documents necessary to transfer title if there is a default. Lender may file a copy of this Agreement as a financing statement. If Grantor changes Grantor's name or address, or the name or address of any person granting a security interest under this Agreement changes, Grantor will promptly notify the Lender of such change. GRANTOR'S RIGHT TO POSSESSION AND TO COLLECT ACCOUNTS. Until default and except as otherwise provided below with respect to accounts, Grantor may have possession of the tangible personal property and beneficial use of all the Collateral and may use it in any lawful manner not inconsistent with this Agreement or the Related Documents, provided that Grantor's right to possession and beneficial use shall not apply to any Collateral where possession of the Collateral by Lender is required by law to perfect Lender's security interest in such Collateral. Until otherwise notified by Lender, Grantor may collect any of the Collateral consisting of accounts. At any time and even though no Default exists, Lender may exercise its rights to collect the accounts and to notify account debtors to make payments directly to Lender for application to the Indebtedness. If Lender at any time has possession of any Collateral, whether before or after Default., Lender shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral if Lendat takes such action for that purpose as Grantor shall request or as Lender, in Lender's sole discretion, shall deem apprcpriate under the circumsiancaa, but failure to honer any request by Grantor shall not of itself be deemed to be a failure to exercise reasonable care. Lender shall not be required to take any steps necessary to preserve any rights in the Collateral against prior parties, nor to protect, preserve or maintain any security interest given to secure the Indebtedness. LENDER'S EXPENDITURES, If any action or proceeding is commenced that would materially affect Lender's interest in the Collateral or if Grantor fails to comply with any provision of this Agreement or any Related Documents, including but not limited to Grantor's failure to discharge or pay when due any amounts Grantor is required to discharge or pay under this Agreement or any Related Documents, Lender on Grantor's 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 Collateral and paying all costs for insuring, maintaining and preserving the 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 Grantor. All such expenses will become a part of the Indebtedness and, at Lender's 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. The Agreement also will secure payment of these amounts. Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon Default. DEFAULT. Default will occur it payment in full is not made immediately when due. RIGHTS AND REMEDIES ON DEFAULT. If Default occurs under this Agreement, :at any time thereafter, Lender shall have all the, rights of a secured party under the Pennsylvania Uniform Commercial Code. In addition and Without limitation, Lender may exercise any one or more of the following rights and remedies: Accelerate Indebtedness. Lender may declare the entire Indebtedness, including any prepayment penalty which Grantor would be required to pay, immediately due and payable, without notice of anv kind to Grantor. Assemble Collateral. Lender may require Grantor to deliver to Lender all or any portion of the Collateral and any and all certificates of title and other documents relating to the Collateral. Lender may require Grantor to assemble the Collateral and make it available to Lender at a place to be designated by Lender. Lender also shall have full power to enter upon the property of Grantor to take possession of and remove the Collateral. If the Collateral contains other goods not covered by ;this Agreement at the time of repossession, Grantor agrees Lender may take such other goods, provided that Lender makes reasonable efforts to return them to Grantor after repossession. Sell the Collateral. Lender shall have full power to sell, lease, transfer, or otherwise deal with the Collateral or proceeds thereof in Lender's own name or that of Grantor. Lender may sell the Collateral at public auction or private sale. Unless the Collateral threatens to decline speedily in value or is of a type customarily sold on a recognized market, Lender will give Grantor, and other persons as required by law, reasonable notice of the time and place of any pub4c sa!e, or the time after which any private sa!e or any other disposition of the Co!latcra: is to be made. However, no notice need be provided to any person who, after Event of Default occurs, enters into and authenticates an agreement waiving that person's right to notification of sale. The requirements of reasonable notice shall be met if such notice is given at least ten (10) days before the time of the sale or disposition. All expenses ►elating to the disposition of the Collateral, including without limitation the expenses of retaking, holding, insuring, preparing for sale and selling the Collateral, shall become a part of the Indebtedness secured by this Agreement and shall be payable on demand, with interest at the Note rate from date of expenditure until repaid. Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the Collateral, with the power to protect and preserve the Collateral, to operate the Collateral preceding foreclosure or sale, and to collect the Rents from the Collateral and apply the proceeds, over and above the cost of the receivership, against the Indebtedness. The receiver may serve without bond if permitted by law. Lender's right to the appointment of a receiver shall exist whether or not the apparent value of the Collateral exceeds the Indebtedness by a substantial amount. Employment by Lender shall not disqualify a person from serving as a receiver. Collect Revenues, Apply Accounts. Lender, either itself or through a receiver, may collect the payments, rents, income, and revenues from It COMMERCIAL SECURITY AGREEMENT Loan No: 4000002205 (Continued) Page 4 the Collateral. Lender may at any time in Lender's discretion transfer any Collateral into Lender's own name or that of Lender's nominee and receive the payments, rents, income, and revenues therefrom and holdi the same as security for the Indebtedness or apply it to payment of the Indebtedness in such order of preference as Lender may determine. Insofar as the Collateral consists of accounts, general intangibles, insurance policies, instruments, chattel paper, chases in action, or similar property, Lender may demand, collect, receipt for, settle, compromise, adjust, sue for, foreclose, or realize on the Collateral as Lender may determine, whether or not Indebtedness or Collateral is then due. For these purposes, Lender may, on behalf of and in the name of Grantor, receive, open and dispose of mail addressed to Grantor; change any address to which mail and payments are to be sent; and endorse notes, checks, drafts, money orders, documents of title, instruments and items pertaining to payment, shipment, or storage of any Collateral. To facilitate collection, Lender may notify account debtors and obligors on any Collateral to make payments directly to Lender. Obtain Deficiency. If Lender chooses to sell any or all of the Collateral, Lender may obtain a judgment against Grantor for any deficiency remaining on the Indebtedness due to Lender after application of all amounts received from the exercise of the rights provided in this Agreement. Grantor shall be liable for a deficiency even if the transaction described in this subsection is a sale of accounts or chattel paper. Other Rights and Remedies. Lender shall have all the rights and remedies ;of a secured creditor under the provisions of the Uniform Commercial Code, as may be amended from time to time. In addition, Lender shall have and may exercise any or all other rights and remedies it may have available at law, in equity, or otherwise. Election of Remedies. Except as may be prohibited by applicable law, all of Lender's rights and remedies, whether evidenced by this Agreement, the Related Documents, or by any other writing, shall be cumulative and may be exercised singularly or concurrently. 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 Agreement, after Grantor's failure to perform, shall not affect Lender's right to declare a default and exercise its remedies. CROSS COLLATERALIZE /CROSS DEFAULT. This loan will be cross - collateralized /cross- defaulted with all other loans from Borrower, or any of Borrower's related entities, to Lender. If at any time there is a default under this loan, all loans will be considered in default and all outstanding amounts. under the loans will be immediately due and payable in full. A default in one loan shall constitute a default in all others. 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. Grantor agrees to pay upon demand all of Lender's costs and expenses, including Lender's attorneys' fees and Lender's legal expenses, incurred in connection with the enforcement of this: Agreement. Lender may hire or pay someone else to help enforce this Agreement, and Grantor shall pay the costs and expenses ofisuch enforcement. Costs and expenses include Lender's attorneys' fees and legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings fincluding efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post - judgment collection services. Grantor also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings. Caption headings in this Agreement are for convenience purposes only and are not to be.used to interpret or define the 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, Grantor agrees upon Lender's request to submit to the jurisdiction of the courts of Dauphin County, Commonwealth of Pennsylvania. No Waiver by Lender. Lender shall not be deemed to have waived any rightsunder 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 Lender's 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 Grantor, shall constitute a waiver of any of Lender's rights or of any of 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. Notices. Unless otherwise provided by applicable law, any notice required to be given under this Agreement 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, if mailed, when deposited in the;United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of thisi Agreement. Any party may change its address for notices under this Agreement 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 Lender informed at all times of Grantor's current address. Unless otherwise provided by applicable la::, if there is more than one Grantor, any notice gher. by L ender to any Grantor is deemed to be notice given to a!! Grantors. Additional Authorizations. Grantor hereby authorizes Lender, with full power bf substitution, to execute in Grantor's name any documents necessary to perfect, amend, or to continue the security interest granted in ;this Agreement or to demand termination of filings of other secured parties and, without further authorization from Grantor, to file a carbon, photographic or other reproduction of any financing statement or of tnis Agreement for use as a financing statement. Grantor will reimburse Lender for all expenses for the perfection and the continuation of the perfection of Lender's security interest in the Collateral. It is understood and agreed that any exercise of this authorization by Lender shall be on behalf of Lender and not on behalf of Grantor. Lender is not an agent or fiduciary of Grantor. However, in exercising the authorization granted hereby, Lender shall exercise reasonable caution and prudence and Lender shall keep full and accurate record of all actions, receipts and disbursements. 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 unentorceability of any provision of this Agreement shall not affect the legality, validity or enforceability of any other provision of this Agreement. Successor Interests. The terms of this Agreement shall be binding upon Grantor, and upon Grantor's heirs, personal representatives, successors, and assigns, and shall be enforceable by Lender and its successors and assigns. r� COMMERCIAL SECURITY AGREEMENT Loan No: 4000002205 (Continued) Page 5 Survival of Representations and Warranties. All representations, warranties,• and agreements made by Grantor in this Agreement shall survive the execution and delivery of this Agreement, shall be continuing in nature, and shall remain in full force and effect until such time as Grantor's Indebtedness shall be paid in full. 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 Uhiform Commercial Code: Agreement. The word "Agreement" means this Commercial Security Agreement, as this Commercial Security Agreement may be amended or modified from time to time, together with all exhibits and schedules attached to this Commercial Security Agreement from time to time. Borrower. The word "Borrower" means Lightstyles, Ltd. and includes all- co-signers and co- makers signing the Note and all their successors and assigns. Coliaterai. The word "Collaterai" means aii of Grantor's right, title and interest in and to ail the Coilateral as described in the Collateral. Description section of this Agreement. Default. The word "Default" means the Default set forth in this Agreement in the section titled "Default ". Environmental 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. Grantor. The word "Grantor" means Lightstyles, Ltd.. 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. 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 Grantor is responsible under this Agreement or under any of the Related Documents. The liens and security interests created pursuant fp this Agreement covering the Indebtedness which may be created in the future shall relate back to the date of this Agreement. Specifically, without limitation, Indebtedness includes the future advances set forth in the Future Advances provision, together with all interest thereon and all amounts that may be indirectly secured by the Cross - Collateralization provision of this Agreement. Lender. The word "Lender" means GRAYSTONE BANK, its successors and assigns. Note. The word "Note" means the Note executed by Lightstyles, Ltd. in tfie principal amount of $11,000,000.00 dated December 6, 2006, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the note or credit agreement. Property. The word "Property" means all of Grantor's right, title and interest in and to all the Property as described in the "Collateral Description" section of this Agreement. Related Documents. The words "Related Documents" mean all promissory' notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter existing, executed in connection with the Indebtedness. GRANTOR HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS COMMERCIAL SECURITY AGREEMENT AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED DECEMBER 6, 2006. THIS AGREEMENT IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS AGREEMENT IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. GRANTOR: LIGHTS4L. D. By: (Seal) Robgle, Pr rdent fightstyles, Ltd. Y t COMMERCIAL SECURITY AGREEMENT Loan No: 4000002205 (Continued) ; Page 6 LENDER: GRAYSTONE BAN X Steven D. Bu z, Vice PreWn USER PRO L.din V.. S.00.00.00E Ce, Nnil,nd Fi ..W SeluYan,. 1— 1997. 2006. AA RiDhl. Awwvnd. PA S:IObtiIInICFALR TA.a09 AA -f \ �" f G I i i '� ��,. (.. ' �:; -�:. , _ � - - �� �. - i��i���i i nip iiii 11 11 VIII II III I II II II I I I I � � � ��� �,��,.��I II I�III II VIII IIIIIIII IIII t 1; _ File UCC FI NANCING 'e Number: 200 FOLLOWINSTRUCTIONS date Filed: 0 6p4 p503i61 A. NAME IN lSrq d E'HENT 3 /30/200 6 pg: 00 HONE OF CONT k ACT bac CA REFULLY Pedro AM B• SEND AT FILER [optionafJ Secrets A C ° Secretary of the Co mmo nwealth CKN OWLEDGMENT TO; (Name and Address) GRZ Ma -ONE BANK Harrisbur 9. Street PA 17101 Commonwealth of P I eh ns ylva nia UCC1 initial Filing 1 p � r'�m" ' r 1 . DEBTOR' I��flf s ExACr F g If ;a. ORG � ULL LE AT I lllllll ll GN S N NAME - AME tnsart o 7 lllil� t) h nlyone p�� �lllll g tattles debtor n OR ,ltd. none 1a 1b. fN0lVI ( or 1 b) - do not ab TH E ABOVE• SP DUALS LAST NAME brewate or co ACE IS FOR FILIN names O OFFICE 1c. MAILING ADDRESS USE ONLY 1261 Clarernon Road F1RST►IAME d_ S Cfiy T RUCTIONS M fDDt E NAME ADD'L INFO RE 1e DEBTO ATION n pE OF pRGA TION Carlisle SUFFU( ADDITIO IZq STATE pSTAI NAL BTOR'S E Co7POration 1f. JURIS P CODE ATlON'S NAME FULL LEGAL DICTION OFORG gN�ATi ON ;2a. ORGANlZ DE >L4Ct PA PA 17013 COUN RY N AME • insert only one / to ORGAN' USA na AN:Zg 1 ONAL ID 2b PAJD/YIDUAL'S me (2a or2b - 265 ar, it any LAST NAME ) do notabbre „a 5217 tc or combine names 41LING ADDRESS NAME NONE FIRST E INSTRU Cm ORGANIZA MIDDLENgME AD IN RE 2e. n pE OF TnON SUFFp( DEBTOR ORG ANIZATION L Pq 2L JU STATE POSTAL CODE COU O RGANIIO 7A %b RISDICTION OF ORIZA �NAMN�E (or NAME orTOTgLgSSIGN ;AN TION NTRY L4YSTONE RANI( EEOt ASSIGNOR ZB• ORGANIZATION IOnnDUAL•s LAST NAME inasrton) one secured ALfDp, lany name or 3b 'AOORESS FIRST NAME NONE rRet Street V "NG C MIDDLE NAME STATEMENT IT1' "01Y, Ch B the 1ollowlna collate SUFFD( Ift attel Pa Harrisburg trurnenta Psr, Ac counts, STATE ' I'll P r on s, Leasehold 1tnPro ercrnent POSTAL COD s Re 41e, Equipnla addition celva Rq I'll Proceed rePiace Machinery, and nt, C 77 107 CO UNTRr s relating to la nients, and neral In ontra Ge Ct Rights, p Y of the ing (���din relating to any of her U t o r Posit Acc foregoin Intan USA whet °c umsnts, p 9 insure 9eneref )ntan 9blas an�records o f any ksisd relating now Cr eloure3, insur ance, g Cuter n account g to any of the cluire P SIGNATION Aa A ME 1�4b1 °' LESS � ENCE e dum a NSIGNE[JC �eeATA ad) in the REAL O NSIGNOR I' to B AILEE/gglL ADDITIONAL FE S E! LERiBWER Y _ UCC FINANCING STATEMENT (FORM UCC1) (REV. ru c s All Debt LI EN �b�NON UC yFILINC t Commonwealth of Pennsylvania w y ` Department of State - Corporation Bureau 1 Pedro A. Cort6s - �;' UNIFORM COMMERCIAL CODE FILING ACKNOWLEDGMENT 04/05/2006 Graystone Bank 112 Market Street Harrisblrg, PA 17101 United States 8 File Number: 2006040503161 Filing Date: 03/30/2006 8:00 AM Filing Type: UCC Lapse Date: 03/30/2011 Pages: 1 Indexed Debtor(s): Commercial: Lightstyles, Ltd., 1261 Claremont Road, Carlisle, PA, 17013 Secured Party(s) / Assignee(s): Commercial: GRAYSTONE BANK, 112 MARKET STREET, Harn —lag, PA, 17101 Other Information: Please review the above information that was indexed in our database. We have indexed the above information exactly as it was presented on your enclosed filing. If there is an error please contact our office at the number listed below. If you wish to make a change from your original document an amendment (UCC -3) with the appropriate fee is required, UCC Filing Fees: UCC-1 and UCC -3 $84. 206 North Office Building UCC -11 $12.00 Harrisburg, PA 17120 Copies $3.00 (717) 787 -10S7 Please refer to the Secretary of State's web page at www.dos.state.pa.us /corps www.dos.state.pa.us /corps for additional filing information. Folder: T0609063082 Tracking: T0609063094 Fite Number: 2011011403759 . Date Filed: 01/141201108:00 AM Thomas J. Weaver - Deputy Secretary UCC FINANCING STATEMENT AMENDMENT FOLLOW IiSTRUCTIONS nt and beck CAREFULLY A I PHOPE OF CONTACT AT FN ER MAW* ACKNOWLEOGMENT Tt7 (me W Na Address) Commonwealth of Pennsylvania Tower Bank UCC3 Amendment 1 Page(s) E ola PA 1 7025 Road lil�ilif l�l T110!465024 L 7� THE ABOW SPACE IS FOR FRNNO OFFICE WE ONLY 1a. NRIAL FINANCING STATEMENT FILE 0 1b. This FINANCING STATEMENTAMt3iDMENT Ia 2006040503161 Filed 03/30/2006 te ° i "''d Pot (« "°°"i0� R 2. . TERMI NATION: dnp Mite Tenn *Nw Shbener . 3. CONTINUATION: l] NetiwrredtlrFInerobg8laWrrntMentlMdeba +wN Fn IDSWOr kmroat(yol/MSnuredWrryautlwds3 oitc r&nunbnsmm mis continued for the a6d1l" Period Pic" by appNeabte low. 4. 8 N T (lu/ or parYeq: Menem d eenow to Rerh 7a cr 7b and edMew d eeave- In Nem 7c; and e" Oe nam d mavwr in Rem 0. 5. AMENDNENT (PARTY INFORMATION): Thk AmeW.* aRadrr 006- a ured Party d record. Chock only M d tiara two betas. Aro otraok an d rra kiarWa Maee bane Rod ao+ evraalNe bkfoandbn M Rem. S ankYor 7. I" I CHAMbErwnerrdbraddwecPYweMertotaMeile /babuoYora .bDE n sm: C4M .. nem, ioeor lek � *wn7a M or�,-Wd* NMn7� a. CURRENT RECORD INFORMRTION: e.. OWANWIDWS NAME Lighbtyles, Ltd. OR W. LAST RAME 7 NAME MIDDLE NAME SUFFIX 7. - C= NEW OR ADDED' INFORMATION: 7a. OR TIOMS NA OR Th. iN mouAvs LAST NAME FIRSTNAMIE MIDDLE NAME SLFFIX 7c: MAIUNG ADDRESS CITY SPATE POSTAL CODE CO 1261 Claremont Road Carlisle PA 17013 USA 7d. ADLYLNFORE 70; TYPEOFORGANIZATLON 7f. JURIS5VWN 6F ORGANIZATION 79. ORGANIZATIONAL ID N.If any °R � ° T ' 1 Cotpon lion ' PA 2655217 raNE S. AMENDMENT (COLLATERAL CHANGE): check only =box Deeerlbe eoltetand ❑ debt d or sddsd, or ptw enb.0eateted oopeterel deseriptien, or de..0 to l t. I �ouiyned. p..NAME OF SECURED PARTY OF RECORD Atmx+R®NG THIS ANE40MENIT (near d vulpm, Nth'& is or Assi m*r4. NSA k an Amordmwtoulwrltod by a Debbrwhkb aAt c*ft%V or aft the ar.'1e:tiiny ^..abtr, or S Sde a a T:m .unweaw 4 a Deboat, e hw k We F end enter rem, of DEBTOR auth Wng this Amendmart q. ORGANIZATIONS NAME Gra stone Bank, a division of Graystone Tower Bank OR oo INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX 10.OPTIONAL FILER REFERENCE DATA y -aa o - FILINO OFFICE COPY — UCC FINANCING STATEMENT AMENDMENT (FORM UCC3) (REV. 05=02) H£ 1 Commonwealth of Pennsylvania w Department of State - Corporation Bureau Thomas J. Weaver - ,, UNIFORM COMMERCIAL CODE FILING ACKNOWLEDGMENT 01/14/2011 Graystone Bank 112 Market Street Harrisburg, PA 17101 4' File Number: 2011011403759 Filing Date: 01/14!2011 8:00 AM Filing Type: UCC Lapse Date: 03/30/2016 Original File Number: 2006040503161 Pages: 1 Amendments: Continuation Indexed Debtor(s): Secured Party(s) / Assignee(s): Other Information: Please review the above information that was indexed in our database. We have indexed the above information exactly as it was presented on your enclosed filing. If there is an error please contact our office at the number listed below. If you wish to make a change from your original document an amendment (UCC -3) with the appropriate fee is required. UCC Filing Fees: UCC-1 and UCC -3 $84.00 206 North Office Building UCC -11 $12.00 Harrisburg, PA 17120 Copies $3.00 ( 717) 787. Please refer to the Secretary of State's web page at www.dos.state.pa.us/corps www.dos.state.pa.us /corps for additional filing information. Folder: T1101465021 Tracking: T1 1 0 1 465024 —,��� 3� ° a ;: �; �. �, �. { i C. i _ �. f. �" h �.e� � i _ � 1 i I i `. 'r I. i . r. j. i k. s Il . Mr[Nl:)ow:3 • r) OORS • HARDWOOD Ri.00Rs BLIN 5 Nt'inclow Gang Wii1cloav and Door is changing m our name to Wirdows and More ass �ea� z�s;E with the ne:�rly created logo provided above. Our new address will be 5317 - A Highway 70 Morehead Cily, NC 28557. This addr-2 ; change will be of e:ctive 01 December 2003. Our corporate name is FS•h:irv) .�eIviI Lh.iired and we will be doing business as ",Windows and More ". Our FederEJ .ID 3?umb ,.. is S6­2288701. Our sates tax fly DUrriber is 600389073., Tittl McCullen is to be released of any personal guarantee on this account and Sliar(jr Yeomans is to tssUrt1,s the responsibility ofpersorlal guarantor as of 14 Novemb '.00 If .,you have any nucstions you can contact Tint McCullen or Sharon Yeorr as at ?S 72 14153. A t else send coirformatio:z of the above infor mation by fax. to 252 -726-2837. Sharon yoxnans .1 Ti:ra McCull n i i WINDOWS • DOORS • IiAItDWOOD P1AOR5 • BIdIYDS Corporation Name: Eskimo Seven Limited Management: S. P. Yeomans Street Address: 531.7 -A Highway 70 Morehead City, NC 28557 Federal ID #: 56- 2288701 Sales Tax #: 600389073 Form of Business: N.C. S Corporation Nature of Business: Supply Distribution Banking Reference: Soundbank Wachovia Bank 5039 Executive Dr. Carol Piner -V. Pres PO Box 943 800 Arendell St. Morehead City, NC 28557 Morehead City, NC 28557 252- 727 -5558 252- 240 -6325 fax 252 -727 -5559 fax 252- 726 -9011 CPA: Brad Piner PO Box 750 Beaufort NC 28516 252 - 728 -4832 252 -728 -7489 Credit References: Dyke Industries, Inc. Tucker Millworks 653 Instrument Dr. PO Box 835 PO Box 8257 Lithonia, GA 30058 Rocky Mount, NC 27804 1 =770 -482 -8.136 252 - 4440 -8100 1- 770- 482 -4158 Horizon Forest Products Lightstyles PO Box 46809 1261 Claremont Rd. Raleigh, NC 27620 Carlisle, PA 17013 1800- 773 -8020 1800- 326 -5914 1910- 343 -3334 1800 -326 -6231 fax Woodharbor Doors & Cabinetry, 3277 Ninth St. SW Mason City, IA 50401 641- 423 -0444 1800 -657 -4699 x. No. CI -13- VERIFICATION I hereby verify that I am the Loan Workout Officer of Susquehanna Bank; that as such I am authorized to make this verification; and that the information set forth in the foregoing Complaint is true and correct to the best of my knowledge, information and belief. I understand that any false statements contained herein are subject to the penalties of 18 Pa.C.S. § 4904, relating to unsworn falsification to authorities. Dated: Robert Sayre, Loan Workout Officer 9 Doc22451 BRUBAKER CONNAUGHTON GOSS & LUCARELLI LLC By: Brett D. Jackson, Esquire Attorney I.D. No. 87517 Dana C. Panagopoulos, Esquire Attorney I.D. No. 89491 460 New Holland Ave, Suite 6205 Attorneys for Plaintiff: Lancaster, PA 17602 Susquehanna Bank SUSQUEHANNA BANK, successor IN THE COURT OF COMMON in interests to Graystone Tower PLEAS OF CUMBERLAND Bank, in its capacity as secured COUNTY, PENNSYLVANIA Lender to Lightstyles, Inc., Plaintiff V. CIVIL ACTION - LAW r �-rl ESKIMO SEVEN LIMITED, No. CI -13- 0-; d/b /a WINDOWS AND MORE, and Mme: SHARON YEOMANS, Defendants . <> cr, PRAECIPE FOR ENTRY OF APPEARANCE --'F TO THE PROTHONOTARY: Please enter the appearance of Brett D. Jackson, Esquire, Dana C. Panagopoulos, Esquire and Brubaker Connaughton Goss & Lucarelli LLC, as Attorneys for Plaintiff, Susquehanna Bank, successor in interests to Graystone Tower Bank, in its capacity as secured Lender to Lightstyles, Inc., in the above - captioned matter. BRUBAKER CONNAUGHTON GOSS & LUCARELLI LLC Attorneys for Plaintiff Date: By: Da C. Panagopolus, Esquire 26681 No. CI-13-4205 BRUBAKER CONNAUGHTON GOSS & LUCARELLI LLC By: Brett D. Jackson, Esquire Attorney I.D. No. 87517 Dana C. Panagopoulos, Esquire Attorney I.D. No. 89491 480 New Holland Ave, Suite 6205 Lancaster, PA 17602 Attorneys for Plaintiff: (717) 945-5745 / (717) 945-5764 (Fax) Susquehanna Bank SUSQUEHANNA BANK, successor IN THE COURT OF COMMON in interests to Graystone Tower PLEAS OF CUMBERLAND Bank, in its capacity as secured COUNTY, PENNSYLVANIA Lender to Lightstyles, Inc., Plaintiff V. CIVIL ACTION - LAW w ESKIMO SEVEN LIMITED, No. CI-13-4205 = C:) lr d/b/a WINDOWS AND MORE, and c� SHARON YEOMANS, CD Defendants C 7) `— PRAECIPE TO REINSTATE COMPLAINT TO THE PROTHONOTARY: Pursuant to Pa.R.C.P. 401(b)(1), please reinstate the Complaint filed on July 19, 2013 in the above-captioned matter. Respectfully Submitted, BRUBAKER CONNAUGHTON GOSS & LUCARELLI LLC Attorneys for Plaintiff Date: By: Pa ha C. Panagopoulos, Esquire At4orney I.D. No. 89491 44528 �� �a, SNP BRUBAKER CONNAUGHTON GOSS & LUCARELLI LLC By: Brett D. Jackson, Esquire Attorney I.D. No. 87517 Dana C. Panagopoulos, Esquire Attorney I.D. No. 89491 480 New Holland Ave, Suite 6205 Lancaster, PA 17602 (717) 945 -5745 / (717) 945 -5764 (Fax) No. CI -13 -4205 ti TIiGt j 2G'f y APR 17 CLIH ERL ?I'D SO PEN SYLVAF�IANTy Attorneys for Plaintiff: Susquehanna Bank SUSQUEHANNA BANK, successor in interests to Graystone Tower Bank, in its capacity as secured Lender to Lightstyles, Inc., Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA v. CIVIL ACTION - LAW ESKIMO SEVEN LIMITED, d/b /a WINDOWS AND MORE, and SHARON YEOMANS, No. CI -13 -4205 Defendants -: PRAECIPE TO REINSTATE COMPLAINT TO THE PROTHONOTARY: Pursuant to Pa.R.C.P. 401(b)(1), please reinstate the Complaint filed on July 19, 2013, and reinstated on October 30, 2013 in the above - captioned matter. Date: 70490 61 Respectfully Submitted, BRUBAKER CONNAUGHTON GOSS & LUCARELLI LLC Att . eys for Plaintiff By: D C. Panagopoulos, Esquire At orney I.D. No. 89491 BRUBAKER CONNAUGHTON GOSS & LUCARELLI LLC By: Brett D. Jackson, Esquire Attorney I.D. No. 87517 Dana C. Panagopoulos, Esquire Attorney I.D. No. 89491 480 New Holland Ave, Suite 6205 Lancaster, PA 17602 Attorneys for Plaintiff: (717) 945 -5745 / (717) 945 -5764 (Fax) Susquehanna Bank SUSQUEHANNA BANK, successor in interests to Graystone Tower Bank, in its capacity as secured Lender to Lightstyles, Inc., Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA v. CIVIL ACTION - LAW ESKIMO SEVEN LIMITED, d/b /a WINDOWS AND MORE, and SHARON YEOMANS, Defendants : No. CI -13 -4205 AFFIDAVIT OF SERVICE OF COMPLAINT ma) r' Z73 7;1 r-x <ci .4 (am. DANA C. PANAGOPOULOS, ESQUIRE, being duly affirmed according to law, deposes and says, to the best of her knowledge, information and belief: That she is an associate of the law firm of Brubaker Connaughton Goss & Lucarelli LLC, which firm is acting as attorneys for Plaintiff Susquehanna Bank in this civil proceeding; that service of the Complaint was made upon the Defendant, Sharon Yeomans, an adult individual, outside of the Commonwealth of Pennsylvania, pursuant to Pa.R.C.P. 403 and 404, on October 28, 2013, by Certified United States Mail, Restricted Delivery, Return Receipt Requested; and that true and correct copies of the signed return receipt card and USPS confirmation of mailing are attached hereto and together marked Exhibit A. 76160 ti Affirmed to and subscribed Before me this U Uo day of ) ) By: Jau614t-v14 ) Notary Public April, 2014. No. CI -13 -4205 BRUBAKER CONNAUGHTON GOSS & LUCARELLI LLC Attorfeys for Plaintiff My commission expires: 0016'N \5S, 0VD1 a COMMONWEALTH OP PENNSYLVANIA Notarial Seal Angela 3. Glasmlre, Notary Public I Palmyra Bolo, Lebanon County My Commission Expires March 18, 2018 «wim vt•.a'n:uc. •sso Ana+ co pwruuss 76160 2 ana C. Panagopoulos, Esquire ttorney I.D. No. 89491 480 New Holland Ave., Suite 6205 Lancaster, PA 17602 (717) 945 -5745 6 SENDER: COMPLETE THIS SECTION Complete items 1, 2, and 3. Also complete item 4 if Restricted Delivery is desired. • Print your name and address on the reverse so that we can return the card to you. • Attach this card to the back of the mailpiece, or on the front if space permits. icie Addressed to: Sharon Yeomans 111 Tiffany Way f Beaufort, NC 28516 D. Is delivery address different from item 1? EPrtg--- If YES, enter delivery address below: 0 No /0/ eapn PAA' 64- . Service Type Z:Certif led Mall 0 Registered 0 Insured Mall , • 0 Express Mall 0 Return Receipt for Merchandise 0 C.O.D. 4. Restricted Delivery? (Extra Fee) XXYes 2. Article Number t 1 (Transfer from service labe0 r e 3050 0006 1304 2226 PS Form 3811, February 2004 Domestic Retum Receipt U.S. Postal ServiceTM • CERTIFIED MA(LTM RECEIPT (Domestic Mail Only; No Insurance Coy .rage Provided) For delivery information visit our webslte at www.usps.come COAL USE OFF Postage Certified Fee Return Receipt Fee (Endorsement Required) Restricted Delivery Fee (Endorsement Required) Total Postage & Fees $ 3.10 2.55 4.75 $ 1.2 10\ \3 Postmark Here See Reverse for Instructions 102595-02-M-1540 ; BRUBAKER CONNAUGHTON GOSS & LUCARELLI LLC By: Brett D. Jackson, Esquire Attorney I.D. No. 87517 Dana C. Panagopoulos, Esquire Attorney I.D. No. 89491 480 New Holland Ave, Suite 6205 Lancaster, PA 17602 (717) 945-5745 / (717) 945-5764 (Fax) Attorneys for Plaintiff: Susquehanna Bank SUSQUEHANNA BANK, successor IN THE COURT OF COMMON in interests to Graystone Tower PLEAS OF CUMBERLAND Bank, in its capacity as secured COUNTY, PENNSYLVANIA Lender to Lightstyles, Inc., Plaintiff r_`' ..L.-- mCC c_ v. CIVIL ACTION - LAW = C.n 1 --<> (Ji ESKIMO SEVEN LIMITED, No. CI -13-4205 r --- d/b/a WINDOWS AND MORE, and c'3 SHARON YEOMANS, ;, Defendants : Fri T ; `) �r CJ C) _r., CD AFFIDAVIT OF SERVICE OF COMPLAINT DANA C. PANAGOPOULOS, ESQUIRE, being duly affirmed according to law, deposes and says, to the best of her knowledge, information and belief: That she is an associate of the law firm of Brubaker Connaughton Goss & Lucarelli LLC, which firm is acting as attorneys for Plaintiff Susquehanna Bank in this civil proceeding; that service of the Complaint was made upon the Defendant, Eskimo Seven Limited, d/b/a Windows and More, a North Carolina corporation, outside of the Commonwealth of Pennsylvania, pursuant to Pa.R.C.P. 403 and 404, on May 21, 2014, by Certified United States Mail, Return Receipt Requested; and that true and correct copies of the certified mail receipt and USPS confirmation of mailing printout are attached hereto and together marked Exhibit A. 84518 No. CI -13-4205 Affirmed to and subscribed ) BRUBAKER CONNAUGHTON GOSS & LUCARELLI LLC Before me this ' day of ) Attorn ys for Plaintiff — ) ) By: na C. Panagopoulos, Esquire June, 2014. Notary Public J. t1U4( 1 ttorney I.D. No. 89491 480 New Holland Ave., Suite 6205 Lancaster, PA 17602 (717) 945-5745 My commission expires: (Y\akrir. IIsi 9.01$ COMMONWEALTH OF PENNSYLVANIA Notarial Seal Angela J. Glasmlre, Notary Pubitc Paimyra Soto, Lebanon County My Commission Ex:pires March 18, I018 $LMIU. PIAefffs.i& :i M1. c:ATIo t o! *mutat; 84518 2 EXHIBIT A N ri -n ra 'm c0 U.S. Postal ServiceTM CERTIFIED MAILTM RECEIPT (Domestic Mail Only; No Insurance Coverage Provided) For delivery information visit our website at www.usps.come Postage Certified Fee O Retum Receipt Fee p (Endorsement Required) m fU m r -i O N Restricted Delivery Fee (Endorsement Required) Total PostageB, Fees '4 Postmark Here Sent To Eskimo Seven Limited d/b/a Street, Apt. No.; -Windows-and-More. or PO Box No. 101 Capn Pat_COUrt Cary State, ZIP+a Morehead City, NC 28557 PS Form 3800, August2006 See Reverse for Instructions Crack and Confirm Intranet Product Tracking System Home Search Reports Manual Entry Rates/ Commitments Track & Confirm Intranet Delivery Signature and Address Tracking Number: 7013 2630 0000 8631 6417 This item was delivered on 05/21/2014 at 13:52:00 < Return to Tracking Number View Signature ( ANY PTS / EDW USPS Corporate Accounts • Page 1 of Help UNITED STATES POST44 SERWCE June 03, 2014 Enter up to 10 items separated by commas. Select Search Type: Quick Search Submit Product Tracking System, At Rights Reserved Version: 1.8.0.9 t ""! w'..7411"IrIbm'' ittps://pts.usps.gov/pts2-web/tcIntranetTrackingNumResponse/delierSrgriatureAndAddress?sigImageSeqI... 6/3/201, USFS.com® - USPS TrackingTM https://tools.usps.com/go/TrackConfirmAction.action?tRef=fullpage... English Customer Service USPS Mobile Register / Sign In 2USP Quick Tools USPS TrackingTM Search USPS.com or Track Packages Ship a Package Send Mail Manage Your Mail Shop Business Solutions Customer ServiceE2i Have questions? We're here to help. Tracking Number: 70132630000086316417 Product & Tracking Information Available Actions Postal Product: Features: Certified Mail" DATE & TIME STATUS OF ITEM May 21, 2014 , 1:52 pm Delivered LOCATION MOREHEAD CITY, NC 28557 Your item was delivered at 1:52 pm on May 21, 2014 in MOREHEAD CITY, NC 28557. May 21, 2014, 1:41 am May 20, 2014 , 10:32 pm May 18, 2014, 4:17 pm May 6, 2014, 9:19 am May 6,2014,2:41 am May 5, 2014, 11:06 pm May 4, 2014, 12:22 am May 3, 2014, 10:12 am April 29, 2014 , 9:05 pm April 29, 2014 , 5:23 am April 29, 2014 , 4:58 am April 28, 2014 , 10:09 pm April 26, 2014 , 10:19 pm April 26, 2014 , 6:04 am April 25, 2014 , 3:50 pm Processed through USPS Sort Facility Processed through USPS Sort Facility Processed through USPS Sort Facility Forwarded Processed through USPS Sort Facility Processed through USPS Sort Facility Processed through USPS Sort Facility Processed through USPS Sort Facility Processed through USPS Sort Facility Depart USPS Sort Facility Processed through USPS Sort Facility Processed through USPS Sort Facility Processed at USPS Origin Sort Facility Depart USPS Sort Facility Processed through USPS Sort Facility FAYETTEVILLE, NC 28302 FAYETTEVILLE, NC 28302 MERRIFIELD, VA 22081 MOREHEAD CITY, NC FAYETTEVILLE, NC 28302 FAYETTEVILLE, NC 28302 FAYETTEVILLE, NC 28302 CHARLOTTE, NC 28228 HARRISBURG, PA 17107 LANCASTER, PA 17604 LANCASTER, PA 17604 HARRISBURG, PA 17107 HARRISBURG, PA 17107 MERRIFIELD, VA 22081 MERRIFIELD, VA 22081 1 of 2 6/3/2014 11:54 A1v! USPS.com® - USPS TrackingTM https://tools.usps.com/go/TrackConfirmAction.action?tRef=fullpage... DATE & TIME April 18, 2014 , 2:15 pm April 18, 2014 , 9:31 am April 18, 2014 , 9:25 am April 18, 2014 , 8:57 am April 18, 2014 , 4:20 am April 18, 2014 , 12:41 am April 17, 2014 , 9:42 pm April 17, 2014 , 5:01 pm April 17, 2014 , 5:21 am April 17, 2014 , 12:07 am April 16, 2014 , 7:14 pm STATUS OF ITEM Forwarded Forwarded Sorting Complete Arrival at Unit Depart USPS Sort Facility Processed through USPS Sort Facility Depart USPS Sort Facility Processed through USPS Sort Facility Depart USPS Sort Facility Processed at USPS Origin Sort Facility Depart Post Office LOCATION MOREHEAD CITY, NC MOREHEAD CITY, NC MOREHEAD CITY, NC 28557 MOREHEAD CITY, NC 28557 FAYETTEVILLE, NC 28302 FAYETTEVILLE, NC 28302 CHARLOTTE, NC 28228 CHARLOTTE, NC 28228 HARRISBURG, PA 17107 HARRISBURG, PA 17107 LANCASTER, PA 17602 April 16, 2014 , 6:25 pm Acceptance LANCASTER, PA 17602 i _J Track Another Package What's your tracking (or receipt) number? 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